[Federal Register Volume 84, Number 154 (Friday, August 9, 2019)]
[Proposed Rules]
[Pages 39398-39644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16107]
[[Page 39397]]
Vol. 84
Friday,
No. 154
August 9, 2019
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 412. 416, et al.
Office of the Secretary
45 Part 180
Medicare Program: Proposed Changes to Hospital Outpatient Prospective
Payment and Ambulatory Surgical Center Payment Systems and Quality
Reporting Programs; Price Transparency of Hospital Standard Charges;
Proposed Revisions of Organ Procurement Organizations Conditions of
Coverage; Proposed Prior Authorization Process and Requirements for
Certain Covered Outpatient Department Services; Potential Changes to
the Laboratory Date of Service Policy; Proposed Changes to
Grandfathered Children's Hospitals-Within-Hospitals; Proposed Rule
Federal Register / Vol. 84 , No. 154 / Friday, August 9, 2019 /
Proposed Rules
[[Page 39398]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 412, 416, 419, and 486
Office of the Secretary
45 CFR Part 180
[CMS-1717-P]
RIN 0938-AT74
Medicare Program: Proposed Changes to Hospital Outpatient
Prospective Payment and Ambulatory Surgical Center Payment Systems and
Quality Reporting Programs; Price Transparency of Hospital Standard
Charges; Proposed Revisions of Organ Procurement Organizations
Conditions of Coverage; Proposed Prior Authorization Process and
Requirements for Certain Covered Outpatient Department Services;
Potential Changes to the Laboratory Date of Service Policy; Proposed
Changes to Grandfathered Children's Hospitals-Within-Hospitals
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule proposes revisions to the Medicare hospital
outpatient prospective payment system (OPPS) and the Medicare
ambulatory surgical center (ASC) payment system for CY 2020 based on
our continuing experience with these systems. In this proposed rule, we
describe the proposed changes to the amounts and factors used to
determine the payment rates for Medicare services paid under the OPPS
and those paid under the ASC payment system. In addition, this proposed
rule would update and refine the requirements for the Hospital
Outpatient Quality Reporting (OQR) Program and the ASC Quality
Reporting (ASCQR) Program. In addition, in this proposed rule, we are
proposing to establish requirements for all hospitals in the United
States for making hospital standard charges available to the public;
establish a process and requirements for prior authorization for
certain covered outpatient department services; revise the conditions
for coverage of organ procurement organizations; and revise the
regulations to allow grandfathered children's hospitals-within-
hospitals to increase the number of beds without resulting in the loss
of grandfathered status. We also solicit comments on potential
revisions to the laboratory date of service policy under the Clinical
Laboratory Fee Schedule. Finally, we solicit comments on an appropriate
remedy in litigation involving our OPPS payment policy for 340B-
acquired drugs, which would inform future rulemaking in the event of an
adverse decision on appeal in that litigation.
DATES: Comment period: To be assured consideration, comments on this
proposed rule must be received at one of the addresses provided in the
ADDRESSES section no later than 5 p.m. EST on September 27, 2019.
ADDRESSES: In commenting, please refer to file code CMS-1717-P when
commenting on the issues in this proposed rule. 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-1717-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-1717-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 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:
2-Midnight Rule (Short Inpatient Hospital Stays), contact Lela
Strong-Holloway via email [email protected] or at 410-786-3213.
Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact
the HOP Panel mailbox at [email protected].
Ambulatory Surgical Center (ASC) Payment System, contact Scott
Talaga via email [email protected] or at 410-786-4142.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Administration, Validation, and Reconsideration Issues, contact Anita
Bhatia via email [email protected] or at 410-786-7236.
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Measures, contact Vinitha Meyyur via email [email protected]
or at 410-786-8819.
Blood and Blood Products, contact Josh McFeeters via email
[email protected] or at 410-786-9732.
Cancer Hospital Payments, contact Scott Talaga via email
[email protected] or at 410-786-4142.
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
Braver via email [email protected] or at 410-786-6719.
Control for Unnecessary Increases in Volume of Outpatient Services,
contact Elise Barringer via email [email protected] or at
410-786-9222.
Composite APCs (Low Dose Brachytherapy and Multiple Imaging),
contact Elise Barringer via email [email protected] or at
410-786-9222.
Comprehensive APCs (C-APCs), contact Lela Strong-Holloway via email
[email protected] or at 410-786-3213, or Mitali Dayal via email
at [email protected] or at 410-786-4329.
CPT and Level II HCPCS Codes, contact Marjorie Baldo via email
[email protected] or at 410-786-4617.
Grandfathered Children's Hospitals-within-Hospitals, contact
Michele Hudson via email [email protected] or 410-786-4487.
Hospital Cost Reporting and Chargemaster Comment Solicitation,
contact Dr. Terri Postma via email at
[email protected].
Hospital Outpatient Quality Reporting (OQR) Program Administration,
Validation, and Reconsideration Issues, contact Anita Bhatia via email
[email protected] or at 410-786-7236.
Hospital Outpatient Quality Reporting (OQR) Program Measures,
contact Vinitha Meyyur via email [email protected] or at 410-
786-8819.
Hospital Outpatient Visits (Emergency Department Visits and
Critical Care Visits), contact Elise Barringer via email
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[email protected] or at 410-786-9222.
Inpatient Only (IPO) Procedures List, contact Lela Strong-Holloway
via email [email protected] or at 410-786-3213, or Au'Sha
Washington via email at [email protected] or at 410-786-
3736.
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga
via email [email protected] or at 410-786-4142.
No Cost/Full Credit and Partial Credit Devices, contact Scott
Talaga via email [email protected] or at 410-786-4142.
OPPS Brachytherapy, contact Scott Talaga via email
[email protected] or at 410-786-4142.
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier
Payments, and Wage Index), contact Erick Chuang via email
[email protected] or at 410-786-1816, Steven Johnson via email
[email protected] or at 410-786-3332, or Scott Talaga via
email [email protected] or at 410-786-4142, or Josh McFeeters
via email at [email protected] or at 410-786-9732.
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar
Products, contact Josh McFeeters via email [email protected]
or at 410-786-9732.
OPPS New Technology Procedures/Services, contact the New Technology
APC mailbox at [email protected].
OPPS Packaged Items/Services, contact Lela Strong-Holloway via
email [email protected] or at 410-786-3213, or Mitali Dayal via
email at [email protected] or at 410-786-4329.
OPPS Pass-Through Devices, contact the Device Pass-Through mailbox
at [email protected].
OPPS Status Indicators (SI) and Comment Indicators (CI), contact
Marina Kushnirova via email [email protected] or at 410-
786-2682.
Organ Procurement Organization (OPO) Conditions for Coverage
(CfCs), contact Alpha-Banu Wilson via email at
[email protected] or at 410-786-8687, or Diane Corning via
email at [email protected] or at 410-786-8486.
Partial Hospitalization Program (PHP) and Community Mental Health
Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
[email protected].
Price Transparency of Hospital Standard Charges, contact Dr. Terri
Postma or Elizabeth November via email at
[email protected].
Prior Authorization Process and Requirements for Certain Hospital
Outpatient Department Services, contact Thomas Kessler via email at
[email protected] or at 410-786-1991.
Quality Measurement Relating to Price Transparency, contact Dr.
Reena Duseja or Dr. Terri Postma via email at
[email protected]
Rural Hospital Payments, contact Josh McFeeters via email at
[email protected] or at 410-786-9732.
Skin Substitutes, contact Josh McFeeters via email
[email protected] or at 410-786-9732.
Supervision of Outpatient Therapeutic Services in Hospitals and
CAHs, contact Josh McFeeters via email [email protected] or
at 410-786-9732, or Mitali Dayal via email at [email protected]
or at 410-786-4329.
All Other Issues Related to Hospital Outpatient and Ambulatory
Surgical Center Payments Not Previously Identified, contact Elise
Barringer via email [email protected] or at 410-786-9222.
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.
Addenda Available Only Through the Internet on the CMS Website
In the past, a majority of the Addenda referred to in our OPPS/ASC
proposed and final rules were published in the Federal Register as part
of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC
proposed rule, all of the Addenda no longer appear in the Federal
Register as part of the annual OPPS/ASC proposed and final rules to
decrease administrative burden and reduce costs associated with
publishing lengthy tables. Instead, these Addenda are published and
available only on the CMS website. The Addenda relating to the OPPS are
available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. The Addenda relating to the
ASC payment system are available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
Current Procedural Terminology (CPT) Copyright Notice
Throughout this proposed rule, we use CPT codes and descriptions to
refer to a variety of services. We note that CPT codes and descriptions
are copyright 2018 American Medical Association. All Rights Reserved.
CPT is a registered trademark of the American Medical Association
(AMA). Applicable Federal Acquisition Regulations (FAR and Defense
Federal Acquisition Regulations (DFAR) apply.
Table of Contents
I. Summary and Background
A. Executive Summary of This Document
B. Legislative and Regulatory Authority for the Hospital OPPS
C. Excluded OPPS Services and Hospitals
D. Prior Rulemaking
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel
or the Panel)
F. Public Comments Received on the CY 2019 OPPS/ASC Final Rule
With Comment Period
II. Proposed Updates Affecting OPPS Payments
A. Proposed Recalibration of APC Relative Payment Weights
B. Proposed Conversion Factor Update
C. Proposed Wage Index Changes
D. Proposed Statewide Average Default Cost-to-Charge Ratios
(CCRs)
E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs)
and Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2020
F. Proposed Payment Adjustment for Certain Cancer Hospitals for
CY 2020
G. Proposed Hospital Outpatient Outlier Payments
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
I. Proposed Beneficiary Copayments
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New and Revised HCPCS Codes
B. Proposed OPPS Changes--Variations Within APCs
C. Proposed New Technology APCs
D. Proposed APC-Specific Policies
IV. Proposed OPPS Payment for Devices
A. Pass-Through Payments for Devices
B. Proposed Device-Intensive Procedures
V. Proposed OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals
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B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals Without Pass-Through Payment Status
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for
Drugs, Biologicals, Radiopharmaceuticals, and Devices
A. Background
B. Proposed Estimate of Pass-Through Spending
VII. Proposed OPPS Payment for Hospital Outpatient Visits and
Critical Care Services
VIII. Proposed Payment for Partial Hospitalization Services
A. Background
B. Proposed PHP APC Update for CY 2020
C. Proposed Outlier Policy for CMHCs
D. Update to PHP Allowable HCPCS Codes
IX. Proposed Procedures That Would Be Paid Only as Inpatient
Procedures
A. Background
B. Proposed Changes to the Inpatient Only (IPO) List
X. Proposed Nonrecurring Policy Changes
A. Proposed Changes in the Level of Supervision of Outpatient
Therapeutic Services in Hospitals and Critical Access Hospitals
(CAHs)
B. Short Inpatient Hospital Stays
C. Method To Control Unnecessary Increases in the Volume of
Clinic Visit Services Furnished in Excepted Off-Campus Provider-
Based Departments (PBDs)
XI. Proposed CY 2020 OPPS Payment Status and Comment Indicators
A. Proposed CY 2020 OPPS Payment Status Indicator Definitions
B. Proposed CY 2020 Comment Indicator Definitions
XII. MedPAC Recommendations
A. OPPS Payment Rates Update
B. ASC Conversion Factor Update
C. ASC Cost Data
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC)
Payment System
A. Background
B. Proposed ASC Treatment of New and Revised Codes
C. Proposed Update to the List of ASC Covered Surgical
Procedures and Covered Ancillary Services
D. Proposed Update and Payment for ASC Covered Surgical
Procedures and Covered Ancillary Services
E. New Technology Intraocular Lenses (NTIOLs)
F. Proposed ASC Payment and Comment Indicators
G. Proposed Calculation of the ASC Payment Rates and the ASC
Conversion Factor
XIV. Requirements for the Hospital Outpatient Quality Reporting
(OQR) Program
A. Background
B. Hospital OQR Program Quality Measures
C. Administrative Requirements
D. Form, Manner, and Timing of Data Submitted for the Hospital
OQR Program
E. Proposed Payment Reduction for Hospitals That Fail To Meet
the Hospital OQR Program Requirements for the CY 2020 Payment
Determination
XV. Requirements for the Ambulatory Surgical Center Quality
Reporting (ASCQR) Program
A. Background
B. ASCQR Program Quality Measures
C. Administrative Requirements
D. Form, Manner, and Timing of Data Submitted for the ASCQR
Program
E. Payment Reduction for ASCs That Fail To Meet the ASCQR
Program Requirements
XVI. Proposed Requirements for Hospitals To Make Public a List of
Their Standard Charges
A. Introduction and Overview
B. Proposed Definition of ``Hospital'' and Proposed Special
Requirements That Would Apply to Certain Types of Hospitals
C. Proposed Definition of ``Items and Services'' Provided by
Hospitals
D. Proposed Definitions for Types of ``Standard Charges''
E. Proposed Requirements for Public Disclosure of All Hospital
Standard Charges for All Items and Services
F. Proposed Requirements for Consumer-Friendly Display of the
Payer-Specific Negotiated Charges for Selected Shoppable Services
G. Proposed Monitoring and Enforcement of Requirements for
Making Standard Charges Public
H. Proposed Appeals Process
XVII. Request for Information (RFI): Quality Measurement Relating to
Price Transparency for Improving Beneficiary Access to Provider and
Supplier Charge Information
A. Introduction
B. Request for Information
XVIII. Organ Procurement Organizations (OPOs) Conditions for
Coverage (CfCs): Proposed Revision of the Definition of ``Expected
Donation Rate''
A. Background
B. Proposed Revision of the Definition of ``Expected Donation
Rate''
C. Request for Information Regarding Potential Changes to the
Organ Procurement Organization and Transplant Center Regulations
XIX. Clinical Laboratory Fee Schedule: Potential Revisions to the
Laboratory Date of Service Policy
A. Background on the Medicare Part B Laboratory Date of Service
Policy
B. Medicare DOS Policy and the ``14-Day Rule''
C. Billing and Payment for Laboratory Services Under the OPPS
D. ADLTs Under the New Private Payor Rate-Based CLFS
E. Additional Laboratory DOS Policy Exception for the Hospital
Outpatient Setting
F. Potential Revisions to Laboratory DOS Policy and Request for
Public Comments
XX. Proposed Prior Authorization Process and Requirements for
Certain Hospital Outpatient Department (OPD) Services
A. Background
B. Proposal for a Prior Authorization Process for Certain OPD
Services
C. Proposed List of Outpatient Department Services Requiring
Prior Authorization
XXI. Comment Solicitation on Cost Reporting, Maintenance of Hospital
Chargemasters, and Related Medicare Payment Issues
XXII. Proposed Changes to Requirements for Grandfathered Children's
Hospitals-Within-Hospitals (HwHs)
XXIII. Files Available to the Public Via the internet
XXIV. Collection of Information Requirements
A. Statutory Requirement for Solicitation of Comments
B. ICRs for the Hospital OQR Program
C. ICRs for the ASCQR Program
D. ICR for Proposal on Hospital Price Transparency
E. ICRs for Proposed Revision of the Definition of ``Expected
Donation Rate'' for Organ Procurement Organizations
F. ICR for Proposed Prior Authorization Process and Requirements
for Certain Hospital Outpatient Department (OPD) Services
G. Potential Revisions to Laboratory Date of Service (DOS)
Policy
H. Total Reduction in Burden Hours and in Costs
XXV. Response to Comments
XXVI. Economic Analyses
A. Statement of Need
B. Overall Impact for the Provisions of This Proposed Rule
C. Detailed Economic Analyses
D. Effects of the Proposals Relating to Price Transparency in
Hospital Standard Charges
E. Effects of Proposed Prior Authorization Process and
Requirements for Certain Hospital Outpatient Department (OPD)
Services
F. Effects of Proposal Relating to Changes in the Definition of
Expected Donation Rate for Organ Procurement Organizations
G. Potential Revisions to the Laboratory Date of Service Policy
H. Effect of Proposed Changes to Requirements for Grandfathered
Children's Hospitals-Within-Hospitals (HwHs)
I. Regulatory Review Costs
J. Regulatory Flexibility Act (RFA) Analysis
K. Unfunded Mandates Reform Act Analysis
L. Reducing Regulation and Controlling Regulatory Costs
M. Conclusion
XXVII. Federalism Analysis Regulation Text
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
In this proposed rule, we are proposing to update the payment
policies and payment rates for services furnished to Medicare
beneficiaries in hospital outpatient departments (HOPDs) and ambulatory
surgical centers (ASCs), beginning January 1, 2020. Section 1833(t) of
the Social Security Act (the Act) requires us to
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annually review and update the payment rates for services payable under
the Hospital Outpatient Prospective Payment System (OPPS).
Specifically, section 1833(t)(9)(A) of the Act requires the Secretary
to review certain components of the OPPS not less often than annually,
and to revise the groups, the relative payment weights, and the wage
and other adjustments that take into account changes in medical
practices, changes in technologies, and the addition of new services,
new cost data, and other relevant information and factors. In addition,
under section 1833(i) of the Act, we annually review and update the ASC
payment rates. We describe these and various other statutory
authorities in the relevant sections of this proposed rule. In
addition, this proposed rule would update and refine the requirements
for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC
Quality Reporting (ASCQR) Program.
In this proposed rule, we also are proposing to: Establish
requirements for all hospitals (including hospitals not paid under the
OPPS) in the United States for making hospital standard charges
available to the public; establish a process and requirements for prior
authorization for certain covered outpatient department services;
revise the conditions for coverage for organ procurement organizations;
and revise the regulations to allow grandfathered children's hospitals-
within-hospitals to increase the number of beds without resulting in
the loss of grandfathered status. We also solicit comments on potential
revisions to the laboratory date of service policy under the Clinical
Laboratory Fee Schedule.
2. Summary of the Major Provisions
OPPS Update: For CY 2020, we are proposing to increase the
payment rates under the OPPS by an Outpatient Department (OPD) fee
schedule increase factor of 2.7 percent. This increase factor is based
on the proposed hospital inpatient market basket percentage increase of
3.2 percent for inpatient services paid under the hospital inpatient
prospective payment system (IPPS), minus the proposed multifactor
productivity (MFP) adjustment of 0.5 percentage point. Based on this
proposed update, we estimate that total payments to OPPS providers
(including beneficiary cost-sharing and estimated changes in
enrollment, utilization, and case-mix) for CY 2020 would be
approximately $79 billion, an increase of approximately $6 billion
compared to estimated CY 2019 OPPS payments.
We are proposing to continue to implement the statutory 2.0
percentage point reduction in payments for hospitals failing to meet
the hospital outpatient quality reporting requirements, by applying a
reporting factor of 0.980 to the OPPS payments and copayments for all
applicable services.
2-Midnight Rule (Short Inpatient Hospital Stays): For CY
2020, we are proposing to establish a 1-year exemption from Beneficiary
and Family-Centered Care Quality Improvement Organizations (BFCC-QIOs)
referrals to Recovery Audit Contractors (RACs) and RAC reviews for
``patient status'' (that is, site-of-service) for procedures that are
removed from the inpatient only (IPO) list under the OPPS beginning on
January 1, 2020.
Comprehensive APCs: For CY 2020, we are proposing to
create two new comprehensive APCs (C-APCs). These proposed new C-APCs
include the following: C-APC 5182 (Level 2 Vascular Procedures) and
proposed C-APC 5461 (Level 1 Neurostimulator and Related Procedures).
This proposal would increase the total number of C-APCs to 67.
Proposed Changes to the Inpatient Only (IPO) List: For CY
2020, we are proposing to remove one procedure from the inpatient only
list and we are seeking public comment on the removal of six procedures
from the inpatient only (IPO) list.
Method to Control Unnecessary Increases in the Volume of
Clinic Visit Services Furnished in Excepted Off-Campus Provider-Based
Departments (PBDs): For CY 2020, we are completing the phase-in of the
reduction in payment for the clinic visit services described by HCPCS
code G0463 furnished in expected off-campus provider-based departments
as a method to control uncessary increases in the volume of this
service.
Device Pass-Through Payment Applications: For CY 2020, we
are evaluating seven applications for device pass-through payments and
are seeking public comments in this CY 2020 proposed rule on whether
these applications meet the criteria for device pass-through payment
status.
Proposed Changes to Substantial Clinical Improvement
Criterion: For CY 2020, we are proposing an alternative pathway to the
substantial clinical improvement criterion for devices approved under
the FDA Breakthrough Devices Program to qualify for device pass-through
status beginning with applications received on or after January 1,
2020.
Cancer Hospital Payment Adjustment: For CY 2020, we are
proposing to continue to provide additional payments to cancer
hospitals so that a cancer hospital's payment-to-cost ratio (PCR) after
the additional payments is equal to the weighted average PCR for the
other OPPS hospitals using the most recently submitted or settled cost
report data. However, section 16002(b) of the 21st Century Cures Act
requires that this weighted average PCR be reduced by 1.0 percentage
point. Based on the data and the required 1.0 percentage point
reduction, a proposed target PCR of 0.89 will be used to determine the
CY 2020 cancer hospital payment adjustment to be paid at cost report
settlement. That is, the payment adjustment will be the additional
payments needed to result in a PCR equal to 0.89 for each cancer
hospital.
Rural Adjustment: For 2020 and subsequent years, we are
continuing the 7.1 percent adjustment to OPPS payments for certain
rural SCHs, including essential access community hospitals (EACHs). We
intend to continue such 7.1 percent adjustment in the absence of data
to suggest a different percentage adjustment should apply.
340B-Acquired Drugs: We are proposing to continue to pay
ASP-22.5 percent for 340B-acquired drugs including when furnished in
nonexcepted off-campus PBDs paid under the PFS. On December 27, 2018,
in the case of American Hospital Association et al. v. Azar et al., the
United States District Court for the District of Columbia (hereinafter
referred to as ``the district court'') concluded in the context of
reimbursement requests for CY 2018 that the Secretary exceeded his
statutory authority by adjusting the Medicare payment rates for drugs
acquired under the 340B Program to ASP minus 22.5 percent for that
year. CMS respectfully disagreed with the district court's
understanding of the scope of CMS' adjustment authority and asked the
district court to enter final judgment so as to permit an immediate
appeal. On July 10, 2019, the district court granted the government's
request and entered final judgment, and the agency does intend to
pursue its appeal rights. Nonetheless, CMS is taking the steps
necessary to craft an appropriate remedy in the event of an unfavorable
decision on appeal. We are soliciting public comments on the
appropriate OPPS payment rate for 340B-acquired drugs, including
whether a rate of ASP+3 percent could be an appropriate payment amount
for these drugs, both for CY 2020 and for purposes of determining the
remedy for CYs 2018 and 2019. In addition to comments on the
appropriate payment amount for
[[Page 39402]]
calculating the remedy for CYs 2018 and 2019 and for use for CY 2020,
we also seek public comment on how to structure the remedy for CYs 2018
and 2019. This request for public comment includes comments on whether
such a remedy should be retrospective in nature (for example, made on a
claim-by-claim basis), whether such a remedy could be prospective in
nature (for example, an upward adjustment to 340B claims in the future
to account for any underpayments in the past), and whether there is
some other mechanism that could produce a result equitable to hospitals
that do not acquire drugs through the 340B program while respecting the
budget neutrality mandate. In the event of an adverse decision on
appeal, we would anticipate proposing the specific remedy for CYs 2018
and 2019, and, if necessary, to the CY 2020 rates, in the next
available rulemaking vehicle, which is the CY 2021 OPPS/ASC proposed
rule. Those proposals will be informed by the comments solicited in
this proposed rule.
ASC Payment Update: For CYs 2019 through 2023, we update
the ASC payment system using the hospital market basket update. Using
the hospital market basket methodology, for CY 2020, we are proposing
to increase payment rates under the ASC payment system by 2.7 percent
for ASCs that meet the quality reporting requirements under the ASCQR
Program. This proposed increase is based on a proposed hospital market
basket of 3.2 percent minus a proposed multifactor productivity
adjustment required by the Affordable Care Act of 0.5 percentage point.
Based on this proposed update, we estimate that total payments to ASCs
(including beneficiary cost-sharing and estimated changes in
enrollment, utilization, and case-mix) for CY 2020 would be
approximately $4.89 billion, an increase of approximately $200 million
compared to estimated CY 2019 Medicare payments.
Proposed Changes to the List of ASC Covered Surgical
Procedures: For CY 2020, we are proposing to add 8 procedures to the
ASC list of covered surgical procedures. Additions to the list include
a total knee arthroplasty procedure, a mosaicplasty procedure, as well
as six coronary intervention procedures. We are soliciting public
comments with respect to whether certain other surgical procedures
related to the cardiovascular system should be added to the ASC list of
covered surgical procedures.
Proposed Changes to the Level of Supervision of Outpatient
Therapeutic Services in Hospitals and Critical Access Hospitals: For CY
2020, we are proposing to change the minimum required level of
supervision from direct supervision to general supervision for all
hospital outpatient therapeutic services provided by all hospitals and
CAHs. This proposal would ensure a standard minimum level of
supervision for each hospital outpatient service furnished incident to
a physician's service.
Hospital Outpatient Quality Reporting (OQR) Program: For
the Hospital OQR Program, we are proposing to remove OP-33: External
Beam Radiotherapy for Bone Metastases for the CY 2022 payment
determination and subsequent years.
Ambulatory Surgical Center Quality Reporting (ASCQR)
Program: For the ASCQR Program, we are proposing to adopt one new
measure, ASC-19: Facility-Level 7-Day Hospital Visits after General
Surgery Procedures Performed at Ambulatory Surgical Centers, beginning
with the CY 2024 payment determination and for subsequent years.
Proposed Requirements for Hospitals to Make
Public a List of Their Standard Charges: We are proposing to add a new
Part 180--Hospital Price Transparency to Title 45 of the Code of
Federal Regulations (CFR) which would contain our proposed regulations
on price transparency for purposes of section 2718(e) of the PHS Act.
In this section, we make proposals related to: (1) A definition of
``hospital''; (2) different reporting requirements that would apply to
certain hospitals; (3) definitions for two types of ``standard
charges'' (specifically, gross charges and payer-specific negotiated
charges) that hospitals would be required to make public, and a request
for public comment on other types of standard charges that hospitals
should be required to make public; (4) a definition of hospital ``items
and services'' that would include all items and services (including
individual items and services and service packages) provided by the
hospital to a patient in connection with an inpatient admission or an
outpatient department visit; (5) requirements for making public a
machine-readable file that contains a hospital's gross charges and
payer-specific negotiated charges for all items and services provided
by the hospital; (6) requirements for making public payer-specific
negotiated charges for select hospital-provided items and services that
are ``shoppable'' and that are displayed in a consumer-friendly manner;
(7) monitoring for hospital noncompliance with public disclosure
requirements to make public standard charges; (8) actions that would
address hospital noncompliance, which include issuing a written warning
notice, requesting a corrective action plan, and imposing civil
monetary penalties (CMPs) on noncompliant hospitals and publicizing
these penalties on a CMS website; and (9) appeals of CMPs.
Proposed Prior Authorization Process and Requirements for
Certain Hospital Outpatient Department (OPD) Services: We are proposing
a prior authorization process using the authority in section
1833(t)(2)(F) of the Act as a method for controlling unnecessary
increases in the volume of the following five categories of services:
(1) Blepharoplasty, (2) botulinum toxin injections, (3) panniculectomy,
(4) rhinoplasty, and (5) vein ablation.
Organ Procurement Organizations (OPOs) Conditions for
Coverage (CfCs) Proposed Revision of the Definition of ``Expected
Donation Rate'': We are proposing to revise the definition of
``expected donation rate'' that is included in the second outcome
measure to match the Scientific Registry of Transplant Recipients
(SRTR) definition.
We are also proposing to reduce the time period for the second
outcome measure and calculate the expected donation rate using 12 out
of the 24 months of data (from January 1, 2020 through December 31,
2020) for the 2022 recertification cycle only.
Request for Information Regarding Potential Changes to the
Organ Procurement Organization and Transplant Center Regulations: We
are soliciting public comments regarding what revisions may be
appropriate for the current OPO CfCs and the current transplant center
CoPs. In addition, we are seeking public comments on two potential
outcome measures for OPOs.
3. Summary of Costs and Benefits
In sections XXVI. and XXVII. of this proposed rule, we set forth a
detailed analysis of the regulatory and federalism impacts that the
proposed changes would have on affected entities and beneficiaries. Key
estimated impacts are described below.
a. Impacts of All OPPS Proposed Changes
Table 41 in section XXVI. of this proposed rule displays the
distributional impact of all the proposed OPPS changes on various
groups of hospitals and CMHCs for CY 2020 compared to all estimated
OPPS payments in CY 2019. We estimate that the policies in this
proposed rule would result in a 2.0 percent overall increase in OPPS
payments to providers. We estimate that total OPPS payments for
[[Page 39403]]
CY 2020, including beneficiary cost-sharing, to the approximately 3,734
facilities paid under the OPPS (including general acute care hospitals,
children's hospitals, cancer hospitals, and CMHCs) would increase by
approximately $940 million compared to CY 2019 payments, excluding our
estimated changes in enrollment, utilization, and case-mix.
We estimated the isolated impact of our proposed OPPS policies on
CMHCs because CMHCs are only paid for partial hospitalization services
under the OPPS. Continuing the provider-specific structure we adopted
beginning in CY 2011, and basing payment fully on the type of provider
furnishing the service, we estimate a 3.9 percent increase in CY 2020
payments to CMHCs relative to their CY 2019 payments.
b. Impacts of the Proposed Updated Wage Indexes
We estimate that our proposed update of the wage indexes based on
the FY 2020 IPPS proposed rule wage indexes would result in no
estimated payment change for urban hospitals under the OPPS and an
estimated increase of 0.8 percent for rural hospitals. These proposed
wage indexes include the continued implementation of the OMB labor
market area delineations based on 2010 Decennial Census data, with
updates, as discussed in section II.C. of this proposed rule.
c. Impacts of the Proposed Rural Adjustment and the Cancer Hospital
Payment Adjustment
There are no significant impacts of our proposed CY 2020 payment
policies for hospitals that are eligible for the rural adjustment or
for the cancer hospital payment adjustment. We are not proposing to
make any change in policies for determining the rural hospital payment
adjustments. While we are proposing to implement the reduction to the
cancer hospital payment adjustment required by section 16002 of the
21st Century Cures Act for CY 2020, the target payment-to-cost ratio
(PCR) for CY 2020 is 0.89, compared to 0.88 for CY 2019, and therefore
has a slight impact on budget neutrality adjustments.
d. Impacts of the Proposed OPD Fee Schedule Increase Factor
For the CY 2020 OPPS/ASC, we are proposing an OPD fee schedule
increase factor of 2.7 percent and applying that increase factor to the
conversion factor for CY 2020. As a result of the proposed OPD fee
schedule increase factor and other budget neutrality adjustments, we
estimate that urban hospitals would experience an increase of
approximately 2.8 percent and that rural hospitals would experience an
increase of 3.0 percent. Classifying hospitals by teaching status, we
estimate nonteaching hospitals would experience an increase of 3.0
percent, minor teaching hospitals would experience an increase of 3.1
percent, and major teaching hospitals would experience an increase of
2.3 percent. We also classified hospitals by the type of ownership. We
estimate that hospitals with voluntary ownership would experience an
increase of 2.7 percent in payments, while hospitals with government
ownership would experience an increase of 2.8 percent in payments. We
estimate that hospitals with proprietary ownership would an experience
an increase of 3.6 percent in payments.
e. Impacts of the Proposed ASC Payment Update
For impact purposes, the surgical procedures on the ASC list of
covered procedures are aggregated into surgical specialty groups using
CPT and HCPCS code range definitions. The percentage change in
estimated total payments by specialty groups under the proposed CY 2020
payment rates, compared to estimated CY 2019 payment rates, generally
ranges between an increase of 2 and 5 percent, depending on the
service, with some exceptions. We estimate the impact of applying the
hospital market basket update to proposed ASC payment rates would
increase payments by $100 million under the ASC payment system in CY
2020.
f. Impact of the Proposed Changes to the Hospital OQR Program
Across 3,300 hospitals participating in the Hospital OQR Program,
we estimate that our proposed requirements would result in the
following changes to costs and burdens related to information
collection for the Hospital OQR Program compared to previously adopted
requirements: If all proposals are adopted as final, there is a net
reduction of one measure reported by hospitals, which would result in a
minimal net reduction in burden of $21,379.
g. Impact of the Proposed Changes to the ASCQR Program
Across 3,937 ASCs participating in the ASCQR Program, we estimate
that our proposed requirements would not result in changes to costs and
burdens related to information collection for the ASCQR Program,
compared to previously adopted requirements.
h. Impact of the Proposed Requirements for Hospitals To Make Public a
List of Their Standard Charges
We estimate the total annual burden for hospitals to review and
post their standard charges to be 12 hours per hospital at $1,017.24
per hospital for a total burden of 72,024 hours (12 hours x 6,002
hospitals) and total cost of $6,105,474 ($1,017.24 x 6,002 hospitals)
if our policies, as discussed in section XVI. of this proposed rule are
finalized as proposed.
i. Impact of the Proposed Prior Authorization Process and Requirements
for Certain Hospital Outpatient Department (OPD) Services
Across all providers, we estimate that the total burden for year
one (6 months) would be 73,647 hours and $2,604,281 (Table 48--Year 1
(6 Month) Private Sector Costs of this proposed rule) for the five
categories of services for which we are proposing to require prior
authorization. In addition, we estimate that the total annual burden,
allotted across all providers, would be 125,242 hours and $4,475,116
per year for the services. An annualized burden is estimated at 108,044
hours and $3,851,504. The annualized burden is based on an average of 3
years, that is, 1 year at the 6-month burden and 2 years at the 12-
month burden. This accounts for the time associated with submitting the
prior authorization request package and related medical documentation
to support Medicare payment of the service(s). Medicare would incur
$5,787,055 for the first 6 months (Table 49--Year 1 (6 Month) Estimated
Annual Medicare Costs of this proposed rule) and $11,571,179 annually
therafter, in additional costs associated with processing the prior
authorization requests, as well as education, outreach, and systems.
Benefits include decreased unnecessary utilization of these OPD
services, and subsequently, reduced improper payments made for claims
for these services that do not meet Medicare requirements.
j. Impacts of the Proposed Revision of the Definition of ``Expected
Donation Rate'' for Organ Procurement Organizations
All 58 OPOs are required to meet two out of three outcome measures
detailed in the OPO CfC regulations at 42 CFR 486.318(b). We are
proposing to revise the definition of ``expected donation rate'' in the
OPO CfCs. This revision would eliminate the potential for confusion in
the OPO community due to different definitions of the same term.
[[Page 39404]]
The proposal would not affect data collection or reporting by the OPTN
and SRTR, nor their statistical evaluation of OPO performance.
Therefore, it would not result in any quantifiable financial impact.
B. Legislative and Regulatory Authority for the Hospital OPPS
When Title XVIII of the Social Security Act (the Act) was enacted,
Medicare payment for hospital outpatient services was based on
hospital-specific costs. In an effort to ensure that Medicare and its
beneficiaries pay appropriately for services and to encourage more
efficient delivery of care, the Congress mandated replacement of the
reasonable cost-based payment methodology with a prospective payment
system (PPS). The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33)
added section 1833(t) to the Act, authorizing implementation of a PPS
for hospital outpatient services. The OPPS was first implemented for
services furnished on or after August 1, 2000. Implementing regulations
for the OPPS are located at 42 CFR parts 410 and 419.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS.
The following Acts made additional changes to the OPPS: The Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8,
2006; the Medicare Improvements and Extension Act under Division B of
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173),
enacted on December 29, 2007; the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July
15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
148), enacted on March 23, 2010, as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on
March 30, 2010 (these two public laws are collectively known as the
Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010
(MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act
of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the
Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L.
112-96), enacted on February 22, 2012; the American Taxpayer Relief Act
of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR
Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the
Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93),
enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization
Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the
Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2,
2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113),
enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-
255), enacted on December 13, 2016; the Consolidated Appropriations
Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; and the
Substance Use-Disorder Prevention that Promotes Opioid Recovery and
Treatment for Patients and Communities Act (Pub. L. 115-271), enacted
on October 24, 2018.
Under the OPPS, we generally pay for hospital Part B services on a
rate-per-service basis that varies according to the APC group to which
the service is assigned. We use the Healthcare Common Procedure Coding
System (HCPCS) (which includes certain Current Procedural Terminology
(CPT) codes) to identify and group the services within each APC. The
OPPS includes payment for most hospital outpatient services, except
those identified in section I.C. of this proposed rule. Section
1833(t)(1)(B) of the Act provides for payment under the OPPS for
hospital outpatient services designated by the Secretary (which
includes partial hospitalization services furnished by CMHCs), and
certain inpatient hospital services that are paid under Medicare Part
B.
The OPPS rate is an unadjusted national payment amount that
includes the Medicare payment and the beneficiary copayment. This rate
is divided into a labor-related amount and a nonlabor-related amount.
The labor-related amount is adjusted for area wage differences using
the hospital inpatient wage index value for the locality in which the
hospital or CMHC is located.
All services and items within an APC group are comparable
clinically and with respect to resource use, as required by section
1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of
the Act, subject to certain exceptions, items and services within an
APC group cannot be considered comparable with respect to the use of
resources if the highest median cost (or mean cost, if elected by the
Secretary) for an item or service in the APC group is more than 2 times
greater than the lowest median cost (or mean cost, if elected by the
Secretary) for an item or service within the same APC group (referred
to as the ``2 times rule''). In implementing this provision, we
generally use the cost of the item or service assigned to an APC group.
For new technology items and services, special payments under the
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act
provides for temporary additional payments, which we refer to as
``transitional pass-through payments,'' for at least 2 but not more
than 3 years for certain drugs, biological agents, brachytherapy
devices used for the treatment of cancer, and categories of other
medical devices. For new technology services that are not eligible for
transitional pass-through payments, and for which we lack sufficient
clinical information and cost data to appropriately assign them to a
clinical APC group, we have established special APC groups based on
costs, which we refer to as New Technology APCs. These New Technology
APCs are designated by cost bands which allow us to provide appropriate
and consistent payment for designated new procedures that are not yet
reflected in our claims data. Similar to pass-through payments, an
assignment to a New Technology APC is temporary; that is, we retain a
service within a New Technology APC until we acquire sufficient data to
assign it to a clinically appropriate APC group.
C. Excluded OPPS Services and Hospitals
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to
designate the hospital outpatient services that are paid under the
OPPS. While most hospital outpatient services are payable under the
OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for
ambulance, physical and occupational therapy, and speech-language
pathology services, for which payment is made under a fee schedule. It
also excludes screening mammography, diagnostic mammography, and
effective January 1, 2011, an annual wellness visit providing
personalized prevention plan services. The Secretary exercises the
authority granted under the statute to also exclude from the OPPS
certain services that are paid under fee schedules or other payment
systems. Such excluded services include, for example, the professional
services of physicians and nonphysician practitioners paid under the
Medicare Physician Fee Schedule (MPFS); certain laboratory services
paid under the Clinical Laboratory Fee
[[Page 39405]]
Schedule (CLFS); services for beneficiaries with end-stage renal
disease (ESRD) that are paid under the ESRD prospective payment system;
and services and procedures that require an inpatient stay that are
paid under the hospital IPPS. In addition, section 1833(t)(1)(B)(v) of
the Act does not include applicable items and services (as defined in
subparagraph (A) of paragraph (21)) that are furnished on or after
January 1, 2017 by an off-campus outpatient department of a provider
(as defined in subparagraph (B) of paragraph (21). We set forth the
services that are excluded from payment under the OPPS in regulations
at 42 CFR 419.22.
Under Sec. 419.20(b) of the regulations, we specify the types of
hospitals that are excluded from payment under the OPPS. These excluded
hospitals include:
Critical access hospitals (CAHs);
Hospitals located in Maryland and paid under the Maryland
All-Payer Model;
Hospitals located outside of the 50 States, the District
of Columbia, and Puerto Rico; and
Indian Health Service (IHS) hospitals.
D. Prior Rulemaking
On April 7, 2000, we published in the Federal Register a final rule
with comment period (65 FR 18434) to implement a prospective payment
system for hospital outpatient services. The hospital OPPS was first
implemented for services furnished on or after August 1, 2000. Section
1833(t)(9)(A) of the Act requires the Secretary to review certain
components of the OPPS, not less often than annually, and to revise the
groups, relative payment weights, and the wage and other adjustments
that take into account changes in medical practices, changes in
technologies, and the addition of new services, new cost data, and
other relevant information and factors.
Since initially implementing the OPPS, we have published final
rules in the Federal Register annually to implement statutory
requirements and changes arising from our continuing experience with
this system. These rules can be viewed on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the
Panel)
1. Authority of the Panel
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law
106-113, requires that we consult with an external advisory panel of
experts to annually review the clinical integrity of the payment groups
and their weights under the OPPS. In CY 2000, based on section
1833(t)(9)(A) of the Act, the Secretary established the Advisory Panel
on Ambulatory Payment Classification Groups (APC Panel) to fulfill this
requirement. In CY 2011, based on section 222 of the Public Health
Service Act, which gives discretionary authority to the Secretary to
convene advisory councils and committees, the Secretary expanded the
panel's scope to include the supervision of hospital outpatient
therapeutic services in addition to the APC groups and weights. To
reflect this new role of the panel, the Secretary changed the panel's
name to the Advisory Panel on Hospital Outpatient Payment (the HOP
Panel or the Panel). The HOP Panel is not restricted to using data
compiled by CMS, and in conducting its review, it may use data
collected or developed by organizations outside the Department.
2. Establishment of the Panel
On November 21, 2000, the Secretary signed the initial charter
establishing the Panel, and, at that time, named the APC Panel. This
expert panel is composed of appropriate representatives of providers
(currently employed full-time, not as consultants, in their respective
areas of expertise) who review clinical data and advise CMS about the
clinical integrity of the APC groups and their payment weights. Since
CY 2012, the Panel also is charged with advising the Secretary on the
appropriate level of supervision for individual hospital outpatient
therapeutic services. The Panel is technical in nature, and it is
governed by the provisions of the Federal Advisory Committee Act
(FACA). The current charter specifies, among other requirements, that
the Panel--
May advise on the clinical integrity of Ambulatory Payment
Classification (APC) groups and their associated weights;
May advise on the appropriate supervision level for
hospital outpatient services;
Continues to be technical in nature;
Is governed by the provisions of the FACA;
Has a Designated Federal Official (DFO); and
Is chaired by a Federal Official designated by the
Secretary.
The Panel's charter was amended on November 15, 2011, renaming the
Panel and expanding the Panel's authority to include supervision of
hospital outpatient therapeutic services and to add critical access
hospital (CAH) representation to its membership. The Panel's charter
was also amended on November 6, 2014 (80 FR 23009), and the number of
members was revised from up to 19 to up to 15 members. The Panel's
current charter was approved on November 19, 2018, for a 2-year period.
The current Panel membership and other information pertaining to
the Panel, including its charter, Federal Register notices, membership,
meeting dates, agenda topics, and meeting reports, can be viewed on the
CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
The Panel has held many meetings, with the last meeting taking
place on August 20, 2018. Prior to each meeting, we publish a notice in
the Federal Register to announce the meeting and, when necessary, to
solicit nominations for Panel membership, to announce new members, and
to announce any other changes of which the public should be aware.
Beginning in CY 2017, we have transitioned to one meeting per year (81
FR 31941). The next meeting will take place on August 19-20, 2019.
Complete information on the 2019 summer meeting, including information
related to meeting presentations and submittals, meeting attendance/
admittance, and web streaming of the meeting, can be found in the
meeting notice published in the Federal Register on June 5, 2019 (84 FR
26117) and available on the website at: https://www.govinfo.gov/content/pkg/FR-2019-06-05/pdf/2019-11756.pdf. Registration to attend
the meeting in person may be made through the CMS website at: https://www.cms.gov/apps/events/event.asp?id=3745.
In addition, the Panel has established an operational structure
that, in part, currently includes the use of three subcommittees to
facilitate its required review process. The three current subcommittees
include the following:
APC Groups and Status Indicator Assignments Subcommittee,
which advises the Panel on the appropriate status indicators to be
assigned to
[[Page 39406]]
HCPCS codes, including but not limited to whether a HCPCS code or a
category of codes should be packaged or separately paid, as well as the
appropriate APC assignment of HCPCS codes regarding services for which
separate payment is made;
Data Subcommittee, which is responsible for studying the
data issues confronting the Panel and for recommending options for
resolving them; and
Visits and Observation Subcommittee, which reviews and
makes recommendations to the Panel on all technical issues pertaining
to observation services and hospital outpatient visits paid under the
OPPS.
Each of these subcommittees was established by a majority vote from
the full Panel during a scheduled Panel meeting, and the Panel
recommended at the August 20, 2018 meeting that the subcommittees
continue. We accepted this recommendation.
Discussions of the other recommendations made by the Panel at the
August 20, 2018 Panel meeting, namely CPT codes and a comprehensive APC
for autologous hematopoietic stem cell transplantation, OPPS payment
for outpatient clinic visits and restrictions to service line
expansions, and packaging policies, were discussed in the CY 2019 OPPS/
ASC final rule with comment period (83 FR 58827). For discussions of
earlier Panel meetings and recommendations, we refer readers to
previously published OPPS/ASC proposed and final rules, the CMS website
mentioned earlier in this section, and the FACA database at http://facadatabase.gov.
F. Public Comments Received on the CY 2019 OPPS/ASC Final Rule With
Comment Period
We received over 540 timely pieces of correspondence on the CY 2019
OPPS/ASC final rule with comment period that appeared in the Federal
Register on November 30, 2018 (83 FR 61567), some of which contained
comments on the interim APC assignments and/or status indicators of new
or replacement Level II HCPCS codes (identified with comment indicator
``NI'' in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that
final rule).
II. Proposed Updates Affecting OPPS Payments
A. Proposed Recalibration of APC Relative Payment Weights
1. Database Construction
a. Database Source and Methodology
Section 1833(t)(9)(A) of the Act requires that the Secretary review
not less often than annually and revise the relative payment weights
for APCs. In the April 7, 2000 OPPS final rule with comment period (65
FR 18482), we explained in detail how we calculated the relative
payment weights that were implemented on August 1, 2000 for each APC
group.
In this CY 2020 OPPS/ASC proposed rule, for CY 2020, we are
proposing to recalibrate the APC relative payment weights for services
furnished on or after January 1, 2020, and before January 1, 2021 (CY
2020), using the same basic methodology that we described in the CY
2019 OPPS/ASC final rule with comment period (83 FR 58827 through
58828), using updated CY 2018 claims data. That is, we are proposing to
recalibrate the relative payment weights for each APC based on claims
and cost report data for hospital outpatient department (HOPD)
services, using the most recent available data to construct a database
for calculating APC group weights.
For the purpose of recalibrating the APC proposed relative payment
weights for CY 2020, we began with approximately 164 million final
action claims (claims for which all disputes and adjustments have been
resolved and payment has been made) for HOPD services furnished on or
after January 1, 2018, and before January 1, 2019, before applying our
exclusionary criteria and other methodological adjustments. After the
application of those data processing changes, we used approximately 88
million final action claims to develop the proposed CY 2020 OPPS
payment weights. For exact numbers of claims used and additional
details on the claims accounting process, we refer readers to the
claims accounting narrative under supporting documentation for this CY
2020 OPPS/ASC proposed rule on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
Addendum N to this proposed rule (which is available via the
internet on the CMS website) includes the proposed list of bypass codes
for CY 2020. The proposed list of bypass codes contains codes that were
reported on claims for services in CY 2018 and, therefore, includes
codes that were in effect in CY 2018 and used for billing, but were
deleted for CY 2019. We retained these deleted bypass codes on the
proposed CY 2020 bypass list because these codes existed in CY 2018 and
were covered OPD services in that period, and CY 2018 claims data were
used to calculate proposed CY 2020 payment rates. Keeping these deleted
bypass codes on the bypass list potentially allows us to create more
``pseudo'' single procedure claims for ratesetting purposes. ``Overlap
bypass codes'' that are members of the proposed multiple imaging
composite APCs are identified by asterisks (*) in the third column of
Addendum N to this proposed rule. HCPCS codes that we are proposing to
add for CY 2020 are identified by asterisks (*) in the fourth column of
Addendum N.
Table 1 contains the list of codes that we are proposing to remove
from the CY 2020 bypass list.
[GRAPHIC] [TIFF OMITTED] TP09AU19.000
[[Page 39407]]
b. Proposed Calculation and Use of Cost-to-Charge Ratios (CCRs)
For CY 2020, in this CY 2020 OPPS/ASC proposed rule, we are
proposing to continue to use the hospital-specific overall ancillary
and departmental cost-to-charge ratios (CCRs) to convert charges to
estimated costs through application of a revenue code-to-cost center
crosswalk. To calculate the APC costs on which the proposed CY 2020 APC
payment rates are based, we calculated hospital-specific overall
ancillary CCRs and hospital-specific departmental CCRs for each
hospital for which we had CY 2018 claims data by comparing these claims
data to the most recently available hospital cost reports, which, in
most cases, are from CY 2017. For the proposed CY 2020 OPPS payment
rates, we used the set of claims processed during CY 2018. We applied
the hospital-specific CCR to the hospital's charges at the most
detailed level possible, based on a revenue code-to-cost center
crosswalk that contains a hierarchy of CCRs used to estimate costs from
charges for each revenue code. That crosswalk is available for review
and continuous comment on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
To ensure the completeness of the revenue code-to-cost center
crosswalk, we reviewed changes to the list of revenue codes for CY 2018
(the year of claims data we used to calculate the proposed CY 2020 OPPS
payment rates) and found that the National Uniform Billing Committee
(NUBC) did not add any new revenue codes to the NUBC 2018 Data
Specifications Manual.
In accordance with our longstanding policy, we calculate CCRs for
the standard and nonstandard cost centers accepted by the electronic
cost report database. In general, the most detailed level at which we
calculate CCRs is the hospital-specific departmental level. For a
discussion of the hospital-specific overall ancillary CCR calculation,
we refer readers to the CY 2007 OPPS/ASC final rule with comment period
(71 FR 67983 through 67985). The calculation of blood costs is a
longstanding exception (since the CY 2005 OPPS) to this general
methodology for calculation of CCRs used for converting charges to
costs on each claim. This exception is discussed in detail in the CY
2007 OPPS/ASC final rule with comment period and discussed further in
section II.A.2.a.(1) of this proposed rule.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74840
through 74847), we finalized our policy of creating new cost centers
and distinct CCRs for implantable devices, magnetic resonance imaging
(MRIs), computed tomography (CT) scans, and cardiac catheterization.
However, in response to the CY 2014 OPPS/ASC proposed rule, commenters
reported that some hospitals currently use an imprecise ``square feet''
allocation methodology for the costs of large moveable equipment like
CT scan and MRI machines. They indicated that while CMS recommended
using two alternative allocation methods, ``direct assignment'' or
``dollar value,'' as a more accurate methodology for directly assigning
equipment costs, industry analysis suggested that approximately only
half of the reported cost centers for CT scans and MRIs rely on these
preferred methodologies. In response to concerns from commenters, we
finalized a policy for the CY 2014 OPPS to remove claims from providers
that use a cost allocation method of ``square feet'' to calculate CCRs
used to estimate costs associated with the APCs for CT and MRI (78 FR
74847). Further, we finalized a transitional policy to estimate the
imaging APC relative payment weights using only CT and MRI cost data
from providers that do not use ``square feet'' as the cost allocation
statistic. We provided that this finalized policy would sunset in 4
years to provide a sufficient time for hospitals to transition to a
more accurate cost allocation method and for the related data to be
available for ratesetting purposes (78 FR 74847). Therefore, beginning
CY 2018, with the sunset of the transition policy, we would estimate
the imaging APC relative payment weights using cost data from all
providers, regardless of the cost allocation statistic employed.
However, in the CY 2018 OPPS/ASC final rule with comment period (82 FR
59228 and 59229), we finalized a policy to extend the transition policy
for 1 additional year and continued to remove claims from providers
that use a cost allocation method of ``square feet'' to calculate CT
and MRI CCRs for the CY 2018 OPPS.
As we discussed in the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59228), some stakeholders had raised concerns regarding
using claims from all providers to calculate CT and MRI CCRs,
regardless of the cost allocations statistic employed (78 FR 74840
through 74847). Stakeholders noted that providers continue to use the
``square feet'' cost allocation method and that including claims from
such providers would cause significant reductions in the imaging APC
payment rates.
Table 2 demonstrates the relative effect on imaging APC payments
after removing cost data for providers that report CT and MRI standard
cost centers using ``square feet'' as the cost allocation method by
extracting HCRIS data on Worksheet B-1. Table 3 provides statistical
values based on the CT and MRI standard cost center CCRs using the
different cost allocation methods.
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[GRAPHIC] [TIFF OMITTED] TP09AU19.001
Our analysis shows that since the CY 2014 OPPS in which we
established the transition policy, the number of valid MRI CCRs has
increased by 17.5 percent to 2,184 providers and the number of valid CT
CCRs has increased by 15.1 percent to 2,274 providers. However, as
shown in Table 2, nearly all imaging APCs would see an increase in
payment rates for CY 2020 if claims from providers that report using
the ``square feet'' cost allocation method were removed. This can be
attributed to the generally lower CCR values from providers that use a
``square feet'' cost allocation method as shown in Table 2.
For the CY 2019 OPPS, in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58831), we extended our transition policy for an
additional year and removed claims from providers that use a cost
allocation method of ``square feet'' to calculate CCRs used to estimate
costs with the APCs for CT and MRI identified in Table 2.
We note that the CT and MRI cost center CCRs have been available
for ratesetting since the CY 2014 OPPS in which we established the
transition policy. Since the initial 4-year transition, we have
extended the transition an additional 2 years to offer provider
flexibility in applying cost allocation methodologies for CT and MRI
cost centers other than ``square feet.'' We believe we have provided
sufficient time for providers to adopt an alternative cost allocation
methodology for CT and MRI cost centers if they intended to do so.
However, many providers continue to use the ``square feet'' cost
allocation methodology, which we believe indicates that these providers
believe this methodology is a sufficient method for attributing costs
to this cost center. Additionally, we generally believe that increasing
the amount of claims data available for use in ratesetting improves our
ratesetting process. Therefore, we are proposing that, for the CY 2020
OPPS/ASC proposed rule and final rule with comment period, we will use
all claims with valid CT and MRI cost center CCRs, including those that
use a ``square feet'' cost allocation method, to estimate costs for the
APCs for CT and MRI identified in Table 2. We do not believe another
extension is warranted and
[[Page 39409]]
expect to determine the imaging APC relative payment weights for CY
2020 using cost data from all providers, regardless of the cost
allocation method employed.
In addition, as we stated in the CY 2014 OPPS/ASC final rule with
comment period (78 FR 74845), we have noted the potential impact the CT
and MRI CCRs may have on other payment systems. We understand that
payment reductions for imaging services under the OPPS could have
significant payment impacts under the Physician Fee Schedule (PFS)
where the technical component payment for many imaging services is
capped at the OPPS payment amount. We will continue to monitor OPPS
imaging payments in the future and consider the potential impacts of
payment changes on the PFS and the ASC payment system.
2. Proposed Data Development and Calculation of Costs Used for
Ratesetting
In this section of this proposed rule, we discuss the use of claims
to calculate the proposed OPPS payment rates for CY 2020. The Hospital
OPPS page on the CMS website on which this proposed rule is posted
(http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html) provides an accounting of claims used
in the development of the proposed payment rates. That accounting
provides additional detail regarding the number of claims derived at
each stage of the process. In addition, below in this section, we
discuss the file of claims that comprises the data set that is
available upon payment of an administrative fee under a CMS data use
agreement. The CMS website, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html, includes
information about obtaining the ``OPPS Limited Data Set,'' which now
includes the additional variables previously available only in the OPPS
Identifiable Data Set, including ICD-10-CM diagnosis codes and revenue
code payment amounts. This file is derived from the CY 2018 claims that
were used to calculate the proposed payment rates for this CY 2020
OPPS/ASC proposed rule.
Previously, the OPPS established the scaled relative weights, on
which payments are based using APC median costs, a process described in
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188).
However, as discussed in more detail in section II.A.2.f. of the CY
2013 OPPS/ASC final rule with comment period (77 FR 68259 through
68271), we finalized the use of geometric mean costs to calculate the
relative weights on which the CY 2013 OPPS payment rates were based.
While this policy changed the cost metric on which the relative
payments are based, the data process in general remained the same,
under the methodologies that we used to obtain appropriate claims data
and accurate cost information in determining estimated service cost. In
this CY 2020 OPPS/ASC proposed rule, we are proposing to continue to
use geometric mean costs to calculate the proposed relative weights on
which the CY 2020 OPPS payment rates are based.
We used the methodology described in sections II.A.2.a. through
II.A.2.c. of this proposed rule to calculate the costs we used to
establish the proposed relative payment weights used in calculating the
proposed OPPS payment rates for CY 2020 shown in Addenda A and B to
this proposed rule (which are available via the internet on the CMS
website). We refer readers to section II.A.4. of this proposed rule for
a discussion of the conversion of APC costs to scaled payment weights.
We note that, under the OPPS, CY 2019 was the first year in which
claims data containing lines with the modifier ``PN'' were available,
which indicate nonexcepted items and services furnished and billed by
off-campus provider-based departments (PBDs) of hospitals. Because
nonexcepted services are not paid under the OPPS, in the CY 2019 OPPS/
ASC final rule with comment period (83 FR 58832), we finalized a policy
to remove those claim lines reported with modifier ``PN'' from the
claims data used in ratesetting for the CY 2019 OPPS and subsequent
years. For the CY 2020 OPPS, we will continue to remove these claim
lines with modifier ``PN'' from the ratesetting process.
For details of the claims process used in this proposed rule, we
refer readers to the claims accounting narrative under supporting
documentation for this CY 2020 OPPS/ASC proposed rule on the CMS
website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
a. Proposed Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
(a) Methodology
Since the implementation of the OPPS in August 2000, we have made
separate payments for blood and blood products through APCs rather than
packaging payment for them into payments for the procedures with which
they are administered. Hospital payments for the costs of blood and
blood products, as well as for the costs of collecting, processing, and
storing blood and blood products, are made through the OPPS payments
for specific blood product APCs.
In this CY 2020 OPPS/ASC proposed rule, we are proposing to
continue to establish payment rates for blood and blood products using
our blood-specific CCR methodology, which utilizes actual or simulated
CCRs from the most recently available hospital cost reports to convert
hospital charges for blood and blood products to costs. This
methodology has been our standard ratesetting methodology for blood and
blood products since CY 2005. It was developed in response to data
analysis indicating that there was a significant difference in CCRs for
those hospitals with and without blood-specific cost centers, and past
public comments indicating that the former OPPS policy of defaulting to
the overall hospital CCR for hospitals not reporting a blood-specific
cost center often resulted in an underestimation of the true hospital
costs for blood and blood products. Specifically, in order to address
the differences in CCRs and to better reflect hospitals' costs, we are
proposing to continue to simulate blood CCRs for each hospital that
does not report a blood cost center by calculating the ratio of the
blood-specific CCRs to hospitals' overall CCRs for those hospitals that
do report costs and charges for blood cost centers. We also are
proposing to apply this mean ratio to the overall CCRs of hospitals not
reporting costs and charges for blood cost centers on their cost
reports in order to simulate blood-specific CCRs for those hospitals.
We are proposing to calculate the costs upon which the proposed CY 2020
payment rates for blood and blood products are based using the actual
blood-specific CCR for hospitals that reported costs and charges for a
blood cost center and a hospital-specific, simulated blood-specific CCR
for hospitals that did not report costs and charges for a blood cost
center.
We continue to believe that the hospital-specific, simulated blood-
specific, CCR methodology better responds to the absence of a blood-
specific CCR for a hospital than alternative methodologies, such as
defaulting to the overall hospital CCR or applying an average blood-
specific CCR across hospitals. Because this methodology takes into
account the unique charging and cost accounting structure of each
hospital, we believe that it yields more accurate estimated costs for
these products. We continue to
[[Page 39410]]
believe that this methodology in CY 2020 would result in costs for
blood and blood products that appropriately reflect the relative
estimated costs of these products for hospitals without blood cost
centers and, therefore, for these blood products in general.
We note that, as discussed in section II.A.2.b.(1). of the CY 2019
OPPS/ASC final rule with comment period (82 FR 58837 through 58843), we
defined a comprehensive APC (C-APC) as a classification for the
provision of a primary service and all adjunctive services provided to
support the delivery of the primary service. Under this policy, we
include the costs of blood and blood products when calculating the
overall costs of these C-APCs. In this CY 2020 OPPS/ASC proposed rule,
we are proposing to continue to apply the blood-specific CCR
methodology described in this section when calculating the costs of the
blood and blood products that appear on claims with services assigned
to the C-APCs. Because the costs of blood and blood products would be
reflected in the overall costs of the C-APCs (and, as a result, in the
proposed payment rates of the C-APCs), we are proposing to not make
separate payments for blood and blood products when they appear on the
same claims as services assigned to the C-APCs (we refer readers to the
CY 2015 OPPS/ASC final rule with comment period (79 FR 66796)).
We also refer readers to Addendum B to this CY 2020 OPPS/ASC
proposed rule (which is available via the internet on the CMS website)
for the proposed CY 2020 payment rates for blood and blood products
(which are identified with status indicator ``R''). For a more detailed
discussion of the blood-specific CCR methodology, we refer readers to
the CY 2005 OPPS proposed rule (69 FR 50524 through 50525). For a full
history of OPPS payment for blood and blood products, we refer readers
to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66807
through 66810).
(b) Pathogen-Reduced Platelets Payment Rate
In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70322
through 70323), we reiterated that we calculate payment rates for blood
and blood products using our blood-specific CCR methodology, which
utilizes actual or simulated CCRs from the most recently available
hospital cost reports to convert hospital charges for blood and blood
products to costs. Because HCPCS code P9072 (Platelets, pheresis,
pathogen reduced or rapid bacterial tested, each unit), the predecessor
code to HCPCS code P9073 (Platelets, pheresis, pathogen-reduced, each
unit), was new for CY 2016, there were no claims data available on the
charges and costs for this blood product upon which to apply our blood-
specific CCR methodology. Therefore, we established an interim payment
rate for HCPCS code P9072 based on a crosswalk to existing blood
product HCPCS code P9037 (Platelets, pheresis, leukocytes reduced,
irradiated, each unit), which we believed provided the best proxy for
the costs of the new blood product. In addition, we stated that once we
had claims data for HCPCS code P9072, we would calculate its payment
rate using the claims data that should be available for the code
beginning in CY 2018, which is our practice for other blood product
HCPCS codes for which claims data have been available for 2 years.
We stated in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59233) that, although our standard practice for new codes
involves using claims data to set payment rates once claims data become
available, we were concerned that there may have been confusion among
the provider community about the services that HCPCS code P9072
described. That is, as early as 2016, there were discussions about
changing the descriptor for HCPCS code P9072 to include the phrase ``or
rapid bacterial tested'', which is a less costly technology than
pathogen reduction. In addition, effective January 2017, the code
descriptor for HCPCS code P9072 was changed to describe rapid bacterial
testing of platelets and, effective July 1, 2017, the descriptor for
the temporary successor code (HCPCS code Q9988) for HCPCS code P9072
was changed again back to the original descriptor for HCPCS code P9072
that was in place for 2016.
Based on the ongoing discussions involving changes to the original
HCPCS code P9072 established in CY 2016, we believed that claims from
CY 2016 for pathogen reduced platelets may have potentially reflected
certain claims for rapid bacterial testing of platelets. Therefore, we
decided to continue to crosswalk the payment amount for services
described by HCPCS code P9073 (the successor code to HCPCS code P9072
established January 1, 2018) to the payment amount for services
described by HCPCS code P9037 for CY 2018 (82 FR 59232), as had been
done previously, to determine the payment rate for services described
by HCPCS code P9072. In the CY 2019 OPPS/ASC proposed rule (83 FR
37058), for CY 2019, we discussed that we had reviewed the CY 2017
claims data for the two predecessor codes to HCPCS code P9073 (HCPCS
codes P9072 and Q9988), along with the claims data for the CY 2017
temporary code for pathogen test for platelets (HCPCS code Q9987),
which describes rapid bacterial testing of platelets. We found that
there were over 2,200 claims billed with either HCPCS code P9072 or
Q9988 in the CY 2017 claims data available for CY 2019 rulemaking.
Accordingly, we believed that there were a sufficient number of claims
to calculate a payment rate for HCPCS code P9073 for CY 2019 without
using a crosswalk.
We also performed checks to estimate the share of claims that may
have been billed for rapid bacterial testing of platelets as compared
to the share of claims that may have been billed for pathogen-reduced,
pheresis platelets (based on when HCPCS code P9072 was an active
procedure code from January 1, 2017 to June 30, 2017). First, we found
that the geometric mean cost for pathogen-reduced, pheresis platelets,
as reported by HCPCS code Q9988 when billed separately from rapid
bacterial testing of platelets, was $453.87, and that over 1,200 claims
were billed for services described by HCPCS code Q9988. Next, we found
that the geometric mean cost for rapid bacterial testing of platelets,
as reported by HCPCS code Q9987 on claims, was $33.44, and there were
59 claims reported for services described by HCPCS code Q9987, of which
3 were separately paid.
These findings implied that almost all of the claims billed for
services reported with HCPCS code P9072 were for pathogen-reduced,
pheresis platelets. In addition, the geometric mean cost for services
described by HCPCS code P9072, which may have contained rapid bacterial
testing of platelets claims, was $468.11, which was higher than the
geometric mean cost for services described by HCPCS code Q9988 of
$453.87, which should not have contained claims for rapid bacterial
testing of platelets. Because the geometric mean for services described
by HCPCS code Q9987 was only $33.44, it would be expected that if a
significant share of claims billed for services described by HCPCS code
P9072 were for the rapid bacterial testing of platelets, the geometric
mean cost for services described by HCPCS code P9072 would be lower
than the geometric mean cost for services described by HCPCS code
Q9988. Instead, we found that the geometric mean cost for services
described by HCPCS code Q9988 was higher than the geometric mean cost
for services described by HCPCS code P9072.
[[Page 39411]]
However, we received many comments from providers and stakeholders
requesting that we not implement our proposal for CY 2019, and instead
that we should once again establish the payment rate for HCPCS code
P9073 by performing a crosswalk from the payment amount for services
described by HCPCS code P9073 to the payment amount for services
described by HCPCS code P9037. The commenters were concerned that the
payment rate for HCPCS code P9073 calculated by using claims data for
that service was too low. Several commenters believed the claim costs
for pathogen-reduced platelets were lower than actual costs because of
coding errors by providers, providers who did not use pathogen-reduced
platelets when billing the service, and confusion over whether to use
the hospital CCR or the blood center CCR to report charges for
pathogen-reduced platelets. We considered the comments we received and
decided not to finalize our proposal for CY 2019 to calculate the
payment rate for services described by HCPCS code P9073 using claims
payment history. Instead, for CY 2019, we established the payment rate
for services described by HCPCS code P9073 by crosswalking the payment
rate for the services described by HCPCS code P9073 from the payment
rate for services described by HCPCS code P9037 (83 FR 58834).
For CY 2020 and subsequent years, we are proposing to calculate the
payment rate for services described by HCPCS code P9073 by using claims
payment history, which is the standard methodology used under the OPPS
to calculate payment rates for HCPCS codes with at least 2 years of
claims history. Claims for HCPCS code P9073 and its predecessor codes
have been billed under the OPPS for over 3 years and we believe
providers have had sufficient time to become familiar with the services
covered by the procedure code and the appropriate charges and CCRs used
to report the service. Also, it has been more than a year and half
since the issue in which payment for pathogen-reduced platelets and
payment for rapid bacterial testing were combined under the same code
was resolved. In our analysis of claims data from CY 2018, we found
that approximately 4,700 claims have been billed for services described
by HCPCS code P9073 and the estimated payment rate for services
described by HCPCS code P9073 based on the claims data is approximately
$585. The claims-based payment rate for services described by HCPCS
code P9073 is approximately $60 less than the estimated crosswalked
payment rate using HCPCS code P9037 of approximately $645. The claims
data show that services described by HCPCS code P9073 have been
reported regularly by providers during CY 2018 and the payment rate is
close to the payment rate of the crosswalked payment rate for services
described by HCPCS code P9037. Therefore, we believe that the payment
rate for services described by HCPCS code P9073 can be determined using
claims data without a crosswalk from the payment rate for services
described by HCPCS code P9037.
We refer readers to Addendum B of this proposed rule for the
proposed payment rate for services described by HCPCS code P9073
reportable under the OPPS. Addendum B is available via the internet on
the CMS website.
(2) Brachytherapy Sources
Section 1833(t)(2)(H) of the Act mandates the creation of
additional groups of covered OPD services that classify devices of
brachytherapy consisting of a seed or seeds (or radioactive source)
(``brachytherapy sources'') separately from other services or groups of
services. The statute provides certain criteria for the additional
groups. For the history of OPPS payment for brachytherapy sources, we
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
final rule with comment period (77 FR 68240 through 68241). As we have
stated in prior OPPS updates, we believe that adopting the general OPPS
prospective payment methodology for brachytherapy sources is
appropriate for a number of reasons (77 FR 68240). The general OPPS
methodology uses costs based on claims data to set the relative payment
weights for hospital outpatient services. This payment methodology
results in more consistent, predictable, and equitable payment amounts
per source across hospitals by averaging the extremely high and low
values, in contrast to payment based on hospitals' charges adjusted to
costs. We believe that the OPPS methodology, as opposed to payment
based on hospitals' charges adjusted to cost, also would provide
hospitals with incentives for efficiency in the provision of
brachytherapy services to Medicare beneficiaries. Moreover, this
approach is consistent with our payment methodology for the vast
majority of items and services paid under the OPPS. We refer readers to
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323
through 70325) for further discussion of the history of OPPS payment
for brachytherapy sources.
In this CY 2020 OPPS/ASC proposed rule, for CY 2020, we are
proposing to use the costs derived from CY 2018 claims data to set the
proposed CY 2020 payment rates for brachytherapy sources because CY
2018 is the year of data we are proposing to use to set the proposed
payment rates for most other items and services that would be paid
under the CY 2020 OPPS. We are proposing to base the payment rates for
brachytherapy sources on the geometric mean unit costs for each source,
consistent with the methodology that we are proposing for other items
and services paid under the OPPS, as discussed in section II.A.2. of
this proposed rule. We also are proposing to continue the other payment
policies for brachytherapy sources that we finalized and first
implemented in the CY 2010 OPPS/ASC final rule with comment period (74
FR 60537). We are proposing to pay for the stranded and nonstranded not
otherwise specified (NOS) codes, HCPCS codes C2698 (Brachytherapy
source, stranded, not otherwise specified, per source) and C2699
(Brachytherapy source, non-stranded, not otherwise specified, per
source), at a rate equal to the lowest stranded or nonstranded
prospective payment rate for such sources, respectively, on a per
source basis (as opposed to, for example, a per mCi), which is based on
the policy we established in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66785). We also are proposing to continue the
policy we first implemented in the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60537) regarding payment for new brachytherapy
sources for which we have no claims data, based on the same reasons we
discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR
66786; which was delayed until January 1, 2010 by section 142 of Pub.
L. 110-275). Specifically, this policy is intended to enable us to
assign new HCPCS codes for new brachytherapy sources to their own APCs,
with prospective payment rates set based on our consideration of
external data and other relevant information regarding the expected
costs of the sources to hospitals. The proposed CY 2020 payment rates
for brachytherapy sources are included in Addendum B to this proposed
rule (which is available via the internet on the CMS website) and are
identified with status indicator ``U''. For CY 2020, we are proposing
to continue to assign status indicator ``U'' (Brachytherapy Sources,
Paid under OPPS; separate APC payment) to HCPCS code C2645
(Brachytherapy planar source,
[[Page 39412]]
palladium-103, per square millimeter). However, our CY 2018 claims data
include two claims with over 9,000 units of HCPCS code C2645. For the
CY 2019 OPPS/ASC final rule with comment period, our CY 2017 claims
data only included one claim with one unit of HCPCS code C2645.
Therefore, we believe the CY 2018 claims data are adequate to establish
an APC payment rate for HCPCS code C2645 and to discontinue our use of
external data for this brachytherapy source. Specifically, we are
proposing to set the proposed CY 2020 payment rate at the geometric
mean cost of HCPCS code C2645 based on CY 2018 claims data, which is
$1.02 per mm\2\.
We continue to invite hospitals and other parties to submit
recommendations to us for new codes to describe new brachytherapy
sources. Such recommendations should be directed to the Division of
Outpatient Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid
Services, 7500 Security Boulevard, Baltimore, MD 21244. We will
continue to add new brachytherapy source codes and descriptors to our
systems for payment on a quarterly basis.
b. Proposed Comprehensive APCs (C-APCs) for CY 2020
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
through 74910), we finalized a comprehensive payment policy that
packages payment for adjunctive and secondary items, services, and
procedures into the most costly primary procedure under the OPPS at the
claim level. The policy was finalized in CY 2014, but the effective
date was delayed until January 1, 2015, to allow additional time for
further analysis, opportunity for public comment, and systems
preparation. The comprehensive APC (C-APC) policy was implemented
effective January 1, 2015, with modifications and clarifications in
response to public comments received regarding specific provisions of
the C-APC policy (79 FR 66798 through 66810).
A C-APC is defined as a classification for the provision of a
primary service and all adjunctive services provided to support the
delivery of the primary service. We established C-APCs as a category
broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015
(79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70332), we finalized 10 additional C-APCs to be
paid under the existing C-APC payment policy and added 1 additional
level to both the Orthopedic Surgery and Vascular Procedures clinical
families, which increased the total number of C-APCs to 37 for CY 2016.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584
through 79585), we finalized another 25 C-APCs for a total of 62 C-
APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did
not change the total number of C-APCs from 62. In the CY 2019 OPPS/ASC
final rule with comment period, we created 3 new C-APCs, increasing the
total number to 65 (83 FR 58844 through 58846).
Under our C-APC policy, we designate a service described by a HCPCS
code assigned to a C-APC as the primary service when the service is
identified by OPPS status indicator ``J1''. When such a primary service
is reported on a hospital outpatient claim, taking into consideration
the few exceptions that are discussed below, we make payment for all
other items and services reported on the hospital outpatient claim as
being integral, ancillary, supportive, dependent, and adjunctive to the
primary service (hereinafter collectively referred to as ``adjunctive
services'') and representing components of a complete comprehensive
service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services
are packaged into the payments for the primary services. This results
in a single prospective payment for each of the primary, comprehensive
services based on the costs of all reported services at the claim
level.
Services excluded from the C-APC policy under the OPPS include
services that are not covered OPD services, services that cannot by
statute be paid for under the OPPS, and services that are required by
statute to be separately paid. This includes certain mammography and
ambulance services that are not covered OPD services in accordance with
section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also
are required by statute to receive separate payment under section
1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which
also require separate payment under section 1833(t)(6) of the Act;
self-administered drugs (SADs) that are not otherwise packaged as
supplies because they are not covered under Medicare Part B under
section 1861(s)(2)(B) of the Act; and certain preventive services (78
FR 74865 and 79 FR 66800 through 66801). A list of services excluded
from the C-APC policy is included in Addendum J to this proposed rule
(which is available via the internet on the CMS website).
The C-APC policy payment methodology set forth in the CY 2014 OPPS/
ASC final rule with comment period for the C-APCs and modified and
implemented beginning in CY 2015 is summarized as follows (78 FR 74887
and 79 FR 66800):
Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule
with comment period, we define the C-APC payment policy as including
all covered OPD services on a hospital outpatient claim reporting a
primary service that is assigned to status indicator ``J1'', excluding
services that are not covered OPD services or that cannot by statute be
paid for under the OPPS. Services and procedures described by HCPCS
codes assigned to status indicator ``J1'' are assigned to C-APCs based
on our usual APC assignment methodology by evaluating the geometric
mean costs of the primary service claims to establish resource
similarity and the clinical characteristics of each procedure to
establish clinical similarity within each APC.
In the CY 2016 OPPS/ASC final rule with comment period, we expanded
the C-APC payment methodology to qualifying extended assessment and
management encounters through the ``Comprehensive Observation
Services'' C-APC (C-APC 8011). Services within this APC are assigned
status indicator ``J2''. Specifically, we make a payment through C-APC
8011 for a claim that:
Does not contain a procedure described by a HCPCS code to
which we have assigned status indicator ``T'' that is reported with a
date of service on the same day or 1 day earlier than the date of
service associated with services described by HCPCS code G0378;
Contains 8 or more units of services described by HCPCS
code G0378 (Hospital observation services, per hour);
Contains services provided on the same date of service or
1 day before the date of service for HCPCS code G0378 that are
described by one of the following codes: HCPCS code G0379 (Direct
admission of patient for hospital observation care) on the same date of
service as HCPCS code G0378; CPT code 99281 (Emergency department visit
for the evaluation and management of a patient (Level 1)); CPT code
99282 (Emergency department visit for the evaluation and management of
a patient (Level 2)); CPT code 99283 (Emergency department visit for
the evaluation and management of a patient (Level 3)); CPT code 99284
(Emergency department visit for the evaluation and management of a
patient (Level 4)); CPT code 99285
[[Page 39413]]
(Emergency department visit for the evaluation and management of a
patient (Level 5)) or HCPCS code G0380 (Type B emergency department
visit (Level 1)); HCPCS code G0381 (Type B emergency department visit
(Level 2)); HCPCS code G0382 (Type B emergency department visit (Level
3)); HCPCS code G0383 (Type B emergency department visit (Level 4));
HCPCS code G0384 (Type B emergency department visit (Level 5)); CPT
code 99291 (Critical care, evaluation and management of the critically
ill or critically injured patient; first 30-74 minutes); or HCPCS code
G0463 (Hospital outpatient clinic visit for assessment and management
of a patient); and
Does not contain services described by a HCPCS code to
which we have assigned status indicator ``J1''.
The assignment of status indicator ``J2'' to a specific combination
of services performed in combination with each other allows for all
other OPPS payable services and items reported on the claim (excluding
services that are not covered OPD services or that cannot by statute be
paid for under the OPPS) to be deemed adjunctive services representing
components of a comprehensive service and resulting in a single
prospective payment for the comprehensive service based on the costs of
all reported services on the claim (80 FR 70333 through 70336).
Services included under the C-APC payment packaging policy, that
is, services that are typically adjunctive to the primary service and
provided during the delivery of the comprehensive service, include
diagnostic procedures, laboratory tests, and other diagnostic tests and
treatments that assist in the delivery of the primary procedure; visits
and evaluations performed in association with the procedure; uncoded
services and supplies used during the service; durable medical
equipment as well as prosthetic and orthotic items and supplies when
provided as part of the outpatient service; and any other components
reported by HCPCS codes that represent services that are provided
during the complete comprehensive service (78 FR 74865 and 79 FR
66800).
In addition, payment for hospital outpatient department services
that are similar to therapy services and delivered either by therapists
or nontherapists is included as part of the payment for the packaged
complete comprehensive service. These services that are provided during
the perioperative period are adjunctive services and are deemed not to
be therapy services as described in section 1834(k) of the Act,
regardless of whether the services are delivered by therapists or other
nontherapist health care workers. We have previously noted that therapy
services are those provided by therapists under a plan of care in
accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the
Act and are paid for under section 1834(k) of the Act, subject to
annual therapy caps as applicable (78 FR 74867 and 79 FR 66800).
However, certain other services similar to therapy services are
considered and paid for as hospital outpatient department services.
Payment for these nontherapy outpatient department services that are
reported with therapy codes and provided with a comprehensive service
is included in the payment for the packaged complete comprehensive
service. We note that these services, even though they are reported
with therapy codes, are hospital outpatient department services and not
therapy services. We refer readers to the July 2016 OPPS Change Request
9658 (Transmittal 3523) for further instructions on reporting these
services in the context of a C-APC service.
Items included in the packaged payment provided in conjunction with
the primary service also include all drugs, biologicals, and
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and SADs, unless they function as packaged
supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We
refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit
Policy Manual for a description of our policy on SADs treated as
hospital outpatient supplies, including lists of SADs that function as
supplies and those that do not function as supplies.
We define each hospital outpatient claim reporting a single unit of
a single primary service assigned to status indicator ``J1'' as a
single ``J1'' unit procedure claim (78 FR 74871 and 79 FR 66801). Line
item charges for services included on the C-APC claim are converted to
line item costs, which are then summed to develop the estimated APC
costs. These claims are then assigned one unit of the service with
status indicator ``J1'' and later used to develop the geometric mean
costs for the C-APC relative payment weights. (We note that we use the
term ``comprehensive'' to describe the geometric mean cost of a claim
reporting ``J1'' service(s) or the geometric mean cost of a C-APC,
inclusive of all of the items and services included in the C-APC
service payment bundle.) Charges for services that would otherwise be
separately payable are added to the charges for the primary service.
This process differs from our traditional cost accounting methodology
only in that all such services on the claim are packaged (except
certain services as described above). We apply our standard data trims,
which exclude claims with extremely high primary units or extreme
costs.
The comprehensive geometric mean costs are used to establish
resource similarity and, along with clinical similarity, dictate the
assignment of the primary services to the C-APCs. We establish a
ranking of each primary service (single unit only) to be assigned to
status indicator ``J1'' according to its comprehensive geometric mean
costs. For the minority of claims reporting more than one primary
service assigned to status indicator ``J1'' or units thereof, we
identify one ``J1'' service as the primary service for the claim based
on our cost-based ranking of primary services. We then assign these
multiple ``J1'' procedure claims to the C-APC to which the service
designated as the primary service is assigned. If the reported ``J1''
services on a claim map to different C-APCs, we designate the ``J1''
service assigned to the C-APC with the highest comprehensive geometric
mean cost as the primary service for that claim. If the reported
multiple ``J1'' services on a claim map to the same C-APC, we designate
the most costly service (at the HCPCS code level) as the primary
service for that claim. This process results in initial assignments of
claims for the primary services assigned to status indicator ``J1'' to
the most appropriate C-APCs based on both single and multiple procedure
claims reporting these services and clinical and resource homogeneity.
Complexity Adjustments. We use complexity adjustments to provide
increased payment for certain comprehensive services. We apply a
complexity adjustment by promoting qualifying paired ``J1'' service
code combinations or paired code combinations of ``J1'' services and
certain add-on codes (as described further below) from the originating
C-APC (the C-APC to which the designated primary service is first
assigned) to the next higher paying C-APC in the same clinical family
of C-APCs. We apply this type of complexity adjustment when the paired
code combination represents a complex, costly form or version of the
primary service according to the following criteria:
Frequency of 25 or more claims reporting the code
combination (frequency threshold); and
[[Page 39414]]
Violation of the 2 times rule in the originating C-APC
(cost threshold).
These criteria identify paired code combinations that occur
commonly and exhibit materially greater resource requirements than the
primary service. The CY 2017 OPPS/ASC final rule with comment period
(81 FR 79582) included a revision to the complexity adjustment
eligibility criteria. Specifically, we finalized a policy to
discontinue the requirement that a code combination (that qualifies for
a complexity adjustment by satisfying the frequency and cost criteria
thresholds described above) also not create a 2 times rule violation in
the higher level or receiving APC.
After designating a single primary service for a claim, we evaluate
that service in combination with each of the other procedure codes
reported on the claim assigned to status indicator ``J1'' (or certain
add-on codes) to determine if there are paired code combinations that
meet the complexity adjustment criteria. For a new HCPCS code, we
determine initial C-APC assignment and qualification for a complexity
adjustment using the best available information, crosswalking the new
HCPCS code to a predecessor code(s) when appropriate.
Once we have determined that a particular code combination of
``J1'' services (or combinations of ``J1'' services reported in
conjunction with certain add-on codes) represents a complex version of
the primary service because it is sufficiently costly, frequent, and a
subset of the primary comprehensive service overall according to the
criteria described above, we promote the claim including the complex
version of the primary service as described by the code combination to
the next higher cost C-APC within the clinical family, unless the
primary service is already assigned to the highest cost APC within the
C-APC clinical family or assigned to the only C-APC in a clinical
family. We do not create new APCs with a comprehensive geometric mean
cost that is higher than the highest geometric mean cost (or only) C-
APC in a clinical family just to accommodate potential complexity
adjustments. Therefore, the highest payment for any claim including a
code combination for services assigned to a C-APC would be the highest
paying C-APC in the clinical family (79 FR 66802).
We package payment for all add-on codes into the payment for the C-
APC. However, certain primary service add-on combinations may qualify
for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70331), all add-on codes that can be
appropriately reported in combination with a base code that describes a
primary ``J1'' service are evaluated for a complexity adjustment.
To determine which combinations of primary service codes reported
in conjunction with an add-on code may qualify for a complexity
adjustment for CY 2020, in this CY 2020 OPPS/ASC proposed rule, we are
proposing to apply the frequency and cost criteria thresholds discussed
above, testing claims reporting one unit of a single primary service
assigned to status indicator ``J1'' and any number of units of a single
add-on code for the primary ``J1'' service. If the frequency and cost
criteria thresholds for a complexity adjustment are met and
reassignment to the next higher cost APC in the clinical family is
appropriate (based on meeting the criteria outlined above), we make a
complexity adjustment for the code combination; that is, we reassign
the primary service code reported in conjunction with the add-on code
to the next higher cost C-APC within the same clinical family of C-
APCs. As previously stated, we package payment for add-on codes into
the C-APC payment rate. If any add-on code reported in conjunction with
the ``J1'' primary service code does not qualify for a complexity
adjustment, payment for the add-on service continues to be packaged
into the payment for the primary service and is not reassigned to the
next higher cost C-APC. We list the proposed complexity adjustments for
``J1'' and add-on code combinations for CY 2020, along with all of the
other proposed complexity adjustments, in Addendum J to this CY 2020
OPPS/ASC proposed rule (which is available via the internet on the CMS
website).
Addendum J to this proposed rule includes the cost statistics for
each code combination that would qualify for a complexity adjustment
(including primary code and add-on code combinations). Addendum J to
this proposed rule also contains summary cost statistics for each of
the paired code combinations that describe a complex code combination
that would qualify for a complexity adjustment and are proposed to be
reassigned to the next higher cost C-APC within the clinical family.
The combined statistics for all proposed reassigned complex code
combinations are represented by an alphanumeric code with the first 4
digits of the designated primary service followed by a letter. For
example, the proposed geometric mean cost listed in Addendum J for the
code combination described by complexity adjustment assignment 3320R,
which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar
Procedures), includes all paired code combinations that are proposed to
be reassigned to C-APC 5224 when CPT code 33208 is the primary code.
Providing the information contained in Addendum J to this proposed rule
allows stakeholders the opportunity to better assess the impact
associated with the proposed reassignment of claims with each of the
paired code combinations eligible for a complexity adjustment.
(2) Proposed Additional C-APCs for CY 2020
For CY 2020 and subsequent years, in this CY 2020 OPPS/ASC proposed
rule, we are proposing to continue to apply the C-APC payment policy
methodology. We refer readers to the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79583) for a discussion of the C-APC payment
policy methodology and revisions.
Each year, in accordance with section 1833(t)(9)(A) of the Act, we
review and revise the services within each APC group and the APC
assignments under the OPPS. As a result of our annual review of the
services and the APC assignments under the OPPS, in this proposed rule,
we are proposing to add two C-APCs under the existing C-APC payment
policy in CY 2020: Proposed C-APC 5182 (Level 2 Vascular Procedures);
and proposed C-APC 5461 (Level 1 Neurostimulator and Related
Procedures). These APCs were selected to be included in this proposed
rule because, similar to other C-APCs, these APCs include primary,
comprehensive services, such as major surgical procedures, that are
typically reported with other ancillary and adjunctive services. Also,
similar to other APCs that have been converted to C-APCs, there are
higher APC levels within the clinical family or related clinical family
of these APCs that have previously been assigned to a C-APC. Table 4 of
this proposed rule lists the proposed C-APCs for CY 2020. All C-APCs
are displayed in Addendum J to this proposed rule (which is available
via the internet on the CMS website). Addendum J to this proposed rule
also contains all of the data related to the C-APC payment policy
methodology, including the list of proposed complexity adjustments and
other information.
We also are considering developing an episode-of-care for skin
substitutes and are interested in comments regarding a future C-APC for
procedures using skin substitute products furnished in the hospital
outpatient department
[[Page 39415]]
setting. We note that this comment solicitation is discussed in section
V.B.7. of this proposed rule.
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(3) Exclusion of Procedures Assigned to New Technology APCs From the C-
APC Policy
Services that are assigned to New Technology APCs are typically new
procedures that do not have sufficient claims history to establish an
accurate payment for the procedures. Beginning in CY 2002, we retain
services within New Technology APC groups until we gather sufficient
claims data to enable us to assign the service to an appropriate
clinical APC. This policy allows us to move a service from a New
Technology APC in less than 2 years if sufficient data are available.
It also allows us to retain a service in a New Technology APC for more
than 2 years if sufficient data upon which to base a decision for
reassignment have not been collected (82 FR 59277).
The C-APC payment policy packages payment for adjunctive and
secondary items, services, and procedures into the most costly primary
procedure under the OPPS at the claim level. Prior to CY 2019 when a
procedure assigned to a New Technology APC was included on the claim
with a primary procedure, identified by OPPS status indicator ``J1'',
payment for the new technology service was typically packaged into the
payment for the primary procedure. Because the new technology service
was not separately paid in this scenario, the overall number of single
claims available to determine an appropriate clinical APC for the new
service was reduced. This was contrary to the objective of the New
Technology APC payment policy, which is to gather sufficient claims
data to enable us to assign the service to an appropriate clinical APC.
For example, for CY 2017, there were seven claims generated for
HCPCS code 0100T (Placement of a subconjunctival retinal prosthesis
receiver and pulse generator, and implantation of intraocular retinal
electrode array, with vitrectomy), which involves the use of the
Argus[supreg] II Retinal Prosthesis System. However, several of these
claims were not available for ratesetting because HCPCS code 0100T was
reported with a ``J1'' procedure and, therefore, payment was packaged
into the associated C-APC payment. If these services had been
separately paid under the OPPS, there would be at least two additional
single claims available for ratesetting. As mentioned previously, the
purpose of the new technology APC policy is to ensure that there are
sufficient claims data for new services, which is particularly
important for services with a low volume such as procedures described
by HCPCS code 0100T. Another concern is the costs reported for the
claims when payment is not packaged for a new technology procedure may
not be representative of all of the services included on a claim that
is generated, which may also affect our ability to assign the new
service to the most appropriate clinical APC.
To address this issue and help ensure that there is sufficient
claims data for services assigned to New Technology APCs, in the CY
2019 OPPS/ASC final rule with comment period (83 FR 58847), we excluded
payment for any procedure that is assigned to a New Technology APC
(APCs 1491 through 1599 and APCs 1901 through 1908) from being packaged
when included on a claim with a ``J1'' service assigned to a C-APC. For
CY 2020, we are proposing to continue to exclude payment for any
procedure that is assigned to a New Technology APC from being packaged
when included on a claim with a ``J1'' service assigned to a C-APC.
Some stakeholders have raised questions about whether the policy
established in the CY 2019 OPPS/ASC final rule with comment period
would also apply to comprehensive observation services assigned status
indicator ``J2.'' We recognize that the policy described and adopted in
the CY 2019 rulemaking may have been ambiguous with respect to this
issue. While our intention in the CY 2019 rulemaking was only to
exclude payment for services assigned to New Technology APCs from being
bundled into the payment for a comprehensive ``J1'' service, we believe
that there may also be some instances in which it would be clinically
appropriate to provide a new technology service when providing
comprehensive observation services. We would not generally expect that
to be the case, because procedures assigned to New Technology APCs
typically are new or low-volume surgical procedures, or are specialized
tests to diagnosis a specific condition. In addition, it is highly
unlikely a general observation procedure would be assigned to a New
Technology APC because there are clinical APCs already established
under the OPPS to classify general observation procedures. As we stated
in the CY 2016 OPPS/ASC final rule with comment period, observation
services may not be used for post-operative recovery and, as such,
observation services furnished with services assigned to status
indicator ``T'' will always be packaged (80 FR 70334). Therefore, we
are proposing that payment for services assigned to a New Technology
APC when included on a claim for a service assigned status indicator
``J2'' assigned to a C-APC will be packaged into the payment for the
comprehensive service. Nonetheless, we are seeking public comments on
whether it would be clinically appropriate to exclude payment for any
New Technology APC procedures from
[[Page 39418]]
being packaged into the payment for a comprehensive ``J2'' service
starting in CY 2020.
c. Proposed Calculation of Composite APC Criteria-Based Costs
As discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66613), we believe it is important that the OPPS enhance
incentives for hospitals to provide necessary, high quality care as
efficiently as possible. For CY 2008, we developed composite APCs to
provide a single payment for groups of services that are typically
performed together during a single clinical encounter and that result
in the provision of a complete service. Combining payment for multiple,
independent services into a single OPPS payment in this way enables
hospitals to manage their resources with maximum flexibility by
monitoring and adjusting the volume and efficiency of services
themselves. An additional advantage to the composite APC model is that
we can use data from correctly coded multiple procedure claims to
calculate payment rates for the specified combinations of services,
rather than relying upon single procedure claims which may be low in
volume and/or incorrectly coded. Under the OPPS, we currently have
composite policies for mental health services and multiple imaging
services. (We note that, in the CY 2018 OPPS/ASC final rule with
comment period, we finalized a policy to delete the composite APC 8001
(LDR Prostate Brachytherapy Composite) for CY 2018 and subsequent
years.) We refer readers to the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66611 through 66614 and 66650 through 66652) for
a full discussion of the development of the composite APC methodology,
and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163)
and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241
through 59242 and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
In this CY 2020 OPPS/ASC proposed rule, we are proposing to
continue our longstanding policy of limiting the aggregate payment for
specified less resource-intensive mental health services furnished on
the same date to the payment for a day of partial hospitalization
services provided by a hospital, which we consider to be the most
resource-intensive of all outpatient mental health services. We refer
readers to the April 7, 2000 OPPS final rule with comment period (65 FR
18452 through 18455) for the initial discussion of this longstanding
policy and the CY 2012 OPPS/ASC final rule with comment period (76 FR
74168) for more recent background.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79588
through 79589), we finalized a policy to combine the existing Level 1
and Level 2 hospital-based PHP APCs into a single hospital-based PHP
APC, and thereby discontinue APCs 5861 (Level 1--Partial
Hospitalization (3 services) for Hospital-Based PHPs) and 5862 (Level--
2 Partial Hospitalization (4 or more services) for Hospital-Based PHPs)
and replace them with APC 5863 (Partial Hospitalization (3 or more
services per day)).
In the CY 2018 OPPS/ASC proposed rule and final rule with comment
period (82 FR 33580 through 33581 and 59246 through 59247,
respectively), we proposed and finalized the policy for CY 2018 and
subsequent years that, when the aggregate payment for specified mental
health services provided by one hospital to a single beneficiary on a
single date of service, based on the payment rates associated with the
APCs for the individual services, exceeds the maximum per diem payment
rate for partial hospitalization services provided by a hospital, those
specified mental health services will be paid through composite APC
8010 (Mental Health Services Composite). In addition, we set the
payment rate for composite APC 8010 for CY 2018 at the same payment
rate that will be paid for APC 5863, which is the maximum partial
hospitalization per diem payment rate for a hospital, and finalized a
policy that the hospital will continue to be paid the payment rate for
composite APC 8010. Under this policy, the I/OCE will continue to
determine whether to pay for these specified mental health services
individually, or to make a single payment at the same payment rate
established for APC 5863 for all of the specified mental health
services furnished by the hospital on that single date of service. We
continue to believe that the costs associated with administering a
partial hospitalization program at a hospital represent the most
resource intensive of all outpatient mental health services. Therefore,
we do not believe that we should pay more for mental health services
under the OPPS than the highest partial hospitalization per diem
payment rate for hospitals.
In this CY 2020 OPPS/ASC proposed rule, for CY 2020, we are
proposing that when the aggregate payment for specified mental health
services provided by one hospital to a single beneficiary on a single
date of service, based on the payment rates associated with the APCs
for the individual services, exceeds the maximum per diem payment rate
for partial hospitalization services provided by a hospital, those
specified mental health services would be paid through composite APC
8010 for CY 2020. In addition, we are proposing to set the proposed
payment rate for composite APC 8010 at the same payment rate that we
are proposing for APC 5863, which is the maximum partial
hospitalization per diem payment rate for a hospital, and that the
hospital continue to be paid the proposed payment rate for composite
APC 8010.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
8008)
Effective January 1, 2009, we provide a single payment each time a
hospital submits a claim for more than one imaging procedure within an
imaging family on the same date of service, in order to reflect and
promote the efficiencies hospitals can achieve when performing multiple
imaging procedures during a single session (73 FR 41448 through 41450).
We utilize three imaging families based on imaging modality for
purposes of this methodology: (1) Ultrasound; (2) computed tomography
(CT) and computed tomographic angiography (CTA); and (3) magnetic
resonance imaging (MRI) and magnetic resonance angiography (MRA). The
HCPCS codes subject to the multiple imaging composite policy and their
respective families are listed in Table 12 of the CY 2014 OPPS/ASC
final rule with comment period (78 FR 74920 through 74924).
While there are three imaging families, there are five multiple
imaging composite APCs due to the statutory requirement under section
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging
services provided with and without contrast. While the ultrasound
procedures included under the policy do not involve contrast, both CT/
CTA and MRI/MRA scans can be provided either with or without contrast.
The five multiple imaging composite APCs established in CY 2009 are:
APC 8004 (Ultrasound Composite);
APC 8005 (CT and CTA without Contrast Composite);
APC 8006 (CT and CTA with Contrast Composite);
APC 8007 (MRI and MRA without Contrast Composite); and
APC 8008 (MRI and MRA with Contrast Composite).
We define the single imaging session for the ``with contrast''
composite APCs
[[Page 39419]]
as having at least one or more imaging procedures from the same family
performed with contrast on the same date of service. For example, if
the hospital performs an MRI without contrast during the same session
as at least one other MRI with contrast, the hospital will receive
payment based on the payment rate for APC 8008, the ``with contrast''
composite APC.
We make a single payment for those imaging procedures that qualify
for payment based on the composite APC payment rate, which includes any
packaged services furnished on the same date of service. The standard
(noncomposite) APC assignments continue to apply for single imaging
procedures and multiple imaging procedures performed across families.
For a full discussion of the development of the multiple imaging
composite APC methodology, we refer readers to the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68559 through 68569).
In this CY 2020 OPPS/ASC proposed rule, we are proposing, for CY
2020, to continue to pay for all multiple imaging procedures within an
imaging family performed on the same date of service using the multiple
imaging composite APC payment methodology. We continue to believe that
this policy would reflect and promote the efficiencies hospitals can
achieve when performing multiple imaging procedures during a single
session.
The proposed CY 2020 payment rates for the five multiple imaging
composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) are based on
proposed geometric mean costs calculated from CY 2018 claims available
for the CY 2020 OPPS/ASC proposed rule that qualified for composite
payment under the current policy (that is, those claims reporting more
than one procedure within the same family on a single date of service).
To calculate the proposed geometric mean costs, we used the same
methodology that we have used to calculate the geometric mean costs for
these composite APCs since CY 2014, as described in the CY 2014 OPPS/
ASC final rule with comment period (78 FR 74918). The imaging HCPCS
codes referred to as ``overlap bypass codes'' that we removed from the
bypass list for purposes of calculating the proposed multiple imaging
composite APC geometric mean costs, in accordance with our established
methodology as stated in the CY 2014 OPPS/ASC final rule with comment
period (78 FR 74918), are identified by asterisks in Addendum N to this
CY 2020 OPPS/ASC proposed rule (which is available via the internet on
the CMS website) and are discussed in more detail in section II.A.1.b.
of this CY 2020 OPPS/ASC proposed rule.
For this CY 2020 OPPS/ASC proposed rule, we were able to identify
approximately 700,000 ``single session'' claims out of an estimated 4.9
million potential claims for payment through composite APCs from our
ratesetting claims data, which represents approximately 14 percent of
all eligible claims, to calculate the proposed CY 2020 geometric mean
costs for the multiple imaging composite APCs. Table 5 of this CY 2020
OPPS/ASC proposed rule lists the proposed HCPCS codes that would be
subject to the multiple imaging composite APC policy and their
respective families and approximate composite APC proposed geometric
mean costs for CY 2020.
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3. Proposed Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
Like other prospective payment systems, the OPPS relies on the
concept of averaging to establish a payment rate for services. The
payment may be more or less than the estimated cost of providing a
specific service or a bundle of specific services for a particular
beneficiary. The OPPS packages
[[Page 39424]]
payments for multiple interrelated items and services into a single
payment to create incentives for hospitals to furnish services most
efficiently and to manage their resources with maximum flexibility. Our
packaging policies support our strategic goal of using larger payment
bundles in the OPPS to maximize hospitals' incentives to provide care
in the most efficient manner. For example, where there are a variety of
devices, drugs, items, and supplies that could be used to furnish a
service, some of which are more costly than others, packaging
encourages hospitals to use the most cost-efficient item that meets the
patient's needs, rather than to routinely use a more expensive item,
which often occurs if separate payment is provided for the item.
Packaging also encourages hospitals to effectively negotiate with
manufacturers and suppliers to reduce the purchase price of items and
services or to explore alternative group purchasing arrangements,
thereby encouraging the most economical health care delivery.
Similarly, packaging encourages hospitals to establish protocols that
ensure that necessary services are furnished, while scrutinizing the
services ordered by practitioners to maximize the efficient use of
hospital resources. Packaging payments into larger payment bundles
promotes the predictability and accuracy of payment for services over
time. Finally, packaging may reduce the importance of refining service-
specific payment because packaged payments include costs associated
with higher cost cases requiring many ancillary items and services and
lower cost cases requiring fewer ancillary items and services. Because
packaging encourages efficiency and is an essential component of a
prospective payment system, packaging payments for items and services
that are typically integral, ancillary, supportive, dependent, or
adjunctive to a primary service has been a fundamental part of the OPPS
since its implementation in August 2000. For an extensive discussion of
the history and background of the OPPS packaging policy, we refer
readers to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC
final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66817), the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70343), the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79592), the CY 2018 OPPS/ASC
final rule with comment period (82 FR 59250), and the CY 2019 OPPS/ASC
final rule with comment period (83 FR 58854). As we continue to develop
larger payment groups that more broadly reflect services provided in an
encounter or episode of care, we have expanded the OPPS packaging
policies. Most, but not necessarily all, categories of items and
services currently packaged in the OPPS are listed in 42 CFR 419.2(b).
Our overarching goal is to make payments for all services under the
OPPS more consistent with those of a prospective payment system and
less like those of a per-service fee schedule, which pays separately
for each coded item. As a part of this effort, we have continued to
examine the payment for items and services provided under the OPPS to
determine which OPPS services can be packaged to further achieve the
objective of advancing the OPPS toward a more prospective payment
system.
For CY 2020, we examined the items and services currently provided
under the OPPS, reviewing categories of integral, ancillary,
supportive, dependent, or adjunctive items and services for which we
believe payment would be appropriately packaged into payment for the
primary service that they support. Specifically, we examined the HCPCS
code definitions (including CPT code descriptors) and outpatient
hospital billing patterns to determine whether there were categories of
codes for which packaging would be appropriate according to existing
OPPS packaging policies or a logical expansion of those existing OPPS
packaging policies. In this CY 2020 OPPS/ASC proposed rule, for CY
2020, we are proposing to conditionally package the costs of selected
newly identified ancillary services into payment with a primary service
where we believe that the packaged item or service is integral,
ancillary, supportive, dependent, or adjunctive to the provision of
care that was reported by the primary service HCPCS code. Below we
discuss the proposed changes to the packaging policies beginning in CY
2020.
b. Packaging Policy for Non-Opioid Pain Management Treatments
(1) Background on OPPS/ASC Non-Opioid Pain Management Packaging
Policies
In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the
framework of existing packaging categories, such as drugs that function
as supplies in a surgical procedure or diagnostic test or procedure, we
requested stakeholder feedback on common clinical scenarios involving
currently packaged items and services described by HCPCS codes that
stakeholders believe should not be packaged under the OPPS. We also
expressed interest in stakeholder feedback on common clinical scenarios
involving separately payable HCPCS codes for which payment would be
most appropriately packaged under the OPPS. Commenters who responded to
the CY 2018 OPPS/ASC proposed rule expressed a variety of views on
packaging under the OPPS. In the CY 2018 OPPS/ASC final rule with
comment period (82 FR 59255), we summarized these public comments. The
public comments ranged from requests to unpackage most items and
services that are either conditionally or unconditionally packaged
under the OPPS, including drugs and devices, to specific requests for
separate payment for a specific drug or device.
In terms of Exparel[supreg] in particular, we received several
requests to pay separately for the drug Exparel[supreg] rather than
packaging payment for it as a surgical supply. We had previously stated
that we considered Exparel[supreg] to be a drug that functions as a
surgical supply because it is indicated for the alleviation of
postoperative pain (79 FR 66874 and 66875). We had also stated before
that we considered all items related to the surgical outcome and
provided during the hospital stay in which the surgery is performed,
including postsurgical pain management drugs, to be part of the surgery
for purposes of our drug and biological surgical supply packaging
policy. (We note that Exparel[supreg] is a liposome injection of
bupivacaine, an amide local anesthetic, indicated for single-dose
infiltration into the surgical site to produce postsurgical analgesia.
In 2011, Exparel[supreg] was approved by the FDA for single-dose
infiltration into the surgical site to provide postsurgical
analgesia.1 2 Exparel[supreg] had pass-through payment
status from CYs 2012 through 2014 and was separately paid under both
the OPPS and the ASC payment system during this 3-year period.
Beginning in CY 2015, Exparel[supreg] was packaged as a surgical supply
under both the OPPS and the ASC payment system.)
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\1\ 2011 product label available at: https://www.accessdata.fda.gov/drugsatfda_docs/label/2011/022496s000lbl.pdf.
\2\ 2011 FDA approval letter available at: https://www.accessdata.fda.gov/drugsatfda_docs/nda/2011/022496Orig1s000Approv.pdf.
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In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59345), we reiterated our position with regard to
[[Page 39425]]
payment for Exparel[supreg], stating that we believed that payment for
this drug is appropriately packaged with the primary surgical
procedure. We also stated in the CY 2018 OPPS/ASC final rule with
comment period that CMS would continue to explore and evaluate
packaging policies under the OPPS and consider these policies in future
rulemaking.
In addition to stakeholder feedback regarding OPPS packaging
policies in response to the CY 2018 OPPS/ASC proposed rule, the
President's Commission on Combating Drug Addiction and the Opioid
Crisis (the Commission) had recommended that CMS examine payment
policies for certain drugs that function as a supply, specifically non-
opioid pain management treatments. The Commission was established in
2017 to study ways to combat and treat drug abuse, addiction, and the
opioid crisis. The Commission's report \3\ included a recommendation
for CMS to ``. . . review and modify ratesetting policies that
discourage the use of non-opioid treatments for pain, such as certain
bundled payments that make alternative treatment options cost
prohibitive for hospitals and doctors, particularly those options for
treating immediate postsurgical pain. . . .'' \4\ With respect to the
packaging policy, the Commission's report states that ``. . . the
current CMS payment policy for `supplies' related to surgical
procedures creates unintended incentives to prescribe opioid
medications to patients for postsurgical pain instead of administering
non-opioid pain medications. Under current policies, CMS provides one
all-inclusive bundled payment to hospitals for all `surgical supplies,'
which includes hospital administered drug products intended to manage
patients' postsurgical pain. This policy results in the hospitals
receiving the same fixed fee from Medicare whether the surgeon
administers a non-opioid medication or not.'' \5\ HHS also presented an
Opioid Strategy in April 2017 \6\ that aims in part to support cutting-
edge research and advance the practice of pain management. On October
26, 2017, the President declared the opioid crisis a national public
health emergency under Federal law \7\ and this declaration was most
recently renewed on April 19, 2019.\8\
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\3\ President's Commission on Combating Drug Addiction and the
Opioid Crisis, Report (2017). Available at: https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Final_Report_Draft_11-1-2017.pdf.
\4\ Ibid, at page 57, Recommendation 19.
\5\ Ibid.
\6\ Available at: https://www.hhs.gov/about/leadership/secretary/speeches/2017-speeches/secretary-price-announces-hhs-strategy-for-fighting-opioid-crisis/index.html.
\7\ Available at: https://www.hhs.gov/about/news/2017/10/26/hhs-acting-secretary-declares-public-health-emergency-address-national-opioid-crisis.html.
\8\ Available at: https://www.phe.gov/emergency/news/healthactions/phe/Pages/default.aspx.
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For the CY 2019 rulemaking, we reviewed available literature with
respect to Exparel[supreg], including a briefing document \9\ submitted
for the FDA Advisory Committee Meeting held February 14-15, 2018, by
the manufacturer of Exparel[supreg] that notes that ``. . .
Bupivacaine, the active pharmaceutical ingredient in Exparel[supreg],
is a local anesthetic that has been used for infiltration/field block
and peripheral nerve block for decades'' and that ``since its approval,
Exparel[supreg] has been used extensively, with an estimated 3.5
million patient exposures in the US.'' \10\ On April 6, 2018, the FDA
approved Exparel[supreg]'s new indication for use as an interscalene
brachial plexus nerve block to produce postsurgical regional
analgesia.\11\ We stated in the CY 2019 OPPS/ASC proposed rule that,
based on our review of currently available OPPS Medicare claims data
and public information from the manufacturer of the drug, we did not
believe that the OPPS packaging policy had discouraged the use of
Exparel[supreg] for either of the drug's indications when furnished in
the hospital outpatient department setting.
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\9\ Food and Drug Administration, Meeting of the Anesthetic and
Analgesic Drug Products Advisory Committee Briefing Document (2018).
Available at: https://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/AnestheticAndAnalgesicDrugProductsAdvisoryCommittee/UCM596314.pdf.
\10\ Ibid, page 9.
\11\ 2018 updated product label available at: https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/022496s009lbledt.pdf.
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In the CY 2019 OPPS/ASC proposed rule, in response to stakeholder
comments on the CY 2018 OPPS/ASC final rule with comment period (82 FR
59345) and in light of the recommendations regarding payment policies
for certain drugs, we evaluated the impact of our packaging policy for
drugs that function as a supply when used in a surgical procedure on
the utilization of these drugs in both the hospital outpatient
department and the ASC setting. Our packaging policy is that the costs
associated with packaged drugs that function as a supply are included
in the ratesetting methodology for the surgical procedures with which
they are billed, and the payment rate for the associated procedure
reflects the costs of the packaged drugs and other packaged items and
services to the extent they are billed with the procedure. In our
evaluation, we used currently available data to analyze the utilization
patterns associated with specific drugs that function as a supply over
a 5-year time period to determine whether this packaging policy reduced
the use of these drugs. If the packaging policy discouraged the use of
drugs that function as a supply or impeded access to these products, we
would expect to see a significant decline in utilization of these drugs
over time, although we note that a decline in utilization could also
reflect other factors, such as the availability of alternative
products.
The results of the evaluation of our packaging policies under the
OPPS and the ASC payment system showed decreased utilization for
certain drugs that function as a supply in the ASC setting, in
comparison to the hospital outpatient department setting. In light of
these results, as well as the Commission's recommendation to examine
payment policies for non-opioid pain management drugs that function as
a supply, we believed it was appropriate to pay separately for
evidence-based non-opioid pain management drugs that function as a
supply in a surgical procedure in the ASC setting to address the
decreased utilization of these drugs and to encourage use of these
types of drugs rather than prescription opioids. Therefore, in the CY
2019 OPPS/ASC final rule with comment period (83 FR 58855 through
58860), we finalized the proposed policy to unpackage and pay
separately at ASP+6 percent for the cost of non-opioid pain management
drugs that function as surgical supplies when they are furnished in the
ASC setting for CY 2019. We also stated that we would continue to
analyze the issue of access to non-opioid alternatives in the hospital
outpatient department setting and in the ASC setting as we implemented
section 6082 of the Substance Use-Disorder Prevention that Promotes
Opioid Recovery and Treatment for Patients and Communities (SUPPORT)
Act (Pub. L. 115-271) enacted on October 24, 2018 (83 FR 58860 through
58861).
(2) Evaluation and CY 2020 Proposal for Payment for Non-Opioid
Alternatives
Section 1833(t)(22)(A)(i) of the Act, as added by section 6082(a)
of the SUPPORT Act, states that the Secretary must review payments
under the OPPS for opioids and evidence-based non-opioid alternatives
for pain management (including drugs and devices, nerve blocks,
surgical injections, and neuromodulation) with a goal of
[[Page 39426]]
ensuring that there are not financial incentives to use opioids instead
of non-opioid alternatives. As part of this review, under section
1833(t)(22)(A)(iii) of the Act, the Secretary must consider the extent
to which revisions to such payments (such as the creation of additional
groups of covered OPD services to separately classify those procedures
that utilize opioids and non-opioid alternatives for pain management)
would reduce the payment incentives for using opioids instead of non-
opioid alternatives for pain management. In conducting this review and
considering any revisions, the Secretary must focus on covered OPD
services (or groups of services) assigned to C-APCs, APCs that include
surgical services, or services determined by the Secretary that
generally involve treatment for pain management. If the Secretary
identifies revisions to payments pursuant to section
1833(t)(22)(A)(iii) of the Act, section 1833(t)(22)(C) of the Act
requires the Secretary to, as determined appropriate, begin making
revisions for services furnished on or after January 1, 2020. Any
revisions under this paragraph are required to be treated as
adjustments for purposes of paragraph (9)(B), which requires any
adjustments to be made in a budget neutral manner. Pursuant to these
requirements, in our evaluation of whether there are payment incentives
for using opioids instead of non-opioid alternatives, for this CY 2020
OPPS/ASC proposed rule, we used currently available data to analyze the
payment and utilization patterns associated with specific non-opioid
alternatives, including drugs that function as a supply, nerve blocks,
and neuromodulation products, to determine whether our packaging
policies have reduced the use of non-opioid alternatives. We focused on
covered OPD services for this review, including services assigned to C-
APCs, surgical APCs, and other pain management services. We believed
that if the packaging policy discouraged the use of these non-opioid
alternatives or impeded access to these products, we would expect to
see a decline in the utilization over time, although we note that a
decline in utilization could also reflect other factors, such as the
availability of alternative products.
We evaluated continuous peripheral nerve blocks and neuromodulation
alternatives to determine if the current packaging policy represented a
barrier to access. For each product, we examined the most recently
available Medicare claims data. All of the alternatives examined showed
consistent or increasing utilization in recent years, with no products
showing decreases in utilization.
We also evaluated drugs that function as surgical supplies over a
6-year time period (CYs 2013 through 2018). During our evaluation, we
did not observe significant declines in the total number of units used
in the hospital outpatient department for a majority of the drugs
included in our analysis. In fact, under the OPPS, we observed the
opposite effect for several drugs that function as surgical supplies,
including Exparel[supreg] (HCPCS code C9290). This trend indicates
appropriate packaged payments that adequately reflect the cost of the
drug and are not prohibiting beneficiary access.
From CYs 2013 through 2018, we found that there was an overall
increase in the OPPS Medicare utilization of Exparel[supreg] of
approximately 491 percent (from 2.3 million units to 13.6 million
units) during this 6-year time period. The total number of claims
reporting the use of Exparel[supreg] increased by 463 percent (from
10,609 claims to 59,724 claims) over this 6-year time period. This
increase in utilization continued, even after the expiration of the 3-
year pass-through payment status for this drug in 2014, resulting in a
109-percent overall increase in the total number of units used between
CYs 2015 and 2018, from 6.5 million units to 13.6 million units. The
number of claims reporting the use of Exparel[supreg] increased by 112
percent during this time period, from 28,166 claims to 59,724 claims.
The results of our review and evaluation of our claims data do not
provide evidence to indicate that the OPPS packaging policy has had the
unintended consequence of discouraging the use of non-opioid treatments
for postsurgical pain management in the hospital outpatient department.
Therefore, based on this data evaluation, we do not believe that
changes are necessary under the OPPS for the packaged drug policy for
drugs that function as a surgical supply, nerve blocks, surgical
injections, and neuromodulation products when used in a surgical
procedure in the OPPS setting at this time.
For Exparel[supreg], we reviewed claims data for development of
this CY 2020 OPPS/ASC proposed rule and, based on these data and
available literature, we concluded that there is no clear evidence that
the OPPS packaging policy discourages the use of Exparel[supreg] for
either of the drug's indications in the hospital outpatient department
setting because the use of Exparel[supreg] continues to increase in
this setting. Accordingly, we continue to believe it is appropriate to
package payment for the use of Exparel[supreg], as we do for other
postsurgical pain management drugs, when it is furnished in a hospital
outpatient department. In addition, our updated review of claims data
showed a continued decline in the utilization of Exparel[supreg] in the
ASC setting, which we believe supports our proposal to continue paying
separately for Exparel[supreg] in the ASC setting.
Therefore, for CY 2020, we are proposing to continue our policy to
pay separately at ASP+6 percent for the cost of non-opioid pain
management drugs that function as surgical supplies in the performance
of surgical procedures when they are furnished in the ASC setting and
continue to package payment for non-opioid pain management drugs that
function as surgical supplies in the performance of surgical procedures
in the hospital outpatient department setting for CY 2020. However, we
are inviting public comments on this proposal and asking the public to
provide peer reviewed evidence, if any, to describe existing evidence-
based non-opioid pain management therapies used in the outpatient and
ASC setting. We are also inviting the public to provide detailed
claims-based evidence to document how specific unfavorable utilization
trends are due to the financial incentives of the payment systems
rather than other factors.
Multiple stakeholders, largely manufacturers of devices and drugs,
have requested separate payments for various non-opioid pain management
treatments, such as continuous nerve blocks (including a disposable
elastomeric pump that delivers non-opioid local anesthetic to a
surgical site or nerve), cooled thermal radiofrequency ablation, and
local anesthetics designed to reduce postoperative pain for cataract
surgery and other procedures. These stakeholders have suggested various
mechanisms through which separate payment or a higher-paying APC
assignment for the primary service could be made. The stakeholders have
offered surveys, reports, studies, and anecdotal evidence of varying
degrees to support why the devices, drugs, or services offer an
alternative to or a reduction of the need for opioid prescriptions. The
majority of these stakeholder offerings have lacked adequate sample
size, contained possible conflicts of interest such as studies
conducted by employees of device manufacturers, have not been fully
published in peer-reviewed literature, or have only provided anecdotal
evidence as to how the drug
[[Page 39427]]
or device could serve as an alternative to, or reduce the need for,
opioid prescriptions.
After reviewing the data from stakeholders and Medicare claims
data, we have not found compelling evidence to suggest that revisions
to our OPPS payment policies for non-opioid pain management
alternatives are necessary for CY 2020. Additionally, MedPAC's March
2019 Report to Congress supports CMS' conclusion. Specifically, Chapter
16 of MedPAC's report, titled Mandated Report: Opioids and Alternatives
in Hospital Settings--Payments, Incentives, and Medicare Data,
concludes that there is no clear indication that Medicare's OPPS
provides systematic payment incentives that promote the use of opioid
analgesics over non-opioid analgesics.\12\ However, we are inviting
public comments on whether there are other non-opioid pain management
alternatives for which our payment policy should be revised to allow
separate payment. We are requesting public comments that provide
evidence-based support, such as published peer-reviewed literature,
that we could use to determine whether these products help to deter or
avoid prescription opioid use and addiction as well as evidence that
the current packaged payment for such non-opioid alternatives presents
a barrier to access to care and therefore warrants revised, including
possibly separate, payment under the OPPS. Evidence that current
payment policy provides a payment incentive for using opioids instead
of non-opioid alternatives should align with available Medicare claims
data.
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\12\ Available at: http://www.medpac.gov/-documents-/reports.
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4. Proposed Calculation of OPPS Scaled Payment Weights
We established a policy in the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68283) of using geometric mean-based APC costs to
calculate relative payment weights under the OPPS. In the CY 2019 OPPS/
ASC final rule with comment period (83 FR 58860 through 58861), we
applied this policy and calculated the relative payment weights for
each APC for CY 2019 that were shown in Addenda A and B to that final
rule with comment period (which were made available via the internet on
the CMS website) using the APC costs discussed in sections II.A.1. and
II.A.2. of that final rule with comment period. For CY 2020, as we did
for CY 2019, we are proposing to continue to apply the policy
established in CY 2013 and calculate relative payment weights for each
APC for CY 2020 using geometric mean-based APC costs.
For CY 2012 and CY 2013, outpatient clinic visits were assigned to
one of five levels of clinic visit APCs, with APC 0606 representing a
mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75036 through 75043), we finalized a policy that created
alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for
assessment and management of a patient), representing any and all
clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634
(Hospital Clinic Visits). We also finalized a policy to use CY 2012
claims data to develop the CY 2014 OPPS payment rates for HCPCS code
G0463 based on the total geometric mean cost of the levels one through
five CPT E/M codes for clinic visits previously recognized under the
OPPS (CPT codes 99201 through 99205 and 99211 through 99215). In
addition, we finalized a policy to no longer recognize a distinction
between new and established patient clinic visits.
For CY 2016, we deleted APC 0634 and reassigned the outpatient
clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and
Related Services) (80 FR 70372). For CY 2020, as we did for CY 2019, we
are proposing to continue to standardize all of the relative payment
weights to APC 5012. We believe that standardizing relative payment
weights to the geometric mean of the APC to which HCPCS code G0463 is
assigned maintains consistency in calculating unscaled weights that
represent the cost of some of the most frequently provided OPPS
services. For CY 2020, as we did for CY 2019, we are proposing to
assign APC 5012 a relative payment weight of 1.00 and to divide the
geometric mean cost of each APC by the geometric mean cost for APC 5012
to derive the unscaled relative payment weight for each APC. The choice
of the APC on which to standardize the relative payment weights does
not affect payments made under the OPPS because we scale the weights
for budget neutrality.
We note that in the CY 2019 OPPS/ASC final rule with comment period
(83 FR 59004 through 59015), we discussed our policy, implemented on
January 1, 2019, to control for unnecessary increases in the volume of
covered outpatient department services by paying for clinic visits
furnished at excepted off-campus provider-based department (PBD) at a
reduced rate. While the volume associated with these visits is included
in the impact model, and thus used in calculating the weight scalar,
the policy has a negligible effect on the scalar. Specifically, under
this policy, there was no change to the relativity of the OPPS payment
weights because the adjustment is made at the payment level rather than
in the cost modeling. Further, under this policy, the savings that
would result from the change in payments for these clinic visits would
not be budget neutral. Therefore, the impact of this policy would
generally not be reflected in the budget neutrality adjustments,
whether the adjustment is to the OPPS relative weights or to the OPPS
conversion factor.
Section 1833(t)(9)(B) of the Act requires that APC reclassification
and recalibration changes, wage index changes, and other adjustments be
made in a budget neutral manner. Budget neutrality ensures that the
estimated aggregate weight under the OPPS for CY 2020 is neither
greater than nor less than the estimated aggregate weight that would
have been made without the changes. To comply with this requirement
concerning the APC changes, we are proposing to compare the estimated
aggregate weight using the CY 2019 scaled relative payment weights to
the estimated aggregate weight using the proposed CY 2020 unscaled
relative payment weights.
For CY 2019, we multiplied the CY 2019 scaled APC relative payment
weight applicable to a service paid under the OPPS by the volume of
that service from CY 2018 claims to calculate the total relative
payment weight for each service. We then added together the total
relative payment weight for each of these services in order to
calculate an estimated aggregate weight for the year. For CY 2020, we
are proposing to apply the same process using the estimated CY 2020
unscaled relative payment weights rather than scaled relative payment
weights. We are proposing to calculate the weight scalar by dividing
the CY 2019 estimated aggregate weight by the proposed unscaled CY 2020
estimated aggregate weight.
For a detailed discussion of the weight scalar calculation, we
refer readers to the OPPS claims accounting document available on the
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. Click on the CY 2020 OPPS
proposed rule link and open the claims accounting document link at the
bottom of the page.
We are proposing to compare the estimated unscaled relative payment
weights in CY 2020 to the estimated total relative payment weights in
CY
[[Page 39428]]
2019 using CY 2018 claims data, holding all other components of the
payment system constant to isolate changes in total weight. Based on
this comparison, we are proposing to adjust the calculated CY 2020
unscaled relative payment weights for purposes of budget neutrality. We
are proposing to adjust the estimated CY 2020 unscaled relative payment
weights by multiplying them by a proposed weight scalar of 1.4401 to
ensure that the proposed CY 2020 relative payment weights are scaled to
be budget neutral. The proposed CY 2020 relative payment weights listed
in Addenda A and B to this proposed rule (which are available via the
internet on the CMS website) were scaled and incorporated the
recalibration adjustments discussed in sections II.A.1. and II.A.2. of
this proposed rule.
Section 1833(t)(14) of the Act provides the payment rates for
certain SCODs. Section 1833(t)(14)(H) of the Act provides that
additional expenditures resulting from this paragraph shall not be
taken into account in establishing the conversion factor, weighting,
and other adjustment factors for 2004 and 2005 under paragraph (9), but
shall be taken into account for subsequent years. Therefore, the cost
of those SCODs (as discussed in section V.B.2. of this proposed rule)
is included in the budget neutrality calculations for the CY 2020 OPPS.
B. Proposed Conversion Factor Update
Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to
update the conversion factor used to determine the payment rates under
the OPPS on an annual basis by applying the OPD fee schedule increase
factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject
to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee
schedule increase factor is equal to the hospital inpatient market
basket percentage increase applicable to hospital discharges under
section 1886(b)(3)(B)(iii) of the Act. In the FY 2020 IPPS/LTCH PPS
proposed rule (84 FR 19401), consistent with current law, based on IHS
Global, Inc.'s fourth quarter 2018 forecast of the FY 2020 market
basket increase, the proposed FY 2020 IPPS market basket update is 3.2
percent. However, sections 1833(t)(3)(F) and 1833(t)(3)(G)(v) of the
Act, as added by section 3401(i) of the Patient Protection and
Affordable Care Act of 2010 (Pub. L. 111-148) and as amended by section
10319(g) of that law and further amended by section 1105(e) of the
Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152),
provide adjustments to the OPD fee schedule increase factor for CY
2020.
Specifically, section 1833(t)(3)(F)(i) of the Act requires that,
for 2012 and subsequent years, the OPD fee schedule increase factor
under subparagraph (C)(iv) be reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. Section
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as
equal to the 10-year moving average of changes in annual economy-wide,
private nonfarm business multifactor productivity (MFP) (as projected
by the Secretary for the 10-year period ending with the applicable
fiscal year, year, cost reporting period, or other annual period) (the
``MFP adjustment''). 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, and then revised this methodology, as
discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49509).
According to the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19402), the
proposed MFP adjustment for FY 2020 is 0.5 percentage point.
For CY 2020, we are proposing that the MFP adjustment for the CY
2020 OPPS is 0.5 percentage point. We are proposing that if more recent
data become subsequently available after the publication of this
proposed rule (for example, a more recent estimate of the market basket
increase and the MFP adjustment), we would use such updated data, if
appropriate, to determine the CY 2020 market basket update and the MFP
adjustment, which are components in calculating the OPD fee schedule
increase factor under sections 1833(t)(3)(C)(iv) and 1833(t)(3)(F) of
the Act, in this CY 2020 OPPS/ASC proposed rule.
We note that section 1833(t)(3)(F) of the Act provides that
application of this subparagraph may result in the OPD fee schedule
increase factor under section 1833(t)(3)(C)(iv) of the Act being less
than 0.0 percent for a year, and may result in OPPS payment rates being
less than rates for the preceding year. As described in further detail
below, we are proposing to apply an OPD fee schedule increase factor of
2.7 percent for the CY 2020 OPPS (which is 3.2 percent, the proposed
estimate of the hospital inpatient market basket percentage increase,
less the proposed 0.5 percentage point MFP adjustment).
Hospitals that fail to meet the Hospital OQR Program reporting
requirements are subject to an additional reduction of 2.0 percentage
points from the OPD fee schedule increase factor adjustment to the
conversion factor that would be used to calculate the OPPS payment
rates for their services, as required by section 1833(t)(17) of the
Act. For further discussion of the Hospital OQR Program, we refer
readers to section XIV. of this proposed rule.
We are proposing to amend 42 CFR 419.32(b)(1)(iv)(B) by adding a
new paragraph (11) to reflect the requirement in section
1833(t)(3)(F)(i) of the Act that, for CY 2020, we reduce the OPD fee
schedule increase factor by the MFP adjustment as determined by CMS.
To set the OPPS conversion factor for CY 2020, we are proposing to
increase the CY 2019 conversion factor of $79.490 by 2.7 percent. In
accordance with section 1833(t)(9)(B) of the Act, we are proposing
further to adjust the conversion factor for CY 2020 to ensure that any
revisions made to the wage index and rural adjustment were made on a
budget neutral basis. We are proposing to calculate an overall budget
neutrality factor of 0.9993 for wage index changes. This adjustment is
comprised of a 1.0005 proposed budget neutrality adjustment, using our
standard calculation, of comparing proposed total estimated payments
from our simulation model using the proposed FY 2020 IPPS wage indexes
to those payments using the FY 2019 IPPS wage indexes, as adopted on a
calendar year basis for the OPPS as well as a 0.9988 proposed budget
neutrality adjustment for the proposed CY 2020 5 percent cap on wage
index decreases to ensure that this transition wage index is
implemented in a budget neutral manner, consistent with the proposed FY
2020 IPPS wage index policy (84 FR 19398). We believe it is appropriate
to ensure that this proposed wage index transition policy (that is, the
proposed CY 2020 5 percent cap on wage index decreases) does not
increase estimated aggregate payments under the OPPS beyond the
payments that would be made without this transition policy. We are
proposing to calculate this budget neutrality adjustment by comparing
total estimated OPPS payments using the FY 2020 IPPS wage index,
adopted on a calendar year basis for the OPPS, where a 5 percent cap on
wage index decreases is not applied to total estimated OPPS payments
where the 5 percent cap on wage index decreases is applied. These two
proposed wage index budget neutrality adjustments would maintain budget
neutrality for the proposed CY 2020 OPPS wage index (which, as
discussed in section II.C of this proposed rule, would use the FY 2020
IPPS post-reclassified wage index and any adjustments, including
without limitation any proposed adjustments
[[Page 39429]]
finalized under the IPPS to address wage index disparities).
For the CY 2020 OPPS, we are maintaining the current rural
adjustment policy, as discussed in section II.E. of this proposed rule.
Therefore, the proposed budget neutrality factor for the rural
adjustment is 1.0000.
For this CY 2020 OPPS/ASC proposed rule, we are proposing to
continue previously established policies for implementing the cancer
hospital payment adjustment described in section 1833(t)(18) of the
Act, as discussed in section II.F. of this proposed rule. We are
proposing to calculate a CY 2020 budget neutrality adjustment factor
for the cancer hospital payment adjustment by comparing estimated total
CY 2020 payments under section 1833(t) of the Act, including the
proposed CY 2020 cancer hospital payment adjustment, to estimated CY
2020 total payments using the CY 2019 final cancer hospital payment
adjustment, as required under section 1833(t)(18)(B) of the Act. The
proposed CY 2020 estimated payments applying the proposed CY 2020
cancer hospital payment adjustment are the same as estimated payments
applying the CY 2019 final cancer hospital payment adjustment.
Therefore, we are proposing to apply a budget neutrality adjustment
factor of 0.9998 to the conversion factor for the cancer hospital
payment adjustment. In accordance with section 16002(b) of the 21st
Century Cures Act, we are proposing to apply a budget neutrality factor
calculated as if the proposed cancer hospital adjustment target
payment-to-cost ratio is 0.90, not the 0.89 target payment-to-cost
ratio we are proposing to apply as stated in section II.F. of this
proposed rule.
For this CY 2020 OPPS/ASC proposed rule, we estimate that proposed
pass-through spending for drugs, biologicals, and devices for CY 2020
would equal approximately $268.8 million, which represents 0.34 percent
of total projected CY 2020 OPPS spending. Therefore, the proposed
conversion factor would be adjusted by the difference between the 0.14
percent estimate of pass-through spending for CY 2019 and the 0.34
percent estimate of proposed pass-through spending for CY 2020,
resulting in a proposed decrease for CY 2020 of 0.20 percent. Proposed
estimated payments for outliers would remain at 1.0 percent of total
OPPS payments for CY 2020. We estimate for this proposed rule that
outlier payments would be 1.03 percent of total OPPS payments in CY
2019; the 1.00 percent for proposed outlier payments in CY 2020 would
constitute a 0.03 percent increase in payment in CY 2020 relative to CY
2019.
For this CY 2020 OPPS/ASC proposed rule, we also are proposing that
hospitals that fail to meet the reporting requirements of the Hospital
OQR Program would continue to be subject to a further reduction of 2.0
percentage points to the OPD fee schedule increase factor. For
hospitals that fail to meet the requirements of the Hospital OQR
Program, we are proposing to make all other adjustments discussed
above, but use a reduced OPD fee schedule update factor of 0.7 percent
(that is, the proposed OPD fee schedule increase factor of 2.7 percent
further reduced by 2.0 percentage points). This would result in a
proposed reduced conversion factor for CY 2020 of $79.770 for hospitals
that fail to meet the Hospital OQR Program requirements (a difference
of -1.628 in the conversion factor relative to hospitals that meet the
requirements).
In summary, for CY 2020, we are proposing to amend Sec. 419.32 by
adding a new paragraph (b)(1)(iv)(B)(11) to reflect the reductions to
the OPD fee schedule increase factor that are required for CY 2020 to
satisfy the statutory requirements of sections 1833(t)(3)(F) and
(t)(3)(G)(v) of the Act. We are proposing to use a reduced conversion
factor of $79.770 in the calculation of payments for hospitals that
fail to meet the Hospital OQR Program requirements (a difference of -
1.628 in the conversion factor relative to hospitals that meet the
requirements).
For CY 2020, we are proposing to use a conversion factor of $81.398
in the calculation of the national unadjusted payment rates for those
items and services for which payment rates are calculated using
geometric mean costs; that is, the proposed OPD fee schedule increase
factor of 2.7 percent for CY 2020, the required proposed wage index
budget neutrality adjustment of approximately 0.9993, the proposed
cancer hospital payment adjustment of 0.9998, and the proposed
adjustment of -0.20 percentage point of projected OPPS spending for the
difference in pass-through spending that resulted in a proposed
conversion factor for CY 2020 of $81.398. We refer readers to section
XXVI.B. of this proposed rule for a discussion of the estimated effect
on the conversion factor of a policy to pay for 340B-acquired drugs at
ASP+3 percent, which is a policy on which we solicit comments for
potential future rulemaking in the event of an adverse decision on
appeal in the ongoing litigation involving our payment policy for 340B-
acquired drugs.
C. Proposed Wage Index Changes
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust the portion of payment and
coinsurance attributable to labor-related costs for relative
differences in labor and labor-related costs across geographic regions
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion
of the OPPS payment rate is called the OPPS labor-related share. Budget
neutrality is discussed in section II.B. of this proposed rule.
The OPPS labor-related share is 60 percent of the national OPPS
payment. This labor-related share is based on a regression analysis
that determined that, for all hospitals, approximately 60 percent of
the costs of services paid under the OPPS were attributable to wage
costs. We confirmed that this labor-related share for outpatient
services is appropriate during our regression analysis for the payment
adjustment for rural hospitals in the CY 2006 OPPS final rule with
comment period (70 FR 68553). In this CY 2020 OPPS/ASC proposed rule,
we are proposing to continue this policy for the CY 2020 OPPS. We refer
readers to section II.H. of this proposed rule for a description and an
example of how the wage index for a particular hospital is used to
determine payment for the hospital.
As discussed in the claims accounting narrative included with the
supporting documentation for this proposed rule (which is available via
the internet on the CMS website), for estimating APC costs, we would
standardize 60 percent of estimated claims costs for geographic area
wage variation using the same FY 2020 pre-reclassified wage index that
CMS is proposing to use under the IPPS to standardize costs. This
standardization process removes the effects of differences in area wage
levels from the determination of a national unadjusted OPPS payment
rate and copayment amount.
Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS
April 7, 2000 final rule with comment period (65 FR 18495 and 18545)),
the OPPS adopted the final fiscal year IPPS post-reclassified wage
index as the calendar year wage index for adjusting the OPPS standard
payment amounts for labor market differences. Therefore, the wage index
that applies to a particular acute care, short-stay hospital under the
IPPS also applies to that hospital under the OPPS. As initially
explained in the September 8, 1998 OPPS proposed rule (63 FR 47576), we
believe that using the IPPS wage index as the source of an
[[Page 39430]]
adjustment factor for the OPPS is reasonable and logical, given the
inseparable, subordinate status of the HOPD within the hospital
overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS
wage index is updated annually.
The Affordable Care Act contained several provisions affecting the
wage index. These provisions were discussed in the CY 2012 OPPS/ASC
final rule with comment period (76 FR 74191). Section 10324 of the
Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act,
which defines a frontier State and amended section 1833(t) of the Act
to add paragraph (19), which requires a frontier State wage index floor
of 1.00 in certain cases, and states that the frontier State floor
shall not be applied in a budget neutral manner. We codified these
requirements at Sec. 419.43(c)(2) and (3) of our regulations. For the
CY 2020 OPPS, we are proposing to implement this provision in the same
manner as we have since CY 2011. Under this policy, the frontier State
hospitals would receive a wage index of 1.00 if the otherwise
applicable wage index (including reclassification, the rural floor, and
rural floor budget neutrality) is less than 1.00. Because the HOPD
receives a wage index based on the geographic location of the specific
inpatient hospital with which it is associated, the frontier State wage
index adjustment applicable for the inpatient hospital also would apply
for any associated HOPD. We refer readers to the FY 2011 through FY
2019 IPPS/LTCH PPS final rules for discussions regarding this
provision, including our methodology for identifying which areas meet
the definition of ``frontier States'' as provided for in section
1886(d)(3)(E)(iii)(II) of the Act: For FY 2011, 75 FR 50160 through
50161; for FY 2012, 76 FR 51793, 51795, and 51825; for FY 2013, 77 FR
53369 through 53370; for FY 2014, 78 FR 50590 through 50591; for FY
2015, 79 FR 49971; for FY 2016, 80 FR 49498; for FY 2017, 81 FR 56922;
for FY 2018, 82 FR 38142; and for FY 2019, 83 FR 41380.
In addition to the changes required by the Affordable Care Act, we
note that the proposed FY 2020 IPPS wage indexes continue to reflect a
number of adjustments implemented over the past few years, including,
but not limited to, reclassification of hospitals to different
geographic areas, the rural floor provisions, an adjustment for
occupational mix, and an adjustment to the wage index based on
commuting patterns of employees (the out-migration adjustment). In
addition, we note that, as discussed in the FY 2020 IPPS/LTCH PPS
proposed rule (84 FR 19393 through 19399), we proposed a number of
policies under the IPPS to address wage index disparities between high
and low wage index value hospitals. In particular, in the FY 2020 IPPS/
LTCH PPS proposed rule, we proposed to (1) calculate the rural floor
without including the wage data of urban hospitals that have
reclassified as rural under section 1886(d)(8)(E) of the Act (as
implemented in Sec. 412.103) (84 FR 19396 through 19398); (2) remove
the wage data of urban hospitals that have reclassified as rural under
Sec. 412.103 from the calculation of ``the wage index for rural areas
in the State'' for purposes of applying section 1886(d)(8)(C)(iii) of
the Act (84 FR 19398); (3) increase the wage index values for hospitals
with a wage index below the 25th percentile wage index value across all
hospitals 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, and to offset the estimated increase in
payments to hospitals with wage index values below the 25th percentile
by decreasing the wage index values for hospitals with wage index
values above the 75th percentile wage index value across all hospitals
(84 FR 19394 through 19396); and (4) apply a 5-percent cap for FY 2020
on any decrease in a hospital's final wage index from the hospital's
final wage index in FY 2019, as a proposed transition wage index to
help mitigate any significant negative impacts on hospitals (84 FR
19398). In addition, in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR
19398), we proposed to apply a budget neutrality adjustment to the
standardized amount so that our proposed transition wage index for
hospitals that may be negatively impacted (described in item (4) above)
would be implemented in a budget neutral manner. Furthermore, in the FY
2020 IPPS/LTCH PPS proposed rule (84 FR 19398 through 19399), we noted
that our proposed adjustment relating to the rural floor calculation
also would be budget neutral. We refer readers to the FY 2020 IPPS/LTCH
PPS proposed rule (84 FR 19373 through 19399) for a detailed discussion
of all proposed changes to the FY 2020 IPPS wage indexes.
As discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951
through 49963) and in each subsequent IPPS/LTCH PPS final rule,
including the FY 2019 IPPS/LTCH PPS final rule (83 FR 41362), the
Office of Management and Budget (OMB) issued revisions to the labor
market area delineations on February 28, 2013 (based on 2010 Decennial
Census data), that included a number of significant changes, such as
new Core Based Statistical Areas (CBSAs), urban counties that became
rural, rural counties that became urban, and existing CBSAs that were
split apart (OMB Bulletin 13-01). This bulletin can be found at:
https://obamawhitehouse.archives.gov/sites/default/files/omb/bulletins/2013/b13-01.pdf. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49950
through 49985), for purposes of the IPPS, we adopted the use of the OMB
statistical area delineations contained in OMB Bulletin No. 13-01,
effective October 1, 2014. For purposes of the OPPS, in the CY 2015
OPPS/ASC final rule with comment period (79 FR 66826 through 66828), we
adopted the use of the OMB statistical area delineations contained in
OMB Bulletin No. 13-01, effective January 1, 2015, beginning with the
CY 2015 OPPS wage indexes. In the FY 2017 IPPS/LTCH PPS final rule (81
FR 56913), we adopted revisions to statistical areas contained in OMB
Bulletin No. 15-01, issued on July 15, 2015, which provided updates to
and superseded OMB Bulletin No. 13-01 that was issued on February 28,
2013. For purposes of the OPPS, in the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79598), we adopted the revisions to the OMB
statistical area delineations contained in OMB Bulletin No. 15-01,
effective January 1, 2017, beginning with the CY 2017 OPPS wage
indexes.
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
provided detailed information on the update to the statistical areas
since July 15, 2015, and were 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 CY 2019 OPPS/ASC final rule with comment period (83 FR
58863 through 58865), we adopted the updates set forth in OMB Bulletin
No. 17-01, effective January 1, 2019, beginning with the CY 2019 wage
index. We continue to believe that it is important for the OPPS to use
the latest labor market area delineations available as soon as is
reasonably possible in order to maintain a more accurate and up-to-date
payment system that reflects the reality of population shifts and labor
market conditions. For a complete discussion of the adoption of the
[[Page 39431]]
updates set forth in OMB Bulletin No. 17-01, we refer readers to the CY
2019 OPPS/ASC final rule with comment period (83 FR 58864 through
58865).
As we stated in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR
19374), for the FY 2020 IPPS wage indexes, we would continue 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. Similarly, in this CY 2020 OPPS/ASC proposed rule, for
the CY 2020 OPPS wage indexes, we would continue to use the OMB
delineations that were adopted under the OPPS, beginning with CY 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.
CBSAs are made up of one or more constituent counties. Each CBSA
and constituent county has its own unique identifying codes. The FY
2018 IPPS/LTCH PPS final rule (82 FR 38130) discussed the two different
lists of codes to identify counties: Social Security Administration
(SSA) codes and Federal Information Processing Standard (FIPS) codes.
Historically, CMS listed and used SSA and FIPS county codes to identify
and crosswalk counties to CBSA codes for purposes of the IPPS and OPPS
wage indexes. However, the SSA county codes are no longer being
maintained and updated, although the FIPS codes continue to be
maintained by the U.S. Census Bureau. 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 (which, as of May 6, 2019, migrated to:
https://www.census.gov/programs-surveys/geography.html). In the FY 2018
IPPS/LTCH PPS final rule (82 FR 38130), for purposes of crosswalking
counties to CBSAs for the IPPS wage index, we finalized our proposal to
discontinue the use of the SSA county codes and begin using only the
FIPS county codes. Similarly, for the purposes of crosswalking counties
to CBSAs for the OPPS wage index, in the CY 2018 OPPS/ASC final rule
with comment period (82 FR 59260), we finalized our proposal to
discontinue the use of SSA county codes and begin using only the FIPS
county codes for the purposes of crosswalking counties to CBSAs for the
OPPS wage index. For CY 2020, under the OPPS, we are continuing to use
only the FIPS county codes for purposes of crosswalking counties to
CBSAs.
In this CY 2020 OPPS/ASC proposed rule, we are proposing to use the
FY 2020 hospital IPPS post-reclassified wage index for urban and rural
areas as the wage index for the OPPS to determine the wage adjustments
for both the OPPS payment rate and the copayment standardized amount
for CY 2020. Therefore, any adjustments for the FY 2020 IPPS post-
reclassified wage index, including, but not limited to, any proposed
policies finalized under the IPPS to address wage index disparities
between low and high wage index value hospitals as discussed above and
in the FY 2020 IPPS/LTCH PPS proposed rule at 84 FR 19393 through19399,
would be reflected in the final CY 2020 OPPS wage index beginning on
January 1, 2020. (We refer readers to the FY 2020 IPPS/LTCH PPS
proposed rule (84 FR 19373 through 19399) and the proposed FY 2020
hospital wage index files posted on the CMS website.) With regard to
budget neutrality for the CY 2020 OPPS wage index, we refer readers to
section II.B. of this proposed rule. We continue to believe that using
the IPPS wage index as the source of an adjustment factor for the OPPS
is reasonable and logical, given the inseparable, subordinate status of
the HOPD within the hospital overall.
Hospitals that are paid under the OPPS, but not under the IPPS, do
not have an assigned hospital wage index under the IPPS. Therefore, for
non-IPPS hospitals paid under the OPPS, it is our longstanding policy
to assign the wage index that would be applicable if the hospital were
paid under the IPPS, based on its geographic location and any
applicable wage index adjustments. In this CY 2020 OPPS/ASC proposed
rule, we are proposing to continue this policy for CY 2020, and are
including a brief summary of the major proposed FY 2020 IPPS wage index
policies and adjustments that we are proposing to apply to these
hospitals under the OPPS for CY 2020, which we have summarized below.
We refer readers to the FY 2020 IPPS/LTCH PPS proposed rule (84 FR
19373 through 19399) for a detailed discussion of the proposed changes
to the FY 2020 IPPS wage indexes.
It has been our longstanding policy to allow non-IPPS hospitals
paid under the OPPS to qualify for the out-migration adjustment if they
are located in a section 505 out-migration county (section 505 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)). Applying this adjustment is consistent with our policy of
adopting IPPS wage index policies for hospitals paid under the OPPS. We
note that, because non-IPPS hospitals cannot reclassify, they are
eligible for the out-migration wage index adjustment if they are
located in a section 505 out-migration county. This is the same out-
migration adjustment policy that applies if the hospital were paid
under the IPPS. For CY 2020, we are proposing to continue our policy of
allowing non-IPPS hospitals paid under the OPPS to qualify for the out-
migration adjustment if they are located in a section 505 out-migration
county (section 505 of the MMA). In addition, for non-IPPS hospitals
paid under the OPPS, we are proposing to apply any proposed policies
that are finalized under the IPPS relating to wage index disparities as
discussed earlier in this proposed rule and in the FY 2020 IPPS/LTCH
PPS proposed rule at 84 FR 19393 through 19399. We also are proposing
that the wage index that would apply to non-IPPS hospitals for CY 2020
would include the rural floor adjustment.
For CMHCs, for CY 2020, we are proposing to continue to calculate
the wage index by using the post-reclassification IPPS wage index based
on the CBSA where the CMHC is located. We also are proposing to apply
any proposed policies that are finalized under the IPPS relating to
wage index disparities as discussed earlier in this proposed rule and
in the FY 2020 IPPS/LTCH PPS proposed rule at 84 FR 19393 through
19399. In addition, we are proposing that the wage index that would
apply to CMHCs for CY 2020 would include the rural floor adjustment.
Also, we are proposing that the wage index that would apply to CMHCs
would not include the out-migration adjustment because that adjustment
only applies to hospitals.
Table 4 associated with the FY 2020 IPPS/LTCH PPS proposed rule
(available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html)
identifies counties eligible for the out-migration adjustment. Table 2
associated with the FY 2020 IPPS/LTCH PPS proposed rule (available for
download via the website above) identifies IPPS hospitals that would
receive the out-migration adjustment for FY 2020. We are including the
out-migration adjustment information from Table 2 associated with the
FY 2020 IPPS/LTCH PPS proposed rule as Addendum L to this proposed rule
with the addition of non-IPPS hospitals that would receive the section
505 out-migration adjustment under this CY
[[Page 39432]]
2020 OPPS/ASC proposed rule. Addendum L is available via the internet
on the CMS website. We refer readers to the CMS website for the OPPS
at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. At this link, readers will find a
link to the proposed FY 2020 IPPS wage index tables and Addendum L.
D. Proposed Statewide Average Default Cost-to-Charge Ratios (CCRs)
In addition to using CCRs to estimate costs from charges on claims
for ratesetting, CMS uses overall hospital-specific CCRs calculated
from the hospital's most recent cost report to determine outlier
payments, payments for pass-through devices, and monthly interim
transitional corridor payments under the OPPS during the PPS year. For
certain hospitals, under the regulations at 42 CFR 419.43(d)(5)(iii),
CMS uses the statewide average default CCRs to determine the payments
mentioned earlier if it is unable to determine an accurate CCR for a
hospital in certain circumstances. This includes hospitals that are
new, hospitals that have not accepted assignment of an existing
hospital's provider agreement, and hospitals that have not yet
submitted a cost report. CMS also uses the statewide average default
CCRs to determine payments for hospitals whose CCR falls outside the
predetermined ceiling threshold for a valid CCR or for hospitals in
which the most recent cost report reflects an all-inclusive rate status
(Medicare Claims Processing Manual (Pub. 100-04), Chapter 4, Section
10.11).
We discussed our policy for using default CCRs, including setting
the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68594 through 68599) in the context of
our adoption of an outlier reconciliation policy for cost reports
beginning on or after January 1, 2009. For details on our process for
calculating the statewide average CCRs, we refer readers to the CY 2020
OPPS proposed rule Claims Accounting Narrative that is posted on the
CMS website. In this CY 2020 OPPS/ASC proposed rule, we are proposing
to update the default ratios for CY 2020 using the most recent cost
report data. We will update these ratios in the final rule if more
recent cost report data are available.
Beginning with this CY 2020 proposed rule, we are no longer
publishing a table in the Federal Register containing the statewide
average CCRs in the annual OPPS proposed rule and final rule. These
CCRs with the upper limit will be available for download with each OPPS
calendar year proposed rule and final rule on the CMS website. We refer
the reader to the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; click on the link on the left
of the page titled ``Hospital Outpatient Regulations and Notices'' and
then select the relevant regulation to download the statewide CCRs and
upper limit in the downloads section of the web page.
E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs) and
Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2020
In the CY 2006 OPPS final rule with comment period (70 FR 68556),
we finalized a payment increase for rural sole community hospitals
(SCHs) of 7.1 percent for all services and procedures paid under the
OPPS, excluding drugs, biologicals, brachytherapy sources, and devices
paid under the pass-through payment policy, in accordance with section
1833(t)(13)(B) of the Act, as added by section 411 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)
(Pub. L. 108-173). Section 1833(t)(13) of the Act provided the
Secretary the authority to make an adjustment to OPPS payments for
rural hospitals, effective January 1, 2006, if justified by a study of
the difference in costs by APC between hospitals in rural areas and
hospitals in urban areas. Our analysis showed a difference in costs for
rural SCHs. Therefore, for the CY 2006 OPPS, we finalized a payment
adjustment for rural SCHs of 7.1 percent for all services and
procedures paid under the OPPS, excluding separately payable drugs and
biologicals, brachytherapy sources, items paid at charges reduced to
costs, and devices paid under the pass-through payment policy, in
accordance with section 1833(t)(13)(B) of the Act.
In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010
and 68227), for purposes of receiving this rural adjustment, we revised
Sec. 419.43(g) of the regulations to clarify that essential access
community hospitals (EACHs) also are eligible to receive the rural SCH
adjustment, assuming these entities otherwise meet the rural adjustment
criteria. Currently, two hospitals are classified as EACHs, and as of
CY 1998, under section 4201(c) of Public Law 105-33, a hospital can no
longer become newly classified as an EACH.
This adjustment for rural SCHs is budget neutral and applied before
calculating outlier payments and copayments. We stated in the CY 2006
OPPS final rule with comment period (70 FR 68560) that we would not
reestablish the adjustment amount on an annual basis, but we may review
the adjustment in the future and, if appropriate, would revise the
adjustment. We provided the same 7.1 percent adjustment to rural SCHs,
including EACHs, again in CYs 2008 through 2019. Further, in the CY
2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated
the regulations at Sec. 419.43(g)(4) to specify, in general terms,
that items paid at charges adjusted to costs by application of a
hospital-specific CCR are excluded from the 7.1 percent payment
adjustment.
For the CY 2020 OPPS, we are proposing to continue the current
policy of a 7.1 percent payment adjustment that is done in a budget
neutral manner for rural SCHs, including EACHs, for all services and
procedures paid under the OPPS, excluding separately payable drugs and
biologicals, brachytherapy sources, items paid at charges reduced to
costs, and devices paid under the pass-through payment policy.
F. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2020
1. Background
Since the inception of the OPPS, which was authorized by the
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid
the 11 hospitals that meet the criteria for cancer hospitals identified
in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered
outpatient hospital services. These cancer hospitals are exempted from
payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced
Budget Refinement Act of 1999 (Pub. L. 106-113), Congress established
section 1833(t)(7) of the Act, ``Transitional Adjustment to Limit
Decline in Payment,'' to determine OPPS payments to cancer and
children's hospitals based on their pre-BBA payment amount (often
referred to as ``held harmless'').
As required under section 1833(t)(7)(D)(ii) of the Act, a cancer
hospital receives the full amount of the difference between payments
for covered outpatient services under the OPPS and a ``pre-BBA
amount.'' That is, cancer hospitals are permanently held harmless to
their ``pre-BBA amount,'' and they receive transitional outpatient
payments (TOPs) or hold harmless payments to ensure that they do not
[[Page 39433]]
receive a payment that is lower in amount under the OPPS than the
payment amount they would have received before implementation of the
OPPS, as set forth in section 1833(t)(7)(F) of the Act. The ``pre-BBA
amount'' is the product of the hospital's reasonable costs for covered
outpatient services occurring in the current year and the base payment-
to-cost ratio (PCR) for the hospital defined in section
1833(t)(7)(F)(ii) of the Act. The ``pre-BBA amount'' and the
determination of the base PCR are defined at 42 CFR 419.70(f). TOPs are
calculated on Worksheet E, Part B, of the Hospital Cost Report or the
Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-
2552-10, respectively), as applicable each year. Section 1833(t)(7)(I)
of the Act exempts TOPs from budget neutrality calculations.
Section 3138 of the Affordable Care Act amended section 1833(t) of
the Act by adding a new paragraph (18), which instructs the Secretary
to conduct a study to determine if, under the OPPS, outpatient costs
incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of
the Act with respect to APC groups exceed outpatient costs incurred by
other hospitals furnishing services under section 1833(t) of the Act,
as determined appropriate by the Secretary. Section 1833(t)(18)(A) of
the Act requires the Secretary to take into consideration the cost of
drugs and biologicals incurred by cancer hospitals and other hospitals.
Section 1833(t)(18)(B) of the Act provides that, if the Secretary
determines that cancer hospitals' costs are higher than those of other
hospitals, the Secretary shall provide an appropriate adjustment under
section 1833(t)(2)(E) of the Act to reflect these higher costs. In
2011, after conducting the study required by section 1833(t)(18)(A) of
the Act, we determined that outpatient costs incurred by the 11
specified cancer hospitals were greater than the costs incurred by
other OPPS hospitals. For a complete discussion regarding the cancer
hospital cost study, we refer readers to the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74200 through 74201).
Based on these findings, we finalized a policy to provide a payment
adjustment to the 11 specified cancer hospitals that reflects their
higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74202 through 74206). Specifically, we
adopted a policy to provide additional payments to the cancer hospitals
so that each cancer hospital's final PCR for services provided in a
given calendar year is equal to the weighted average PCR (which we
refer to as the ``target PCR'') for other hospitals paid under the
OPPS. The target PCR is set in advance of the calendar year and is
calculated using the most recently submitted or settled cost report
data that are available at the time of final rulemaking for the
calendar year. The amount of the payment adjustment is made on an
aggregate basis at cost report settlement. We note that the changes
made by section 1833(t)(18) of the Act do not affect the existing
statutory provisions that provide for TOPs for cancer hospitals. The
TOPs are assessed, as usual, after all payments, including the cancer
hospital payment adjustment, have been made for a cost reporting
period. For CYs 2012 and 2013, the target PCR for purposes of the
cancer hospital payment adjustment was 0.91. For CY 2014, the target
PCR was 0.90. For CY 2015, the target PCR was 0.90. For CY 2016, the
target PCR was 0.92, as discussed in the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70362 through 70363). For CY 2017, the
target PCR was 0.91, as discussed in the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79603 through 79604). For CY 2018, the
target PCR was 0.88, as discussed in the CY 2018 OPPS/ASC final rule
with comment period (82 FR 59265 through 59266). For CY 2019, the
target PCR was 0.88, as discussed in the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58871 through 58873).
2. Proposed Policy for CY 2020
Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255)
amended section 1833(t)(18) of the Act by adding subparagraph (C),
which requires that in applying 42 CFR 419.43(i) (that is, the payment
adjustment for certain cancer hospitals) for services furnished on or
after January 1, 2018, the target PCR adjustment be reduced by 1.0
percentage point less than what would otherwise apply. Section 16002(b)
also provides that, in addition to the percentage reduction, the
Secretary may consider making an additional percentage point reduction
to the target PCR that takes into account payment rates for applicable
items and services described under section 1833(t)(21)(C) of the Act
for hospitals that are not cancer hospitals described under section
1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality
adjustment under section 1833(t) of the Act, the Secretary shall not
take into account the reduced expenditures that result from application
of section 1833(t)(18)(C) of the Act.
For CY 2020, we are proposing to provide additional payments to the
11 specified cancer hospitals so that each cancer hospital's final PCR
is equal to the weighted average PCR (or ``target PCR'') for the other
OPPS hospitals, using the most recent submitted or settled cost report
data that were available at the time of the development of this
proposed rule, reduced by 1.0 percentage point, to comply with section
16002(b) of the 21st Century Cures Act.
We are not proposing an additional reduction beyond the 1.0
percentage point reduction required by section 16002(b) for CY 2020. To
calculate the proposed CY 2020 target PCR, we are using the same
extract of cost report data from HCRIS, as discussed in section II.A.
of this proposed rule, used to estimate costs for the CY 2020 OPPS.
Using these cost report data, we are including data from Worksheet E,
Part B, for each hospital, using data from each hospital's most recent
cost report, whether as submitted or settled.
We then limited the dataset to the hospitals with CY 2018 claims
data that we used to model the impact of the proposed CY 2020 APC
relative payment weights (3,770 hospitals) because it is appropriate to
use the same set of hospitals that are being used to calibrate the
modeled CY 2020 OPPS. The cost report data for the hospitals in this
dataset were from cost report periods with fiscal year ends ranging
from 2016 to 2018. We then removed the cost report data of the 49
hospitals located in Puerto Rico from our dataset because we did not
believe their cost structure reflected the costs of most hospitals paid
under the OPPS, and, therefore, their inclusion may bias the
calculation of hospital-weighted statistics. We also removed the cost
report data of 23 hospitals because these hospitals had cost report
data that were not complete (missing aggregate OPPS payments, missing
aggregate cost data, or missing both), so that all cost reports in the
study would have both the payment and cost data necessary to calculate
a PCR for each hospital, leading to a proposed analytic file of 3,539
hospitals with cost report data.
Using this smaller dataset of cost report data, we estimated that,
on average, the OPPS payments to other hospitals furnishing services
under the OPPS were approximately 90 percent of reasonable cost
(weighted average PCR of 0.90). Therefore, after applying the 1.0
percentage point reduction, as required by section 16002(b) of the 21st
Century Cures Act, we are proposing that the payment amount associated
with the cancer hospital payment
[[Page 39434]]
adjustment to be determined at cost report settlement would be the
additional payment needed to result in a proposed target PCR equal to
0.89 for each cancer hospital.
Table 6 shows the estimated percentage increase in OPPS payments to
each cancer hospital for CY 2020, due to the cancer hospital payment
adjustment policy. The actual amount of the CY 2020 cancer hospital
payment adjustment for each cancer hospital will be determined at cost
report settlement and will depend on each hospital's CY 2020 payments
and costs. We note that the requirements contained in section
1833(t)(18) of the Act do not affect the existing statutory provisions
that provide for TOPs for cancer hospitals. The TOPs will be assessed,
as usual, after all payments, including the cancer hospital payment
adjustment, have been made for a cost reporting period.
[GRAPHIC] [TIFF OMITTED] TP09AU19.009
G. Proposed Hospital Outpatient Outlier Payments
1. Background
The OPPS provides outlier payments to hospitals to help mitigate
the financial risk associated with high-cost and complex procedures,
where a very costly service could present a hospital with significant
financial loss. As explained in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66832 through 66834), we set our projected target
for aggregate outlier payments at 1.0 percent of the estimated
aggregate total payments under the OPPS for the prospective year.
Outlier payments are provided on a service-by-service basis when the
cost of a service exceeds the APC payment amount multiplier threshold
(the APC payment amount multiplied by a certain amount) as well as the
APC payment amount plus a fixed-dollar amount threshold (the APC
payment plus a certain amount of dollars). In CY 2019, the outlier
threshold was met when the hospital's cost of furnishing a service
exceeded 1.75 times (the multiplier threshold) the APC payment amount
and exceeded the APC payment amount plus $4,825 (the fixed-dollar
amount threshold) (83 FR 58874 through 58875). If the cost of a service
exceeds both the multiplier threshold and the fixed-dollar threshold,
the outlier payment is calculated as 50 percent of the amount by which
the cost of furnishing the service exceeds 1.75 times the APC payment
amount. Beginning with CY 2009 payments, outlier payments are subject
to a reconciliation process similar to the IPPS outlier reconciliation
process for cost reports, as discussed in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68594 through 68599).
It has been our policy to report the actual amount of outlier
payments as a percent of total spending in the claims being used to
model the OPPS. Our estimate of total outlier payments as a percent of
total CY 2018 OPPS payments, using CY 2018 claims available for this CY
2020 OPPS/ASC proposed rule, is approximately 1.0 percent of the total
aggregated OPPS payments. Therefore, for CY 2018, we estimated that we
paid the outlier target of 1.0 percent of total aggregated OPPS
payments. Using an updated claims dataset for this CY 2020 OPPS
proposed rule, we estimate that we paid
[[Page 39435]]
approximately 1.03 percent of the total aggregated OPPS payments in
outliers for CY 2018.
For this CY 2020 OPPS/ASC proposed rule, using CY 2018 claims data
and CY 2019 payment rates, we estimate that the aggregate outlier
payments for CY 2019 would be approximately 1.03 percent of the total
CY 2019 OPPS payments. We are providing estimated CY 2020 outlier
payments for hospitals and CMHCs with claims included in the claims
data that we used to model impacts in the Hospital--Specific Impacts--
Provider-Specific Data file on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
2. Proposed Outlier Calculation for CY 2020
For CY 2020, we are proposing to continue our policy of estimating
outlier payments to be 1.0 percent of the estimated aggregate total
payments under the OPPS. We are proposing that a portion of that 1.0
percent, an amount equal to less than 0.01 percent of outlier payments
(or 0.0001 percent of total OPPS payments), would be allocated to CMHCs
for PHP outlier payments. This is the amount of estimated outlier
payments that would result from the proposed CMHC outlier threshold as
a proportion of total estimated OPPS outlier payments. As discussed in
section VIII.C. of this proposed rule, we are proposing to continue our
longstanding policy that if a CMHC's cost for partial hospitalization
services, paid under APC 5853 (Partial Hospitalization for CMHCs),
exceeds 3.40 times the payment rate for proposed APC 5853, the outlier
payment would be calculated as 50 percent of the amount by which the
cost exceeds 3.40 times the proposed APC 5853 payment rate.
For further discussion of CMHC outlier payments, we refer readers
to section VIII.C. of this proposed rule.
To ensure that the estimated CY 2020 aggregate outlier payments
would equal 1.0 percent of estimated aggregate total payments under the
OPPS, we are proposing that the hospital outlier threshold be set so
that outlier payments would be triggered when a hospital's cost of
furnishing a service exceeds 1.75 times the APC payment amount and
exceeds the APC payment amount plus $4,950.
We calculated the proposed fixed-dollar threshold of $4,950 using
the standard methodology most recently used for CY 2019 (83 FR 58874
through 58875). For purposes of estimating outlier payments for the
proposed rule, we are using the hospital-specific overall ancillary
CCRs available in the April 2019 update to the Outpatient Provider-
Specific File (OPSF). The OPSF contains provider-specific data, such as
the most current CCRs, which are maintained by the MACs and used by the
OPPS Pricer to pay claims. The claims that we use to model each OPPS
update lag by 2 years.
In order to estimate the CY 2020 hospital outlier payments for this
proposed rule, we inflate the charges on the CY 2018 claims using the
same inflation factor of 1.11189 that we used to estimate the proposed
IPPS fixed-dollar outlier threshold for the FY 2020 IPPS/LTCH PPS
proposed rule (84 FR 19596). We used an inflation factor of 1.05446 to
estimate CY 2019 charges from the CY 2018 charges reported on CY 2018
claims. The methodology for determining this charge inflation factor is
discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41717 through
41718). As we stated in the CY 2005 OPPS final rule with comment period
(69 FR 65845), we believe that the use of these charge inflation
factors is appropriate for the OPPS because, with the exception of the
inpatient routine service cost centers, hospitals use the same
ancillary and outpatient cost centers to capture costs and charges for
inpatient and outpatient services.
As noted in the CY 2007 OPPS/ASC final rule with comment period (71
FR 68011), we are concerned that we could systematically overestimate
the OPPS hospital outlier threshold if we do not apply a CCR inflation
adjustment factor. Therefore, we are proposing to apply the same CCR
inflation adjustment factor that we proposed to apply for the FY 2020
IPPS outlier calculation to the CCRs used to simulate the proposed CY
2020 OPPS outlier payments to determine the fixed-dollar threshold.
Specifically, for CY 2020, we are proposing to apply an adjustment
factor of 0.97517 to the CCRs that were in the April 2019 OPSF to trend
them forward from CY 2019 to CY 2020. The methodology for calculating
the proposed adjustment is discussed in the FY 2020 IPPS/LTCH PPS
proposed rule (84 FR 19597).
To model hospital outlier payments for the proposed rule, we are
applying the overall CCRs from the April 2019 OPSF after adjustment
(using the proposed CCR inflation adjustment factor of 0.97517 to
approximate CY 2020 CCRs) to charges on CY 2018 claims that were
adjusted (using the proposed charge inflation factor of 1.11189 to
approximate CY 2020 charges). We simulated aggregated CY 2020 hospital
outlier payments using these costs for several different fixed-dollar
thresholds, holding the 1.75 multiplier threshold constant and assuming
that outlier payments would continue to be made at 50 percent of the
amount by which the cost of furnishing the service would exceed 1.75
times the APC payment amount, until the total outlier payments equaled
1.0 percent of aggregated estimated total CY 2020 OPPS payments. We are
estimating that a proposed fixed-dollar threshold of $4,950, combined
with the proposed multiplier threshold of 1.75 times the APC payment
rate, would allocate 1.0 percent of aggregated total OPPS payments to
outlier payments. For CMHCs, we are proposing that, if a CMHC's cost
for partial hospitalization services, paid under APC 5853, exceeds 3.40
times the payment rate for APC 5853, the outlier payment would be
calculated as 50 percent of the amount by which the cost exceeds 3.40
times the APC 5853 payment rate.
Section 1833(t)(17)(A) of the Act, which applies to hospitals, as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
reduction to their OPD fee schedule increase factor; that is, the
annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that will apply to certain outpatient items and services
furnished by hospitals that are required to report outpatient quality
data and that fail to meet the Hospital OQR Program requirements. For
hospitals that fail to meet the Hospital OQR Program requirements, we
are continuing the policy that we implemented in CY 2010 that the
hospitals' costs will be compared to the reduced payments for purposes
of outlier eligibility and payment calculation. For more information on
the Hospital OQR Program, we referred readers to section XIV. of this
proposed rule.
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
The basic methodology for determining prospective payment rates for
HOPD services under the OPPS is set forth in existing regulations at 42
CFR part 419, subparts C and D. For this CY 2020 OPPS/ASC proposed
rule, the payment rate for most services and procedures for which
payment is made under the OPPS is the product of the
[[Page 39436]]
conversion factor calculated in accordance with section II.B. of this
proposed rule and the relative payment weight determined under section
II.A. of this proposed rule. Therefore, the proposed national
unadjusted payment rate for most APCs contained in Addendum A to this
proposed rule (which is available via the internet on the CMS website)
and for most HCPCS codes to which separate payment under the OPPS has
been assigned in Addendum B to this proposed rule (which is available
via the internet on the CMS website) was calculated by multiplying the
proposed CY 2020 scaled weight for the APC by the proposed CY 2020
conversion factor.
We note that section 1833(t)(17) of the Act, which applies to
hospitals, as defined under section 1886(d)(1)(B) of the Act, requires
that hospitals that fail to submit data required to be submitted on
quality measures selected by the Secretary, in the form and manner and
at a time specified by the Secretary, incur a reduction of 2.0
percentage points to their OPD fee schedule increase factor, that is,
the annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that apply to certain outpatient items and services provided by
hospitals that are required to report outpatient quality data and that
fail to meet the Hospital OQR Program (formerly referred to as the
Hospital Outpatient Quality Data Reporting Program (HOP QDRP))
requirements. For further discussion of the payment reduction for
hospitals that fail to meet the requirements of the Hospital OQR
Program, we refer readers to section XIV. of this proposed rule.
Below we demonstrate the steps used to determine the APC payments
that will be made in a calendar year under the OPPS to a hospital that
fulfills the Hospital OQR Program requirements and to a hospital that
fails to meet the Hospital OQR Program requirements for a service that
has any of the following status indicator assignments: ``J1'', ``J2'',
``P'', ``Q1'', ``Q2'', ``Q3'', ``Q4'', ``R'', ``S'', ``T'', ``U'', or
``V'' (as defined in Addendum D1 to this proposed rule, which is
available via the internet on the CMS website), in a circumstance in
which the multiple procedure discount does not apply, the procedure is
not bilateral, and conditionally packaged services (status indicator of
``Q1'' and ``Q2'') qualify for separate payment. We note that, although
blood and blood products with status indicator ``R'' and brachytherapy
sources with status indicator ``U'' are not subject to wage adjustment,
they are subject to reduced payments when a hospital fails to meet the
Hospital OQR Program requirements.
Individual providers interested in calculating the payment amount
that they will receive for a specific service from the national
unadjusted payment rates presented in Addenda A and B to this proposed
rule (which are available via the internet on the CMS website) should
follow the formulas presented in the following steps. For purposes of
the payment calculations below, we refer to the national unadjusted
payment rate for hospitals that meet the requirements of the Hospital
OQR Program as the ``full'' national unadjusted payment rate. We refer
to the national unadjusted payment rate for hospitals that fail to meet
the requirements of the Hospital OQR Program as the ``reduced''
national unadjusted payment rate. The reduced national unadjusted
payment rate is calculated by multiplying the reporting ratio of 0.980
times the ``full'' national unadjusted payment rate. The national
unadjusted payment rate used in the calculations below is either the
full national unadjusted payment rate or the reduced national
unadjusted payment rate, depending on whether the hospital met its
Hospital OQR Program requirements in order to receive the full CY 2020
OPPS fee schedule increase factor.
Step 1. Calculate 60 percent (the labor-related portion) of the
national unadjusted payment rate. Since the initial implementation of
the OPPS, we have used 60 percent to represent our estimate of that
portion of costs attributable, on average, to labor. We refer readers
to the April 7, 2000 OPPS final rule with comment period (65 FR 18496
through 18497) for a detailed discussion of how we derived this
percentage. During our regression analysis for the payment adjustment
for rural hospitals in the CY 2006 OPPS final rule with comment period
(70 FR 68553), we confirmed that this labor-related share for hospital
outpatient services is appropriate.
The formula below is a mathematical representation of Step 1 and
identifies the labor-related portion of a specific payment rate for a
specific service.
X is the labor-related portion of the national unadjusted payment rate.
X = .60 * (national unadjusted payment rate).
Step 2. Determine the wage index area in which the hospital is
located and identify the wage index level that applies to the specific
hospital. We note that, under the proposed CY 2020 OPPS policy for
continuing to use the OMB labor market area delineations based on the
2010 Decennial Census data for the wage indexes used under the IPPS, a
hold harmless policy for the wage index may apply, as discussed in
section II.C. of this proposed rule. The wage index values assigned to
each area reflect the geographic statistical areas (which are based
upon OMB standards) to which hospitals are assigned for FY 2020 under
the IPPS, reclassifications through the Medicare Geographic
Classification Review Board (MGCRB), section 1886(d)(8)(B) ``Lugar''
hospitals, reclassifications under section 1886(d)(8)(E) of the Act, as
defined in Sec. 412.103 of the regulations, and hospitals designated
as urban under section 601(g) of Public Law 98-21. For further
discussion of the proposed changes to the FY 2020 IPPS wage indexes, as
applied to the CY 2020 OPPS, we refer readers to section II.C. of this
proposed rule. We are proposing to continue to apply a wage index floor
of 1.00 to frontier States, in accordance with section 10324 of the
Affordable Care Act of 2010.
Step 3. Adjust the wage index of hospitals located in certain
qualifying counties that have a relatively high percentage of hospital
employees who reside in the county, but who work in a different county
with a higher wage index, in accordance with section 505 of Public Law
108-173. Addendum L to this proposed rule (which is available via the
internet on the CMS website) contains the qualifying counties and the
associated wage index increase developed for the proposed FY 2020 IPPS,
which are listed in Table 2 associated with the FY 2020 IPPS/LTCH PPS
proposed rule and available via the internet 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'' and select
``FY 2020 Proposed Rule Tables.'') This step is to be followed only if
the hospital is not reclassified or redesignated under section
1886(d)(8) or section 1886(d)(10) of the Act.
Step 4. Multiply the applicable wage index determined under Steps 2
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
The formula below is a mathematical representation of Step 4 and
adjusts the labor-related portion of the national unadjusted payment
rate for the specific service by the wage index.
Xa is the labor-related portion of the national unadjusted payment rate
(wage adjusted).
[[Page 39437]]
Xa = .60 * (national unadjusted payment rate) * applicable wage index.
Step 5. Calculate 40 percent (the nonlabor-related portion) of the
national unadjusted payment rate and add that amount to the resulting
product of Step 4. The result is the wage index adjusted payment rate
for the relevant wage index area.
The formula below is a mathematical representation of Step 5 and
calculates the remaining portion of the national payment rate, the
amount not attributable to labor, and the adjusted payment for the
specific service.
Y is the nonlabor-related portion of the national unadjusted payment
rate.
Y = .40 * (national unadjusted payment rate).
Adjusted Medicare Payment = Y + Xa.
Step 6. If a provider is an SCH, as set forth in the regulations at
Sec. 412.92, or an EACH, which is considered to be an SCH under
section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural
area, as defined in Sec. 412.64(b), or is treated as being located in
a rural area under Sec. 412.103, multiply the wage index adjusted
payment rate by 1.071 to calculate the total payment.
The formula below is a mathematical representation of Step 6 and
applies the rural adjustment for rural SCHs.
Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment *
1.071.
We are providing examples below of the calculation of both the full
and reduced national unadjusted payment rates that will apply to
certain outpatient items and services performed by hospitals that meet
and that fail to meet the Hospital OQR Program requirements, using the
steps outlined above. For purposes of this example, we are using a
provider that is located in Brooklyn, New York that is assigned to CBSA
35614. This provider bills one service that is assigned to APC 5071
(Level 1 Excision/Biopsy/Incision and Drainage). The proposed CY 2020
full national unadjusted payment rate for APC 5071 is approximately
$617.00. The proposed reduced national unadjusted payment rate for APC
5071 for a hospital that fails to meet the Hospital OQR Program
requirements is approximately $604.66. This reduced rate is calculated
by multiplying the reporting ratio of 0.980 by the full unadjusted
payment rate for APC 5071.
The proposed FY 2020 wage index for a provider located in CBSA
35614 in New York, which includes the proposed adoption of IPPS 2020
wage index policies, is 1.2747. The labor-related portion of the
proposed full national unadjusted payment is approximately $471.89 (.60
* $617.00 * 1.2747). The labor-related portion of the proposed reduced
national unadjusted payment is approximately $462.46 (.60 * 604.66 *
1.2747). The nonlabor-related portion of the proposed full national
unadjusted payment is approximately $246.80 (.40 * $617.00). The
nonlabor-related portion of the proposed reduced national unadjusted
payment is approximately $241.86. (.40 * $604.66). The sum of the
labor-related and nonlabor-related portions of the proposed full
national adjusted payment is approximately $718.69 ($471.89. +
$246.80). The sum of the portions of the proposed reduced national
adjusted payment is approximately $704.32 ($462.46. + $241.86).
I. Proposed Beneficiary Copayments
1. Background
Section 1833(t)(3)(B) of the Act requires the Secretary to set
rules for determining the unadjusted copayment amounts to be paid by
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of
the Act specifies that the Secretary must reduce the national
unadjusted copayment amount for a covered OPD service (or group of such
services) furnished in a year in a manner so that the effective
copayment rate (determined on a national unadjusted basis) for that
service in the year does not exceed a specified percentage. As
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective
copayment rate for a covered OPD service paid under the OPPS in CY
2006, and in calendar years thereafter, shall not exceed 40 percent of
the APC payment rate.
Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered
OPD service (or group of such services) furnished in a year, the
national unadjusted copayment amount cannot be less than 20 percent of
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the
Act limits the amount of beneficiary copayment that may be collected
for a procedure (including items such as drugs and biologicals)
performed in a year to the amount of the inpatient hospital deductible
for that year.
Section 4104 of the Affordable Care Act eliminated the Medicare
Part B coinsurance for preventive services furnished on and after
January 1, 2011, that meet certain requirements, including flexible
sigmoidoscopies and screening colonoscopies, and waived the Part B
deductible for screening colonoscopies that become diagnostic during
the procedure. Our discussion of the changes made by the Affordable
Care Act with regard to copayments for preventive services furnished on
and after January 1, 2011, may be found in section XII.B. of the CY
2011 OPPS/ASC final rule with comment period (75 FR 72013).
2. Proposed OPPS Copayment Policy
For CY 2020, we are proposing to determine copayment amounts for
new and revised APCs using the same methodology that we implemented
beginning in CY 2004. (We refer readers to the November 7, 2003 OPPS
final rule with comment period (68 FR 63458).) In addition, we are
proposing to use the same standard rounding principles that we have
historically used in instances where the application of our standard
copayment methodology would result in a copayment amount that is less
than 20 percent and cannot be rounded, under standard rounding
principles, to 20 percent. (We refer readers to the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66687) in which we discussed our
rationale for applying these rounding principles.) The proposed
national unadjusted copayment amounts for services payable under the
OPPS that would be effective January 1, 2020 are included in Addenda A
and B to this proposed rule (which are available via the internet on
the CMS website).
As discussed in section XIV.E. of this proposed rule, for CY 2020,
the proposed Medicare beneficiary's minimum unadjusted copayment and
national unadjusted copayment for a service to which a reduced national
unadjusted payment rate applies will equal the product of the reporting
ratio and the national unadjusted copayment, or the product of the
reporting ratio and the minimum unadjusted copayment, respectively, for
the service.
We note that OPPS copayments may increase or decrease each year
based on changes in the calculated APC payment rates, due to updated
cost report and claims data, and any changes to the OPPS cost modeling
process. However, as described in the CY 2004 OPPS final rule with
comment period, the development of the copayment methodology generally
moves beneficiary copayments closer to 20 percent of OPPS APC payments
(68 FR 63458 through 63459).
In the CY 2004 OPPS final rule with comment period (68 FR 63459),
we adopted a new methodology to calculate unadjusted copayment amounts
in situations including reorganizing APCs, and we finalized the
following rules to determine copayment amounts in CY 2004 and
subsequent years.
[[Page 39438]]
When an APC group consists solely of HCPCS codes that were
not paid under the OPPS the prior year because they were packaged or
excluded or are new codes, the unadjusted copayment amount would be 20
percent of the APC payment rate.
If a new APC that did not exist during the prior year is
created and consists of HCPCS codes previously assigned to other APCs,
the copayment amount is calculated as the product of the APC payment
rate and the lowest coinsurance percentage of the codes comprising the
new APC.
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
equal to or greater than the prior year's rate, the copayment amount
remains constant (unless the resulting coinsurance percentage is less
than 20 percent).
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
less than the prior year's rate, the copayment amount is calculated as
the product of the new payment rate and the prior year's coinsurance
percentage.
If HCPCS codes are added to or deleted from an APC and,
after recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in a decrease in the coinsurance
percentage for the reconfigured APC, the copayment amount would not
change (unless retaining the copayment amount would result in a
coinsurance rate less than 20 percent).
If HCPCS codes are added to an APC and, after
recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in an increase in the coinsurance
percentage for the reconfigured APC, the copayment amount would be
calculated as the product of the payment rate of the reconfigured APC
and the lowest coinsurance percentage of the codes being added to the
reconfigured APC.
We noted in the CY 2004 OPPS final rule with comment period that we
would seek to lower the copayment percentage for a service in an APC
from the prior year if the copayment percentage was greater than 20
percent. We noted that this principle was consistent with section
1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the
national unadjusted coinsurance rate so that beneficiary liability will
eventually equal 20 percent of the OPPS payment rate for all OPPS
services to which a copayment applies, and with section 1833(t)(3)(B)
of the Act, which achieves a 20-percent copayment percentage when fully
phased in and gives the Secretary the authority to set rules for
determining copayment amounts for new services. We further noted that
the use of this methodology would, in general, reduce the beneficiary
coinsurance rate and copayment amount for APCs for which the payment
rate changes as the result of the reconfiguration of APCs and/or
recalibration of relative payment weights (68 FR 63459).
3. Proposed Calculation of an Adjusted Copayment Amount for an APC
Group
Individuals interested in calculating the national copayment
liability for a Medicare beneficiary for a given service provided by a
hospital that met or failed to meet its Hospital OQR Program
requirements should follow the formulas presented in the following
steps.
Step 1. Calculate the beneficiary payment percentage for the APC by
dividing the APC's national unadjusted copayment by its payment rate.
For example, using APC 5071, $617.00 is approximately 20 percent of the
proposed full national unadjusted payment rate of $123.40. For APCs
with only a minimum unadjusted copayment in Addenda A and B to this
proposed rule (which are available via the internet on the CMS
website), the beneficiary payment percentage is 20 percent.
The formula below is a mathematical representation of Step 1 and
calculates the national copayment as a percentage of national payment
for a given service.
B is the beneficiary payment percentage.
B = National unadjusted copayment for APC/national unadjusted payment
rate for APC.
Step 2. Calculate the appropriate wage-adjusted payment rate for
the APC for the provider in question, as indicated in Steps 2 through 4
under section II.H. of this proposed rule. Calculate the rural
adjustment for eligible providers, as indicated in Step 6 under section
II.H. of this proposed rule.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC.
The formula below is a mathematical representation of Step 3 and
applies the beneficiary payment percentage to the adjusted payment rate
for a service calculated under section II.H. of this proposed rule,
with and without the rural adjustment, to calculate the adjusted
beneficiary copayment for a given service.
Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment
* B.
Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted
Medicare Payment * 1.071) * B.
Step 4. For a hospital that failed to meet its Hospital OQR Program
requirements, multiply the copayment calculated in Step 3 by the
reporting ratio of 0.980.
The proposed unadjusted copayments for services payable under the
OPPS that would be effective January 1, 2020, are shown in Addenda A
and B to this proposed rule (which are available via the internet on
the CMS website). We note that the proposed national unadjusted payment
rates and copayment rates shown in Addenda A and B to this proposed
rule reflect the proposed CY 2020 OPD fee schedule increase factor
discussed in section II.B. of this proposed rule.
In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act
limits the amount of beneficiary copayment that may be collected for a
procedure performed in a year to the amount of the inpatient hospital
deductible for that year.
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New and Revised HCPCS Codes
Payment for OPPS procedures, services, and items are generally
based on medical billing codes, specifically, HCPCS codes, that are
reported on HOPD claims. The HCPCS is divided into two principal
subsystems, referred to as Level I and Level II of the HCPCS. Level I
is comprised of CPT (Current Procedural Terminology), a numeric and
alphanumeric coding system maintained by the American Medical
Association (AMA), and consist of Category I, II, and III CPT codes.
Level II, which is maintained by CMS, is a standardized coding system
that is used primarily to identify products, supplies, and services not
included in the CPT codes. HCPCS codes are used to report surgical
procedures, medical services, items, and supplies under the hospital
OPPS. Specifically, CMS recognizes the following codes on OPPS claims:
Category I CPT codes, which describe surgical procedures,
diagnostic and therapeutic services, and vaccine codes;
Category III CPT codes, which describe new and emerging
technologies, services, and procedures; and
[[Page 39439]]
Level II HCPCS codes (also known as alphanumeric codes),
which are used primarily to identify drugs, devices, ambulance
services, durable medical equipment, orthotics, prosthetics, supplies,
temporary surgical procedures, and medical services not described by
CPT codes.
CPT codes are established by the American Medical Association (AMA)
while the Level II HCPCS codes are established by the CMS HCPCS
Workgroup. These codes are updated and changed throughout the year. CPT
and Level II HCPCS code changes that affect the OPPS are published
through the annual rulemaking cycle and through the OPPS quarterly
update Change Requests (CRs). Generally, these code changes are
effective January 1, April 1, July 1, or October 1. CPT code changes
are released by the AMA while Level II HCPCS code changes are released
to the public via the CMS HCPCS website. CMS recognizes the release of
new CPT and Level II HCPCS codes and makes the codes effective (that
is, the codes can be reported on Medicare claims) outside of the formal
rulemaking process via OPPS quarterly update CRs. Based on our review,
we assign the new codes to interim status indicators (SIs) and APCs.
These interim assignments are finalized in the OPPS/ASC final rules.
This quarterly process offers hospitals access to codes that more
accurately describe items or services furnished and provides payment
for these items or services in a timelier manner than if we waited for
the annual rulemaking process. We solicit public comments on the new
CPT and Level II HCPCS codes and finalize our proposals through our
annual rulemaking process.
We note that, under the OPPS, the APC assignment determines the
payment rate for an item, procedure, or service. Those items,
procedures, or services not paid separately under the hospital OPPS are
assigned to appropriate status indicators. Certain payment status
indicators provide separate payment while other payment status
indicators do not. In section XI. of this proposed rule (Proposed CY
2020 OPPS Payment Status and Comment Indicators), we discuss the
various status indicators used under the OPPS. We also provide a
complete list of the status indicators and their definitions in
Addendum D1 to this CY 2020 OPPS/ASC proposed rule.
1. April 2019 Codes for Which We Are Soliciting Public Comments in This
Proposed Rule
For the April 2019 update, there were no new CPT codes. However,
eight new Level II HCPCS codes were established and made effective on
April 1, 2019. These codes and their long descriptors are listed in
Table 7. Through the April 2019 OPPS quarterly update CR (Transmittal
4255, Change Request 11216, dated March 15, 2019), we recognized
several new Level II HCPCS codes for separate payment under the OPPS.
In this CY 2020 OPPS/ASC proposed rule, we are soliciting public
comments on the proposed APC and status indicator assignments for the
codes listed Table 7. The proposed status indicator, APC assignment,
and payment rate for each HCPCS code can be found in Addendum B to this
proposed rule. The complete list of status indicators and corresponding
definitions used under the OPPS can be found in Addendum D1 to this
proposed rule. These new codes that are effective April 1, 2019 are
assigned to comment indicator ``NP'' in Addendum B to this proposed
rule to indicate that the codes are assigned to an interim APC
assignment and that comments will be accepted on their interim APC
assignments. Also, the complete list of comment indicators and
definitions used under the OPPS can be found in Addendum D2 to this
proposed rule. We note that OPPS Addendum B, Addendum D1, and Addendum
D2 are available via the internet on the CMS website.
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[[Page 39440]]
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2. July 2019 HCPCS Codes for Which We Are Soliciting Public Comments in
This Proposed Rule
For the July 2019 update, 58 new codes were established and made
effective July 1, 2019. The codes and long descriptors are listed in
Table 8. Through the July 2019 OPPS quarterly update CR (Transmittal
4313, Change Request 11318, dated May 24, 2019), we recognized several
new codes for separate payment and assigned them to appropriate interim
OPPS status indicators and APCs. In this CY 2020 OPPS/ASC proposed
rule, we are soliciting public comments on the proposed APC and status
indicator assignments for the codes implemented on July 1, 2019, all of
which are listed in Table 8. The proposed status indicator, APC
assignment, and payment rate for each HCPCS code can be found in
Addendum B to this proposed rule. The complete list of status
indicators and corresponding definitions used under the OPPS can be
found in Addendum D1 to this proposed rule. These new codes that are
effective July 1, 2019 are assigned to comment indicator ``NP'' in
Addendum B to this proposed rule to indicate that the codes are
assigned to an interim APC assignment and that comments will be
accepted on their interim APC assignments. Also, the complete list of
comment indicators and definitions used under the OPPS can be found in
Addendum D2 to this proposed rule. We note that OPPS Addendum B,
Addendum D1, and Addendum D2 are available via the internet on the CMS
website.
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3. October 2019 HCPCS Codes for Which We Will Be Soliciting Public
Comments in the CY 2020 OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we will solicit comments on
the new CPT and Level II HCPCS codes that will be effective October 1,
2019 in the CY 2020 OPPS/ASC final rule with comment period, thereby
allowing us to finalize the status indicators and APC assignments for
the codes in the CY 2021 OPPS/ASC final rule with comment period. The
Level II HCPCS codes will be released to the public through the October
2019 OPPS Update CR and the CMS HCPCS website while the CPT codes will
be released to the public through the AMA website.
For CY 2020, we are proposing to continue our established policy of
assigning comment indicator ``NI'' in Addendum B to the OPPS/ASC final
rule with comment period to those new HCPCS codes that are effective
October 1, 2019 to indicate that we are assigning them an interim
status indicator, which is subject to public comment. We will be
inviting public comments in the CY 2020 OPPS/ASC final rule with
comment period on the status indicator and APC assignments, which would
then be finalized in the CY 2021 OPPS/ASC final rule with comment
period.
4. January 2020 HCPCS Codes
a. New Level II HCPCS Codes for Which We Will Be Soliciting Public
Comments in the CY 2020 OPPS/ASC Final Rule With Comment Period
Consistent with past practice, we will solicit comments on the new
Level II HCPCS codes that will be effective January 1, 2020 in the CY
2020 OPPS/ASC final rule with comment period, thereby allowing us to
finalize the status indicators and APC assignments for the codes in the
CY 2021 OPPS/ASC final rule with comment period. Unlike the CPT codes
that are effective January 1 and are included in the OPPS/ASC proposed
rules, and except for the G-codes listed in Addendum O of this proposed
rule, most Level II HCPCS codes are not released until sometime around
November to be effective January 1. Because these codes are not
available until November, we are unable to include them in the OPPS/ASC
proposed rules. Therefore, these Level II HCPCS codes will be released
to the public through the CY 2020 OPPS/ASC final rule with comment
period, January 2020 OPPS Update CR, and the CMS HCPCS website.
For CY 2020, we are proposing to continue our established policy of
assigning comment indicator ``NI'' in Addendum B to the OPPS/ASC final
rule with comment period to the new HCPCS codes that will be effective
January 1, 2020 to indicate that we are assigning them an interim
status indicator, which is subject to public comment. We will be
inviting public comments in the CY 2020 OPPS/ASC final rule with
comment period on the status indicator and APC assignments, which would
then be finalized in the CY 2021 OPPS/ASC final rule with comment
period.
b. CPT Codes for Which We Are Soliciting Public Comments in This
Proposed Rule
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841
through 66844), we finalized a revised process of assigning APC and
status indicators for new and revised Category I and III CPT codes that
would be effective January 1. Specifically, for the new/revised CPT
codes that we receive in a timely manner from the AMA's CPT Editorial
Panel, we finalized our proposal to include the codes that would be
effective January 1 in the OPPS/ASC proposed rules, along with proposed
APC and status indicator assignments for them, and to finalize the APC
and status indicator assignments in the OPPS/ASC final rules beginning
with the CY 2016 OPPS update. For those new/revised CPT codes that were
received too late for inclusion in the OPPS/ASC proposed rule, we
finalized our proposal to establish and use HCPCS G-codes that mirror
the predecessor CPT codes and retain the current APC and status
indicator assignments for a year until we can propose APC and status
indicator assignments in the following year's rulemaking cycle. We note
that even if we find that we need to create HCPCS G-codes in place of
certain CPT codes for the PFS proposed rule, we do not anticipate that
these HCPCS G-codes will always be necessary for OPPS purposes. We will
make every effort to
[[Page 39450]]
include proposed APC and status indicator assignments for all new and
revised CPT codes that the AMA makes publicly available in time for us
to include them in the proposed rule, and to avoid the resort to HCPCS
G-codes and the resulting delay in utilization of the most current CPT
codes. Also, we finalized our proposal to make interim APC and status
indicator assignments for CPT codes that are not available in time for
the proposed rule and that describe wholly new services (such as new
technologies or new surgical procedures), solicit public comments, and
finalize the specific APC and status indicator assignments for those
codes in the following year's final rule.
For the CY 2020 OPPS update, we received the CPT codes that will be
effective January 1, 2020 from AMA in time to be included in this
proposed rule. The new, revised, and deleted CPT codes can be found in
Addendum B to this proposed rule (which is available via the internet
on the CMS website). We note that the new and revised CPT codes are
assigned to comment indicator ``NP'' in Addendum B of this proposed
rule to indicate that the code is new for the next calendar year or the
code is an existing code with substantial revision to its code
descriptor in the next calendar year as compared to current calendar
year with a proposed APC assignment, and that comments will be accepted
on the proposed APC assignment and status indicator.
Further, we note that the CPT code descriptors that appear in
Addendum B are short descriptors and do not accurately describe the
complete procedure, service, or item described by the CPT code.
Therefore, we are including the 5-digit placeholder codes and the long
descriptors for the new and revised CY 2020 CPT codes in Addendum O to
this proposed rule (which is available via the internet on the CMS
website) so that the public can adequately comment on our proposed APCs
and status indicator assignments. The 5-digit placeholder codes can be
found in Addendum O, specifically under the column labeled ``CY 2020
OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code''. The final CPT
code numbers will be included in the CY 2020 OPPS/ASC final rule with
comment period.
In summary, we are soliciting public comments on the proposed CY
2020 status indicators and APC assignments for the new and revised CPT
codes that will be effective January 1, 2020. Because the CPT codes
listed in Addendum B appear with short descriptors only, we list them
again in Addendum O to this proposed rule with long descriptors. In
addition, we are proposing to finalize the status indicator and APC
assignments for these codes (with their final CPT code numbers) in the
CY 2020 OPPS/ASC final rule with comment period. The proposed status
indicator and APC assignment for these codes can be found in Addendum B
to this proposed rule (which is available via the internet on the CMS
website).
Finally, in Table 9, we summarize our current process for updating
codes through our OPPS quarterly update CRs, seeking public comments,
and finalizing the treatment of these codes under the OPPS.
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[[Page 39451]]
B. Proposed OPPS Changes--Variations Within APCs
1. Background
Section 1833(t)(2)(A) of the Act requires the Secretary to develop
a classification system for covered hospital outpatient department
services. Section 1833(t)(2)(B) of the Act provides that the Secretary
may establish groups of covered OPD services within this classification
system, so that services classified within each group are comparable
clinically and with respect to the use of resources. In accordance with
these provisions, we developed a grouping classification system,
referred to as Ambulatory Payment Classifications (APCs), as set forth
in regulations at 42 CFR[thinsp]419.31. We use Level I (also known as
CPT codes) and Level II HCPCS codes (also known as alphanumeric codes)
to identify and group the services within each APC. The APCs are
organized such that each group is homogeneous both clinically and in
terms of resource use. Using this classification system, we have
established distinct groups of similar services. We also have developed
separate APC groups for certain medical devices, drugs, biologicals,
therapeutic radiopharmaceuticals, and brachytherapy devices that are
not packaged into the payment for the procedure.
We have packaged into the payment for each procedure or service
within an APC group the costs associated with those items and services
that are typically ancillary and supportive to a primary diagnostic or
therapeutic modality and, in those cases, are an integral part of the
primary service they support. Therefore, we do not make separate
payment for these packaged items or services. In general, packaged
items and services include, but are not limited to, the items and
services listed in regulations at 42 CFR 419.2(b). A further discussion
of packaged services is included in section II.A.3. of this proposed
rule.
Under the OPPS, we generally pay for covered hospital outpatient
services on a rate-per-service basis, where the service may be reported
with one or more HCPCS codes. Payment varies according to the APC group
to which the independent service or combination of services is
assigned. For CY 2020, we are proposing that each APC relative payment
weight represents the hospital cost of the services included in that
APC, relative to the hospital cost of the services included in APC 5012
(Clinic Visits and Related Services). The APC relative payment weights
are scaled to APC 5012 because it is the hospital clinic visit APC and
clinic visits are among the most frequently furnished services in the
hospital outpatient setting.
2. Application of the 2 Times Rule
Section 1833(t)(9)(A) of the Act requires the Secretary to review,
not less often than annually, and revise the APC groups, the relative
payment weights, and the wage and other adjustments described in
paragraph (2) to take into account changes in medical practice, changes
in technology, the addition of new services, new cost data, and other
relevant information and factors. Section 1833(t)(9)(A) of the Act also
requires the Secretary to consult with an expert outside advisory panel
composed of an appropriate selection of representatives of providers to
review (and advise the Secretary concerning) the clinical integrity of
the APC groups and the relative payment weights. We note that the HOP
Panel recommendations for specific services for the CY 2020 OPPS update
will be discussed in the relevant specific sections throughout the CY
2020 OPPS/ASC final rule with comment period.
In addition, section 1833(t)(2) of the Act provides that, subject
to certain exceptions, the items and services within an APC group
cannot be considered comparable with respect to the use of resources if
the highest cost for an item or service in the group is more than 2
times greater than the lowest cost for an item or service within the
same group (referred to as the ``2 times rule''). The statute
authorizes the Secretary to make exceptions to the 2 times rule in
unusual cases, such as low-volume items and services (but the Secretary
may not make such an exception in the case of a drug or biological that
has been designated as an orphan drug under section 526 of the Federal
Food, Drug, and Cosmetic Act). In determining the APCs with a 2 times
rule violation, we consider only those HCPCS codes that are significant
based on the number of claims. We note that, for purposes of
identifying significant procedure codes for examination under the 2
times rule, we consider procedure codes that have more than 1,000
single major claims or procedure codes that both have more than 99
single major claims and contribute at least 2 percent of the single
major claims used to establish the APC cost to be significant (75 FR
71832). This longstanding definition of when a procedure code is
significant for purposes of the 2 times rule was selected because we
believe that a subset of 1,000 or fewer claims is negligible within the
set of approximately 100 million single procedure or single session
claims we use for establishing costs. Similarly, a procedure code for
which there are fewer than 99 single claims and that comprises less
than 2 percent of the single major claims within an APC will have a
negligible impact on the APC cost (75 FR 71832). In this section of
this proposed rule, for CY 2020, we are proposing to make exceptions to
this limit on the variation of costs within each APC group in unusual
cases, such as for certain low-volume items and services.
For the CY 2020 OPPS update, we have identified the APCs with
violations of the 2 times rule. Therefore, we are proposing changes to
the procedure codes assigned to these APCs in Addendum B to this
proposed rule. We note that Addendum B does not appear in the printed
version of the Federal Register as part of this CY 2020 OPPS/ASC
proposed rule. Rather, it is published and made available via the
internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. To eliminate
a violation of the 2 times rule and improve clinical and resource
homogeneity, we are proposing to reassign these procedure codes to new
APCs that contain services that are similar with regard to both their
clinical and resource characteristics. In many cases, the proposed
procedure code reassignments and associated APC reconfigurations for CY
2020 included in this proposed rule are related to changes in costs of
services that were observed in the CY 2018 claims data newly available
for CY 2020 ratesetting. Addendum B to this CY 2020 OPPS/ASC proposed
rule identifies with a comment indicator ``CH'' those procedure codes
for which we are proposing a change to the APC assignment or status
indicator, or both, that were initially assigned in the July 1, 2019
OPPS Addendum B Update (available via the internet on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html).
3. Proposed APC Exceptions to the 2 Times Rule
Taking into account the APC changes that we are proposing to make
for CY 2020, we reviewed all of the APCs to determine which APCs would
not meet the requirements of the 2 times rule. We used the following
criteria to evaluate whether to propose exceptions to the 2 times rule
for affected APCs:
Resource homogeneity;
[[Page 39452]]
Clinical homogeneity;
Hospital outpatient setting utilization;
Frequency of service (volume); and
Opportunity for upcoding and code fragments.
Based on the CY 2018 claims data available for this CY 2020
proposed rule, we found 18 APCs with violations of the 2 times rule. We
applied the criteria as described above to identify the APCs for which
we are proposing to make exceptions under the 2 times rule for CY 2020,
and found that all of the 18 APCs we identified meet the criteria for
an exception to the 2 times rule based on the CY 2018 claims data
available for this proposed rule. We did not include in that
determination those APCs where a 2 times rule violation was not a
relevant concept, such as APC 5401 (Dialysis), which only has two HCPCS
codes assigned to it that have a similar geometric mean costs and do
not create a 2 time rule violation. Therefore, we have only identified
those APCs, including those with criteria-based costs, such as device-
dependent CPT/HCPCS codes, with violations of the 2 times rule.
We note that, for cases in which a recommendation by the HOP Panel
appears to result in or allow a violation of the 2 times rule, we may
accept the HOP Panel's recommendation because those recommendations are
based on explicit consideration (that is, a review of the latest OPPS
claims data and group discussion of the issue) of resource use,
clinical homogeneity, site of service, and the quality of the claims
data used to determine the APC payment rates.
Table 10 of this proposed rule lists the 18 APCs that we are
proposing to make an exception for under the 2 times rule for CY 2020
based on the criteria cited above and claims data submitted between
January 1, 2018, and December 31, 2018, and processed on or before
December 31, 2018. For the final rule with comment period, we intend to
use claims data for dates of service between January 1, 2018, and
December 31, 2018, that were processed on or before June 30, 2019, and
updated CCRs, if available. The proposed geometric mean costs for
covered hospital outpatient services for these and all other APCs that
were used in the development of this proposed rule can be found on the
CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
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C. Proposed New Technology APCs
1. Background
In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes
to the time period in which a service can be eligible for payment under
a New Technology APC. Beginning in CY 2002, we retain services within
New Technology APC groups until we gather sufficient claims data to
enable us to assign the service to an appropriate clinical APC. This
policy allows us to move a service from a New Technology APC in less
than 2 years if sufficient data are available. It also allows us to
retain a service in a New Technology APC for more than 2 years if
sufficient data upon which to base a decision for reassignment have not
been collected.
In the CY 2004 OPPS final rule with comment period (68 FR 63416),
we restructured the New Technology APCs to make the cost intervals more
[[Page 39453]]
consistent across payment levels and refined the cost bands for these
APCs to retain two parallel sets of New Technology APCs, one set with a
status indicator of ``S'' (Significant Procedures, Not Discounted when
Multiple. Paid under OPPS; separate APC payment) and the other set with
a status indicator of ``T'' (Significant Procedure, Multiple Reduction
Applies. Paid under OPPS; separate APC payment). These current New
Technology APC configurations allow us to price new technology services
more appropriately and consistently.
For CY 2019, there were 52 New Technology APC levels, ranging from
the lowest cost band assigned to APC 1491 (New Technology--Level 1A
($0-$10)) through the highest cost band assigned to APC 1908 (New
Technology--Level 52 ($145,001-$160,000)). We note that the cost bands
for the New Technology APCs, specifically, APCs 1491 through 1599 and
1901 through 1908, vary with increments ranging from $10 to $14,999.
These cost bands identify the APCs to which new technology procedures
and services with estimated service costs that fall within those cost
bands are assigned under the OPPS. Payment for each APC is made at the
mid-point of the APC's assigned cost band. For example, payment for New
Technology APC 1507 (New Technology--Level 7 ($501-$600)) is made at
$550.50.
Under the OPPS, one of our goals is to make payments that are
appropriate for the services that are necessary for the treatment of
Medicare beneficiaries. The OPPS, like other Medicare payment systems,
is budget neutral and increases are limited to the annual hospital
inpatient market basket increase adjusted for multifactor productivity.
We believe that our payment rates generally reflect the costs that are
associated with providing care to Medicare beneficiaries. Furthermore,
we believe that our payment rates are adequate to ensure access to
services (80 FR 70374).
For many emerging technologies, there is a transitional period
during which utilization may be low, often because providers are first
learning about the technologies and their clinical utility. Quite
often, parties request that Medicare make higher payment amounts under
the New Technology APCs for new procedures in that transitional phase.
These requests, and their accompanying estimates for expected total
patient utilization, often reflect very low rates of patient use of
expensive equipment, resulting in high per-use costs for which
requesters believe Medicare should make full payment. Medicare does
not, and we believe should not, assume responsibility for more than its
share of the costs of procedures based on projected utilization for
Medicare beneficiaries and does not set its payment rates based on
initial projections of low utilization for services that require
expensive capital equipment. For the OPPS, we rely on hospitals to make
informed business decisions regarding the acquisition of high-cost
capital equipment, taking into consideration their knowledge about
their entire patient base (Medicare beneficiaries included) and an
understanding of Medicare's and other payers' payment policies. (We
refer readers to the CY 2013 OPPS/ASC final rule with comment period
(77 FR 68314) for further discussion regarding this payment policy.)
We note that, in a budget neutral system, payments may not fully
cover hospitals' costs in a particular circumstance, including those
for the purchase and maintenance of capital equipment. We rely on
hospitals to make their decisions regarding the acquisition of high-
cost equipment with the understanding that the Medicare program must be
careful to establish its initial payment rates, including those made
through New Technology APCs, for new services that lack hospital claims
data based on realistic utilization projections for all such services
delivered in cost-efficient hospital outpatient settings. As the OPPS
acquires claims data regarding hospital costs associated with new
procedures, we regularly examine the claims data and any available new
information regarding the clinical aspects of new procedures to confirm
that our OPPS payments remain appropriate for procedures as they
transition into mainstream medical practice (77 FR 68314). For CY 2020,
we are including the proposed payment rates for New Technology APCs
1491 through 1599 and 1901 through 1908 in Addendum A to this CY 2020
OPPS/ASC proposed rule (which is available via the internet on the CMS
website).
2. Establishing Payment Rates for Low-Volume New Technology Procedures
Procedures that are assigned to New Technology APCs are typically
new procedures that do not have sufficient claims history to establish
an accurate payment for the procedures. One of the objectives of
establishing New Technology APCs is to generate sufficient claims data
for a new procedure so that it can be assigned to an appropriate
clinical APC. Some procedures that are assigned to New Technology APCs
have very low annual volume, which we consider to be fewer than 100
claims. We consider procedures with fewer than 100 claims annually as
low-volume procedures because there is a higher probability that the
payment data for a procedure may not have a normal statistical
distribution, which could affect the quality of our standard cost
methodology that is used to assign services to an APC. In addition,
services with fewer than 100 claims per year are not generally
considered to be a significant contributor to the APC ratesetting
calculations and, therefore, are not included in the assessment of the
2 times rule. As we explained in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58890), we were concerned that the methodology we
use to estimate the cost of a procedure under the OPPS by calculating
the geometric mean for all separately paid claims for a HCPCS procedure
code from the most recent available year of claims data may not
generate an accurate estimate of the actual cost of the procedure for
these low-volume procedures.
In accordance with section 1833(t)(2)(B) of the Act, services
classified within each APC must be comparable clinically and with
respect to the use of resources. As described earlier, assigning a
procedure to a new technology APC allows us to gather claims data to
price the procedure and assign it to the APC with services that use
similar resources and are clinically comparable. However, where
utilization of services assigned to a New Technology APC is low, it can
lead to wide variation in payment rates from year to year, resulting in
even lower utilization and potential barriers to access to new
technologies, which ultimately limits our ability to assign the service
to the appropriate clinical APC. To mitigate these issues, we
determined in the CY 2019 OPPS/ASC final rule with comment period that
it was appropriate to utilize our equitable adjustment authority at
section 1833(t)(2)(E) of the Act to adjust how we determined the costs
for low-volume services assigned to New Technology APCs (83 FR 58892
through 58893). We have utilized our equitable adjustment authority at
section 1833(t)(2)(E) of the Act, which states that the Secretary shall
establish, in a budget neutral manner, other adjustments as determined
to be necessary to ensure equitable payments, to estimate an
appropriate payment amount for low-volume new technology procedures in
the past (82 FR 59281). Although we
[[Page 39454]]
have used this adjustment authority on a case-by-case basis in the
past, we stated in the CY 2019 OPPS/ASC final rule with comment period
that we believe it is appropriate to adopt an adjustment for low-volume
services assigned to New Technology APCs in order to mitigate the wide
payment fluctuations that have occurred for new technology services
with fewer than 100 claims and to provide more predictable payment for
these services.
For purposes of this adjustment, we stated that we believe that it
is appropriate to use up to 4 years of claims data in calculating the
applicable payment rate for the prospective year, rather than using
solely the most recent available year of claims data, when a service
assigned to a New Technology APC has a low annual volume of claims,
which, for purposes of this adjustment, we define as fewer than 100
claims annually. We adopted a policy to consider procedures with fewer
than 100 claims annually as low-volume procedures because there is a
higher probability that the payment data for a procedure may not have a
normal statistical distribution, which could affect the quality of our
standard cost methodology that is used to assign services to an APC. We
explained that we were concerned that the methodology we use to
estimate the cost of a procedure under the OPPS by calculating the
geometric mean for all separately paid claims for a HCPCS procedure
code from the most recent available year of claims data may not
generate an accurate estimate of the actual cost of the low-volume
procedure. Using multiple years of claims data will potentially allow
for more than 100 claims to be used to set the payment rate, which
would, in turn, create a more statistically reliable payment rate.
In addition, to better approximate the cost of a low-volume service
within a New Technology APC, we stated that we believe using the median
or arithmetic mean rather than the geometric mean (which ``trims'' the
costs of certain claims out) could be more appropriate in some
circumstances, given the extremely low volume of claims. Low claim
volumes increase the impact of ``outlier'' claims; that is, claims with
either a very low or very high payment rate as compared to the average
claim, which would have a substantial impact on any statistical
methodology used to estimate the most appropriate payment rate for a
service. We also explained that we believe having the flexibility to
utilize an alternative statistical methodology to calculate the payment
rate in the case of low-volume new technology services would help to
create a more stable payment rate. Therefore, in the CY 2019 OPPS/ASC
final rule with comment period (83 FR 58893), we established that, in
each of our annual rulemakings, we will seek public comments on which
statistical methodology should be used for each low-volume service
assigned to a New Technology APC. In the preamble of each annual
rulemaking, we stated that we would present the result of each
statistical methodology and solicit public comment on which methodology
should be used to establish the payment rate for a low-volume new
technology service. In addition, we will use our assessment of the
resources used to perform a service and guidance from the developer or
manufacturer of the service, as well as other stakeholders, to
determine the most appropriate payment rate. Once we identify the most
appropriate payment rate for a service, we will assign the service to
the New Technology APC with the cost band that includes its payment
rate.
Accordingly for CY 2020, we are proposing to continue our policy
adopted in CY 2019 under which we will utilize our equitable adjustment
authority under section 1833(t)(2)(E) of the Act to calculate the
geometric mean, arithmetic mean, and median using multiple years of
claims data to select the appropriate payment rate for purposes of
assigning services with fewer than 100 claims per year to a New
Technology APC. Additional details on our policy is available in the CY
2019 OPPS/ASC final rule with comment period (83 FR 58892 through
58893).
3. Procedures Assigned to New Technology APC Groups for CY 2020
As we explained in the CY 2002 OPPS final rule with comment period
(66 FR 59902), we generally retain a procedure in the New Technology
APC to which it is initially assigned until we have obtained sufficient
claims data to justify reassignment of the procedure to a clinically
appropriate APC.
In addition, in cases where we find that our initial New Technology
APC assignment was based on inaccurate or inadequate information
(although it was the best information available at the time), where we
obtain new information that was not available at the time of our
initial New Technology APC assignment, or where the New Technology APCs
are restructured, we may, based on more recent resource utilization
information (including claims data) or the availability of refined New
Technology APC cost bands, reassign the procedure or service to a
different New Technology APC that more appropriately reflects its cost
(66 FR 59903).
Consistent with our current policy, for CY 2020, in this proposed
rule, we are proposing to retain services within New Technology APC
groups until we obtain sufficient claims data to justify reassignment
of the service to a clinically appropriate APC. The flexibility
associated with this policy allows us to reassign a service from a New
Technology APC in less than 2 years if sufficient claims data are
available. It also allows us to retain a service in a New Technology
APC for more than 2 years if sufficient claims data upon which to base
a decision for reassignment have not been obtained (66 FR 59902).
a. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS) (APCs
1575, 5114, and 5414)
Currently, there are four CPT/HCPCS codes that describe magnetic
resonance image-guided, high-intensity focused ultrasound (MRgFUS)
procedures, three of which we are proposing to continue to assign to
standard APCs, and one that we are proposing to continue to assign to a
New Technology APC for CY 2020. These codes include CPT codes 0071T,
0072T, and 0398T, and HCPCS code C9734. CPT codes 0071T and 0072T
describe procedures for the treatment of uterine fibroids, CPT code
0398T describes procedures for the treatment of essential tremor, and
HCPCS code C9734 describes procedures for pain palliation for
metastatic bone cancer.
As shown in Table 11 of this CY 2020 OPPS/ASC proposed rule, and as
listed in Addendum B to this CY 2020 OPPS/ASC proposed rule, we are
proposing to continue to assign the procedures described by CPT codes
0071T and 0072T to APC 5414 (Level 4 Gynecologic Procedures) for CY
2020. We also are proposing to continue to assign the APC to status
indicator ``J1'' (Hospital Part B services paid through a comprehensive
APC). In addition, we are proposing to continue to assign the services
described by HCPCS code C9734 (Focused ultrasound ablation/therapeutic
intervention, other than uterine leiomyomata, with magnetic resonance
(mr) guidance) to APC 5115 (Level 5 Musculoskeletal Procedures) for CY
2020. We also are proposing to continue to assign HCPCS code C9734 to
status indicator ``J1''. We refer readers to Addendum B to this
proposed rule for the proposed payment rates for CPT codes 0071T and
0072T and HCPCS code C9734 under the OPPS. Addendum B is available via
the internet on the CMS website.
[[Page 39455]]
For the procedure described by CPT code 0398T, we have identified
37 paid claims from CY 2016 through CY 2018 (1 claim in CY 2016, 11
claims in CY 2017, and 25 claims in CY 2018). We note that the
procedure described by CPT code 0398T was first assigned to a New
Technology APC in CY 2016. Accordingly, there are 3 years of claims
data available for the OPPS ratesetting purposes. The payment amounts
for the claims vary widely, with a cost of approximately $29,254 for
the sole CY 2016 claim, a geometric mean cost of approximately $4,647
for the 11 claims from CY 2017, and a geometric mean cost of
approximately $11,716 for the 25 claims from CY 2018. We are concerned
about the large fluctuation in the cost of the procedure described by
CPT code 0398T from year to year and the relatively small number of
claims available to establish a payment rate for the service. To be in
accordance with section 1833(t)(2)(B) of the Act, we must establish
that services classified within each APC are comparable clinically and
with respect to the use of resources.
Therefore, as discussed in section III.C.2. of this proposed rule,
we are proposing to apply the policy we adopted in CY 2019, under which
we will utilize our equitable adjustment authority under section
1833(t)(2)(E) of the Act to calculate the geometric mean, arithmetic
mean, and median costs using multiple years of claims data to select
the appropriate payment rate for purposes of assigning CPT code 0398T
to a New Technology APC. We believe using this approach to assign CPT
code 0398T to a New Technology APC is more likely to yield a payment
rate that will be representative of the cost of the procedure described
by CPT code 0398T, despite the fluctuating geometric mean costs for the
procedure available in the claims data used for this proposed rule. We
continue to believe that the situation for the procedure described by
CPT code 0398T is unique, given the limited number of claims for the
procedure and the high variability for the cost of the claims, which
makes it challenging to determine a reliable payment rate.
Our analysis found that the estimated geometric mean cost of the 37
claims was approximately $8,829, the estimated arithmetic mean cost of
the claims was approximately $10,021, and the median cost of the claims
was approximately $11,985. While the results of using different
methodologies range from approximately $8,800 to nearly $12,000, two of
the estimates fall within the cost bands of New Technology APC 1575
(New Technology--Level 38 ($10,001-$15,000)), with a proposed payment
rate of $12,500.50. Consistent with our policy stated in section
III.C.2. of this proposed rule, we are presenting the result of each
statistical methodology in this preamble, and we are seeking public
comments on which methodology should be used to establish payment for
the procedures described by CPT code 0398T. We note that we believe
that the median cost estimate is the most appropriate representative
cost of the procedure described by CPT code 0398T because it is
consistent with the payment rates established for the procedure from CY
2017 to CY 2019 and does not involve any trimming of claims.
Calculating the payment rate using either the geometric mean cost or
the arithmetic mean cost would involve trimming the one paid claim from
CY 2016, because the paid amount for the claim of $29,254 is
substantially larger than the amount for any other paid claim reported
for the procedure described by CPT code 0398T. The median cost estimate
for CPT code 0398T also falls within the same New Technology APC cost
band that was used to set the payment rate for CY 2019, which is
$12,500.50 for this procedure. Therefore, for purposes of determining
the proposed CY 2020 payment rate, we are proposing to estimate the
cost for the procedure described by CPT code 0398T by calculating the
median cost of the 37 paid claims for the procedures in CY 2016 through
CY 2018, and assigning the procedure described by CPT code 0398T to the
New Technology APC that includes the estimated cost. Accordingly, we
are proposing to maintain the procedure described by CPT code 0398T in
APC 1575 (New Technology--Level 38 ($10,001-$15,000)), with a proposed
payment rate of $12,500.50 for CY 2020. We refer readers to Addendum B
to this proposed rule for the proposed payment rates for all codes
reportable under the OPPS. Addendum B is available via the internet on
the CMS website.
BILLING CODE 4120-01-P
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[GRAPHIC] [TIFF OMITTED] TP09AU19.023
BILLING CODE 4120-01-C
b. Retinal Prosthesis Implant Procedure
CPT code 0100T (Placement of a subconjunctival retinal prosthesis
receiver and pulse generator, and implantation of intra-ocular retinal
electrode array, with vitrectomy) describes the implantation of a
retinal prosthesis, specifically, a procedure involving the use of the
Argus[supreg] II Retinal Prosthesis System. This first retinal
prosthesis was approved by the Food and Drug Administration (FDA) in
2013 for adult patients diagnosed with severe to profound retinitis
pigmentosa. Pass-through payment status was granted for the
Argus[supreg] II device under HCPCS code C1841 (Retinal prosthesis,
includes all internal and external components) beginning October 1,
2013, and this status expired on December 31, 2015. We note that after
pass-through payment status expires for a medical device, the payment
for the device is packaged into the payment for the associated surgical
procedure. Consequently, for CY 2016, the device described by HCPCS
code C1841 was assigned to OPPS status indicator ``N'' to indicate that
payment for the device is packaged and included in the payment rate for
the surgical procedure described by CPT code 0100T. For CY 2016, the
procedure described by CPT code 0100T was assigned to New Technology
APC 1599, with a payment rate of $95,000, which was the highest paying
New Technology APC for that year. This payment included both the
surgical procedure (CPT code 0100T) and the use of the Argus[supreg] II
device (HCPCS code C1841). However, stakeholders (including the device
manufacturer and hospitals) believed that the CY 2016 payment rate for
the procedure involving the Argus[supreg] II System was insufficient to
cover the hospital cost of performing the procedure, which includes the
cost of the retinal prosthesis at the retail price of approximately
$145,000.
For CY 2017, analysis of the CY 2015 OPPS claims data used for the
CY 2017 OPPS/ASC final rule with comment period showed 9 single claims
(out of 13 total claims) for the procedure described by CPT code 0100T,
with a geometric mean cost of approximately $142,003 based on claims
submitted between January 1, 2015, through December 31, 2015, and
processed through June 30, 2016. Based on the CY 2015 OPPS claims data
available for the final rule with comment period and our understanding
of the Argus[supreg] II procedure, we reassigned the procedure
described by CPT code 0100T from New Technology APC 1599 to New
Technology APC 1906, with a final payment rate of $150,000.50 for CY
2017. We noted that this payment rate included the cost of both the
surgical procedure (CPT code 0100T) and the retinal prosthesis device
(HCPCS code C1841).
For CY 2018, the reported cost of the Argus[supreg] II procedure
based on CY 2016 hospital outpatient claims data for 6 claims used for
the CY 2018 OPPS/ASC final rule with comment period was approximately
$94,455, which was more than $55,000 less than the payment rate for the
procedure in CY 2017, but closer to the CY 2016 payment rate for the
procedure. We noted that the costs of the Argus[supreg] II procedure
are extraordinarily high compared to many other procedures paid under
the OPPS. In addition, the number of claims submitted has been very low
and has not exceeded 10 claims within a single year. We believed that
it is important to mitigate significant payment differences, especially
shifts of several tens of thousands of dollars, while also basing
payment rates on available cost information and claims data. In CY
2016, the payment rate for the Argus[supreg] II procedure was
$95,000.50. The payment rate increased to $150,000.50 in CY 2017. For
CY 2018, if we had established the payment rate based on updated final
rule claims data, the payment rate would have decreased to $95,000.50
for CY 2018, a decrease of $55,000 relative to CY 2017. We were
concerned that these large fluctuations in payment could potentially
create an access to care issue for the Argus[supreg] II procedure, and
we wanted to establish a payment rate to mitigate the potential sharp
decline in payment from CY 2017 to CY 2018.
In accordance with section 1833(t)(2)(B) of the Act, we must
establish that services classified within each APC are comparable
clinically and with respect to the use of resources. Therefore, for CY
2018, we used our equitable adjustment authority under section
1833(t)(2)(E) of the Act, which states that the Secretary shall
establish, in a budget neutral manner, other adjustments as determined
to be necessary to ensure equitable payments, to maintain the payment
rate for this procedure, despite the lower geometric mean costs
available in the claims data used for the final rule with comment
period. For CY 2018, we reassigned the Argus[supreg] II procedure to
APC 1904 (New Technology--Level 50 ($115,001-$130,000)), which
established a payment rate for the Argus[supreg] II procedure of
$122,500.50, which was the arithmetic mean of the payment rates for the
procedure for CY 2016 and CY 2017.
For CY 2019, the reported cost of the Argus[supreg] II procedure
based on the geometric mean cost of 12 claims from the CY 2017 hospital
outpatient claims data was approximately $171,865, which was
approximately $49,364 more than the payment rate for the procedure for
CY 2018. In the CY 2019 OPPS/ASC
[[Page 39458]]
final rule with comment period, we continued to note that the costs of
the Argus[supreg] II procedure are extraordinarily high compared to
many other procedures paid under the OPPS (83 FR 58897 through 58898).
In addition, the number of claims submitted continued to be very low
for the Argus[supreg] II procedure. We stated that we continued to
believe that it is important to mitigate significant payment
fluctuations for a procedure, especially shifts of several tens of
thousands of dollars, while also basing payment rates on available cost
information and claims data because we are concerned that large
decreases in the payment rate could potentially create an access to
care issue for the Argus[supreg] II procedure. In addition, we
indicated that we wanted to establish a payment rate to mitigate the
potential sharp increase in payment from CY 2018 to CY 2019, and
potentially ensure a more stable payment rate in future years.
In accordance with section 1833(t)(2)(B) of the Act, we must
establish that services classified within each APC are comparable
clinically and with respect to the use of resources. Therefore, as
discussed in section III.C.2. of the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58892 through 58893), we used our equitable
adjustment authority under section 1833(t)(2)(E) of the Act, which
states that the Secretary shall establish, in a budget neutral manner,
other adjustments as determined to be necessary to ensure equitable
payments, to establish a payment rate that is more representative of
the likely cost of the service. We stated that we believed the likely
cost of the Argus[supreg] II procedure is higher than the geometric
mean cost calculated from the claims data used for the CY 2018 OPPS/ASC
final rule with comment period but lower than the geometric mean cost
calculated from the claims data used for the CY 2019 OPPS/ASC final
rule with comment period.
For CY 2019, we analyzed claims data for the Argus[supreg] II
procedure using 3 years of available data from CY 2015 through CY 2017.
These data included claims from the last year that the Argus[supreg] II
received transitional device pass-through payments (CY 2015) and the
first 2 years since device pass-through payment status for the
Argus[supreg] II expired. We found that the geometric mean cost for the
procedure was approximately $145,808, the arithmetic mean cost was
approximately $151,367, and the median cost was approximately $151,266.
As we do each year, we reviewed claims data regarding hospital costs
associated with new procedures. We regularly examine the claims data
and any available new information regarding the clinical aspects of new
procedures to confirm that OPPS payments remain appropriate for
procedures like the Argus[supreg] II procedure as they transition into
mainstream medical practice (77 FR 68314). We noted that the proposed
payment rate included both the surgical procedure (CPT code 0100T) and
the use of the Argus[supreg] II device (HCPCS code C1841). For CY 2019,
the estimated costs using all three potential statistical methods for
determining APC assignment under the New Technology low-volume policy
fell within the cost band of New Technology APC 1908, which is between
$145,001 and $160,000. Therefore, we reassigned the Argus[supreg] II
procedure (CPT code 0100T) to APC 1908 (New Technology--Level 52
($145,001-$160,000)), with a payment rate of $152,500.50 for CY 2019.
For CY 2020, the number of reported claims for the Argus[supreg] II
procedure continues to be very low with a substantial fluctuation in
cost from year to year.
The high annual variability of the cost of the Argus[supreg] II
procedure continues to make it difficult to establish a consistent and
stable payment rate for the procedure. In accordance with section
1833(t)(2)(B) of the Act, we are required to establish that services
classified within each APC are comparable clinically and with respect
to the use of resources. Therefore, for CY 2020, we are proposing to
apply the policy we adopted in CY 2019, under which we utilize our
equitable adjustment authority under section 1833(t)(2)(E) of the Act
to calculate the geometric mean, arithmetic mean, and median costs
using multiple years of claims data to select the appropriate payment
rate for purposes of assigning the Argus[supreg] II procedure (CPT code
0100T) to a New Technology APC.
We identified 35 claims reporting the procedure described by CPT
code 0100T for the 4-year period of CY 2015 through CY 2018. We found
the geometric mean cost for the procedure described by CPT code 0100T
to be approximately $146,059, the arithmetic mean cost to be
approximately $152,123, and the median cost to be approximately
$151,267. All of the resulting estimates from using the three
statistical methodologies fall within the same New Technology APC cost
band ($145,001-$160,000), where the Argus[supreg] II procedure is
assigned for CY 2019. Consistent with our policy stated in section
III.C.2. of this proposed rule, we are presenting the result of each
statistical methodology in this preamble, and we are seeking public
comments on which method should be used to assign procedures described
by CPT code 0100T to a New Technology APC. All three potential
statistical methodologies used to estimate the cost of the
Argus[supreg] II procedure fall within the cost band for New Technology
APC 1908, with the estimated cost being between $145,001 and $160,000.
Accordingly, we are proposing to maintain the assignment of the
procedure described by CPT code 0100T in APC 1908 (New Technology--
Level 52 ($145,001-$160,000)), with a proposed payment rate of
$152,500.50 for CY 2020. We note that the proposed payment rate
includes both the surgical procedure (CPT code 0100T) and the use of
the Argus[supreg] II device (HCPCS code C1841). We refer readers to
Addendum B to this proposed rule for the proposed payment rates for all
codes reportable under the OPPS. Addendum B is available via the
internet on the CMS website.
As we discussed in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58898), the claims data from CY 2017 showed another
payment issue with regard to the Argus[supreg] II procedure. We found
that payment for the Argus[supreg] II procedure was sometimes bundled
into the payment for another procedure. Therefore in CY 2019, we
implemented a policy to exclude payment for all procedures assigned to
New Technology APCs from being bundled into the payment for procedures
assigned to a C-APC. For CY 2020, we are proposing to continue this
policy as described in section II.A.2.b.(3) of this proposed rule. Our
proposal would continue to exclude payment for any procedure that is
assigned to a New Technology APC from being packaged when included on a
claim with a service assigned to status indicator ``J1''. While we are
not proposing to exclude payment for a procedure assigned to a New
Technology APC from being packaged when included on a claim with a
service assigned to status indicator ``J2'', we are seeking public
comments on this issue.
c. Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave
Energy
Effective January 1, 2019, CMS established HCPCS code C9751
(Bronchoscopy, rigid or flexible, transbronchial ablation of lesion(s)
by microwave energy, including fluoroscopic guidance, when performed,
with computed tomography acquisition(s) and 3-D rendering, computer-
assisted, image-guided navigation, and endobronchial ultrasound (EBUS)
guided transtracheal and/or transbronchial sampling (e.g.,
[[Page 39459]]
aspiration[s]/biopsy[ies]) and all mediastinal and/or hilar lymph node
stations or structures and therapeutic intervention(s)). This microwave
ablation procedure utilizes a flexible catheter to access the lung
tumor via a working channel and may be used as an alternative procedure
to a percutaneous microwave approach. Based on our review of the New
Technology APC application for this service and the service's clinical
similarity to existing services paid under the OPPS, we estimated the
likely cost of the procedure would be between $8,001 and $8,500. We
have not received any claims data for this service. Therefore, we are
proposing to continue to assign the procedure described by HCPCS code
C9751 to New Technology APC 1571 (New Technology--Level 34 ($8,001-
$8,500)), with a proposed payment rate of $8,250.50 for CY 2020.
Details regarding HCPCS code C9751 are shown in Table 12.
[GRAPHIC] [TIFF OMITTED] TP09AU19.024
d. Pathogen Test for Platelets
As stated in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59281), HCPCS code P9100 is used to report any test used to
identify bacterial or other pathogen contamination in blood platelets.
Currently, there are two rapid bacterial detection tests cleared by the
FDA that are described by HCPCS code P9100. According to their
instructions for use, rapid bacterial detection tests should be
performed on platelets from 72 hours after collection. Currently,
certain rapid and culture-based tests can be used to extend the dating
for platelets from 5 days to 7 days. Blood banks and transfusion
services may test and use 6-day old to 7-day old platelets if the test
results are negative for bacterial contamination.
HCPCS code P9100 was assigned in CY 2019 to New Technology APC 1493
(New Technology--Level 1C ($21-$30)), with a payment rate of $25.50.
For CY 2020, based on CY 2018 claims data, there are approximately
1,100 claims reported for this service with a geometric mean cost of
approximately $32. This geometric mean cost would result in the
assignment of the service described by HCPCS code P9100 to a New
Technology APC, based on the associated cost band, with a higher
payment rate than where the service is currently assigned. Therefore,
for CY 2020, we are proposing to reassign the service described by
HCPCS code P9100 to New Technology APC 1494 (New Technology--Level 1D
($31-$40)), with a proposed payment rate of $35.50.
e. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)
Fractional Flow Reserve Derived From Computed Tomography (FFRCT),
also known by the trade name HeartFlow, is a noninvasive diagnostic
service that allows physicians to measure coronary artery disease in a
patient through the use of coronary CT scans. The HeartFlow procedure
is intended for clinically stable symptomatic patients with coronary
artery disease, and, in many cases, may avoid the need for an invasive
coronary angiogram procedure. HeartFlow uses a proprietary data
analysis process performed at a central facility to develop a three-
dimensional image of a patient's coronary arteries, which allows
physicians to identify the fractional flow reserve to assess whether or
not patients should undergo further invasive testing (that is, a
coronary angiogram).
For many procedures in the OPPS, payment for analytics that are
performed after the main diagnostic/image procedure are packaged into
the payment for the primary procedure. However, in CY 2018, we
determined that HeartFlow should receive a separate payment because the
procedure is performed by a separate entity (that is, a HeartFlow
technician who conducts computer analysis offsite) rather than the
provider performing the CT scan. We assigned CPT code 0503T, which
describes the analytics performed, to New Technology APC 1516 (New
Technology--Level 16 ($1,401-$1,500)), with a payment rate of $1,450.50
based on pricing information provided by the developer of the procedure
that indicated the price of the procedure was approximately $1,500.
For CY 2020, based on our analysis of the CY 2018 claims data, we
found that over 840 claims had been submitted for payment for HeartFlow
during CY 2018. The estimated geometric mean cost of HeartFlow is
$788.19, which is over $660 lower that the payment rate for CY 2019 of
$1,450.50. Therefore, for CY 2020, we are proposing to reassign the
service described by CPT code 0503T in order to adjust the payment rate
to better reflect the cost for the service. We are proposing to
reassign the service described by CPT code 0503T to New Technology APC
1509 (New Technology--Level 9 ($701-$800)), with a proposed payment
rate of $750.50 for
[[Page 39460]]
CY 2020. We are seeking public comments on this proposal.
D. Proposed APC Specific Policies
1. Intraocular Procedures (APCs 5491 Through 5494)
In prior years, CPT code 0308T (Insertion of ocular telescope
prosthesis including removal of crystalline lens or intraocular lens
prosthesis) was assigned to the APC 5495 (Level 5 Intraocular
Procedures) based on its estimated costs. In addition, its relative
payment weight has been based on its median cost under our payment
policy for low-volume device-intensive procedures because the APC
contained a low volume of claims. The low-volume device-intensive
procedures payment policy is discussed in more detail in section
III.C.2. of this proposed rule.
In the CY 2019 OPPS/ASC proposed rule, we proposed to reassign CPT
code 0308T from APC 5495 to APC 5493 (Level 3 Intraocular Procedures),
based on the data for two claims available for ratesetting for the
proposed rule, and to delete APC 5495 (83 FR 37096 through 37097).
However in the CY 2019 OPPS/ASC final rule with comment period, based
on updated data on a single claim available for ratesetting for the
final rule, we modified our proposal and reassigned procedure code CPT
code 0308T to the APC 5494 (Level 4 Intraocular Procedures) (83 FR
58917 through 58918). We made this change based on the similarity of
the estimated cost for the single claim of $12,939.75 compared to that
of the APC ($11,427.14). However, this created a discrepancy in
payments between the OPPS setting and the ASC setting in which the ASC
payments would be higher than the OPPS payments for the same service
because of the intersection of the estimated cost for the encounter
determined under a comprehensive methodology within the OPPS and the
estimated cost determined under the payment methodology for device-
intensive services within the ASC payment system.
In reviewing the claims data available for this proposed rule for
CY 2020 OPPS ratesetting, we found several claims reporting the
procedure described by CPT code 0308T. Based on the claims data, the
procedure would have a geometric mean cost of $28,122.51 and a median
cost of $19,864.38. These cost statistics are significantly higher than
the geometric mean cost of the other procedure assigned to APC 5494,
that is, the procedure described by CPT code 67027 (Implant eye drug
system), which has a geometric mean cost of $12,296.27. In addition, if
we continued to assign the procedure described by CPT code 0308T to APC
5494 (the Level 4 Intraocular Procedures APC), the discrepancy between
payments within the OPPS and the ASC payment system would also continue
to exist. As a result, we are proposing to reestablish APC 5495 (Level
5 Intraocular Procedures) because we believe that the procedure
described by CPT code 0308T would be most appropriately placed in this
APC based on its estimated cost. Assignment of the procedure to the
Level 5 Intraocular Procedures APC is consistent with its historical
placement and would also address the large differential discrepancy in
payment for the procedure between the OPPS and the ASC payment system.
We note that, based on data available for the proposed rule, the
proposed payment rate for this procedure when performed in an ASC, as
discussed in more detail in section XIII.D.1.c. of this proposed rule,
would be no higher than the OPPS payment rate for this procedure
performed in the hospital outpatient setting. We will continue to
monitor the volume of claims data available for the procedure for
ratesetting purposes.
Therefore, for CY 2020, we are proposing to reestablish APC 5495
(Level 5 Intraocular Procedures) and reassign the procedure described
by CPT code 0308T from APC 5494 to APC 5495. Under this proposal, the
proposed CY 2020 OPPS payment rate for the service would be established
based on its median cost, as discussed in section V.A.5. of this
proposed rule, because it is a device-intensive procedure assigned to
an APC with fewer than 100 total annual claims within the APC.
2. Musculoskeletal Procedures (APCs 5111 Through 5116)
Prior to the CY 2016 OPPS, payment for musculoskeletal procedures
was primarily divided according to anatomy and the type of
musculoskeletal procedure. As part of the CY 2016 reorganization to
better structure the OPPS payments towards prospective payment
packages, we consolidated those individual APCs so that they became a
general Musculoskeletal APC series (80 FR 70397 through 70398).
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59300), we continued to apply a six-level structure for the
Musculoskeletal APCs because doing so provided an appropriate
distinction for resource costs at each level and provided clinical
homogeneity. However, we indicated that we would continue to review the
structure of these APCs to determine whether additional granularity
would be necessary.
In the CY 2019 OPPS proposed rule (83 FR 37096), we recognized that
commenters had previously expressed concerns regarding the granularity
of the current APC levels and, therefore, requested comment on the
establishment of additional levels. Specifically, we solicited comments
on the creation of a new APC level between the current Level 5 and
Level 6 within the Musculoskeletal APC series. While some commenters
provided suggested APC reconfigurations and requests for change to APC
assignments, many commenters requested that we maintain the current
six-level structure and continue to monitor the claims data as they
become available. Therefore, in the CY 2019 OPPS/ASC final rule with
comment period, we maintained the six-level APC structure for the
Musculoskeletal Procedures APCs (83 FR 58920 through 58921).
Based on the claims data available for this CY 2020 OPPS/ASC
proposed rule, we continue to believe that the six-level APC structure
for the Musculoskeletal Procedures APC series is appropriate.
Therefore, we are proposing to maintain the APC structure for the CY
2020 OPPS update.
We note that this is the first year for which claims data are
available for the total knee arthroplasty procedure described by CPT
code 27447, which was removed from the inpatient only list in the CY
2018 OPPS/ASC final rule with comment period (82 FR 59382 through
59385). Based on approximately 60,000 hospital outpatient claims
reporting the procedure that are available for ratesetting in this
proposed rule, the geometric mean cost is approximately $12,472.05,
which is similar to the geometric mean cost for APC 5115 (Level 5
Musculoskeletal Procedures) of $11,879.66, and within a range of the
lowest geometric mean cost of the significant procedure costs of
$9,969.37 and the highest geometric mean cost of the significant
procedure costs of $12,894.18. Therefore, we believe that the
assignment of the procedure described by CPT code 27447 in the Level 5
Musculoskeletal Procedures APC series remains appropriate and,
therefore, we are proposing to continue to assign CPT code 27447 to APC
5115 (Level 5 Musculoskeletal Procedures) for CY 2020.
We also are proposing to remove the procedure described by CPT code
27130 (Total hip arthroplasty) from the CY 2020 OPPS inpatient only
list. Based on the estimated costs derived from in the available claims
data, as well as the 50th
[[Page 39461]]
percentile IPPS payment for TKA/THA procedures without major
complications or comorbidities (MS-DRG 470) of approximately $11,900
for FY 2020 when the procedure is performed on an inpatient basis, we
believe that it is appropriate to assign the procedure described by CPT
code 27130 to the Level 5 Musculoskeletal Procedures APC series, which
has a geometric mean cost of $11,879.66. Therefore, for CY 2020, we
also are proposing to assign the procedure described by CPT code 27130
to APC 5115. We note that we will monitor the claims data reflecting
these procedures as they become available. For a more detailed
discussion of the procedures that are being proposed to be removed from
the inpatient only (IPO) list for CY 2020 under the OPPS, we refer
readers to section IX. of this proposed rule.
Table 13 displays the CY 2020 Musculoskeletal Procedures APC
series' structure and APC geometric mean costs.
[GRAPHIC] [TIFF OMITTED] TP09AU19.025
IV. Proposed OPPS Payment for Devices
A. Pass-Through Payment for Devices
1. Beginning Eligibility Date for Device Pass-Through Status and
Quarterly Expiration of Device Pass-Through Payments
a. Background
Under section 1833(t)(6)(B)(iii) of the Act, the period for which a
device category eligible for transitional pass-through payments under
the OPPS can be in effect is at least 2 years but not more than 3
years. Prior to CY 2017, our regulation at 42 CFR 419.66(g) provided
that this pass-through payment eligibility period began on the date CMS
established a particular transitional pass-through category of devices,
and we based the pass-through status expiration date for a device
category on the date on which pass-through payment was effective for
the category. In the CY 2017 OPPS/ASC final rule with comment period
(81 FR 79654), in accordance with section 1833(t)(6)(B)(iii)(II) of the
Act, we amended Sec. 419.66(g) to provide that the pass-through
eligibility period for a device category begins on the first date on
which pass-through payment is made under the OPPS for any medical
device described by such category.
In addition, prior to CY 2017, our policy was to propose and
finalize the dates for expiration of pass-through status for device
categories as part of the OPPS annual update. This means that device
pass-through status would expire at the end of a calendar year when at
least 2 years of pass-through payments had been made, regardless of the
quarter in which the device was approved. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79655), we changed our policy to allow
for quarterly expiration of pass-through payment status for devices,
beginning with pass-through devices approved in CY 2017 and subsequent
calendar years, to afford a pass-through payment period that is as
close to a full 3 years as possible for all pass-through payment
devices. We refer readers to the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79648 through 79661) for a full discussion of the
changes to the device pass-through payment policy. We also have an
established policy to package the costs of the devices that are no
longer eligible for pass-through payments into the costs of the
procedures with which the devices are reported in the claims data used
to set the payment rates (67 FR 66763).
b. Expiration of Transitional Pass-Through Payments for Certain Devices
As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires
that, under the OPPS, a category of devices be eligible for
transitional pass-through payments for at least 2 years, but not more
than 3 years. There currently is one device category eligible for pass-
through payment: HCPCS code C1822 (Generator, neurostimulator
(implantable), high frequency, with rechargeable battery and charging
system), which was established effective January 1, 2019. The pass-
through payment status of the device category for HCPCS code C2624 will
expire on December 31, 2022. Therefore, HCPCS code C2624 will continue
to receive device pass-through payments in CY 2020.
2. New Device Pass-Through Applications
a. Background
Section 1833(t)(6) of the Act provides for pass-through payments
for devices, and section 1833(t)(6)(B) of the Act requires CMS to use
categories in determining the eligibility of devices for pass-through
payments. As part of implementing the statute through regulations, we
have continued to
[[Page 39462]]
believe that it is important for hospitals to receive pass-through
payments for devices that offer substantial clinical improvement in the
treatment of Medicare beneficiaries to facilitate access by
beneficiaries to the advantages of the new technology. Conversely, we
have noted that the need for additional payments for devices that offer
little or no clinical improvement over previously existing devices is
less apparent. In such cases, these devices can still be used by
hospitals, and hospitals will be paid for them through appropriate APC
payment. Moreover, a goal is to target pass-through payments for those
devices where cost considerations might be most likely to interfere
with patient access (66 FR 55852; 67 FR 66782; and 70 FR 68629). We
note that, in section IV.A.4. of this proposed rule, we are proposing
an alternative pathway that would grant fast-track device pass-through
payment under the OPPS for devices approved under the FDA Breakthrough
Device Program for OPPS device pass-through payment applications
received on or after January 1, 2020. We refer the reader to section
IV.A.4. of this proposed rule for a complete discussion on this
proposal.
As specified in regulations at 42 CFR 419.66(b)(1) through (3), to
be eligible for transitional pass-through payment under the OPPS, a
device must meet the following criteria:
If required by FDA, the device must have received FDA
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 meet 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;
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
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).
Separately, 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 device 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 was 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 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 cryoablation, which are
exempt from the cost requirements as specified at 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.
Beginning in CY 2016, we changed our device pass-through evaluation
and determination process. Device pass-through applications are still
submitted to CMS through the quarterly subregulatory process, but the
applications will be subject to notice-and-comment rulemaking in the
next applicable OPPS annual rulemaking cycle. Under this process, all
applications that are preliminarily approved upon quarterly review will
automatically be included in the next applicable OPPS annual rulemaking
cycle, while submitters of applications that are not approved upon
quarterly review will have the option of being included in the next
applicable OPPS annual rulemaking cycle or withdrawing their
application from consideration. Under this notice-and-comment process,
applicants may submit new evidence, such as clinical trial results
published in a peer-reviewed journal or other materials for
consideration during the public comment process for the proposed rule.
This process allows those applications that we are able to determine
meet all of the criteria for device pass-through payment under the
quarterly review process to receive timely pass-through payment status,
while still allowing for a transparent, public review process for all
applications (80 FR 70417 through 70418).
More details on the requirements for device pass-through payment
applications are included on the CMS website in the application form
itself at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the
``Downloads'' section. In addition, CMS is amenable to meeting with
applicants or potential applicants to discuss research trial design in
advance of any device pass-through application or to discuss
application criteria, including the substantial clinical improvement
criterion.
b. Applications Received for Device Pass-Through Payment for CY 2020
We received seven complete applications by the March 1, 2019
quarterly deadline, which was the last quarterly deadline for
applications to be received in time to be included in this CY 2020
OPPS/ASC proposed rule. We received one of the applications in the
second quarter of 2018, three of the applications in the fourth quarter
of 2018, and three of the applications in the first quarter of 2019.
None of the applications were approved for device pass-through payment
during the quarterly review process.
Applications received for the later deadlines for the remaining
2019 quarters (June 1, September 1, and December 1), if any, will be
presented in the CY 2021 OPPS/ASC proposed rule. We note that the
quarterly application process and requirements
[[Page 39463]]
have not changed in light of the addition of rulemaking review.
Detailed instructions on submission of a quarterly device pass-through
payment application are included on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf. A discussion of the
applications received by the March 1, 2019 deadline is presented below.
(1) Surefire[supreg] SparkTM Infusion System
TriSalus Life Sciences submitted an application for a new device
category for transitional pass-through payment status for the
Surefire[supreg] SparkTM Infusion System. The
Surefire[supreg] SparkTM Infusion System is described as a
flexible, ultra-thin microcatheter with a self-expanding, nonocclusive
one-way microvalve at the distal end. The applicant stated that it has
designed the Pressure Enabled Drug DeliveryTM technology of
the Surefire[supreg] SparkTM Infusion System to overcome
intratumoral pressure in solid tumors and improve distribution and
penetration of therapy during Transcatheter Arterial Chemoembolization
(TACE) procedures. TACE is a minimally invasive, image-guided procedure
used to infuse a high dose of chemotherapy into liver tumors. According
to the applicant, the pliable, one-way valve at the distal tip of the
Surefire[supreg] SparkTM Infusion System creates a temporary
local increase in pressure during infusion, opening up collapsed
vessels in tumors, which enables perfusion and therapy delivery in
areas inaccessible to the systemic circulation, a positive hydrostatic
pressure gradient, and restores convective flow to enable therapy to
penetrate deeper into the tumor. During the TACE procedure, the
physician first gains catheter access into the arterial system of the
hepatic arteries through a small incision in the groin or the wrist.
The applicant stated that the physician then uses real-time
fluoroscopic guidance to navigate the Surefire[supreg]
SparkTM Infusion System into the blood vessels feeding the
tumors, infusing the chemotherapy and embolic materials through the
Surefire[supreg] SparkTM Infusion System until the tumor bed
is completely saturated.
With respect to the newness criterion at Sec. 419.66(b)(1), the
FDA granted 510(k) premarket clearance as of April 3, 2018. The
application for a new device category for transitional pass-through
payment status for the Surefire[supreg] SparkTM Infusion
System was received on November 29, 2018, which is within 3 years of
the date of the initial FDA approval or clearance. We are inviting
public comments on whether the Surefire[supreg] SparkTM
Infusion System meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the use of the Surefire[supreg]
SparkTM Infusion System is integral to the service of
providing delivery of chemotherapy into liver tumors, is used for one
patient only, comes in contact with human skin, and is applied in or on
a wound or other skin lesion. The applicant also claimed the
Surefire[supreg] SparkTM Infusion System meets the device
eligibility requirements of Sec. 419.66(b)(4) because it is not an
instrument, apparatus, implement, or items for which depreciation and
financing expenses are recovered, and it is not a supply or material
furnished incident to a service. We are inviting public comments on
whether the Surefire[supreg] SparkTM Infusion System meets
the eligibility criteria at Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have
identified several existing pass-through payment categories that may be
applicable to the Surefire[supreg] SparkTM Infusion System.
The Surefire[supreg] SparkTM Infusion System may be
described by HCPCS code C1887 (Catheter, guiding (may include infusion/
perfusion capability)). The applicant describes the Surefire[supreg]
SparkTM Infusion System as a device used in vascular
interventional procedures to deliver diagnostic and therapeutic agents
in the peripheral vasculatures. The CMS List of Device Category Codes
for Present or Previous Pass-Through Payment and Related Definitions
describes HCPCS code C1887 as intended for the introduction of
interventional/diagnostic devices into the coronary or peripheral
vascular systems. The Surefire[supreg] SparkTM Infusion
System may also be described by HCPCS code C1751 (Catheter, infusion,
inserted peripherally, centrally or midline (other than hemodialysis)).
The applicant describes the Surefire[supreg] SparkTM
Infusion System as being inserted through a small incision in the groin
or the wrist. We are inviting public comments on this issue.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will 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. With respect to this criterion, the applicant
submitted four studies to support the claim that their technology
represents a substantial clinical improvement over existing
technologies. The applicant asserts that the Surefire[supreg]
SparkTM Infusion System represents a substantial clinical
improvement over existing technologies because it offers a treatment
option that no other catheters currently available can provide. The
manufacturer notes that the self-expanding, nonocclusive, one-way valve
can infuse therapy at pressure higher than the baseline mean arterial
pressure, and this pressurized delivery opens up collapsed vessels in
tumors and enables perfusion and therapy delivery into hypoxic areas of
the liver tumors. The applicant also believes that the Surefire[supreg]
SparkTM Infusion System represents a substantial clinical
improvement because the technology has shown improved tumor response
rates in hepatocellular carcinoma, as well as a decrease in the rate of
disease recurrence and the need for subsequent treatment.
The first pilot study of nine patients being treated for
hepatocellular carcinoma, who received infusions via both a
conventional end-hole catheter and an antireflux microcatheter,
demonstrated statistically significant reductions in downstream
distribution of embolic particles with the antireflux catheter and
increases in tumor deposition (p<0.05).\13\ The second singlecenter
retrospective study was conducted with 22 patients treated for
hepatocellular carcinoma with the Surefire[supreg] SparkTM
Infusion System and TACE. As assessed by MRI, there appeared to be
overall disease response in 91 percent of patients and 85 percent of
lesions and complete response in 32 percent of patients and 54 percent
of lesions.\14\ In the first study for a case-control series, 19
patients undergoing treatment using SIS-TACE had a statistically
significant improvement in
[[Page 39464]]
disease response rate compared to 19 patients treated with end-hole
microcatheters, 78.9 percent compared to 36.8 percent for initial
overall response rate (p = 0.008).\15\ In the second study, a multi-
center registry of 72 patients demonstrated high response rate when
compared to historical control at 6 months follow-up.\16\
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\13\ Pasciak AS, McElmurray JH, Bourgeois AC, Heidel RE, Bradley
YC. Impact of an antireflux catheter on target volume particulate
distribution in liver-directed embolotherapy: A pilot study. J Vasc
Interv Radiol. 2015 May;26(5):660-9.
\14\ Kim AY, Frantz S, Krishnan P, DeMulder D, Caridi T, Lynskey
GE, et al. (2017) Short-term imaging response after drug-eluting
embolic trans- arterial chemoembolization delivered with the
Surefire Infusion System[supreg] for the treatment of hepatocellular
carcinoma. PloS one 12.9 (2017): e0183861.
\15\ N Apseloff, J Keung, T Caridi, D Buckley, G Lynskey, A Kim.
Case-control evaluation of endhole microcatheter versus Surefire
Infusion System for use during transarterial chemoembolization for
hepatocellular carcinoma. Conference abstract presented at 2017
Society of Intervention Radiology Annual Congress, March 8, 2017.
\16\ Kapoor B, Contreras F, Katz M, Arepally A, Fischman A, Rose
S, Kim A, Ferraro J. Surefire Infusion System (SIS) hepatocellular
carcinoma registry study interim results: A multicenter study of the
safety, feasibility, and outcomes of the SIS expandable-tip
microcatheter in DEB-TACE.
Conference abstract presented at 2018 Society of Intervention
Radiology Annual Congress, March 19, 2017.
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Based on the information submitted by the applicant, one concern is
that large-scale studies with long-term follow-up are limited. Also,
the majority of studies presented had a sample size of less than 25 and
the highest sample size presented was less than 100 patients.
Additionally, patient follow-up occurred mostly within a 3 to 6 month
timeframe with few studies occurring beyond this range.
Another concern is that none of the studies presented improvements
in mortality with the use of the Surefire[supreg] SparkTM
Infusion System. Outcomes focused primarily on tumor response rates and
lesion size, based upon imaging. Additional data on mortality endpoints
would be helpful to fully assess substantial clinical improvement.
We are inviting public comments on whether the Surefire[supreg]
SparkTM Infusion System meets the substantial clinical
improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the
Surefire[supreg] SparkTM Infusion System would be reported
with CPT code 37243, which is assigned to APC 5193 (Level 3
Endovascular Procedures). To meet the cost criterion for device pass-
through payment status, a device must pass all three tests of the cost
criterion for at least one APC. For our calculations, we used APC 5193,
which has a CY 2019 payment rate of $9,669.04. Beginning in CY 2017, we
calculated the device offset amount at the HCPCS/CPT code level instead
of the APC level (81 FR 79657). CPT code 37243 had a device offset
amount of $3,894.69 at the time the application was received. According
to the applicant, the cost of the Surefire[supreg] SparkTM
Infusion System is $7,750.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $7,750 for the Surefire[supreg]
SparkTM Infusion System is 80.2 percent of the applicable
APC payment amount for the service related to the category of devices
of $9,669.04 ($7,750/$9,669.04 x 100 = 80.2 percent). Therefore, we
believe the Surefire[supreg] SparkTM Infusion System meets
the first cost significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $7,750 for the
Surefire[supreg] SparkTM Infusion System exceeds the cost of
the device-related portion of the APC payment amount for the related
service of $3,894.69 by 199 percent ($7,750/$3,894.69) x 100 = 198.99
percent). Therefore, we believe that the Surefire[supreg]
SparkTM Infusion System meets the second cost significance
requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that 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 must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $7,750 for the SparkTM Infusion System
and the portion of the APC payment amount for the device of $3,894.69
exceeds the APC payment amount for the related service of $9,669.04 by
40 percent (($7,750-$3,894.69)/$9,669.04) x 100 = 39.87 percent).
Therefore, we believe that the Surefire[supreg] SparkTM
Infusion System meets the third cost significance requirement.
We are inviting public comments on whether the Surefire[supreg]
SparkTM Infusion System meets the device pass-through
payment criteria discussed in this section, including the cost
criterion.
(2) TracPatch
According to the applicant, TracPatch is a wearable device which
utilizes an accelerometer, temperature sensor and step counter to allow
the surgeon and patient to monitor recovery and help ensure critical
milestones are being met. The applicant states that TracPatch utilizes
wearable monitoring technology and methods in an effort to enhance the
rehabilitation experience for both patients and physicians.
Accelerometers are utilized to recognize and record the results when
patients perform standard physical therapy exercises, in addition to
providing standard step count and high-acceleration events that may
indicate a fall. A temperature sensor monitors the skin temperature
near the joint.
TracPatch is described by the applicant as a 24/7 remote monitoring
wearable device that captures a patient's key daily activities: Such as
range of motion progress, exercise compliance, and ambulation.
TracPatch is used for pre- and post-operative patient monitoring,
patient engagement, data analytics and post-op cost reduction.
According to the applicant, the wearable devices stick on the skin
above and below the knee. The wearables are applied before total knee
surgery to determine a patient's baseline activity levels, and then
again after surgery to allow the patient and surgeon to monitor
activity, pain, range of motion and physical therapy. The use of the
Bluetooth connectivity allows the device to be paired with any
smartphone and the TracPatch cloud allows for unlimited data collection
and storage. The applicant states that TracPatch includes a web
dashboard and computer application, which permit a health care provider
to monitor a patient's recovery in real-time, allowing for immediate
care adjustments and the ability for providers and patients to respond
to issues that may occur during recovery from surgery.
With respect to the newness criterion at Sec. 419.66(b)(1), the
applicant stated that TracPatch does not need FDA clearance because it
is a Class I device that would be assigned to a generic category of
devices described in title 21 of the Code of Federal Regulations, parts
862 through 892 (21 CFR parts 862 through 892) that do not require FDA
clearance. However, the applicant did not identify which category of
exempted devices that TracPatch would be assigned. The applicant also
stated that TracPatch will be introduced into the market in 2019, which
would be within 3 years of the device pass-through payment application
for TracPatch that
[[Page 39465]]
was received in March 2019. We are inviting public comments on whether
the TracPatch is exempt from FDA clearance and if the TracPatch meets
the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
the applicant claimed that the TracPatch is an integral part of
monitoring the range of motion for a knee prior to and after total knee
arthroplasty, is used for one patient only, and is placed on the skin
above and below the knee and secured by Velcro strips. The applicant
stated that the device is not surgically implanted or inserted into the
patient and is not applied in or on a wound or other skin lesion. We
have concerns with the TracPatch's eligibility with respect to the
criterion at Sec. 419.66(b)(3) because to be eligible for pass-through
payment a device must be surgically implanted or inserted into the
patient or applied in a wound or on other skin lesions. In addition,
the applicant stated that the TracPatch meets the device eligibility
requirements of Sec. 419.66(b)(4) because it is not an instrument,
apparatus, implement, or item for which depreciation and financing
expenses are recovered. We have determined that TracPatch is not a
material or supply furnished incident to a service. We are inviting
public comments on whether the TracPatch meets the eligibility
criterion.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any existing categories or
by any category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. With respect to the
existence of a previous pass-through device category that describes the
TracPatch, the applicant suggested a category descriptor of ``Real time
patient monitoring surface sensor technology for pre and post-op Total
Knee Arthroplasty.'' We have not identified an existing pass-through
payment category that describes the TracPatch, but we welcome public
comments on this topic.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will 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. The applicant asserted that use of the TracPatch
significantly improves clinical outcomes for a patient population
because the TracPatch allows both real-time and remote monitoring of
the knee after total knee arthroplasty, which allows providers to make
care decisions with up-to-the-minute data. The applicant noted that
health care providers have instant access to a patient's pre-operative
and post-operative data and can adjust care plans based on the data.
The applicant stated that physicians will be able to preoperatively
monitor patient activity to set a clinical baseline, but surgeons will
also be able to monitor how their patients are recovering long after
they have been discharged, which the applicant claims will ultimately
result in fewer patients being readmitted to the hospital and higher
success rates of surgery. The applicant asserted that the use of the
TracPatch will result in decreased rate of subsequent diagnostics and
therapeutic interventions and physician visits. The applicant also
noted that the TracPatch system will allow physicians to monitor their
patients in real-time and take corrective actions in a timely manner,
which will result in reduced recovery time as well as improved patient
outcomes.
Although the applicant presented these claims, the applicant
provided no clinical research evidence to support them; only the
testimonials from practicing physicians and large hospital systems were
presented. The testimonials addressed the benefits of remote data
monitoring and stated that the real-time data would provide better
information to understand the effectiveness of surgeries performed,
according to one provider. However, there were no reference articles
submitted to support the claims made in the application and the
testimonials nor were any data provided on the clinical effectiveness
of the use of the TracPatch. We are concerned that, without clinical
data to support the applicant's claims, we do not have sufficient
information to determine whether the use of the TracPatch is a
substantial clinical improvement over the current methods to monitor
recovery from total knee arthroplasty. We are inviting public comments
on whether the TracPatch meets the substantial clinical improvement
criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of device is not
insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. With
respect to the cost criterion, the applicant stated that the use of the
TracPatch would be reported with either CPT code 99453 (Remote
monitoring of physiologic parameter(s) (e.g., weight, blood pressure,
pulse oximetry, respiratory flow rate), initial; set-up and patient
education on use of equipment) or CPT code 99454 (Remote monitoring of
physiologic parameter(s) (e.g., weight, blood pressure, pulse oximetry,
respiratory flow rate), initial; device(s) supply with daily
recording(s) or programmed alert(s) transmission, each 30 days). CPT
code 99453 is assigned to APC 5012 (Clinic Visits and Related
Services), with a proposed CY 2020 payment rate of $120.16, and there
is no device offset for the procedure. CPT code 99454 is assigned to
APC 5741 (Level 1 Electronic Analysis of Devices), with a proposed CY
2020 payment rate of $38.04, and there is no device offset for the
procedure. The applicant stated that the cost of the TracPatch device
is $3,250.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The cost of $3,250
for the TracPatch exceeds the applicable APC amount for CPT code 99454
of $38.04 by 8,543.64 percent ($3,250/$38.04 x 100 = 8,543.64 percent).
Therefore, the TracPatch appears to meet the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of devices in the
category must exceed the cost of the device-related portion of the APC
payment amount by at least 25 percent, which means the device cost
needs to be at least 125 percent of the device offset amount (the
device-related portion of the APC found on the offset list). The two
procedure codes that would be billed for the use of the TracPatch do
not have a device offset amount, which means the TracPatch would appear
to meet the second cost significance requirement.
Section 419.66(d)(3), the third cost significance requirement,
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount determined to be associated with the device exceeds 10 percent
of the APC payment amount for the related service. The difference
between the cost of $3,250 for the TracPatch and the portion of the APC
payment for the device of $0.00 exceeds 10 percent at 8,543.64 percent
(($3,250 - $0.00)/$38.04 x 100 = 8,543.64 percent). Therefore, the
TracPatch
[[Page 39466]]
appears to meet the third cost significance requirement and, therefore,
satisfies the cost significance criterion. We are inviting public
comments on whether the TracPatch meets the device pass-through payment
criteria discussed in this section.
(3) Vagus Nerve Stimulation (VNS) Therapy[supreg] System for Treatment
Resistant Depression (TRD)
LivaNova USA Inc. submitted an application for the Vagus Nerve
Stimulation (VNS) Therapy[supreg] System for Treatment Resistant
Depression (TRD). According to the applicant, the VNS Therapy[supreg]
System consists of two implantable components: A programmable
electronic pulse generator and a bipolar electrical lead that is
connected to the programmable electronic pulse generator. The applicant
stated that the surgical procedure to implant the VNS Therapy[supreg]
System involves subcutaneous implanting of the pulse generator in the
intraclavicular region as well as insertion of the bipolar electrical
lead which entails wrapping two spiral electrodes around the cervical
portion of the left vagus nerve within the carotid sheath.
According to the applicant, following implant and recovery, the
physician programs the pulse generator to intermittently stimulate the
vagus nerve at a level that balances efficacy and patient tolerability.
The pulse generator delivers electrical stimulation via the bipolar
electrical lead to the cervical portion of the left vagus nerve within
the carotid sheath thereby relaying information to the brain stem
modulating structures relevant to depression. Stimulation typically
consists of a 30-second period of ``on time,'' during which the device
stimulates at a fixed level of output current, followed by a 5-minute
``off time'' period of no stimulation.
The applicant states that a hand-held programmer is utilized to
program the pulse generator stimulation parameters, including the
current charge, pulse width, pulse frequency, and the on/off stimulus
time, which is also known as the on/off duty cycle. Initial settings
can be adjusted to enhance the tolerability of the device as well as
its clinical effects on the patient. The generator runs continuously,
but patients can temporarily turn off the device by holding a magnet
over it. The generator can also be turned on and off by the programmer.
The applicant states that the VNS Therapy[supreg] System provides
indirect modulation of brain activity through the stimulation of the
vagus nerve. The vagus nerve, the tenth cranial nerve, has
parasympathetic outflow that regulates the autonomic (that is,
involuntary) functions of heart rate and gastric acid secretion, and
also includes the primary functions of sensation from the pharynx,
muscles of the vocal cords and swallowing. It is a nerve that carries
both sensory and motor information to and from the brain. Importantly,
the vagus nerve has influence over widespread brain areas and it is
believed that electrical stimulation of the vagus nerve alters various
networks of the brain in order to treat psychiatric disease.
With respect to the newness criterion at Sec. 419.66(b)(1), the
applicant received FDA clearance for the VNS Therapy[supreg] System for
TRD through the premarket approval (PMA) process on July 15, 2005, and
the VNS Therapy[supreg] for TRD device was introduced to the market in
September 2005. However, on May 4, 2007, a national coverage
determination (NCD 160.18) was released prohibiting Medicare from
covering the use of the VNS Therapy[supreg] System for TRD. This NCD
remained in effect until February 15, 2019, when CMS determined that
the VNS Therapy[supreg] for TRD could receive payment if the service
was performed in CMS-approved coverage with evidence development (CED)
studies. Although the VNS Therapy[supreg] System for TRD was introduced
to the market in September 2005, Medicare has only covered it for
slightly more than 1\1/2\ years. However, Sec. 419.66(b)(1) states
that a pass-through payment application for a device must be received
within 3 years of when the device either received FDA approval or was
introduced to the market. The applicant stated that the VNS
Therapy[supreg] System for TRD was introduced to the market in
September 2005, which means the device pass-through payment application
would have needed to have been submitted to CMS by September 2008.
However, the pass-through application for the device was not received
by CMS until March 2019.
In addition, it appears that the neurostimulator device for the VNS
Therapy[supreg] System for TRD is the same device that has been used
since 1997 to treat epilepsy.\17\ The applicant stated the following
three differences between the two devices: (1) How the device is
programmed to treat epilepsy versus TRD; (2) how the external magnets
of the device are used for epilepsy treatment as compared to TRD
treatment; and (3) that the battery life of the device to treat
epilepsy is different than the battery life of the device when treating
TRD. However, it is not clear that these differences demonstrate that
the actual device used to treat TRD is any different than the device
used to treat epilepsy.
---------------------------------------------------------------------------
\17\ Current Behavioral Neuroscience Reports. 2014 Jun; 1(2):
64-73.
---------------------------------------------------------------------------
Based on the information presented, we are inviting public comments
on whether the VNS Therapy[supreg] System for TRD meets the newness
criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
the applicant claimed that the VNS Therapy[supreg] System for TRD is an
integral part of a procedure to provide adjunctive treatment of chronic
or recurrent depression in adult patients that have failed four or more
antidepressant treatments. The VNS Therapy[supreg] System for TRD is
used for one patient only, comes in contact with human tissue, and is
surgically implanted or inserted into the patient. In addition, the
applicant stated that the VNS Therapy[supreg] System for TRD meets the
device eligibility requirements of Sec. 419.66(b)(4) because it is not
an instrument, apparatus, implement, or item for which depreciation and
financing expenses are recovered. We have determined that the VNS
Therapy[supreg] for TRD is not a material or supply furnished incident
to a service. We are inviting public comments on whether the VNS
Therapy[supreg] for TRD meets the eligibility criterion.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any existing categories or
by any category previously in effect, and was not being paid for as an
outpatient service as of December 31, 1996. With respect to the
existence of a previous pass-through device category that describes the
device used for the VNS Therapy[supreg] System for TRD, the applicant
suggested a category descriptor of ``Generator, neurostimulator
(implantable), treatment resistant depression, non-rechargeable.''
However, the device category represented by HCPCS code C1767 is
described as ``Generator, neurostimulator (implantable), non-
rechargeable,'' which appears to encompass the device category
descriptor for the VNS Therapy[supreg] System for TRD suggested by the
applicant. The applicant asserts that the device category descriptor
for HCPCS code C1767 is overly broad and noted the establishment of
HCPCS code C1823 (Generator, neurostimulator (implantable),
nonrechargeable, with transvenous sensing and stimulation leads),
effective January 1, 2019, as an
[[Page 39467]]
example of where a new device category for a nonrechargeable
neurostimulation system to treat central sleep apnea was carved out
from the broad category described by HCPCS code C1767.
The applicant believes its proposed category for the device for the
VNS Therapy[supreg] System for TRD should qualify for a similar carve-
out. However, HCPCS code C1823 was established due to specific device
features which distinguish that device category from HCPCS code C1767.
The applicant for the VNS Therapy[supreg] System for TRD requested a
new device category based on a beneficiary's diagnosis, but OPPS does
not differentiate payment by diagnosis. We welcome public comments on
whether the proposed device category for the VNS Therapy[supreg] for
TRD is not described by any existing categories or by any category
previously in effect and meets the requirements of Sec. 419.66(c)(1).
The second criterion for establishing a device category, at
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will 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. The applicant stated that the VNS Therapy[supreg]
System for TRD would be a substantial clinical improvement because it
is a treatment option for beneficiaries that have failed four or more
antidepressant treatments. Patients with residual depressive symptoms
despite treatment may be demonstrating TRD, but a universally accepted
definition of TRD has yet to be achieved.\18\ The applicant described
the VNS Therapy[supreg] System for TRD as a treatment option for
beneficiaries who have exhausted all other available options to treat
depression. The applicant also provided studies to show how beneficial
impacts on the quality of life by using the VNS Therapy[supreg] System
for TRD can be maintained for multiple years. These studies have been
fully reviewed and discussed by the CMS Coverage and Analysis Group's
(CAG) national coverage determination with coverage with evidence
development for VNS therapy for TRD.\19\
---------------------------------------------------------------------------
\18\ ``Decision Memo for Vagus Nerve Stimulation (VNS) for
Treatment Resistant Depression (TRD) (CAG-00313R2).'' Available at:
https://www.cms.gov/medicare-coverage-database/details/nca-decision-memo.aspx?NCAId=292&NCDId=230&ncdver=2&IsPopup=y&bc=AAAAAAAAQAAA&.
\19\ Ibid.
---------------------------------------------------------------------------
We reviewed the studies provided by the applicant to determine if
the VNS Therapy[supreg] for TRD and its associated device offered a
treatment option for patients unresponsive to or ineligible for
currently available treatments. Our review also examined whether the
VNS Therapy[supreg] System for TRD provides a benefit relative to a
previously established device category or other available treatment. To
show that the VNS Therapy[supreg] for TRD provides a relative benefit,
the applicant submitted the same studies it had submitted to the CMS
CAG in October 2017. These studies had been submitted as a part of a
request to reconsider the NCD in place at that time that prohibited
Medicare from providing coverage for the VNS Therapy[supreg] System for
TRD. Therefore, our review focuses on and is consistent with the eight
studies discussed in detail in the ``Decision Memo for Vagus Nerve
Stimulation (VNS) for Treatment Resistant Depression (TRD)'' (CAG-
00313R2).\20\ We also reviewed an additional study submitted by the
applicant for this device pass-through application.
---------------------------------------------------------------------------
\20\ Ibid.
---------------------------------------------------------------------------
The first study was a randomized control trial.\21\ The study was a
double-blind, randomized, multi-centered study and its goal was to
compare the clinical outcomes in patients diagnosed with TRD of three
VNS dose response curves with variable output currents and pulse
widths, but with the same duty cycle and pulse frequency. Groups were
designated high, medium and low dose and a total of 331 patients
participated in the study. Enrollment criteria included: Individuals 18
years of age or older with a diagnosis of a chronic (>2 years) or
recurrent (>=2 prior episodes) MDD or bipolar disorder and a current
diagnosis of MDE as defined by the DSM-4 and determined using the Mini-
International Neuropsychiatric Interview; a history of failure to
respond to four or more adequate dose/duration of antidepressant
treatment trials from at least two different antidepressant treatment
categories as documented through medical history and record review; a
minimum pre-study and baseline score of 24 on the MADRS, with no
greater than a 25-percent decrease between the pre-study and baseline
visits; current recipient of at least one antidepressant treatment
(medication or ECT); and a stable regimen of all current antidepressant
treatments for at least 4 weeks before the baseline visit. Furthermore,
patients with bipolar disease had to be receiving a mood stabilizer at
baseline. Exclusion criteria included a history of psychotic disorder,
a history of rapid cycling bipolar disorder, a current history of
bipolar disorder mixed phase, a history of borderline personality
disorder, clinically significant suicidal intent at the time of
screening, a history of drug/alcohol dependence in the last year, and a
previous history of use of VNS. The only study personnel unblinded to
the assignment of treatment groups were study programmers at each site
and clinical engineers who were employed by the sponsor to monitor the
programmers.
---------------------------------------------------------------------------
\21\ Aaronson ST, Carpenter LL, Conway CR, et al. Vagus Nerve
Stimulation Therapy Randomized to Different Amounts of Electrical
Charge for Treatment-Resistant Depression: Acute and Chronic
Effects. Brain Stimul. 2013; 6(4):631-40.
---------------------------------------------------------------------------
Eligible patients were implanted with a VNS Therapy[supreg] System
for TRD device and then randomized to low, medium or high target
settings. The low dose was chosen to deliver active stimulation at the
lowest available setting for amplitude of output current with a narrow
pulse width (0.25 mA; 130 [mu]s). The high dose was chosen to be
consistent with higher levels of stimulation, often seen in the
treatment of epilepsy (1.25-1.5mA; 250 [mu]s). The medium dose was
chosen to track closely to the high dose, but without overlap (0.5-1.0
mA; 250 [mu]s), potentially providing a better opportunity to
demonstrate efficacy versus the low dose.
The study authors reported that in neither the acute nor the long-
term phase were there any significant differences in response or
remission rates among the treatment groups (response was defined as
>=50 percent improvement from baseline; remission was defined as <=14
on the Inventory of Depressive Symptomatology Clinician Administered
Version (IDS-C)). However, the authors stated that although effect
sizes were limited, statistically significant decreases in mean
depression scores (based on IDS-C) were observed in all groups. Mean
IDS-C scores decreased approximately 15 points from baseline through
week 50. The authors concluded that within the limits of this study,
the VNS Therapy[supreg] System for TRD provided as adjunctive treatment
to patients diagnosed with TRD as described above offers significant
improvement at study endpoint as compared with baseline and that the
effect is durable over 1 year. The authors also stated that higher
electrical dose parameters were associated with higher response
durability.
The second study by Aaronson et al. was a prospective, multi-
center, open label, nonrandomized, longitudinal, naturalistic,
observational post
[[Page 39468]]
marketing FDA surveillance study for which a registry was designed to
follow the clinical response and outcome over 5 years of patients with
a major depressive disorder (MDD), including those with unipolar or
bipolar depression.\22\ Patients participating in this study were
recruited by physician referral and received treatment as usual (TAU)
and VNS or just TAU. Subjects included those who were being evaluated
for surgery or anesthesia to undergo VNS implantation, patients who had
signed consent forms to receive a VNS device, patients who had
scheduled VNS implantation surgery, and patients who had completed
participation in a previous study termed the D-21 study [NCT 00305565:
Study Comparing Outcomes for Patients With Treatment Resistant
Depression Who Receive VNS Therapy at Different Doses].
---------------------------------------------------------------------------
\22\ Aaronson ST, Sears P, Ruvuna F, et al.: A 5-Year
Observational Study of Patients With Treatment--Resistant Depression
Treated With Vagus Nerve Stimulation or Treatment as Usual:
Comparison of Response, Remission, and Suicidality. Am J Psychiatry.
2017; 174(7):640-648.
---------------------------------------------------------------------------
The VNS arm included 335 patients without prior VNS treatment as
well as 159 patients who received VNS treatment in the previous D-21
investigation. The TAU arm contained 301 patients. Eligibility criteria
for the study included: Age 18 years or older; a current major
depressive disorder diagnosed according to DSM-IV-TR criteria and
confirmed by the Mini International Neuropsychiatric Interview of at
least 2 years in duration (unipolar or bipolar depression) or a history
of at least three depressive episodes including the current major
depression episode; and a history of inadequate response to at least
four depression treatments (including maintenance pharmacotherapy,
psychotherapy and ECT). Maintenance pharmacotherapy was defined as
dosage per Physician's Desk Reference labeling for a minimum of 4
weeks. Exclusion criteria included a history of schizophrenia,
schizoaffective disorder, other psychotic disorder, current psychosis,
history of rapid cycling bipolar disorder and a CGI score <4. Other
than the patients from the D-21 study, the individuals in the study had
not previously experienced VNS.
All patients (except those who participated in the D-21 study) were
allowed to choose the treatment arm of their choice. However, the
patients could be assigned to receive the alternate treatment due to
various reasons (for example, availability of surgical implantation at
a site, failure to receive insurance coverage for the procedure,
availability of donated VNS devices, among others). There were no
restrictions on concomitant treatments.
Post baseline follow-up visits for all patients were scheduled to
occur at 3, 6, 9, 12, 18, 24, 30, 36, 42, 48, 54, and 60 months. During
these scheduled visits, data were collected on medical status, need for
adjustment of mood disorder therapy and concomitant treatments. Also,
various depression scale ratings were collected as well as data
concerning mortality and suicidality. Central raters (un-blinded nurses
with special training) conducted an assessment of suicidality via
telephone after each patient visit.
Propensity scores were used to adjust for imbalance of baseline
prognostic factors between treatment arms. The ITT population included
those study participants who completed a baseline visit, received their
respective treatment and completed at least one post-baseline
treatment.
Of the 494 patients in the VNS arm, 300 (61 percent) completed all
5 years of data. It is noted that the D-21 patients rolled over into
this study at various time points after implantation. Of the 301 TAU
patients, 138 (46 percent) completed all 5 years of data.
Approximately 70 percent of all study participants were female and
over 90 percent were Caucasian in both groups. A diagnosis of severe
recurrent major depressive disorder was reported in 46 percent of the
patients in the VNS arm and 32 percent in the TAU arm. A diagnosis of
primary bipolar I or bipolar II disorder was reported in 28 percent of
patients in the VNS arm and 24 percent in the TAU arm. Other
psychiatric diagnoses included moderate recurrent major depression,
moderate single episode major depression, severe recurrent major
depression, and severe single episode major depression. Fifty-seven
percent of the VNS group and 40 percent of the TAU group had
experienced past treatments of ECT.
Of the patients who withdrew early, 40 percent (195) were from the
VNS arm and 54 percent (163) were from the TAU arm. The investigators
observed that reasons for early withdrawal were similar between the
treatment arms. It was also noted that after premature closure of a
study site where 48 patients were participating in the TAU arm, most of
the patients at that site were either lost to follow up or were dropped
from the study for nonadherence.
The primary efficacy measure was a response rate, defined as a
decrease of >=50 percent in baseline Montgomery-[Auml]sberg Depression
Rating Scale (MADRS) score at any post-baseline visit during the study.
The study authors report a 5-year cumulative response rate of 67.6
percent [95 percent CI = 63.4, 71.7] in the VNS group and 40.9 percent
[95 percent CI = 35.4, 47.1] in the TAU group (p <0.001). Also, the
authors note that the cumulative percentage of first-time responders in
the VNS Therapy[supreg] System arm was approximately double that in the
TAU arm at all post-baseline points in time through the 5 years of the
study. The authors concluded that adjunctive treatment with the use of
the VNS Therapy[supreg] System device resulted in superior outcomes in
both effectiveness and mortality over a 5-year period compared with
treatment as usual for patients diagnosed with chronic, severe TRD.
A third study by Conway et al. compared quality of life (QoL)
changes associated with treatment using VNS + TAU versus TAU in
patients diagnosed with unipolar and bipolar TRD.\23\ QoL data were
gathered on all patients using the patient reported Quality of Life
Enjoyment and Satisfaction Questionnaire Short Form (Q-LES-Q-SF), as
well as the clinician reported CGI-I scale.
---------------------------------------------------------------------------
\23\ Conway CR, Kumar A, Xiong W, et al. Chronic Vagus Nerve
Stimulation Significantly Improves Quality of Life in Treatment-
Resistant Major Depression. J Clin Psychiatry. 2018; 79:e1-e7.
---------------------------------------------------------------------------
The data were collected as part of the 5 year registry described in
Aaronson et al. (2017), noted above. However, the patient population
analyzed was somewhat different, in that patients who rolled over from
the previous D-21 study (Aaronson et al., 2017) were excluded so that
all subjects had the same follow-up period. Furthermore, patients who
were not depressed at baseline according to their MADRS scores, were
also excluded. Therefore, the data from 328 patients treated with VNS +
TAU and 271 patients treated with TAU were analyzed.
Females comprised 68.6 percent of the VNS + TAU group and 70.8
percent of the TAU group; 97 percent of the VNS + TAU group and 90.8
percent of the TAU group were Caucasian. Major depressive disorder was
diagnosed in 70.4 percent of the VNS + TAU group and 78.2 percent of
the TAU group. Bipolar I or II disorder (most recent episode depressed)
was diagnosed in 29.6 percent of the VNS + TAU group and 21.7 percent
of the TAU group.
Paired data analysis (for example, change in Q-LES-Q-SF versus
percent change in MADRS score) were matched by assigned visit number;
however these assessments for any given month might have taken place on
separate visits (visit window was 45 days until 1 year of
[[Page 39469]]
follow-up; thereafter 90 days). The authors report that the
time difference between the paired measures was similar between the two
groups and was a median of 4 weeks. Missing data were excluded if one
component of a paired observation was lacking.
Among the results, the authors reported that on average, there was
a comparative QoL advantage observed for the VNS + TAU group as early
as 3 months, which was sustained throughout the 5-year study. The VNS +
TAU treatment group demonstrated a significantly greater improvement in
Q-LES-Q-SF scores than the TAU treatment group for the same percentage
drop in MADRS score from baseline. The authors reported a similar
pattern when the Clinical Global Impression (CGI) score was used. The
authors concluded that adjunctive treatment using the VNS
Therapy[supreg] System for TRD provided greater and sustained
improvements in QoL as compared to TAU alone. Further, TRD patients
treated with THE VNS Therapy[supreg] System for TRD experienced
clinically meaningful QoL improvements even with symptom reduction less
than the traditional 50 percent reduction used to describe a
``response'' to treatment.
The goal of the fourth study by Olin et al. was to characterize
all-cause mortality rate and suicide risk in patients diagnosed with
TRD who were treated with standard TAU and those treated with VNS +
TAU.\24\
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\24\ Olin B, Jayewardene AK, Bunker M, Moreno F. Mortality and
Suicide Risk in Treatment-Resistant Depression: An Created on 04/12/
2019. Page 19 of 49 Observational Study of the Long-Term Impact of
Intervention. PLOS ONE. 2012.
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The study was an observational, open label, longitudinal, multi-
center registry. The registry was a post-market surveillance study
required by the FDA as a condition of approval of the TRD indication
for VNS therapy to evaluate long-term patient outcomes. Patients were
followed for 60 months, until withdrawal from the study, death or study
completion.
Patients in the VNS + TAU group had been followed for an average of
3.2 years; those in the TAU group had been followed for 2.1 years.
Because baseline characteristics of each group showed areas of
imbalance, the use of propensity score modeling was required.
Suicidal ideation was evaluated by a central ratings group using
both the Assessment of Suicidality (AOS) [Has the patient made a
suicidal gesture or attempt since the last visit; yes or no] and MADRS
Item 10, score >=4, [``Probably better off dead. Suicide thoughts are
common, and suicide is considered a possible solution, but without
specific plans or intention'']. Among other criteria, eligible patients
for the Registry were: Individuals who had been diagnosed with a
current MDE according to the DSM-IV-TR criteria; individuals who had
been in the current depressive episode for at least 2 years or had
experienced at least three lifetime MDEs (including the current
episode); individuals who had an inadequate response to four or more
adequate antidepressive treatments; and individuals who had a CGI-S of
4 or greater. Exclusion criteria included schizophrenia,
schizoaffective disorder, any other psychotic disorder, a history of
rapid cycling bipolar disorder, or previous use of VNS.
After completing a screening visit, patients self-selected the
treatment course that they believed was the best medical option.
However, after the study started, there were some treatment arm changes
due to the implementation of a Medicare noncoverage policy and
subsequent lack of reimbursement for the VNS procedure. The authors
stated that they believed that the majority of individuals who chose
VNS + TAU did so as a final alternative when all other treatments
failed.
There were 335 patients in the VNS + TAU group and 301 subjects in
the TAU group. Average age of all patients was between 48 and 50 years.
In the VNS + TAU group, 68.4 percent of patients were female; 96.4
percent were Caucasian. In the TAU group, 70.1 percent of the patients
were female; 91 percent were Caucasian. Major depressive disorder was
diagnosed in 71.1 percent of the VNS + TAU group and 76.4 percent of
the TAU group. Bipolar disorder was diagnosed in 28.9 percent of the
VNS + TAU group and 23.6 percent of the TAU group. In the VNS + TAU
group, 58.2 percent of patients had a history of ECT; in the TAU group,
45.2 percent had a history of ECT treatment.
The authors found that the standardized all-cause mortality (4.46
[VNS + TAU] versus 8.06 [TAU only] per 1,000 person years) and suicide
rates (0.88 [VNS + TAU] versus 1.61 [TAU only] per 1,000 person years)
for patients treated with VNS + TAU were approximately half that of the
patients treated only with TAU. However, the specific results were not
statistically different due to the low mortality rates in both groups.
Similar results were noted when stratifying by propensity score
quintiles.
However, both groups had a significantly higher rate of suicide
relative to the U.S. population; VNS + TAU 5.72 (95 percent CI; 0.07,
31.82) and TAU 9.98 (95 percent CI; 0.13, 55.55). The authors stated
that individuals treated with VNS + TAU had a 10 percent--20 percent
reduction in the risk of suicidality as compared to individuals treated
with TAU alone, as measured by the MADRS Item 10 score. However, when
the Assessment of Suicidality was used, no statistical difference was
noted between treatment groups.
The authors further noted that the side effects profiles as
measured by the Frequency, Intensity and Burden of Side Effects Rating
questionnaire demonstrated that the percentage of unacceptable side
effects for VNS + TAU was higher than that of TAU; however, this
difference lessens over time.
The authors concluded that treatment with adjunctive VNS in this
population can potentially lower the risk of all-cause mortality,
suicide and suicide attempts.
The fifth study by Berry et al. performed a Bayesian meta-analysis
of patient level data from six clinical studies that had been
previously performed and supported by the manufacturer of the VNS
Therapy[supreg] System for TRD device (Cyberonics).\25\ The
investigations included in the meta-analysis were two single arm
studies of VNS + TAU, a randomized trial of VNS + TAU versus TAU, a
single arm study of patients receiving only TAU, a randomized trial of
VNS + TAU comparing different VNS intensities, and a nonrandomized
registry of patients who received either VNS + TAU or TAU.
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\25\ Berry SM, Broglio K, Bunker M, Jayewardene A, Olin B, Rush
AJ. A patient-level meta-analysis of studies evaluating vagus nerve
stimulation therapy for treatment-resistant depression. Med Devices
(Auckl). 2013.
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The MADRS and CGI-I were selected as the primary endpoints for the
meta-analysis, though they were not necessarily the primary outcome
measures in the individual studies analyzed. Outcomes of interest were
response, remission and sustained response based on these scales of
disease severity. Response was assessed across five of the six studies
using the MADRS and defined as a follow up score of at least a 50
percent reduction compared to baseline score. Response per the CGI
Improvement subscale (CGI-I) was defined as a follow-up score of 1--
``very much improved'' or 2--``much improved.'' Remission was assessed
using the MADRS (score at follow up <10 points). The study designs of
the original investigations included in the meta-analysis necessitated
that the TAU group data be
[[Page 39470]]
limited to two trials for the CGI-I scale and one trial for the MADRS
scale.
Because only one of the studies randomized patients to VNS + TAU or
TAU groups, the authors used propensity scores to control for potential
differences between treatment groups. The researchers calculated
propensity scores using standard methods and included the score in
mixed effects repeated measures models to account for the fact that the
patients in all of the different studies arrived at their assessment
points at different points in real time.
In the final analysis, there were 425 TAU patients, and 1,035 VNS +
TAU patients. The authors reported that while outcomes for both groups
tended to improve, those who were treated with VNS + TAU demonstrated
better outcomes over 96 weeks of treatment. The repeated measures
analysis showed that, compared to patients who received TAU only, those
who received VNS + TAU had lower MADRS scores (mean difference -3.26
points; 95 percent CI: -3.99, -2.54). The odds of a MADRS response in
the VNS + TAU group was 3.19 times greater (95 percent CI: 2.12, 4.66)
and the odds of a MADRS remission was 4.99 times greater (95 percent
CI: 2.93, 7.76) than those individuals who received TAU alone.
Similarly, those in the VNS + TAU group had lower CGI-I scores (mean
difference of -0.49 points; 95 percent CI: -0.59, -0.39) and had 7
times the odds of a CGI-I response (95 percent CI: 4.63, 10.83)
compared to individuals receiving TAU alone. The authors concluded that
the Bayesian meta-analysis demonstrated consistent superiority of VNS +
TAU as compared to the use of TAU alone. The authors stated that, for
patients diagnosed with TRD, treatment using VNS + TAU has greater
response and remission rates that are more likely to persist than TAU.
The sixth study was another meta-analysis study, by Cimpianu et
al., involving a systematic review that summarized the evidence
regarding the use of invasive and noninvasive VNS for the treatment of
TRD and other psychiatric disorders.\26\ The study authors searched
through the PubMed/MEDLINE database (up to September 2016) to identify
relevant publications for their review.
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\26\ Cimpianu C, Strube W, Falkai P, Palm U, Hasan A. Vagus
nerve stimulation in psychiatry: A systematic review of the
available evidence. J Neural Transm (Vienna). 2017.
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The authors noted that very few studies exhibited a double-blind
randomized sham controlled design; instead the majority were single
blinded, open label observational or cohort investigations.
Nonetheless, the text of the review pertaining to invasive VNS in the
treatment of depressive disorders focused on those studies that used a
randomized double blind design in at least one period (beginning) of a
trial. However, of those investigations described, the authors observed
that, for the most part, effect sizes were either not reported at all
or were not reported in detail.
The authors found that the application of the VNS Therapy[supreg]
System for TRD received a mixed recommendation in national guidelines.
They stated that there is a consensus in the field that further
randomized controlled studies, as well as long term naturalistic
studies are needed for the future evaluation of the efficacy of VNS for
the treatment of depression.
The seventh study was a meta-analysis study as well. Daban et al.
performed a systematic review of studies published between 2000 and
September 2007, found in the Medline, Psychological Abstracts and
Current Content databases, that evaluated the safety and efficacy of
VNS therapy in TRD patients.\27\ The authors reviewed 6 short-term
studies and 12 long-term studies. The measured outcomes consisted of
baseline depression severity compared to ratings 2 weeks after
implantation and after 3 months in acute and long-term studies and also
after 6, 9, 12, and subsequent months in long-term studies. The authors
stated their review demonstrated that VNS therapy has been reported to
have antidepressant effects in open and long-term studies and that
these effects may be sustained. However, they also noted that the
evidence base is weak and the only blinded randomized trial was
inconclusive, and they suggest more double-blinded, sham-controlled,
randomized studies be conducted.
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\27\ Daban C., Martinez-Aran A., Cruz N., Vieta E. Safety and
efficacy of Vagus Nerve Stimulation in treatment-resistant
depression. A systematic review. J Affect Disord. 2008; 110(1-2):1-
15.
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The eighth and final study discussed in the NCD with CED
reconsideration decision memo was also a meta-analysis study. This
study, by Martin et al., performed a systematic review to determine the
efficacy of VNS for the treatment of depression.\28\ In order to
achieve this goal, a review of the pertinent scientific literature
available until December 2010 was conducted. The databases searched
were Medline/PubMed, Embase, The Cochrane Controlled Trials Register,
Pascal Biomed and CINAL. References found on the web pages of ongoing
clinical trials were also examined. Selection criteria included any RCT
or pre/post design study, in which depressive symptomatology was
measured and the intervention studied was VNS. The outcomes assessed
were levels of depression severity as measured by depression
symptomatology scales and percentage of responders, defined as subjects
whose symptomatology scores demonstrated >=50 percent change from
baseline. The outcomes were analyzed in the short term (<=12 weeks),
medium term (>12 and <48 weeks) and long term (>48 weeks).
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\28\ Martin JLR and Martin-Sanchez E. Systematic review and
meta-analysis of vagus nerve stimulation in the treatment of
depression: Variable results based on study designs. Eur Psychiatry.
2012; 27(3).
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In their literature search, the authors found only one randomized
controlled trial involving VNS for treatment of depression. The primary
outcome was a response rate as measured by the Hamilton Depression
Rating Scale (HDRS). No statistically significant differences between
the active and the placebo group were noted. However, the meta analysis
of efficacy for the uncontrolled pre/post studies, showed a significant
reduction in HDRS scores and the percentage of responders was 31.8
percent ([23.2 percent-41.8 percent]. p<0.001). To study the cause of
this heterogeneity, a meta-regression was performed, which implied that
an 84 percent variation in effect size across the studies was explained
by baseline severity of depression (p<0.0001). In the uncontrolled pre/
post studies that were meta-analyzed, the incidence density of suicide
or attempted suicides was practically identical in the studies of the
use of VNS and selective serotonin reuptake inhibitors. Therefore, the
authors stated that the use of VNS did not appear to provoke suicide
conduct any more than treatment with the comparator antidepressant.
The authors concluded that insufficient data exist to describe VNS
as an effective treatment for depression. Moreover, they stated that
the ability of the uncontrolled studies to show causality is limited
and positive outcomes might be caused by placebo effect, regression to
the mean, spontaneous remission, differences in patient characteristics
or the Hawthorn effect (the alteration of behavior by subjects in a
study because they are aware of being observed). They stated that
evidence to determine the benefit (or not) of VNS therapy should be
based on long-term clinical trials with a control group aimed at
monitoring the possible latency involved in the effect of the use of
VNS, as well as the associated adverse effects.
[[Page 39471]]
The applicant submitted an additional study by Kumar et al. This
was an observational study attempting to compare the duration of
treatment response for patients that received VNS and treatment as
usual (TAU) together as compared to the duration of response for
patients receiving only TAU.\29\ Data from 271 participants receiving
TAU and 328 participants receiving VNS + TAU were analyzed. Response
was defined as >=50 percent decrease in baseline MADRS score at post-
baseline visit and was considered retained until the decrease was <40
percent. In the VNS + TAU group, 62.5 percent (205/328) of participants
had a first response over 5 years compared with 39.9 percent (108/271)
in the TAU group. The time to first response was significantly shorter
for VNS + TAU participants than for TAU participants (P<0.01). The
authors of the study concluded that combining VNS therapy with TAU for
patients having severe TRD leads to a faster response and a greater
likelihood of response to treatment as compared to TAU alone. Also, the
duration of the treatment response is longer for those receiving VNS +
TAU.
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\29\ Kumar A, Bunker M, Aaronson S, Conway C, Rothschild A,
Mordenti G, Rush A. Durability of symptomatic responses obtained
with adjunctive vagus nerve stimulation in treatment-resistant
depression. Neuropsychiatr Dis Treat. 2019:15 457-468.
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With regard to the studies presented, we are concerned that the
clinical utility of the VNS Therapy[supreg] System for TRD has not been
well demonstrated by the applicant. The majority of the studies
presented were case series, open labeled, or not randomized. The
literature presented did not appear to have comparator arms with
current treatment options like Magnetic Stimulation (TMS). We note that
the CMS CAG found that all of the studies they reviewed and submitted
for this application indicated some positive findings regarding
clinical improvement with the use of VNS therapy. However, the CMS CAG
also identified significant issues with the studies that either reduced
the overall quality and strength of evidence and/or the clinical
significance of the outcomes. Nevertheless, some of the published
evidence suggests that the use of VNS is a promising treatment for
patients diagnosed with TRD, which contributed to CMS CAG's decision to
propose coverage with evidence development.
We are inviting public comments on whether the VNS Therapy[supreg]
System for TRD meets the substantial clinical improvement criterion.
The third criterion for establishing a device category at Sec.
419.66(c)(3) requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. With
respect to the cost criterion, the applicant stated that the VNS
Therapy[supreg] System for TRD would be reported with CPT code 64568
(Incision for implantation of cranial nerve (e.g., vagus nerve)
neurostimulator electrode array and pulse generator), which is assigned
to APC 5464 (Level 4 Neurostimulator and Related Services). The
proposed CY 2020 payment rate for CPT code 64568 is $28,511.24, with a
device offset of $24,168.98. The applicant stated that the cost of the
VNS Therapy[supreg] System for TRD device is $42,000.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The cost of $42,000
for the VNS Therapy[supreg] System for TRD device exceeds the
applicable APC amount for CPT code 64568 of $28,511.24 by 147.31
percent ($42,000/$28,511.24 x 100 = 147.31 percent). Therefore, the VNS
Therapy[supreg] System for TRD appears to meet the first cost
significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of devices in the
category must exceed the cost of the device-related portion of the APC
payment amount by at least 25 percent, which means the device cost
needs to be at least 125 percent of the device offset amount (the
device-related portion of the APC found on the offset list). The
estimated cost of $42,000 for the VNS Therapy[supreg] System for TRD
device exceeds the device-related portion of the APC amount for the
related service of $24,168.98 by 173.78 percent ($42,000/$24,168.98 x
100 = 173.78 percent). Therefore, the VNS Therapy[supreg] System for
TRD appears to meet the second cost significance requirement.
Section 419.66(d)(3), the third cost significance requirement,
requires that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount determined to be associated with the device exceeds 10 percent
of the APC payment amount for the related service. The difference
between cost of $42,000 for the VNS Therapy[supreg] System for TRD and
the portion of the APC payment for the device of $24,168.98 exceeds 10
percent at 62.54 percent (($42,000-$24,168.98)/$28,511.24 x 100 = 62.54
percent). Therefore, the VNS Therapy[supreg] System for TRD appears to
meet the third cost significance requirement and, therefore, satisfies
the cost significance criterion. We are inviting public comments on
whether the VNS Therapy[supreg] System for TRD meets the device pass-
through payment criteria discussed in this section, including the cost
criterion.
(4) Optimizer[supreg] System
Impulse Dynamics submitted an application for a new device category
for transitional pass-through payment status for the Optimizer[supreg]
System. According to the applicant, the Optimizer[supreg] System is an
implantable device that delivers Cardiac Contractility Modulation (CCM)
therapy for the treatment of patients with moderate to severe chronic
heart failure. CCM therapy is intended to treat patients with
persistent symptomatic heart failure despite receiving guideline
directed medical therapy (GDMT). The applicant stated that the
Optimizer System consists of the Optimizer Implantable Pulse Generator
(IPG), Optimizer Mini Charger, and Omni II Programmer with Omni Smart
Software. Lastly, the applicant stated that the Optimizer[supreg]
System delivers CCM signals to the myocardium. CCM signals are
nonexcitatory electrical signals applied during the cardiac absolute
refractory period that, over time, enhance the strength of cardiac
muscle contraction.
With respect to the newness criterion at Sec. 419.66(b)(1), the
applicant received a Category B-3 Investigational Device Exemption
(IDE) from the FDA on April 6, 2017. Subsequently, the applicant
received its premarket approval (PMA) application from the FDA on March
21, 2019. We received the application for a new device category for
transitional pass-through payment status for the Optimizer[supreg]
System on February 26, 2019, which is within 3 years of the date of the
initial FDA approval or clearance. We are inviting public comments on
whether the Optimizer[supreg] System meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the Optimizer[supreg] System is integral to
the CCM therapy service provided, is used for one patient only, comes
in contact with human skin, and is applied in or on a wound or other
skin lesion. The applicant also stated that the Optimizer[supreg]
System meets the device eligibility requirements of Sec. 419.66(b)(4)
because it is not an instrument, apparatus, implement, or items for
which depreciation and financing expenses are recovered, and it
[[Page 39472]]
is not a supply or material furnished incident to a service.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing pass-through payment category that describes the
Optimizer[supreg] System.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will 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. The applicant stated that the use of CCM
significantly improves clinical outcomes for a patient population
compared to currently available treatments. With respect to this
criterion, the applicant submitted studies that examined the impact of
CCM on quality of life, exercise tolerance, hospitalizations, and
mortality.
The applicant noted that the use of the Optimizer[supreg] System
significantly improves clinical outcomes for patients with moderate-to-
severe chronic heart failure, and specifically improves exercise
tolerance, quality of life, and functional status of patients that are
otherwise underserved. The applicant claims that the Optimizer[supreg]
System fulfills an unmet need because there is currently no therapeutic
medical device therapies available for the 70 percent of heart failure
patients who have New York Heart Association (NYHA) Class III heart
failure, normal QRS duration and reduced ejection fraction (EF).
The applicant presented several studies to support these claims.
According to the applicant, the results of a randomized clinical study
in which patients with NYHA functional Class III, ambulatory Class IV
heart failure despite OMT, an EF from 25-45 percent, or a normal sinus
rhythm with QRS duration <130 ms (n=160) were randomized to continued
medical therapy (n=86) or CCM with the Optimizer[supreg] System (n=74)
for 24 weeks showed a statistically significant improvement in the
primary endpoint of peak oxygen consumption (pVO2 = 0.84, 95 percent
Bayesian credible interval 0.123 to 1.52) compared with the patients
who were randomized to continued medical therapy.\30\ The secondary
endpoint of quality of life, measured by Minnesota Living with Heart
Failure Questionnaire (MLWHFQ) (p<0.001), 6-minute hall walk test
(p=0.02), and an NYHA function class assessment (p<0.001) were better
in the treatment group versus control group. The secondary endpoint of
heart failure-related hospitalizations was lowered from 10.8 percent to
2.9 percent (p=0.048). The applicant also reported a registry study of
140 patients with a left ventricular ejection fraction from 25-45
percent receiving CCM therapy with a primary endpoint of comparing
observed survival to Seattle Heart Failure Model (SHFM) predicted
survival over 3 years of follow-up. All patients implanted with the
Optimizer[supreg] System at participating centers were offered
participation and 72 percent of patients agreed to enroll in the
registry. There were improvements in quality of life markers (MLWHFQ)
and a 75-percent reduction in heart failure hospitalizations
(p<0.0001). Survival at 3 years was similar between the two study arms
with CCM at 82.8 percent [73.4 percent-89.1 percent] and SHFM at 76.7
percent (p = 0.16). However, for patients with a left ventricular
ejection fraction from 35-45 percent receiving CCM therapy, the 3-year
mortality for CCM therapy was significantly better than predicted with
88 percent for CCM compared to 74.7 percent for SHFM (p=0.0463).\31\
The applicant presented a randomized, double blind, crossover study of
CCM signals with 164 patients with EF <=35 percent and NYHA Class II
(24 percent) or III (76 percent) symptoms who received a CCM pulse
generator. After the 6-month treatment period, results indicated
statistically significantly improved peak VO2 and MLWHFQ (p=0.03 for
each parameter), concluding that CCM signals appear to be safe for
patients and that exercise tolerance and quality of life were
significantly better while patients were receiving active CCM
treatment.\32\
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\30\ Abraham, W.T., Kuck, K.H., Goldsmith, R.L., Lindenfeld, J.,
Reddy, V.Y., Carson, P.E., & Wiegn, P. (2018). A randomized
controlled trial to evaluate the safety and efficacy of cardiac
contractility modulation. JACC: Heart Failure, 6(10), 874-883.
\31\ Anker, S.D., Borggrefe, M., Neuser, H., Ohlow, M. A.,
R[ouml]ger, S., Goette, A., & Rousso, B. Cardiac contractility
modulation improves long-term survival and hospitalizations in heart
failure with reduced ejection fraction. Eur J Heart Fail. 2019 Jan
16. doi: 10.1002/ejhf.1374. [Epub ahead of print]
\32\ Borggrefe MM, Lawo T, Butter C, Schmidinger H, Lunati M,
Pieske B, Misier AR, Curnis A, Bocker D, Remppis A, Kautzner J,
Stuhlinger M, Leclerq C, Taborsky M, Frigerio M, Parides M, Burkhoff
D and Hindricks G. Randomized, double blind study of non-excitatory,
cardiac contractility modulation electrical impulses for symptomatic
heart failure. Eur Heart J. 2008;29:1019-28.
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A study was conducted with 68 consecutive heart failure patients
with NYHA Class II or III symptoms, QRS duration <=130 ms, and who had
been implanted with a CCM device between May 2002 and July 2013 in
Germany. Based upon pre-implant SHFM survival rates, 4.5 years mean
follow-up, and an average patient age of 61 years old, the study found
lower mortality rates for CCM therapy group with 0 percent at 1 year,
3.5 percent at 2 years, and 14.2 percent at 5 years, compared to 6.1
percent, 11.8 percent, and 27.7 percent predicted by SHFM, respectively
(p=0.007). \33\ In a study on long-term outcomes, 41 consecutive heart
failure patients with left ventricular ejection fraction (EF) <40
percent receiving CCM therapy were compared to a control group of 41
similar heart failure patients and primarily evaluated for all-cause
mortality, as well as heart failure hospitalization, cardiovascular
death, and a death and heart failure hospitalization composite. After 6
years of follow-up, the results showed that all-cause mortality was
lower for the CCM group as compared to the control group (39 percent
versus 71 percent respectively, p=0.001), especially among patients
with EF >=25-40 percent with 36 percent for the CCM group versus 80
percent for the control group (p<0.001). Although heart failure
hospitalization was similar between the treatment and control cohorts,
there was a significantly lower heart failure hospitalization rate for
CCM patients with EF >=25-40 percent (36 percent versus 64 percent
respectively, p=0.005).\34\ The applicant also presented additional
studies 35 36 that presented similar conclusions to the
studies discussed above, noting that CCM therapy provided improvements
in quality of life, exercise capacity, NYHA class, and mortality rates.
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\33\ Kloppe A, Lawo T, Mijic D, et al. Long-term survival with
Cardiac Contractility Modulation in patients with NYHA II or III
symptoms and normal QRS duration. Int J Cardiol. 2016 Apr
15;209:291-5.
\34\ Liu M, Fang F, Luo XX, Shlomo BH, Burkhoff D, Chan JY, Chan
CP, Cheung L, Rousso B, Gutterman D, Yu CM. Improvement of long-term
survival by cardiac contractility modulation in heart failure
patients: A case-control study. Int J Cardiol. 2016 Mar 1;206:122-6.
\35\ M[uuml]ller D, Remppis A, Schauerte P, et al. Clinical
effects of long-term cardiac contractility modulation (CCM) in
subjects with heart failure caused by left ventricular systolic
dysfunction. Clin Res. Cardiol. 2017 Nov 1;106(11):893-904.
\36\ Kuschyk J, Roeger S, Schneider R, et al. Efficacy and
survival in patients with cardiac contractility modulation: Long-
term single center experience in 81 patients. Int J Cardiol.
2015;183C:76-81.
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We noted several concerns with the studies presented by the
applicant. One
[[Page 39473]]
concern regarding the evidence for the Optimizer[supreg] System
involves the mixed mortality outcomes presented. Three studies showed
significantly lower mortality rates with the use of CCM compared to
controls or predicted mortality. Each of these studies focused on
slightly different mortality outcomes, including all-cause mortality, a
composite of death and heart failure hospitalization, and cardiac
mortality rates from 1 to 5 years. Two studies show mixed results. For
the first, 3-year survival was not significant for the overall
population, despite a significantly higher survival rate found in a
subpopulation. For the second, mortality rates were significant
compared to predictions at 1 year, but not 3 years. The final study did
not report significance in its overall survival at 2 years. Although
the studies and trials presented show improvements in mortality when
evaluating CCM therapy with comparators, the studies have small sample
sizes and limited timeframes for measuring survival. Additionally,
three studies compared observed mortality rates to statistically
projected mortality rates. In the two studies with observed mortality
rates, the overall improvement in mortality was not significant,
despite some significance found in subanalyses. These issues raise
concerns about the strength of the conclusions related to the use of
CCM therapy improving patient outcomes.
Another concern with the studies presented for the
Optimizer[supreg] System is that the included study population may not
be necessarily representative of the Medicare beneficiary population.
Several studies had a predominantly white, male patient population,
which could make generalization of study results to a more diverse
Medicare population difficult. Additionally, the average age of
patients for several studies was under 65 years old, which may also be
a limitation in applying these study results to the Medicare
population.
Overall, there is a lack of evidence from large trials for the CCM
therapy provided by the Optimizer[supreg] System. The studies presented
had sample sizes fewer than 500 patients. Other limitations include the
potential placebo effects and selection bias that may have impacted
study results. Only two studies presented were randomized and only one
of those two was a double-blinded study. For the remaining studies, no
blinding occurred to minimize potential biases, which indicates that
patients and researchers knew they were receiving CCM therapy. This is
a limitation because observed outcomes may be impacted by the placebo
effect. Although most studies matched participants for similar
demographics, there could be systematic differences and unmeasured bias
between the two groups beyond the similarities addressed in the study
that could affect outcomes. The lack of randomization may have
implications for the strength of the studies' conclusions.
Based upon the evidence presented, we are inviting public comments
on whether the Optimizer[supreg] System meets the substantial clinical
improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the
Optimizer[supreg] System would be reported with CPT codes 0408T, 0409T,
0410T, 0411T, 0412T, 0413T, 0414T, 0415T, 0416T, 0417T, and 0418T. The
associated APCs are APC 5231 (Level 1 ICD and Similar Procedures) and
APC 5222 (Level 2 Pacemaker and Similar Procedures). To meet the cost
criterion for device pass-through payment status, a device must pass
all three tests of the cost criterion for at least one APC. For our
calculations, we used APC 5222, which had a CY 2019 payment rate of
$7,404.11 at the time the application was received. Beginning in CY
2017, we calculate the device offset amount at the HCPCS/CPT code level
instead of the APC level (81 FR 79657). CPT code 0410T had a device
offset amount of $2,295.27 at the time the application was received.
According to the applicant, the cost of the Optimizer[supreg] System
was $15,700.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $15,700 for the Optimizer[supreg] System
exceeds 212 percent of the applicable APC payment amount for the
service related to the category of devices of $7,404.11 ($15,700/
$7,404.11 x 100 = 212 percent). Therefore, we believe the
Optimizer[supreg] System meets the first cost significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $15,700 for the
Optimizer[supreg] System exceeds the cost of the device-related portion
of the APC payment amount for the related service of $2,295.27 by 684
percent ($15,700/$2,295.27) x 100 = 684 percent. Therefore, we believe
that the Optimizer[supreg] System meets the second cost significance
requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that 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 must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $15,700 for the Optimizer[supreg] System and the
portion of the APC payment amount for the device of $2,295.27 exceeds
the APC payment amount for the related service of $7,404.11 by 181
percent (($15,700-$2,295.27)/$7,404.11) x 100 = 181 percent).
Therefore, we believe that the Optimizer[supreg] System meets the third
cost significance requirement.
We are inviting public comments on whether the Optimizer[supreg]
System meets the device pass-through payment criteria discussed in this
section, including the cost criterion for device pass-through payment
status.
(5) AquaBeam[supreg] System
PROCEPT BioRobotics Corporation submitted an application for a new
device category for transitional pass-through payment status for the
AquaBeam[supreg] System as a resubmission of their CY 2019 application.
The AquaBeam[supreg] System is intended for the resection and removal
of prostate tissue in males suffering from lower urinary tract symptoms
(LUTS) due to benign prostatic hyperplasia (BPH). The applicant stated
that this is a very common condition typically occurring in elderly
men. The clinical symptoms of this condition can include diminished
urinary stream and partial urethral obstruction.\37\ According to the
applicant, the AquaBeam[supreg] system resects the prostate to relieve
symptoms of urethral compression. The resection is performed
robotically using a high
[[Page 39474]]
velocity, nonheated sterile saline water jet (in a procedure called
Aquablation). The applicant stated that the AquaBeam[supreg] System
utilizes real-time intra-operative ultrasound guidance to allow the
surgeon to precisely plan the surgical resection area of the prostate
and then the system delivers Aquablation therapy to accurately resect
the obstructive prostate tissue without the use of heat. The materials
submitted by the applicant state that the AquaBeam[supreg] System
consists of a disposable, single-use handpiece as well as other
components that are considered capital equipment.
---------------------------------------------------------------------------
\37\ Chungtai B. Forde JC. Thomas DDM et al. Benign Prostatic
Hyperplasia. Nature Reviews Disease Primers 2 (2016) article 16031.
---------------------------------------------------------------------------
With respect to the newness criterion at Sec. 419.66(b)(1), the
FDA granted a De Novo request classifying the AquaBeam[supreg] System
as a Class II device under section 513(f)(2) of the Federal Food, Drug,
and Cosmetic Act on December 21, 2017. The application for a new device
category for transitional pass-through payment status for the
AquaBeam[supreg] System was received on March 1, 2018, which is within
3 years of the date of the initial FDA approval or clearance. We are
inviting public comments on whether the AquaBeam[supreg] System meets
the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the AquaBeam[supreg] System is integral to
the service provided, is used for one patient only, comes in contact
with human skin, and is applied in or on a wound or other skin lesion.
The applicant also claimed the AquaBeam[supreg] System meets the device
eligibility requirements of Sec. 419.66(b)(4) because it is not an
instrument, apparatus, implement, or items for which depreciation and
financing expenses are recovered, and it is not a supply or material
furnished incident to a service. However, in the CY 2019 OPPS/ASC
proposed and final rules, we cited the CY 2000 OPPS interim final rule
with comment period (65 FR 67804 through 67805), where we explained how
we interpreted Sec. 419.43(e)(4)(iv). We stated that we consider a
device to be surgically implanted or inserted if is surgically inserted
or implanted via a natural or surgically created orifice, or inserted
or implanted via a surgically created incision. We also stated that we
do not consider an item used to cut or otherwise create a surgical
opening to be a device that is surgically implanted or inserted. We
consider items used to create incisions, such as scalpels,
electrocautery units, biopsy apparatuses, or other commonly used
operating room instruments, to be supplies or capital equipment, not
eligible for transitional pass-through payments. We stated that we
believe the function of these items is different and distinct from that
of devices that are used for surgical implantation or insertion.
Finally, we stated that, generally, we would expect that surgical
implantation or insertion of a device occurs after the surgeon uses
certain primary tools, supplies, or instruments to create the surgical
path or site for implanting the device. In the CY 2006 OPPS final rule
with comment period (70 FR 68329 and 68630), we adopted as final our
interpretation that surgical insertion or implantation criteria include
devices that are surgically inserted or implanted via a natural or
surgically created orifice, as well as those devices that are inserted
or implanted via a surgically created incision. We reiterated that we
maintain all of the other criteria in Sec. 419.66 of the regulations,
namely, that we do not consider an item used to cut or otherwise create
a surgical opening to be a device that is surgically implanted or
inserted.
The applicant resubmitted their application with additional
information that they believe supports their stance that the device
should be considered eligible under the device pass-through payment
eligibility criteria. The applicant stated that the AquaBeam[supreg]
System's handpiece is temporarily surgically inserted into the urethra
via the urinary meatus. The applicant indicated that the
AquaBeam[supreg] System's handpiece does not create an incision or
surgical opening or pathway, but instead ablates prostate tissue. The
applicant further stated that the device only cuts the prostatic tissue
after being inserted into the prostatic urethra and therefore it should
be considered eligible. The applicant also stated that the prostatic
urethra tissue is cut because it is at the center of the obstruction in
the prostate. Additionally, the applicant explained that to relieve the
symptoms of BPH, both the prostatic urethra and prostate tissue
encircling the prostatic urethra must be ablated, or cut, to relieve
the symptoms of BPH and provide some additional clearance for future
swelling or growth of the prostate. The applicant stated that the
prostatic urethra tissue is not cut or disturbed to access the prostate
tissue underneath, but the removal of the prostatic urethra is a key
aspect of treating the obstruction that causes BPH symptoms. Finally,
the applicant believes that clinically the distinction between the
prostatic urethra tissue and the prostate tissue are not meaningful in
the context of a BPH surgical intervention. We are inviting public
comments on whether the AquaBeam[supreg] System meets the eligibility
criteria at Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing pass-through payment category that describes the
AquaBeam[supreg] System. The applicant proposed a category descriptor
for the AquaBeam[supreg] System of ``Probe, image guided, robotic
resection of prostate.'' We are inviting public comments on whether the
AquaBeam[supreg] System meets this criterion.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will 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. The applicant stated that the AquaBeam[supreg]
System provides a substantial clinical improvement as the first
autonomous tissue resection robot for the treatment of lower urinary
tract symptoms due to BPH. The applicant further provided that the
AquaBeam[supreg] System is also a substantial clinical improvement
because the Aquablation procedure demonstrated superior efficacy and
safety for larger prostates (prostates sized 50-80 mL) as compared to
transurethral resection of the prostate (TURP). The applicant also
believes that the Aquablation procedure would provide better outcomes
for patients with large prostates (>80 mL) who may undergo open
prostatectomy whereas the open prostatectomy procedure would require a
hospital inpatient admission. With respect to this criterion, the
applicant submitted several articles that examined the use of a current
standard treatment for BPH--transurethral prostatectomy TURP, including
complications associated with the procedure and the comparison of the
effectiveness of TURP to other modalities used to treat BPH, including
holmium laser enucleation of the
[[Page 39475]]
prostate (HoLEP) \38\ and photoselective vaporization (PVP).\39\
---------------------------------------------------------------------------
\38\ Montorsi, F. et al.: Holmium Laser Enucleation Versus
Transurethral Resection of The Prostate: Results from A 2-Center,
Prospective, Randomized Trial In Patients With Obstructive Benign
Prostatic Hyperplasia. J. Urol. 172, 1926-1929 (2004).
\39\ Bachmann A, et al.: 180-W XPS GreenLight laser vaporisation
versus transurethral resection of the prostate for the treatment of
benign prostatic obstruction: 6-month safety and efficacy results of
a European Multicentre Randomised Trial--the GOLIATH study. Eur
Urol, 2014;65(5):931-42.
---------------------------------------------------------------------------
The most recent clinical study involving the AquaBeam[supreg]
System was an accepted manuscript describing a double-blind trial that
compared men treated with the AquaBeam[supreg] System versus men
treated with traditional TURP.\40\ This was a multicenter study in 4
countries with 17 sites, 6 of which contributed 5 patients or fewer.
Patients were randomized to receive treatment with either the
AquaBeam[supreg] System or TURP in a two-to-one ratio. With exclusions
and dropouts, 117 patients were treated with the AquaBeam[supreg]
System and 67 patients with TURP. The data on efficacy supported the
equivalence of the two procedures based upon noninferiority analysis.
The safety data were reported as showing superiority of the
AquaBeam[supreg] System over TURP, although the data were difficult to
track because adverse consequences were combined into categories. The
applicant claimed that the International Prostate Symptom Scores (IPPS)
were significantly improved in AquaBeam[supreg] System patients as
compared to TURP patients in men whose prostate was greater the 50 ml
in size. The applicant also claimed that the proportion of men with a
worsening of sexual function (as shown with a decrease in Male Sexual
Health Questionnaire for Ejaculatory Dysfunction (MSHQ) score of at
least 2 points or a decrease in International Index of Erectile
Function (IIEF-5) score of at least 6 points by 6 months) was lower for
the Aquablation procedure at 32.9 percent compared to the TURP groups
at 52.8 percent.
---------------------------------------------------------------------------
\40\ Gilling P. Barber M. Anderson P et al.: WATER--A Double-
Blind Randomized Controlled Trial of Aquablation vs Transurethal
Resection of the Prostate in Benign Prostatic Hyperplasia. J Urol.
Accepted December 29, 2017 doi 10.1016/j.juro.2017.12.065.
---------------------------------------------------------------------------
Although there may be some evidence of the improved safety of the
AquaBeam[supreg] System over TURP, we believe that the comparison of
the AquaBeam[supreg] System with TURP does not recognize that there are
other treatment modalities available that are likely to have a similar
safety profile as the AquaBeam[supreg] System. No studies comparing
other treatment modalities were cited to show that the AquaBeam[supreg]
System is a significant improvement over other available procedures.
Based on the evidence submitted with the application, we are
concerned that there is a lack of sufficient evidence that the
AquaBeam[supreg] System provides a substantial clinical improvement
over other similar products, particularly in the outpatient setting
where large prostates are less likely to be treated. We are inviting
public comments on whether the AquaBeam[supreg] System meets the
substantial clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the
AquaBeam[supreg] System would be reported with CPT code 0421T. CPT code
0421T is assigned to APC 5375 (Level 5 Urology and Related Services).
To meet the cost criterion for device pass-through payment status, a
device must pass all three tests of the cost criterion for at least one
APC. For our calculations, we used APC 5375, which has a CY 2018
payment rate of $3,706.03. Beginning in CY 2017, we calculate the
device offset amount at the HCPCS/CPT code level instead of the APC
level (81 FR 79657). CPT code 0421T had device offset amount of $0.00
at the time the application was received. According to the applicant,
the cost of the handpiece for the AquaBeam[supreg] System is $2,500.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $2,500 for the AquaBeam[supreg] System
exceeds 25 percent of the applicable APC payment amount for the service
related to the category of devices of $3,706.03 ($2,500/$3,706.03 x 100
= 67.5 percent). Therefore, we believe the AquaBeam[supreg] System
meets the first cost significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $2,500 for the
AquaBeam[supreg] System exceeds the cost of the device-related portion
of the APC payment amount for the related service of $0.00 by at least
25 percent. Therefore, we believe that the AquaBeam[supreg] System
meets the second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that 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 must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $2,500 for the AquaBeam[supreg] System and the
portion of the APC payment amount for the device of $0.00 exceeds the
APC payment amount for the related service of $3,706.03 by 68 percent
(($2,500 - $0.00)/$3,706.03 x 100 = 67.5 percent). Therefore, we
believe that the AquaBeam[supreg] System meets the third cost
significance requirement.
We are inviting public comments on whether the AquaBeam[supreg]
System meets the device pass-through payment criteria discussed in this
section, including the cost criterion.
(6) 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. 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 the 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
[[Page 39476]]
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.\41\ 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.\42\
---------------------------------------------------------------------------
\41\ 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.
\42\ Centers for Disease Control and Prevention, ``Peripheral
Arterial Disease (PAD) Fact Sheet,'' 2018, Available at: https://www.cdc.gov/DHDSP/data_statistics/fact_sheets/fs_PAD.htm.
---------------------------------------------------------------------------
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 the 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 Drug-Eluting Vascular 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
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).
With respect to the newness criterion at Sec. 419.66(b)(1),
EluviaTM received FDA premarket approval (PMA) on September
18, 2018. The application for a new device category for transitional
pass-through payment status for EluviaTM was received on
November 15, 2018, which is within 3 years of the date of the initial
FDA approval or clearance. We are inviting public comments on whether
the EluviaTM Drug-Eluting Vascular Stent System meets the
newness criterion. With respect to the eligibility criterion at Sec.
419.66(b)(3), according to the applicant, the EluviaTM Drug-
Eluting Vascular Stent System is integral to the service provided, is
used for one patient only, comes in contact with human skin, and is
applied in or on a wound or other skin lesion. The applicant also
claimed that the EluviaTM Drug-Eluting Vascular Stent System
meets the device eligibility requirements of Sec. 419.66(b)(4) because
it is not an instrument, apparatus, implement, or items for which
depreciation and financing expenses are recovered, and it is not a
supply or material furnished incident to a service. We are inviting
public comments on whether the EluviaTM Drug-Eluting
Vascular Stent System meets the eligibility criterion at Sec.
419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing pass-through payment category that describes the
EluviaTM Drug-Eluting Vascular Stent System. The applicant
proposed a category descriptor for the EluviaTM Drug-Eluting
Vascular Stent System of ``Stent, non-coronary, polymer matrix, minimum
12-month sustained drug release, with delivery system.'' We are
inviting public comments on this issue.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will 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. With respect to this criterion, the applicant
submitted several articles that examined the use of a current standard
treatment for 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 claims of substantial
clinical improvement in achieving superior primary patency; reducing
the rate of subsequent therapeutic interventions; decreasing the number
of future hospitalizations or physician visits; reducing hospital
readmission rates; reducing the rate of device-related complications;
and achieving similar functional outcomes and EQ-5D index values while
associated with half the rate of target lesion revascularizations
(TLRs) procedures.
The applicant submitted the results of the MAJESTIC study, a
single-arm, first-in-human study of the EluviaTM Drug-
Eluting Vascular Stent System. The MAJESTIC \43\ 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 SAF or PPA. 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
[[Page 39477]]
TLR or bypass. Safety monitoring through 3 years included adverse
events and TLR. The 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.
---------------------------------------------------------------------------
\43\ 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.
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With regard to the EluviaTM stent achieving superior
primary patency, the applicant submitted the results of the IMPERIAL
\44\ 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 SFA or PPA, 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.
---------------------------------------------------------------------------
\44\ 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)
substudies were done: A nonblinded, nonrandomized pharmacokinetic sub-
study and a nonblinded, nonrandomized 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) noninferiority 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) procedure 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, 6 months, and 12
months post-procedure. Patient demographic and characteristics were
balanced between the 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 noninferiority primary efficacy endpoint
was also met. The applicant asserts that the superior primary patency
results at the SFA are noteable because 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.\45\ 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.
---------------------------------------------------------------------------
\45\ 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) substudies: A nonblinded, nonrandomized
pharmacokinetic substudy and a nonblinded, nonrandomized 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 substudy 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 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, referred to as target lesion
revascularization (TLR), over the 12 months following the index
procedure. 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 stent group
[[Page 39478]]
represents a substantial reduction in reintervention on the target
lesion compared to that of the Zilver[supreg] PTX stent group (at a
p=0.067 p-value). The Eluvia[supreg] stent group clinically driven TLR
rates through 12 months following the index procedure were likewise
lower for U.S. patients age 65 and older as well as for those with
medically treated diabetes (confidential and unpublished as of the date
of the device transitional pass-through payment application, data on
file with Boston Scientific). In the subgroup of U.S. patients age 65
and older, the rates of TLR were 2.4 percent in the EluviaTM
group compared to 3.1 percent in the Zilver[supreg] PTX group, and in
the subgroup of medically treated diabetes patients, the rates of TLR
were 3.7 percent compared to 13.6 percent in the Zilver[supreg] PTX
group (p=0.0269).
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 stent
group from the Zilver[supreg] PTX stent group. In the IMPERIAL study,
the EluviaTM-treated patients required fewer days of re-
hospitalization. Patients in the EluviaTM group averaged
13.9 days of rehospitalization for all adverse events compared to 17.7
days of rehospitalization for patients in the Zilver[supreg] PTX stent
group. Patients in the EluviaTM group were rehospitalized
for 2.8 days for TLR/Total Vessel Revascularization (TVR) compared to
7.1 days in the Zilver[supreg] PTX stent group. Lastly, patients in the
EluviaTM stent group were rehospitalized for 2.7 days for
procedure/device-related adverse events compared to 4.5 days from the
Zilver[supreg] PTX stent group.
Regarding reduction in hospital readmission rates, the applicant
asserted that patients treated in the EluviaTM stent 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 stent 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 stent group compared to 14 percent of the
patients in the Zilver[supreg] PTX stent group.
Lastly, the applicant asserted that 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.\46\ 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 the 281 patients in the EluviaTM group and
120 (85 percent) of the 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 approximately 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:
---------------------------------------------------------------------------
\46\ 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. Available at: http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
[GRAPHIC] [TIFF OMITTED] TP09AU19.026
[[Page 39479]]
We note that the IMPERIAL study, which showed significant
differences in primary patency at 12 months, was designed for
noninferiority and not superiority. Therefore, we are concerned that
results showing primary patency at 12 months may not be valid given the
study design. We also are concerned that 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,\47\ although
the EluviaTM system was not included in the meta-analysis.
We are concerned that the findings from this study indicate that the
data suggesting that drug-coated stents are substantially clinically
improved are unconfirmed. We are inviting public comments on whether
the EluviaTM Drug-Eluting Vascular Stent System meets the
substantial clinical improvement criterion, including the implications
of the meta-analysis results with respect to a finding of substantial
clinical improvement for the EluviaTM system.
---------------------------------------------------------------------------
\47\ 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).
---------------------------------------------------------------------------
We further note that the applicant for the EluviaTM Drug
Eluting Vascular Stent System also applied for the IPPS new technology
add-on payment (FY 2020 IPPS/LTCH PPS proposed rule; 86 FR 19314). In
the FY 2020 IPPS/LTCH PPS proposed rule, we discuss several publicly
available comments that also raised concerns relating to substantial
clinical improvement. We list several of those concerns below. While
the EluviaTM IMPERIAL study does cite a reduced rate of
``Subsequent Therapeutic Interventions'', public comments for the IPPS
proposed rule note that ``Subsequent Therapeutic Interventions'' was
not further defined in the New Technology Town Hall presentation nor in
the IMPERIAL study. The commenters stated that it would appear from the
presentation materials, however, that this claim refers specifically to
``target lesion revascularizations (TLR)'', which does not appear
statistically significant.
With regard to the applicant's assertion that the use of the
EluviaTM stent reduces hospital readmission rates, a
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 the manufacturer of the EluviaTM stent did not discuss
this particular hospital readmission rate data comparison in the main
body of the Lancet paper; however, the data could be found in the
online appendix and is shown as not statistically significant.
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 Lancet 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.\48\ The
commenter stated that, at this point in time, very limited longer-term
data are available on the use of the EluviaTM stent and that
the IMPERIAL study offers only 12-month data, although data out to 3
years have 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.
---------------------------------------------------------------------------
\48\ Cassese, S., & Byrne, R.E., ``Endovascular stenting in
femoropopliteal arteries,'' The Lancet, 2018, vol. 392(10157), pp.
1491-1493.
---------------------------------------------------------------------------
The commenter also 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 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 are 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 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.
Based on the evidence submitted with the application, we are
concerned that there is a lack of sufficient evidence that the
EluviaTM Vascular Drug-Eluting Stent System provides a
substantial clinical improvement over other similar products. We are
inviting public comments on whether EluviaTM Vascular Drug-
Eluting Stent System meets the substantial clinical improvement
criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section
[[Page 39480]]
419.66(d) includes three cost significance criteria that must each be
met. The applicant provided the following information in support of the
cost significance requirements. The applicant stated that use of the
EluviaTM stent would be reported with CPT code 37226, which
is assigned to APC 5193 (Level 3 Endovascular Procedures). To meet the
cost criterion for device pass-through payment status, a device must
pass all three tests of the cost criterion for at least one APC. For
our calculations, we used APC 5193, which has a CY 2019 payment rate of
$10,509.72. Beginning in CY 2017, we calculate the device offset amount
at the HCPCS/CPT code level instead of the APC level (81 FR 79657). CPT
code 37226 had a device offset amount of $4,996.32. According to the
applicant, the cost of the EluviaTM Vascular Drug-Eluting
Stent System is $1,995 to $2,895 per stent, with each procedure
requiring approximately 2.2 stents per procedure at an average device
cost of $5,768 per procedure.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of the EluviaTM stent exceeds 25
percent of the applicable APC payment amount for the service related to
the category of devices of $10,509.72-(($5,768/$10,509.72) x 100 = 55
percent). Therefore, we believe that the EluviaTM Vascular
Drug-Eluting Stent System meets the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $5,768 for the
EluviaTM stent exceeds the cost of the device-related
portion of the APC payment amount for the related service of $4,996.32
by less than 25 percent (($5,768/$4,996.32) x 100 = 115 percent).
Therefore, we do not believe that the EluviaTM Vascular
Drug-Eluting Stent System meets the second cost significance
requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that 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 must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $5,768 for the EluviaTM stent and the
portion of the APC payment amount for the device of $4,996.32 does not
exceed 10 percent of the APC payment amount for the related service of
$10,509.72 (($5,768 - $4,996.32)/$10,509.72 x 100 = 7.3 percent).
Therefore, we do not believe that the EluviaTM Vascular
Drug-Eluting Stent System meets the third cost significance
requirement.
We are inviting public comments on whether the EluviaTM
Vascular Drug-Eluting Stent System meets the device pass-through
payment criteria discussed in this section, including the cost
criterion.
(7) AUGMENT[supreg] Bone Graft
Wright Medical submitted an application for a new device category
for transitional pass-through payment status for the AUGMENT[supreg]
Bone Graft. The applicant describes AUGMENT[supreg] Bone Graft as a
device/drug indicated for use as an alternative to autograft in
arthrodesis of the ankle and/or hindfoot where the need for
supplemental graft material is required. The applicant stated that the
product has two components: Recombinant human platelet-derived growth
factor-BB (rhPDGF-BB) solution (0.3 mg/mL) and Beta-tricalcium
phosphate ([beta]-TCP) granules (1000 - 2000 [mu]m). The two components
are combined at the point of use and applied to the surgical site. The
beta-TCP provides a porous osteoconductive scaffold for new bone growth
and the rhPDGF-BB, which act as an osteoinductive chemo-attractant and
mitogen for cells involved in wound healing and through promotion of
angiogenesis.
According to the applicant, the AUGMENT[supreg] Bone Graft is
indicated for use in arthrodesis of the ankle and/or hindfoot due to
osteoarthritis, post-traumatic arthritis (PTA), rheumatoid arthritis,
psoriatic arthritis, avascular necrosis, joint instability, joint
deformity, congenital defect or joint arthropathy as an alternative to
autograft in patients needing graft material. Osteoarthritis is the
most common joint disease among middle aged and older individuals and
has been shown to also have health related mental and physical
disabilities, which can be compared to the severity as patients with
end-stage hip arthritis.\49\ Additionally, post-traumatic arthritis
develops after an acute direct trauma to the joint and can cause 12
percent of all osteoarthritis cases.\50\ Common causes leading to PTOA
include intra-articular fractures and meniscal, ligamentous and
chondral injuries.\51\ The ankle is cited as the most affected joint,
reportedly accounting for 54 to 78 percent of over 300,000 injuries
occurring in the USA annually. The applicant stated that autologous
bone graft has often been used in ankle arthrodesis. Autologous bone is
retrieved from a donor site, which may require an incision separate
from the arthrodesis.\52\ The applicant stated that, in these
procedures, harvested autologous bone graft is implanted to stimulate
healing between the bones across a diseased joint. The applicant
further stated that the procedures may require the use of synthetic
bone substitutes to fill the bony voids or gaps or to serve as an
alternative to the autograft where autograft is not feasible. The
applicant stated that the AUGMENT[supreg] Bone Graft removes the need
for autologous retrieval. The applicant noted that during the
procedure, the surgeon prepares the joint for the graft application and
locates any potential bony defect, then applying and packing the
AUGMENT[supreg] Bone Graft into the joint defects intended for
arthrodesis.
---------------------------------------------------------------------------
\49\ Greaser M, Ellington JK. 2014. ``Ankle arthritis.'' Journal
of Arthritis, 3:129. doi:10.4172/2167-7921.1000129.
\50\ Punzi, Leonardo et al. 2016. ``Post-traumatic arthritis:
overview on pathogenic mechanisms and role of inflammation.''
Rheumatic & Musculoskeletal Diseases. RMD open, 2(2), e000279.
doi:10.1136/rmdopen-2016-000279.
\51\ Ibid.
\52\ Lareau, Craig R. et al. 2015.''Does autogenous bone graft
work? A logistic regression analysis of data from 159 papers in the
foot and ankle literature.'' Foot and Ankle Surgery. 21(3): 150-59.
---------------------------------------------------------------------------
With respect to the newness criterion at Sec. 419.66(b)(1), the
FDA granted the AUGMENT[supreg] Bone Graft premarket approval on
September 1, 2015. The application for a new device category for
transitional pass-through payment status for the AUGMENT[supreg] Bone
Graft was received May 31, 2018, which is within 3 years of the date of
the initial FDA approval or clearance. We are inviting public comments
on whether the AUGMENT[supreg] Bone Graft meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the use of the AUGMENT[supreg] Bone Graft
is integral to the service provided, is used for one patient only,
comes in contact with human skin, and is applied in or on a wound or
other skin lesion. The applicant also claimed that the AUGMENT[supreg]
Bone Graft meets the device eligibility requirements of Sec.
419.66(b)(4) because it is not an
[[Page 39481]]
instrument, apparatus, implement, or items for which depreciation and
financing expenses are recovered, and it is not a supply or material
furnished incident to a service.
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. We have not
identified an existing pass-through payment category that describes the
AUGMENT[supreg] Bone Graft. The applicant proposed a category
descriptor for the AUGMENT[supreg] of ``rhPDGF-BB and [beta]-TCP as an
alternative to autograft in arthrodesis of the ankle and/or hindfoot.''
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines that a device to be included
in the category has demonstrated that it will 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. The applicant claims that the AUGMENT[supreg] Bone
Graft provides a substantial clinical improvement over autograft
procedures by reducing pain at the autograft donor site. With respect
to this criterion, the applicant submitted data that examined the use
of autograft arthrodesis of the ankle and/or hind foot and arthrodesis
with the use of the AUGMENT[supreg] Bone Graft.
In a randomized, nonblinded, placebo controlled, noninferiority
trial of the AUGMENT[supreg] Bone Graft versus autologous bone graft,
the AUGMENT[supreg] arm showed equivalence bone bridging as
demonstrated by CT, pain on weight bearing, The American Orthopaedic
Foot & Ankle Society Ankle-Hindfoot (AOFAS-AHS) score, and the Foot
Function Index to autologous bone graft. The study noted that patients
experienced significantly decreased (in fact no) pain due to
elimination of the donor site procedure. In the autograft group, at 6
months, 18/142 patients (13 percent) experienced pain >20 mm (of 100
mm) on the Visual Analog Scale (VAS) at the autograft donor site as
compared to 0/272 in the AUGMENT[supreg] Bone Graft group. At 12
months, 13/142 autograft patients (9 percent) had pain defined as >20
mm VAS as compared to 0/272 AUGMENT[supreg] patients.\53\ The VAS has
patients mark a visual representation of pain on a ruler based scale
from 1 to 100. The measured distance (in mm) on the 10-cm line between
the ``no pain'' anchor and the patient's mark represents the level of
pain. We are concerned that we are unable to sufficiently determine
substantial clinical improvement using the provided data, given that a
comparison to alternatives to autologous bone graft, such as the
reamer-irrigator-aspirator (RIA) technique were not evaluated.
Specifically, the RIA technique has been suggested in a number of
studies to be a viable alternative to bone autograft, because
autogenous bone graft can be readily obtained without the need for
additional incisions, therefore eliminating pain from an incisional
site.\54\ Another concern is the time period of the study because
certain ankle arthrodesis complications such as ankle replacement and
repeat arthrodesis can happen more than 2 years after the initial
surgery.\55\ A long-term study of at least 60 months is currently
underway in order to assess long-term safety and efficacy, looking at
the following 4 primary outcomes: Bone bridging as demonstrated by CT,
pain on weight bearing, The American Orthopaedic Foot & Ankle Society
Ankle-Hindfoot (AOFAS-AHS) score, and the Foot Function Index. We
believe that this long-term study is necessary for meaningful
information about long-term efficacy of the Augment[supreg] Bone Graft.
Further, there was a notable difference in the infection rate,
musculoskeletal and tissue disorders, and pain in extremity for those
in the AUGMENT[supreg] Bone Graft group. These findings were
unfortunately not tested for significance and also were not necessarily
focused on relevance to the procedure. Should these be significant and
related to the device, these findings would suggest that the adverse
outcomes due to the Augment[supreg] Bone Graft may outweigh its
potential benefits.
---------------------------------------------------------------------------
\53\ DiGiovanni CW, Lin SS, Baumbauer JF, et al. 2013.
``Recombinant Human Platelet-Derived Growth Factor-BB and Beta-
Tricalcium Phosphate (rhPDGF-BB/b-TCP): An Alternative to Autogenous
Bone Graft.'' J Bone Joint Surg Am., 95: 1184-92.
\54\ Herscovici, D., Scaduto, J.M. 2012. ``Use of the reamer-
irrigator-aspirator technique to obtain autograft for ankle and
hindfoot arthrodesis.'' The Journal of Bone & Joint Surgery. 94-B:
75-9.
\55\ Stavrakis, AL., SooHoo, NF. 2016. ``Trends in complication
rates following ankle arthrodesis and total ankle replacement.'' The
Journal of Bone & Joint Surgery. JBJS 1453-1458.
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We are inviting public comments on whether the AUGMENT[supreg] Bone
Graft meets the substantial clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the use of the
AUGMENT[supreg] Bone Graft would be reported with CPT code 27870
(Arthrodesis, ankle, open), which is assigned to APC 5115 (Level 5
Musculoskeletal Procedures). To meet the cost criterion for device
pass-through payment status, a device must pass all three tests of the
cost criterion for at least one APC. For our calculations, we used APC
5115, which has a CY 2019 payment rate of $10,122.92. Beginning in CY
2017, we calculate the device offset amount at the HCPCS/CPT code level
instead of the APC level (81 FR 79657). CPT code 27870 had a device
offset amount of $4,553.29. According to the applicant, the cost of the
AUGMENT[supreg] Bone Graft is $3,077 per device/drug combination. The
applicant further provided a weighted average cost of the graft,
accounting for how many procedures required one, two, or three
AUGMENT[supreg] Bone Graft device/drug kits, equaling a weighted
average cost of $6,020.22.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of the AUGMENT[supreg] Bone Graft is more than
25 percent of the applicable APC payment amount \56\ for the service
related to the category of devices of $10,122.92 (($6,020.22/
$10,122.92) x 100 = 59 percent)). Therefore, we believe that the
AUGMENT[supreg] Bone Graft meets the first cost significance
requirement.
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\56\ Due to the timing of the application, the AUGMENT[supreg]
Bone Graft cost values were calculated using the 2018 proposed rule
data.
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The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $6,020.22 for
AUGMENT[supreg] Bone Graft
[[Page 39482]]
exceeds the cost of the device-related portion of the APC payment
amount for the related service of $4,553.29 by at least 25 percent
(($6,020.22/$4,553.29) x 100 = 132 percent). Therefore, we have
concerns about whether the AUGMENT[supreg] Bone Graft meets the second
cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that 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 must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $6,020.22 for the AUGMENT[supreg] Bone Graft and the
portion of the APC payment amount for the device of $4,553.29 exceeds
the APC payment amount for the related service of $10,122.92 by more
than 10 percent (($6,020.22-$4,553.29)/$10,122.92 x 100 = 15 percent).
Therefore, we believe that AUGMENT[supreg] Bone Graft meets the third
cost significance test. We are inviting public comments on whether the
AUGMENT[supreg] Bone Graft meets the device pass-through payment
criteria discussed in this section, including the cost criterion.
3. Request for Information and Potential Revisions to the OPPS Device
Pass-Through Substantial Clinical Improvement Criterion in the FY 2020
IPPS/LTCH PPS Proposed Rule
As mentioned earlier, section 1833(t)(6) of the Act provides for
pass-through payments for devices, and section 1833(t)(6)(B) of the Act
requires CMS to use categories in determining the eligibility of
devices for pass-through payments. Separately, the criteria as set
forth under Sec. 419.66(c) are used to determine whether a new
category of pass-through payment devices should be established. One of
these criteria, at Sec. 419.66(c)(2), states that CMS determines that
a device to be included in the category has demonstrated that it will
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. CMS considers the totality of
the substantial clinical improvement claims and supporting data, as
well as public comments, when evaluating this aspect of each
application. CMS summarizes each applicant's claim 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 OPPS, CMS
responds to public comments and discusses its decision to approve or
deny the application for separate transitional pass-through payments.
Over the years, applicants and commenters have indicated that it
would be helpful for CMS to provide greater guidance on what
constitutes ``substantial clinical improvement.'' In the FY 2020 IPPS/
LTCH PPS proposed rule (84 FR 19368 through 19371), we requested
information on the substantial clinical improvement criterion for OPPS
transitional pass-through payments for devices and stated that we were
considering potential revisions to that criterion. In particular, we
sought public comments in the FY 2020 IPPS/LTCH PPS proposed rule on
the type of additional detail and guidance that the public and
applicants for device pass-through transitional payment would find
useful (84 FR 19367 to 19369). This request for public comments was
intended to be broad in scope and provide a foundation for potential
rulemaking in future years. We refer readers to the FY 2020 IPPS/LTCH
proposed rule for the full text of this request for information.
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 also solicited comments from the
public in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19369 through
19371) 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. We refer readers to the FY 2020 IPPS/LTCH
PPS proposed rule for complete details on those potential revisions. We
note that any responses to public comments we receive on potential
revisions to the OPPS substantial clinical improvement criterion in
response to the FY 2020 IPPS/LTCH PPS proposed rule, as well as any
revisions that might be adopted, will be included in the CY 2020 OPPS/
ASC final rule and will inform future OPPS rulemaking. We further
invite public comment on this topic in this rule.
4. Proposed Alternative Pathway to the OPPS Device Pass-Through
Substantial Clinical Improvement Criterion for Transformative New
Devices
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. There is
currently 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: (1) That represent breakthrough technologies; (2) for which
no approved or cleared alternatives exist; (3) 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 (4) the availability of which is in the best
interest of patients.
Some stakeholders over the years have requested that devices that
receive marketing authorization and are part of an FDA expedited
program be deemed as representing a substantial clinical improvement
for purposes of OPPS device pass-through status. We understand this
request would arguably create administrative efficiency because the
commenters currently view the two sets of criteria as the same,
overlapping, similar, or otherwise duplicative or unnecessary.
The Administration is committed to addressing barriers to health
care 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 (we refer readers to HHS FY 2020 Budget in Brief, Improve
Medicare Beneficiary Access to Breakthrough Devices, pp. 84-85), 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
[[Page 39483]]
and review of transformative devices that meet expedited program
criteria (that is, new 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; or the granting
of a De Novo classification request) 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) (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 health care
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
outpatient pass-through pathway to facilitate access to this technology
for Medicare beneficiaries beginning with applications received for
pass-through payment on or after January 1, 2020.
We continue to believe that hospitals should receive pass-through
payments for devices that offer clear clinical improvement and that
cost considerations should not interfere with patient access. In light
of the criteria applied under the FDA's Breakthrough Devices Program,
and because we recognize that the technology may not have a sufficient
evidence base to demonstrate substantial clinical improvement at the
time of FDA marketing authorization, we are proposing to amend the OPPS
device transitional pass-through payment regulations to create an
alternative pathway to demonstrating substantial clinical improvement
that would enable devices approved under the FDA Breakthrough Devices
Program to qualify for our quarterly approval process for device pass-
through payment under the OPPS for pass-through payment applications
received on or after January 1, 2020. With this proposal, OPPS device
pass-through payment applicants approved under the FDA Breakthrough
Devices Program would not be evaluated in terms of the current
substantial clinical improvement criterion at Sec. 419.66(c)(2) for
the purposes of determining device pass-through payment status, but
would continue to need to meet the other requirements for pass-through
payment status in our regulation at Sec. 419.66. Devices approved
under the Breakthrough Devices Program that are approved for OPPS
device transitional pass-through payment can be approved through the
quarterly process and would be announced through that process (81 FR
79655). Finally, we would include proposals regarding these devices and
whether pass-through payment status should continue to apply in the
next applicable OPPS rulemaking cycle.
As such, we are proposing to revise paragraph (c)(2) under Sec.
419.66. Under proposed revised paragraph (c)(2), we are proposing to
establish an alternative pathway where applications for device pass-
through payment status for new medical devices received on or after
January 1, 2020 that are a part of FDA's Breakthrough Devices Program
and have received FDA marketing authorization (that is, the device has
received PMA, 510(k) clearance, or the granting of a De Novo
classification request) will not be evaluated for substantial clinical
improvement for the purposes of determining device pass-through payment
status. 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
still need to meet the eligibility criteria under Sec. 419.66(b), the
other criteria for establishing device categories under Sec.
419.66(c), and the cost criterion under Sec. 419.66(d). We note that
this proposal aligns with a proposal in the FY 2020 IPPS/LTCH PPS
proposed rule (84 FR 19371 through 19373) and will help achieve the
goals of expedited access to innovative therapies and further reduce
administrative burden.
B. Proposed Device-Intensive Procedures
1. Background
Under the OPPS, prior to CY 2017, device-intensive status for
procedures was determined at the APC level for APCs with a device
offset percentage greater than 40 percent (79 FR 66795). Beginning in
CY 2017, CMS began determining device-intensive status at the HCPCS
code level. In assigning device-intensive status to an APC prior to CY
2017, the device costs of all the procedures within the APC were
calculated and the geometric mean device offset of all of the
procedures had to exceed 40 percent. Almost all of the procedures
assigned to device-intensive APCs utilized devices, and the device
costs for the associated HCPCS codes exceeded the 40-percent threshold.
The no cost/full credit and partial credit device policy (79 FR 66872
through 66873) applies to device-intensive APCs and is discussed in
detail in section IV.B.4. of this proposed rule. A related device
policy was the requirement that certain procedures assigned to device-
intensive APCs require the reporting of a device code on the claim (80
FR 70422). For further background information on the device-intensive
APC policy, we refer readers to the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70421 through 70426).
a. HCPCS Code-Level Device-Intensive Determination
As stated earlier, prior to CY 2017, the device-intensive
methodology assigned device-intensive status to all procedures
requiring the implantation of a device that were assigned to an APC
with a device offset greater than 40 percent and, beginning in CY 2015,
that met the three criteria listed below. Historically, the device-
intensive designation was at the APC level and applied to the
applicable procedures within that APC. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79658), we changed our methodology to
assign device-intensive status at the individual HCPCS code level
rather than at the APC level. Under this policy, a procedure could be
assigned device-intensive status regardless of its APC assignment, and
device-intensive APCs were no longer applied under the OPPS or the ASC
payment system.
We believe that a HCPCS code-level device offset is, in most cases,
a better representation of a procedure's device cost than an APC-wide
average device offset based on the average device offset of all of the
procedures assigned to an APC. Unlike a device offset calculated at
[[Page 39484]]
the APC level, which is a weighted average offset for all devices used
in all of the procedures assigned to an APC, a HCPCS code-level device
offset is calculated using only claims for a single HCPCS code. We
believe that this methodological change results in a more accurate
representation of the cost attributable to implantation of a high-cost
device, which ensures consistent device-intensive designation of
procedures with a significant device cost. Further, we believe a HCPCS
code-level device offset removes inappropriate device-intensive status
for procedures without a significant device cost that are granted such
status because of APC assignment.
Under our existing policy, procedures that meet the criteria listed
below in section IV.B.1.b. of this proposed rule are identified as
device-intensive procedures and are subject to all the policies
applicable to procedures assigned device-intensive status under our
established methodology, including our policies on device edits and no
cost/full credit and partial credit devices discussed in sections
IV.B.3. and IV.B.4. of this proposed rule, respectively.
b. Use of the Three Criteria To Designate Device-Intensive Procedures
We clarified our established policy in the CY 2018 OPPS/ASC final
rule with comment period (82 FR 52474), where we explained that device-
intensive procedures require the implantation of a device and
additionally are subject to the following criteria:
All procedures must involve implantable devices that would
be reported if device insertion procedures were performed;
The required devices must be surgically inserted or
implanted devices that remain in the patient's body after the
conclusion of the procedure (at least temporarily); and
The device offset amount must be significant, which is
defined as exceeding 40 percent of the procedure's mean cost.
We changed our policy to apply these three criteria to determine
whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66926), where we stated that we
would apply the no cost/full credit and partial credit device policy--
which includes the three criteria listed above--to all device-intensive
procedures beginning in CY 2015. We reiterated this position in the CY
2016 OPPS/ASC final rule with comment period (80 FR 70424), where we
explained that we were finalizing our proposal to continue using the
three criteria established in the CY 2007 OPPS/ASC final rule with
comment period for determining the APCs to which the CY 2016 device
intensive policy will apply. Under the policies we adopted in CYs 2015,
2016, and 2017, all procedures that require the implantation of a
device and meet the above criteria are assigned device-intensive
status, regardless of their APC placement.
2. Device-Intensive Procedure Policy for CY 2019 and Subsequent Years
As part of CMS' effort to better capture costs for procedures with
significant device costs, in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58944 through 58948), for CY 2019, we modified
our criteria for device-intensive procedures. We had heard from
stakeholders that the criteria excluded some procedures that
stakeholders believed should qualify as device-intensive procedures.
Specifically, we were persuaded by stakeholder arguments that
procedures requiring expensive surgically inserted or implanted devices
that are not capital equipment should qualify as device-intensive
procedures, regardless of whether the device remains in the patient's
body after the conclusion of the procedure. We agreed that a broader
definition of device-intensive procedures was warranted, and made two
modifications to the criteria for CY 2019 (83 FR 58948). First, we
allow procedures that involve surgically inserted or implanted, single-
use devices that meet the device offset percentage threshold to qualify
as device-intensive procedures, regardless of whether the device
remains in the patient's body after the conclusion of the procedure. We
established this policy because we no longer believe that whether a
device remains in the patient's body should affect its designation as a
device-intensive procedure, as such devices could, nonetheless,
comprise a large portion of the cost of the applicable procedure.
Second, we modified our criteria to lower the device offset percentage
threshold from 40 percent to 30 percent, to allow a greater number of
procedures to qualify as device-intensive. We stated that we believe
allowing these additional procedures to qualify for device-intensive
status will help ensure these procedures receive more appropriate
payment in the ASC setting, which will help encourage the provision of
these services in the ASC setting. In addition, we stated that this
change would help to ensure that more procedures containing relatively
high-cost devices are subject to the device edits, which leads to more
correctly coded claims and greater accuracy in our claims data.
Specifically, for CY 2019 and subsequent years, we finalized that
device-intensive procedures will be subject to the following criteria:
All procedures must involve implantable devices assigned a
CPT or HCPCS code;
The required devices (including single-use devices) must
be surgically inserted or implanted; and
The device offset amount must be significant, which is
defined as exceeding 30 percent of the procedure's mean cost (83 FR
58945).
In addition, to further align the device-intensive policy with the
criteria used for device pass-through payment status, we finalized, for
CY 2019 and subsequent years, that for purposes of satisfying the
device-intensive criteria, a device-intensive procedure must involve a
device that:
Has received FDA marketing authorization, has received an
FDA investigational device exemption (IDE), and has been classified as
a Category B device by the FDA in accordance with 42 CFR 405.203
through 405.207 and 405.211 through 405.215, or meets another
appropriate FDA exemption from premarket review;
Is an integral part of the service furnished;
Is used for one patient only;
Comes in contact with human tissue;
Is surgically implanted or inserted (either permanently or
temporarily); and
Is not either of the following:
(a) Equipment, an instrument, apparatus, implement, or item of this
type for which depreciation and financing expenses are recovered as
depreciable assets as defined in Chapter 1 of the Medicare Provider
Reimbursement Manual (CMS Pub. 15-1); or
(b) A material or supply furnished incident to a service (for
example, a suture, customized surgical kit, scalpel, or clip, other
than a radiological site marker) (83 FR 58945).
In addition, for new HCPCS codes describing procedures requiring
the implantation of medical devices that do not yet have associated
claims data, in the CY 2017 OPPS/ASC final rule with comment period (81
FR 79658), we finalized a policy for CY 2017 to apply device-intensive
status with a default device offset set at 41 percent for new HCPCS
codes describing procedures requiring the implantation or insertion of
a medical device that did not yet have associated claims data until
claims data are available to establish the HCPCS code-level device
offset for the procedures. This default device offset
[[Page 39485]]
amount of 41 percent was not calculated from claims data; instead, it
was applied as a default until claims data were available upon which to
calculate an actual device offset for the new code. The purpose of
applying the 41-percent default device offset to new codes that
describe procedures that implant or insert medical devices was to
ensure ASC access for new procedures until claims data become
available.
As discussed in the CY 2019 OPPS/ASC proposed rule and final rule
with comment period (83 FR 37108 through 37109 and 58945 through 58946,
respectively), in accordance with our policy stated above to lower the
device offset percentage threshold for procedures to qualify as device-
intensive from greater than 40 percent to greater than 30 percent, for
CY 2019 and subsequent years, we modified this policy to apply a 31-
percent default device offset to new HCPCS codes describing procedures
requiring the implantation of a medical device that do not yet have
associated claims data until claims data are available to establish the
HCPCS code-level device offset for the procedures. In conjunction with
the policy to lower the default device offset from 41 percent to 31
percent, we continued our current policy of, in certain rare instances
(for example, in the case of a very expensive implantable device),
temporarily assigning a higher offset percentage if warranted by
additional information such as pricing data from a device manufacturer
(81 FR 79658). Once claims data are available for a new procedure
requiring the implantation of a medical device, device-intensive status
is applied to the code if the HCPCS code-level device offset is greater
than 30 percent, according to our policy of determining device-
intensive status by calculating the HCPCS code-level device offset.
In addition, in the CY 2019 OPPS/ASC final rule with comment
period, we clarified that since the adoption of our policy in effect as
of CY 2018, the associated claims data used for purposes of determining
whether or not to apply the default device offset are the associated
claims data for either the new HCPCS code or any predecessor code, as
described by CPT coding guidance, for the new HCPCS code. Additionally,
for CY 2019 and subsequent years, in limited instances where a new
HCPCS code does not have a predecessor code as defined by CPT, but
describes a procedure that was previously described by an existing
code, we use clinical discretion to identify HCPCS codes that are
clinically related or similar to the new HCPCS code but are not
officially recognized as a predecessor code by CPT, and to use the
claims data of the clinically related or similar code(s) for purposes
of determining whether or not to apply the default device offset to the
new HCPCS code (83 FR 58946). Clinically related and similar procedures
for purposes of this policy are procedures that have little or no
clinical differences and use the same devices as the new HCPCS code. In
addition, clinically related and similar codes for purposes of this
policy are codes that either currently or previously describe the
procedure described by the new HCPCS code. Under this policy, claims
data from clinically related and similar codes are included as
associated claims data for a new code, and where an existing HCPCS code
is found to be clinically related or similar to a new HCPCS code, we
apply the device offset percentage derived from the existing clinically
related or similar HCPCS code's claims data to the new HCPCS code for
determining the device offset percentage. We stated that we believe
that claims data for HCPCS codes describing procedures that have minor
differences from the procedures described by new HCPCS codes will
provide an accurate depiction of the cost relationship between the
procedure and the device(s) that are used, and will be appropriate to
use to set a new code's device offset percentage, in the same way that
predecessor codes are used. If a new HCPCS code has multiple
predecessor codes, the claims data for the predecessor code that has
the highest individual HCPCS-level device offset percentage is used to
determine whether the new HCPCS code qualifies for device-intensive
status. Similarly, in the event that a new HCPCS code does not have a
predecessor code but has multiple clinically related or similar codes,
the claims data for the clinically related or similar code that has the
highest individual HCPCS level device offset percentage is used to
determine whether the new HCPCS code qualifies for device-intensive
status.
As we indicated in the CY 2019 OPPS/ASC proposed rule and final
rule with comment period, additional information for our consideration
of an offset percentage higher than the default of 31 percent for new
HCPCS codes describing procedures requiring the implantation (or, in
some cases, the insertion) of a medical device that do not yet have
associated claims data, such as pricing data or invoices from a device
manufacturer, should be directed to the Division of Outpatient Care,
Mail Stop C4-01-26, Centers for Medicare and Medicaid Services, 7500
Security Boulevard, Baltimore, MD 21244-1850, or electronically at
[email protected]. Additional information can be submitted
prior to issuance of an OPPS/ASC proposed rule or as a public comment
in response to an issued OPPS/ASC proposed rule. Device offset
percentages will be set in each year's final rule.
For CY 2020, we are not proposing any changes to our device-
intensive policy. The full listing of the proposed CY 2020 device-
intensive procedures can be found in Addendum P to this CY 2020 OPPS/
ASC proposed rule (which is available via the internet on the CMS
website).
3. Device Edit Policy
In the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795), we finalized a policy and implemented claims processing edits
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code
assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC
final rule with comment period (the CY 2015 device-dependent APCs) is
reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70422), we modified our previously existing
policy and applied the device coding requirements exclusively to
procedures that require the implantation of a device that are assigned
to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with
comment period, we also finalized our policy that the claims processing
edits are such that any device code, when reported on a claim with a
procedure assigned to a device-intensive APC (listed in Table 42 of the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)) will
satisfy the edit.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658
through 79659), we changed our policy for CY 2017 and subsequent years
to apply the CY 2016 device coding requirements to the newly defined
device-intensive procedures. For CY 2017 and subsequent years, we also
specified that any device code, when reported on a claim with a device-
intensive procedure, will satisfy the edit. In addition, we created
HCPCS code C1889 to recognize devices furnished during a device-
intensive procedure that are not described by a specific Level II HCPCS
Category C-code. Reporting HCPCS code C1889 with a device-intensive
procedure will satisfy the edit requiring a device code to be reported
on a claim with a device-intensive procedure. In the CY 2019 OPPS/ASC
final rule with comment period, we revised the description of
[[Page 39486]]
HCPCS code C1889 to remove the specific applicability to device-
intensive procedures (83 FR 58950). For CY 2019 and subsequent years,
the description of HCPCS code C1889 is ``Implantable/insertable device,
not otherwise classified''.
We are not proposing any changes to this policy for CY 2020.
4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial
Credit Devices
a. Background
To ensure equitable OPPS payment when a hospital receives a device
without cost or with full credit, in CY 2007, we implemented a policy
to reduce the payment for specified device-dependent APCs by the
estimated portion of the APC payment attributable to device costs (that
is, the device offset) when the hospital receives a specified device at
no cost or with full credit (71 FR 68071 through 68077). Hospitals were
instructed to report no cost/full credit device cases on the claim
using the ``FB'' modifier on the line with the procedure code in which
the no cost/full credit device is used. In cases in which the device is
furnished without cost or with full credit, hospitals were instructed
to report a token device charge of less than $1.01. In cases in which
the device being inserted is an upgrade (either of the same type of
device or to a different type of device) with a full credit for the
device being replaced, hospitals were instructed to report as the
device charge the difference between the hospital's usual charge for
the device being implanted and the hospital's usual charge for the
device for which it received full credit. In CY 2008, we expanded this
payment adjustment policy to include cases in which hospitals receive
partial credit of 50 percent or more of the cost of a specified device.
Hospitals were instructed to append the ``FC'' modifier to the
procedure code that reports the service provided to furnish the device
when they receive a partial credit of 50 percent or more of the cost of
the new device. We refer readers to the CY 2008 OPPS/ASC final rule
with comment period for more background information on the ``FB'' and
``FC'' modifiers payment adjustment policies (72 FR 66743 through
66749).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
through 75007), beginning in CY 2014, we modified our policy of
reducing OPPS payment for specified APCs when a hospital furnishes a
specified device without cost or with a full or partial credit. For CY
2013 and prior years, our policy had been to reduce OPPS payment by 100
percent of the device offset amount when a hospital furnishes a
specified device without cost or with a full credit and by 50 percent
of the device offset amount when the hospital receives partial credit
in the amount of 50 percent or more of the cost for the specified
device. For CY 2014, we reduced OPPS payment, for the applicable APCs,
by the full or partial credit a hospital receives for a replaced
device. Specifically, under this modified policy, hospitals are
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' (Credit Received from the Manufacturer
for a Replaced Medical Device) when the hospital receives a credit for
a replaced device that is 50 percent or greater than the cost of the
device. For CY 2014, we also limited the OPPS payment deduction for the
applicable APCs to the total amount of the device offset when the
``FD'' value code appears on a claim. For CY 2015, we continued our
policy of reducing OPPS payment for specified APCs when a hospital
furnishes a specified device without cost or with a full or partial
credit and to use the three criteria established in the CY 2007 OPPS/
ASC final rule with comment period (71 FR 68072 through 68077) for
determining the APCs to which our CY 2015 policy will apply (79 FR
66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70424), we finalized our policy to no longer specify a
list of devices to which the OPPS payment adjustment for no cost/full
credit and partial credit devices would apply and instead apply this
APC payment adjustment to all replaced devices furnished in conjunction
with a procedure assigned to a device-intensive APC when the hospital
receives a credit for a replaced specified device that is 50 percent or
greater than the cost of the device.
b. Policy for No Cost/Full Credit and Partial Credit Devices
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659
through 79660), for CY 2017 and subsequent years, we finalized our
policy to reduce OPPS payment for device-intensive procedures, by the
full or partial credit a provider receives for a replaced device, when
a hospital furnishes a specified device without cost or with a full or
partial credit. Under our current policy, hospitals continue to be
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' when the hospital receives a credit for a
replaced device that is 50 percent or greater than the cost of the
device.
We are not proposing any changes to our no cost/full credit and
partial credit device policies in this proposed rule.
5. Proposed Payment Policy for Low-Volume Device-Intensive Procedures
In CY 2016, we used our equitable adjustment authority under
section 1833(t)(2)(E) of the Act and used the median cost (instead of
the geometric mean cost per our standard methodology) to calculate the
payment rate for the implantable miniature telescope procedure
described by CPT code 0308T (Insertion of ocular telescope prosthesis
including removal of crystalline lens or intraocular lens prosthesis),
which is the only code assigned to APC 5494 (Level 4 Intraocular
Procedures) (80 FR 70388). We noted that, as stated in the CY 2017
OPPS/ASC proposed rule (81 FR 45656), we proposed to reassign the
procedure described by CPT code 0308T to APC 5495 (Level 5 Intraocular
Procedures) for CY 2017, but it would be the only procedure code
assigned to APC 5495. The payment rates for a procedure described by
CPT code 0308T (including the predecessor HCPCS code C9732) were
$15,551 in CY 2014, $23,084 in CY 2015, and $17,551 in CY 2016. The
procedure described by CPT code 0308T is a high-cost device-intensive
surgical procedure that has a very low volume of claims (in part
because most of the procedures described by CPT code 0308T are
performed in ASCs). We believe that the median cost is a more
appropriate measure of the central tendency for purposes of calculating
the cost and the payment rate for this procedure because the median
cost is impacted to a lesser degree than the geometric mean cost by
more extreme observations. We stated that, in future rulemaking, we
would consider proposing a general policy for the payment rate
calculation for very low-volume device-intensive APCs (80 FR 70389).
For CY 2017, we proposed and finalized a payment policy for low-
volume device-intensive procedures that is similar to the policy
applied to the procedure described by CPT code 0308T in CY 2016. In the
CY 2017 OPPS/ASC final rule with comment period (81 FR 79660 through
79661), we established our current policy that the payment rate for any
device-intensive procedure that is assigned to a clinical APC with
fewer than 100 total claims for all procedures in the APC be calculated
using the median cost instead of the geometric mean cost, for the
reasons described above for the policy
[[Page 39487]]
applied to the procedure described by CPT code 0308T in CY 2016. The CY
2018 final rule geometric mean cost for the procedure described by CPT
code 0308T (based on 19 claims containing the device HCPCS C-code, in
accordance with the device-intensive edit policy) was approximately
$21,302, and the median cost was approximately $19,521. The final CY
2018 payment rate (calculated using the median cost) was approximately
$17,560.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR
58951), for CY 2019, we continued with our policy of establishing the
payment rate for any device-intensive procedure that is assigned to a
clinical APC with fewer than 100 total claims for all procedures in the
APC based on calculations using the median cost instead of the
geometric mean cost. For more information on the specific policy for
assignment of low-volume device-intensive procedures for CY 2019, we
refer readers to section III.D.13. of the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58917 through 58918).
For CY 2020, we are proposing to continue our current policy of
establishing the payment rate for any device-intensive procedure that
is assigned to a clinical APC with fewer than 100 total claims for all
procedures in the APC using the median cost instead of the geometric
mean cost. For CY 2020, this policy would apply to CPT code 0308T,
which we are proposing to assign to APC 5495 (Level 5 Intraocular
Procedures) in this proposed rule. The CY 2020 proposed rule geometric
mean cost for the procedure described by CPT code 0308T (based on 7
claims containing the device HCPCS C-code, in accordance with the
device-intensive edit policy) is approximately $28,237, and the median
cost is approximately $19,270. The proposed CY 2020 payment rate
(calculated using the median cost) is approximately $19,740 and can be
found in Addendum B to this proposed rule (which is available via the
internet on the CMS website).
V. Proposed OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for Additional Costs
of Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biologicals. Throughout this proposed rule, the term ``biological''
is used because this is the term that appears in section 1861(t) of the
Act. A ``biological'' as used in this proposed rule includes (but is
not necessarily limited to) a ``biological product'' or a ``biologic''
as defined under section 351 of the Public Health Service Act. As
enacted by the Medicare, Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999 (BBRA) (Pub. L. 106-113), this pass-through payment
provision requires the Secretary to make additional payments to
hospitals for: Current orphan drugs for rare disease and conditions, as
designated under section 526 of the Federal Food, Drug, and Cosmetic
Act; current drugs and biologicals and brachytherapy sources used in
cancer therapy; and current radiopharmaceutical drugs and biologicals.
``Current'' refers to those types of drugs or biologicals mentioned
above that are hospital outpatient services under Medicare Part B for
which transitional pass-through payment was made on the first date the
hospital OPPS was implemented.
Transitional pass-through payments also are provided for certain
``new'' drugs and biologicals that were not being paid for as an HOPD
service as of December 31, 1996 and whose cost is ``not insignificant''
in relation to the OPPS payments for the procedures or services
associated with the new drug or biological. For pass-through payment
purposes, radiopharmaceuticals are included as ``drugs.'' As required
by statute, transitional pass-through payments for a drug or biological
described in section 1833(t)(6)(C)(i)(II) of the Act can be made for a
period of at least 2 years, but not more than 3 years, after the
payment was first made for the product as a hospital outpatient service
under Medicare Part B. Proposed CY 2020 pass-through drugs and
biologicals and their designated APCs are assigned status indicator
``G'' in Addenda A and B to this proposed rule (which are available via
the internet on the CMS website).
Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act for the
drug or biological exceeds the portion of the otherwise applicable
Medicare OPD fee schedule that the Secretary determines is associated
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64.
These regulations specify that the pass-through payment equals the
amount determined under section 1842(o) of the Act minus the portion of
the APC payment that CMS determines is associated with the drug or
biological.
Section 1847A of the Act establishes the average sales price (ASP)
methodology, which is used for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after
January 1, 2005. The ASP methodology, as applied under the OPPS, uses
several sources of data as a basis for payment, including the ASP, the
wholesale acquisition cost (WAC), and the average wholesale price
(AWP). In this proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described
therein. Additional information on the ASP methodology can be found on
the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
The pass-through application and review process for drugs and
biologicals is described on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html.
2. Three-Year Transitional Pass-Through Payment Period for All Pass-
Through Drugs, Biologicals, and Radiopharmaceuticals and Quarterly
Expiration of Pass-Through Status
As required by statute, transitional pass-through payments for a
drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act
can be made for a period of at least 2 years, but not more than 3
years, after the payment was first made for the product as a hospital
outpatient service under Medicare Part B. Our current policy is to
accept pass-through applications on a quarterly basis and to begin
pass-through payments for newly approved pass-through drugs and
biologicals on a quarterly basis through the next available OPPS
quarterly update after the approval of a product's pass-through status.
However, prior to CY 2017, we expired pass-through status for drugs and
biologicals on an annual basis through notice-and-comment rulemaking
(74 FR 60480). In the CY 2017 OPPS/ASC final rule with comment period
(81 FR 79662), we finalized a policy change, beginning with pass-
through drugs and biologicals newly approved in CY 2017 and subsequent
calendar years, to allow for a quarterly expiration of pass-through
payment status for drugs, biologicals, and radiopharmaceuticals to
afford a pass-through payment period that is as close to a full 3 years
as possible for all
[[Page 39488]]
pass-through drugs, biologicals, and radiopharmaceuticals.
This change eliminated the variability of the pass-through payment
eligibility period, which previously varied based on when a particular
application was initially received. We adopted this change for pass-
through approvals beginning on or after CY 2017, to allow, on a
prospective basis, for the maximum pass-through payment period for each
pass-through drug without exceeding the statutory limit of 3 years.
Notice of drugs whose pass-through payment status is ending during the
calendar year will continue to be included in the quarterly OPPS Change
Request transmittals.
3. Proposed Drugs and Biologicals With Expiring Pass-Through Payment
Status in CY 2019
We are proposing that the pass-through payment status of six drugs
and biologicals would expire on December 31, 2019 as listed in Table
14. These drugs and biologicals will have received OPPS pass-through
payment for 3 years during the period of January 1, 2017 until December
31, 2019.
In accordance with the policy finalized in CY 2017 and described
earlier, pass-through payment status for drugs and biologicals newly
approved in CY 2017 and subsequent years will expire on a quarterly
basis, with a pass-through payment period as close to 3 years as
possible. With the exception of those groups of drugs and biologicals
that are always packaged when they do not have pass-through payment
status (specifically, anesthesia drugs; drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure (including diagnostic
radiopharmaceuticals, contrast agents, and stress agents); and drugs
and biologicals that function as supplies when used in a surgical
procedure), our standard methodology for providing payment for drugs
and biologicals with expiring pass-through payment status in an
upcoming calendar year is to determine the product's estimated per day
cost and compare it with the OPPS drug packaging threshold for that
calendar year (which is proposed to be $130 for CY 2020), as discussed
further in section V.B.2. of this proposed rule. We are proposing that
if the estimated per day cost for the drug or biological is less than
or equal to the applicable OPPS drug packaging threshold, we would
package payment for the drug or biological into the payment for the
associated procedure in the upcoming calendar year. If the estimated
per day cost of the drug or biological is greater than the OPPS drug
packaging threshold, we are proposing to provide separate payment at
the applicable relative ASP-based payment amount (which is proposed at
ASP+6 percent for CY 2020, as discussed further in section V.B.3. of
this proposed rule).
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The proposed packaged or separately payable status of each of these
drugs or biologicals is listed in Addendum B to this proposed rule
(which is available via the internet on the CMS website).
4. Proposed Drugs, Biologicals, and Radiopharmaceuticals With New or
Continuing Pass-Through Payment Status in CY 2020
We are proposing to continue pass-through payment status in CY 2020
for 61 drugs and biologicals. These drugs and biologicals, which were
approved for pass-through payment status between April 1, 2017 and
April 1, 2019 are listed in Table 15. The APCs and HCPCS codes for
these drugs and biologicals approved for pass-through payment status on
or after January 1, 2020 are assigned status indicator ``G'' in Addenda
A and B to this proposed rule (which are available via the internet on
the CMS website). In addition, there are four drugs and biologicals
that have already had 3 years of pass-through payment status but for
which pass-through payment status is required to be extended for an
additional 2 years, effective October 1, 2018 under section
1833(t)(6)(G) of the Act, as added by section 1301(a)(1)(C) of the
Consolidated Appropriations Act of 2018 (Pub. L. 115-141). That means
the last 9 months of pass-through status for these drugs will occur in
CY 2020. Because of this requirement, these drugs and biologicals are
also included in Table 15, which brings the total number of drugs and
biologicals with proposed pass-through payment status in CY 2020 to 65.
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the
[[Page 39489]]
pass-through payment amount) as the difference between the amount
authorized under section 1842(o) of the Act and the portion of the
otherwise applicable OPD fee schedule that the Secretary determines is
associated with the drug or biological. For CY 2020, we are proposing
to continue to pay for pass-through drugs and biologicals at ASP+6
percent, equivalent to the payment rate these drugs and biologicals
would receive in the physician's office setting in CY 2020. We are
proposing that a $0 pass-through payment amount would be paid for pass-
through drugs and biologicals under the CY 2020 OPPS because the
difference between the amount authorized under section 1842(o) of the
Act, which is proposed at ASP+6 percent, and the portion of the
otherwise applicable OPD fee schedule that the Secretary determines is
appropriate, which is proposed at ASP+6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
Anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure
(including contrast agents, diagnostic radiopharmaceuticals, and stress
agents); and drugs and biologicals that function as supplies when used
in a surgical procedure), we are proposing that their pass-through
payment amount would be equal to ASP+6 percent for CY 2020 minus a
payment offset for any predecessor drug products contributing to the
pass-through payment as described in section V.A.6. of this proposed
rule. We are making this proposal because, if not for the pass-through
payment status of these policy-packaged products, payment for these
products would be packaged into the associated procedure.
We are proposing to continue to update pass-through payment rates
on a quarterly basis on the CMS website during CY 2020 if later quarter
ASP submissions (or more recent WAC or AWP information, as applicable)
indicate that adjustments to the payment rates for these pass-through
payment drugs or biologicals are necessary. For a full description of
this policy, we refer readers to the CY 2006 OPPS/ASC final rule with
comment period (70 FR 68632 through 68635).
For CY 2020, consistent with our CY 2019 policy for diagnostic and
therapeutic radiopharmaceuticals, we are proposing to provide payment
for both diagnostic and therapeutic radiopharmaceuticals that are
granted pass-through payment status based on the ASP methodology. As
stated earlier, for purposes of pass-through payment, we consider
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a
diagnostic or therapeutic radiopharmaceutical receives pass-through
payment status during CY 2020, we are proposing to follow the standard
ASP methodology to determine the pass-through payment rate that drugs
receive under section 1842(o) of the Act, which is proposed at ASP+6
percent. If ASP data are not available for a radiopharmaceutical, we
are proposing to provide pass-through payment at WAC+3 percent
(consistent with our proposed policy in section V.B.2.b. of this
proposed rule), the equivalent payment provided to pass-through payment
drugs and biologicals without ASP information. Additional detail and
comments on the WAC+3 percent payment policy can be found in section
V.B.2.b. of this proposed rule. If WAC information also is not
available, we are proposing to provide payment for the pass-through
radiopharmaceutical at 95 percent of its most recent AWP.
The drugs and biologicals that we are proposing to continue to have
pass-through payment status on or after January 1, 2020 or that have
been granted pass-through payment status as of April 2019 are shown in
Table 15.
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
5. Proposed Drugs, Biologicals, and Radiopharmaceuticals With Pass-
Through Status as a Result of Section 1301 of the Consolidated
Appropriations Act of 2018 (Pub. L. 115-141)
As mentioned earlier, section 1301(a)(1) of the Consolidated
Appropriations Act of 2018 (Pub. L. 115-141) amended section 1833(t)(6)
of the Act and added a new section 1833(t)(6)(G), which provides that
for drugs or biologicals whose period of pass-through payment status
ended on December 31, 2017 and for which payment was packaged into a
covered hospital outpatient service furnished beginning January 1,
2018, such pass-through payment status shall be extended for a 2-year
period beginning on October 1, 2018 through September 30, 2020. There
are four products whose period of drug and biological pass-through
payment status ended on December 31, 2017 and for which payment would
have been packaged beginning January 1, 2018. These products were
listed in Table 39 of the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58962).
Starting in CY 2019, the HCPCS code Q4172 (PuraPly, and PuraPly
Antimicrobial, any type, per square centimeter) was discontinued. In
its place, two new HCPCS codes were established--Q4195 (Puraply, per
square centimeter) and Q4196 (Puraply am, per square centimeter).
Because these HCPCS codes are direct successors to HCPCS code Q4172,
the provisions of section 1833(t)(6)(G) of the Act apply to HCPCS codes
Q4195 and Q4196, and these codes are listed in Table 16. For CY 2020,
we are proposing to continue pass-through payment status for the drugs
and biologicals listed in Table 16 of this proposed rule (we note that
these drugs and biologicals are also listed in Table 15 of this
proposed rule) through September 30, 2020 as required in section
1833(t)(6)(G) of the Act, as added by section 1301(a)(1)(C) of the
Consolidated Appropriations Act of 2018. The APCs and HCPCS codes for
these drugs and biologicals approved for pass-through payment status
are assigned status indicator ``G'' in Addenda A and B to this proposed
rule (which are available via the internet on the CMS website).
We are proposing to continue to update pass-through payment rates
for HCPCS codes Q4195 and Q4196 along with the other three drugs and
biologicals covered by section 1833(t)(6)(G) of the Act on a quarterly
basis on the CMS website during CY 2020 if later quarter ASP
submissions (or more recent WAC or AWP information, as applicable)
indicate that adjustments to the payment rates for these pass-through
drugs or biologicals are necessary. The replacement of HCPCS code Q4172
by HCPCS codes Q4195 and Q4196 means there are five HCPCS codes for
drugs and biologicals covered by section 1833(t)(6)(G) of the Act. For
a full description of this policy, we refer readers to the CY 2019
OPPS/ASC final rule with comment period (83 FR 58960 through 58962).
The five HCPCS codes for drugs and biologicals that we are
proposing would have pass-through payment status for CY 2020 under
section 1833(t)(6)(G) of the Act, as added by section 1301(a)(1)(C) of
the Consolidated Appropriations Act of 2018, are shown in Table 16.
Included as two of the five HCPCS codes for drugs and biologicals with
pass-through payment status for CY 2020 are HCPCS codes Q4195 (Puraply,
per square centimeter) and Q4196 (Puraply am, per square centimeter).
PuraPly and PuraPly AM are skin substitute products that were approved
for pass-through payment status on January 1, 2015 through the drug and
biological pass-through payment process. Beginning on April 1, 2015,
skin substitute products are evaluated for pass-through payment status
through the device pass-through payment process. However, we stated in
the CY 2015 OPPS/ASC final rule with comment period (79 FR 66887) that
skin substitutes that are approved for pass-through payment status as
biologicals effective on or before January 1, 2015 would continue to be
paid as pass-through biologicals for the duration of their pass-through
payment period. Because PuraPly and PuraPly AM were approved for pass-
through payment status through the drug and biological pass-through
payment pathway, we finalized a policy to consider both PuraPly and
PuraPly AM to be drugs or biologicals as described by section
1833(t)(6)(G) of the Act, as added by section 1301(a)(1)(C) of the
Consolidated Appropriations Act of 2018, and to be eligible for
extended pass-through payment under our proposal for CY 2020 (83 FR
58961 through 58962).
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6. Proposed Provisions for Reducing Transitional Pass-Through Payments
for Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals To
Offset Costs Packaged Into APC Groups
Under the regulations at 42 CFR 419.2(b), nonpass-through drugs,
biologicals, and radiopharmaceuticals that function as supplies when
used in a diagnostic test or procedure are packaged in the OPPS. This
category includes diagnostic radiopharmaceuticals, contrast agents,
stress agents, and other diagnostic drugs. Also under 42 CFR 419.2(b),
nonpass-through drugs and biologicals that function as supplies in a
surgical procedure are packaged in the OPPS. This category includes
skin substitutes and other surgical-supply drugs and biologicals. As
described earlier, section 1833(t)(6)(D)(i) of the Act specifies that
the transitional pass-through payment amount for pass-through drugs and
biologicals is the difference between the amount paid under section
1842(o) of the Act and the otherwise applicable OPD fee schedule
amount. Because a payment offset is necessary in order to provide an
appropriate transitional pass-through payment, we deduct from the pass-
through payment for policy-packaged drugs, biologicals, and
radiopharmaceuticals an amount reflecting the portion of the APC
payment associated with predecessor products in order to ensure no
duplicate payment is made. This amount reflecting the portion of the
APC payment associated with predecessor products is called the payment
offset.
The payment offset policy applies to all policy packaged drugs,
biologicals, and radiopharmaceuticals. For a full description of the
payment offset policy as applied to diagnostic radiopharmaceuticals,
contrast agents, stress agents, and skin substitutes, we refer readers
to the discussion in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70430 through 70432). For CY 2020, as we did in CY 2019,
we are proposing to continue to apply the same policy packaged offset
policy to payment for pass-through diagnostic radiopharmaceuticals,
pass-through contrast agents, pass-through stress agents, and pass-
through skin substitutes. The proposed APCs to which a payment offset
may be applicable for pass-through diagnostic radiopharmaceuticals,
pass-through contrast agents, pass-through stress agents, and pass-
through skin substitutes are identified in Table 17.
[[Page 39496]]
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We are proposing to continue to post annually on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html a file that contains the
APC offset amounts that will be used for that year for purposes of both
evaluating cost significance for candidate pass-through payment device
categories and drugs and biologicals and establishing any appropriate
APC offset amounts. Specifically, the file will continue to provide the
amounts and percentages of APC payment associated with packaged
implantable devices, policy-packaged drugs, and threshold packaged
drugs and biologicals for every OPPS clinical APC.
B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals Without Pass-Through Payment Status
1. Proposed Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Proposed Packaging Threshold
In accordance with section 1833(t)(16)(B) of the Act, the threshold
for establishing separate APCs for payment of drugs and biologicals was
set to $50 per administration during CYs 2005 and 2006. In CY 2007, we
used the four quarter moving average Producer Price Index (PPI) levels
for Pharmaceutical Preparations (Prescription) to trend the $50
threshold forward from the third quarter of CY 2005 (when the Pub. L.
108-173 mandated threshold became effective) to the third quarter of CY
2007. We then rounded the resulting dollar amount to the nearest $5
increment in order to determine the CY 2007 threshold amount of $55.
Using the same methodology as that used in CY 2007 (which is discussed
in more detail in the CY 2007 OPPS/ASC final rule with comment period
(71 FR 68085 through 68086)), we set the packaging threshold for
establishing separate APCs for drugs and biologicals at $125 for CY
2019 (83 FR 58963 through 58964).
Following the CY 2007 methodology, for this CY 2020 OPPS/ASC
proposed rule, we used the most recently available four quarter moving
average PPI levels to trend the $50 threshold forward from the third
quarter of CY 2005 to the third quarter of CY 2020 and rounded the
resulting dollar amount ($131.19) to the nearest $5 increment, which
yielded a figure of $130. In performing this calculation, we used the
most recent forecast of the quarterly index levels for the PPI for
Pharmaceuticals for Human Use (Prescription) (Bureau of Labor
Statistics series code WPUSI07003) from CMS' Office of the Actuary. For
this CY 2020 OPPS/ASC proposed rule, based on these calculations using
the CY 2007 OPPS methodology, we are proposing a packaging threshold
for CY 2020 of $130.
b. Proposed Packaging of Payment for HCPCS Codes That Describe Certain
Drugs, Certain Biologicals, and Therapeutic Radiopharmaceuticals Under
the Cost Threshold (``Threshold-Packaged Drugs'')
To determine the proposed CY 2020 packaging status for all nonpass-
through drugs and biologicals that are not policy packaged, we
calculated, on a HCPCS code-specific basis, the per day cost of all
drugs, biologicals, and therapeutic radiopharmaceuticals (collectively
called ``threshold-packaged'' drugs) that had a HCPCS code in CY 2018
and were paid (via packaged or separate payment) under the OPPS. We
used data from CY 2018 claims processed before January 1, 2019 for this
calculation. However, we did not perform this calculation for those
drugs and biologicals with multiple HCPCS codes that include different
dosages, as described in section V.B.1.d. of this proposed rule, or for
the following policy-packaged items that we are proposing to continue
to package in CY 2020: Anesthesia drugs; drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure; and drugs and biologicals that function
as supplies when used in a surgical procedure.
In order to calculate the per day costs for drugs, biologicals, and
therapeutic radiopharmaceuticals to determine their proposed packaging
status in CY 2020, we used the methodology that was
[[Page 39497]]
described in detail in the CY 2006 OPPS proposed rule (70 FR 42723
through 42724) and finalized in the CY 2006 OPPS final rule with
comment period (70 FR 68636 through 68638). For each drug and
biological HCPCS code, we used an estimated payment rate of ASP+6
percent (which is the payment rate we are proposing for separately
payable drugs and biologicals for CY 2020, as discussed in more detail
in section V.B.2.b. of this proposed rule) to calculate the CY 2020
proposed rule per day costs. We used the manufacturer-submitted ASP
data from the fourth quarter of CY 2018 (data that were used for
payment purposes in the physician's office setting, effective April 1,
2019) to determine the proposed rule per day cost.
As is our standard methodology, for CY 2020, we are proposing to
use payment rates based on the ASP data from the first quarter of CY
2019 for budget neutrality estimates, packaging determinations, impact
analyses, and completion of Addenda A and B to this proposed rule
(which are available via the internet on the CMS website) because these
are the most recent data available for use at the time of development
of this proposed rule. These data also were the basis for drug payments
in the physician's office setting, effective April 1, 2019. For items
that did not have an ASP-based payment rate, such as some therapeutic
radiopharmaceuticals, we used their mean unit cost derived from the CY
2018 hospital claims data to determine their per day cost.
We are proposing to package items with a per day cost less than or
equal to $130, and identify items with a per day cost greater than $130
as separately payable unless they are policy-packaged. Consistent with
our past practice, we cross-walked historical OPPS claims data from the
CY 2018 HCPCS codes that were reported to the CY 2019 HCPCS codes that
we display in Addendum B to this proposed rule (which is available via
the internet on the CMS website) for proposed payment in CY 2020.
Our policy during previous cycles of the OPPS has been to use
updated ASP and claims data to make final determinations of the
packaging status of HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals for the OPPS/ASC final rule with comment period.
We note that it is also our policy to make an annual packaging
determination for a HCPCS code only when we develop the OPPS/ASC final
rule with comment period for the update year. Only HCPCS codes that are
identified as separately payable in the final rule with comment period
are subject to quarterly updates. For our calculation of per day costs
of HCPCS codes for drugs and biologicals in this CY 2020 OPPS/ASC
proposed rule, we are proposing to use ASP data from the fourth quarter
of CY 2018, which is the basis for calculating payment rates for drugs
and biologicals in the physician's office setting using the ASP
methodology, effective April 1, 2019, along with updated hospital
claims data from CY 2018. We note that we also are proposing to use
these data for budget neutrality estimates and impact analyses for this
CY 2020 OPPS/ASC proposed rule.
Payment rates for HCPCS codes for separately payable drugs and
biologicals included in Addenda A and B for the final rule with comment
period will be based on ASP data from the third quarter of CY 2019.
These data will be the basis for calculating payment rates for drugs
and biologicals in the physician's office setting using the ASP
methodology, effective October 1, 2019. These payment rates would then
be updated in the January 2020 OPPS update, based on the most recent
ASP data to be used for physician's office and OPPS payment as of
January 1, 2020. For items that do not currently have an ASP-based
payment rate, we are proposing to recalculate their mean unit cost from
all of the CY 2018 claims data and updated cost report information
available for the CY 2020 final rule with comment period to determine
their final per day cost.
Consequently, the packaging status of some HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals in this proposed rule
may be different from the same drugs' HCPCS codes' packaging status
determined based on the data used for the final rule with comment
period. Under such circumstances, we are proposing to continue to
follow the established policies initially adopted for the CY 2005 OPPS
(69 FR 65780) in order to more equitably pay for those drugs whose
costs fluctuate relative to the proposed CY 2020 OPPS drug packaging
threshold and the drug's payment status (packaged or separately
payable) in CY 2019. These established policies have not changed for
many years and are the same as described in the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70434). Specifically, for CY 2020,
consistent with our historical practice, we are proposing to apply the
following policies to these HCPCS codes for drugs, biologicals, and
therapeutic radiopharmaceuticals whose relationship to the drug
packaging threshold changes based on the updated drug packaging
threshold and on the final updated data:
HCPCS codes for drugs and biologicals that were paid
separately in CY 2019 and that are proposed for separate payment in CY
2020, and that then have per day costs equal to or less than the CY
2020 final rule drug packaging threshold, based on the updated ASPs and
hospital claims data used for the CY 2020 final rule, would continue to
receive separate payment in CY 2020.
HCPCS codes for drugs and biologicals that were packaged
in CY 2019 and that are proposed for separate payment in CY 2020, and
that then have per day costs equal to or less than the CY 2020 final
rule drug packaging threshold, based on the updated ASPs and hospital
claims data used for the CY 2020 final rule, would remain packaged in
CY 2020.
HCPCS codes for drugs and biologicals for which we
proposed packaged payment in CY 2020 but that then have per-day costs
greater than the CY 2020 final rule drug packaging threshold, based on
the updated ASPs and hospital claims data used for the CY 2020 final
rule, would receive separate payment in CY 2020.
c. Policy Packaged Drugs, Biologicals, and Radiopharmaceuticals
As mentioned earlier in this section, in the OPPS, we package
several categories of drugs, biologicals, and radiopharmaceuticals,
regardless of the cost of the products. Because the products are
packaged according to the policies in 42 CFR 419.2(b), we refer to
these packaged drugs, biologicals, and radiopharmaceuticals as
``policy-packaged'' drugs, biologicals, and radiopharmaceuticals. These
policies are either longstanding or based on longstanding principles
and inherent to the OPPS and are as follows:
Anesthesia, certain drugs, biologicals, and other
pharmaceuticals; medical and surgical supplies and equipment; surgical
dressings; and devices used for external reduction of fractures and
dislocations (Sec. 419.2(b)(4));
Intraoperative items and services (Sec. 419.2(b)(14));
Drugs, biologicals, and radiopharmaceuticals that function
as supplies when used in a diagnostic test or procedure (including, but
not limited to, diagnostic radiopharmaceuticals, contrast agents, and
pharmacologic stress agents) (Sec. 419.2(b)(15)); and
Drugs and biologicals that function as supplies when used
in a surgical procedure (including, but not limited to,
[[Page 39498]]
skin substitutes and similar products that aid wound healing and
implantable biologicals) (Sec. 419.2(b)(16)).
The policy at Sec. 419.2(b)(16) is broader than that at Sec.
419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with
comment period: ``We consider all items related to the surgical outcome
and provided during the hospital stay in which the surgery is
performed, including postsurgical pain management drugs, to be part of
the surgery for purposes of our drug and biological surgical supply
packaging policy'' (79 FR 66875). The category described by Sec.
419.2(b)(15) is large and includes diagnostic radiopharmaceuticals,
contrast agents, stress agents, and some other products. The category
described by Sec. 419.2(b)(16) includes skin substitutes and some
other products. We believe it is important to reiterate that cost
consideration is not a factor when determining whether an item is a
surgical supply (79 FR 66875).
d. Proposed Packaging Determination for HCPCS Codes That Describe the
Same Drug or Biological but Different Dosages
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490
through 60491), we finalized a policy to make a single packaging
determination for a drug, rather than an individual HCPCS code, when a
drug has multiple HCPCS codes describing different dosages because we
believed that adopting the standard HCPCS code-specific packaging
determinations for these codes could lead to inappropriate payment
incentives for hospitals to report certain HCPCS codes instead of
others. We continue to believe that making packaging determinations on
a drug-specific basis eliminates payment incentives for hospitals to
report certain HCPCS codes for drugs and allows hospitals flexibility
in choosing to report all HCPCS codes for different dosages of the same
drug or only the lowest dosage HCPCS code. Therefore, we are proposing
to continue our policy to make packaging determinations on a drug-
specific basis, rather than a HCPCS code-specific basis, for those
HCPCS codes that describe the same drug or biological but different
dosages in CY 2020.
For CY 2020, in order to propose a packaging determination that is
consistent across all HCPCS codes that describe different dosages of
the same drug or biological, we aggregated both our CY 2018 claims data
and our pricing information at ASP+6 percent across all of the HCPCS
codes that describe each distinct drug or biological in order to
determine the mean units per day of the drug or biological in terms of
the HCPCS code with the lowest dosage descriptor. The following drugs
did not have pricing information available for the ASP methodology for
this CY 2020 OPPS/ASC proposed rule, and as is our current policy for
determining the packaging status of other drugs, we used the mean unit
cost available from the CY 2018 claims data to make the proposed
packaging determinations for these drugs: HCPCS code J1840 (Injection,
kanamycin sulfate, up to 500 mg); HCPCS code J1850 (Injection,
kanamycin sulfate, up to 75 mg); HCPCS code J3472 (Injection,
hyaluronidase, ovine, preservative free, per 1,000 usp units); HCPCS
code J7100 (Infusion, dextran 40, 500 ml); and HCPCS code J7110
(Infusion, dextran 75, 500 ml).
For all other drugs and biologicals that have HCPCS codes
describing different doses, we then multiplied the proposed weighted
average ASP+6 percent per unit payment amount across all dosage levels
of a specific drug or biological by the estimated units per day for all
HCPCS codes that describe each drug or biological from our claims data
to determine the estimated per day cost of each drug or biological at
less than or equal to the proposed CY 2020 drug packaging threshold of
$130 (so that all HCPCS codes for the same drug or biological would be
packaged) or greater than the proposed CY 2020 drug packaging threshold
of $130 (so that all HCPCS codes for the same drug or biological would
be separately payable). The proposed packaging status of each drug and
biological HCPCS code to which this methodology would apply in CY 2020
is displayed in Table 18.
BILLING CODE 4120-01-P
[[Page 39499]]
[GRAPHIC] [TIFF OMITTED] TP09AU19.035
BILLING CODE 4120-01-C
2. Proposed Payment for Drugs and Biologicals Without Pass-Through
Status That Are Not Packaged
a. Proposed Payment for Specified Covered Outpatient Drugs (SCODs) and
Other Separately Payable Drugs and Biologicals
Section 1833(t)(14) of the Act defines certain separately payable
radiopharmaceuticals, drugs, and biologicals and mandates specific
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
``specified covered outpatient drug'' (known as a SCOD) is defined as a
covered outpatient drug, as defined in section 1927(k)(2) of the Act,
for which a separate APC has been established and that either is a
radiopharmaceutical agent or is a drug or biological for which payment
was made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
biologicals are designated as exceptions and are not included in the
definition of SCODs. These exceptions are--
A drug or biological for which payment is first made on or
after January 1, 2003, under the transitional pass-through payment
provision in section 1833(t)(6) of the Act.
A drug or biological for which a temporary HCPCS code has
not been assigned.
[[Page 39500]]
During CYs 2004 and 2005, an orphan drug (as designated by
the Secretary).
Section 1833(t)(14)(A)(iii) of the Act requires that payment for
SCODs in CY 2006 and subsequent years be equal to the average
acquisition cost for the drug for that year as determined by the
Secretary, subject to any adjustment for overhead costs and taking into
account the hospital acquisition cost survey data collected by the
Government Accountability Office (GAO) in CYs 2004 and 2005, and later
periodic surveys conducted by the Secretary as set forth in the
statute. If hospital acquisition cost data are not available, the law
requires that payment be equal to payment rates established under the
methodology described in section 1842(o), section 1847A, or section
1847B of the Act, as calculated and adjusted by the Secretary as
necessary for purposes of paragraph (14). We refer to this alternative
methodology as the ``statutory default.'' Most physician Part B drugs
are paid at ASP+6 percent in accordance with section 1842(o) and
section 1847A of the Act.
Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in
OPPS payment rates for SCODs to take into account overhead and related
expenses, such as pharmacy services and handling costs. Section
1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead
and related expenses and to make recommendations to the Secretary
regarding whether, and if so how, a payment adjustment should be made
to compensate hospitals for overhead and related expenses. Section
1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the
weights for ambulatory procedure classifications for SCODs to take into
account the findings of the MedPAC study.\57\
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\57\ Medicare Payment Advisory Committee. June 2005 Report to
the Congress. Chapter 6: Payment for pharmacy handling costs in
hospital outpatient departments. Available at: http://www.medpac.gov/docs/default-source/reports/June05_ch6.pdf?sfvrsn=0.
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It has been our policy since CY 2006 to apply the same treatment to
all separately payable drugs and biologicals, which include SCODs, and
drugs and biologicals that are not SCODs. Therefore, we apply the
payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs,
as required by statute, but we also apply it to separately payable
drugs and biologicals that are not SCODs, which is a policy
determination rather than a statutory requirement. In this CY 2020
OPPS/ASC proposed rule, we are proposing to apply section
1833(t)(14)(A)(iii)(II) of the Act to all separately payable drugs and
biologicals, including SCODs. Although we do not distinguish SCODs in
this discussion, we note that we are required to apply section
1833(t)(14)(A)(iii)(II) of the Act to SCODs, but we also are applying
this provision to other separately payable drugs and biologicals,
consistent with our history of using the same payment methodology for
all separately payable drugs and biologicals.
For a detailed discussion of our OPPS drug payment policies from CY
2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68383 through 68385). In the CY 2013 OPPS/
ASC final rule with comment period (77 FR 68386 through 68389), we
first adopted the statutory default policy to pay for separately
payable drugs and biologicals at ASP+6 percent based on section
1833(t)(14)(A)(iii)(II) of the Act. We continued this policy of paying
for separately payable drugs and biologicals at the statutory default
for CYs 2014 through 2019.
b. Proposed CY 2020 Payment Policy
For CY 2020, we are proposing to continue our payment policy that
has been in effect since CY 2013 to pay for separately payable drugs
and biologicals at ASP+6 percent in accordance with section
1833(t)(14)(A)(iii)(II) of the Act (the statutory default). We are
proposing to continue to pay for separately payable nonpass-through
drugs acquired with a 340B discount at a rate of ASP minus 22.5
percent, but are also soliciting comments on alternative policies as
well as the appropriate remedy for CYs 2018 and 2019 in the event that
we do not prevail on appeal in the pending litigation, as discussed in
greater detail later in this section. We refer readers to the CY 2018
OPPS/ASC final rule with comment period (82 FR 59353 through 59371) and
the CY 2019 OPPS/ASC final rule with comment period (83 FR 58979
through 58981) for more information about how the payment rate for
drugs acquired with a 340B discount was established.
In the case of a drug or biological during an initial sales period
in which data on the prices for sales for the drug or biological are
not sufficiently available from the manufacturer, section 1847A(c)(4)
of the Act permits the Secretary to make payments that are based on
WAC. Under section 1833(t)(14)(A)(iii)(II), the amount of payment for a
separately payable drug equals the average price for the drug for the
year established under, among other authorities, section 1847A of the
Act. As explained in greater detail in the CY 2019 PFS final rule,
under section 1847A(c)(4), although payments may be based on WAC,
unlike section 1847A(b) of the Act (which specifies that payments using
ASP or WAC must be made with a 6 percent add-on), section 1847A(c)(4)
of the Act does not require that a particular add-on amount be applied
to WAC-based pricing for this initial period when ASP data is not
available. Consistent with section 1847A(c)(4) of the Act, in the CY
2019 PFS final rule (83 FR 59661 to 59666), we finalized a policy that,
effective January 1, 2019, WAC-based payments for Part B drugs made
under section 1847A(c)(4) of the Act will utilize a 3-percent add-on in
place of the 6-percent add-on that was being used according to our
policy in effect as of CY 2018. For the CY 2019 OPPS, we followed the
same policy finalized in the CY 2019 PFS final rule (83 FR 59661 to
59666). For the CY 2020 OPPS, we are proposing to continue to utilize a
3 percent add-on instead of a 6-percent add-on for WAC-based drugs
pursuant to our authority under section 1833(t)(14)(A)(iii)(II) of the
Act, which provides, in part, that the amount of payment for a SCOD is
the average price of the drug in the year established under section
1847A of the Act. We also are proposing to apply this provision to non-
SCOD separately payable drugs. Because we are proposing to establish
the average price for a WAC-based drug under section 1847A of the Act
as WAC+3 percent instead of WAC+6 percent, we believe it is appropriate
to price separately payable WAC-based drugs at the same amount under
the OPPS. We are proposing that, if finalized, our proposal to pay for
drugs or biologicals at WAC+3 percent, rather than WAC+6 percent, would
apply whenever WAC-based pricing is used for a drug or biological. For
drugs and biologicals that would otherwise be subject to a payment
reduction because they were acquired under the 340B Program, the 340B
Program rate (in this case, WAC minus 22.5 percent) would continue to
apply. We refer readers to the CY 2019 PFS final rule (83 FR 59661 to
59666) for additional background on this proposal.
We are proposing that payments for separately payable drugs and
biologicals are included in the budget neutrality adjustments, under
the requirements in section 1833(t)(9)(B) of the Act. We also are
proposing that the budget neutral weight scalar not be applied in
determining payments for these separately paid drugs and biologicals.
We note that separately payable drug and biological payment rates
listed in Addenda A and B to this proposed rule
[[Page 39501]]
(available via the internet on the CMS website), which illustrate the
proposed CY 2020 payment of ASP+6 percent for separately payable
nonpass-through drugs and biologicals and ASP+6 percent for pass-
through drugs and biologicals, reflect either ASP information that is
the basis for calculating payment rates for drugs and biologicals in
the physician's office setting effective April 1, 2019, or WAC, AWP, or
mean unit cost from CY 2018 claims data and updated cost report
information available for this proposed rule. In general, these
published payment rates are not the same as the actual January 2020
payment rates. This is because payment rates for drugs and biologicals
with ASP information for January 2020 will be determined through the
standard quarterly process where ASP data submitted by manufacturers
for the third quarter of CY 2019 (July 1, 2019 through September 30,
2019) will be used to set the payment rates that are released for the
quarter beginning in January 2020 near the end of December 2019. In
addition, payment rates for drugs and biologicals in Addenda A and B to
this proposed rule for which there was no ASP information available for
April 2019 are based on mean unit cost in the available CY 2018 claims
data. If ASP information becomes available for payment for the quarter
beginning in January 2020, we will price payment for these drugs and
biologicals based on their newly available ASP information. Finally,
there may be drugs and biologicals that have ASP information available
for this proposed rule (reflecting April 2019 ASP data) that do not
have ASP information available for the quarter beginning in January
2020. These drugs and biologicals would then be paid based on mean unit
cost data derived from CY 2018 hospital claims. Therefore, the proposed
payment rates listed in Addenda A and B to this proposed rule are not
for January 2020 payment purposes and are only illustrative of the CY
2020 OPPS payment methodology using the most recently available
information at the time of issuance of this proposed rule.
c. Biosimilar Biological Products
For CY 2016 and CY 2017, we finalized a policy to pay for
biosimilar biological products based on the payment allowance of the
product as determined under section 1847A of the Act and to subject
nonpass-through biosimilar biological products to our annual threshold-
packaged policy (for CY 2016, 80 FR 70445 through 70446; and for CY
2017, 81 FR 79674). In the CY 2018 OPPS/ASC proposed rule (82 FR
33630), for CY 2018, we proposed to continue this same payment policy
for biosimilar biological products.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59351), we noted that, with respect to comments we received regarding
OPPS payment for biosimilar biological products, in the CY 2018 PFS
final rule, CMS finalized a policy to implement separate HCPCS codes
for biosimilar biological products. Therefore, consistent with our
established OPPS drug, biological, and radiopharmaceutical payment
policy, HCPCS coding for biosimilar biological products is based on
policy established under the CY 2018 PFS final rule.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59351), after consideration of the public comments we received, we
finalized our proposed payment policy for biosimilar biological
products, with the following technical correction: All biosimilar
biological products are eligible for pass-through payment and not just
the first biosimilar biological product for a reference product. In the
CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed
to continue the policy in place from CY 2018 to make all biosimilar
biological products eligible for pass-through payment and not just the
first biosimilar biological product for a reference product.
In addition, in CY 2018, we adopted a policy that biosimilars
without pass-through payment status that were acquired under the 340B
Program would be paid the ASP of the biosimilar minus 22.5 percent of
the reference product's ASP (82 FR 59367). We adopted this policy in
the CY 2018 OPPS/ASC final rule with comment period because we believe
that biosimilars without pass-through payment status acquired under the
340B Program should be treated in the same manner as other drugs and
biologicals acquired through the 340B Program. As noted earlier,
biosimilars with pass-through payment status are paid their own ASP+6
percent of the reference product's ASP. Separately payable biosimilars
that do not have pass-through payment status and are not acquired under
the 340B Program are also paid their own ASP+6 percent of the reference
product's ASP. If a biosimilar does not have ASP pricing, but instead
has WAC pricing, the WAC pricing add-on of either 3 percent or 6
percent is calculated from the biosimilar's WAC and is not calculated
from the WAC price of the reference product.
As noted in the CY 2019 OPPS/ASC proposed rule (83 FR 37123),
several stakeholders raised concerns to us that the current payment
policy for biosimilars acquired under the 340B Program could unfairly
lower the OPPS payment for biosimilars not on pass-through payment
status because the payment reduction would be based on the reference
product's ASP, which would generally be expected to be priced higher
than the biosimilar, thus resulting in a more significant reduction in
payment than if the 22.5 percent was calculated based on the
biosimilar's ASP. We agreed with stakeholders that the current payment
policy could unfairly lower the price of biosimilars without pass-
through payment status that are acquired under the 340B Program. In
addition, we believed that these changes would better reflect the
resources and production costs that biosimilar manufacturers incur. We
also believed this approach is more consistent with the payment
methodology for 340B-acquired drugs and biologicals, for which the 22.5
percent reduction is calculated based on the drug or biological's ASP,
rather than the ASP of another product. In addition, we believed that
paying for biosimilars acquired under the 340B Program at ASP minus
22.5 percent of the biosimilar's ASP, rather than 22.5 percent of the
reference product's ASP, will more closely approximate hospitals'
acquisition costs for these products.
Accordingly, in the CY 2019 OPPS/ASC proposed rule (83 FR 37123),
for CY 2019, we proposed changes to our Medicare Part B drug payment
methodology for biosimilars acquired under the 340B Program.
Specifically, for CY 2019 and subsequent years, in accordance with
section 1833(t)(14)(A)(iii)(II) of the Act, we proposed to pay nonpass-
through biosimilars acquired under the 340B Program at ASP minus 22.5
percent of the biosimilar's ASP instead of the biosimilar's ASP minus
22.5 percent of the reference product's ASP. This proposal was
finalized without modification in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58977).
For CY 2020, we are proposing to continue our policy to make all
biosimilar biological products eligible for pass-through payment and
not just the first biosimilar biological product for a reference
product. We also are proposing to continue our policy to pay nonpass-
through biosimilars acquired under the 340B Program at the biosimilar's
ASP minus 22.5 percent of the biosimilar's ASP instead of the
biosimilar's ASP minus 22.5 percent of the reference product's ASP, in
accordance with section 1833(t)(14)(A)(iii)(II) of the Act. In
[[Page 39502]]
addition, as discussed further below, we are soliciting comments on the
appropriate remedy in the event of an adverse decision on appeal in the
litigation related to our policy for payment of 340B-acquired drugs and
biologicals, and we are specifically soliciting comments here on
whether paying for 340B-acquired biosimilars at ASP+3 percent of the
reference product's ASP would be an appropriate policy in line with
that discussion.
3. Proposed Payment Policy for Therapeutic Radiopharmaceuticals
For CY 2020, we are proposing to continue the payment policy for
therapeutic radiopharmaceuticals that began in CY 2010. We pay for
separately payable therapeutic radiopharmaceuticals under the ASP
methodology adopted for separately payable drugs and biologicals. If
ASP information is unavailable for a therapeutic radiopharmaceutical,
we base therapeutic radiopharmaceutical payment on mean unit cost data
derived from hospital claims. We believe that the rationale outlined in
the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524
through 60525) for applying the principles of separately payable drug
pricing to therapeutic radiopharmaceuticals continues to be appropriate
for nonpass-through, separately payable therapeutic
radiopharmaceuticals in CY 2020. Therefore, we are proposing for CY
2020 to pay all nonpass-through, separately payable therapeutic
radiopharmaceuticals at ASP+6 percent, based on the statutory default
described in section 1833(t)(14)(A)(iii)(II) of the Act. For a full
discussion of ASP-based payment for therapeutic radiopharmaceuticals,
we refer readers to the CY 2010 OPPS/ASC final rule with comment period
(74 FR 60520 through 60521). We also are proposing to rely on CY 2018
mean unit cost data derived from hospital claims data for payment rates
for therapeutic radiopharmaceuticals for which ASP data are unavailable
and to update the payment rates for separately payable therapeutic
radiopharmaceuticals according to our usual process for updating the
payment rates for separately payable drugs and biologicals on a
quarterly basis if updated ASP information is unavailable. For a
complete history of the OPPS payment policy for therapeutic
radiopharmaceuticals, we refer readers to the CY 2005 OPPS final rule
with comment period (69 FR 65811), the CY 2006 OPPS final rule with
comment period (70 FR 68655), and the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60524). The proposed CY 2020 payment rates for
nonpass-through, separately payable therapeutic radiopharmaceuticals
are included in Addenda A and B to this proposed rule (which are
available via the internet on the CMS website).
4. Proposed Payment for Blood Clotting Factors
For CY 2019, we provided payment for blood clotting factors under
the same methodology as other nonpass-through separately payable drugs
and biologicals under the OPPS and continued paying an updated
furnishing fee (83 FR 58979). That is, for CY 2019, we provided payment
for blood clotting factors under the OPPS at ASP+6 percent, plus an
additional payment for the furnishing fee. We note that when blood
clotting factors are provided in physicians' offices under Medicare
Part B and in other Medicare settings, a furnishing fee is also applied
to the payment. The CY 2019 updated furnishing fee was $0.220 per unit.
For CY 2020, we are proposing to pay for blood clotting factors at
ASP+6 percent, consistent with our proposed payment policy for other
nonpass-through, separately payable drugs and biologicals, and to
continue our policy for payment of the furnishing fee using an updated
amount. Our policy to pay for a furnishing fee for blood clotting
factors under the OPPS is consistent with the methodology applied in
the physician's office and in the inpatient hospital setting. These
methodologies were first articulated in the CY 2006 OPPS final rule
with comment period (70 FR 68661) and later discussed in the CY 2008
OPPS/ASC final rule with comment period (72 FR 66765). The proposed
furnishing fee update is based on the percentage increase in the
Consumer Price Index (CPI) for medical care for the 12-month period
ending with June of the previous year. Because the Bureau of Labor
Statistics releases the applicable CPI data after the PFS and OPPS/ASC
proposed rules are published, we are not able to include the actual
updated furnishing fee in the proposed rules. Therefore, in accordance
with our policy, as finalized in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66765), we are proposing to announce the actual
figure for the percent change in the applicable CPI and the updated
furnishing fee calculated based on that figure through applicable
program instructions and posting on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
5. Proposed Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims
Data
For CY 2020, we are proposing to continue to use the same payment
policy as in CY 2019 for nonpass-through drugs, biologicals, and
radiopharmaceuticals with HCPCS codes but without OPPS hospital claims
data, which describes how we determine the payment rate for drugs,
biologicals, or radiopharmaceuticals without an ASP. For a detailed
discussion of the payment policy and methodology, we refer readers to
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70442
through 70443). The proposed CY 2020 payment status of each of the
nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS
codes but without OPPS hospital claims data is listed in Addendum B to
this proposed rule, which is available via the internet on the CMS
website.
The proposed CY 2020 payment status of each of the nonpass-through
drugs, biologicals, and radiopharmaceuticals with HCPCS codes but
without OPPS hospital claims data is listed in Addendum B to this
proposed rule, which is available via the internet on the CMS website.
6. CY 2020 OPPS Payment Methodology for 340B Purchased Drugs
In the CY 2018 OPPS/ASC proposed rule (82 FR 33558 through 33724),
we proposed changes to the Medicare Part B drug payment methodology for
340B hospitals. We proposed these changes to better, and more
accurately, reflect the resources and acquisition costs that these
hospitals incur. We believed that such changes would allow Medicare
beneficiaries (and the Medicare program) to pay a more appropriate
amount when hospitals participating in the 340B Program furnish drugs
to Medicare beneficiaries that are purchased under the 340B Program.
Subsequently, in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59369 through 59370), we finalized our proposal and adjusted the
payment rate for separately payable drugs and biologicals (other than
drugs on pass-through payment status and vaccines) acquired under the
340B Program from average sales price (ASP)+6 percent to ASP minus 22.5
percent. We stated that our goal was to make Medicare payment for
separately payable drugs more aligned with the resources expended by
hospitals to acquire such drugs, while recognizing the intent of the
340B
[[Page 39503]]
Program to allow covered entities, including eligible hospitals, to
stretch scarce resources in ways that enable hospitals to continue
providing access to care for Medicare beneficiaries and other patients.
Critical access hospitals are not included in this 340B policy change
because they are paid under section 1834(g) of the Act. We also
excepted rural sole community hospitals, children's hospitals, and PPS-
exempt cancer hospitals from the 340B payment adjustment in CY 2018. In
addition, as stated in the CY 2018 OPPS/ASC final rule with comment
period, this policy change does not apply to drugs on pass-through
payment status, which are required to be paid based on the ASP
methodology, or vaccines, which are excluded from the 340B Program.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699
through 79706), we implemented section 603 of the Bipartisan Budget Act
of 2015. As a general matter, applicable items and services furnished
in certain off-campus outpatient departments of a provider on or after
January 1, 2017 are not considered covered outpatient services for
purposes of payment under the OPPS and are paid ``under the applicable
payment system,'' which is generally the Physician Fee Schedule (PFS).
However, consistent with our policy to pay separately payable, covered
outpatient drugs and biologicals acquired under the 340B Program at ASP
minus 22.5 percent, rather than ASP+6 percent, when billed by a
hospital paid under the OPPS that is not excepted from the payment
adjustment, in the CY 2019 OPPS/ASC final rule with comment period (83
FR 59015 through 59022), we finalized a policy to pay ASP minus 22.5
percent for 340B-acquired drugs and biologicals furnished in
nonexcepted off-campus PBDs paid under the PFS. We adopted this payment
policy effective for CY 2019 and for subsequent years.
As discussed in the CY 2019 OPPS/ASC proposed rule (83 FR 37125),
another topic that had been brought to our attention since we finalized
the payment adjustment for 340B-acquired drugs in the CY 2018 OPPS/ASC
final rule with comment period was whether drugs that do not have ASP
pricing but instead receive WAC or AWP pricing are subject to the 340B
payment adjustment. We did not receive public comments on this topic in
response to the CY 2018 OPPS/ASC proposed rule. However, we since heard
from stakeholders that there had been some confusion about this issue.
We clarified in the CY 2019 proposed rule that the 340B payment
adjustment applies to drugs that are priced using either WAC or AWP,
and it has been our policy to subject 340B-acquired drugs that use
these pricing methodologies to the 340B payment adjustment since the
policy was first adopted. The 340B payment adjustment for WAC-priced
drugs is WAC minus 22.5 percent and AWP-priced drugs have a payment
rate of 69.46 percent of AWP when the 340B payment adjustment is
applied. The 69.46 percent of AWP is calculated by first reducing the
original 95 percent of AWP price by 6 percent to generate a value that
is similar to ASP or WAC with no percentage markup. Then we apply the
22.5 percent reduction to ASP/WAC-similar AWP value to obtain the 69.46
percent of AWP, which is similar to either ASP minus 22.5 percent or
WAC minus 22.5 percent. The number of separately payable drugs
receiving WAC or AWP pricing that are affected by the 340B payment
adjustment is small--consisting of less than 10 percent of all
separately payable Medicare Part B drugs in April 2018.
Furthermore, data limitations previously inhibited our ability to
identify which drugs were acquired under the 340B Program in the
Medicare OPPS claims data. This lack of information within the claims
data has limited researchers' and our ability to precisely analyze
differences in acquisition cost of 340B and non-340B acquired drugs
with Medicare claims data. Accordingly, in the CY 2018 OPPS/ASC
proposed rule (82 FR 33633), we stated our intent to establish a
modifier, to be effective January 1, 2018, for hospitals to report with
separately payable drugs that were not acquired under the 340B Program.
Because a significant portion of hospitals paid under the OPPS
participate in the 340B Program, we stated our belief that it is
appropriate to presume that a separately payable drug reported on an
OPPS claim was purchased under the 340B Program, unless the hospital
identifies that the drug was not purchased under the 340B Program. We
stated in the CY 2018 proposed rule that we intended to provide further
details about this modifier in the CY 2018 OPPS/ASC final rule with
comment period and/or through subregulatory guidance, including
guidance related to billing for dually eligible beneficiaries (that is,
beneficiaries covered under Medicare and Medicaid) for whom covered
entities do not receive a discount under the 340B Program. As discussed
in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59369
through 59370), to effectuate the payment adjustment for 340B-acquired
drugs, CMS implemented modifier ``JG'', effective January 1, 2018.
Hospitals paid under the OPPS, other than a type of hospital excluded
from the OPPS (such as critical access hospitals or those hospitals
paid under the Maryland waiver), or excepted from the 340B drug payment
policy for CY 2018, are required to report modifier ``JG'' on the same
claim line as the drug HCPCS code to identify a 340B-acquired drug. For
CY 2018, rural sole community hospitals, children's hospitals and PPS-
exempt cancer hospitals are excepted from the 340B payment adjustment.
These hospitals are required to report informational modifier ``TB''
for 340B-acquired drugs, and continue to be paid ASP+6 percent.
We refer readers to the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59353 through 59370) for a full discussion and rationale
for the CY 2018 policies and use of modifier ``JG''.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37125), for CY 2019,
we proposed to continue the 340B Program policies that were implemented
in CY 2018 with the exception of the way we calculate payment for 340B-
acquired biosimilars (that is, we proposed to pay for nonpass-through
340B-acquired biosimilars at ASP minus 22.5 percent of the biosimilar's
ASP, rather than of the reference product's ASP). More information on
our revised policy for the payment of biosimilars acquired through the
340B Program is available in section V.B.2.c. of the CY 2019 OPPS/ASC
final rule with comment period. For CY 2019, we proposed, in accordance
with section 1833(t)(14)(A)(iii)(II) of the Act, to pay for separately
payable Medicare Part B drugs (assigned status indicator ``K''), other
than vaccines and drugs on pass-through payment status, that meet the
definition of ``covered outpatient drug'' as defined in section 1927(k)
of the Act, that are acquired through the 340B Program at ASP minus
22.5 percent when billed by a hospital paid under the OPPS that is not
excepted from the payment adjustment. Medicare Part B drugs or
biologicals excluded from the 340B payment adjustment include vaccines
(assigned status indicator ``F'', ``L'' or ``M'') and drugs with OPPS
transitional pass-through payment status (assigned status indicator
``G''). As discussed in section V.B.2.c. of the CY 2019 OPPS/ASC
proposed rule, we proposed to pay nonpass-through biosimilars acquired
under the 340B Program at the biosimilar's ASP minus 22.5 percent of
the biosimilar's ASP. We also proposed for CY 2019 that Medicare would
continue to pay for
[[Page 39504]]
drugs or biologicals that were not purchased with a 340B discount at
ASP+6 percent.
As stated earlier, to effectuate the payment adjustment for 340B-
acquired drugs, CMS implemented modifier ``JG'', effective January 1,
2018. For CY 2019, we proposed that hospitals paid under the OPPS,
other than a type of hospital excluded from the OPPS, or excepted from
the 340B drug payment policy for CY 2018, continue to be required to
report modifier ``JG'' on the same claim line as the drug HCPCS code to
identify a 340B-acquired drug. We also proposed for CY 2019 that rural
sole community hospitals, children's hospitals, and PPS-exempt cancer
hospitals continue to be excepted from the 340B payment adjustment. We
proposed for CY 2019 that these hospitals be required to report
informational modifier ``TB'' for 340B-acquired drugs, and continue to
be paid ASP+6 percent. In the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58981), after consideration of the public comments we
received, we finalized our proposals without modification.
Our CY 2018 and 2019 OPPS payment policies for 340B-acquired drugs
are the subject of ongoing litigation. On December 27, 2018, in the
case of American Hospital Association et al. v. Azar et al., the United
States District Court for the District of Columbia (hereinafter
referred to as ``the district court'') concluded in the context of
reimbursement requests for CY 2018 that the Secretary exceeded his
statutory authority by adjusting the Medicare payment rates for drugs
acquired under the 340B Program to ASP minus 22.5 percent for that
year.\58\ In that same decision, the district court recognized the
```havoc that piecemeal review of OPPS payment could bring about' in
light of the budget neutrality requirement,'' and ordered supplemental
briefing on the appropriate remedy.\59\ On May 6, 2019, after briefing
on remedy, the district court issued an opinion that reiterated that
the 2018 rate reduction exceeded the Secretary's authority, and
declared that the rate reduction for 2019 (which had been finalized
since the Court's initial order was entered) also exceeded his
authority.\60\ Rather than ordering HHS to pay plaintiffs their alleged
underpayments, however, the district court recognized that crafting a
remedy is ``no easy task, given Medicare's complexity,'' \61\ and
initially remanded the issue to HHS to devise an appropriate remedy
while also retaining jurisdiction. The district court acknowledged that
``if the Secretary were to retroactively raise the 2018 and 2019 340B
rates, budget neutrality would require him to retroactively lower the
2018 and 2019 rates for other Medicare Part B products and services.''
\62\ Id. at 19. ``And because HHS has already processed claims under
the previous rates, the Secretary would potentially be required to
recoup certain payments made to providers; an expensive and time-
consuming prospect.'' \63\
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\58\ American Hosp. Ass'n, et al. v. Azar, et al., No. 1:18-cv-
2084 (D.D.C. Dec. 27, 2018).
\59\ Id. at 35 (quoting Amgen, Inc. v. Smith, 357 F.3d 103, 112
(D.C. Cir. 2004) (citations omitted)).
\60\ See May 6, 2019 Memorandum Opinion, Granting in Part
Plaintiffs' Motion for a Permanent Injunction; Remanding the 2018
and 2019 OPPS Rules to HHS at 10-12.
\61\ Id. at 13.
\62\ Id. at 19.
\63\ Id. (citing Declaration of Elizabeth Richter).
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CMS respectfully disagreed with the district court's understanding
of the scope of its adjustment authority and asked the district court
to enter final judgment so as to permit an immediate appeal. On July
10, 2019, the district court granted the government's request and
entered final judgment, and the agency does intend to pursue its appeal
rights. Nonetheless, CMS is taking the steps necessary to craft an
appropriate remedy in the event of an unfavorable decision on appeal.
Devising an appropriate remedy requires an opportunity for public
input. First, these types of changes to the OPPS must be budget
neutral, and reversal of the policy change, which raised rates for non-
drug items and services to the tune of an estimated $1.7 billion for
2018 alone, could have a significant economic impact on the
approximately 3,900 facilities that are reimbursed for outpatient items
and services covered under the OPPS. Second, any remedy is likely to
significantly affect beneficiary cost-sharing. The items and services
that could be affected by the remedy were provided to millions of
different Medicare beneficiaries, who, by statute, are required to pay
cost-sharing for such items and services, which is usually 20 percent
of the total Medicare payment rate.
CMS is soliciting initial public comment on how to formulate a
solution that accounts for all of the complexities that the district
court recognized. We intend to use this public input to further inform
the steps that are required under the Administrative Procedure Act to
provide adequate notice and an opportunity for meaningful comment on
our proposed policies, which would entail devising the specific remedy
itself, presenting the specific budget neutrality implications of that
remedy in the proposed rule, and potentially calculating all the
different payment rates under the OPPS for 340B-acquired drugs, as well
as all other items and services under the OPPS. (In essence, we would
need to provide hospitals with sufficient notice of the impact of the
remedy on their rates to enable them to comment meaningfully on the
proposed rule.) Our own best practices for preparing notices of
proposed rulemaking dictate that we begin policy development in the
year before the proposed rule is issued, and that we begin the rule
drafting process in the first quarter of each year.
In order to comply with the requirements of the Administrative
Procedure Act and our regulatory development process and calendar, we
would anticipate proposing the specific remedy for CYs 2018 and 2019,
as well as changes to the CY 2020 rates, in the next available
rulemaking vehicle, which is the CY 2021 OPPS/ASC proposed rule. Those
proposals will be informed by the comments solicited in this proposed
rule. Specifically, we are using this proposed rule to solicit comment
in advance of next year's rulemaking on approaches to the CY 2018 and
2019 remedy, as well as how best to address CY 2020 rates, so we are
poised to propose those policies in the CY 2021 rule if necessary.
Thus, for CY 2020 we are proposing to continue to pay ASP-22.5
percent for 340B-acquired drugs including when furnished in nonexcepted
off-campus PBDs paid under the PFS. Our proposal would continue the
340B Program policies that were implemented in CY 2018 with the
exception of the way we are calculating payment for 340B-acquired
biosimilars, which is discussed in section V.B.2.c. of the CY 2019
OPPS/ASC final rule with comment period, and would continue the policy
we finalized in CY 2019 to pay ASP minus 22.5 percent for 340B-acquired
drugs and biologicals furnished in nonexcepted off-campus PBDs paid
under the PFS.
We also seek public comment on the appropriate OPPS payment rate
for 340B-acquired drugs, including whether a rate of ASP+3 percent
could be an appropriate remedial payment amount for these drugs, both
for CY 2020 and for purposes of determining the remedy for CYs 2018 and
2019. To be sure, this amount would result in payment rates that are
well above the actual costs hospitals incur in purchasing 340B drugs,
and it is being proposed solely because of the court decision. However,
to the extent the courts are limiting the
[[Page 39505]]
size of the payment reduction the agency can permissibly apply, the
agency believes it could be appropriate to apply a payment reduction
that is at the upper end of that limit, to the extent it has been or
could be clearly defined, given the substantial discounts that
hospitals receive through the 340B program. For example, absent further
guidance from the Court of Appeals on what it believes is an
appropriate ``adjustment'' amount, CMS could look to the district
court's December 27, 2018 opinion, which cites to payment reductions of
0.2 percent and 2.9 percent as ``not significant enough'' to fall
outside of the Secretary's authority to ``adjust'' ASP.\64\ This
payment rate would apply to 340B-acquired drugs and biologicals billed
by a hospital paid under the OPPS that are not excepted from the
payment adjustment and to 340B-acquired drugs and biologicals furnished
in nonexcepted off-campus PBDs paid under the PFS. We welcome public
comments on payment rates other than ASP+3 percent that commenters
believe would be appropriate for purposes of addressing CY 2020 payment
as an alternative to our proposal above, as well as for potential
future rulemaking related to CY 2018 and 2019 underpayments.
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\64\ 348 F. Supp. 3d 62, 81 (D.D.C. 2018) (citing to payment
reductions of 0.2 percent and 2.9 percent that other decisions have
recognized as being within the agency's adjustment authority for
Medicare rates under the inpatient prospective payment system).
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In addition to comments on the appropriate payment amount for
calculating the remedy for CYs 2018 and 2019 and for use for CY 2020,
we also seek public comment on how to structure the remedy for CYs 2018
and 2019. This request for public comment includes comments on whether
such a remedy should be retrospective in nature (for example, made on a
claim-by-claim basis), whether such a remedy could be prospective in
nature (for example, an upward adjustment to 340B claims in the future
to account for any underpayments in the past), and whether there is
some other mechanism that could produce a result equitable to hospitals
that do not acquire drugs through the 340B program while respecting the
budget neutrality mandate.
One potential remedy for alleged underpayments in 2018 and 2019
would involve making additional payments to the parties who have
demonstrated harm from the alleged underpayments (which could be
defined as hospitals that submitted a claim for drug payment with the
``JG'' modifier in CYs 2018 and 2019) outside the normal claims
process. Under this approach, we would calculate the amount that such
hospitals should have been paid and would utilize our Medicare
contractors to make one payment to each affected hospital. This
approach--one additional payment made to each affected hospital by our
contractors--is a different approach than reprocessing each and every
claim submitted by plaintiff hospitals for 2018 and 2019. Then,
depending on when a final decision is rendered, the Secretary would
propose to budget-neutralize those additional expenditures for each of
CYs 2018 and 2019. For example, if the Court of Appeals were to render
a decision in February of 2020, under such an approach we might propose
those additional payments and an appropriate budget neutrality
adjustment for each of CYs 2018, 2019, and, if necessary, 2020, in time
for the CY 2021 rule. We note that we would need to receive a final
decision from the Court of Appeals sufficiently early in CY 2020
(likely by March 1, 2020) to make it potentially possible for us to
propose and finalize an appropriate remedy and budget neutrality
adjustments in the CY 2021 rulemaking. We solicit public comment on
this approach as well as other suggested approaches from commenters.
In considering these potential future proposals, we note that we
would rely on our statutory authority under section 1833(t)(14) for
determining the OPPS payment rates for drugs and biologicals as well as
section 1833(t)(9)(A) of the Act to review certain components of the
OPPS not less often than annually and to revise the groups, relative
payment weights, and other adjustments. In addition, we note that under
section 1833(t)(14)(H) of the Act, any adjustments made by the
Secretary to payment rates using the statutory formula outlined in
section 1833(t)(14)(A)(iii)(II) of the Act are required to be taken
into account under the budget neutrality requirements outlined in
section 1833(t)(9)(B) of the Act. We are soliciting public comments on
the best, most appropriate way to maintain budget neutrality, either
under a retrospective claim-by-claim approach, with a prospective
approach, or any other proposed remedy. We also solicit comments on
whether, depending on the amount of those additional expenditures, we
should consider spreading out the relevant budget neutrality adjustment
across multiple years. We would be interested to receive public comment
on the advantages and disadvantages of such an approach.
In addition, we are interested in public comments on the best, most
appropriate treatment of Medicare beneficiary cost-sharing
responsibilities under any proposed remedy. These issues--the statutory
budget neutrality requirement and beneficiary cost-sharing--are
extremely difficult to balance, and we are interested in stakeholder
comments as we continue to review the viability of alternative remedies
in the event of an adverse decision from the Court of Appeals.
We refer readers to the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59369 through 59370) and the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58976 through 58977 and 59015 through 59022)
for more detail on the policies implemented in CY 2018 and CY 2019 for
drugs acquired through the 340B Program.
7. Proposed High Cost/Low Cost Threshold for Packaged Skin Substitutes
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
74938), we unconditionally packaged skin substitute products into their
associated surgical procedures as part of a broader policy to package
all drugs and biologicals that function as supplies when used in a
surgical procedure. As part of the policy to finalize the packaging of
skin substitutes, we also finalized a methodology that divides the skin
substitutes into a high cost group and a low cost group, in order to
ensure adequate resource homogeneity among APC assignments for the skin
substitute application procedures (78 FR 74933).
Skin substitutes assigned to the high cost group are described by
HCPCS codes 15271 through 15278. Skin substitutes assigned to the low
cost group are described by HCPCS codes C5271 through C5278. Geometric
mean costs for the various procedures are calculated using only claims
for the skin substitutes that are assigned to each group. Specifically,
claims billed with HCPCS code 15271, 15273, 15275, or 15277 are used to
calculate the geometric mean costs for procedures assigned to the high
cost group, and claims billed with HCPCS code C5271, C5273, C5275, or
C5277 are used to calculate the geometric mean costs for procedures
assigned to the low cost group (78 FR 74935).
Each of the HCPCS codes described above are assigned to one of the
following three skin procedure APCs according to the geometric mean
cost for the code: APC 5053 (Level 3 Skin Procedures): HCPCS codes
C5271, C5275, and C5277); APC 5054 (Level 4 Skin Procedures): HCPCS
codes C5273, 15271, 15275, and 15277); or APC 5055 (Level 5 Skin
Procedures): HCPCS code 15273). In CY 2019, the payment rate for
[[Page 39506]]
APC 5053 (Level 3 Skin Procedures) was $482.89, the payment rate for
APC 5054 (Level 4 Skin Procedures) was $1,548.96, and the payment rate
for APC 5055 (Level 5 Skin Procedures) was $2,766.13. This information
also is available in Addenda A and B of the CY 2019 OPPS/ASC final rule
with comment period (which is available via the internet on the CMS
website).
We have continued the high cost/low cost categories policy since CY
2014, and we are proposing to continue it for CY 2020. Under this
current policy, skin substitutes in the high cost category are reported
with the skin substitute application CPT codes, and skin substitutes in
the low cost category are reported with the analogous skin substitute
HCPCS C-codes. For a discussion of the CY 2014 and CY 2015
methodologies for assigning skin substitutes to either the high cost
group or the low cost group, we refer readers to the CY 2014 OPPS/ASC
final rule with comment period (78 FR 74932 through 74935) and the CY
2015 OPPS/ASC final rule with comment period (79 FR 66882 through
66885).
For a discussion of the high cost/low cost methodology that was
adopted in CY 2016 and has been in effect since then, we refer readers
to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70434
through 70435). For CY 2020, consistent with our policy since CY 2016,
we are proposing to continue to determine the high cost/low cost status
for each skin substitute product based on either a product's geometric
mean unit cost (MUC) exceeding the geometric MUC threshold or the
product's per day cost (PDC) (the total units of a skin substitute
multiplied by the mean unit cost and divided by the total number of
days) exceeding the PDC threshold. For CY 2020, as we did for CY 2019,
we are proposing to assign each skin substitute that exceeds either the
MUC threshold or the PDC threshold to the high cost group. In addition,
as described in more detail later in this section, for CY 2020, as we
did for CY 2019, we are proposing to assign any skin substitute with a
MUC or a PDC that does not exceed either the MUC threshold or the PDC
threshold to the low cost group. For CY 2020, we are proposing that any
skin substitute product that was assigned to the high cost group in CY
2019 would be assigned to the high cost group for CY 2020, regardless
of whether it exceeds or falls below the CY 2020 MUC or PDC threshold.
This policy was established in the CY 2018 OPPS/ASC final rule with
comment period (82 FR 59346 through 59348).
For this CY 2020 OPPS/ASC proposed rule, consistent with the
methodology as established in the CY 2014 through CY 2017 final rules
with comment period, we analyzed CY 2018 claims data to calculate the
MUC threshold (a weighted average of all skin substitutes' MUCs) and
the PDC threshold (a weighted average of all skin substitutes' PDCs).
The proposed CY 2020 MUC threshold is $49 per cm\2\ (rounded to the
nearest $1) and the proposed CY 2020 PDC threshold is $789 (rounded to
the nearest $1).
For CY 2020, we are proposing to continue to assign skin
substitutes with pass-through payment status to the high cost category.
We are proposing to assign skin substitutes with pricing information
but without claims data to calculate a geometric MUC or PDC to either
the high cost or low cost category based on the product's ASP+6 percent
payment rate as compared to the MUC threshold. If ASP is not available,
we are proposing to use WAC+3 percent to assign a product to either the
high cost or low cost category. Finally, if neither ASP nor WAC is
available, we would use 95 percent of AWP to assign a skin substitute
to either the high cost or low cost category. We are proposing to
continue to use WAC+3 percent instead of WAC+6 percent to conform to
our proposed policy described in section V.B.2.b. of this proposed rule
to establish a payment rate of WAC+3 percent for separately payable
drugs and biologicals that do not have ASP data available. New skin
substitutes without pricing information would be assigned to the low
cost category until pricing information is available to compare to the
CY 2020 MUC threshold. For a discussion of our existing policy under
which we assign skin substitutes without pricing information to the low
cost category until pricing information is available, we refer readers
to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70436).
Some skin substitute manufacturers have raised concerns about
significant fluctuation in both the MUC threshold and the PDC threshold
from year to year. The fluctuation in the thresholds may result in the
reassignment of several skin substitutes from the high cost group to
the low cost group which, under current payment rates, can be a
difference of approximately $1,000 in the payment amount for the same
procedure. In addition, these stakeholders were concerned that the
inclusion of cost data from skin substitutes with pass-through payment
status in the MUC and PDC calculations would artificially inflate the
thresholds. Skin substitute stakeholders requested that CMS consider
alternatives to the current methodology used to calculate the MUC and
PDC thresholds and also requested that CMS consider whether it might be
appropriate to establish a new cost group in between the low cost group
and the high cost group to allow for assignment of moderately priced
skin substitutes to a newly created middle group.
We share the goal of promoting payment stability for skin
substitute products and their related procedures as price stability
allows hospitals using such products to more easily anticipate future
payments associated with these products. We have attempted to limit
year-to-year shifts for skin substitute products between the high cost
and low cost groups through multiple initiatives implemented since CY
2014, including: Establishing separate skin substitute application
procedure codes for low-cost skin substitutes (78 FR 74935); using a
skin substitute's MUC calculated from outpatient hospital claims data
instead of an average of ASP+6 percent as the primary methodology to
assign products to the high cost or low cost group (79 FR 66883); and
establishing the PDC threshold as an alternate methodology to assign a
skin substitute to the high cost group (80 FR 70434 through 70435).
To allow additional time to evaluate concerns and suggestions from
stakeholders about the volatility of the MUC and PDC thresholds, in the
CY 2018 OPPS/ASC proposed rule (82 FR 33627), we proposed that a skin
substitute that was assigned to the high cost group for CY 2017 would
be assigned to the high cost group for CY 2018, even if it does not
exceed the CY 2018 MUC or PDC thresholds. We finalized this policy in
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59347). We
stated in the CY 2018 OPPS/ASC proposed rule that the goal of our
proposal to retain the same skin substitute cost group assignments in
CY 2018 as in CY 2017 was to maintain similar levels of payment for
skin substitute products for CY 2018 while we study our skin substitute
payment methodology to determine whether refinement to the existing
policies is consistent with our policy goal of providing payment
stability for skin substitutes.
We stated in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59347) that we would continue to study issues related to the
payment of skin substitutes and take these comments into consideration
for future rulemaking. We received many responses to our requests for
comments in the CY 2018 OPPS/ASC proposed
[[Page 39507]]
rule about possible refinements to the existing payment methodology for
skin substitutes that would be consistent with our policy goal of
providing payment stability for these products. In addition, several
stakeholders have made us aware of additional concerns and
recommendations since the release of the CY 2018 OPPS/ASC final rule
with comment period. As discussed in the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58967 through 58968), we identified four
potential methodologies that have been raised to us that we encouraged
the public to review and provide comments on. We stated in the CY 2019
OPPS/ASC final rule with comment period that we were especially
interested in any specific feedback on policy concerns with any of the
options presented as they relate to skin substitutes with differing per
day or per episode costs and sizes and other factors that may differ
among the dozens of skin substitutes currently on the market. We also
specified in the CY 2019 OPPS/ASC final rule with comment period that
we were interested in any new ideas that are not represented below
along with an analysis of how different skin substitute products would
fare under such ideas. Finally, we stated that we intend to explore the
full array of public comments on these ideas for the CY 2020
rulemaking, and we indicated that we will consider the feedback
received in response to our requests for comments in developing
proposals for CY 2020.
a. Discussion of CY 2019 Comment Solicitation for Episode-Based Payment
and Solicitation of Additional Comments for CY 2020
The methodology that commenters discussed most in response to our
comment solicitation in CY 2019 and that stakeholders raised in
subsequent meetings we have had with the wound care community has been
a lump-sum ``episode-based'' payment for a wound care episode.
Commenters that supported an episode-based payment believe that it
would allow health care professionals to choose the best skin
substitute to treat a patient's wound and would give providers
flexibility with the treatments they administer. These commenters also
believe an episode-based payment helps to reduce incentives for
providers to use excessive applications of skin substitute products or
use higher cost products to generate more payment for the services they
furnish. In addition, they believe that episode-based payment could
help with innovations with skin substitutes by encouraging the
development of products that require fewer applications. These
commenters noted that episode-based payment would make wound care
payment more predictable for hospitals and provide incentives to manage
the cost of care that they furnish. Finally, commenters for an episode-
based payment believe that workable quality metrics can be developed to
monitor the quality of care administered under the payment methodology
and limit excessive applications of skin substitutes.
However, many commenters opposed establishing an episode-based
payment. One of the main concerns of commenters who opposed episode-
based payment was that wound care is too complex and variable to be
covered through such a payment methodology. These commenters stated
that every patient and every wound is different; therefore, it would be
very challenging to establish a standard episode length for coverage.
They noted that it would be too difficult to risk-stratify and
specialty-adjust an episode-based payment, given the diversity of
patients receiving wound care and their providers who administer
treatment, as well as the variety of pathologies covered in treatment.
Also, these commenters questioned how episodes would be defined for
patients when they are having multiple wounds treated at one time or
had another wound develop while the original wound was receiving
treatment. These commenters expressed concerns that episode-based
payment would be burdensome both operationally and administratively for
providers. They believe that CMS will need to create a large number of
new APCs and HCPCS codes to account for all of the patient situations
that would be covered with an episode-based payment, which would
increase burdens on providers. Finally, these commenters had concerns
about the impacts of episode-based payment on the usage of higher cost
skin substitute products. They believed that a single payment could
discourage the use of higher-cost products because of the large
variability in the cost of skin substitute products, which could limit
innovations for skin substitute products.
The wide array of views on episode-based payment for skin
substitute products and the unforeseen issues that may arise from the
implementation of such a policy make us reluctant to present a proposal
for this CY 2020 proposed rule without more review of the issues
involved with episode-based payment. Therefore, we are seeking further
comments from stakeholders and other interested parties regarding skin
substitute payment policies that could be applied in future years to
address concerns about excessive utilization and spending on skin
substitute products, while avoiding administrative issues such as
establishing additional HCPCS codes to describe different treatment
situations. One possible policy construct that we are seeking comments
on would be to establish a payment period for skin substitute
application services (CPT codes 15271 through 15278 and HCPCS codes
C5271 through C5278) between 4 weeks and 12 weeks. Under this option,
we could also assign CPT codes 15271, 15273, 15275, and 15277, and
HCPCS codes C5271, C5273, C5275, and C5277 to comprehensive APCs with
the option for a complexity adjustment that would allow for an increase
in the standard APC payment for more resource-intensive cases. Our
research has found that most wound care episodes require one to three
skin substitute applications. Those cases would likely receive the
standard APC payment for the comprehensive procedure. Then the
complexity adjustment could be applied for the relatively small number
of cases that require more intensive treatments. We look forward to
comments from stakeholders and other interested parties on this
possible policy construct.
b. Potential Revisions to the OPPS Payment Policy for Skin Substitutes:
Comment Solicitation for CY 2020
In addition to possible future rulemaking based on the responses to
the comment solicitations in the preceding section, we are considering
adopting for CY 2020 another payment methodology that generated
significant public comments in response to the CY 2019 comment
solicitation. That option would be to eliminate the high cost and low
cost categories for skin substitutes and have only one payment category
and set of procedure codes for the application of all graft skin
substitute products. The only available procedure codes to bill for
skin substitute graft procedures would be CPT codes 15271 through
15278. HCPCS codes C5271 through C5278 would be eliminated. Providers
would bill CPT codes 15271 through 15278 without having to consider
either the MUC or PDC of the graft skin substitute product used in the
procedure. There would be only one APC for the graft skin substitute
application procedures described by CPT codes 15271 (Skin sub graft
trnk/arm/leg), 15273 (Skin sub grft t/arm/lg child), 15275 (Skin sub
graft face/nk/hf/g), and 15277 (Skn sub grft f/n/hf/g child). The
payment rate would be the geometric mean of all graft skin substitutes
procedures for a given CPT
[[Page 39508]]
code that are covered through the OPPS. For example under the current
skin substitute payment policy, there are two procedure codes (CPT code
15271 and HCPCS code C5271) that are reported for the procedure
described as ``application of skin substitute graft to trunk, arms,
legs, total wound surface area up to 100 sq cm; first 25 sq cm or less
wound surface area''. The geometric mean cost for CPT code 15271 is
currently $1,572.17 and the geometric mean cost for HCPCS code C5271 is
$728.28. If this policy option was implemented, only CPT code 15271
would be available in the OPPS, and the geometric mean cost for the
procedure code would be $1,465.18.
Commenters that supported this option believe this would remove the
incentives for manufacturers to develop and providers to use high cost
skin substitute products and lead to the use of lower-cost, quality
products. Commenters noted that lower Medicare payments for graft skin
substitute procedures would lead to lower copayments for beneficiaries.
In addition, commenters believed a single payment category would reduce
incentives to apply skin substitute products in excessive amounts.
Commenters also believed a single payment category is clinically
justified because many studies have shown that no one skin substitute
product is superior to another. Finally, supporters of a single payment
category believed it will simplify coding for providers and reduce
administrative burden.
There were also commenters that raised concerns that a single
payment category would not offer providers incentives to furnish
quality care and would reduce the use of higher-cost skin substitute
products. Eliminating the high cost and low cost payment categories
also does not maintain homogeneity among APC assignments for services
using skin substitutes according to opponents of the single payment
category. Commenters stated that instead of having categories grouped
by the relative cost of products, there would be only one category to
cover the payment of products with a mean unit cost ranging from less
than $1 to over $750. Commenters believed a single payment category
would favor inexpensive products, which could limit innovation, and
could eliminate all but the most inexpensive products from the market.
Finally, opponents of a single payment category believed a single
payment category would discourage the treatment of wounds that are
difficult and costly to treat.
The responses to the comment solicitation show the potential of a
single payment category to reduce the cost of wound care services for
graft skin substitute procedures for both beneficiaries and Medicare in
general. In addition, a single payment category may help to lower
administrative burden for providers. Conversely, we are cognizant of
other commenters' concerns that a single payment category may hinder
innovation of new graft skin substitute products and cause some
products that are currently well-utilized to leave the market.
Nonetheless, we are persuaded that a single payment category could
potentially provide a more equitable payment for many products used
with graft skin substitute procedures, while recognizing that
procedures performed with expensive skin substitute products would
likely receive substantially lower payment.
We believe a more equitable payment rate for graft skin substitute
procedures could substantially reduce the amount Medicare pays for
these procedures. We welcome suggestions or other information regarding
the possibility of utilizing a single payment category to pay for skin
substitute products under the OPPS, and, depending on the information
we receive in response to this request, we may consider modifying our
skin substitute payment policy in the CY 2020 OPPS/ASC final rule with
comment period.
We believe some of the concerns commenters who oppose a single
payment category for skin substitute products raised might be mitigated
if stakeholders have a period of time to adjust to the changes inherent
in establishing a single payment category. We are soliciting public
comments that provide additional information about how commenters
believe we should transition from the current low cost/high cost
payment methodology to a single payment category.
Such suggestions to facilitate the payment transition from a low
cost/high cost payment methodology to a single payment category
methodology could include, but are not limited to--
Delaying implementation of a single category payment for 1
or 2 years after the payment methodology is adopted; and
Gradually lowering the MUC and PDC thresholds over 2 or
more years to add more graft skin substitute procedures into the
current high cost group until all graft skin substitute procedures are
assigned to the high cost group and it becomes a single payment
category.
We are seeking commenters' feedback on these ideas, or other
approaches, to mitigate challenges that could impact providers,
manufacturers, and other stakeholders if we establish a single payment
category, which we might include as part of a final skin substitute
payment policy that we would adopt in the CY 2020 OPPS/ASC final rule
with comment period.
c. Proposals for Packaged Skin Substitutes
To allow stakeholders time to analyze and comment on the issues
discussed above, we are proposing for CY 2020 to continue our policy
established in CY 2018 to assign skin substitutes to the low cost or
high cost group. Specifically, we are proposing to assign a skin
substitute with a MUC or a PDC that does not exceed either the MUC
threshold or the PDC threshold to the low cost group, unless the
product was assigned to the high cost group in CY 2019, in which case
we would assign the product to the high cost group for CY 2020,
regardless of whether it exceeds the CY 2020 MUC or PDC threshold. We
also are proposing to assign to the high cost group any skin substitute
product that exceeds the CY 2020 MUC or PDC thresholds and assign to
the low cost group any skin substitute product that does not exceed the
CY 2020 MUC or PDC thresholds and was not assigned to the high cost
group in CY 2019. We are proposing to continue to use payment
methodologies including ASP+6 percent and 95 percent of AWP for skin
substitute products that have pricing information but do not have
claims data to determine if their costs exceed the CY 2020 MUC. In
addition, we are proposing to use WAC+3 percent for skin substitute
products that do not have ASP pricing information or have claims data
to determine if those products' costs exceed the CY 2020 MUC. We are
proposing to continue our established policy to assign new skin
substitute products without pricing information to the low cost group.
We look forward to public comments on our proposals.
Table 19 displays the proposed CY 2020 cost category assignment for
each skin substitute product.
BILLING CODE 4120-01-P
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[GRAPHIC] [TIFF OMITTED] TP09AU19.036
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[GRAPHIC] [TIFF OMITTED] TP09AU19.037
BILLING CODE 4120-01-C
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for
Drugs, Biologicals, Radiopharmaceuticals, and Devices
A. Background
Section 1833(t)(6)(E) of the Act limits the total projected amount
of transitional pass-through payments for drugs, biologicals,
radiopharmaceuticals, and categories of devices for a given year to an
``applicable percentage,'' currently not to exceed 2.0 percent of total
program payments estimated to be made for all
[[Page 39511]]
covered services under the OPPS furnished for that year. If we estimate
before the beginning of the calendar year that the total amount of
pass-through payments in that year would exceed the applicable
percentage, section 1833(t)(6)(E)(iii) of the Act requires a uniform
prospective reduction in the amount of each of the transitional pass-
through payments made in that year to ensure that the limit is not
exceeded. We estimate the pass-through spending to determine whether
payments exceed the applicable percentage and the appropriate prorata
reduction to the conversion factor for the projected level of pass-
through spending in the following year to ensure that total estimated
pass-through spending for the prospective payment year is budget
neutral, as required by section 1833(t)(6)(E) of the Act.
For devices, developing a proposed estimate of pass-through
spending in CY 2020 entails estimating spending for two groups of
items. The first group of items consists of device categories that are
currently eligible for pass-through payment and that will continue to
be eligible for pass-through payment in CY 2020. The CY 2008 OPPS/ASC
final rule with comment period (72 FR 66778) describes the methodology
we have used in previous years to develop the pass-through spending
estimate for known device categories continuing into the applicable
update year. The second group of items consists of items that we know
are newly eligible, or project may be newly eligible, for device pass-
through payment in the remaining quarters of CY 2019 or beginning in CY
2020. The sum of the proposed CY 2020 pass-through spending estimates
for these two groups of device categories equals the proposed total CY
2020 pass-through spending estimate for device categories with pass-
through payment status. We base the device pass-through estimated
payments for each device category on the amount of payment as
established in section 1833(t)(6)(D)(ii) of the Act, and as outlined in
previous rules, including the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75034 through 75036). We note that, beginning in CY 2010,
the pass-through evaluation process and pass-through payment
methodology for implantable biologicals newly approved for pass-through
payment beginning on or after January 1, 2010, that are surgically
inserted or implanted (through a surgical incision or a natural
orifice) use the device pass-through process and payment methodology
(74 FR 60476). As has been our past practice (76 FR 74335), in this
proposed rule, we are proposing to include an estimate of any
implantable biologicals eligible for pass-through payment in our
estimate of pass-through spending for devices. Similarly, we finalized
a policy in CY 2015 that applications for pass-through payment for skin
substitutes and similar products be evaluated using the medical device
pass-through process and payment methodology (76 FR 66885 through
66888). Therefore, as we did beginning in CY 2015, for CY 2020, we are
also proposing to include an estimate of any skin substitutes and
similar products in our estimate of pass-through spending for devices.
For drugs and biologicals eligible for pass-through payment,
section 1833(t)(6)(D)(i) of the Act establishes the pass-through
payment amount as the amount by which the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a competitive acquisition contract under section 1847B of the
Act, an amount determined by the Secretary equal to the average price
for the drug or biological for all competitive acquisition areas and
year established under such section as calculated and adjusted by the
Secretary) exceeds the portion of the otherwise applicable fee schedule
amount that the Secretary determines is associated with the drug or
biological. Our estimate of drug and biological pass-through payment
for CY 2020 for this group of items is $224.1 million, as discussed
below, because we are proposing to pay for most nonpass-through
separately payable drugs and biologicals under the CY 2020 OPPS at
ASP+6 percent with the exception of 340B-acquired separately payable
drugs that are paid at ASP minus 22.5 percent, and because we are
proposing to pay for CY 2020 pass-through payment drugs and biologicals
at ASP+6 percent, as we discuss in section V.A. of this proposed rule.
We refer readers to section V.B.6 of this proposed rule where we
solicit comments on an appropriate remedy in litigation involving our
OPPS payment policy for 340B purchased drugs, which would inform CY
2021 rulemaking in the event of an adverse decision on appeal in that
litigation.
Furthermore, payment for certain drugs, specifically diagnostic
radiopharmaceuticals and contrast agents without pass-through payment
status, is packaged into payment for the associated procedures, and
these products will not be separately paid. In addition, we policy-
package all nonpass-through drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure and drugs and biologicals that function as
supplies when used in a surgical procedure, as discussed in section
II.A.3. of this proposed rule. In this proposed rule, we are proposing
that all of these policy-packaged drugs and biologicals with pass-
through payment status would be paid at ASP+6 percent, like other pass-
through drugs and biologicals, for CY 2020. Therefore, our proposed
estimate of pass-through payment for policy-packaged drugs and
biologicals with pass-through payment status approved prior to CY 2020
is not $0, as discussed below. In section V.A.5. of this proposed rule,
we discussed our policy to determine if the costs of certain policy-
packaged drugs or biologicals are already packaged into the existing
APC structure. If we determine that a policy-packaged drug or
biological approved for pass-through payment resembles predecessor
drugs or biologicals already included in the costs of the APCs that are
associated with the drug receiving pass-through payment, we are
proposing to offset the amount of pass-through payment for the policy-
packaged drug or biological. For these drugs or biologicals, the APC
offset amount is the portion of the APC payment for the specific
procedure performed with the pass-through drug or biological, which we
refer to as the policy-packaged drug APC offset amount. If we determine
that an offset is appropriate for a specific policy-packaged drug or
biological receiving pass-through payment, we are proposing to reduce
our estimate of pass-through payments for these drugs or biologicals by
this amount.
Similar to pass-through spending estimates for devices, the first
group of drugs and biologicals requiring a pass-through payment
estimate consists of those products that were recently made eligible
for pass-through payment and that will continue to be eligible for
pass-through payment in CY 2020. The second group contains drugs and
biologicals that we know are newly eligible, or project will be newly
eligible, in the remaining quarters of CY 2019 or beginning in CY 2020.
The sum of the CY 2020 pass-through spending estimates for these two
groups of drugs and biologicals equals the total CY 2019 pass-through
spending estimate for drugs and biologicals with pass-through payment
status.
B. Proposed Estimate of Pass-Through Spending
We are proposing to set the applicable pass-through payment
percentage limit at 2.0 percent of the total projected OPPS payments
for CY 2020, consistent with section 1833(t)(6)(E)(ii)(II) of the Act
and our OPPS policy from CY 2004
[[Page 39512]]
through CY 2019 (82 FR 59371 through 59373).
For the first group, consisting of device categories that are
currently eligible for pass-through payment and will continue to be
eligible for pass-through payment in CY 2020, there is one active
category for CY 2020. The active category is described by HCPCS code
C1823 (Generator, neurostimulator (implantable), nonrechargeable, with
transvenous sensing and stimulation leads). Based on the information
from the device manufacturer, we are estimating that 100 devices will
receive payment in the OPPS in CY 2019 at an estimated cost of $5,655
per device. Therefore, we are proposing an estimate for the first group
of devices of $565,500. In estimating our proposed CY 2020 pass-through
spending for device categories in the second group, we included: Device
categories that we knew at the time of the development of the proposed
rule will be newly eligible for pass-through payment in CY 2020;
additional device categories that we estimated could be approved for
pass-through status subsequent to the development of the proposed rule
and before January 1, 2020; and contingent projections for new device
categories established in the second through fourth quarters of CY
2020. For CY 2020, we are proposing to use the general methodology
described in the CY 2008 OPPS/ASC final rule with comment period (72 FR
66778), while also taking into account recent OPPS experience in
approving new pass-through device categories. For this proposed rule,
the proposed estimate of CY 2020 pass-through spending for this second
group of device categories is $10 million.
To estimate proposed CY 2020 pass-through spending for drugs and
biologicals in the first group, specifically those drugs and
biologicals recently made eligible for pass-through payment and
continuing on pass-through payment status for at least one quarter in
CY 2020, we are proposing to use the most recent Medicare hospital
outpatient claims data regarding their utilization, information
provided in the respective pass-through applications, historical
hospital claims data, pharmaceutical industry information, and clinical
information regarding those drugs or biologicals to project the CY 2020
OPPS utilization of the products.
For the known drugs and biologicals (excluding policy-packaged
diagnostic radiopharmaceuticals, contrast agents, drugs, biologicals,
and radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure, and drugs and biologicals that function
as supplies when used in a surgical procedure) that will be continuing
on pass-through payment status in CY 2020, we estimated the pass-
through payment amount as the difference between ASP+6 percent and the
payment rate for nonpass-through drugs and biologicals that will be
separately paid. Separately payable drugs are paid at a rate of ASP+6
percent with the exception of 340B-acquired drugs that are paid at ASP
minus 22.5 percent. Therefore, the payment rate difference between the
pass-through payment amount and the nonpass-through payment amount is
$224.1 million for this group of drugs. Because payment for policy-
packaged drugs and biologicals is packaged if the product was not paid
separately due to its pass-through payment status, we are proposing to
include in the CY 2020 pass-through estimate the difference between
payment for the policy-packaged drug or biological at ASP+6 percent (or
WAC+6 percent, or 95 percent of AWP, if ASP or WAC information is not
available) and the policy-packaged drug APC offset amount, if we
determine that the policy-packaged drug or biological approved for
pass-through payment resembles a predecessor drug or biological already
included in the costs of the APCs that are associated with the drug
receiving pass-through payment, which we estimate for CY 2020 to be
$17.0 million. For this proposed rule, using the proposed methodology
described above, we calculated a CY 2020 proposed spending estimate for
this first group of drugs and biologicals that includes drugs currently
on pass-through payment status that would otherwise be separately
payable or policy-packaged of approximately $241.1 million.
To estimate proposed CY 2020 pass-through spending for drugs and
biologicals in the second group (that is, drugs and biologicals that we
knew at the time of development of the proposed rule were newly
eligible for pass-through payment in CY 2020, additional drugs and
biologicals that we estimated could be approved for pass-through status
subsequent to the development of this proposed rule and before January
1, 2020 and projections for new drugs and biologicals that could be
initially eligible for pass-through payment in the second through
fourth quarters of CY 2020), we are proposing to use utilization
estimates from pass-through applicants, pharmaceutical industry data,
clinical information, recent trends in the per unit ASPs of hospital
outpatient drugs, and projected annual changes in service volume and
intensity as our basis for making the CY 2020 pass-through payment
estimate. We also are proposing to consider the most recent OPPS
experience in approving new pass-through drugs and biologicals. Using
our proposed methodology for estimating CY 2020 pass-through payments
for this second group of drugs, we calculated a proposed spending
estimate for this second group of drugs and biologicals of
approximately $17.1 million.
In summary, in accordance with the methodology described earlier in
this section, for this proposed rule, we estimate that total pass-
through spending for the device categories and the drugs and
biologicals that are continuing to receive pass-through payment in CY
2020 and those device categories, drugs, and biologicals that first
become eligible for pass-through payment during CY 2020 is
approximately $268.8 million (approximately $10.6 million for device
categories and approximately $258.2 million for drugs and biologicals)
which represents 0.34 percent of total projected OPPS payments for CY
2020 (approximately $80 billion). Therefore, we estimate that pass-
through spending in CY 2020 would not amount to 2.0 percent of total
projected OPPS CY 2020 program spending.
VII. Proposed OPPS Payment for Hospital Outpatient Visits and Critical
Care Services
For CY 2020, we are proposing to continue with our current clinic
and emergency department (ED) hospital outpatient visits payment
policies. For a description of the current clinic and ED hospital
outpatient visits policies, we refer readers to the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70448). We also are proposing to
continue our payment policy for critical care services for CY 2020. For
a description of the current payment policy for critical care services,
we refer readers to the CY 2016 OPPS/ASC final rule with comment period
(80 FR 70449), and for the history of the payment policy for critical
care services, we refer readers to the CY 2014 OPPS/ASC final rule with
comment period (78 FR 75043). In this proposed rule, we are seeking
public comments on any changes to these codes that we should consider
for future rulemaking cycles. We continue to encourage commenters to
provide the data and analysis necessary to justify any suggested
changes.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59004
through 59015), we adopted a method to control unnecessary increases in
the
[[Page 39513]]
volume of covered outpatient department services under section
1833(t)(2)(F) of the Act by utilizing a Medicare Physician Fee Schedule
(PFS)-equivalent payment rate for the hospital outpatient clinic visit
(HCPCS code G0463) when it is furnished by excepted off-campus
provider-based departments (PBDs). As discussed in section X.D of this
proposed rule and the CY 2019 final rule (FR 58818 through 59179), CY
2020 will be the second year of the 2-year transition of this policy,
and in CY 2020, these departments will be paid the site-specific PFS
rate for the clinic visit service. For a full discussion of this
policy, we refer readers to that final rule with comment period.
VIII. Proposed Payment for Partial Hospitalization Services
A. Background
A partial hospitalization program (PHP) is an intensive outpatient
program of psychiatric services provided as an alternative to inpatient
psychiatric care for individuals who have an acute mental illness,
which includes, but is not limited to, conditions such as depression,
schizophrenia, and substance use disorders. Section 1861(ff)(1) of the
Act defines partial hospitalization services as the items and services
described in paragraph (2) prescribed by a physician and provided under
a program described in paragraph (3) under the supervision of a
physician pursuant to an individualized, written plan of treatment
established and periodically reviewed by a physician (in consultation
with appropriate staff participating in such program), which sets forth
the physician's diagnosis, the type, amount, frequency, and duration of
the items and services provided under the plan, and the goals for
treatment under the plan. Section 1861(ff)(2) of the Act describes the
items and services included in partial hospitalization services.
Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program
furnished by a hospital to its outpatients or by a community mental
health center (CMHC), as a distinct and organized intensive ambulatory
treatment service, offering less than 24-hour-daily care, in a location
other than an individual's home or inpatient or residential setting.
Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this
benefit.
Section 1833(t)(1)(B)(i) of the Act provides the Secretary with the
authority to designate the outpatient department (OPD) services to be
covered under the OPPS. The Medicare regulations that implement this
provision specify, at 42 CFR 419.21, that payments under the OPPS will
be made for partial hospitalization services furnished by CMHCs as well
as Medicare Part B services furnished to hospital outpatients
designated by the Secretary, which include partial hospitalization
services (65 FR 18444 through 18445).
Section 1833(t)(2)(C) of the Act requires the Secretary, in part,
to establish relative payment weights for covered OPD services (and any
groups of such services described in section 1833(t)(2)(B) of the Act)
based on median (or, at the election of the Secretary, mean) hospital
costs using data on claims from 1996 and data from the most recent
available cost reports. In pertinent part, section 1833(t)(2)(B) of the
Act provides that the Secretary may establish groups of covered OPD
services, within a classification system developed by the Secretary for
covered OPD services, so that services classified within each group are
comparable clinically and with respect to the use of resources. In
accordance with these provisions, we have developed the PHP APCs. Since
a day of care is the unit that defines the structure and scheduling of
partial hospitalization services, we established a per diem payment
methodology for the PHP APCs, effective for services furnished on or
after July 1, 2000 (65 FR 18452 through 18455). Under this methodology,
the median per diem costs were used to calculate the relative payment
weights for the PHP APCs. Section 1833(t)(9)(A) of the Act requires the
Secretary to review, not less often than annually, and revise the
groups, the relative payment weights, and the wage and other
adjustments described in section 1833(t)(2) of the Act to take into
account changes in medical practice, changes in technology, the
addition of new services, new cost data, and other relevant information
and factors.
We began efforts to strengthen the PHP benefit through extensive
data analysis, along with policy and payment changes finalized in the
CY 2008 OPPS/ASC final rule with comment period (72 FR 66670 through
66676). In that final rule with comment period, we made two refinements
to the methodology for computing the PHP median: The first remapped 10
revenue codes that are common among hospital-based PHP claims to the
most appropriate cost centers; and the second refined our methodology
for computing the PHP median per diem cost by computing a separate per
diem cost for each day rather than for each bill.
In CY 2009, we implemented several regulatory, policy, and payment
changes, including a two-tier payment approach for partial
hospitalization services under which we paid one amount for days with 3
services under PHP APC 0172 (Level 1 Partial Hospitalization) and a
higher amount for days with 4 or more services under PHP APC 0173
(Level 2 Partial Hospitalization) (73 FR 68688 through 68693). We also
finalized our policy to deny payment for any PHP claims submitted for
days when fewer than 3 units of therapeutic services are provided (73
FR 68694). Additionally, for CY 2009, we revised the regulations at 42
CFR 410.43 to codify existing basic PHP patient eligibility criteria
and to add a reference to current physician certification requirements
under 42 CFR 424.24 to conform our regulations to our longstanding
policy (73 FR 68694 through 68695). We also revised the partial
hospitalization benefit to include several coding updates (73 FR 68695
through 68697).
For CY 2010, we retained the two-tier payment approach for partial
hospitalization services and used only hospital-based PHP data in
computing the PHP APC per diem costs, upon which PHP APC per diem
payment rates are based. We used only hospital-based PHP data because
we were concerned about further reducing both PHP APC per diem payment
rates without knowing the impact of the policy and payment changes we
made in CY 2009. Because of the 2-year lag between data collection and
rulemaking, the changes we made in CY 2009 were reflected for the first
time in the claims data that we used to determine payment rates for the
CY 2011 rulemaking (74 FR 60556 through 60559).
In the CY 2011 OPPS/ASC final rule with comment period (75 FR
71994), we established four separate PHP APC per diem payment rates:
Two for CMHCs (APC 0172 (for Level 1 services) and APC 0173 (for Level
2 services)) and two for hospital-based PHPs (APC 0175 (for Level 1
services) and APC 0176 (for Level 2 services)), based on each provider
type's own unique data. For CY 2011, we also instituted a 2-year
transition period for CMHCs to the CMHC APC per diem payment rates
based solely on CMHC data. Under the transition methodology, CMHC APCs
Level 1 and Level 2 per diem costs were calculated by taking 50 percent
of the difference between the CY 2010 final hospital-based PHP median
costs and the CY 2011 final CMHC median costs and then adding that
number to the CY 2011 final CMHC median costs. A 2-year transition
under this methodology moved us in the direction of our goal, which is
to pay appropriately for partial
[[Page 39514]]
hospitalization services based on each provider type's data, while at
the same time allowing providers time to adjust their business
operations and protect access to care for Medicare beneficiaries. We
also stated that we would review and analyze the data during the CY
2012 rulemaking cycle and, based on these analyses, we might further
refine the payment mechanism. We refer readers to section X.B. of the
CY 2011 OPPS/ASC final rule with comment period (75 FR 71991 through
71994) for a full discussion.
In addition, in accordance with section 1301(b) of the Health Care
and Education Reconciliation Act of 2010 (HCERA 2010), we amended the
description of a PHP in our regulations to specify that a PHP must be a
distinct and organized intensive ambulatory treatment program offering
less than 24-hour daily care other than in an individual's home or in
an inpatient or residential setting. In accordance with section 1301(a)
of HCERA 2010, we revised the definition of a CMHC in the regulations
to conform to the revised definition now set forth under section
1861(ff)(3)(B) of the Act (75 FR 71990).
For CY 2012, as discussed in the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74348 through 74352), we determined the relative
payment weights for partial hospitalization services provided by CMHCs
based on data derived solely from CMHCs and the relative payment
weights for partial hospitalization services provided by hospital-based
PHPs based exclusively on hospital data.
In the CY 2013 OPPS/ASC final rule with comment period, we
finalized our proposal to base the relative payment weights that
underpin the OPPS APCs, including the four PHP APCs (APCs 0172, 0173,
0175, and 0176), on geometric mean costs rather than on the median
costs. We established these four PHP APC per diem payment rates based
on geometric mean cost levels calculated using the most recent claims
and cost data for each provider type. For a detailed discussion on this
policy, we refer readers to the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68406 through 68412).
In the CY 2014 OPPS/ASC proposed rule (78 FR 43621 through 43622),
we solicited comments on possible future initiatives that may help to
ensure the long-term stability of PHPs and further improve the accuracy
of payment for PHP services, but proposed no changes. In the CY 2014
OPPS/ASC final rule with comment period (78 FR 75050 through 75053), we
summarized the comments received on those possible future initiatives.
We also continued to apply our established policies to calculate the
four PHP APC per diem payment rates based on geometric mean per diem
costs using the most recent claims data for each provider type. For a
detailed discussion on this policy, we refer readers to the CY 2014
OPPS/ASC final rule with comment period (78 FR 75047 through 75050).
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66902
through 66908), we continued to apply our established policies to
calculate the four PHP APC per diem payment rates based on PHP APC
geometric mean per diem costs, using the most recent claims and cost
data for each provider type.
In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70455
through 70465), we described our extensive analysis of the claims and
cost data and ratesetting methodology. We found aberrant data from some
hospital-based PHP providers that were not captured using the existing
OPPS 3 standard deviation trims for extreme cost-to-charge
ratios (CCRs) and excessive CMHC charges resulting in CMHC geometric
mean costs per day that were approximately the same as or more than the
daily payment for inpatient psychiatric facility services.
Consequently, we implemented a trim to remove hospital-based PHP
service days that use a CCR that was greater than 5 to calculate costs
for at least one of their component services, and a trim on CMHCs with
a geometric mean cost per day that is above or below 2 (2)
standard deviations from the mean. We stated in the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70456) that, without using a
trimming process, the data from these providers would inappropriately
skew the geometric mean per diem cost for Level 2 CMHC services.
In addition, in the CY 2016 OPPS/ASC final rule with comment period
(80 FR 70459 through 70460), we corrected a cost inversion that
occurred in the final rule data with respect to hospital-based PHP
providers. We corrected the cost inversion with an equitable adjustment
to the actual geometric mean per diem costs by increasing the Level 2
hospital-based PHP APC geometric mean per diem costs and decreasing the
Level 1 hospital-based PHP APC geometric mean per diem costs by the
same factor, to result in a percentage difference equal to the average
percent difference between the hospital-based Level 1 PHP APC and the
Level 2 PHP APC for partial hospitalization services from CY 2013
through CY 2015.
Finally, we renumbered the PHP APCs, which were previously APCs
0172 and 0173 for CMHCs' partial hospitalization Level 1 and Level 2
services, and APCs 0175 and 0176 for hospital-based partial
hospitalization Level 1 and Level 2 services to APCs 5851 and 5852 for
CMHCs' partial hospitalization Level 1 and Level 2 services, and APCs
5861 and 5862 for hospital-based partial hospitalization Level 1 and
Level 2 services, respectively. For a detailed discussion of the PHP
ratesetting process, we refer readers to the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70462 through 70467).
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79687
through 79691), we continued to apply our established policies to
calculate the PHP APC per diem payment rates based on geometric mean
per diem costs using the most recent claims and cost data for each
provider type. However, we finalized a policy to combine the Level 1
and Level 2 PHP APCs for CMHCs and to combine the Level 1 and Level 2
APCs for hospital-based PHPs because we believed this would best
reflect actual geometric mean per diem costs going forward, provide
more predictable per diem costs, particularly given the small number of
CMHCs, and generate more appropriate payments for these services, for
example by avoiding the cost inversions for hospital-based PHPs
addressed in the CY 2016 and CY 2017 OPPS/ASC final rules with comment
period (80 FR 70459 and 81 FR 79682). We also implemented an 8-percent
outlier cap for CMHCs to mitigate potential outlier billing
vulnerabilities by limiting the impact of inflated CMHC charges on
outlier payments. We stated that we will continue to monitor the trends
in outlier payments and consider policy adjustments as necessary.
For a comprehensive description of PHP payment policy, including a
detailed methodology for determining PHP per diem amounts, we refer
readers to the CY 2016 and CY 2017 OPPS/ASC final rules with comment
period (80 FR 70453 through 70455 and 81 FR 79678 through 79680).
In the CYs 2018 and 2019 OPPS/ASC final rules with comment period
(82 FR 59373 through 59381, and 83 FR 58983 through 58998,
respectively), we continued to apply our established policies to
calculate the PHP APC per diem payment rates based on geometric mean
per diem costs using the most recent claims and cost data for each
provider type. We also continued to designate a portion of the
estimated 1.0 percent hospital outpatient outlier threshold
specifically for CMHCs, consistent with the percentage of projected
payments to CMHCs under the
[[Page 39515]]
OPPS, excluding outlier payments. In the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58997 through 58998), we also included
proposed updates to the PHP allowable HCPCS codes. Specifically, we
proposed to delete 6 psychological and neuropsychological testing CPT
codes, which affect PHPs, and to add 9 new codes as replacements. We
refer readers to section VIII.D. of this proposed rule for a discussion
of those proposed updates and the applicability for CY 2020.
B. Proposed PHP APC Update for CY 2020
1. Proposed PHP APC Geometric Mean Per Diem Costs
In summary, for CY 2020, we are proposing to use the CY 2020 CMHC
geometric mean per diem cost and the CY 2020 hospital-based PHP
geometric mean per diem cost, each calculated in accordance with our
existing methodology, but with a cost floor equal to the CY 2019 final
geometric mean per diem cost for CMHCs of $121.62 and for hospital-
based PHPs of $222.76 (83 FR 58991), as the basis for developing the CY
2020 PHP APC per diem rates. As part of this proposal, in the final
rule with comment period, we are proposing that we would use the most
recent updated claims and cost data to calculate CY 2020 geometric mean
per diem costs.
Also, we are proposing to continue to use CMHC APC 5853 (Partial
Hospitalization (3 or More Services Per Day)) and hospital-based PHP
APC 5863 (Partial Hospitalization (3 or More Services Per Day)). These
proposals are discussed in more detail below.
2. Development of the Proposed PHP APC Geometric Mean Per Diem Costs
In preparation for CY 2020 and subsequent years, we followed the
PHP ratesetting methodology described in section VIII.B.2. of the CY
2016 OPPS/ASC final rule with comment period (80 FR 70462 through
70466) to calculate the PHP APCs' geometric mean per diem costs and
payment rates for APCs 5853 and 5863, incorporating the modifications
made in the CY 2017 OPPS/ASC final rule with comment period. As
discussed in section VIII.B.1. of the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79680 through 79687), the proposed geometric mean
per diem cost for hospital-based PHP APC 5863 would be based upon
actual hospital-based PHP claims and costs for PHP service days
providing 3 or more services. Similarly, the proposed geometric mean
per diem cost for CMHC APC 5853 would be based upon actual CMHC claims
and costs for CMHC service days providing 3 or more services.
The CMHC or hospital-based PHP APC per diem costs are the provider-
type specific costs derived from the most recent claims and cost data.
The CMHC or hospital-based PHP APC per diem payment rates are the
national unadjusted payment rates calculated from the CMHC or hospital-
based PHP APC geometric mean per diem costs, after applying the OPPS
budget neutrality adjustments described in section II.A.4. of this
proposed rule.
As previously stated, in this CY 2020 OPPS/ASC proposed rule, we
applied our established methodologies in calculating the CY 2020
geometric mean per diem costs and payment rates, including the
application of a 2 standard deviation trim on costs per day
for CMHCs and a CCR greater than 5 hospital service day trim for
hospital-based PHP providers. These two trims were finalized in the CY
2016 OPPS/ASC final rule with comment period (80 FR 70455 through
70462) for CY 2016 and subsequent years.
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
For CY 2020, prior to calculating the geometric mean per diem cost
for CMHC APC 5853, we prepared the data by first applying trims and
data exclusions, and assessing CCRs as described in the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70463 through 70465), so that
ratesetting is not skewed by providers with extreme data. Before any
trims or exclusions were applied, there were 41 CMHCs in the PHP claims
data file. Under the 2 standard deviation trim policy, we
excluded any data from a CMHC for ratesetting purposes when the CMHC's
geometric mean cost per day was more than 2 standard
deviations from the geometric mean cost per day for all CMHCs. In
applying this trim for CY 2020 ratesetting, no CMHCs had geometric mean
costs per day below the trim's lower limit of $21.13 or had geometric
mean costs per day above the trim's upper limit of $506.11. Therefore,
we did not exclude any CMHCs because of the 2 standard
deviation trim.
In accordance with our PHP ratesetting methodology, we also remove
service days with no wage index values, because we use the wage index
data to remove the effects of geographic variation in costs prior to
APC geometric mean per diem cost calculation (80 FR 70465). For CY
2020, no CMHC was missing wage index data for all of its service days
and, therefore, no CMHC was excluded.
In addition to our trims and data exclusions, before calculating
the PHP APC geometric mean per diem costs, we also assess CCRs (80 FR
70463). Our longstanding PHP OPPS ratesetting methodology defaults any
CMHC CCR greater than 1 to the statewide hospital CCR (80 FR 70457).
For CY 2020, there were no CMHCs in the outpatient provider specific
file (OPSF) that showed CCRs greater than 1. Therefore, it was not
necessary to default any CMHC to its statewide hospital CCR for
ratesetting.
In summary, these data preparation steps did not adjust the CCR for
any CMHCs shown in the OPSF with a CCR greater than 1 during our
ratesetting process. We also did not exclude any CMHCs for other
missing data or for failing the 2 standard deviation trim,
resulting in the inclusion of all 41 CMHCs. There were 188 CMHC claims
removed during data preparation steps because they either had no PHP-
allowable codes or had zero payment days, leaving 10,271 CMHC claims in
our CY 2020 proposed rule ratesetting modeling.
After applying all of the above trims, exclusions, and adjustments,
we followed the methodology described in the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70464 through 70465) and modified in
the CY 2017 OPPS/ASC final rule with comment period (81 FR 79687
through 79688, and 79691) to calculate a CMHC APC geometric mean per
diem cost.\65\ The calculated CY 2020 geometric mean per diem cost for
all CMHCs for providing 3 or more services per day (CMHC APC 5853) is
$103.42, a decrease from
[[Page 39516]]
$121.62 calculated last year for CY 2019 ratesetting (83 FR 58986
through 58989).
---------------------------------------------------------------------------
\65\ Each revenue code on the CMHC claim must have a HCPCS code
and charge associated with it. We multiply each claim service line's
charges by the CMHC's overall CCR from the OPSF (or statewide CCR,
where the overall CCR was greater than 1) to estimate CMHC costs.
Only the claims service lines containing PHP allowable HCPCS codes
and PHP allowable revenue codes from the CMHC claims remaining after
trimming are retained for CMHC cost determination. The costs,
payments, and service units for all service lines occurring on the
same service date, by the same provider, and for the same
beneficiary are summed. CMHC service days must have 3 or more
services provided to be assigned to CMHC APC 5853. The proposed
geometric mean per diem cost for CMHC APC 5853 is calculated by
taking the nth root of the product of n numbers, for days where 3 or
more services were provided. CMHC service days with costs 3 standard deviations from the geometric mean costs within APC
5853 are deleted and removed from modeling. The remaining PHP
service days are used to calculate the proposed geometric mean per
diem cost for each PHP APC by taking the nth root of the product of
n numbers for days where 3 or more services were provided.
---------------------------------------------------------------------------
Due to this fluctuation, we investigated why the calculated CMHC
APC geometric mean per diem cost had decreased from the prior year, and
found that a single large provider that reported low costs per day was
heavily influencing the calculated geometric mean per diem cost.
Because this provider had a high number of paid PHP days, and because
the CMHC data set is so small (n=41), this provider had a significant
influence on the calculated CY 2020 CMHC APC geometric mean per diem
cost. In the case of PHPs provided by CMHCs, we note that we have an
unusually low number of PHP providers in our ratesetting dataset (41
CMHCs compared to 364 hospital-based PHPs) that provide a small volume
of services and, therefore, account for a limited amount of payments,
relative to the rest of OPPS payments (total CY 2018 CMHC payments are
estimated to be approximately 0.02 percent of all OPPS payments).
We are concerned that a CMHC APC geometric mean per diem cost of
$103.42 would not support ongoing access to PHPs in CMHCs. This cost is
nearly a 15 percent decrease from the final CY 2019 CMHC geometric mean
per diem cost. We believe access to partial hospitalization services
and PHPs is better supported when the geometric mean per diem cost does
not fluctuate greatly. In addition, while the CMHC APC 5853 is
described as providing 3 or more partial hospitalization services per
day (81 FR 79680), 95 percent of CMHC paid days in CY 2018 were for
providing 4 or more services per day. To be eligible for a PHP, a
patient must need at least 20 hours of therapeutic services per week,
as evidenced in the patient's plan of care (42 CFR 410.43(c)(1)). To
meet those patient needs, most PHP provider paid days are for providing
4 or more services per day (we refer readers to Table 22.--Percentage
of PHP Days by Service Unit Frequency of this proposed rule).
Therefore, the CMHC APC 5853 is actually heavily weighted to the cost
of providing 4 or more services. The per diem costs for CMHC APC 5853
have been calculated as $124.92, $143.22, and $121.62 for CY 2017 (81
FR 79691), CY 2018 (82 FR 59378), and CY 2019 (83 FR 58991),
respectively. We do not believe it is likely that the actual cost of
providing partial hospitalization services through a PHP by CMHCs has
suddenly declined when costs generally increase over time. We are
concerned by this fluctuation, which we believe is influenced by data
from a single large provider.
Therefore, rather than simply proposing to use the calculated CY
2020 CMHC APC geometric mean per diem cost for CY 2020 ratesetting, we
are instead proposing to use the CY 2020 CMHC APC geometric mean per
diem cost, calculated in accordance with our existing methodology, but
with a cost floor equal to the CY 2019 final geometric mean per diem
cost for CMHCs of $121.62 (83 FR 58991), as the basis for developing
the CY 2020 CMHC APC per diem rate. As part of this proposal, in the
final rule with comment period, we are proposing that we would use the
most recent updated claims and cost data to calculate CY 2020 CMHC
geometric mean per diem cost. This proposal aligns with our proposal
for hospital-based PHPs. We believe using the CY 2019 CMHC geometric
mean per diem cost as the floor is appropriate because it is based on
very recent CMHC PHP claims and cost data and would help to protect
provider access by preventing wide fluctuation in the per diem costs
for CMHC APC 5853. Because the calculated amount of $103.42 is less
than the final CY 2019 CMHC APC geometric mean per diem cost of
$121.62, the inclusion of a cost floor means that the proposed CY 2020
CMHC geometric mean per diem cost at the time of the development of
this proposed rule is $121.62. The inclusion of the cost floor would
protect CMHCs if the final CY 2020 calculated per diem cost still
results in an amount that is less than $121.62. We believe this
proposal for CY 2020 ratesetting allows us to use the most recent or
very recent CMHC claims and cost reporting data while still protecting
provider access. To be clear, this policy would only apply for the CY
2020 ratesetting.
In crafting this proposal, we also considered proposing a 3-year
rolling average calculated using the final PHP geometric mean per diem
costs, by provider type, from CY 2018 (82 FR 59378), CY 2019 (83 FR
58991), and the calculated CY 2020 geometric mean per diem costs of
$103.42 discussed earlier in this section for CMHCs and the calculated
CY 2020 geometric mean per diem costs for hospital-based PHPs discussed
in section VIII.B.2.b. of this proposed rule. The 3-year rolling
averages results in geometric mean per diem cost for CMHCs that would
have been $122.75 and for hospital-based PHPs that would have been
$209.79. While we believe this option would have avoided the
fluctuation in the geometric mean per diem cost and, therefore,
supported access to PHPs provided by CMHCs, it would have maintained
the fluctuation in the geometric mean per diem costs used to derive the
hospital-based PHP APC per diem payment rates. This is further
discussed in the hospital-based PHP section VIII.B.2.b. of this
proposed rule. In addition, we believe that it is necessary to
recalculate the CMHC geometric mean per diem cost for the final rule
with comment period using updated claims and cost data, and simply
proposing to use a 3-year rolling average for the CMHC geometric mean
per diem cost for CY 2020 would not have allowed us to do so.
Therefore, we believe that it is more appropriate to propose to use the
final CY 2019 geometric mean per diem costs, by provider type, as the
cost floor for use with the calculated CY 2020 PHP geometric mean per
diem costs, by provider type, because those CY 2019 per diem costs are
based on very recent CMHC and hospital-based PHP claims and cost data,
are the easiest to understand, and would result in proposed geometric
mean per diem costs which would support access for both CMHCs and
hospital-based PHPs.
We estimate the aggregate difference in the (prescaled) CMHC
geometric mean per diem costs for CY 2020 from proposing the CMHC cost
floor amount of $121.62 rather than the calculated CMHC geometric mean
per diem cost of $103.42 to be $1.4 million. We refer readers to
section XXVI. of this proposed rule for payment impacts, which are
budget neutral.
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
For this CY 2020 proposed rule, we prepared data consistent with
our policies as described in the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70463 through 70465) for hospital-based PHP
providers, which is similar to that used for CMHCs. The CY 2018 PHP
claims included data for 427 hospital-based PHP providers for our
calculations in this CY 2020 OPPS/ASC proposed rule.
Consistent with our policies as stated in the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70463 through 70465), we prepared
the data by applying trims and data exclusions. We applied a trim on
hospital service days for hospital-based PHP providers with a CCR
greater than 5 at the cost center level. To be clear, the CCR greater
than 5 trim is a service day-level trim in contrast to the CMHC 2 standard deviation trim, which is a provider-level trim.
Applying this CCR greater than 5 trim removed affected service days
from 1 hospital-based PHP provider with a CCR of 6.944 from our
proposed rule ratesetting. However, 100 percent of the
[[Page 39517]]
service days for this 1 hospital-based PHP provider had at least 1
service associated with a CCR greater than 5, so the trim removed this
provider entirely from our proposed rule ratesetting. In addition, 60
hospital-based PHPs were removed for having no PHP costs and,
therefore, no days with PHP payment. Two hospital-based PHPs were
removed because none of their days included PHP-allowable HCPCS codes.
No hospital-based PHPs were removed for missing wage index data, nor
were any hospital-based PHPs removed by the OPPS 3 standard
deviation trim on costs per day. (We refer readers to the OPPS Claims
Accounting Document, available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/CMS-1695-FC-2019-OPPS-FR-Claims-Accounting.pdf.)
Overall, we removed 63 hospital-based PHP providers [(1 with all
service days having a CCR greater than 5) + (60 with zero daily costs
and no PHP payment) + (2 with no PHP-allowable HCPCS codes)], resulting
in 364 (427 total-63 excluded) hospital-based PHP providers in the data
used for calculating ratesetting. In addition, 3 hospital-based PHP
providers were defaulted to their overall hospital ancillary CCRs due
to outlier cost center CCR values.
After completing these data preparation steps, we calculated the CY
2020 geometric mean per diem cost for hospital-based PHP APC 5863 for
hospital-based partial hospitalization services by following the
methodology described in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70464 through 70465) and modified in the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79687 and 79691).\66\ The
calculated CY 2020 hospital-based PHP APC geometric mean per diem cost
for hospital-based PHP providers that provide 3 or more services per
service day (hospital-based PHP APC 5863) is $198.53, a decrease from
$222.76 calculated last year for CY 2019 ratesetting (83 FR 58989
through 58991).
---------------------------------------------------------------------------
\66\ Each revenue code on the hospital-based PHP claim must have
a HCPCS code and charge associated with it. We multiply each claim
service line's charges by the hospital's department-level CCR; in CY
2020 and subsequent years, that CCR is determined by using the PHP-
only revenue-code-to-cost-center crosswalk. Only the claims service
lines containing PHP-allowable HCPCS codes and PHP-allowable revenue
codes from the hospital-based PHP claims remaining after trimming
are retained for hospital-based PHP cost determination. The costs,
payments, and service units for all service lines occurring on the
same service date, by the same provider, and for the same
beneficiary are summed. Hospital-based PHP service days must have 3
or more services provided to be assigned to hospital-based PHP APC
5863. The proposed geometric mean per diem cost for hospital-based
PHP APC 5863 is calculated by taking the nth root of the product of
n numbers, for days where 3 or more services were provided.
Hospital-based PHP service days with costs 3 standard
deviations from the geometric mean costs within APC 5863 are deleted
and removed from modeling. The remaining hospital-based PHP service
days are used to calculate the proposed geometric mean per diem cost
for hospital-based PHP APC 5863.
---------------------------------------------------------------------------
Due to this fluctuation, we investigated why this calculated
hospital-based PHP APC geometric mean per diem cost decreased from the
prior year, and found that a single provider with a large number of
paid PHP service days had a significant decrease in its cost per day
and, therefore, was heavily influencing the data. We are concerned that
a hospital-based PHP APC geometric mean per diem cost of $198.53 would
not support ongoing access to hospital-based PHPs. This cost is nearly
an 11 percent decrease from the final CY 2019 hospital-based PHP
geometric mean per diem cost. We believe access is better supported
when the geometric mean per diem cost does not fluctuate greatly. In
addition, while the hospital-based PHP APC 5863 is described as
providing payment for the cost of 3 or more services per day (81 FR
79680), 89 percent of hospital-based PHP paid service days in CY 2018
were for providing 4 or more services per day. To be eligible for a
PHP, a patient must need at least 20 hours of therapeutic services per
week, as evidenced in the patient's plan of care (42 CFR 410.43(c)(1)).
To meet those patient needs, most PHP paid service days provide 4 or
more services (we refer readers to Table 22.--Percentage of PHP Days by
Service Unit Frequency in this proposed rule). Therefore, the hospital-
based PHP APC 5863 is actually heavily weighted to the cost of
providing 4 or more services. The per diem costs for hospital-based PHP
APC 5863 have been calculated as $213.14, $208.09, and $222.76 for CY
2017 (81 FR 79691), CY 2018 (82 FR 59378), and CY 2019 (83 FR 58991),
respectively. We do not believe that it is likely that the cost of
providing hospital-based PHP services has suddenly declined when costs
generally increase over time. We are concerned by this fluctuation,
which we believe is influenced by data from a single large provider
that had low service costs per day.
Therefore, rather than proposing the calculated CY 2020 hospital-
based PHP APC geometric mean per diem cost, we are instead proposing to
use the CY 2020 hospital-based PHP APC geometric mean per diem cost,
calculated in accordance with our existing methodology, but with a cost
floor equal to the CY 2019 final geometric mean per diem cost for
hospital-based PHPs of $222.76 (83 FR 58991), as the basis for
developing the CY 2020 hospital-based PHP APC per diem rate. As part of
this proposal, in the final rule with comment period, we are proposing
that we would use the most recent updated claims and cost data to
calculate CY 2020 geometric mean per diem costs. This proposal aligns
with our proposal for CMHCs. We believe using the CY 2019 hospital-
based PHP per diem cost as the floor is appropriate because it is based
on very recent hospital-based PHP claims and cost data and would help
to protect provider access by preventing wide fluctuation in the per
diem costs for hospital-based APC 5863. Because the calculated amount
of $198.53 is less than the final CY 2019 hospital-based PHP APC
geometric mean per diem cost of $222.76, the inclusion of a cost floor
means that the proposed CY 2020 hospital-based PHP geometric mean per
diem cost, as of the time of this proposed rule, is $222.76. The
inclusion of the cost floor would protect hospital-based PHPs if the
final CY 2020 calculated hospital-based PHP APC geometric mean per diem
cost results in an amount that is still less than $222.76. We believe
this proposal for CY 2020 ratesetting allows us to use the most recent
or very recent hospital-based PHP claims and cost reporting data while
still protecting provider access. To be clear, this policy would only
apply for the CY 2020 ratesetting.
In crafting this proposal, we also considered proposing a 3-year
rolling average calculated using the final PHP geometric mean per diem
costs, by provider type, from CY 2018 (82 FR 59378) and CY 2019 (83 FR
58991), and the calculated CY 2020 geometric mean per diem cost of
$198.53 discussed earlier in this section for hospital-based PHPs. As
discussed previously in this section, the 3-year rolling average per
diem cost floor for CMHCs would have been $122.75, but the resulting
rolling average per diem cost floor for hospital-based PHPs would have
been $209.79. While we believe that this option would have supported
access to CMHCs, as discussed previously, it would have resulted in a
geometric mean per diem cost for the hospital-based PHP APC which still
would have been a decrease from the hospital-based PHP APC geometric
mean per diem cost of $222.76 finalized in CY 2019 (83 FR 58991). In
addition, we believe that it is necessary to recalculate the hospital-
[[Page 39518]]
based PHP geometric mean per diem cost for the final rule using updated
claims and cost data and simply proposing to use a 3-year rolling
average per diem cost floor for the hospital-based PHP APC per diem
costs for CY 2020 would not have allowed us to do so. We are concerned
that this 3-year rolling average per diem cost would continue to result
in a fluctuation in the cost of a hospital providing 4 or more
hospital-based PHP services per day. We believe that it is important to
support access to partial hospitalization services in both CMHCs and in
hospital-based PHPs, and note that hospital-based PHPs provide 80
percent of all paid PHP service days. Therefore, we believe that it is
more appropriate to propose to use the final CY 2019 geometric mean per
diem costs, by provider type, as the cost floor for use with the
calculated CY 2020 PHP geometric mean per diem costs, by provider type,
because those CY 2019 per diem costs are based on very recent CMHC and
hospital-based PHP claims and cost data, are the easiest to understand,
and would result in proposed geometric mean per diem costs which would
help to protect provider access by preventing wide fluctuation in the
per diem costs for both CMHCs and hospital-based PHPs.
We estimate the aggregate difference in the (prescaled) hospital-
based PHP geometric mean per diem costs for CY 2020 from proposing the
hospital-based PHP cost floor amount of $222.76 rather than the
calculated hospital-based PHP geometric mean per diem cost of $198.53
to be $9.3 million. We refer readers to section XXVI. of this proposed
rule for payment impacts, which are budget neutral.
In summary, for CY 2020, we are proposing to use the calculated CY
2020 CMHC geometric mean per diem cost and the calculated CY 2020
hospital-based PHP geometric mean per diem cost, each calculated in
accordance with our existing methodology, but with a cost floor equal
to the CY 2019 final geometric mean per diem costs as the basis for
developing the CY 2020 PHP APC per diem rates. Because the CY 2020
calculated geometric mean per diem costs for these provider types were
both less than their respective final CY 2019 APC geometric mean per
diem costs, the inclusion of a cost floor in this proposal means that
both the proposed CY 2020 CMHC geometric mean per diem cost and the
proposed CY 2020 hospital-based PHP geometric mean per diem cost, as of
the time of this proposed rule, are $121.62 and $222.76, respectively.
As part of this proposal, in the final rule with comment period, we are
proposing that we would use the most recent updated claims and cost
data to calculate CY 2020 geometric mean per diem costs. The inclusion
of a cost floor, which is based on very recent data, would protect
providers should the final CY 2020 calculated per diem costs for CMHCs
or for hospital-based PHPs result in amounts that are still less than
the final CY 2019 CMHC and hospital-based PHP geometric mean per diem
costs.
These proposed CY 2020 PHP geometric mean per diem costs are shown
in Table 20, and are used to derive the proposed CY 2020 PHP APC per
diem rates for CMHCs and hospital-based PHPs. The proposed CY 2020 PHP
APC per diem rates are included in Addendum A to this proposed rule
(which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html).\67\
[GRAPHIC] [TIFF OMITTED] TP09AU19.038
3. PHP Service Utilization Updates
a. Provision of Individual Therapy
---------------------------------------------------------------------------
\67\ As discussed in section II.A. of this CY 2020 OPPS/ASC
proposed rule, proposed OPPS APC geometric mean per diem costs
(including proposed PHP APC geometric mean per diem costs) are
divided by the proposed geometric mean per diem costs for APC 5012
(Clinic Visits and Related Services) to calculate each PHP APC's
unscaled relative payment weight. An unscaled relative payment
weight is one that is not yet adjusted for budget neutrality. Budget
neutrality is required under section 1833(t)(9)(B) of the Act, and
ensures that the estimated aggregate weight under the OPPS for a
calendar year is neither greater than nor less than the estimated
aggregate weight that would have been made without the changes. To
adjust for budget neutrality (that is, to scale the weights), we
compare the estimated aggregated weight using the scaled relative
payment weights from the previous calendar year at issue. We refer
readers to the ratesetting procedures described in Part 2 of the
OPPS Claims Accounting narrative and in section II. of this proposed
rule for more information on scaling the weights, and for details on
the final steps of the process that lead to proposed PHP APC per
diem payment rates. The OPPS Claims Accounting narrative is
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
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In the CY 2016 OPPS/ASC final rule with comment period (81 FR 79684
through 79685), we expressed concern over the low frequency of
individual therapy provided to beneficiaries. The CY 2018 claims data
used for this CY 2020 proposed rule revealed some changes in the
provision of individual therapy compared to CY 2015, CY 2016, and CY
2017 claims data as shown in the Table 21.
[[Page 39519]]
[GRAPHIC] [TIFF OMITTED] TP09AU19.039
As shown in Table 21, the CY 2018 claims show that both CMHCs and
hospital-based PHPs have slightly increased the provision of individual
therapy on days with 4 or more services, compared to CY 2017 claims.
However, on days with 3 services, CMHCs decreased the provision of
individual therapy, while hospital-based PHPs provided the same level
of individual therapy as in CY 2017.
b. Provision of 3-Service Days
In the CY 2018 OPPS/ASC proposed rule and final rule with comment
period (82 FR 33640 and 82 FR 59378), we stated that we are aware that
our single-tier payment policy may influence a change in service
provision because providers are able to obtain payment that is heavily
weighted to the cost of providing 4 or more services when they provide
only 3 services. We indicated that we are interested in ensuring that
providers furnish an appropriate number of services to beneficiaries
enrolled in PHPs. Therefore, with the CY 2017 implementation of CMHC
APC 5853 and hospital-based PHP APC 5863 for providing 3 or more PHP
services per day, we are continuing to monitor utilization of days with
only 3 PHP services.
For this CY 2020 OPPS/ASC proposed rule, we used the CY 2018 claims
data. Table 22 shows the utilization findings based on the most recent
claims data.
[[Page 39520]]
[GRAPHIC] [TIFF OMITTED] TP09AU19.040
As shown in Table 22, the CY 2018 claims data used for this
proposed rule showed that PHPs maintained an appropriately low
utilization of 3 service days compared to the 3 prior claim years.
Compared to CY 2017, in CY 2018 hospital-based PHPs provided slightly
more days with 3 services only, more days with 4 services only, and
fewer days with 5 or more services. Compared to CY 2017, in CY 2018
CMHCs decreased their provision of 3 service days, slightly increased
their provision of days with 4 services, but have decreased their
provision of days with 5 or more services.
The CY 2017 data are the first year of claims data to reflect the
change to the single-tier PHP APCs. As we noted in the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79685), we will continue to
monitor the provision of days with only 3 services, particularly now
that the single-tier PHP APCs 5853 and 5863 are established for
providing 3 or more services per day for CMHCs and hospital-based PHPs,
respectively.
It is important to reiterate our expectation that days with only 3
services are meant to be an exception and not the typical PHP day. In
the CY 2009 OPPS/ASC final rule with comment period (73 FR 68694), we
clearly stated that we consider the acceptable minimum units of PHP
services required in a PHP day to be 3 and explained that it was never
our intention that 3 units of service represent the number of services
to be provided in a typical PHP day. PHP is furnished in lieu of
inpatient psychiatric hospitalization and is intended to be more
intensive than a half-day program. We further indicated that a typical
PHP day should generally consist of 5 to 6 units of service (73 FR
68689). We explained that days with only 3 units of services may be
appropriate to bill in certain limited circumstances, such as when a
patient might need to leave early for a medical appointment and,
therefore, would be unable to complete a full day of PHP treatment. At
that time, we noted that if a PHP were to only provide days with 3
services, it would be difficult for patients to meet the eligibility
requirement in 42 CFR 410.43(c)(1) that patients must require a minimum
of 20 hours per week of therapeutic services as evidenced in their plan
of care (73 FR 68689).
C. Proposed Outlier Policy for CMHCs
In this CY 2020 OPPS/ASC proposed rule, for CY 2020, we are
proposing to continue to calculate the CMHC outlier percentage, cutoff
point and percentage payment amount, outlier reconciliation, outlier
payment cap, and fixed-dollar threshold according to previously
established policies. These topics are discussed in more detail below.
We refer readers to section II.G. of this proposed rule for our general
policies for hospital outpatient outlier payments.
1. Background
As discussed in the CY 2004 OPPS final rule with comment period (68
FR 63469 through 63470), we noted a significant difference in the
amount of outlier payments made to hospitals and CMHCs for PHP
services. Given the difference in PHP charges between hospitals and
CMHCs, we did not believe it was appropriate to make outlier payments
to CMHCs using the outlier percentage target amount and threshold
established for hospitals. Therefore, beginning in CY 2004, we created
a separate outlier policy specific to the estimated costs and OPPS
payments provided to CMHCs. We designated a portion of the estimated
OPPS outlier threshold specifically for CMHCs, consistent with the
percentage of projected payments to CMHCs under the OPPS each year,
excluding outlier payments, and established a separate outlier
threshold for CMHCs. This separate outlier threshold for CMHCs resulted
in $1.8 million in outlier payments to CMHCs in CY 2004 and $0.5
million in outlier payments to CMHCs in CY 2005 (82 FR 59381). In
contrast, in CY 2003, more than $30 million was paid to CMHCs in
outlier payments (82 FR 59381).
2. CMHC Outlier Percentage
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
through 59268), we described the current outlier policy for hospital
outpatient payments and CMHCs. We
[[Page 39521]]
note that we also discussed our outlier policy for CMHCs in more detail
in section VIII. C. of that same final rule (82 FR 59381). We set our
projected target for all OPPS aggregate outlier payments at 1.0 percent
of the estimated aggregate total payments under the OPPS (82 FR 59267).
We estimate CMHC per diem payments and outlier payments by using the
most recent available utilization and charges from CMHC claims, updated
CCRs, and the updated payment rate for APC 5853. For increased
transparency, we are providing a more detailed explanation of the
existing calculation process for determining the CMHC outlier
percentages below. As previously stated, we are proposing to continue
to calculate the CMHC outlier percentage according to previously
established policies, and we are not proposing any changes to our
current methodology for calculating the CMHC outlier percentage for CY
2020. To calculate the CMHC outlier percentage, we follow three steps:
Step 1: We multiply the OPPS outlier threshold, which is
1.0 percent, by the total estimated OPPS Medicare payments (before
outliers) for the prospective year to calculate the estimated total
OPPS outlier payments:
(0.01 x Estimated Total OPPS Payments) = Estimated Total OPPS Outlier
Payments.
Step 2: We estimate CMHC outlier payments by taking each
provider's estimated costs (based on their allowable charges multiplied
by the provider's CCR) minus each provider's estimated CMHC outlier
multiplier threshold (we refer readers to section VIII.C.3. of this
proposed rule). That threshold is determined by multiplying the
provider's estimated paid days by 3.4 times the CMHC PHP APC payment
rate. If the provider's costs exceed the threshold, we multiply that
excess by 50 percent, as described in section VIII.C.3. of this
proposed rule, to determine the estimated outlier payments for that
provider. CMHC outlier payments are capped at 8 percent of the
provider's estimated total per diem payments (including the
beneficiary's copayment), as described in section VIII.C.5. of this
proposed rule, so any provider's costs that exceed the CMHC outlier cap
would have its payments adjusted downward. After accounting for the
CMHC outlier cap, we sum all of the estimated outlier payments to
determine the estimated total CMHC outlier payments.
(Each Provider's Estimated Costs--Each Provider's Estimated Multiplier
Threshold) = A. If A is greater than 0, then (A x 0.50) = Estimated
CMHC Outlier Payment (before cap) = B. If B is greater than (0.08 x
Provider's Total Estimated Per Diem Payments), then cap-adjusted B =
(0.08 x Provider's Total Estimated Per Diem Payments); otherwise, B =
B. Sum (B or cap-adjusted B) for Each Provider = Total CMHC Outlier
Payments.
Step 3: We determine the percentage of all OPPS outlier
payments that CMHCs represent by dividing the estimated CMHC outlier
payments from Step 2 by the total OPPS outlier payments from Step 1:
(Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).
In CY 2019, we designated approximately 0.01 percent of that
estimated 1.0 percent hospital outpatient outlier threshold for CMHCs
(83 FR 58996), based on this methodology. In this proposed rule, we are
proposing to continue to use the same methodology for CY 2020.
Therefore, based on our CY 2020 payment estimates, CMHCs are projected
to receive 0.02 percent of total hospital outpatient payments in CY
2020, excluding outlier payments. We are proposing to designate
approximately less than 0.01 percent of the estimated 1.0 percent
hospital outpatient outlier threshold for CMHCs. This percentage is
based upon the formula given in Step 3 above.
3. Cutoff Point and Percentage Payment Amount
As described in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59381), our policy has been to pay CMHCs for outliers if the
estimated cost of the day exceeds a cutoff point. In CY 2006, we set
the cutoff point for outlier payments at 3.4 times the highest CMHC PHP
APC payment rate implemented for that calendar year (70 FR 68551). For
CY 2018, the highest CMHC PHP APC payment rate is the payment rate for
CMHC PHP APC 5853. In addition, in CY 2002, the final OPPS outlier
payment percentage for costs above the multiplier threshold was set at
50 percent (66 FR 59889). In CY 2018, we continued to apply the same 50
percent outlier payment percentage that applies to hospitals to CMHCs
and continued to use the existing cutoff point (82 FR 59381).
Therefore, for CY 2018, we continued to pay for partial hospitalization
services that exceeded 3.4 times the CMHC PHP APC payment rate at 50
percent of the amount of CMHC PHP APC geometric mean per diem costs
over the cutoff point. For example, for CY 2018, if a CMHC's cost for
partial hospitalization services paid under CMHC PHP APC 5853 exceeds
3.4 times the CY 2018 payment rate for CMHC PHP APC 5853, the outlier
payment would be calculated as 50 percent of the amount by which the
cost exceeds 3.4 times the CY 2018 payment rate for CMHC PHP APC 5853
[0.50 x (CMHC Cost-(3.4 x APC 5853 rate))].
In this CY 2020 OPPS/ASC proposed rule, for CY 2020, in accordance
with our existing policy, we are proposing to continue to pay for
partial hospitalization services that exceed 3.4 times the proposed
CMHC PHP APC payment rate at 50 percent of the CMHC PHP APC geometric
mean per diem costs over the cutoff point. That is, for CY 2020, if a
CMHC's cost for partial hospitalization services paid under CMHC PHP
APC 5853 exceeds 3.4 times the proposed payment rate for CMHC APC 5853,
the outlier payment would be calculated as [0.50 x (CMHC Cost-(3.4 x
APC 5853 rate))].
4. Outlier Reconciliation
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594
through 68599), we established an outlier reconciliation policy to
address charging aberrations related to OPPS outlier payments. We
addressed vulnerabilities in the OPPS outlier payment system that lead
to differences between billed charges and charges included in the
overall CCR, which are used to estimate cost and would apply to all
hospitals and CMHCs paid under the OPPS. CMS initiated steps to ensure
that outlier payments appropriately account for the financial risk when
providing an extraordinarily costly and complex service, but are only
being made for services that legitimately qualify for the additional
payment.
For a comprehensive description of outlier reconciliation, we refer
readers to the CY 2019 OPPS/ASC final rules with comment period (83 FR
58874 through 58875 and 81 FR 79678 through 79680).
In this CY 2020 OPPS/ASC proposed rule, we are proposing to
continue these policies for partial hospitalization services provided
through PHPs for CY 2020. The current outlier reconciliation policy
requires that providers whose outlier payments meet a specified
threshold (currently $500,000 for hospitals and any outlier payments
for CMHCs) and whose overall ancillary CCRs change by plus or minus 10
percentage points or more, are subject to outlier reconciliation,
pending approval of the CMS Central Office and Regional Office (73 FR
68596 through 68599). The policy also includes provisions related to
CCRs and to calculating the
[[Page 39522]]
time value of money for reconciled outlier payments due to or due from
Medicare, as detailed in the CY 2009 OPPS/ASC final rule with comment
period and in the Medicare Claims Processing Manual (73 FR 68595
through 68599 and Medicare Claims Processing internet Only Manual,
Chapter 4, Section 10.7.2 and its subsections, available online at:
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf).
5. Outlier Payment Cap
In the CY 2017 OPPS/ASC final rule with comment period, we
implemented a CMHC outlier payment cap to be applied at the provider
level, such that in any given year, an individual CMHC will receive no
more than a set percentage of its CMHC total per diem payments in
outlier payments (81 FR 79692 through 79695). We finalized the CMHC
outlier payment cap to be set at 8 percent of the CMHC's total per diem
payments (81 FR 79694 through 79695). This outlier payment cap only
affects CMHCs, it does not affect other provider types (that is,
hospital-based PHPs), and is in addition to and separate from the
current outlier policy and reconciliation policy in effect. For CY
2019, we continued this policy in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58997).
For CY 2020 and subsequent years, we are proposing to continue to
apply the 8 percent CMHC outlier payment cap to the CMHC's total per
diem payments.
6. Fixed-Dollar Threshold
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
through 59268), for the hospital outpatient outlier payment policy, we
set a fixed-dollar threshold in addition to an APC multiplier
threshold. Fixed-dollar thresholds are typically used to drive outlier
payments for very costly items or services, such as cardiac pacemaker
insertions. CMHC PHP APC 5853 is the only APC for which CMHCs may
receive payment under the OPPS, and is for providing a defined set of
services that are relatively low cost when compared to other OPPS
services. Because of the relatively low cost of CMHC services that are
used to comprise the structure of CMHC PHP APC 5853, it is not
necessary to also impose a fixed-dollar threshold on CMHCs. Therefore,
in the CY 2018 OPPS/ASC final rule with comment period, we did not set
a fixed-dollar threshold for CMHC outlier payments (82 FR 59381).
In this CY 2020 OPPS/ASC proposed rule, we are proposing to
continue this policy for CY 2020.
D. Update to PHP Allowable HCPCS Codes
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 58997
through 58998), we discussed that, during the CY 2019 rulemaking, we
received the Category I and III CPT codes from the AMA that were new,
revised, and deleted, effective January 1, 2019. This included the
deleting of the following psychological and neuropsychological testing
CPT codes, which affect PHPs, as of January 1, 2019:
CPT code 96101 (Psychological testing by psychologist/
physician);
CPT code 96102 (Psychological testing by technician);
CPT code 96103 (Psychological testing administered by
computer);
CPT code 96118 (Neuropsychological testing by
psychologist/physician)
CPT code 96119 (Neuropsychological testing by technician);
and
CPT code 96120 (Neuropsychological test administered w/
computer).
In addition, the AMA added the following psychological and
neuropsychological testing CPT codes to replace the deleted codes, as
of January 1, 2019:
CPT code 96130 (Psychological testing evaluation by
physician/qualified health care professional; first hour);
CPT code 93131 (Psychological testing evaluation by
physician/qualified health care professional; each additional hour);
CPT code 96132 (Neuropsychological testing evaluation by
physician/qualified health care professional; first hour);
CPT code 96133 (Neuropsychological testing evaluation by
physician/qualified health care professional; each additional hour);
CPT code 96136 (Psychological/neuropsychological testing
by physician/qualified health care professional; first 30 minutes);
CPT code 96137 (Psychological/neuropsychological testing
by physician/qualified health care professional; each additional 30
minutes);
CPT code 96138 (Psychological/neuropsychological testing
by technician; first 30 minutes);
CPT code 96139 (Psychological/neuropsychological testing
by technician; each additional 30 minutes); and
CPT code 96146 (Psychological/neuropsychological testing;
automated result only).
As we proposed, in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58997 through 58998), we included these replacement codes
in Addenda B and O. As is our usual practice for including new and
revised Category I and III CPT codes under the OPPS, we included
interim APC assignments and status indicators for these codes and
provided an opportunity under the OPPS for the public to comment on
these interim assignments. That is, we included comment indicator
``NP'' to indicate that the code is new for the next calendar year or
the code is an existing code with substantial revision to its code
descriptor in the next calendar year as compared to current calendar
year with a proposed APC assignment, and that comments will be accepted
on the proposed APC and status indicator assignments.
While these interim APC and status indicator assignments under the
OPPS were included in Addendum B and Addendum O to the CY 2019 OPPS/ASC
proposed rule and final rule with comment period, PHP is a part of the
OPPS and PHP providers may not have been aware of those changes because
we did not also include these in the PHP discussion presented in the
proposed rule. To ensure that PHP providers were aware of the new and
replacement codes related to CMHC and hospital-based partial
hospitalization programs and had the opportunity to comment on the
changes, we utilized a practice similar to the one we use under the
OPPS for new Level II HCPCS codes that become effective after the
proposed rule is published. Therefore, in the CY 2019 OPPS/ASC final
rule with comment period, we proposed to delete the same 6 CPT codes
listed above from the PHP-allowable code set for CMHC APC 5853 and
hospital-based PHP APC 5863, and replace them with 9 new CPT codes as
shown in Table 47 of the final rule with comment period, effective
January 1, 2019. We solicited public comments on these proposals and
indicated that we will consider the public comments we receive in
response to the CY 2019 final rule with comment period and seek to
finalize our proposed actions in the CY 2020 OPPS/ASC final rule with
comment period.
We also refer readers to section III.A.4. of this proposed rule for
a detailed discussion of how we include new and revised Category I and
III CPT codes for a related calendar year, assign interim APC and
status indicator assignments, and allow for public
[[Page 39523]]
comments on these interim assignments for finalization in the next
calendar year final rule with comment period.
IX. Proposed Procedures That Would Be Paid Only as Inpatient Procedures
A. Background
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74352 through 74353) for a full historical discussion of
our longstanding policies on how we identify procedures that are
typically provided only in an inpatient setting (referred to as the
inpatient only (IPO) list) and, therefore, will not be paid by Medicare
under the OPPS, and on the criteria that we use to review the IPO list
each year to determine whether or not any procedures should be removed
from the list. The complete list of proposed codes that describe
procedures that would be paid by Medicare in CY 2020 as inpatient only
procedures is included as Addendum E to this CY 2020 proposed rule,
which is available via the internet on the CMS website.
B. Proposed Changes to the Inpatient Only (IPO) List
1. Methodology for Identifying Appropriate Changes to IPO List
In this proposed rule, for CY 2020, we are proposing to use the
same methodology (described in the November 15, 2004 final rule with
comment period (69 FR 65834)) of reviewing the current list of
procedures on the IPO list to identify any procedures that may be
removed from the list. We have established five criteria that are part
of this methodology. As noted in the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74353), we utilize these criteria when reviewing
procedures to determine whether or not they should be removed from the
IPO list and assigned to an APC group for payment under the OPPS when
provided in the hospital outpatient setting. We note that a procedure
is not required to meet all of the established criteria to be removed
from the IPO list. The criteria include the following:
1. Most outpatient departments are equipped to provide the services
to the Medicare population.
2. The simplest procedure described by the code may be performed in
most outpatient departments.
3. The procedure is related to codes that we have already removed
from the IPO list.
4. A determination is made that the procedure is being performed in
numerous hospitals on an outpatient basis.
5. A determination is made that the procedure can be appropriately
and safely performed in an ASC and is on the list of approved ASC
procedures or has been proposed by us for addition to the ASC list.
2. Procedures Proposed for Removal From the IPO List
Using the above-listed criteria, for the CY 2020 OPPS, we have
identified one procedure described by the following code that we are
proposing to remove from the IPO list for CY 2020: CPT code 27130
(Arthroplasty, acetabular and proximal femoral prosthetic replacement
(total hip arthroplasty) with or without autograft or allograft). The
procedure that we are proposing to remove from the IPO list for CY 2020
and subsequent years, including the CPT/HCPCS code, long descriptor,
and the proposed CY 2020 payment indicator is displayed in Table 23 of
this proposed rule.
For a number of years, total hip arthroplasty (THA) has been a
topic of discussion for removal from the IPO list with both stakeholder
support and opposition. Most recently, in the CY 2018 OPPS/ASC proposed
rule (82 FR 33644 and 33645), we sought public comment on the possible
removal of partial hip arthroplasty (PHA), CPT code 27125
(Hemiarthroplasty, hip, partial (eg, femoral stem prosthesis, bipolar
arthroplasty)), and total hip arthroplasty (THA) or total hip
replacement, CPT code 27130 (Arthroplasty, acetabular and proximal
femoral prosthetic replacement (total hip arthroplasty), with or
without autograft or allograft from the IPO list. Both THA and PHA were
placed on the original IPO list in the CY 2001 OPPS/ASC final rule with
comment period (65 FR 18780).
Among those commenters expressing support in response to the CY
2018 OPPS/ASC proposed rule (which we summarized and responded to in
the CY 2018 OPPS/ASC final rule with comment period (82 FR 52527
through 52528) for removal of THA from the IPO list were several
surgeons and other stakeholders who believed that, given thorough
preoperative screening by medical teams with significant experience and
expertise involving hip replacement procedures, the THA procedure could
be provided on an outpatient basis for some Medicare beneficiaries.
These commenters noted significant success involving same day discharge
for patients who met the screening criteria and whose experienced
medical teams were able to perform the procedure early enough in the
day for the patients to achieve postoperative goals, allowing home
discharge by the end of the day. The commenters believed that the
benefits of providing the THA procedure on an outpatient basis would
lead to significant enhancements in patient well-being, improved
efficiency, and cost savings to the Medicare program, including shorter
hospital stays resulting in fewer medical complications, improved
results, and enhanced patient satisfaction.
We stated in the CY 2018 OPPS/ASC proposed rule that, like most
surgical procedures, both PHA and THA need to be tailored to the
individual patient's needs. Patients with a relatively low anesthesia
risk and without significant comorbidities who have family members at
home who can assist them may likely be good candidates for an
outpatient PHA or THA procedure. These patients may be determined to
also be able to tolerate outpatient rehabilitation in either an
outpatient facility or at home postsurgery. On the other hand, patients
with multiple medical comorbidities, aside from their osteoarthritis,
would more likely require inpatient hospitalization and possibly
postacute care in a skilled nursing facility or other facility.
Surgeons who discussed outpatient PHA and THA procedures in public
comments in response to our CY 2017 OPPS/ASC proposed rule (81 FR
45679) comment solicitation (which we summarized and responded to in
the CY 2017 OPPS/ASC final rule with comment period (81 FR 79696)) on
the TKA procedure emphasized the importance of careful patient
selection and strict protocols to optimize outpatient hip replacement
outcomes. These protocols typically manage all aspects of the patient's
care, including the at-home preoperative and postoperative environment,
anesthesia, pain management, and rehabilitation to maximize rapid
recovery, ambulation, and performance of activities of daily living.
Numerous commenters representing a variety of stakeholders,
including physicians and other care providers, individual stakeholders,
specialty societies, hospital associations, hospital systems, ASCs,
device manufacturers, and beneficiaries, responded to our solicitation
of comments regarding the removal of PHA and THA from the IPO list
(which we summarized and responded to in CY 2018 OPPS/ASC final rule
with comment period (82 FR 52527 through 52528)). The comments were
diverse and some were similar to the comments we received on our
proposal to remove TKA from the IPO
[[Page 39524]]
list. Some commenters, including hospital systems and associations as
well as specialty societies and physicians, stated that it would not be
clinically appropriate to remove PHA and THA from the IPO list,
indicating that the patient safety profile of outpatient THA and PHA in
the non-Medicare population is not well-established. Commenters
representing orthopedic surgeons also stated that patients requiring a
hemiarthroplasty (PHA) for fragility fractures are by nature higher
risk, suffer more extensive comorbidities and require closer monitoring
and preoperative optimization; therefore, it would not be medically
appropriate to remove the PHA procedure from the IPO list.
Other commenters, including ambulatory surgery centers, physicians,
and beneficiaries, supported the removal of PHA and THA from the IPO
list. These commenters stated that the procedures were appropriate for
certain Medicare beneficiaries and most outpatient departments are
equipped to provide THA to some Medicare beneficiaries. They also
referenced their own personal successful experiences with outpatient
THA.
After reviewing the clinical characteristics of the procedure
described by CPT code 27130, considering the public comments described
earlier from past rules, additional feedback from stakeholders, and
with further consultation with our clinical advisors regarding this
procedure, we believe that this procedure meets criterion 2 (the
simplest procedure described by the code may be performed in most
outpatient departments) and criterion 3 (the procedure is related to
codes that we have already removed from the IPO list). As such, we
believe that appropriately selected patients could have this procedure
performed on an outpatient basis. Therefore, we are proposing to remove
THA from the IPO list and to assign the THA procedure (CPT code 27130)
to C-APC 5115 with status indicator ``J1''. We are seeking public
comments on our conclusion that the procedure described by CPT code
27130 meets criteria 2 and 3 and our proposal to assign the procedure
to C-APC 5115 with status indicator ``J1''. At this time, we are not
proposing to remove PHA from the IPO list because we continue to
believe that it does not meet the criteria for removal.
3. Solicitation of Public Comments on the Potential Removal of
Procedures Described by CPT Codes 22633, 22634, 63265, 63266, 63267,
63268 From the IPO List
Throughout the years, we have received several public comments on
additional CPT codes that stakeholders believe fit our criteria and
should be removed from the IPO list. In this CY 2020 OPPS/ASC proposed
rule, we are seeking public comment on the removal of the following
procedures from the IPO list in Table 23.
[GRAPHIC] [TIFF OMITTED] TP09AU19.041
We have reviewed the clinical characteristics of CPT code 22633 and
CPT code 22634 and believe that they are related to codes that we have
already removed from the IPO list. Specifically, stakeholders have
suggested that CPT codes 22633 and 22634 are related to CPT code
22551(Arthrodesis, anterior interbody, including disc space
[[Page 39525]]
preparation, discectomy, osteophytectomy and decompression of spinal
cord and/or nerve roots; cervical below c2), which is currently
performed in the outpatient hospital setting. However, after reviewing
the current data available on CPT codes 22633 and 22634, we are
concerned that the available data do not provide a large enough
sampling of outpatient procedures and do not directly address the
criteria for removal from the IPO list. At this time, we are seeking
public comments that would provide additional information on the safety
of performing CPT codes 22633 and 22634 in the outpatient hospital
setting.
In addition, we have reviewed CPT codes 63265, 63266, 63267, and
63268. Over the years, stakeholders have indicated that this series of
CPT codes should be considered minimally invasive, arguing that CPT
codes 63265, 63266, 63267, and 63268 meet criteria one and two for
removal from the IPO list: Most outpatient departments are equipped to
provide the services to the Medicare population and the simplest
procedure described by the code may be performed in most outpatient
departments. At this time, we do not believe that there is sufficient
information to demonstrate that CPT codes 63265, 63266, 63267, and
63268 meet the IPO list removal criteria. However, we are seeking
public comment on whether CPT codes 63265 through 63268 meet criteria
to be removed from the IPO list, including information from commenters
to demonstrate that the codes meet these criteria.
Table 24 contains the proposed change that we are proposing to make
to the IPO list for CY 2020.
[GRAPHIC] [TIFF OMITTED] TP09AU19.042
X. Proposed Nonrecurring Policy Changes
A. Proposed Changes in the Level of Supervision of Outpatient
Therapeutic Services in Hospitals and Critical Access Hospitals (CAHs)
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59390
through 59391) and in the CY 2009 OPPS/ASC proposed rule and final rule
with comment period (73 FR 41518 through 41519 and 73 FR 68702 through
68704, respectively), we clarified that direct supervision is required
for hospital outpatient therapeutic services covered and paid by
Medicare that are furnished in hospitals as well as in provider-based
departments (PBDs) of hospitals, as set forth in the CY 2000 OPPS final
rule with comment period (65 FR 18525). In the CY 2010 OPPS/ASC final
rule with comment period (74 FR 60575 through 60591), we finalized a
technical correction to the title and text of the applicable regulation
at 42 CFR 410.27 to clarify that this standard applies in critical
access hospitals (CAHs) as well as hospitals. In response to concerns
expressed by the hospital community, in particular CAHs and small rural
hospitals, that they would have difficulty meeting this standard, on
March 15, 2010, we instructed all MACs not to evaluate or enforce the
supervision requirements for therapeutic services provided to
outpatients in CAHs from January 1, 2010 through December 31, 2010,
while the agency revisited the supervision policy during the CY 2011
OPPS/ASC rulemaking cycle.
Due to continued concerns expressed by CAHs and small rural
hospitals, we extended this notice of nonenforcement (``enforcement
instruction'') as an interim measure for CY 2011, and expanded it to
apply to small rural hospitals having 100 or fewer beds (75 FR 72007).
We continued to consider the issue further in our annual OPPS notice-
and-comment rulemaking, and implemented an independent review process
in 2012 to obtain advice from the HOP Panel on this matter (76 FR 74360
through 74371). Under this process used since CY 2012, the HOP Panel
considers and advises CMS regarding stakeholder requests for changes in
the required minimum level of supervision of individual hospital
outpatient therapeutic services. In addition, we extended the
enforcement instruction through CY 2012 and CY 2013. For the period of
CY 2014 through CY 2017, Congress took legislative action (Pub. L. 113-
198, Pub. L. 114-112, Pub. L. 114-255, and Pub. L. 115-123) to extend
nonenforcement of the direct supervision requirement for hospital
outpatient therapeutic services in CAHs and small rural hospitals
having 100 or fewer beds through December 31, 2017. Then in the CY 2018
OPPS/ASC final rule with comment period (82 FR 59391), we reinstated
the enforcement instruction providing for the nonenforcement of the
direct supervision requirement for hospital outpatient therapeutic
services in CAHs and small rural hospitals having 100 or fewer beds
through December 31, 2019. The current enforcement instruction is
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/Supervision-Moratorium-on-Enforcement-for-CAHs-and-Certain-Small-Rural-Hospitals.pdf.
As discussed in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59390 through 59391), stakeholders have consistently requested
that CMS continue the nonenforcement of the direct supervision
requirement for hospital outpatient therapeutic services for CAHs and
small rural hospitals having 100 or fewer beds. Stakeholders stated
that some small rural hospitals and CAHs have insufficient staff
available to furnish direct supervision. The primary reason
stakeholders cited for this request is the difficulty that CAHs and
small rural hospitals have in
[[Page 39526]]
recruiting physicians and nonphysician practitioners to practice in
rural areas. These stakeholders noted that it is particularly difficult
to furnish direct supervision for critical specialty services, such as
radiation oncology services, that cannot be directly supervised by a
hospital emergency department physician or nonphysician practitioner
because of the volume of emergency patients or lack of specialty
expertise. In addition, we are not aware of any supervision-related
complaints from beneficiaries or providers regarding quality of care
for services furnished during the several years that the enforcement
instruction has been in effect.
The upcoming expiration of the latest enforcement instruction
providing for the nonenforcement of the direct supervision requirement
for hospital outpatient therapeutic services for CAHs and small rural
hospitals having 100 or fewer beds has prompted us to consider whether
to change the level of supervision for hospital outpatient therapeutic
services for all hospitals and CAHs. The enforcement instructions and
legislative actions that have been in place since 2010 have created a
two-tiered system of physician supervision requirements for hospital
outpatient therapeutic services for providers in the Medicare program,
with direct supervision required for most hospital outpatient
therapeutic services in most hospital providers, but only general
supervision required for most hospital outpatient therapeutic services
in CAHs and small rural hospitals with fewer than 100 beds.
However, we have not learned of any data or information from CAHs
and small rural hospitals indicating that the quality of outpatient
therapeutic services has been affected by requiring only general
supervision for these services. It is important to remember that the
requirement for general supervision for outpatient therapeutic services
does not preclude these hospitals from providing direct supervision for
outpatient therapeutic services when the physicians administering the
medical procedures decide that it is appropriate to do so. Many
outpatient therapeutic services involve a level of complexity and risk
such that direct supervision would be warranted even though only
general supervision is required.
In addition, CAHs and hospitals in general continue to be subject
to conditions of participation (CoPs) that complement the general
supervision requirements for hospital outpatient therapeutic services
to ensure that the medical services Medicare patients receive are
properly supervised. The CoPs for hospitals require Medicare patients
to be under the care of a physician (42 CFR 482.12(c)(4))), and for the
hospital to ``have an organized medical staff that operates under
bylaws approved by the governing body, and which is responsible for the
quality of medical care provided to patients by the hospital'' (42 CFR
482.22). The CoPs for CAHs (42 CFR 485.631(b)(1)(i)) require physicians
to provide medical direction for the CAHs' health care activities,
consultation for, and medical supervision of the health care staff. The
physicians' responsibilities in hospitals and CAHs include supervision
of all services performed at those facilities. In addition, physicians
must also follow State laws regarding scope of practice. Failure of
doctors of medicine or osteopathy to provide adequate supervision in
accordance with the hospital and CAH CoPs does not cause payment to be
denied for that individual service. However, consistent violations of
the CoP supervision requirements can lead to a provider having to
establish a corrective action plan to address supervision deficiencies,
and if the provider still fails to meet the CoP requirements, the
hospital or CAH can be terminated from Medicare participation.
Our experience indicates that Medicare providers will provide a
similar quality of hospital outpatient therapeutic services, regardless
of whether the minimum level of supervision required under the Medicare
program is direct or general. We have come to believe that the direct
supervision requirement for hospital outpatient therapeutic services
places an additional burden on providers that reduces their flexibility
to provide medical care. The issues with increased burden and reduced
flexibility to provide medical care have a more significant impact on
CAHs and small rural hospitals due to their recruiting and staffing
challenges, as we have recognized over the years in providing for
nonenforcement of the policy for these hospitals. Larger hospitals and
hospitals in urban or suburban areas are less affected by the burden
and reduced flexibility of the direct supervision requirement. However,
given that the direct supervision requirement has not yet been enforced
for CAHs and small rural hospitals, we believe it is time to end what
is effectively a two-tiered system of supervision levels for hospital
outpatient therapeutic services by proposing a policy that sets an
appropriate and uniformly enforceable supervision standard for all
hospital outpatient therapeutic services.
Therefore, we are proposing to change the generally applicable
minimum required level of supervision for hospital outpatient
therapeutic services from direct supervision to general supervision for
services furnished by all hospitals and CAHs. General supervision, as
defined in our regulation at 42 CFR 410.32(b)(3)(i) means that the
procedure is furnished under the physician's overall direction and
control, but that the physician's presence is not required during the
performance of the procedure. This proposal would ensure a standard
minimum level of supervision for each hospital outpatient therapeutic
service furnished incident to a physician's service in accordance with
the statute. We are proposing to amend the existing regulation at Sec.
410.27(a)(1)(iv) to provide that the default minimum level of
supervision for each hospital outpatient therapeutic service is
``general.''
We will continue to have the HOP Panel provide advice on the
appropriate supervision levels for hospital outpatient services as
described in section I.E.2. of this proposed rule. We will also retain
the ability to consider a change to the supervision level of an
individual hospital outpatient therapeutic service to a level of
supervision that is more intensive than general supervision through
notice and comment rulemaking. We are seeking public comments on this
proposal. Additionally, we are seeking public comments on whether
specific types of services, such as chemotherapy administration or
radiation therapy, should be excepted from this proposal.
B. Short Inpatient Hospital Stays
1. Background on the 2-Midnight Rule
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50913 through
50954), we clarified our policy regarding when an inpatient admission
is considered reasonable and necessary for purposes of Medicare Part A
payment. Under this policy, we established a benchmark providing that
surgical procedures, diagnostic tests, and other treatments would be
generally considered appropriate for inpatient hospital admission and
payment under Medicare Part A when the physician expects the patient to
require a stay that crosses at least 2 midnights and admits the patient
to the hospital based upon that expectation. Conversely, when a
beneficiary enters a hospital for a surgical procedure not designated
as an inpatient-only (IPO) procedure as
[[Page 39527]]
described in 42 CFR 419.22(n), a diagnostic test, or any other
treatment, and the physician expects to keep the beneficiary in the
hospital for only a limited period of time that does not cross 2
midnights, the services would be generally inappropriate for payment
under Medicare Part A, regardless of the hour that the beneficiary came
to the hospital or whether the beneficiary used a bed. With respect to
services designated under the OPPS as IPO procedures, we explained that
because of the intrinsic risks, recovery impacts, or complexities
associated with such services, these procedures would continue to be
appropriate for inpatient hospital admission and payment under Medicare
Part A regardless of the expected length of stay. We also indicated
that there might be further ``rare and unusual'' exceptions to the
application of the benchmark, which would be detailed in subregulatory
guidance.
2. Current Policy for Medical Review of Inpatient Hospital Admissions
Under Medicare Part A
In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70538
through 70549), we revised the previous rare and unusual exceptions
policy and finalized a proposal to allow for case-by-case exceptions to
the 2-midnight benchmark, whereby Medicare Part A payment may be made
for inpatient admissions where the admitting physician does not expect
the patient to require hospital care spanning 2 midnights, if the
documentation in the medical record supports the physician's
determination that the patient nonetheless requires inpatient hospital
care.
We note that, in the CY 2016 OPPS/ASC final rule with comment
period, we reiterated our position that the 2-midnight benchmark
provides clear guidance on when a hospital inpatient admission is
appropriate for Medicare Part A payment, while respecting the role of
physician judgment. We stated that the following criteria will be
relevant to determining whether an inpatient admission with an expected
length of stay of less than 2 midnights is nonetheless appropriate for
Medicare Part A payment:
Complex medical factors such as history and comorbidities;
The severity of signs and symptoms;
Current medical needs; and
The risk of an adverse event.
In other words, for purposes of Medicare payment, an inpatient
admission is payable under Part A if the documentation in the medical
record supports either the admitting physician's reasonable expectation
that the patient will require hospital care spanning at least 2
midnights, or the physician's determination based on factors such as
those identified above that the patient nonetheless requires care on an
inpatient basis. The exceptions for procedures on the IPO list and for
``rare and unusual'' circumstances designated by CMS as national
exceptions were unchanged by the CY 2016 OPPS/ASC final rule with
comment period.
As we stated in the CY 2016 OPPS/ASC final rule with comment
period, the decision to formally admit a patient to the hospital is
subject to medical review. For instance, for cases where the medical
record does not support a reasonable expectation of the need for
hospital care crossing at least 2 midnights, and for inpatient
admissions not related to a surgical procedure specified by Medicare as
an IPO procedure under 42 CFR 419.22(n) or for which there was not a
national exception, payment of the claim under Medicare Part A is
subject to the clinical judgment of the medical reviewer. The medical
reviewer's clinical judgment involves the synthesis of all submitted
medical record information (for example, progress notes, diagnostic
findings, medications, nursing notes, and other supporting
documentation) to make a medical review determination on whether the
clinical requirements in the relevant policy have been met. In
addition, Medicare review contractors must abide by CMS' policies in
conducting payment determinations, but are permitted to take into
account evidence-based guidelines or commercial utilization tools that
may aid such a decision. While Medicare review contractors may continue
to use commercial screening tools to help evaluate the inpatient
admission decision for purposes of payment under Medicare Part A, such
tools are not binding on the hospital, CMS, or its review contractors.
This type of information also may be appropriately considered by the
physician as part of the complex medical judgment that guides their
decision to keep a beneficiary in the hospital and formulation of the
expected length of stay.
3. Proposed Change for Medical Review of Certain Inpatient Hospital
Admissions Under Medicare Part A for CY 2020 and Subsequent Years
As stated earlier in this section, the procedures on the IPO list
of procedures under the OPPS are not subject to the 2-midnight
benchmark for purposes of inpatient hospital payment. However, the 2-
midnight benchmark is applicable once procedures have been removed from
the IPO list. Procedures that are removed from the IPO list are also
subject to initial medical reviews of claims for short-stay inpatient
admissions conducted by Beneficiary and Family-Centered Care Quality
Improvement Organizations (BFCC-QIOs).
BFCC-QIOs may also refer providers to the Recovery Audit
Contractors (RACs) for further medical review due to exhibiting
persistent noncompliance with Medicare payment policies, including, but
not limited to:
Having high denial rates;
Consistently failing to adhere to the 2-midnight rule; or
Failing to improve their performance after QIO educational
intervention.
As part of our continued effort to facilitate compliance with our
payment policy for inpatient admissions, we are proposing to establish
a 1-year exemption from certain medical review activities for
procedures removed from the IPO list under the OPPS in CY 2020 and
subsequent years. Specifically, we are proposing that procedures that
have been removed from the IPO list would not be eligible for referral
to RACs for noncompliance with the 2-midnight rule within the first
calendar year of their removal from the IPO list. These procedures
would not be considered by the BFCC-QIOs in determining whether a
provider exhibits persistent noncompliance with the 2-midnight rule for
purposes of referral to the RAC nor would these procedures be reviewed
by RACs for ``patient status.'' During this 1-year period, BFCC-QIOs
would have the opportunity to review such claims in order to provide
education for practitioners and providers regarding compliance with the
2-midnight rule, but claims identified as noncompliant would not be
denied with respect to the site-of-service under Medicare Part A.
Again, information gathered by the BFCC-QIO when reviewing procedures
that are newly removed from the IPO list could be used for educational
purposes and would not result in a claim denial during the proposed 1-
year exemption period.
We believe that a 1-year exemption from BFCC-QIO referral to RACs
and RAC ``patient status'' review of the setting for procedures removed
from the IPO list under the OPPS and performed in the inpatient setting
would be an adequate amount of time to allow providers to gain
experience with application of the 2-midnight rule to these procedures
and the
[[Page 39528]]
documentation necessary for Part A payment for those patients for which
the admitting physician determines that the procedures should be
furnished in an inpatient setting. Furthermore, we believe that this 1-
year exemption from referrals to RACs, RAC patient status review, and
claims denials would be sufficient to allow providers time to update
their billing systems and gain experience with respect to newly removed
procedures eligible to be paid under either the IPPS or the OPPS, while
avoiding potential adverse site-of-service determinations. Nonetheless,
we are soliciting public comments regarding the appropriate period of
time for this proposed exemption. Commenters may indicate whether and
why they believe the proposed 1-year period is appropriate, or whether
they believe a longer or shorter exemption period would be more
appropriate.
In summary, for CY 2020 and subsequent years, we are proposing to
establish a 1-year exemption from site-of-service claim denials, BFCC-
QIO referrals to RACs, and RAC reviews for ``patient status'' (that is,
site-of-service) for procedures that are removed from the IPO list
under the OPPS beginning on January 1, 2020. We encourage BFCC-QIOs to
review these cases for medical necessity in order to educate themselves
and the provider community on appropriate documentation for Part A
payment when the admitting physician determines that it is medically
reasonable and necessary to conduct these procedures on an inpatient
basis. We note that we will monitor changes in site-of-service to
determine whether changes may be necessary to certain CMS Innovation
Center models.
C. Method To Control Unnecessary Increases in the Volume of Clinic
Visit Services Furnished in Excepted Off-Campus Provider-Based
Departments (PBDs)
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59004
through 59014), we adopted a method to control unnecessary increases in
the volume of the clinic visit service furnished in excepted off-campus
provider-based departments (PBDs) by removing the payment differential
that drives the site-of-service decision and, as a result,
unnecessarily increases service volume. We refer readers to the CY 2019
OPPS/ASC final rule with comment period for a detailed discussion of
the background, legislative provisions, and the changes in payment
policies we developed to address increases in the volume of covered OPD
services. Below we discuss the specific policy we finalized in the CY
2019 OPPS/ASC final rule with comment period and its application under
the OPPS for CY 2020.
For the CY 2019 OPPS, using our authority under section
1833(t)(2)(F) of the Act to adopt a method to control unnecessary
increases in the volume of covered outpatient department services, we
applied an amount equal to the site-specific Medicare Physician Fee
Schedule (PFS) payment rate for nonexcepted items and services
furnished by a nonexcepted off-campus PBD (the PFS payment rate) for
the clinic visit service, as described by HCPCS code G0463, when
provided at an off-campus PBD excepted from section 1833(t)(21) of the
Act (departments that bill the modifier ``PO'' on claim lines).
However, we phased in the application of the reduction in payment for
the clinic visit service described by HCPCS code G0463 in the excepted
provider-based department setting over 2 years. For CY 2019, the
payment reduction was transitioned by applying 50 percent of the total
reduction in payment that was applied if these departments were paid
the site-specific PFS rate for the clinic visit service. The PFS-
equivalent rate was 40 percent of the OPPS payment for CY 2019 (that
is, 60 percent less than the OPPS rate). We provided for a 2-year
phase-in of this policy under which one-half of the total 60-percent
payment reduction (a 30-percent reduction) was applied in CY 2019.
These departments are paid approximately 70 percent of the OPPS rate
(100 percent of the OPPS rate minus the 30-percent payment reduction
that is applied in CY 2019) for the clinic visit service in CY 2019.
For CY 2020, the second year of the 2-year phase-in, we stated that
we would apply the total reduction in payment that is applied if these
departments (departments that bill the modifier ``PO'' on claims lines)
are paid the site-specific PFS rate for the clinic visit service
described by HCPCS code G0463. The proposed PFS-equivalent rate for CY
2020 is 40 percent of the proposed OPPS payment (that is, 60 percent
less than the proposed OPPS rate) for CY 2020. Under this policy,
departments will be paid approximately 40 percent of the OPPS rate (100
percent of the OPPS rate minus the 60-percent payment reduction that is
applied in CY 2020) for the clinic visit service in CY 2020.
In addition, as we stated in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 59013), for CY 2020, this policy will be
implemented in a non-budget neutral manner. The estimated payment
impact of this policy is displayed in Column 5 of Table 44--Estimated
Impact of the Proposed CY 2020 Changes for the Hospital Outpatient
Prospective Payment System in this CY 2020 OPPS/ASC proposed rule. In
order to effectively establish a method for controlling the unnecessary
growth in the volume of clinic visits furnished by excepted off-campus
PBDs that does not simply reallocate expenditures that are unnecessary
within the OPPS, we believe that this method must be adopted in a non-
budget neutral manner. The impact associated with this policy is
further described in section XXVI. of this CY 2020 OPPS/ASC proposed
rule.
XI. Proposed CY 2020 OPPS Payment Status and Comment Indicators
A. Proposed CY 2020 OPPS Payment Status Indicator Definitions
Payment status indicators (SIs) that we assign to HCPCS codes and
APCs serve an important role in determining payment for services under
the OPPS. They indicate whether a service represented by a HCPCS code
is payable under the OPPS or another payment system, and also, whether
particular OPPS policies apply to the code.
For CY 2020, we are not proposing to make any changes to the
definitions of status indicators that were listed in Addendum D1 to the
CY 2019 OPPS/ASC final rule with comment period available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1717-P.html?DLPage=1&DLEntries=10&10DLSort=2DLSortDir=descending.
We are requesting public comments on the proposed definitions of
the OPPS status indicators for CY 2020. The complete list of the
proposed payment status indicators and their definitions that would
apply for CY 2020 is displayed in Addendum D1 to this proposed rule,
which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
The proposed CY 2020 payment status indicator assignments for APCs
and HCPCS codes are shown in Addendum A and Addendum B, respectively,
to this proposed rule, which are available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
[[Page 39529]]
B. Proposed CY 2020 Comment Indicator Definitions
In this proposed rule, we are proposing to use four comment
indicators for the CY 2020 OPPS. These comment indicators, ``CH'',
``NC'', ``NI'', and ``NP'', are in effect for CY 2019 and we are
proposing to continue their use in CY 2020. The proposed CY 2020 OPPS
comment indicators are as follows:
``CH''--Active HCPCS code in current and next calendar
year, status indicator and/or APC assignment has changed; or active
HCPCS code that will be discontinued at the end of the current calendar
year.
``NC''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year for which we
requested comments in the proposed rule, final APC assignment; comments
will not be accepted on the final APC assignment for the new code.
``NI''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year, interim APC
assignment; comments will be accepted on the interim APC assignment for
the new code.
``NP''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year, proposed APC
assignment; comments will be accepted on the proposed APC assignment
for the new code.
The definitions of the proposed OPPS comment indicators for CY 2020
are listed in Addendum D2 to this proposed rule, which is available on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
XII. MedPAC Recommendations
The Medicare Payment Advisory Commission (MedPAC) was established
under section 1805 of the Act in large part to advise the U.S. Congress
on issues affecting the Medicare program. As required under the
statute, MedPAC submits reports to the Congress no later than March and
June of each year that present its Medicare payment policy
recommendations. The March report typically provides discussion of
Medicare payment policy across different payment systems and the June
report typically discusses selected Medicare issues. We are including
this section of the proposed rule to make stakeholders aware of certain
MedPAC recommendations for the OPPS and ASC payment systems as
discussed in its March 2019 report.
A. OPPS Payment Rates Update
The March 2019 MedPAC ``Report to the Congress: Medicare Payment
Policy'' recommended that Congress update Medicare OPPS payment rates
of 2 percent, with the difference between this and the update amount
specified in current law to be used to increase payments in a new
suggested Medicare quality program, the ``Hospital Value Incentive
Program (HVIP).'' We refer readers to the March 2019 MedPAC report,
which is available for download at www.medpac.gov, for a complete
discussion on these recommendations. We appreciate MedPAC's
recommendations, but as MedPAC acknowledged in its report, Congress
would need to change current law to enable us to implement its
recommendations.
B. ASC Conversion Factor Update
In the March 2019 MedPAC ``Report to the Congress: Medicare Payment
Policy'' MedPAC found that, based on its analysis of indicators of
payment adequacy, the number of Medicare-certified ASCs had increased,
beneficiaries' use of ASCs had increased, and ASC access to capital has
been adequate.\68\ As a result, for CY 2020, MedPAC stated that
payments to ASCs are adequate and recommended that no payment update
should be given for 2020 (that is, the update factor would be 0
percent).
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\68\ Medicare Payment Advisory Committee. March 2019 Report to
the Congress. Chapter 5: Ambulatory surgical center services.
Available at: http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch5_sec.pdf?sfvrsn=0.
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In the CY 2019 OPPS/ASC final rule with comment period (83 FR
59079), we adopted a policy, which we codified at 42 CFR 416.171(a)(2),
to apply the hospital market basket update to ASC payment system rates
for an interim period of 5 years. We refer the reader to the CY 2019
OPPS/ASC final rule with comment period for complete details regarding
our policy to use the hospital market basket update for the ASC payment
system. Therefore, consistent with our policy for the ASC payment
system, we are proposing to apply a 2.7 percent MFP-adjusted hospital
market basket update factor to the CY 2019 ASC conversion factor for
ASCs meeting the quality reporting requirements to determine the CY
2020 ASC payment amounts. See section XIII of this proposed rule for a
complete explanation of our relevant policies.
C. ASC Cost Data
MedPAC recommended that Congress require ASCs to report cost data
to enable the Commission to examine the growth of ASCs' costs over time
and analyze Medicare payments relative to the costs of efficient
providers, and that CMS could use ASC cost data to examine whether an
existing Medicare price index is an appropriate proxy for ASC costs or
an ASC specific market basket should be developed. Further, MedPAC
suggested that CMS could limit the scope of the cost reporting system
to minimize administrative burden on ASCs and the program.\69\
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\69\ Medicare Payment Advisory Committee. March 2019 Report to
the Congress. Chapter 5: Ambulatory surgical center services.
Available at: http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch5_sec.pdf?sfvrsn=0.
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We recognize that the submission of cost data places additional
administrative burden on ASCs. We are interested in methods that would
mitigate the burden of reporting costs on ASCs while also collecting
enough data to reliably use such data in the determination of ASC
costs. We are not proposing any cost reporting requirements for ASCs in
this CY 2020 OPPS/ASC proposed rule.
The full March 2019 MedPAC report can be downloaded from MedPAC's
website at: http://www.medpac.gov/docs/default-source/reports/mar19_medpac_entirereport_sec.pdf.
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC) Payment
System
A. Background
1. Legislative History, Statutory Authority, and Prior Rulemaking for
the ASC Payment System
For a detailed discussion of the legislative history and statutory
authority related to payments to ASCs under Medicare, we refer readers
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377
through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through
32292). For a discussion of prior rulemaking on the ASC payment system,
we refer readers to the CYs 2012, 2013, 2014, 2015, 2016, 2017, 2018
and 2019 OPPS/ASC final rules with comment period (76 FR 74378 through
74379; 77 FR 68434 through 68467; 78 FR 75064 through 75090; 79 FR
66915 through 66940; 80 FR 70474 through 70502; 81 FR 79732 through
79753; 82 FR 59401 through 59424; and 83 FR 59028 through 59080,
respectively).
[[Page 39530]]
2. Policies Governing Changes to the Lists of Codes and Payment Rates
for ASC Covered Surgical Procedures and Covered Ancillary Services
Under 42 CFR 416.2 and 416.166 of the Medicare regulations, subject
to certain exclusions, covered surgical procedures in an ASC are
surgical procedures that are separately paid under the OPPS, that would
not be expected to pose a significant risk to beneficiary safety when
performed in an ASC, and for which standard medical practice dictates
that the beneficiary would not typically be expected to require active
medical monitoring and care at midnight following the procedure
(``overnight stay''). We adopted this standard for defining which
surgical procedures are covered under the ASC payment system as an
indicator of the complexity of the procedure and its appropriateness
for Medicare payment in ASCs. We use this standard only for purposes of
evaluating procedures to determine whether or not they are appropriate
to be furnished to Medicare beneficiaries in ASCs. Historically, we
have defined surgical procedures as those described by Category I CPT
codes in the surgical range from 10000 through 69999 as well as those
Category III CPT codes and Level II HCPCS codes that directly crosswalk
or are clinically similar to procedures in the CPT surgical range that
we have determined do not pose a significant safety risk, that we would
not expect to require an overnight stay when performed in ASCs, and
that are separately paid under the OPPS (72 FR 42478).
In the August 2, 2007 final rule (72 FR 42495), we also established
our policy to make separate ASC payments for the following ancillary
items and services when they are provided integral to ASC covered
surgical procedures: (1) Brachytherapy sources; (2) certain implantable
items that have pass-through payment status under the OPPS; (3) certain
items and services that we designate as contractor-priced, including,
but not limited to, procurement of corneal tissue; (4) certain drugs
and biologicals for which separate payment is allowed under the OPPS;
and (5) certain radiology services for which separate payment is
allowed under the OPPS. In the CY 2015 OPPS/ASC final rule with comment
period (79 FR 66932 through 66934), we expanded the scope of ASC
covered ancillary services to include certain diagnostic tests within
the medicine range of CPT codes for which separate payment is allowed
under the OPPS when they are provided integral to an ASC covered
surgical procedure. Covered ancillary services are specified in Sec.
416.164(b) and, as stated previously, are eligible for separate ASC
payment. Payment for ancillary items and services that are not paid
separately under the ASC payment system is packaged into the ASC
payment for the covered surgical procedure.
We update the lists of, and payment rates for, covered surgical
procedures and covered ancillary services in ASCs in conjunction with
the annual proposed and final rulemaking process to update the OPPS and
the ASC payment system (Sec. 416.173; 72 FR 42535). We base ASC
payment and policies for most covered surgical procedures, drugs,
biologicals, and certain other covered ancillary services on the OPPS
payment policies, and we use quarterly change requests (CRs) to update
services covered under the OPPS. We also provide quarterly update CRs
for ASC covered surgical procedures and covered ancillary services
throughout the year (January, April, July, and October). We release new
and revised Level II HCPCS codes and recognize the release of new and
revised CPT codes by the AMA and make these codes effective (that is,
the codes are recognized on Medicare claims) via these ASC quarterly
update CRs. We recognize the release of new and revised Category III
CPT codes in the July and January CRs. These updates implement newly
created and revised Level II HCPCS and Category III CPT codes for ASC
payments and update the payment rates for separately paid drugs and
biologicals based on the most recently submitted ASP data. New and
revised Category I CPT codes, except vaccine codes, are released only
once a year, and are implemented only through the January quarterly CR
update. New and revised Category I CPT vaccine codes are released twice
a year and are implemented through the January and July quarterly CR
updates. We refer readers to Table 41 in the CY 2012 OPPS/ASC proposed
rule for an example of how this process, which we finalized in the CY
2012 OPPS/ASC final rule with comment period, is used to update HCPCS
and CPT codes (76 FR 42291; 76 FR 74380 through 74384).
In our annual updates to the ASC list of, and payment rates for,
covered surgical procedures and covered ancillary services, we
undertake a review of excluded surgical procedures (including all
procedures newly proposed for removal from the OPPS inpatient list),
new codes, and codes with revised descriptors, to identify any that we
believe meet the criteria for designation as ASC covered surgical
procedures or covered ancillary services. Updating the lists of ASC
covered surgical procedures and covered ancillary services, as well as
their payment rates, in association with the annual OPPS rulemaking
cycle is particularly important because the OPPS relative payment
weights and, in some cases, payment rates, are used as the basis for
the payment of many covered surgical procedures and covered ancillary
services under the revised ASC payment system. This joint update
process ensures that the ASC updates occur in a regular, predictable,
and timely manner.
3. Definition of ASC Covered Surgical Procedures
Since the implementation of the ASC prospective payment system, we
have historically defined a ``surgical'' procedure under the payment
system as any procedure described within the range of Category I CPT
codes that the CPT Editorial Panel of the American Medical Association
(AMA) defines as ``surgery'' (CPT codes 10000 through 69999) (72 FR
42478). We also have included as ``surgical,'' procedures that are
described by Level II HCPCS codes or by Category III CPT codes that
directly crosswalk or are clinically similar to procedures in the CPT
surgical range that we have determined do not pose a significant safety
risk, would not expect to require an overnight stay when performed in
an ASC, and that are separately paid under the OPPS (72 FR 42478).
As we noted in the CY 2008 final rule that implemented the revised
ASC payment system, using this definition of surgery would exclude from
ASC payment certain invasive, ``surgery-like'' procedures, such as
cardiac catheterization or certain radiation treatment services that
are assigned codes outside the CPT surgical range (72 FR 42477). We
stated in that final rule that we believed continuing to rely on the
CPT definition of surgery is administratively straightforward, is
logically related to the categorization of services by physician
experts who both establish the codes and perform the procedures, and is
consistent with a policy to allow ASC payment for all outpatient
surgical procedures (72 FR 42477).
However, in the CY 2019 OPPS/ASC final rule with comment period (83
FR 59029 through 59030), after consideration of public comments
received in response to the CY 2019 proposed rule and earlier OPPS/ASC
rulemaking cycles, we revised our definition of a surgical procedure
under the ASC payment system. We now
[[Page 39531]]
define a surgical procedure under the ASC payment system as any
procedure described within the range of Category I CPT codes that the
CPT Editorial Panel of the American Medical Association (AMA) defines
as ``surgery'' (CPT codes 10000 through 69999) (72 FR 42476), as well
as procedures that are described by Level II HCPCS codes or by Category
I CPT codes or by Category III CPT codes that directly crosswalk or are
clinically similar to procedures in the CPT surgical range that we have
determined are not expected to pose a significant risk to beneficiary
safety when performed in an ASC, for which standard medical practice
dictates that the beneficiary would not typically be expected to
require an overnight stay following the procedure, and are separately
paid under the OPPS.
B. Proposed ASC Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised HCPCS
Codes
Payment for ASC procedures, services, and items are generally based
on medical billing codes, specifically, HCPCS codes, that are reported
on ASC claims. The HCPCS is divided into two principal subsystems,
referred to as Level I and Level II of the HCPCS. Level I is comprised
of CPT (Current Procedural Terminology) codes, a numeric and
alphanumeric coding system maintained by the American Medical
Association (AMA), and includes Category I, II, and III CPT codes.
Level II of the HCPCS, which is maintained by CMS, is a standardized
coding system that is used primarily to identify products, supplies,
and services not included in the CPT codes. Together, Level I and II
HCPCS codes are used to report procedures, services, items, and
supplies under the ASC payment system. Specifically, we recognize the
following codes on ASC claims:
Category I CPT codes, which describe surgical procedures,
diagnostic and therapeutic services, and vaccine codes;
Category III CPT codes, which describe new and emerging
technologies, services, and procedures; and
Level II HCPCS codes (also known as alphanumeric codes),
which are used primarily to identify drugs, devices, supplies,
temporary procedures, and services not described by CPT codes.
We finalized a policy in the August 2, 2007 final rule (72 FR 42533
through 42535) to evaluate each year all new and revised Category I and
Category III CPT codes and Level II HCPCS codes that describe surgical
procedures, and to make preliminary determinations during the annual
OPPS/ASC rulemaking process regarding whether or not they meet the
criteria for payment in the ASC setting as covered surgical procedures
and, if so, whether or not they are office-based procedures. In
addition, we identify new and revised codes as ASC covered ancillary
services based upon the final payment policies of the revised ASC
payment system. In prior rulemakings, we refer to this process as
recognizing new codes. However, this process has always involved the
recognition of new and revised codes. We consider revised codes to be
new when they have substantial revision to their code descriptors that
necessitate a change in the current ASC payment indicator. To clarify,
we refer to these codes as new and revised in this CY 2020 OPPS/ASC
proposed rule.
We have separated our discussion below based on when the codes are
released and whether we are proposing to solicit public comments in
this proposed rule (and respond to those comments in the CY 2020 OPPS/
ASC final rule with comment period) or whether we will be soliciting
public comments in the CY 2020 OPPS/ASC final rule with comment period
(and responding to those comments in the CY 2021 OPPS/ASC final rule
with comment period).
2. April 2019 HCPCS Codes for Which We Are Soliciting Public Comments
in This Proposed Rule
For the April 2019 update, there were no new CPT codes, however,
there were several new Level II HCPCS codes. In the April 2019 ASC
quarterly update (Transmittal 4263, CR 11232, dated March 22, 2019), we
added eight new Level II HCPCS codes to the list of covered ancillary
services. Table 25 list the new Level II HCPCS codes that were
implemented April 1, 2019, along with their proposed payment indicators
for CY 2020. The proposed comment indicators, payment indicators and
payment rates, where applicable, for these April codes can be found in
Addendum BB to this proposed rule. The list of ASC payment indicators
and corresponding definitions can be found in Addendum DD1 to this
proposed rule. These new codes that are effective April 1, 2019 are
assigned to comment indicator ``NP'' in Addendum BB to this proposed
rule to indicate that the codes are assigned to an interim APC
assignment and that comments will be accepted on their interim APC
assignments. Also, the list of comment indicators and definitions used
under the ASC can be found in Addendum DD2 to this proposed rule. We
note that ASC Addendum BB, Addendum DD1, and Addendum DD2 are available
via the internet on the CMS website.
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We are inviting public comments on these proposed payment
indicators and payment rates for the new HCPCS codes that were
recognized as ASC ancillary services in April 2019 through the
quarterly update CRs, as listed in Table 25. We are proposing to
finalize their payment indicators in the CY 2020 OPPS/ASC final rule
with comment period.
3. July 2019 HCPCS Codes for Which We Are Soliciting Public Comments in
This Proposed Rule
In the July 2019 ASC quarterly update (Transmittal 4076, Change
Request 10788, dated June 14, 2019), we added several separately
payable Category III CPT and Level II HCPCS codes to the list of
covered surgical procedures and ancillary services. Table 26 lists the
new HCPCS codes that are effective July 1, 2019. The proposed payment
indicators and payment rates for these codes can be found in Addendum
AA and Addendum BB to this proposed rule. The list of ASC payment
indicators and corresponding definitions can be found in Addendum DD1
to this proposed rule. These new codes that are effective July 1, 2019
are assigned to comment indicator ``NP'' in Addendum BB to this
proposed rule to indicate that the codes are assigned to an interim APC
assignment and that comments will be accepted on their interim APC
assignments. Also, the list of comment indicators and definitions used
under the ASC can be found in Addendum DD2 to this proposed rule. We
note that ASC Addendum BB, Addendum DD1, and Addendum DD2 are available
via the internet on the CMS website.
[[Page 39533]]
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In addition, through the July 2019 quarterly update CR, we are also
implementing an ASC payment for one new Category III CPT code as an ASC
covered ancillary service, effective July 1, 2019. This code is listed
in Table 27, along with the proposed comment indicator and payment
indicator. The CY 2020 proposed payment rate for this new Category III
CPT code can be found in Addendum BB. As noted above, the list of
payment indicators and comment indicators used under the ASC can be
found in Addendum DD1 and DD2, respectively, of this proposed rule. We
note that ASC Addendum BB, Addendum DD1, and Addendum DD2 are available
via the internet on the CMS website.
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[[Page 39534]]
We are inviting public comments on these proposed payment
indicators for the new Category III CPT code and Level II HCPCS codes
newly recognized as ASC covered surgical procedures or covered
ancillary services in July 2019 through the quarterly update CRs, as
listed in Tables 25, 26, and 27. We are proposing to finalize the
payment indicators in the CY 2020 OPPS/ASC final rule with comment
period.
4. October 2019 HCPCS Codes for Which We Will Be Soliciting Public
Comments in the CY 2020 OPPS/ASC Final Rule With Comment Period
For CY 2020, consistent with our established policy, we are
proposing that the Level II HCPCS codes that will be effective October
1, 2019, would be flagged with comment indicator ``NI'' in Addendum BB
to the CY 2020 OPPS/ASC final rule with comment period to indicate that
we have assigned the codes an interim ASC payment status for CY 2020.
We will invite public comments in the CY 2020 OPPS/ASC final rule with
comment period on the interim payment indicators, which would then be
finalized in the CY 2021 OPPS/ASC final rule with comment period.
5. January 2020 HCPCS Codes
a. Level II HCPCS Codes for Which We Will Be Soliciting Public Comments
in the CY 2020 OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we incorporate those new
Level II HCPCS codes that are effective January 1 in the final rule
with comment period, thereby updating the ASC payment system for the
calendar year. We note that unlike the CPT codes that are effective
January 1 and are included in the OPPS/ASC proposed rules, and except
for the G-codes listed in Addendum O to this proposed rule, most Level
II HCPCS codes are not released until sometime around November to be
effective January 1. Because these codes are not available until
November, we are unable to include them in the OPPS/ASC proposed rules.
Therefore, these Level II HCPCS codes will be released to the public
through the CY 2020 OPPS/ASC final rule with comment period, January
2020 ASC Update CR, and the CMS HCPCS website.
In addition, for CY 2020, we will propose to continue our
established policy of assigning comment indicator ``NI'' in Addendum AA
and Addendum BB to the OPPS/ASC final rule with comment period to the
new Level II HCPCS codes that will be effective January 1, 2020 to
indicate that we are assigning them an interim payment indicator, which
is subject to public comment. We will be inviting public comments in
the CY 2020 OPPS/ASC final rule with comment period on the payment
indicator assignments, which would then be finalized in the CY 2021
OPPS/ASC final rule with comment period.
b. CPT Codes for Which We Will Be Soliciting Public Comments in This
Proposed Rule
For new and revised CPT codes effective January 1, 2020 that were
received in time to be included in this proposed rule, we are proposing
the appropriate payment indicator assignments, and soliciting public
comments on the payment assignments. We will accept comments and
finalize the payment indicators in the CY 2020 OPPS/ASC final rule with
comment period. For those new/revised CPT codes that are received too
late for inclusion in this OPPS/ASC proposed rule, we may either make
interim final assignments in the final rule with comment period or
possibly use HCPCS G-codes that mirror the predecessor CPT codes and
retain the current APC and status indicator assignments for a year
until we can propose APC and status indicator assignments in the
following year's rulemaking cycle.
For the CY 2020 ASC update, the new and revised Category I and III
CPT codes that will be effective on January 1, 2020, can be found in
ASC Addendum AA and Addendum BB to this proposed rule (which are
available via the internet on the CMS website). The CPT codes are
assigned to comment indicator ``NP'' to indicate that the code is new
for the next calendar year or the code is an existing code with
substantial revision to its code descriptor in the next calendar year
as compared to current calendar year and that comments will be accepted
on the proposed payment indicator. Further, we remind readers that the
CPT code descriptors that appear in Addendum AA and Addendum BB are
short descriptors and do not describe the complete procedure, service,
or item described by the CPT code. Therefore, we include the 5-digit
placeholder codes and their long descriptors for the new and revised CY
2020 CPT codes in Addendum O to this proposed rule (which is available
via the internet on the CMS website) so that the public can comment on
our proposed payment indicator assignments. The 5-digit placeholder
codes can be found in Addendum O to this proposed rule, specifically
under the column labeled ``CY 2020 OPPS/ASC Proposed Rule 5-Digit
Placeholder Code.'' The final CPT code numbers will be included in the
CY 2020 OPPS/ASC final rule with comment period where possible.
In summary, we are soliciting public comments on the proposed CY
2020 payment indicators for the new and revised Category I and III CPT
codes that will be effective January 1, 2020. Because these codes are
listed in Addendum AA and Addendum BB with short descriptors only, we
are listing them again in Addendum O with the long descriptors. We are
also proposing to finalize the payment indicator for these codes (with
their final CPT code numbers) in the CY 2020 OPPS/ASC final rule with
comment period. The proposed payment indicator and comment indicator
for these codes can be found in Addendum AA and Addendum BB to this
proposed rule. The list of ASC payment indicators and corresponding
definitions can be found in Addendum DD1 to this proposed rule. The new
CPT codes that will be effective January 1, 2020 are assigned to
comment indicator ``NP'' in Addendum AA and Addendum BB to this
proposed rule to indicate that the codes are assigned to an interim
payment indicator and that comments will be accepted on their interim
ASC payment assignments. Also, the list of comment indicators and
definitions used under the ASC can be found in Addendum DD2 to this
proposed rule. We note that ASC Addendum BB, Addendum DD1, and Addendum
DD2 are available via the internet on the CMS website.
Finally, in Table 28, we summarize our process for updating codes
through our ASC quarterly update CRs, seeking public comments, and
finalizing the treatment of these new codes under the ASC.
[[Page 39535]]
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C. Proposed Update to the List of ASC Covered Surgical Procedures and
Covered Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated as Office-Based
(1) Background
In the August 2, 2007 ASC final rule, we finalized our policy to
designate as ``office-based'' those procedures that are added to the
ASC Covered Procedures List (CPL) in CY 2008 or later years that we
determine are performed predominantly (more than 50 percent of the
time) in physicians' offices based on consideration of the most recent
available volume and utilization data for each individual procedure
code and/or, if appropriate, the clinical characteristics, utilization,
and volume of related codes. In that rule, we also finalized our policy
to exempt all procedures on the CY 2007 ASC list from application of
the office-based classification (72 FR 42512). The procedures that were
added to the ASC CPL beginning in CY 2008 that we determined were
office-based were identified in Addendum AA to that rule by payment
indicator ``P2'' (Office-based surgical procedure added to ASC list in
CY 2008 or later with MPFS nonfacility PE RVUs; payment based on OPPS
relative payment weight); ``P3'' (Office-based surgical procedures
added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs;
payment based on MPFS nonfacility PE RVUs); or ``R2'' (Office-based
surgical procedure added to ASC list in CY 2008 or later without MPFS
nonfacility PE RVUs; payment based on OPPS relative payment weight),
depending on whether we estimated the procedure would be paid according
to the standard ASC payment methodology based on its OPPS relative
payment weight or at the MPFS nonfacility PE RVU-based amount.
Consistent with our final policy to annually review and update the
ASC CPL to include all covered surgical procedures eligible for payment
in ASCs, each year we identify covered surgical procedures as either
temporarily office-based (these are new procedure codes with little or
no utilization data that we have determined are clinically similar to
other procedures that are permanently office-based), permanently
office-based, or nonoffice-based, after taking into account updated
volume and utilization data.
(2) Proposed Changes for CY 2020 to Covered Surgical Procedures
Designated as Office-Based
In developing this proposed rule, we followed our policy to
annually review and update the covered surgical procedures for which
ASC payment is made and to identify new procedures that may be
appropriate for ASC payment, including their potential designation as
office-based. We reviewed CY 2018 volume and utilization data and the
clinical characteristics for all covered surgical procedures that are
assigned payment indicator ``G2'' (Nonoffice-based surgical procedure
added in CY 2008 or later; payment based on OPPS relative payment
weight) in CY 2018, as well as for those procedures assigned one of the
temporary office-based payment indicators, specifically ``P2'', ``P3'',
or ``R2'' in the CY 2019 OPPS/ASC final rule with comment period (83 FR
59039 through 59040).
As we stated in the CY 2019 final rule with comment period (83 FR
59036), the office-based utilization for CPT codes 36902 and 36905
(dialysis vascular
[[Page 39536]]
access procedures) was greater than 50 percent. However, we did not
designate CPT codes 36902 and 36905 as office-based procedures for CY
2019. These codes became effective January 1, 2017 and CY 2017 was the
first year we had claims volume and utilization data for CPT codes
36902 and 36905. We shared commenters' concerns that the available data
were not adequate to make a determination that these procedures should
be office-based, and believed it was premature to assign office-based
payment status to those procedures for CY 2019. For CY 2019, CPT codes
36902 and 36905 were assigned payment indicators of ``G2''--Non office-
based surgical procedure added in CY 2008 or later; payment based on
OPPS relative weight.
In reviewing the CY 2018 volume and utilization data for CPT code
36902 we determined that the procedure was performed more than 50
percent of the time in physicians' offices based on 2018 volume and
utilization data.
However, the office-based utilization for CPT code 36902 has fallen
from 62 percent based on 2017 data to 52 percent based on 2018 data. In
addition, there was a sizeable increase in claims for this service in
ASCs--from approximately 14,000 in 2017 to 38,000 in 2018. As
previously stated in the CY 2019 OPPS/ASC final rule (83 FR 59036),
when we believe that the available data for our review process are
inadequate to make a determination that a procedure should be office-
based, we either make no change to the procedure's payment status or
make the change on a temporary basis, and reevaluate our decision when
more data become available for our next evaluation. In light of these
changes in utilization and due to the high utilization of this
procedure in all settings (over 125,000 claims in 2018), we believe it
may be premature to assign office-based payment status to CPT code
36902 at this time.
Therefore, for CY 2020, we are not proposing to designate CPT code
36902 as an office-based procedure and continue to assign CPT code
36902 a payment indicator of ``G2''--nonoffice-based surgical procedure
paid based on OPPS relative weights.
The CY 2018 volume and utilization data for CPT code 36905 show the
procedure was not performed more than 50 percent of the time in
physicians' offices. Therefore, we are not considering assigning an
office-based designation for CPT code 36905 and the procedure will
retain its payment indicator of ``G2''--non office-based surgical
procedure based on OPPS relative weights.
Our review of the CY 2018 volume and utilization data resulted in
our identification of 9 other covered surgical procedures that we
believe meet the criteria for designation as permanently office-based.
The data indicate that these procedures are performed more than 50
percent of the time in physicians' offices, and we believe that the
services are of a level of complexity consistent with other procedures
performed routinely in physicians' offices. The CPT codes that we are
proposing to permanently designate as office-based for CY 2020 are
listed in Table 29.
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We also reviewed CY 2018 volume and utilization data and other
information for 12 procedures designated as temporarily office-based in
Tables 57 and 58 in the CY 2019 OPPS/ASC final rule with comment period
(83 FR 59039 through 59040). Of these 12 procedures, there were very
few claims in our data and no claims data for 11 procedures described
by CPT codes 10005, 10007, 10009, 10011, 11102, 11104, 11106, 65785,
67229, 0402T and 0512T. Consequently, we are proposing to maintain the
temporary office-based designations for these 11 CPT codes for CY 2020.
We list all of those codes for which we proposed to maintain the
temporary office-based designations for CY 2020 in Table 30. The
procedures for which the proposed office-based designations for CY 2020
are temporary also are indicated by asterisks in Addendum AA to this
proposed rule (which is available via the internet on the CMS website).
The volume and utilization data for the one remaining procedure
that has a temporary office-based designation for CY 2019, described by
CPT code 38222 (Diagnostic bone marrow; biopsy(ies) and aspiration(s)),
are sufficient to indicate that this covered surgical procedures was
not performed predominantly in physicians' offices and, therefore, we
are proposing to assign a nonoffice-based payment indicator--``G2''--to
this code for CY 2020.
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For CY 2020, we are proposing to designate 7 new CY 2020 CPT codes
for ASC covered surgical procedures as temporarily office-based, as
displayed in Table 31. After reviewing the clinical characteristics,
utilization, and volume of related procedure codes, we determined that
the procedures in Table 30 described by the new CPT codes would be
predominantly performed in physicians' offices. We believe the
procedure described by CPT codes 93X00 (Duplex scan of arterial inflow
and venous outflow for preoperative vessel assessment prior to creation
of hemodialysis access; complete bilateral study) and 93X01 (Duplex
scan of arterial inflow and venous outflow for preoperative vessel
assessment prior to creation of hemodialysis access; complete
unilateral study) is clinically similar to HCPCS code G0365 (Vessel
mapping of vessels for hemodialysis access (services for preoperative
vessel mapping prior to creation of hemodialysis access using an
autogenous hemodialysis conduit, including arterial inflow and venous
outflow)), which is currently on the list of covered surgical
procedures and assigned a proposed payment indicator ``R2''--Office-
based surgical procedure added to ASC list in CY 2008 or later without
MPFS nonfacility PE RVUs; payment based on OPPS relative payment
weight--for CY 2020. As such, we are proposing to add CPT codes 93X00
and 93X01 in Table 30 to the list of temporarily office-based covered
surgical procedures.
Because we have no utilization data for the procedures specifically
described by these new CPT codes, we are proposing to make the office-
based designation temporary rather than permanent, and we will
reevaluate the procedures when data become available. The procedures
for which the proposed office-based designation for CY 2020 is
temporary are indicated by asterisks in Addendum AA to this proposed
rule (which is available via the internet on the CMS website).
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b. Proposed ASC Covered Surgical Procedures To Be Designated as Device-
Intensive
(1) Background
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59040 through 59041), for a summary of our existing
policies regarding ASC covered surgical procedures that are designated
as device-intensive.
(2) Proposed Changes To List of ASC Covered Surgical Procedures
Designated as Device-Intensive for CY 2020
In the CY 2019 OPPS/ASC final rule with comment period (83 FR
590401 through 59043), for CY 2019 we modified our criteria for device-
intensive procedures to better capture costs for procedures with
significant device costs. We adopted a policy to allow procedures that
involve surgically inserted or implanted, high-cost, single-use devices
to qualify as device-intensive procedures. In addition, we modified our
criteria to lower the device offset percentage threshold from 40
percent to 30 percent. Specifically, for CY 2019 and subsequent years,
we adopted a policy that device-intensive procedures would be subject
to the following criteria:
All procedures must involve implantable devices assigned a
CPT or HCPCS code;
The required devices (including single-use devices) must
be surgically inserted or implanted; and
The device offset amount must be significant, which is
defined as exceeding 30 percent of the procedure's mean cost.
Corresponding to this change in the cost criterion we adopted a policy
that the default device offset for new codes that describe procedures
that involve the implantation of medical devices will be 31 percent
beginning in CY 2019. For new codes describing procedures that are
payable when furnished in an ASC involving the implantation of a
medical device, we adopted a policy that the default device offset
would be applied in the same manner as the policy we adopted in section
IV.B.2. of the CY 2019 OPPS/ASC final rule with comment period (83 FR
58944 through 58948). We amended Sec. 416.171(b)(2) of the regulations
to reflect these new device criteria.
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In addition, as also adopted in section IV.B.2. of that final rule
with comment period, to further align the device-intensive policy with
the criteria used for device pass-through status, we specified, for CY
2019 and subsequent years, that for purposes of satisfying the device-
intensive criteria, a device-intensive procedure must involve a device
that:
Has received FDA marketing authorization, has received an
FDA investigational device exemption (IDE) and has been classified as a
Category B device by the FDA in accordance with 42 CFR 405.203 through
405.207 and 405.211 through 405.215, or meets another appropriate FDA
exemption from premarket review;
Is an integral part of the service furnished;
Is used for one patient only;
Comes in contact with human tissue;
Is surgically implanted or inserted (either permanently or
temporarily); and
Is not any of the following:
(a) Equipment, an instrument, apparatus, implement, or item of this
type for which depreciation and financing expenses are recovered as
depreciable assets as defined in Chapter 1 of the Medicare Provider
Reimbursement Manual (CMS Pub. 15-1); or
(b) A material or supply furnished incident to a service (for
example, a suture, customized surgical kit, scalpel, or clip, other
than a radiological site marker).
Based on our modified device-intensive criteria, for CY 2020, we
are proposing to update the ASC CPL to indicate procedures that are
eligible for payment according to our device-intensive procedure
payment methodology, based on the proposed individual HCPCS code
device-offset percentages using the CY 2018 OPPS claims and cost report
data available for this proposed rule.
The ASC covered surgical procedures that we are proposing to
designate as device-intensive, and therefore subject to the device-
intensive procedure payment methodology for CY 2020, are assigned
payment indicator ``J8'' and are included in ASC Addendum AA to this
proposed rule (which is available via the internet on the CMS website).
The CPT code, the CPT code short descriptor, and the proposed CY 2020
ASC payment indicator, and an indication of whether the full credit/
partial credit (FB/FC) device adjustment policy would apply because the
procedure is designated as device-intensive also are included in
Addendum AA to this proposed rule (which is available via the internet
on the CMS website). In addition, we note that in our CY 2019 OPPS/ASC
proposed rule (83 FR 37158 through 37159), we proposed to apply our
device-intensive procedure payment methodology to device-intensive
procedures under the ASC payment system only when the device-intensive
procedure is furnished with a surgically-inserted or implanted device
(including single-used medical devices). We inadvertently omitted
language finalizing this policy for CY 2019. For CY 2020 and subsequent
calendar years, we are proposing to only apply our device-intensive
procedure payment methodology to device-intensive procedures under the
ASC payment system when the device-intensive procedure is furnished
with a surgically inserted or implanted device (including single use
medical devices). The payment rate under the ASC payment system for
device-intensive procedures furnished without an implantable or
inserted medical device would be calculated by applying the uniform ASC
conversion factor to both the device portion and service (non-device)
portion of the OPPS relative payment weight for the device-intensive
procedure and summing both portions (device and service) to establish
the ASC payment rate.
c. Adjustment to ASC Payments for No Cost/Full Credit and Partial
Credit Devices
Our ASC payment policy for costly devices implanted in ASCs at no
cost/full credit or partial credit, as set forth in Sec. 416.179 of
our regulations, is consistent with the OPPS policy that was in effect
until CY 2014. Specifically, the OPPS policy that was in effect through
CY 2013 provided a reduction in OPPS payment by 100 percent of the
device offset amount when a hospital furnishes a specified device
without cost or with a full credit and by 50 percent of the device
offset amount when the hospital receives partial credit in the amount
of 50 percent or more of the cost for the specified device (77 FR 68356
through 68358). The established ASC policy reduces payment to ASCs when
a specified device is furnished without cost or with full credit or
partial credit for the cost of the device for those ASC covered
surgical procedures that are assigned to APCs under the OPPS to which
this policy applies. We refer readers to the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68742 through 68744) for a full
discussion of the ASC payment adjustment policy for no cost/full credit
and partial credit devices.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37159), we noted that,
as discussed in section IV.B. of the CY 2014 OPPS/ASC final rule with
comment period (78 FR 75005 through 75006), we finalized our proposal
to modify our former policy of reducing OPPS payment for specified APCs
when a hospital furnishes a specified device without cost or with a
full or partial credit. Formerly, under the OPPS, our policy was to
reduce OPPS payment by 100 percent of the device offset amount when a
hospital furnished a specified device without cost or with a full
credit and by 50 percent of the device offset amount when the hospital
received partial credit in the amount of 50 percent or more (but less
than 100 percent) of the cost for the specified device. For CY 2014, we
finalized our proposal to reduce OPPS payment for applicable APCs by
the full or partial credit a provider receives for a replaced device,
capped at the device offset amount.
Although we finalized our proposal to modify the policy of reducing
payments when a hospital furnishes a specified device without cost or
with full or partial credit under the OPPS, in that final rule with
comment period (78 FR 75076 through 75080), we finalized our proposal
to maintain our ASC policy for reducing payments to ASCs for specified
device-intensive procedures when the ASC furnishes a device without
cost or with full or partial credit. Unlike the OPPS, there is
currently no mechanism within the ASC claims processing system for ASCs
to submit to CMS the actual credit received when furnishing a specified
device at full or partial credit. Therefore, under the ASC payment
system, we finalized our proposal for CY 2014 to continue to reduce ASC
payments by 100 percent or 50 percent of the device offset amount when
an ASC furnishes a device without cost or with full or partial credit,
respectively.
All ASC covered device-intensive procedures are subject to the no
cost/full credit and partial credit device adjustment policy.
Specifically, when a device-intensive procedure is performed to implant
a device that is furnished at no cost or with full credit from the
manufacturer, the ASC would append the HCPCS ``FB'' modifier on the
line in the claim with the procedure to implant the device. The
contractor would reduce payment to the ASC by the device offset amount
that we estimate represents the cost of the device when the necessary
device is furnished without cost or with full credit to the ASC. We
continue to
[[Page 39542]]
believe that the reduction of ASC payment in these circumstances is
necessary to pay appropriately for the covered surgical procedure
furnished by the ASC.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043
through 59044), for partial credit, we adopted a policy to reduce the
payment for a device-intensive procedure for which the ASC receives
partial credit by one-half of the device offset amount that would be
applied if a device was provided at no cost or with full credit, if the
credit to the ASC is 50 percent or more (but less than 100 percent) of
the cost of the new device. The ASC will append the HCPCS ``FC''
modifier to the HCPCS code for the device-intensive surgical procedure
when the facility receives a partial credit of 50 percent or more (but
less than 100 percent) of the cost of a device. To report that the ASC
received a partial credit of 50 percent or more (but less than 100
percent) of the cost of a new device, ASCs have the option of either:
(1) Submitting the claim for the device replacement procedure to their
Medicare contractor after the procedure's performance, but prior to
manufacturer acknowledgment of credit for the device, and subsequently
contacting the contractor regarding a claim adjustment, once the credit
determination is made; or (2) holding the claim for the device
implantation procedure until a determination is made by the
manufacturer on the partial credit and submitting the claim with the
``FC'' modifier appended to the implantation procedure HCPCS code if
the partial credit is 50 percent or more (but less than 100 percent) of
the cost of the replacement device. Beneficiary coinsurance would be
based on the reduced payment amount. As finalized in the CY 2015 OPPS/
ASC final rule with comment period (79 FR 66926), to ensure our policy
covers any situation involving a device-intensive procedure where an
ASC may receive a device at no cost or receive full credit or partial
credit for the device, we apply our ``FB''/``FC'' modifier policy to
all device-intensive procedures.
In this proposed rule, we are not proposing any changes to these
policies.
d. Proposed Additions to the List of ASC Covered Surgical Procedures
(1) Proposed Additions to the List of ASC Covered Surgical Procedures
for CY 2020
As finalized in section XII.A.3. of the CY 2019 OPPS/ASC final rule
with comment period (83 FR 59029 through 59030), we revised our
definition of ``surgery'' for CY 2019 to include certain ``surgery-
like'' procedures that are assigned codes outside the CPT surgical
range. For CY 2020 and subsequent years we are proposing to adopt the
modified definition we finalized for CY 2019, to include procedures
that are described by Category I CPT codes that are not in the surgical
range but directly crosswalk or are clinically similar to procedures in
the Category I CPT code surgical range that we have determined do not
pose a significant safety risk, would not be expected to require an
overnight stay when performed in an ASC, and are separately paid under
the OPPS. We also are proposing to continue to include in our
definition of surgical procedures those procedures described by
Category I CPT codes in the surgical range from 10000 through 69999 as
well as those Category III CPT codes and Level II HCPCS codes that
directly crosswalk or are clinically similar to procedures in the CPT
surgical range that we have determined do not pose a significant safety
risk, that we would not expect to require an overnight stay when
performed in ASCs, and that are separately paid under the OPPS.
We conducted a review of HCPCS codes that currently are paid under
the OPPS, but not included on the ASC CPL, and that meet our proposed
definition of surgery to determine if changes in technology and/or
medical practice affected the clinical appropriateness of these
procedures for the ASC setting. Based on this review, we are proposing
to update the list of ASC covered surgical procedures by adding a
mosiacplasty procedure and three coronary intervention procedures to
the list for CY 2020, as shown in Table 32. After reviewing the
clinical characteristics of these procedures and consulting with
stakeholders and our clinical advisors, we determined that these four
procedures are separately paid under the OPPS, would not be expected to
pose a significant risk to beneficiary safety when performed in an ASC,
and would not be expected to require active medical monitoring and care
of the beneficiary at midnight following the procedure. Our regulation
at 42 CFR 416.166(c) lists general exclusions from the list of ASC
covered surgical procedures based primarily on factors relating to
safety, including procedures that generally result in extensive blood
loss, require major or prolonged invasion of body cavities, or directly
involve major blood vessels. We have assessed each of the proposed
added procedures against the regulatory safety criteria and believe
that these procedures meet each of the criteria. Although the proposed
coronary intervention procedures may involve blood vessels that could
be considered major, as stated in the August 2, 2007 ASC final rule (72
FR 42481), we believe the involvement of major blood vessels is best
considered in the context of the clinical characteristics of individual
procedures, and we do not believe that it is logically or clinically
consistent to exclude certain cardiac procedures from the list of ASC
covered surgical procedures on the basis of the involvement of major
blood vessels, yet continue to provide ASC payment for similar
procedures involving major blood vessels that have a history of safe
performance in ASCs, such as CPT code 36473 (Mechanicochemical
destruction of insufficient vein of arm or leg, accessed through the
skin using imaging guidance) and CPT code 37223 (Insertion of stents
into groin artery, endovascular, accessed through the skin or open
procedure). Based on our review of the clinical characteristics of the
procedures and their similarity to other procedures that are currently
included on the ASC CPL, we believe these procedures can be safely
performed in an ASC. Therefore, we are proposing to include these 3
coronary intervention procedures on the list of ASC covered surgical
procedures for CY 2020. We are also proposing to add their respective
add-on procedures which are packaged under the ASC payment system.
In the CY 2018 OPPS/ASC proposed rule, we solicited public comments
on whether the total knee arthroplasty (TKA) procedure, CPT code 27447
(Arthroplasty, knee, condyle and plateau; medial and lateral
compartments with or without patella resurfacing (total knee
arthroplasty)), should be added to the ASC CPL. In the CY 2018 OPPS/ASC
final rule with comment period (82 FR 59411 through 59412) we noted
that some commenters argued that many ASCs are equipped to perform
these procedures and orthopedic surgeons in ASCs are increasingly
performing these procedures safely and effectively on non-Medicare
patients and appropriate Medicare patients. However, other commenters
noted that the majority of ASCs were not well-equipped to safely
perform TKA procedures on patients and that the majority of Medicare
patients are not suitable candidates to receive ``overnight'' joint
arthroplasty procedures in an ASC setting. For CY 2018, we did not
finalize adding TKA to the ASC covered surgical procedures list, but
noted that we would take the
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suggestions and recommendations into consideration for future
rulemaking.
In this CY 2020 OPPS/ASC proposed rule, we continue to promote
site-neutrality, where possible, between the hospital outpatient
department and ASC settings. Further, we agree with commenters that
there is a small subset of Medicare beneficiaries who may be suitable
candidates to receive TKA procedures in an ASC setting based on their
clinical characteristics. For example, based on Medicare Advantage
encounter data, we estimate over 800 TKA procedures were performed in
an ASC on Medicare Advantage enrollees in 2016. We believe that
beneficiaries not enrolled in an MA plan should also have the option of
choosing to receive the TKA procedure in an ASC setting based on their
physicians' determinations.
As we stated in the August 2, 2007 final rule (72 FR 42483 through
42484), we exclude procedures that would otherwise pose a significant
safety risk to the typical Medicare beneficiary. However, we believe
physicians should continue to play an important role in exercising
their clinical judgment when making site-of-service determinations,
including for TKA. In light of the information commenters submitted in
support of adding TKA to the ASC CPL in response to our CY 2018 public
comment solicitation, we are proposing to add TKA to the ASC CPL in CY
2020.
We note that TKA procedures were still predominantly performed in
the inpatient hospital setting in CY 2018 (82 percent of the time)
based on professional claims data, and we are cognizant of the fact
that the majority of beneficiaries may not be suitable candidates to
receive TKA in an ASC setting. We believe that appropriate limits are
necessary to ensure that Medicare Part B payment will only be made for
TKA procedures performed in the ASC setting when that setting is
clinically appropriate. Therefore, we are soliciting public comment on
the appropriate approach to provide safeguards for Medicare
beneficiaries who should not receive the TKA procedure in an ASC
setting. Specifically, we are soliciting public comment on methods to
ensure beneficiaries receive surgical procedures in the ASC setting
only as clinically appropriate. For instance, CMS could issue a new
modifier that indicates the physician believes that the beneficiary
would not be expected to require active medical monitoring and care at
midnight following a particular procedure furnished in the ASC setting.
CMS could require that such a modifier be included on the claims line
for a surgical procedure performed in an ASC. Alternatively, given the
importance of post-operative care in making determinations about
whether the ASC is an appropriate setting for a procedure, CMS could
require that an ASC has a defined plan of care for each beneficiary
following a surgical procedure. We could also establish certain
requirements for ASCs that choose to perform certain surgical
procedures on Medicare patients, such as requiring an ASC to have a
certain amount of experience in performing a procedure before being
eligible for payment for performing the procedure under Medicare. We
are soliciting comment on these options, and other options, for
ensuring that beneficiaries receive surgical procedures, including TKA,
that do not pose a significant safety risk when performed in an ASC.
In light of the information we received from commenters in support
of adding TKA to the ASC-CPL in response to our comment solicitation in
the CY 2018 OPPS/ASC proposed rule, we believe TKA would meet our
regulatory requirements established under 42 CFR 416.2 and 416.166(b)
for covered surgical procedures in the ASC setting. Therefore, we are
proposing to add TKA to the ASC CPL as shown in Table 31 below. Based
on the public comments we receive, we will consider appropriate
safeguards and limitations for surgical procedures furnished in the ASC
setting.
As we stated in the CY 2019 OPPS/ASC proposed rule (83 FR 59054
through 59055), section 1833(i)(1) of the Act requires us, in part, to
specify, in consultation with appropriate medical organizations,
surgical procedures that are appropriately performed on an inpatient
basis in a hospital, but can be safely performed in an ASC, and to
review and update the ASC covered surgical procedures list at least
every 2 years.
We are also soliciting comment on how CMS should think about the
role of the ASC-CPL compared to State regulations and market forces in
providing payment for certain surgical procedures in an ASC and whether
any modifications should be made to the ASC-CPL. Comments on this topic
could help formulate the basis for future policy development regarding
how we determine what procedures are payable for Medicare fee-for-
service beneficiaries in the ASC setting and maintain the balance
between safety and access. Finally, we are soliciting comment on how
our proposed additions to the list of ASC covered surgical procedures
might affect rural hospitals to the extent rural hospitals rely on
providing such procedures.
The procedures that we are proposing to add to the ASC list of
covered surgical procedures, including the HCPCS code long descriptors
and the proposed CY 2020 payment indicators, are displayed in Table 32.
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(2) Comment Solicitation on Coronary Intervention Procedures
For CY 2020, as discussed above, we are proposing to add three
coronary intervention procedures (along with the codes describing their
respective add-on procedures) that involve major blood vessels that we
believe can be safely performed in an ASC setting and would not pose a
significant safety risk to beneficiaries if performed in an ASC
setting. For this CY 2020 OPPS/ASC proposed rule, in addition to the
three coronary intervention procedures we are proposing to add to the
ASC CPL, we also reviewed several other coronary intervention
procedures. While we do not believe the procedures included in Table 33
meet our criteria for inclusion on the ASC CPL at this time, and we are
not proposing to add such procedures to the ASC CPL for CY 2020, we are
soliciting public comments on whether stakeholders believe they can be
safely performed in an ASC setting and to provide any materials
supporting their position. In considering whether or not these
procedures should be added to the ASC CPL, we are requesting that
commenters provide information and data that specifically address the
requirements in our regulations at 42 CFR 416.2 and 416.166. For
example, commenters should provide information to support their
position as to whether each of these procedures would be expected to
pose a significant risk to beneficiary safety when performed in an ASC,
whether standard medical practice dictates that the beneficiary would
typically be expected to require active medical monitoring and care at
midnight following the procedure (``overnight stay''), and whether the
procedure would fall under our general exclusions for covered surgical
procedures at 42 CFR 416.166(c) (for example, would it generally result
in extensive blood loss). We will consider public comments we receive
in future rulemaking cycles.
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2. Covered Ancillary Services
Consistent with the established ASC payment system policy (72 FR
42497), we are proposing to update the ASC list of covered ancillary
services to reflect the payment status for the services under the CY
2020 OPPS. Maintaining consistency with the OPPS may result in proposed
changes to ASC payment indicators for some covered ancillary services
because of changes that are being proposed under the OPPS for CY 2020.
For example, if a covered ancillary service was separately paid under
the ASC payment system in CY 2019, but is proposed for packaged status
under the CY 2020 OPPS, to maintain consistency with the OPPS, we would
also propose to package the ancillary service under the ASC payment
system for CY 2020. We are proposing to continue this reconciliation of
packaged status for subsequent calendar years. Comment indicator
``CH'', which is discussed in section XIII.F. of this proposed rule, is
used in Addendum BB to this proposed rule (which is available via the
internet on the CMS website) to indicate covered ancillary services for
which we are proposing a change in the ASC payment indicator to reflect
a proposed change in the OPPS treatment of the service for CY 2020.
All ASC covered ancillary services and their proposed payment
indicators for CY 2020 are included in Addendum BB to this proposed
rule (which is available via the internet on the CMS website).
D. Proposed Update and Payment for ASC Covered Surgical Procedures and
Covered Ancillary Services
1. Proposed ASC Payment for Covered Surgical Procedures
a. Background
Our ASC payment policies for covered surgical procedures under the
revised ASC payment system are fully described in the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66828 through 66831). Under our
established policy, we use the ASC standard ratesetting methodology of
multiplying the ASC relative payment weight for the procedure by the
ASC conversion factor for that same year to calculate the national
unadjusted payment rates for procedures with payment indicators ``G2''
and ``A2''. Payment indicator ``A2'' was developed to identify
procedures that were included on the list of ASC covered surgical
procedures in CY 2007 and, therefore, were subject to transitional
payment prior to CY 2011. Although the 4-year transitional period has
ended and payment indicator ``A2'' is no longer required to identify
surgical procedures subject to transitional payment, we retained
payment indicator ``A2'' because it is used to identify procedures that
are exempted from the application of the office-based designation.
The rate calculation established for device-intensive procedures
(payment indicator ``J8'') is structured so only the service portion of
the rate is subject to the ASC standard ratesetting methodology. In the
CY 2019 OPPS/ASC final rule with comment period (83 FR 59028 through
59080), we updated the CY 2018 ASC payment rates for ASC covered
surgical procedures with payment indicators of ``A2'', ``G2'', and
``J8'' using CY 2017 data, consistent with the CY 2019 OPPS update. We
also updated payment rates for device-intensive procedures to
incorporate the CY 2019 OPPS device offset percentages calculated under
the standard APC ratesetting methodology, as discussed earlier in this
section.
Payment rates for office-based procedures (payment indicators
``P2'', ``P3'', and ``R2'') are the lower of the PFS nonfacility PE
RVU-based amount or the amount calculated using the ASC standard rate
setting methodology for the procedure. In the CY 2018 OPPS/ASC final
rule with comment period, we updated the payment amounts for office-
based procedures (payment indicators ``P2'', ``P3'', and ``R2'') using
the most recent available MPFS and OPPS data. We compared the estimated
[[Page 39547]]
CY 2018 rate for each of the office-based procedures, calculated
according to the ASC standard rate setting methodology, to the PFS
nonfacility PE RVU-based amount to determine which was lower and,
therefore, would be the CY 2018 payment rate for the procedure under
our final policy for the revised ASC payment system (Sec. 416.171(d)).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
75081), we finalized our proposal to calculate the CY 2014 payment
rates for ASC covered surgical procedures according to our established
methodologies, with the exception of device removal procedures. For CY
2014, we finalized a policy to conditionally package payment for device
removal procedures under the OPPS. Under the OPPS, a conditionally
packaged procedure (status indicators ``Q1'' and ``Q2'') describes a
HCPCS code where the payment is packaged when it is provided with a
significant procedure but is separately paid when the service appears
on the claim without a significant procedure. Because ASC services
always include a covered surgical procedure, HCPCS codes that are
conditionally packaged under the OPPS are always packaged (payment
indicator ``N1'') under the ASC payment system. Under the OPPS, device
removal procedures are conditionally packaged and, therefore, would be
packaged under the ASC payment system. There would be no Medicare
payment made when a device removal procedure is performed in an ASC
without another surgical procedure included on the claim; therefore, no
Medicare payment would be made if a device was removed but not
replaced. To ensure that the ASC payment system provides separate
payment for surgical procedures that only involve device removal--
conditionally packaged in the OPPS (status indicator ``Q2'')--we
continued to provide separate payment since CY 2014 and assigned the
current ASC payment indicators associated with these procedures.
b. Proposed Update to ASC Covered Surgical Procedure Payment Rates for
CY 2020
We are proposing to update ASC payment rates for CY 2020 and
subsequent years using the established rate calculation methodologies
under Sec. 416.171 and using our definition of device-intensive
procedures, as discussed in section XII.C.1.b. of this proposed rule.
Because the proposed OPPS relative payment weights are generally based
on geometric mean costs, the ASC system would generally use geometric
means to determine proposed relative payment weights under the ASC
standard methodology. We are proposing to continue to use the amount
calculated under the ASC standard ratesetting methodology for
procedures assigned payment indicators ``A2'' and ``G2''.
We are proposing to calculate payment rates for office-based
procedures (payment indicators ``P2'', ``P3'', and ``R2'') and device-
intensive procedures (payment indicator ``J8'') according to our
established policies and, for device-intensive procedures, using our
modified definition of device-intensive procedures, as discussed in
section XII.C.1.b. of this proposed rule. Therefore, we are proposing
to update the payment amount for the service portion of the device-
intensive procedures using the ASC standard rate setting methodology
and the payment amount for the device portion based on the proposed CY
2020 OPPS device offset percentages that have been calculated using the
standard OPPS APC ratesetting methodology. Payment for office-based
procedures would be at the lesser of the proposed CY 2020 MPFS
nonfacility PE RVU-based amount or the proposed CY 2020 ASC payment
amount calculated according to the ASC standard ratesetting
methodology.
As we did for CYs 2014 through 2019, for CY 2020, we are proposing
to continue our policy for device removal procedures, such that device
removal procedures that are conditionally packaged in the OPPS (status
indicators ``Q1'' and ``Q2'') would be assigned the current ASC payment
indicators associated with these procedures and would continue to be
paid separately under the ASC payment system.
c. Proposed Limit on ASC Payment Rates for Low Volume Device-Intensive
Procedures
As stated in section XIII.D.1.b. of this proposed rule, the ASC
payment system generally uses OPPS geometric mean costs under the
standard methodology to determine proposed relative payment weights
under the standard ASC ratesetting methodology. However, for low-volume
device-intensive procedures, the proposed relative payment weights are
based on median costs, rather than geometric mean costs, as discussed
in section IV.B.5. of this proposed rule.
While we believe this policy generally helps to provide more
appropriate payment for low-volume device intensive procedures, these
procedures can still have data anomalies as a result of the limited
data available for these procedures in our ratesetting process. For the
Level 5 Intraocular APC, which includes only HCPCS code 0308T (insj
ocular telescope prosth), based on the CY 2018 claims data available
for this proposed rule, the geometric mean cost and median cost under
the standard ASC ratesetting methodology is $67,946.51 and $111,019.30,
respectively. As described in section IV.B.5. of this proposed rule, a
device-intensive procedure that is assigned to a clinical APC with
fewer than 100 total claims for all procedures is considered ``low-
volume'' and the cost of the procedure is based on calculations using
the APC's median cost instead of the APC's geometric mean cost. Since
this APC meets the criteria for low-volume device-intensive procedure
designation, the ASC relative weight would be based on the median cost
rather than the geometric mean cost. We note that this median cost for
this APC is significantly higher than either the OPPS geometric mean
cost or median cost based on the OPPS comprehensive ratesetting
methodology, which are $28,122.51 and $19,269.55, respectively. This
very large difference in cost calculations between these two settings
is largely attributable to the APC's low claims volume and to the
comprehensive methodology used under the OPPS which is not utilized in
ratesetting under the ASC payment system. The cost calculation for this
APC under the ASC payment system is primarily based on charges from one
hospital with a significantly higher device cost center cost-to-charge
ratio and significantly higher charges when compared to other hospitals
providing the procedure.
If the ASC payment system were to base the CY 2020 payment rate for
HCPCS code 0308T on the median cost of $111,019.30, the ASC payment
rate would be several times greater than the OPPS payment rate for
HCPCS code 0308T. We note that the median cost under the OPPS
ratesetting methodology based on CY 2018 claims data is closer to the
historical average for the median cost of HCPCS code 0308T
(approximately $19,000). In addition, given that the outpatient
hospital setting is generally considered to have higher costs than the
ASC setting and that the payment rates for both settings are based on
hospital outpatient cost data, we do not believe there should be a
scenario where the payment rate for a low-volume device intensive
procedure under the ASC payment system is significantly greater than
payment under the OPPS.
Therefore, for CY 2020 and subsequent years, we are proposing to
limit the ASC payment rate for low-volume device intensive procedure to
a payment rate equal to the OPPS
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payment rate for that procedure. Under this proposal, where the ASC
payment rate based on the standard ASC ratesetting methodology for low
volume device-intensive procedures would exceed the rate paid under the
OPPS for the same procedure, we are proposing to establish an ASC
payment rate for such procedures equal to the OPPS payment rate for the
same procedure. In this CY 2020 proposed rule, our proposed policy
would only affect HCPCS code 0308T, which has very low claims volume (7
claims used for ratesetting in the OPPS). We are proposing to amend 42
CFR 416.171(b) of the regulations to reflect the proposed new limit on
ASC payment rates for low-volume device-intensive procedures. CMS'
existing regulation at 42 CFR 416.171(b)(2) requires the payment of the
device portion of a device-intensive procedure at an amount derived
from the payment rate for the equivalent item under the OPPS using our
standard ratesetting methodology. We are proposing to add paragraph
(b)(4) to Sec. 416.171 to require that, notwithstanding paragraph
(b)(2), low volume device-intensive procedures where the otherwise
applicable payment rate calculated based on the standard methodology
for device-intensive procedures would exceed the payment rate for the
same procedure set under the OPPS, the payment rate for the procedure
under the ASC payment system would be equal to the payment rate for the
same procedure under the OPPS.
Covered surgical procedures and their proposed payment rates for CY
2020 are listed in Addendum AA to this proposed rule (which is
available via the internet on the CMS website).
2. Proposed Payment for Covered Ancillary Services
a. Background
Our payment policies under the ASC payment system for covered
ancillary services generally vary according to the particular type of
service and its payment policy under the OPPS. Our overall policy
provides separate ASC payment for certain ancillary items and services
integrally related to the provision of ASC covered surgical procedures
that are paid separately under the OPPS and provides packaged ASC
payment for other ancillary items and services that are packaged or
conditionally packaged (status indicators ``N'', ``Q1'', and ``Q2'')
under the OPPS. In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77
FR 68457 through 68458), we further clarified our policy regarding the
payment indicator assignment of procedures that are conditionally
packaged in the OPPS (status indicators ``Q1'' and ``Q2''). Under the
OPPS, a conditionally packaged procedure describes a HCPCS code where
the payment is packaged when it is provided with a significant
procedure but is separately paid when the service appears on the claim
without a significant procedure. Because ASC services always include a
surgical procedure, HCPCS codes that are conditionally packaged under
the OPPS are generally packaged (payment indictor ``N1'') under the ASC
payment system (except for device removal procedures, as discussed in
section IV. of this proposed rule). Thus, our policy generally aligns
ASC payment bundles with those under the OPPS (72 FR 42495). In all
cases, in order for those ancillary services also to be paid, ancillary
items and services must be provided integral to the performance of ASC
covered surgical procedures for which the ASC bills Medicare.
Our ASC payment policies generally provide separate payment for
drugs and biologicals that are separately paid under the OPPS at the
OPPS rates and package payment for drugs and biologicals for which
payment is packaged under the OPPS. However, as discussed in section
XIII.D.3. of this proposed rule, below, for CY 2019 we finalized a
policy to unpackage and pay separately at ASP + 6 percent for the cost
of non-opioid pain management drugs that function as surgical supplies
when furnished in the ASC setting, even though payment for these drugs
continues to be packaged under the OPPS. We generally pay for
separately payable radiology services at the lower of the PFS
nonfacility PE RVU-based (or technical component) amount or the rate
calculated according to the ASC standard ratesetting methodology (72 FR
42497). However, as finalized in the CY 2011 OPPS/ASC final rule with
comment period (75 FR 72050), payment indicators for all nuclear
medicine procedures (defined as CPT codes in the range of 78000 through
78999) that are designated as radiology services that are paid
separately when provided integral to a surgical procedure on the ASC
list are set to ``Z2'' so that payment is made based on the ASC
standard ratesetting methodology rather than the MPFS nonfacility PE
RVU amount (``Z3''), regardless of which is lower (42 CFR
416.171(d)(1)).
Similarly, we also finalized our policy to set the payment
indicator to ``Z2'' for radiology services that use contrast agents so
that payment for these procedures will be based on the OPPS relative
payment weight using the ASC standard ratesetting methodology and,
therefore, will include the cost for the contrast agent (42 CFR
416.171(d)(2)).
ASC payment policy for brachytherapy sources mirrors the payment
policy under the OPPS. ASCs are paid for brachytherapy sources provided
integral to ASC covered surgical procedures at prospective rates
adopted under the OPPS or, if OPPS rates are unavailable, at
contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs
have been paid for brachytherapy sources provided integral to ASC
covered surgical procedures at prospective rates adopted under the
OPPS.
Our ASC policies also provide separate payment for: (1) Certain
items and services that CMS designates as contractor-priced, including,
but not limited to, the procurement of corneal tissue; and (2) certain
implantable items that have pass-through payment status under the OPPS.
These categories do not have prospectively established ASC payment
rates according to ASC payment system policies (72 FR 42502 and 42508
through 42509; 42 CFR 416.164(b)). Under the ASC payment system, we
have designated corneal tissue acquisition and hepatitis B vaccines as
contractor-priced. Corneal tissue acquisition is contractor-priced
based on the invoiced costs for acquiring the corneal tissue for
transplantation. Hepatitis B vaccines are contractor-priced based on
invoiced costs for the vaccine.
Devices that are eligible for pass-through payment under the OPPS
are separately paid under the ASC payment system and are contractor-
priced. Under the revised ASC payment system (72 FR 42502), payment for
the surgical procedure associated with the pass-through device is made
according to our standard methodology for the ASC payment system, based
on only the service (non-device) portion of the procedure's OPPS
relative payment weight if the APC weight for the procedure includes
other packaged device costs. We also refer to this methodology as
applying a ``device offset'' to the ASC payment for the associated
surgical procedure. This ensures that duplicate payment is not provided
for any portion of an implanted device with OPPS pass-through payment
status.
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933
through 66934), we finalized that, beginning in CY 2015, certain
diagnostic tests within the medicine range of CPT codes for which
separate payment is allowed under the OPPS are covered
[[Page 39549]]
ancillary services when they are integral to an ASC covered surgical
procedure. We finalized that diagnostic tests within the medicine range
of CPT codes include all Category I CPT codes in the medicine range
established by CPT, from 90000 to 99999, and Category III CPT codes and
Level II HCPCS codes that describe diagnostic tests that crosswalk or
are clinically similar to procedures in the medicine range established
by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also
finalized our policy to pay for these tests at the lower of the PFS
nonfacility PE RVU-based (or technical component) amount or the rate
calculated according to the ASC standard ratesetting methodology (79 FR
66933 through 66934). We finalized that the diagnostic tests for which
the payment is based on the ASC standard ratesetting methodology be
assigned to payment indicator ``Z2'' and revised the definition of
payment indicator ``Z2'' to include a reference to diagnostic services
and those for which the payment is based on the PFS nonfacility PE RVU-
based amount be assigned payment indicator ``Z3,'' and revised the
definition of payment indicator ``Z3'' to include a reference to
diagnostic services.
b. Proposed Payment for Covered Ancillary Services for CY 2020
We are proposing to update the ASC payment rates and to make
changes to ASC payment indicators, as necessary, to maintain
consistency between the OPPS and ASC payment system regarding the
packaged or separately payable status of services and the proposed CY
2020 OPPS and ASC payment rates and subsequent year payment rates. We
also are proposing to continue to set the CY 2020 ASC payment rates and
subsequent year payment rates for brachytherapy sources and separately
payable drugs and biologicals equal to the OPPS payment rates for CY
2020 and subsequent year payment rates.
We note that stakeholders requested that we propose to add CPT code
91040 (Esophageal balloon distension study, diagnostic, with
provocation when performed) to the ASC Covered Procedures List (CPL)
and ASC list of covered ancillary services as it is integral to the
performance of covered surgical procedures such as CPT code 43235
(Esophagogastroduodenoscopy, flexible, transoral; diagnostic, including
collection of specimen(s) by brushing or washing, when performed
(separate procedure)) and 43239 (Esophagogastroduodenoscopy, flexible,
transoral; with biopsy, single or multiple). Based on available data
and other information related to CPT code 91040, we do not believe this
diagnostic test is integral to the covered surgical procedures of CPT
codes 43235 or 43239. Therefore, we are not proposing to add CPT code
91040 as a covered ancillary service.
Covered ancillary services and their proposed payment indicators
for CY 2020 are listed in Addendum BB to this proposed rule (which is
available via the internet on the CMS website). For those covered
ancillary services where the payment rate is the lower of the proposed
rates under the ASC standard rate setting methodology and the PFS
proposed rates, the proposed payment indicators and rates set forth in
this proposed rule are based on a comparison using the proposed PFS
rates effective January 1, 2020. For a discussion of the PFS rates, we
refer readers to the CY 2020 PFS proposed rule, which will be available
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
3. Proposed CY 2020 ASC Packaging Policy for Non-Opioid Pain Management
Treatments
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59066
through 59072), we finalized the policy to unpackage and pay separately
at ASP+6 percent for the cost of non-opioid pain management drugs that
function as surgical supplies when they are furnished in the ASC
setting for CY 2019. We also finalized conforming changes to 42 CFR
416.164(a)(4) to exclude non-opioid pain management drugs that function
as a supply when used in a surgical procedure from our policy to
package payment for drugs and biologicals for which separate payment is
not allowed under the OPPS into the ASC payment for the covered
surgical procedure. We added a new 42 CFR 416.164(b)(6) to include non-
opioid pain management drugs that function as a supply when used in a
surgical procedure as covered ancillary services that are integral to a
covered surgical procedure. Finally, we finalized a change to 42 CFR
416.171(b)(1) to exclude non-opioid pain management drugs that function
as a supply when used in a surgical procedure from our policy to pay
for ASC covered ancillary services an amount derived from the payment
rate for the equivalent item or service set under the OPPS.
In that final rule with comment period, we noted that we will
continue to analyze the issue of access to non-opioid alternatives in
the OPPS and ASC settings as we implement section 6082 of the Substance
Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for
Patients and Communities Act (SUPPORT for Patients and Communities Act)
(Pub. L. 115-271), enacted on October 24, 2018. We also discussed our
policy to unpackage and pay separately at ASP + 6 percent for the cost
of non-opioid pain management drugs that function as surgical supplies
when furnished in the ASC setting in section II.A.3.b. of the CY 2019
OPPS/ASC final rule with comment period (83 FR 58854 through 58860). As
required under Section 6082(b) of the SUPPORT Act, we will continue to
review and revise ASC payments for non-opioid alternatives for pain
management, as appropriate. For more information on our implementation
of section 6082 of the SUPPORT for Patients and Communities Act and
related proposals, we refer readers to section II.A.3.b. of this
proposed rule.
E. New Technology Intraocular Lenses (NTIOLs)
New Technology Intraocular Lenses (NTIOLs) are intraocular lenses
that replace a patient's natural lens that has been removed in cataract
surgery and that also meet the requirements listed in 42 CFR 416.195.
1. NTIOL Application Cycle
Our process for reviewing applications to establish new classes of
NTIOLs is as follows:
Applicants submit their NTIOL requests for review to CMS
by the annual deadline. For a request to be considered complete, we
require submission of the information that is found in the guidance
document entitled ``Application Process and Information Requirements
for Requests for a New Class of New Technology Intraocular Lenses
(NTIOLs) or Inclusion of an IOL in an Existing NTIOL Class'' posted on
the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.html.
We announce annually, in the proposed rule updating the
ASC and OPPS payment rates for the following calendar year, a list of
all requests to establish new NTIOL classes accepted for review during
the calendar year in which the proposal is published. In accordance
with section 141(b)(3) of Public Law 103-432 and our regulations at 42
CFR 416.185(b), the deadline for receipt of public comments is 30 days
following publication of the list of requests in the proposed rule.
[[Page 39550]]
In the final rule updating the ASC and OPPS payment rates
for the following calendar year, we--
++ Provide a list of determinations made as a result of our review
of all new NTIOL class requests and public comments;
++ When a new NTIOL class is created, identify the predominant
characteristic of NTIOLs in that class that sets them apart from other
IOLs (including those previously approved as members of other expired
or active NTIOL classes) and that is associated with an improved
clinical outcome.
++ Set the date of implementation of a payment adjustment in the
case of approval of an IOL as a member of a new NTIOL class
prospectively as of 30 days after publication of the ASC payment update
final rule, consistent with the statutory requirement.
++ Announce the deadline for submitting requests for review of an
application for a new NTIOL class for the following calendar year.
2. Requests To Establish New NTIOL Classes for CY 2020
We did not receive any requests for review to establish a new NTIOL
class for CY 2020 by March 1, 2019, the due date published in the CY
2019 OPPS/ASC final rule with comment period (83 FR 59072).
3. Payment Adjustment
The current payment adjustment for a 5-year period from the
implementation date of a new NTIOL class is $50 per lens. Since
implementation of the process for adjustment of payment amounts for
NTIOLs in 1999, we have not revised the payment adjustment amount, and
we are not proposing to revise the payment adjustment amount for CY
2020.
F. Proposed ASC Payment and Comment Indicators
1. Background
In addition to the payment indicators that we introduced in the
August 2, 2007 final rule, we created final comment indicators for the
ASC payment system in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66855). We created Addendum DD1 to define ASC payment
indicators that we use in Addenda AA and BB to provide payment
information regarding covered surgical procedures and covered ancillary
services, respectively, under the revised ASC payment system. The ASC
payment indicators in Addendum DD1 are intended to capture policy-
relevant characteristics of HCPCS codes that may receive packaged or
separate payment in ASCs, such as whether they were on the ASC CPL
prior to CY 2008; payment designation, such as device-intensive or
office-based, and the corresponding ASC payment methodology; and their
classification as separately payable ancillary services, including
radiology services, brachytherapy sources, OPPS pass-through devices,
corneal tissue acquisition services, drugs or biologicals, or NTIOLs.
We also created Addendum DD2 that lists the ASC comment indicators.
The ASC comment indicators included in Addenda AA and BB to the
proposed rules and final rules with comment period serve to identify,
for the revised ASC payment system, the status of a specific HCPCS code
and its payment indicator with respect to the timeframe when comments
will be accepted. The comment indicator ``NI'' is used in the OPPS/ASC
final rule to indicate new codes for the next calendar year for which
the interim payment indicator assigned is subject to comment. The
comment indicator ``NI'' also is assigned to existing codes with
substantial revisions to their descriptors such that we consider them
to be describing new services, and the interim payment indicator
assigned is subject to comment, as discussed in the CY2010 OPPS/ASC
final rule with comment period (74 FR 60622).
The comment indicator ``NP'' is used in the OPPS/ASC proposed rule
to indicate new codes for the next calendar year for which the proposed
payment indicator assigned is subject to comment. The comment indicator
``NP'' also is assigned to existing codes with substantial revisions to
their descriptors, such that we consider them to be describing new
services, and the proposed payment indicator assigned is subject to
comment, as discussed in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70497).
The ``CH'' comment indicator is used in Addenda AA and BB to this
proposed rule (which are available via the internet on the CMS website)
to indicate that the payment indicator assignment has changed for an
active HCPCS code in the current year and the next calendar year, for
example if an active HCPCS code is newly recognized as payable in ASCs;
or an active HCPCS code is discontinued at the end of the current
calendar year. The ``CH'' comment indicators that are published in the
final rule with comment period are provided to alert readers that a
change has been made from one calendar year to the next, but do not
indicate that the change is subject to comment.
2. Proposed ASC Payment and Comment Indicators for CY 2020
For CY 2020, there are proposed new and revised Category I and III
CPT codes as well as new and revised Level II HCPCS codes. Therefore,
proposed Category I and III CPT codes that are new and revised for CY
2019 and any new and existing Level II HCPCS codes with substantial
revisions to the code descriptors for CY 2020 compared to the CY 2019
descriptors that are included in ASC Addenda AA and BB to this proposed
rule are labeled with proposed comment indicator ``NP'' to indicate
that these CPT and Level II HCPCS codes are open for comment as part of
this proposed rule. Proposed comment indicator ``NP'' means a new code
for the next calendar year or an existing code with substantial
revision to its code descriptor in the next calendar year, as compared
to current calendar year; and denotes that comments will be accepted on
the proposed ASC payment indicator for the new code.
We will respond to public comments on ASC payment and comment
indicators and finalize their ASC assignment in the CY 2020 OPPS/ASC
final rule with comment period. We refer readers to Addenda DD1 and DD2
to this proposed rule (which are available via the internet on the CMS
website) for the complete list of ASC payment and comment indicators
proposed for the CY 2020 update.
G. Proposed Calculation of the ASC Payment Rates and the ASC Conversion
Factor
1. Background
In the August 2, 2007 final rule (72 FR 42493), we established our
policy to base ASC relative payment weights and payment rates under the
revised ASC payment system on APC groups and the OPPS relative payment
weights. Consistent with that policy and the requirement at section
1833(i)(2)(D)(ii) of the Act that the revised payment system be
implemented so that it would be budget neutral, the initial ASC
conversion factor (CY 2008) was calculated so that estimated total
Medicare payments under the revised ASC payment system in the first
year would be budget neutral to estimated total Medicare payments under
the prior (CY 2007) ASC payment system (the ASC conversion factor is
multiplied by the relative payment weights calculated for many ASC
services in order to establish payment rates). That is, application of
the ASC conversion factor was designed to result in aggregate Medicare
expenditures under the revised ASC payment system in CY
[[Page 39551]]
2008 being equal to aggregate Medicare expenditures that would have
occurred in CY 2008 in the absence of the revised system, taking into
consideration the cap on ASC payments in CY 2007, as required under
section 1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to
make the system budget neutral in subsequent calendar years (72 FR
42532 through 42533; 42 CFR 416.171(e)).
We note that we consider the term ``expenditures'' in the context
of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of
the Act to mean expenditures from the Medicare Part B Trust Fund. We do
not consider expenditures to include beneficiary coinsurance and
copayments. This distinction was important for the CY 2008 ASC budget
neutrality model that considered payments across the OPPS, ASC, and
MPFS payment systems. However, because coinsurance is almost always 20
percent for ASC services, this interpretation of expenditures has
minimal impact for subsequent budget neutrality adjustments calculated
within the revised ASC payment system.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857
through 66858), we set out a step-by-step illustration of the final
budget neutrality adjustment calculation based on the methodology
finalized in the August 2, 2007 final rule (72 FR 42521 through 42531)
and as applied to updated data available for the CY 2008 OPPS/ASC final
rule with comment period. The application of that methodology to the
data available for the CY 2008 OPPS/ASC final rule with comment period
resulted in a budget neutrality adjustment of 0.65.
For CY 2008, we adopted the OPPS relative payment weights as the
ASC relative payment weights for most services and, consistent with the
final policy, we calculated the CY 2008 ASC payment rates by
multiplying the ASC relative payment weights by the final CY 2008 ASC
conversion factor of $41.401. For covered office-based surgical
procedures, covered ancillary radiology services (excluding covered
ancillary radiology services involving certain nuclear medicine
procedures or involving the use of contrast agents, as discussed in
section XII.D.2. of this proposed rule), and certain diagnostic tests
within the medicine range that are covered ancillary services, the
established policy is to set the payment rate at the lower of the MPFS
unadjusted nonfacility PE RVU-based amount or the amount calculated
using the ASC standard ratesetting methodology. Further, as discussed
in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66841
through 66843), we also adopted alternative ratesetting methodologies
for specific types of services (for example, device-intensive
procedures).
As discussed in the August 2, 2007 final rule (72 FR 42517 through
42518) and as codified at Sec. 416.172(c) of the regulations, the
revised ASC payment system accounts for geographic wage variation when
calculating individual ASC payments by applying the pre-floor and pre-
reclassified IPPS hospital wage indexes to the labor-related share,
which is 50 percent of the ASC payment amount based on a GAO report of
ASC costs using 2004 survey data. Beginning in CY 2008, CMS accounted
for geographic wage variation in labor costs when calculating
individual ASC payments by applying the pre-floor and pre-reclassified
hospital wage index values that CMS calculates for payment under the
IPPS, using updated Core Based Statistical Areas (CBSAs) issued by OMB
in June 2003.
The reclassification provision in section 1886(d)(10) of the Act is
specific to hospitals. We believe that using the most recently
available pre-floor and pre-reclassified IPPS hospital wage indexes
results in the most appropriate adjustment to the labor portion of ASC
costs. We continue to believe that the unadjusted hospital wage
indexes, which are updated yearly and are used by many other Medicare
payment systems, appropriately account for geographic variation in
labor costs for ASCs. Therefore, the wage index for an ASC is the pre-
floor and pre-reclassified hospital wage index under the IPPS of the
CBSA that maps to the CBSA where the ASC is located.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. On February 28,
2013, OMB issued OMB Bulletin No. 13-01, which provides the
delineations of all Metropolitan Statistical Areas, Metropolitan
Divisions, Micropolitan Statistical Areas, Combined Statistical Areas,
and New England City and Town Areas in the United States and Puerto
Rico based on the standards published on June 28, 2010 in the Federal
Register (75 FR 37246 through 37252) and 2010 Census Bureau data. (A
copy of this bulletin may be obtained at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2013/b13-01.pdf). In the FY
2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963), we
implemented the use of the CBSA delineations issued by OMB in OMB
Bulletin 13-01 for the IPPS hospital wage index beginning in FY 2015.
OMB occasionally issues minor updates and revisions to statistical
areas in the years between the decennial censuses. On July 15, 2015,
OMB issued OMB Bulletin No. 15-01, which provides updates to and
supersedes OMB Bulletin No. 13-01 that was issued on February 28, 2013.
OMB Bulletin No. 15-01 made changes that are relevant to the IPPS and
ASC wage index. We refer readers to the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79750) for a discussion of these changes and
our implementation of these revisions. (A copy of this bulletin may be
obtained at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2015/15-01.pdf).
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. We refer readers to the CY 2019 OPPS/ASC final
rule with comment period (83 FR 58864 through 58865) for a discussion
of these changes and our implementation of these revisions. (A copy of
this bulletin may be obtained at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf).
For CY 2020, the proposed CY 2020 ASC wage indexes fully reflect
the OMB labor market area delineations (including the revisions to the
OMB labor market delineations discussed above, as set forth in OMB
Bulletin Nos. 15-01 and 17-01).
We note that, in certain instances, there might be urban or rural
areas for which there is no IPPS hospital that has wage index data that
could be used to set the wage index for that area. For these areas, our
policy has been to use the average of the wage indexes for CBSAs (or
metropolitan divisions as applicable) that are contiguous to the area
that has no wage index (where ``contiguous'' is defined as sharing a
border). For example, for CY 2014, we applied a proxy wage index based
on this methodology to ASCs located in CBSA 25980 (Hinesville-Fort
Stewart, GA) and CBSA 08 (Rural Delaware).
When all of the areas contiguous to the urban CBSA of interest are
rural and there is no IPPS hospital that has wage index data that could
be used to set the wage index for that area, we determine the ASC wage
index by calculating the average of all wage indexes for urban areas in
the State (75 FR 72058 through 72059). (In other situations, where
there are no IPPS hospitals located in a relevant labor market area, we
continue our current policy of calculating an urban or rural area's
wage index by
[[Page 39552]]
calculating the average of the wage indexes for CBSAs (or metropolitan
divisions where applicable) that are contiguous to the area with no
wage index.)
2. Proposed Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2020 and Future
Years
We update the ASC relative payment weights each year using the
national OPPS relative payment weights (and PFS nonfacility PE RVU-
based amounts, as applicable) for that same calendar year and uniformly
scale the ASC relative payment weights for each update year to make
them budget neutral (72 FR 42533). Consistent with our established
policy, we are proposing to scale the CY 2020 relative payment weights
for ASCs according to the following method. Holding ASC utilization,
the ASC conversion factor, and the mix of services constant from CY
2018, we are proposing to compare the total payment using the CY 2019
ASC relative payment weights with the total payment using the CY 2020
ASC relative payment weights to take into account the changes in the
OPPS relative payment weights between CY 2019 and CY 2020. We are
proposing to use the ratio of CY 2019 to CY 2020 total payments (the
weight scalar) to scale the ASC relative payment weights for CY 2020.
The proposed CY 2020 ASC weight scalar is 0.8452 and scaling would
apply to the ASC relative payment weights of the covered surgical
procedures, covered ancillary radiology services, and certain
diagnostic tests within the medicine range of CPT codes, which are
covered ancillary services for which the ASC payment rates are based on
OPPS relative payment weights.
Scaling would not apply in the case of ASC payment for separately
payable covered ancillary services that have a predetermined national
payment amount (that is, their national ASC payment amounts are not
based on OPPS relative payment weights), such as drugs and biologicals
that are separately paid or services that are contractor-priced or paid
at reasonable cost in ASCs. Any service with a predetermined national
payment amount would be included in the ASC budget neutrality
comparison, but scaling of the ASC relative payment weights would not
apply to those services. The ASC payment weights for those services
without predetermined national payment amounts (that is, those services
with national payment amounts that would be based on OPPS relative
payment weights) would be scaled to eliminate any difference in the
total payment between the current year and the update year.
For any given year's ratesetting, we typically use the most recent
full calendar year of claims data to model budget neutrality
adjustments. At the time of this proposed rule, we had available 98
percent of CY 2018 ASC claims data.
To create an analytic file to support calculation of the weight
scalar and budget neutrality adjustment for the wage index (discussed
below), we summarized available CY 2017 ASC claims by ASC and by HCPCS
code. We used the National Provider Identifier for the purpose of
identifying unique ASCs within the CY 2018 claims data. We used the
supplier zip code reported on the claim to associate State, county, and
CBSA with each ASC. This file, available to the public as a supporting
data file for this proposed rule, is posted on the CMS website at:
http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/ASCPaymentSystem.html.
b. Updating the ASC Conversion Factor
Under the OPPS, we typically apply a budget neutrality adjustment
for provider level changes, most notably a change in the wage index
values for the upcoming year, to the conversion factor. Consistent with
our final ASC payment policy, for the CY 2017 ASC payment system and
subsequent years, in the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79751 through 79753), we finalized our policy to
calculate and apply a budget neutrality adjustment to the ASC
conversion factor for supplier level changes in wage index values for
the upcoming year, just as the OPPS wage index budget neutrality
adjustment is calculated and applied to the OPPS conversion factor. For
CY 2020, we calculated the proposed adjustment for the ASC payment
system by using the most recent CY 2018 claims data available and
estimating the difference in total payment that would be created by
introducing the proposed CY 2020 ASC wage indexes. Specifically,
holding CY 2018 ASC utilization, service-mix, and the proposed CY 2020
national payment rates after application of the weight scalar constant,
we calculated the total adjusted payment using the CY 2019 ASC wage
indexes and the total adjusted payment using the proposed CY 2020 ASC
wage indexes. We used the 50-percent labor-related share for both total
adjusted payment calculations. We then compared the total adjusted
payment calculated with the CY 2019 ASC wage indexes to the total
adjusted payment calculated with the proposed CY 2020 ASC wage indexes
and applied the resulting ratio of 1.0008 (the proposed CY 2020 ASC
wage index budget neutrality adjustment) to the CY 2019 ASC conversion
factor to calculate the proposed CY 2020 ASC conversion factor.
Section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary
has not updated amounts established under the revised ASC payment
system in a calendar year, the payment amounts shall be increased by
the percentage increase in the Consumer Price Index for all urban
consumers (CPI-U), U.S. city average, as estimated by the Secretary for
the 12-month period ending with the midpoint of the year involved. The
statute does not mandate the adoption of any particular update
mechanism, but it requires the payment amounts to be increased by the
CPI-U in the absence of any update. Because the Secretary updates the
ASC payment amounts annually, we adopted a policy, which we codified at
42 CFR 416.171(a)(2)(ii)), to update the ASC conversion factor using
the CPI-U for CY 2010 and subsequent calendar years.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075
through 59080), we finalized our proposal to apply the hospital market
basket update to ASC payment system rates for an interim period of 5
years (CY 2019 through CY 2023), during which we will assess whether
there is a migration of the performance of procedures from the hospital
setting to the ASC setting as a result of the use of a hospital market
basket update, as well as whether there are any unintended
consequences, such as less than expected migration of the performance
of procedures from the hospital setting to the ASC setting. In
addition, we finalized our proposal to revise our regulations under 42
CFR 416.171(a)(2), which address the annual update to the ASC
conversion factor. During this 5-year period, we intend to assess the
feasibility of collaborating with stakeholders to collect ASC cost data
in a minimally burdensome manner and could propose a plan to collect
such information. We refer readers to that final rule for a detailed
discussion of the rationale for these policies.
For this proposed rule, the hospital market basket update for CY
2020 is projected to be 3.2 percent, as published in the FY 2020 IPPS/
LTCH PPS proposed rule (84 FR 19402), based on IHS Global Inc.'s
(IGI's) 2018 fourth quarter forecast with historical data through the
third quarter of 2018.
[[Page 39553]]
We finalized the methodology for calculating the MFP adjustment in
the CY 2011 PFS final rule with comment period (75 FR 73394 through
73396) and revised it in the CY 2012 PFS final rule with comment period
(76 FR 73300 through 73301) and the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70500 through 70501). For this proposed rule, the
proposed MFP adjustment for CY 2020 is projected to be 0.5 percentage
point, as published in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR
19402) based on IGI's 2018 fourth quarter forecast.
For CY 2020, we are proposing to utilize the hospital market basket
update of 3.2 percent minus the MFP adjustment of 0.5 percentage point,
resulting in an MFP-adjusted hospital market basket update factor of
2.7 percent for ASCs meeting the quality reporting requirements.
Therefore, we are proposing to apply a 2.7 percent MFP-adjusted
hospital market basket update factor to the CY 2019 ASC conversion
factor for ASCs meeting the quality reporting requirements to determine
the CY 2020 ASC payment amounts. The ASCQR Program affected payment
rates beginning in CY 2014 and, under this program, there is a 2.0
percentage point reduction to the update factor for ASCs that fail to
meet the ASCQR Program requirements. We refer readers to section XIV.E.
of the CY 2019 OPPS/ASC final rule with comment period (83 FR 59138
through 59139) and section XIV.E. of this proposed rule for a detailed
discussion of our policies regarding payment reduction for ASCs that
fail to meet ASCQR Program requirements. We are proposing to utilize
the hospital market basket update of 3.2 percent reduced by 2.0
percentage points for ASCs that do not meet the quality reporting
requirements and then subtract the 0.5 percentage point MFP adjustment.
Therefore, we are proposing to apply a 0.7 percent MFP-adjusted
hospital market basket update factor to the CY 2019 ASC conversion
factor for ASCs not meeting the quality reporting requirements. We also
are proposing that if more recent data are subsequently available (for
example, a more recent estimate of the hospital market basket update
and MFP), we would use such data, if appropriate, to determine the CY
2020 ASC update for the final rule with comment period.
For CY 2020, we are proposing to adjust the CY 2019 ASC conversion
factor ($46.532) by the proposed wage index budget neutrality factor of
1.0008 in addition to the MFP-adjusted hospital market basket update
factor of 2.7 percent discussed above, which results in a proposed CY
2020 ASC conversion factor of $47.827 for ASCs meeting the quality
reporting requirements. For ASCs not meeting the quality reporting
requirements, we are proposing to adjust the CY 2019 ASC conversion
factor ($46.532) by the proposed wage index budget neutrality factor of
1.0008 in addition to the quality reporting/MFP-adjusted hospital
market basket update factor of 0.7 percent discussed above, which
results in a proposed CY 2020 ASC conversion factor of $46.895.
3. Display of Proposed CY 2020 ASC Payment Rates
Addenda AA and BB to this proposed rule (which are available on the
CMS website) display the proposed updated ASC payment rates for CY 2020
for covered surgical procedures and covered ancillary services,
respectively. For those covered surgical procedures and covered
ancillary services where the payment rate is the lower of the proposed
rates under the ASC standard ratesetting methodology and the MPFS
proposed rates, the proposed payment indicators and rates set forth in
this proposed rule are based on a comparison using the proposed PFS
rates that would be effective January 1, 2020. For a discussion of the
PFS rates, we refer readers to the CY 2020 PFS proposed rule that is
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
The proposed payment rates included in these addenda reflect the
full ASC payment update and not the reduced payment update used to
calculate payment rates for ASCs not meeting the quality reporting
requirements under the ASCQR Program. These addenda contain several
types of information related to the proposed CY 2020 payment rates.
Specifically, in Addendum AA, a ``Y'' in the column titled ``To be
Subject to Multiple Procedure Discounting'' indicates that the surgical
procedure would be subject to the multiple procedure payment reduction
policy. As discussed in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66829 through 66830), most covered surgical procedures
are subject to a 50-percent reduction in the ASC payment for the lower-
paying procedure when more than one procedure is performed in a single
operative session.
Display of the comment indicator ``CH'' in the column titled
``Comment Indicator'' indicates a change in payment policy for the item
or service, including identifying discontinued HCPCS codes, designating
items or services newly payable under the ASC payment system, and
identifying items or services with changes in the ASC payment indicator
for CY 2020. Display of the comment indicator ``NI'' in the column
titled ``Comment Indicator'' indicates that the code is new (or
substantially revised) and that comments will be accepted on the
interim payment indicator for the new code. Display of the comment
indicator ``NP'' in the column titled ``Comment Indicator'' indicates
that the code is new (or substantially revised) and that comments will
be accepted on the ASC payment indicator for the new code.
The values displayed in the column titled ``Proposed CY 2020
Payment Weight'' are the proposed relative payment weights for each of
the listed services for CY 2020. The proposed relative payment weights
for all covered surgical procedures and covered ancillary services
where the ASC payment rates are based on OPPS relative payment weights
were scaled for budget neutrality. Therefore, scaling was not applied
to the device portion of the device-intensive procedures, services that
are paid at the MPFS nonfacility PE RVU-based amount, separately
payable covered ancillary services that have a predetermined national
payment amount, such as drugs and biologicals and brachytherapy sources
that are separately paid under the OPPS, or services that are
contractor-priced or paid at reasonable cost in ASCs. This includes
separate payment for non-opioid pain management drugs.
To derive the proposed CY 2020 payment rate displayed in the
``Proposed CY 2020 Payment Rate'' column, each ASC payment weight in
the ``Proposed CY 2020 Payment Weight'' column was multiplied by the
proposed CY 2020 conversion factor of $47.827. The proposed conversion
factor includes a budget neutrality adjustment for changes in the wage
index values and the annual update factor as reduced by the
productivity adjustment (as discussed in section XIII.G.2.b. of this
proposed rule).
In Addendum BB, there are no relative payment weights displayed in
the ``Proposed CY 2020 Payment Weight'' column for items and services
with predetermined national payment amounts, such as separately payable
drugs and biologicals. The ``Proposed CY 2020 Payment'' column displays
the proposed CY 2020 national unadjusted ASC payment rates for all
items and services. The proposed CY 2020 ASC payment rates listed in
Addendum BB for separately payable drugs and biologicals are based on
ASP data used
[[Page 39554]]
for payment in physicians' offices in April 2019.
Addendum EE provides the HCPCS codes and short descriptors for
surgical procedures that are proposed to be excluded from payment in
ASCs for CY 2020.
XIV. Requirements for the Hospital Outpatient Quality Reporting (OQR)
Program
A. Background
1. Overview
CMS seeks to promote higher quality and more efficient healthcare
for Medicare beneficiaries. Consistent with these goals, CMS has
implemented quality reporting programs for multiple care settings
including the quality reporting program for hospital outpatient care,
known as the Hospital Outpatient Quality Reporting (OQR) Program,
formerly known as the Hospital Outpatient Quality Data Reporting
Program (HOP QDRP). The Hospital OQR Program is generally aligned with
the quality reporting program for hospital inpatient services known as
the Hospital Inpatient Quality Reporting (IQR) Program, formerly known
as the Reporting Hospital Quality Data for Annual Payment Update
(RHQDAPU) Program.
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58820 through 58822) and section I.A.2. of this proposed
rule where we discuss our Meaningful Measures Initiative and our
approach in evaluating quality program measures.
2. Statutory History of the Hospital OQR Program
We refer readers to the CY 2011 OPPS/ASC final rule with comment
period (75 FR 72064 through 72065) for a detailed discussion of the
statutory history of the Hospital OQR Program.
3. Regulatory History of the Hospital OQR Program
We refer readers to the CY 2008 through 2019 OPPS/ASC final rules
with comment period (72 FR 66860 through 66875; 73 FR 68758 through
68779; 74 FR 60629 through 60656; 75 FR 72064 through 72110; 76 FR
74451 through 74492; 77 FR 68467 through 68492; 78 FR 75090 through
75120; 79 FR 66940 through 66966; 80 FR 70502 through 70526; 81 FR
79753 through 79797; 82 FR 59424 through 59445; and 83 FR 59080 through
59110) for the regulatory history of the Hospital OQR Program. We have
codified certain requirements under the Hospital OQR Program at 42 CFR
419.46.
B. Hospital OQR Program Quality Measures
1. Considerations in the Selection of Hospital OQR Program Quality
Measures
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74458 through 74460) for a detailed discussion of the
priorities we consider for the Hospital OQR Program quality measure
selection. We are not proposing any changes to these policies in this
proposed rule.
2. Retention of Hospital OQR Program Measures Adopted in Previous
Payment Determinations
We previously adopted a policy to retain measures from a previous
year's Hospital OQR Program measure set for subsequent years' measure
sets in the CY 2013 OPPS/ASC final rule with comment period (77 FR
68471) whereby quality measures adopted in a previous year's rulemaking
are retained in the Hospital OQR Program for use in subsequent years
unless otherwise specified. For more information regarding this policy,
we refer readers to that final rule with comment period. We codified
this policy at 42 CFR 419.46(h)(1) in the CY 2019 OPPS/ASC final rule
with comment period (83 FR 59082).
3. Removal of Quality Measures From the Hospital OQR Program Measure
Set
In the CY 2010 OPPS/ASC final rule with comment period (74 FR
60635), we finalized a process to use the regular rulemaking process to
remove a measure for circumstances for which we do not believe that
continued use of a measure raises specific patient safety concerns.\70\
We codified this policy at 42 CFR 419.46(h)(3) in the CY 2019 OPPS/ASC
final rule with comment period (83 FR 59082).
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\70\ We initially referred to this process as ``retirement'' of
a measure in the 2010 OPPS/ASC proposed rule, but later changed it
to ``removal'' during final rulemaking.
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a. Considerations in Removing Quality Measures From the Hospital OQR
Program
(1) Immediate Removal
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60634
through 60635), we finalized a process for immediate retirement, which
we later termed ``removal,'' of Hospital OQR Program measures, based on
evidence that the continued use of the measure as specified raises
patient safety concerns.\71\ We codified this policy at 42 CFR
419.46(h)(2) in the CY 2019 OPPS/ASC final rule with comment period (83
FR 59082).
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\71\ We refer readers to the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68472 through 68473) for a discussion of our
reasons for changing the term ``retirement'' to ``removal'' in the
Hospital OQR Program.
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(2) Consideration Factors for Removing Measures
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59083
through 59085), we clarified, finalized, and codified at 42 CFR
419.46(h)(2) and (3) an updated set of factors \72\ and policies for
determining whether to remove measures from the Hospital OQR Program.
We refer readers to that final rule with comment period for a detailed
discussion of our policies regarding measure removal. The factors are:
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\72\ We note that we previously referred to these factors as
``criteria'' (for example, 77 FR 68472 through 68473); we now use
the term ``factors'' in order to align the Hospital OQR Program
terminology with the terminology we use in other CMS quality
reporting and pay-for-performance (value-based purchasing) programs.
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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. Performance or improvement on a measure does not
result in better patient outcomes.
Factor 3. A measure does not align with current clinical
guidelines or practice.
Factor 4. The availability of a more broadly applicable
(across settings, populations, or conditions) measure for the topic.
Factor 5. The availability of a measure that is more
proximal in time to desired patient outcomes for the particular topic.
Factor 6. The availability of a measure that is more
strongly associated with desired patient outcomes for the particular
topic.
Factor 7. Collection or public reporting of a measure
leads to negative unintended consequences other than patient harm.
Factor 8. The costs associated with a measure outweigh the
benefit of its continued use in the program.
b. Proposed Removal of Quality Measure From the Hospital OQR Program
Measure Set: OP-33: External Beam Radiotherapy (NQF# 1822)
In this proposed rule, we are proposing to remove one measure from
the Hospital OQR Program for the CY 2022 payment determination as
discussed below. Specifically, beginning with the CY 2022 payment
[[Page 39555]]
determination, we are proposing to remove OP-33: External Beam
Radiotherapy for Bone Metastases under removal Factor 8, the costs
associated with a measure outweigh the benefit of its continued use in
the program.
We refer readers to the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70507 through 70510), where we adopted OP-33: External
Beam Radiotherapy (NQF# 1822), beginning with the CY 2018 payment
determination and for subsequent years. This measure assesses the
``percentage of patients (all-payer) with painful bone metastases and
no history of previous radiation who receive EBRT with an acceptable
dosing schedule.'' \73\ We adopted this measure to address the
performance gap in External Beam Radiotherapy (EBRT) treatment
variation, ensure appropriate use of EBRT, and prevent the overuse of
radiation therapy (80 FR 70508).
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\73\ 80 FR 70508.
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We believe that removing EBRT from the Hospital OQR Program is
appropriate at this time because the costs associated with this measure
outweigh the benefit of its continued use in the program (removal
Factor 8). The Hospital OQR Program implemented the EBRT measure using
``radiation delivery'' Current Procedural Terminology (CPT) codes,
which are appropriate for hospital-level measurement. We have
identified issues with reporting this measure, finding that more
questions are received about how to report the EBRT measure than about
any other measure in the program. In addition, the measure steward has
received feedback on data collection of the measure in the outpatient
setting, and has indicated new and significant concerns regarding the
``radiation delivery'' CPT coding used to report the EBRT measure in
the Hospital OQR Program including complicated measure exclusions,
sampling concerns, and administrative burden.
``Radiation delivery'' CPT codes require complicated measure
exclusions, and the use of ``radiation delivery'' CPT codes causes the
administration of EBRT to different anatomic sites to be considered
separate cases for this measure. The numerator for this measure
includes all patients, regardless of age, with painful bone metastases,
and no previous radiation to the same anatomic site who receive EBRT
with any of the following recommended fractionation schemes: 30Gy/
10fxns, 24Gy/6fxns, 20Gy/5fxns, 8Gy/1fxn. The denominator for this
measure includes all patients with painful bone metastases and no
previous radiation to the same anatomic site who receive EBRT.\74\ As
noted above, each anatomic site is considered a different case, and as
a result it is necessary to determine when EBRT has been administered
to different anatomic sites. This determination is not possible without
completing a detailed manual review of the patient's record, creating
burden and difficulty in determining which sites and instances of EBRT
administration are considered cases and should be included in the
denominator for the measure. These challenges in determining which
cases are included in the denominator for the measure result in
difficulty in determining if sample size requirements for the measure
are being met.
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\74\ National Quality Forum. NQF #1822 External Beam
Radiotherapy for Bone Metastases. Available at: http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=70374.
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Further, current information systems do not automatically calculate
the total dose provided, so manual review of patient records by
practice staff is also required in order to determine the total dose
and fractionation scheme, which in turn is used to determine which
cases fall into the numerator for this measure. This manual review of
patient records is a labor-intensive process that contributes to burden
and difficulty in reporting this measure. As a result, we believe that
the complexity of reporting this measure places substantial
administrative burden on facilities. This also reflects observations
made by the measure steward that implementing the measure in the
outpatient setting has proven to be very burdensome, given that
facilities have noted confusion regarding when the administration of
EBRT to different numbers and locations of bone metastases are
considered separate cases. These issues identifying cases have led to
questions about sampling and difficulty determining if sample size
requirements are met. Additional burdens associated with this measure
have come to our attention,--including complicated measure exclusions,
sampling concerns, and administrative burden. These challenges cause
difficulty in tracking and reporting data for this measure and
additional administrative burden, as evidenced by numerous questions
about how to report this measure received by CMS and its contractors.
This EBRT measure was also adopted into another CMS quality
reporting program, the PCHQR Program (79 FR 50278 through 50279). That
program initially used ``radiation planning'' CPT codes billable at the
physician level, but beginning in March 2016, the PCHQR program updated
the measure to enable the use of ``radiation delivery'' CPT codes.\75\
In the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19502 through 19503),
CMS proposed to remove the measure from the PCHQR Program because the
burden associated with the measure outweighs the value of its inclusion
in the PCHQR Program. Specifically, the PCHQR Program has proposed to
remove the measure because it is overly burdensome and because the
measure steward is no longer maintaining the measure. As such, the
PCHQR Program stated it can no longer ensure that the measure is in
line with clinical guidelines and standards (84 FR 19502 through
19503). We note that while the version of the measure using ``radiation
planning'' CPT codes is less burdensome, Hospital Outpatient
Departments (HOPDs) do not have access to physician billing data, and
so it is not operationally feasible to use ``radiation planning'' CPT
codes (as opposed to the current ``radiation delivery'' CPT codes) for
the EBRT measure in the Hospital OQR Program.
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\75\ QualityNet. 2018 EBRT Measure Information Form. Available
at: https://www.qualitynet.org/dcs/ContentServer?cid=1228774479863&pagename=QnetPublic%2FPage%2FQnetTier4&c=Page.
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This measure was originally adopted to address the performance gap
in EBRT treatment variation, ensure appropriate use of EBRT, and
prevent the overuse of radiation therapy. While we still believe that
these goals are important, the benefits of this measure have
diminished. Stakeholder feedback has shown that this measure is
burdensome and difficult to report. Since the measure steward is no
longer maintaining this measure,\76\ we no longer believe that we can
ensure that the measure is in line with clinical guidelines and
standards. Thus, considering these circumstances, we believe the costs
associated with this measure outweigh the benefit of its continued use
in the program (removal Factor 8).
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\76\ See language about measure steward no longer maintaining
this measure in the FY 2020 IPPS/LTCH PPS proposed rule at 84 FR
19502 through 19503.
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Therefore, we are proposing to remove the measure beginning with
October 2020 encounters used in the CY 2022 payment determination and
for subsequent years. We note that in crafting our proposal, we
considered removing this measure beginning with the CY 2021 payment
determination, but we decided on proposing to delay removal until the
CY 2022 payment determination to be sensitive to facilities' planning
and operational
[[Page 39556]]
procedures given that data collection for this measure begins during CY
2019 for the CY 2021 payment determination. We believe that this
proposed removal date balances reporting burden, while recognizing that
HOPDs must use resources to modify information systems and reporting
processes to discontinue reporting the measure.
In summary, we are proposing to remove OP-33: External Beam
Radiotherapy for Bone Metastases (NQF #1822) from the Hospital OQR
Program beginning with the CY 2022 payment determination and for
subsequent years under removal Factor 8.
4. Summary of Proposed Hospital OQR Program Measure Sets for the CY
2022 Payment Determination
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59099 through 59102) for a summary of the previously
finalized Hospital OQR Program measure sets for the CY 2020 and CY 2021
payment determinations and subsequent years.
We are not proposing to add any measures and are proposing to
remove one measure for the CY 2022 payment determination for the
Hospital OQR Program. The Table 34 summarizes the proposed Hospital OQR
Program measure set for the CY 2022 payment determination and
subsequent years (including previously adopted measures and excluding
one measure proposed for removal in this proposed rule).
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP09AU19.054
[[Page 39557]]
BILLING CODE 4120-01-C
5. Hospital OQR Program Measures and Topics for Future Consideration
We are requesting comment on the potential future adoption of four
patient safety measures as well as future outcome measures generally.
a. Request for Comment on the Potential Future Adoption of Four Patient
Safety Measures
We are seeking comment on the potential future adoption of four
patient safety measures for the Hospital OQR Program that were
previously adopted for the ASCQR Program: ASC-1: Patient Burn; ASC-2:
Patient Fall; ASC-3: Wrong Site, Wrong Side, Wrong Procedure, Wrong
Implant; and ASC-4: All-Cause Hospital Transfer/Admission.\77\ We refer
readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR
74497 through 74499), where we adopted these measures (referred to as
NQF #0263, NQF #0266, NQF #0267, and NQF #0265 at the time) in the
ASCQR Program. We note that data collection for these measures was
suspended in the ASCQR Program due to concerns with their data
submission method using quality data codes (QDCs) in the CY 2019 OPPS/
ASC final rule with comment period (83 FR 59117 through 59123; 59134
through 59135); however, we refer readers to section XV.B.5. of this
proposed rule, in which the ASCQR Program is requesting public comment
on updating the submission method for these measures in the future. We
are requesting public comment on potentially adding these measures with
the updated submission method using a CMS online data submission tool,
to the Hospital OQR Program in future rulemaking. These measures are
currently specified for the ASC setting; we are considering having them
specified for the hospital outpatient setting and would seek
collaboration with the measure steward if we do so.
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\77\ ASCQR Specifications Manual, discussing these measures,
available at: http://qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1228772475754.
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We believe these measures could be valuable to the Hospital OQR
Program because they would allow us to monitor these types of events
and prevent their occurrence to ensure that they remain rare, and
because they provide critical data to beneficiaries and further
transparency for care provided in the outpatient setting that could be
useful in choosing a HOPD. In addition, these measures address an
important Meaningful Measure Initiative quality priority, Making Care
Safer by Reducing Harm Caused in the Delivery of Care.\78\ There has
been broad stakeholder support for these measures in the ASC setting;
stakeholders believe these measures provide important data for
facilities and patients because they are serious and the occurrence of
these events should be zero (83 FR 59118). A few commenters noted in
the CY 2019 OPPS/ASC final rule with comment period that it would be
beneficial to also include these ASCQR Program measures in the Hospital
OQR Program in order to provide patients with more meaningful data to
compare sites of service (83 FR 59119). The future addition of these
measures would further align the Hospital OQR and ASCQR Programs, which
would benefit patients because these are two outpatient settings that
patients may be interested in comparing, especially if they are able to
choose in which of these two settings they receive care.
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\78\ Centers for Medicare & Medicaid Services. Meaningful
Measures Hub. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
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Although NQF endorsement for these ASC measures was removed (in
February 2016 for the All-Cause Hospital Transfer/Admission measure;
\79\ in May 2016 for the Patient Burn \80\ and the Wrong Site, Wrong
Side, Wrong Patient, Wrong Procedure, Wrong Implant \81\ measures; and
in June 2018 for the Patient Fall measure \82\), as one commenter
pointed out in the CY 2019 OPPS/ASC final rule with comment period, the
NQF endorsement of the ASC measures was removed as endorsement was
allowed to lapse by the measure steward, not because they failed the
endorsement maintenance process (83 FR 59119). If specified for the
HOPD setting, we plan to coordinate with the measure steward to seek
NQF endorsement for those measures. These measures are discussed in
more detail below.
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\79\ National Quality Forum. 0265 All-Cause Hospital Transfer/
Admission. Available at: http://www.qualityforum.org/QPS/0265.
\80\ National Quality Forum. 0263 Patient Burn. Available at:
http://www.qualityforum.org/QPS/0263.
\81\ National Quality Forum. 0267 Wrong Site, Wrong Side, Wrong
Patient, Wrong Procedure, Wrong Implant. Available at: http://www.qualityforum.org/QPS/0267.
\82\ National Quality Forum. 0266 Patient Fall. Available at:
http://www.qualityforum.org/QPS/0266.
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(1) Patient Burn
The ASCQR Patient Burn measure assesses the percentage of
admissions experiencing a burn prior to discharge. The numerator for
this measure is defined as ASC admissions experiencing a burn prior to
discharge and the denominator is defined as all ASC admissions.\83\ We
believe this measure, if specified for the hospital outpatient setting,
would allow HOPDs, Medicare beneficiaries, and other stakeholders to
develop a better understanding of the incidence of these events. In the
CY 2012 OPPS/ASC final rule with comment period (76 FR 74497 through
74498), we adopted this measure for the ASCQR Program because ASCs
serve surgical patients who may face the risk of burns during
ambulatory surgical procedures and we believe monitoring patient burns
is valuable to patients and other stakeholders. HOPDs also serve
surgical patients who may face the risk of burns during outpatient
procedures, so we believe this measure would be valuable for the HOPD
setting. Further, we have reviewed studies demonstrating the high
impact of monitoring patient burns because patient burns are serious
reportable events in healthcare \84\ and because patient burns are
preventable.85 86
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\83\ ASC Quality Collaboration. Quality measures developed and
tested by the ASC Quality Collaboration. Available at: http://ascquality.org/documents/2019-Summary-ASC-QC-Measures.pdf.
\84\ National Quality Forum. Serious Reportable Events in
Healthcare 2006 Update. Washington, DC: NQF, 2007. Available at:
https://www.qualityforum.org/Publications/2007/03/Serious_Reportable_Events_in_Healthcare%E2%80%932006_Update.aspx.
\85\ ECRI Institute. New clinical guide to surgical fire
prevention. Health Devices 2009 Oct;38(10):314-32.
\86\ 170. National Fire Protection Association (NFPA). NFPA 99:
Standard for health care facilities. Quincy (MA): NFPA; 2005.
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(2) Patient Fall
The ASCQR Program Patient Fall measure assesses the percentage of
admissions experiencing a fall. The numerator for this measure is
defined as ASC admissions experiencing a fall within the confines of
the ASC and excludes ASC admissions experiencing a fall outside the
ASC. The denominator is defined as all ASC admissions and excludes ASC
admissions experiencing a fall outside the ASC.\87\ We believe this
measure, if specified for the hospital outpatient setting, would enable
HOPDs to take steps to reduce the risk of falls. In the CY 2012 OPPS/
ASC final rule with comment period (76 FR 74498), we adopted this
measure for the ASCQR Program because falls, particularly in the
elderly, can cause injury and loss of functional status; because the
use of anxiolytics, sedatives, and anesthetic
[[Page 39558]]
agents may put patients undergoing outpatient surgery at increased risk
for falls; and because falls in healthcare settings can be prevented
through the assessment of risk, care planning, and patient monitoring.
These same risks for patient falls are a concern in the HOPD setting.
Further, we have reviewed studies demonstrating the high impact of
monitoring patient burns because patient falls are serious reportable
events in healthcare \88\ and because patient falls are
preventable.\89\
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\87\ ASC Quality Collaboration. Quality measures developed and
tested by the ASC Quality Collaboration. Available at: http://ascquality.org/documents/2019-Summary-ASC-QC-Measures.pdf.
\88\ National Quality Forum. Serious Reportable Events in
Healthcare--2006 Update: A Consensus Report. March 2007. Available
at: https://www.qualityforum.org/Publications/2007/03/Serious_Reportable_Events_in_Healthcare%E2%80%932006_Update.aspx.
\89\ Boushon B, Nielsen G, Quigley P, Rutherford P, Taylor J,
Shannon D. Transforming Care at the Bedside How-to Guide: Reducing
Patient Injuries from Falls. Cambridge, MA: Institute for Healthcare
Improvement; 2008.
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(3) Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong
Implant
The ASCQR Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure,
Wrong Implant measure assesses the percentage of admissions
experiencing a wrong site, wrong side, wrong patient, wrong procedure,
or wrong implant. The numerator for this measure is defined as ASC
admissions experiencing a wrong site, a wrong side, a wrong patient, a
wrong procedure, or a wrong implant, and the denominator is defined as
all ASC admissions.\90\ We believe this measure, if specified for the
hospital outpatient setting, would provide important HOPD information
about surgeries and procedures performed on the wrong site/side, and
wrong patient. In the CY 2012 OPPS/ASC final rule with comment period
(76 FR 74498 through 74499), we adopted this measure for the ASCQR
Program because surgeries and procedures performed on the wrong site/
side, and wrong patient can result in significant impact on patients,
including complications, serious disability or death. We also stated
that while the prevalence of such serious errors may be rare, such
events are considered serious reportable events. These same significant
impacts on patients apply for the HOPD setting. Further, we have
reviewed studies demonstrating the high impact of monitoring wrong
site, wrong side, wrong patient, wrong procedure, wrong implant
procedures and surgeries because these types of errors are serious
reportable events in healthcare \91\ and because these errors are
preventable.\92\
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\90\ ASC Quality Collaboration. Quality measures developed and
tested by the ASC Quality Collaboration. Available at: http://ascquality.org/documents/2019-Summary-ASC-QC-Measures.pdf.
\91\ National Quality Forum. Serious Reportable Events in
Healthcare--2006 Update: A Consensus Report. March 2007. Available
at: https://www.qualityforum.org/Publications/2007/03/Serious_Reportable_Events_in_Healthcare%E2%80%932006_Update.aspx.
\92\ American College of Obstetricians and Gynecologists. ACOG
committee opinion #464: patient safety in the surgical environment.
Obstet Gynecol. 2010;116(3):786-790.
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(4) All-Cause Hospital Transfer/Admission
The All-Cause Hospital Transfer/Admission measure assesses the rate
of admissions requiring a hospital transfer or hospital admission upon
discharge. The numerator for this measure is defined as ASC admissions
requiring a hospital transfer or hospital admission upon discharge from
the ASC and the denominator is defined as all ASC admissions.\93\ We
believe this measure, if specified for the hospital outpatient setting,
would be valuable for HOPDs. In the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74499), we adopted this measure for ASCs because
the transfer or admission of a surgical patient from an outpatient
setting to an acute care setting can be an indication of a
complication, serious medical error, or other unplanned negative
patient outcome. We also stated that while acute intervention may be
necessary in these circumstances, a high rate of such incidents may
indicate suboptimal practices or patient selection criteria. These same
potential negative patient outcomes apply to the HOPD setting. Further,
we have reviewed studies demonstrating the high impact of monitoring
patient transfers and admissions because facilities can take steps to
prevent and reduce these types of events.94 95
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\93\ ASC Quality Collaboration. Quality measures developed and
tested by the ASC Quality Collaboration. Available at: http://ascquality.org/documents/2019-Summary-ASC-QC-Measures.pdf.
\94\ Coley KC, Williams BA, DaPos SV, Chen C, Smith RB.
Retrospective evaluation of unanticipated admissions and
readmissions after same day surgery and associated costs. J Clin
Anesth. 2002 Aug; 14(5):349-53.
\95\ Junger A, Klasen J, Benson M, Sciuk G, Hartmann B, Sticher
J, Hempelmann G. Factors determining length of stay of surgical day-
case patients. Eur J Anaesthesiol. 2001 May;18(5):314-21.
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b. Future Outcome Measures
In this proposed rule, we are also requesting public comment on
future measure topics for the Hospital OQR Program. Specifically, we
are requesting public comment on any outcome measures that would be
useful to add as well as feedback on any process measures that should
be eliminated from the Hospital OQR Program to further our goal of
developing a comprehensive set of quality measures for informed
decision-making and quality improvement in HOPDs. We are moving towards
greater use of outcome measures and away from use of clinical process
measures across our Medicare quality reporting programs to better
assess the results of care. The current measure set for the Hospital
OQR Program includes measures that assess process of care, imaging
efficiency patterns, care transitions, ED throughput efficiency, Health
Information Technology (health IT) use, care coordination, and patient
safety. Measures are of various types, including those of process,
structure, outcome, and efficiency. Through future rulemaking, we
intend to propose new measures that support our goal of achieving
better health care and improved health for Medicare beneficiaries who
receive health care in the HOPD setting, while aligning quality
measures across the Medicare program to the extent possible.
6. Maintenance of Technical Specifications for Quality Measures
CMS maintains technical specifications for previously adopted
Hospital OQR Program measures. These specifications are updated as we
modify the Hospital OQR Program measure set. The manuals that contain
specifications for the previously adopted measures can be found on the
QualityNet website at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1196289981244. We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59104 through 59105), where we changed the frequency of
the Hospital OQR Program Specifications Manual release beginning with
CY 2019 and for subsequent years, such that we will release a manual
once every 12 months and release addenda as necessary. We are not
proposing any changes to these policies in this proposed rule.
7. Public Display of Quality Measures
We refer readers to the CY 2014 and CY 2017 OPPS/ASC final rules
with comment period (78 FR 75092 and 81 FR 79791 respectively) for our
previously finalized policies regarding public display of quality
measures. In this proposed rule, we are not proposing any changes to
our previously finalized public display policies.
[[Page 39559]]
C. Administrative Requirements
1. QualityNet Account and Security Administrator
The previously finalized QualityNet security administrator
requirements, including setting up a QualityNet account and the
associated timelines, are described in the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75108 through 75109). We codified these
procedural requirements at 42 CFR 419.46(a) in that final rule with
comment period. We are not proposing any changes to our requirements
for the QualityNet account and security administrator in this proposed
rule.
2. Requirements Regarding Participation Status
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75108 through 75109), the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70519) and the CY 2019 OPPS/ASC final rule
with comment period (83 FR 59103 through 59104) for requirements for
participation and withdrawal from the Hospital OQR Program. We codified
these procedural requirements regarding participation status at 42 CFR
419.46(a) and (b). We are not proposing any changes to our
participation status policies in this proposed rule.
D. Form, Manner, and Timing of Data Submitted for the Hospital OQR
Program
1. Hospital OQR Program Annual Payment Determinations
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75110
through 75111) and the CY 2016 OPPS/ASC final rule with comment period
(80 FR 70519 through 70520), we specified our data submission
deadlines. We codified these submission requirements at 42 CFR
419.46(c).
We refer readers to the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70519 through 70520), where we finalized our proposal to
shift the quarters upon which the Hospital OQR Program payment
determinations are based beginning with the CY 2018 payment
determination. The deadlines for the CY 2022 payment determination and
subsequent years are illustrated in Table 35.
[GRAPHIC] [TIFF OMITTED] TP09AU19.055
In the CY 2018 OPPS/ASC final rule with comment period, we
finalized a policy to align the initial data submission timeline for
all hospitals that did not participate in the previous year's Hospital
OQR Program and made conforming revisions at 42 CFR 419.46(c)(3). We
are not proposing any changes to these policies in this proposed rule.
2. Requirements for Chart-Abstracted Measures Where Patient-Level Data
Are Submitted Directly to CMS for the CY 2022 Payment Determination and
Subsequent Years
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68481 through 68484) for a discussion of the form,
manner, and timing for data submission requirements of chart-abstracted
measures for the CY 2014 payment determination and subsequent years. In
this proposed rule, we are not proposing any changes to our policies
regarding the submission of chart-abstracted measure data where
patient-level data are submitted directly to CMS.
The following previously finalized Hospital OQR Program chart-
abstracted measures will require patient-level data to be submitted for
the CY 2022 payment determination and subsequent years:
OP-2: Fibrinolytic Therapy Received Within 30 Minutes of
ED Arrival (NQF #0288);
OP-3: Median Time to Transfer to Another Facility for
Acute Coronary Intervention (NQF #0290);
OP-18: Median Time from ED Arrival to ED Departure for
Discharged ED Patients (NQF #0496); and
OP-23: Head CT Scan Results for Acute Ischemic Stroke or
Hemorrhagic Stroke Patients who Received Head CT Scan Interpretation
Within 45 Minutes of ED Arrival (NQF #0661).
3. Claims-Based Measure Data Requirements for the CY 2022 Payment
Determination and Subsequent Years
Currently, the following previously finalized Hospital OQR Program
claims-based measures are required for the CY 2022 payment
determination and subsequent years:
OP-8: MRI Lumbar Spine for Low Back Pain (NQF #0514);
OP-10: Abdomen CT--Use of Contrast Material;
OP-13: Cardiac Imaging for Preoperative Risk Assessment
for Non-Cardiac, Low Risk Surgery (NQF #0669);
OP-32: Facility 7-Day Risk-Standardized Hospital Visit
Rate after Outpatient Colonoscopy (NQF #2539);
OP-35: Admissions and Emergency Department Visits for
Patients Receiving Outpatient Chemotherapy; and
OP-36: Hospital Visits after Hospital Outpatient Surgery
(NQF #2687).
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59106 through 59107), where we established a three-year
reporting period for OP-32: Facility 7-Day Risk-Standardized Hospital
Visit Rate after Outpatient Colonoscopy beginning with the CY 2020
payment determination and for subsequent years. In that final rule with
comment period (83 FR 59136 through 59138), we established a similar
policy under the ASCQR Program. In this proposed rule, we are not
proposing any changes regarding the submission of claims-based
measures.
[[Page 39560]]
4. Data Submission Requirements for the OP-37a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based Measures for the CY 2022 Payment
Determination and Subsequent Years
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79792 through 79794) for a discussion of the previously
finalized requirements related to survey administration and vendors for
the OAS CAHPS Survey-based measures. In addition, we refer readers to
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59432
through 59433), where we finalized a policy to delay implementation of
the OP-37a-e OAS CAHPS Survey-based measures beginning with the CY 2020
payment determination (2018 reporting period) until further action in
future rulemaking. In this proposed rule, we are not proposing any
changes to the previously finalized requirements related to survey
administration and vendors for the OAS CAHPS Survey-based measures.
5. Data Submission Requirements for Measures for Data Submitted via a
Web-Based Tool for the CY 2022 Payment Determination and Subsequent
Years
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75112 through 75115) and the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70521) and the CMS QualityNet website
(https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1205442125082) for a discussion of the requirements for measure data submitted
via the CMS QualityNet website for the CY 2017 payment determination
and subsequent years. In addition, we refer readers to the CY 2014
OPPS/ASC final rule with comment period (78 FR 75097 through 75100) for
a discussion of the requirements for measure data submitted via the CDC
NHSN website. In this proposed rule, we are not proposing any changes
to our policies regarding the submission of measure data submitted via
a web-based tool. However, as discussed in section XIV.B.3.b. of this
proposed rule, we are proposing to remove OP-33: External Beam
Radiotherapy for Bone Metastases beginning with the CY 2022 payment
determination and for subsequent years.
If our proposal to remove OP-33 is finalized, the following
previously finalized quality measures will require data to be submitted
via a web-based tool for the CY 2022 payment determination and
subsequent years:
OP-22: Left Without Being Seen (NQF #0499) (via CMS'
QualityNet website);
OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up
Interval for Normal Colonoscopy in Average Risk Patients (NQF #0658)
(via CMS' QualityNet website); and
OP-31: Cataracts: Improvement in Patient's Visual Function
within 90 Days Following Cataract Surgery (NQF #1536) (via CMS'
QualityNet website).
6. Population and Sampling Data Requirements for the CY 2021 Payment
Determination and Subsequent Years
We refer readers to the CY 2011 OPPS/ASC final rule with comment
period (75 FR 72100 through 72103) and the CY 2012 OPPS/ASC final rule
with comment period (76 FR 74482 through 74483) for discussions of our
population and sampling requirements. We are not proposing any changes
to our population and sampling requirements for chart-abstracted
measures in this proposed rule.
7. Hospital OQR Program Validation Requirements
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68484 through 68487), the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66964 through 66965), the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70524), and the CY 2018 OPPS/ASC
final rule with comment period (82 FR 59441 through 59443), and 42 CFR
419.46(e) for our policies regarding validation. We are not proposing
any changes to these policies in this proposed rule.
8. Extraordinary Circumstances Exception (ECE) Process for the CY 2021
Payment Determination and Subsequent Years
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68489), the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75119 through 75120), the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66966), the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70524), the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79795), the CY 2018 OPPS/ASC final rule with
comment period (82 FR 59444), and 42 CFR 419.46(d) for a complete
discussion of our extraordinary circumstances exception (ECE) process
under the Hospital OQR Program. We are not proposing any changes to our
ECE policy in this proposed rule.
9. Hospital OQR Program Reconsideration and Appeals Procedures for the
CY 2021 Payment Determination and Subsequent Years
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68487 through 68489), the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75118 through 75119), the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70524), the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79795), and 42 CFR 419.46(f) for
our reconsideration and appeals procedures. We are not proposing any
changes to our reconsideration and appeals procedures in this proposed
rule.
E. Proposed Payment Reduction for Hospitals That Fail To Meet the
Hospital OQR Program Requirements for the CY 2020 Payment Determination
1. Background
Section 1833(t)(17) of the Act, which applies to subsection (d)
hospitals (as defined under section 1886(d)(1)(B) of the Act), states
that hospitals that fail to report data required to be submitted on
measures selected by the Secretary, in the form and manner, and at a
time, specified by the Secretary will incur a 2.0 percentage point
reduction to their Outpatient Department (OPD) fee schedule increase
factor; that is, the annual payment update factor. Section
1833(t)(17)(A)(ii) of the Act specifies that any reduction applies only
to the payment year involved and will not be taken into account in
computing the applicable OPD fee schedule increase factor for a
subsequent year.
The application of a reduced OPD fee schedule increase factor
results in reduced national unadjusted payment rates that apply to
certain outpatient items and services provided by hospitals that are
required to report outpatient quality data in order to receive the full
payment update factor and that fail to meet the Hospital OQR Program
requirements. Hospitals that meet the reporting requirements receive
the full OPPS payment update without the reduction. For a more detailed
discussion of how this payment reduction was initially implemented, we
refer readers to the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68769 through 68772).
The national unadjusted payment rates for many services paid under
the OPPS equal the product of the OPPS conversion factor and the scaled
relative payment weight for the APC to which
[[Page 39561]]
the service is assigned. The OPPS conversion factor, which is updated
annually by the OPD fee schedule increase factor, is used to calculate
the OPPS payment rate for services with the following status indicators
(listed in Addendum B to this proposed rule, which is available via the
internet on the CMS website): ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'',
``Q3'', ``R'', ``S'', ``T'', ``V'', or ``U''. In the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79796), we clarified that the
reporting ratio does not apply to codes with status indicator ``Q4''
because services and procedures coded with status indicator ``Q4'' are
either packaged or paid through the Clinical Laboratory Fee Schedule
and are never paid separately through the OPPS. Payment for all
services assigned to these status indicators will be subject to the
reduction of the national unadjusted payment rates for hospitals that
fail to meet Hospital OQR Program requirements, with the exception of
services assigned to New Technology APCs with assigned status indicator
``S'' or ```T''. We refer readers to the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68770 through 68771) for a discussion of
this policy.
The OPD fee schedule increase factor is an input into the OPPS
conversion factor, which is used to calculate OPPS payment rates. To
reduce the OPD fee schedule increase factor for hospitals that fail to
meet reporting requirements, we calculate two conversion factors--a
full market basket conversion factor (that is, the full conversion
factor), and a reduced market basket conversion factor (that is, the
reduced conversion factor). We then calculate a reduction ratio by
dividing the reduced conversion factor by the full conversion factor.
We refer to this reduction ratio as the ``reporting ratio'' to indicate
that it applies to payment for hospitals that fail to meet their
reporting requirements. Applying this reporting ratio to the OPPS
payment amounts results in reduced national unadjusted payment rates
that are mathematically equivalent to the reduced national unadjusted
payment rates that would result if we multiplied the scaled OPPS
relative payment weights by the reduced conversion factor. For example,
to determine the reduced national unadjusted payment rates that applied
to hospitals that failed to meet their quality reporting requirements
for the CY 2010 OPPS, we multiplied the final full national unadjusted
payment rate found in Addendum B of the CY 2010 OPPS/ASC final rule
with comment period by the CY 2010 OPPS final reporting ratio of 0.980
(74 FR 60642).
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68771
through 68772), we established a policy that the Medicare beneficiary's
minimum unadjusted copayment and national unadjusted copayment for a
service to which a reduced national unadjusted payment rate applies
would each equal the product of the reporting ratio and the national
unadjusted copayment or the minimum unadjusted copayment, as
applicable, for the service. Under this policy, we apply the reporting
ratio to both the minimum unadjusted copayment and national unadjusted
copayment for services provided by hospitals that receive the payment
reduction for failure to meet the Hospital OQR Program reporting
requirements. This application of the reporting ratio to the national
unadjusted and minimum unadjusted copayments is calculated according to
Sec. 419.41 of our regulations, prior to any adjustment for a
hospital's failure to meet the quality reporting standards according to
Sec. 419.43(h). Beneficiaries and secondary payers thereby share in
the reduction of payments to these hospitals.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68772), we established the policy that all other applicable adjustments
to the OPPS national unadjusted payment rates apply when the OPD fee
schedule increase factor is reduced for hospitals that fail to meet the
requirements of the Hospital OQR Program. For example, the following
standard adjustments apply to the reduced national unadjusted payment
rates: The wage index adjustment; the multiple procedure adjustment;
the interrupted procedure adjustment; the rural sole community hospital
adjustment; and the adjustment for devices furnished with full or
partial credit or without cost. Similarly, OPPS outlier payments made
for high cost and complex procedures will continue to be made when
outlier criteria are met. For hospitals that fail to meet the quality
data reporting requirements, the hospitals' costs are compared to the
reduced payments for purposes of outlier eligibility and payment
calculation. We established this policy in the OPPS beginning in the CY
2010 OPPS/ASC final rule with comment period (74 FR 60642). For a
complete discussion of the OPPS outlier calculation and eligibility
criteria, we refer readers to section II.G. of this proposed rule.
2. Proposed Reporting Ratio Application and Associated Adjustment
Policy for CY 2020
We are proposing to continue our established policy of applying the
reduction of the OPD fee schedule increase factor through the use of a
reporting ratio for those hospitals that fail to meet the Hospital OQR
Program requirements for the full CY 2020 annual payment update factor.
For the CY 2020 OPPS, the proposed reporting ratio is 0.980, calculated
by dividing the proposed reduced conversion factor of $79.770 by the
proposed full conversion factor of $81.398. We are proposing to
continue to apply the reporting ratio to all services calculated using
the OPPS conversion factor. For the CY 2020 OPPS, we are proposing to
apply the reporting ratio, when applicable, to all HCPCS codes to which
we have proposed status indicator assignments of ``J1'', ``J2'', ``P'',
``Q1'', ``Q2'', ``Q3'', ``R'', ``S'', ``T'', ``V'', and ``U'' (other
than new technology APCs to which we have proposed status indicator
assignment of ``S'' and ``T''). We are proposing to continue to exclude
services paid under New Technology APCs. We are proposing to continue
to apply the reporting ratio to the national unadjusted payment rates
and the minimum unadjusted and national unadjusted copayment rates of
all applicable services for those hospitals that fail to meet the
Hospital OQR Program reporting requirements. We are also proposing to
continue to apply all other applicable standard adjustments to the OPPS
national unadjusted payment rates for hospitals that fail to meet the
requirements of the Hospital OQR Program. Similarly, we are proposing
to continue to calculate OPPS outlier eligibility and outlier payment
based on the reduced payment rates for those hospitals that fail to
meet the reporting requirements.
XV. Requirements for the Ambulatory Surgical Center Quality Reporting
(ASCQR) Program
A. Background
1. Overview
We refer readers to section XIV.A.1. of this proposed rule for a
general overview of our quality reporting programs and to the CY 2019
OPPS/ASC final rule with comment period (83 FR 58820 through 58822) and
section I.A.2. of this proposed rule where we discuss our Meaningful
Measures Initiative and our approach in evaluating quality program
measures.
[[Page 39562]]
2. Statutory History of the ASCQR Program
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74492 through 74494) for a detailed discussion of the
statutory history of the ASCQR Program.
3. Regulatory History of the ASCQR Program
We seek to promote higher quality and more efficient health care
for beneficiaries. This effort is supported by the adoption of widely
accepted quality of care measures. We have collaborated with relevant
stakeholders to define such measures in most healthcare settings and
currently measure some aspect of care for almost all settings of care
available to Medicare beneficiaries. These measures assess structural
aspects of care, clinical processes, patient experiences with care, and
clinical outcomes. We have implemented quality measure reporting
programs for multiple healthcare settings. To measure the quality of
ASC services and to make such information publicly available, we
implemented the ASCQR Program. We refer readers to the CYs 2014 through
2019 OPPS/ASC final rules with comment period (78 FR 75122; 79 FR 66966
through 66987; 80 FR 70526 through 70538; 81 FR 79797 through 79826; 82
FR 59445 through 59476; and 83 FR 59110 through 59139, respectively)
for an overview of the regulatory history of the ASCQR Program. We have
codified certain requirements under the ASCQR Program at 42 CFR part
16, subpart H (42 CFR 416.300 through 416.330).
B. ASCQR Program Quality Measures
1. Considerations in the Selection of ASCQR Program Quality Measures
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68493 through 68494) for a detailed discussion of the
priorities we consider for ASCQR Program quality measure selection. We
are not proposing any changes to these policies in this proposed rule.
2. Policies for Retention and Removal of Quality Measures From the
ASCQR Program
a. Retention of Previously Adopted ASCQR Program Measures
We previously finalized a policy that quality measures adopted for
an ASCQR Program measure set for a previous payment determination year
be retained in the ASCQR Program for measure sets for subsequent
payment determination years, except when they are removed, suspended,
or replaced as indicated (76 FR 74494 and 74504; 77 FR 68494 through
68495; 78 FR 75122; and 79 FR 66967 through 66969). We are not
proposing any changes to this policy in this proposed rule.
b. Removal Factors for ASCQR Program Measures
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59111
through 59115), we clarified, finalized and codified at 42 CFR 416.320
an updated set of factors \96\ and the process for removing measures
from the ASCQR Program. The factors are:
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\96\ We note that we previously referred to these factors as
``criteria'' (for example, 79 FR 66967 through 66969); we now use
the term ``factors'' in order to align the ASCQR Program terminology
with the terminology we use in other CMS quality reporting and pay-
for-performance (value-based purchasing) programs.
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Factor 1. Measure performance among ASCs is so high and
unvarying that meaningful distinctions and improvements in performance
can no longer be made (``topped-out'' measures).
Factor 2. Performance or improvement on a measure does not
result in better patient outcomes.
Factor 3. A measure does not align with current clinical
guidelines or practice.
Factor 4. The availability of a more broadly applicable
(across settings, populations, or conditions) measure for the topic.
Factor 5. The availability of a measure that is more
proximal in time to desired patient outcomes for the particular topic.
Factor 6. The availability of a measure that is more
strongly associated with desired patient outcomes for the particular
topic.
Factor 7. Collection or public reporting of a measure
leads to negative unintended consequences other than patient harm.
Factor 8. The costs associated with a measure outweigh the
benefit of its continued use in the program.
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59111 through 59115) for a detailed discussion of our
process regarding measure removal.
3. Proposed New Quality Measure for the ASCQR Program Measure Set:
Proposal To Adopt ASC-19: Facility-Level 7-Day Hospital Visits After
General Surgery Procedures Performed at Ambulatory Surgical Centers
(NQF #3357)
In this proposed rule, we are proposing one new quality measure for
the ASCQR Program for the CY 2024 payment determination and subsequent
years--ASC-19: Facility-Level 7-Day Hospital Visits after General
Surgery Procedures Performed at Ambulatory Surgical Centers (NQF
#3357).
a. Background
Ambulatory surgery in the outpatient setting is common in the
United States. Nearly 70 percent of all surgeries in the United States
are performed in an outpatient setting with an expanding number and
variety of procedures being performed at stand-alone
ASCs.97 98 General surgery procedures are commonly performed
at ASCs. Based on an analysis of Medicare fee-for-service (FFS) claims
for patients aged 65 years and older, from January 1, 2015 through
December 31, 2015, 3,251 ASCs performed 149,468 general surgery
procedures. These procedures include abdominal, alimentary tract,
breast, skin/soft tissue, wound, and varicose vein stripping
procedures. Of the 3,251 ASCs that performed general surgery
procedures, 1,157 (35.5 percent) performed at least 25 such procedures
during this time period. Because of the large number of general surgery
procedures that occur in the ambulatory setting, we believe that
adopting ASC-19: Facility-Level 7-Day Hospital Visits after General
Surgery Procedures Performed at Ambulatory Surgical Centers in the
ASCQR Program will provide beneficiaries with transparent quality data
that can be utilized in choosing healthcare facilities.
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\97\ Cullen KA, Hall MJ, Golosinskiy A, Statistics NCfH.
Ambulatory surgery in the United States, 2006. US Department of
Health and Human Services, Centers for Disease Control and
Prevention, National Center for Health Statistics; 2009.
\98\ Medicare Payment Advisory Committee. Report for the
Congress: Medicare Payment Policy, March 2019. http://medpac.gov/docs/default-source/reports/mar19_medpac_entirereport_sec.pdf?sfvrsn=0. Accessed May 24, 2019.
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While ambulatory surgery is considered low risk for complications,
there are well-described and potentially preventable adverse events
that can occur after ambulatory surgery leading to unplanned care at a
hospital, such as emergency department (ED) visits, observation stays,
or hospital admissions. These events include uncontrolled pain, urinary
retention, infection, bleeding, and venous
thromboembolism.99 100
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\99\ Coley KC, Williams BA, DaPos SV, Chen C, Smith RB.
Retrospective evaluation of unanticipated admissions and
readmissions after same day surgery and associated costs. Journal of
clinical anesthesia. 2002;14(5):349-353.
\100\ Bain J, Kelly H, Snadden D, Staines H. Day surgery in
Scotland: patient satisfaction and outcomes. Quality in Health Care.
1999;8(2):86-91.
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[[Page 39563]]
Hospital visits following same-day surgery are an important and
broadly accepted patient-centered outcome reported in the
literature.101 102 103 104 105 106 107 108 National
estimates of hospital visit rates following outpatient surgery vary
from 0.5 to 9.0 percent, based on the type of surgery, outcome measured
(admissions alone or admissions and ED visits), and length of time
between the surgery and the hospital visit.
109 110 111 112 113 114 115 116 117 The frequency of such
events also varies among ASCs, suggesting variation in quality of pre-
surgical assessment, surgical care, post-surgical care, and the care
and support provided to patients post-discharge.
118 119 120 121 122 123 124 125
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\101\ Majholm BB. Is day surgery safe? A Danish multicentre
study of morbidity after 57,709 day surgery procedures. Acta
anaesthesiologica Scandinavica. 2012;56(3):323-331.
\102\ Whippey A, Kostandoff G, Paul J, Ma J, Thabane L, Ma HK.
Predictors of unanticipated admission following ambulatory surgery:
a retrospective case-control study. Canadian Journal of Anesthesia/
Journal canadien d'anesth[eacute]sie. 2013;60(7):675-683.
\103\ Fleisher LA, Pasternak LR, Herbert R, Anderson GF.
Inpatient hospital admission and death after outpatient surgery in
elderly patients: importance of patient and system characteristics
and location of care. Arch Surg. 2004;139(1):67-72.
\104\ Coley KC, Williams BA, DaPos SV, Chen C, Smith RB.
Retrospective evaluation of unanticipated admissions and
readmissions after same day surgery and associated costs. Journal of
clinical anesthesia. 2002;14(5):349-353.
\105\ Hollingsworth JMJM. Surgical quality among Medicare
beneficiaries undergoing outpatient urological surgery. The Journal
of urology. 2012;188(4):1274-1278.
\106\ Bain J, Kelly H, Snadden D, Staines H. Day surgery in
Scotland: patient satisfaction and outcomes. Quality in Health Care.
1999;8(2):86-91.
\107\ Fortier J, Chung F, Su J. Unanticipated admission after
ambulatory surgery--a prospective study. Canadian journal of
anaesthesia = Journal canadien d'anesthesie. 1998;45(7):612-619.
\108\ Aldwinckle R, Montgomery J. Unplanned admission rates and
postdischarge complications in patients over the age of 70 following
day case surgery. Anaesthesia. 2004;59(1):57-59.
\109\ Coley KC, Williams BA, DaPos SV, Chen C, Smith RB.
Retrospective evaluation of unanticipated admissions and
readmissions after same day surgery and associated costs. Journal of
clinical anesthesia. 2002;14(5):349-353.
\110\ Hollingsworth JMJM. Surgical quality among Medicare
beneficiaries undergoing outpatient urological surgery. The Journal
of urology. 2012;188(4):1274-1278.
\111\ Baugh RR. Safety of outpatient surgery for obstructive
sleep apnea. Otolaryngology--head and neck surgery. 2013;148(5):867-
872.
\112\ Bhattacharyya N. Ambulatory sinus and nasal surgery in the
United States: Demographics and perioperative outcomes. The
Laryngoscope. 2010;120(3):635-638.
\113\ Bhattacharyya NN. Unplanned revisits and readmissions
after ambulatory sinonasal surgery. The Laryngoscope.
2014;124(9):1983-1987.
\114\ Bhattacharyya NN. Revisits and postoperative hemorrhage
after adult tonsillectomy. The Laryngoscope. 2014;124(7):1554-1556.
\115\ Hansen DG, Abbott LE, Johnson RM, Fox JP. Variation in
hospital-based acute care within 30 days of outpatient plastic
surgery. Plastic and reconstructive surgery (1963).
2014;134(3):370e-378e.
\116\ Mahboubi HH. Ambulatory laryngopharyngeal surgery:
evaluation of the national survey of ambulatory surgery. JAMA
otolaryngology-- head & neck surgery. 2013;139(1):28-31.
\117\ Orosco RKRK. Ambulatory thyroidectomy: a multistate study
of revisits and complications. Otolaryngology--head and neck
surgery. 2015;152(6):1017-1023.
\118\ Baugh RR. Safety of outpatient surgery for obstructive
sleep apnea. Otolaryngology--head and neck surgery. 2013;148(5):867-
872.
\119\ Bhattacharyya N. Ambulatory sinus and nasal surgery in the
United States: Demographics and perioperative outcomes. The
Laryngoscope. 2010;120(3):635-638.
\120\ Bhattacharyya NN. Unplanned revisits and readmissions
after ambulatory sinonasal surgery. The Laryngoscope.
2014;124(9):1983-1987.
\121\ Bhattacharyya NN. Revisits and postoperative hemorrhage
after adult tonsillectomy. The Laryngoscope. 2014;124(7):1554-1556.
\122\ Hansen DG, Abbott LE, Johnson RM, Fox JP. Variation in
hospital-based acute care within 30 days of outpatient plastic
surgery. Plastic and reconstructive surgery (1963).
2014;134(3):370e-378e.
\123\ Mahboubi HH. Ambulatory laryngopharyngeal surgery:
evaluation of the national survey of ambulatory surgery. JAMA
otolaryngology-- head & neck surgery. 2013;139(1):28-31.
\124\ Menachemi. Quality of care differs by patient
characteristics: outcome disparities after ambulatory surgical
procedures. American journal of medical quality. 2007;22(6):395-401.
\125\ Orosco RKRK. Ambulatory thyroidectomy: a multistate study
of revisits and complications. Otolaryngology--head and neck
surgery. 2015;152(6):1017-1023.
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We calculated the national unadjusted rate of hospital visits (ED
visits, observation stays, or hospital admissions) following any
general surgery procedure at an ASC. In a Medicare FFS dataset of
claims for services during CY 2015 (January 1, 2015-December 31, 2015),
the distribution of unadjusted outcome rates was skewed, suggesting
variation in quality of care. Among 1,153 ASCs with at least 25
qualifying general surgery cases in the Medicare FFS CY 2015 dataset,
the unadjusted rate of unplanned hospital visits ranged from 0.0
percent to 13.2 percent. These results suggest opportunity for ASCs to
improve the quality of care for patients seeking general surgery
procedures.
ASCs may be unaware of patients' subsequent unplanned hospital
visits given that patients tend to present to the ED or to hospitals
unaffiliated with the ASC. In addition, information on the rate of
patients' subsequent unplanned hospital visits would provide
transparent data to beneficiaries that could be utilized when choosing
ambulatory surgery sites of care. Quality measurement of the number of
unplanned hospital visits following general surgery procedures
performed at ASCs, coupled with transparency through public reporting
would make these outcomes more visible to both ASCs and beneficiaries.
Therefore, we expect that this would encourage ASCs to incorporate
quality improvement activities to reduce the number of unplanned
hospital visits and track quality improvement over time.
Therefore, in this proposed rule, we are proposing to adopt ASC-19:
Facility-Level 7-Day Hospital Visits after General Surgery Procedures
Performed at Ambulatory Surgical Centers (NQF #3357) (hereafter
referred to as the proposed ASC-19 measure) into the ASCQR Program for
the CY 2024 payment determination and subsequent years.
The proposed ASC-19 measure was developed in conjunction with two
other measures adopted for the ASCQR Program beginning with the CY 2022
payment determination as finalized in the CY 2018 OPPS/ASC final rule
with comment period: ASC-17: Hospital Visits After Orthopedic
Ambulatory Surgical Center Procedures (82 FR 59455) and ASC-18:
Hospital Visits After Urology Ambulatory Surgical Center Procedures (82
FR 59463). All three measures assess the same patient outcome for care
provided in the ASC setting and use the same risk-adjustment
methodology. These three measures differ in surgical procedures
considered (orthopedic, urological, or general surgery), specific risk
variables included, and reporting of the outcome, unplanned hospital
visits. The proposed ASC-19 measure reports the outcome as a risk-
standardized ratio because the diverse mix of procedures included in
the proposed ASC-19 measure can have varying levels of risk of
unplanned hospital visits; while the ASC-17 and ASC-18 measures report
a risk-standardized rate that reflects clinically specific cohorts with
fairly comparable mixes of procedures. We refer readers to section
XV.B.3.d. of this proposed rule for a full discussion on the measure
outcome calculation.
b. Overview of Measure
The proposed ASC-19 measure is a risk-adjusted outcome measure of
acute, unplanned hospital visits within 7 days of a general surgery
procedure performed at an ASC among Medicare FFS patients aged 65 years
and older. We define an unplanned hospital visit as including an
emergency department (ED) visit, observation stay, or unplanned
inpatient admission. The measure aligns with the Admissions and
Readmissions to Hospitals and Preventable Healthcare Harm Meaningful
Measure areas of our
[[Page 39564]]
Meaningful Measures Initiative.\126\ This measure was developed with
input from a national Technical Expert Panel (TEP) consisting of
patients, surgeons, methodologists, researchers, and providers. We also
held a three-week public comment period soliciting stakeholder input on
the measure methodology, and publicly posted a summary of the comments
received as well as our responses (available in the Downloads section
at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/PC-Updates-on-Previous-Comment-Periods.html).
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\126\ 83 FR 58820 through 58822.
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During the measure development public comment period, we received
public comment recommending the removal of two specific procedures (CPT
29893 endoscopic plantar and CPT 69222 clean out mastoid cavity) deemed
outside the scope of general surgery and to review the cohort procedure
list with general surgeons to ensure appropriateness. In response to
this feedback, we reviewed the cohort of procedures incorporating
feedback from general surgeons and removed 15 individual skin/soft
tissue and wound procedure codes from the measure that are outside the
scope of general surgery practice. These procedures include those
specifically suggested for removal (that is, endoscopic plantar and
clean out mastoid cavity) as well as chemical peels, dermabrasions, and
nerve procedures.
Section 1890A of the Act requires the Secretary to establish a pre-
rulemaking process with respect to the selection of certain categories
of quality and efficiency measures. Under section 1890A(a)(2) of the
Act, the Secretary must make available to the public by December 1 of
each year a list of quality and efficiency measures that the Secretary
is considering. The ASC-19: Facility-Level 7-Day Hospital Visits after
General Surgery Procedures Performed at Ambulatory Surgical Centers
measure was included on a publicly available document entitled ``List
of Measures under Consideration for December 1, 2017.'' \127\ The MAP
reviewed this measure (MUC17-233) and provided conditional support for
rulemaking, pending NQF review and endorsement, with the recognition
that this measure assesses an important outcome for patients receiving
care at ASCs.\128\ The MAP had some concerns about the attribution
model of the measure, noting that hospital visits after ASC procedures
are relatively rare events and could disproportionately affect low-
income or rural ASCs and that the measure may need risk adjustment for
social risk factors. At the time of the MAP's review, this measure was
still undergoing field testing.
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\127\ National Quality Forum. List of Measures under
Consideration for December 1, 2017. Available at: http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=86526.
\128\ National Quality Forum. MAP 2018 Considerations for
Implementing Measures: Hospitals--Final Report. Available at: http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=87096.
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Since the MAP's conditional support,\129\ we completed testing for
the proposed ASC-19 measure by estimating risk-standardized scores
using two full years of Medicare FFS claims data (CYs 2014 and 2015)
containing 286,999 procedures. The results showed score variation
across ASCs, from a minimum risk-standardized ratio of 0.42 to a
maximum of 2.13; the median was 0.97 and the 25th and 75th percentiles
were 0.90 and 1.10, respectively. After adjusting for case and
procedure mixes of ASCs, these results suggest there are underlying
differences in the quality of care and opportunities for quality
improvement. The reliability testing found an intraclass correlation
coefficient (ICC) score of 0.530, indicating moderate measure score
reliability.\130\ We considered the face validity of the measure score
among TEP members. Among the 14 TEP members, 12 agreed that the measure
scores are valid and useful measures of ASC quality of care for general
surgery procedures and will provide ASCs with information that can be
used to improve their quality of care. Detailed testing results are
available in the technical report for this measure, located at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\129\ Ibid.
\130\ Landis JR, Koch GG. The Measurement of Observer Agreement
for Categorical Data. Biometrics. 1977;33(1):159-174.
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On June 6, 2018, the NQF's Consensus Standards Approval Committee
endorsed ASC-19: Facility-Level 7-Day Hospital Visits after General
Surgery Procedures Performed at Ambulatory Surgical Centers (NQF
#3357).\131\ The proposed ASC-19 measure is consistent with the
information submitted to the NQF and the MAP, supporting its scientific
acceptability for use in quality reporting programs. We note that we
have made minor annual coding updates to the measure to incorporate
changes to the CPT and ICD-10 coding systems and to incorporate
clinical input to remove select procedures outside the scope of general
surgery as noted above, endoscopic plantar, clean out mastoid cavity,
chemical peels, dermabrasions, and nerve procedures. For the current
list of codes that define the proposed ASC-19 measure and a description
of updates since development, we refer readers to the zip file labeled
``Version 1.0 Hospital Visits General Surgery ASC Procedures Measure
Technical Report'' located at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\131\ National Quality Forum. Facility-Level 7-Day Hospital
Visits after General Surgery Procedures Performed at Ambulatory
Surgical Centers. Available at: http://www.qualityforum.org/QPS/3357.
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We believe this proposed measure reflects consensus among
stakeholders because it was developed with stakeholder input from a TEP
convened by a CMS contractor as well as from the measure development
public comment period.\132\ During the measure development processes
and the MAP meeting, the majority of public commenters supported the
measure's focus on assessing patient outcomes after general surgery
procedures performed in ASC setting of care. Most commenters supported
MAP's conditional support of the measure, noting it should be further
developed and NQF-endorsed before implementation in the ASCQR Program.
Importantly, the proposed ASC-19 measure addresses the MAP-identified
priority measure area of addressing preventable healthcare harm, such
as surgical complications, for the ASCQR Program.\133\ Therefore, we
believe it is appropriate to incorporate this proposed measure into the
ASCQR Program measure set because collecting and publicly reporting
these data would increase transparency, inform patients and ASCs, and
foster quality improvement efforts.
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\132\ National Quality Forum. ``MAP 2018 Considerations for
Implementing Measures in Federal Programs: Hospitals.'' Report.
2017. Available at: http://www.qualityforum.org/map/ under
``Hospitals--Final Report.''
\133\ The Centers for Medicare and Medicaid Services Center for
Clinical Standards and Quality. ``2018 Measures under Consideration
List: Program-Specific Measure Needs and Priorities''. Available at:
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Downloads/2018-CMS-Measurement-Priorities-and-Needs.pdf. Accessed February 28, 2019.
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c. Data Sources
The proposed ASC-19 measure is claims-based using Part A and Part B
Medicare administrative claims and
[[Page 39565]]
Medicare enrollment data to calculate the measure.
We are proposing that the data collection period for the proposed
ASC-19 measure would be the 2 calendar years ending 2 years prior to
the applicable payment determination year. For example, for the CY 2024
payment determination, the data collection period would be CYs 2021 to
2022. Because the measure data are collected via claims, ASCs will not
need to submit any additional data directly to CMS. We refer readers to
section XV.D.4. of this proposed rule for a more detailed discussion of
the requirements for data submitted via claims.
d. Measure Calculation
The measure outcome is all-cause, unplanned hospital visits within
7 days of any general surgery procedure performed at an ASC. For the
purposes of this measure, ``hospital visits'' include emergency
department visits, observation stays, and unplanned inpatient
admissions. The outcome of hospital visits is limited to 7 days since
existing literature suggests that the vast majority of adverse events
after outpatient surgery occur within the first 7 days following the
surgery.134 135 When there are two or more qualifying
surgical procedures within a 7-day period, the measure considers all
procedures as index procedures; however, the timeframe for outcome
assessment is defined as the interval between procedures (including the
day of the next procedure) and then 7 days after the last procedure.
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\134\ Fleisher LA, Pasternak LR, Herbert R, Anderson GF.
Inpatient hospital admission and death after outpatient surgery in
elderly patients: Importance of patient and system characteristics
and location of care. Arch Surg. 2004;139(1):67-72.
\135\ Mattila K, Toivonen J, Janhunen L, Rosenberg PH, Hynynen
M. Postdischarge symptoms after ambulatory surgery: First-week
incidence, intensity, and risk factors. Anesthesia and analgesia.
2005;101(6):1643-1650.
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The facility-level score is a risk-standardized hospital visit
ratio (RSHVR), an approach that accounts for the clustering of patients
within ASCs and variation in sample size across ASCs. The proposed ASC-
19 measure reports the outcome as a risk-standardized ratio because the
diverse mix of procedures included in the proposed measure can have
varying levels of risk of unplanned hospital visits. The RSHVR is
calculated as the ratio of the predicted to the expected number of
unplanned hospital visits among ASC patients. For each ASC, the
numerator of the ratio is the number of hospital visits predicted for
the ASC's patients accounting for its observed rate, the number of the
general surgery procedures performed at the ASC, the case-mix, and the
surgical complexity mix. The denominator of the ratio is the number of
hospital visits expected nationally given the ASC's case-mix and
surgical complexity mix. To calculate an ASC's predicted-to-expected
(P/E) ratio, the measure uses a two-level hierarchical logistic
regression model. The log-odds of the outcome for an index procedure is
modeled as a function of the patient demographic, comorbidity,
procedure characteristics, and a random ASC-specific intercept. A ratio
of less than one indicates the ASC facility's patients were estimated
as having fewer post-surgical visits than expected compared to ASCs
with similar surgical complexity and patients; and a ratio of greater
than one indicates the ASC facility's patients were estimated as having
more visits than expected. This approach is analogous to an observed-
to-expected ratio, but the method accounts for within-facility
correlation of the observed outcome and sample size differences,
accommodates the assumption that underlying differences in quality
across ASCs lead to systematic differences in outcomes, and is tailored
to and appropriate for a publicly reported outcome measure as
articulated in published scientific guidelines.136 137 138
For more information on measure calculations, we refer readers to:
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\136\ Krumholz HM, Brindis RG, Brush JE, et al. Standards for
Statistical Models Used for Public Reporting of Health Outcomes An
American Heart Association Scientific Statement From the Quality of
Care and Outcomes Research Interdisciplinary Writing Group:
Cosponsored by the Council on Epidemiology and Prevention and the
Stroke Council Endorsed by the American College of Cardiology
Foundation. Circulation. 2006;113(3):456-462.
\137\ Normand S-LT, Shahian DM. Statistical and clinical aspects
of hospital outcomes profiling. Statistical Science. 2007;22(2):206-
226.
\138\ National Quality Forum. Measure Evaluation Criteria and
Guidance for Evaluating Measures for Endorsement. 2015. Available
at: http://www.qualityforum.org/Measuring_Performance/Submitting_Standards/2015_Measure_Evaluation_Criteria.aspx. Accessed
July 26, 2016.
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e. Cohort
The patient cohort for the proposed ASC-19 measure includes all
Medicare beneficiaries ages 65 and older undergoing outpatient general
surgery procedures at an ASC who have 12 prior months of Medicare FFS
(Medicare Parts A and B) enrollment. The target group of procedures
includes those that: (1) Are routinely performed at ASCs; (2) involve
some increased risk of post-surgery hospital visits; and (3) are within
the scope of general surgery training. These include the following
types of procedures: Abdominal (for example, hernia repair), alimentary
tract (for example, hemorrhoid procedures), breast (for example,
mastectomies), skin/soft tissue (for example, skin grafting), wound
(for example, incision and drainage of skin and subcutaneous tissue),
and varicose vein stripping. The proposed ASC-19 measure does not
include gastrointestinal endoscopy, endocrine, or vascular procedures,
other than varicose vein procedures, because for these procedures,
reasons for hospital visits are typically related to patients'
underlying comorbidities.
The scope of general surgery overlaps with that of other
specialties (for example, vascular surgery and plastic surgery). For
this measure, we targeted surgeries that general surgeons are trained
to perform with the understanding that other subspecialists may also be
performing many of these surgeries at ASCs. Since the type of surgeon
performing a particular procedure may vary across ASCs in ways that
affect quality, the measure is neutral to surgeons' specialty training.
Procedures included in the measure cohort are on CMS' list of
covered ASC procedures.\139\ We developed this list to identify
surgeries that have a low-to-moderate risk profile. Surgeries on the
ASC list of covered procedures do not involve or require major or
prolonged invasion of body cavities, extensive blood loss, major blood
vessels, or care that is either urgent or life threatening. We annually
review and update this list, which includes a transparent public
comment submission and review process for addition and/or removal of
procedures codes.\140\ The current list is accessible in the Downloads
section at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html.
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\139\ Centers for Medicare and Medicaid Services. ``Ambulatory
Surgical Center (ASC) Payment: Addenda Updates.'' Available at:
https://www.cms.gov/medicare/medicare-fee-for-service-payment/ascpayment/11_addenda_updates.html.
\140\ Ibid.
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In addition, the measure includes only ``major'' and ``minor''
procedures, as indicated by the Medicare Physician Fee Schedule global
surgery indicator (GSI) values of 090 and 010, respectively, to focus
the measure only on the subset of surgeries on CMS' list of covered ASC
procedures that impose a meaningful risk of post-procedure hospital
visits. This list of GSI values is publicly available for CY 2015 at:
https://www.cms.gov/Medicare/
[[Page 39566]]
Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-
Regulation-Notices-Items/CMS-1612-FC.html (download PFS Addenda,
Addendum B). Moreover, to identify the subset of ASC procedures within
the scope of general surgery, we used the Clinical Classifications
Software (CCS) developed by the Agency for Healthcare Research and
Quality.\141\ We identified and included CCS categories within the
scope of general surgery, and only included individual procedures
within the CCS categories at the procedure (CPT code) level if they
were within the scope of general surgery practice. For more cohort
details, we refer readers to the measure technical report located at:
https://www.cms.gov/medicare/Quality-Initiatives-Patient-Assessment-
Instruments/HospitalQualityInits/Measure-Methodology.html.
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\141\ Healthcare Cost and Utilization Project. Clinical
Classifications Software for Services and Procedures. Available at:
https://www.hcup-us.ahrq.gov/toolssoftware/ccs_svcsproc/ccssvcproc.jsp.
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To ensure that all patients included under this measure have full
data available for outcome assessment, the measure excludes patients
who survived at least 7 days following general surgery procedures at an
ASC, but were not continuously enrolled in Medicare FFS (Medicare Parts
A and B) during the 7 days after surgery. There are no additional
patient inclusion or exclusion criteria for the proposed ASC-19
measure. Additional methodology and measure development details are
available at: https://www.cms.gov/medicare/Quality-Initiatives-Patient-
Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
f. Risk Adjustment
The statistical risk-adjustment model includes clinically relevant
risk-adjustment variables that are strongly associated with risk of
hospital visits within 7 days following ASC general surgery procedures.
Accordingly, only comorbidities that convey information about the
patient at that time or in the 12 months prior, and not complications
that arise during the course of the index procedure, are included in
the risk adjustment. The measure risk adjusts for age, 18
comorbidities, procedure type (abdomen vs. alimentary tract vs. breast
vs. skin/soft tissue vs. wound vs. varicose vein), a variable for work
Relative Value Units (RVUs) to adjust for surgical complexity, and an
interaction term of procedure type and surgical complexity.\142\
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\142\ S. Coberly. The Basics; Relative Value Units (RVUs).
National Health Policy Forum. January 12, 2015. Available at: http://www.nhpf.org/library/the-basics/Basics_RVUs_01-12-15.pdf.
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To select the final set of variables for the risk-adjustment model,
candidate risk variables were entered into logistic regression analyses
\143\ predicting the outcome of hospital visits within 7 days. To
develop a parsimonious risk model, non-significant variables were
iteratively removed from the model using a stepwise selection approach
described by Hosmer and Lemeshow.\144\ All variables significant at
p<0.05 were retained in the final model. We also tested interaction
terms and retained those that were both significant at p<0.05 and
demonstrated a clinically plausible relationship to the outcome.
Finally, after reviewing TEP and public comments, as well as the
statistically selected variables for face validity, we settled upon the
model variables. We retained one additional variable (opioid use) for
the final risk model because experts advised it was an important risk
predictor and expressed a strong preference for including it in the
model even though it was not statistically selected. Additional details
on risk model development and testing are available in the technical
report at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
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\143\ Hosmer DW, Lemeshow S. Introduction to the logistic
regression model. Applied Logistic Regression, Second Edition.
2000:1-30.
\144\ Hosmer DW, Lemeshow S. Introduction to the logistic
regression model. Applied Logistic Regression, Second Edition.
2000:1-30.
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g. Public Reporting
We are proposing that if the proposed ASC-19 measure is adopted, we
would publicly report results only for facilities with sufficient case
numbers to meet moderate reliability standards.\145\ We would determine
the case size cutoff for meeting moderate reliability standards by
calculating reliability at different case sizes using the ratio of true
variance to observed variance during the measure dry run (discussed
below).\146\ We would provide confidential performance data directly to
all facilities including those which do not meet the criteria for
sufficient case numbers for reliability considerations so that all
facilities can benefit from seeing their measure results and individual
patient-level outcomes. We believe that the measure will provide
beneficiaries with information about the quality of care for general
surgery procedures in the ASC setting. In addition, we believe that
these performance data may help ASCs track their patient outcomes and
provide information on their cases that facilities can use to improve
quality of care.
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\145\ Ibid.
\146\ Snijders TA, Bosker RJ. Multilevel Analysis: An
introduction to basic and advanced multilevel modeling. SAGE
Publications. 2000. London.
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h. Provision of Facility-Specific Information Prior to Public Reporting
If this proposed measure is finalized, we intend to conduct a dry
run before the official data collection period or any public reporting.
A dry run is a period of confidential reporting and feedback during
which ASCs may review their dry run measure results, and in addition,
further familiarize themselves with the measure methodology and ask
questions. For the dry run, we intend to use the most current 2-year
set of complete claims (usually 12 months prior to the start date)
available at the time of dry run. For example, if the dry run began in
June 2020, the most current 2-year set of data available would likely
be July 2017 to June 2019. Because we use paid, final action Medicare
claims, ASCs would not need to submit any additional data for the dry
run. The dry run would generate confidential feedback reports for ASCs,
including patient-level data indicating whether the patient had a
hospital visit and, if so, the type of visit (emergency department
visit, observation stay, or unplanned inpatient admission), the
admitting facility, and the principal discharge diagnosis. Further, the
dry run would enable ASCs to see their dry run measure results prior to
the measure being implemented. General information about the dry run as
well as confidential facility-specific reports would be made available
for ASCs to review on their accounts at: http://www.qualitynet.org. We
plan to continue to generate these reports for ASCs after we implement
the proposed measure if it is finalized so ASCs can use the information
to identify performance gaps and develop quality improvement
strategies.
These confidential dry run results are not publicly reported and do
not affect payment. We expect the dry run to take approximately one
month to conduct, during which facilities would be provided the
confidential report and the opportunity to review their performance and
provide feedback to us. After the dry run, measure results would have a
payment impact and would be publicly reported as discussed above
beginning with the CY 2024 payment determination and for subsequent
years.
[[Page 39567]]
4. Summary of ASCQR Program Quality Measure Set Proposed for the CY
2024 Payment Determination and for Subsequent Years
As discussed above, we are proposing to add one measure beginning
with the CY 2024 payment determination and for subsequent years to the
ASCQR Program. We refer readers to the CY 2019 OPPS/ASC final rule with
comment period (83 FR 59129 through 59132) for previously finalized
ASCQR Program measure sets.
Table 36 summarizes the proposed ASCQR Program measure set for the
CY 2024 payment determination and subsequent years (including
previously adopted measures).
[GRAPHIC] [TIFF OMITTED] TP09AU19.056
5. ASCQR Program Measures and Topics for Future Consideration
In this proposed rule, we are considering one topic for future
implementation: Updates to the submission method for ASC-1: Patient
Burn, ASC-2: Patient Fall, ASC-3: Wrong Site, Wrong Side, Wrong
Patient, Wrong Procedure, Wrong Implant, and ASC-4: All-Cause Hospital
Transfer/Admission measures.
ASC-1, ASC-2, ASC-3, and ASC-4 were adopted into the ASCQR Program
in the CY 2012 OPPS/ASC final rule with comment period beginning with
the CY 2014 payment determination (76 FR 74496 through 74500). These
[[Page 39568]]
measures were developed by the ASC Quality Collaboration (ASC QC). The
ASC QC is a cooperative effort of organizations and companies formed in
2006 with a common interest in ensuring that ASC quality data is
measured and reported in a meaningful way.\147\ Stakeholders in the ASC
QC include ASC corporations, ASC associations, professional societies
and accrediting bodies that focus on ASC quality and safety.\148\ The
ASC QC initiated a process of standardizing ASC quality measure
development through evaluation of existing nationally endorsed quality
measures to determine which could be directly applied to the outpatient
surgery facility setting.\149\
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\147\ ASC Quality Collaboration. ASC Quality Measures
Implementation Guide Version 6.1 March 2019. Available at: http://ascquality.org/documents/ASC-QC-Implementation-Guide-6.1-March-2019.pdf.
\148\ Ibid.
\149\ Ibid.
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The ASC QC developed and pilot-tested ASC-1, ASC-2, ASC-3, and ASC-
4 at the facility-level for feasibility and usability (76 FR 74496).
These measures are calculated via quality data codes (QDCs), as
described in section XV.D.1. of this proposed rule. ASCs were formerly
required to submit the appropriate QDCs on individual Medicare FFS
claims billed by the facility (78 FR 75135). In the FY 2013 IPPS/LTCH
PPS final rule (77 FR 53640 through 53641), we finalized our policy
that the minimum threshold for successful reporting be that at least 50
percent of claims meeting measure specifications contain QDCs. At that
time, we believed that 50 percent was a reasonable minimum threshold
for the initial implementation years of the ASCQR Program, because ASCs
were not yet familiar with how to report quality data under the ASCQR
Program and because many ASCs are relatively small and may have needed
more time to set up reporting systems (77 FR 53641). We stated in that
final rule that we intended to propose to increase this percentage for
subsequent years' payment determinations as ASCs become more familiar
with reporting requirements for the ASCQR Program. We have assessed
this reporting threshold annually and have found that over 78 percent
of reporting ASCs report data for at least 90 percent of eligible
claims.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59117
through 59123), we expressed concern that the data submission method
for these measures may impact the completeness and accuracy of the data
due to the inability of ASCs to correct errors in submitted QDCs that
are used to calculate these measures. An ASC that identifies an
erroneous or missing QDC is unable to correct or add a QDC if the claim
has already been submitted to Medicare and been processed. We also
stated that we believe that revising the data submission method for the
measures, such as via QualityNet, would address this issue and allow
ASCs to correct any data submissions errors, resulting in more complete
and accurate data. In that final rule with comment period, we explained
that we agree it is important to continue to monitor the types of
events included in these measures considering the potential negative
impacts to patients' morbidity and mortality, in order to continue to
prevent their occurrence and ensure that they remain rare. We
acknowledged that these measures provide critical data to beneficiaries
and further transparency for care provided in the ASC setting that
would be useful in choosing an ASC for care, and that these measures
are valuable to the ASC community.
As such, in the CY 2019 OPPS/ASC final rule with comment period (83
FR 59117 through 59123; 59134 through 59135), we retained these
measures in the ASCQR Program, but suspended their data submission
until further action in rulemaking with the goal of updating their data
submission method.
In this proposed rule, we are requesting comment about potential
future updates to the data submission method for ASC-1: Patient Burn,
ASC-2: Patient Fall, ASC-3: Wrong Site, Wrong Side, Wrong Patient,
Wrong Procedure, Wrong Implant, and ASC-4: All-Cause Hospital Transfer/
Admission. Specifically, we have considered updating the data
submission method to a CMS online data submission tool. We refer
readers to the CY 2018 OPPS/ASC final rule with comment period (82 FR
59473) (and the previous rulemakings cited therein) and 42 CFR
416.310(c)(1) for our requirements regarding data submitted via a CMS
online data submission tool. We are currently using the QualityNet
website (https://www.qualitynet.org) as our CMS online data submission
tool.
To submit measures via an online data submission tool to the
QualityNet website, ASCs and any agents submitting data on an ASC's
behalf would have to maintain a QualityNet account (42 CFR
416.310(c)(1)). A QualityNet security administrator would be necessary
to set up such an account for the purpose of submitting this
information (42 CFR 416.310(c)(1)). We believe that using a CMS online
data collection tool would address our concern about the ability of
ASCs to correct data submission errors because ASCs would simply report
their data via the online tool. If data for these measures were
submitted via QualityNet, ASCs would still submit claims for
reimbursement to CMS, but would not be required to include QDCs. As
specified at 42 CFR 416.310(c)(1)(ii), the data collection time period
for quality measures for which data are submitted via a CMS online data
submission tool is for services furnished during the calendar year 2
years prior to the payment determination year. ASCs would then submit
their data for ASC-1, ASC-2, ASC-3, and ASC-4 via QualityNet during the
data submission period, January 1 through May 15 in the year prior to
the payment determination year. ASCs would be able to submit and modify
their data throughout the data submission period and could correct any
errors during this period. We are seeking comments on whether updating
the data submission method for ASC-1, ASC-2, ASC-3, and ASC-4 to a CMS
online data submission tool would be appropriate for these measures in
the future.
We are committed to work with stakeholders to ensure the ASCQR
Program measure set does not place an inappropriate amount of burden on
facilities while addressing and providing information about these types
of patient safety, adverse, rare events to patients and other
consumers. We recognize that updating the data submission method to a
CMS online data submission tool would add some burden to the ASCQR
Program due to the additional time for submitting any of these four
measures via QualityNet for each payment determination year. Thus, we
are also seeking comment about the burden associated with potentially
updating the data submission method for ASC-1, ASC-2, ASC-3, and ASC-4
to a CMS online data submission tool (for example, the QualityNet
website) in future years.
6. Maintenance of Technical Specifications for Quality Measures
We refer readers to the CY 2012 OPPS/ASC final rule with comment
period (76 FR 74513 through 74514), where we finalized our proposal to
follow the same process for updating the ASCQR Program measures that we
adopted for the Hospital OQR Program measures, including the
subregulatory process for updating adopted measures. In the CY 2013
OPPS/ASC final rule with comment period (77 FR 68496 through 68497),
the CY 2014 OPPS/ASC final rule with comment period (78 FR 75131), and
the CY 2015 OPPS/ASC
[[Page 39569]]
final rule with comment period (79 FR 66981), we provided additional
clarification regarding the ASCQR Program policy in the context of the
previously finalized Hospital OQR Program policy, including the
processes for addressing nonsubstantive and substantive changes to
adopted measures. In the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70531), we provided clarification regarding our decision
to not display the technical specifications for the ASCQR Program on a
CMS website, but stated that we will continue to display the technical
specifications for the ASCQR Program on the QualityNet website. In
addition, our policies regarding the maintenance of technical
specifications for the ASCQR Program are codified at 42 CFR 416.325. In
this proposed rule, we are not proposing any changes to our policies
regarding the maintenance of technical specifications for the ASCQR
Program.
7. Public Reporting of ASCQR Program Data
In the CY 2012 OPPS/ASC final rule with comment period (76 FR 74514
through 74515), we finalized a policy to make data that an ASC
submitted for the ASCQR Program publicly available on a CMS website
after providing an ASC an opportunity to review the data to be made
public. In the CY 2016 OPPS/ASC final rule with comment period (80 FR
70531 through 70533), we finalized our policy to publicly display data
by the National Provider Identifier (NPI) when the data are submitted
by the NPI and to publicly display data by the CCN when the data are
submitted by the CCN. In addition, we codified our policies regarding
the public reporting of ASCQR Program data at 42 CFR 416.315 (80 FR
70533). In the CY 2017 OPPS/ASC final rule with comment period (81 FR
79819 through 79820), we formalized our current public display
practices regarding timing of public display and the preview period by
finalizing our proposals to: Publicly display data on the Hospital
Compare website, or other CMS website as soon as practicable after
measure data have been submitted to CMS; to generally provide ASCs with
approximately 30 days to review their data before publicly reporting
the data; and to announce the timeframes for each preview period
starting with the CY 2018 payment determination on a CMS website and/or
on our applicable listservs. In the CY 2018 OPPS/ASC final rule with
comment period (82 FR 59455 through 59470), we discussed specific
public reporting policies associated with two measures beginning with
the CY 2022 payment determination: ASC-17: Hospital Visits after
Orthopedic Ambulatory Surgical Center Procedures, and ASC-18: Hospital
Visits after Urology Ambulatory Surgical Center Procedures. We are not
proposing any changes to our public reporting policies in this proposed
rule.
C. Administrative Requirements
1. Requirements Regarding QualityNet Account and Security Administrator
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75132 through 75133) for a detailed discussion of the
QualityNet security administrator requirements, including setting up a
QualityNet account, and the associated timelines, for the CY 2014
payment determination and subsequent years. In the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70533), we codified the
administrative requirements regarding maintenance of a QualityNet
account and security administrator for the ASCQR Program at 42 CFR
416.310(c)(1)(i). We are not proposing any changes to these policies in
this proposed rule.
2. Requirements Regarding Participation Status
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75133 through 75135) for a complete discussion of the
participation status requirements for the CY 2014 payment determination
and subsequent years. In the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70533 through 70534), we codified these requirements
regarding participation status for the ASCQR Program at 42 CFR 416.305.
We are not proposing any changes to these policies in this proposed
rule.
D. Form, Manner, and Timing of Data Submitted for the ASCQR Program
1. Requirements Regarding Data Processing and Collection Periods for
Claims-Based Measures Using Quality Data Codes (QDCs)
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75135) for a complete summary of the data processing and
collection periods for the claims-based measures using QDCs for the CY
2014 payment determination and subsequent years. In the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70534), we codified the
requirements regarding data processing and collection periods for
claims-based measures using QDCs for the ASCQR Program at 42 CFR
416.310(a)(1) and (2).
We are not proposing any changes to these requirements in this
proposed rule. We note that data submission for the following claims-
based measures using QDCs was suspended in the CY 2019 OPPS/ASC final
rule with comment period (83 FR 59117 through 59123; 59134 through
59135) until further action in rulemaking:
ASC-1: Patient Burn;
ASC-2: Patient Fall;
ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong
Procedure, Wrong Implant; and
ASC-4: Hospital Transfer/Admission.
We also note that we are requesting comment on updating the
submission method for the above measures in section XV.B.5. of this
proposed rule.
These data processing and collection period requirements will
remain in the ASCQR Program for application to any future claims-based
measures using QDCs adopted by the ASCQR Program.
2. Minimum Threshold, Minimum Case Volume, and Data Completeness for
Claims-Based Measures Using QDCs
We refer readers to the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59472) (and the previous rulemakings cited therein), as
well as 42 CFR 416.310(a)(3) and 42 CFR 416.305(c) for our policies
about minimum threshold, minimum case volume, and data completeness for
claims-based measures using QDCs. In this proposed rule, we are not
proposing any changes to these policies.
3. Requirements for Data Submitted via an Online Data Submission Tool
We refer readers to the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59472) (and the previous rulemakings cited therein) and
42 CFR 416.310(c) for our previously finalized policies for data
submitted via an online data submission tool. For more information on
data submission using QualityNet, we refer readers to: https://www.qualitynet.org.
a. Requirements for Data Submitted via a Non-CMS Online Data Submission
Tool
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75139 through 75140) and the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66985 through 66986) for our requirements
regarding data submitted via a non-CMS online data submission tool
(that is, the CDC NHSN website). We codified our existing policies
regarding the data collection time periods for measures involving
online data submission and
[[Page 39570]]
the deadline for data submission via a non-CMS online data submission
tool at 42 CFR 416.310(c)(2).
As we noted in the CY 2019 OPPS/ASC final rule with comment period
(83 FR 59135), no measures submitted via a non-CMS online data
submission tool remain in the ASCQR Program beginning with the CY 2020
payment determination. We are not proposing any changes to our non-CMS
online data submission tool reporting requirements; these requirements
would apply to any future non-CMS online data submission tool measures
adopted in the ASCQR Program.
b. Requirements for Data Submitted via a CMS Online Data Submission
Tool
We refer readers to the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59473) (and the previous rulemakings cited therein) and
42 CFR 416.310(c)(1) for our requirements regarding data submitted via
a CMS online data submission tool. We are currently using the
QualityNet website to host our CMS online data submission tool: https://www.qualitynet.org. We note that in the CY 2018 OPPS/ASC final rule
with comment period (82 FR 59473), we finalized expanded submission via
the CMS online tool to also allow for batch data submission and made
corresponding changes to 42 CFR 416.310(c)(1)(i).
In this proposed rule, we are not proposing any changes to this
policy. The following previously finalized measures will require data
to be submitted via a CMS online data submission tool for the CY 2021
payment determination and subsequent years:
ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up
Interval for Normal Colonoscopy in Average Risk Patients
ASC-11: Cataracts: Improvement in Patients' Visual Function
within 90 Days Following Cataract Surgery
ASC-13: Normothermia Outcome
ASC-14: Unplanned Anterior Vitrectomy
4. Requirements for Non-QDC Based, Claims-Based Measure Data
We are not proposing any changes to our requirements for non-QDC
based, claims-based measures in this proposed rule. We refer readers to
the CY 2019 OPPS/ASC final rule with comment period (83 FR 59136
through 59138, where we established a 3-year reporting period for the
previously adopted measure, ASC-12: Facility 7-Day Risk-Standardized
Hospital Visit Rate after Outpatient Colonoscopy. In that final rule
with comment period (83 FR 59106 through 59107), we established a
similar policy under the Hospital OQR Program.
We also note that we are proposing to adopt ASC-19: Facility-Level
7-Day Hospital Visits after General Surgery Procedures Performed at
Ambulatory Surgical Centers (NQF #3357) in section XV.B.3. of this
proposed rule to which these requirements for non-QDC based, claims-
based measures would apply if the proposed ASC-19 measure is finalized
as proposed.
5. Requirements for Data Submission for ASC-15a-e: Outpatient and
Ambulatory Surgery Consumer Assessment of Healthcare Providers and
Systems (OAS CAHPS) Survey-Based Measures
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79822 through 79824) for our previously finalized
policies regarding survey administration and vendor requirements for
the CY 2020 payment determination and subsequent years. In addition, we
codified these policies at 42 CFR 416.310(e). However, in the CY 2018
OPPS/ASC final rule with comment period (82 FR 59450 through 59451), we
delayed implementation of the ASC-15a-e: OAS CAHPS Survey-based
measures beginning with the CY 2020 payment determination (CY 2018 data
submission) until further action in future rulemaking, and we refer
readers to that discussion for more details. In this proposed rule, we
are not proposing any changes to this policy.
6. Extraordinary Circumstances Exception (ECE) Process for the CY 2020
Payment Determination and Subsequent Years
We refer readers to the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59474 through 59475) (and the previous rulemakings cited
therein) and 42 CFR 416.310(d) for the ASCQR Program's policies for
extraordinary circumstance exceptions (ECE) requests.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59474
through 59475), we: (1) Changed the name of this policy from
``extraordinary circumstances extensions or exemption'' to
``extraordinary circumstances exceptions'' for the ASCQR Program,
beginning January 1, 2018; and (2) revised 42 CFR 416.310(d) of our
regulations to reflect this change. We also clarified that we will
strive to complete our review of each request within 90 days of
receipt. In this proposed rule, we are not proposing any changes to
these policies.
7. ASCQR Program Reconsideration Procedures
We refer readers to the CY 2016 OPPS/ASC final rule with comment
period (82 FR 59475) (and the previous rulemakings cited therein) and
42 CFR 416.330 for the ASCQR Program's reconsideration policy. In this
proposed rule, we are not proposing any changes to this policy.
E. Payment Reduction for ASCs That Fail To Meet the ASCQR Program
Requirements
1. Statutory Background
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68499) for a detailed discussion of the statutory
background regarding payment reductions for ASCs that fail to meet the
ASCQR Program requirements.
2. Policy Regarding Reduction to the ASC Payment Rates for ASCs That
Fail To Meet the ASCQR Program Requirements for a Payment Determination
Year
The national unadjusted payment rates for many services paid under
the ASC payment system are equal to the product of the ASC conversion
factor and the scaled relative payment weight for the APC to which the
service is assigned. For CY 2020, the proposed ASC conversion factor is
equal to the conversion factor calculated for the previous year updated
by the multifactor productivity (MFP)-adjusted hospital market basket
update factor. The MFP adjustment is set forth in section
1833(i)(2)(D)(v) of the Act. The MFP-adjusted hospital market basket
update is the annual update for the ASC payment system for a 5-year
period (CY 2019 through CY 2023). Under the ASCQR Program in accordance
with section 1833(i)(7)(A) of the Act and as discussed in the CY 2013
OPPS/ASC final rule with comment period (77 FR 68499), any annual
increase shall be reduced by 2.0 percentage points for ASCs that fail
to meet the reporting requirements of the ASCQR Program. This reduction
applied beginning with the CY 2014 payment rates (77 FR 68500). For a
complete discussion of the calculation of the ASC conversion factor and
our finalized proposal to update the ASC payment rates using the
inpatient hospital market basket update for CYs 2019 through 2023, we
refer readers to the CY 2019 OPPS/ASC final rule with comment period
(83 FR 59073 through 59080).
In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499
through 68500), in order to implement
[[Page 39571]]
the requirement to reduce the annual update for ASCs that fail to meet
the ASCQR Program requirements, we finalized our proposal that we would
calculate two conversion factors: A full update conversion factor and
an ASCQR Program reduced update conversion factor. We finalized our
proposal to calculate the reduced national unadjusted payment rates
using the ASCQR Program reduced update conversion factor that would
apply to ASCs that fail to meet their quality reporting requirements
for that calendar year payment determination. We finalized our proposal
that application of the 2.0 percentage point reduction to the annual
update may result in the update to the ASC payment system being less
than zero prior to the application of the MFP adjustment.
The ASC conversion factor is used to calculate the ASC payment rate
for services with the following payment indicators (listed in Addenda
AA and BB to the proposed rule, which are available via the internet on
the CMS website): ``A2'', ``G2'', ``P2'', ``R2'' and ``Z2'', as well as
the service portion of device-intensive procedures identified by ``J8''
(77 FR 68500). We finalized our proposal that payment for all services
assigned the payment indicators listed above would be subject to the
reduction of the national unadjusted payment rates for applicable ASCs
using the ASCQR Program reduced update conversion factor (77 FR 68500).
The conversion factor is not used to calculate the ASC payment
rates for separately payable services that are assigned status
indicators other than payment indicators ``A2'', ``G2'', ``J8'',
``P2'', ``R2'' and ``Z2.'' These services include separately payable
drugs and biologicals, pass-through devices that are contractor-priced,
brachytherapy sources that are paid based on the OPPS payment rates,
and certain office-based procedures, radiology services and diagnostic
tests where payment is based on the PFS nonfacility PE RVU-based
amount, and a few other specific services that receive cost-based
payment (77 FR 68500). As a result, we also finalized our proposal that
the ASC payment rates for these services would not be reduced for
failure to meet the ASCQR Program requirements because the payment
rates for these services are not calculated using the ASC conversion
factor and, therefore, not affected by reductions to the annual update
(77 FR 68500).
Office-based surgical procedures (generally those performed more
than 50 percent of the time in physicians' offices) and separately paid
radiology services (excluding covered ancillary radiology services
involving certain nuclear medicine procedures or involving the use of
contrast agents) are paid at the lesser of the PFS nonfacility PE RVU-
based amounts or the amount calculated under the standard ASC
ratesetting methodology. Similarly, in the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66933 through 66934), we finalized our
proposal that payment for certain diagnostic test codes within the
medical range of CPT codes for which separate payment is allowed under
the OPPS will be at the lower of the PFS nonfacility PE RVU-based (or
technical component) amount or the rate calculated according to the
standard ASC ratesetting methodology when provided integral to covered
ASC surgical procedures. In the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68500), we finalized our proposal that the
standard ASC ratesetting methodology for this type of comparison would
use the ASC conversion factor that has been calculated using the full
ASC update adjusted for productivity. This is necessary so that the
resulting ASC payment indicator, based on the comparison, assigned to
these procedures or services is consistent for each HCPCS code,
regardless of whether payment is based on the full update conversion
factor or the reduced update conversion factor.
For ASCs that receive the reduced ASC payment for failure to meet
the ASCQR Program requirements, we believe that it is both equitable
and appropriate that a reduction in the payment for a service should
result in proportionately reduced coinsurance liability for
beneficiaries (77 FR 68500). Therefore, in the CY 2013 OPPS/ASC final
rule with comment period (77 FR 68500), we finalized our proposal that
the Medicare beneficiary's national unadjusted coinsurance for a
service to which a reduced national unadjusted payment rate applies
will be based on the reduced national unadjusted payment rate.
In that final rule with comment period, we finalized our proposal
that all other applicable adjustments to the ASC national unadjusted
payment rates would apply in those cases when the annual update is
reduced for ASCs that fail to meet the requirements of the ASCQR
Program (77 FR 68500). For example, the following standard adjustments
would apply to the reduced national unadjusted payment rates: The wage
index adjustment; the multiple procedure adjustment; the interrupted
procedure adjustment; and the adjustment for devices furnished with
full or partial credit or without cost (77 FR 68500). We believe that
these adjustments continue to be equally applicable to payment for ASCs
that do not meet the ASCQR Program requirements (77 FR 68500).
In the CY 2015, CY 2016, CY 2017, CY 2018, and CY 2019 OPPS/ASC
final rules with comment period (79 FR 66981 through 66982; 80 FR 70537
through 70538; 81 FR 79825 through 79826; 82 FR 59475 through 59476;
and 83 FR 59138 through 59139, respectively), we did not make any other
changes to these policies. We are not proposing any changes to these
policies for CY 2020 in this proposed rule.
XVI. Proposed Requirements for Hospitals To Make Public a List of Their
Standard Charges
A. Introduction and Overview
1. Statutory Basis and Current Guidance
Section 1001 of the Patient Protection and Affordable Care Act
(Pub. L. 111-148), as amended by section 10101 of the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152), amended Title
XXVII of the Public Health Service Act (the PHS Act), in part, by
adding a new section 2718(e). Section 2718 of the PHS Act, entitled
``Bringing Down the Cost of Health Care Coverage,'' requires each
hospital operating within the United States for each year to establish
(and update) and make public a list of the hospital's standard charges
for items and services provided by the hospital, including for
diagnosis-related groups established under section 1886(d)(4) of the
Social Security Act (the Act).
In the FY 2015 IPPS/LTCH PPS proposed and final rules (79 FR 28169
and 79 FR 50146, respectively), we reminded hospitals of their
obligation to comply with the provisions of section 2718(e) of the PHS
Act and provided guidelines for its implementation. At that time, we
required hospitals to either make public a list of their standard
charges or their policies for allowing the public to view a list of
those charges in response to an inquiry. In addition, we stated that we
expected hospitals to update the information at least annually, or more
often as appropriate, to reflect current charges. We also encouraged
hospitals to undertake efforts to engage in consumer-friendly
communication of their charges to enable consumers to compare charges
for similar services across hospitals and to help consumers understand
what their potential financial liability might be for items and
services they obtain at the hospital.
[[Page 39572]]
In the FY 2019 IPPS/LTCH PPS proposed rule and final rule (83 FR
20164 and 83 FR 41144, respectively), we again reminded hospitals of
their obligation to comply with the provisions of section 2718(e) of
the PHS Act and updated our guidelines for its implementation. The
announced update to our guidelines became effective January 1, 2019,
and took one step to further improve the public accessibility of
standard charge information. Specifically, we updated our guidelines to
require hospitals to make available a list of their current standard
charges via the internet in a machine-readable format and to update
this information at least annually, or more often as appropriate. We
subsequently published two sets of Frequently Asked Questions (FAQs)
\150\ that provided additional guidance to hospitals, including a FAQ
clarifying that while hospitals could choose the format they would use
to make public a list of their standard charges, the publicly posted
information should represent their standard charges as reflected in the
hospital's chargemaster. We also clarified that the requirement applies
to all hospitals operating within the United States and to all items
and services provided by the hospital.
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\150\ Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/FAQs-Req-Hospital-Public-List-Standard-Charges.pdf and https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/Downloads/Additional-Frequently-Asked-Questions-Regarding-Requirements-for-Hospitals-To-Make-Public-a-List-of-Their-Standard-Charges-via-the-internet.pdf.
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2. Background
As health care costs continue to rise, health care affordability
has become an area of intense focus. Health care spending is projected
to consume 20 percent of the economy by 2026.\151\ One reason for this
upward trajectory in spending is the lack of transparency in health
care pricing.\152\ Additionally, numerous studies suggest that
consumers want greater transparency. For example, a study of high
deductible health plan enrollees found that respondents wanted
additional health care price information so that they could make more
informed decisions about where to seek care based on price.\153\ Health
economists and other experts state that significant cost containment
cannot occur without widespread and sustained transparency in provider
prices.\154\ We believe there is a direct connection between
transparency in hospital standard charge information and having more
affordable health care and lower health care coverage costs. We believe
health care markets could work more efficiently and provide consumers
with higher-value health care if we promote policies that encourage
choice and competition.\155\ In short, as articulated by the CMS
Administrator, we believe that transparency in health care pricing is
``critical to enabling patients to become active consumers so that they
can lead the drive towards value.'' \156\
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\151\ CMS. National Health Expenditures Projections, 2018-2027:
Forecast Summary. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf.
\152\ Scheurer, D. Lack of Transparency Plagues U.S. Health Care
System. The Hospitalist. 2013 May; 2013(5). Available at: https://www.the-hospitalist.org/hospitalist/article/125866/health-policy/lack-transparency-plagues-us-health-care-system. Bees, J. Survey
Snapshot: Is Transparency the Answer to Rising Health Care Costs?
New England Journal of Medicine Catalyst. March 20, 2019. Available
at: https://catalyst.nejm.org/health-care-cost-transparency-answer/.
Wetzell, S. Transparency: A Needed Step Towards Health Care
Affordability. American Health Policy Institute. March, 2014.
Available at: http://www.americanhealthpolicy.org/Content/documents/resources/Transparency%20Study%201%20-%20The%20Need%20for%20Health%20Care%20Transparency.pdf. Robert Wood
Johnson Foundation. How Price Transparency Can Control the Cost of
Health Care. March 1, 2016. Available at: https://www.rwjf.org/en/library/research/2016/03/how-price-transparency-controls-health-care-cost.html.
\153\ Sinaiko, A.D., Mehrotra, A., & Sood, N. (2016). Cost-
Sharing Obligations, High-Deductible Health Plan Growth, and
Shopping for Health Care: Enrollees with Skin in the Game. JAMA
internal medicine, 176(3), 395-397. doi:10.1001/
jamainternmed.2015.7554.
\154\ Boynton A, and Robinson, JC. Appropriate Use of Reference
Pricing Can Increase Value. July 7, 2015. Available at: https://www.healthaffairs.org/do/10.1377/hblog20150707.049155/full/.
\155\ Azar, A.M., Mnuchin, S.T., and Acosta, A. ``Reforming
America's Healthcare System Through Choice and Competition.''
December 3, 2018. Available at: https://www.hhs.gov/sites/default/files/Reforming-Americas-Healthcare-System-Through-Choice-and-Competition.pdf.
\156\ Bresnick J. Verma: Price Transparency Rule a ``First
Step'' for Consumerism. January 11, 2019. Available at: https://healthpayerintelligence.com/news/verma-price-transparency-rule-a-first-step-for-consumerism.
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Many empirical studies have investigated the impact of price
transparency on markets, with most research showing that price
transparency leads to lower and more uniform prices, consistent with
predictions of standard economic theory.\157\ Traditional economic
analysis suggests that if consumers have better pricing information for
health care services, providers would face pressure to lower prices and
provide better quality care.\158\ Falling prices may, in turn, expand
access to health care for consumers.\159\
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\157\ Congressional Research Service Report to Congress: Does
Price Transparency Improve Market Efficiency? Implications of
Empirical Evidence in Other Markets for the Healthcare Sector, July
24, 2007.
\158\ Ibid.
\159\ Ibid.
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Presently, however, the information that health care consumers need
to make informed decisions based on the prices of health care services
is not readily available. The Government Accountability Office (GAO)
report (2011), ``Health Care Price Transparency: Meaningful Price
Information is Difficult for Consumers to Obtain Prior to Receiving
Care,'' \160\ found that opacity in health care prices, coupled with
the often wide pricing disparities for particular procedures within the
same market, can make it difficult for consumers to understand health
care prices and to effectively shop for value. The report references a
number of barriers that make it difficult for consumers to obtain price
estimates in advance for health care services. Such barriers include
the difficulty of predicting health care service needs in advance, a
complex billing structure resulting in bills from multiple providers,
the variety of insurance benefit structures, and concerns related to
the public disclosure of rates negotiated between providers and third
party payers. The GAO report goes on to explore various price
transparency initiatives, including tools that consumers could use to
generate price estimates in advance of receiving a health care service.
The report notes that pricing information displayed by tools varies
across initiatives, in large part due to limits reported by the
initiatives in their access or authority to collect certain necessary
price data. According to the GAO report, transparency initiatives were
best able to provide reasonable estimates of consumers' complete costs
when they had access and integrated pricing data from both providers
and insurers.
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\160\ Available at: https://www.gao.gov/products/GAO-11-791.
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The concept of making health care provider charges and insurance
benefit information available to consumers is not new; some States have
required disclosure of pricing information by providers and payers for
a number of years. More than half of the States have passed legislation
establishing price transparency websites or mandating that health
plans, hospitals, or physicians make price information available to
consumers.\161\ As of early 2012, there
[[Page 39573]]
were 62 consumer-oriented, State-based health care price comparison
websites.\162\ Half of these websites were launched after 2006, and
most were developed and funded by a State government agency (46.8
percent) or hospital association (38.7 percent).\163\ Most websites
report prices of inpatient care for medical conditions (72.6 percent)
or surgeries (71.0 percent). Information about prices of outpatient
services such as diagnostic or screening procedures (37.1 percent),
radiology studies (22.6 percent), prescription drugs (14.5 percent), or
laboratory tests (9.7 percent) are reported less often.\164\
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\161\ Desai S, Hatfield LA, Hicks AL, et al. Association Between
Availability of a Price Transparency Tool and Outpatient Spending.
JAMA. 2016;315(17):1874-1881. Available at: https://jamanetwork.com/journals/jama/fullarticle/2518264.
\162\ Kullgren JT, Duey KA, Werner RM. A census of state health
care price transparency websites. JAMA. 2013;309(23):2437-2438.
Available at: https://jamanetwork.com/journals/jama/fullarticle/1697957.
\163\ Ibid.
\164\ Ibid.
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Since the early 2000s, California-licensed hospitals have been
required to submit annually to the State for public posting on a State
website: The charge description master (CDM, also known as a
``chargemaster''); a list of the hospital's average charges for at
least 25 common outpatient procedures, including ancillary services;
and the estimated percentage increase in gross revenue due to price
changes.\165\ The information is required to be submitted in plain
language using easily understood terminology.\166\ In 2012,
Massachusetts began requiring insurers to provide, upon request, the
estimated amount insured patients will be responsible to pay for
proposed admissions, procedures, or services based upon the information
available to the insurer at the time, and also began requiring
providers to disclose the charge for the admission, procedure, or
service upon request by the patient within 2 working days.\167\ Since
2015, Oregon has offered pricing data for the top 100 common hospital
outpatient procedures and top 50 common inpatient procedures on its
OregonHospitalGuide.org website, which displays the median negotiated
amount of the procedure by hospital and includes patient paid amounts
such as deductibles and copayments. The data are derived from State-
mandated annual hospital claims collection by the State's all payer
claims database (APCD) and represent the service package cost for each
of the procedures, including ancillary services and elements related to
the procedure, with the exception of professional fees which are billed
separately.\168\ More recently, in 2018, Colorado began requiring
hospitals to post the prices of the 50 most used diagnosis-related
group (DRG) codes, and the 25 most used outpatient Current Procedural
Terminology (CPT) codes or health care services procedure codes with a
``plain-English description'' of the service, which must be updated at
least annually.\169\
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\165\ Available at: https://oshpd.ca.gov/data-and-reports/cost-transparency/hospital-chargemasters/2018-chargemasters/.
\166\ Jenkins K. CMS Price Transparency Push Trails State
Initiatives. The National Law Review. February 8, 2019. Available
at: https://www.natlawreview.com/article/cms-price-transparency-push-trails-state-initiatives.
\167\ Ibid.
\168\ Available at: http://oregonhospitalguide.org/ and http://oregonhospitalguide.org/understanding-the-data/procedure-costs.html.
\169\ Jenkins K. CMS Price Transparency Push Trails State
Initiatives. The National Law Review. February 8, 2019. Available
at: https://www.natlawreview.com/article/cms-price-transparency-push-trails-state-initiatives.
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Not only have States taken an interest in price transparency, but
insurers and self-funded employers have also moved in this direction.
For example, some self-funded employers are using price transparency
tools to incentivize their employees to make cost-conscious decisions
when purchasing health care services. Most large insurers have embedded
cost estimation tools into their member websites, and some provide
their members with comparative cost and value information, which
includes rates that the insurers have negotiated with in-network
providers and suppliers.
Research suggests that making such consumer-friendly pricing
information available to the public can reduce health care costs for
consumers. Specifically, recent research evaluating the impact of New
Hampshire's price transparency efforts reveals that providing insured
patients with information about prices can have an impact on the out-
of-pocket costs paid by consumers for medical imaging procedures, not
only by helping users of New Hampshire's website choose lower-cost
options, but also by leading to lower prices that benefited all
patients, including those in the State that did not use the
website.\170\
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\170\ Brown, ZY. What would happen if hospitals openly shared
their prices? The Conversation. January 30, 3019. Available at:
https://theconversation.com/what-would-happen-if-hospitals-openly-shared-their-prices-110352. And http://www-personal.umich.edu/
~zachb/zbrown_empirical_model_price_transparency.pdf.
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Despite the growing consumer demand and awareness of the need for
health care pricing data, there continues to be a gap in easily
accessible pricing information for consumers to use for health care
shopping purposes. Specifically, there is inconsistent (and many times
nonexistent) availability of provider charge information. We believe
this information gap can, in part, be filled by the proposals in this
proposed rule which seek to further price transparency by proposing to
adopt new requirements under section 2718(e) of the PHS Act, as
described below. We believe that ensuring public access to hospital
standard charge data will promote and support current and future price
transparency efforts. We believe that this, in turn, will enable health
care consumers to make more informed decisions, increase market
competition, and ultimately drive down the cost of health care
services, making them more affordable for all patients.
3. Summary of Stakeholder Engagement
In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20548 and 20549)
and other Requests for Information (RFIs) published during 2018 (which
we will refer to as the 2018 RFIs),\171\ we remarked that challenges
continue to exist for consumers because of insufficient transparency in
pricing information. Therefore, we sought public comment on a variety
of questions related to our price transparency efforts, including:
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\171\ FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20164); CY 2019
Home Health proposed rule (83 FR 32473); CY 2020 ESRD PPS proposed
rule (83 FR 34394); CY 2020 PFS proposed rule (83 FR 36009); and CY
2019 OPPS/ASC proposed rule (83 FR 37211).
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What types of information would be most beneficial to
patients, how can health care providers and suppliers best enable
patients to use charge and cost information in their decision-making,
and how can CMS and providers help third parties create patient-
friendly interfaces with these data?
Should health care providers and suppliers be required to
inform patients how much their out-of- pocket costs for a service will
be before those patients are furnished that service? What changes would
be needed to support greater transparency around patient obligations
for their out-of-pocket costs? What can be done to better inform
patients of these obligations? Should health care providers and
suppliers play any role in helping to inform patients of what their
out-of-pocket obligations will be?
Most of the commenters who responded to the 2018 RFIs supported
furthering price transparency efforts, although a few stakeholders
opposed efforts to make hospital pricing information available to the
public. Reasons stakeholders cited in opposition included, for example:
That hospital chargemasters are highly technical documents that
frequently
[[Page 39574]]
identify items and services by the complex payment codes used by
hospitals for purposes of billing, instead of terms that consumers can
understand; concern that hospital charge data as found in the hospital
chargemaster may not be helpful to consumers for determining what they
are likely to pay for a service or facility encounter because most
consumers have health insurance; concern that some pricing information
might be commercially sensitive; and that posting price information
without corresponding educational tools might increase patient
confusion.
In addition to seeking public input on price transparency issues
through the 2018 RFIs, we hosted a series of five listening sessions in
the summer and fall of 2018 that were attended by a wide representation
of stakeholders, including hospitals, clinicians, payers, tool
developers, and consumer and patient advocacy groups. During the
listening sessions, several stakeholders applauded our efforts to
release public use files on a quarterly basis and stated that they use
the information in those files to supplement their algorithms to
provide Medicare fee-for-service patients with out-of-pocket pricing
information. Price transparency tool developers asserted that machine-
readable chargemaster release would provide promising opportunities and
support existing efforts for user-friendly tool development, including
the development of out-of-pocket comparison cost estimates for self-pay
and commercially insured health care consumers. Some stakeholders noted
that the most useful pricing information for consumers is information
that displays a patient's expected out-of-pocket costs for nonurgent
health care services that can be scheduled in advance, also referred to
as ``shoppable'' services.
We appreciate the many detailed comments and suggestions
stakeholders have provided us during the past year. In this proposed
rule, after taking into consideration our past pricing transparency
efforts and stakeholder feedback and our policy objective to make price
information more readily available, we are proposing to codify a set of
requirements that further implement section 2718(e) of the PHS Act. We
believe that the public posting of hospital standard charge information
will be useful to health care consumers who need to obtain items and
services from a hospital, health care consumers who wish to view
hospital prices prior to selecting a hospital, clinicians who use the
data at the point of care when making referrals, and other members of
the public who may develop consumer-friendly price transparency tools.
These proposed requirements represent an important step towards putting
health care consumers at the center of their health care and ensuring
they have access to the hospital standard charge information they need.
4. Summary of Proposals
Health care consumers continue to lack the meaningful pricing
information they need to choose the healthcare services they want and
need despite prior requirements for hospitals to publicly post their
chargemaster rates online. Therefore, in response to stakeholders and
in accordance with President's Executive Order on ``Improving Price and
Quality Transparency in American Healthcare to Put Patients First''
(June 24, 2019), we are proposing an expansion of hospital charge
display requirements to include charges and information based on
negotiated rates and for common shoppable items and services, in a
manner that is consumer-friendly. We believe this will meaningfully
inform patients' decision making and allow consumers to compare prices
across hospitals. We are also proposing to establish a mechanism for
monitoring and the application of penalties for noncompliance.
Specifically, we are proposing to add a new Part 180--Hospital
Price Transparency to title 45 of the Code of Federal Regulations (CFR)
which would contain our regulations on price transparency for purposes
of section 2718(e) of the PHS Act. In our discussions in the sections
that follow, we make proposals related to: (1) A definition of
``hospital''; (2) different reporting requirements that would apply to
certain hospitals; (3) definitions for two types of ``standard
charges'' (specifically, gross charges and payer-specific negotiated
charges) that hospitals would be required to make public, and a request
for public comment on other types of standard charges that hospitals
should be required to make public; (4) a definition of hospital ``items
and services'' that would include all items and services (both itemized
and packaged) provided by the hospital to a patient in connection with
an inpatient admission or an outpatient department visit; (5)
requirements for making public a machine-readable file that contains a
hospital's gross charges and payer-specific negotiated charges for all
items and services provided by the hospital; (6) requirements for
making public payer-specific negotiated charges for select hospital-
provided items and services that are ``shoppable'' and that are
displayed and packaged in a consumer-friendly manner; (7) monitoring
for hospital noncompliance with public disclosure requirements to make
public standard charges; (8) actions that would address hospital
noncompliance, which include issuing a written warning notice,
requesting a corrective action plan, and imposing civil monetary
penalties (CMPs) on noncompliant hospitals and publicizing these
penalties on a CMS website; and (9) appeals of CMPs.
We believe that these proposals requiring public release of
hospital standard charge information are a necessary and important
first step in ensuring transparency in health care prices for
consumers, although we recognize that the release of hospital standard
charge information is not sufficient by itself to achieve our ultimate
goals for price transparency. For example, we know through our
stakeholder engagement and research conducted over the past year that
consumers of health care services simply want to know where they can
get a needed health care service and what that service will cost them
out-of-pocket. There are many barriers to achieving this simple desire
to make price comparisons for health care services, including that the
data necessary for such an analysis are not available to the general
public. Necessary data to make price comparisons depends on an
individual's circumstances. For example, a self-pay individual may
simply want to know the amount a health care provider will accept in
cash (or cash equivalent) as payment in full, while an individual with
health insurance may want to know the charge negotiated between the
health care provider and payer, along with additional individual
benefit-specific information such as the amount of cost-sharing, the
network status of the health care provider, how much of a deductible
has been paid to date, and other information. The proposals in this
proposed rule seek to address the barriers related to lack of hospital
data by standardizing the release of two types of hospital standard
charge information--gross charges and payer-specific negotiated
charges.
We believe these proposed policies are an important first step in
our efforts to achieve price transparency in health care, and believe
our proposed policies should be viewed in the context of the broader
price transparency initiative. We are continuing to explore other
authorities that the Department can use to further advance our goal of
getting
[[Page 39575]]
patients the information they need to make informed health care
decisions.
B. Proposed Definition of ``Hospital'' and Proposed Special
Requirements That Would Apply to Certain Types of Hospitals
1. Proposed Definition of ``Hospital''
Section 2718(e) of the PHS Act does not define ``hospital.''
Initially, we considered proposing to adopt a definition of
``hospital'' that is used either in other sections of the PHS Act or in
the Social Security Act, but we found that no single or combined
definition was suitable because those other definitions were applicable
to specific programs or Medicare participation and therefore had
program-specific requirements that made them too narrow for our
purposes. For example, we considered referencing the definition of
``hospital'' at section 1861(e) of the Social Security Act because that
definition is well understood by institutions that participate as
hospitals for purposes of Medicare. However, we were concerned that
doing so could have had the unintentional effect of limiting the
institutions we believe should be covered by section 2718(e) of the PHS
Act. Even so, we believe that the licensing requirement described at
section 1861(e)(7) of the Social Security Act captures the institutions
that we believe should be characterized as hospitals for purposes of
this section.
Accordingly, we are proposing to define a ``hospital'' as an
institution in any State in which State or applicable local law
provides for the licensing of hospitals, (1) is licensed as a hospital
pursuant to such law or (2) is approved, by the agency of such State or
locality responsible for licensing hospitals, as meeting the standards
established for such licensing (which we propose to codify in new 45
CFR 180.20).
We believe this proposed definition is the best way to ensure that
section 2718(e) of the PHS Act applies to each hospital operating
within the United States. First, in addition to applying to all
Medicare-enrolled hospitals (that, by definition, must be licensed by a
State as a hospital, or otherwise approved by the State or local
licensing agency as meeting hospital licensing standards), the proposed
definition would also capture any institutions that are, in fact,
operating as hospitals under State or local law, but might not be
considered hospitals for purposes of Medicare participation. As
discussed in section XVI.A.2. of this proposed rule, many States have
promoted price transparency initiatives and some require institutions
they license as hospitals to make certain charges public as a part of
those initiatives. Therefore, defining a hospital by its licensure (or
by its approval by the State or locality as meeting licensing
standards) may carry the advantage of aligning the application of
Federal and State price transparency initiatives to the same
institutions.
We also are proposing that, for purposes of the definition of
``hospital,'' a State includes each of the several States, the District
of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and
the Northern Mariana Islands. This proposed definition of State would
be consistent with how that term is defined under section 2791(d)(14)
of the PHS Act. We believe that adopting this definition of ``State''
for purposes of section 2718(e) of the PHS Act is appropriate because,
unlike the other provisions in section 2718 which apply to health
insurance issuers, section 2718(e) applies to hospitals. Therefore, it
is distinguishable from the approach outlined in the July 2014 letters
\172\ to the Territories regarding the PHS Act health insurance
requirements established or amended by Public Law 111-148 and Public
Law 111-152.
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\172\ The July 2014 letters are available at: https://www.cms.gov/CCIIO/Resources/Letters/index.html#Health%20Market%20Reforms.
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Our proposed definition focuses on whether or not the institution
is licensed by the State or under applicable local law as a hospital,
or is approved, by the agency of such State or locality responsible for
licensing hospitals, as meeting the standards established for such
licensing. As such, a ``hospital'' would include each institution that
satisfies the definition, regardless of whether that institution is
enrolled in Medicare or, if enrolled, regardless of how Medicare
designates the institution for its purposes. Thus, the proposed
definition would include critical access hospitals (CAHs), inpatient
psychiatric facilities (IPFs), sole community hospitals (SCHs), and
inpatient rehabilitation facilities (IRFs), which we previously
identified in our guidelines as being hospitals for the purposes of
section 2718(e),\173\ as well as any other type of institution, so long
as such institutions are licensed as a hospital (or otherwise approved)
as meeting hospital licensing standards.
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\173\ Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/Downloads/Additional-Frequently-Asked-Questions-Regarding-Requirements-for-Hospitals-To-Make-Public-a-List-of-Their-Standard-Charges-via-the-internet.pdf.
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Finally, we note that the proposed definition of ``hospital'' would
not include entities such as ambulatory surgical centers (ASCs) or
other non-hospital sites-of-care from which consumers may seek health
care items and services. For example, nonhospital sites may offer
ambulatory surgical services, laboratory or imaging services, or other
services that are similar or identical to the services offered by
hospital outpatient departments. In the interest of increasing
opportunities for health care consumers to compare prices for similar
services and promoting widespread transparency in health care prices,
we encourage non-hospital sites-of-care to make public their lists of
standard charges in alignment with these proposed requirements so that
consumers can make effective pricing comparisons.
We invite public comments on our proposed definition of
``hospital,'' which we are proposing to codify at 45 CFR 180.20.
2. Proposed Special Requirements That Would Apply to Certain Hospitals
In sections XVI.E. and XVI.F of this proposed rule, we propose the
requirements that most institutions meeting our definition of
``hospital'' would have to meet in order to comply with section 2718(e)
of the PHS Act. However, we are proposing that these requirements would
not apply to federally-owned or operated hospitals, including Indian
Health Service (IHS) facilities (including Tribally-owned and operated
facilities), Veterans Affairs (VA) facilities, and Department of
Defense Military Treatment Facilities (MTFs), because, with the
exception of some emergency services, these facilities do not provide
services to the general public and the established payment rates for
services are not subject to negotiation. Instead, each of these
facility types is authorized to provide services only to patients who
meet specific eligibility criteria. For example, individuals must meet
the requirements enumerated at 42 CFR 136.22 through 136.23 to be
eligible to receive services from IHS and Tribal facilities. Similarly,
under 38 CFR 17.43 through 17.46, Veterans Affairs hospitals provide
hospital, domiciliary, and nursing home services to individuals with
prior authorization who are discharged or retiring members of the Armed
Forces and, upon authorization, beneficiaries of the Public Health
Service, Office of Workers' Compensation Programs, and other Federal
agencies (38 CFR 17.43). In addition, federally-owned or operated
hospitals such as IHS and Tribal
[[Page 39576]]
facilities \174\ impose no cost-sharing, or, in the case of VA
hospitals \175\ and Department of Defense MTFs,\176\ little cost-
sharing. With respect to such facilities where there is cost-sharing,
the charges are publicized through the Federal Register, Federal
websites, or direct communication and therefore known to the
populations served by such facilities in advance of receiving health
care services. Only emergency services at federally-owned or operated
facilities are available to non-eligible individuals. Because these
hospitals do not treat the general public, their rates are not subject
to negotiation, and the cost sharing obligations for hospital provided
services are known to their patients in advance, we believe it is
appropriate to establish different requirements that apply to these
hospitals. Specifically, we are proposing to deem federally owned or
operated hospitals that do not treat the general public (except for
emergency services) and whose rates are not subject to negotiation,
meet the requirements of section 2718(e) of the PHS Act when their
charges for hospital provided services are publicized to their patients
in advance (for example, through the Federal Register) (proposed new 45
CFR 180.30(b)).
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\174\ Section 1680r(b) of the Indian Health Care Improvement Act
(25 U.S.C. 1680r).
\175\ VA cost-sharing information available at: https://www.va.gov/HEALTHBENEFITS/cost/copays.asp.
\176\ MTF cost-sharing information available at: https://tricare.mil/Costs/Compare and https://comptroller.defense.gov/Portals/45/documents/rates/fy2019/2019_ia.pdf.
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In addition, as a result of public comments received in response to
the 2018 RFIs suggesting that certain hospitals be exempted from having
to make public their standard charges, we considered whether it was
appropriate to establish different requirements for hospitals located
in a rural areas, critical access hospitals (CAHs), or hospitals that
are not federally owned or operated but that serve special populations
(such as children's hospitals and State psychiatric hospitals).
However, because such hospitals are open to the general public, and
their charges are generally not made available to the public, we
continue to believe there is value in such hospitals making public
their standard charges. For example, hospitals may gain market share
and enjoy increased patient satisfaction as a result of being
transparent with their prices.\177\ Moreover, we believe that the
proposed requirements are not overly burdensome because hospitals
already have these data readily available. Therefore, at this time, we
are not proposing different requirements for hospitals located in rural
areas, CAHs or hospitals that are not federally owned or operated but
that treat special populations. However, we are requesting public
comments on whether exceptions to our proposed requirements might be
warranted for hospitals (for example, hospitals located in rural areas,
CAHs, or hospitals that treat special populations) that are not
federally owned or operated, while also ensuring that charges for the
services provided by such hospitals are available to the public.
Specifically, we recognize that many hospitals are going above and
beyond these proposed requirements, for example, by offering patient-
friendly price transparency tools that calculate individualized out-of-
pocket cost estimates. We seek comment on whether offering such tools
could qualify a hospital to be excepted from some of the proposed
requirements, for example, the consumer-friendly display requirements
discussed in section XVI.F.
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\177\ Hammer, David C. ``Adapting customer service to consumer-
directed health care: by implementing new tools that provide greater
transparency in billing, hospitals can decrease collection costs
while improving consumer satisfaction.'' Healthcare Financial
Management, Sept. 2006, p. 118+. Academic OneFile, Accessed 8 July
2019. https://www.mckesson.com/documents/providers/hfma---adapting-customer-service-to-consumer-directed-health-care/.
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C. Proposed Definition of ``Items and Services'' Provided by Hospitals
Section 2718(e) of the PHS Act requires that hospitals make public
a list of the hospital's standard charges for items and services
provided by the hospital, including for diagnosis related groups
(DRGs). We are proposing that, for purposes of section 2718(e), ``items
and services'' provided by the hospital are all items and services,
including individual items and services and service packages, that
could be provided by a hospital to a patient in connection with an
inpatient admission or an outpatient department visit for which the
hospital has established a standard charge. Examples of these items and
services include, but are not limited to, supplies, procedures, room
and board, use of the facility and other items (generally described as
facility fees), services of employed physicians and non-physician
practitioners (generally reflected as professional charges), and any
other items or services for which a hospital has established a charge.
Our proposed definition includes both individual items and services
as well as ``service packages'' for which a hospital has established a
charge. Every hospital maintains a file system known as the
chargemaster (or Charge Description Master ``CDM''), which contains all
billable procedure codes performed at the hospital, along with
descriptions of those codes and the hospitals' own list prices. The
format and contents of the chargemaster vary from one hospital to the
next, although the source codes are derived from common billing code
systems (such as the AMA's CPT system). Chargemasters can include tens
of thousands of line items, depending on the type of facility, and can
be maintained in spreadsheet or database formats.\178\ For purposes of
section 2718(e) of the PHS Act, we are proposing to define
``chargemaster'' to mean the list of all individual items and services
maintained by a hospital for which the hospital has established a
standard charge (at proposed new 45 CFR 180.20). Each individual item
or service found on the hospital chargemaster has a corresponding
``gross'' charge (discussed in more detail in section XVI.D.2). Each
individual item or service may also have a corresponding negotiated
discount because some hospitals negotiate with third party payers to
establish a flat percent discounted rate off the gross charge for each
individual item and service listed on the chargemaster; for example, a
hospital may negotiate a 50 percent discount off all chargemaster gross
rates with a third party payer.
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\178\ https://www.healthaffairs.org/doi/10.1377/hlthaff.25.1.45.
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In contrast to the chargemaster or so-called ``fee-for-service''
price list, hospitals also routinely negotiate rates with third party
payers for bundles of services or ``service packages'' in lieu of
charging for each and every imaging study, laboratory test, or alcohol
swab found on the chargemaster.\179\ Such service packages may have
charges established on, for example, the basis of a common procedure or
patient characteristic, or may have an established per diem rate that
includes all individual items and services furnished during an
inpatient stay. Some hospitals present ``self-pay package pricing'' for
prompt same-day payment from health care consumers. The hospital's
billing and accounting systems maintain the negotiated charges for
service packages which are commonly identified in the hospital's
billing system by recognized industry standards and codes. For example,
a diagnosis-related group (DRG) system may be used to define a hospital
product based on the characteristics of patients receiving similar sets
of
[[Page 39577]]
[itemized] services.\180\ Medicare and some commercial insurers have
adopted DRG classifications as a method of inpatient hospital payment.
Other codes (for example, payer specific codes, CPT or HCPCS codes) are
used by hospitals and payers to identify service packages based on
procedures.
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\179\ https://www.healthaffairs.org/doi/10.1377/hlthaff.25.1.81.
\180\ https://repository.library.georgetown.edu/handle/10822/556896.
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For purposes of section 2718(e) of the PHS Act, we are proposing to
define a ``service package'' to mean an aggregation of individual items
and services into a single service with a single charge (proposed new
45 CFR 180.20). We believe this is appropriate and consistent with
section 2718(e) of the PHS Act because we believe its inclusion of DRGs
as an item or service in section 2718(e) recognizes that hospital
services can be provided and charged for based on the service's
individual component parts or as a more inclusive packaged service.
While section 2718(e) of the PHS Act specifically includes items and
services grouped into DRGs as an example of the items and services for
which hospitals must list their standard charges, we believe that our
definition of ``items and services'' should include not just all DRGs
(as established under 1886(d)(4) of the Social Security Act) but also
all other service packages provided by the hospital, including, for
example, service packages the hospital provides in an outpatient
setting for which a hospital may have established a standard charge.
Therefore, our proposed definition of ``items and services'' includes
both individual items and services and service packages.
We would also include in our proposed definition of ``items and
services'' provided by the hospital the services furnished by
physicians and non-physician practitioners who are employed by the
hospital. We believe the services the hospital provides through its
employed physicians (and non-physician practitioners) are items and
services provided by the hospital, because such physicians (and non-
physician practitioners) are employed by the hospital specifically so
that the hospital can offer such services to the hospital's patients.
In addition, the hospital establishes and negotiates the charges for
the employed physician and non-physician services. The hospital bills
and retains the payment for the professional services of employed
physician and non-physician practitioners. We therefore believe it is
appropriate for these services to be included in our proposed
definition of hospital items and services provided by the hospital
under Section 2718(e), and for hospitals to make public the charges for
the services of their employed physician and non-physician
practitioners.
We also considered including in our proposed definition of items
and services the services provided by physicians and non-physician
practitioners who are not employed by the hospitals, but who provide
services at a hospital location. For example, a procedure performed in
a hospital setting may involve anesthesiology services provided by a
non-employed physician who has established his or her own charge for
the service he or she is providing at a hospital location. These
physicians and non-physician practitioners may send a bill that is
separate from the hospital bill, or, they may elect to reassign their
billing rights to the hospital that will send a single bill that
includes both hospital charges and professional service charges. Often,
health care consumers are not expecting an additional charge or are
otherwise surprised when they receive bills from entities other than
the hospital, or when charges for non-employed physicians and non-
physician practitioners are higher than expected (for example, when a
non-employed physician is out-of-network and the consumer's third party
payer declines payment for those services for that reason). We believe
that the provision of such additional charge information would be
exceptionally valuable to give consumers a more complete picture of the
total amount they might be charged in connection with an inpatient
admission or an outpatient department visit at a hospital location,
potentially helping to address the widely recognized ``surprise
billing'' issue. However, because physicians and non-physician
practitioners who are not employed by the hospital are practicing
independently, establish their own charges for services, and receive
the payment for their services, we do not believe their charges for
their services fall within the scope of section 2718(e) as they are not
services ``provided by the hospital.''
We welcome comment on these proposals.
D. Proposed Definitions for Types of ``Standard Charges''
1. Overview and Background
Under our current guidelines regarding section 2718(e) of the PHS
Act (as discussed in the FY 2019 IPPS/LTCH PPS proposed rule and final
rule (83 FR 20164 and 41144, respectively)), a hospital may choose the
format it uses to make public a list of its standard charges, so long
as the information represents the hospital's current standard charges
as reflected in its chargemaster.
In response to the 2018 RFIs, several commenters, including
hospitals and patient advocacy organizations, commented that gross
charges as reflected in hospital chargemasters may only apply to a
small subset of consumers; for example, those who are self-pay or who
are being asked to pay the chargemaster rate because the hospital is
not included in the patient's insurance network. Many commenters also
noted that the charges listed in a hospital's chargemaster are
typically not the amounts that hospitals actually charge to consumers
who have health insurance because, for the insured population,
hospitals charge amounts reflect discounts to the chargemaster rates
that the hospital has negotiated with third party payers. Further, with
respect to patients who qualify for financial assistance or who pay in
cash, commenters pointed out that some hospitals will charge lower
amounts than the rates that appear on the chargemaster. Adding to the
complexity, some commenters noted that hospitals often package items
and services and charge a single discounted negotiated amount for the
packaged service. For example, as discussed in XVI.C. of this proposed
rule, instead of itemizing and charging for each individual hospital
item or service found on the chargemaster, a hospital may identify a
primary common condition or procedure and charge a single negotiated or
``cash'' amount for the primary common condition or procedure that
includes all associated items and services that are necessary for
treatment of the common condition or to perform the procedures. We
believe that these comments illustrate a fundamental challenge of
making health care prices transparent in general, and specifically with
respect to the issue of how we should best implement section 2718(e) of
the PHS Act; simply put, hospitals do not offer all consumers a single
``standard charge'' for the items and services they furnish. Rather,
the ``standard charge'' for an item or service (including service
packages) varies depending on the circumstances particular to the
consumer.
Therefore, we sought public comment through the RFIs issued in 2018
\181\ on
[[Page 39578]]
a definition of ``standard charges.'' Specifically, we requested
information on the following:
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\181\ FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20164); CY 2019
Home Health proposed rule (83 FR 32473); CY 2020 ESRD PPS proposed
rule (83 FR 34394); CY 2020 PFS proposed rule (83 FR 36009); and CY
2019 OPPS/ASC proposed rule (83 FR 37211).
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Should ``standard charges'' be defined to mean: Average or
median rates for the items in the chargemaster; average or median rates
for groups of services commonly billed together (such as for an MS-
DRG), as determined by the hospital based on its billing patterns; or
the average discount off the chargemaster amount across all payers,
either for each item on the chargemaster or for groups of services
commonly billed together?
Should ``standard charges'' be defined and reported for
both some measure of the average contracted rate and the chargemaster
[rate]? Or is the best measure of a hospital's standard charges its
chargemaster [rate]?
Commenters responded with a number of suggestions for defining
``standard charges'' including the following:
Chargemaster rates.
Average discount off the chargemaster amount across all
payers (for example, an average negotiated rate).
Actual, estimated, or average out-of-pocket costs to
individuals.
The amount the hospital will accept as payment in full for
items and services (without complications) by non-governmental payers
and individuals (for example, a negotiated rate).
Usual and customary charges as defined by the National
Council of Insurance Legislators (NCIL). Specifically, the NCIL defines
usual and customary as the 80th percentile of physician charges in a
geographic region based on an independent unbiased benchmarking charge
database.
Median or average charges for groups of services routinely
billed together, such as at the DRG or APC level, or other layman-
termed groupings.
Average median payment rate or average out-of-pocket
charges for shoppable services (that is, nonemergent or elective
procedures that patients will most likely use).
Net negotiated charges for health insurance plan networks.
We appreciate the many comments and suggestions on this issue
offered by stakeholders. We believe the variety of suggested
definitions reflects our assessment that hospitals can have different
standard charges for various groups of individuals. In general, for
purposes of 2718(e), we believe a standard charge can be identified as
a charge that is the regular rate established by the hospital for the
items and services provided to a specific group of paying patients.
Therefore, we considered what types of standard charges may reflect
certain common and identifiable groups of paying patients. After
considering the feedback noted above and the various types of standard
charges that may exist, we are proposing to define standard charges to
mean ``gross charges'' and ``payer-specific negotiated charges,'' and
to codify this definition in proposed new 45 CFR 180.20. ``Gross
charges'' and ``payer-specific negotiated charges'' are further defined
in sections XVI.D.2. and XVI.D.3., respectively, of this proposed rule.
We believe the proposal to define standard charges as gross charges and
payer-specific negotiated charges reflects the fact that a hospital's
standard charge for an item or service is not typically a single fixed
amount, but, rather, depends on factors such as who is being charged
for the item or service, and particular circumstances that apply to an
identifiable group of people, including, for example, health care
consumers that are insured members of third party insurance products
and plans that have negotiated a rate on its members' behalf.
We are proposing to define standard charges as ``gross charges''
and ``payer-specific negotiated charges'' based on our research and
prior stakeholder input. Hospitals would be required to make public
these two types of standard charges in the form and manner proposed in
sections XVI.E and F. As explained in section XVI.C. of this proposed
rule, gross charges found in the chargemaster as well as negotiated
charges are both informative and necessary for consumers to understand
their potential out-of-pocket cost obligations, but such information is
not readily available to consumers. We believe these two specific types
of standard charges have the potential to inform two large identifiable
groups of health care consumers who do not currently have ready access
to hospital charge information, specifically those who have limited
power to negotiate charges (for example, self-pay individuals) and
those who rely on third party payers to negotiate charges on their
behalf. We also believe that these two specific types of standard
charges present a limited burden for hospitals to make publicly
available, because these charges are already available, maintained, and
in use in hospital billing systems. Moreover, we believe these two
specific types of standard charges are necessary basic information
needed to begin to ensure that consumers have the ability to shop for
and compare pricing for health care services. We believe these
proposals will help provide information to consumers to help make
health care more affordable and drive down the cost of health care
coverage.
We acknowledge that the proposed definition of hospital ``standard
charges'' is limited to only two of the many possibilities that exist
for defining types of hospital ``standard charges,'' and we discuss
below other potential definitions that we considered, but decided not
to propose at this time. We are seeking public input and comment on the
alternatives and additional types of standard charges that may be
useful to consumers.
2. Proposed Definition of ``Gross Charges'' as a Type of Standard
Charge
As previously noted, in general, for purposes of 2718(e), we
believe a standard charge can be identified as a charge that is the
regular rate established by the hospital for the items and services
provided to a specific group of paying patients. We are proposing that,
for purposes of the first type of ``standard charge,'' a ``gross
charge'' would be defined as the charge for an individual item or
service that is reflected on a hospital's chargemaster, absent any
discounts (at proposed new 45 CFR 180.20). As we explain in section
XVI.C. of this proposed rule, the hospital chargemaster contains a list
of all individual items and services the hospital provides. The gross
charges reflected in the chargemaster often apply to a specific group
of individuals who are self-pay, but do not reflect charges negotiated
by third party payers. We also note that the chargemaster does not
include charges that the hospital may have negotiated for service
packages, such as per diem rates, DRGs or other common payer service
packages, and therefore this type of standard charge would not include
standard charges for service packages.
We are proposing to require hospitals to make public their gross
charges because, in addition to applying to a specific group of
individuals, based on research and stakeholder input, we believe gross
charges are useful to the general public, necessary to promote price
transparency, and necessary to drive down premium and out-of-pocket
costs for consumers of health care. For example, studies suggest that
the gross charge plays an important role in the negotiation of third
party insurance products that are subsequently sold to consumers.\182\
Specifically, as hospital
[[Page 39579]]
executives and others familiar with hospital billing cycles often note,
hospitals routinely use gross charges as a starting point for
negotiating discounted rates with third party payers, and higher gross
charges have been found to be associated with both higher negotiated
rates and, in turn, higher premiums and out-of-pocket costs for insured
individuals.\183\ \184\ As such, gross charges are relevant to all
consumers, including those with insurance coverage. We believe that
requiring transparency of hospital gross charges may drive competition,
which might, in turn, have the effect of not only lowering hospital
charges for the most vulnerable consumers and those with the least
market power to negotiate prices, but also for consumers who have
access to charges negotiated on their behalf by a third party payer.
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\182\ Bai G and Anderson GF. Market Power: Price Variation Among
Commercial Insurers for Hospital Services. Health Affairs. Oct 2018;
37(10): 1615-1622. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.0567.
\183\ Bai G and Anderson GF. Extreme Markup: The Fifty US
Hospitals With The Highest Charge-To-Cost Ratios. Health Affairs.
Jun 2015; 34(6): 922-928. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2014.1414.
\184\ Batty M and Ippolito B. Mystery of The Chargemaster:
Examining The Role Of Hospital List Prices in What Patients Actually
Pay. Health Affairs. April 2017; 36(4): 689-696. Available at:
https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.0986.
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In addition, as a result of stakeholder feedback, we learned that
third party developers of consumer price transparency tools can use
gross charges in conjunction with additional information (such as an
individual's specific insurance and benefit information and quality
data) to develop and make available consumer-friendly out-of-pocket
cost estimates that allow consumers to compare health care service
prices across hospitals and other nonhospital settings of care.
Moreover, as previously noted in section XVI.A.2., research suggests
that making such consumer-friendly information available to the public
has been demonstrated to reduce consumer health care costs. As such, we
believe that public access to hospital gross charges is critical to
inform all patients (both self-pay and insured) of their choices and
drive transparency in prices.
We are proposing to codify the proposed definition of ``gross
charges'' at proposed new 45 CFR 180.20. We are inviting public
comments on our proposal to define a type of ``standard charge'' as a
``gross charge'' and on our proposed definition of ``gross charge.''
3. Proposed Definition of ``Payer-Specific Negotiated Charge'' as a
Type of Standard Charge
As noted in section XVI.D.1, in general, for purposes of 2718(e),
we believe a standard charge can be identified based on the regular
rate established by the hospital for the items and services provided to
a specific group of paying patients. We are proposing that, for
purposes of the second type of ``standard charge,'' a ``payer-specific
negotiated charge'' would be defined as the charge that the hospital
has negotiated with a third party payer for an item or service. We are
further proposing to define ``third party payer'' for purposes of
section 2718(e) of the PHS Act as an entity that is, by statute,
contract, or agreement, legally responsible for payment of a claim for
a health care item or service and to codify this definition at proposed
new 45 CFR 180.20. As the reference to ``third party'' suggests, this
definition excludes an individual who pays for a health care item or
service that he or she receives (such as self-pay patients).
We are proposing to focus on a second type of ``standard charge''
related to negotiated rates because most consumers (over 90 percent
\185\) rely on a third party payer to cover a portion or all of the
cost of health care items and services, including a portion or all of
the cost of items and services provided by hospitals (in accordance
with the terms and conditions of the third party payer's contract
agreement with that consumer). Some third party payers (for example,
Medicare fee-for-service or Medicaid fee-for-service) currently make
public the maximum rate they pay for a hospital item or service.
However, many third party payers do not reveal their negotiated rates,
even to individuals on behalf of whom they pay. Additionally, many
contracts between third party payers and hospitals contain so-called
``gag clauses'' that prohibit hospitals from disclosing the rates they
have negotiated with third party payers.\186\ Because consumers are not
generally part of the negotiations or privy to the resulting negotiated
rates, consumers often find it difficult to learn in advance of
receiving a health care service the rate their third party payers may
pay. Having insight into the charges that have been negotiated on one's
behalf, however, is necessary for insured health care consumers to
determine their potential out-of-pocket obligations prior to receipt of
a health care service. For example, if a health care consumer knows
that he or she will be responsible for 20 percent of the charges for a
hospital service, her or she can compare the charges that the third
party negotiated with hospital A and hospital B and, from that, the
consumer can determine his or her expected out-of-pocket costs at
hospital A versus hospital B.
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\185\ https://www.census.gov/content/dam/Census/library/publications/2018/demo/p60-264.pdf.
\186\ https://pdfs.semanticscholar.org/f604/1a0484c65c593525d0c07e040cf655697f2d.pdf.
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Knowing a negotiated charge is also important because a growing
number of insured health care consumers are finding that some services
are more affordable if the consumer chooses to forego insurance and pay
out-of-pocket. For example, stakeholders and reports indicate that an
increasing number of consumers are discovering that sometimes the
providers' cash discount can mean paying lower out-of-pocket costs than
paying the out-of-pocket costs calculated after taking a third party
payer's higher negotiated rate into account.\187\ \188\ \189\ \190\
However, consumers cannot make such determinations without knowing the
rate their third party payer has negotiated.
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\187\ Beck, M. How to Cut Your Health-Care Bill: Pay Cash. The
Wall Street Journal. February 15, 2016. Available at: https://www.wsj.com/articles/how-to-cut-your-health-care-bill-pay-cash-1455592277.
\188\ Rosato, D. How Paying Your Doctor in Cash Could Save You
Money. Consumer Reports. May 4, 2018. Available at: https://www.consumerreports.org/healthcare-costs/how-paying-your-doctor-in-cash-could-save-you-money/.
\189\ Terhune, C. Many hospitals, doctors offer cash discount
for medical bills. Los Angeles Times. March 27, 2012. Available at:
https://www.latimes.com/business/healthcare/la-fi-medical-prices-20120527-story.html.
\190\ https://khn.org/news/an-arm-and-a-leg-can-you-shop-around-for-a-lower-priced-mri/.
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For the reasons discussed above, we agree with commenters that
gross charges (as a type of standard charge) are largely applicable to
one identifiable group of consumers (for example, self-pay) and are not
enough for another large and identifiable group of consumers (for
example, those with third party insurance) to know their charges for
hospital items. Thus, we are proposing that a type of `standard charge'
is the ``payer-specific negotiated charge'' that would be defined as
all charges that the hospital has negotiated with third party payers
for an item or service. We decided to focus on negotiated rates rather
than all payer rates because charges that are not negotiated (for
example, Medicare fee-for-service or Medicaid fee-for-service rates)
are often already publicly available.
We recognize that the impact resulting from the release of
negotiated rates is largely unknown. While it is
[[Page 39580]]
clear that such data is necessary for consumers to be able to determine
their potential out-of-pocket costs in advance, and we believe the
release of such data will help drive down health care costs (as
discussed above), some stakeholders have expressed concern with the
public display of de-identified negotiated rates which may have the
unintended consequence of increasing health care costs of hospital
services in highly concentrated markets or as a result of
anticompetitive behaviors without additional legislative or regulatory
efforts.\191\
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\191\ https://pdfs.semanticscholar.org/f604/1a0484c65c593525d0c07e040cf655697f2d.pdf.
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Moreover, we recognize that requiring release of all payer-specific
negotiated charges for all hospital items and services (both individual
items and services as well as service packages) would mean releasing a
large amount of data. To get a sense for the number of potential
negotiated rates a hospital may have, we conducted an internal analysis
of plans in the regulated individual and small group insurance markets
under the Patient Protection and Affordable Care Act. Our analysis
indicates that the number of products or lines of service per rating
area ranges from approximately 1 to 200 in the individual market
(averaging nearly 20 products or lines of service in each rating area),
while in the small market group, the number ranges from 1 to 400
(averaging nearly 40 products or lines of service in each rating area).
Most (if not all) hospitals maintain such data electronically because
these data are used routinely for billing, and therefore we believe it
presents little burden for a hospital to electronically pull and
display these data online in a machine-readable format (as discussed in
more detail in section XVI.E). However, we recognize that ensuring
display of such a large amount of data in a consumer-friendly manner
may pose greater challenges that we address in section (XVI.F).
We note that, in displaying the payer-specific negotiated charges,
hospitals would display all negotiated charges, including, for example,
charges negotiated with Medicare Advantage (MA) plans because such
rates are negotiated. Conversely, hospitals would not include payment
rates that are not negotiated, such as rates set by certain health care
programs that are directly government-financed, for example, those set
by CMS for Medicare fee-for-service. We believe, however, that the
display of a non-negotiated rate, for example, display of a Medicare
and Medicaid fee-for-service rate for an item or service, in
conjunction with the gross charge and the payer-specific negotiated
charges for the same item or service could be informative for the
public and that nothing in this proposed rule would preclude hospitals
from displaying them.
We are proposing to codify the definition of ``payer-specific
negotiated charge'' and ``third party payer'' at proposed new 45 CFR
180.20. We invite public comments on our proposal to define a type of
``standard charge'' as a ``payer-specific negotiated charge''. Given
concerns raised by stakeholders related to release of identifiable
negotiated charges, we are seeking public comment on whether and how
the release of such specific charge information could result in
unintended consequences. We also seek comment on whether and how there
may be different methods for making such information available to
individuals who seek to understand what their out-of-pocket cost
obligations may be in advance of receiving a health care service.
4. Request for Comment on Alternative Definitions for Types of Standard
Charges Under Consideration
Although we propose above that two types of charges would be
standard charges for purposes of section 2718(e), we are seeking public
comments on whether we should instead, or additionally, require the
disclosure of other types of charges discussed below as standard
charges. We considered alternatives for types of standard charges
related to groups of individuals with third party payer coverage and
also for types of standard charges that could be useful to groups of
individuals who are self-pay.
a. Alternative Types of ``Standard Charges'' Related to Groups of
Individuals With Third Party Payer Coverage
Access to the rate one's third party payer has negotiated on one's
behalf can be a challenge. As discussed earlier, we believe that
disclosure of negotiated charges will help many consumers with health
care coverage know the charge hospitals have negotiated with their
third party payers for items and services. However, we understand that
the ``payer-specific negotiated charge'' represents a type of standard
charge for some, but not all, groups of individuals with health care
coverage; for example, individuals who have third party payer coverage
for charges that are not negotiated. Additionally, we recognize
concerns that may exist related to the unintended consequence of
increased healthcare costs in some geographic regions as a result of
disclosure of all negotiated charges. For this reason, we considered
several additional or alternative types of ``standard charges'' that
hospitals could be required to make public that would provide estimated
or additional information for individuals with health care coverage.
Specifically, we considered the following types of ``standard
charges'':
Volume driven negotiated charge. As a variant of the
definition of the ``payer-specific negotiated charge,'' we considered
defining a type of ``standard charge'' based on the volume of patients
to whom the hospital applies the standard charge. Specifically, we
considered defining a type of ``standard charge'' as the ``modal
negotiated charge.'' The mode of a distribution represents the number
that occurs most frequently in a set of numbers. Here, we considered
defining ``modal negotiated charge'' as the most frequently charged
rate across all rates the hospital has negotiated with third party
payers for an item or service. We believe that this definition could
provide a useful and reasonable proxy for payer-specific negotiated
charges and decrease burden for the amount of data the hospital would
have to make public and display in a consumer-friendly format. While we
are not proposing this definition at this time, we are seeking public
comment on whether the modal negotiated charge would be as informative
to consumers with insurance and whether it should be required as an
alternative or in addition to the payer-specific negotiated charges.
Minimum, median and maximum negotiated charge. We also
considered defining a type of ``standard charge'' as the minimum,
median, and maximum negotiated charge. Under this definition, the
hospital would be required to make public the lowest, median, and
highest charges of the distribution of all negotiated charges across
all third party payer plans and products. This information could
provide health care consumers with an estimate of what a hospital may
charge, because it conveys the range of charges negotiated by all third
party payers. Such a definition may also limit the amount of data a
hospital would have to make public and package in a consumer-friendly
manner which may reduce some burden. It may also relieve some concerns
by stakeholders related to the potential for increased healthcare costs
in some markets as a result of the disclosure of third party payer
negotiated charges.
All Allowed Charges. We also considered defining a type of
``standard charge'' as the charges for all items and
[[Page 39581]]
services for all third party payer plans and products, including
charges that are non-negotiated (such as FFS Medicare rates), which we
would call ``all allowed charges.'' This option would require hospitals
to provide the broadest set of charge information for all individuals
with health insurance coverage because it would have the advantage of
including all identified third party payer charges (including third
party payer rates that are not negotiated). Additionally, every
consumer would have access to charge information specific to their
insurance plan. We considered, but are not proposing, this alternative
because we believe consumers with non-negotiated health care coverage
already have adequate and centralized access to non-negotiated charges
for hospital items and services and are largely protected from out-of-
pocket costs which may make them less sensitive to price shopping.
However, we seek public comment on whether increasing the data hospital
would be required to make public would pose a burden, particularly for
smaller or rural hospitals that may not keep such data electronically
available.
b. Alternative Types of ``Standard Charges'' Considered for Groups of
Individuals That Are Self-Pay
As discussed earlier, hospital gross charge information may be most
directly relevant to a large group of self-pay consumers who do not
have third party payer insurance coverage or who seek care out-of-
network. Such consumers would not need information in additional to
hospital gross charges in order to determine their potential out-of-
pocket cost obligations. However, stakeholders have indicated that
hospitals often offer discounts off the gross charge or make other
concessions to individuals who are self-pay. Thus, we considered
additional definitions of hospital standard charges that may be
relevant to certain subgroups of individuals who are self-pay.
Discounted Cash Price. We considered defining a type of
``standard charge'' as the ``discounted cash price,'' defined as the
price the hospital would charge individuals who pay cash (or cash
equivalent) for an individual item or service or service package. We
considered this alternative definition because there are many consumers
who pay in cash (or cash equivalent) for hospital items and services.
The first subgroup of self-pay consumers that could benefit from
knowing the discount cash price would be those who are uninsured. The
number of uninsured individuals in the United States rose to 27.4
million in 2017.\192\ These individuals' need for transparency in
hospital charges differs from patients with insurance who generally are
otherwise shielded from the full cost of hospitalization and hospital
items and services. Uninsured individuals do not have the advantage of
having access to a discounted group rate that has been negotiated by a
third party payer. Therefore, individuals without insurance may face
higher out-of-pocket costs for health care services.
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\192\ Kaiser Family Foundation. Available at: https://www.kff.org/uninsured/press-release/the-number-of-uninsured-people-rose-in-2017-reversing-some-of-the-coverage-gains-under-the-affordable-care-act/.
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The second subgroup of self-pay consumers who may benefit from
knowing the discounted cash price are those who may have some health
care coverage but who still bear the full cost of at least certain
health care services. For example, these may be individuals who: Have
insurance but who go out of network; have exceeded their insurance
coverage limits; have high deductible plans but have not yet met their
deductible; prefer to pay through a health savings account (HSA) or
similar vehicle; or seek noncovered and/or elective items or services.
Many hospitals offer discounts to these groups of individuals,
either as a flat percentage discount off the chargemaster rate or the
insurer's negotiated rate, while some hospitals offer consumers a cash
discount if they pay in full on the day of the service.\193\ Other
hospitals have developed and offer standardized cash prices for service
packages for certain segments of the population who traditionally pay
in cash for health care services. Currently, it is difficult for most
consumers to determine in advance of receiving a service what
discount(s) the hospital may offer an individual because cash and
financial need discounts and policies can vary widely among hospitals.
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\193\ Beck, M. How to Cut Your Health-Care Bill: Pay Cash. The
Wall Street Journal. February 15, 2016. Available at: https://www.wsj.com/articles/how-to-cut-your-health-care-bill-pay-cash-1455592277.
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Under this option, we specifically considered an option that would
require hospitals to make public the cash discount that would apply for
shoppable service packages that would include all ancillary services,
similar to our proposals in XVI.F for consumer-friendly display of
payer-specific negotiated charges. In this case, the discounted cash
price would represent the amount a hospital would accept as payment in
full for the shoppable service package from an individual. Such charges
could be lower than the rate the hospital negotiates with third party
payers because it would not require many of the administrative
functions that exist for hospitals to seek payment from third party
payers (for example, prior authorization and billing functions).
However, we recognize, that many hospitals have not determined or
maintain a standard cash discount that would apply uniformly to all
self-pay consumers for each of the items and services provided by the
hospital or for services packages, unlike they do for negotiated
charges. We are seeking comment on this option, specifically, how many
shoppable services for which it would be reasonable to require
hospitals to develop and maintain and make public a discounted cash
price.
Median Cash Price. Similar to rates hospitals negotiate
with third party payers, a hospital may offer a range of cash (or cash
equivalent) discounts to various certain groups of self-pay consumers.
For example, in addition to other cash discount prices mentioned
earlier, many hospitals offer cash discounts on a sliding scale
according to financial need. In such instances, as noted above, it may
be difficult for a hospital to establish and make public a single
standardized cash rate for such groups of consumers. For this reason,
we also considered a definition that would take sliding scale cash
discounts into account by defining a standard charge as the median cash
price. The median cash price would be the midpoint of all cash
discounts offered to consumers, including prices for self-pay patients
and those qualifying for financial assistance. For uninsured patients
who may qualify for financial assistance, the value of making a median
cash price public could raise awareness of their available options,
including the ability to apply for financial assistance. At this time,
we are not proposing to require hospitals to make public their median
cash price because we believe such a rate would be less useful to the
public than a single standard cash price that the hospital would accept
as payment in full as discussed above. However, we continue to consider
it and seek public comments on whether this definition would be useful
and whether it would enhance our policy goals for improving consumer
health care affordability.
E. Proposed Requirements for Public Disclosure of All Hospital Standard
Charges for All Items and Services
1. Overview
Section 2718(e) of the PHS Act requires hospitals to make their
[[Page 39582]]
standard charges public in accordance with guidelines developed by the
Secretary. Therefore, in the following sections we make proposals for
hospitals to make public their standard charges in two ways: (1) A
comprehensive machine-readable file that makes public all standard
charge information for all hospital items and services (XVI.E), and (2)
a consumer-friendly display of common ``shoppable'' services derived
from the machine-readable file (XVI.F). We believe that these two
different methods of making hospital standard charges public is
necessary to ensure such data is available to consumers where and when
it is needed (for example, via integration into price transparency
tools, EHRs, and consumer apps), and also directly available and useful
to consumers that search for hospital-specific charge information
without use of a developed price transparency tool.
In this section, we make proposals for requirements for hospitals
to make public online in a machine-readable file the standard charges
(both gross charges and payer-specific negotiated charges) for all
items and services (both individual items and services as well as
service packages) provided by the hospital. For display of these
standard charge data, we are proposing requirements for the file
format, the content of the data in the file, and how to ensure the
public can easily access and find the file. We believe these data could
be of most use to health care consumers indirectly; that is, such data
could be used by the public in price transparency tools or integrated
into EHRs for purposes of clinical decision-making and referrals.
In section XVI.F. of this proposed rule, we propose requirements
for hospitals to make public a limited amount of standard charge data
for a limited set of the items and services the hospital provides
online in a form and manner that is more user-friendly. Specifically,
we are proposing to require hospitals to make public their payer-
specific negotiated rates for certain ``shoppable'' services online in
a consumer-friendly format. To do so, we are proposing that the
hospital would disply their payer-specific negotiated charges for the
primary shoppable service side-by-side with payer-specific negotiated
charges for all ancillary items and services the hospital customarily
as part of or in conjunction with the primary service. We make
additional proposals related to consumer-friendly form, content, and
manner of public display of these data. We believe these proposed
requirements are responsive to stakeholder feedback and will assist
health care consumers by making hospital standard charge information
more directly useful and understandable to the public without the use
of a developed price transparency tool.
2. Proposed Standardized Data Elements
As discussed in more detail in section XVI.E.3. of this proposed
rule, we are proposing that hospitals disclose their list of standard
charges for all items and services online in a single digital file that
is machine-readable. Without specifying a minimum reporting standard
for the machine-readable file, the standard charges data made publicly
available by each hospital could vary, making it difficult for
consumers to compare items and services. For example, some hospitals
currently post a single column of gross charges without any
associations to CPT or HCPCS codes or other identifying descriptions of
the items and services to which the gross charge applies. A similar
example would be a hospital that displays a list of gross charges that
is correlated with a list of item numbers that are meaningful to the
hospital billing personnel, but a not understandable to the general
public. By contrast, some hospitals list their gross charges along with
a brief description of the item or service to which each gross charge
applies and the corresponding standardized identifying codes (typically
HCPCS or CPT codes).
We are concerned that the lack of uniformity leaves the public
unable to meaningfully use, understand, and compare standard charge
information across hospitals. Therefore, for the first way we are
proposing hospital make public their standard charges, which would
contain gross charges and payer-specific negotiated charges for all
hospital items and services, we are making a proposal to ensure
uniformity of the data made publicly available by each hospital. To
inform this proposal, we considered what data elements are typically
included in a hospital's billing system and which of those elements
would result in hospital standard charge data being most transparent,
identifiable, meaningful, and comparable.
Based on a review of current State requirements and a sampling of
hospitals that are currently making public their charges, we are
proposing that hospitals make public a list of each item or service the
hospital provides and that the list include the following corresponding
information, as applicable, for each item or service:
Description of each item or service (including both
individual items and services and service packages).
The corresponding gross charge that applies to each
individual item or service when provided in, as applicable, the
hospital inpatient setting and outpatient department setting.
The corresponding payer-specific negotiated charge that
applies to each item or service (including charges for both individual
items and services as well as service packages) when provided in, as
applicable, the hospital inpatient setting and outpatient department
setting. Each list of payer-specific charges must be clearly associated
with the name of the third party payer.
Any code used by the hospital for purposes of accounting
or billing for the item or service, including, but not limited to, the
Current Procedural Terminology (CPT) code, Healthcare Common Procedure
Coding System (HCPCS) code, Diagnosis-Related Group (DRG), National
Drug Code (NDC), or other common payer identifier.
Revenue code, as applicable.
We are proposing to codify these requirements at proposed new 45
CFR 180.50(b). We believe that these elements are necessary to ensure
that the public can compare standard charges for similar or the same
items and services provided by different hospitals.
We are proposing that hospitals associate each standard charge with
a CPT or HCPCS code, DRG, NDC, or other common payer identifier, as
applicable, because hospitals uniformly understand them and commonly
use them for billing items and services (including both individual
items and services and service packages). We also are proposing that
hospitals include item descriptions for each item or service. In the
case of items and services that are associated with common billing
codes (such as the HCPCS codes), the hospital could use the code's
associated short text description.
In addition, based on stakeholder feedback suggesting hospital
charge information should include revenue codes to be comparable, we
are proposing to require that the hospital include a revenue code where
applicable and appropriate. Hospitals use revenue codes to associate
items and services to various hospital departments. When a hospital
charges differently for the same item or service in a different
department, we are proposing that the hospital associate the charge
with the department represented by the revenue code, providing the
public some additional detail about the charges they may expect for
hospital services provided in different hospital departments.
[[Page 39583]]
In developing this proposal, we also considered whether the
following data elements, which are commonly included in hospital
billing systems, might be useful to the public:
Numeric designation for hospital department.
General ledger number for accounting purposes.
Long text description.
Other identifying elements.
However, we determined that, for various reasons, these data
elements may not be as useful as the data elements that we are
proposing to require hospitals to make public. For example, data
elements such as general ledger numbers are generally relevant to the
hospital for accounting purposes but may not add value for the public,
while data elements such as alternative code sets (such as ICD-10
codes) or long text descriptions associated with CPT codes, while
useful, might be difficult to associate with a single item or service
or be otherwise difficult to display in a file that is intended mainly
for further computer processing. Because of this, while long text
descriptions might benefit health care consumers and be appropriate for
the consumer-friendly display of shoppable services (discussed in
XVI.F), we believe it may add unnecessary burden for hospitals when
such descriptions are not readily electronically available, or when the
display of such data is not easily formatted into a machine-readable
file. Therefore, we are not proposing to require these additional
elements for the machine-readable data file that contains a list of all
standard charges for all hospital items and services. We invite public
comments on the proposed data elements for standard charge data that
hospitals would be required to make public. We also seek public
comments on the other data elements that, as we detail above, we
considered but are not proposing to require, and on any other standard
charge data elements that CMS should consider requiring hospitals to
make public.
3. Proposed File Format Requirements
To make public their list of all gross charges and all payer-
specific negotiated charges for all hospital items and services, we are
proposing to require that hospitals post the charge information in a
single digital file that is in a machine-readable format. We are
proposing to define a machine-readable format as a digital
representation of data or information in a file that can be imported or
read into a computer system for further processing. Examples of
machine-readable formats include, but are not limited to, .XML, JSON
and .CSV formats. A PDF would not meet this definition because the data
contained within the PDF file cannot be easily extracted without
further processing or formatting. We are proposing to codify these
format requirements at proposed new 45 CFR 180.50(c) and the definition
of machine-readable at proposed new 45 CFR 180.20. We believe that
making public such data in a machine-readable format poses little
burden on hospitals because many (if not all) hospitals already keep
these data in electronic format in their accounting systems for
purposes of, for example, ensuring accurate billing. However, we seek
comment on this assumption and the burden associated with transferring
hospital charge data into a machine-readable format.
As an alternative, we considered proposing to require that
hospitals post their list of all standard charges for all items and
services using a single standardized file format, specifically.XML
only, because this format is generally easily downloadable and readable
for many health care consumers, and it could simplify the ability of
price transparency tool developers to access the data. However, we did
not want to be overly prescriptive in our requirements for formatting.
We are seeking public comments on whether we should require that
hospitals use a specific machine-readable format, and if so, which
format(s). Specifically, we are seeking public comment on whether we
should require hospitals to make all standard charge data for all items
and services available as an .XML file only.
In addition, we considered formats that could allow direct public
access to hospital standard charge information. For example, through
the HHS' outreach on innovation,\194\ we have heard ideas from
stakeholders about processes involving standards and technologies that
could allow public access to hospital standard charge data in real
time. Such a process could have a number of benefits for the public and
hospitals. Specifically, such a process could ensure the public has
access to the most up-to-date standard charge information, rather than
waiting for the hospital to update data that is publicly posted in a
static digital file. Such technology may require or involve a type of
portal or standard(s) in which entities have access to certain
nonsensitive data elements or files within the hospital IT system
environment, such as the chargemaster, but that otherwise restricts
access to sensitive, personal identifying information (PII) commercial,
protected health information (PHI), and/or confidential information.
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\194\ https://www.hhs.gov/cto/initiatives/index.html.
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Therefore, we seek public comment from all stakeholders,
particularly hospitals and innovative information technology vendors,
regarding such technologies or standards that could facilitate public
access to real-time updates in a format to make it easier for
information to be available when and where consumers want to use it,
for example, into applications used by health care consumers or into
electronic medical records for point-of-care decision-making and
referral opportunities by clinicians. For example, application
programming interface (API) standards could be used to facilitate
public access to real-time hospital charge information. An API can be
thought of as a set of commands, functions, protocols, or tools
published by one software developer (``A'') that enable other software
developers to create programs (applications or ``apps'') that can
interact with A's software without needing to know the internal
workings of A's software, all while maintaining consumer privacy data
standards. This is how API technology enables the seamless user
experiences associated with applications familiar from other aspects of
many consumers' daily lives, such as travel and personal finance.
Standardized, transparent, and procompetitive API technology can
similarly benefit consumers of health care services. In the case of
``open'' APIs, technical and other information required for a third-
party application to connect is openly published. More information on
API certification criteria and how APIs can be used by patients and
health care providers and other entities to exchange electronic
information can be found on the website at: https://www.healthit.gov/api-education-module/story_content/external_files/hhs_transcript_module.pdf.
We are specifically seeking public comment on adopting a
requirement that hospitals make public their standard charges through
an ``openly published'' (or simply ``open'') API through which they
would disclose the standard charges and associated data elements
discussed in XVI.E.2. of this proposed rule. Being able to access these
data through open APIs would allow the health care consumers to use the
application of their choice to obtain personalized, actionable health
care service price estimates.
An ``open API,'' for purposes of this comment solicitation, would
simply be one for which the technical and other
[[Page 39584]]
information required for a third-party application to connect to it is
openly published. Open API does not imply that any and all applications
or application developers would have unfettered access to sensitive
information. Rather, an open API's published technical and other
information specifically includes what an application developer would
need to know to connect to and obtain the data required to be disclosed
under this proposed rule. For example, hospitals could use the CMS open
source implementation which would facilitate adoption.\195\ We also
seek public comment on the additional burden that may be associated
with a requirement that hospitals make public their standard charges
through an open API.
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\195\ https://developer.cms.gov/.
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4. Proposed Location and Accessibility Requirements
We have reviewed how hospitals are currently implementing our
updated guidelines, which took effect on January 1, 2019, and we are
concerned that some charge information made public by hospitals may be
difficult for the public to locate. For example, information may be
difficult to locate if the public is required to click down several
levels in order to find the information. We also are concerned about
barriers that could inhibit the public's ability to access the
information once located. For example, we are aware that some hospitals
require consumers to set up a username and password, or require
consumers to submit various types of other information, including, but
not limited to, their email address, in order to access the data. We
are concerned that these requirements might deter the public from
accessing hospital charge information.
Accordingly, we are proposing that a hospital would have discretion
to choose the internet location it uses to post its file containing the
list of standard charges so long as the file is displayed on a
publicly-available web page, it is displayed prominently and clearly
identifies the hospital location with which the standard charges
information is associated, and the standard charge data are easily
accessible, without barriers, and the data can be digitally searched.
For purposes of these proposed requirements: (1) ``displayed
prominently'' would mean that the value and purpose of the web page
\196\ and its content \197\ is clearly communicated, there is no
reliance on breadcrumbs \198\ to help with navigation, and the link to
the standard charge file is visually distinguished on the web page;
\199\ (2) ``easily accessible'' would mean that standard charge data
are presented in a single machine-readable file that is searchable and
that the standard charges file posted on a website can be accessed with
the fewest number of clicks; \200\ and (3) ``without barriers'' would
mean the data can be accessed free of charge, users would not have to
input information (such as their name, email address, or other PII) or
register to access or use the standard charge data file. We are
proposing to codify this requirement at proposed new 45 CFR 180.50(d).
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\196\ https://webstandards.hhs.gov/guidelines/49.
\197\ Nielsen, J. (2003, November 10). The ten most violated
homepage design guidelines. Alertbox. Available at: http://www.useit.com/alertbox/20031110.html.
\198\ https://webstandards.hhs.gov/guidelines/78.
\199\ https://webstandards.hhs.gov/guidelines/88.
\200\ https://webstandards.hhs.gov/guidelines/181.
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We encourage hospitals to review the HHS Web Standards and
Usability Guidelines (available at: https://webstandards.hhs.gov/),
which are research-based and are intended to provide best practices
over a broad range of web design and digital communications issues.
We also are requesting public comments on an alternative we
considered, which would require hospitals to submit a link to the
standard charges file to a CMS-specified central website, or submit a
link to the standard charge file to CMS that would be made public on a
CMS web page. Such a method could allow the public to access standard
charge information for their purposes in one centralized location. We
believe this could reduce potential confusion about where to find
standard charge information and potentially allow standard charge
information to be posted alongside CMS hospital quality information. It
could also assist in the assessment of hospital compliance with section
2718(e) of the PHS Act. In spite of these possible benefits, we are not
now proposing to require hospitals to submit or upload a link to their
standard charge information to a CMS-specified centralized website
because we believe such an effort could be unnecessarily duplicative of
ongoing State and private sector efforts to centralize hospital pricing
information and potentially confuse consumers who may reasonably look
to a hospital website directly for charge information. However, because
we appreciate the advantages of having all data available through a
single site, we are considering this alternative and seek public
comments. We seek comment on this alternative option, specifically,
whether the burden outweighs the advantages.
Finally, we seek public comments on potential additional
requirements, including easily-searchable file naming conventions and
whether we should specify the website location for posting rather than
our current proposal that would permit hospitals some flexibility in
choosing an appropriate website. Current instances of machine-readable
charge files posted on hospital websites contain variable file types,
file names, and locations on each website. Standardizing file name or
website location information could provide consumers with a standard
pathway to find the information and would provide uniformity, making it
easier for potential software to review information on each website.
Specific requirements for file naming conventions and locations for
posting on websites could also facilitate the monitoring and
enforcement of the requirement. Therefore, we are seeking public
comments on whether we should propose to adopt these additional
requirements or other requirements related to these issues.
5. Proposed Frequency of Updates
The statute requires hospitals to establish, update, and make
public their standard charges for each year. Therefore, we are
proposing to require hospitals to make public and update their file
containing the list of all standard charges for all items and services
at least once annually (proposed new 45 CFR 180.50(e)). We recognize
that hospital charges may change more frequently and therefore we
encourage (but are not requiring) hospitals to update this file more
often, as appropriate, so that the public may have access to the most
up-to-date charge information. We also recognize that hospitals update
their charges at different times during the year and may also have
various State price transparency reporting requirements that require
updates. For purposes of these requirements, we believe that updates
that occur at least once in a 12-month period will satisfy our proposed
requirement to update at least once annually and reduce reporting
burden for hospitals. In other words, the hospital could make public
and update its list of standard charges at any point in time during the
year, so long as the update to the charge data occurs no more than 12
months after posting.
We also are proposing to require hospitals to clearly indicate the
date of the last update they have made to the standard charge data,
with some
[[Page 39585]]
discretion as to where the date of late update is indicated. For
example, if a hospital chooses to make public its list of standard
charges in .XML format, the first row of the spreadsheet could indicate
the date the file was last updated. The hospital could also indicate
the date the file was last updated in text associated with the file on
the web page on which it is posted, or could indicate the date in some
other way, as long as that date is clearly indicated and associated
with the file or location containing the standard charge information.
6. Proposed Requirements for Making Public Separate Files for Different
Hospital Locations
We recognize that some hospitals may have different locations
operating under a consolidated or single State license, and that
different hospital locations may offer different services that have
different associated standard charges. To address this circumstance, we
are proposing at proposed new 45 CFR 180.50(a)(2) that the proposed
requirements for making public the file containing all standard charges
for all items and services in this section of this proposed rule would
separately apply to each hospital location such that each hospital
location would be required to make public a separate identifiable list
of standard charges.
F. Proposed Requirements for Consumer-Friendly Display of the Payer-
Specific Negotiated Charges for Selected Shoppable Services
1. Background and Overview
We believe that our proposal in section XVI.E. of this proposed
rule requiring hospitals to post on the internet a machine-readable
file containing a list of all standard charges (both gross charges and
payer-specific negotiated charges) for all items and services (both
individual items and services and service packages) is a good first
step for driving transparency in health care pricing. As noted earlier,
we also believe our proposed policy for making these data available in
a machine-readable format will help make these data accessible to
health care consumers when and where it is needed to make decisions,
for example, via integration in price transparency tools or into
electronic health record systems. However, as noted by many
stakeholders in the 2018 RFIs and listening sessions, such long lists
of charges in a file posted online in a machine-readable format may not
be immediately or directly useful for many health care consumers,
because the amount of data could be overwhelming or not easily
understood by consumers. Because of this, we considered ways of
requiring or encouraging hospitals to make public standard charges for
frequently provided services in a form and manner that is more directly
accessible and consumer friendly. In addition to including all their
payer-specific negotiated charges for all items and services in the
machine-readable file (as described in section XVI.E. of this proposed
rule), in the following sections we propose that hospitals must make
public their payer-specific negotiated charges for common services for
which consumers may have the opportunity to shop.
First, we propose requirements for hospitals to display a list of
payer-specific negotiated charges for a set of `shoppable' services. We
believe doing so will enable consumers to make comparisons across
hospital sites of care. Second, we make proposals intended to ensure
the charge information for `shoppable' services are presented in a way
that is consumer-friendly. To be consumer-friendly, we believe that the
information should be displayed in a way that is understandable to
patient (for example, by including plain-language descriptions of the
services), that the shoppable service charge is displayed along with
charges for ancillary services the hospital customarily provides with
the primary shoppable service, and that the consumer can easily search
for and find charges for the shoppable services based on the service
description, by the code associated with the shoppable service, or by
payer.
We believe the proposals related to consumer-friendly display of
hospital charge information align with and enhance many ongoing State
and hospital efforts. We seek comment from hospitals regarding the
extent to which our proposals are duplicative of such ongoing efforts,
and how best to ensure consistency of consumer-friendly data display
across hospital settings. We further seek comment from consumers
regarding their potential engagement with a list of `shoppable'
hospital items and services, including whether our proposals provide
for a useful amount of data and data elements that allow for actionable
comparisons of `shoppable' hospital provided items and services.
2. Proposed Definition of ``Shoppable Service''
For purposes of this requirement, a ``shoppable service'' would be
defined as a service package that can be scheduled by a health care
consumer in advance. Shoppable services are typically those that are
routinely provided in non-urgent situations that do not require
immediate action or attention to the patient, thus allowing patients to
price shop and schedule a service at a time that is convenient for
them. We are proposing this definition because it is consistent with
definitions proposed by policy experts or used by researchers who
identify a service as `shoppable' if a patient is able to determine
where and when they will receive services and can compare charges for
multiple providers.\201\ Since hospitals may not have insight into
whether a particular service is available across multiple providers or
where a consumer will ultimately determine where they want to receive a
particular services, we have focused our proposed definition on the
first aspect, that is, whether or not a service offered by the hospital
could be scheduled by the consumer in advance.
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\201\ White, Chapin and Eguchi, Megan. Reference Pricing: A
Small Piece of the Health Care Price and Quality Puzzle. National
Institute for Health Care Reform Research Brief Number 18 (2014).
https://nihcr.org/wp-content/uploads/2016/07/Research_Brief_No._18.pdf.
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Additionally, we are proposing that the charges for such services
be displayed as a grouping of related services, meaning that the charge
for the shoppable service is displayed along with charges for ancillary
items and services the hospital customarily provides as part of or in
addition to the primary shoppable service. We are proposing that
hospital make public the payer-specific negotiated charge for a
shoppable service that is grouped together with charges for associated
ancillary services because we believe charge information displayed in
such a way is consumer-friendly and patient-focused. In other words, we
believe that consumers want to see and shop for healthcare services in
the way they experience the service. We are proposing to define an
``ancillary service'' as an item or service a hospital customarily
provides as part of or in conjunction with a shoppable primary service
(proposed new 45 CFR 180.20). Ancillary items and services may include
laboratory, radiology, drugs, delivery room (including maternity labor
room), operating room (including post-anesthesia and postoperative
recovery rooms), therapy services (physical, speech, occupational),
hospital fees, room and board charges, and charges for employed
professional services. Ancillary services may also include other
special items and services for which charges are customarily made in
addition to a routine service charge. For example, an outpatient
procedure
[[Page 39586]]
may include many services that are provided by the hospital, for
example, local and/or global anesthesia, services of employed
professionals, supplies, facility and/or ancillary facility fees,
imaging services, lab services and pre- and post-op follow up. To the
extent that a hospital customarily provides (and bills for) such
services as a part of or in conjunction with the primary service, the
hospital should group the service charge along with the other payer-
specific negotiated charges that are displayed for the shoppable
service. We believe such a practice is consumer-friendly by presenting
charge information in a way that reflects how the patient experiences
the service.
Examples of shoppable services may include certain imaging and
laboratory services, medical and surgical procedures, and outpatient
clinic visits. The emphasis on shoppable services aligns with various
State price transparency efforts and is consistent with stakeholder
feedback. We also believe that this emphasis is consistent with
research demonstrating that improving price transparency for shoppable
services can have an impact on driving down the cost of health care (we
refer readers to section XVI.A.2. of this proposed rule). We are
proposing to add this definition to our regulations at proposed new 45
CFR 180.20.
3. Proposed Selected Shoppable Services
We are proposing to require hospitals to make public a list of
their payer-specific negotiated charges for as many of the 70 shoppable
services that we identify in Table 37 below that are provided by the
hospital, and as many additional shoppable services selected by the
hospital as is necessary for a combined total of at least 300 shoppable
services (new Sec. 180.60(a)).
In a study of 2011 claims by autoworkers, researchers identified a
set of 350 frequently billed healthcare services that consumers could
schedule in advance and for which there was variation in charges across
providers.\202\ Hospitals that are early adopters of price transparency
have suggested that it is possible to initially identify and display
good-faith individualized price estimates for at least 350 shoppable
health care services identified by primary billing codes (including
prices for ancillary services) with more sophisticated price
transparency tool developers creating and being able to display
individualized pricing estimates for at least 1000 shoppable services.
In contrast, most States that require hospital posting of shoppable
services range in requiring 25-50 shoppable services, with California
being the only State that requires the corresponding charge information
to include ancillary services. Since these proposed regulations will
apply to all hospitals operating in the United States, some of which
may not have any experience in displaying charges for shoppable
services, we believe it is reasonable to propose a starting point of at
least 300 shoppable services for which hospitals would be required to
display payer-specific negotiated charges. We anticipate we would
increase this number over time as hospitals become accustomed to
displaying charge information to consumers as a grouping of related
charges and as such data is more routinely used by consumers.
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\202\ https://nihcr.org/wp-content/uploads/2016/07/Research_Brief_No._18.pdf.
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Moreover, we believe it is reasonable to require a portion of the
300 shoppable services to be CMS-selected in order to ensure
standardization that would provide consumers with the ability to
compare prices across hospital settings. We further believe it would be
prudent to permit hospitals to select a portion of the shoppable
services themselves, recognizing that some hospitals may specialize in
certain services (for example, specialized procedures) or may serve
populations that utilize other shoppable services with more frequency
or are more relevant than the ones we have identified for purposes of
the CMS-selected services.
The proposed 70 CMS-specified shoppable services are identified by
a primary HCPCS, CPT, or DRG code and are in Table 37.
BILLING CODE 4120-01-P
[[Page 39587]]
[GRAPHIC] [TIFF OMITTED] TP09AU19.057
[[Page 39588]]
[GRAPHIC] [TIFF OMITTED] TP09AU19.058
[[Page 39589]]
[GRAPHIC] [TIFF OMITTED] TP09AU19.059
BILLING CODE 4120-01-C
These 70 shoppable services were selected based on an analysis of
shoppable services that are currently made public under State price
transparency requirements, a review of services that frequently appear
in web-based price transparency tools, an analysis of high volume
services and high cost procedures derived from External Data Gathering
Environment (EDGE) server data \203\), and a review by CMS medical
officers. In other words, we used a combination of quantitative
analysis of the EDGE server claims data, a qualitative review of
commonly selected services for State and hospital price transparency
initiatives and tools, and clinician review to ensure such services
could be scheduled in advance in order to identify our list of 70 CMS-
selected shoppable services.
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\203\ Consistent with 45 CFR 153.700, in States where HHS is
operating the risk adjustment program, issuers must submit
enrollment, claims, and encounter data for risk adjustment-covered
plans in the individual and small group markets through the External
Data Gathering Environment (EDGE) servers. Issuers upload enrollee,
pharmaceutical claim, medical claim, and supplemental diagnosis
information from their systems to an issuer-owned and controlled
EDGE server.
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In addition to the 70 CMS-selected shoppable services proposed
above, we also are proposing that each hospital would select, at
minimum, 230 additional shoppable services, identified by a primary
HCPCS, CPT, DRG, or other widely used industry code, as applicable, and
make publicly available a list of its payer-specific negotiated charges
for each of those shoppable services, including the payer-specific
negotiated charges for the shoppable service in both the inpatient
setting and the outpatient setting, if different. We further propose
that hospitals select such services based on the utilization or billing
rate of the services in the past year. We believe that enabling
hospitals to select most of the shoppable services for which they make
their payer-specific negotiated charges available will permit them to
tailor their list of shoppable services to their specific patient
populations and area of expertise. For example, a children's hospital
could select additional shoppable services that are predominantly
provided to children.
Although we believe that most hospitals provide the 70 CMS-selected
shoppable services which are very common and frequently billed by
hospitals, it is possible that some hospitals may not offer all of them
(for example, specialty hospitals). Therefore, we are propose that
hospitals make public a list of their payer-specific negotiated charges
for as many of the 70 shoppable services that we identify in Table 36
that are provided by the hospital, plus as many additional shoppable
services as is necessary to reach a total of at least 300 shoppable
services.
An alternative option would be for us to propose a larger set of
shoppable services and allow hospitals to select up to 70 CMS-selected
shoppable services from the larger list for which it would make its
payer-specific negotiated charges publicly available. The hospital
would then select an additional 230 shoppable services for a total of
300 shoppable services. However, we are not proposing this because we
believe most hospitals provide the 70 CMS selected shoppable services
and because we have concerns that more discretion will erode our desire
to ensure consumers can get hospital charge information for a minimum
standardized set of services.
We seek public comments on the 70 CMS-selected shoppable services
we identify in Table 36. We are particularly interested in feedback
regarding the specific services we have identified as shoppable
services and whether other services should be included because they are
more common, more shoppable or both. We also are interested in feedback
on whether we should require more or less than a total of 300 shoppable
services. Specifically, we seek comment from hospitals and consumers on
whether a list of 100 shoppable services (or less) is a reasonable
starting point. We also are seeking public comment on whether we should
identify more specific requirements related to hospital-selected
shoppable services; for example, requiring hospitals to select their
most frequently billed shoppable services (that are not included in the
CMS-specified list).
4. Proposed Required Corresponding Data Elements
We are proposing that the consumer-friendly charge information the
hospital makes available to the public online for the CMS and hospital-
selected shoppable services must include certain corresponding data
elements in order to ensure that consumers understand the hospital's
payer-specific negotiated charge for each shoppable service and can use
that information to make comparisons across hospitals. Specifically, we
are proposing that the consumer-friendly display of payer-specific
negotiated charge information contain the following corresponding
information for each of the 70 CMS-selected and at least 230 hospital-
selected shoppable services:
A plain-language description of each shoppable service.
For example,
[[Page 39590]]
hospitals would not be required but are invited to review and use the
Federal plain language guidelines.\204\
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\204\ found here: https://plainlanguage.gov/guidelines/.
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The payer-specific negotiated charge that applies to each
shoppable service. If the hospital does not provide one or more of the
CMS-selected shoppable services, the hospital may indicate ``N/A'' for
the corresponding charge or otherwise make it clear that the service is
not provided by the hospital. Each payer-specific charge must be
clearly associated with the name of the third party payer.
A list of all the associated ancillary items and services
that the hospital provides with the shoppable service, including the
payer-specific negotiated charge for each ancillary item or service.
The location at which each shoppable service is provided
by the hospital (for example, Smithville Campus or XYZ Clinic),
including whether the payer-specific negotiated charge for the
shoppable service applies at that location to the provision of that
shoppable service in the inpatient setting or the outpatient department
setting or both. If the payer-specific negotiated charge for the
shoppable service varies based upon location or whether the hospital
provides the shoppable service in the inpatient setting versus the
outpatient setting, the hospital would be required to identify each
payer-specific negotiated charge.
Any primary code used by the hospital for purposes of
accounting or billing for the shoppable service, including, but not
limited to, the Current Procedural Terminology (CPT) code, the
Healthcare Common Procedure Coding System (HCPCS) code, the Diagnosis-
Related Group (DRG), or other commonly used service billing code.
As discussed in more detail in section XVI.F, we are proposing that
hospital make public the payer-specific negotiated charge for a
shoppable service in a manner that groups the payer-specific negotiated
charge for the primary shoppable service along with charges for
associated ancillary services because we believe charge information
displayed in such a way is consumer-friendly and patient-focused. In
other words, we believe that consumers want to see and shop for
healthcare services in the way they experience the service. We
recognize that not all hospitals will customarily provide exactly the
same ancillary items or services with a primary shoppable service and
therefore we believe it is important for hospitals to display a list of
which ancillary services are included in conjunction with or as part of
the primary shoppable service.
We are proposing to codify these proposed required data elements at
proposed new 45 CFR 180.60(b). We are seeking public comments on these
data elements and whether there are additional data elements that
should be displayed to the public in a consumer-friendly manner. We
emphasize that nothing in this proposed rule is meant to inhibit or
restrict hospitals from including additional data elements that would
improve the ability of health care consumers to understand the
hospital's charges for shoppable services, for example, a hospital
could choose to display the cash price the hospital would accept as
payment in full for the shoppable service from a consumer.
5. Proposals for Format of Display of Consumer-Friendly Information
We are aware that many hospitals are already making public various
types of standard charges for shoppable services available online in
various formats. For example, some hospitals offer searchable price
transparency tools on their website that offer estimated charges
(averages or individualized out-of-pocket costs) or may display charges
for shoppable services in brochures (both online and offline) that
contain self-pay discounted prices for a service package. Because there
are a variety of consumer-friendly ways to display charges for hospital
services and because we do not want to restrict hospitals from
innovating or from having to duplicate efforts, we are not proposing a
specific format for making such data public online in a consumer-
friendly manner. Specifically, unlike our proposals for the machine-
readable list of standard charges for all items and services (discussed
in section XVI.E), we are not proposing to require that hospitals make
payer-specific charge data public in a single digital file posted
online. Instead, we are proposing that hospitals retain flexibility on
how best to display the payer-specific negotiated charge data and
proposed associated data elements to the public online, so long as the
website is easily accessible to the public. We believe this approach
would permit some flexibility for hospitals to, for example, post one
or more files online with a list of payer-specific charges for the
shoppable services and associated data elements, or, for example, to
integrate such data into existing price estimate tools.
Additionally, we note that we are not proposing, but are
considering, an option that would require hospitals to make these data
available in API format. As explained in more detail in section
XVI.E.3. of this proposed rule, an API enabled format could allow
consumers to access the data by searching for it directly when they do
not have a computer by, for example, putting a CPT code in the URL path
of the hospital to render in one's mobile phone browser the gross or
payer-specific negotiated charge for the service. For example, a
consumer searching for the price of a blood test for cholesterol (CPT
code 80061) at fictional hospital ABC could look it up by inserting the
URL path https://hospitalABC.com/api/80061.
We further recognize not all consumers have access to the internet.
Therefore, we are proposing to require hospitals make the data elements
proposed in section XVI.F.4. of this proposed rule available in a
consumer-friendly manner offline. Specifically, we are proposing that
the hospital must provide a paper copy (for example, a brochure or
booklet) of the information is available to consumers upon request
within 72 hours of the request. We are proposing to codify this
provision at proposed new 45 CFR 180.60(c).
6. Proposed Location and Accessibility Requirements
Additionally, we are proposing that hospitals make the data
elements proposed in section XVI.F.4. of this proposed rule online in
such a way that the payer-specific negotiated charge and associated
data elements can be located and accessed easily by consumers.
First, we propose that a hospital would have discretion to select
an appropriate internet location it uses to post the standard charge
information required under this section (that is, the payer-specific
charges for shoppable services and associated data elements). We
further propose that the website location be publicly available, that
the data be displayed prominently and clearly identifies the hospital
location with which the standard charge information is associated, and
the standard charge data are easily accessible, without barriers, and
the data can be digitally searched. For purposes of these proposed
requirements: (1) ``displayed prominently'' would mean that the value
and purpose of the web page \205\ and its content \206\ is clearly
communicated, there is no reliance on breadcrumbs \207\ to help with
navigation, and the link to the standard charge
[[Page 39591]]
information is visually distinguished on the web page; \208\ (2)
``easily accessible'' would mean that standard charge data are
presented in format that is searchable by service description, billing
code, and payer, and that the standard charge data posted on the
website can be accessed with the fewest number of clicks; \209\ and (3)
``without barriers'' would mean the data can be accessed free of
charge, users would not have to input information (such as their name,
email address, or other PII) or register to access or use the standard
charge data. We are proposing to codify this requirement at proposed
new 45 CFR 180.50(d).
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\205\ https://webstandards.hhs.gov/guidelines/49.
\206\ Nielsen, J. (2003, November 10). The ten most violated
homepage design guidelines. Alertbox. Available at: http://www.useit.com/alertbox/20031110.html.
\207\ https://webstandards.hhs.gov/guidelines/78.
\208\ https://webstandards.hhs.gov/guidelines/88.
\209\ https://webstandards.hhs.gov/guidelines/181.
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We encourage hospitals to review the HHS Web Standards and
Usability Guidelines (available at: https://webstandards.hhs.gov/),
which are research-based and are intended to provide best practices
over a broad range of web design and digital communications issues.
We seek comment on these proposed location and accessibility
requirements and specifically regarding whether there are additional
requirements that should be considered to ensure public access to
payer-specific negotiated charges for shoppable services.
7. Proposed Frequency of Updates
The statute requires hospitals to establish, update, and make
public their standard charges for each year. Therefore, we are
proposing to require hospitals to make public and update the standard
charge information proposed in section XVI.F.2 at least once annually
(proposed new 45 CFR 180.60(e)). We recognize that hospital charges may
change more frequently and therefore we encourage (but are not
requiring) hospitals to update this file more often, as appropriate, so
that the public may have access to the most up-to-date charge
information. We also recognize that hospitals update their charges at
different times during the year and may also have various State price
transparency reporting requirements that require updates. For purposes
of these requirements, we believe that updates that occur at least once
in a 12-month period will satisfy our proposed requirement to update at
least once annually and reduce reporting burden for hospitals. In other
words, the hospital could make public and update its list of standard
charges at any point in time during the year, so long as the update to
the charge data occurs no more than 12 months after posting.
We also are proposing to require hospitals to clearly indicate the
date of the last update they have made to the standard charge data,
with some discretion as to where the date of late update is indicated.
G. Proposed Monitoring and Enforcement of Requirements for Making
Standard Charges Public
1. Background
Section 2718(b)(3) of the PHS Act requires the Secretary to
promulgate regulations to enforce the provisions of section 2718 of the
PHS Act, and in so doing, the Secretary may provide for appropriate
penalties. As such, we are proposing that we may impose penalties on
hospitals that fail to make their standard charges public in accordance
with the requirements we finalize under section 2718(e) of the PHS Act.
In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20549), we sought
public comments on a variety of issues related to enforcement of the
requirement that hospitals make public their standard charges and noted
our intent to address enforcement and other actions to ensure
compliance in future rulemaking.
We specifically sought comments on the following:
What is the most appropriate mechanism for CMS to enforce
price transparency requirements?
Should CMS require hospitals to attest to meeting
requirements in the provider agreement or elsewhere?
How should CMS assess hospital compliance?
Should CMS publicize complaints regarding access to price
information or review hospital compliance and post results? What is the
most effective way for CMS to publicize information regarding hospitals
that fail to comply?
Should CMS impose civil monetary penalties (CMPs) on
hospitals that fail to make standard charges publicly available as
required by section 2718(e) of the PHS Act?
Should CMS use a framework similar to the Federal civil
penalties under 45 CFR 158.601 through 158.615, that apply to issuers
that fail to report information and pay rebates related to medical loss
ratios, as required by sections 2718(a) and (b) of the PHS Act, or
would a different framework be more appropriate?
We received a number of comments in response to this RFI. Many
commenters agreed that enforcing this requirement under section 2718(e)
of the PHS Act would send an important signal that CMS values
transparency and ensure that the public has access to hospital charge
information. Some commenters suggested that CMS model enforcement after
various quality reporting programs, such as the Hospital Inpatient and
Outpatient Quality Reporting Programs or the LTCH Quality Reporting
Program. Some commenters recommended publicizing noncompliant hospitals
or providing a mechanism for the public to file complaints against
noncompliant hospitals. Some commenters suggested that CMS propose to
make the publication of standard charges a Medicare condition of
participation or provider enrollment. However, one commenter indicated
that revoking a provider agreement over lack of a website disclosure
would be unnecessarily punitive. Other commenters warned that
subjecting hospitals violating pricing transparency provisions to
compliance actions could pose a challenge, particularly for smaller
hospitals, and recommended limiting or deferring compliance actions to
a later date. Some commenters agreed that imposing monetary penalties
on noncompliant hospitals was appropriate, while other commenters
believed that CMS does not have authority to enforce section 2718(e) of
the PHS Act and, for that reason, should not adopt penalties for
noncompliance.
We agree with commenters who noted that an enforcement regime
signals the value we place on price transparency and assurance of
public access to hospital standard charges. We interpret section
2718(b)(3) of the PHS Act as authorizing us to enforce the provisions
of section 2718(e). Therefore, in this proposed rule, we are proposing
to adopt mechanisms to monitor and enforce our requirements for making
standard charges public.
2. Proposed Monitoring Methods
Section 2718(e) of the PHS Act requires hospitals to make public
their list of standard charges and authorizes the Secretary to
promulgate additional criteria that hospitals must satisfy in order to
make such charges public. The statute does not prescribe monitoring
procedures or the factors we should consider in imposing penalties on
hospitals for noncompliance. Based on our experience with the Medicare
program and health care marketplace plans, we believe it is important
for the public to be informed, and, therefore, for CMS to ensure
compliance with this statutory requirement. Therefore, we are proposing
to employ methods to monitor and assess hospital compliance with
section 2718(e) of the PHS Act, and specifically proposed new 45 CFR
180.40, 180.50, and 180.60.
In general, we are proposing that CMS may use methods to monitor
hospital
[[Page 39592]]
compliance with the requirements under proposed 45 CFR part 180. We
anticipate relying predominantly on complaints made to CMS by
individuals or entities regarding a hospital's potential noncompliance.
Therefore, we are proposing that our monitoring methods may include,
but are not limited to, the following, as appropriate:
CMS' evaluation of complaints made by individuals or
entities to CMS.
CMS review of individuals' or entities' analysis of
noncompliance.
As we gain experience with monitoring compliance with the
requirements for proposed 45 CFR part 180, based on reports of
potential noncompliance, we may consider self-initiating audits of
hospitals' websites as a monitoring method. Therefore, we are proposing
that our monitoring methods may include CMS audit of hospitals'
websites.
We are proposing to set forth these monitoring methods in the
regulations at proposed new 45 CFR 180.70.
3. Proposed Actions To Address Hospital Noncompliance With Requirements
To Make Public Standard Charges
We are proposing that hospitals that CMS identifies as noncompliant
would be notified of their deficiencies and given an opportunity to
take corrective action to come into compliance. As discussed in section
XVI.G.4. of this proposed rule, for hospitals determined by CMS to be
noncompliant with section 2718(e) of the PHS Act that fail to respond
to CMS' requests to submit a corrective action plan (CAP) or comply
with the requirements of a CAP, we are proposing that we may impose
CMPs on hospitals and publicize these penalties on a CMS website.
Should we conclude, based upon the proposed monitoring activities
previously described, that a hospital is noncompliant with section
2718(e) of the PHS Act and the requirements of proposed 45 CFR part
180, we are proposing that CMS may take any of the following actions,
which generally, but not necessarily, would occur in this order:
We may provide a written warning notice to the hospital of
the specific violation(s).
We would request a CAP from the hospital if its
noncompliance constitutes a material violation of one or more
requirements.
If the hospital fails to respond to CMS' request to submit
a CAP or comply with the requirements of a CAP, CMS may impose a CMP on
the hospital and publicize the penalty on a CMS website as discussed in
section XVI.G.4. of this proposed rule.
Prior to requesting a CAP, or in the case of violations that are
deemed nonmaterial violations warranting a CAP, CMS anticipates
warning, via written notice, a hospital of noncompliance with one or
more of the requirements to make public standard charges (according to
section 2718(e) of the PHS Act and the requirements of proposed 45 CFR
part 180), and of the need for voluntary corrective action. We would
then reevaluate the hospital's compliance with the statutory and
proposed regulatory requirements. Should we determine the hospital
remains noncompliant and that the noncompliance constitutes a material
violation of one or more requirements, we anticipate requiring that the
hospital submit a CAP, and there would be increasing consequences for
failure to remedy noncompliance.
We are proposing that a material violation may include, but is not
limited to, the following:
A hospital's failure to make public its standard charges
required by proposed new 45 CFR 180.40.
A hospital's failure to make public its standard charges
in the form and manner required under to proposed new 45 CFR 180.50 and
180.60.
We are proposing that CMS may request that a hospital submit a CAP,
specified in a notice of violation issued by CMS to a hospital. A
hospital required to submit a CAP must do so, in the form and manner,
and by the deadline, specified in the notice of violation issued by CMS
to the hospital and must comply with the requirements of the CAP.
We are proposing that a hospital's CAP must specify elements
including, but not limited to, the deficiency or deficiencies that
caused noncompliance to occur, the corrective actions or processes the
hospital will take to come into compliance with the requirements of 45
CFR part 180, and the timeframe by which the hospital will complete the
corrective action. We are proposing that a CAP would be subject to CMS
review and approval. We are proposing that after CMS' review and
approval of a hospital's CAP, CMS may monitor and evaluate the
hospital's compliance with the corrective actions.
We are proposing that a hospital's failure to respond to CMS'
request to submit a CAP includes failure to submit a CAP in the form,
manner, or by the deadline, specified in a notice of violation issued
by CMS to the hospital. We are proposing that a hospital's failure to
comply with the requirements of a CAP includes failure to correct
violation(s) within the specified timeframes.
We are proposing to set forth in the regulations at proposed new 45
CFR 180.70 the actions CMS may take to address a hospital's
noncompliance with the requirements to make public standard charges,
and to set forth in proposed new 45 CFR 180.80 the requirements for a
CAP, as discussed in this section of this proposed rule.
4. Proposal To Impose Civil Monetary Penalties
We are proposing that we may impose a CMP on a hospital that we
identify as noncompliant with the requirements of proposed 45 CFR part
180, and that fails to respond to CMS' request to submit a CAP or
comply with the requirements of a CAP as we describe earlier.
We are proposing that we may impose a CMP upon a hospital for a
violation of each requirement of proposed 45 CFR part 180. The maximum
daily dollar amount for a CMP to which a hospital may be subject would
be $300. We are proposing that even if a hospital is in violation of
multiple discrete requirements of proposed 45 CFR part 180, the maximum
total sum that a single hospital may be assessed per day is $300.
Further, we are proposing to adjust the CMP amount annually by
applying the cost-of-living adjustment multiplier determined by OMB for
adjusting applicable CMP amounts pursuant to the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015. This
multiplier, based on the Consumer Price Index for All Urban Consumers
(CPI-U), not seasonally adjusted, is applied to the CMPs in 45 CFR
102.3. For instance, the cost-of-living adjustment multiplier for 2018,
based on the CPI-U for the month of October 2017, not seasonally
adjusted, was 1.02041 (83 FR 51369).
Given the importance of compliance with the price transparency
policies, we believe this proposed CMP amount strikes a balance between
penalties that are sufficiently harsh to incentivize compliance but not
so severe as to be punitive. We reviewed CMP amounts for other CMS
programs that require reporting information and we believe our proposed
$300 maximum daily dollar amount for a CMP is commensurate with the
level of severity of the potential violation, taking into consideration
that nondisclosure of standard charges does not rise to the level of
harm to the public as other violations (such as safety and quality
issues) for which CMS imposes CMPs and, therefore, should remain at a
relatively lower level.
[[Page 39593]]
We considered applying lower and higher maximum dollar amounts for
a CMP for noncompliance with the requirements of proposed 45 CFR part
180. For example, we considered that CMS has imposed $100 per day
penalty amounts with respect to other compliance matters, such as where
health insurers fail to comply with premium revenue reporting and
rebate requirements found at 45 CFR 158.606. The basis for the CMPs
under 45 CFR 158.606 is the number of individuals affected. With
respect to the disclosure requirements under proposed 45 CFR part 180,
where the lack of information could affect an unknown number of
consumers and in myriad ways (for example, not just individuals who
paid more for items and services), we do not believe it is feasible to
utilize a ``per person'' type basis. We also considered proposing
higher maximum daily dollar amounts, such as $400 per day, $500 per day
or more.
Further, we considered establishing a cumulative annual total limit
for the CMP to which a hospital is subject for noncompliance with
proposed 45 CFR part 180. For example, we considered applying a
cumulative annual total limit of $100,000 per hospital for each
calendar year. However, we are concerned that such an approach could,
for example, mitigate the amount of penalty imposed on hospitals that
remain noncompliant for multiple years.
If CMS imposes a penalty in accordance with the requirements of
proposed 45 CFR part 180, we are proposing that CMS provides a written
notice of imposition of a CMP to the hospital via certified mail or
another form of traceable carrier. This notice may include, but would
not be limited to, the following:
The basis for the hospital's noncompliance, including, but
not limited to, the following: CMS' determination as to which
requirement(s) the hospital violated; and the hospital's failure to
respond to CMS' request to submit a CAP or comply with the requirements
of a CAP.
CMS' determination as to the effective date for the
violation(s). This date would be the latest date of the following:
++ The first day the hospital is required to meet the requirements
of proposed 45 CFR part 180.
++ If a hospital previously met the requirements of this part but
did not update the information annually as required, the date 12 months
after the date of the last annual update specified in information
posted by the hospital.
++ A date determined by CMS, such as one resulting from monitoring
activities specified in proposed new 45 CFR 180.70, or development of a
CAP as specified in proposed new 45 CFR 180.80.
The amount of the penalty as of the date of the notice.
A statement that a CMP may continue to be imposed for
continuing violation(s).
Payment instructions.
Intent to publicize the hospital's noncompliance and CMS'
determination to impose a CMP on the hospital for noncompliance with
the requirements of proposed 45 CFR part 180 by posting the notice of
imposition of a CMP on a CMS website.
A statement of the hospital's right to a hearing (as
described in section XVI.H. of this proposed rule).
A statement that the hospital's failure to request a
hearing within 30 calendar days of the issuance of the notice permits
the imposition of the penalty, and any subsequent penalties pursuant to
continuing violations, without right of appeal.
Further, in the event that a hospital elects to appeal the penalty,
and if the CMP is upheld, in part, by a final and binding decision, we
propose that CMS would issue a modified notice of imposition of a CMP.
We are proposing that a hospital must pay a CMP in full within 60
calendar days after the date of the notice of imposition of a CMP from
CMS. In the event a hospital requests a hearing (as described in
section XVI.H. of this proposed rule), we are proposing that the
hospital must pay the amount in full within 60 calendar days after the
date of a final and binding decision to uphold, in whole or in part,
the CMP. We are also proposing that if the 60th calendar day is a
weekend or a Federal holiday, then the timeframe is extended until the
end of the next business day.
We also are proposing to publicize, by posting on a CMS website,
our notice of imposition of a CMP on a hospital for noncompliance with
these requirements, and any subsequently issued notice of imposition of
a CMP for continuing violations. In the event that a hospital requests
a hearing (as described in section XVI.H. of this proposed rule), we
are proposing that CMS would indicate in its posting that the CMP is
under review. If the CMP amount is upheld, in whole, by a final and
binding decision, we would maintain the posting of the notice of
imposition of a CMP on a CMS website. If the CMP is upheld, in part, by
a final and binding decision, we would issue a modified notice of
imposition of a CMP, and would make this modified notice public on a
CMS website. If the CMP is overturned in full by a final and binding
decision, we would remove the notice of imposition of a CMP from a CMS
website.
In addition, we are proposing that CMS may issue subsequent
notice(s) of imposition of a CMP, as described in this section of this
proposed rule, that result from the same instance(s) of noncompliance.
We are proposing to set forth in proposed new 45 CFR 180.90 the
proposed CMPs for hospitals determined by CMS to be noncompliant with
requirements for making standard charges public.
We seek comment on whether the proposed amount of a CMP, in
combination with making public on a CMS website our notice of
imposition of a CMP, are reasonable and sufficient to ensure hospitals'
compliance with the proposed requirements to make public standard
charges. We are interested in public comments on our proposed $300
maximum daily dollar amount for a CMP for noncompliance with section
2718(e) of the PHS Act and proposed 45 CFR part 180. In particular, we
seek comment on whether we should impose stronger penalties for
noncompliance, or whether we should further limit the maximum amount of
penalty we would impose on a hospital for a calendar year and the
methodology for creating such a limit (for instance through limiting
the maximum daily penalty amount, by establishing a cumulative annual
total limit on the penalty amount, or both). We seek comment on
unintended consequences of the proposed penalties for noncompliance. We
also seek commenters' suggestions on whether other penalties should be
applied for noncompliance with section 2718(e) of the PHS Act.
H. Proposed Appeals Process
Under section 2718(b)(3) of the PHS Act, we are proposing to impose
penalties on hospitals that fail to make their standard charges public
in accordance with the requirements we finalize under section 2718(e).
We believe it is important to establish a fair administrative process
by which a hospital may appeal CMS' decisions to impose penalties under
section 2718(b)(3) regarding the hospital's noncompliance with the
requirements of section 2718(e) of the PHS Act and the requirements of
proposed 45 CFR part 180. Through various Medicare programs, we have
gained experience with administrative hearings and other processes to
review CMS' determinations.
We are proposing to align the procedures for the appeals process
with
[[Page 39594]]
the procedures established under section 2718(b)(3) of the PHS Act for
an issuer to appeal a CMP imposed by HHS for its failure to report
information and pay rebates related to medical loss ratios, as required
by sections 2718(a) and (b) of the PHS Act, and according to 45 CFR
parts 158 and 150. Therefore, we are proposing that a hospital upon
which CMS has imposed a penalty under proposed 45 CFR part 180 may
appeal that penalty in accordance with 45 CFR part 150, subpart D,
except as we have proposed otherwise.
Generally, under this proposed approach, a hospital upon which CMS
has imposed a penalty may request a hearing before an Administrative
Law Judge (ALJ) of that penalty. The Administrator of CMS, at his or
her discretion, may review in whole or in part the ALJ's decision. A
hospital against which a final order imposing a CMP is entered may
obtain judicial review.
For purposes of applying the appeals procedures at 45 CFR part 150
to appeals of CMPs under proposed 45 CFR part 180, we are proposing the
following exceptions to the provisions of 45 CFR part 150:
Civil money penalty means a civil monetary penalty
according to proposed new 45 CFR 180.90.
Respondent means a hospital that received a notice of
imposition of a CMP according to proposed new 45 CFR 180.90(b).
References to a notice of assessment or proposed
assessment, or notice of proposed determination of CMPs, are considered
to be references to the notice of imposition of a CMP specified in
proposed new 45 CFR 180.90(b).
Under 45 CFR 150.417(b), in deciding whether the amount of
a civil money penalty is reasonable, the ALJ may only consider evidence
of record relating to the following:
++ The hospital's posting(s) of its standard charges, if available.
++ Material the hospital timely previously submitted to CMS
(including with respect to corrective actions and CAPs).
++ Material CMS used to monitor and assess the hospital's
compliance according to proposed new 45 CFR 180.70(a)(2).
The ALJ's consideration of evidence of acts other than
those at issue in the instant case under 45 CFR 150.445(g) does not
apply.
We are proposing to set forth in proposed new 45 CFR 180.100 the
proposed procedures for a hospital to appeal the CMP imposed by CMS for
its noncompliance with the requirements of proposed 45 CFR part 180.
We also are proposing to set forth in proposed new 45 CFR 180.110
the consequences for failure of a hospital to request a hearing. If a
hospital does not request a hearing within 30 calendar days of the
issuance of the notice of imposition of a CMP described in proposed new
45 CFR 180.90(b), we are proposing that CMS may impose the CMP
indicated in such notice and may impose additional penalties pursuant
to continuing violations according to proposed new 45 CFR 180.90(f)
without right of appeal. We propose that if the 30th calendar day is a
weekend or a Federal holiday, then the timeframe is extended until the
end of the next business day. We also are proposing that the hospital
has no right to appeal a penalty with respect to which it has not
requested a hearing in accordance with 45 CFR 150.405, unless the
hospital can show good cause, as determined at 45 CFR 150.405(b), for
failing to timely exercise its right to a hearing.
Alternatively, we considered and are seeking public comment on
following a process for appealing CMPs similar to the approach
specified in 42 CFR part 498, subparts D through F. There are
differences between the appeals procedures at 42 CFR part 498 compared
to 45 CFR part 150. Under the regulations at 42 CFR part 498, for
example, either party dissatisfied with a hearing decision by the ALJ
may request Departmental Appeals Board review of the ALJ's decision.
XVII. Request for Information (RFI): Quality Measurement Relating to
Price Transparency for Improving Beneficiary Access to Provider and
Supplier Charge Information
A. Introduction
Last year, we published Requests for Information (RFIs) on price
transparency in several Medicare payment rules,\210\ including the CY
2019 OPPS/ASC proposed rule (83 FR 37211 and 37212). In the RFIs, we
sought public comments on a variety of issues related to making
provider and supplier charges for health care services furnished in
hospitals more transparent. In general, we encouraged all providers and
suppliers of health care services to undertake efforts to engage in
consumer-friendly communication of their charges to help patients
understand what their potential financial liability might be for
services they plan to obtain, and to enable patients to compare charges
for similar services. We encouraged providers and suppliers of health
services to update this information at least annually, or more often as
appropriate, to reflect current charges. We expressed concern that
challenges continue to exist for patients due to insufficient price
transparency. We also indicated that we are considering potential
actions that would be appropriate to further our objective of having
providers and suppliers of health care services undertake efforts to
engage in consumer-friendly communication of their charges to help
patients understand what their potential financial liability might be
for services they obtain from them, and to enable patients to compare
charges for similar services across providers and suppliers, including
when services could be offered in more than one setting, such as a
hospital outpatient department or an ambulatory surgical center.
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\210\ FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20164); CY 2019
Home Health proposed rule (83 FR 32473); CY 2020 ESRD PPS proposed
rule (83 FR 34394); CY 2020 PFS proposed rule (83 FR 36009); and CY
2019 OPPS/ASC proposed rule (83 FR 37211).
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In response to the RFIs, stakeholders consistently indicated
support for our efforts to improve transparency in health care pricing.
Stakeholders noted that out-of-pocket costs are the most relevant and
beneficial information for patients and that such pricing information
should be shared with patients along with associated quality of care
and outcome data. Some stakeholders suggested that educational efforts
would help to increase health care pricing literacy. Stakeholders
believed that pricing and quality of care information should be shared
with patients in a user-friendly format and be comparable across
services and providers, which would allow patients to ``shop'' for the
best value of health care. Multiple stakeholders commented that quality
of care and outcome data should be paired with price information to
allow patients to make informed decisions about where they could
receive their care and to help ensure that consumers do not assume that
the high cost of services necessarily equates to higher quality of
care. Respondents to the RFIs suggested that quality information could
be displayed by health care entities (such as hospitals) in conjunction
with the posting of hospital standard charges, integrated
electronically with cost and coverage data in electronic health records
(EHRs) or regional health information exchanges (HIEs) for use in
shared decision making at the point of care, or incorporated into
public facing websites and price transparency tools.
Over the years, CMS has made much progress in improving health care
quality measurement and making such quality information publicly
available
[[Page 39595]]
through various mechanisms, including public use files (PUFs) on the
CMS website. In addition, CMS makes quality of health care information
publicly available on the website at https://data.Medicare.gov for a
number of different health care providers and suppliers, including
hospitals, nursing homes, and physicians. Such data are available for
the public and could be used by providers and suppliers of health care
and pricing tool developers and integrated into EHRs in the manner
identified by respondents to the RFI in the CY 2019 OPPS/ASC proposed
rule. In addition, CMS has adopted Medicare quality measures that
encourage patient engagement, improve patient experience of care, and
create incentives for health care providers and suppliers to help
patients understand their treatment choices and the financial
implications. For example, starting in 2019, Merit-Based Incentive
Payment System eligible clinicians participating in the Quality Payment
Program will have the opportunity to receive points in the Improvement
Activities performance category for helping patients or their
caregivers understand the costs of care and explore different payment
options by providing financial counseling (83 FR 60289).
B. Request for Information
To enhance our future efforts to improve policies related to
transparency in health care charges, we are interested in stakeholder
input on a number of related quality of health care issues, including
the following:
1. Improving availability and access to existing quality of health
care information for third parties and health care entities to use when
developing price transparency tools and when communicating charges for
health care services. Stakeholders are invited to submit specific
suggestions and comments on the following:
What type of existing quality of health care information
would be most beneficial to patients, and how can health care providers
and suppliers best enable patients to use quality of health care
information in conjunction with information on charges in their
decision making before or at the time a service is sought? For example,
would it be feasible to use health care quality information from the
Medicare Quality Payment Program (QPP) or the Quality Measures
Inventory (QMI)? Could quality of health care information from state-
mandated quality reporting initiatives or quality reporting initiatives
by nationally recognized accrediting entities, such as the National
Committee for Quality Assurance, URAC, the Joint Commission, and the
National Quality Forum, be engaged to help patients meaningfully assess
quality information at the time care is sought?
How can CMS help providers, suppliers, and third parties
create patient-friendly interfaces with this information? What steps
should be taken to ensure that quality outcome and experience of care
measure data can be used by providers, suppliers, third party pricing
tool developers, and consumers when and where health care decisions are
being made? Are there potential strategies CMS should consider to
create standardized quality data? We are also interested in comments on
the timing of information delivery relative to the referral or event,
the form of delivery of the information, and the channels (for
instance, verbally by the referring doctor, via a mobile application,
and on a website, among others) through which the information could
best be delivered.
Is there value in displaying volume and complications of
procedures side by side with charge information for patients? If so,
should this information be best displayed at the individual physician
level, the group practice level, or the facility level and why?
Should health care providers and suppliers integrate
quality information when informing patients of how much their out-of-
pocket costs for services will be before patients are furnished
services? How would providers that are not included in certain
hospital-based quality initiatives, such as critical access hospitals,
integrate quality information? What can be done better to inform
patients of quality outcomes and patient experience with various
providers and suppliers?
2. Improving incentives and assessing the ability of health care
providers and suppliers to communicate and share charge information
with patients. Stakeholders are invited to submit specific suggestions
and comments on the following:
Should CMS develop Hospital Consumer Assessment of
Healthcare Providers and Systems (HCAHPS) questions to assess how well
hospitals and other providers and suppliers communicate and discuss the
cost of care with their patients? Example questions could be: ``How
well did your doctor communicate the expected out-of-pocket cost for
your health care services in advance?'' ``Were you surprised by the
amount of out-of-pocket costs you had for a given procedure or hospital
stay?''
Are there existing measures or measure concepts to develop
that can help patients when assessing the accuracy of charges that
providers and suppliers communicate in advance of a service, including
the accuracy of expected out-of-pocket cost information? What indices
should be used to assess how well a provider or supplier aggregates
charge and quality information for public display?
Are there Medicare value-based purchasing initiatives that
could be improved by developing or implementing additional assessments
of how well Medicare providers and suppliers engage and respond to
patient inquiries related to cost of care, or how Medicare providers
and suppliers engage in shared decision making for future care,
including discussions of both charges and quality of referral services?
XVIII. Organ Procurement Organizations (OPOs) Conditions for Coverage
(CfCs): Proposed Revision of the Definition of ``Expected Donation
Rate''
A. Background
1. Organ Procurement Organizations (OPOs)
Organ procurement organizations (OPOs) are vital partners in the
procurement, distribution, and transplantation of human organs in a
safe and equitable manner for all potential transplant recipients. The
role of OPOs is critical to ensuring that the maximum possible number
of transplantable human organs is available to seriously ill patients
who are on a waiting list for an organ transplant. OPOs are responsible
for identifying eligible donors, recovering organs from deceased
donors, and complying with all CMS outcome and process performance
measures. OPOs also must be a member of, participate in, and abide by
the rules and requirements of the Organ Procurement and Transplantation
Network (OPTN) that have been approved by the Secretary. The OPTN is a
membership organization that links all professionals in the United
States organ donation and transplantation system and whose board
establishes and maintains transplant policies (which are available on
the OPTN website at: https://optn.transplant.hrsa.gov/governance/about-the-optn/). Currently, the United Network for Organ Sharing (UNOS)
serves as the OPTN under contract. OPOs are required to report specific
information to the OPTN, including the data used to calculate the
outcome measures for OPOs.
[[Page 39596]]
2. Statutory and Regulatory Provisions
To be an OPO, an entity must meet the applicable requirements of
both the Act and the Public Health Service Act (the PHS Act). Section
1138(b) of the Act provides the statutory qualifications and
requirements that an OPO must meet in order for organ procurement costs
to be paid under the Medicare program or the Medicaid program. Section
1138(b)(1)(A) of the Act specifies that an OPO must operate under a
grant made under section 371(a) of the PHS Act or must be certified or
recertified by the Secretary as meeting the standards to be a qualified
OPO within a certain time period. Congress has provided that payment
may be made for organ procurement cost ``only if'' the OPO meets the
performance-related standards prescribed by the Secretary. To receive
payment under the Medicare program or the Medicaid program for organ
procurement costs, the entity must have an agreement with, or be
designated by, the Secretary (section 1138(b)(1)(F) of the Act and 42
CFR 486.304).
Pursuant to section 371(b)(1)(D)(ii)(II) of the PHS Act, the
Secretary is required to establish outcome and process performance
measures for OPOs to meet based on empirical evidence, obtained through
reasonable efforts, of organ donor potential and other related factors
in each service area of the qualified OPO. An OPO also must be a member
of and abide by the rules and requirements of the OPTN that have been
approved by the Secretary (section 1138(b)(1)(D) of the Act). We
established Conditions for Coverage (CfCs) for OPOs to be able to
receive payments from the Medicare and Medicaid programs at 42 CFR part
486, subpart G, to implement the statutory requirements. These
regulations set forth the certification and recertification processes,
outcome requirements, and process performance measures for OPOs and
were effective on July 31, 2006 (71 FR 30982).
3. HHS Initiatives Related to OPO Services
In 2000, the Secretary's Advisory Committee on Organ
Transplantation (ACOT) was established under the general authority of
section 222 of the PHS Act, as amended, and implementing regulations
under 42 CFR 121.12. A 2012 recommendation by ACOT stated: ``The ACOT
recognizes that the current CMS and HRSA/OPTN structure creates
unnecessary burdens and inconsistent requirements on transplant centers
(TCs) and OPOs and that the current system lacks responsiveness to
advances in TC and OPO performance metrics. The ACOT recommends that
the Secretary direct CMS and HRSA to confer with the OPTN, [Scientific
Registry of Transplant Recipients] SRTR, the OPO community, and TC
representatives to conduct a comprehensive review of regulatory and
other requirements, and to promulgate regulatory and policy changes to
requirements for OPOs and TCs that unify mutual goals of increasing
organ donation, improving recipient outcomes, and reducing organ
wastage and administrative burden on TCs and OPOs. These revisions
should include, but not be limited to, improved risk adjustment
methodologies for TCs and a statistically sound method for yield
measures for OPOs. . . .'' \211\ We believe that our proposal to
harmonize the definitions of ``expected donation rate'' as discussed
below would address this ACOT recommendation. We also believe that the
proposal demonstrates responsiveness to advances in OPO metrics and
resolves an inconsistency in the OPO requirements for how OPO measures
are being determined.
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\211\ Available at: https://www.organdonor.gov/about-dot/acot/acotrecs55.html.
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B. Proposed Revision of the Definition of ``Expected Donation Rate''
As set forth in 42 CFR 486.328, which specifies the condition for
reporting of data, transplant hospitals and OPOs must report data to
the OPTN and those data are transmitted on a monthly basis to the SRTR
contractor. The OPTN members, including OPOs, are required to submit
certain data to the OPTN or SRTR. The OPTN and SRTR collect and analyze
the data pursuant to the HRSA mission to increase organ donation and
transplantation. Periodically, the data that OPOs must report to the
OPTN or the SRTR is revised based on methodologies and clinical
practice improvements that enable them to draw more accurate
conclusions about donor and organ suitability for transplantation.
The CfCs for OPOs regulations at 42 CFR 486.318(a) and (b) require
that an OPO must meet two of the three following outcome measures:
The OPOs donation rate of eligible donors as a percentage
of eligible deaths is no more than 1.5 standard deviations below the
mean national donation rate of eligible donors as a percentage of
eligible deaths, averaged over the 4 years of the re-certification
cycle. Both the numerator and denominator of an individual OPO's
donation rate ratio are adjusted by adding a 1 for each donation after
cardiac death donor and each donor over the age of 70;
The observed donation rate is not significantly lower than
the expected donation rate for 18 or more months of the 36 months of
data used for re-recertification, as calculated by SRTR;
The OPO data reports, averaged over the 4 years of the re-
certification cycle, must meet the rules and requirements of the most
current OPTN aggregate donor yield measure.
The expected donation rate used in the second outcome measure is
calculated by the SRTR. The CfCs for OPOs at 42 CFR 486.302 defines
``expected donation rate'' as the donation rate expected for an OPO
based on the national experience for OPOs serving similar hospitals and
donation service areas (DSAs). This rate is adjusted for the following
hospital characteristics: Level I or Level II trauma center;
Metropolitan Statistical Area (MSA) size; Metropolitan Statistical (MS)
case-mix index; total bed size; number of intensive care unit (ICU)
beds; primary service; presence of a neurosurgery unit; and hospital
control/ownership.
In 2009, the SRTR modified the definition of ``expected donation
rate'' we used for this outcome measure. The updated SRTR's definition
states: ``[t]he expected donation rate per 100 eligible deaths is the
rate expected for an OPO based on the national experience for OPOs
serving similar eligible donor populations and DSAs. This rate is
adjusted for the distributions of age, sex, race, and cause of death
among eligible deaths.'' \212\
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\212\ Available at: https://www.srtr.org/about-the-data/technical-methods-for-the-opo-specific-reports/.
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To determine the expected donation rate, the SRTR believed that it
was important to adjust for characteristics that would allow for
isolation of the effects that OPOs' practices were having on donation
in that DSA. The SRTR determined that basing the expected donation rate
for an OPO on the national experience for OPOs serving similar
hospitals and DSAs and then adjusting for hospital characteristics did
not take into consideration the eligible donor population in the DSA.
The SRTR found that the eligible donor population varies from DSA to
DSA across the country and such variations do have an impact on
donation rates. Therefore, the SRTR determined that a more precise
method to calculate an OPO's expected donation rate would be to base it
on the national experience for OPOs serving similar eligible donor
populations and DSAs and then adjust for patient characteristics, that
is age, sex, race, and cause of death among eligible deaths.
[[Page 39597]]
Due to an oversight, CMS did not make a corresponding change to the
definition in the CfCs for OPOs at the time that the SRTR made its
change. In order to address this issue, we are proposing to change our
requirements so that we are consistent with the SRTR's definition for
the second outcome measure. Therefore, in this proposed rule, we are
proposing to make a change to harmonize the CMS definition with the
SRTR definition. We are proposing to make this change at this time in
order to clarify the regulatory standard so that we may properly
enforce the second outcome measure, eliminate any provider confusion,
and further support our goals of accurately and reliably measuring OPO
performance.
Specifically, we are proposing to revise the definition to state
that the expected donation rate per 100 eligible deaths is the rate
expected for an OPO based on the national experience for OPOs serving
similar eligible donor populations and DSAs. We are proposing that this
rate would be adjusted for the distributions of age, sex, race, and
cause of death among eligible deaths.
If we finalize this proposal, this change would take effect on the
effective date of the final rule with comment period, which would occur
during the 2022 recertification cycle. Because the final regulation
change would not be retroactive and, in order to give OPOs adequate
time to comply with the change to the definition for ``expected
donation rate,'' we are proposing to change the time period for the
observed donation rate for the second outcome measure for the 2022
recertification cycle only. As a result, we also are proposing to
revise Sec. 486.318(a)(2), (b)(2), and (c)(1) to reduce the time
period for this outcome measure. We are proposing to calculate the
expected donation rate using 12 of the 24 months of data following the
effective date of the final rule with comment period (using data from
January 1, 2020 through December 31, 2020). After the 2022
recertification cycle, and if there are no other changes to the OPO
outcome measures, we would assess OPO performance based on 36 months of
data.
C. Request for Information Regarding Potential Changes to the Organ
Procurement Organization and Transplant Center Regulations
Since the OPO and the transplant center regulations were finalized,
we have received substantial feedback from the organ procurement and
transplant communities recommending modifications to the current
requirements. Therefore, we are considering a comprehensive proposal to
update the CfCs for OPOs and possibly the CoPs for transplant centers.
We are including transplant centers in this request for information due
to the inextricable connection between transplant centers and OPOs. We
are seeking public input regarding what revisions may be appropriate
for the current CfCs for OPOs that are set forth at 42 CFR 486.301
through 486.360 and the current CoPs for transplant centers that are
set forth at 42 CFR 482.68 through 482.104. The CfCs for OPOs set forth
the requirements each OPO must meet to be eligible for payment under
the Medicare and Medicaid programs. The CoPs for transplant centers set
forth the requirements each transplant center must meet to be eligible
for payment under the Medicare. In addition, more information on how
data regarding OPOs as well as transplant centers are identified and
used can be found on the website at: https://www.srtr.org/.
The following are key areas on which we are seeking public input:
Do the current OPO outcome measures that are set forth at
42 CFR 486.318 accurately and reliably reflect an OPO's performance? If
not, please explain.
What are the impacts or consequences of the current
outcome measures on: (1) An OPO's performance; and (2) the availability
of transplantable organs?