[Federal Register Volume 84, Number 218 (Tuesday, November 12, 2019)]
[Rules and Regulations]
[Pages 61142-61492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24138]
[[Page 61141]]
Vol. 84
Tuesday,
No. 218
November 12, 2019
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 410, 412, et al.
Medicare Program: Changes to Hospital Outpatient Prospective Payment
and Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs; Revisions of Organ Procurement Organizations Conditions of
Coverage; Prior Authorization Process and Requirements for Certain
Covered Outpatient Department Services; Potential Changes to the
Laboratory Date of Service Policy; Changes to Grandfathered Children's
Hospitals-Within-Hospitals; Notice of Closure of Two Teaching Hospitals
and Opportunity To Apply for Available Slots; Final Rule
Federal Register / Vol. 84 , No. 218 / Tuesday, November 12, 2019 /
Rules and Regulations
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 412, 414, 416, 419, and 486
[CMS-1717-FC]
RIN 0938-AT74
Medicare Program: Changes to Hospital Outpatient Prospective
Payment and Ambulatory Surgical Center Payment Systems and Quality
Reporting Programs; Revisions of Organ Procurement Organizations
Conditions of Coverage; Prior Authorization Process and Requirements
for Certain Covered Outpatient Department Services; Potential Changes
to the Laboratory Date of Service Policy; Changes to Grandfathered
Children's Hospitals-Within-Hospitals; Notice of Closure of Two
Teaching Hospitals and Opportunity To Apply for Available Slots
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
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SUMMARY: This final rule with comment period revises the Medicare
hospital outpatient prospective payment system (OPPS) and the Medicare
ambulatory surgical center (ASC) payment system for Calendar Year 2020
based on our continuing experience with these systems. In this final
rule with comment period, we describe the 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. Also, this
final rule with comment period updates and refines the requirements for
the Hospital Outpatient Quality Reporting (OQR) Program and the ASC
Quality Reporting (ASCQR) Program. In addition, this final rule with
comment period establishes 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; and provides notice of the closure of
two teaching hospitals and the opportunity to apply for available slots
for purposes of indirect medical education (IME) and direct graduate
medical education (DGME) payments.
DATES:
Effective date: This final rule is effective on January 1, 2020.
Comment period: To be assured consideration, comments on the
payment classifications assigned to the interim APC assignments and/or
status indicators of new or replacement Level II HCPCS codes in this
final rule with comment period must be received at one of the addresses
provided in the ADDRESSES section no later than 5 p.m. EST on December
2, 2019.
ADDRESSES: In commenting, please refer to file code CMS-1717-FC when
commenting on the issues in this final rule with comment period.
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-FC, P.O. Box 8013,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments via
express or overnight mail to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1717-FC, 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 or Mitali
Dayal via email [email protected] or at 410-786-4329.
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 Nicole Hewitt via email [email protected] or
at 410-786-7778.
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 at 410-786-4169.
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.
Notice of Closure of Two Teaching Hospitals and Opportunity to
Apply for Available Slots, contact Michele Hudson via email
[email protected] or 410-786-4487.
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, 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].
Prior Authorization Process and Requirements for Certain Hospital
Outpatient Department Services, contact Thomas Kessler via email at
[email protected] or at 410-786-1991.
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.
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 final rule with comment period, 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 in Response to the CY 2020 OPPS/ASC
Proposed Rule
G. Public Comments Received on the CY 2019 OPPS/ASC Final Rule
With Comment Period
II. Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
B. Conversion Factor Update
C. Wage Index Changes
D. Statewide Average Default Cost-to-Charge Ratios (CCRs)
E. 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. Payment Adjustment for Certain Cancer Hospitals for CY 2020
G. Hospital Outpatient Outlier Payments
H. Calculation of an Adjusted Medicare Payment From the National
Unadjusted Medicare Payment
I. Beneficiary Copayments
III. OPPS Ambulatory Payment Classification (APC) Group Policies
A. OPPS Treatment of New and Revised HCPCS Codes
B. OPPS Changes--Variations Within APCs
C. New Technology APCs
D. APC-Specific Policies
IV. OPPS Payment for Devices
A. Pass-Through Payments for Devices
B. Device-Intensive Procedures
V. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs
of Drugs, Biologicals, and Radiopharmaceuticals
B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Payment Status
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Background
B. Estimate of Pass-Through Spending
VII. OPPS Payment for Hospital Outpatient Visits and Critical Care
Services
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VIII. Payment for Partial Hospitalization Services
A. Background
B. PHP APC Update for CY 2020
C. Outlier Policy for CMHCs
D. Update to PHP Allowable HCPCS Codes
IX. Procedures That Will Be Paid Only as Inpatient Procedures
A. Background
B. Changes to the Inpatient Only (IPO) List
X. Nonrecurring Policy Changes
A. 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. CY 2020 OPPS Payment Status and Comment Indicators
A. CY 2020 OPPS Payment Status Indicator Definitions
B. CY 2020 Comment Indicator Definitions
XII. MedPAC Recommendations
A. OPPS Payment Rates Update
B. ASC Conversion Factor Update
C. ASC Cost Data
XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
A. Background
B. ASC Treatment of New and Revised Codes
C. Update to the List of ASC Covered Surgical Procedures and
Covered Ancillary Services
D. Update and Payment for ASC Covered Surgical Procedures and
Covered Ancillary Services
E. New Technology Intraocular Lenses (NTIOLs)
F. ASC Payment and Comment Indicators
G. 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. 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. Requirements for Hospitals To Make Public a List of Their
Standard Charges and Request for Information (RFI): Quality
Measurement Relating to Price Transparency for Improving Beneficiary
Access to Provider and Supplier Charge Information
XVII. Organ Procurement Organizations (OPOs) Conditions for Coverage
(CfCs): Revision of the Definition of ``Expected Donation Rate''
A. Background
B. Revision of the Definition of ``Expected Donation Rate''
C. Request for Information Regarding Potential Changes to the
Organ Procurement Organization and Transplant Center Regulations
XVIII. 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
XIX. Prior Authorization Process and Requirements for Certain
Hospital Outpatient Department (OPD) Services
A. Background
B. Prior Authorization Process for Certain OPD Services
C. List of Outpatient Department Services Requiring Prior
Authorization
XX. Comments Received in Response to Comment Solicitation on Cost
Reporting, Maintenance of Hospital Chargemasters, and Related
Medicare Payment Issues
XXI. Changes to Requirements for Grandfathered Children's Hospitals-
Within-Hospitals (HwHs)
XXII. Notice of Closure of Two Teaching Hospitals and Opportunity To
Apply for Available Slots
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. ICRs for Revision of the Definition of ``Expected Donation
Rate'' for Organ Procurement Organizations
E. ICR for Prior Authorization Process and Requirements for
Certain Hospital Outpatient Department (OPD) Services
F. Potential Revisions to Laboratory Date of Service (DOS)
Policy
G. 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 Final Rule
C. Detailed Economic Analyses
D. Effects of Prior Authorization Process and Requirements for
Certain Hospital Outpatient Department (OPD) Services
E. Effects of Requirement Relating to Changes in the Definition
of Expected Donation Rate for Organ Procurement Organizations
F. Potential Revisions to the Laboratory Date of Service Policy
G. Effect of Changes to Requirements for Grandfathered
Children's Hospitals-Within-Hospitals (HwHs)
H. Regulatory Review Costs
I. Regulatory Flexibility Act (RFA) Analysis
J. Unfunded Mandates Reform Act Analysis
K. Reducing Regulation and Controlling Regulatory Costs
L. Conclusion
XXVII. Federalism Analysis
Regulation Text
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
In this final rule with comment period, we are updating 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 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. This final rule with comment period also includes
additional policy changes made in accordance with our experience with
the OPPS and the ASC payment system. We describe these and various
other statutory authorities in the relevant sections of this final rule
with comment period. In addition, this final rule with comment period
updates and refines the requirements for the Hospital Outpatient
Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR)
Program.
In this final rule with comment period, we 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
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the number of beds without resulting in the loss of grandfathered
status.
2. Summary of the Major Provisions
OPPS Update: For CY 2020, we are increasing the payment
rates under the OPPS by an Outpatient Department (OPD) fee schedule
increase factor of 2.6 percent. This increase factor is based on the
final hospital inpatient market basket percentage increase of 3.0
percent for inpatient services paid under the hospital inpatient
prospective payment system (IPPS), minus the multifactor productivity
(MFP) adjustment required by the Affordable Care Act of 0.4 percentage
point. Based on this update, we estimate that total payments to OPPS
providers (including beneficiary cost-sharing and estimated changes in
enrollment, utilization, and case-mix) for calendar year (CY) 2020 will
be approximately $79.0 billion, an increase of approximately $6.3
billion compared to estimated CY 2019 OPPS payments.
We are continuing 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 0.981 to the OPPS payments and copayments for all applicable
services.
2-Midnight Rule (Short Inpatient Hospital Stays): For CY
2020, we are establishing a 2-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 creating two new
comprehensive APCs (C-APCs). These new C-APCs include the following: C-
APC 5182 (Level 2 Vascular Procedures) and C-APC 5461 (Level 1
Neurostimulator and Related Procedures). This increases the total
number of C-APCs to 67.
Changes to the Inpatient Only (IPO) List: For CY 2020, we
are removing Total Hip Arthroplasty, six spinal procedure codes, and
five anesthesia codes from the inpatient only 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 unnecessary increases in the volume of this
service. We acknowledge that the district court vacated the volume
control policy for CY 2019 and we are working to ensure affected 2019
claims for clinic visits are paid consistent with the court's order. We
do not believe it is appropriate at this time to make a change to the
second year of the two-year phase-in of the clinic visit policy. The
government has appeal rights, and is still evaluating the rulings and
considering, at the time of this writing, whether to appeal from the
final judgment.
Device Pass-Through Payment Applications: For CY 2020, we
evaluated seven applications for device pass-through payments and based
on public comments received, we are approving four of these
applications for device pass-through payment status. Additionally, we
are approving an additional application that was not discussed in the
CY 2020 OPPS/ASC proposed rule, but has received a Breakthrough Devices
designation from the Food and Drug Administration (FDA) and qualifies
for the alternative pathway to the OPPS device pass-through substantial
clinical improvement criterion.
Changes to Substantial Clinical Improvement Criterion: For
CY 2020, we are finalizing 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 determinations effective on or after January 1, 2020.
Cancer Hospital Payment Adjustment: For CY 2020, we are
continuing 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, we
are providing that a 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 adjustments 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 the 7.1 percent adjustment for future years in the
absence of data to suggest a different percentage adjustment should
apply.
340B-Acquired Drugs: We are continuing to pay ASP-22.5
percent for 340B-acquired drugs including when furnished in nonexcepted
off-campus PBDs paid under the PFS. In light of ongoing litigation, we
also summarized comments received on a potential remedy for 2018 and
2019. CMS announced in the Federal Register (84 FR 51590) its intent to
conduct a 340B hospital survey to collect drug acquisition cost data
for CY 2018 and 2019. Such survey data may be used in setting the
Medicare payment amount for drugs acquired by 340B hospitals for cost
years going forward, and also may be used to devise a remedy for prior
years in the event of an adverse decision on appeal. In the event 340B
hospital survey data are not used to devise a remedy, we intend to
consider the suggestions commenters submitted in response to the
comment solicitation in the proposed rule to propose a remedy in the CY
2021 OPPS/ASC proposed rule.
ASC Payment Update: For CYs 2019 through 2023, we adopted
a policy to update the ASC payment system using the hospital market
basket update. Using the hospital market basket methodology, for CY
2020, we are increasing payment rates under the ASC payment system by
2.6 percent for ASCs that meet the quality reporting requirements under
the ASCQR Program. This increase is based on a hospital market basket
percentage increase of 3.0 percent minus a proposed multifactor
productivity adjustment required by the Affordable Care Act of 0.4
percentage point. Based on this update, we estimate that total payments
to ASCs (including beneficiary cost-sharing and estimated changes in
enrollment, utilization, and case-mix) for CY 2020 will be
approximately $4.96 billion, an increase of approximately $230 million
compared to estimated CY 2019 Medicare payments.
Changes to the List of ASC Covered Surgical Procedures:
For CY 2020, we are adding several 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, as well as 12 surgical procedures
with new CPT codes for CY 2020.
Changes to the Level of Supervision of Outpatient
Therapeutic Services in Hospitals and Critical Access Hospitals: For CY
2020, we are changing the
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minimum required level of supervision from direct supervision to
general supervision for all hospital outpatient therapeutic services
provided by all hospitals and CAHs. This ensures 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 removing OP-33: External Beam
Radiotherapy for Bone Metastases for the CY 2022 payment determination
and subsequent years with modification.
Ambulatory Surgical Center Quality Reporting (ASCQR)
Program: For the ASCQR Program, we are adopting 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.
Prior Authorization Process and Requirements for Certain
Hospital Outpatient Department (OPD) Services: We are finalizing a
prior authorization process using the authority at 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) Revision of the Definition of ``Expected Donation
Rate.'' We are revising the definition of ``expected donation rate''
that is included in the second outcome measure to match the Scientific
Registry of Transplant Recipients (SRTR) definition. In conjunction
with this change, we are also temporarily suspending the requirement
that OPOs meet two of three outcome measures for the 2022
recertification cycle only.
Request for Information Regarding Potential Changes to the
Organ Procurement Organization and Transplant Center Regulations: We
solicited public comments regarding what revisions may be appropriate
for the current OPO CfCs and the current transplant center CoPs. In
addition, we solicited public comments on two potential outcome
measures for OPOs.
3. Summary of Costs and Benefits
In sections XXVI. and XXVII. of this final rule with comment
period, we set forth a detailed analysis of the regulatory and
federalism impacts that the changes will have on affected entities and
beneficiaries. Key estimated impacts are described below.
a. Impacts of All OPPS Changes
Table 70 in section XXV.B of this final rule with comment period
displays the distributional impact of all the 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 final
rule with comment period will result in a 1.3 percent overall increase
in OPPS payments to providers. We estimate that total OPPS payments for
CY 2020, including beneficiary cost-sharing, to the approximately 3,732
facilities paid under the OPPS (including general acute care hospitals,
children's hospitals, cancer hospitals, and CMHCs) will increase by
approximately $1.21 billion compared to CY 2019 payments, excluding our
estimated changes in enrollment, utilization, and case-mix.
We estimated the isolated impact of our 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 3.7 percent increase in CY 2020
payments to CMHCs relative to their CY 2019 payments.
b. Impacts of the Updated Wage Indexes
We estimate that our update of the wage indexes based on the FY
2020 IPPS proposed rule wage indexes will result in no estimated
payment change for urban hospitals under the OPPS and an estimated
increase of 0.7 percent for rural hospitals. These 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 final rule with comment period.
c. Impacts of the Rural Adjustment and the Cancer Hospital Payment
Adjustment
There are no significant impacts of our CY 2020 payment policies
for hospitals that are eligible for the rural adjustment or for the
cancer hospital payment adjustment. We are not making any change in
policies for determining the rural hospital payment adjustments. While
we are implementing the required 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 OPD Fee Schedule Increase Factor
For the CY 2020 OPPS/ASC, we are establishing an OPD fee schedule
increase factor of 2.6 percent and applying that increase factor to the
conversion factor for CY 2020. As a result of the OPD fee schedule
increase factor and other budget neutrality adjustments, we estimate
that urban hospitals will experience an increase of approximately 2.7
percent and that rural hospitals will experience an increase of 2.8
percent. Classifying hospitals by teaching status, we estimate
nonteaching hospitals will experience an increase of 2.8 percent, minor
teaching hospitals will experience an increase of 2.9 percent, and
major teaching hospitals will experience an increase of 2.4 percent. We
also classified hospitals by the type of ownership. We estimate that
hospitals with voluntary ownership will experience an increase of 2.6
percent in payments, while hospitals with government ownership will
experience an increase of 2.8 percent in payments. We estimate that
hospitals with proprietary ownership will experience an increase of 3.2
percent in payments.
e. Impacts of the 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 CY 2020 payment
rates, compared to estimated CY 2019 payment rates, generally ranges
between an increase of 1 and 5 percent, depending on the service, with
some exceptions. We estimate the impact of applying the hospital market
basket update to ASC payment rates will increase payments by $230
million under the ASC payment system in CY 2020.
f. Impact of the Changes to the Hospital OQR Program
Across 3,300 hospitals participating in the Hospital OQR Program,
we estimate that our requirements will result in the following changes
to costs and burdens related to information collection for the Hospital
OQR Program compared to previously adopted requirements: There is a net
reduction of one measure reported by hospitals, which results in a
minimal net reduction in burden of $21,379.
[[Page 61147]]
g. Impacts of the Revision of the Definition of ``Expected Donation
Rate'' for Organ Procurement Organizations
We are finalizing our revision to the definition of ``expected
donation rate'' used in the second outcome measure of the OPO CfCs at
42 CFR 486.318(a) and (b) to eliminate the potential for confusion in
the OPO community due to different definitions of the same term;
however, due to comments received on the CY 2020 OPPS/ASC proposed rule
we are finalizing a policy that would not require all OPOs to meet the
standards of the second outcome measure for the 2022 recertification
cycle only. As a result, OPOs will only have to meet one of the
remaining outcome measures, which may provide temporary relief for a
small number of OPOs that, absent this waiver, might have faced de-
certification and the appeal process due to only meeting one outcome
measure.
For subsequent recertification cycles, all 58 OPOs will once again
be required to meet two out of three outcome measures detailed in the
OPO CfCs. The revised definition of ``expected donation rate'' used in
the second outcome measure will not affect data collection or reporting
by the OPTN and SRTR, nor their statistical evaluation of OPO
performance; therefore, it will not result in any quantifiable
financial impact.
B. Legislative and Regulatory Authority for the Hospital OPPS
When Title XVIII of 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 final rule with comment
period. 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.
[[Page 61148]]
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 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 Maryland's
All-Payer or Total Cost of Care 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
(84 FR 26117).
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 19, 2019. 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
[[Page 61149]]
FR 31941). Further information on the 2019 summer meeting can be found
in the meeting notice titled ``Medicare Program: Announcement of the
Advisory Panel on Hospital Outpatient Payment (the Panel) Meeting on
August 19 through 20, 2019'' (84 FR 26117).
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 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 19, 2019, meeting that the subcommittees
continue. We accepted this recommendation.
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.
Comment: One commenter supported CMS' extension of the HOP Panel
meeting presentation submission deadline when there is a truncated
submittal timeframe due to delayed publication of the OPPS/ASC proposed
rule. However, to avoid the need to modify the submission deadline in
the future, the commenter suggested that CMS revise the submission
deadline in the Federal Register notice from a firm date to a fluid 21
days from the proposed rule display date to avoid this deadline issue
in the future.
Response: We appreciate the commenter's request to modify the HOP
Panel meeting submission deadline format. However, frequency, timing,
and presentation deadlines are outside the scope of the proposed rule
and are generally announced through either a separate Federal Register
notice or subregulatory channel such as the CMS website, or both.
F. Public Comments Received in Response to the CY 2020 OPPS/ASC
Proposed Rule
We received over 3400 timely pieces of correspondence on the CY
2020 OPPS/ASC proposed rule that appeared in the Federal Register on
August 9, 2019 (84 FR 39398). We note that we received some public
comments that were outside the scope of the CY 2020 OPPS/ASC proposed
rule. Out-of-scope-public comments are not addressed in this CY 2020
OPPS/ASC final rule with comment period. Summaries of those public
comments that are within the scope of the proposed rule and our
responses are set forth in the various sections of this final rule with
comment period under the appropriate headings.
G. 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). Summaries of the public comments on new or replacement
Level II HCPCS codes are set forth in the CY 2020 OPPS/ASC proposed
rule and this final rule with comment period under the appropriate
subject matter headings.
II. Updates Affecting OPPS Payments
A. 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 the CY 2020 OPPS/ASC proposed rule (84 FR 39406), for CY 2020,
we proposed 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, as we
proposed, we 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 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 the 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 the proposed rule (which is available via the
internet on the CMS website) included the proposed list of bypass codes
for CY 2020. The proposed list of bypass codes contained codes that
were reported on claims for services in CY 2018 and, therefore,
included 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 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 were identified by asterisks (*) in the third column of
Addendum N to the proposed rule. HCPCS codes that we proposed to add
for CY 2020 were identified by asterisks (*) in the fourth column of
Addendum N.
Table 1 contains the list of codes that we proposed to remove from
the CY 2020 bypass list.
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b. Calculation and Use of Cost-to-Charge Ratios (CCRs)
For CY 2020, in the CY 2020 OPPS/ASC proposed rule (84 FR 39407),
we proposed 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 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 the proposed rule and this final rule with
comment period.
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 used a less precise ``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) and in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58831), we finalized a policy to extend the transition
policy for 1 additional year and we 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 and the CY 2019 OPPS.
As we discussed in the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59228), some stakeholders have 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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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 18.8 percent to 2,207 providers and the number of valid CT
CCRs has increased by 16.0 percent to 2,291 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.
We noted in the CY 2020 OPPS/ASC proposed rule 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 noted that we believed we had 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
proposed that for the CY 2020 OPPS we would 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 noted that we did not believe another
extension was warranted and expected to determine the imaging APC
relative payment weights for CY 2020 using cost data from all
providers, regardless of the cost allocation method employed.
Comment: One commenter noted that approximately half of all
hospitals paid under the OPPS had CT and/or MRI cost centers that were
reporting CCRs using the preferred methods (``dollar value'' or
``direct assignment''). This commenter further suggested that hospitals
not using these preferred methods are either unable or unwilling to
make the change to using these preferred methods. This commenter stated
that some CT and
[[Page 61152]]
MRI procedures show a significant number of CCRs that are close to
zero, and that the commenter believed that these hospitals are likely
unable to accurately reallocate these costs across hospital departments
to new CT and MRI departmental cost centers. This commenter
acknowledged that the number of valid CT and MRI CCRs has increased
over time, but noted that incorrect cost allocation has negative
effects on payment rates for almost all imaging APCs.
Several commenters recommended that CMS continue to exclude
``square feet'' cost allocation data and continue to educate hospitals
on the importance of reporting direct CT and MRI services. Several
commenters requested that CMS not use the CT and MRI-specific cost
centers and instead estimate cost using the single diagnostic radiology
cost center, believing this will solve the inaccurate reporting of
costs for CT and MR services. They further suggested that we should
advise hospitals through regulation and cost reporting instructions to
no longer report costs separately for CT and MRI cost centers and make
sure they review their diagnostic radiology cost center inclusive of CT
and MR equipment, space, labor and over factors. This same commenter
noted that the benefits of using a single diagnostic radiology cost
center include consistency across hospitals, properly accounting for
high-cost medical equipment, simplifying and standardizing cost
reporting within the diagnostic radiology cost center, eliminating
partial allocation of costs to CT and MRI cost centers, and reducing
burden. One commenter requested that we work with various hospital
organizations to help educate the hospital community on how to report
these costs on the CT and MRI CCRs in hopes to transition to this
policy over time.
Other commenters requested that we extend the transition to using
all claims for one additional year. These same commenters requested
that if extending the transition 1 additional year is not possible,
that we phase in the payment impacts of this transition over 2 years.
One commenter requested that CMS extend the transition for 2 additional
years and stated that we should study the effects of this policy even
further to better understand its payment impacts. One commenter noted
that we should continue the transition policy of removing provider
claims using the ``square feet'' cost allocation method to calculate
cost-to-charge ratios (CCRs) associated with CT and MRI procedures into
2020 and require providers to report costs via the direct assignment or
dollar value methodologies moving forward. Another commenter noted that
the use of separate CT and MRI CCRs creates unintended consequences on
the technical component of CT and MRI codes in the Medicare Physician
Fee Schedule (MPFS). The commenter noted the resulting reductions in
hospital payments would also affect the physician office practice
setting. They believed that the OPPS technical payments would fall
below the payment rates in the MPFS causing further cuts as mandated by
the Deficit Reduction Act of 2005 (DRA), which mandates CMS pay the
lesser of MPFS or OPPS rate.
One commenter suggested that, because CMS has various APC groupings
for MRI and CT, the individual MRI and CT cost centers are no longer
needed. This commenter suggested that, at the time separate cost
centers for these services were established, the classification of
imaging procedures into APCs was very specific, but that CMS is now
``intermingling'' the MRI and CT costs with other imaging services.
Response: We appreciate the comments regarding the use of CT and
MRI cost center CCRs. As we stated in prior rulemaking, we recognize
the concerns with regard to the application of the CT and MRI standard
cost center CCRs and their use in the OPPS ratesetting. We understand
that there is greater sensitivity to the cost allocation method being
used on the cost report forms for these relatively new standard imaging
cost centers under the OPPS due to the limited size of the OPPS payment
bundles and because the OPPS applies the CCRs at the departmental level
for cost estimation purposes. However, it is important to note that
since we initially established the transition policy in the OPPS in CY
2014, we have continued to develop the OPPS as a prospective payment
system. This includes greater packaging and the development of
comprehensive APCs. As we have packaged a greater number of items and
services with imaging payment under the OPPS, we believe imaging
payments are somewhat less sensitive to the cost allocation method
being used than they previously were. We also note that we still find
value in obtaining more specific cost data and that the CT and MRI-
specific cost centers provide useful cost and charge data for
ratesetting purposes.
However, to address concerns in the comments about the amount of
the decrease in imaging payment in CY 2020 due to ending of the
transition period, we are finalizing a 2-year phased-in approach, as
suggested by some commenters, that will apply 50 percent of the payment
impact from ending the transition in CY 2020 and 100 percent of the
payment impact from ending the transition in CY 2021. For CY 2020, we
will calculate the imaging payment rates using both the transition
methodology (excluding providers that use a ``square feet'' cost
allocation method) and the standard methodology (including all
providers, regardless of cost allocation method) and will assign the
imaging APCs a payment rate that includes data representing 50 percent
of the transition methodology payment rate and includes data
representing 50 percent of the standard methodology payment rate.
Beginning in CY 2021, we will set the imaging APC payment rates at 100
percent of the payment rate using the standard payment methodology
(including all providers, regardless of cost allocation method). Table
4 below illustrates the estimated impact on geometric mean costs for CT
and MRI APCs under our blended approach of utilizing 50 percent of the
transitional payment methodology and 50 percent of the standard payment
methodology for CY 2020.
BILLING CODE 4120-01-P
[[Page 61153]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.003
BILLING CODE 4120-01-C
As noted earlier, the Deficit Reduction Act (DRA) of 2005 requires
Medicare to limit Medicare payment for certain imaging services covered
by the physician fee schedule to not exceed what Medicare pays for
these services under the OPPS. As required by law, for certain imaging
series paid for under the MPFS, we cap the technical component of the
PFS payment amount for the applicable year at the OPPS payment amount
(71 FR 69659 through 69661). 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. Data Development and Calculation of Costs Used for Ratesetting
In this section of this final rule with comment period, we discuss
the use of claims to calculate the OPPS payment rates for CY 2020. The
Hospital OPPS page on the CMS website on which this final rule with
comment period 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 final payment
rates. That accounting provides additional detail regarding the number
of claims derived at each stage of the
[[Page 61154]]
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 final payment rates for this CY 2020 OPPS/
ASC final rule with comment period.
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.
For CY 2020, in the CY 2020 OPPS/ASC proposed rule (84 FR 39409), we
proposed 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 final rule with comment period to calculate the costs
we used to establish the relative payment weights used in calculating
the OPPS payment rates for CY 2020 shown in Addenda A and B to this
final rule with comment period (which are available via the internet on
the CMS website). We refer readers to section II.A.4. of this final
rule with comment period 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.
Comment: Several commenters noted a potential issue with missing
lines with the PN modifier. Specifically, these commenters believed
that the CY 2020 proposed rule data, based on CY 2018 claims, excluded
approximately 400,000 lines with Healthcare Common Procedure Coding
System (HCPCS) codes and the PN modifier. They noted that this would
mean that there was over an 80 percent decline from the CY 2017 claims
data, which had approximately 2.8 million lines with HCPCS and the PN
modifier. These commenters reviewed the 2018 Outpatient Standard
Analytic File (SAF) and noted that they found approximately 3.5 million
lines with HCPCS codes and the PN modifier. These commenters asserted
that the ratesetting data included substantially less PN modifiers than
in the SAF file for the same time period. These same commenters assert
that if the PN lines were not included in the ratesetting process then
the OPPS payment weights are accurate. They noted that, conversely, if
the PN lines were included in the payment weights then payments would
be inaccurate. These commenters wanted CMS to explain what occurred in
the proposed rule data files to ensure that the APC payment weights
correctly reflect the exclusion of PN modifier claims in the final
rule.
Response: We thank the commenters for their input. First, we would
like to note that claim lines with the PN modifier are excluded from
the ratesetting process. Please note that the difference between the
2019 OPPS Final Rule and the 2020 OPPS Proposed rule is the following:
We processed the claim lines with the PN modifier differently between
the two rules, which resulted in the decrease in the number of PN lines
in the OPPS limited data set as noted above. Specifically, the programs
used for the CY 2020 proposed rule were modified to not factor in those
lines as being OPPS lines, which resulted in more lines, and
potentially, more total claims being categorized as non-OPPS claims.
Previously, even though those lines were excluded from OPPS for
ratesetting purposes, they were still considered OPPS in categorizing
the claims for the limited data set. This change in processing logic
had no effect on ratesetting and all of the lines with modifier ``PN''
are excluded from the OPPS ratesetting process for both CY 2019 and CY
2020. We are including these lines as non-OPPS claims in the CY 2020
OPPS final rule limited data set, but as discussed, are continuing to
exclude them for ratesetting purposes.
For details of the claims accounting process used in this final
rule with comment period, we refer readers to the claims accounting
narrative under supporting documentation for this CY 2020 OPPS/ASC
final rule with comment period on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
2. Final Data Development and Calculation of Costs Used for Ratesetting
a. 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 the CY 2020 OPPS/ASC proposed rule (84 FR 39409), we proposed to
continue to establish payment rates for blood and blood products using
our blood-specific CCR methodology, which utilizes actual or simulated
CCRs from the most recently available hospital cost reports to convert
hospital charges for blood and blood products to costs. This
methodology has been our standard ratesetting methodology for blood and
blood products since CY 2005. It was developed in response to data
analysis indicating that there was a significant difference in CCRs for
those hospitals with and without blood-specific cost centers, and past
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
proposed to continue to simulate blood CCRs for each hospital that does
not report a
[[Page 61155]]
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 proposed 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 proposed 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 stated in the proposed rule that we continue to
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 the CY 2020 OPPS/ASC proposed rule
(84 FR 39410), we proposed 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
payment rates of the C-APCs), we proposed 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 referred readers to Addendum B to the 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).
We did not receive any comments on our proposal to establish
payment rates for blood and blood products using our blood-specific CCR
methodology and we are finalizing this policy as proposed.
(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), 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
[[Page 61156]]
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.
However, we received many comments from providers and other
stakeholders including blood product industry stakeholder groups and
the company who developed the pathogen-reduced platelets technology
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 proposed 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 was
approximately $585. The claims-based payment rate for services
described by HCPCS code P9073 was 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 the 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.
Comment: We received comments that opposed the proposal to end the
crosswalk between P9073 (Platelets, pheresis, pathogen-reduced, each
unit) and P9037 (Platelets, pheresis, leukocytes reduced, irradiated,
each unit) and calculate the payment rate for services described by
HCPCS code P9073 using claims payment history. The commenters stated
that the 2018 claims data used to establish the CY 2020 payment rate
for pathogen-reduced platelets continue to include erroneous claims and
is therefore inaccurate. The commenters further state, as an example of
the inaccuracies of the 2018 claims data, that approximately 30 percent
of the 2018 claims data for P9073 contain costs that are at least $100
lower than the costs of P9037, which is a less expensive technology.
The commenters requested that we continue the crosswalk between these
two codes for both CYs 2020 and 2021 to allow hospitals time to
continue to correct errors in their chargemasters and to prevent
underpayment to hospitals for pathogen-reduced platelets. The
commenters also claim that hospitals may be reluctant to adopt a
relatively new technology, such as pathogen-reduced platelets, if the
payment is too low.
Response: We continue to believe that, beginning in CY 2020, it is
appropriate to calculate the payment rate for services described by
HCPCS code P9073 using the standard methodology (which involves using
data from CY 2018 claims for the code). We have previously acknowledged
(83 FR 58834) that there was confusion among the provider community
surrounding the reporting and billing for P9073 and have made
exceptions to our standard methodology for calculating payment rates
for this service. At this time, we believe providers have had
sufficient time to become familiar with the services covered by the
procedure code and we believe the issue in which payment for pathogen-
reduced platelets and payment for rapid bacterial testing was combined
under the same code has been resolved. Additionally, in response to
concerns that hospitals may be reluctant to adopt the pathogen-reduced
platelet technology based on a payment rate that is too low, in our
analysis of claims data from CY 2018, we found that approximately 5,300
claims have been billed for services described by HCPCS code P9073,
which is significantly higher that the approximately 2,200 claims
billed in 2017 for services described by the predecessor codes for
HCPCS code P9073, HCPCS codes Q9988 and P9072. Also, the estimated CY
2020 payment rate for services described by HCPCS code P9073 based on
the CY 2018 claims data is approximately $600
[[Page 61157]]
which is comparable to the CY 2020 estimated crosswalked payment rate
using HCPCS code P9037 of approximately $620. These data suggest that a
crosswalk is no longer necessary. Further, we have now used a cross-
walk for P9073 and its predecessor codes for 4 years, which is longer
than the typical 2-year period for which we normally cross-walk new
HCPCS codes. We agreed with past commenters that an extended period of
cross-walking payment for P9073 was necessary to address the coding
confusion in 2016 that may have led to the claims data reflecting costs
for services not described by HCPCS code P9073. However, the above-
referenced coding issues were resolved in January 2018, so we have no
reason to believe that the data may reflect the costs for services
other than those described by P9073.
Accordingly, for CY 2020 and subsequent years, we are finalizing
the policy to calculate the payment rate for services described by
HCPCS code P9073 by using claims payment history and to end the
crosswalk between HCPCS codes P9037 and P9073.
(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 the CY 2020 OPPS/ASC proposed rule, for CY 2020, we proposed 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 proposed to use to set the proposed payment rates for
most other items and services that would be paid under the CY 2020
OPPS. We proposed to base the payment rates for brachytherapy sources
on the geometric mean unit costs for each source, consistent with the
methodology that we proposed for other items and services paid under
the OPPS, as discussed in section II.A.2. of the proposed rule. We also
proposed 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 proposed 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 proposed 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 were included in Addendum B to
the proposed rule (which is available via the internet on the CMS
website) and were identified with status indicator ``U''.
For CY 2018, we assigned status indicator ``U'' (Brachytherapy
Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645
(Brachytherapy planar source, palladium-103, per square millimeter) in
the absence of claims data and established a payment rate using
external data (invoice price) at $4.69 per mm\2\. For CY 2019, in the
absence of sufficient claims data, we continued to establish a payment
rate for C2645 at $4.69 per mm\2\. For CY 2020, we proposed to continue
to assign status indicator ``U'' to HCPCS code C2645 (Brachytherapy
planar source, palladium-103, per square millimeter). Our CY 2018
claims data available for the proposed CY 2020 rule, included two
claims with over 9,000 units of HCPCS code C2645. Therefore, we stated
our belief that the CY 2018 claims data were 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 proposed
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\.
Comment: One commenter stated that the reduction in the payment
rate for HCPCS code C2645 (Brachytherapy planar source, palladium-103,
per square millimeter) for CY 2020 will preclude outpatient use for an
FDA-cleared, predominantly outpatient indication, for C2645.
Additionally, the commenter argued that the two claims used to
establish the payment rate for C2645 are not a sufficient volume for
ratesetting and that the claims are most likely erroneous in that the
brachytherapy source was used for procedures on the inpatient-only
list.
Response: Claims that include brachytherapy sources along with
procedures on the inpatient-only list are sufficient and appropriate to
use for our ratesetting process as brachytherapy sources are line-item
paid. However, given the limited number of claims for HCPCS C2645 for
both CY 2020 and previous calendar years and the new FDA-approved
outpatient indication for HCPCS code C2645, we are persuaded that the
proposed CY 2020 payment rate, which is significantly lower than that
of the rate in effect in prior years, may not adequately represent the
costs associated with C2645. Therefore, we are using 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
[[Page 61158]]
determined to be necessary to ensure equitable payments, to maintain
the CY 2019 rate for this brachytherapy source, despite the lower
geometric mean costs of $1.03 per mm\2\ available in the claims data
used for this final rule with comment period. We believe this situation
is unique, given the very limited number of claims for this
brachytherapy source for both CY 2020 ratesetting purposes and previous
calendar years.
After consideration of the public comment we received, we are not
finalizing the proposed rate for C2645 and are instead assigning the
brachytherapy source described by HCPCS code C2645 a payment rate of
$4.69 mm\2\ for CY 2020 through use of our equitable adjustment
authority.
Comment: Some commenters recommended that we reevaluate our
approach to ratesetting HCPCS C2642 (Brachytherapy source, stranded,
cesium-131, per source) and stated that our proposed CY 2020 payment
rate of $67.29 per source for HCPCS code C2642 would be too low to
ensure fair and adequate reimbursement. Additionally, one provider who
billed C2642 stated there was a clerical error and that it may have
inadvertently underreported the actual costs for C2642 incurred by the
provider.
Response: Based on the most current available data for the CY 2020
OPPS/ASC final rule with comment period, the geometric mean for HCPCS
code C2642 based on 85 claims from CY 2018 is $75.06 per source. We
note that the CY 2019 payment rate for HCPCS Code C2642 was $79.94 per
source. We believe that the variation in costs for HCPCS code C2642
does not appear unusual or erroneous and that the CY 2020 geometric
mean for HCPCS code C2642 based on CY 2018 claims data is consistent
with historical payment rates for this brachytherapy source.
Comment: One commenter stated that the geometric mean cost and
payment for brachytherapy sources has fluctuated significantly since
2013. The commenter argued that such fluctuations may put financial
pressure on providers and create access barriers for beneficiaries to
receive brachytherapy. The commenter requested we review and consider
removing outliers to ensure payment stability for low-volume
brachytherapy sources in future rulemaking.
Response: We thank the commenter for their recommendation and will
take it under consideration in future rulemaking. As discussed in the
CY 2013 OPPS/ASC final rule with comment period (77 FR 68259 through
68271), geometric mean costs better encompass the variation in costs
that occur when providing a service because, in addition to the
individual cost values that are reflected by medians, geometric means
reflect the magnitude of the cost measurements, and thus are more
sensitive to changes in the data. OPPS relative payment weights based
on geometric mean costs would better capture the range of costs
associated with providing services. Further, geometric means capture
cost changes that are introduced slowly into the system on a case-by-
case or hospital-by-hospital basis. For these reasons, we believe it
would be inappropriate to remove outliers when determining
brachytherapy geometric mean costs and payment rates.
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. 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 final rule with
comment period
[[Page 61159]]
(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''
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 (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
[[Page 61160]]
(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
Violation of the 2 times rule, as stated in section
1833(t)(2) of the Act and section III.B.2. of this final 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 the CY 2020 OPPS/ASC proposed rule (84 FR
39414), we proposed 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 listed the 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 the CY 2020 OPPS/ASC
proposed rule (which is available via the internet on the CMS website).
Addendum J to the proposed rule included 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
the proposed rule also contained summary cost statistics for each of
the paired code combinations that describe a complex code combination
that would qualify for a complexity adjustment and were 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 were 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
[[Page 61161]]
Similar Procedures), includes all paired code combinations that were
proposed to be reassigned to C-APC 5224 when CPT code 33208 is the
primary code. Providing the information contained in Addendum J to the
proposed rule allowed 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.
Comment: Several commenters requested that CMS alter the
established C-APC complexity adjustment eligibility criteria to allow
additional code combinations to qualify for complexity adjustments.
Some commenters reiterated their request to allow clusters of
procedures, consisting of a ``J1'' code-pair and multiple other
associated add-on codes used in combination with that ``J1'' code-pair
to qualify for complexity adjustments. Other commenters requested that
CMS allow procedures assigned status indicator ``S'' or ``T'' to be
eligible for complexity adjustments, to allow a C-APC to receive
payment at the C-APC rate two levels higher within the clinical family
when there is a violation of the two-times rule in the receiving C-APC
and also to account for patient characteristics such as comorbidities
and sociodemographic factors in the complexity adjustment policy. One
commenter recommended that HCPCS code 0546T--Radiofrequency
spectroscopy, real time, intraoperative margin assessment, at the time
of partial mastectomy, with report--be assigned to APC 5091--Level 1
Breast/Lymphatic Surgery and Related Procedures and designated for
complexity adjustment to APC 5092--Level 2 Breast/Lymphatic Surgery and
Related Procedures for CY 2020.
We also received a comment requesting that CMS modify its
complexity adjustment criteria and apply the complexity adjustment to
all blue light cystoscopy with Cysview procedures in the HOPD,
including eliminating the claim frequency requirement to determine
eligibility for the complexity adjustment and expanding the eligibility
for a complexity adjustment to other APCs besides C-APCs.
Response: We appreciate these comments. However, at this time, we
do not believe changes to the C-APC complexity adjustment criteria are
necessary or that we should make exceptions to the criteria to allow
claims with the code combinations suggested by the commenters to
receive complexity adjustments. As stated previously (81 FR 79582), we
continue to believe that the complexity adjustment criteria, which
require a frequency of 25 or more claims reporting a code combination
and a violation of the 2 times rule in the originating C-APC in order
to receive payment in the next higher cost C-APC within the clinical
family, are adequate to determine if a combination of procedures
represents a complex, costly subset of the primary service. If a code
combination meets these criteria, the combination receives payment at
the next higher cost C-APC. Code combinations that do not meet these
criteria receive the C-APC payment rate associated with the primary
``J1'' service. A minimum of 25 claims is already a very low threshold
for a national payment system. Lowering the minimum of 25 claims
further could lead to unnecessary complexity adjustments for service
combinations that are rarely performed.
We also do not believe that it is necessary to provide payment for
claims including qualifying code combinations at two APC levels higher
than the originating APC. As stated in the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58842), we believe that payment at the next
higher paying C-APC is adequate for code combinations that exhibit
materially greater resource requirements than the primary service and
that, in many cases, paying the rate assigned to two levels higher may
lead to a significant overpayment. As mentioned previously, we do not
create new APCs with a comprehensive geometric mean cost that is higher
than the highest geometric mean cost C-APC in a clinical family just to
accommodate potential complexity adjustments. 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). Therefore, a policy to pay for claims with qualifying code
combinations at two C-APC levels higher than the originating APC is not
always feasible.
Lastly, as stated in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58843), we do not believe that it is necessary to adjust
the complexity adjustment criteria to allow claims that include more
than two ``J1'' procedures, procedures that are not assigned to C-APCs,
or procedures performed at certain hospitals with patients with more
comorbidities, to qualify for a complexity adjustment. As mentioned
earlier, we believe the current criteria are adequate to determine if a
combination of procedures represents a complex, costly subset of the
primary service.
With regard to the requests for further complexity adjustments for
blue light cystoscopy procedures using the drug Cysview, as discussed
in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59243-
59246), we acknowledged that there are additional equipment, supplies,
operating room time, and other resources required to perform blue light
cystoscopy in addition to white light cystoscopy. We also acknowledged
stakeholder concerns that the payment for blue light cystoscopy
procedures involving Cysview[supreg] may be creating a barrier to
beneficiaries receiving access to reasonable and necessary care for
which there may not be a clinically comparable alternative. Based on
these issues, in CY 2018, we created a HCPCS C-code (C9738--Adjunctive
blue light cystoscopy with fluorescent imaging agent (list separately
in addition to code for primary procedure)) to describe blue light
cystoscopy with fluorescent imaging agent and allowed this code to be
eligible for complexity adjustments when billed with procedure codes
used to describe white light cystoscopy of the bladder, although this
code is not a ``J1'' service or an add-on code for the primary ``J1''
service. For CY 2020, there are three code combinations of six total
involving C9738 and procedure codes used to describe white light
cystoscopy that will qualify for a complexity adjustment. At this time,
we do not believe that further modifications to the C-APC policy are
necessary.
After consideration of the public comments we received on the
proposed complexity adjustment policy, we are finalizing the C-APC
complexity adjustment policy for CY 2020, as proposed, without
modification.
(2) Additional C-APCs for CY 2020
For CY 2020 and subsequent years, in the CY 2020 OPPS/ASC proposed
rule (84 FR 39414), we proposed 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 the proposed rule
(84 FR 39414), we proposed to add two C-APCs under the existing C-APC
payment policy in CY 2020: Proposed C-APC 5182 (Level 2
[[Page 61162]]
Vascular Procedures); and proposed C-APC 5461 (Level 1 Neurostimulator
and Related Procedures). These APCs were selected to be included in
this proposal 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 the proposed rule listed the proposed C-APCs for CY
2020. All C-APCs were displayed in Addendum J to the proposed rule
(which is available via the internet on the CMS website). Addendum J to
the proposed rule also contained 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 setting. We note that this comment solicitation
is discussed in section V.B.7. of the proposed rule and this final rule
with comment period.
Comment: Several commenters supported the creation of the two new
proposed C-APCs, encouraging CMS to continue to evaluate outpatient
charge and cost data for additions to the list of C-APCs during future
rulemaking periods. One commenter requested that CMS closely monitor
payments for the proposed C-APC 5461 (Level 1 Neurostimulator and
Related Products) relative to costs of the procedure to ensure accurate
compensation and availability in the ASC setting.
Response: We appreciate the commenters' support and note that we
annually review the most recent data available to determine costs
associated with furnishing a service and update payment rates
accordingly.
Comment: We received comments requesting that CMS create a C-APC
for autologous hematopoietic stem cell transplant similar to the C-APC
established for allogeneic hematopoietic stem cell transplant. The
commenters stated CMS' APC rate-setting process of using single and
pseudo-single procedure claims results in an inadequately low APC
payment rate for autologous stem cell transplant and believed that the
creation of a C-APC for autologous hematopoietic stem cell transplant
would improve payment rates by allowing a greater number of claims to
be used in the rate setting process. The Advisory Panel on Hospital
Outpatient Payment (HOP Panel) also recommended that CMS consider
creating a comprehensive APC for autologous stem cell transplantation
and that CMS provide a rationale if it decides not to create such an
APC.
Response: We thank the commenter for this comment. In order to
determine whether it would be appropriate to create a C-APC for
autologous hematopoietic stem cell transplant, we modeled this change
with APC 5242--Level 2 Blood Product Exchange and Related Services,
which includes CPT code 38241 Hematopoietic progenitor cell (hpc);
autologous transplantation as well as APC 5243--Level 3 Blood Product
Exchange and Related Services, in keeping with our practice of
converting APCs to C-APCs that have higher APC levels within the
clinical family that are assigned to a C-APC.
After analyzing the results, we found that creating a C-APC for APC
5242 would increase the number of single claims available for
ratesetting for this APC by approximately 8 percent, however creating
new C-APCs in the Stem Cell Transplant clinical family would decrease
the geometric mean cost of C-APC 5244--Level 4 Blood Product Exchange
and Related Services by approximately 75 percent due to complexity
adjustments of code combinations within the clinical family,
specifically complexity adjustments from C-APC 5243 to C-APC 5244.
Therefore, at this time we do not believe it is appropriate to create a
C-APC for autologous hematopoietic stem cell transplant.
Comment: Two manufacturers of drugs used in ocular procedures
requested that CMS discontinue the C-APC payment policy for existing C-
APCs that include procedures involving their drugs and instead provide
separate payment for the drugs. The manufacturer commenters believed
that the C-APC packaging policy, which packages payment for certain
drugs that are adjunctive to the primary service, results in
underpayment for the drugs and violates the 2 times rule.
Response: We continue to believe that the procedures assigned to
the proposed C-APCs, including the procedures involving the drugs used
in ocular procedures mentioned by the commenters, are appropriately
paid through a C-APC and the costs of drugs (as well as other items or
services furnished with the procedures) are reflected in hospital
billing, and therefore the rates that are established for the ocular
procedures. As stated in the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79584), procedures assigned to C-APCs are primary
services (mostly major surgical procedures) that are typically the
focus of the hospital outpatient stay. In addition, with regard to the
packaging of the drugs based on the C-APC policy, as stated in previous
rules (78 FR 74868 through 74869 and 74909 and 79 FR 66800), items
included in the packaged payment provided with the primary ``J1''
service include all drugs, biologicals, and radiopharmaceuticals
payable under the OPPS, regardless of cost, except those drugs with
pass-through payment status. In accordance with section 1833(t)(2) of
the Act and Sec. 419.31 of the regulations, we annually review the
items and services within an APC group to determine if there are any
APC violations of the 2 times rule and whether there are any revisions
to APC assignments that may be necessary or any exceptions that should
be made.
Comment: Several commenters, including device manufacturer
associations, expressed concern that the C-APC payment rates may not
adequately reflect the costs associated with services and requested
that CMS not establish any additional C-APCs. These comments questioned
the broader C-APC payment methodology, ratesetting accuracy, the impact
of C-APCs on broader agency objectives, and recommended methodological
changes to better capture costs of providing comprehensive services
before further expansion. Some commenters were concerned that hospital
are not correctly charging for procedures assigned to C-APCs and urged
CMS to invest in policies and education for hospitals regarding correct
billing patterns. These commenters also requested that CMS provide an
analysis of the impact of the C-APC policy on affected procedures and
patient access to services.
Response: We appreciate the comments. We continue to believe that
the proposed new C-APCs for CY 2020 are appropriate to be added to the
existing C-APC payment policy. We also note that, in the CY 2018 OPPS/
ASC final rule with comment period (82 FR 59246), we conducted an
analysis of the effects of the C-APC policy. The analysis looked at
data from CY 2016 OPPS/ASC final rule with comment period, the CY 2017
OPPS/ASC final rule with comment period, and the CY 2018 OPPS/ASC
proposed rule, which involved claims data from CY 2014 (before C-APCs
became effective) to CY 2016. We looked at separately payable codes
that were then assigned to C-APCs and, overall, we observed an increase
in claim line frequency, units
[[Page 61163]]
billed, and Medicare payment for those procedures, which suggest that
the C-APC payment policy did not adversely affect access to care or
reduce payments to hospitals.
Comment: One commenter requested that CMS discontinue the C-APC
payment policy for single session stereotactic radiosurgery (SRS)
procedures, stating concerns that the C-APC methodology does not
account for the complexity of delivering radiation therapy and fails to
capture appropriately coded claims. The commenters also requested that
CMS continue to make separate payments for the 10 planning and
preparation codes related to SRS and include the HCPCS code for IMRT
planning (77301) on the list of planning and preparation codes, stating
that the service has become more common in single fraction radiosurgery
treatment planning.
Response: At this time, we do not believe that it is necessary to
discontinue the C-APCs that include single session SRS procedures. We
continue to believe that the C-APC policy is appropriately applied to
these surgical procedures for the reasons cited when this policy was
first adopted and note that the commenters did not provide any
empirical evidence to support their claims that the existing C-APC
policy does not adequately pay for these procedures. Also, we will
continue in CY 2020 to pay separately for the 10 planning and
preparation services (HCPCS codes 70551, 70552, 70553, 77011, 77014,
77280, 77285, 77290, 77295, and 77336) adjunctive to the delivery of
the SRS treatment using either the Cobalt-60-based or LINAC based
technology when furnished to a beneficiary within 1 month of the SRS
treatment for CY 2020 (82 FR 59242 and 59243).
Comment: Several commenters requested that CMS discontinue the C-
APC payment policy for all surgical insertion codes required for
brachytherapy treatment. The commenters stated concerns about how the
C-APC methodology impacts radiation oncology, particularly the delivery
of brachytherapy for the treatment of cervical cancer. They also stated
that they oppose C-APC payment for cancer care given the complexity of
coding, serial billing for cancer care, and potentially different sites
of service for the initial surgical device insertion and subsequent
treatment delivery or other supportive services.
Response: While we continue to believe that the C-APC policy is
appropriately applied to these surgical procedures, we will continue to
examine these concerns and will determine if any modifications to this
policy are warranted in future rulemaking.
Comment: We received requests for clarifications related to C-APC
8011 Comprehensive Observation Services (status indicator ``J2''). One
commenter requested that CMS clarify the distinction between status
indicators for ``V'' and ``J2''. Another commenter questioned the
rationale for the established criteria for payment through C-APC 8011,
specifically the requirement that the claim 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.
Response: The comprehensive observation services C-APC (C-APC 8011)
was established in CY 2016 (80 FR 70333 through 70336) to provide
payment for extended assessment and management encounters. C-APC 8011
is paid and status indicator ``J2'' is assigned when a specific
combination of services is performed. This combination of services was
described in previous rulemaking (80 FR 70333 through 70336) in detail
and is repeated for clarity below. 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;''
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 (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'' results in a single
prospective payment for the comprehensive observation services based on
the costs of all reported services on the claim. We make payment for
all other items and services reported on the hospital outpatient claim
as being adjunctive to the specific combination of observation
services. The assignment of status indicator ``V'' describes a clinic
or emergency department visit. It does not describe services paid
through a comprehensive APC and it will not trigger payment through C-
APC 8011.
With regard to the comment questioning the rationale for the
requirement that the claim 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 in order to be paid through C-APC 8011, this criterion was
incorrectly quoted as the final policy in the CY 2020 OPPS/ASC proposed
rule (84 FR 39412). This language has been updated in this final rule
with comment period. This criterion was proposed in the CY 2016 OPPS/
ASC proposed rule, however a modification of this criterion was
finalized. We refer readers to the discussion of the establishment of
C-APC 8011 in the CY 2016 OPPS/ASC Final Rule with comment period (80
FR 70335-70336). In this rule, we stated in response to commenters'
concerns regarding packaging payment for potentially high-cost surgical
procedures into the payment for an observation C-APC, we finalized a
policy that claims reporting procedures assigned status indicator ``T''
should not qualify for payment through C-APC 8011, regardless of
whether the procedure assigned status indicator ``T'' was furnished
before or after observation services (described by HCPCS code G0378)
were provided. We state the final criteria for assignment for payment
through C-APC 8011 in the CY 2016 OPPS/ASC final rule with comment
period, including that the
[[Page 61164]]
claims must not contain a procedure described by a HCPCS code to which
we have assigned status indicator ``T'' (80 FR 70335).
After consideration of the public comments we received, we are
finalizing the proposed C-APCs for CY 2020. Table 4 below lists the
final C-APCs for CY 2020. All C-APCs are displayed in Addendum J to
this final rule with comment period (which is available via the
internet on the CMS website). Addendum J to this final rule with
comment period also contains all of the data related to the C-APC
payment policy methodology, including the list of complexity
adjustments and other information for CY 2020.
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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 proposed
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 proposed 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
[[Page 61167]]
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
proposed 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 sought public comments on
whether it would be clinically appropriate to exclude payment for any
New Technology APC procedures from being packaged into the payment for
a comprehensive ``J2'' service starting in CY 2020.
Comment: Several commenters, including device manufacturers, device
manufacturer associations and physicians were opposed to our proposal
to package payment for procedures assigned to a New Technology APC into
the payment for comprehensive observation services assigned status
indicator ``J2''. The commenters stated that there were instances where
beneficiaries receiving observation services may require the types of
procedures that are assigned to new technology APCs. Several commenters
specifically mentioned the HeartFlow Analysis, and stated that it could
be performed appropriately for a patient receiving observation
services. The commenters also stated that providing separate payment
for this new technology procedure will allow CMS to collect sufficient
claims data to enable assignment of the procedure to an appropriate
clinical APC.
Response: We appreciate the stakeholders' comments regarding this
proposal and agree that, although rare, there are situations in which
it is clinically appropriate to provide a new technology service when
providing comprehensive observation services. As discussed in the CY
2019 OPPS/ASC final rule with comment period (83 FR 58847), the purpose
of the new technology APC policy is to ensure that there are sufficient
claims data for new services to assign these procedures to an
appropriate clinical APC and therefore, we excluded procedures assigned
to New Technology APCs from packaging under the C-APC policy. In the CY
2019 final rule, we specifically stated that the exclusion policy
included circumstances when New Technology procedures were billed with
comprehensive services assigned to status indicator ``J1'', however we
believe this rationale is also applicable to comprehensive observation
services that are assigned status indicator ``J2''. Therefore, we are
modifying our policy for excluding procedures assigned to New
Technology APCs from the C-APC policy. For CY 2020, we are finalizing
our policy 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. For CY 2020, we are
also finalizing a policy to exclude payment for any procedures that are
assigned to a New Technology APC from being packaged into the payment
for comprehensive observation services assigned to status indicator
``J2'' when they are included on a claim with ``J2'' procedures.
c. 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 the CY 2020 OPPS/ASC proposed rule (84 FR 39398), we proposed to
continue our longstanding policy of limiting the aggregate payment for
specified less resource-intensive mental health services furnished on
the same date to the payment for a day of partial hospitalization
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,
[[Page 61168]]
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 the CY 2020 OPPS/ASC proposed rule (84 FR 39398), for CY 2020,
we proposed 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 proposed to set the proposed payment
rate for composite APC 8010 at the same payment rate that we proposed
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.
We did not receive any public comment on these proposals.
Therefore, we are finalizing our proposal, without modification, 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 finalizing our proposal to set
the payment rate for composite APC 8010 for CY 2020 at the same payment
rate that we set for APC 5863, which is the maximum partial
hospitalization per diem payment rate for a hospital.
(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 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 the CY 2020 OPPS/ASC proposed rule (84 FR 39398), we proposed 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 stated that 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) were 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), were identified by asterisks in Addendum N to the
CY 2020 OPPS/ASC proposed rule (which is available via the internet on
the CMS website) and were discussed in more detail in section II.A.1.b.
of the CY 2020 OPPS/ASC proposed rule.
For the 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 the CY 2020
OPPS/ASC proposed rule listed the proposed
[[Page 61169]]
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.
We did not receive any public comments on these proposals.
Therefore, we are finalizing our proposal to continue the use of
multiple imaging composite APCs to pay for services providing more than
one imaging procedure from the same family on the same date, without
modification. Table 6 below lists the HCPCS codes that will be subject
to the multiple imaging composite APC policy and their respective
families and approximate composite APC final geometric mean costs for
CY 2020.
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3. 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 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 may occur 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 the CY 2020 OPPS/ASC proposed rule (84 FR 39423
through 39424), beginning in CY 2020, we proposed 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 and finalized changes to the
packaging policies beginning in CY 2020.
Comment: We received several comments from patient advocates,
physicians, drug manufacturers, and professional medical societies
regarding payment for blue light cystoscopy procedures involving
Cysview[supreg] (hexaminolevulinate HCl) (described by HCPCS code
C9275). Cysview[supreg] is a drug that functions as a supply in a
diagnostic test or procedure and therefore payment for this product is
packaged with payment for the primary procedure in the OPPS and ASC
settings. Commenters stated that utilization of Cysview[supreg] is low
in the HOPD and ASC settings, which they attributed to the packaging of
Cysview as a drug that functions as a supply in a diagnostic test or
procedure. Commenters indicated that packaged payment does not
adequately pay for the blue light cystoscopy procedures, particularly
in the ASC setting where payment is generally approximately 55 percent
of the HOPD payment. Commenters believe that providers have been
deterred from the use of this technology, especially in the ASC, and as
a result a significant percentage of
[[Page 61174]]
beneficiaries are not able to access the procedure.
Commenters also stated that there has been literature published
showing that Blue Light Cystoscopy with Cysview[supreg] is more
effective than white light cystoscopy alone at detecting and
eliminating nonmuscle invasive bladder cancer tumors, leading to a
reduction in bladder cancer recurrence.
Commenters made various recommendations for payment for blue light
cystoscopy procedures involving Cysview[supreg], including to pay
separately for Cysview[supreg] when it is used with blue light
cystoscopy in the HOPD and ASC settings, to pay separately for
Cysview[supreg] when it is used with blue light cystoscopy in the ASC
setting, similar to the policy finalized for Exparel[supreg] in the CY
2019 OPPS/ASC final rule with comment period (83 FR 58860), or to
utilize our equitable adjustment authority at section 1833(t)(2)(E) of
the Act to provide an ``add-on'' or ``drug intensive'' payment to ASCs
when using Cysview[supreg] in blue light cystoscopy procedures. Other
commenters requested separate payment for all diagnostic imaging drugs
(radiopharmaceuticals and contrast agents).
Response: We acknowledge the concerns of the numerous stakeholders
who commented on this issue and understand the importance of blue light
cystoscopy procedures involving Cysview[supreg]. Cysview has been
packaged as a drug, biological, or radiopharmaceutical that functions
as a supply in a diagnostic test or procedure since CY 2014 (78 FR
74930). As we stated in the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59244), we recognize that blue light cystoscopy
represents an additional elective but distinguishable service as
compared to white light cystoscopy that, in some cases, may allow
greater detection of bladder tumors in beneficiaries relative to white
light cystoscopy alone. Given the additional equipment, supplies,
operating room time, and other resources required to perform blue light
cystoscopy in addition to white light cystoscopy, in CY 2018, we
created a new HCPCS C-code to describe blue light cystoscopy and since
CY 2018 have allowed for complexity adjustments to higher paying C-APCs
for qualifying white light and blue light cystoscopy code combinations.
At this time, we continue to believe that Cysview[supreg] is a drug
that functions as a supply in a diagnostic test or procedure and
payment for this drug is packaged with payment for the diagnostic
procedure. Therefore, we do not believe it is necessary to pay
separately for Cysview[supreg] when it is used with blue light
cystoscopy in either the HOPD or ASC setting. We also do not believe
that it would be appropriate to utilize our equitable adjustment
authority at section 1833(t)(2)(E) of the Act to provide an ``add-on''
or ``drug intensive'' payment to ASCs when using Cysview[supreg] in
blue light cystoscopy procedures nor do we have any evidence to show
that separate payment for all diagnostic imaging drugs
(radiopharmaceuticals, contrast agents) is required. However, we will
continue to examine payment for blue light cystoscopy procedures
involving Cysview to determine if any changes to this policy would be
appropriate in future rulemaking.
Comment: Some commenters requested that we eliminate the packaging
policy for drugs that function as a supply when used in a diagnostic
test or procedure.
Response: In the CY 2014 OPPS/ASC final rule with comment period,
we established a policy to package drugs, biologicals, and
radiopharmaceuticals that function as supplies when used in a
diagnostic test or procedure. In particular, we referred to drugs,
biologicals, and radiopharmaceuticals that function as supplies as a
part of a larger, more encompassing service or procedure, namely, the
diagnostic test or procedure in which the drug, biological, or
radiopharmaceutical is employed (78 FR 74927). At this time, we do not
believe it is necessary to eliminate this policy. As previously noted,
the OPPS packages 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.
Comment: One commenter requested separate payment for add-on codes
for Fractional Flow Reserve Studies (FFR/iFR) and Intravascular
Ultrasound (IVUS). The commenter stated that they believe the packaging
of these codes will disincentivize physicians to perform these adjunct
procedures because of cost. The codes include:
93571--Intravascular doppler velocity and/or pressure
derived coronary flow reserve measurement (coronary vessel or graft)
during coronary angiography including pharmacologically induced stress;
initial vessel (list separately in addition to code for primary
procedure);
93572--Intravascular doppler velocity and/or pressure
derived coronary flow reserve measurement (coronary vessel or graft)
during coronary angiography including pharmacologically induced stress;
each additional vessel (list separately in addition to code for primary
procedure));
92978--Endoluminal imaging of coronary vessel or graft
using intravascular ultrasound (ivus) or optical coherence tomography
(oct) during diagnostic evaluation and/or therapeutic intervention
including imaging supervision, interpretation and report; initial
vessel (list separately in addition to code for primary procedure); and
92979--Endoluminal imaging of coronary vessel or graft
using intravascular ultrasound (ivus) or optical coherence tomography
(oct) during diagnostic evaluation and/or therapeutic intervention
including imaging supervision, interpretation and report; each
additional vessel (list separately in addition to code for primary
procedure)).
Response: As stated in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66630), we continue to believe that IVUS and FFR are
dependent services that are always provided in association with a
primary service. Add-on codes represent services that are 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. As we have noted in past
rules, add-on codes do not represent standalone procedures and are
inclusive to other procedures performed at the same time (79 FR 66818).
We continue to believe it is unnecessary to provide separate payment
for the previously mentioned add-on codes at this time.
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
[[Page 61175]]
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 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
52485, we reiterated our position with regard to 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 2019 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 (83 FR 37068). 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 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, FDA
approved Exparel[supreg]'s new indication for use as an interscalene
brachial plexus nerve block to produce postsurgical regional
analgesia.\11\ Therefore, we also 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
52485) 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
[[Page 61176]]
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, or a combination
thereof.
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 stated that we believe 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 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 the 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 or a combination thereof.
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 period of 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 stated in the proposed
rule that 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 the
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 stated in the proposed rule that we continue
to believe it is appropriate to package payment for the use of
[[Page 61177]]
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 for the proposed rule showed a
continued decline in the utilization of Exparel[supreg] in the ASC
setting, which we believed supports our proposal to continue paying
separately for Exparel[supreg] in the ASC setting.
Therefore, for CY 2020, we proposed 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 to 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 invited
public comments on this proposal and asked 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 also invited 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,
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 suggested various
mechanisms through which separate payment or a higher-paying APC
assignment for the primary service could be made. The stakeholders
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 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 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 did not find 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 our 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 invited public comments on whether there
were other non-opioid pain management alternatives for which our
payment policy should be revised to allow separate payment. We
requested public comments that provided 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. We noted that 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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We provide a summary of the comments received and our responses to
those comments below.
Comment: Multiple commenters, including hospital associations,
medical specialty societies, and drug manufacturers, requested that we
pay separately for Exparel and other drugs that function as surgical
supply in the hospital outpatient setting. Some of these commenters
noted that Exparel is more frequently used in this setting and the use
of non-opioid pain management treatments should also be encouraged in
the hospital outpatient department. The manufacturer of Exparel, Pacira
Pharmaceuticals, presented a 5-year OPPS claims data analysis of
hospital trends in Exparel use and a 200 hospital survey on purchasing
decisions for non-opioid alternatives, concluding that Medicare's
packaging policy has led to hospitals reducing or stopping Exparel use.
Response: As we stated in the CY 2019 OPPS/ASC final rule (83 FR
58856), we do not believe that there is sufficient evidence that non-
opioid pain management drugs should be paid separately in the hospital
outpatient setting at this time. The commenters did not provide
evidence that the OPPS packaging policy for Exparel (or other non-
opioid drugs) creates a barrier to use of Exparel in the hospital
setting. Further, while we received some public comments suggesting
that, as a result of using Exparel in the OPPS setting, providers may
prescribe fewer opioids for Medicare beneficiaries, we do not believe
that the OPPS payment policy presents a barrier to use of Exparel or
affects the likelihood that providers will prescribe fewer opioids in
the HOPD setting. Several drugs are packaged under the OPPS and payment
for such drugs is included in the payment for the associated primary
procedure. We were not persuaded by the information supplied by
commenters suggesting that some providers avoid use of non-opioid
alternatives (including Exparel) solely because of the OPPS packaged
payment policy. We observed increasing Exparel utilization in the HOPD
setting with the total units increasing from 9.0 million in 2017 to
13.6 million in 2018, despite the bundled payment in the OPPS setting.
This upward trend has been consistent since 2015, as the data shows
approximately 6.5 million total units in 2015 and 8.1 million total
units in 2016. Therefore, we do not believe that the current OPPS
payment methodology for Exparel and other non-opioid pain management
drugs presents a widespread barrier to their use.
In addition, higher use in the hospital outpatient setting not only
supports the notion that the packaged payment for Exparel is not
causing an access to care issue, but also that the payment rate for
primary procedures in the HOPD using Exparel adequately reflects the
cost of the drug. That is, because Exparel is commonly used and billed
under the OPPS, the APC rates for the primary procedures reflect such
utilization. Therefore, the higher utilization in the OPPS setting
should mitigate the need for separate payment. We remind readers that
the OPPS is a prospective payment system, not a cost-based system and,
by design, is based on a system of averages under which payment for
certain cases may exceed the costs incurred, while for others, it may
not. As stated earlier in this section, the OPPS packages payments for
multiple interrelated items and services into a single payment to
create incentives for hospitals to furnish
[[Page 61178]]
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. We continue to invite
stakeholders to share evidence, such as published peer-reviewed
literature, on these non-opioid alternatives. We also intend to
continue to analyze the evidence and monitor utilization of non-opioid
alternatives in the OPD and ASC settings for potential future
rulemaking.
We also stated in the CY 2020 OPPS/ASC proposed rule that, although
we found increases in utilization for Exparel when it is paid under the
OPPS, we did notice a continued decline in Exparel utilization in the
ASC setting. While several variables may contribute to this difference
in utilization and claims reporting between the hospital outpatient
department and the ASC setting, one potential explanation is that, in
comparison to hospital outpatient departments, ASCs tend to provide
specialized care and a more limited range of services. Also, ASCs are
paid, in aggregate, approximately 55 percent of the OPPS rate.
Therefore, fluctuations in payment rates for specific services may
impact these providers more acutely than hospital outpatient
departments, and as a result, ASCs may be less likely to choose to
furnish non-opioid postsurgical pain management treatments, which are
typically more expensive than opioids. Another possible contributing
factor is that ASCs do not typically report packaged items and services
and, accordingly, our analysis may be undercounting the number of
Exparel units utilized in the ASC setting.
Therefore, we are finalizing our proposal to continue to unpackage
and pay separately for the cost of non-opioid pain management drugs
that function as surgical supplies when they are furnished in the ASC
setting without modification. This policy and related comments are
addressed in section XIII.D.3. of this final rule with comment period.
As we stated previously in the CY 2018 OPPS/ASC final rule with
comment period (82 FR 59250), our packaging policies are designed to
support our strategic goal of using larger payment bundles in the OPPS
to maximize hospitals' incentives to provide clinically appropriate
care in the most efficient manner. The packaging policies established
under the OPPS also typically apply when services are provided in the
ASC setting, and the policies have the same strategic goals in both
settings. While unpackaging and paying separately for drugs that
function as surgical supplies is a departure from our overall packaging
policy for drugs, we believe that the proposed change will continue to
incentivize the use of non-opioid pain management drugs and is
responsive to the Commission's recommendation to examine payment
policies for non-opioid pain management drugs that function as a
supply, with the overall goal of combating the current opioid addiction
crisis. As previously noted, a discussion of the CY 2020 proposal for
payment of non-opioid pain management drugs in the ASC setting was
presented in further detail in section XIII.D.3 of the CY 2020 OPPS/ASC
proposed rule, and we refer readers to section XIII.D.3 of this CY 2020
OPPS/ASC final rule with comment period for further discussion of the
final policy for CY 2020. As stated above, we also requested public
comments in the CY 2020 OPPS/ASC proposed rule that provide peer-
reviewed evidence, 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. We also stated that evidence
that current payment policy provides a payment incentive for using
opioids instead of non-opioid alternatives should align with available
Medicare claims data.
Comment: Several commenters supported the assignment of status
indicator ``K'' (Nonpass-Through Drugs and Nonimplantable Biologicals,
Including Therapeutic Radiopharmaceuticals) and continuing to pay
separately for the drug Prialt (HCPCS J2278, injection, ziconitide), a
non-narcotic pain reliever administered via intrathecal injection.
Commenters provided data indicating that Prialt potentially could lower
opioid use, including opioids such as morphine. In addition to
continued separate payment, several commenters recommended CMS reduce
or eliminate the coinsurance for the drug in order to increase
beneficiary access. Commenters stated that due to the drug's
significant cost, the 20 percent coinsurance would put the drug out of
reach for beneficiaries. Additionally, commenters stated that there is
not enough financial incentive for providers to use Prialt in their
patients compared to lower cost opioids. Commenters claim that Prialt
is only paid at invoice cost, which they believe discourages provider
use.
Response: We thank commenters for their feedback and for their
support of the continued assignment of status indicator ``K'' to HCPCS
J2278. Prialt is paid at its average sales price plus 6 percent
according to the ASP methodology under the OPPS. We note that under
section 1833(t)(8) of the Act, the payment is subject to applicable
deductible and coinsurance, and we are unaware of statutory authority
to alter beneficiary coinsurance for payments made under the OPPS. We
note that because the dollar value of beneficiary coinsurance is
directly proportionate to the payment rate (which is ASP + 6 percent
for HCPCS code J2278), a lower sales price for the drug (which would
lead to a lower Medicare payment rate under current policy) would be
necessary for beneficiaries to have a lower coinsurance amount.
Comment: Many commenters requested that the drug Omidria (HCPCS
code C9447, injection, phenylephrine ketorolac) be excluded from the
packaging policy once its pass-through status expires on September 30,
2020. Omidria is indicated for maintaining pupil size by preventing
intraoperative miosis and reducing postoperative ocular pain in
cataract or intraocular surgeries. The commenters stated that the
available data and multiple peer-reviewed articles on Omidria meet the
section 6082 criteria for packaging exclusion. Commenters asserted that
the use of Omidria decreases patients' need for fentanyl during
surgeries and another commenter stated that Omidria reduces opioid use
after cataract surgeries. In addition, commenters asserted that the
OPPS and ASC payment system do not address the cost of packaged
products used by small patient populations. Therefore, the OPPS and ASC
payment structures for packaged supplies creates an access barrier and
patients are forced to use inferior products that have increased
complication risk and require the continued use of opioids to manage
pain. One commenter referenced the results of a study that showed that
Omidria reduces the need for opioids during cataract surgery by nearly
80 percent while decreasing pain scores by more than 50 percent.
Response: We thank commenters for their feedback on Omidria.
Omidria received pass-through status for a 3-year period from 2015 to
2017. After expiration of its pass-through status, it was packaged per
OPPS policy. Subsequently, Omidria's pass-through status was reinstated
in October 2018
[[Page 61179]]
through September 30, 2020 as required by section 1833(t)(6)(G) of the
Act, as added by section 1301(a)(1)(C) of the Consolidated
Appropriations Act 2018 (Pub. L. 115-141). While our analysis supports
the commenter's assertion that there was a decrease in the utilization
of Omidria in 2018 following its pass-through expiration, we note that
there could be many reasons that utilization declines after the pass-
through period ends that are unrelated to the lack of separate payment,
including the availability of other alternatives on the market (many of
which had been used for several years before Omidria came on the market
and are sold for a lower price), or physician preference among others.
Further, our clinical advisors' review of the clinical evidence
submitted concluded that the study the commenter submitted was not
sufficiently compelling or authoritative to overcome contrary evidence.
Moreover, the results of a CMS study of cataract procedures performed
on Medicare beneficiaries in the OPPS between January 2015 and July
2019 comparing procedures performed with Omidria to procedures
performed without Omidria did not demonstrate a significant decrease in
fentanyl utilization during the cataract surgeries in the OPPS when
Omidria was used. Our results also did not suggest any decrease in
opioid utilization post-surgery for procedures involving Omidria. At
this time, we do not have compelling evidence to exclude Omidria from
packaging after its current pass-through expires on September 30, 2020.
We will continue to analyze the evidence and monitor utilization of
this drug.
Comment: One commenter requested that MKO Melt, a non-FDA-approved,
compounded drug comprised of midazolam/ketamine/ondansetron be excluded
from the packaging policy under section 1833(t)(22)(A)(iii) of the Act.
The commenter contended that MKO Melt are drugs functioning as a
surgical supply in the ASC setting. The commenter provided a reference
to a study titled, ``Anesthesia for opioid addict: Challenges for
perioperative physician'' by Goyal et al., on the need for pain
management in the opioid-dependent patient. The commenter also
referenced a review article, ``Perioperative Management of Acute Pain
in the Opioid-dependent Patient,'' by Mitra et al., on the special
needs of opioid-dependent patients in surgeries and the potential
opioid relapse in those patients who are recovering from opioid use
disorder. Additionally, the commenter referenced a clinical trial
registered in clinicaltrials.gov (NCT03653520) that supports sublingual
MKO Melt for use during cataract surgeries to replace opioids. The
study looked at 611 patients that were divided into three arms: (1) MKO
melt arm, (2) diazepam/tramadol/ondansetron arm, (3) diazepam only arm.
The study concluded that the MKO melt arm had the lowest incidence for
supplemental injectable anesthesia to control pain.
Response: We thank the commenter for the comment. Based on the
information provided, we are not able to validate that MKO Melt reduces
the use of opioids. We note that ketamine, one of the components of MKO
melt, exhibits some addictive properties. Moreover, we did not identify
any compelling evidence that MKO Melt is effective for patients with a
prior opioid addiction nor did we receive any data demonstrating that
the current OPPS packaging policy incentivized providers to use opioids
over MKO Melt. In accordance with our review under section
1833(t)(22)(A)(i) of the Act, as well as the lack of HCPCS code for the
drug, and FDA approval, we were not able to establish any compelling
evidence that MKO should be excluded from packaged payment.
Comment: Several commenters, including individual physicians,
medical associations, and device manufacturers, supported separate
payment for continuous peripheral nerve blocks as the commenters
believed they significantly reduce opioid use. One commenter suggested
that CMS provide separate payment for HCPCS code A4306 (Disposable drug
delivery system, flow rate of less than 50 ml per hour) in the hospital
outpatient department setting and the ASC setting because packaging
represents a cost barrier for providers. The commenter contended that
continuous nerve block procedures have been shown in high quality
clinical studies to reduce the use of opioids, attaching studies for
review. The commenter stated that separate payment for A4306 will
remove the financial disincentive for HOPDs and ASCs to use these
items, and would encourage continuous nerve blocks as a non-opioid
alternative for post-surgical pain management.
Response: We appreciate the commenters' suggestion. We examined the
data for A4306 and noted an overall trend of increasing utilization
from CY 2014 through CY 2017. There was a slight decrease in
utilization in CY 2018. However, we note that this slight decline may
be an outlier, given the four year trend of consistently increasing
utilization. Additionally, the geometric mean cost for HCPCS code A4306
was approximately $30 each year during that 4-year period. We
acknowledge that use of these items may help in the reduction of opioid
use. However, we note that packaged payment of such an item does not
prevent the use of these items, as we found with the overall increased
utilization of this product. We do not believe that the current
utilization trends for HCPCS code A4306 suggest that the packaged
payment is preventing use and remind readers that payment for packaged
items is included in the payment for the primary service. We share the
commenter's concern about the need to reduce opioid use and will take
the commenter's suggestion regarding the need for separate payment for
HCPCS code A4306 into consideration for future rulemaking.
Comment: Multiple commenters identified other non-opioid pain
management alternatives that they believe decrease the dose, duration,
and/or number of opioid prescriptions beneficiaries receive during and
following an outpatient visit or procedure (especially for
beneficiaries at high-risk for opioid addiction) and that may warrant
separate payment for CY 2020. Commenters representing various
stakeholders requested separate payments for various non-opioid pain
management treatments, such as continuous nerve blocks, neuromodulation
radiofrequency ablation, implants for lumbar stenosis, enhanced
recovery after surgery, IV acetaminophen, IV ibuprofen, Polar ice
devices for postoperative pain relief, THC oil, acupuncture, and dry
needling procedures.
For neuromodulation, several commenters noted that spinal cord
stimulators (SCS) may lead to a reduction in the use of opioids for
chronic pain patients. One manufacturer commented that SCS provides the
opportunity to potentially stabilize or decrease opioid usage and that
neuromodulation retains its efficacy over multiple years. Regarding
barriers to access, the commenter noted that Medicare beneficiaries
often do not have access to SCS until after they have exhausted other
treatments, which often includes opioids. The commenter presented
evidence from observational studies that use of SCS earlier in a
patient's treatment could help reduce opioid use while controlling
pain, suggesting CMS look for ways to incorporate SCS earlier in the
treatment continuum.
Another commenter asserted that the standard endpoints, such as a
greater than 50 percent reduction in pain, that are used to determine
if a neuromodulation-based non-opioid pain
[[Page 61180]]
alternative therapy is effective are well-established and validated in
all types of clinical trials and that CMS should establish a general,
national coverage determination for neuromodulation-based non-opioid
pain therapy based on these endpoints, rather than taking the time to
create and process specific national coverage determinations or local
coverage determinations. The commenter suggested that this would be a
much faster and streamlined process for enhancing Medicare beneficiary
access to neuromodulation-based pain management therapies.
One of the manufacturers of a high-frequency SCS device stated that
additional payment was warranted for non-opioid pain management
treatments because they provide an alternative treatment option to
opioids for patients with chronic, leg, or back pain. The commenter
provided supporting studies that claimed that patients treated with
their high-frequency SCS device reported a statistically significant
average decrease in opioid use compared to the control group. This
commenter also submitted data that showed a decline in the mean daily
dosage of opioid medication taken and that fewer patients were relying
on opioids at all to manage their pain when they used the
manufacturer's device.
Other commenters wrote regarding their personal experiences with
radiofrequency ablation for sacral iliac joints and knees. One
commenter referenced several studies, one of which found a decrease in
analgesic medications associated with radiofrequency ablation; however,
it did not provide evidence regarding a decrease in opioid usage.
One national hospital association commenter recommended that while
``certainly not a solution to the opioid epidemic, unpackaging
appropriate non-opioid therapies, like Exparel, is a low-cost tactic
that could change long-standing practice patterns without major
negative consequences.'' This same commenter suggested that Medicare
consider separate payment for IV acetaminophen, IV ibuprofen, and Polar
ice devices for postoperative pain relief after knee procedures. The
commenter also noted that therapeutic massage, topically applied THC
oil, acupuncture, and dry needling procedures are very effective
therapies for relief of both postoperative pain and long-term and
chronic pain. Several other commenters expressed support for separate
payment for IV acetaminophen.
Response: We appreciate the detailed responses from commenters on
this topic. At this time, we have not found compelling evidence for
other non-opioid pain management alternatives described above to
warrant separate payment under the OPPS or ASC payment systems for CY
2020. We plan to take these comments and suggestions into consideration
for future rulemaking. We agree that providing incentives to avoid and/
or reduce opioid prescriptions may be one of several strategies for
addressing the opioid epidemic. To the extent that the items and
services mentioned by the commenters are effective alternatives to
opioid prescriptions, we encourage providers to use them when medically
necessary. We note that some of the items and services mentioned by
commenters are not covered by Medicare, and we do not intend to
establish payment for noncovered items and services at this time. We
look forward to working with stakeholders as we further consider
suggested refinements to the OPPS and the ASC payment system that will
encourage use of medically necessary items and services that have
demonstrated efficacy in decreasing opioid prescriptions and/or opioid
abuse or misuse during or after an outpatient visit or procedure.
After reviewing the non-opioid pain management alternatives
suggested by the commenters as well as the studies and other data
provided to support the request for separate payment, we have not
determined that separate payment is warranted at this time for any of
the non-opioid pain management alternatives discussed above.
Comment: Several commenters addressed payment barriers that may
inhibit access to non-opioid pain management treatments discussed
throughout this section. Several commenters disagreed with CMS's
assessment that current payment policies do not represent barriers to
access for certain non-opioid pain management alternatives. Commenters
encouraged CMS to provide timely insurance coverage for evidence-
informed interventional procedures early in the course of treatment
when clinically appropriate. Several other commenters encouraged CMS to
more broadly evaluate all of its packaging policies to help ensure
patient access to appropriate therapies and to evaluate how packaging
affects the utilization of a medicine.
Response: We appreciate the various, insightful comments we
received from stakeholders regarding barriers that may inhibit access
to non-opioid alternatives for pain treatment and management in order
to more effectively address the opioid epidemic. We will take these
comments into consideration for future rulemaking. Many of these
comments have been previously addressed throughout this section. CMS
recognizes that medical exposure to opioids entails inherent risks,
which may include delayed recovery, diversion, misuse, accidental
overdose, development or re-emergence of addiction, and neonatal
abstinence syndrome. However, there are challenges in developing a
methodology to identify disincentives to use opioid alternatives. In
the context of the opioid crisis, and given the central role the
federal government plays in addressing it, these issues are of
particular concern to CMS. Because of this, CMS intends to work with an
interagency task force to review available data and to develop criteria
for revisions to payment for opioid alternatives that are effective for
pain relief or in reducing opioid use.
After consideration of the public comments we received, we are
finalizing the proposed policy, without modification, 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 2020. Under this policy, the only
FDA-approved drug that meets this criteria is Exparel.
We will continue to analyze the issue of access to non-opioid
alternatives in the OPPS and the ASC settings for any subsequent
reviews we conduct under section 1833(t)(22)(A)(ii). We are continuing
to examine whether there are other non-opioid pain management
alternatives for which our payment policy should be revised to allow
separate payment. We will be reviewing 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. This policy is also discussed in section XII.D.3 of this
final rule with comment period.
4. 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
[[Page 61181]]
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 proposed 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
proposed 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 proposed 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 did not receive any public comments on our proposal to continue
to use the geometric mean cost of APC 5012 to standardize relative
payment weights for CY 2020. Therefore, we are finalizing our proposal
and assigning APC 5012 the relative payment weight of 1.00, and using
the relative payment weight for APC 5012 to derive the unscaled
relative payment weight for each APC for CY 2020.
We note that in the CY 2019 OPPS/ASC final rule with comment period
(83 FR 59004 through 59015), we discuss 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, and we are continuing the policy with the second year of
the two-year transition in CY 2020. 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 is 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 will result from the change in payments
for these clinic visits will not be budget neutral. Therefore, the
impact of this policy will generally not be reflected in the budget
neutrality adjustments, whether the adjustment is to the OPPS relative
weights or to the OPPS conversion factor. We refer readers to section
X.C. of this CY 2020 OPPS/ASC final rule with comment period for
further discussion of this final policy.
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 calculated without the changes. To comply with this
requirement concerning the APC changes, we proposed 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
proposed to apply the same process using the estimated CY 2020 unscaled
relative payment weights rather than scaled relative payment weights.
We proposed to calculate the weight scalar by dividing the CY 2019
estimated aggregate weight by the 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
final rule link and open the claims accounting document link at the
bottom of the page.
We proposed to compare the estimated unscaled relative payment
weights in CY 2020 to the estimated total relative payment weights in
CY 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 proposed to adjust the calculated CY 2020 unscaled
relative payment weights for purposes of budget neutrality. We proposed
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 the 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
the 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 final rule with
comment period) is included in the budget neutrality calculations for
the CY 2020 OPPS.
We did not receive any public comments on the proposed weight
scalar calculation. Therefore, we are finalizing our proposal to use
the calculation process described in the proposed rule, without
modification, for CY 2020. Using updated final rule claims data, we are
updating the
[[Page 61182]]
estimated CY 2020 unscaled relative payment weights by multiplying them
by a weight scalar of 1.4349 to ensure that the final CY 2020 relative
payment weights are scaled to be budget neutral. The final CY 2020
relative payments weights listed in Addenda A and B to this final rule
with comment period (which are available via the internet on the CMS
website) were scaled and incorporate the recalibration adjustments
discussed in sections II.A.1. and II.A.2. of this final rule with
comment period.
B. 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 was 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 was 0.5 percentage point.
For CY 2020, we proposed that the MFP adjustment for the CY 2020
OPPS is 0.5 percentage point (84 FR 39428). We proposed that if more
recent data become subsequently available after the publication of the
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 final rule with comment period.
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 proposed for CY 2020 an OPD fee schedule increase factor of
2.7 percent for the CY 2020 OPPS (which was 3.2 percent, the final
estimate of the hospital inpatient market basket percentage increase,
less the final 0.5 percentage point MFP adjustment).
We proposed that hospitals that fail to meet the Hospital OQR
Program reporting requirements would be 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 final rule with
comment period.
In the CY 2020 OPPS/ASC proposed rule, we proposed 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 proposed 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 proposed 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 proposed to calculate an overall budget
neutrality factor of 0.9993 for wage index changes. This adjustment was
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 stated in the proposed
rule that we believed it was appropriate to ensure that this proposed
wage index transition policy (that is, the proposed CY 2020 5 percent
cap on wage index decreases) did not increase estimated aggregate
payments under the OPPS beyond the payments that would be made without
this transition policy. We proposed 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. We stated in the proposed rule that these two proposed wage
index budget neutrality adjustments would maintain budget neutrality
for the proposed CY 2020 OPPS wage index (which, as we discussed in
section II.C of the proposed rule, would use the FY 2020 IPPS post-
reclassified wage index and any adjustments, including without
limitation any adjustments finalized under the IPPS to address wage
index disparities).
We did not receive any public comments on our proposed methodology
for calculating the wage index budget neutrality adjustments discussed
earlier in this section. Therefore, for the reasons discussed above and
in the CY 2020 OPPS/ASC proposed rule (84 FR 39428 through 39429), we
are finalizing our methodology for calculating the wage index budget
neutrality adjustments as proposed, without modification. For CY 2020,
we are finalizing an overall budget neutrality factor of 0.9981 for
wage index changes. This adjustment is comprised of a 0.9990 budget
neutrality adjustment, using our standard
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calculation of comparing total estimated payments from our simulation
model using the final 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 0.9991 budget neutrality adjustment for the CY
2020 5 percent cap on wage index decreases to ensure that this
transition wage index is implemented in a budget neutral manner. We
note that the final wage index budget neutrality adjustment figures set
forth above differ from the figures set forth in the proposed rule due
to updated data for the final rule.
For the CY 2020 OPPS, we are maintaining the current rural
adjustment policy, as discussed in section II.E. of the proposed rule.
Therefore, the proposed budget neutrality factor for the rural
adjustment is 1.0000.
For the CY 2020 OPPS/ASC proposed rule, we proposed 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 the proposed rule and this final rule
with comment period. We proposed 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 were
the same as estimated payments applying the CY 2019 final cancer
hospital payment adjustment. Therefore, we proposed 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 stated in the proposed rule that we
are applying a budget neutrality factor calculated as if the proposed
cancer hospital adjustment target payment-to-cost ratio was 0.90, not
the 0.89 target payment-to-cost ratio we applied as stated in section
II.F. of the proposed rule.
For the CY 2020 OPPS/ASC proposed rule, we estimated that proposed
pass-through spending for drugs, biologicals, and devices for CY 2020
would equal approximately $268.8 million, which represented 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 estimated for the 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 the CY 2020 OPPS/ASC proposed rule, we also proposed 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 proposed 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 met the
requirements).
In summary, for CY 2020, we proposed 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 proposed 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 met the requirements).
For CY 2020, we proposed 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 referred readers to
section XXVI.B. of the 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 solicited
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.
Comment: One commenter, a state hospital association, asserts its
member hospitals receive payments from CMS that are substantially lower
than the costs their members incur to provide services. The commenter
believes underpayments occur because the CMS hospital market basket
estimate of inflation of 2.7 percent substantially underestimates
overall health care inflation which the commenter claims to be between
5.5 percent and 7 percent. The commenter also states that hospital
payments from CMS are reduced because of payment sequestration and the
policy to reduce payment rates for clinic visits at off-campus hospital
outpatient departments to 40 percent of the standard OPPS payment rate.
The commenter suggests that CMS should help hospitals in all states
regain this lost revenue by implementing a much larger annual increase
in the market basket amount. The commenter advocates a 4.7 percent
market basket adjustment in CY 2020, and even larger percentage
increases in following years.
Response: The percentage change in the hospital market basket
reflects the average change in the price of goods and services
purchased by hospitals in order to provide medical care. A general
measure of health care inflation (such as the Consumer Price Index for
Medical Care Services) would not be appropriate as it is not specific
to hospital medical services and is not reflective of the input price
changes experienced by hospitals but rather the inflation experienced
by the consumer for their medical expenses. In addition, the OPPS
conversion factor is not designed to redress payment reductions made in
a non-budget neutral manner. The policies cited by the commenter are
intended to reduce Medicare expenditures. If the conversion factor was
to be increased to offset these payment reductions, it would defeat the
intent of these policy initiatives.
Comment: A commenter expressed their support for the proposed
market basket increase of 2.7 percent.
Response: We appreciate the support of the commenter.
[[Page 61184]]
After reviewing the public comments we received, we are finalizing
these proposals without modification. For CY 2020, we proposed to
continue previously established policies for implementing the cancer
hospital payment adjustment described in section 1833(t)(18) of the Act
(discussed in section II.F. of this final rule with comment period).
Based on the final rule updated data used in calculating the cancer
hospital payment adjustment in section II.F. of this final rule with
comment period, the target payment-to-cost ratio for the cancer
hospital payment adjustment, which was 0.88 for CY 2019, is 0.89 for CY
2020. As a result, we are applying a budget neutrality adjustment
factor of 0.9999 to the conversion factor for the cancer hospital
payment adjustment.
As a result of these finalized policies, the OPD fee schedule
increase factor for the CY 2020 OPPS is 2.6 percent (which reflects the
3.0 percent final estimate of the hospital inpatient market basket
percentage increase, less the final 0.4 percentage point MFP
adjustment). For CY 2020, we are using a conversion factor of $80.784
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 OPD fee schedule increase factor of
2.6 percent for CY 2020, the required wage index budget neutrality
adjustment of approximately 0.9981, and the adjustment of 0.88
percentage point of projected OPPS spending for the difference in pass-
through spending that results in a conversion factor for CY 2020 of
$80.784.
C. 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 final rule with
comment period.
The OPPS labor-related share is 60 percent of the national OPPS
payment. This labor-related share is based on a regression analysis
that determined that, 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 the CY 2020 OPPS/ASC proposed rule (84
FR 39429), we proposed to continue this policy for the CY 2020 OPPS. We
refer readers to section II.H. of this final rule with comment period
for a description and an example of how the wage index for a particular
hospital is used to determine payment for the hospital. We did not
receive any public comments on this proposal. Therefore, for the
reasons discussed above and in the CY 2020 OPPS/ASC proposed rule (84
FR 39429), we are finalizing our proposal, without modification, to
continue this policy as discussed above for the CY 2020 OPPS.
As discussed in the claims accounting narrative included with the
supporting documentation for this final rule with comment period (which
is available via the internet on the CMS website), for estimating APC
costs, we standardize 60 percent of estimated claims costs for
geographic area wage variation using the same FY 2020 pre-reclassified
wage index that that is used 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 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 proposed 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, we stated that the
frontier State wage index adjustment applicable for the inpatient
hospital also would apply for any associated HOPD. In the CY 2020 OPPS/
ASC proposed rule (84 FR 39430), we referred 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. We did not
receive any public comments on this proposal. Accordingly, for the
reasons discussed above and in the CY 2020 OPPS/ASC proposed rule (84
FR 39430), we are finalizing our proposal, without modification, to
continue to implement the frontier State floor under the OPPS in the
same manner as we have since CY 2011.
In addition to the changes required by the Affordable Care Act, we
noted in the CY 2020 OPPS/ASC proposed rule (84 FR 39430) that the 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). Also, we noted 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
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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 referred 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.
Furthermore, 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
provide detailed information on the update to the statistical areas
since July 15, 2015, and are based on the application of the 2010
Standards for Delineating Metropolitan and Micropolitan Statistical
Areas to Census Bureau population estimates for July 1, 2014 and July
1, 2015. In the 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
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 final rule (84 FR 42301),
for the FY 2020 IPPS wage indexes, we are using 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 the CY 2020 OPPS/ASC proposed rule (84 FR 39431),
for the proposed CY 2020 OPPS wage indexes, we proposed to 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. We did not receive any
public comments on our proposal. Accordingly, for the reasons discussed
above and in the CY 2020 OPPS/ASC proposed rule (84 FR 39430 through
39431), we are finalizing our proposal to continue to use the OMB
delineations that were adopted beginning with CY 2015 to calculate area
wage indexes under the OPPS, with updates as reflected in the 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
[[Page 61186]]
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 CY 2020, under the OPPS, we are continuing to use only the FIPS
county codes for purposes of crosswalking counties to CBSAs.
In the CY 2020 OPPS/ASC proposed rule (84 FR 39431), we proposed 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, we stated in the proposed
rule that any adjustments for the FY 2020 IPPS post-reclassified wage
index, including, but not limited to, any policies finalized under the
IPPS to address wage index disparities between low and high wage index
value hospitals, would be reflected in the final CY 2020 OPPS wage
index beginning on January 1, 2020. (We referred 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
referred readers to section II.B. of the CY 2020 OPPS/ASC proposed
rule. We stated that 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. Summarized below are the comments we
received regarding our proposal to use the final FY 2020 hospital IPPS
post-reclassified wage index for urban and rural areas as the wage
index for the OPPS, including any adjustments for the final FY 2020
IPPS post-reclassified wage index as discussed above, along with our
responses.
Comment: Several commenters supported CMS adopting the finalized
post-reclassified wage index from the FY 2020 IPPS/LTCH PPS final rule
for use under the OPPS. Many of these commenters noted that the gap in
payment between rural and urban hospitals has contributed to
disparities in care and noted that increasing the wage index for
hospitals with wage index values below the 25th percentile wage index
value will help to lessen the gap. Some of these commenters noted that
this change will help rural areas have access to quality, affordable
health care. One commenter supported the proposal to increase the wage
index for hospitals with wage index values below the 25th percentile,
but wanted CMS to consider this solution temporary until the wage index
is more equitable between hospitals.
Response: We appreciate the commenters' support. In response to the
comment that CMS should consider the increase in the wage index for
hospitals with wage index values below the 25th percentile wage index
value (that it, low wage index hospitals) temporary until the wage
index is more equitable between hospitals, as we stated in the FY 2020
IPPS/LTCH PPS final rule (84 FR 42326 through 42327), the increase in
the IPPS wage index for low wage index hospitals is not intended to be
permanent. As we stated in the FY 2020 IPPS/LTCH PPS final rule (84 FR
42326 through 42327), we expect that this policy will be in place for
at least 4 years in order to allow employee compensation increases
implemented by low wage index hospitals sufficient time to be reflected
in the wage index calculation. We stated in the FY 2020 IPPS/LTCH PPS
final rule (84 FR 42327) that, once there has been sufficient time for
that increased employee compensation to be reflected in the wage data,
there should not be a continuing need for this policy.
Comment: Several commenters supported the proposal to increase the
wage index for low wage index hospitals but wanted it implemented in a
non-budget neutral manner. They believe this would mitigate disparities
for median wage index hospitals. Several commenters opposed the
proposal to recalculate the wage index to help the lowest wage
hospitals. These commenters believed that applying a budget neutrality
adjustment for all hospitals to offset the increase in payments for low
wage index hospitals would result in a significant loss of resources
for patient care in other hospitals. While these commenters understood
and appreciated the goal of the proposed changes to increase the wage
index for low wage hospitals, they did not believe that these policies
would help rural hospitals. They believed that certain communities
would benefit from increasing the wage index for low wage hospitals but
believed this policy does not adequately recognize differences in
geographic labor markets. They further claimed that the offsetting
reductions to the wage index in some areas will hinder hospitals'
ability to attract and recruit quality health care practitioners.
Some commenters noted that OPPS payments to hospitals in their
respective states would decrease by millions in CY 2020 due to the
budget neutral implementation of the increase in the wage index for low
wage hospitals. These commenters noted that any reduction in Medicare
payments would force hospitals to reduce staff and/or salary and
benefits. One commenter noted that, for many years, the disparities
among geographic areas have continued to grow and have resulted in
challenges recruiting staff. Some commenters recommended CMS convene a
meeting to understand all of the challenges and issues in order to
develop a comprehensive reform of the wage index. One commenter
recommended that, if CMS is going to redistribute the area wage index,
CMS offset the increased wage index for very low wage areas with a
budget neutrality adjustment to the wage index applied evenly to all
hospitals. However, this commenter preferred that CMS not use budget
neutrality for the area wage index. They did not believe that the
budget neutrality adjustment policy follows statutory requirements for
adjusting the area wage index that require CMS to address real
differences in labor costs. Several commenters believed CMS went beyond
its authority in reallocating funding from hospitals in high wage
areas, to provide funding to low wage area hospitals, without any
relationship to actual wage-related data for the impacted areas.
Another commenter strongly opposed decreasing payments to some or all
hospitals to offset an increase in the area wage index for low wage
index hospitals and did not believe the rationale in the FY 2020 IPPS
final rule supported this change. One commenter opposed CMS making a
budget neutrality adjustment across all hospitals as well as the
transition wage index adjustment to ensure that no hospital's wage
index decreases by more than 5 percent. This commenter believed that
these adjustments negatively impact hospitals in the bottom quartile of
wage index that would have seen a larger increase in payment without
these additional adjustments.
Response: As we stated in the FY 2020 IPPS/LTCH PPS final rule (84
FR 42331), the intent of the wage index increase for hospitals with
wage indexes below the 25th percentile wage index value across all
hospitals (that is, low wage index hospitals) is to increase the
accuracy of the wage index as a technical adjustment, and not to use
the wage index as a policy tool to address non-wage issues related to
rural hospitals, or the laudable goals of the overall financial health
of hospitals in low wage areas or broader wage index reform. As we
stated in the FY 2020 IPPS/LTCH PPS final rule, we believe the wage
index increase we finalized for
[[Page 61187]]
low wage index hospitals increases the accuracy of the wage index as a
relative measure because it allows low wage index hospitals to increase
their employee compensation in ways that we would expect if there were
no lag in reflecting compensation adjustments in the wage index. Thus,
we stated in the FY 2020 IPPS/LTCH PPS final rule that we believe the
IPPS wage index adjustment for low wage index hospitals will
appropriately reflect the relative hospital wage level in those areas
compared to the national average wage level. We further stated in the
FY 2020 IPPS/LTCH PPS final rule that because this policy is based on
the actual wages that we expect low wage index hospitals to pay, it
falls within the scope of the authority of section 1886(d)(3)(E) of the
Act.
However, we note that, in the FY 2020 IPPS/LTCH PPS final rule (84
FR 42331 through 42332), we did not finalize our budget neutrality
proposal to decrease the wage index for hospitals with wage index
values above the 75th percentile wage index value to offset the
estimated increase in payments to low wage index hospitals. Instead, in
the FY 2020 IPPS/LTCH PPS final rule, consistent with our current
methodology for implementing wage index budget neutrality under the
IPPS, we finalized a budget neutrality adjustment to the IPPS national
standardized amount for all hospitals so that the increase in the IPPS
wage index for low wage index hospitals is implemented in a budget
neutral manner. As explained in the FY 2020 IPPS/LTCH PPS final rule
(84 FR42331), under section 1886(d)(3)(E) of the Act, the IPPS wage
index adjustment is required to be implemented in a budget neutral
manner. We further noted in the FY 2020 IPPS/LTCH PPS final rule that,
even if the wage index were not required to be budget neutral, we would
consider it inappropriate to use the wage index to increase or decrease
overall spending. Similarly, under section 1886(t)(2)(D) and (9)(B) of
the Act, the OPPS wage index adjustment is required to be implemented
in a budget neutral manner. Accordingly, consistent with the policy
finalized in the FY 2020 IPPS/LTCH PPS final rule, in this CY 2020
OPPS/ASC final rule with comment period, we are finalizing a budget
neutrality adjustment to the conversion factor for all hospitals paid
under the OPPS so that the increase in the OPPS wage index for low wage
index hospitals is implemented in a budget neutral manner. We refer
readers to section II.B. of this final rule with comment period for a
discussion of budget neutrality. In addition, we refer readers to the
FY 2020 IPPS/LTCH PPS final rule (84 FR 42328 through 42332) for
further discussion of the final FY 2020 IPPS wage index policies
(including the transition wage index adjustment) and detailed responses
to similar comments.
In the CY 2020 OPPS/ASC proposed rule (84 FR 39431), we proposed to
use the FY 2020 IPPS post-reclassified wage index for urban and rural
areas as the wage index under the OPPS to determine the wage
adjustments for both the OPPS payment rate and the copayment
standardized amount. Because we continue to believe that using the IPPS
post-reclassified wage index as the source of the wage index adjustment
factor under the OPPS is reasonable and logical given the inseparable,
subordinate status of the HOPD within the hospital overall, as
proposed, we are finalizing the use of the FY 2020 hospital IPPS post-
reclassified wage index for urban and rural areas as the wage index
under the OPPS to determine the wage adjustments for both the OPPS
payment rate and the copayment standardized amount for CY 2020.
Accordingly, any adjustments for the final FY 2020 IPPS post-
reclassified wage index, including, but not limited to, any policies
finalized in the FY 2020 IPPS/LTCH PPS final rule to address wage index
disparities between low and high wage index value hospitals, will be
reflected in the final CY 2020 OPPS wage index beginning on January 1,
2020.
Comment: Several commenters noted support for the revised rural
floor policy finalized in the FY 2020 IPPS/LTCH final rule. Many of
these commenters supported the proposal to exclude the wage data of
urban hospitals that reclassify as rural in calculating the rural
floor. These commenters suggested that including the wage data of these
hospitals in the rural floor calculation has inflated wage index values
in certain states and that excluding the wage data of these hospitals
will have positive effects on OPPS payment for rural hospitals.
Response: We thank commenters for their support.
Comment: A few commenters opposed the change to exclude the wage
data of urban hospitals that have been reclassified as rural in
calculating the IPPS rural floor. One of these commenters believed that
CMS lacks the legal authority to remove from the rural floor
calculation the wage data of hospitals that have been reclassified from
urban to rural as implemented in the FY 2020 IPPS/LTCH final rule. This
commenter believed CMS misread the applicable law in Section
1886(d)(8)(E) of the Act. One of the commenter's believed that removing
the urban to rural reclassifications from the calculation of the rural
floor penalizes hospitals that are allowed to reclassify under HHS
authority.
One commenter believed that CMS should put more structure around
the rural floor policy and should not apply the rural floor in
primarily urban states with only one or two rural facilities. The
commenter believed that this would reduce the potential for gaming the
system in determining an equitable wage adjustment.
Response: We addressed similar comments in the FY 2020 IPPS/LTCH
PPS final rule (84 FR 42334 through 42336). As provided in the FY 2020
IPPS/LTCH final rule (84 FR 42334), in the absence of broader wage
index reform from Congress, we believe it is appropriate to revise the
rural floor calculation as part of an effort to reduce wage index
disparities. Regarding CMS's statutory authority to exclude the wage
data of urban hospitals reclassified as rural from the IPPS rural floor
calculation, as we stated in the FY 2020 IPPS/LTCH PPS final rule (84
FR 42334), we believe our calculation methodology is permissible under
section 1886(d)(8)(E) of the Act (as implemented in Sec. 412.103) and
the rural floor statute (section 4410 of Pub. L. 105-33). Further, as
we discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42336), we
do not believe this policy penalizes or adversely impacts urban
hospitals that have reclassified as rural. We refer readers to the FY
2020 IPPS/LTCH PPS final rule (84 FR 42332 through 42336) for further
discussion of this policy and detailed responses to similar comments.
We note that impact files and supporting data files available on the FY
2020 IPPS Final Rule Home Page provide the data necessary to understand
the impact of the finalized policies under the IPPS. Furthermore, we
appreciate the comment that CMS should not apply the rural floor in
primarily urban states with only one or two rural facilities; however,
because we consider this comment to be outside the scope of the CY 2020
OPPS wage index proposals, we are not addressing it in this final rule
with comment period.
As we discussed above, we continue to believe that using the IPPS
post-reclassified wage index as the source of the wage index adjustment
factor under the OPPS is reasonable and logical given the inseparable,
subordinate status of the HOPD within the hospital overall. Thus, as
proposed, we are using the FY 2020 hospital IPPS post-reclassified
[[Page 61188]]
wage index for urban and rural areas as the wage index under the OPPS
to determine the wage adjustments for both the OPPS payment rate and
the copayment standardized amount for CY 2020. Accordingly, as we
proposed, any adjustments for the final FY 2020 IPPS post-reclassified
wage index, including, but not limited to, the revised rural floor
calculation methodology and other IPPS wage index policies finalized in
the FY 2020 IPPS/LTCH PPS final rule to address wage index disparities,
will be reflected in the final CY 2020 OPPS wage index beginning on
January 1, 2020.
After considering the public comments received, for the reasons
discussed earlier in this section and in the CY 2020 OPPS/ASC proposed
rule, we are finalizing without modification our proposal to use the
final FY 2020 IPPS post-reclassified wage index for urban and rural
areas as the wage index under the OPPS to determine the wage
adjustments for both the OPPS payment rate and the copayment
standardized amount for CY 2020. Accordingly, as we proposed, any
adjustments for the final FY 2020 IPPS post-reclassified wage index (as
set forth in the FY 2020 IPPS/LTCH PPS final rule, 84 FR 42300 through
42339), including, but not limited to, any policies finalized in the FY
2020 IPPS/LTCH PPS final rule to address wage index disparities between
low and high wage index value hospitals (as set forth at 84 FR 42300
through 42339), will be reflected in the final CY 2020 OPPS wage index
beginning on January 1, 2020. As discussed above, we note that in the
FY 2020 IPPS/LTCH PPS final rule (84 FR 42325 through 42332), we did
not finalize our budget neutrality proposal to decrease the wage index
for hospitals with wage index values above the 75th percentile wage
index value to offset the estimated increase in payments to hospitals
with wage index values below the 25th percentile wage index value, and
thus this budget neutrality policy will not be applied under the OPPS.
Instead, in the FY 2020 IPPS/LTCH PPS final rule, consistent with our
current methodology for implementing IPPS wage index budget neutrality,
we finalized a budget neutrality adjustment to the IPPS national
standardized amount for all hospitals so that the increase in the IPPS
wage index for low wage index hospitals is implemented in a budget
neutral manner. Consistent with this IPPS policy, in this CY 2020 OPPS/
ASC final rule with comment period, we are finalizing a budget
neutrality adjustment to the conversion factor for all hospitals paid
under the OPPS so that the increase in the OPPS wage index for low wage
index hospitals is implemented in a budget neutral manner. We refer
readers to section II.B. of this final rule with comment period for a
discussion of budget neutrality.
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 the CY 2020 OPPS/ASC proposed
rule (84 FR 39431), we proposed to continue this policy for CY 2020,
and included a brief summary of the major proposed FY 2020 IPPS wage
index policies and adjustments that we proposed 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 final rule (84 FR 42300
through 42339) for a detailed discussion of the final 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 proposed 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 proposed to apply any policies that are
finalized under the IPPS relating to wage index disparities. We also
proposed that the wage index that would apply to non-IPPS hospitals for
CY 2020 would include the rural floor adjustment. We did not receive
any public comments on these proposals. Accordingly, for the reasons
discussed above and in the CY 2020 OPPS/ASC proposed rule (84 FR
39431), we are finalizing these proposals without modifications.
For CMHCs, for CY 2020, we proposed 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 proposed to apply any
policies that are finalized under the IPPS relating to wage index
disparities. In addition, we proposed that the wage index that would
apply to CMHCs for CY 2020 would include the rural floor adjustment.
Also, we proposed that the wage index that would apply to CMHCs would
not include the out-migration adjustment because that adjustment only
applies to hospitals. We did not receive any public comments on these
proposals. Therefore, for the reasons discussed above and in the CY
2020 OPPS/ASC proposed rule (84 FR 39431), we are finalizing these
proposals without modifications.
Table 4 associated with the FY 2020 IPPS/LTCH PPS final 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 final rule (available for
download via the website above) identifies IPPS hospitals that will
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 final rule as Addendum L to this final rule with
comment period with the addition of non-IPPS hospitals that will
receive the section 505 out-migration adjustment under this CY 2020
OPPS/ASC final rule with comment period. 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 final FY 2020 IPPS wage index tables and Addendum L.
D. 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
[[Page 61189]]
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 referred readers to the CY
2020 OPPS proposed rule Claims Accounting Narrative that is posted on
the CMS website. In the CY 2020 OPPS/ASC proposed rule (84 FR 39432),
we proposed to update the default ratios for CY 2020 using the most
recent cost report data. We indicated that we would update these ratios
in this final rule with comment period if more recent cost report data
are available.
We did not receive any public comments on our proposal to use
statewide average default CCRs if we cannot calculate a CCR for a
hospital and to use these CCRs to adjust charges on claims to costs for
setting the final CY 2020 OPPS payment weights. Therefore, we
finalizing our proposal without modification.
As we stated in the CY 2020 OPPS/ASC proposed rule (84 FR 39432),
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 CY proposed rule and final rule on the CMS website. We
refer readers 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. 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
our regulations at Sec. 419.43(g) to clarify that essential access
community hospitals (EACHs) are also 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.
In the CY 2020 OPPS/ASC proposed rule (84 FR 58870 through 58871),
for the CY 2020 OPPS, we proposed 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.
Comment: Several commenters supported the proposal to continue the
7.1 percent payment adjustment.
Response: We appreciate the commenters' support.
Comment: One commenter requested that CMS make the 7.1 percent
rural adjustment permanent. The commenter appreciated the policy that
CMS adopted in CY 2019 where we stated that the 7.1 percent rural
adjustment would continue to be in place until our data support
establishing a different rural adjustment percentage. However, the
commenter believed that this policy still does not provide enough
certainty for rural SCHs and EACHs to know whether they should take
into account the rural SCH adjustment when attempting to calculate
expected revenues for their hospital budgets.
Response: We thank the commenter for their input. We believe that
our currrent policy, which states that the 7.1 percent payment
adjustment for rural SCHs and EACHs will remain in effect until our
data show that a different percentage for the rural payment adjustment
is necessary, provides sufficient budget predictability for rural SCHs
and EACHs. Providers would receive notice in a proposed rule before any
changes to the rural adjustment percentage would be implemented.
Comment: Some commenters requested that CMS expand the payment
adjustment for rural SCHs and EACHs to additional types of hospitals.
One commenter requested that the payment adjustment apply to include
urban SCHs because, according to the commenter, urban SCHs care for
patient populations similar to rural SCHs and EACHs, face similar
financial challenges to rural SCHs and EACHs, and act as safety net
providers for rural areas despite their designation as urban providers.
Another commenter requested that the payment adjustment also apply to
Medicare-dependent hospitals (MDHs) because,
[[Page 61190]]
according to the commenter, these hospitals face similar financial
challenges to rural SCHs and EACHs, and MDHs play a similar safety net
role to rural SCHs and EACHs, especially for Medicare. One commenter
requested that payment rates for OPPS services for all rural hospitals
be increased to reduce financial vulnerability for rural hospitals
related to the high share of Medicare and Medicaid beneficiaries they
serve.
Response: We thank the commenters for their comments. However, the
analysis we did to compare costs of urban providers to those of rural
providers did not support an add-on adjustment for providers other than
rural SCHs and EACHs. In addition, our follow-up analyses performed in
recent years have not shown differences in costs for all services for
any of the additional types of providers mentioned by the commenters.
Accordingly, we do not believe we currently have a basis to expand the
payment adjustment to any providers other than rural SCHs and EACHs.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, 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, devices paid under the pass-through payment policy, and
items paid at charges reduced to costs.
F. 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
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. 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 Sec. 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
[[Page 61191]]
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.
In the CY 2020 OPPS/ASC proposed rule (84 FR 39433), for CY 2020,
we proposed 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 the proposed rule, reduced
by 1.0 percentage point, to comply with section 16002(b) of the 21st
Century Cures Act.
We did not propose 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 the CY 2020 OPPS/ASC proposed rule and this final rule with comment
period, used to estimate costs for the CY 2020 OPPS. Using these cost
report data, we included 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 proposed that the payment amount associated with
the cancer hospital payment 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.
We did not receive any public comments on our proposals. Therefore,
we are finalizing our proposed cancer hospital payment adjustment
methodology without modification. For this final rule with comment
period, we are using the most recent cost report data through June 30,
2019 to update the adjustment. This updated yields a target PCR of
0.90. We limited the dataset to hospitals with CY 2018 claims data that
we used to model the impact of the CY 2020 APC relative payment weights
(3,763) because it is appropriate to use the same set of hospitals that
we are using to calibrate the modeled CY 2020 OPPS. The cost report
data for the hospitals in the dataset were from cost report periods
with fiscal years ends ranging from 2010 to 2018. We then removed the
cost report data of the 46 hospitals located in Puerto Rico from our
dataset because we do not believe their cost structure reflects the
cost 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 21 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 report in the study would have both the payment and
cost data necessary to calculate a PCR for each hospital, leading to an
analytic file of 3,523 hospitals with cost report data.
Using this smaller dataset of cost report data, we estimated a
target PCR of 0.90. Therefore, after applying the 1.0 percentage point
reduction as required by section 1602(b) of the 21st Century Cures Act,
we are finalizing that the payment amount associated with the cancer
hospital adjustment to be determined at cost report settlement will be
the additional payment needed to result in a PCR equal to 0.89 for each
cancer hospital.
Table 7 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.
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G. 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 the CY
2020 OPPS/ASC proposed rule (84 FR 39434 through 39435) was
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 final rule with comment period, we
estimate that we paid approximately 1.00 percent of the total
aggregated OPPS payments in outliers for CY 2018.
For the CY 2020 OPPS/ASC proposed rule, using CY 2018 claims data
and CY 2019 payment rates, we estimated that the aggregate outlier
payments for CY 2019 would be approximately 1.03 percent of the total
CY 2019 OPPS payments. We provided 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. Outlier Calculation for CY 2020
In the CY 2020 OPPS/ASC proposed rule (84 FR 39434 through 39435),
for CY 2020, we proposed to continue our policy of estimating outlier
payments to be 1.0 percent of the estimated aggregate total payments
under the OPPS. We proposed that a portion of that 1.0 percent, an
amount equal to less than
[[Page 61193]]
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 the CY 2020 OPPS/
ASC proposed rule (84 FR 39435), we proposed 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 the CY 2020 OPPS/ASC proposed rule and this final
rule with comment period.
To ensure that the estimated CY 2020 aggregate outlier payments
would equal 1.0 percent of estimated aggregate total payments under the
OPPS, we proposed that the hospital outlier threshold be set so that
outlier payments would be triggered when 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 used 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 the
proposed rule, we inflated the charges on the CY 2018 claims using the
same inflation factor of 1.11189 that we used to estimate the 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 did not apply a CCR inflation
adjustment factor. Therefore, we proposed to apply the same CCR
inflation adjustment factor that we proposed to apply for the FY 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 proposed 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
applied 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
estimated 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 proposed 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, as
we proposed, 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 final rule with comment period.
We received no public comments on our proposal. Therefore, we are
finalizing our proposal, without modification, to continue our policy
of estimating outlier payments to be 1.0 percent of the estimated
aggregate total payments under the OPPS and to use our established
methodology to set the OPPS outlier fixed-dollar loss threshold for CY
2020.
3. Final Outlier Calculation
Consistent with historical practice, we used updated data for this
final rule with comment period for outlier calculations. For CY 2020,
we are applying the overall CCRs from the October 2019 OPSF file after
adjustment (using the CCR inflation adjustment factor of 0.97615 to
approximate CY 2020 CCRs) to charges on CY 2018 claims that were
adjusted using a charge inflation factor of 1.11100 to approximate CY
2020 charges. These are the same CCR adjustment and charge inflation
factors that were used to set the IPPS fixed-dollar threshold for the
FY 2020 IPPS/LTCH PPS final rule (84 FR 42629). We simulated aggregated
CY 2020 hospital outlier payments using these costs for several
different fixed-dollar thresholds, holding the 1.75 multiple-threshold
constant and assuming that outlier payments will 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
payment equaled 1.0 percent of aggregated estimated total CY 2020 OPPS
payments. We estimated that a
[[Page 61194]]
fixed-dollar threshold of $5,075 combined with the multiple threshold
of 1.75 times the APC payment rate, will allocate the 1.0 percent of
aggregated total OPPS payments to outlier payments.
For CMHCs, if a CMHC's cost for partial hospitalization services,
paid under APC 5853, exceeds 3.40 times the payment rate the outlier
payment will be calculated as 50 percent of the amount by which the
cost exceeds 3.40 times APC 5853.
H. 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 final rule
with comment period, the payment rate for most services and procedures
for which payment is made under the OPPS is the product of the
conversion factor calculated in accordance with section II.B. of this
final rule with comment period and the relative payment weight
determined under section II.A. of this final rule with comment period.
Therefore, the proposed national unadjusted payment rate for most APCs
contained in Addendum A to this final rule with comment period (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 final rule with comment period (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 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 final rule with
comment period.
In the CY 2020 OPPS/ASC proposed rule (84 FR 39435), we
demonstrated the steps used to determine the APC payments that will be
made in a CY 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 the 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 noted 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.
We did not receive any public comments on these steps under the
methodology that we included in the CY 2020 CY OPPS/ASC proposed rule
to determine the APC payments for CY 2020. Therefore, we are using the
steps in the methodology specified below, as we proposed, to
demonstrate the calculation of the final CY 2020 OPPS payments using
the same parameters.
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 final
rule with comment period (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 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 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 final rule with comment period. 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 changes to the FY 2020 IPPS wage indexes, as applied
to the CY 2020 OPPS, we refer readers to section II.C. of this final
rule with comment period. We are continuing 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
[[Page 61195]]
counties that have a relatively high percentage of hospital employees
who reside in the county, but who work in a different county with a
higher wage index, in accordance with section 505 of Public Law 108-
173. Addendum L to this final rule with comment period (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).
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 CY 2020 full
national unadjusted payment rate for APC 5071 is $609.94. The reduced
national unadjusted payment rate for APC 5071 for a hospital that fails
to meet the Hospital OQR Program requirements is $598.35. This reduced
rate is calculated by multiplying the reporting ratio of 0.981 by the
full unadjusted payment rate for APC 5071.
The 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 1.2866. The labor-related portion of the full national
unadjusted payment is approximately $470.84 (.60 * $609.94 * 1.2866).
The labor-related portion of the reduced national unadjusted payment is
approximately $461.90 (.60 * $598.35 * 1.2866). The nonlabor-related
portion of the full national unadjusted payment is approximately
$243.98 (.40 * $609.94). The nonlabor-related portion of the reduced
national unadjusted payment is approximately $239.34 (.40 * $598.35).
The sum of the labor-related and nonlabor-related portions of the full
national adjusted payment is approximately $714.82 ($470.84 + $243.98).
The sum of the portions of the reduced national adjusted payment is
approximately $701.24 ($461.90 + $239.34).
I. 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 CYs 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. OPPS Copayment Policy
In the CY 2020 OPPS/ASC proposed rule (84 FR 39437), we proposed to
determine copayment amounts for new and revised APCs using the same
methodology that we implemented beginning in CY 2004. (We refer readers
to the November 7, 2003 OPPS final rule with comment period (68 FR
63458).) In addition, we proposed to use the same standard rounding
principles that we have historically used in instances where the
application of our standard copayment methodology would result in a
copayment amount that is less than 20 percent and cannot be rounded,
under standard rounding principles, to 20 percent. (We refer readers to
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66687) in
which we discuss our rationale for applying these rounding principles.)
The proposed national unadjusted copayment amounts for services payable
[[Page 61196]]
under the OPPS that would be effective January 1, 2020 are included in
Addenda A and B to the proposed rule (which are available via the
internet on the CMS website).
We did not receive any public comments on the proposed copayment
amounts for new and revised APCs using the same methodology we
implemented beginning in CY 2004 or the standard rounding principles we
apply to our copayment amounts. Therefore, we are finalizing our
proposed copayment policies, without modification.
As discussed in section XIV.E. of the CY 2020 OPPS/ASC proposed
rule and this final rule with comment period, for CY 2020, the Medicare
beneficiary's minimum unadjusted copayment and national unadjusted
copayment for a service to which a reduced national unadjusted payment
rate applies will equal the product of the reporting ratio and the
national unadjusted copayment, or the product of the reporting ratio
and the minimum unadjusted copayment, respectively, for the service.
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.
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. 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, $121.99 is approximately 20 percent of the
full national unadjusted payment rate of $609.94. For APCs with only a
minimum unadjusted copayment in Addenda A and B to this final rule with
comment period (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 final rule with comment period. Calculate
the rural adjustment for eligible providers, as indicated in Step 6
under section II.H. of this final rule with comment period.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC.
The formula below is a mathematical representation of Step 3 and
applies the beneficiary payment percentage to the adjusted payment rate
for a service calculated under section II.H. of this final rule with
comment period, with and without the rural adjustment, to calculate the
adjusted beneficiary copayment for a given service.
Wage-adjusted copayment amount for the APC = Adjusted Medicare
Payment * B.
Wage-adjusted copayment amount for the APC (SCH or EACH) =
(Adjusted Medicare Payment * 1.071) * B.
Step 4. For a hospital that failed to meet its 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 will be effective January 1, 2020, are shown in Addenda A and
B to this final rule with comment period (which are available via the
internet on the CMS website). We note that the national unadjusted
payment rates and copayment rates shown in Addenda A
[[Page 61197]]
and B to this final rule with comment period reflect the CY 2020 OPD
fee schedule increase factor discussed in section II.B. of this final
rule with comment period.
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. OPPS Ambulatory Payment Classification (APC) Group Policies
A. 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
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 via their website 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. (CY 2020 OPPS Payment Status and
Comment Indicators) of this final rule with comment period, 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 final rule with comment period.
1. HCPCS Codes That Were Effective April 1, 2019 for Which We Solicited
Public Comments in the CY 2020 OPPS/ASC 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 were displayed in
Table 7 of the proposed rule and are now listed in Table 8 of this
final rule with comment period. 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 the CY 2020 OPPS/ASC proposed rule (84 FR
39531-39532), we solicited public comments on the proposed APC and
status indicator assignments for these Level II HCPCS codes, which were
listed in Table 7 of the proposed rule.
We did not receive any public comments on the proposed OPPS APC and
status indicator assignments for the new Level II HCPCS codes
implemented in April 2019. Therefore, we are finalizing the proposed
APC and status indicator assignments for these codes, as indicated in
Table 8 below. We note that several of the HCPCS C-codes have been
replaced with HCPCS J-codes, effective January 1, 2020. Their
replacement codes are listed in Table 8. The final payment rates for
these codes can be found in Addendum B to this final rule with comment
period. In addition, the status indicator definitions can be found in
Addendum D1 to this final rule with comment period. Both Addendum B and
Addendum D1 are available via the internet on the CMS website.
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2. HCPCS Codes That Were Effective July 1, 2019 for Which We Solicited
Public Comments in the CY 2020 OPPS/ASC Proposed Rule
For the July 2019 update, 58 new codes were established and made
effective July 1, 2019. The codes and long descriptors were listed in
Table 8 of the proposed rule. 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 the CY 2020
OPPS/ASC proposed rule, we solicited public comments on the proposed
APC and status indicator assignments for the codes implemented on July
1, 2019, all of which were listed in Table 8 of the proposed rule.
We received some public comments related to CPT codes 0546T, 0548T,
0549T, 0554T, 0555T, 0556T, 0557T, and 0558T, which we address in
section III.D. (OPPS APC-Specific Policies) of this final rule with
comment period. With the exception of the eight codes, we did not
receive any public comments on the proposed OPPS APC and status
indicator assignments for the other new CPT and Level II HCPCS codes
implemented in July 2019. Therefore, we are finalizing the proposed APC
and status indicator assignments for the July 2019 codes, including the
eight codes on which we received public comments, as indicated in Table
9 below. We note that several of the HCPCS C-codes have been replaced
with HCPCS J-codes, effective January 1, 2020. Their replacement codes
are listed in Table 9. The final payment rates for the codes can be
found in Addendum B to this final rule with comment period. In
addition, the status indicator meanings can be found in Addendum D1 to
this final rule with comment period. Both Addendum B and Addendum D1
are available via the internet on the CMS website.
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3. October 2019 HCPCS Codes for Which We Are Soliciting Public Comments
in This CY 2020 OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we incorporate those new
HCPCS codes that are effective October 1 in the final rule with comment
period, thereby updating the OPPS for the following calendar year, as
displayed in Table 9 of the proposed rule and reprinted as Table 10 of
this final rule with comment period. These codes are released to the
public through the October OPPS quarterly update CRs and via the CMS
HCPCS website (for Level II HCPCS codes). For CY 2020, these codes are
flagged with comment indicator ``NI'' in Addendum B to this OPPS/ASC
final rule with comment period to indicate that we are assigning them
an interim payment status which is subject to public comment.
Specifically, the interim status indicator and APC assignments for
codes flagged with comment indicator ``NI'' are open to public comment
in this final rule with comment period, and we will respond to these
public comments in the OPPS/ASC final rule with comment period for the
next year's OPPS/ASC update.
In the CY 2020 OPPS/ASC proposed rule (84 FR 39449), we proposed to
continue this process for CY 2020. Specifically, for CY 2020, we
proposed to include in Addendum B to the CY 2020 OPPS/ASC final rule
with comment period the new HCPCS codes effective October 1, 2019, that
would be incorporated in the October 2019 OPPS quarterly update CR.
Also, as stated above, the October 1, 2019 codes are flagged with
comment indicator ``NI'' in Addendum B to this CY 2020 OPPS/
[[Page 61207]]
ASC final rule with comment period to indicate that we have assigned
the codes an interim OPPS payment status for CY 2020. We are inviting
public comments on the interim status indicator and APC assignments for
these codes, if applicable, that will be finalized in the CY 2021 OPPS/
ASC final rule with comment period.
We note that we received a comment related to HCPCS code Q4184
(Cellesta or Cellesta Duo, per square centimeter), which was assigned
to comment indicator ``NI'' in Addendum B of the CY 2019 OPPS/ASC final
rule. The comment and our response can be found in section V.B.7 (Skin
Substitutes) of this CY 2020 OPPS/ASC final rule with comment period.
4. January 2020 HCPCS Codes
a. New Level II HCPCS Codes for Which We Are Soliciting Public Comments
in This CY 2020 OPPS/ASC Final Rule With Comment Period
As shown in Table 10 below, and as stated in the CY 2020 OPPS/ASC
proposed rule (84 FR 39449), consistent with past practice, we solicit
comments on the new Level II HCPCS codes that will be effective January
1 in the OPPS/ASC final rule with comment period, thereby allowing us
to finalize the status indicators and APC assignments for the codes in
the next 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, 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. Consequently, for CY 2020, we proposed to include in
Addendum B to the CY 2020 OPPS/ASC final rule with comment period the
new Level II HCPCS codes effective January 1, 2020, that would be
incorporated in the January 2020 OPPS quarterly update CR. These codes
will be released to the public through the January OPPS quarterly
update CRs and via the CMS HCPCS website (for Level II HCPCS codes).
For CY 2020, the Level II HCPCS codes effective January 1, 2020 codes
are flagged with comment indicator ``NI'' in Addendum B to this CY 2020
OPPS/ASC final rule with comment period to indicate that we have
assigned the codes an interim OPPS payment status for CY 2020. We are
inviting public comments on the interim status indicator and APC
assignments for these codes, if applicable, that will be finalized in
the CY 2021 OPPS/ASC final rule with comment period.
b. CPT Codes for Which We Solicited Public Comments in the CY 2020
OPPS/ASC Proposed Rule
For CY 2020, we received the CY 2020 CPT code updates that would be
effective January 1, 2020, from AMA in time for inclusion in the CY
2020 OPPS/ASC proposed rule. We note that 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
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 annual 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.
As stated above, for the CY 2020 OPPS update, we received the CY
2020 CPT codes from AMA in time for inclusion in the CY 2020 OPPS/ASC
proposed rule. The new, revised, and deleted CY 2020 Category I and III
CPT codes were included in Addendum B to the proposed rule (which is
available via the internet on the CMS website). We noted in the
proposed rule that the new and revised codes are assigned to new
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.
Further, we reminded readers 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 included the 5-digit placeholder codes and their
long descriptors for the new and revised CY 2020 CPT codes in Addendum
O to the proposed rule (which is available via the internet on the CMS
website) so that the public could adequately comment on the proposed
APCs and status indicator assignments. The 5-digit placeholder codes
were included in Addendum O, specifically under the column labeled ``CY
2020 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code,'' to the
proposed rule. We noted that the final CPT code numbers will be
included in this CY 2020 OPPS/ASC final rule with comment period. We
also noted that not every code listed in Addendum O is subject to
public comment. For the new and revised Category I and III CPT codes,
we requested public comments on only those codes that are assigned to
comment indicator ``NP''.
In summary, in the CY 2020 OPPS/ASC proposed rule, we solicited
public comments on the proposed CY 2020 status indicator and APC
assignments for the new and revised Category I and III CPT codes that
will be effective January 1, 2020. The CPT codes were listed in
Addendum B to the proposed rule with short descriptors only. We listed
them again in Addendum O to the proposed rule with long descriptors. We
also proposed 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
assignments for these codes were included in Addendum B to the proposed
rule (which is available via the internet on the CMS website).
Commenters addressed several of the new CPT codes that were
assigned to comment indicator ``NP'' in Addendum B to the CY 2020 OPPS/
ASC proposed
[[Page 61208]]
rule. We have responded to those public comments in sections III.D.
(OPPS APC-Specific Policies), IV.B. (Device-Intensive Procedures) and
XII. (Updates to the ASC Payment System) of this CY 2020OPPS/ASC final
rule with comment period.
The final status indicators, APC assignments, and payment rates for
the new CPT codes that are effective January 1, 2020 can be found in
Addendum B to this final rule with comment period. In addition, the
status indicator meanings can be found in Addendum D1 (OPPS Payment
Status Indicators for CY 2020) to this final rule with comment period.
Both Addendum B and D1 are available via the internet on the CMS
website.
Finally, Table 10 below, which is a reprint of Table 9 from the CY
2020 OPPS/ASC proposed rule, shows the comment timeframe for new and
revised HCPCS codes. The table provides information on 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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B. OPPS Changes--Variations Within APCs
1. Background
Section 1833(t)(2)(A) of the Act requires the Secretary to develop
a classification system for covered 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 final rule
with comment period.
[[Page 61209]]
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. In the CY 2020 OPPS/ASC proposed rule (84 FR 39451-39452),
for CY 2020, we proposed 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
are discussed in the relevant specific sections throughout this 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 the CY 2020 OPPS/
ASC proposed rule (84 FR 39451 through 39452), for CY 2020, we proposed
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.
In the CY 2020 OPPS/ASC proposed rule, we identified the APCs with
violations of the 2 times rule. Therefore, we proposed changes to the
procedure codes assigned to these APCs in Addendum B to the proposed
rule. We noted that Addendum B does not appear in the printed version
of the Federal Register as part of the 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
proposed 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 the proposed rule were 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 the CY 2020 OPPS/ASC proposed rule
identified with a comment indicator ``CH'' those procedure codes for
which we proposed 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), which
was the latest payment rate file for 2019 prior to issuance of the
proposed rule.
3. APC Exceptions to the 2 Times Rule
Taking into account the APC changes that we proposed to make for CY
2020 in the CY 2020 OPPS/ASC proposed rule, 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;
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 the 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
proposed to make exceptions under the 2 times rule for CY 2020, and
found that all of the 18 APCs we identified met the criteria for an
exception to the 2 times rule based on the CY 2018 claims data
available for the 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 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 the proposed rule listed the 18 APCs that we proposed
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. In the proposed
[[Page 61210]]
rule, we stated that 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.
Based on the updated final rule CY 2018 claims data used for this
CY 2020 final rule with comment period, we were able to remedy two APC
violation out of the 18 APCs that appeared in Table 10 of the CY 2020
OPPS/ASC proposed rule. Specifically, APC 5672 (Level 2 Pathology) and
APC 5733 (Level 3 Minor Procedures) no longer met the criteria for
exception to the 2 times rule in this final rule with comment period.
In addition, based on our analysis of the final rule claims data, we
found a total of 17 APCs with violations of the 2 times rule. Of these
17 total APCs, 16 were identified in the proposed rule and one newly
identified APC. Specifically, we found the following 16 APCs from the
proposed rule continued to have violations of the 2 times rule for this
final rule with comment period:
APC 5112 (Level 2 Musculoskeletal Procedures);
APC 5161 (Level 1 ENT Procedures)
APC 5181 (Level 1 Vascular Procedures)
APC 5311 (Level 1 Lower GI Procedures)
APC 5521 (Level 1 Imaging without Contrast);
APC 5522 (Level 2 Imaging without Contrast);
APC 5523 (Level 3 Imaging without Contrast);
APC 5524 (Level 4 Imaging without Contrast);
APC 5571 (Level 1 Imaging with Contrast)
APC 5612 (Level 2 Therapeutic Radiation Treatment
Preparation);
APC 5691 (Level 1 Drug Administration);
APC 5721 (Level 1 Diagnostic Tests and Related Services);
APC 5731 (Level 1 Minor Procedures);
APC 5734 (Level 4 Minor Procedures);
APC 5822 (Level 2 Health and Behavior Services); and
APC 5823 (Level 3 Health and Behavior Services).
In addition, we found that APC 5593 (Level 3 Nuclear Medicine and
Related Services) violated the 2 times rule using the final rule with
comment period claims data.
Although we did not receive any comments on Table 10 of the
proposed rule, we did receive comments on APC assignments for specific
HCPCS codes. The comments, and our responses, can be found in section
III.D. (OPPS APC-Specific Policies) of this final rule with comment
period.
After considering the public comments we received on APC
assignments and our analysis of the CY 2018 costs from hospital claims
and cost report data available for this CY 2020 final rule with comment
period, we are finalizing our proposals with some modifications.
Specifically, we are finalizing our proposal to except 16 of the 18
proposed APCs from the 2 times rule for CY 2020 and also excepting one
additional APC (APC 5593). As noted above, we were able to remedy two
of the proposed rule 2 time violations in this final rule with comment
period.
In summary, Table 11 below lists the 17 APCs that we are excepting
from the 2 times rule for CY 2020 based on the criteria described
earlier and a review of updated 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. 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 generally accept the
HOP Panel's recommendation because those recommendations are based on
explicit consideration of resource use, clinical homogeneity, site of
service, and the quality of the claims data used to determine the APC
payment rates. The geometric mean costs for hospital outpatient
services for these and all other APCs that were used in the development
of this final rule with comment period can be found on the CMS website
at: http://www.cms.gov.
[[Page 61211]]
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C. 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
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
[[Page 61212]]
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 included the proposed payment rates for New Technology APCs 1491 to
1599 and 1901 through 1908 in Addendum A to the CY 2020 OPPS/ASC
proposed rule (which is available via the internet on the CMS website).
The final payment rates for these New Technology APCs are included in
Addendum A to the CY 2020 OPPS/ASC final rule with comment period
(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 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
[[Page 61213]]
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 proposed to continue 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 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).
Comment: One commenter expressed support for the continuation of
our policy regarding payment rates for low-volume new technology
procedures.
Response: We appreciate the commenter's support.
After considering the public comments we received, we are
finalizing this proposal without modification.
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 the CY 2020
OPPS/ASC proposed rule (84 FR 39454), we proposed 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 proposed to continue to assign to
standard APCs, and one that we proposed 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 the CY 2020 OPPS/ASC proposed rule, and as
listed in Addendum B to the CY 2020 OPPS/ASC proposed rule, we proposed
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
proposed to continue to assign the APC to status indicator ``J1''
(Hospital Part B services paid through a comprehensive APC). In
addition, we proposed 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
proposed to continue to assign HCPCS code C9734 to status indicator
``J1''. We refer readers to Addendum B to the 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.
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. 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 proposed rule,
we proposed 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 the 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 over the 3 year period for which there are 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
[[Page 61214]]
Technology--Level 38 ($10,001-$15,000)), with a proposed payment rate
of $12,500.50. Consistent with our low volume policy for procedures
assigned to a new technology APC, we presented the result of each
statistical methodology in the proposed rule, and we sought public
comments on which methodology should be used to establish payment for
the procedures described by CPT code 0398T. We noted that we believe
that the median cost estimate was the most appropriate representative
cost of the procedure described by CPT code 0398T because it was
consistent with the payment rates established for the procedure from CY
2017 to CY 2019 and did 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 proposed 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 assigned
the procedure described by CPT code 0398T to the New Technology APC
that includes the estimated cost. Accordingly, we proposed 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 the 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.
[[Page 61215]]
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[[Page 61216]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.025
Comment: Multiple commenters, including the developer of MRgFUS,
stated that the proposed payment rate for CPT code 0398T was too low
because they believed the claims data for CPT code 0398T continue to
underestimate the resources used to perform the procedure even when
using the low-volume payment policy to establish the payment rate for
the procedure. The developer also used the example of the service
described by HCPCS code C9734 (Focused ultrasound ablation/therapeutic
intervention, other than uterine leiomyomata, with magnetic resonance
(mr) guidance), where the payment rate for the service had doubled from
$5,222 in CY 2017 to $11,675 in the CY 2020 proposed rule, to argue
that a similar increase could occur for CPT code 0398T. Commenters
suggested several ideas for what they believed would be a more
appropriate rate. Commenters believed the claims cost data reported for
CPT code 0398T does not fully reflect the resource costs for the time
the procedure takes, the cost of single-use supplies for the procedure,
and hours of use of a provider's MRI machine. To reflect these costs,
several commenters supported restoring the payment rate from CY 2018 of
$17,500.50. Other commenters simply requested a higher rate than what
was proposed such as a payment rate of either $22,000 or $25,000.
Response: We appreciate the commenters' concerns, but the claims
data we currently have for CPT code 0398T do not support a higher
payment rate even when using the low-volume payment policy. Also, while
the payment rate for HCPCS code C9734 (Focused ultrasound ablation/
therapeutic intervention, other than uterine leiomyomata, with magnetic
resonance (mr) guidance) doubled from CY 2017 to CY 2020, the payment
rate increase for HCPCS code C9734 is not predictive of the changes in
cost that may occur with CPT code 0398T (Magnetic resonance image
guided high intensity focused ultrasound (mrgfus), stereotactic
ablation lesion, intracranial for movement disorder including
stereotactic navigation and frame placement when performed). Rather,
the payment rate for each service, including that described by HCPCS
code C9734, is generally based on the costs associated with furnishing
the service, which, in turn, drives the APC assignment. The geometric
mean for C9734, which represents the cost of the individual procedure,
increased from $8,655 in CY 2017 to $9,294 in CY 2020, and was
reassigned to a higher level APC based clinical and resource similarity
to other services.
Under the low-volume payment policy, we utilized 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
identified 43 claims reporting the procedure described by CPT code
0398T for the 3-year period of CY 2016 through CY 2018. We found the
geometric mean cost for the procedure described by CPT code 0398T is
approximately $8,485, the arithmetic mean cost is approximately $9,672,
and the median cost is approximately $11,182. Based on our methodology,
we will use the median cost of CPT code 0398T to set the payment rate
for the procedure because the median cost is the highest rate of the
three statistical methods and may reflect some of the higher resource
costs, as described by commenters, for the procedure. The median cost
for CPT code 0398T falls within the same New Technology APC 1575 (New
Technology--Level 38 ($10,001-$15,000)) with a proposed payment rate of
$12,500.50 that was proposed as the APC assignment for CPT code 0398T
in the proposed rule.
Comment: Two commenters supported the assignment of CPT code 0398T
to New Technology APC 1575 (New Technology--Level 38 ($10,001-$15,000))
with a proposed payment rate of $12,500.50. One of the commenters
supported the proposed new technology APC assignment because it is
reflective of the median cost of the service and would ensure that what
the commenter believed would be a severe underpayment calculated from
the geometric mean would not be used to establish the payment rate for
CPT code 0398T, which the commenter believed could discourage providers
from performing the service.
Response: We appreciate the support of the commenters.
Comment: One commenter, the developer, supported the assignment of
HCPCS code C9734 to APC 5115 (Level 5 Musculoskeletal Procedures) for
CY 2020.
Response: We appreciate the support of the commenter.
After consideration of the public comments we received, we are
finalizing our proposal for the APC assignment of CPT code 0398T.
Specifically, we are continuing to assign this code to New Technology
APC 1575 (New Technology--Level 38 ($10,001-$15,000)), with a payment
rate of $12,500.50, for CY 2020 through use of our low-volume payment
policy for new technology procedures. In addition, we are finalizing
our proposal, without modification, to assign HCPCS code C9734 to APC
5115. We also are finalizing our proposal to continue to assign CPT
codes 0071T and 0072T to APC 5414, without modification. Table 11 above
lists the final CY 2018 status
[[Page 61217]]
indicator and APC assignments for MRgFUS procedures. We refer readers
to Addendum B of this final rule with comment period for the final
payment rates for all codes reportable under the OPPS. Addendum B is
available via the internet on the CMS website.
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 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.
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
[[Page 61218]]
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 payment
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. As previously
mentioned, 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 proposed 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 the proposed rule, we presented the result of each
statistical methodology in the proposed rule, and we sought 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 fell within the cost band for New Technology
APC 1908, with the estimated cost being between $145,001 and $160,000.
Accordingly, we proposed 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 the
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.
Comment: Two commenters, including the manufacturer, supported the
assignment of 0100T to APC 1908 (New Technology--Level 52 ($145,001-
$160,000)), with a proposed payment rate of $152,500.50 for CY 2020.
Response: We appreciate the support of the commenters. Consistent
with our policy for low-volume services assigned to a New Technology
APC, for this final rule, we calculated 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 41 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 $146,042, the arithmetic mean cost to be approximately
$151,453, and the median cost to be approximately $151,426. All of the
resulting estimates from using the three statistical methodologies fall
within the same New Technology APC cost band ($145,001-$160,000), that
was proposed as the APC assignment for CPT code 0100T in the proposed
rule. Therefore, we are finalizing our proposal 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 payment rate of
$152,500.50 for CY 2020. We refer readers to Addendum B to the 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 proposed to continue this policy
as described in section II.A.2.b.(3) of the 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 did not propose
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 sought public comments on this issue.
Comment: Several commenters, including device manufacturers, device
manufacturer associations and physicians were opposed to our proposal
to package payment for procedures assigned to a New Technology APC into
the payment for comprehensive observation services assigned status
indicator ``J2''. The commenters stated that there were instances where
beneficiaries receiving observation services may require the types of
procedures that are assigned to New Technology APCs. Several commenters
specifically mentioned HeartFlow, and stated that it could be performed
appropriately for a patient receiving observation services. The
commenters also stated that providing separate payment for this new
technology procedure will allow CMS to collect sufficient claims data
to enable assignment of the procedure to an appropriate clinical APC.
Response: We appreciate the stakeholders' comments regarding this
proposal and agree that, although rare, there are situations in which
it is clinically appropriate to provide a new technology service when
providing comprehensive observation services. As discussed in the CY
2019 OPPS/ASC
[[Page 61219]]
final rule with comment period (83 FR 58847), the purpose of the new
technology APC policy is to ensure that there are sufficient claims
data for new services in order to assign these procedures to a clinical
APC and therefore, we excluded procedures assigned to New Technology
APCs from packaging under the C-APC policy. In the CY 2019 final rule,
we specifically stated that the exclusion policy included circumstances
when New Technology procedures were billed with comprehensive services
assigned to status indicator ``J1'', however we believe this rationale
is also applicable to comprehensive observations services that are
assigned status indicator ``J2''.
Accordingly, for CY 2020 and subsequent years, we are modifying our
policy for excluding procedures assigned to New Technology APCs from
the C-APC policy. That is, we are finalizing our proposal 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. For CY 2020 and subsequent years, we are also finalizing a
policy to exclude payment for any procedures that are assigned to a New
Technology APC from being packaged into the payment for comprehensive
observation services assigned to status indicator ``J2'' when they are
included on a claim with ``J2'' procedures. This policy is also
described in section II.A.2.b.(3) of this final rule.
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 (eg, 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
proposed 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 were shown in Table 12 of the CY
2020 OPPS/ASC proposed Rule, which is reprinted below in Table 13.
[GRAPHIC] [TIFF OMITTED] TR12NO19.026
Comment: The developer of the procedure noted that there will be
clinical trials for HCPCS code C9751 in CY 2020 and it is anticipated
the procedure also will have a limited market release in CY 2020.
Therefore, the developer is expecting claims to be reported billed with
HCPCS code C9751 for CY 2020.
Response: We appreciate the update on the expected utilization for
HCPCS code C9751 for CY 2020.
Comment: One commenter supported our proposal to assign 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.
Response: We appreciate the support of the commenter.
After considering the public comments, we are finalizing our
proposal to assign HCPCS code C9751 to New Technology APC 1571 (New
Technology--Level 34 ($8,001-$8,500)), with a payment rate of $8,250.50
for CY 2020.
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 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.
[[Page 61220]]
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 proposed 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.
Comment: One commenter expressed support for the proposal.
Response: We appreciate the support of the commenter.
After considering the public comments, we are finalizing our
proposal to assign HCPCS code P9100 to New Technology APC 1494 (New
Technology--Level 1D ($31-$40)), with a 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
available for the proposed rule, we found that over 840 claims had been
submitted for payment for HeartFlow during CY 2018. We stated that the
estimated geometric mean cost of HeartFlow was $788.19, or roughly $660
lower that the payment rate for CY 2019 of $1,450.50. Therefore, for CY
2020, we proposed 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 proposed 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 CY 2020. We sought public
comments on this proposal.
Comment: Multiple commenters requested that we retain the CY 2019
OPPS APC assignment of APC 1516 (New Technology--Level 16 ($1401-
$1500)) for HeartFlow with a payment rate of $1,450.50. The commenters
were concerned that reducing the payment rate to $750.50 would
discourage hospitals from using the service because they stated that
the list price of the HeartFlow service is substantially higher than
the proposed payment rate. Commenters were concerned that reduced
utilization of HeartFlow would cause some beneficiaries to have
unnecessary invasive coronary angiograms that are more costly than the
HeartFlow procedure.
Multiple commenters, including the developer of HeartFlow, provided
additional reasons to maintain the current payment rate for the service
of $1,450.50 despite claims data suggesting a lower payment rate for
HeartFlow. The commenters believed that 78 single frequency claims used
for the proposed rule solely represented a single year and that such a
low number of claims would be an insufficient number of claims on which
to base a payment rate reduction for the service. Two commenters
suggested that CMS should collect another one or two years of claims
data before making changes to the current payment rate. One of the
commenters believed the reason the estimated cost of HeartFlow derived
from claims data is substantially less than the current payment rate
may be due to providers submitting claims without marked up gross
charges for the services they provide.
Another commenter, the developer, encouraged CMS to use 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 current payment rate for HeartFlow.
The developer suggested that CMS should use its own assessment of the
resources required to perform the HeartFlow service to set the payment
rate for the service. The developer cited instances in the last four
years where CMS used its equitable adjustment authority to mitigate
either large fluctuations or declines in annual payment rates. These
cases include: (1) A CY 2018 decision to use multiple years of claims
data to pay a higher rate for CPT code 0100T (Placement of a
subconjunctival retinal prosthesis receiver and pulse generator, and
implantation of intraocular retinal electrode array, with vitrectomy)
of $122,500.50 rather than the payment rate generated by the most
recent year of claims data of $95,000.50; (2) a CY 2016 decision
regarding the payment rate of CPT code 0308T (Insertion of ocular
telescope prosthesis including removal of crystalline lens or
intraocular lens prosthesis) where the median cost of $18,365 was used
to set the payment rate instead of the geometric mean cost of $13,865
because only 39 single frequency claims were reported for the service,
and where we stated that ``the median cost would be a more appropriate
measure of the central tendency for purposes of calculating the cost
and the payment rate for the procedure;'' (3) a CY 2016 decision to
adjust the geometric mean per diem cost for the partial hospital
program to ensure a per diem payment for fewer services was less than a
per diem payment for a larger number of services; and (4) a CY 2018
decision to establish a payment rate of $17,500.50 for CPT code 0398T
(Magnetic resonance image guided high intensity focused ultrasound
(mrgfus), stereotactic ablation lesion, intracranial for movement
disorder including stereotactic navigation and frame placement when
performed) instead of proposed payment rate of $9,750.50.
The developer believes that the proposed New Technology APC
assignment for HeartFlow, which would result in a nearly 50 percent
reduction in the payment rate between CY 2019 and CY 2020, is similar
to these cases described in their comment. Therefore, the developer
asked us to use our equitable adjustment authority to
[[Page 61221]]
maintain the CY 2019 payment rate of $1,450.50 for the service rather
than adopt the proposed payment rate.
Response: The proposed payment rate for CPT code 0503T was based on
claims data from CY 2018, which is the first year the service was
payable in the OPPS. For ratesetting for CY 2018 and CY 2019, there
were no claims data available showing the cost of the service. Also,
there were no services identified as comparable to CPT code 0503T,
which meant we could not estimate the cost of CPT code 0503T by using
the cost of a similar service. Accordingly, we previously based pricing
for the service on pricing information provided by the developer of the
procedure.
We recognize that there was a low volume of claims for HeartFlow
based on the data available for the proposed rule and, thus, we should
have applied the low-volume policy for new technology services in the
proposed rule.
However, for the final rule, using the most recently available
data, there are now 957 total claims billed with CPT code 0503T and 101
single frequency claims. We appreciate the concerns of the commenters
who stated that there were not enough claims billed with HeartFlow to
use claims data to revise the rate for HeartFlow. While 101 single
claims is above the threshold we established for low-volume services
assigned to a new technology APC, we agree with the commenters that a
payment reduction of nearly 50 percent is significant for a new
technology that still has relatively low volume.
Accordingly, given the low number of single frequency claims for
CPT code 0503T, that number of claims for the Heartflow procedure was
below the low-volume payment policy threshold for the proposed rule,
and that it is only two claims above the threshold using data available
for this final rule with comment period, we have decided to use our
equitable adjustment authority under section 1833(t)(2)(E) of the Act
to calculate the geometric mean, arithmetic mean, and median using the
CY 2018 claims data to determine an appropriate payment rate for
HeartFlow using our new technology APC low-volume payment policy. While
the number of single frequency claims is just above our threshold to
use the low-volume payment policy, we still have concerns about the
normal cost distribution of the claims used to calculate the payment
rate for Heartflow, and we decided the low-volume payment policy would
be the best approach to address those concerns.
Our analysis found that the geometric mean cost for CPT code 0503T
was $768.26, the arithmetic mean cost for CPT code 0503T was $960.12
and that the median cost for CPT code 0503T was $900.28. Of the three
cost methods, the highest amount was for the arithmetic mean. The
arithmetic mean falls within the cost band for New Technology APC 1511
(New Technology--Level 11 ($901-$1000)) with a payment rate of $950.50.
The arithmetic mean helps to account for some of the higher costs of
CPT code 0503T identified by the commenters that may not have been
reflected by either the median or the geometric mean. We acknowledge
the commenters' concern and recognize that it may be theoretically
possible that the reported cost of CPT code 0503T is higher than what
we calculated from the claims data due to some providers reporting
costs lower than actual costs for the service. However, we rely on
hospitals to bill all CPT codes accurately in accordance with their
code descriptors and CPT and CMS instructions, as applicable, and to
report charges on claims and charges and costs on their Medicare
hospital cost reports appropriately. In addition, we do not specify the
methodologies that hospitals must use to set charges for this or any
other service.
After consideration of the public comments we received, we are
utilizing our new technology low-volume payment policy to set the
payment rate for the HeartFlow service CPT code 0503T based on the
arithmetic mean for the procedure. Specifically, we are assigning CPT
code 0503T to New Technology APC 1511 (New Technology--Level 11 ($901-
$1000)) with a payment rate of $950.50.
f. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT)
Studies
Effective January 1, 2020, we have assigned three CPT codes (78431,
78432, and 78433) that describe the services associated with cardiac
PET/CT studies to New Technology APCs. Table 13 reports code
descriptors, status indicators, and APC assignments for these CPT
codes. These codes were listed in Addendum B to the CY 2020 OPPS/ASC
proposed rule as 78X32, 78X33, and 78X44. More information about CPT
codes 78431, 78432, and 78433 can be found in section III. D. b. of
this final rule.
Comment: Several commenters reported that certain societies
submitted a new technology application to CMS for CPT codes 78431,
78432, and 78433 that details the costs associated with providing these
services. For CPT code 78431, these same commenters disagreed with the
proposed APC placement and recommended its reassignment from APC 5594
(Level 4 Nuclear Medicine and Related Services) with a proposed payment
rate of $1,466.16 to APC 1522 (New Technology--Level 23 ($2501-$3000))
with a proposed payment rate of $2,750.50. They reported that, based on
the resource cost of the service described by CPT code 78431, APC 1522
provides adequate reimbursement for the service. Similarly, for CPT
codes 78432 and 78433, the commenters indicated that APC 5594 would not
adequately cover the resource costs associated with these procedures,
and recommended their reassignment to APC 1523 (New Technology--Level
23 ($2501-$3000)) with a proposed payment rate of $ 2,750.50
Response: Based on the information provided in the new technology
application, and the comments received, we are revising the APC
assignments for these codes. Specifically, we are revising the APC
assignment for CPT code 78431 from APC 5594 to APC 1522, and
reassigning CPT codes 78432 and 78433 from APC 5594 to APC 1523.
In summary, after consideration of the public comments for the new
cardiac PET/CT codes, and based on our evaluation of the new technology
application which provided the estimated costs for the services and
described the components and characteristics of the new codes, we are
assigning CPT codes 78431, 78432, and 78433 to the final APCs listed in
Table 14 below. Please refer to section III. D. b. of this final rule
for more information on the finalized proposal to establish a payment
rate for other new CPT codes associated with PET/CT studies. The final
CY 2020 payment rate for the codes can be found in Addendum B to this
final rule with comment period (which is available via the internet on
the CMS website).
[[Page 61222]]
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[[Page 61223]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.028
g. V-Wave Interatrial Shunt Procedure
A randomized, double-blinded control IDE study is currently in
progress for the V-Wave interatrial shunt procedure. All participants
who passed initial screening for the study receive a right heart
catherization procedure described by CPT code 93451 (Right heart
catheterization including measurement(s) of oxygen saturation and
cardiac output, when performed). Participants assigned to the
experimental group also receive the V-Wave interatrial shunt procedure
while participants assigned to the control group only receive right
heart catheterization. The developer of V-Wave is concerned that the
current coding of these services by Medicare would reveal to the study
participants whether they have received the interatrial shunt because
an additional procedure code, CPT code 93799 (Unlisted cardiovascular
service or procedure) would be included on the claims for participants
receiving the interatrial shunt. Therefore, we created a temporary
HCPCS code to describe the V-wave interatrial shunt procedure for both
the experimental group and the control group in the study.
Specifically, we established HCPCS code C9758 (Blinded procedure for
NYHA class III/IV heart failure; transcatheter implantation of
interatrial shunt or placebo control, including right heart
catheterization, trans-esophageal echocardiography (TEE)/intracardiac
echocardiography (ICE), and all imaging with or without guidance (for
example, ultrasound, fluoroscopy), performed in an approved
investigational device exemption (IDE) study) to describe the service,
and we assigned the service to New Technology APC 1589 (New
Technology--Level 38 ($10,001-$15,000)). Details about the temporary
HCPCS code are shown in Table 15 below. The final CY 2020 payment rate
for V-Wave interatrial shunt procedure can be found in Addendum B to
this final rule with comment period (which is available via the
internet on the CMS website).
[[Page 61224]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.029
D. OPPS APC-Specific Policies
1. Barostim Neo\TM\ System (APC 5464)
In CY 2019, CPT codes 0266T and 0268T were assigned to APC 5463
(Level 3 Neurostimulator and Related Procedures) with a payment rate of
$18,707.16. For CY 2020, as listed in Addendum B to the CY 2020 OPPS/
ASC proposed rule, we proposed to reassign both codes to APC 5464
(Level 4 Neurostimulator and Related Procedures) with a proposed
payment rate of $29,025.99. Table 16 below lists the long descriptors,
proposed status indicator (SI), and APC assignments for these codes. We
note that both codes are associated with the Barostim Neo\TM\ System.
Comment: A medical device company agreed with the reassignment for
CPT codes 0266T and 0268T to APC 5464. The commenter stated that APC
5464 is the more appropriate assignment for these codes based on
clinical and resource homogeneity, and encouraged CMS to finalize the
APC assignment.
Response: As we have stated every year since the implementation of
the OPPS on August 1, 2000, we review, on an annual basis, the APC
assignments for all services and items paid under the OPPS based on our
analysis of the latest claims data.
Based on our analysis of the proposed rule claims data as well as
clinical review of the services described, we proposed to revise the
APC assignment for both CPT codes 0266T and 0268T to APC 5464. In our
analysis of CPT code 0268T (which describes implantation/replacement of
the pulse generator), we noticed that the APC assignment for CPT code
0266T (which describes the implantation or replacement of the complete
system) was lower. We do not believe that the payment for the complete
system (CPT code 0266T) should be less than the payment for the
implantation/replacement of the pulse generator (CPT code 0268T)
procedure. Consequently, we proposed to revise the APC assignment for
CPT code 0266T to APC 5464. Although we had no claims data for CPT code
0266T, we believed it was necessary to revise the APC assignment to
appropriately reflect the device cost associated with the procedure.
Similar to our findings for the proposed rule, based on updated
claims data for this final rule with comment period, the geometric mean
cost for CPT code 0268T supports its reassignment from APC 5463 to APC
5464. Specifically, our claims data show a geometric mean cost of
approximately $25,558 for CPT code 0268T based on 6 single claims (out
of 6 total claims), which is consistent with the geometric mean cost of
approximately $28,491 for APC 5464, rather than the geometric mean cost
of approximately $18,864 for APC 5463. Furthermore, as mentioned above,
we are also assigning CPT code 0266T to APC 5464 even though we do not
yet have claims data because we do not believe that the service for
implantation of the entire system (CPT code 0266T) would be less
resource intensive than the implantation of the pulse generator alone
(CPT code 0268T).
[[Page 61225]]
In summary, after consideration of the public comment and analysis
of the latest claims data, we are finalizing our proposal, without
modification, to assign CPT codes 0266T and 0268T to APC 5464 for CY
2020. Table 16 below list the long descriptors for the codes and the
final SI and APC assignments. The final CY 2020 payment rate for the
codes can be found in Addendum B to this final rule with comment
period. In addition, we refer readers to Addendum D1 of this final rule
with comment period for the status indicator (SI) assignments for all
codes reported under the OPPS. Both Addendum B and D1 are available via
the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR12NO19.030
2. Biomechanical Computed Tomography (BCT) Analysis (APCs 5521, 5523,
and 5731)
The CPT Editorial Panel established five new codes, specifically,
CPT codes 0554T, 0555T, 0556T, 0557T, and 0558T, to describe the
services associated with biomechanical computed tomography (BCT)
analysis effective July 1, 2019. Through the July 2019 OPPS quarterly
update CR (Transmittal 4313, Change Request 11318, dated May 24, 2019),
we assigned these new codes to appropriate interim status indicators
(SI) and APCs. Table 17 below lists the long descriptors and proposed
SI and APCs of the codes.
Comment: A commenter agreed with the SI and APC assignments and
stated that the APC assignments for these codes are the best available
placements. The commenter also noted that CMS did not assign the
comprehensive code (CPT code 0554T) and the physician interpretation
code (CPT code 0557T) to an APC because the codes represent physician
services.
Response: We thank the commenter for its feedback. We are
finalizing the SIs and APC assignments for the codes. Table 17 below
list the long descriptors and final SIs and APCs. The final CY 2020
payment rate for the codes can be found in Addendum B to this final
rule with comment period. In addition, we refer readers to Addendum D1
of this final rule with comment period for the complete list of the
OPPS payment status indicators and their definitions for CY 2020. Both
Addendum B and Addendum D1 are available via the internet on the CMS
website.
As we do for all codes, we will reevaluate the APC assignments for
CPT codes 0555T, 0556T, and 0558T once we have claims data. We remind
hospitals that we review, on an annual basis, the APC assignments for
all services and items paid under the OPPS based on the latest claims
data.
[[Page 61226]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.031
3. Cardiac Magnetic Resonance (CMR) Imaging (APC 5572)
For CY 2020, we proposed to maintain the APC assignment for CPT
code 75561 (Cardiac magnetic resonance imaging for morphology and
function without contrast material(s), followed by contrast material(s)
and further sequences) to APC 5572 (Level 2 Imaging with Contrast) with
a proposed payment rate of $373.45.
Comment: Some commenters expressed concern with the placement of
CPT code 75561 in APC 5572, and stated that it is grouped with services
that are not similar clinically or with respect to resource use. As an
example, they observed that CPT code 75561 is unlike CT of the abdomen
or pelvis or MRI of the neck and spine, and instead, is more similar to
those services in APC 5573 (Level 3 Imaging with Contrast), with a
proposed payment rate of $682.96.Another commenter expressed concern
with the payment stability for CPT code 75561. The commenter noted that
although the code is assigned to the same APC for CY 2020, the payment
for the service is slated for another reduction. The commenter observed
that the payment rate for the service has decreased in the last several
years and noted the following yearly rates:
CY 2017 OPPS payment rate: $426.52
CY 2018 OPPS payment rate: $456.34
[[Page 61227]]
CY 2019 OPPS payment rate: $385.88
CY 2020 OPPS proposed payment rate: $373.45
This same commenter reported that the code was previously included
in a nuclear medicine APC, which it maintained was appropriate based on
its clinical and resource homogeneity to cardiovascular magnetic
resonance and cardiac nuclear imaging services in the APC, and that,
since its APC reassignment, the payment for the service has dropped.
The commenter believed that the different cost reporting methods used
by hospitals may contribute to the artificially low relative payment
weights and payment amounts for CT and MR.
Response: For CY 2020, based on claims submitted between January 1,
2018 through December 30, 2018, that were processed on or before June
30, 2019, our analysis of the latest claims data for this final rule
continues to support our proposal of assigning CPT code 75561 to APC
5572. Specifically, our claims data show a geometric mean cost of
approximately $413 for CPT code 75561 based on 14,350 single claims
(out of 18,118 total claims), which is comparable to the geometric mean
cost of about $359 for APC 5572, rather than the geometric mean cost of
approximately $660 for APC 5573. The geometric cost of approximately
$413 for CPT code 75561 is also consistent with the costs for
significant services in APC 5572, which range between about $269 (for
CPT code 74174) to $515 (for CPT code 73525). Based on our analysis of
the latest claims data, we believe that CPT code 75561 is appropriately
assigned to APC 5572.
With regards to the issue of payment stability, we note that
Section 1833(t)(9)(A) of the Act requires the Secretary to review, not
less often than annually, and to revise the groups, relative payment
weights, and the wage and other adjustments to take into account
changes in medical practices, changes in technology, the addition of
new services, new cost data, and other relevant information and
factors. Therefore, every year we review and revise the APC assignments
based on our evaluation of these factors using the latest OPPS claims
data. While we recognize the concerns about payment stability, we note
that changes made to payment rates are based on our calculations of
geometric mean costs from the most recently available Medicare claims
and cost report data analysis, which may or may not result in payment
increases and/or reductions based on the most recent geometric mean
costs available. We note that the geometric mean costs reflect the
national average resources to furnish a service in the hospital
outpatient setting. To the extent that costs decrease, so too, would
the payment rate.
In addition, with regard to the issue of different hospital cost
reporting methods, we are unable to determine whether hospitals are
misreporting the procedure. It is generally not our policy to judge the
accuracy of hospital charging and coding for purposes of ratesetting.
We rely on hospitals to accurately report the use of HCPCS codes in
accordance with their code descriptors and CPT and CMS instructions,
and to appropriately report services on claims and charges and costs
for the services on their Medicare hospital cost report. Also, we do
not specify the methodologies that hospitals use to set charges for
this or any other service. Furthermore, we state in Chapter 4 of the
Medicare Claims Processing Manual that ``it is extremely important that
hospitals report all HCPCS codes consistent with their descriptors; CPT
and/or CMS instructions and correct coding principles, and all charges
for all services they furnish, whether payment for the services is made
separately paid or is packaged'' to enable CMS to establish future
ratesetting for OPPS services.
Comment: One commenter who expressed concern with the APC
assignment for CPT code 75561 also requested that we address in the
final rule how we determine which services are clinically similar. The
commenter noted that CMS has constructed many APCs with a mix of
imaging services that are dissimilar and yet preserves the clinical
homogeneity of some APCs, such as nuclear medicine services.
Response: Under the OPPS, each service is assigned to an APC based
on the clinical and resource similarity to other services within the
APC or family of APCS. The OPPS is a prospective payment system under
which payment groupings (that is, APCs) are based on clinical and
resource similarity rather than code-specific payment rates, which
would result in a cost-based fee schedule. For example APCs 5111-5116,
which are described as Levels 1 through 6 Musculoskeletal Procedures,
all include services that involve musculoskeletal services/procedures
and the various levels of that APC family differentiate such procedures
based on resource homogeneity. That is, the descriptors for APCs 5111
through 5116 are general and broadly describe a variety of
musculoskeletal procedures, and are differentiated by the various
levels based on the geometric mean costs for each APC. Clinically, all
the procedures in APCs 5111 through 5116 are similar in that they
involve some form of musculoskeletal procedure. In addition, as stated
in section III.B.2. (Application of the 2 Times Rule) of this final
rule with comment, 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''). While it may seem
appropriate to place one code in a specific grouping, based on our 2
times rule criteria, we must assign the code to the appropriate APC
based on its geometric mean cost.
In summary, after consideration of the public comments, we are
finalizing our proposal, without modification, to assign CPT code 75561
to APC 5572. The final CY 2020 payment rate for CPT code 75561 can be
found in Addendum B to this final rule with comment period. In
addition, we refer readers to Addendum D1 of this final rule with
comment period for the status indicator (SI) meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website.
4. CardioFluxTM Magnetocardiography (MCG) Myocardial Imaging
(APC 5723)
For CY 2020, we proposed to maintain the APC assignment for CPT
code 0541T to APC 5722 (Level 2 Diagnostic Tests and Related Services)
with a proposed payment rate of $256.60. We also proposed to continue
to assign CPT code 0541T, which is an add-on code, to status indicator
``N'' to indicate that the code is packaged and payment for it is
included in the primary procedure or service. In this case, the payment
for 0542T is included in CPT code 0541T. We note that CPT codes 0541T
and 0542T are associated with the CardioFlux magnetocardiography
imaging technology. Table 18 below lists the long descriptors for the
codes as well as the proposed SI and APC assignments.
Comment: A commenter disagreed with the assignment to APC 5722 and
reported that the service associated with CPT code 0541T is not
clinically and resource comparable to the services in the APC. The
commenter stated that the service is clinically comparable to the
services that are assigned to APCs 5593 and 5724, specifically:
[[Page 61228]]
APC 5593 (Level 3 Nuclear Medicine), with a proposed
payment rate of $ 1,293.33, which includes--
+ CPT code 78451 (Myocardial perfusion imaging); and
+ CPT code 78452 (Myocardial perfusion imaging).
APC 5724 (Level 4 Diagnostic Tests and Related Services),
with a proposed payment rate of approximately $ 920.66, which
includes--
+ CPT code 95965 (Magnetoencephalography (MEG)); and
+ CPT code 95966 (Magnetoencephalography (MEG)).
The commenter indicated that this new technology requires the use of
very expensive capital equipment, and added that the CardioFlux System
costs about $1.5 million with a useful life of seven years. The
technology itself involves hospital site implementation and ongoing
operation. The commenter stated that the proposed payment does not
provide adequate payment for this novel technology. The commenter
expressed concern that the proposed low payment rate will severely
limit uptake of this new technology, and, consequently, urged CMS to
reassign CPT code 0541T to either APC 5593 or APC 5724 to ensure
patient access to this emerging technology and its potential for
savings to the Medicare program.
Response: 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 a prospective payment system. The payment rates that are
established reflect the geometric mean costs associated with items and
services assigned to an APC and we believe that our payment rates
generally reflect the costs that are associated with providing care to
Medicare beneficiaries in cost efficient settings. Moreover, we strive
to establish rates that are adequate to ensure access to medically
necessary services for Medicare beneficiaries.
For many emerging technologies there is a transitional period
during which utilization may be low, often because providers are first
learning about the techniques and their clinical utility. Quite often,
the requests for higher payment amounts are for new procedures in that
transitional phase. These requests, and their accompanying estimates
for expected Medicare beneficiary or total patient utilization, often
reflect very low rates of patient use, 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 Medicare
beneficiary projected utilization and does not set its payment rates
based on initial projections of low utilization for services that
require expensive capital equipment.
We note that in a budget neutral environment, payments may not
fully cover hospitals' costs, 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 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 annually review 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.
In addition, we note this new technology is currently under
clinical trial (ClinicalTrials.gov Identifiers: NCT03968809 and
NCT04044391) and does not appear to be a service that is typically
performed in an HOPD facility. Further, based on our clinical
evaluation, we do not agree that CardioFlux MCG is similar to the MEG
procedures described by CPT codes 95965 and 95966 since MEG procedures
involve the brain while the CardioFlux technology involves imaging of
the heart. Also, we do not agree that CardioFlux MCG is similar to the
myocardial perfusion scans described by CPT codes 78451 and 78452
because these scans involve the use of radioactive tracers, specialized
staff, and more time as the test generally takes two to four hours to
complete. Furthermore, based on our findings, the CardioFlux MCG scan
is unlike other cardiac imaging tests because it does not require or
expose the patient to radiation, and takes about 90 seconds to perform
with physician review and return of interpretation of the results in an
estimated 5 minutes per patient.
However, based on our review of the issue and feedback from our
medical advisors, as well as the anticipated operating costs per case
derived from the public comment and publicly available information
about the service, we believe that CPT code 0541T should be assigned to
APC 5723 (Level 3 Diagnostic Tests and Related Services) rather than to
APC 5722 (Level 2 Diagnostic Tests and Related Services). Because we
have neither claims data nor specific HOPD costs, including the cost to
perform each exam (other than the cost of the capital equipment that
was supplied to us), we believe that APC 5723 is the most appropriate
assignment at this time.
Therefore, after consideration of the public comment, we are
finalizing our proposal, with modification, to assign CPT code 0541T to
APC 5723. Table 18 list the long descriptors and final SI and APC
assignments for both codes. The final CY 2020 payment rate for CPT code
0541T can be found in Addendum B to this final rule with comment
period. In addition, we refer readers to Addendum D1 of this final rule
with comment period for the status indicator (SI) meanings for all
codes reported under the OPPS. Both Addendum B and D1 are available via
the internet on the CMS website.
[[Page 61229]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.032
5. Cataract Removal With Endoscopic Cyclophotocoagulation (ECP) (APC
5492)
For CY 2020, the CPT Editorial Panel established two new codes to
describe cataract removal with endoscopic cyclophotocoagulation (ECP),
specifically, CPT codes 66987 and 66988. As listed in Table 19 below
with the long descriptors, and also in Addendum B to the CY 2020 OPPS/
ASC proposed rule, we proposed to assign CPT code 66987 and 66988 to
APC 5491 (Level 1 Intraocular Procedures) with a proposed payment rate
of $2,053.39. The codes were listed as 66X01 and 66X02 (the 5-digit CMS
placeholder codes), respectively, in Addendum B with the short
descriptors and again in Addendum O with the long descriptors. We also
assigned the codes to comment indicator ``NP'' in Addendum B to
indicate that they are new for CY 2020 and that public comments would
be accepted on their proposed status indicator assignments. We note
these codes will be effective January 1, 2020.
Comment: A commenter disagreed with the APC assignment and, based
on their analysis of the combined geometric mean costs for the existing
cataract and ECP procedures (CPT codes 66982, 66984, and 66711),
believed the new codes should be reassigned to APC 5492 (Level 2
Intraocular Procedures) with a proposed payment rate of $3,867.16. Four
professional ophthalmology organizations suggested that CMS should
establish the payment rate for CPT code 66987 based on the combined
costs of CPT codes 66711 and 66982, and, similarly, determine the
payment rate for CPT code 66988 based on the combined costs of CPT
codes 66711 and 66984. They expressed concern that the proposed payment
rates for the codes do not adequately capture the resources hospitals
will expend for each combined procedure.
Response: APC assignment for a code is not typically based on
combined costs of existing HCPCS codes, rather, it is based on
similarity to other codes within an APC based clinical homogeneity and
resource costs. As specified in 42 CFR 419.31(a)(1), CMS classifies
outpatient services and procedures that are comparable clinically and
in terms of resource use into APC groups. Also, as we stated in the CY
2012 OPPS/ASC final rule (76 FR 74224), the OPPS is a prospective
payment system that provides payment for groups of services that share
clinical and resource use characteristics. It should be noted that,
with all new codes, our policy has been to assign the service or
procedure to an APC based on feedback from a variety of sources,
including but not limited to review of the clinical similarity of the
service to existing procedures; advice from CMS medical advisors;
information from interested specialty societies; and review of all
other information available to us, including information provided to us
by the public, whether through meetings with stakeholders or additional
information that is mailed or otherwise communicated to us.
Based on our analysis of the public comment and input from our
medical advisors, we believe that we should
[[Page 61230]]
revise the APC assignment for these new cataract codes. We reviewed the
components of the procedure associated with CPT codes 66987 and 66988,
and after our analysis, we agree with commenters that the resources
associated with the new codes are higher than the routine cataract and
ECP procedures when performed by themselves. Therefore, we are
reassigning the new codes from APC 5491 to APC 5492.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification, and revising the APC
assignment for CPT codes 66987 and 66988 to APC 5492 for CY 2020. Table
19 lists the final SI and APC assignments for the two codes. The final
CY 2020 payment rate for the codes can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
We note that we will reevaluate the APC assignments for CPT codes
66987 and 66988 once we have claims data. We review, on an annual
basis, the APC assignments for all services and items paid under the
OPPS based on the latest claims data that we have available.
BILLING CODE 4120-01-P
[[Page 61231]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.033
BILLING CODE 4120-01-C
6. Chimeric Antigen Receptor T-Cell (CAR T) Therapy (APCs 5694, 9035,
and 9194)
Chimeric Antigen Receptor (CAR) T-cell therapy is a cell-based gene
therapy in which T-cells are collected and genetically engineered to
express a chimeric antigen receptor that will bind to a certain protein
on a patient's cancerous cells. The CAR T-cells are then administered
to the patient to attack certain cancerous cells and the individual is
observed for potential serious side effects that would require medical
intervention.
Two CAR T-cell therapies received FDA approval in 2017.
KYMRIAH[supreg] (manufactured by Novartis Pharmaceuticals Corporation)
was
[[Page 61232]]
approved for use in the treatment of patients up to 25 years of age
with B-cell precursor acute lymphoblastic leukemia (ALL) that is
refractory or in second or later relapse. In May 2018, KYMRIAH[supreg]
received FDA approval for a second indication, treatment of adult
patients with relapsed or refractory large B-cell lymphoma after two or
more lines of systemic therapy, including diffuse large B-cell lymphoma
(DLBCL), high grade B-cell lymphoma, and DLBCL arising from follicular
lymphoma. YESCARTA[supreg] (manufactured by Kite Pharma, Inc.) was
approved for use in the treatment of adult patients with relapsed or
refractory large B-cell lymphoma and who have not responded to or who
have relapsed after at least two other kinds of treatment.
The HCPCS code to describe the use of KYMRIAH[supreg] (HCPCS code
Q2042) has been active since January 1, 2019 for OPPS, which replaced
HCPCS code Q2040, active January 1, 2018 through December 31, 2018, as
discussed in the CY2019 OPPS/ASC final rule with comment period. The
HCPCS code to describe the use of YESCARTA[supreg] (HCPCS code Q2041)
has been active since April, 1, 2018 for OPPS. The HCPCS Q-code for the
currently approved CAR T-cell therapies include leukapheresis and dose
preparation procedures because these services are included in the
manufacturing of these biologicals. Both of these CAR T-cell therapies
were approved for transitional pass-through payment status, effective
April 1, 2018. The HCPCS codes that describe the use of these CAR T-
cell therapies were assigned status indicator ``G'' in Addenda A and B
to the CY2020 OPPS/ASC proposed rule.
As discussed in section V.A.4. (Drugs, Biologicals, and
Radiopharmaceuticals with New or Continuing Pass-Through Payment Status
in CY 2019) of this final rule with comment period, we are finalizing
our proposal to continue pass-through payment status for HCPCS code
Q2042 and HCPCS code Q2041 for CY 2020. In section V.A.4. of this final
rule with comment period, we also are finalizing our proposal to
determine the pass-through payment rate following the standard ASP
methodology, updating pass-through payment rates on a quarterly basis
if applicable information indicates that adjustments to the payment
rates are necessary.
The AMA created four Category III CPT codes that are related to CAR
T-cell therapy, effective January 1, 2019. As discussed in the CY 2019
OPPS/ASC final rule with comment period, we finalized our proposal to
assign procedures described by CPT codes, 0537T, 0538T, and 0539T to
status indicator ``B'' (Codes that are not recognized by OPPS when
submitted on an outpatient hospital Part B bill type (12x and 13x)) to
indicate that the services are not paid under the OPPS. The procedures
described by CPT codes 0537T, 0538T, and 0539T describe the various
steps required to collect and prepare the genetically modified T-cells,
and Medicare does not generally pay separately for each step used to
manufacture a drug or biological. Additionally, we finalized that the
procedures described by CPT code 0540T would be assigned status
indicator ``S'' (Procedure or Service, Not Discounted when Multiple)
and APC 5694 (Level IV Drug Administration) for CY 2019. Additionally,
the National Uniform Billing Committee (NUBC) established CAR T-cell
related revenue codes and value code to be reportable on Hospital
Outpatient Department (HOPD) claims effective for claims received on or
after April 1, 2019.
As listed in Addendum B of the CY 2020 OPPS/ASC proposed rule, we
proposed to assign procedures described by these CPT codes, 0537T,
0538T, and 0539T, to status indicator ``B'' (Codes that are not
recognized by OPPS when submitted on an outpatient hospital Part B bill
type (12x and 13x)) to indicate that the services are not paid under
the OPPS. We proposed to assign CPT code 0540T to status indicator
``S'' (Procedure or Service, Not Discounted when Multiple) and APC 5694
(Level IV Drug Administration).
At the August 19, 2019 meeting, the HOP Panel recommended that CMS
reassign the status indicator for the procedures described by the
specific CPT codes 0537T, 0538T, and 0539T from ``B'' to ``Q1'' for
CY2020.
Comment: Several commenters opposed our proposal to continue to
assign status indicator ``B'' to CPT codes 0537T, 0538T, and 0539T for
CY2020. Commenters proposed a variety of alternative status indicators
including status indicators ``N'', ``S'', and ``Q1.'' Commenters
believed that CPT codes 0537T, 0538T, and 0539T did not represent the
steps required to manufacture the CAR T product as CMS has stated.
Generally, those advocating for status indicator ``N'' (Items and
Services Packaged into APC Rates) stated that this assignment would
ease the billing burden and confusion experienced by providers under
the current status indicator assignment of ``B''. Generally, those
advocating for status indicator ``S'' (Procedure or Service, Not
Discounted When Multiple) believed that separate payment is warranted
for these services as they are distinct procedures and are ordered and
performed by clinicians. Finally, generally those advocating for status
indicator ``Q1'', indicating conditional separate payment, supported
the HOP Panel's recommendation to assign this status indicator based on
codes, such as CPT code 0565T (placeholder code 05X3T) (Autologous
cellular implant derived from adipose tissue for the treatment of
osteoarthritis of the knees; tissue harvesting and cellular implant
creation). CPT code 0565T has a status indicator of ``Q1'' and
commenters believe it is similar to the procedures described by CPT
codes 0537T, 0538T, and 0539T, since CPT code 0565T involves the
collection and harvest of cells, in the form of tissue, for the
treatment of osteoarthritis of the knee. Additionally, commenters
stated that the HCPCS drug Q-codes (Q2041 and Q2042) should be revised
to eliminate the language referencing leukapheresis and dose
preparation procedures.
Response: We thank the commenters for their feedback. CMS does not
believe that separate or packaged payment under the OPPS is necessary
for the procedures described by CPT codes 0537T, 0538T, and 0539T for
CY2020. The existing CAR T-cell therapies on the market were approved
as biologics and, therefore, provisions of the Medicare statute
providing for payment for biological products apply. The procedures
described by CPT codes 0537T, 0538T, and 0539T describe the various
steps required to collect and prepare the genetically modified T-cells
and Medicare does not generally pay separately for each step used to
manufacture a drug or biological product. Additionally, we note that
CAR T-cell therapy is a unique therapy approved as a biologic, with
unique preparation procedures, and it cannot be directly compared to
other therapies or existing CPT codes. We note that the current HCPCS
coding for the currently approved CAR T-cell therapy drugs, HCPCS codes
Q2041 and Q2042, include leukapheresis and dose preparation procedures
as these services are including in the manufacturing of these
biologicals. Therefore, payment for these services is incorporated into
the drug Q-codes. We note that although there is no payment associated
with 0537T, 0538T, and 0539T for reasons stated previously, these codes
can still be reported to CMS for tracking purposes. Additionally, HOPDs
can bill Medicare for reasonable and necessary services that are
otherwise payable under the OPPS, and we believe that the comments in
reference to payment for services in settings not payable under
[[Page 61233]]
the OPPS are outside the scope of this proposed rule.
Accordingly, we are not revising the existing Q-codes for CAR T-
cell therapies to remove leukapheresis and dose preparation procedures,
and we are not accepting the recommendations to revise the status
indicators for procedures described by CPT codes 0537T, 0538T, and
0539T. We will continue to evaluate and monitor our payment for CAR T-
cell therapies.
Comment: We note that commenters were supportive of the decision to
continue the assignment of status indicator ``S'' (Procedure or
Service, Not Discounted When Multiple) to CPT code 0540T.
Response: We thank commenters for their support and are finalizing
our proposal to maintain status indicator ``S'' for CPT code 0540T.
Comment: Some commenters recommended CMS evaluate modifications to
CAR T-cell payments for future rule making years, including strategies
such as creating a new statutory benefit category for cell and gene
therapies and value-based payment. Specifically, commenters suggested
value-based payments could include milestone-based payments over time,
indication-based pricing or combination-based pricing.
Response: We thank commenters for their feedback. Currently, the
existing CAR T-cell therapies on the market were approved as biologics
and, therefore, provisions of the Medicare statute providing for
payment for biologicals apply. In regards to the creation of a new
statutory benefit category, that is out of the scope of existing CMS
statutory authority.
In summary, after consideration of the public comments we received,
we are finalizing our proposal to assign status indicator ``B'' to CPT
codes 0537T, 0538T, and 0539T for CY2020. Additionally, we are
continuing our policy from CY2019 to assign status indicator ``S'' to
CPT code 0540T for CY2020. Tables 20 and 21 below show the final SI and
APC assignments for HCPCS codes Q2041, Q2042, 0537T, 0538T, 0539T, and
0540T for CY 2020. We refer readers to Addendum B to this final rule
with comment period for the payment rates for all codes reportable
under the OPPS. Addendum B is available via the internet on the CMS
website. In addition, we refer readers to Addendum D1 to this final
rule with comment period for the complete list of the OPPS payment
status indicators and their definitions for CY2020.
[GRAPHIC] [TIFF OMITTED] TR12NO19.034
[[Page 61234]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.035
7. Colonoscopy and Sigmoidoscopy With Endoscopic Mucosal Resection
(EMR) (APC 5313)
For CY 2020, we proposed to continue to assign CPT codes 45349 and
45390 to APC 5312 (Level 2 Lower GI Procedures), with a proposed
payment rate of $1,024.08. The long descriptors and proposed SI and APC
assignments for both codes can be found in Table 22 below.
Comment: A commenter believed that the two procedures are different
from the other procedures currently assigned to APC 5312, and stated
they are more similar to these procedures that are assigned to APC
5313:
46610 (Anoscopy; with removal of single tumor, polyp, or
other lesion by hot biopsy forceps or bipolar cautery);
46612 (Anoscopy; with removal of multiple tumors, polyps,
or other lesions by hot biopsy forceps, bipolar cautery or snare
technique); and
46615 (Anoscopy; with ablation of tumor(s), polyp(s), or
other lesion(s) not amenable to removal by hot biopsy forceps, bipolar
cautery or snare technique) where lesions are being removed by methods
other than just the snare wire technique.
Based on clinical and resource homogeneity, the commenter requested a
reassignment from APC 5312 to APC 5313 (Level 3 Lower GI Procedures),
which had a proposed payment rate of $2,512.28, for CPT code 45349 and
45390
Response: Upon review of data available for this final rule with
comment period, we agree with the commenter that the most appropriate
assignment for both codes is APC 5313. Based on the latest hospital
outpatient claims data used for this final rule with comment period,
our analysis supports the reassignment for the codes to APC 5313.
Specifically, our analysis of the claims data show a geometric mean
cost of approximately $1,941 for CPT code 45349 based on 386 single
claims (out of 387 total claims), and a geometric mean cost of about
$2,039 for CPT code 45390 based on 10,212 single claims (out of
10,246). In both instances, the geometric mean cost for the codes are
most compatible with APC 5313, whose geometric mean cost is
approximately $2,294, compared to APC 5312, whose geometric mean cost
is about $983. We believe that maintaining both codes in APC 5312 would
underpay for the procedures. Therefore, we are reassigning the codes
from APC 5312 to APC 5313 for CY 2020.
In summary, after consideration of the public comment, we are
finalizing our proposal with modification, and revising the APC
assignment for 45349 and 45390 from APC 5312 to APC 5313 for CY 2020.
Table 22 lists the final SI and APC assignments for the two codes. The
final CY 2020 payment rate for the codes can be found in Addendum B to
this final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
As we do every year, we will reevaluate the APC assignment for CPT
codes 45349 and 45390 in the next rulemaking cycle. We remind hospitals
that we review, on an annual basis, the APC assignments for all
services and items paid under the OPPS based on the latest claims data
available to us.
[[Page 61235]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.036
8. Coronary Computed Tomographic Angiography (CCTA) (APC 5571)
For CY 2020, we proposed to continue to assign CPT codes 75572,
75573, and 75574 to APC 5571 (Level 1 Imaging with Contrast) with a
proposed payment rate of $179.91. The long descriptors and proposed
status indicator (SI) and APC assignments for the codes can be found in
Table 23 below.
Comment: Many commenters expressed concern with the decreased
reimbursement for the codes and stated that the proposed payment rate
underestimates the resources necessary to provide the service. They
noted this is the third consecutive year of decreased reimbursement for
cardiac CT. Some commenters added that the exams described by CPT codes
75572, 75573, and 75574 require more resources than the contrast-
enhanced studies in APC 5571 because they require more time, are
performed by highly trained technologists, involve higher risk
patients, require administration of vasoactive medications, and require
close supervision of patients during and after the procedure. A
commenter urged CMS to reassign the codes to a higher paying APC that
is more resource intensive and includes procedures that share similar
clinical characteristics, such as APC 5572 (Level 2 Imaging with
Contrast), which had a proposed payment rate of $373.45, or APC 5573
(Level 3 Imaging with Contrast), which had a proposed payment rate of
$682.96. Other commenters specifically requested a reassignment to APC
5573 based on clinical and resource homogeneity to these services that
are assigned to the APC: Stress cardiac magnetic resonance imaging (CPT
code 75563), stress echocardiography (HCPCS codes C8928, C8930), and
nuclear SPECT MPI (CPT codes 78451, 78452). One commenter recommended
the reassignment of CPT code 75574 to APC 5191 (Level 1 Endovascular
Procedures) with a proposed payment rate of $2,899.34 and believed the
service is very similar to a cardiac catheterization procedure that is
described by CPT code 93455 (Catheter placement in coronary artery(s)
for coronary angiography, including intraprocedural injection(s) for
coronary angiography, imaging supervision and interpretation; with
catheter placement(s) in bypass graft(s) (internal mammary, free
arterial, venous grafts) including intraprocedural injection(s) for
bypass graft angiography). This same commenter suggested that the less-
intensive CPT codes 75572 and 75573 be reassigned to APC 5572.
Response: CPT codes 75572, 75573, and 75574 were effective January
1, 2010, and prior to that they were described by Category III CPT
codes from January 1, 2006 through December 31, 2009; therefore, we
have many years of claims data associated with these services. For this
final rule with comment period, based on claims submitted between
January 1, 2018 through December 30, 2018, that were processed on or
before June 30, 2019, our analysis of the latest claims data for this
final rule supports maintaining CPT codes 75572, 75573, and 75574 in
APC 5571. Specifically, our claims data show a geometric mean cost of
approximately $159 for CPT code 75572 based on 12,299 single claims
(out of 23,902 total claims), $185 for CPT code 75573 based on 323
single claims (out of 466 total claims), and $196 for CPT code 75574
based on 25,434 single claims (out of 40,219 total claims). Because the
geometric mean costs for the CCTA codes range are between $159 and
$196, we believe it would be inappropriate to reassign the codes to
these suggested APCs because their geometric mean costs are
significantly higher:
APC 5572 (with geometric mean cost of about $359)
APC 5573 (with a geometric mean cost of approximately
$660)
APC 5191 (with a geometric mean cost of about $2,788)
In our analysis to determine the cause of the decreased payment
rates for the last several years, we also reviewed our claims data to
determine whether changes in payment for certain computed tomography
(CT) services impacted the OPPS payment rates. Specifically, section
218(a)(1) of the Protecting Access to Medicare Act of 2014 (PAMA) (Pub.
L. 113-93) amended section 1834 of the Act by establishing a new
subsection 1834(p). Effective for services furnished on or after
January 1, 2016, section 1834(p) of the Act reduces payment for the
technical component (TC) of applicable CT services paid under the MPFS
and applicable CT services paid under the OPPS, with a 5-percent
reduction required in 2016 and a 15-percent reduction required in 2017
and subsequent years. The applicable CT services are identified by
HCPCS codes 70450 through 70498; 71250 through 71275; 72125 through
72133; 72191 through 72194; 73200 through 73206; 73700 through 73706;
74150 through 74178; 74261 through 74263; and 75571 through 75574 (and
any succeeding codes) for services furnished using equipment that does
not meet each of the attributes of the National Electrical
Manufacturers Association (NEMA) Standard XR-29-2013, entitled
``Standard Attributes on CT Equipment Related to Dose Optimization and
Management.''
In the CY 2016 OPPS/ASC final rule with comment period (80 FR
70470), we established a new ``CT'' modifier to be used on claims that
include CT services furnished using equipment that does not meet each
of the attributes of NEMA Standard XR-29-2013. Hospitals are required
to report the ``CT'' modifier on claims for CT scans described by any
of the HCPCS codes we identified (and any
[[Page 61236]]
successor codes) that are furnished on non-NEMA Standard XR-29-2013-
compliant CT scanners. The use of this modifier results in the
applicable payment reduction for the CT service, as specified under
section 1834(p) of the Act.
Based on our analysis, we observed declining use of the CT modifier
in both billing volume and the number of providers using the modifier
over the past several years. Further, we note that the payment
reduction required by section 1834(p), as amended by section 218(a)(1)
of PAMA, does not directly affect the geometric mean costs under the
OPPS, because we do not use payment rates to establish CCRs, rather we
use the charges submitted by hospitals on claims and costs estimated
through applying the cost report CCRs for modeling purposes. The
application of the payment reductions associated with the CT modifier
only occurs after the prospective OPPS payments are already calculated.
Comment: Some commenters recommended the establishment of a new
cost center specific to CCTA. They noted that hospitals currently do
not submit any cost center data for cardiac CT services.
Response: We thank the commenters for their suggestion. CMS is
currently reviewing non-standard cost centers used frequently in the
Medicare cost report in order to establish additional standardized
reporting. We will consider the establishment of a new cost center
specific to cardiac CT services in our review.
In summary, after consideration of the public comments and after
our analysis of the latest claims data, we are finalizing our proposal,
without modification, to assign CPT codes 75572, 75573, and 75574 to
APC 5571 for CY 2020. Table 23 lists the final SI and APC assignments
for the three codes. The final CY 2020 payment rate for the codes can
be found in Addendum B to this final rule with comment period (which is
available via the internet on the CMS website).
As we do every year, we will reevaluate the APC assignment for CPT
codes 75572, 75573, and 75574 for the next rulemaking cycle. We remind
hospitals that we review, on an annual basis, the APC assignments for
all services and items paid under the OPPS based on the latest claims
data.
[GRAPHIC] [TIFF OMITTED] TR12NO19.037
[[Page 61237]]
9. Deep Brain Stimulation (DBS) Programming (APC 5742)
In CY 2018, the DBS programming codes were described by CPT code
95978 (first 60 minutes), which was assigned to APC 5742, with a
payment of $115.18, and CPT code 95979 (each additional 30 minutes),
which was assigned to SI ``N'' to indicate that the code is packaged
since it is an add-on code. For CY 2019, the CPT Editorial Panel
deleted CPT code 95978 and replaced it with CPT code 95983 (first 15
minutes) effective January 1, 2019. Similarly, CPT code 95979 was
deleted and replaced with CPT code 95984 (each additional 15 minutes)
effective January 1, 2019. As a result of this coding change, we
assigned the 15-minute CPT code 95983 to APC 5741 (Level 1 Electronic
Analysis of Devices) with a payment rate of $37.16, and assigned CPT
code 95984 to ``N'' to indicate that the code is packaged because it
describes an add-on service, which is similar to the SI for its
predecessor code (CPT code 95979). Table 24 below list the long
descriptors and proposed SI and APC assignments for CPT codes 95983 and
95984.
At the August 21, 2019 HOP Panel Meeting, a presenter requested
that the 15-minute CPT code 95983 be reassigned to APC 5742. The
presenter added that the cost of providing the service from 2018 to
2019 has not changed but the reimbursement has reduced the hospital
payment by about $100. The presenter requested an APC modification for
CPT code 95983 from APC 5741 to APC 5742 so that hospitals receive
adequate payment for providing the service. Based on the information
presented at the meeting, the HOP Panel recommended a reassignment to
APC 5742 for CPT code 95983. Specifically, the Panel recommended that
``CMS move HCPCS code 95983, Electronic analysis of implanted
neurostimulator pulse generator/transmitter (e.g., contact group[s],
interleaving, amplitude, pulse width, frequency [hz], on/off cycling,
burst, magnet mode, dose lockout, patient selectable parameters,
responsive neurostimulation, detection algorithms, closed loop
parameters, and passive parameters) by physician or other qualified
health care professional; with brain neurostimulator pulse generator/
transmitter programming, first 15 minutes face-to-face time with
physician or other qualified health care professional, to APC code
5472, Level II Electronic Analysis of Devices, if the final data that
are available in time for consideration of the Final Rule are
consistent with preliminary data.''
For CY 2020, we proposed to continue to assign CPT code 95983 to
APC 5741 (Level 1 Electronic Analysis of Devices) with a proposed
payment rate of $36.81. In addition, we proposed to continue to assign
CPT code 95984 to status indicator (SI) ``N'' to indicate that the code
is an add-on that is packaged and payment for it is included in the
primary service. In this case, the payment for the add-on code is
included in CPT code 95983.
Comment: Several commenters requested the reassignment of CPT code
95983 to APC 5742. One commenter stated that the assignment of the
primary CPT code 95983 to the lower level APC 5741 is not appropriate
because the overall time and resources expended by a hospital when
furnishing this service in the HOPD setting remains the same, even if
the units are billed differently. This same commenter indicated that,
based on the coding descriptor for the replacement codes with the
primary service described as the first 15-minutes and the secondary
service as each additional 15-minutes, hospitals will continue to
receive a single line-item payment for the service, with the payment
for the add-on CPT code packaged into it, regardless of the number of
units billed. Another commenter stated that reassigning the code from
APC 5741 to APC 5742 will have no effect on the geometric mean cost of
either APC. Another commenter requested the reassignment based on the
geometric mean cost of approximately $109 for the predecessor code (CPT
code 95978) and the Panel's recommendation at the August 19, 2019 HOP
Panel Meeting.
Response: As noted above, the predecessor CPT code 95978 described
a 60-minute service, while the replacement code--CPT code 95983--
describes a 15-minute service. Based on the new time specified in the
descriptor for CPT code 95983, we believed that assigning the
replacement code to APC 5741 was appropriate. However, at the August
21, 2019 HOP Panel meeting, the presenter indicated that the service of
providing DBS programming during 2018 and 2019 are the same, but
because of the coding change that packages any service after each
additional 15 minutes, the maximum payment that a hospital would
receive for the service is a single unit of the code. The presenter
recommended a change in the APC assignment to APC 5742 so that
hospitals receive adequate payment for the service based on the coding
structure of the replacement codes.
As recommended by the HOP Panel, we reviewed the claims data
associated with the predecessor code (CPT code 95978). Based on the
latest hospital outpatient claims data used for this final rule with
comment period, our analysis reveals a geometric mean cost of
approximately $109 for the code, which is consistent with the geometric
mean cost of about $111 for APC 5742 compared to APC 5741 whose
geometric mean cost is about $35. Based on the information presented at
the HOP Panel Meeting, the Panel's recommendation, as well as the final
rule claims data, we agree with the commenters that APC 5741 may not
adequately reflect the resources to provide the service described by
CPT code 95983 and are, therefore, modifying the assignment for CPT
code 95983 to APC 5742.
In summary, after consideration of the public comments and the
presentation at the August 21 HOP Panel Meeting, we are finalizing our
proposal, with modification, and revising the APC assignment for CPT
code 95983 to APC 5742 for CY 2020. Table 24 list the final SI and APC
assignments for CPT code 95983 and 95984. The final CY 2020 payment
rate for CPT code 95983 can be found in Addendum B to this final rule
with comment period. In addition, we refer readers to Addendum D1 of
this final rule with comment period for the status indicator (SI)
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
As we do every year, we will reevaluate the APC assignment for CPT
code 95983 for the next rulemaking cycle. We remind hospitals that we
review, on an annual basis, the APC assignments for all services and
items paid under the OPPS.
BILLING CODE 4120-01-P
[[Page 61238]]
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[[Page 61239]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.039
BILLING CODE 4120-01-C
10. Extracorporeal Shock Wave Lithotripsy (ESWL) (APC 5374)
For the CY 2019 OPPS/ASC final rule, we reviewed all of the
procedures assigned to the Urology Procedures APCs, specifically, APCs
5371 through 5377, and made some modifications to more appropriately
reflect the resource costs and clinical characteristics of the services
within each APC grouping. Specifically, we revised the APC assignment
of the procedures assigned to the family of Urology APCs to more
appropriately reflect a prospective payment system that is based on
payment groupings and not code-specific payment rates, while
maintaining clinical and resource homogeneity. As we stated in the CY
2019 OPPS/ASC final rule (83 FR 58900), this modification was based on
public comments we received in response to the CY 2019 OPPS/ASC
proposed rule on the proposed APC assignments for certain urology
procedures.
We received many comments on the APC reassignment for the
extracorporeal shock wave lithotripsy (ESWL) procedure, which is
described by CPT code 50590 (Lithotripsy, extracorporeal shock wave),
in the CY 2019 OPPS/ASC final rule with comment period. The commenters
indicated there was no discussion in the preamble on the reassignment
of the code from APC 5375 (Level 5 Urology and Related Services) to APC
5374 (Level 4 Urology and Related Services), and they disagreed with
the revision and believed that APC 5375 was the more appropriate
assignment for the code. We remind the commenters that, as we have
stated in every OPPS/ASC proposed and final rules, we review, on an
annual basis, the APC assignments for all services and items paid under
the OPPS based on our analysis of the latest claims data. Based on
updated claims data for the final rule for CY 2019, we found that the
geometric mean cost of approximately $3,265 for CPT code 50590 did not
support its continued assignment to APC 5375, which had a geometric
mean cost of about $4,055. We believed that we would have significantly
overpaid for the procedure had we maintained the assignment to APC
5375. Consequently, we revised the APC assignment for CPT code 50590 to
APC 5374, which had a geometric mean cost of approximately $2,952 for
CY 2019.
We note that the SI and APC assignment for CPT code 50590 were
subject to comment in the CY 2019 OPPS/ASC proposed rule but not in the
CY 2019 OPPS/ASC final rule with comment period. Nevertheless, we
received comments on this specific issue in response to the CY 2019
OPPS/ASC final rule with comment period. Because CPT code 50590 was not
assigned to comment indicator ``NI'' in the final rule because it was
not a new code for CY 2019, and therefore, the comments received
related to this code
[[Page 61240]]
were out-of-scope. Nonetheless, we discuss above to provide some
clarity to this issue.
For CY 2020, as listed in Addendum B to the proposed rule, we
proposed to maintain the APC assignment for CPT code 50590 to APC 5374
with a proposed payment rate of $3,059.21.
Comment: Some commenters requested that we restore the code to APC
5375 where it had been placed for several years prior to CY 2019. The
commenters indicated that CPT code 50590 is similar to two ureteroscopy
with lithotripsy (URSL) procedures that are assigned to APC 5375,
specifically:
CPT code 52353 (Cystourethroscopy, with ureteroscopy and/
or pyeloscopy; with lithotripsy (ureteral catheterization is
included)); and
CPT code 52356 (Cystourethroscopy, with ureteroscopy and/
or pyeloscopy; with lithotripsy including insertion of indwelling
ureteral stent (e.g., gibbons or double-j type)).
In addition, some commenters suggested that placing the three
procedures in two separate APCs may create an unintended consequence of
unplanned admissions to the hospital. Specifically, the commenters
indicated that if the proposed assignment for CPT code 50590 is
finalized in APC 5374, while CPT codes 52353 and 52356 are finalized in
APC 5375, hospitals might discontinue ESWL services (described by CPT
code 50590) which would make it less accessible to Medicare
beneficiaries and, ultimately, encourage hospitals to perform more URSL
procedures, which, according to the commenter, have higher complication
rates compared to ESWL. These commenters asserted that 90 percent of
Medicare patients require an indwelling ureteral stent after a URSL
procedure (described by CPT codes 52353 and 52356), and that the stents
lead to infection, visits to the ER, and unplanned admissions. Hence,
the commenters requested an APC reassignment to APC 5375 for CPT code
50590 to eliminate any unintended consequences.
Further, the commenters noted that because of the capital equipment
expense associated with purchasing ($500,000) and maintaining ($65,000
per year) a lithotripter, hospitals rarely own their own lithotripter
and generally contract under arrangement with suppliers to provide the
service. Alternatively, the commenter asserted that all URSL equipment
is owned by the hospitals furnishing the service and that the hospitals
are therefore able to train clinicians on the equipment.
Response: As discussed above, we revised the APC assignment for CPT
code 50590 based on our analysis of the latest claims data for the CY
2019 final rule. For this final rule with comment period, which is
based on claims submitted between January 1, 2018 through December 30,
2018, that were processed on or before June 30, 2019, our findings do
not support a reassignment to APC 5375. Instead, our analysis supports
retaining CPT code 50590 in APC 5374. Specifically, our data reveal a
geometric mean cost of approximately $3,247 for CPT code 50590 based on
40,009 single claims (out of 40,351 total claims). The geometric mean
cost for APC 5374 is about $2,953 while APC 5375 shows a geometric mean
cost of approximately $4,140. Based on the geometric mean cost, we
believe that maintaining CPT code in APC 5374 is more appropriate than
reassigning it to APC 5375, based on the geometric mean cost of CPT
code 50590 relative to that of APCs 5374 and 5375.
In addition, we note that the resource costs associated with the
URSL procedures (CPT codes 52353 and 52356) are higher than that of
ESWL (CPT code 50590). Specifically, the geometric mean cost for CPT
code 50590 for CY 2020 is $3,247 while the geometric mean cost for CPT
codes 52353 and 52356 are $3,740 and $4,361, respectively. The
geometric mean cost of $3,247 for CPT code 50590 falls within APC 5374,
whose geometric mean costs for the significant procedures range between
$2,495 (for CPT code 52351) and $3,472 (for CPT code 52318), while the
geometric mean costs of $3,740 and $4,361 for CPT codes 52353 and
52356, respectively, fall within APC 5375, whose geometric mean costs
for the significant procedures range between $3,575 (for CPT code
52630) and $5,655 (for CPT code 55875). Although all three procedures
are used for the treatment of kidney stones, we disagree that CPT codes
50590, 52353, and 52356 are similar based on resource and clinical
homogeneity. With regards to unintended consequences as a result of the
assignment to APC 5374 for CPT code 50590, we rely on physicians to
provide appropriate care based on the needs of their patients. While
the payment rate for services assigned to APC 5375 is higher than that
of APC 5374, it is based on the relative resources associated with
furnishing the services assigned to that APC. While each of the
lithotripsy procedures have some clinical similarity, as the commenters
pointed out, they have clinical differences. While the commenters
expected that these clinical differences may result in similar or
higher resources for CPT code 50590 compared to CPT codes 52353 and
52356, that has not been borne out in the Medicare data we have
available. As we do every year, we will review the claims data
associated with CPT code 50590 to determine its appropriate APC
placement for the next rulemaking update.
Comment: Some commenters suggested, based on their analysis of the
OPPS Limited Data Sets (LDS) for the CY 2018 OPPS/ASC final rule, the
CY 2019 OPPS/ASC final rule, and the CY 2020 OPPS/ASC proposed rule,
that the methodology formula that was supplied with the LDS materials
was flawed and, therefore, they were unable to validate CMS's
calculation or the accuracy of the cost data upon which CMS relied to
determine the payment rates. In addition, these same commenters
suggested that because hospitals do not generally own lithotripters,
they would not be surprised if the cost reports for CPT code 50590 were
inaccurate.
Response: It is generally not our policy to judge the accuracy of
hospital coding and charging for purposes of ratesetting. We rely on
hospitals to accurately report the use of HCPCS codes in accordance
with their code descriptors and CPT and CMS instructions, and to report
services on claims and charges and costs for the services on their
Medicare hospital cost report appropriately. We do not specify the
methodologies that hospitals use to set charges for this or any other
service. In addition, we state in Chapter 4 of the Medicare Claims
Processing Manual that ``it is extremely important that hospitals
report all HCPCS codes consistent with their descriptors; CPT and/or
CMS instructions and correct coding principles, and all charges for all
services they furnish, whether payment for the services is made
separately paid or is packaged'' to enable CMS to establish future
ratesetting for OPPS services.
Comment: To pay appropriately for CPT code 50590, some commenters
suggested adding the cost of a ureteral stent in calculating the
geometric mean cost since some procedures (less than 20 percent)
require the device. They noted that the URSL procedure described by CPT
code 52356 requires the insertion of a ureteral stent that costs
$609.16.
Response: Geometric mean costs are determined based on the costs
reported on the claim. If the CPT code descriptor describes the
insertion of a device, we would expect the device cost to be packaged
into the cost of the procedure
[[Page 61241]]
since the charges associated with the device and its insertion should
be reflected in claims submitted to Medicare. We note that the CPT code
descriptor for the URSL procedures (CPT codes 52353 and 52356)
describes the use of stents, consequently, the geometric mean cost for
the procedures include the packaged cost of the devices. However, the
CPT code descriptor for the ESWL procedure does not describe the use of
a ureteral stent, so we disagree that device costs for a ureteral stent
should be included in CPT code 50590. If a ureteral stent were involved
in an ESWL procedure, HOPDs should report the CPT code that
appropriately describes the procedure performed. Moreover, as we have
stated previously, we rely on HOPDs to accurately report all HCPCS
codes consistent with their descriptors; CPT and/or CMS instructions
and correct coding principles, and all charges for all services they
furnish, whether payment for the services is made separately paid or is
packaged.
In summary, after consideration of the public comments and after
our analysis of the updated claims data for this final rule with
comment period, we are finalizing our proposal, without modification,
to continue to assign CPT code 50590 to APC 5374 for CY 2020. The final
CY 2020 payment rate for the code can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
As always, we will reevaluate the APC assignment for CPT code 50590
for the next rulemaking cycle. As stated above, we review, on an annual
basis, the APC assignments for all services and items paid under the
OPPS.
11. Extravascular Implantable Cardioverter Defibrillator (EV ICD)
As displayed in Table 25 and in Addendum B to the CY 2020 OPPS/ASC
proposed rule, we proposed to assign CPT codes 0571T through 0580T to
status indicator (SI) ``E1'' to indicate that the codes are not payable
by Medicare when submitted on outpatient claims (any outpatient bill
type) because the services associated with these codes are either not
covered by any Medicare outpatient benefit category, are statutorily
excluded from Medicare payment, or are not reasonable and necessary.
The codes were listed as 06X0T through and 07X4T (the 5-digit CMS
placeholder codes) in Addendum B with the short descriptors, and again
in Addendum O with the long descriptors. We also assigned the codes to
comment indicator ``NP'' in Addendum B to indicate that they are new
for CY 2020 and that public comments would be accepted on their
proposed status indicator assignments. We note that these codes will be
effective January 1, 2020.
Comment: A commenter reported that the device associated with these
codes is in a clinical trial and also received FDA approval with an IDE
Category B designation. The commenter added that they are currently in
the process of applying for Medicare national coverage for the clinical
trial as a Category B IDE study. The commenter requested that we
crosswalk the new codes to the SIs and APC assignments of comparable
procedures involving ICD placement so that appropriate hospital
outpatient payment may be made in the event the Category B IDE study is
approved for Medicare coverage. The commenter listed the comparable
codes with the SI and APCs assignments.
Response: Based on our review, the clinical trial has not met
Medicare's standards for coverage, nor does it appear on the CMS
Approved IDE List, which can be found at this CMS website: https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html. Because
the clinical trial associated with these codes has not been approved
for Medicare coverage, we believe we should continue to assign CPT
codes 0571T through 0580T to status indicator ``E1'' for CY 2020. If
Medicare approves the clinical trial as a Category B IDE study, we will
reassess the SI and APC assignments for the codes.
Therefore, after consideration of the public comment received, we
are finalizing our proposal without modification for CPT codes 0571T
through 0580T. The final status indicator assignments for both codes
are listed in Table 25 below. We refer readers to Addendum D1 of this
final rule with comment period for the complete list of the OPPS
payment status indicators and their definitions for CY 2020. Addendum
D1 is available via the internet on the CMS website.
BILLING CODE 4120-01-P
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[[Page 61243]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.041
BILLING CODE 4120-01-C
12. Genicular and Sacroiliac Joint Nerve Injections/Procedures (APCs
5442 and 5431)
For CY 2020, the CPT Editorial Panel established four new codes to
describe genicular and sacroiliac joint nerve injections and
procedures. As listed in Table 26 below with the long descriptors, and
also in Addendum B to the CY 2020 OPPS/ASC proposed rule, we proposed
to assign CPT codes 64451 and 64454 to APC 5442 (Level 2 Nerve
Injections) with a proposed payment rate of $627.39. We note both CPT
codes 64451 and 64454 describe therapeutic and/or diagnostic injection
procedures. We also proposed to assign CPT code 64624 to APC 5443
(Level 3 Nerve Injections) with a proposed payment rate of $808.58. In
addition, we proposed to assign CPT code 64625 to APC 5431 (Level 1
Nerve Procedures) with a proposed payment rate of $1,747.26. CPT codes
64451, 64454, 64624, and 64625 were listed as 6XX00, 64XX0, 64XX1, and
6XX01 (the 5-digit CMS placeholder codes), respectively, in Addendum B
with the short descriptors, and again in Addendum O with the long
descriptors. We also assigned these codes to comment indicator ``NP''
in Addendum B to indicate that the codes are new for CY 2020 and that
public comments would be accepted on their proposed status indicator
assignments. We note that these codes will be effective January 1,
2020.
Comment: Several commenters disagreed with the APC assignment for
CPT code 64624 (shown in the proposed rule with placeholder code 64XX1)
and suggested that it would be more appropriate, based on clinical
homogeneity, to assign it to APC 5431, where similar radiofrequency
ablation procedures are assigned, specifically, CPT codes 64633
(Destruction by neurolytic agent, paravertebral facet joint nerve(s),
with imaging guidance (fluoroscopy or ct); cervical or thoracic, single
facet joint), 64635 (Destruction by neurolytic agent, paravertebral
facet joint nerve(s), with imaging guidance
[[Page 61244]]
(fluoroscopy or ct); lumbar or sacral, single facet joint), and new CPT
code 64625. Several commenters reported that, unlike CPT code 64640
(Destruction by neurolytic agent; other peripheral nerve or branch)
which only involves one nerve, the procedure described by CPT code
64624 requires more expensive medical equipment and supplies and
involves the destruction of three nerves. Most commenters agreed that
the procedure is not a nerve injection. One commenter explained that
the procedure describes the destruction of three nerve branches at
three locations in the knee, and the destruction is typically done via
radiofrequency ablation similar to those procedures described by CPT
codes 64633 and 64635 that are assigned to APC 5431. Another commenter
suggested that reassigning CPT code 64624 to APC 5431, similar to new
CPT code 64625, would provide adequate reimbursement for the procedure
and enable providers to offer patients with chronic knee pain an
effective alternative to systemic opioids.
Response: After consideration of the public comments, and based on
the characteristics of the procedure, as well as input from our medical
advisors, we believe that it would be appropriate to revise the APC
assignment for CPT code 64624 from APC 5443 to APC 5431. We agree with
the commenters that this new procedure shares similar characteristics
with CPT codes 64633 and 64635 that are assigned to APC 5431.
Comment: A commenter agreed with the proposed APC assignments for
CPT codes 64451, 64454, and 64425.
Response: We thank the commenter for their feedback and are
finalizing the APC assignments for these codes.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification. Specifically, we are
finalizing the APC assignments for CPT codes 64451, 64454, and 64425 to
the APCs listed in Table 26. In addition, we are revising the APC
assignment for CPT code 64624 from APC 5443 to APC 5431. Table 26 lists
the long descriptors for the codes, as well as the final APC and SI
assignments for all four codes. The final CY 2020 payment rate for the
codes can be found in Addendum B to this final rule with comment
period. In addition, we refer readers to Addendum D1 of this final rule
with comment period for the status indicator (SI) meanings for all
codes reported under the OPPS. Both Addendum B and D1 are available via
the internet on the CMS website.
As always, we will reevaluate the APC assignment for these codes
once we have claims data. We review, on an annual basis, the APC
assignments for all services and items paid under the OPPS based on the
latest claims data that we have available.
[[Page 61245]]
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13. FemBloc[supreg] and FemChec[supreg]
For CY 2020, the CPT Editorial Panel established two new codes to
describe FemBloc (0567T) and FemChec (0568T). As listed in Table 27
with the long descriptors, and in Addendum B to the CY 2020 OPPS/ASC
proposed rule, we proposed to assign CPT code 0567T to APC 5414 (Level
4 Gynecologic Procedures) and status indicator (SI) ``J1'' (Hospital
Part B services paid through a comprehensive APC) with a payment rate
of $2,564.60. In addition, we proposed to assign new CPT code 0568T to
APC 5732 (Level 2 Minor Procedures) and status indicator ``Q1''
(conditionally packaged) with a payment rate of $34.33. The codes were
listed as 05X1T and 05X2T (the 5-digit CMS placeholder codes),
respectively, in Addendum B with the short descriptors, and again in
Addendum O with the long descriptors. We also assigned these codes to
comment indicator ``NP'' in Addendum B to indicate that the codes are
new for CY 2020 and that public comments would be accepted on their
proposed status indicator assignments. We note these codes will be
effective January 1, 2020.
Comment: A medical technology company disagreed with the proposed
APC assignment for CPT code 0567T and suggested that we reassign the
procedure code from APC 5414 to APC 5415 (Level 5 Gynecologic
Procedures) with a proposed payment rate of $4,426.45. The commenter
noted that the single-use, disposable device associated with the code
contains two deployable and retractable balloon catheters and a
biopolymer that retails for $1,800. The commenter believes the
procedure more appropriately fits in APC 5415 based on its similarity
to CPT code 58565 (Hysteroscopy, surgical; with bilateral fallopian
tube cannulation to induce occlusion by placement of permanent
implants). Specifically, the commenter explained that in both
procedures, specifically CPT codes
[[Page 61246]]
58565 and 0567T, the entrances to the fallopian tubes are accessed and
a device is placed that causes permanent occlusion of the tubes.
Response: Based on our findings associated with FemBloc, the
procedure is currently in clinical trial with an estimated study
completion date of September 2022 (ClinicalTrials.gov Identifier:
NCT03067272). Because the FemBloc device has not received FDA approval,
we believe that we should reassign CPT code 0567T to status indicator
``E1'' to indicate that the code is not payable by Medicare when
submitted on outpatient claims (any outpatient bill type). If FDA
approves the device, we will reassess the code and determine the
appropriate SI and APC assignments.
Comment: The same commenter for FemBloc also requested an APC
modification for the code associated with FemChec. Specifically, the
commenter requested the reassignment for CPT code 0568T from APC 5732
(Level 2 Minor Procedures) to APC 5523 (Level 3 Imaging without
Contrast) with a proposed payment rate of $231.28. The commenter
reported that the code is more clinically related to one of the
procedures assigned to APC 5523, specifically, CPT code 76831 (Saline
infusion sonohysterography (sis), including color flow doppler, when
performed). Both CPT codes 0568T and 76831 require ultrasound and
saline to study the uterus.
Response: Our findings reveal that the clinical study associated
with FemBloc also applies to FemChec. Based on the clinical study
(ClinicalTrials.gov Identifier: NCT03067272), FemChec will be used with
FemBloc. Because the FemBloc device has not received FDA approval, we
believe that we should reassign CPT code 0568T to status indicator
``E1'' to indicate that the code is not payable by Medicare when
submitted on outpatient claims (any outpatient bill type). If FDA
approves FemBloc, we will reassess the code associated with FemChec and
determine the appropriate OPPS SI and APC assignments for CPT code
0568T.
Therefore, after consideration of the public comments, we are
revising the SI and APC assignments for CPT codes 0567T and 0568T. The
final status indicator assignments for both codes are listed in Table
27 below. We refer readers to Addendum D1 of this final rule with
comment period for the complete list of the OPPS payment status
indicators and their definitions for CY 2020. Addendum D1 is available
via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR12NO19.043
14. Hemodialysis Arteriovenous Fistula (AVF) Procedures (APC 5194)
For CY 2019, based on two new technology applications received by
CMS for hemodialysis arteriovenous fistula creation, CMS established
two new HCPCS codes to describe the procedures. Specifically, CMS
established HCPCS code C9754 for the Ellipsys[supreg] System and C9755
for the WavelinQ\TM\ System effective January 1, 2019. Both HCPCS codes
were assigned to APC 5193 (Level 3 Endovascular Procedures) with a
payment rate of 9,669.04 for CY 2019.
At the August 21, 2019 HOP Panel Meeting, a presenter requested
that we reassign the WavelinQ procedure to APC 5194. The presenter
indicated that the APC payment associated with HCPCS code C9755 is
inadequate to cover the cost of the procedure. According to the
presenter, the conservative cost estimate for the procedure is over
$12,500. The presenter also reported that their HOPD facility performed
35 procedures between October 2018 to July 31, 2019, and the average
payment for each procedure ranged between $3,410 and $11,247. Based on
the information presented at the meeting, the HOP Panel made no
recommendation to CMS on the APC assignment for the WavelinQ procedure.
For CY 2020, as listed in Table 28 below with the long descriptors
and proposed SI and APC assignments, we
[[Page 61247]]
proposed to continue to assign HCPCS codes C9754 and C9755 to APC 5193
with a proposed payment rate of $10,013.25. We received several
comments related to this proposal. Below are the comments and our
responses.
Comment: Several physicians stated that the current payment rate
does not cover the cost of the procedure and requested the reassignment
of both HCPCS code C9754 and C9755 to APC 5194 (Level 4 Endovascular
Procedures) with a proposed payment rate of $16,049.73. A physician
association explained that the new technologies describe innovative new
procedures that increase options for dialysis patients to have a
successful arteriovenous fistula for dialysis access, and that the
procedures are important in making fistula access possible for patients
that either refuse open surgery or where skilled surgeons are not
readily available. However, they expressed concern that the procedures
may not be available to patients if the costs are higher than the
payment, and requested that CMS carefully examine the most recent
claims to determine if they should be reclassified to APC 5194.
Response: After consideration of the public comments received and
based on input from our medical advisors, as well as our review of the
latest claims data available to us, we believe that we should revise
the APC assignment for HCPCS code C9754 and C9755 to APC 5194 for CY
2020.
Comment: A medical device company requested an APC reassignment
based on data presented at the August 21, 2019 HOP Panel Meeting. They
indicated that their analysis of the 1Q2019 Medicare Limited Data Set
(LDS) Standard Analytic File (SAF) for HCPCS code C9755 showed a
geometric mean cost of $12,960, and suggested reassigning the code to
APC 5194. They also reminded CMS that the reassignment to APC 5194 is
in line with various HHS initiatives, such as the HHS Initiative on
``Advancing American Kidney Health'' since the payment rate for the
procedure would improve access to the service.
Response: As stated above, we believe that it is appropriate to
revise the APC assignment for HCPCS code C9754 and C9755. Consequently,
we are reassigning both codes from APC 5193 to APC 5194 for CY 2020.
Comment: A commenter representing 13 different health systems
suggested that CMS adopt the recommendation they made at the August 21,
2019 HOP Panel Meeting. Specifically, they recommended the reassignment
of HCPCS code C9755 from APC 5193 to APC 5194.
Response: Although there was a presentation at the August 21, 2019
meeting on HCPCS code C9755 with a request to reassign the code to APC
5194, the HOP Panel made no recommendation to CMS. We note that the
August 21, 2019, HOP Panel recommendations are posted online and can be
found on this CMS website: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html. Although the
HOP Panel made no recommendation to CMS, based on the proposed rule
comments, and our review of the issue, we are revising the APC
assignment for HCPCS code C9755 to APC 5194 for CY 2020.
Comment: A commenter stated that it was brought to their attention
that other comments related to the WavelinQ procedure may urge CMS to
revisit the APC assignment for HCPCS code C9755. The commenter
indicated that if CMS were to revisit the issue and reassign the APC
assignment for the WavelinQ procedure, it should also apply the same
consideration to the Ellipsys procedure (C9754).
Response: We agree that the services described by HCPCS codes C9754
and C9755 are clinically similar and, therefore, we are revising the
APC assignment for both HCPCS code C9754 and C9755 to APC 5194 for CY
2020. However, we note that claims data upon which we could determine
the geometric mean costs associated with each procedure are not yet
available for ratesetting but once such data become available, we will
be able to determine whether the two services are similar in terms of
resources. In addition, as has been our practice since the
implementation of the OPPS in 2000, we review, on an annual basis, the
APC assignments for the procedures and services paid under the OPPS.
Consequently, we will review the cost data associated with HCPCS codes
C9754 and C9755 for the next annual rulemaking.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification. Specifically, we are
reassigning HCPCS codes C9754 and C9755 from APC 5193 to APC 5194 for
CY 2020. The final CY 2020 payment rate for the codes can be found in
Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the status indicator (SI) meanings for all codes reported under the
OPPS. Both Addendum B and D1 are available via the internet on the CMS
website. Table 28 lists the final SI and APC assignments for HCPCS
codes C9754 and C9755.
[[Page 61248]]
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15. Hemodialysis Duplex Studies (APCs 5522 and 5523)
For CY 2020, the CPT Editorial Panel established two new codes to
describe hemodialysis duplex studies, specifically, CPT codes 93985 and
93986. The new codes replace 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)).
HCPCS code G0365 was assigned to status indicator ``D'' in the proposed
rule to indicate that the code would be deleted on December 31, 2019.
As listed in Table 29 below with the long descriptors, and also in
Addendum B to the CY 2020 OPPS/ASC proposed rule, we proposed to assign
CPT code 93985 and 93986 to APC 5522 (Level 2 Imaging without Contrast)
with a proposed payment rate of $111.04. The codes were listed as 93X00
and 93X01 (the 5-digit CMS placeholder codes), respectively, in
Addendum B with the short descriptors, and again in Addendum O with the
long descriptors. We also assigned these codes to comment indicator
``NP'' in Addendum B to indicate that the codes are new for CY 2020 and
that public comments would be accepted on their proposed status
indicator assignments. We note that these codes will be effective
January 1, 2020.
Comment: Several commenters recommended a reassignment of CPT code
93985 from APC 5522 to APC 5523 (Level 3 Imaging without Contrast) with
a proposed payment rate of $231.28. They indicated that the code
represents a bilateral study, and as such, should be assigned to APC
5523 with similar bilateral/complete duplex studies.
Response: Based on the public comments that we received, our review
of the procedure associated with CPT code 93985 and advice from our
medical advisors, we agree that the code fits more appropriately in APC
5523 based on its clinical homogeneity and resource use to the other
procedures in the APC. Therefore, we are reassigning the code to APC
5523. We received no comments on CPT code 93986. Consequently, we are
finalizing its APC assignment to APC 5522.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification. Specifically, we are
finalizing our proposal for CPT code 93986 to APC 5522, and reassigning
CPT code 93985 to APC 5523. Table 29 below lists the long descriptors
for the three codes and the final SI and APC assignments for CY 2020.
The final CY 2020 OPPS payment rates can be found in Addendum B of this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator meanings for all codes reported under the OPPS for CY 2020.
Both Addendum B and Addendum D1 are available via the internet on the
CMS website.
[[Page 61249]]
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16. 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 the 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
[[Page 61250]]
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 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 the 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 proposed 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 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 the proposed rule, would be no higher
than the OPPS payment rate for this procedure when 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 proposed 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 the proposed rule,
because it is a device-intensive procedure assigned to an APC with
fewer than 100 total annual claims within the APC.
Comment: Several commenters expressed support for our proposal to
assign the HCPCS code 0308T to APC 5495 (Level 5 Intracoular
Procedures).
Response: We thank commenters for their support.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to assign HCPCS code CPT
0308T to APC 5495 for the CY 2020 OPPS.
17. Long-Term Electroencephalogram (EEG) Monitoring Services (APCs
5722, 5723, and 5724)
For CY 2020, the CPT Editorial Panel deleted four existing long-
term EEG monitoring services, specifically, CPT codes 95950, 95951,
95953, and 95956, and replaced them with 23 new CPT codes that
consisted of 10 professional component (PC) codes and 13 technical
component (TC) codes. As listed in Table 30 below with the long
descriptors, and also in Addendum B to the CY 2020 OPPS/ASC proposed
rule, we proposed to assign the 13 technical component codes,
specifically, CPT codes 95700 through 95716, to either APC 5722 (Level
2 Diagnostic Tests and Related Services) with a proposed payment rate
of $256.60 or APC 5723 (Level 3 Diagnostic Tests and Related Services)
with a proposed payment rate of $486.65. The codes were listed as 95X01
through and 95X13 (the 5-digit CMS placeholder codes) in Addendum B
with the short descriptors, and again in Addendum O with the long
descriptors. In addition, we proposed to assign the 10 professional
component codes, specifically, CPT codes 95717 through 95726, to status
indicator ``M'' to indicate that the services are not paid under the
OPPS since they describe physician services. These codes were listed
were listed as 95X14 through 95X23 (the 5-digit CMS placeholder codes)
in Addendum B with the short descriptors, and again in Addendum O with
the long descriptors. We assigned these 23 codes to comment indicator
``NP'' in Addendum B to indicate that the codes are new for CY 2020 and
that public comments would be accepted on their proposed status
indicator assignments. We note these codes will be effective January 1,
2020.
Comment: Many commenters expressed concern with the proposed APC
assignments for CPT codes 95712, 95713, 95715, and 95716 and stated
that the proposed payment rates for the codes do not provide adequate
reimbursement. A commenter indicated that the proposed APC assignments
for the EEG monitoring services for 2 to 12 hours does not
appropriately reflect the resources and time required to monitor
complex epilepsy patients. Several other commenters recommended the
reassignment of CPT codes 95712 and 95713 to APC 5723 and stated they
should be paid approximately half the rate of the 24-hour video EEG
services. These same commenters stated that the reassignment of CPT
codes 95715 and 95716 to APC 5724, which had a proposed payment rate of
$920.66, would be appropriate since patients being tested may be
classified as observation stays and will not be admitted to the
hospital. The commenters added that these codes were previously
described by predecessor CPT code 95951 (24 hour VEEG), which was
assigned to APC 5724 (Level 4 Diagnostic Tests and Related Services).
Response: With respect to CPT codes 95712 (2-12 hours VEEG with
intermittent monitoring) and 95713 (2-12 hours VEEG with continuous
monitoring), we believe that the resources and time associated with
intermittent monitoring (CPT code 95712) are less than that of
continuous monitoring (CPT code 95713), and therefore, believe they
should be assigned to different APCs. Based on input from our medical
advisors that intermittent monitoring involves checking the patient
every two hours rather than the full 12 hours, we believe it would be
appropriate to modify the APC assignment for the continuous monitoring
code (CPT code 95713) to APC 5723. Applying this same concept to the
12-24 VEEG technical component codes, we believe that the resources
associated with the intermittent monitoring code (CPT code 95715) are
not the same as the continuous monitoring code (CPT code 95716).
Therefore, we are reassigning the APC assignment for CPT code 95716 to
APC 5724. Although the commenters indicated that the predecessor code
for 95715 and 95716 was CPT code 95951, we are uncertain whether the
predecessor code describes continuous or intermittent monitoring since
the code descriptor lacks this specificity.
Comment: Some commenters urged CMS not to finalize the policies
proposed in the PFS or OPPS proposed rules. They indicated that the
policies would dramatically reduce reimbursement for EEG and VEEG
services and instead, suggested that we
[[Page 61251]]
appropriately value these services so that people with epilepsy have
access and can be diagnosed and treated in a timely manner.
Response: We believe these commenters did not fully understand our
APC proposal. Because the existing EEG and VEEG CPT codes will be
deleted on December 31, 2019, if we do not finalize our proposal for
the 13 technical codes that will be effective January 1, 2020, there
would be no codes to report the services associated with EEG and VEEG.
In summary, after consideration of the public comments, we are
finalizing our proposal, with modification. Specifically, we are
finalizing our proposal to assign CPT codes 95700 through 95712, 95714,
and 95715 to the APCs listed in Table 30 below. In addition, we are
modifying our proposal for CPT codes 95713 and 95716, and revising
their APC assignments to APC 5723 and APC 5724, respectively. Further,
we are finalizing our proposal to assign CPT codes 95717 through 95726
to status indicator ``M''. These codes, along with the deleted codes,
are listed in Table 30. The final CY 2020 payment rate for these codes
can be found in Addendum B to this final rule with comment period
(which is available via the internet on the CMS website).
As always, we will reevaluate the APC assignment for these codes
once we have claims data. We review, on an annual basis, the APC
assignments for all services and items paid under the OPPS based on the
latest claims data that we have available.
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[[Page 61252]]
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BILLING CODE 4120-01-C
18. 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
[[Page 61253]]
Musculoskeletal Procedures APCs (83 FR 58920 through 58921).
Based on the claims data available for the 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 proposed 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 were available for ratesetting in the
proposed rule, the geometric mean cost was 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 believed that the
assignment of the procedure described by CPT code 27447 in the Level 5
Musculoskeletal Procedures APC series remains appropriate and,
therefore, we proposed to continue to assign CPT code 27447 to APC 5115
(Level 5 Musculoskeletal Procedures) for CY 2020.
We also proposed 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 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 believed that it was appropriate to assign the
procedure described by CPT code 27130 to the Level 5 Musculoskeletal
Procedures APC series, which had a geometric mean cost of $11,879.66.
Therefore, for CY 2020, we also proposed to assign the procedure
described by CPT code 27130 to APC 5115. We noted that we will monitor
the claims data reflecting these procedures as they become available.
For a more detailed discussion of the procedures that were proposed to
be removed from the inpatient only (IPO) list for CY 2020 under the
OPPS, we refer readers to section IX. of the proposed rule.
Table 31 displays the CY 2020 Musculoskeletal Procedures APC
series' structure and APC geometric mean costs.
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Comment: Several commenters requested that CMS reconsider the
proposal to assign CPT code 22869 (Insertion of interlaminar/
interspinous process stabilization/distraction device, without open
decompression or fusion, including image guidance when performed,
lumbar; single level) to APC 5115, and instead allow the code to remain
in APC 5116, where it has been historically placed. They believed that
the proposal to move the APC was based on inaccurate data, due to one
hospital incorrectly reporting its costs and charges. They noted that
the influence of that inaccurate data would be short term and that the
claims would eventually support the higher placement, as the reporting
issues were corrected. We also note that the HOP Panel made a
recommendation that CMS examine the claims data for CPT code 22869 and
determine an appropriate APC placement.
Response: While we recognize the concerns that the commenters have
described, it is generally not our policy to judge the accuracy of
hospital coding and charging for purposes of ratesetting. We rely on
hospitals to accurately report the use of HCPCS codes in accordance
with their code descriptors and CPT and CMS instructions, and to report
services on claims and charges and costs for the services on their
Medicare hospital cost report appropriately. However, we do not specify
the methodologies that hospitals use to set charges for this or any
other service. In addition, we state in Chapter 4 of the Medicare
Claims Processing Manual that ``it is extremely important that
hospitals report all HCPCS codes consistent with their descriptors; CPT
and/or CMS instructions and correct coding principles, and all charges
for all services they furnish, whether payment for the services is made
separately paid
[[Page 61254]]
or is packaged'' to enable CMS to establish future ratesetting for OPPS
services.
After consideration of the public comments we received, we are
finalizing the proposed six level Musculoskeletal Procedures APC
structure. We also are finalizing the proposed assignment of the
procedure described by CPT codes 22869 to APC 5115. As discussed in
section IX. of this final rule, we are also finalizing the proposal to
remove the procedure described by CPT code 27130 from the inpatient
only list and to assign it to APC 5115 for the CY 2020 OPPS.
19. Nuclear Medicine Services
a. Cardiac Positron Emission Tomography (PET) Studies (APCs 5593 and
5594)
For CY 2020, we proposed to continue to assign CPT code 78459
(Myocardial imaging, positron emission tomography (pet), metabolic
evaluation) to APC 5593 (Level 3 Nuclear Medicine and Related Services)
with a proposed payment rate of $1,293.33. Similarly, we proposed to
maintain the APC assignments for CPT codes 78491 (Myocardial imaging,
positron emission tomography (pet), perfusion; single study at rest or
stress) and 78492 (Myocardial imaging, positron emission tomography
(pet), perfusion; multiple studies at rest and/or stress) to APC 5594
(Level 4 Nuclear Medicine and Related Services) with a proposed payment
rate of $1,466.16.
Comment: Commenters agreed with the APC assignments for CPT codes
78459, 78491, and 78492 and stated they are placed appropriately in
APCs 5593 and 5594. Some commenters added that the cost associated with
CPT code 78492, which describes a wall motion and ejection fraction,
supports its maintenance in APC 5594.
Response: We thank the commenters for their feedback and will
finalize the APC assignments for CPT code 78459 to APC 5593, and for
CPT codes 78491 and 78492 to APC 5594.
b. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT)
Studies (APCs 1522, 1523, and 5594)
For CY 2020, the CPT Editorial established six new codes to
describe the services associated with cardiac PET/CT studies,
specifically, CPT codes 78429, 78430, 78431, 78432, 78433, and 78434.
These codes were listed in Addendum B to the CY 2020 OPPS/ASC proposed
rule as 78X29, 78X31, 78X32, 78X33, 78X34, and 78X35 (the 5-digit CMS
placeholder codes), respectively, in Addendum B with the short
descriptors, and again in Addendum O with the long descriptors. We also
assigned these codes to comment indicator ``NP'' in Addendum B to
indicate that the codes are new for CY 2020 and that public comments
would be accepted on their proposed status indicator assignments. We
note that these codes will be effective January 1, 2020. Table 32 below
list the placeholder codes, long descriptors, and proposed SI and APC
assignments.
Comment: Several commenters opposed the APC assignment for CPT code
78429 (placeholder code 78X29) and recommended its reassignment from
APC 5593 to APC 5594. They stated that APC 5593 does not recognize the
additional cost associated with the CT scan that is included in the
service, and requested revising the code to APC 5594.
Response: Based on the commenters' feedback and our review of the
components of this new service, we agree with the commenters that APC
5594 is the more appropriate assignment for CPT code 78429. Therefore,
we will reassign CPT code 78429 from APC 5593 to APC 5594.
Comment: Several commenters agreed with the APC placement for CPT
code 78430 (placeholder code 78X31) in APC 5594. They stated that APC
5594 allows adequate payment for the CT scanner that that is a
component of this service.
Response: We thank the commenters for their feedback and are
finalizing the APC assignment for CPT code 78430 to APC 5594.
Comment: Several commenters reported that certain societies
submitted a new technology application to CMS for CPT codes 78431
(placeholder code 78X32), 78432 (placeholder code 78X33), and 78433
(placeholder code 78X34) that details the costs associated with
providing the services. For CPT code 78431, these same commenters
disagreed with the proposed APC placement and recommended its revision
from APC 5594 (Level 4 Nuclear Medicine and Related Services) with a
proposed payment rate of $1,466.16 to APC 1522 (New Technology--Level
23 ($2501-$3000)) with a proposed payment rate of $2,750.50. They
reported that, based on the resource cost of the service described by
CPT code 78431, APC 1522 provides adequate reimbursement for the
service. Similarly, for CPT codes 78432 and 78433, the commenters
indicated that APC 5594 would not adequately reimburse the resource
costs associated with providing these services, and recommended their
reassignment to APC 1523 (New Technology--Level 23 ($2501-$3000)) with
a proposed payment rate of $ 2,750.50
Response: Based on our assessment of the information provided in
the new technology application and the public comments received, we are
revising the APC assignments for these codes. Specifically, we are
revising the APC assignment for CPT code 78431 from APC 5594 to APC
1522, and reassigning CPT codes 78432 and 78433 from APC 5594 to APC
1523.
In summary, after consideration of the public comments for the new
cardiac PET/CT codes, and based on our evaluation of the new technology
application that provided the estimated costs for the services and
described the components and characteristics of the new codes, we are
finalizing our proposal, with modification, to assign CPT codes 78429,
78431, 78432, and 78433 to the final APCs listed in Table 32 below. In
addition, we are finalizing our proposal, without modification, for CPT
codes 78430 and 78434. In Table 32 below we list the long descriptors
and final SI and APC assignments for the codes. The final CY 2020
payment rate for the codes can be found in Addendum B to this final
rule with comment period (which is available via the internet on the
CMS website).
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c. Single-Photon Emission Computed Tomography (SPECT) Studies (APCs
5591, 5593, and 5594).
For CY 2020, we proposed to continue to assign CPT codes 78800 and
78801 to APC 5591 with a proposed payment rate of $372.69, CPT codes
78802 and 78804 to APC 5593 with a proposed payment rate of $1,293.33),
and CPT code 78803 to APC 5592 with a proposed payment rate of $482.38.
We also proposed to assign new CPT codes 78830 and 78831 to APC
5593, and 78832 to APC 5594 with a proposed payment rate of $1,466.16.
In addition, we proposed to assign new CPT code 78835 to status
indicator ``N'' because it is an add-on code that is packaged and
payment for it is included in the primary service. Table 33 below list
the long descriptors and their proposed SI and APC assignments for
these codes.
Comment: Some commenters agreed with the proposed APC assignments
for CPT codes 78800, 78801, and 78802.
Response: We thank the commenters for their feedback and are
finalizing the APC assignments for these codes.
Comment: Several commenters disagreed with the assignment for CPT
codes 78803 and requested a modification from APC 5592 to APC 5593
because this one code will replace seven SPECT codes that will be
deleted on December 31, 2019. Specifically, they reported that the
seven CPT codes listed in Figure 34 will be deleted. Several commenters
indicated that APC 5592 would not account for the deleted SPECT codes
and recommended using a weighted average to determine an appropriate
geometric mean cost for 78803. Based on their calculation, the
geometric mean cost for the code should be $784.18, which is higher
than the approximately $462 geometric mean cost for APC 5592, and is
more consistent with the geometric mean cost for APC 5593.
Response: Based on our analysis of the latest claims data for this
final rule with comment period, and as listed in the Figure 33 below,
the range of geometric mean cost for CPT code 78803 and the seven
deleted codes is between $433 and $1,417. We note that several of the
deleted codes were assigned to APC 5593, and based on our review of
these codes, we believe it would be appropriate to reassign CPT code
78803 from APC 5592 to APC 5593.
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Comment: Some commenters disagreed with the assignment of CPT code
78804 to APC 5593, and stated that the APC assignment does not
adequately capture the cost of multiple SPECTs provided. The commenters
indicated that it would not make sense to continue to assign single and
full sets of studies to the same APC and urged CMS to reassign the code
to APC 5594.
Response: For CY 2020, based on claims submitted between January 1,
2018 and December 30, 2018 that were processed on or before June 30,
2019, our analysis of the latest claims data for this final rule
supports maintaining CPT code 78804 in APC 5593. Specifically, our
claims data show a geometric mean cost of approximately $1,298 for CPT
code 78804 based on 1,656 single claims (out of 2,961 total claims),
which is more appropriate in APC 5593 whose geometric mean cost is
about $1,245 compared to the geometric mean cost of approximately
$1,412 for APC 5594.
Comment: Some commenters agreed with the APC assignment for new CPT
codes 78830 and 78832 to APC 5593 and APC 5594, respectively.
Response: We appreciate the commenters' feedback and are finalizing
the APC assignment for CPT code 78830 to APC 5593 and for CPT code
78832 to APC 5594.
Comment: Several commenters opposed the APC assignment for CPT code
78831 to APC 5593. They indicated that the proposed APC assignment for
CPT code 78831 does not adequately capture the resources required to
perform the procedure and should be reassigned to APC 5594.
Response: We believe that new CPT code 78831 shares similar
characteristics and resources to existing CPT code 78804. Consequently,
we assigned the new code to APC 5593, which is the same APC assignment
for CPT 78804. We note that once we have claims data for CPT code
78831, we will assess and determine whether a reassignment is
necessary. As always, we review the APC assignments for all services
under the OPPS based on the latest claims data.
In summary, after consideration of the public comments and after
evaluation of our claims data for this final rule with comment period,
we are finalizing our proposal, without modification, for CPT codes
78800, 78801, 78802, 78804, 78830, 78831, 78832, and 78835. However, we
are finalizing our proposal, with modification, for CPT code 78803 and
reassigning the code from APC 5592 to APC 5593 for CY 2020. Table 34
below list the long descriptors for these codes and their final SI and
APC assignments. The final CY 2020 payment rate for the codes can be
found in Addendum B to this final rule with comment period (which is
available via the internet on the CMS website).
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20. Radiofrequency Spectroscopy
As displayed in Table 8 and Addendum B to the CY 2020 OPPS/ASC
proposed rule, we proposed to assign CPT code 0546T (Radiofrequency
spectroscopy, real time, intraoperative margin assessment, at the time
of partial
[[Page 61262]]
mastectomy, with report) to status indicator (SI) ``N'' to indicate
that the code is packaged and payment for it is included in the primary
surgical procedure. Specifically, payment for the codes assigned to
status indicator ``N'' is made through the payment for the separately
payable, independent services with which they are billed. No separate
payment is made for services that we have assigned to status indicator
``N.'' We note that CPT code 0546T is associated with the MarginProbe
procedure.
Comment: Several commenters requested separate payment for CPT code
0546T. One commenter stated that the code should be adequately valued
and removed from packaging. Another commenter stated that packaging the
code will limit the number of Medicare beneficiaries who will benefit
from the procedure. Still another commenter suggested a modification in
the status indicator from ``N'' to ``J1'' (comprehensive APC) but did
not suggest any specific APC to which they believed the code should be
assigned. Another commenter stated that assigning separate payment for
CPT code 0546T is in line with CMS' objectives of reducing the number
of repeat surgical excisions.
Response: As noted in the code descriptor, CPT code 0546T describes
an intraoperative procedure that is performed at the time of partial
mastectomy. As specified in 42 CFR 419.2(b)(14), intraoperative items
and services are packaged under the OPPS. By definition, a service that
is performed intraoperatively is provided during and, therefore on the
same date of service, as another procedure that is separately payable
under the OPPS. Because intraoperative services support the performance
of an independent procedure and they are provided in the same operative
session as the independent procedure, we have packaged the payment for
the radiofrequency spectroscopy into the OPPS payment for the primary
surgical procedure with which it is reported. In this case, the payment
for CPT code 0546T is included in the breast mastectomy codes that are
reported with the procedure.
We note that since 2008, intraoperative services have been packaged
under the OPPS, however, packaging has always been a primary component
of the OPPS since its implementation in 2000. As we state in section
II.A.3. (Changes to Packaged Items and Services) of this final rule,
because packaging encourages efficiency and is an essential component
of a prospective payment system, packaging payment 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.
Comment: A medical device company stated that although CPT code
0546T is a procedure provided during an operative session, it is a
distinct procedure with a beginning, middle, and end. The commenter
reported that the cost of the procedure is not included in the primary
surgical procedure. The same commenter pointed out that based on the
language below from the CY 2008 OPPS/ASC final rule (72 FR 66621), it
believed CMS has the discretion not to package an intraoperative
service:
``To the extent that a service for which New Technology APC
status is being requested is ancillary and supportive of another
service, for example, a new intraoperative service or a new guidance
service, we might not consider it to be a complete service because
its value is as part of an independent service. However, if the
entire, complete service, including the guidance component of the
service, for example, is `truly new,' as we explained that term at
length . . . we would consider the new complete procedure for New
Technology APC assignment.''
The commenter also indicated that, at its September 2018 meeting,
the CPT Editorial Panel determined that radiofrequency spectroscopy is
a stand-alone service and, therefore, issued a unique code,
specifically, CPT code 0546T to be effective July 1, 2019. The
commenter noted that until July 1, 2019 there was no code available to
adequately describe the service, therefore, the procedure could not be
represented in the claims data upon which CMS has established the CY
2020 OPPS payment determinations. Consequently, the commenter requested
that CMS assign CPT code 0546T to New Technology APC 1518 (New
Technology--Level 18 ($1601-$1700)) with a proposed payment rate of
$1,650.50, and indicated that the payment would reflect the cost of the
sterile, disposable, radiofrequency spectroscopy probe and supplies.
The commenter asserted that assigning separate payment for the
procedure would alleviate the barrier to access to care for the
service.
Response: We note that the establishment of a new CPT code does not
indicate that a code is always a stand-alone procedure or service. The
current CPT code set lists hundreds of add-on codes that do not
describe stand-alone services. For the list of add-on codes, refer to
Appendix D (Summary of CPT Add-on Codes) of the latest CPT code book.
We note that the CPT Editorial Panel does not establish new CPT codes
because the service or procedure is considered stand-alone, rather they
establish new codes for procedures and services that are not described
by any existing code and have met their application criteria.
As stated above, CPT code 0546T is associated with the MarginProbe
procedure. CPT code 0546T describes an intraoperative procedure that is
performed at the time of partial mastectomy. As specified in 42 CFR
419.2(b)(14), intraoperative items and services are packaged under the
OPPS.
We also disagree with the commenter's statement that CMS has the
discretion not to package an intraoperative procedure. As noted above,
42 CFR 419.2(b)(14) states that intraoperative items and services are
packaged under the OPPS. We do not agree that MarginProbe, for which
CPT code 0546T was established, is a new, standalone procedure for
which separate payment should be made. We note that the preamble
language the commenter quoted only applies for services that are truly
new and a complete service and, as mentioned in the quoted language,
with respect to an ancillary service, which may include a new
intraoperative service or a new guidance service, we might not consider
it to be a complete service because its value is as part of an
independent service. MarginProbe, received Premarket Approval (PMA)
from the FDA on December 27, 2012, and has been on the market since
February 2013, however, FDA approval alone does not compel a
determination under Medicare that the technology represents a separate
standalone service that would qualify for New Technology APC
assignment.
Finally, because CPT code 0546T describes an intraoperative service
that is performed during a mastectomy procedure, we are finalizing our
proposal to assign the code to status indicator ``N''. Therefore, after
consideration of the public comments received, we are finalizing our
proposal without modification for CPT code 0546T. The final status
indicator assignment for the code is listed in Addendum B to this final
with comment period. We refer readers to Addendum D1 of this final rule
with comment period for the complete list of the OPPS payment status
indicators and their definitions for CY 2020. Both Addendum B and
Addendum D1 are available via the internet on the CMS website.
[[Page 61263]]
21. Reflectance Confocal Microscopy (RCM)
For CY 2020, we proposed to continue to assign CPT code 96932 to
status indicator ``Q1'' (conditionally packaged) and APC 5731 (Level 1
Minor Procedures) with a proposed payment rate of $23.57. We note that
the CPT Editorial Panel established six (6) CPT codes to describe the
services associated with RCM. These codes are shown in Table 35 with
the long descriptors and proposed status indicator assignments.
Comment: A commenter stated that the low payment rate for this
service under the OPPS is based on misreporting of charges by a
hospital. The commenter explained that based on their review and
analysis of the OPPS claims, only two hospitals in the country are
performing this imaging test, and that the proposed payment rate is
based primarily on one hospital's charges. The same commenter stated
that the cost of performing the imaging service is about $128, which is
more than the proposed payment rate of $23.57. To correct the low
payment for the test, the commenter suggested that CMS use its
equitable adjustment authority to set an appropriate payment for 96932
and also recommended that we do one of the following:
Reassign the code to APC 5522 (Level 1 Imaging without
Contrast) with a proposed payment rate of $111.04;
Reassign the code to New Technology APC 1503 (New
Technology--Level 3 ($101-$200) with a proposed payment rate of
$150.50; or
Assign an unconditionally packaged (``N'') or non-payable
status indicator to the code, similar to the other RCM codes.
The commenter also expressed concern that the low payment rate
under the OPPS significantly impacts the payment for the service under
the PFS. The commenter added that RCM is primarily performed in the
physician office setting, however, because of the low payment rate
established under the OPPS, the payment for the service is inadequate.
To correct the low payment rate, the commenter suggested that CMS
revise the status indicator of CPT code 96932 to identify the service
as packaged or non-payable, and, therefore, not have a published OPPS
payment rate for the code. The commenter believed that packaging the
code or assigning it as non-payable will correct the payment rate and
provide adequate payment for the service.
Response: Section 5102(b) of the Deficit Reduction Act of 2005
(DRA) amended the PFS statute to place a payment cap on the technical
component (TC) of certain diagnostic imaging procedures and the TC
portions of the global diagnostic imaging services at the amount paid
under the OPPS. To implement this provision, the physician fee schedule
(PFS) amount is compared to the OPPS payment amount and the lower
amount is used for payment. CPT code 96932 is designated as a DRA
imaging code whose payment under the PFS is capped at the OPPS rate
even when performed in a physician office setting. Based on our review
of the issue, we believe that we should revise the OPPS status
indicator assignment for CPT code 96932 from ``Q1'' to ``N'', similar
to the status indicator assignment for several other RCM codes. Since
CPT code was low volume under the OPPS, it may be inappropriate to
establish an OPPS payment rate by which the PFS rate would be capped.
Accordingly, this change will allow there not to be an OPPS cap for the
service.
In summary, after consideration of the public comment, we are
finalizing our proposal with modification and revising the status
indicator assignment for CPT code 96930 to ``N'' for CY 2020. Table 35
below lists the long descriptors and final status indicator assignments
for the six (6) codes that describe the services associated with RCM.
We refer readers to Addendum D1 of this final rule with comment period
for the complete list of the OPPS payment status indicators and their
definitions for CY 2020. Addendum D1 is available via the internet on
the CMS website.
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22. remed[emacr][supreg] System--Transvenous Phrenic Nerve Stimulation
Therapy (APCs 5461-5464, 5724, and 5742)
For the CY 2020 update, we proposed to modify the APC assignment
for certain CPT codes associated with the Transvenous Phrenic Nerve
Stimulation Therapy or remed[emacr][supreg] System. Of the 13 codes, we
received a comment on the APC assignment for three codes, specifically,
CPT codes 0426T, 0427T, and 0431T. As shown in Table 36 below with the
long descriptors, and also in Addendum B to the CY 2020 OPPS/ASC
proposed rule, we proposed to reassign CPT codes 0426T and 0431T from
APC 5463 (Level 3 Neurostimulator and Related Procedures) to APC 5464
(Level 4 Neurostimulator and Related Procedures) with a proposed
payment rate of $29,025.99. In addition, we proposed to continue to
assign CPT code 0427T to APC 5463 ((Level 3 Neurostimulator and Related
Procedures) with a proposed payment rate of $19,370.82.
Comment: A device company suggested that we maintain the current
assignment and not revise the APC assignment to APC 5464 for CPT code
0426T. The commenter stated that the resources required for the
procedure are more closely aligned with the procedures in APC 5463.
Response: Based on our evaluation of the procedure associated with
CPT code 0426T, we agree that the procedure described by the code
appropriately fits in APC 5463 based on its clinical similarity to
other procedures in the APC. CPT code 0426T describes the insertion or
replacement of the stimulation lead associated with a neurostimulator
system for the treatment of central sleep apnea, and APC 5463 includes
other procedures that involve the insertion or replacement of a
stimulation lead for a neurostimulator system. Therefore, we will
maintain the APC assignment for CPT code 0426T to APC 5463 for CY 2020.
Comment: The same device company that commented on CPT code 0426T
also commented on the APC assignment for CPT code 0427T. According to
the commenter, the procedure describes the initial insertion of the
implantable pulse generator when the full system cannot be implanted
for a patient, and added that the procedure does not occur frequently.
The commenter also noted that the hospital resources associated
with CPT code 0427T are very similar to CPT code 0431T, which is
assigned to APC 5464, and recommended the assignment of both procedures
to APC 5464.
Response: Based on our review of the two procedures, we agree that
the resources associated with inserting or replacing a pulse generator
for a neurostimulator system that is described by CPT code 0427T are
very similar to removing and replacing a pulse generator for a
neurostimulator system that is described by CPT code 0431T.
Consequently, we are modifying our
[[Page 61265]]
proposal and reassigning CPT code 0427T to APC 5464.
Comment: The same device company that commented on CPT codes 0426T
and 0427T also commented on CPT code 0431T. Specifically, the commenter
concurred with the APC reassignment for the code to APC 5464.
Response: As indicated above, based on our review of the two
procedures, we agree that the resources associated with inserting or
replacing a pulse generator for a neurostimulator system that is
described by CPT code 0427T are very similar to removing and replacing
a pulse generator for a neurostimulator system that is described by CPT
code 0431T. Therefore, we are finalizing our proposal for CPT code
0431T and assigning the code to APC 5464.
In summary, after consideration of the public comment, we are
finalizing our proposal with modification. Specifically, we are
finalizing our APC proposal for CPT code 0431T to APC 5464, however, we
are maintaining the APC assignment for CPT code 0426T to APC 5463, and
reassigning CPT code 0427T to APC 5464. We note that the final CY 2020
OPPS payment rates for all the codes associated with the Transvenous
Phrenic Nerve Stimulation Therapy or remed[emacr][supreg] System can be
found in Addendum B of this final rule with comment period. Table 36
below lists the long descriptors for all 13 codes and the final APC and
SI assignments for CY 2020. In addition, we refer readers to Addendum
D1 of this final rule with comment period for the status indicator
meanings for all codes reported under the OPPS for CY 2020. Both
Addendum B and Addendum D1 are available via the internet on the CMS
website.
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23. Surgical Pathology Tissue Exam (APC 5673)
In CY 2019, CPT code 88307 (Level V--surgical pathology, gross and
microscopic examination) was assigned to APC 5673 (Level 3 Pathology)
with a payment rate of $274.22. For CY 2020, we proposed to reassign
the code to APC 5672 (Level 2 Pathology) with a proposed payment rate
of $148.62.
Comment: A commenter disagreed with the proposed reassignment and
urged CMS to continue to assign CPT code 88307 to APC 5673. This same
commenter reported that the service includes complex Level V surgical
pathology specimens and the proposed change represents a 46 percent
decrease in the payment amount. The commenter added that the proposed
reassignment creates a resource cost rank order anomaly with other
physician services and the technical costs will not be fully recovered
from each unit of service. In addition, the commenter believed that the
data do not identify actual costs for specific procedures, and stated
that the cost associated with CPT code 88307 is greater than six times
the cost of the services assigned to APC 5672 (Level 2 Pathology) based
on physician fee schedule technical component cost differences. The
commenter also believed that the data leading to the APC reassignment
must be flawed and added that charge-based cost data were neither
designed nor intended to be an accurate estimate of service/procedure
level costs at the CPT code level. The commenter stated that the
hospital charge-based cost data used for OPPS rate-setting allows CMS
to estimate costs for purposes of grouping a number of services or
procedures (multiple distinct codes) into appropriate clinically and
economically homogeneous APCs.
Response: As stated in section III.B. (Final OPPS Changes--
Variations Within APCs) of this final rule with comment period,
payments for OPPS services and procedures are based on our analysis of
the latest claims data. For the proposed rule, the OPPS proposed
payment rates were based on claims data that were submitted between
January 1, 2018 through December 31, 2018, that were processed on or
before December 31, 2018. However, for the final rule, the OPPS final
payment rates are based on claims that were submitted between January
1, 2018 through December 31, 2018, that were processed on or before
June 30, 2019. Based on the latest hospital outpatient claims data used
for this final rule with comment period, we agree with the commenter
that the code should continue to be assigned to APC 5673 for CY 2020.
Specifically, CPT code 88307 shows a geometric mean cost of
approximately $219, which is more appropriate in APC 5673 whose
geometric cost is approximately $277 compared to the geometric mean
cost of about $140 for APC 5672. Consequently, we are revising our
proposal and maintaining the APC assignment for CPT code 88307 to APC
5673 for CY 2020.
In summary, after consideration of the public comment, and after
our analysis of the updated claims data for this final rule with
comment period, we are finalizing our proposal with modification.
Specifically, we are revising the APC assignment for CPT code 88307 to
APC 5673 for CY 2020. The final CY 2020 payment rate for the code can
be found in Addendum B to this final rule with comment period (which is
available via the internet on the CMS website).
As we do every year, we will reevaluate the APC assignment for CPT
code 88307 for the next rulemaking cycle. We note that we review, on an
annual basis, the APC assignments for all services and items paid under
the OPPS.
[[Page 61268]]
24. Urology Procedures
a. HIFU Procedure--High-Intensity Focused Ultrasound of the Prostate
(APC 5375)
In 2017, CMS received a new technology application for the prostate
HIFU procedure and established a new code, specifically, HCPCS code
C9747 (Ablation of prostate, transrectal, high intensity focused
ultrasound (hifu), including imaging guidance). Based on the estimated
cost provided in the new technology application, we assigned the new
code to APC 5376 (Level 6 Urology and Related Services) with a payment
rate of $7,452.66 effective July 1, 2017. We announced the SI and APC
assignment in the July 2017 OPPS quarterly update CR (Transmittal 3783,
Change Request 10122, dated May 26, 2017).
For the CY 2018 update, we made no change to the APC assignment and
continued to assign HCPCS code C9747 to APC 5376 with a payment rate of
$7,596.26. We note that the payment rates for the CY 2018 OPPS update
were based on claims submitted between January 1, 2016 through December
30, 2016, that were processed on or before June 30, 2017. Since HCPCS
code C9747 was established on July 1, 2017, we had no claims data for
the procedure for use in ratesetting for CY 2018.
However, for the CY 2019 update, based on the latest claims data
for the final rule, we revised the APC assignment for HCPCS code C9747
from APC 5376 to APC 5375 with a payment rate of $4,020.54. We note
that the payment rates for CY 2019 were based on claims submitted
between January 1, 2017 through December 30, 2017, that were processed
on or before June 30, 2018. Our claims data showed a geometric mean
cost of approximately $5,000 for HCPCS code C9747 based on 64 single
claims (out of 64 total claims), which was significantly lower than the
geometric mean cost of about $7,717 for APC 5376. We believed that the
geometric mean cost for HCPCS code C9747 was more comparable to the
geometric mean cost of approximately $4,055 for APC 5375. Consequently,
we reassigned the code from APC 5376 to APC 5375 (Level 5 Urology and
Related Services) for CY 2019.
For CY 2020, we proposed to continue to assign HCPCS code C9747 to
APC 5375 with a proposed payment rate $4,286.06.
Comment: Several commenters disagreed with the APC assignment for
HCPCS code C9747 and recommended a reclassification to APC 5376 because
they believed the service is clinically similar and comparable in terms
of resources to cryoablation of the prostate, which is described by CPT
code 55873 (Cryosurgical ablation of the prostate (includes ultrasonic
guidance and monitoring), and placed in APC 5376 (Level 6 Urology and
Related Services), with a proposed payment rate of $8,193.30. The
commenters believed that the geometric mean cost, and ultimately, the
APC determination for the prostate HIFU procedure was based on
inaccurate hospital costs. They believed that the average cost of the
procedure should be approximately $6,250, and requested a reassignment
to APC 5376 to enable Medicare beneficiaries to continue to receive the
treatment. They stated based on their projections that maintaining the
APC assignment to APC 5375 for the procedure will decrease the number
of Medicare beneficiaries receiving the treatment by 75 percent if the
CY 2020 payment rate is finalized.
Response: As we have stated every year since the implementation of
the OPPS on August 1, 2000, we review, on an annual basis, the APC
assignments for all services and items paid under the OPPS based on our
analysis of the latest claims data. For CY 2020, based on claims
submitted between January 1, 2018 through December 30, 2018, that were
processed on or before June 30, 2019, our analysis of the latest claims
data for this final rule supports maintaining HCPCS code C9747 in APC
5375. Specifically, our claims data shows a geometric mean cost of
approximately $5,850 for HCPCS code C9747 based on 264 single claims
(out of 268 total claims), which is comparable to the geometric mean
cost of about $4,140 for APC 5375, rather than the geometric mean cost
of approximately $7,894 for APC 5376.
Also, we do not agree that the resource costs associated with the
prostate HIFU procedure are similar to those of cryoablation of the
prostate. Our claims data for the CY 2020 update shows a geometric mean
cost of about $8,152 based on 1,417 single claims (out of 1,429 total
claims) for cryoablation of the prostate. The geometric mean cost for
CPT code 55873 is reasonably consistent with APC 5376, whose geometric
mean cost is approximately $7,894.
With respect to the issue of inaccurate hospital cost reporting for
HCPCS code C9747, based on our analysis of the CY 2020 hospital
outpatient claims data used for this final rule with comment period, we
are unable to determine whether hospitals are misreporting the
procedure. It is generally not our policy to judge the accuracy of
hospital coding and charging for purposes of ratesetting. We rely on
hospitals to accurately report the use of HCPCS codes in accordance
with their code descriptors and CPT and CMS instructions, and to report
services on claims and charges and costs for the services on their
Medicare hospital cost report appropriately. Also, we do not specify
the methodologies that hospitals use to set charges for this or any
other service. Furthermore, we state in Chapter 4 of the Medicare
Claims Processing Manual that ``it is extremely important that
hospitals report all HCPCS codes consistent with their descriptors; CPT
and/or CMS instructions and correct coding principles, and all charges
for all services they furnish, whether payment for the services is made
separately paid or is packaged'' to enable CMS to establish future
ratesetting for OPPS services.
Comment: A commenter reported that the prostate HIFU procedure
(C9747) and cryoablation of the prostate (55873) are two clinically
similar procedures for the ablation of prostate for cancer, and are the
only two acknowledged treatments for radiorecurrent, non-metastatic
prostate cancer. This same commenter requested that we either create a
new APC group specific to prostate ablation procedures or modify the
organization of HCPCS codes within the urology family of APCs. The
commenter specifically noted that a reorganization for APCs 5374
through 5376 would be appropriate but added that there are other
inconsistencies across procedures within the urology APCs. The
commenter also mentioned that CPT codes 50555 (Renal endoscopy through
established nephrostomy or pyelostomy, with or without irrigation,
instillation, or ureteropyelography, exclusive of radiologic service;
with biopsy) and 50557 (Renal endoscopy through established nephrostomy
or pyelostomy, with or without irrigation, instillation, or
ureteropyelography, exclusive of radiologic service; with fulguration
and/or incision, with or without biopsy) are assigned to two different
APCs, however, their APC assignments appear reversed. The commenter
further suggested updating the procedures within APCs 5374, 5375, and
5376 so that the geometric mean costs for the procedure fall into the
following ranges:
[[Page 61269]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.059
Response: We appreciate the commenter's suggestions and may
consider a reorganization of the procedures in the urology APCs in
future rulemaking. We note that each year, under the OPPS, we revise
and make changes to the APC groupings based on the latest hospital
outpatient claims data to appropriately place procedures and services
in APCs based on clinical characteristics and resource similarity. For
CY 2020, based on our analysis of the latest claims data for this final
rule, we do not believe that establishing a new APC specific to
prostate ablation procedures is necessary, nor do we believe that
modifying the HCPCS codes within the urology family APCs is appropriate
at this time.
With respect to CPT codes 50555 and 50557, based on our review of
the claims data for this final rule with comment period, we revised the
APC assignment for CPT code 50555 from APC 5375 to APC 5376, and
maintained the APC assignment for CPT code 50557 in APC 5376.
Specifically, our claims data show a geometric about $7,327 for CPT
code 50555 and approximately $6,224 for CPT code 50557, which are more
comparable with the geometric cost for APC 5376 of about $7,894 unlike
that of APC 5375 whose geometric mean cost is approximately $4,140.
In summary, after consideration of the public comments, and after
our analysis of the updated claims data for this final rule with
comment period, we are finalizing our proposal, without modification,
to continue to assign HCPCS code C9747 to APC 5375 for CY 2020. The
final CY 2020 payment rate for the code can be found in Addendum B to
this final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
b. ProACT Procedure--Transperineal Periurethral Adjustable Balloon
Continence Device Procedure (APCs 5371, 5374, 5375, and 5376)
In 2017, CMS received a new technology application for the
transperineal periurethral adjustable balloon continence device
procedure, which is associated with ProACT Therapy, and established a
new code, specifically, HCPCS code C9746. Based on the estimated cost
for the bilateral placement of the balloon continence devices, we
assigned the code to APC 5377 (Level 7 Urology and Related Services)
with a payment rate of $14,363.61 effective July 1, 2017. We announced
the new code, and interim SI and APC assignments, and payment rate in
the July 2017 quarterly update to the OPPS (Transmittal 3783, Change
Request 10122, dated May 26, 2017).
For the CY 2018 update, we made no change to the APC assignment and
continued to assign HCPCS code C9746 to APC 5377 with a payment rate of
$15,697.82. We note that OPPS payment rates for the CY 2018 update were
based on claims submitted between January 1, 2016 through December 30,
2016, that were processed on or before June 30, 2017. Since HCPCS code
C9746 was established on July 1, 2017, we had no claims data for the
procedure for use in ratesetting in CY 2018.
For the CY 2019 update, we again had no claims data for the code so
we made no change to the APC assignment and continued to assign HCPCS
code C9746 to APC 5377 with a payment rate of $16,319.55. We note that
the payment rates for CY 2019 were based on claims submitted between
January 1, 2017 through December 30, 2017, that were processed on or
before June 30, 2018.
In July 2019, the CPT Editorial Panel established four new codes to
describe the transperineal periurethral adjustable balloon continence
device procedure, specifically, CPT codes 0548T, 0549T, 0550T, and
0551T. In the July 2019 quarterly update to the OPPS (Transmittal 4313,
Change Request 11318, dated May 24, 2019), we listed the temporary APC
assignments for the new codes in the July 2019 OPPS Update CR and
announced the deletion of HCPCS code C9746 on June 30, 2019, since it
was replaced with CPT code 0548T effective July 1, 2019. These codes
are listed in Table 37 along with their long descriptors and proposed
SI and APC assignments.
For CY 2020, we proposed to revise the APC assignment for new CPT
code 0548T, which was previously described by HCPCS code C9746. In
addition, we proposed to assign CPT codes 0549T, 0550T, and 0551T to
APCs 5375, 5374, and 5371, respectively.
Comment: A medical device company suggested that CPT code 0548T
remain in APC 5377, consistent with the APC assignment for the
predecessor code (HCPCS code C9746). This commenter indicated that the
calculated geometric mean cost does not accurately reflect the actual
cost of the procedure. The commenter noted there were only two billings
identified in the CMS data--one billing at the correct cost of $16,250
and one billing incorrectly recorded at $0. The commenter stated that
the resulting calculation of the geometric mean cost of $8,125 does not
accurately represent the actual cost of the bilateral procedure for CPT
code 0548T. In addition, the same commenter requested a reassignment
from APC 5375 to APC 5376 for CPT code 0549T.
Response: As we have stated every year since the implementation of
the OPPS on August 1, 2000, we review, on an annual basis, the APC
assignments for all services and items paid under the OPPS based on our
analysis of the latest claims data. For CY 2020, based on claims
submitted between January 1, 2018 through December 30, 2018, that were
processed on or before June 30, 2019, our analysis of the latest claims
data for this final rule supports revising the APC assignment for CPT
code 0548T (which was previously described by predecessor HCPCS code
C9746) from APC 5377 to APC 5376 (Level 6 Urology and Related
Services). Specifically, our claims data shows a geometric mean cost of
approximately $9,504 for HCPCS code C9746 based on 7 single claims (out
of 7 total claims), which is most comparable to the geometric mean cost
of about $7,894 for APC 5376, rather than the geometric mean cost of
approximately $17,195 for APC 5377. We believe that assigning CPT code
0548T to APC 5377 would significantly overpay for the procedure.
In addition, based on the geometric mean cost for the placement of
the bilateral balloon continence devices (CPT code 0548T), we do not
agree that we should revise the APC assignment for CPT code 0549T,
which represents
[[Page 61270]]
the unilateral placement of the balloon continence device, from APC
5375 to APC 5376. We believe that the cost associated with CPT code
0549T should be less than that of CPT code 0548T since CPT code 0549T
describes the use of only one device.
Moreover, we rely on hospitals to accurately report the use of
HCPCS codes in accordance with their code descriptors and CPT and CMS
instructions, and to appropriately report services on claims and
charges and costs for the services on their Medicare hospital cost
report. However, we do not specify the methodologies that hospitals use
to set charges for this or any other service. We also state in Chapter
4 of the Medicare Claims Processing Manual that ``it is extremely
important that hospitals report all HCPCS codes consistent with their
descriptors; CPT and/or CMS instructions and correct coding principles,
and all charges for all services they furnish, whether payment for the
services is made separately paid or is packaged'' to enable CMS to
establish future ratesetting for OPPS services.
In summary, after consideration of the public comment and after our
analysis of the updated claims data for this final rule with comment
period, we are finalizing our proposal, without modification, to assign
CPT codes 0548T, 0549T, 0550T, and 0551T to the APCs listed in Table 37
below. The final CY 2020 payment rate for the codes can be found in
Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the status indicator (SI) meanings for all codes reported under the
OPPS. Both Addendum B and D1 are available via the internet on the CMS
website.
[GRAPHIC] [TIFF OMITTED] TR12NO19.060
c. Rezum Procedure--Transurethral High Energy Water Vapor Thermal
Therapy of the Prostate (APC 5373)
In late 2017, CMS received a new technology application for the
transurethral radiofrequency generated water vapor thermal therapy of
the prostate, also known as the Rezum procedure, and established a new
code, specifically, HCPCS code C9748 (Transurethral destruction of
prostate tissue; by radiofrequency water vapor (steam) thermal therapy)
effective January 1, 2018. Based on the estimated cost of the
procedure, we assigned the new code to APC 5373 (Level 3 Urology and
Related Services) with a payment rate of $1,695.68 effective January 1,
2018. The new code appeared in both the OPPS Addendum B of the CY 2018
OPPS/ASC final rule and the January 2018 OPPS Update CR (Transmittal
3941, Change Request 10417, dated December 22, 2017).
For the CY 2019 update, the CPT Editorial Panel established a new
code to describe the Rezum procedure, specifically, CPT code 53854
(Transurethral destruction of prostate tissue; by radiofrequency
generated water vapor thermotherapy) effective January 1, 2019. We
deleted HCPCS code C9748 on December 31, 2018 because it was replaced
with CPT code 53854 and assigned the new code to APC 5373, which was
the same APC assignment for the predecessor code, with a payment rate
of $1,739.75. We note that payment rates for the CY 2019 update were
based on claims submitted between January 1, 2017 and December 30, 2017
that were processed on or before June 30, 2018.
For the CY 2020 update, we proposed to maintain the APC assignment
for CPT code 53854 to APC 5373 with a proposed payment rate of
$1,797.97.
Comment: Several commenters requested a reclassification for CPT
code 53854 from APC 5373 to APC 5374 (Level 4 Urology and Related
Services) with a proposed payment rate of $3,059.21. The commenters
reported that the Rezum procedure is most clinically similar to the
transurethral microwave therapy (TUMT), which is described by CPT code
53850 (Transurethral destruction of prostate tissue; by microwave
thermotherapy), and transurethral needle (radiofrequency) ablation
(TUNA), which is described by CPT code 53852
[[Page 61271]]
(Transurethral destruction of prostate tissue; by radiofrequency
thermotherapy). Some commenters reported that the primary difference
between each of these codes is the energy source used to destroy or
shrink the prostate tissue, specifically, CPT code 53850 uses microwave
energy, 53852 uses radiofrequency energy, and 53854 uses radiofrequency
generated water vapor thermotherapy. Apart from the energy source, the
commenters indicated that the procedures and resources used in these
procedures are similar. Consequently, they recommended that all three
procedures be placed in APC 5374.
Response: As we have stated every year since the implementation of
the OPPS on August 1, 2000, we review, on an annual basis, the APC
assignments for all services and items paid under the OPPS based on our
analysis of the latest claims data. For CY 2020, based on claims
submitted between January 1, 2018 through December 30, 2018, that were
processed on or before June 30, 2019, our analysis of the latest claims
data for this final rule supports maintaining the APC assignment for
CPT code 53854 (which was previously described by predecessor HCPCS
code C9748) to APC 5373. Our claims data show a geometric mean cost of
approximately $1,899 for the predecessor HCPCS code C9748 based on 191
single claims (out of 192 total claims). The geometric mean cost for
the Rezum procedure is more in line with the geometric mean cost of
about $1,733 for APC 5373 rather than with APC 5374 whose geometric
mean cost is approximately $2,953.
In addition, based on our analysis of the claims data, the resource
costs associated with the TUMT and TUNA procedures are not similar to
the Rezum procedure. While all three procedures treat the same
indication and utilize the same type of technology, time, set up, and
planning, their resource costs vary. Our claims data show a geometric
mean cost of approximately $2,851 for the TUMT procedure (CPT code
53850) based on 41 single claims (out of 41 total claims), and about
$3,027 for the TUNA procedure (CPT code 53852) based on 513 single
claims (out of 514 total claims). In both cases, the resource costs for
the TUMT and TUNA procedures are much higher than those for the Rezum
procedure.
Therefore, after consideration of the public comments, and after
our analysis of the updated claims data for this final rule with
comment period, we are finalizing our proposal, without modification,
and assigning CPT code 53854 to APC 5373. Table 38 below list the final
APC assignments for CPT code 58350 (TUMT), 53852 (TUNA) and 53854
(Rezum). In addition, the final CY 2020 payment rates for these
procedures can be found in Addendum B to this final rule with comment
period. Further, we refer readers to Addendum D1 of this final rule
with comment period for the status indicator (SI) meanings for all
codes reported under the OPPS. Both Addendum B and D1 are available via
the internet on the CMS website.
As always, we will reevaluate the APC assignment for CPT code 53854
in the next rulemaking cycle. As stated above, we review, on an annual
basis, the APC assignments for all services and items paid under the
OPPS.
[GRAPHIC] [TIFF OMITTED] TR12NO19.061
d. VaporBlate Procedure--Transurethral Radiofrequency Generated Water
Vapor Thermal Therapy of the Prostate
As displayed in Addendum B to the CY 2020 OPPS/ASC proposed rule,
we proposed to assign the procedure described by CPT code 0582T
(Transurethral ablation of malignant prostate tissue by high-energy
water vapor thermotherapy, including intraoperative imaging and needle
guidance) to status indicator ``E1'' to indicate that the code is not
payable by Medicare when submitted on outpatient claims (any outpatient
bill type) because the services associated with these codes are either
not covered by any Medicare outpatient benefit category, are
statutorily excluded by Medicare, or are not reasonable and necessary.
The code was listed as 0X76T (the 5-digit CMS placeholder code) in
Addendum B with the short descriptor, and again in Addendum O with the
long descriptor. We also assigned the code to comment indicator ``NP''
in Addendum B to indicate that the code is new for CY 2020 and that
public comments would be accepted on the proposed status indicator
assignment. We note that the code will be effective January 1, 2020.
Comment: A medical device company reported that the technology
associated with this new code received FDA approval as an IDE.
Specifically, the VaporBlate technology was designated by the FDA as a
Category B IDE on August 29, 2019. The commenter also
[[Page 61272]]
stated that they are in the process of applying for Medicare coverage
of the Category B IDE clinical trial. In the event the clinical trial
is approved by Medicare, the commenter suggested assigning the code to
one of the following APCs:
APC 1590 (New Technology--Level 39 ($15,001-$20,000)) with
a proposed payment rate of $ 17,500.50; or
APC 5377 (Level 7 Urology and Related Services) with a
proposed payment rate of $17,465.94.
The commenter explained that the VaporBlate procedure involves the
transurethral ablation of malignant prostate tissue by high-energy
water vapor thermotherapy, which is unlike that of the Rezum procedure
that involves transurethral radiofrequency generated water vapor
thermal therapy for benign prostatic hyperplasia (BPH). The commenter
added that the resource costs associated with the VaporBlate procedure
are significantly higher than those for the Rezum procedure. The Rezum
generator (capital equipment) used in CPT code 53854 costs $32,500 and
the Rezum supply kit (disposables) costs between $1,000 and $1,500,
while the VaporBlate generator (capital equipment) used to perform the
procedure described by the VaporBlate procedure costs $80,000 and the
supply kits (disposables) cost $12,500 each. Based on the clinical and
cost differences, the commenter stated that CPT code 0582T should not
be assigned to the same APC as CPT code 53854 (Rezum procedure).
Response: Based on our understanding of the procedure, we found
that the service associated with CPT code 0582T is currently in
clinical trial (Study Title: ``Ablation of Prostate Tissue in Patients
With Intermediate Risk Localized Prostate Cancer''; ClinicalTrials.gov
Identifier: NCT04087980). Further review of the clinical trial revealed
that the clinical study has not yet met CMS' standards for coverage,
nor does it appear on the CMS Approved IDE List, which can be found at
this CMS website: https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html. Because the VaporBlate technology has not been
approved for Medicare coverage as a Category B IDE, we believe that we
should continue to assign CPT code 0582T to status indicator ``E1''. If
this technology later meets CMS' standards for coverage, we will
reassess the APC assignment for the code in a future quarterly update
and/or rulemaking cycle.
Therefore, after consideration of the public comment, we are
finalizing our proposal, without modification, to assign CPT code 0582T
to status indicator ``E1''. We refer readers to Addendum D1 of this
final rule with comment period for the complete list of the OPPS
payment status indicators and their definitions for CY 2020. Addendum
D1 is available via the internet on the CMS website.
IV. 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
The intent of transitional device pass-through payment, as
implemented at 42 CFR 419.66, is to facilitate access for beneficiaries
to the advantages of new and truly innovative devices by allowing for
adequate payment for these new devices while the necessary cost data is
collected to incorporate the costs for these devices into the procedure
APC rate (66 FR 55861). 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 current
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: C1823 Generator, neurostimulator (implantable),
nonrechargeable, with transvenous sensing and stimulation leads), which
was established effective January 1, 2019. The pass-through payment
status of the device category for HCPCS code C1823 will end on December
31, 2021. HCPCS code C1823 will continue to receive pass-through status
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 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).
[[Page 61273]]
We note that, in section IV.A.4. of the CY 2020 OPPS/ASC proposed rule,
we proposed 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 readers to
section IV.A.4. of the CY 2020 OPPS/ASC 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 the 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 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
[[Page 61274]]
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), 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 invited public comments on
whether the Surefire[supreg] SparkTM Infusion System meets
the newness criterion.
Comment: The manufacturer of Surefire[supreg] SparkTM
Infusion System believed this device meets the eligibility criteria for
device pass-through payment under the regulation at Sec. 419.66, which
includes the newness criterion.
Response: We appreciate the commenter's input. After consideration
of the public comments we received and based on the fact that the
Surefire[supreg] SparkTM Infusion System application was
received within 3 years of FDA approval, we believe that 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 invited public comments on whether
the Surefire[supreg] SparkTM Infusion System meets the
eligibility criteria at Sec. 419.66(b).
Comment: The manufacturer of Surefire[supreg] SparkTM
Infusion System believed that that the Surefire[supreg]
SparkTM Infusion System met the eligibility criteria at
Sec. 419.66(b).
Response: We appreciate the commenter's input. Based on the
information we have received and our review of the application, we have
determined that Surefire[supreg] SparkTM Infusion System
meets the eligibility criterion at Sec. 419.66(b)(3) and (b)(4).
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
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. In the CY 2020 OPPS/ASC proposed rule, we also stated
that 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 invited public comments on this issue.
Comment: The manufacturer of the device does not believe there is
an existing pass-through payment category that describes the
Surefire[supreg] SparkTM Infusion System, commenting that
the existing device categories that CMS identified do not adequately
describe critical aspects of the device. The manufacturer noted that
existing categories, such as C1887 Catheter, guiding (may include
infusion/perfusion capability) and C1751 Catheter, infusion, inserted
peripherally, centrally or midline (other than hemodialysis)--do not
appropriately describe catheters with a pressure-enabled drug delivery
(PEDD) valve, a key mechanism of action of the Surefire[supreg]
SparkTM Infusion System. The manufacturer stated that the
PEDD valve is closely associated with differential and improved
outcomes as compared to catheters without PEDD valves and is not
appropriately described by existing categories.
Response: We appreciate the commenter's input. After consideration
of the public comments we received, we believe there is no existing
pass-through payment category that appropriately describes the
Surefire[supreg] SparkTM Infusion System, due to the
pressure-enabled drug delivery (PEDD) valve which offers a unique
mechanism for therapy delivery. Based on this information, we believe
that the Surefire[supreg] SparkTM Infusion System meets the
eligibility 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. 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
[[Page 61275]]
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 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\
---------------------------------------------------------------------------
\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
was that large-scale studies with long-term follow-up were 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
was 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. We noted additional data on mortality endpoints
would be helpful to fully assess substantial clinical improvement. We
invited public comments on whether the Surefire[supreg]
SparkTM Infusion System meets the substantial clinical
improvement criterion.
Comment: The manufacturer responded to several statements regarding
Surefire[supreg] SparkTM Infusion System and substantial
clinical improvement in the CY 2020 OPPS/ASC proposed rule, and
asserted that SparkTM Infusion System meets the substantial
clinical improvement criterion. The manufacturer stated that the
population size in the studies submitted to CMS are normal for a new
and innovative technology, noting that the studies are methodologically
rigorous and show statistically significant differentiation from
comparators. The manufacturer also noted that overall survival is not
an appropriate endpoint for hepatocellular carcinoma. They cited
National Comprehensive Cancer Network (NCCN) guidelines, noting that
tumor necrosis and pathologic response are primary predictors of
success in these cases and locoregional therapy should be viewed as a
way to transition patients to transplant or resection. The manufacturer
also suggested that CMS should consider that clinical improvements vary
based on the therapeutic agent being delivered by the
SparkTM Infusion System and that these agents are approved
on a variety of endpoints.
Response: We appreciate the response to the questions we had
regarding SparkTM Infusion System. After reviewing the
information provided in the public comment, we agree that while the
opportunity for large-scale studies with long-term follow-up is limited
for a new technology, the existing studies show statistically
significant improvements. Additionally, with regard to our questions
about impacts on mortality, we accept the applicant's statement that
there are other key clinical endpoints, such as tumor necrosis and
progression-free survival, that can be used to assess improvements from
the SparkTM Infusion System.
Comment: Multiple commenters supported granting SparkTM
Infusion System transitional pass-through payment status. Many of the
commenters mentioned that SparkTM Infusion System provides
substantial clinical benefit over conventional therapy and urged CMS to
approve the transitional pass-through payment to reduce cost burden and
increase patient access.
Response: We appreciate the additional information that the
commenters provided on the performance and the benefits of
SparkTM Infusion System.
After consideration of the public comments we received, we have
determined that SparkTM Infusion System does meet 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
[[Page 61276]]
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 invited 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.
Comment: The manufacturer of the Surefire[supreg]
SparkTM Infusion System believed that the device meets the
cost criterion for device pass-through payment status.
Response: We appreciate the manufacturer's input. After
consideration of the public comments we received, we believe that
Surefire[supreg] SparkTM Infusion System meets the cost
criterion for device pass-through payment status.
After consideration of the public comments we received, we are
approving the Surefire[supreg] SparkTM Infusion System for
device pass-through payment status beginning in CY 2020.
(2) TracPatch
According to the applicant, TracPatch is a wearable device that
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 21 CFR parts 862 through 892 that is exempt from
FDA premarket notification. 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 was received in March
2019. We invited public comments on whether the TracPatch is exempt
from FDA clearance and if the TracPatch meets the newness criterion.
Comment: One commenter, the manufacturer, stated that they had
registered TracPatch as a Class I Exempt goniometer with FDA which was
listed on the Global Unique Device Identification Database (GUDID) as
of August 28, 2019.
Response: We thank the manufacturer for clarifying that TracPatch
is now registered with FDA as a Class I Exempt goniometer as of August
28, 2019.
After consideration of the public comments, we have determined that
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
stated concerns in the proposed rule with 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 determined that TracPatch was not
a material or supply furnished incident to a service. We invited public
comments on whether the TracPatch meets the eligibility criterion.
Comment: One commenter, the manufacturer, provided more information
on whether TracPatch meets the eligibility criterion. The manufacturer
states that the device is adhered to a patient's skin using a medical
adhesive patch and not Velcro strips and that the device is placed near
a wound (which we assume is the incision for the associated knee
surgery) in a sterile setting. The placement of the device near the
wound allows real time monitoring of changes to the wound and
complications and abnormalities that may arise. Also the device
placement is important to perform measurements related to the knee's
range of motion.
[[Page 61277]]
Response: The commenter did not state or provide evidence either in
its device pass-through application or in its comment on the CY 2020
OPPS/ASC proposed rule, that the TracPatch device is surgically
implanted or inserted into a patient or is applied in a wound or on
other skin lesions. In fact, the description of the Class I Exempt
goniometer on the FDA product classification web page states that the
goniometer is not an implantable device. To be considered for device
pass-through payment, a device must meet this part of the eligibility
criterion.
After consideration of all of the information we have received, we
have determined that TracPatch is not surgically implanted or inserted
into a patient or applied in a wound or on other skin lesions, and the
product thus does not meet the eligibility criterion for device pass-
through payment status. Because we have determined that TracPatch does
not meet the basic eligibility criterion for transitional pass-through
payment status, we have not evaluated this product to determine whether
it meets the other criteria required for transitional pass-through
payment for devices; that is the substantial clinical improvement
criterion, and the cost criterion.
Comment: Multiple commenters, including physicians and patients,
described the benefits of TracPatch and how it helped either them or
their patients with their recoveries from knee surgery.
Response: We appreciate the comments we received about the benefits
of TracPatch. However, we did not evaluate substantial clinical
improvement for TracPatch because it did not meet the eligibility
criterion.
After consideration of the public comments we received, we are not
approving device pass-through payment status for TracPatch for CY 2020.
(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 appeared 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 was 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 invited public comments on
whether the VNS Therapy[supreg] System for TRD meets the newness
criterion.
Comment: One commenter, the manufacturer, made additional arguments
for why the VNS Therapy[supreg] System for TRD meets the newness
criterion. The manufacturer stated that there were 22 months between
the FDA approval of the associated procedure to treat TRD in July 2005
and CMS' issuance of the national determination of non-coverage on May
4, 2007. The manufacturer asserts that during those 22 months the VNS
Therapy[supreg] System for TRD was ``realistically not available''
because of concerns about covering the TRD treatment procedure during
the period between FDA approval and the national determination of non-
coverage.
[[Page 61278]]
In another part of the manufacturer's comment, they state that the
uncertainty of coverage for the TRD treatment procedure meant that the
treatment was not available to patients during the July 2005 to May
2007 time period.
The manufacturer believes the most equitable reading of the rule
that is consistent with the intent of the criterion when it was
established in the CY 2016 OPPS final rule (80 FR 70418 through 70420)
is that the 3-year period for newness from when the VNS Therapy[supreg]
System for TRD was introduced into the market in July 2015 should have
been held in suspension from May 4, 2007 when the original national
determination of non-coverage by CMS until the subsequent national
determination allowing coverage of the VNS Therapy[supreg] System for
TRD with coverage with evidence development (CED) was released on
February 15, 2019.
The manufacturer cites CMS statements from the CY 2016 OPPS final
rule supporting this reading, including that device pass-through
payment is for devices that are truly new and do not have sufficient
claims data for CMS to analyze, and that market availability for a
device could be considered to be after its FDA approval or clearance
date where there is a national coverage determination of non-coverage
of the device within the Medicare population. The manufacturer asserts
that the reason that the newness criterion does not address the market
availability situation faced by the VNS Therapy[supreg] System for TRD
is that CMS simply did not envision that such a situation would occur.
The manufacturer asserts that the VNS Therapy[supreg] System for TRD
neurostimulator device has not been available in the market for 3 full
years, and therefore still meets the newness criterion.
Response: We disagree with the commenter's conclusion. The
manufacturer did not provide evidence to establish that the
neurostimulator device for the VNS Therapy[supreg] System for TRD was
not similar to the neurostimulator device that has been used since 1997
to treat epilepsy. With no evidence to the contrary, it appears the
neurostimulator device for the VNS Therapy[supreg] System for TRD has
been on the market continuously since 1997 and therefore fails the
newness criterion.
However, even if we were to assume the neurostimulator device for
the VNS Therapy[supreg] System for TRD was a new device upon FDA
approval for the TRD treatment procedure in July 2005, the device would
still not meet the newness criterion. The manufacturer's comment about
suggesting an equitable reading of the newness criterion consistent
with what it believed was our intent in the CY 2016 OPPS final rule (80
FR 70418 through 70420) implied that, for a device to meet the newness
standard, it had to be available in the market for less than three
years and that the availability period would be suspended if the device
was unavailable in the market due to national non-coverage. This
comment does not align with the language of Sec. 419.66(b)(1), which
states that the application for device pass-through payment must be
received within 3 years from the date of market availability and makes
no exception for periods of national non-coverage. As we stated in the
proposed rule, based on information provided in the original device
pass-through application, the device pass-through application had to be
submitted by September 2008 to meet the newness requirement.
Comment: One commenter stated that it did not believe that the VNS
Therapy[supreg] System for TRD meets the newness criterion for device
pass-through payment. The commenter states that while there have been
technical improvements with the VNS Therapy[supreg] System for TRD, the
commenter believes these are typical upgrades of an existing technology
and not evidence of a new device.
Response: We appreciate the feedback from the commenter, including
their concern that the differences cited by the manufacturer between
the neurostimulator VNS device to treat epilepsy and the
neurostimulator VNS device to treat TRD are not substantial enough to
establish the VNS Therapy[supreg] System for TRD neurostimulator device
as a new device that meets the newness criterion. A device also will
fail the newness criterion if, as noted above, it is on the market more
than three years, based either on its FDA clearance or approval date or
the date of U.S. market availability.
After consideration of all of the information we have received, we
have determined that the VNS Therapy[supreg] System for TRD does not
meet 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 determined that the VNS
Therapy[supreg] for TRD was not a material or supply furnished incident
to a service. We invited public comments on whether the VNS
Therapy[supreg] for TRD meets the eligibility criterion.
Comment: One commenter, the manufacturer, claimed that the VNS
Therapy[supreg] for TRD device meets the basic eligibility criteria for
pass-through status. The device is an integral part of the service
provided which is the adjunctive treatment of TRD. The device is used
by one patient, comes in contact with human tissue and is surgically
implanted. The manufacturer also asserts that the device is not an
instrument, apparatus, implement, or item for which depreciation and
financing expenses are recovered. The manufacturer states that the
device is not a material or supply furnished incident to a service.
Response: We appreciate the additional comments from the
manufacturer. After consideration of all of the information we have
received, we have determined that the VNS Therapy[supreg] System for
TRD does meet the device eligibility criterion as described by Sec.
419.66(b)(4).
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
[[Page 61279]]
leads), effective January 1, 2019, as an 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 similarly qualify as a new
category. 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.
Comment: The applicant asserts that the VNS Therapy[supreg] for TRD
device is not described by any of the existing device categories in the
OPPS and that the associated service was not paid as an outpatient
service as of December 31, 1996.
Response: We do not agree with the applicant's assertion. We
believe the VNS Therapy[supreg] for TRD device is described by existing
HCPCS code C1767 (Generator, neurostimulator (implantable), non-
rechargeable) and does not meet the criterion that is described by
Sec. 419.66(c)(1) because the device is described by an existing
device category. As stated in the proposed rule, OPPS does not
differentiate payment by diagnosis and therefore cannot establish new
device categories based solely on a previously described device being
used to treat a new indication. In the original pass-through
application, the applicant cited the example of the establishment of a
new category code, HCPCS code C1823 (Generator, neurostimulator
(implantable), nonrechargeable, with transvenous sensing and
stimulation leads), for the remede system even though that device is a
non-rechargeable neurostimulator and initially appeared to be covered
by HCPCS code C1767, like the VNS Therapy[supreg] for TRD device.
However, as we stated in the proposed rule, HCPCS code C1823 was
established due to specific device features that distinguish that
device category from HCPCS code C1767. The applicant has not identified
any device features of the VNS Therapy[supreg] for TRD device that
distinguish it from the category described by HCPCS code C1767.
After consideration of all of the information we have received, we
have determined that the VNS Therapy[supreg] System for TRD is
described by either an existing category or by a category previously in
effect and does not meets the requirements of Sec. 419.66(c)(1) and
the device category eligibility criterion.
Because we have determined that the VNS Therapy[supreg] System for
TRD does not meet either the newness criterion or the device category
eligibility criterion for transitional pass-through payment status, we
have not evaluated this device to determine whether it meets the other
criteria required for transitional pass-through payment for devices;
namely, the substantial clinical improvement criterion and the cost
criterion.
Comment: A commenter supported giving pass-through status for the
VNS Therapy[supreg] System for TRD because the commenter believes the
clinical benefits of the VNS Therapy[supreg] System for TRD have been
demonstrated by the studies submitted for the recent national coverage
determination that established coverage with evidence development for
the procedure.
Response: We appreciate the comment in support of the clinical
benefits of the VNS Therapy[supreg] System for TRD. However, we did not
evaluate substantial clinical improvement for the VNS Therapy[supreg]
System for TRD because this device does not meet the newness criterion
or the device category eligibility criterion.
After consideration of the public comments we received, we are not
approving VNS Therapy[supreg] System for TRD device pass-through
payment status for CY 2020.
(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 FDA on April 6, 2017. Subsequently, the applicant received
its premarket approval (PMA) application from 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 invited public comments on whether the
Optimizer[supreg] System meets the newness criterion.
Comment: The manufacturer believes that the Optimizer[supreg]
System meets the newness criterion.
Response: We appreciate the commenter's input. After consideration
of the public comment we received, we believe that 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 is not
a supply or material furnished incident to a service.
We did not receive any public comments regarding whether
Optimizer[supreg] System meets the eligibility criterion. Based on the
information we have received, we have determined that Optimizer[supreg]
System 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 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. For the
proposed rule, we had not identified an existing pass-through payment
category that describes the Optimizer[supreg] System.
Comment: The manufacturer of the Optimizer[supreg] System indicated
that there is not an existing pass-through payment category that
describes the device.
Response: We appreciate the commenter's input. After consideration
of the public comment we received, we believe that the
Optimizer[supreg] System meets the device category eligibility
criterion.
[[Page 61280]]
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). FDA
approved the Optimizer[supreg] System for NYHA Class III heart failure
patients who remain symptomatic despite guideline directed medical
therapy, who are in normal sinus rhythm, are not indicated for Cardiac
Resynchronization Therapy, and have a left ventricular ejection
fraction ranging from 25 percent to 45 percent.\18\
---------------------------------------------------------------------------
\18\ https://www.accessdata.fda.gov/cdrh_docs/pdf18/P180036B.pdf.
---------------------------------------------------------------------------
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 <130ms (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.\19\ 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).\20\
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.\21\
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\19\ 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.
\20\ 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]
\21\ 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.
---------------------------------------------------------------------------
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).\22\ 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).\23\ The applicant also presented additional
studies 24 25 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.
---------------------------------------------------------------------------
\22\ 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.
\23\ 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.
\24\ 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.
\25\ 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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[[Page 61281]]
We noted several concerns with the studies presented by the
applicant. One 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, we were concerned that there was 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 invited public comments on
whether the Optimizer[supreg] System meets the substantial clinical
improvement criterion.
Comment: The manufacturer responded to several statements regarding
Optimizer[supreg] System and substantial clinical improvement in the CY
2020 OPPS/ASC proposed rule, and asserted that Optimizer[supreg] System
meets the substantial clinical improvement criterion. The manufacturer
noted that a mortality benefit cannot be claimed based on currently
published data but that the Optimizer[supreg] System does not appear to
have a negative impact on mortality. The manufacturer acknowledged that
male patients and those that identify as white were prevalent in the
Optimizer System studies but contended that for clinical trials in
general, and for heart failure specifically, these groups are typically
over-represented. They presented several examples of cardiac device and
pharmaceutical clinical trials for the treatment of heart failure,
where a similar mix of patients in terms of gender and race existed
across unrelated trials and therapies. In response to the concern that
the average age of patients for several studies was under 65 years old,
limiting the application of the study results to the Medicare
population, the manufacturer conducted additional analyses on patients
aged 65 and older. The analysis showed that the two populations were
not dissimilar, and the manufacturer believes the clinical trial
results are applicable to the Medicare patient population.
The manufacturer presented data to demonstrate that the
Optimizer[supreg] System delivers substantial clinical improvement in
terms of improved functional status, quality of life, and exercise
tolerance. In response to the concern regarding clinical trials
enrolling sample sizes fewer than 500 patients, the manufacturer noted
that there were 638 subjects enrolled and implanted with the Optimizer
System in the U.S. randomized trials and that trials of this size are
common in Class III medical device trials, which are tailored for
gathering the required evidence to support FDA approval of novel
technology. Regarding the concern about the lack of randomization and
blinding in studies presented, the manufacturer noted that four out of
the six studies were randomized, and two of the four were also blinded
with both the control and the treatment group receiving the device.
Response: We appreciate the response to the questions we had
regarding Optimizer[supreg] System. After reviewing the additional
information provided during the public comment period, we agree that,
for patients with NYHA Class III heart failure patients who remain
symptomatic despite guideline directed medical therapy, who are in
normal sinus rhythm, are not indicated for Cardiac Resynchronization
Therapy, and have a left ventricular ejection fraction ranging from 25
percent to 45 percent, Optimizer[supreg] System is a substantial
clinical improvement over existing treatment options for this
population. The provided studies support improvements in functional
status, quality of life, and exercise tolerance, all of which are
relevant outcomes in this population. While the studies describe
improved survival in a subset of patients and substantially reduced
hospitalizations, the numbers are small, the observation period is
short, and the data on readmissions are not specifically highlighted.
However, we accept the manufacturer's note that while mortality benefit
cannot be claimed based on currently published data, the
Optimizer[supreg] System does not appear to have a negative impact on
mortality.
Accordingly, we have determined that the Optimizer[supreg] System
has demonstrated substantial clinical improvement relative to existing
treatment options for patients diagnosed with moderate to severe
chronic heart failure. As the Optimizer[supreg] System received a
Breakthrough Device designation from FDA, it meets the substantial
clinical improvement criterion under this alternative pathway as well.
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,
[[Page 61282]]
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 invited 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.
Comment: The manufacturer of the Optimizer[supreg] System believed
that the device meets the cost criterion for device pass-through
payment status. The manufacturer noted a point of clarification
regarding the average sales price (ASP) of the Optimizer[supreg] System
used for these calculations. They stated that the $15,700 price in the
application was based on discounted clinical trial pricing used during
the FDA IDE clinical trials to cover the manufacturing and research
costs only. After FDA approval on March 21, 2019, commercial pricing
took effect, changing the Optimizer[supreg] System to $23,000. The
manufacturer contended the Cost Criteria are still met with the current
$23,000 ASP for the Optimizer Smart System.
Response: We appreciate the manufacturer's input. After
consideration of the public comments we received, we believe that
Optimizer[supreg] System meets the cost criterion for device pass-
through payment status.
After consideration of the public comments we received, we believe
that the Optimizer[supreg] System qualifies for device pass-through
payment status and we are approving the application for device pass-
through payment status for the Optimizer[supreg] System beginning in CY
2020.
(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.\26\ 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 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.
---------------------------------------------------------------------------
\26\ 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), 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
invited public comments on whether the AquaBeam[supreg] System meets
the newness criterion. We did not receive any comments on the newness
of the AquaBeam[supreg] System. We believe AquaBeam[supreg] System
meets the transitional pass-through payment 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
[[Page 61283]]
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 invited public comments
on whether the AquaBeam[supreg] System meets the eligibility criteria
at Sec. 419.66(b).
Comments: We received several comments in regards to the
eligibility of the AquaBeam[supreg] System. While other stakeholders
commented generally on the eligibility of the AquaBeam[supreg] System,
the applicant provided additional detail in support of AquaBeam's
eligibility. Stakeholders agreed that AquaBeam[supreg] System was
eligible, and providing the following reasons: AquaBeam[supreg] System
is not used to cut or otherwise create a surgical opening; the AquaBeam
System handpiece is not a commonly used operation room instrument; the
AquaBeam System handpiece is integral to the service provided; it is a
single use item; it comes into contact with human tissue and finally,
it is inserted into the prostatic urethra through a natural orifice.
The applicant restated that the AquaBeam[supreg] System does not
cut or otherwise create a surgical opening. They reiterated that the
AquaBeam[supreg] System is inserted into the body through a natural
orifice at the meatus of the urethra without any cutting. The applicant
again stated that the AquaBeam[supreg] System is not used to cut or
otherwise create a surgical opening at the meatus, or the prostatic
urethra. The applicant further detailed that the purpose of the
ablation procedure is to remove the tissue that is obstructing urine
flow through the urethra as well as to remove additional tissue that
may obstruct the urethra causing LUTS. The applicant claimed that the
removal of the obstruction is not the creation of a surgical opening
for inserting the device and that the device is already positioned
inside the body.
The applicant further argued that ablating both the prostatic
urethra and the prostate tissue is central to the treatment of BPH
symptoms. Additionally, they argued that clinically, the distinction
between the prostatic urethra and the prostate tissue are not
meaningful to treat BPH and the procedure does not create an opening at
the urethra to access the prostate for tissue removal. The applicant
further argued that the plain meaning of the language used to expand
eligibility to include devices inserted through natural orifices \27\
means that passing the AquaBeam[supreg] System through the natural
orifice into the body is taking the place of creating a surgical
opening.
---------------------------------------------------------------------------
\27\ 70 FR 68630.
---------------------------------------------------------------------------
Response: We appreciate the comments submitted by the stakeholders
on the eligibility of the AquaBeam[supreg] System. After consideration
of submitted comments and after gaining additional clarity on the
clinical details of the procedure, we have determined that the
AquaBeam[supreg] System meets the eligibility criteria at Sec.
419.66(b). Specifically, we believe that the AquaBeam[supreg] System is
inserted into the urethra, a natural orifice. We recognize that after
being inserted into the urethra, the device then ablates both the
prostatic urethra and the prostate tissue in order to relieve and treat
the symptoms of BPH.
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. In the
proposed rule, we had 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 invited
public comments on whether the AquaBeam[supreg] System meets this
criterion.
We did not receive public comments that identified an existing
pass-through payment category that describes the AquaBeam[supreg]
System. We believe that 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
[[Page 61284]]
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 prostate (HoLEP) \28\ and photoselective vaporization (PVP).\29\
---------------------------------------------------------------------------
\28\ 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).
\29\ 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.\30\ 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.
---------------------------------------------------------------------------
\30\ 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.
---------------------------------------------------------------------------
In the CY 2020 OPPS/ASC proposed rule, we stated that we believed
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 were
concerned that there was 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 invited public
comments on whether the AquaBeam[supreg] System meets the substantial
clinical improvement criterion.
Comment: We received several comments regarding the substantial
clinical improvement that the AquaBeam[supreg] System may provide. They
were concerned 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 and that there were no studies provided
comparing other treatment modalities to show that the AquaBeam[supreg]
System is a significant improvement over other available procedures.
The applicant commented that in the FY 2019 IPPS notice of final
rulemaking, CMS concluded that the WATER study findings were
statistically significant and showed Aquablation superior to TURP in
safety, as well as that patients in the WATER study with prostates
larger than 50 mL in volume treated with Aquablation had superior
improvement in quantifiable symptom outcomes.
Additionally, the applicant provided that TURP is the gold standard
and most common treatment for LUTS due to BPH and that through a direct
comparison to TURP, the WATER study demonstrates that the
AquaBeam[supreg] System is a substantial clinical improvement over the
gold standard. The applicant also provides that the direct comparison
to TURP in the WATER study allows a comparison of Aquablation to other
treatment modalities, including transurethral incision of the prostate,
photoselective vaporization prostatectomy, transurethral needle
ablation of the prostate, transurethral microwave therapy, and
prostatic urethral lift. The applicant included several additional
pieces of clinical literature to demonstrate that the above-mentioned
modalties are inferior in efficacy to TURP in numerous objective and
subjective measurers, including peak urine flow, post-void reduction,
and BPH symptom reduction.31 32 33
---------------------------------------------------------------------------
\31\ Christidis, D. et al. Minimally Invasive Therapies for
Benign Prostatic Hypertrophy: The Rise in Minimally Invasive
Surgical Therapies, Prostate International. 5, 41-46 (2017).
\32\ Bachmann A, Tubaro A, Barber N 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 multicenter randomised trial--the
GOLIATH study. Eur Urol 2014; 65: 931.
\33\ Sonksen J et al. Prospective, Randomized, Multinational
Study of Prostatic Urethral Lift Versus Transurethral Resection of
the Prostate: 12-month Results from the BPH6 Study. Eur Urol 2015;
68:643-52.
---------------------------------------------------------------------------
Additionally, the applicant provided published data on a list of
all surgical treatment modalities. The applicant claims that based on
this provided data it is evident that larger prostates are a clinical
challenge for all other transurethral surgical approaches to BPH due to
high rates of sexual dysfunction in TURP, SP, PVP, HoLEP, and ThuLEP;
high rates of blood transfusions in TURP and SP; longer operative time
due to the size of prostate in PVP, HoLEP, and ThuLEP; transurethral
resection (TUR) syndrome due to length of procedure; high rates of re-
intervention or secondary procedures in PVP; and, transient
incontinence in HoLEP and ThuLEP. The applicant states that these
complication have traditionally limited the treatment of larger
prostates in the outpatient setting. The applicant further details that
the reason for the increase in complications in large prostates is due
to the length of the resection time required. In support of their claim
of being appropriate for the outpatient study, the applicant restates
findings from the WATER II study, which utilized Aquablation therapy to
treat large prostates 80 to 150 mL in volume, with greater than 50
percent of the cases involving large prostates in the hospital
outpatient setting. The average Aquablation operative time was 37
minutes, including 8 minutes of resection time and 29 minutes used for
planning and robotic programming.
Response: We appreciate the submission of public comments.
[[Page 61285]]
Specifically, we appreciate the additional scientific data provided
that demonstrates the AquaBeam[supreg] System's superiority to other
techniques, specifically for reducing operative time and complications
in general, especially for larger prostates. We agree that the results
of the WATER study are statistically significant with a 95 percent
confidence interval of the difference between AquaBeam[supreg] and TURP
and show AquaBeam[supreg] is superior to TURP in safety as evidenced by
a lower proportion of persistent Clavien-Dindo (CD) Grade 1 adverse
events (incontinence, ejaculatory dysfunction and erectile dysfunction)
at 3 months. We also agree that when considering CD Grade 2 and above
events (events requiring pharmacological treatment, blood transfusions,
or endoscopic, surgical or radiological interventions) the WATER study
demonstrated a superior safety rate to TURP. Additionally, patients
enrolled in the WATER study with prostate sizes greater than 50 mL in
volume and treated with AquaBeam[supreg] had superior BPH symptom
reduction (IPSS) than those treated with TURP, as well as better peak
urinary flow rates at 6 months (Qmax), improved ejaculatory function,
and improved incontinence scores at 3 months.
Additionally, results from the WATER II study for patients with
large prostates demonstrate better outcomes of the AquaBeam[supreg]
System over open prostatectomy, regarding shorter operative time,
shorter length of stay, and decreased rates of severe hemorrhage and
transfusions. We also agree that the minimally invasive nature of
Aquablation offers men with large prostates (>80 mL) an outpatient
option. In conclusion, after review of the additional data and
literature, we agree that the AquaBeam[supreg] System provides a
substantial clinical improvement.
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). Given that there are no device-related costs in the APC
payment amount and the AquaBeam[supreg] System has an estimated average
reasonable cost of $2,500, 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 invited public comments on whether the AquaBeam[supreg] System
meets the device pass-through payment criteria discussed in this
section, including the cost criterion.
Comment: The manufacturer believed that the AquaBeam[supreg] System
meets the device pass-through payment criteria, including the cost
criterion.
Response: We thank the manufacturer for their input. After
consideration of the public comments we received, we believe the
AquaBeam[supreg] System meets the cost criterion and we are approving
it for device pass-through payment status beginning in CY 2020.
(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 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.\34\ 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 U.S. have PAD,
including 12 to 20
[[Page 61286]]
percent of individuals who are age 60 years old and older.\35\
---------------------------------------------------------------------------
\34\ 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.
\35\ 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 invited public comments on whether the
EluviaTM Drug-Eluting Vascular Stent System meets the
newness criterion. We did not receive public comments in regards to
Eluvia's newness, however, since the application was received within 3
years of the initial date of FDA approval or clearance, we believe that
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 invited public comments on whether
the EluviaTM Drug-Eluting Vascular Stent System meets the
eligibility criterion at Sec. 419.66(b).
We did not receive any public comments on this issue. We believe
that EluviaTM Drug-Eluting Vascular Stent System 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 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 invited
public comments on this issue.
Comment: One commenter stated that the stent platform, the drug
coating, and the polymer coating of the EluviaTM Drug-
Eluting Vascular Stent System are not new. The commenter compared
EluviaTM to the Zilver PTX drug-eluting stent, arguing that
both are self-expanding nitinol stents coated with paclitaxel. The
commenter also compared the underlying stent platform and delivery
system of EluviaTM to Boston Scientific's Innova self-
expanding stent.\36\ Finally, the commenter believed that the polymers
used in the EluviaTM coating are the same used in the Xience
V and Promus Element coronary stents.\37\
---------------------------------------------------------------------------
\36\ Gray W, 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; Published Online
September 22, 2018; http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
\37\ Gray W, 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; Published Online
September 22, 2018; http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
---------------------------------------------------------------------------
Comment: Another commenter, the manufacturer, restated that they
are vastly different than the Zilver PTX drug eluting stent, as well as
any other device. The commenter provided that Eluvia's polymer matrix
layer is different from the paclitaxel-coated Zilver PTX, and allows
for targeted, localized, sustained, low-dose amorphous paclitaxel
delivery with minimal systemic distribution or particulate loss. The
commenter also states that there is a difference in the diffusion
gradient: Paclitaxel is delivered to the lesion via a diffusion
gradient with poly(vinylidene fluoride)-co-hexafluoropropylene, whereas
they state that the Zilver PTX does not have a diffusion gradient. The
commenter stated that EluviaTM releases paclitaxel directly
to the target lesion, while Zilver PTX release is non-specific to the
target lesion. The commenter also stated that Eluvia releases
paclitaxel over approximately 12 to 15 months, while Zilver PTX's
release is complete at two months. The commenter stated that these
significant differences in the device designs impact drug dose, drug
release mechanism, and drug release kinetics.
Response: We appreciate the stakeholders' comments and comparison
of the polymer matrix EluviaTM versus the paclitaxel-coated
Zilver PTX and several other devices. After consideration of the
comments, we
[[Page 61287]]
believe that EluviaTM device is a new design with a unique
mechanism of action, and therefore is not described by any current
device category. Therefore, the EluviaTM device meets the
device category eligibility 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. 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 MAJESTICT \38\ 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 asserted 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 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.
---------------------------------------------------------------------------
\38\ M[uuml]ller-H[uuml]lsbeck, S., et al., ``Long-Term Results
from the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for
Femoropopliteal Treatment: 3-Year Follow-up,'' Cardiovasc Intervent
Radiol, December 2017, vol. 40(12), pp. 1832-1838.
---------------------------------------------------------------------------
With regard to the EluviaTM stent achieving superior
primary patency, the applicant submitted the results of the IMPERIAL
\39\ 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.
---------------------------------------------------------------------------
\39\ 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 provided that the superior primary patency
results at the SFA are notable 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
[[Page 61288]]
proliferation and matrix formation.\40\ 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.
---------------------------------------------------------------------------
\40\ 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[middot]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 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.\41\ 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[middot]0 (SD
0[middot]2) in both groups at 12 months (baseline mean ankle-brachial
index 0[middot]7 [SD 0[middot]2] for EluviaTM; 0[middot]8
[0[middot]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 shown in Table 39 as follows:
---------------------------------------------------------------------------
\41\ 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.
---------------------------------------------------------------------------
[[Page 61289]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.062
We noted that the IMPERIAL study, which showed significant
differences in primary patency at 12 months, was designed for
noninferiority and not superiority. Therefore, we wereconcerned 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,\42\ although
the EluviaTM system was not included in the meta-analysis.
We were also concerned that the findings from this study indicated that
the data suggesting that drug-coated stents are substantially
clinically improved are unconfirmed. We invited 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.
---------------------------------------------------------------------------
\42\ 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 noted 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 discussed
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 one year will be important to confirm
the durability of the efficacy of the EluviaTM stent.\43\
The commenter stated that, at
[[Page 61290]]
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 three 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 one 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.
---------------------------------------------------------------------------
\43\ 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 were
concerned that there was a lack of sufficient evidence that the
EluviaTM Vascular Drug-Eluting Stent System provides a
substantial clinical improvement over other similar products. We
invited public comments on whether EluviaTM Vascular Drug-
Eluting Stent System meets the substantial clinical improvement
criterion.
Comment: One commenter, the manufacturer, stated that the IMPERIAL
trial's design as a non-inferiority study is consistent with accepted
research methodology and is typical of many head-to-head trials of
medical devices. The commenter stated that they defined a pre-
specified, post-hoc superiority analysis before evaluation of the
clinical trial results, the non-inferiority and subsequent superiority
testing methodology and results are not subjected to bias. The
commenter argued that the pre-specified success criteria for
superiority used the same logic as the pre-specified success criteria
for non-inferiority. The commenter stated: ``Eluvia will be concluded
to be superior to Zilver PTX for device effectiveness if the one-sided
lower 95 percent confidence bound on the difference between treatment
groups in 12-month primary patency is greater than zero.'' The
commenter believes that the more stringent one-sided lower 97.5 percent
confidence bound (shown as two-sided 95 percent confidence interval on
the difference between treatment groups) was observed to be greater
than zero and the corresponding p-value was 0.0144. The commenter also
provided that the aforementioned data were published in The Lancet
following its rigorous peer-review process, suggesting that the claims
are not misleading and are supported by valid scientific evidence. The
commenters also claimed that clinical guidelines support performing a
pre-specified post-hoc analysis given specific requirements, that they
believe they met.
Comment: Two commenters mentioned the meta-analysis of paclitaxel-
coated balloons and stents \44\ that initiated an FDA panel and
analysis. The meta-analysis and systematic review of several 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 and found that there is an increased risk of death following
the application of paclitaxel-coated devices.
---------------------------------------------------------------------------
\44\ Katsanos, K., Spiliopoulos, S., Kitrou, P., Krokidis, M., &
Karnabatidis, D. (2018). Risk of Death Following Application of
Paclitaxel[hyphen]Coated Balloons and Stents in the Femoropopliteal
Artery of the Leg: A Systematic Review and Meta[hyphen]Analysis of
Randomized Controlled Trials. Journal of the American Heart
Association, 7(24). https://doi.org/10.1161/jaha.118.011245.
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Commenters stated that EluviaTM is different from the
devices that were studied in the meta-analysis of paclitaxel-coated
balloons and stents. Specifically, the commenters claim that
EluviaTM delivers paclitaxel in lower doses than the devices
in the meta-analysis and is the only peripheral device to deliver
paclitaxel through a sustained-release mechanism of action where
delivery of paclitaxel is controlled and focused on the target lesion.
The commenters, including the applicant, believe that the suggestion in
the meta-analysis of a late-term mortality risk associated with
paclitaxel-coated devices is not directly applicable to the
EluviaTM device.
Additionally, the applicant stated that given the differences
between EluviaTM's paclitaxel delivery mechanisms and other
peripheral paclitaxel-coated devices, it would be more appropriate to
examine safety considerations and data for Eluvia relative to products
with similar mechanisms of action and dose levels. The applicant
provides the TAXUS coronary stent as such an appropriate comparator,
stating that Eluvia and TAXUS are similar in design intent and
mechanism of action. In support, the applicant provided additional data
showing a 5-year all-cause mortality observed between paclitaxel-
eluting and bare metal stents. The applicant also stated that coronary
and peripheral atherosclerotic lesions have similar disease
presentation and the same antiproliferative impact of paclitaxel on the
lesions regardless of vessel bed. The applicant recommends that signals
for any potential long-term systemic effects of targeted paclitaxel
eluted from a stent polymer matrix would be apparent in patients
treated with TAXUS. As opposed to the meta-analysis and the resulting
FDA panel analysis, the applicant believes that data on TAXUS can be
used to gauge potential system
[[Page 61291]]
effects of paclitaxel eluted from Eluvia. The applicant argues that the
TAXUS stent's safety and effects has been extensively studied with more
than 14 years of commercial experience and clinical trial data out to
10 years 45 46 47 48 in patients with coronary implants and
5 years for those with infrapopliteal implants. The applicant then
recognizes that mortality rates for patients treated for peripheral
artery disease (PAD) are not directly comparable to rates for patients
with coronary artery or infrapopliteal disease due to appreciable
differences in baseline risk. The applicant states that an additive
effect due to low dose paclitaxel elution over time, if it exists,
would have been observed in patients receiving treatment in these
vessel beds. In regards to the meta-analysis and the risk of late
mortality, the applicant further argues that understanding possible
effects of paclitaxel exposure is not possible without complete
analysis of uniformly re-adjudicated patient level data, particularly
with treatment arm crossover and previous interventions or subsequent
reinterventions with paclitaxel-coated devices, which occurred in the
analyzed studies.
---------------------------------------------------------------------------
\45\ Yamaji K, Raber L, Zanchin T, et al. Ten-year clinical
outcomes of first-generation drug-eluting stents: The Sirolimus-
Eluting vs. Paclitaxel-Eluting Stents for Coronary Revascularization
(SIRTAX) VERY LATE trial. Eur Heart J. 2016;37(45):3386-3395.
\46\ Ormiston JA, Charles O, Mann T, et al. Final 5-year results
of the TAXUS ATLAS, TAXUS ATLAS Small Vessel, and TAXUS ATLAS Long
Lesion clinical trials of the TAXUS Liberte paclitaxel-eluting stent
in de-novo coronary artery lesions. Coron Artery Dis. 2013;24(1):61-
68.
\47\ Kereiakes DJ, Cannon LA, Dauber I, et al. Long-term follow-
up of the platinum chromium TAXUS Element (ION) stent: The PERSEUS
Workhorse and Small Vessel trial five-year results. Catheter
Cardiovasc Interv. 2015;86(6):994-1001.
\48\ Stone GW, Ellis SG, Colombo A, et al. Long-term safety and
efficacy of paclitaxel-eluting stents final 5-year analysis from the
TAXUS Clinical Trial Program. JACC Cardiovasc Interv. 2011;4(5):530-
542.
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The applicant also provided responses to several comments that CMS
noted in the CY 2020 OPPS/ASC proposed rule that were originally
mentioned during and following the NTAP Town Hall meeting (84 FR
39479). In the CY 2020 OPPS/ASC proposed rule, CMS noted a comment that
showed concern over the EluviaTM IMPERIAL study's citation
of a reduced rate of ``Subsequent Therapeutic Interventions''. The
applicant states that the use of the term ``Subsequent Therapeutic
Interventions'' was used as a lay explanation for target lesion
revascularization. The applicant then states that it has recently
obtained and analyzed IMPERIAL trial 2-year TLR results, which they
also released at the FDA panel meeting on June 19, 2019. The applicant
states that 1-year trial results, published in The Lancet, demonstrated
a 50 percent reduction in TLRs and 2-year data demonstrated a
statistically significantly (p-value not provided) lower rate of repeat
re-interventions at 2 years compared to Zilver PTX. The applicant
states that the clinical impact of fewer TLR procedures is significant
and therefore demonstrates substantial clinical improvement.
The applicant also addressed concerns regarding hospital
readmissions. Specifically, the applicant stated that in the NTAP Town
Hall Eluvia Meeting, they presented 12-month readmission rates for
Eluvia (3.9 percent) and Zilver PTX (7.1 percent), with a self-reported
p-value of 0.1369. The applicant argues that statistical significance
of the 12-month readmission rates should not be expected to be
statistically significant due to the small number of patients. They
conclude their response by stating that the data suggests a lower
patient and health system burden for rehospitalization of patients for
EluviaTM versus patients for Zilver PTX.
Additionally, the applicant responded to concerns regarding long-
term data and real-world evidence, stating that due to the nature of
the transitional pass-through status requirements for medical devices,
EluviaTM is new to the market and would no longer meet the
newness criterion if the applicant were to wait until 5-year data are
available. The applicant further stated that Medicare NTAP precedent
suggests that one-year peer reviewed published results are sufficient
to prove substantial clinical improvement, given that at the time of
Zilver PTX's NTAP approval they only provided 12-month data published
in peer-reviewed literature.\49\ The applicant further argues that
waiting for a substantial amount of real-world evidence for the use of
the Eluvia\TM\ drug-eluting stent would disqualify the technology for
the transitional pass-through consideration, as the technology would no
longer be considered new by the time the data are available.
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\49\ 84 FR 39479.
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Response: We appreciate the comments. We are aware of FDA's actions
in regards to the meta-analysis of paclitaxel devices and the late
mortality signal in patients treated for PAD with paclitaxel-coated
balloons and paclitaxel-eluting stents. We agree with the applicant
that mortality rates for patients treated for peripheral artery disease
are not directly comparable to rates for patients with coronary artery
or infrapopliteal. We have continued to closely follow FDA's guidance
and recommendations for the use of paclitaxel-coated balloons and
paclitaxel-eluting stents for PAD, with details provided below.
On June 19-20, 2019, FDA convened a public meeting of the
Circulatory System Devices Panel of the Medical Devices Advisory
Committee to discuss, analyze, and make recommendations on the topic of
a potential late mortality signal after treatment of PAD in the
femoropopliteal artery with paclitaxel-coated balloons and paclitaxel-
eluting stents. The Panel concluded that a late mortality signal
associated with the use of paclitaxel-coated devices to treat
femoropopliteal PAD was present. With that, the Panel and FDA
cautiously interpreted the magnitude of the signal due to multiple
limitations in the available data including: Wide confidence intervals
due to a small sample size, pooling of studies of different paclitaxel-
coated devices that were not intended to be combined, substantial
amounts of missing study data, no clear evidence of a paclitaxel dose
effect on mortality, and no identified pathophysiologic mechanism for
the late deaths. The Panel and FDA further concluded that additional
clinical study data are needed to fully evaluate the late mortality
signal.
As of August 7, 2019,\50\ FDA continues to actively work with the
manufacturers and investigators on developing additional clinical
evidence to better assess the long-term safety of paclitaxel-coated
devices. They continue to assert that data could potentially suggest
that paclitaxel-coated balloons and stents may improve blood flow to
the legs and decrease the likelihood of repeat procedures to reopen
blocked blood vessels compared to uncoated devices. However, they also
continue to stress the importance of clinicians weighing potential
benefits of the paclitaxel-coated devices with the potential risks,
including late mortality.
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\50\ https://www.fda.gov/medical-devices/letters-health-care-providers/august-7-2019-update-treatment-peripheral-arterial-disease-paclitaxel-coated-balloons-and-paclitaxel.
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After consideration of public comments and the latest available
information from FDA advisory panel, we note that FDA's panel's has
continued to review data that has identified a potentially concerning
signal of increased long-term mortality in study subjects treated with
paclitaxel-coated products compared to patients treated with uncoated
devices. We also note that FDA determined that the analysis revealed no
clear evidence of a
[[Page 61292]]
paclitaxel dose effect on mortality. While FDA continues to further
evaluate the increased long-term mortality signal and its impact on the
overall benefit-risk profile of these devices, we remain concerned that
we do not have enough information to determine that the
EluviaTM device represents a substantial clinical
improvement over existing devices. Therefore, we are not approving the
EluviaTM device for CY 2020 device transitional payment. We
will continue to monitor any new information and/or recommendations as
they become available.
(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.\51\ Additionally, post-traumatic arthritis
develops after an acute direct trauma to the joint and can cause 12
percent of all osteoarthritis cases.\52\ Common causes leading to PTOA
include intra-articular fractures and meniscal, ligamentous and
chondral injuries.\53\ 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.\54\ 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.
---------------------------------------------------------------------------
\51\ Greaser M, Ellington JK. 2014. ``Ankle arthritis.'' Journal
of Arthritis, 3:129. doi:10.4172/2167-7921.1000129.
\52\ 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.
\53\ Ibid.
\54\ 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), 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 invited public comments on
whether the AUGMENT[supreg] Bone Graft meets the newness criterion.
Comment: We received one comment from the manufacturer restating
the date of their application and their initial FDA approval or
clearance.
Response: As the application was received within 3 years of the
date of the initial FDA approval or clearance, we believe that
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 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.''
We did not receive any public comments on these issue. We continue
to believe that there is no existing pass-through category that
describes AUGMENT[supreg] Bone Graft and have determined that
AUGMENT[supreg] Bone Graft meets this eligibility 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 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
[[Page 61293]]
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.\55\ 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[hyphen]cm line
between the ``no pain'' anchor and the patient's mark represents the
level of pain. We were 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.\56\ Another concern was the time period of the study because
certain ankle arthrodesis complications such as ankle replacement and
repeat arthrodesis can happen more than two years after the initial
surgery.\57\ 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.
---------------------------------------------------------------------------
\55\ 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.
\56\ 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.
\57\ 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.
---------------------------------------------------------------------------
We invited public comments on whether the AUGMENT[supreg] Bone
Graft meets the substantial clinical improvement criterion.
Comment: We received several comments in regards to our inquiry of
whether or not RIA is an appropriate comparator to AUGMENT[supreg] Bone
Graft. Specifically, the applicant asserted that the standard of care
has been autograft, as evidenced by peer-review literature, a review of
claims, and randomized controlled trials. The commenters further
asserted that the RIA technique is another way to harvest autograft,
requires a separate incision, and is not appropriate given the volume
of graft needed for ankle and hindfoot arthrodesis. The applicant
further argued that given that the RIA technique still requires a
separate incision, the concerns surrounding the second procedure,
including pain and potential complications, would still apply. Finally,
the applicant asserted that the RIA technique has additional risks and
complications, including: A steep learning curve for surgeons with the
potential for technical errors creating risk of potential
complications;\58\ select populations for whom the technique is not
appropriate, including patients with osteoporosis and osteopenia, as
well as elderly patients;\59\ and, risk for fractures, penetration of
the anterior cortex, violation of the knee joint, blood loss, and
pressure emboli. 60 61 62
---------------------------------------------------------------------------
\58\ Haubruck P, Ober J, Heller R, Miska M, Schmidmaier G,
Tanner MC (2018) Complications and risk management in the use of the
reaming-irrigator-aspirator (RIA) system: RIA is a safe and reliable
method in harvesting autologous bone graft. PLoS ONE 13(4):
e0196051.
\59\ Ibid.
\60\ Dimitriou R, Mataliotakis GI, Angoules AG, et al.
Complications following autologous bone graft harvesting from the
iliac crest and using the RIA: a systematic review. Injury. 2011
Sep;42 Suppl 2:S3-15.
\61\ See Complications and risk management in the use of the
reaming-irrigator-aspirator (RIA) system: RIA is a safe and reliable
method in harvesting autologous bone graft, supra.
\62\ See Use of the reamer-irrigator-aspirator technique to
obtain autograft for ankle and hindfoot arthrodesis, supra.
---------------------------------------------------------------------------
The applicant also commented on concerns regarding long-term
outcomes. In the CY 2020 OPPS/ASC proposed rule, we noted a potential
lack of data on AUGMENT[supreg] beyond 2 years after the initial
procedure. In response, the applicant submitted information on ongoing
longer-term post-market surveillance data for AUGMENT[supreg].
Specifically, the applicant describes FDA post-market approval studies
as a post-market requirement for the FDA PMA approval order to be
submitted in Q4 2019.
In response to our concern about potential safety and adverse event
rates, the applicant stated that available data demonstrates that the
benefits of AUGMENT[supreg] outweigh the risks. Specifically, the
applicant stated that although the reported percentage of infection
rates outlined in the FDA's Summary of Safety and Effectiveness Data
were higher for the AUGMENT[supreg] versus autograft, this is due to
various infections unrelated to ankle and hindfoot arthrodesis. The
applicant focused on infections related to the surgical support and
commented that there was a dramatically lower infection rate, not
significantly different between AUGMENT[supreg] versus autograft (p =
0.447). The applicant reported that surgical site infections occurred
in 7 percent of AUGMENT[supreg] subjects and 9.2 percent in traditional
autograft procedure subjects. The applicant also stated that it is
common when studying a novel therapy against an active comparator that
is known to be safe and effective to use a non-inferiority study. The
applicant also stated that they conducted an additional analysis of the
IDE trial data to determine the impact of graft type (AUGMENT[supreg]
Bone Graft versus autograft) and subject age (over 65 vs those 65 and
younger) on fusion outcomes.\63\ The applicant believed that the data
confirm results of prior studies that have found that autograft tissue
quality is affected by age. The applicant suggested that while
AUGMENT[supreg] was non-inferior to autograft overall, the elderly
population data shows better odds of fusion success with
AUGMENT[supreg] compared with autograft.
---------------------------------------------------------------------------
\63\ Haddad SL, Berlet GC, Baumhauer JF, et al. Impact of
patient age and graft type on fusion following ankle and hindfoot
arthrodesis. Combined Australia & New Zealand Orthopaedic Foot &
Ankle Societies Conference, Surfers Paradise, Queensland, Australia,
2019
---------------------------------------------------------------------------
Response: We appreciate the additional information and analysis
provided by the applicant and other stakeholders. After reviewing the
additional information provided by the applicant and other stakeholders
addressing our concerns raised in the CY 2020 OPPS/ASC proposed rule,
we agree with the applicant that AUGMENT[supreg] provides a substantial
clinical improvement by significantly reducing, or eliminating, chronic
pain (measured at > 20mm on VAS) associated with the autograft donor
site with the elimination of the donor site procedure, at 6 months and
12 months. We also note that in subjects 65+, AUGMENT[supreg] was more
than twice as
[[Page 61294]]
likely as autograft to result in fusion.\64\ Finally, after analyzing
the additional data provided through public comment, we believe that
AUGMENT[supreg] will provide a substantial clinical improvement by
reducing chronic pain and also reducing complications.
---------------------------------------------------------------------------
\64\ Ibid.
---------------------------------------------------------------------------
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 \65\ 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.
---------------------------------------------------------------------------
\65\ Due to the timing of the application, the AUGMENT[supreg]
Bone Graft cost values were calculated using the 2018 proposed rule
data.
---------------------------------------------------------------------------
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 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 believe 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 invited public comments on whether
the AUGMENT[supreg] Bone Graft meets the device pass-through payment
criteria discussed in this section, including the cost criterion.
Comment: The applicant submitted a comment in support of our cost
analysis of AUGMENT[supreg] Bone Graft.
Response: We thank the applicant for their comment in support, and
continue to believe AUGMENT[supreg] Bone Graft meets the cost criteria.
After consideration of the public comments we received, we are
approving the AUGMENT[supreg] Bone Graft for device pass-through
payment status beginning in CY 2020.
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 the 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
[[Page 61295]]
for complete details on those potential revisions. We noted that any
responses to public comments we received 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, would be included in this final rule with comment period
and would inform future OPPS rulemaking.
Comment: We received one comment addressing this RFI, which
recommended that CMS demonstrate greater flexibility in considering
what constitutes substantial clinical improvement, including evidence
developed through data registries and evidence from markets outside the
U.S.
Response: We thank the commenter for their response. We note that
we accept a wide range of data and other evidence to help determine
whether a device meets the substantial clinical improvement criterion.
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, FDA programs for helping to expedite the
development and review of transformative new devices that are intended
to treat or diagnose serious diseases or conditions and address unmet
medical needs (referred to, for purposes of this rule) as FDA's
expedited programs) have continued to evolve in tandem with advances in
medical innovations and technology. There is currently one FDA
expedited 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 existence of the current and past FDA programs
for helping to expedite the development and review of certain devices
intended to treat or diagnose serious or life-threatening or
irreversibly debilitating 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, at the time
of 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 a FDA expedited program, the evidence
base for demonstrating substantial clinical improvement in accordance
with CMS' current standard may not be fully developed. 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 proposed 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 designation as a Breakthrough Device, and because we
recognize that such devices may not have a sufficient evidence base to
demonstrate substantial clinical improvement at the time of FDA
marketing authorization, we proposed to amend the OPPS device
transitional pass-through payment regulations to create an alternative
pathway to demonstrating substantial clinical improvement that would
enable devices that receive FDA marketing authorization and are part of
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 for
devices that have received FDA marketing authorization and are part of
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 that have received FDA marketing authorization and are
part of the Breakthrough Devices Program 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 proposed to revise paragraph (c)(2) under Sec. 419.66.
Under proposed revised paragraph (c)(2), we proposed to establish an
alternative pathway where applications for device pass-through payment
status for new
[[Page 61296]]
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, FDA) and that is part of 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 noted that this proposal aligns with a proposal in
the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19371 through 19373) and
final rule (84 FR 42292 through 42297) and will help achieve the goals
of expedited access to innovative devices to further reduce
administrative burden.
Comment: MedPAC opposed our proposal and stated that participation
in the FDA Breakthrough Device Program does not necessarily reflect
improvements in outcomes or justify increased payment for Medicare
beneficiaries. MedPAC expressed concern that such a policy would
provide inappropriate incentives for providers to use new technology
without proven safety or efficacy by allowing increased payment for the
new technology.
Most commenters supported the proposal for an alternative pathway
and offered suggestions that they thought would enhance the proposal.
Specifically, commenters requested that CMS expand the alternative
pathway to include other FDA designations, namely the Expedited Access
Pathway and the Regenerative Medicine Advanced Therapy (RMAT)
Designation. A commenter requested that similar to the IPPS policy, we
also waive the newness criterion under the alternative pathway.
Commenters also requested that we expand the alternative pathway to New
Technology APCs, drug pass-through payment, and non-opioid
alternatives.
Finally, a number of commenters encouraged us to ensure coverage
for devices that are approved under the alternative pathway.
Response: We appreciate the commenters' support for the alternative
pathway proposal. After reviewing the public comments, we continue to
believe that the benefits of providing earlier access to Breakthrough
Devices can improve beneficiary health outcomes support establishing
this alternative pathway. While we appreciate the commenter's concern
regarding potential negative incentives, we continue to believe that it
is appropriate to facilitate beneficiary access to transformative new
medical devices by establishing an alternative pathway for devices that
receive FDA marketing authorization through FDA's Breakthrough Devices
Program, and not to require substantial clinical improvement as a
requirement for pass-through status for these devices because the
evidence base to demonstrate substantial clinical improvement may not
be completely developed at the time of FDA marketing authorization for
such devices, which would delay their eligibility for pass-through
status.
In regards to expanding the alternative pathway to include pass-
through drugs and New Technology APCs, we continue to believe that it
is appropriate to distinguish between drugs and devices, while we
continue to work on other initiatives for drug affordability; a
priority for this Administration. Importantly, substantial clinical
improvement is not a requirement to be assigned to a New Technology APC
or for drug pass-through status, so it is not necessary to waive such a
criterion under either of these policies. Finally, we appreciate the
commenters' suggestion that we should apply the alternative pathway to
other types of FDA designations and will continue to take those
comments into consideration for future rulemaking, where appropriate.
Comment: Several commenters suggested that we revise the effective
date of the policy, and specifically requested that the policy be
effective on or after January 1, 2020 for applications submitted prior
to the September 2019 quarterly application submission deadline.
Response: We thank the commenters for their input. We agree with
commenters and do not believe applicants with devices that would
qualify for the alternative pathway should be required to re-submit
their pass-through applications after January 1, 2020 in order to be
considered for the alternative pathway. Therefore, after considering
the public comments we received, we are finalizing a policy that the
alternative pathway will apply for devices that will receive pass-
through payments effective on or after January 1, 2020 and we are
revising paragraph (c)(2) under Sec. 419.66 consistent with this final
policy.
Where we received a device pass-through application by the
September 2019 quarterly application deadline for a device that
qualifies for the alternative pathway and the device meets the other
criteria for device pass-through status, the device can be approved for
pass-through status beginning on January 1, 2020. Similarly, devices
for which we received a device pass-through application prior to the
December 2019 quarterly deadline can receive pass-through status
beginning April 1, 2020, assuming they qualify for the alternative
pathway and meet the other criteria for device pass-through status.
In summary, we are finalizing our proposal with the change to the
effective date suggested by commenters to establish an alternative
pathway to the substantial clinical improvement criterion for devices
that have FDA Breakthrough Devices Program designation 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) for devices approved for transitional pass-through status
effective on or after January 1, 2020.
Devices Approved for Pass-Through Status Under the Breakthrough Device
Alternative Pathway
We received two device pass-through applications by the September
2, 2019 quarterly application deadline that have received FDA marketing
authorization and a Breakthrough Devices designation from FDA and that
qualify for consideration under the alternative pathway to the OPPS
device pass-through substantial clinical improvement criterion. These
devices meet the other criteria for device pass-through including the
eligibility criteria under Sec. 419.66(b), the criteria for
establishing device categories under Sec. 419.66(c), and the cost
criterion under Sec. 419.66(d) and are approved for pass-through
status beginning on January 1, 2020.
The devices include: (1) Optimizer[supreg] System which is
discussed earlier in this section and approved under the standard
pathway, and (2) ARTIFICIALIris[supreg] which is an iris prosthesis for
the treatment of iris defects. The ARTIFICIALIris[supreg] application
was received in June 2019 after the March 2019 quarterly deadline for
applications to be received in time to be included in CY 2020
rulemaking. We are approving ARTIFICIALIris[supreg] for transitional
pass-through payment under the alternative pathway for CY 2020. As
previously stated, all applications that are preliminarily
[[Page 61297]]
approved upon quarterly review will automatically be included in the
next applicable OPPS annual rulemaking cycle, therefore a discussion of
this application will be included in CY 2021 rulemaking.
B. 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 the CY 2020 OPPS/ASC 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 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 the CY 2020 OPPS/ASC 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 the CY 2020 OPP/ASC 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
allowed 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
[[Page 61298]]
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 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 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
[[Page 61299]]
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 did not propose any changes to our device-intensive
policy.
Comment: Some commenters noted that CPT codes 22612 and 64912 had a
device-offset percentage greater than 30 percent and should have been
proposed to have device-intensive status for CY 2020.
Response: We agree with commenters that CPT codes 22612 and 64912
were inadvertently omitted from Addendum P and were not assigned
device-intensive status in the CY 2020 OPPS/ASC proposed rule. For the
CY 2020 OPPS/ASC final rule with comment period, the device offset for
both procedures exceeds the 30 percent threshold and these procedures
are assigned device-intensive status for CY 2020.
Comment: One commenter requested that we assign HCPCS code C9752 a
higher device offset percentage. Additionally, one commenter requested
that we assign HCPCS code C9754 a higher device offset percentage.
Response: We thank the commenters for their recommendations and
their submission of device pricing information. After reviewing the
pricing information provided by commenters, we believe a default device
offset percentage of 31 percent appropriately reflects the device costs
for these procedures for CY 2020.
Comment: One commenter requested we assign device-intensive status
for CPT codes 36904, 36905, 50590, and HCPCS code 0275T for CY 2020.
Response: Using the most currently available data for this CY 2020
OPPS/ASC final rule with comment period, we have determined that the
device offset percentages for CPT codes 36905, 50590, and HCPCS code
0275T are not above the 30-percent threshold and, therefore, these
procedures are not eligible to be assigned device-intensive status.
Additionally, based on the most currently available data for this CY
2020 OPPS/ASC final rule with comment period, we have determined that
the device offset percentage for CPT code 36904 exceeds the 30-percent
threshold and therefore, this procedure is assigned device-intensive
status for CY 2020.
Comment: One commenter stated that the device offset for CPT code
53854 should be based on the predecessor code of HCPCS code 0275T and
that CPT code 53854 should be assigned device-intensive status for CY
2020.
Response: We agree with the commenter that, in the absence of
device cost statistics for a particular procedure, we may use the
predecessor code (in this case HCPCS code 0275T) to make a device-
intensive determination. However, we note that the device-intensive
percentage for HCPCS code 0275T is below the 30 percent threshold and,
therefore, we are not assigning CPT code 53854 device-intensive status
for CY 2020.
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 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 did not propose any changes to this policy for CY 2020.
Comment: Several commenters requested that CMS restore the device-
to-procedure and procedure-to-device edits. Additionally, some
commenters requested specific device edits for total hip arthroplasty
procedures and total knee arthroplasty procedures as well as device-
intensive ``C'' HCPCS codes.
Response: As we stated in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66794), we continue to believe that the
elimination of device-to-procedure edits and procedure-to-device edits
is appropriate due to the experience hospitals now have in coding and
reporting these claims fully. More specifically, for the most costly
devices, we believe the C-APCs will reliably reflect the cost of the
device if charges for the device are included anywhere on the claim. We
note that, under our current policy, hospitals are still expected to
adhere to the guidelines of correct coding and append the correct
device code to the claim when applicable. We also note that, as with
all other items and services recognized under the OPPS, we expect
hospitals to code and report their costs appropriately, regardless of
whether there are claims processing edits in place. Further, we also
note that our current device edit policy requires hospitals to report a
device for certain device-intensive procedures, which include total
knee arthroplasty, device-intensive ``C'' HCPCS codes, as well as total
hip arthroplasty beginning in 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
[[Page 61300]]
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 did not propose any changes to our no cost/full credit and
partial credit device policies in the CY 2020 OPPS/ASC proposed rule.
5. 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 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 $21,302, and the median cost
was $19,521. The final CY 2018 payment rate (calculated using the
median cost) was $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
[[Page 61301]]
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 proposed 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 proposed to assign to APC 5495 (Level 5 Intraocular
Procedures) in the CY 2020 OPPS/ASC proposed rule. The CY 2020 OPPS/ASC
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) was $28,237, and the
median cost was $19,270. The proposed CY 2020 payment rate (calculated
using the median cost) was $19,740 and can be found in Addendum B to
the CY 2020 OPPS/ASC proposed rule (which is available via the internet
on the CMS website).
V. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs of
Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biologicals. Throughout the 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 the 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 the 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 the 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 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.
[[Page 61302]]
3. Drugs and Biologicals With Expiring Pass-Through Payment Status in
CY 2019
We proposed 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 the proposed rule. We proposed 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 proposed 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 the proposed
rule).
The proposed packaged or separately payable status of each of these
drugs or biologicals is listed in Addendum B to the proposed rule
(which is available via the internet on the CMS website).
Comment: One commenter suggested that CMS should establish a new
policy to require equal payment for all drugs, biologicals, and
radiopharmaceuticals included in the same CED trial to avoid affecting
the trial by implicitly favoring one product over another through a
higher payment rate. The commenter referenced a current CED trial for
amyloid positron emission tomography (PET) that will be active into CY
2020. (Information on this CED trial can be found on the CMS website at
https://www.cms.gov/Medicare/Coverage/Coverage-withEvidence-Development/AmyloidPET.html). In the CED trial, Neuraceq\TM\
(florbetaben F18, HCPCS code Q9982) and Vizamyl\TM\ (flutemetamol F18,
HCPCS code Q9983) have not had pass-through status since December 31,
2018, while a third drug, Amyvid\TM\ (florbetapir F18, HCPCS code
A9586) continues to have pass-through status until September 30, 2020.
Response: We do not agree with the commenter's request that we
establish a policy to require the equal payment of all drugs,
biologicals, and radiopharmaceuticals in the same CED trial. The
payment rate for each product is consistent with current OPPS statutory
requirements. In the case of the particular products mentioned above,
one product has drug pass-through status through September 30, 2020, as
required by section 1833(t)(6)(G), while the pass-through period for
the other products has already expired, meaning payment for these
products is packaged into the payment for the primary procedure.
Further, section 1833(t)(6) establishes the statutory authority for CMS
to provide pass-through payment to cover the additional costs of
innovative drugs including radiopharmaceuticals. All of these products
receive payment that is consistent with statutory and regulatory
requirements and payment will be packaged for all three products once
the statutory pass-through period for Amyvid expires. We note that the
payment rate for each product does not affect the protocol established
under the CED trial because the protocol does not consider the cost of
the radiopharmaceutical used for treatment. Therefore, we expect
providers to make their own decision about which radiopharmaceutical to
use to provide the treatment independent of the payment received for an
individual drug.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to expire the pass-
through payment status of the 6 drugs and biologicals listed in Table
40 below on December 31, 2019.
[[Page 61303]]
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4. Drugs, Biologicals, and Radiopharmaceuticals With New or Continuing
Pass-Through Payment Status in CY 2020
We proposed 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 the 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 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 proposed 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 proposed 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 proposed 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 the 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 proposed 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 proposed 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 proposed 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
proposed to provide pass-through payment at WAC+3 percent (consistent
with our proposed policy in section V.B.2.b. of the 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
[[Page 61304]]
V.B.2.b. of the proposed rule. If WAC information also is not
available, we proposed to provide payment for the pass-through
radiopharmaceutical at 95 percent of its most recent AWP.
We did not receive any public comments regarding these proposals.
Therefore, we are finalizing these proposals for CY 2020 without
modification. We note that public comments pertaining to our proposal
to continue to pay WAC+3 percent for drugs and biologicals without ASP
information are addressed elsewhere in this final rule with comment
period. The drugs and biologicals that continue to have pass-through
payment status for CY 2020 or have been granted pass-through payment
status as of January 2020 are shown in Table 41 below.
BILLING CODE 4120-01-P
[[Page 61305]]
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[[Page 61306]]
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[[Page 61307]]
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[[Page 61308]]
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[[Page 61309]]
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[GRAPHIC] [TIFF OMITTED] TR12NO19.069
BILLING CODE 4120-01-C
5. 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 were listed in Table 16 of the
proposed rule (84 FR 39495). For CY 2020, we proposed to continue pass-
through payment status for the drugs and biologicals listed in Table 16
of the proposed rule (we note that these drugs and biologicals are also
listed in Table 15 of the 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 the proposed rule (which are available via the internet on the
CMS website).
We proposed 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 proposed
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 of the
CY 2020 OPPS/ASC proposed rule. 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).
We did not receive any comments on this policy. Therefore, we are
finalizing this proposal without modification. Starting on October 1,
2020, the drugs and biologicals listed in Table 42 will no longer
receive pass-through status, and will be assigned to status indicator
``N'', which means these drugs will once again be packaged in the OPPS.
[[Page 61311]]
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6. 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 proposed 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 43 below.
We did not receive any comments on this proposal. Therefore, we are
finalizing this proposal without modification.
[[Page 61312]]
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We proposed 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. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Payment Status
1. Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. 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 final
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 ($128.11) 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 2019 OPPS/ASC
final rule with comment period, based on these calculations using the
CY 2007 OPPS methodology, we are finalizing a packaging threshold for
CY 2020 of $130.
b. 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 the proposed rule, or for
the following policy-packaged items that we proposed 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 described in detail
in the CY 2006 OPPS proposed rule (70 FR 42723 through
[[Page 61313]]
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 proposed for separately payable drugs and biologicals
for CY 2020, as discussed in more detail in section V.B.2.b. of the
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 proposed 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 the 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
the 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 proposed 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 the proposed rule (which is available via the
internet on the CMS website) for proposed payment in CY 2020.
Comment: Two commenters suggested that CMS create an exception to
the drug cost threshold packaging policy in situations where a shortage
of a drug that is packaged under the drug cost threshold packaging
policy requires providers to use a higher-cost substitute drug that
presumably is still packaged because of the drug cost packaging
threshold. The commenters suggested that the substitute drug be
separately paid even though the per day cost of the substitute drug is
still below the drug cost packaging threshold amount.
Response: We thank the commenter for its suggestion but disagree
that such a policy is necessary at this time. We note that the purpose
of the drug cost threshold is to require the packaging of relatively
small per day drug costs into the associated outpatient hospital
procedure. This suggestion runs contrary to our policy goal of bundling
more services to encourage provider efficiency. However, we are
cognizant of issues surrounding drug shortages and will consider this
suggestion for the future.
Comment: One commenter requested that we no longer package HCPCS
code J2274 (Injection, Morphine Sulfate, Preservative-Free For Epidural
Or Intrathecal Use, 10 mg) because the drug is used in an implantable
infusion pump for intrathecal management of pain and/or spasticity, and
another drug, HCPCS code J0475 (injection, baclofen, 10 mg) which can
be used with the same infusion pump, currently receives separate
payment in the OPPS.
Response: We disagree with the commenter. Neither HCPCS code J2274
nor HCPCS code J0475 are classified as drugs that are policy packaged.
We refer readers to section V.B.1.c. for a description of drugs that
are policy packaged. Also, neither of these drugs is assigned to drug
pass-through status. Therefore, we use our drug cost threshold
methodology as described in this section of the rule to determine
whether the drugs are packaged into an associated procedure or if the
drugs are separately paid. The per day cost of HCPCS code J2274 is
below the $130 drug packaging threshold, and therefore, the drug is
packaged in the OPPS. The per day cost of HCPCS code J0475 is above the
drug packaging threshold, and therefore, the drug is paid separately in
the OPPS. The drug packaging threshold is based on the per day cost of
the specific drug administered, and the threshold is not affected by
the means by which the drug is administered to the beneficiary (in this
case, through a pump). In the case brought up by the commenter, the per
day cost of HCPCS code J2274 is below the $130 drug packaging
threshold, and is therefore packaged into the payment for its
associated procedure.
After consideration of the public comments we received, and
consistent with our methodology for establishing the packaging
threshold using the most recent PPI forecast data, we are adopting a CY
2019 packaging threshold of $130.
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 proposed 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 proposed 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 physicians' office and OPPS payment as of
January 1, 2020. For items that do not currently have an ASP-based
payment rate, we proposed to recalculate their mean unit cost from all
of the CY 2018 claims data and update 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 the 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 proposed 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,
[[Page 61314]]
consistent with our historical practice, we proposed 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.
We did not receive any public comments on our proposal to
recalculate the mean unit cost for items that do not currently have an
ASP-based payment rate from all of the CY 2018 claims data and updated
cost report information available for this CY 2020 final rule with
comment period to determine their final per day cost. We also did not
receive any public comments on our proposal to continue to follow the
established policies, initially adopted for the CY 2005 OPPS (69 FR
65780), when the packaging status of some HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals in the proposed rule
may be different from the same drug HCPCS code's packaging status
determined based on the data used for the final rule with comment
period. Therefore, for CY 2020, we are finalizing these two proposals
without modification.
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, 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).
We did not make any proposals to revise our policy-packaged drug
policy.
Comment: CMS received several comments from stakeholders regarding
the policy-packaged status of diagnostic radiopharmaceuticals. Several
commenters recommended that CMS continue to apply the nuclear medicine
procedure to radiolabeled product edits to ensure that all packaged
costs are included on nuclear medicine claims in order to establish
appropriate payment rates in the future. There was concern that many
providers performing nuclear medicine procedures are not including the
cost of diagnostic radiopharmaceuticals used for the procedures in
their claims submissions. Commenters believe this lack of drug cost
reporting could be causing the cost of nuclear medicine procedures to
be underreported and therefore requests that the radiolabeled product
edits be reinstated.
Response: We appreciated the commenter's feedback; however, we do
not agree with the commenter that we should reinstate the nuclear
medicine procedure to radiolabeled product edits, which required a
diagnostic radiopharmaceutical to be present on the same claim as a
nuclear medicine procedure for payment under the OPPS to be made. As
previously discussed in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58965), the edits were in place between CY 2008 and CY
2014 (78 FR 75033). We believe the period of time in which the edits
were in place was sufficient for hospitals to gain experience reporting
procedures involving radiolabeled products and to become accustomed to
ensuring that they code and report charges so that their claims fully
and appropriately reflect the costs of those radiolabeled products. As
with all other items and services recognized under the OPPS, we expect
hospitals to code and report their costs appropriately, regardless of
whether there are claims processing edits in place.
Comment: Several commenters requested that diagnostic
radiopharmaceuticals be paid separately in all cases, not just when the
drugs have pass-through payment status. Some commenters suggested
payment based upon ASP, WAC, AWP, or mean unit cost data derived from
hospital claims. Some commenters mentioned that pass-through payment
status helps the diffusion of new diagnostic radiopharmaceuticals into
the market, but is not enough to make up for the inadequate payment
after pass-through expires. Several commenters recommended treating
diagnostic radiopharmaceuticals similarly to therapeutic
radiopharmaceuticals. Commenters opposed incorporating the cost of the
drug into the associated APC, and provided limited evidence showing
procedures in which diagnostic radiopharmaceuticals are considered to
be a surgical supply that the commenter believed are often paid at a
lower rate than the payment rate for the diagnostic radiopharmaceutical
itself when the drug was paid separately because it had pass-through
payment status. Additionally, commenters proposed
[[Page 61315]]
alternative payment methodologies such as subjecting diagnostic
radiopharmaceuticals to the drug packaging threshold, creating separate
APC payments for diagnostic radiopharmaceuticals that cost more than
$500, or using ASP, WAC, or AWP to account for packaged
radiopharmaceutical costs. Conversely, other commenters disagreed with
the idea to pay separately for diagnostic radiopharmaceuticals that
cost more than $500 because they claimed that this would incentivize
radiopharmaceutical companies to raise their prices to exceed the
threshold. Additionally, commenters stated that nearly 95 percent of
radiopharmaceuticals are priced less than $500, so creating a
diagnostic radiopharmaceutical packaging threshold of $500 would not be
appropriate.
Response: We thank commenters for their responses. We continue to
believe that diagnostic radiopharmaceuticals are an integral component
of many nuclear medicine and imaging procedures and charges associated
with them should be reported on hospital claims to the extent they are
used. Therefore, the payment for the radiopharmaceuticals is reflected
within the payment for the primary procedure. In response to the
comment regarding the proposed cost of the packaged procedure in CY
2020 being substantially lower than the payment rate of the
radiopharmaceutical when it was on pass-through payment status plus the
payment rate of the procedure associated with the radiopharmaceutical,
we note the rates are established in a manner that uses the average,
more specifically the geometric mean, of reported costs to furnish the
procedure based on data submitted to CMS from all hospitals paid under
the OPPS to set the payment rate for the service. Accordingly, the
costs that are calculated by Medicare reflect the average costs of
items and services that are packaged into a primary procedure and will
not necessarily equal the sum of the cost of the primary procedure and
the average sales price of items and services because the billing
patterns of hospitals may not reflect that a particular item or service
is always billed with the primary procedure. Furthermore, the costs
will be based on the reported costs submitted to Medicare by the
hospitals and not the list price established by the manufacturer.
Claims data that include the radiopharmaceutical packaged with the
associated procedure reflect the combined cost of the procedure and the
radiopharmaceutical used in the procedure. Additionally, we do not
believe it is appropriate to create a new packaging threshold
specifically for diagnostic radiopharmaceuticals as that does not align
with our overall packaging policy and limited data has been submitted
to support a specific threshold. With respect to the request that we
create a new APC for each radiopharmaceutical product, we do not
believe it is appropriate to create unique APCs for diagnostic
radiopharmaceuticals. Diagnostic radiopharmaceuticals function as
supplies during a diagnostic test or procedure and following our
longstanding packaging policy, these items are packaged under the OPPS,
which supports our goal of making OPPS payments consistent with those
of a prospective payment system, which packages costs into a single
aggregate payment for a service, encounter, or episode of care.
Furthermore, diagnostic radiopharmaceuticals function as supplies that
enable the provision of an independent service, and are not themselves
the primary therapeutic modality, and therefore, we do not believe they
warrant separate payment through creation of a unique APC at this time.
We welcome ongoing dialogue with stakeholders regarding suggestions for
payment changes for consideration for future rulemaking.
d. 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
believe 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 proposed 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 1000 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
was displayed in Table 18 of the proposed rule (84 FR 39499).
We did not receive any public comments on this proposal. Therefore,
for CY 2020, we are finalizing our CY 2020 proposal, without
modification, 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. Table 44 below displays the final packaging status
of each drug and biological HCPCS code to which the finalized
methodology applies for CY 2020.
[[Page 61316]]
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2. Payment for Drugs and Biologicals Without Pass-Through Status That
Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other
Separately Payable 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.
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
[[Page 61317]]
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.\66\
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\66\ 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 proposed 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 have continued this policy of
paying for separately payable drugs and biologicals at the statutory
default for CYs 2014 through 2019.
b. CY 2020 Payment Policy
For CY 2020, we proposed 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 proposed
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
we also solicited 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 proposed 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 proposed to apply this provision to non-SCOD
separately payable drugs. Because we proposed 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 proposed 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.
Comment: Several commenters opposed our proposal to utilize a 3
percent add-on instead of a 6 percent add-on for drugs that are paid
based on WAC under section 1847A(c)(4) of the Act. Commenters were
concerned that paying less for new drugs may discourage the use of new
innovative drugs and inhibit access to patients. Commenters also noted
that the sequestration cuts further decreased payment for drugs, which
leaves a smaller margin for providers. Additionally, some commenters
believe that this proposal would only negatively impact providers, and
would not address increasing drug costs. Additionally, commenters
suggested excluding certain drugs and biologicals
[[Page 61318]]
from this policy, such as biosimilar biological products or
radiopharmaceuticals. These commenters felt as though the policy was
appropriate for drugs in general, but not for the previously mentioned
products, which could potentially offer savings to the Medicare program
if utilized in the case of biosimilars or which have a higher
associated overhead in the case of radiopharmaceuticals. Commenters
also discussed value-based payments as a more meaningful change than
this proposal.
Response: We appreciate the commenter's feedback. We continue to
believe our policy will improve Medicare payment rates by better
aligning payments with drug acquisition costs, which is of the utmost
importance to CMS as Part B drug spending has grown significantly. WAC
plus a 3 percent add-on is more comparable to an ASP plus a 6 percent
add-on, since the WAC pricing does not reflect many of the discounts
associated with ASP, such as rebates. This proposal to continue to
utilize a 3 percent add-on instead of a 6 percent add-on for drugs that
are paid based on WAC under section 1847A(c)(4) of the Act is
consistent with MedPAC's previous analysis and recommendations in its
June 2017 Report to the Congress. This policy is not meant to provide
preferential treatment to any specific drug or biological, but to
address WAC based payment under 1847A of the Act. We remind commenters
that this proposal still results in a net payment greater than the WAC.
In addition, this policy decreases the beneficiary cost-sharing for
these drugs. This could help Medicare beneficiaries afford to pay for
new drugs by reducing their out-of-pocket expenses.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to utilize a 3 percent
add-on instead of a 6 percent add-on for drugs that are paid based on
WAC under section 1847A(c)(4) of the Act pursuant to our authority
under section 1833(t)(14)(A)(iii)(II) of the Act.
We proposed 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 proposed
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 the proposed rule (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 the 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 the 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 the 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 the 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 the 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 the
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
[[Page 61319]]
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
believe that these changes would better reflect the resources and
production costs that biosimilar manufacturers incur. We also believe
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 believe 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 proposed 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 proposed 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 addition, as
discussed further below, we solicited 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, including 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. Our policy for 340B-acquired drugs
and biologicals is discussed in V.B.6. of this final rule with comment
period.
Comment: Many commenters supported our biosimilar proposal to
continue our policy from CY 2018 to make biosimilar biological products
eligible for pass-through payment and not just the first biosimilar
biological product for a reference product. Commenters believe this
would continue to improve access to these treatments and lower costs,
and they stressed the importance of consistency with biosimilar
payment. Commenters stated that there is a large disparity between
payment for biosimilars and their reference products and that this
proposal helps to mitigate that concern. Commenters also advocated for
additional proposals to increase the utilization of biosimilars, such
as extended pass-through payment.
Response: We appreciate the commenters' support. We believe this
proposal will continue to encourage competition, lower costs for the
Medicare program and beneficiaries, and eliminate any financial
incentive to utilize one product over another. We will continue to
assess biosimilar utilization under the OPPS.
Comment: Several commenters supported our proposal to pay nonpass-
through biosimilars acquired under the 340B Program at ASP minus 22.5
percent of the biosimilar's ASP in accordance with section
1833(t)(14)(A)(iii)(II) of the Act.
Response: We appreciate the commenters' support. Please see section
V.B.6 for a discussion of payment for biosimilars aquired under 340B.
Comment: Some commenters did not support our proposal to continue
our CY 2018 policy to make all biosimilar biological products eligible
for pass-through payment and not just the first biosimilar biological
product for a reference product. Commenters believe biosimilars are not
new or innovative drugs or biologicals, because they believe the
originator product is the only new and innovative product. Therefore,
they stated biosimilars should not be considered for pass-through
payment status. Additionally, commenters stated there should be a level
playing field between biosimilars and their originator reference
products in order to increase competition and reduce costs for
beneficiaries. Commenters believe that this proposal could potentially
lead to increased Medicare spending on biosimilars, and commenters
articulated concerns that therapies will be interrupted by providers
switching from innovator products to biosimilars.
Response: As discussed in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58977), we continue to believe that eligibility
for pass-through payment status reflects the unique, complex nature of
biosimilars and is important as biosimilars become established in the
market, just as it is for all other new drugs and biologicals.
Additionally, we are not convinced that making all biosimilar
biological products eligible for pass-through payment status will lead
to inappropriate treatment changes from a reference product without
pass-through payment to a biosimilar product with pass-through payment.
Under current policy, both originator products and their associated
biosimilars receive the same percentage add-on amount, regardless of
the ASP of the product; therefore, we do not believe that therapies
will be interrupted by providers switching from innovator products to
biosimilars. We note that Section 351(i) of the Public Health Service
Act defines biosimilarity to mean ``that the biological product is
highly similar to the reference product notwithstanding minor
differences in clinically inactive components'' and that ``there are no
clinically meaningful differences between the biological product and
the reference product in terms of the safety, purity, and potency of
the product.'' Therefore, concerns that therapy would be interrupted by
a switch from an innovator product to a biosimilar are unfounded as the
biosimilar has been determined to have no clinically meaningful
difference from the reference product. In regards to the increased
payment of biosimilars under this policy, overall increased competition
due to more biosimilars on the market as a result of this policy is
expected to drive payments down for both Medicare and for beneficiaries
over time, even if there may be increased spending on biosimilars in
the short term.
For CY 2020, after consideration of the public comments we
received, we are finalizing our proposed payment policy for biosimilar
products, without modification, to continue the policy established in
CY 2018 to make all biosimilar biological products eligible for pass-
through payment and not just the first biosimilar biological product
[[Page 61320]]
for a reference product. We also are finalizing our proposal to pay
nonpass-through biosimilars acquired under the 340B Program at 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.
3. Payment Policy for Therapeutic Radiopharmaceuticals
In the CY 2020 OPPS/ASC proposed rule (84 FR 39502), for CY 2020,
we proposed 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 proposed 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 proposed 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
were included in Addenda A and B to the proposed rule (which are
available via the internet on the CMS website).
Comment: Commenters supported the continuation of the policy to pay
ASP+6 percent for radiopharmaceuticals, if available, and to base
payment on the mean unit cost derived from hospital claims data when
not available. Commenters also stressed the high overhead, handling,
compounding and storage costs associated with delivering therapeutic
radiopharmaceuticals and asked CMS to look into higher payment rates
for radiopharmaceuticals or ways to compensate hospitals for the higher
overhead and handling costs.
Response: We appreciate the commenters' support. As previously
stated, we continue to believe a single payment is appropriate for
therapeutic radiopharmaceuticals and that the payment rate of ASP+6
percent is appropriate because it provides payment for both the
therapeutic radiopharmaceutical's acquisition cost and the associated
costs such as storage and handling of the radiopharmaceuticals. Payment
for the radiopharmaceutical and radiopharmaceutical processing services
is made through the single ASP-based payment.
For CY 2020, after consideration of the public comments we
received, we are finalizing our proposal, without modification, to
continue to pay all nonpass-through, separately payable therapeutic
radiopharmaceuticals at ASP+6 percent. We are also finalizing our
proposal to continue 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. The CY 2020
final payment rates for nonpass-through separately payable therapeutic
radiopharmaceuticals are included in Addenda A and B to this final rule
with comment period (which are available via the internet on the CMS
website).
4. 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 proposed 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 were 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 proposed 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.
Comment: Commenters supported CMS' proposal to continue to pay for
blood clotting factors at ASP+6 percent plus a blood clotting factor
furnishing fee in the hospital outpatient department.
Response: We appreciate the commenters' support.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to provide payment for
blood clotting factors under the same methodology as other separately
payable drugs and biologicals under the OPPS and to continue payment of
an updated furnishing fee. We will announce the actual figure of the
percent change in the applicable CPI and the updated furnishing fee
calculation based on that figure through the applicable program
instructions and posting on the CMS website.
[[Page 61321]]
5. Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims
Data
For CY 2020, we proposed 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
the proposed rule, which is available via the internet on the CMS
website.
We did not receive any comments on our proposal. Therefore, we are
finalizing our CY 2020 proposal without modification, including our
proposal to assign drug or biological products status indicator ``K''
and pay for them separately for the remainder of CY 2020 if pricing
information becomes available. The 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 final rule with comment period, 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 believe 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) plus 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 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 was 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 later 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
[[Page 61322]]
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 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 would 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.\67\ 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.\68\ 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.\69\ 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,'' \70\ 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.''
\71\ 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.'' \72\
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\67\ American Hosp. Ass'n, et al. v. Azar, et al., No. 1:18-cv-
2084 (D.D.C. Dec. 27, 2018).
\68\ Id. at 35 (quoting Amgen, Inc. v. Smith, 357 F.3d 103, 112
(D.C. Cir. 2004) (citations omitted)).
\69\ 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.
\70\ Id. at 13.
\71\ Id. at 19.
\72\ 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. On July 10, 2019, the
district court entered final judgment, and the agency has filed its
appeal. Nonetheless, CMS is taking the steps necessary to craft an
appropriate remedy in the event of an unfavorable decision on appeal.
Notably, after the proposed rule was issued, CMS announced in the
Federal Register (84 FR 51590) its intent to conduct a 340B hospital
survey to collect drug acquisition cost data for CY 2018 and 2019. Such
survey data may be used in setting the Medicare payment amount for
drugs acquired by 340B hospitals for cost years going forward, and also
may be used to devise a remedy for prior years if the district court's
ruling is upheld on appeal. The district court itself acknowledged that
CMS may base the Medicare payment amount on average acquisition cost
when survey data are available. See 348 F. Supp. 3d at 82. No 340B
hospital disputed in the rulemakings for CY 2018 and 2019 that the ASP
minus 22.5 percent formula was a conservative adjustment that
represented the minimum discount that hospitals receive for drugs
acquired through the 340B program--a significant omission because 340B
hospitals have their own data regarding their drug acquisition costs.
We thus anticipate that survey data collected for CY 2018 and 2019 will
confirm that the ASP minus 22.5 percent rate is a conservative measure
that overcompensates 340B hospitals. A
[[Page 61323]]
remedy that relies on such survey data could avoid the remedial
complexities discussed below and in the proposed rule.
Recognizing Medicare's complexity in formulating an appropriate
remedy, any changes to the OPPS must be budget neutral, and reversal of
the policy change, which raised rates for non-drug items and services
by an estimated $1.6 billion for 2018 alone, could have a significant
economic impact on the approximate 3,900 facilities that are paid for
outpatient items and services covered under the OPPS. Second, any
remedy that increases payments to 340B hospitals is likely to
significantly affect beneficiary cost-sharing. The items and services
that could be affected by the remedy were provided to millions of
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 solicited initial public comments on how to formulate a
solution that would account for all of the complexities the district
court recognized in the event of an unfavorable decision on appeal. A
summary of the public comments received on a potential remedy is
included later in this section. In the event 340B hospital survey data
are not used to devise a remedy, we intend to consider 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 the event of an unfavorable decision on appeal, if 340B hospital
survey data are not used to devise a remedy, as we stated in the CY
2020 OPPS/ASC proposed rule, we anticipate proposing the specific
remedy for CYs 2018 and 2019 in the CY 2021 OPPS/ASC proposed rule in
the event of an unfavorable decision on appeal. Those potential
proposals for CY 2021 would be informed by the comments that CMS
solicited in the CY 2020 proposed rule.
Thus, for CY 2020, we proposed to continue to pay ASP minus 22.5
percent for 340B-acquired drugs, including when furnished in
nonexcepted off-campus PBDs paid under the PFS. We proposed to continue
the 340B 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, as well as 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.
In the CY 2020 OPPS/ASC proposed rule (84 FR 39504), we also
solicited 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. This
amount would result in payment rates that are well above the actual
costs hospitals incur in purchasing 340B drugs, and we proposed it
solely because of the court decision. However, to the extent the courts
are limiting the 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.\73\ 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 welcomed 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.
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\73\ 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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Comments on the Appropriate Payment Rate for 340B-Acquired Drugs in CY
2020
Comment: Several commenters supported the continuation of the 340B
Program policy of ASP minus 22.5 percent for CY 2020. One commenter
believed the 340B program's recent growth may be contributing to the
consolidation of community oncology practices. This commenter and
others asserted that the growth of the 340B program has resulted in a
shift in the site of service for chemotherapy administration from the
physician-office setting to the more costly hospital outpatient
setting, since hospitals are able to acquire drugs, including oncologic
drugs, at a significant discount under the 340B program. Another
commenter believed that the 340B program is no longer serving its
intended purpose to help America's most vulnerable patients access the
drugs they need. They further asserted that instead, 340B profits are
being used for hospitals to make larger profits.
Response: We appreciate the commenters' support. We note that
comments related to the 340B program itself are outside the scope of
this rule, however, we note that we adopted the 340B payment policy so
that our payment policy would be more in line with the acquisition
costs hospitals incur, and thereby lower drug expenditures for Medicare
beneficiaries and the Medicare Trust Fund.
Comment: Many commenters, the majority of which represented
hospitals or hospital associations, opposed CMS' proposal to continue
to pay ASP minus 22.5 percent for 340B-acquired drugs in CY 2020. Many
of these commenters believe the proposal undermines the intent and
goals of the 340B program and will have negative impacts on patients
and 340B hospitals. One commenter asserted that CMS should pay
hospitals participating in the 340B program the statutory default
payment of ASP+6 percent. Another commenter opposed the proposal on the
belief that it undermines the Public Health Service Act (PHSA), which
authorized the 340B program and exceeds CMS' statutory authority.
Furthermore, a hospital organization commented that the application of
the reduced payment for the 340B policy has resulted in negative
consequences for patients and providers and does not save any money for
[[Page 61324]]
Medicare because the policy is implemented in a budget-neutral manner.
Several commenters who opposed the continuation of the 340B program
payment policy stated that the district court's ruling showed that the
payment reduction is illegal and exceeded the Administration's
authority. These commenters recommended CMS refrain from ``doing more
damage'' to impacted hospitals by continuing the ASP minus 22.5 percent
policy and return to the payment rate of ASP+6 percent for CY 2020.
Response: As noted in the CY 2018 OPPS/ASC final rule with comment
period, we continue to believe that ASP minus 22.5 percent for drugs
acquired through the 340B Program represents the average minimum
discount that 340B enrolled hospitals receive and better represents
acquisition costs.
We disagree with commenters that the 340B payment policy has had a
negative impact on Medicare patients; we are not aware of any access
issues related to the implementation of this policy. Further, we note
that under the current policy, Medicare patients who receive 340B drugs
for which the Medicare program paid ASP minus 22.5 percent have much
lower cost sharing than if these beneficiaries received 340B drugs for
which the Medicare program paid ASP+6 percent. As a result, we continue
to believe that ASP minus 22.5 percent is a reasonable payment rate for
these drugs.
In regards to the commenters' belief that CMS lacks the legal
authority to continue paying a reduced amount for drugs and biologicals
obtained through the 340B Program and that we should pay the statutory
default amount of ASP+6 percent, we refer commenters to our detailed
response regarding our statutory authority to require payment
reductions for drugs and biologicals obtained through the 340B Program
in the CY 2018 OPPS/ASC final rule with comment period (82 FR 59359
through 59364), as well as our statements in the proposed rule
regarding our appeal of the district court's decision.
After considering these public comments and the comments summarized
below, and in light of the fact that we are awaiting a decision on our
appeal in the litigation, for CY 2020, we are finalizing our proposal,
without modification, to pay ASP minus 22.5 percent for 340B-acquired
drugs including when furnished in nonexcepted off-campus PBDs paid
under the PFS. Our finalized proposal continues the 340B 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.
As noted in the proposed rule (84 FR 39504), we are appealing the
district court's decision and are awaiting a decision from the Court of
Appeals for the District of Columbia Circuit. Because we hope to
prevail on appeal and have our 340B policy upheld, we believe it is
appropriate to finalize our proposal of ASP minus 22.5 percent rather
than an alternative payment amount of either ASP+3 percent or ASP+6
percent, and to maintain the other payment policies we adopted for
340B-acquired drugs in the CY 2018 and 2019 OPPS final rules with
comment period. In the event of an adverse decision on appeal, we
solicited public comments on the appropriate remedy for use in the CY
2021 rulemaking. Those comments are summarized below. We note that in
the event 340B hospital survey data are not used to devise a remedy, we
intend to consider the following comments to develop an appropriate
remedy to propose in next year's rulemaking.
Comments on the CY 2020 Payment Policy for 340B-Aquired Drugs to Non-
Excepted Off-Campus Provider Based Departments (PBDs)
Comment: Many commenters disagreed with CMS' assertion that 340B
hospitals will move drug administration services for 340B-acquired
drugs to non-excepted off-campus PBDs if CMS does not continue to pay
for drugs furnished in these settings at the adjusted amount, and
recommended CMS study hospital's drug administration behavior pre- and
post-implementation of the CY 2018 final rule to confirm this
presumption before finalizing the proposal to continue paying ASP minus
22.5 percent for 340B drugs furnished by non-excepted PBDs. Several
commenters asserted that CMS should not continue with this policy for
CY 2020 for non-excepted PBDs and stated that continuing to do so would
be unlawful.
Response: We appreciate the commenters' input on the proposal to
continue to pay at ASP minus 22.5 percent under the PFS for 340B drugs
furnished in non-excepted off-campus PBDs. As we stated in the CY 2019
OPPS/ASC final rule with comment (83 FR 59017), because hospitals can,
in some cases, acquire drugs and biologicals under the 340B Program for
use in nonexcepted off-campus PBDs, we believe that not adjusting
payment exclusively for these departments would present a significant
incongruity between the payment amounts for these drugs depending on
where they are furnished. This incongruity would distort the relative
accuracy of the resource-based payment amounts under the site-specific
PFS rates and could result in significant perverse incentives for
hospitals to acquire drugs and biologicals under the 340B Program and
avoid Medicare payment adjustments that account for the discount by
providing these drugs to patients predominantly in nonexcepted off-
campus PBDs. In light of the significant payment differences between
excepted and nonexcepted off-campus PBDs, in combination with the
potential eligibility for discounts, which result in reduced costs
under the 340B Program for both kinds of departments, a different
payment policy for 340B drugs in the two settings could undermine the
use of the OPPS payment structure in nonexcepted off-campus PBDs. In
order to avoid such perverse incentives and the potential resulting
distortions in drug payment, pursuant to our authority at section
1833(t)(21)(c) of the Act we adopted a policy to identify the PFS as
the ``applicable payment system for 340B-acquired drugs and biologicals
and, accordingly, to pay under the PFS instead of under section 1847A/
1842(o) of the Act an amount equal to ASP minus 22.5 percent for drugs
and biologicals acquired under the 340B Program that are furnished by
nonexcepted off-campus PBDs. We continue to believe this payment policy
is necessary to avoid the significant incongruity between the payment
amounts that would exist for these drugs depending upon whether they
are furnished by excepted off-campus PBDs or nonexcepted off-campus
PBDs. We believe we have discretion under section 1833(t)(21)(c) of the
Act to continue to adjust payments for nonexcepted off-campus PBDs.
Comments on Use of ASP Plus 3 Percent for CY 2020
Comment: Many commenters opposed a payment amount of ASP+3 percent
as a potential remedial payment for 340B-acquired drugs furnished in CY
2018 and CY 2019 as well as for CY 2020 payments. These commenters
believe CMS did not provide a rationale to support the proposed ASP+3
percent adjustment and stated that CMS does not have statutory
authority to pay one group of hospitals at ASP+3 percent and all other
hospitals at ASP+6 percent.
[[Page 61325]]
Some commenters stated that section 1833(t)(14)(A)(iii)(II) requires
CMS to pay hospitals for covered outpatient drugs at ASP+6 percent and
that CMS does not have the legal authority to change that payment
amount to ASP+3 percent. Furthermore, some commenters stated that
although CMS has some authority to make adjustments, the agency's
stated rationale of imposing a payment reduction at the upper end of
the court's ``limit [on] the size of the payment reduction the agency
can permissibly apply . . . given the substantial discounts that
hospitals receive under the 340B program'' would be inconsistent with
the law itself and therefore, reducing payment for 340B-acquired drugs
to ASP+3 percent would be unlawful.
However, a few commenters supported the proposal to pay ASP+3
percent for 340B-acquired drugs in CY 2020, rather than to continue to
pay ASP minus 22.5 percent. One commenter supported the approach of
paying ASP+3 percent for 340B-acquired drugs if CMS receives an adverse
decision on appeal.
Response: We appreciate commenters' support of CMS' suggestion to
pay at ASP+3 percent if we are unsuccessful in the Appeals Court. As
explained above, we are finalizing our proposal to continue to pay for
340B-acquired drugs at ASP minus 22.5 percent. In the event of an
adverse decision on appeal, we will take these comments into
consideration in crafting an appropriate remedy.
Comment: One commenter believed a rate closer to ASP+6 percent,
such as ASP+3 percent, would mitigate remediation efforts should the
Agency not ultimately prevail on appeal and have to return the
difference in payments between ASP minus 22.5 percent and ASP+6 percent
based on a negative court decision.
Response: We thank the commenter for its feedback. As explained
above, we are finalizing our proposal to continue to pay for 340B-
acquired drugs at ASP minus 22.5 percent. In the event of an adverse
decision on appeal, we will take these comments into consideration in
crafting an appropriate remedy.
Comments on Use of Hospital Acquisition Costs
Comment: Several commenters, including a large medical association,
suggested that CMS gather hospitals' acquisition costs for drugs. One
commenter stated that ``since CMS has the authority to base
reimbursement rates on the hospitals' acquisition cost (340B price) if
the Agency considers hospital acquisition cost survey data, we urge CMS
to collect such data.'' Another commenter urged CMS to gather
additional data to better understand 340B acquisition costs and the
impact of payment reductions on 340B providers prior to making payment
changes that the commenter believes jeopardizes access and 340B program
participation.
Response: We appreciate the commenters' suggestion and note that we
announced in the Federal Register (84 FR 51590) our intent to conduct a
340B hospital survey to collect drug acquisition cost data for CY 2018
and 2019. We have no evidence that the current 340B policy has limited
patient access to 340B drugs or program participation. For the reasons
explained above, we believe it is appropriate to continue our 340B
payment policies for CY 2020.
Thus, for CY 2020, we are finalizing our proposal, without
modification, to pay ASP minus 22.5 percent for 340B-acquired drugs
including when furnished in nonexcepted off-campus PBDs paid under the
PFS. Our finalized proposal continues 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 continues 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.
Comments on a Potential Remedy for CYs 2018 and 2019
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 sought public comment on how to structure the remedy for CYs 2018
and 2019. This request for public comment included 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.
We stated in the CY 2020 OPPS/ASC proposed rule that 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, 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 noted that we would need to receive a final
decision from the Court of Appeals sufficiently early in CY 2020
(likely no later than 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 solicited public
comment on this approach as well as other suggested approaches from
commenters.
In considering these potential future proposals, we noted 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 noted 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. In the CY 2020 OPPS/ASC proposed rule
(84 FR 39505), we solicited 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 solicited comments on whether,
depending on the amount of those additional expenditures, we should
[[Page 61326]]
consider spreading out the relevant budget neutrality adjustment across
multiple years. We appreciated all the public comments that we received
on the advantages and disadvantages of such an approach.
We also sought public comments on the best, most appropriate
treatment of Medicare beneficiary cost-sharing responsibilities under
any proposed remedy. We stated that the statutory budget neutrality
requirement and beneficiary cost-sharing are extremely difficult to
balance, and we sought 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.
We also note that since the CY 2020 OPPS/ASC proposed rule was
published, we announced in the Federal Register (84 FR 51590) our
intent to conduct a 340B hospital survey to collect drug acquisition
cost data for CY 2018 and 2019. As noted above, we may use this survey
data to devise a remedy for prior years if the district court's ruling
is upheld on appeal. A remedy that relies on such survey data could
avoid the remedial complexities discussed below and in the proposed
rule. If, however, 340B hospital survey data are not used to devise a
remedy, we intend to consider the comments summarized below to inform a
remedy we would propose in the CY 2021 OPPS/ASC proposed rule in the
event of an adverse decision upon appeal.
Comments on Potential Remedy Structure
Comment: On the issue of a remedy structure, many commenters
supported a retrospective remedy on a claim-by-claim basis over a
prospective adjustment of prior 340B claims. Several commenters believe
it is CMS' responsibility to remedy the policy by requiring as little
effort as possible on the part of affected hospitals, thus avoiding any
additional injuries to the parties. Many commenters believe that CMS
should repay the difference between ASP+6 percent and ASP minus 22.5
percent plus interest for all claims for 340B-acquired drugs for CYs
2018 and 2019. They asserted that CMS can calculate the amount owed to
the affected 340B hospitals by using the JG modifier that identifies
the claims for 340B drugs. One commenter suggested identifying the
total amount paid to a hospital for drugs with the status indicator
``K'' and multiplying by 1.3677 (that is ASP+6 percent/ASP minus 22.5
percent = 1.06/0.775). Another commenter stated that the percentage of
claims that each hospital was underpaid is the same in each case and
that we can calculate the total payment for each hospital and multiply
that number by a factor, in order to determine how much each hospital
should have been paid. Some commenters supported a lump-sum payment.
One commenter supported either a lump-sum payment or a prospective
payment segmented out over multiple years. One commenter compared this
case to those remedies that the courts and agency have adopted to
handle past cases. This commenter believed the affected parties should
receive a supplemental payment for those affected claims in an amount
equal to the difference between ASP minus 22.5 percent and ASP+6
percent. Another commenter believed that the remedy should be decided
by a federal judge.
Additionally, some commenters supported a prospective remedy,
pointing out that a retrospective process would be too complex and
administratively burdensome. Several commenters supported an aggregate
payment for each affected 340B entity outside the normal claims process
rather than a retrospective adjustment. One commenter suggested
applying an increase factor of 26.89 percent that would pay the
affected entities at an amount that would approximate ASP+6 percent.
Another commenter supported an upward adjustment to future claims,
which they believed would reduce administrative burden.
Another commenter believed that CMS should publish a proposed
methodology for conducting the look-back and issuing the payment.
Further, they believed that providers should have opportunity for
public comment, and that CMS should revise and issue a final
methodology in CY 2020 outside of the normal OPPS rulemaking cycle,
with the applicable data set and calculation instructions posted on the
CMS web page. Other commenters believed the remedy does not necessitate
rulemaking.
One commenter offered three remedy suggestions. Two suggestions
involved staggered methods of payment. Under the first suggested
remedy, this commenter believed that CMS could pay for 340B drugs at
the following amounts over three years, which the commenter believed
would make affected providers whole: Beginning January 1, 2021, CMS
would pay ASP+14.25 percent plus an additional 2 percent; beginning
January 1, 2022 would pay ASP+14.25 percent plus an additional 1
percent; and finally, beginning January 1, 2023, CMS would pay ASP+6
percent going forward.
The same commenter suggested a second approach under which CMS
would pay affected hospitals set amounts plus interest as follows:
The first payment would be for claims submitted between January 1,
2018 and June 30, 2018 and would be paid out by July 1, 2020. The
second payment would be for claims submitted between July 1, 2018 and
December 31, 2018 and would be paid out January 1, 2021. The third
payment would be for claims submitted between January 1, 2019 and June
30, 2019 and would be paid out July 1, 2021. The final payment would be
for claims submitted between July 1, 2019 and December, 31, 2019 and
would be paid out January 1, 2022.
Alternatively, the same commenter suggested a third method of
making remedy payments under which CMS could recalculate the payments
for all claims paid for CYs 2018 and 2019 and pay affected 340B
hospitals the difference (between ASP+6 and ASP minus 22.5 percent) in
one lump-sum payment plus interest by January 1, 2021. The commenter
suggested that CMS would provide affected 340B hospitals notice on or
before July 1, 2021 of the calculated payment amount owed to the
hospital. The commenter suggested that the repayment amounts should be
placed in a 340B-specified account to be redistributed to eligible
hospitals and distributed in equal payments over a two-year period
beginning January 2021 for covered entities that demonstrate
``responsible program integrity'' as determined in collaboration with
HRSA. The commenters suggested that funds not able to be distributed
will be used to provide funding to CMS and HRSA to collaborate with
industry stakeholders to identify and implement solutions for duplicate
discount prevention.
Comments on Budget Neutrality
On the issue of budget neutrality, many commenters asserted that
budget neutrality is not necessary given prior court precedents
involving underpayments: Cape Cod Hospital v. Sebelius (DC Cir. 2011),
H. Lee Moffitt Cancer Center & Research Institute, Inc. vs. Azar,
(D.D.C. 2018), Shands Jacksonville Medical Center v. Burwell, (D.D.C.
2015). Other commenters asserted that neither (t)(9)(B) nor any other
provision of the OPPS statue
[[Page 61327]]
authorizes the agency to revisit budget neutrality if its estimates of
money owed for a prior year turn out to be incorrect. They view the
statute as directing CMS to make estimates for the purposes of setting
prospective payment rates only, and not authorizing the agency to
recalibrate those estimates after the fact if its predictions turn out
to be incorrect. These commenters believe that the Congress drafted the
OPPS statute to prohibit the agency from revisiting its budget-
neutrality determinations after it first makes them on a prospective
basis for a given year. They further asserted that CMS should exercise
discretion in using its budget neutrality authority in seeking payments
back from providers.
Some commenters supported a prospective payment rate reduction on
OPPS non-drug items and services to maintain budget neutrality from any
remedy. Other commenters supported a gradual rate reduction of the
payment amounts for OPPS non-drug items and services ranging from a
minimum of two to six years to lessen the impact of rate reduction to
the affected entities. Several commenters supported a modest reduction
in future OPPS payment by reducing the conversion factor.
Comments on Beneficiary Coinsurance
Additionally, many commenters asserted that there is no law that
requires hospitals to adjust beneficiaries' coinsurance for 340B-
acquired drugs. They stated that neither the False Claims nor the anti-
kickback statutes would apply because beneficiaries did not receive any
inducements to seek services. These commenters believe that
beneficiaries already fully paid for the hospital care months or years
ago and should not have to pay any additional payments. They requested
that CMS clearly state in this final rule that there is no requirement
for any beneficiary copay adjustments. One commenter offered estimates
on what they believe are the percentage of patients who are impacted by
any adjustment on the patient's copay citing 29 percent with Medigap,
22 percent enrolled in Medicaid (dually eligible), and 19 percent
without a supplemental plan, with the remaining 30 percent enrolled in
a Medicare Advantage plan. Thus, this commenter believed that only 19
percent of patients would be impacted directly by cost-sharing
implications and CMS would need to calculate payment owed to Medicare
for these beneficiaries.
Response: We thank the commenters for their comments on the
appropriate remedy for CYs 2018 and 2019. As noted above, we may use
the survey data for 2018 and 2019 that we plan to collect from 340B
hospitals to devise a remedy for prior years if the district court's
ruling is upheld on appeal. A remedy that relies on such survey data
could avoid the remedial complexities discussed above and in the
proposed rule. If, however, 340B hospital survey data are not used to
devise a remedy in the event of an adverse decision from the Court of
Appeals, we intend to consider all of these suggestions in determining
the appropriate remedy to propose in the CY 2021 OPPS rulemaking. To
the extent commenters made legal arguments relating to the False Claims
Act or anti-kickback statutes, CMS offers no opinion.
7. 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 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 proposed 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 proposed 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 proposed 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 proposed 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 proposed 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 final rule, consistent with the
methodology as established in the CY 2014 through CY
[[Page 61328]]
2018 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 final CY 2020 MUC threshold is $48 per cm
\2\ (rounded to the nearest $1) (proposed at $49 per cm \2\) and the
final CY 2020 PDC threshold is $790 (rounded to the nearest $1)
(proposed at $789).
For CY 2020, we proposed to continue to assign skin substitutes
with pass-through payment status to the high cost category. We proposed
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 proposed 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 proposed 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 the 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 are 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 request for
comments in the CY 2018 OPPS/ASC proposed 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
[[Page 61329]]
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
have 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 believe 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 sought 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 sought comments on
was whether 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.
Comment: Several commenters were in favor of establishing a
comprehensive APC with either an option for a complexity adjustment or
outlier payments to pay for higher cost skin substitute application
procedures. The commenters supported the idea of having a traditional
comprehensive APC payment for standard wound care cases with a
complexity adjustment or outlier payment to handle complicated or
costly cases. However, they also expressed concerns about how many
payment levels would be available in the skin substitute procedures APC
group since a complexity adjustment can only be used if there is an
existing higher-paying APC to which the service receiving the
complexity adjustment may be assigned. A couple of commenters wanted
more opportunities for services to receive a complexity adjustment
through using clusters of procedure codes that reflect the full range
of wound care services a beneficiary receives instead of using code
pairs to determine if a complexity adjustment should apply. A few
commenters suggested that episodic payments be risk-adjusted to account
for clinical conditions and co-morbidities of beneficiaries with
outlier payments and that complexity adjustments be linked to
beneficiaries with more co-morbidities.
Some commenters opposed the idea of a complexity adjustment for
skin substitute application procedures. The commenters believe there
was not enough detail in the comment solicitation to understand how a
complexity adjustment would work with an episodic payment arrangement.
Commenters also expressed concerns that payment rates for comprehensive
APCs may not be representative of the wound care services that would be
paid within those APCs. One commenter stated that payment policy is not
the right way to resolve issues with the over-utilization and
inappropriate use of skin substitutes because they are concerned that
major changes in payment methodology, such as episodic payment, could
lead to serious issues with the care beneficiaries receive.
Regarding the topic of episodic payment, commenters brought up some
of the same issues they had mentioned in response to last year's
comment solicitation. Supporters of episodic payments believe the
policy idea would give providers more flexibility with the treatments
they administer to their patients, and will help encourage innovation
by encouraging the development of graft skin substitute products that
require fewer applications.
Some commenters supported developing an episodic payment model
first in the CMS Innovation Center before adopting episodic payment in
the OPPS. One commenter wrote about the need for quality measures as a
part of episodic payment to ensure providers render appropriate care
during a treatment episode. However, another commenter wanted to ensure
that quality measures would not prevent providers from using a
medically necessary product. Commenters also discussed episode length
with a couple of commenters supporting a 12-week payment episode as
mentioned in the comment solicitation, and another commenter suggesting
that an episode be based not only on the length of time but the number
of allowed skin substitute applications during that time period.
Commenters also favored establishing a separate payment episode for
each wound receiving treatment.
Commenters who oppose episodic payment expressed similar concerns
as they did in response to last year's comment solicitation. Many
commenters believe that wound care is too complex and variable to be
covered through episodic payment even with an option for a complexity
adjustment. For example, one commenter noted that the care regimen for
diabetic foot ulcers is very different than the care regimen for
pressure wounds. A few commenters expressed concerns about the
complexities associated with episodic payment, claiming that CMS will
have to established several new HCPCS codes and clinical APCs to be
able to have
[[Page 61330]]
payment rates for all of the care scenarios covered by episodic
payment. Commenters also believe it would take several years to
implement an episode-based payment system and such system would be
operationally and administratively burdensome for providers. Other
commenters were concerned about financial incentives created by
episodic payment that may discourage providers from rendering the best
quality of care and encourage providers to use skin substitute products
that may not be the most clinically appropriate for their patients.
Finally, commenters had concerns about establishing the length of a
payment episode, stating there was no clear evidence on what the
appropriate episode length should be. These commenters believe it also
would be difficult to establish separate payment episodes when a
patient was being treated for multiple wounds at the same time.
Commenters also discussed which services should be included with an
episodic payment. Commenters were divided over whether an episode
should be limited to application of skin substitute products or
encompass other related wound care treatments including hyperbaric
oxygen and negative-pressure treatment. Some commenters were concerned
that episodic payment may discourage the treatment of large or
complicated wounds. There also was one commenter who wanted episodic
payment to cover tissue repair products used in surgical procedures.
Response: We appreciate all of the feedback we received from
commenters, and we will use the feedback as we consider potential
refinements to how we pay for skin substitute products and procedures
under the OPPS.
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 noted that we
were 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. Under this option, 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 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 was
$1,572.17 in the CY 2020 OPPS/ASC proposed rule and the geometric mean
cost for HCPCS code C5271 was $728.28 in the proposed rule. We stated
in the proposed rule that if this policy option was implemented, only
CPT code 15271 would be available in the OPPS, and the geometric mean
cost using data from the CY 2020 proposed rule for the procedure code
would be $1,465.18.
Commenters that supported this option believe it would remove the
incentives for manufacturers to develop and providers to use high cost
skin substitute products and would 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 believe a single payment
category would reduce incentives to apply skin substitute products in
excessive amounts. Commenters also believe a single payment category is
clinically justified because they stated that many studies have shown
that no one skin substitute product is superior to another. Finally,
supporters of a single payment category believe it would 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 high
quality care and would reduce the use of higher-cost skin substitute
products (which they seemed to imply are of higher quality than lower
cost products). They argued that 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 believe 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 believe 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 welcomed 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 received in response to this request, we noted 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. Accordingly, we solicited
public comments that provide additional information about how
commenters believe we should transition from the current low cost/high
cost payment
[[Page 61331]]
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 sought 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
indicated 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.
Comment: A few commenters expressed support for a single payment
category for the application of skin substitute products. These
commenters supported the payment methodology because they believe it
would remove incentives for manufacturers to develop and providers to
use high-cost products. These commenters maintained that a single
payment category would encourage product innovations that maintain the
quality of care for beneficiaries while bringing down the cost of skin
substitute products, which will help to reduce the co-payments
beneficiaries pay for skin substitute application services. Commenters
supported more payment homogeneity because they believe most skin
substitute products perform in a similar manner and no product or group
of products is clinically superior over other skin substitute products.
One commenter noted that the device pass-through payment pathway
continues to be available for manufacturers to receive additional
payment if a superior skin substitute product is developed.
Several commenters in favor of a single payment category believe it
would simplify coding for providers and reduce administrative burden.
They also believe a single payment category provides adequate payment
for providers based on the case mix of smaller, easier to treat wounds
and larger, more complex wounds. Also, a single payment category would
promote cost stability by eliminating the large payment fluctuation for
skin substitutes who are close to the cost-group thresholds in the
current high-cost/low-cost payment methodology for skin substitutes.
The vast majority of commenters were opposed to a single payment
category for skin substitute products. Commenters stated that the large
difference in resource costs between higher cost and lower cost skin
substitute products would mean only the most inexpensive products would
be used to provide care, which would hurt both product innovation and
the quality of care beneficiaries receive. Commenters were concerned
that a single payment category would encourage providers to choose
financial benefit over clinical efficacy when determining which skin
substitute products to use.
These commenters also stated that a single payment category would
increase incentives for providers to use cheaper products that require
more applications to generate more revenue. A couple of commenters
believe that overall Medicare spending on skin substitutes would be
higher with a single payment category than under the current payment
methodology which has separate payment for higher cost and lower cost
skin substitutes. The reason spending would go up according to the
commenters is the overpayment for low cost skin substitutes by Medicare
would exceed the savings Medicare would receive on reduced payments for
higher cost skin substitutes.
Further, commenters stated that a single payment rate would lead to
too much heterogeneity in the products receiving payment through the
skin substitute application procedures. The same payment rate would
apply to skin substitute products whether they cost less than $10 per
cm\2\ or over $200 per cm\2\ and regardless of the type of wound they
treat. Commenters would prefer to have multiple payment categories
where the payment rate is more reflective of the cost of the product.
Commenters believe that a single payment category would discourage
providers from treating more complicated wounds.
Some commenters stated that CMS should not implement a single
payment category methodology in CY 2020 because it only sought comments
and did not propose it and that CMS should formally propose the
methodology to allow commenters a meaningful opportunity to comment on
the precise proposal before implementing it.
There also were comments about the idea of having a transition
period of 1 to 2 years before the full implementation of a single
category payment methodology. Those commenters in favor of a single
payment category did not see a need for a transition period or wanted
only a one-year transition period. Conversely, those commenters opposed
to a single payment category either who did mention the idea of a
transition period wanted it to last multiple years with one commenter
suggesting a transition period of four years.
Response: We appreciate the comments we received for this comment
solicitation, and we will use the feedback to help inform our
development of our payment methodology for skin substitute application
procedures in future rulemaking.
c. Proposals for Packaged Skin Substitutes for CY 2020
To allow stakeholders time to analyze and comment on the issues
discussed above, we proposed 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 proposed 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 proposed
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 proposed 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 proposed 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 proposed to continue our established policy
to assign new skin substitute products without pricing information to
the low cost group.
Table 19 of the proposed rule displayed the proposed CY 2020 cost
category assignment for each skin substitute product.
Comment: Most commenters supported our proposal to continue our
policy to assign skin substitutes to the low cost or high cost group,
mainly
[[Page 61332]]
because they still want more information on both episode-based payment
for skin substitutes and the possibility of creating a single payment
category for skin substitutes. These commenters do not currently
support either potential payment methodology and prefer to keep the
current high-cost and low-cost payment methodology until an alternative
methodology for skin substitutes is better developed.
Response: We appreciate the support of the commenters of our CY
2020 proposal for the payment of skin substitute application services.
Comment: One commenter was opposed to our proposal. This commenter
requested that we no longer assign to the high-cost group skin
substitute products that do not meet either the MUC or PDC thresholds
in CY 2020 because the skin substitute product had previous been
assigned to the high-cost group in CY 2019. The commenter believes skin
substitute products should be assigned to the cost group that for which
they qualify based on current MUC and PDC thresholds because the
commenter believes that Medicare payment should reflect to some extent
the relative cost of a skin substitute product compared to all other
skin substitute products.
Response: We disagree with commenter. Requiring products to
potentially switch annually between the high-cost and low-cost group
leads to payment instability for skin substitute products (82 FR 59346-
59347). The payment rate for a skin substitute application procedure
may change by several hundred dollars depending on if a skin substitute
product is assigned to the high-cost or low-cost group, which can make
it challenging for manufacturers to estimate the payment their products
will generate when used by providers. The policy to continue to assign
skin substitute products to the high-cost group once they qualify for
the group promotes payment stability and allows manufacturers and
providers to know over a long period of time the payment rate of the
procedures used with each skin substitute product.
Comment: For the CY 2019 OPPS/ASC final rule with comment period, a
commenter, the manufacturer, requested that HCPCS code Q4184 (Cellesta,
per square centimeter) be assigned to the high-cost skin substitute
group because the ASP+6 percent price of HCPCS code Q4184 for Quarter 1
of 2019 was $110.02 per cm\2\ which was substantially higher than the
MUC threshold for CY 2019 of $49 per cm\2\.
Response: HCPCS code Q4184 (Cellesta, per square centimeter) has
been assigned to the high-cost group since April 1, 2019 and we
proposed assigning the skin substitute product again to the high-cost
group in CY 2020.
Comment: One commenter, the manufacturer, has requested that HCPCS
codes Q4122 (Dermacell, per square centimeter) and Q4150 (Allowrap ds
or dry, per square centimeter) continue to be assigned to the high-cost
skin substitute group.
Response: HCPCS codes Q4122 (Dermacell, per square centimeter) and
Q4150 (Allowrap ds or dry, per square centimeter) were both assigned to
the high-cost group in CY 2019 and also were proposed to the high-cost
group for CY 2020. Per our proposal, a skin substitute that has been
proposed in the high-cost group in a proposed rule will remain in the
high-cost group in the final rule. Also, any skin substitute assigned
to the high-cost group in CY 2019 will continue to be assigned to the
high-cost group in CY 2020 even if MUC and PDC for the skin substitute
product is below the overall MUC and PDC thresholds for all skin
substitute products. Accordingly, we are finalizing our proposal to
assign HCPCS codes Q4122 and Q4150 to the high-cost group in CY 2020.
After consideration of the public comments we received, we are
finalizing our proposal 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 finalizing our proposal 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 finalizing our proposal 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
finalizing our proposal to continue to use WAC+3 percent instead of
WAC+6 percent for skin substitute products that do not have ASP pricing
information or claims data to determine if those products' costs exceed
the CY 2020 MUC. We also are finalizing our proposal to retain our
established policy to assign new skin substitute products with pricing
information to the low cost group. Table 45 below displays the final CY
2020 cost category assignment for each skin substitute product.
BILLING CODE 4120-01-P
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BILLING CODE 4120-01-C
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Background
Section 1833(t)(6)(E) of the Act limits the total projected amount
of transitional pass-through payments for drugs, biologicals,
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 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 equaled the proposed total CY
2020 pass-through spending estimate for device categories with pass-
through payment status. We based 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 the
proposed rule, we proposed 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 also proposed 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
[[Page 61336]]
million, as discussed below, because we proposed 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 proposed to pay for CY 2020 pass-through payment drugs and
biologicals at ASP+6 percent, as we discuss in section V.A. of the CY
2020 OPPS/ASC proposed rule. We refer readers to section V.B.6 of the
CY 2020 OPPS/ASC proposed rule where we discuss the comments we
solicited 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 the CY 2020 OPPS/ASC proposed rule and this final rule with
comment period. In the CY 2020 OPPS/ASC proposed rule (84 FR 39511), we
proposed 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
estimate of pass-through payment for policy-packaged drugs and
biologicals with pass-through payment status approved prior to CY 2020
was not $0, as discussed below. In section V.A.5. of the CY 2020 OPPS/
ASC 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 proposed 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 proposed 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 2020 pass-through
spending estimate for drugs and biologicals with pass-through payment
status.
B. Estimate of Pass-Through Spending
In the CY 2020 OPPS/ASC proposed rule (84 FR 39511 through 39512),
we proposed 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 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 estimated that 100 devices will
receive payment in the OPPS in CY 2020 at an estimated cost of $5,655
per device. Therefore, we proposed an estimate for the first group of
devices of $565,500. We did not receive any public comments on the
proposal. Therefore, we are finalizing the proposed estimate for the
first group of devices of $565,500 for CY 2020.
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
after 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 proposed to
use the general methodology described in the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66778), while also taking into account
recent OPPS experience in approving new pass-through device categories.
For the proposed rule, the proposed estimate of CY 2020 pass-through
spending for this second group of device categories was $10 million.
We did not receive any public comments on this proposal. As stated
earlier in this final rule with comment period, we are approving five
devices for pass-through payment status: Surefire[supreg]
SparkTM Infusion System; Optimizer[supreg] System;
AquaBeam[supreg] System; AUGMENT[supreg] Bone Graft and
ARTIFICIALIris[supreg] . The manufacturers of these systems provided
utilization and cost data that indicate the spending for the devices
would be approximately $116.25 million for Surefire[supreg]
SparkTM Infusion System, $46 million for Optimizer[supreg]
System, $11.25 million for AquaBeam[supreg] System, $ 72.2 million for
AUGMENT[supreg] Bone Graft, and $500,500 for ARTIFICIALIris[supreg].
Therefore, we are finalizing an estimate of $246.2 million for this
second group of devices for CY 2020.
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 proposed 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
[[Page 61337]]
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 proposed 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 the 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. We did not receive any public comments on
our proposal. Using our methodology for this final rule with comment
period, we calculated a CY 2020 spending estimate for this first group
of drugs and biologicals of approximately $399.6 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 the 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 proposed to use utilization estimates
from pass-through applicants, pharmaceutical industry data, clinical
information, recent trends in the per unit ASPs of hospital outpatient
drugs, and projected annual changes in service volume and intensity as
our basis for making the CY 2020 pass-through payment estimate. We also
proposed 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.
We did not receive any public comments on our proposal. Therefore,
for CY 2020, we are continuing to use the general methodology described
above. For this final rule with comment period, we calculated a CY 2020
spending estimate for this second group of drugs and biologicals of
approximately $26 million.
In summary, in accordance with the methodology described earlier in
this section, for this final rule with comment period, 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 $698.4 million (approximately $246.8 million for device
categories and approximately $451.6 million for drugs and biologicals)
which represents 0.88 percent of total projected OPPS payments for CY
2020 (approximately $79 billion). Therefore, we estimate that pass-
through spending in CY 2020 will not amount to 2.0 percent of total
projected OPPS CY 2020 program spending.
VII. OPPS Payment for Hospital Outpatient Visits and Critical Care
Services
For CY 2020, we proposed 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 proposed 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 the proposed rule, we sought 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.
Comment: We received two public comments, one from a health system
and another from a health information management association, in
response to our CY 2020 proposal. Commenters suggested that CMS should
adopt the recommendation of the Medicare Payment Advisory Commission
(MedPAC) for the development and implementation of a set of national
guidelines for coding hospital emergency department (ED) visits under
the OPPS. They argued that national guidelines would provide hospitals
with a clear set of rules for coding ED visits.
Response: We thank the commenters for their responses. We will
consider these comments for future rulemaking.
After consideration of the public comments received, we are
finalizing our CY 2020 proposal to continue our current clinic and ED
hospital outpatient visits and critical care services payment policies
without modifications.
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 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 the
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 the CY 2020 final rule with comment period
and section X.C of this final rule with comment period.
VIII. 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
[[Page 61338]]
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 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
[[Page 61339]]
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 five 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 eight-
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 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 six psychological and
neuropsychological testing CPT codes, which affect PHPs, and to add
nine new codes as replacements. We refer readers to section VIII.D. of
the proposed rule for a discussion of those proposed updates and the
applicability for CY 2020.
B. Final PHP APC Update for CY 2020
1. Final PHP APC Geometric Mean Per Diem Costs
In summary, for CY 2020, we are finalizing our proposal as proposed
to use the CY 2020 CMHC 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. We are also finalizing our proposal to use the CY 2020
hospital-based PHP geometric mean per diem cost of $233.52, calculated
in accordance with our existing methodology for hospital-based
[[Page 61340]]
PHPs, as the basis for developing the CY 2020 hospital-based APC per
diem rate. We are finalizing our proposal to use the most recent
updated claims and cost data to calculate CY 2020 geometric mean per
diem costs in this final rule with comment period.
Also, we are finalizing our proposal 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, which we are finalizing as
proposed in this final rule with comment period, are discussed in more
detail.
2. Development of the Final 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 geometric mean per diem
cost for hospital-based PHP APC 5863 is based upon actual hospital-
based PHP claims and costs for PHP service days providing 3 or more
services. Similarly, the geometric mean per diem cost for CMHC APC 5853
is based upon actual CMHC claims and costs for CMHC service days
providing three 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
final rule with comment period.
As previously stated, in the CY 2020 OPPS/ASC proposed rule, we
proposed to apply 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 this CY 2020 final rule with comment period, prior to
calculating the final 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 44 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 $20.58 or had geometric mean costs per day above
the trim's upper limit of $520.48. 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 this CY
2020 final rule with comment period ratesetting, no CMHC was missing
wage index data for all of its service days and, therefore, no CMHC was
excluded. However, one CMHC had no days with Medicare payment, and it
was excluded from ratesetting.
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 one to the statewide hospital CCR (80 FR 70457).
For this CY 2020 OPPS/ASC final rule with comment period ratesetting,
there were no CMHCs that showed CCRs greater than one. 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 with a CCR greater than one during our ratesetting process.
We also did not exclude any CMHCs for other missing data or for failing
the 2 standard deviation trim, but excluded one CMHC for
having no Medicare payment data, resulting in the inclusion of 43
CMHCs. There were 319 CMHC claims removed during data preparation steps
because they either had no PHP-allowable codes or had zero payment
days, leaving 12,265 CMHC claims in our CY 2020 final rule ratesetting
modeling.
After applying all of the previously listed 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.\74\ The calculated CY 2020 geometric mean per diem cost
for all CMHCs for providing 3 or more services per day (CMHC APC 5853)
is $103.50, a decrease from $121.62 calculated last year for CY 2019
ratesetting (83 FR 58986 through 58989). This final calculated per diem
cost for CMHCs is almost the same as the $103.42 geometric mean per
diem cost calculated for the CY 2020 OPPS/ASC proposed rule (84 FR
39515 to 39516).
---------------------------------------------------------------------------
\74\ 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 final
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 final 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 from the CY 2019 final CMHC geometric mean
per diem cost, we investigated why the CY 2020 final calculated CMHC
APC geometric mean per diem cost had decreased from the prior year, and
found that two large providers reported lower costs per day than those
reported for the CY 2019 final rule ratesetting; those two providers
heavily influenced the calculated geometric mean per diem cost. Because
these providers had a high number of paid PHP days, and because the
CMHC data set is so small (n=43), these providers had a significant
influence on the calculated CY 2020 CMHC APC geometric mean per diem
[[Page 61341]]
cost. In the case of PHPs provided by CMHCs, we have a low number of
PHP providers in our ratesetting dataset (43 CMHCs compared to 374
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).
As noted in the CY 2020 OPPS/ASC proposed rule (84 FR 39516), we
are concerned that a final calculated CMHC APC geometric mean per diem
cost of $103.50 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 the 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 two large providers.
Therefore, rather than simply finalizing the calculated CY 2020
CMHC APC geometric mean per diem cost of $103.50 for CY 2020
ratesetting, we are instead finalizing our proposal as proposed, 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 final CY 2020 CMHC APC
per diem rate. 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. As we proposed, in this final rule with comment period, we
used the most recent updated claims and cost data to calculate CY 2020
CMHC geometric mean per diem cost, which was $103.50. Because the final
CY 2020 CMHC calculated geometric mean per diem cost of $103.50 is less
than the proposed cost floor (which equals the final CY 2019 CMHC APC
geometric mean per diem cost of $121.62), the final CY 2020 CMHC
geometric mean per diem cost is $121.62. Implementing the cost floor
for CY 2020 will protect CMHCs since the final CY 2020 calculated per
diem cost of $103.50 still results in an amount that is less than
$121.62. We believe finalizing the CMHC cost floor amount of $121.62 as
the final CY 2020 CMHC APC geometric mean per diem cost 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.
As we noted in the CY 2020 OPPS/ASC proposed rule (84 FR 39516), 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 cost from that proposed rule of $103.42 for
CMHCs, and the calculated CY 2020 geometric mean per diem costs for
hospital-based PHPs discussed in section VIII.B.2.b. of the CY 2020
OPPS/ASC proposed rule. The 3-year rolling averages discussed in that
proposed rule resulted in geometric mean per diem costs that would have
been $122.75 for CMHCs, and $209.79 for hospital-based PHPs. 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 the CY 2020 OPPS/ASC proposed rule and section
VIII.B.2.b. of this final rule. In addition, we believe that it is
necessary to recalculate the CMHC geometric mean per diem cost for this
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 use the final CY
2019 geometric mean per diem costs, by provider type, as the cost floor
for use with the final 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 finalizing the CMHC cost
floor amount of $121.62 rather than the calculated CMHC geometric mean
per diem cost of $103.50 to be $1.7 million. We refer readers to
section XXVII. of this final rule with comment period for payment
impacts, which are budget neutral.
We received 6 comments, with those focused on CMHC rate setting
summarized as follows:
Comment: Nearly all commenters supported our proposal to calculate
updated per diem costs with a cost floor, to avoid fluctuations in CMHC
payments and help protect access.
Response: We thank the commenters for their support. For CY 2020,
we are finalizing the CY 2020 CMHC geometric mean per diem cost as
$121.62, which is the cost floor amount, rather than the calculated
geometric mean per diem cost of $103.50.
Comment: Two commenters recommended that CMS pay CMHCs the same
rate as hospital-based PHPs, since these two provider types provide the
same services and have the same qualified clinical staff. One commenter
objected to CMS' continuing use of the single-tier payment system for
CMHCs, stating that it adversely affects the quality and intensity of
PHP services.
Response: The OPPS pays for outpatient services, including partial
hospitalization services, based on the costs of providing services
using provider data from claims and cost reports, in accordance with
statute. 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. While CMHCs and hospital-based
CMHCs provide the same clinical services, their resource use differs,
[[Page 61342]]
because these two provider types have different cost structures. We see
this difference in cost structures reflected when we calculate the
geometric mean cost per day for CMHCs versus for hospital-based PHPs,
where CMHC costs per day are consistently lower than hospital-based PHP
costs per day. For example, the final CY 2020 calculated geometric mean
costs for providing PHP services were $103.50 per day for CMHCs, but
were $233.52 per day for hospital-based PHPs. In this final rule and in
prior rulemaking, commenters and CMS have noted that hospitals tend to
have higher costs than CMHCs, particularly higher overhead (83 FR
58986; 82 FR 59377; 81 FR 79686 to 69687). Therefore, we do not believe
we can pay CMHCs the same APC rate as hospital-based PHPs, and should
calculate a CMHC APC rate based on the CMHC costs which providers
supply on their cost reports. We strongly encourage CMHCs to review
cost reporting instructions to be sure they are reporting their costs
correctly. These instructions are available in chapter 45 of the
Provider Reimbursement Manual, Part 2, available on the CMS website at
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals.html.
We believe our policy to replace the existing Level 1 and Level 2
PHP APCs for both provider types with a single PHP APC, by provider
type, is supported by the statute and regulations and will continue to
pay for partial hospitalization services appropriately based upon
actual provider costs (81 FR 79683). Regarding the commenter's concern
about the small number of providers and the use of a single-tier
payment system, we refer the commenter to the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79682 to 79685), where we discussed our
rationale for implementing the single-tier payment system for CMHCs. A
key reason behind implementing the single tier for CMHCs was to reduce
cost fluctuations and bring more stability to CMHC APC rates,
especially given the small number of providers (81 FR 79683). We also
noted that the costs of providing a Level 1 CMHC day were nearly the
same as the cost of providing a Level 2 CMHC day (81 FR 79684). In
accordance with the regulations at 42 CFR 419.31, we could not justify
continuing to separate these services into two APCs, but combined
clinically similar services with similar resource use into a single APC
(81 FR 79683 to 79684).
We do not believe the intensity of PHP services provided in
hospitals and in CMHCs has been affected by using a single-tier payment
system. Based on the utilization data found in Table 22 of this final
rule, the percentage of paid PHP days which have only three services
has been relatively stable over time. As we note in section VIII.B.3.b,
with only 2 years of claims data reflecting the single-tiered payment
system, we do not have enough data yet to identify any trends in
utilization that could be associated with the change from two-tiered to
single-tiered payment. We continue to monitor the percentage of 3-
service days and are also monitoring the provision of 20 hours per week
of PHP services, to ensure there are no unintended consequences of a
single-tier payment system on PHP intensity. We are unable to determine
the effects of the single-tier payment on CMHC quality, because there
are no quality measures for CMHCs, nor is quality reporting required of
CMHCs. However, we do not believe that a single-tier payment system
would affect the quality of care provided in a CMHC.
Comment: One commenter noted that, in the past, CMS stated that
CMHCs provide fewer services and have less costly staff than hospitals.
Response: We believe that the commenter may be referring to the CY
2011 OPPS/ASC final rule with comment period (75 FR 71991), which
states that we believe that CMHCs have a lower cost structure than
their hospital-based PHP counterparts because the data showed that
CMHCs provide fewer PHP services in a day and use less costly staff
than hospital-based PHPs. Those statements were based on CY 2009 claims
and cost data, which differ from more recent claims and cost data. Each
year, we calculate geometric mean per diem costs based on updated
claims and cost reports. We do not have detailed labor cost data to
make a direct comparison of CMHC versus hospital-based PHP staff costs,
so we could not comment on whether CMHCs have lower labor costs than
hospital-based PHPs. But we note that both provider types use similar
types of clinical staff (see personnel qualifications in 42 CFR 485.904
for CMHCs, and in 42 CFR 482.12, 482.23, and 482.62 for hospitals).
Regarding the level of services provided, we refer the commenter to the
utilization data in section VIII.B.3.b. of this CY 2020 final rule with
comment period for details on current level of services CMHCs provide,
based on CY 2018 claims data. Table 22 shows that CMHCs provide more
days with four or more services than hospital-based PHPs.
Comment: Several commenters expressed concern about the decline in
the number of CMHCs and hospital-based PHPs, and the effects on
beneficiary access to care. Two commenters wrote that the current
payment methodology has resulted in reductions in provider access
rather than protection of access. Commenters noted that these declines
have occurred while the need for mental health services has increased;
that the demand for mental health services is on track to outpace the
supply of behavioral health care providers; and that as the number of
PHPs declines, it may become even more difficult to calculate the
appropriate per diems. A few commenters noted that decreased access to
PHP services could result in increasing instances of patient recidivism
and more inpatient psychiatric admissions. One commenter noted that
beneficiaries would have their treatment alternatives limited if CMHCs
closed, and therefore, be forced to use more costly hospital-based
PHPs, with higher beneficiary co-payments.
A commenter expressed concerns about CMHC rate setting being based
on only 41 providers, and wrote that the data are skewed, the
calculations are incorrect, and the proposed low payment rates would
result in the remaining CMHCs closing. This commenter noted that
setting CMHCs' payment rates based on a small number of CMHCs does not
reflect the actual cost of providing these services and expressed
concern that by using the mean or median costs, more CMHCs would close.
The same commenter also stated that CMHCs incur extra costs to meet the
CMHC conditions of participation (CoPs), have experienced an increase
in bad debt expense, and the effects of sequestration.
Response: We appreciate the work PHPs do to care for a particularly
vulnerable population with serious mental illnesses and believe that
having PHPs available to beneficiaries helps prevent patient recidivism
and inpatient psychiatric admissions. We share the commenters' concerns
about the decline in the number of PHPs, particularly at CMHCs, and the
effect on access. Our goal is to protect access to both provider types,
so beneficiaries have choices regarding where to receive treatment. We
want to ensure that CMHCs remain a viable option as providers of mental
health care in the beneficiary's own community. We agree that
beneficiaries receiving care at a CMHC instead of a hospital-based PHP
would have lower out-of-pocket costs.
We disagree that the CMHC data are skewed and that the calculations
are incorrect. In the CY 2016 OPPS/ASC final rule (80 FR 70456 to
70459), we implemented a 2 standard deviation
[[Page 61343]]
trim on CMHC costs per day to remove aberrant data that could skew
costs up or down inappropriately. We recognize that with a small number
of providers, such as the 43 CMHCs used for this final rule rate
setting, the calculations can be influenced by large providers. That
occurred in this CY 2020 final rule rate setting, as discussed
previously in this section, and we proposed and are finalizing a cost
floor in CY 2020 to help protect CMHCs from this fluctuation and
possible effects on access.
We are confident that the per diem costs we calculate follow the
methodology we discussed in the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70462 to 70466) and in the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79691). Those costs are geometric mean
per diem costs, rather than arithmetic mean or median per diem costs;
in the CY 2013 OPPS final rule (77 FR 68409), we discussed the
advantages of using geometric means rather than medians to calculate
PHP costs, and noted that the geometric mean more accurately captures
the full range of service costs (including outliers) than the median
cost and promotes more stability in the payment system.
We believe that providing payment that is based upon actual
provider-reported costs will not lead to provider closures. As we have
noted in prior rulemaking (76 FR 74350; 79 FR 66906), the closure of
PHPs may be due to any number of reasons, such as business management
or marketing decisions, competition, oversaturation of certain
geographic areas, and Federal and State fraud and abuse efforts, among
others. It does not directly follow that closure could be due to
reduced per diem payment rates alone, especially when the per diem
payment rates reflect the costs of PHP providers, as stated in claims
and cost data.
Furthermore, most (if not all) of the costs associated with
adhering to CoPs should be captured in the cost report data used in
ratesetting and, therefore, are accounted for when computing the
geometric mean per diem costs. The reduction to bad debt reimbursement
was a result of provisions of section 3201 of the Middle Class Tax
Extension and Job Creation Act of 2012 (Pub. L. 112-96). The reduction
to bad debt reimbursement impacted all providers eligible to receive
bad debt reimbursement, as discussed in the CY 2013 End-Stage Renal
Disease final rule (77 FR 67518). Medicare currently reimburses bad
debt for eligible providers at 65 percent. Because this percentage was
enacted by Congress, CMS does not have the authority to change the
percentage. In contrast to the Medicare bad debt reimbursement policy,
private sector insurers typically do not reimburse providers for any
amounts of enrollees' unpaid deductibles or coinsurance. In light of
budgetary constraints and the steady increase in bad debt claims over
the years, a reduction in bad debt reimbursement is necessary to
protect the Medicare Trust Fund and preserve beneficiary access to care
without imposing an undue burden on hospitals.
Finally, the reduction in payments due to sequestration has been
mandated by Congress, and we are unable to remove or modify it. This
mandatory payment reduction was established by the Budget Control Act
of 2011 (Pub. L. 112-25) and amended by the American Taxpayer Relief
Act of 2012 (Pub. L. 112-240). Sequestration is discussed in a Medicare
Fee-for-Service Provider eNews article available at: https://www.cms.gov/Outreach-and-Education/Outreach/FFSProvPartProg/Downloads/2013-03-08-standalone.pdf. Sequestration is outside the scope of the CY
2020 OPPS/ASC proposed rule and this final rule with comment period.
Comment: One commenter suggested that CMS use value-based
purchasing for paying CMHCs instead of a cost-based system. This
commenter recommended that CMS look at the value provided by the
quality of provided services. This commenter believed that rewarding
providers for higher-quality care, as measured by selected standards,
instead of rewarding providers for increasing costs, is a better way to
improve the quality of any service.
Response: We responded to a similar public comment in the CY 2016
OPPS/ASC final rule with comment period (80 FR 70462) and refer readers
to a summary of that comment and our response. Currently, there is no
statutory language authorizing value-based purchasing for CMHCs or for
outpatient hospital-based PHPs. To reiterate, sections 1833(t)(2) and
1833(t)(9) of the Act set forth the requirements for establishing and
adjusting OPPS payment rates, which are based on costs, and which
include PHP payment rates.
We note that section 1833(t)(17) of the Act authorizes the Hospital
Outpatient Quality Reporting (OQR) Program, which applies a payment
reduction to subsection (d) hospitals that fail to meet program
requirements. In the CY 2015 OPPS/ASC proposed rule (79 FR 41040), we
considered future inclusion of, and requested comments on, the
following quality measures addressing PHP issues that would apply in
the hospital outpatient setting: (1) 30-Day Readmission; (2) Group
Therapy; and (3) No Individual Therapy. We refer readers to the CY 2015
OPPS/ASC final rule with comment period (79 FR 66957 through 66958) for
a more detailed discussion of PHP measures considered for inclusion in
the Hospital OQR Program in future years, and of the comments received
as a result of the solicitation. However, the Hospital OQR Program does
not apply to CMHCs, and there are no quality measures applied to CMHCs.
Comment: Several commenters recommended that more work be done to
establish PHP rates accurately, that CMS reconsider its PHP policy
positions to determine how to rebuild PHP services, or that CMS
establish a task force to review and discuss the availability of PHPs
for Medicare beneficiaries.
Response: We will continue to explore policy options for
strengthening the PHP benefit and increasing access to the valuable
services provided by CMHCs as well as by hospital-based PHPs. As part
of that process, we regularly review our methodology to ensure that it
is appropriately capturing the cost of care reported by providers. For
example, for the CY 2016 ratesetting, we extensively reviewed the
methodology used for PHP ratesetting. In the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70462 through 70466), we also included
a detailed description of the ratesetting process to help all PHP
providers record costs correctly so that we can more fully capture PHP
costs in ratesetting. In this CY 2020 ratesetting, we proposed and are
finalizing a policy to calculate the CY 2020 per diem costs with a cost
floor. We believe that policy helps to support access, particularly for
CMHCs, whose calculated costs were still below the cost floor when we
ran the calculations with updated data for this final rule with comment
period.
We also recognize that as the number of providers decreases, the
ratesetting calculations can be more strongly influenced by the costs
of large providers. We are regularly evaluating our rate setting
methodology to ensure that it is as accurate as possible, and captures
provider cost data fully. However, our rate setting methodology must
comply with requirements given in statute at 1833(t)(2) and 1833(t)(9),
and depends heavily on provider-reported costs. As noted previously, we
strongly encourage CMHCs to review cost reporting instructions to be
sure they are reporting their costs correctly. These instructions are
available in chapter 45 of the Provider
[[Page 61344]]
Reimbursement Manual, Part 2, available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals.html. We also strongly encourage those CMHCs that do not file
full cost reports to consider doing so, to help us in more fully
capturing CMHC costs in rate setting.
We maintain positive working relationships with various industry
leaders representing both CMHCs and hospital-based PHP providers with
whom we have consistently met over the years to discuss industry
concerns and ideas. These relationships have provided significant and
valued input regarding PHP ratesetting. We also hold Hospital
Outpatient Open Door Forum calls monthly, in which all individuals are
welcome to participate and/or submit questions regarding specific
issues, including questions related to PHPs. Furthermore, we initiate
rulemaking annually, through which we receive public comments on
proposals set forth in a proposed rule and respond to those comments in
a final rule. All individuals are provided an opportunity to comment,
and we give consideration to each comment that we receive. Given the
relationships that we have established with various industry leaders
and the various means for us to receive comments and recommendations,
we believe that we receive adequate input regarding ratesetting and
take that input into consideration when establishing the payment rates.
We continue to welcome any input and information that the public is
willing to provide.
After consideration of the comments, we are finalizing our proposal
as proposed. Because the final CY 2020 calculated CMHC geometric mean
per diem cost of $103.50 is less than the cost floor amount of $121.62,
the final CY 2020 CMHC geometric mean per diem cost is $121.62.
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
For this CY 2020 final rule with comment period, 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 436 hospital-based PHP providers for our
calculations in this CY 2020 OPPS/ASC final rule with comment period.
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 one hospital-based PHP provider with a CCR of 6.398 from our final
ratesetting. However, 100 percent of the service days for this one
hospital-based PHP provider had at least one service associated with a
CCR greater than 5, so the trim removed this provider entirely from our
final ratesetting. In addition, 59 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 62 hospital-based PHP providers [(1 with all
service days having a CCR greater than 5) + (59 with zero daily costs
and no PHP payment) + (2 with no PHP-allowable HCPCS codes)], resulting
in 374 (436 total - 62 excluded) hospital-based PHP providers in the
data used for calculating ratesetting. In addition, no 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
final 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).\75\
The final 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 $233.52,
which is an increase of 4.8 percent from $222.76 calculated last year
for CY 2019 ratesetting (83 FR 58989 through 58991). The increase in
the final CY 2020 calculated hospital-based PHP APC geometric mean per
diem cost from the prior year is influenced by two large providers with
updated cost data, whose costs per day increased. We believe that a
hospital-based PHP APC geometric mean per diem cost of $233.52 supports
ongoing access to hospital-based PHPs. This cost is nearly a 5 percent
increase from the final CY 2019 hospital-based PHP geometric mean per
diem cost.
---------------------------------------------------------------------------
\75\ 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 final 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 final geometric mean per diem cost for
hospital-based PHP APC 5863.
---------------------------------------------------------------------------
In the CY 2020 OPPS proposed rule (84 FR 39516 to 39518), 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) was $198.53, which was a
decrease from $222.76 calculated last year for CY 2019 ratesetting (83
FR 58989 through 58991). We stated that 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 the proposed
rule). Therefore, the hospital-based PHP APC 5863 is actually heavily
weighted to the cost of providing 4 or
[[Page 61345]]
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 noted that 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 were concerned by this fluctuation,
which we believe was 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 instead proposed 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, we proposed that we would use the most recent updated
claims and cost data to calculate CY 2020 geometric mean per diem costs
for the final rule with comment period, just as we did 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.
In the CY 2020 OPPS/ASC proposed rule discussion of the proposed
cost floor, 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 that proposed rule, 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 could 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 believed that it was necessary to recalculate the
hospital-based PHP geometric mean per diem cost for the final rule
using updated claims and cost data; had we simply proposed to use a 3-
year rolling average per diem cost floor for the hospital-based PHP APC
per diem costs for CY 2020, we could not have done so. We were
concerned that the 3-year rolling average per diem cost would have
continued to result in a fluctuation in the cost of a hospital
providing 3 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 was more appropriate to
have proposed 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 final 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.
While the cost floor would have protected hospital-based PHPs if
the final CY 2020 calculated hospital-based PHP APC geometric mean per
diem cost were still less than $222.76, the final calculated hospital-
based PHP geometric mean per diem cost of $233.52 is greater than the
floor, and therefore, we are finalizing this calculated CY 2020 cost
for hospital-based PHPs. We believe finalizing our 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 of using a cost floor is only
applied for the CY 2020 ratesetting.
In the CY 2020 OPPS/ASC proposed rule, we estimated that 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.
However, because we are finalizing the CY 2020 calculated geometric
mean per diem cost for hospital-based PHPs, there is no cost difference
to Medicare from using a cost floor. We refer readers to section XXVII.
of this final rule for payment impacts, which are budget neutral.
We received several comments on our proposal.
Comment: Several commenters expressed concern about the decline in
the number of CMHCs and hospital-based PHPs, and the effects on
beneficiary access to care. Two commenters wrote that the current
payment methodology has resulted in reductions in provider access
rather than protection of access. Commenters noted that these declines
have occurred while the need for mental health services has increased;
that the demand for mental health services is on track to outpace the
supply of behavioral health care providers; that as the number of PHPs
declines, it may become even more difficult to calculate the
appropriate per diems; and that recent changes in OPPS rulemaking
related to Section 603 of the Bipartisan Budget Act of 2015 require
that the per diem for new hospital-based PHP programs must be set equal
to the lower CMHC rate, which they said was not viable for hospital-
based PHPs and would limit the ability to create new PHP programs. A
few commenters noted that decreased access to PHP services could result
in increasing instances of patient recidivism and more inpatient
psychiatric admissions.
Response: We appreciate the work PHPs do to care for a particularly
vulnerable population with serious mental illnesses and believe that
having PHPs available to beneficiaries helps prevent patient recidivism
and inpatient psychiatric admissions. We share the commenters' concerns
about the decline in the number of PHPs and the effect on access. Our
goal is to protect access to both provider types, so beneficiaries have
choices regarding where to receive treatment. We also refer readers to
section VIII.B.2.a. for a similar comment and response related to
CMHCs.
Regarding the effects of Section 603 of the Bipartisan Budget Act
of 2015 \76\ on hospital-based PHP access, we note that this provision
amended the statute at section 1833(t) of the Act to require that
certain items and services furnished in certain off-campus provider-
based departments (PBDs) shall not be considered covered outpatient
department services for purposes of OPPS, and payment for those
nonexcepted items and services shall be made ``under the applicable
payment system'' beginning January 1, 2017 (81 FR 79720).
---------------------------------------------------------------------------
\76\ Public Law 114-74.
---------------------------------------------------------------------------
These amendments do not prevent hospitals from creating new PHP
programs. Instead, they provide that certain items and services are no
longer
[[Page 61346]]
covered OPD services payable under the OPPS, and instead must be paid
under another ``applicable payment system.'' CMS adopted the Medicare
Physician Fee Schedule (MPFS) as the applicable payment system for
these services (81 FR 79717). Although, nonexcepted off-campus
provider-based departments are no longer paid under the OPPS and
payments may be lower for these departments, the section 603 changes do
not prohibit these departments from creating PHP programs. Excepted
off-campus provider-based departments and the main campuses of
hospitals continue to be paid under the OPPS, so it is unclear for
these locations why entities could not create new PHPs.
Commenters were incorrect in stating that new hospital-based PHPs
are paid at the CMHC per diem rate. Only non-excepted off-campus PHPs
are paid through the MPFS at the CMHC rate; new hospital-based PHPs
that are on-campus are paid at the hospital-based PHP per diem rate
under the OPPS.
We believe that paying non-excepted off-campus PHPs through the
MPFS at the CMHC APC rate is appropriate. We note that the clinical
services, staffing, and documentation requirements are similar for
CMHCs and hospital-based PHPs. As discussed in the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79717), when a beneficiary
receives services in an off-campus department of a hospital (such as in
a hospital-based PHP), the Medicare payment is generally higher than
when those same services are provided in a physician's office.
Similarly, when partial hospitalization services are provided in a
hospital-based PHP, Medicare pays more than when those same services
are provided by a CMHC. CMHCs are freestanding providers that are not
part of a hospital, and that have lower cost structures than hospital-
based PHPs. This is similar to the differences between freestanding
entities paid under the MPFS that furnish other services also provided
by hospital-based entities. We believe that paying for non-excepted
hospital-based partial hospitalization services at the lower CMHC per
diem rate is in alignment with section 603 amendments to the OPPS
statute, while also protecting access to the PHP benefit.
Furthermore, we note that our policy of paying non-excepted off-
campus PHPs at the CMHC APC 5853 per diem rate provides some relief to
those off-campus PHPs since non-PHP mental health services provided by
non-excepted off-campus hospital provider departments are paid through
the MPFS at 40 percent of the OPPS APC amount for the same service.
Paying non-excepted off-campus hospital-based PHPs at the CY 2020 CMHC
APC 5853 payment rate results in a payment that is 52 percent of the CY
2020 APC 5863 OPPS payment rate for hospital-based PHPs. The final FY
2020 payment rates for PHP APCs 5853 and 5863 are in Addendum A to this
final rule with comment period, which is available in the FY 2020 OPPS/
ASC final rule supporting documents found on our website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
Comment: One commenter suggested that CMS base PHP reimbursement on
incentives determined by documented productivity results. This
commenter suggested we consider Measurement-based Care and Patient
Satisfaction.
Response: We believe ``measurement-based care'' that the commenter
cited refers to administering a standardized instrument to measure some
aspect of patient symptoms when he or she begins and ends receiving PHP
services. This type of measure could inform clinical decision-making
and quality improvement activities at minimum, but results could
theoretically be used to adjust payment. We also believe that the
commenter is asking if CMS could administer patient satisfaction
surveys (like HCAHPS) and then reward high-performing PHPs.
Currently, there is no statutory language explicitly authorizing an
incentive payment methodology based on productivity results or patient
satisfaction for CMHCs or for outpatient hospital-based PHPs. We
responded to a similar public comment in the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70462) and refer readers to a summary
of that comment and our response. To reiterate, sections 1833(t)(2) and
1833(t)(9) of the Act set forth the requirements for establishing and
adjusting OPPS payment rates, which are based on costs, and which
include PHP payment rates. We note that section 1833(t)(17) of the Act
authorizes the Hospital Outpatient Quality Reporting (OQR) Program,
which applies a payment reduction to subsection (d) hospitals that fail
to meet program requirements; as finalized in the CY 2019 OPPS/ASC
final rule with comment period (83 FR 59109 to 59110), this payment
reduction applies to HCPCS codes which include PHP services. In the CY
2015 OPPS/ASC proposed rule (79 FR 41040), we considered future
inclusion of, and requested comments on, the following quality measures
addressing PHP issues that would apply in the hospital outpatient
setting: (1) 30-Day Readmission; (2) Group Therapy; and (3) No
Individual Therapy. We also refer readers to the CY 2015 OPPS/ASC final
rule with comment period (79 FR 66957 through 66958) for a discussion
of the comments received and of PHP measures considered for inclusion
in the Hospital OQR Program in future years.
Comment: Several commenters recommended that more work be done to
establish PHP rates accurately, that CMS reconsider its PHP policy
positions to determine how to rebuild PHP services, or that CMS
establish a task force to review and discuss the availability of PHPs
for Medicare beneficiaries.
Response: We will continue to explore policy options for
strengthening the PHP benefit and increasing access to the valuable
services provided by CMHCs as well as by hospital-based PHPs. As part
of that process, we regularly review our methodology to ensure that it
is appropriately capturing the cost of care reported by providers. For
example, for the CY 2016 ratesetting, we extensively reviewed the
methodology used for PHP ratesetting. In the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70462 through 70466), we also included
a detailed description of the ratesetting process to help all PHP
providers record costs correctly so that we can more fully capture PHP
costs in ratesetting. In this CY 2020 ratesetting, we proposed to
calculate the CY 2020 per diem costs with a cost floor. We believe that
proposal helped support access, particularly for CMHCs, whose
calculated costs were still below the cost floor when we ran the
calculations with updated data for this final rule with comment period.
We also recognize that as the number of providers decreases, the
ratesetting calculations can be more strongly influenced by the costs
of large providers. We are regularly evaluating our rate setting
methodology to ensure that it is as accurate as possible, and captures
provider cost data fully. However, our rate setting methodology must
comply with requirements given in statute at 1833(t)(2) and 1833(t)(9),
and depends heavily on provider-reported costs. We remind hospital-
based PHPs that they are required to record PHP costs in cost center
line 9399 (``Partial Hospitalization Program''), which was added to the
cost report in response to commenters in prior OPPS rulemaking (81 FR
79691); this line is the primary source of the department-level CCR
used for hospital-based PHP ratesetting in the Revenue
[[Page 61347]]
Code to Cost Center crosswalk. Line 9399 should not mix other non-PHP
mental health service costs with PHP costs. PHP costs incorrectly
recorded in other cost centers may not be included for PHP rate
setting, thereby affecting the hospital-based PHP per diem cost amount.
We maintain positive working relationships with various industry
leaders representing both CMHCs and hospital-based PHP providers with
whom we have consistently met over the years to discuss industry
concerns and ideas. These relationships have provided significant and
valued input regarding PHP ratesetting. We also hold Hospital
Outpatient Open Door Forum calls monthly, in which all individuals are
welcome to participate and/or submit questions regarding specific
issues, including questions related to PHPs. Furthermore, we initiate
rulemaking annually, through which we receive public comments on
proposals set forth in a proposed rule and respond to those comments in
a final rule. All individuals are provided an opportunity to comment,
and we give consideration to each comment that we receive. Given the
relationships that we have established with various industry leaders
and the various means for us to receive comments and recommendations,
we believe that we receive adequate input regarding ratesetting and
take that input into consideration when establishing the payment rates.
We continue to welcome any input and information that the public is
willing to provide.
We refer readers to section VIII.B.2.a. for a similar comment and
response related to CMHCs.
After consideration of the comments, we are finalizing our proposal
as proposed. Because the final CY 2020 calculated hospital-based PHP
geometric mean per diem cost of $233.52 is greater than the cost floor
amount of $222.76, the final CY 2020 hospital-based PHP geometric mean
per diem cost is $233.52.
In summary, for CY 2020, we are finalizing our proposal 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, as proposed.
Because the final CY 2020 calculated geometric mean per diem cost for
CMHCs is less than the cost floor amount of $121.62, we are finalizing
a CY 2020 geometric mean per diem cost for CMHCs of $121.62. In
addition, because the CY 2020 final calculated hospital-based PHP
geometric mean per diem cost is greater than the hospital-based PHP
cost floor amount of $222.76, we are finalizing the final calculated CY
2020 hospital-based PHP geometric mean per diem cost of $233.52. In
this final rule with comment period, we used 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, protected CMHCs as their final calculated per diem cost was still
less than the cost floor amount, but was not needed for hospital-based
PHPs.
These final CY 2020 PHP geometric mean per diem costs are shown in
Table 45, and are used to derive the final CY 2020 PHP APC per diem
rates for CMHCs and hospital-based PHPs. The final CY 2020 PHP APC per
diem rates are included in Addendum A to this final rule with comment
period (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).\77\
---------------------------------------------------------------------------
\77\ As discussed in section II.A. of this CY 2020 OPPS/ASC
final rule, final OPPS APC geometric mean per diem costs (including
final PHP APC geometric mean per diem costs) are divided by the
final 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 final rule for more information
on scaling the weights, and for details on the final steps of the
process that leads to final 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.
[GRAPHIC] [TIFF OMITTED] TR12NO19.076
3. PHP Service Utilization Updates
a. Provision of Individual Therapy
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 final rule with comment period 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 46.
[[Page 61348]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.077
As shown in Table 46A, 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 and hospital-based PHPs both
decreased the provision of individual therapy compared to prior years.
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 four 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 final rule with comment period, we used
the CY 2018 claims data. Table 46A shows the utilization findings based
on the final claims data.
[[Page 61349]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.078
As shown in Table 46A, the CY 2018 claims data used for this final
rule with comment period show that utilization of 3 service days is
increasing compared to the 3 prior claim years. Compared to CY 2017, in
CY 2018 hospital-based PHPs provided 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 provided more days with 3
services, fewer days with 4 services, and more 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. We hope the increase in the
percentage of days with 3 services is simply an anomaly rather than the
start of a trend, but more data will be needed to make that
determination. 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).
We received 2 comments related to PHP utilization.
Comment: Two commenters noted that the data in Table 22 of the
proposed rule demonstrate commitment by PHPs to comply with and exceed
the 20-hour rule. These commenters noted that the vast majority of
claim days for CMHCs and hospital-based PHPs have 4 or more services
provided. The commenters noted that PHPs are voluntary, and that they
cannot force patients to attend every day. They also noted that the
typical patient profile includes behaviors that work against attendance
and full daily participation. In addition, the commenters wrote that
there are other challenges to providing 20 hours of services per week
that are beyond providers' control, such as holidays, weather, and
other medical appointments.
Response: We appreciate that most PHP days include 4 or more
services being provided, but the updated data for this final rule
showed an uptick in the percentage of 3-service days. We will continue
to monitor the data over time.
The ``20-hour rule'' the commenters mentioned is from our
regulations at 42 CFR 410.43(c) (discussed at 73 FR 68694 to 68695),
which require that eligible PHP patients need at least 20 hours of
therapeutic services per week, as evidenced in their plan of care. PHPs
are intended to be intensive programs that are provided in lieu of
inpatient hospitalization. We appreciate the efforts providers have
made to increase beneficiary attendance, and also recognize the
provider concerns about circumstances beyond their control which can
affect the number of hours of services provided each week. We did not
make any proposals related to the 20-hour requirement, and are
continuing to monitor the claims data regarding the hours per week of
services provided, sending providers
[[Page 61350]]
informational messaging without affecting payment.
C. Outlier Policy for CMHCs
In this CY 2020 OPPS/ASC final rule with comment period, for CY
2020, we are finalizing 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. We refer readers to section II.G. of the CY
2020 OPPS/ASC proposed rule for our general policies for hospital
outpatient outlier payments (84 CFR 39434 through 39435.
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 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). This same policy was also
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83
FR 58996). 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. As previously stated, we proposed to continue to calculate
the CMHC outlier percentage according to previously established
policies, and we did not propose any changes to our current methodology
for calculating the CMHC outlier percentage for CY 2020. To calculate
the CMHC outlier percentage, we followed three steps:
Step 1: We multiplied 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 estimated 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
final rule with comment period). 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 exceeded the threshold,
we multiplied that excess by 50 percent, as described in section
VIII.C.3. of this final rule with comment period, 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 final rule with comment period, so any provider's
costs that exceed the CMHC outlier cap will have its payments adjusted
downward. After accounting for the CMHC outlier cap, we summed 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 determined 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 the CY 2020 proposed rule
(84 FR 39521), we proposed 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 proposed 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.
CMS did not receive any comments on the CMHC outlier percentage, so
we are finalizing the proposal as proposed.
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
[[Page 61351]]
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))]. This same policy was also
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83
FR 58996 through 58997).
In the CY 2020 OPPS/ASC proposed rule (84 FR 39521), in accordance
with our existing policy, we proposed 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 payment rate for CMHC APC 5853, the outlier
payment will be calculated as [0.50 x (CMHC Cost-(3.4 x APC 5853
rate))].
CMS did not receive comments on the Cutoff Point and Percentage
Payment Amount, so we are finalizing our proposal as proposed.
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 the CY 2020 OPPS/ASC proposed rule, we proposed 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 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).
CMS did not receive comments on the Outlier Reconciliation Policy,
so we are finalizing our proposal as proposed.
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 proposed to continue to apply
the 8 percent CMHC outlier payment cap to the CMHC's total per diem
payments (84 FR 39522).
CMS did not receive comments on the CMHC outlier payment cap, so we
are finalizing our proposal as proposed.
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). This
same policy was also reiterated in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58996 through 58997.
In the CY 2020 OPPS/ASC proposed rule (84 FR 39522), we proposed to
continue this policy for CY 2020. CMS did not receive any comments on
the fixed-dollar threshold, so we are finalizing our proposal as
proposed.
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
[[Page 61352]]
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 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 be clear, PHP
is a part of the OPPS. 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 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 also refer readers to section III.A.4. of the 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 comments on these
interim assignments for finalization in the next calendar year final
rule with comment period.
We solicited public comments on these proposals and since we did
not receive any comments, we are finalizing our proposals as proposed.
IX. Procedures That Will 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 codes that describe procedures that
will be paid by Medicare in CY 2020 as inpatient only procedures is
included as Addendum E to this CY 2020 OPPS/ASC final rule with comment
period, which is available via the internet on the CMS website.
B. Changes to the Inpatient Only (IPO) List
1. Methodology for Identifying Appropriate Changes to IPO List
In the CY 2019 OPPS/ASC proposed rule (84 FR 39523 through 39525),
for CY 2020, we proposed 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:
Most outpatient departments are equipped to provide the
services to the Medicare population.
The simplest procedure described by the code may be
performed in most outpatient departments.
The procedure is related to codes that we have already
removed from the IPO list.
A determination is made that the procedure is being
performed in numerous hospitals on an outpatient basis.
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 listed criteria, for the CY 2020 OPPS/ASC proposed rule,
we identified one procedure described by CPT code 27130 (Arthroplasty,
acetabular and proximal femoral prosthetic replacement (total hip
arthroplasty) with or without autograft or allograft) that met the
criteria for proposed removal from the IPO list. The procedure that we
proposed 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 was displayed in Table 23 of the 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 (for example, 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
[[Page 61353]]
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 include 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 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 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, a 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 (ASCs),
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.
a. Removal of Total Hip Arthroplasty From the Inpatient Only List
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, in the CY 2020 OPPS/ASC proposed rule (84 FR 39524), we
stated our belief 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 proposed 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 sought 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''. We did not propose to remove PHA from the
IPO list because we continue to believe that it does not meet the
criteria for removal.
Comment: In response to our proposal to remove CPT code 27130 from
the IPO list, we received many of the same type of comments that we
received in response to our CY 2018 proposed rule comment solicitation
for removing THA. Many commenters, including health care providers and
medical associations, supported the proposal. The commenters recognized
that with careful, appropriate selection, THA could be performed in the
outpatient setting with few to no complications. One commenter, an
orthopaedic specialty society, agreed with the patient selection
characteristics that were noted in the proposed rule--namely, that good
candidates for outpatient THA have relatively low anesthesia risk, do
not have significant comorbidities, have in-home support, and are able
to tolerate post-surgical outpatient rehabilitation in either an
outpatient facility or in the home.
One commenter suggested that a patient that requires a revision of
a prior hip replacement, and/or has other complicating clinical
conditions, including multiple co-morbidities such as obesity,
diabetes, heart disease, is not a strong candidate for outpatient THA
and should be scheduled for an inpatient stay. Furthermore, another
commenter stated that the following social factors should be considered
when analyzing the implications of outpatient THA: Living alone, pain,
prior hospitalization, depression, functional status, high-risk
medication, and health literacy. Additionally, both supporters and
opponents requested that CMS provide detailed guidance on what those
selection criteria should look like.
Some commenters did not support the proposal, citing both clinical
and operational concerns based on their experience with the removal of
TKA from the IPO in 2018. Those commenters believe that it would be
hasty to remove THA without waiting for providers and MACs to have a
better handle on performing TKA in the outpatient setting and
developing better skill at performing appropriate patient selection.
One commenter suggested delaying the removal of THA from the IPO list
for a year, until CMS could provide greater evidence, specifically, a
rigorous medical literature review, that THA could be performed safely
in the outpatient or ASC setting, especially for
[[Page 61354]]
beneficiaries with multiple co-morbidities.
Some commenters, including two major orthopaedic associations,
raised concerns about whether the THA procedure meets the criteria
required to be removed from the IPO list. One commenter, an orthopaedic
surgery specialty society for hips and knees, shared that they do not
believe THA meets criterion 2 (the simplest procedure described by the
code may be performed in most outpatient departments)--they argued that
there is no such thing as a simple THA and that all procedures
described by CPT code 27130 have moderate risks for complications. The
commenter further argues that criterion 3 (the procedure is related to
codes that we have already removed from the IPO list) is also not met
since they do not believe that THA and TKA are similar, except for the
risks associated with each in moving the site of surgery. The commenter
expressed additional concerns regarding criterion 4 (a determination is
made that the procedure is being performed in numerous hospitals on an
outpatient basis) and the lack of peer-reviewed literature that would
provide supportive data. Finally, the commenter expressed concerns
regarding criterion 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), stating that there is a lack of peer-reviewed literature and
the ability to guarantee excellent patient selection and education,
tailored anesthetic techniques, well-done surgery, good medical care,
and exceptional post-operative care coordination in the ASC setting.
The commenter conceded that performance of THA in the outpatient
setting is possible, but does not believe that data and guidance on
appropriate patient selection and education, patient-specific
anesthetic techniques, and post-operative care coordination are well
demonstrated in peer-reviewed literature. This commenter did note that
appropriate patient selection for outpatient THA candidates could
mitigate some of its concerns.
Another orthopaedic surgery specialty society called the removal of
THA from the IPO list ``rash,'' and expressed extensive concern that
CMS would remove a procedure from the IPO list based on only two of the
five criteria used to determine appropriate removals for the IPO list.
The commenter further expressed concern that the rationale behind
removing THA from the IPO list--specifically that CMS believes it meets
criteria 2 and 3--fails to consider whether or not outpatient
facilities are equipped and appropriate for outpatient THA, and whether
or not THA is performed safely in outpatient settings a majority of the
time.
Response: We thank commenters for providing public comments on the
appropriateness of removing THA from the IPO list and providing it in
outpatient settings. We appreciate the support for the proposal. We
also recognize concerns for ensuring patient health and quality care.
As we have stated numerous times, like most surgical procedures, the
appropriate site of service for THA should be based on the physician's
assessment of the patient and tailored to the individual patient's
needs. As we stated in the proposed rule (84 FR 39524), 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 THA procedure. On one hand, it may be
determined that these patients will also be able to tolerate outpatient
rehabilitation either in an outpatient facility or at home postsurgery.
On the other hand, patients that require a revision of a prior hip
replacement, and/or have other complicating clinical conditions,
including multiple co-morbidities such as obesity, diabetes, heart
disease, may not be strong candidates for outpatient THA. We also
recognize that elective THA, necessitated, for example, by
osteoarthritis, for a generally healthy patient with at-home support is
different than THA for a hip fracture that is performed on either an
emergent or scheduled basis. While the former may be appropriate for
outpatient THA if the physician believes that the patient may be safely
discharged on the same or next day, the latter may be more appropriate
for hospital inpatient admission.
As previously stated in the discussion of the CY 2018 OPPS/ASC
final rule (82 FR 59383), we continue to believe that the decision
regarding the most appropriate care setting for a given surgical
procedure is a complex medical judgment made by the physician based on
the beneficiary's individual clinical needs and preferences and on the
general coverage rules requiring that any procedure be reasonable and
necessary. We also reiterate our previous statement that the removal of
any procedure from the IPO list does not require the procedure to be
performed only on an outpatient basis. That is, when a procedure is
removed from the IPO, it simply means that Medicare will pay for it in
either the hospital inpatient or outpatient setting; it does not mean
that the procedure must be performed on an outpatient basis. The 2-
midnight rule, which is discussed in section X.B. of this final rule
with comment period, provides general guidance on when payment under
Medicare Part A (that is, hospital inpatient) may be appropriate.
However, the 2-midnight rule also recognizes the importance of the
attending physician's clinical judgment regarding the appropriate
setting of care for a procedure to be performed.
While we continue to expect providers who perform outpatient THA on
Medicare beneficiaries to use comprehensive patient selection criteria
to identify appropriate candidates for the procedure, we believe that
the surgeons, clinical staff, and medical specialty societies who
perform outpatient THA and possess specialized clinical knowledge and
experience are most suited to create such guidelines. Therefore, we do
not expect to create or endorse specific guidelines or content for the
establishment of providers' patient selection protocols.
With respect to certain criteria not being met, we remind
commenters that not all criteria must be met for a service to be
removed from the IPO. We continue to believe that THA meets criteria 2
and 3.
Comment: Several commenters stated concerns regarding the impact of
removing THA from the IPO list in light of the 2-midnight rule and
subsequent RAC review. Because of past concerns with the removal of TKA
from the IPO list and fear of RAC review, commenters also suggested
that if THA is removed from the IPO list, that CMS should provide a
two-year exemption from site-of service denials and Recovery Audit
Contractor (RAC) referrals. Commenters further stated that in addition
to the exemption, CMS should also educate providers that CMS policy
allows for case-by-case exceptions to the 2-midnight rule in
consideration of patient history, co-morbidities, and risk of adverse
events.
Response: We thank the commenters for their feedback. We will again
refer readers to the more extensive discussion of an exemption from
site-of service denials and RAC referrals in section X.B. of this final
rule with comment period. The case-by-case exception under the 2-
midnight rule continues to allow for Part A payment to be made, on a
case-by-case basis, where the physician does not expect the patient to
remain in the hospital for at least two midnights but nonetheless
determines that inpatient admission is necessary based on the clinical
characteristics of
[[Page 61355]]
the patient and that determination is supported by the medical record.
Comment: Several commenters opposed the removal of THA due to
potential detrimental impacts on hospitals participating in the
Comprehensive Care for Joint Replacement (CJR) Program and the Bundled
Payments for Care Initiative (BCPI). Some commenters supported the
proposal, but requested that payment for THA in the context of
alternative payment models be adjusted.
Response: We again refer readers to the CY 2017 OPPS/ACS final rule
with comment period (81 FR 79698 through 79699) in which we originally
proposed the removal of TKA procedural codes from the IPO list and
sought comments on how to modify the CJR and BPCI programs to reflect
the shift of some Medicare beneficiaries from an inpatient TKA
procedure to an outpatient TKA procedure in the BPCI and CJR model
pricing methodologies, including target price calculations and
reconciliation processes, as we also believe it to be applicable to
THA. As in the case of the policy change to move THAs from the IPO
list, the CMS Innovation Center may consider making future changes to
the CJR and BPCI Models to address the removal of THAs from the IPO
list and the performance of THA procedures in the OPPS setting.
Additionally, CMS notes the concerns about appropriate patient
selection raised by commenters and agrees that it is imperative that
physicians and hospitals are mindful of factors that affect whether a
patient would be a good candidate for outpatient THA or should instead
be admitted as a hospital inpatient; however, for the reasons cited in
the CY 2020 OPPS/ASC proposed rule, we continue to believe that it is
appropriate to remove THA as described by CPT code 27130 from the IPO
list. After consideration of the public comments we received, we are
finalizing the removal of CPT code 27130, and assigning the procedure
to C-APC 5115 (Level 5 Musculoskeletal Procedures) with status
indicator ``J1''. In addition, we are removing anesthesia code 01214,
(anesthesia for open procedures involving hip joint; total hip
arthroplasty) as a conforming change.
As stated above, the decision regarding the most appropriate care
setting for a given surgical procedure is a complex medical judgment
made by the physician based on the beneficiary's individual clinical
needs and preferences and on the general coverage rules requiring that
any procedure be reasonable and necessary. Further, the removal of any
procedure from the IPO list, including THA, does not require the
procedure to be performed only on an outpatient basis. That is, when a
procedure is removed from the IPO, it simply means that Medicare will
pay for it in either the hospital inpatient or outpatient setting; it
does not mean that the procedure must be performed on an outpatient
basis. The decision to admit as an inpatient admission or to perform
the procedure on a hospital outpatient basis is subject to the complex
medical judgment of the physician. While we have not established
patient selection criteria for THA or any other procedure, we reiterate
our finding that patients with a relatively low anesthesia risk and
without significant comorbidities who have family members at home who
can assist them may likely be (but are not necessarily) good candidates
for an outpatient THA procedure. These patients may be determined to be
able to tolerate outpatient rehabilitation either in an outpatient
facility or at home postsurgery. While on the other hand, patients that
require a revision of a prior hip replacement, and/or has other
complicating clinical conditions, including multiple co-morbidities
such as obesity, diabetes, heart disease, may not be strong candidates
for outpatient THA. As stated previously, we also recognize that
elective THA, necessitated, for example, by osteoarthritis, for a
generally healthy patient with at-home support is different than THA
for a hip fracture that is performed on either an emergent or scheduled
basis. While the former may be appropriate for outpatient THA if the
physician believes that the patient may be safely discharged on the
same or next day, the latter may be more appropriate for hospital
inpatient admission.
3. Solicitation of Public Comments on the Potential Removal of
Procedures Described by CPT Codes 22633, 22634, 63265, 63266, 63267,
and 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 the CY 2020 OPPS/ASC proposed
rule, we sought public comment on the removal of the following
procedures from the IPO list in Table 47.
[[Page 61356]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.079
We reviewed the clinical characteristics of CPT codes 22633 and
22634 and stated that we believe 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 preparation,
discectomy, osteophytectomy and decompression of spinal cord and/or
nerve roots; cervical below c2), which is currently performed in the
outpatient hospital setting. During the proposed rule, we sought 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 reviewed CPT codes 63265, 63266, 63267, and 63268.
Over the years, stakeholders indicated that this series of CPT codes
should be considered minimally invasive, arguing that CPT codes 63265,
63266, 63267, and 63268 meet criteria 1 and 2 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. We sought 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.
Comment: We received a few comments in support of the removal of
the services described by CPT codes 22633, 22634, 63265, 63266, 63267,
and 63268. Commenters agreed that these procedures were both related to
codes that were previously removed from the IPO list and are performed
safely in numerous hospitals on an outpatient basis. Commenters largely
provided anecdotal experience in support of removing these services
from the IPO list. One commenter provided a March 2019 published
retrospective cohort study of lumbar interbody fusion to treat spinal
pathology using the American College of Surgeons National Surgical
Quality Improvement Program database. The commenter believed that this
study provided additional insight into the perioperative safety profile
and operative efficiency and efficacy of performing transforaminal
lumbar interbody fusions (TLIF) at an outpatient facility.
Commenters in support of the proposal argued that physicians
perform the cases regardless of the IPO list--evaluating each patient
carefully to determine the best fit clinically for that patient.
Several ASCs commented that they often perform all listed procedures
with few to no complications in that setting. This commenter supported
not only removing all six procedures from the IPO list, but also adding
them to the ASC-CPL list.
Commenters further stated that although their current patient
volume does not constitute a large percentage of Medicare
beneficiaries, they would expect to see similar results with Medicare
patients that are active, have a relatively low anesthesia risk, do not
have significant comorbidities and that also have a support system at
home that can assist them post-procedure. The commenters specifically
supported the removal of the six procedures based on the development of
less invasive techniques, improved perioperative
[[Page 61357]]
pain management, and expedited rehabilitation protocols.
Specifically for the services described by CPT codes 22633 and
22634, commenters agreed that related procedures and similar codes such
as 22551 (Arthrodesis, anterior interbody, including disc space
preparation, discectomy, osteophytectomy and decompression of spinal
cord and/or nerve roots; cervical below c2); 22612 (Arthrodesis,
posterior or posterolateral technique, single level; lumbar (with
lateral transverse technique, when performed); and 22614 (Arthrodesis,
posterior or posterolateral technique, single level; each additional
vertebral segment) were previously removed from the IPO list. One
commenter specifically pointed out that performance of CPT codes 22612,
22614, and 22551 are all allowed in the ASC setting, and that their
safety was reconfirmed in the review of procedures added to the ASC
covered procedures list in the CY 2019 OPPS/ASC final rule (83 FR
59057).
In reference to the laminectomy codes, commenters specifically
supported their removal from the IPO list based on their perceived safe
and effective performance in the outpatient setting, in accordance with
criterion 2.
We also received a few general comments in opposition to the
prospect of removing the codes. Specifically, those who opposed
removing the procedures expressed concern that all six procedures in
this comment solicitation are complex procedures and that very few
Medicare beneficiaries are likely to be good candidates to receive the
procedures in the outpatient setting because of their complexity. The
commenters further stated that removing these procedures from the IPO
list and providing them in the outpatient setting may impact patient
safety and outcomes, which they believe should be the primary
considerations when determining which procedures can be removed from
the IPO list.
Response: After reviewing clinical evidence and the public
comments, including input from multiple spinal specialty societies and
ASCs we have determined that the services described by CPT codes 22633,
22634, 63265, 63266, 63267, and 63268 are appropriate candidates for
removal from the IPO list. CMS notes the overall support and for the
reasons cited in the proposed rule, we believe that it is appropriate
to remove CPT codes 22633 and 22634 from IPO list because they meet
criteria one and two: 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. We also believe that it is appropriate to remove CPT codes
63265, 63266, 63267, and 63268 from the inpatient only list, based on
criterion one; most outpatient departments are equipped to provide the
services to the Medicare population. Therefore, we are finalizing the
removal of CPT codes 22633, 22634, 63265, 63266, 63267, and 63268, and
assigning the procedures as follows. The APC and status indicator
assignments are reflected in Table 48 below.
Additional Requests for Changes to the IPO List
Comment: CMS received two additional comments recommending the
removal of several procedures not originally proposed for removal from
the IPO list for CY 2020. These recommended procedures related to other
procedures that were recently removed from the IPO. Specifically, the
commenters referenced the following anesthesia codes for removal:
[[Page 61358]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.080
Response: We thank the commenters for their feedback. After
consideration of the public comments, we agree that the recommended
anesthesia CPT codes should be removed from the IPO list, as they meet
criterion 3; the procedure is related to codes that we have already
removed from the IPO list. Notably, these removed anesthesia codes will
be assigned a status indicator of ``N''.
Comment: Finally, we also received a comment from a provider
organization that suggested that CMS eliminate the IPO list.
Specifically, the commenter argued that the IPO list should to be
eliminated to allow patient status to be determined by the physician
based on the individual patient's clinical condition.
Response: We thank the commenters for their feedback and will
consider this feedback for future rulemaking.
Table 49 contains the final changes that we are making to the IPO
list for CY 2020.
BILLING CODE 4120-01-P
[[Page 61359]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.081
BILLING CODE 4120-01-C
X. Nonrecurring Policy Changes
A. 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
[[Page 61360]]
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 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. 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 an applicable physician 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 proposed 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
proposed 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
[[Page 61361]]
supervision levels for hospital outpatient services as described in
section I.E.2. of the 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 solicited public comments on this proposal.
The comments and our responses to the comments are set forth below.
Comment: A majority of commenters supported our proposal to change
the generally applicable minimum required level of supervision for
hospital outpatient therapeutic services from direct supervision to
general supervision when these services are furnished by hospitals or
CAHs. The commenters appreciated that we proposed to eliminate what is
effectively a two-tiered system of supervision levels for hospital
outpatient therapeutic services between CAHs and small rural hospitals
and all other hospitals by proposing a policy that would set an
appropriate and uniformly enforceable supervision standard for all
hospital outpatient therapeutic services. The commenters also agreed
with our observation that the quality of outpatient therapeutic
services provided by CAHs and small rural hospitals has not been
adversely affected by the nonenforcement instruction. The majority of
commenters stated that our proposal would reduce burden for outpatient
hospital providers, especially those providers in either rural or
underserved areas. The commenters stated that our proposal would allow
CAHs and small rural hospitals more flexibility to provide outpatient
therapeutic care for the Medicare beneficiaries that they serve than
what CAHs and small rural hospitals could provide when the temporary
nonenforcement instruction for direct supervision was in effect,
because a permanent, rather than temporary policy, would allow them to
better make long-range staffing and budgetary plans.
Numerous commenters mentioned the many safeguards noted in our
proposal, including our ongoing policy that gives providers discretion
to require the appropriate amount of supervision to ensure a
therapeutic outpatient procedure is performed without risking a
beneficiary's safety or the quality of the care a beneficiary receives.
Commenters also noted that outpatient hospital and CAH CoPs and state
and federal laws and regulations are present in addition to the
requirements for physician supervision to ensure the safety, health,
and quality standards of the outpatient therapeutic services that
beneficiaries receive.
Response: We appreciate the overall support for our proposal from a
majority of the commenters. We agree with the commenters that this
policy would support our goal of reducing burden on providers,
especially CAHs and small rural hospitals. We also appreciate the
commenters' point that this policy will allow these providers to be
more flexible with their staffing and in turn provide better care to
the communities they serve.
We also appreciate that the commenters noted that providers and
physicians have flexibility to require a higher level of physician
supervision for any service they render if they believe a higher level
of supervision is required to ensure the quality and safety of the
procedure and to protect a beneficiary from complications that might
occur. We agree with the commenters that CoPs, state and federal laws
and regulations, and supervision requirements will also ensure
beneficiary health and safety when receiving outpatient therapeutic
services.
The CoPs for hospitals require a doctor of medicine or osteopathy
(MD/DO) to be responsible for the care of every Medicare patient with
respect to any medical or psychiatric problem that is present on
admission or develops during hospitalization and that is not
specifically within the scope of practice of other types of
practitioners (such as dentists, podiatrists, chiropractors, or
clinical psychologists) as that scope of practice is defined by the
medical staff and permitted by state law (42 CFR 482.12(c)(4)). The
CoPs also require a 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 an MD or DO to provide medical direction for the CAHs' health
care activities, and consultation for, and medical supervision of, the
health care staff. The responsibilities of an MD or DO in hospitals and
CAHs include supervision of all services performed at those facilities.
In addition, MDs and DOs must also follow state laws regarding scope of
practice. State scope of practice laws are state-level regulations that
apply to physicians and other health care practitioners that determine
the tasks they can perform when caring for patients in healthcare
settings in that state.
Comment: Two of the commenters, including MedPAC, strongly
encouraged CMS to diligently monitor the impacts of our proposal on the
quality and safety of outpatient therapeutic services that Medicare
beneficiaries receive to ensure their quality of care is not
compromised and that beneficiaries do not experience higher rates of
medical errors. In addition, several commenters wrote in support of the
Hospital Outpatient Payment Panel (HOP) Panel, which continues to
evaluate and make recommendations on supervision levels for individual
therapeutic outpatient services. These commenters also wrote in support
of CMS' use of the regulatory process to set a higher minimum level of
supervision for individual therapeutic services if needed.
Response: We agree with the commenters and will continue to have a
system in place to change the default minimum level of physician
supervision to a level of supervision higher than general supervision,
which we believe will be important to the overall success of this
policy. We are also committed to monitoring care furnished to Medicare
beneficiaries to determine if there is any decline in the quality of
therapeutic outpatient services provided to Medicare beneficiaries as a
result of this policy, although we believe that the combination of the
CoPs, state and federal laws and regulations, and supervision
requirements will help beneficiaries to receive safe and high-quality
care. We agree with commenters that the work of HOP Panel is helpful to
identify individual outpatient therapeutic procedures that may require
a higher minimum level of physician supervision, which can assist us in
electing whether to establish higher minimum supervision levels on
case-by-case basis through notice and comment rulemaking.
Comment: A few commenters were entirely opposed to our proposal to
change the default level of supervision from direct to general and
either requested that no changes be made to our current policy (which
requires the default minimum level of physician supervision for
outpatient therapeutic services to be direct supervision unless we
establish a different minimum level of supervision) or requested that
CMS evaluate outpatient therapeutic services individually to determine
if the default minimum level of supervision should change from direct
supervision to general supervision.
Several of these commenters appreciated the concerns from CAHs and
small rural providers about the burden they face from the physician
supervision requirements, but these
[[Page 61362]]
commenters believed those concerns were outweighed by the need to have
qualified physicians directly supervise services, especially in the
fields of radiation therapy, hyperbaric oxygen treatment, and wound
care. These commenters believed the default level of supervision for
outpatient therapeutic services should be the same for all outpatient
hospitals and CAHs.
Other commenters expressed concerns that allowing general
supervision to be the minimum default level of supervision for certain
types of services, including radiation therapy, hyperbaric oxygen
treatment, and wound care, could put the health and safety of Medicare
beneficiaries receiving these procedures at risk. These commenters
described these particular services as requiring a high level of skill
to perform and having complications that, while rare, can cause serious
issues for a beneficiary's health. Therefore, these commenters believed
that the minimum default level of supervision for radiation therapy,
hyperbaric oxygen treatment, and wound care should be direct
supervision.
Response: We agree with the commenters about the importance of
ensuring the quality of outpatient therapeutic services and the health
and safety of the beneficiaries who receive those services. We also
appreciate the concerns several commenters raised about how this
proposal will affect the quality and safety of outpatient therapeutic
services including radiation therapy, hyperbaric oxygen treatments, and
wound care services. We believe our supervision requirements continue
to provide the safeguards Medicare beneficiaries need to ensure they
receive quality care when they receive outpatient hospital therapeutic
services and that health and safety of beneficiaries is protected.
Providers have the flexibility to establish what they believe is
the appropriate level of physician supervision for these procedures,
which may well be higher than the requirements for general supervision.
In addition, providers must adhere to the hospital and CAH conditions
of participation, federal and state regulations for radiation therapy,
hyperbaric oxygen treatments, and wound care services, and state
standards for scope of practice for medical personnel who provide these
services. We believe that the combination of providers' desire to
ensure the safety of their patients and the regulations governing these
procedures discussed by the commenters should ensure that these
procedures will be appropriately supervised without risking
beneficiaries' safety or the quality of the care beneficiaries receive,
whether the default level of physician supervision is direct
supervision or general supervision.
We reiterate a key point that the commenters who are in support of
our proposal mentioned, which is that establishing general supervision
as the default level of physician supervision for outpatient
therapeutic services does not prevent a hospital or CAH from requiring
a higher level of supervision for a particular service if they believe
such a supervision level is necessary. Providers and physicians have
flexibility to require a higher level of physician supervision for any
service they furnish if they believe a higher level of supervision is
required to ensure the quality and safety of the procedure and to
protect a beneficiary from complications that might occur. We believe
this flexibility for individual providers to have a higher level of
physician supervision for a given service, which has always been
present in our supervision policies, should address the concerns of
those commenters who believe general supervision is not sufficient for
certain outpatient therapeutic services. In addition, CoP, other
federal and state regulations, and state standards for scope of work
for medical personnel are not affected by this policy, and remain in
place to ensure that hospitals provide proper medical care to all of
their patients including Medicare beneficiaries.
Comment: Two commenters wanted confirmation that our proposed
policy was intended to be permanent and not just for CY 2020.
Response: This policy will take effect beginning in CY 2020 and
will remain in place through subsequent years unless modified in future
notice and comment rulemaking.
Comment: One commenter wanted more clarification on what
constitutes general supervision. The commenter does not support
Medicare requirements for physician supervision that do not help with
patient safety.
Response: Our policies on supervision, along with hospital
conditions of participation, state scope of practice laws, and other
state and federal laws and regulations, all help ensure the quality and
safety of outpatient hospital therapeutic services Medicare
beneficiaries receive. General supervision is defined in our regulation
at 42 CFR 410.32(b)(3)(i) to mean 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.
With general supervision, our 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. General supervision ensures patient safety as it requires
a physician to provide overall direction and control for outpatient
hospital therapeutic procedures, which means the medical personnel
performing the procedure are being monitored and receiving guidance
from a qualified physician even if the physician is not physically
present. Also, a provider may voluntarily choose to require a higher
level of involvement in the medical procedure by the physician if the
hospital believes it is necessary for the safety of the patient
receiving the procedure.
Additionally, we solicited public comments on whether specific
types of services, such as chemotherapy administration or radiation
therapy, should be excepted from our proposal 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.
Comment: Multiple commenters supported our proposal to have general
supervision be the minimum default level of supervision for outpatient
hospital therapeutic chemotherapy and radiation therapy services. One
commenter supported this policy because they were concerned that if
direct supervision was required to be the default minimum level of
physician supervision for chemotherapy and radiation therapy while all
other outpatient hospital therapeutic services have a default minimum
level of general supervision, it would be difficult to change the
minimum default level of supervision for chemotherapy and radiation
therapy to general supervision in the future. Another commenter wanted
to know under what circumstances the minimum default supervision level
for chemotherapy and radiation therapy would be direct physician
supervision if the current policy has established general supervision
as the minimum default level of supervision.
Response: We appreciate the feedback we received from commenters on
this topic. Regarding the question from the one commenter about how the
default minimum level of supervision for chemotherapy and radiation
services could be direct supervision when the default minimum level of
supervision is
[[Page 61363]]
general supervision for other outpatient therapeutic services, we note
that because we are finalizing our proposal to require general
supervision for all outpatient therapeutic services, the required
supervision level is the same for all of these services, including
chemotherapy and radiation therapy services.
After reviewing all of the public comments, we are finalizing our
proposal for CY 2020 and subsequent years 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 without
modification. We also note all of the policy safeguards that have been
in place to ensure the safety, health, and quality standards of the
outpatient therapeutic services that beneficiaries receive will
continue to be in place under our new policy. These safeguards include
allowing providers and physicians the discretion to require a higher
level of supervision to ensure a therapeutic outpatient procedure is
performed without risking a beneficiary's safety or their quality of
the care, as well as the presence outpatient hospital and CAH CoPs, and
other state and federal laws and regulations. We are also finalizing
the accompanying changes we proposed to the regulatory text at Sec.
410.27 with several technical changes.
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 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. 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
[[Page 61364]]
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 proposed 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 proposed 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.
In the proposed rule, we stated that we believed 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 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 stated our belief 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 solicited public comments regarding the appropriate period of time
for this proposed exemption. Specifically, we stated that 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 proposed 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.
Comment: Numerous stakeholders including medical professional
societies, health systems, hospital associations, and individuals
supported the proposal of a 1-year exemption from site-of-service claim
denials under Medicare Part A, eligibility for BFCC-QIO referrals to
RACs for noncompliance with the 2-midnight rule, 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.
However, many of these commenters supported an extension of the
exemption policy past 1 year, with a majority of commenters
recommending a period of 2 years, some commenters recommending three
years or more, and others recommending that CMS permanently restrict
RAC reviews of patient status for procedures removed from the IPO list
in deference to physicians' clinical judgment. The commenters stated
that a longer period of time is necessary for providers to adjust
patterns of practice for procedures that have been removed from the IPO
list and to prepare for system-wide implementation. Some commenters
also requested that CMS maintain consistency with the policy finalized
when total knee arthroplasty (TKA) was removed from the IPO list and
limit RAC review for ``patient status'' for a period of 2 years.
Response: We appreciate the stakeholders' feedback regarding the
appropriate period of time for this exemption. After considering the
options recommended by commenters, we have decided to modify our
proposal and exempt procedures that are removed from the IPO list from
site-of-service claim denials under Medicare Part A, eligibility for
BFCC-QIO referrals to RACs for noncompliance with the 2-midnight rule,
and RAC reviews for ``patient status'' (that is, site-of-service) for a
period of 2 years beginning in CY 2020. We agree with the majority of
commenters who stated a two-year exemption period from certain medical
review activities for procedures removed from the IPO list would be
more beneficial to the provider community than a 1-year exemption, as
such a time period will be sufficient to help hospitals and clinicians
to become used to the availability of payment under both the hospital
inpatient and outpatient setting for procedures newly removed from the
IPO. Further, we were persuaded by the comments explaining that a 2-
year exemption period of exemption will allow providers time to gather
information on procedures newly removed from the IPO list to help
inform education and guidance for the broader provider community,
develop patient selection criteria to identify which patients are, and
are not, appropriate candidates for outpatient procedures and to
develop related policy protocols. We also believe that an extended
exemption period will further facilitate compliance with our payment
policy for inpatient admissions.
We believe that a 2-year exemption time period is adequate to let
providers gain experience with the application of the 2-midnight rule
to these procedures. We also believe that a 2-year exemption of the
medical review activities discussed above for procedures removed from
the IPO list will be sufficient time for providers and BFCC-QIOs to
understand the documentation necessary to support Part A payment for
those patients for which the admitting physician determines that the
procedures should be furnished in an inpatient setting. At this time,
we do not believe it is necessary to exempt procedures that have been
removed from the IPO list from the medical review activities discussed
above for a
[[Page 61365]]
period of longer than 2 years. With regard to comments recommending
that we permanently restrict RAC reviews of ``patient status'' in
deference to physicians' clinical judgment, we believe that it is
necessary to allow BFCC-QIOs to resume referring providers to the RACs
for further medical review due to exhibiting persistent noncompliance
with Medicare payment policies after the two-year exemption period.
Comment: Some commenters also requested clarifications regarding
the proposed policy with regard to BFCC-QIO reviews. One commenter
questioned if the proposed 1-year exemption from certain medical review
activities applied to BFCC-QIO referrals to RACs for review of patient
status only or if it also applied to BFCC-QIO review of medical
necessity for surgery itself. Other commenters suggested that in the
first year after a service is removed from the IPO list, the procedure
should be exempt from both BFCC-QIO medical review and RAC review.
Response: For clarification, as stated in the CY 2020 OPPS/ASC
proposed rule (84 FR 39527), this proposal does not exempt procedures
that are removed from the IPO list from the initial medical reviews of
claims for short-stay inpatient admissions conducted by BFCC-QIOs. The
proposal was intended to exempt procedures that are removed from the
IPO list from eligibility for BFCC-QIO referrals to RACs for
noncompliance with the 2-midnight rule, 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 also
stated in the CY 2020 OPPS/ASC proposed rule that 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 (84 FR 39528).
Also, as stated in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70545), section 1154(a)(1) of the Act authorizes BFCC-
QIOs to review whether services and items billed under Medicare are
reasonable and medically necessary and whether services that are
provided on an inpatient basis could be appropriately and effectively
provided on an outpatient basis. Accordingly, BFCC-QIOs will continue
to conduct initial medical reviews for both the medical necessity of
the services, and the medical necessity of the site-of-service. BFCC-
QIOs will continue to be permitted and expected to deny claims if the
service itself is determined not to be reasonable and medically
necessary. BFCC-QIOs will not make referrals to RACs for noncompliance
with the 2-midnight rule for procedures that are removed from the IPO
list within the first two years of their removal, RACs will not conduct
reviews for ``patient status'' (that is, site-of-service) for
procedures that are removed from the IPO list within the first two
years of their removal, and claims with procedures that are removed
from the IPO list that are identified as noncompliant with the 2-
midnight rule will not be denied with respect to the site-of-service
under Medicare Part A within the first 2 years of their removal
beginning on January 1, 2020.
After considering comments received, we are finalizing our policy
as proposed with one modification to the time period of the exemption.
That is, for CY 2020 and subsequent years, we are finalizing a policy
to exempt procedures that have been removed from the IPO list from
eligibility for referral to RACs for noncompliance with the 2-midnight
rule within the 2-calendar years following their removal from the IPO
list. These procedures will 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 will these
procedures be reviewed by RACs for ``patient status.'' During this 2-
year period, BFCC-QIOs will 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 will not be denied with respect to the site-of-service
under Medicare Part A.
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
outpatient department (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 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, adopted in
2019, departments would 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
[[Page 61366]]
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 was displayed in Column 5 of Table 44-Estimated
Impact of the Proposed CY 2020 Changes for the Hospital Outpatient
Prospective Payment System in the 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 increase other expenditures that are
unnecessary within the OPPS and drive different service-distorting
decisions, 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 rule.
The comments and our responses to the comments are set forth below.
Comment: Numerous commenters, including organizations representing
health insurance plans, physician associations, specialty medical
associations and individual Medicare beneficiaries, supported moving
forward with the phase-in of this proposal. Some of these commenters
commended CMS for completing the two-year phase-in ``since it increases
the sustainability of the Medicare program and reduces costs for
Medicare patients.'' Commenters expressed that the alignment of payment
between the outpatient and physician office setting ``is an important
and necessary reform that can help reduce provider consolidation and
thereby provide beneficiaries with more care options at a lower cost.''
Commenters continued to be supportive of the immediate impact this
policy would have in lowering Medicare beneficiaries' out-of-pocket
costs.
With respect to the policy being applied in a non-budget neutral
manner, one commenter expressed support for the policy and stated that
``the Agency correctly recognized that it cannot address the payment
disparity between the outpatient hospital and physician office settings
as long as it applies payment changes within the OPPS in a budget-
neutral manner that effectively `traps' the potential savings from the
change within the OPPS.''
Several commenters suggested that CMS ``explore additional
opportunities to expand site neutral payments for all clinically
appropriate outpatient services'' beyond the clinic visit service. They
expressed that site neutral payment policies can create incentives for
providers to make decisions that lower the cost of care for
beneficiaries and the Medicare program.
Response: We appreciate the commenters' support. As we stated in
the CY 2019 OPPS/ASC final rule with comment period (83 FR 59005), we
continue to share the commenters' concern that the current payment
incentives, rather than patient acuity or medical necessity, are
affecting site-of-service decision-making. We continue to believe that
these shifts in the sites of service are unnecessary if the beneficiary
can safely receive the same services in a lower cost setting but
instead receives care in a higher cost setting due to payment
incentives. We remain concerned that this shift in care setting
increases beneficiary cost-sharing liability because Medicare payment
rates for the same or similar services are generally higher in hospital
outpatient departments than in physician offices.
We appreciate the comments supporting the implementation of this
policy in a non-budget neutral manner. As we stated in the CY 2019 OPPS
ASC final rule with comment period (83 FR 59013), we believe
implementing a volume control method in a budget neutral manner would
not appropriately reduce the overall unnecessary volume of covered OPD
services, and instead would simply shift services within the OPPS
system because of payment rather than medical necessity. We also
outlined in the CY 2019 OPPS/ASC final rule with comment period (83 FR
59013) that while section 1833(t)(9)(B) of the Act requires that
certain changes made under the OPPS be made in a budget neutral manner,
this section does not apply to the volume control method under section
1833(t)(2)(F) of the Act. As we detailed in the CY 2019 OPPS/ASC final
rule with comment period (83 FR 59005), ``total spending under the OPPS
is projected to further increase by more than $5 billion from
approximately $70 billion in CY 2018 through CY 2019 to nearly $75
billion. This is approximately twice the total estimated spending in CY
2008, a decade ago.'' And as for one of the drivers of this volume
increase, the ``Medicare Payment Advisory Commission (MedPAC) found
that, from 2011 through 2016, combined program spending and beneficiary
cost-sharing on services covered under the OPPS increased by 51
percent, from $39.8 billion to $60.0 billion, an average of 8.6 percent
per year. In its 2018 report, MedPAC also noted that `A large source of
growth in spending on services furnished in hospital outpatient
departments (HOPDs) appears to be the result of the shift of services
from (lower cost) physician offices to (higher cost) HOPDs'.'' (83 FR
59006).
Section 1833(t)(9)(A) of the Act, titled ``Periodic review,''
provides, in part, that the Secretary must annually review and revise
the 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'' (emphasis
added). Section 1833(t)(9)(B) of the Act, titled ``Budget neutrality
adjustment'' provides that if ``the Secretary makes adjustments under
subparagraph (A), then the adjustments for a year may not cause the
estimated amount of expenditures under this part for the year to
increase or decrease from the estimated amount of expenditures under
this part that would have been made if the adjustments had not been
made'' (emphasis added).
However, section 1833(t)(2)(F) of the Act is not an ``adjustment''
under paragraph (2). Unlike the wage adjustment under section
1833(t)(2)(D) of the Act and the outlier, transitional pass-through,
and equitable adjustments under section 1833(t)(2)(E) of the Act,
section 1833(t)(2)(F) of the Act refers to a ``method'' for controlling
unnecessary increases in the volume of covered OPD services, not an
adjustment. Likewise, sections 1833(t)(2)(D) and (E) of the Act also
explicitly require the adjustments authorized by those paragraphs to be
budget neutral, while the volume control method authority at section
1833(t)(2)(F) of the Act does not. Therefore, the volume control method
proposed under section 1833(t)(2)(F) of the Act is not one of the
adjustments under section 1833(t)(2) of the Act that is referenced
under section 1833(t)(9)(A) of the Act that must be included in the
budget neutrality adjustment under section 1833(t)(9)(B) of the Act.
Moreover, section 1833(t)(9)(C) of the Act specifies that, if the
Secretary determines under methodologies described in paragraph (2)(F)
that the volume of services paid for under this subsection increased
beyond amounts established through those methodologies, the Secretary
may appropriately adjust the update to the conversion factor otherwise
applicable in a subsequent year. We continue to interpret this
provision to mean that the Secretary will have implemented a volume
control method under section 1833(t)(2)(F) of the Act in a nonbudget
neutral manner in the year in which the method is implemented, and that
the Secretary may then make further adjustments to the conversion
factor in
[[Page 61367]]
a subsequent year to account for volume increases that are beyond the
amounts estimated by the Secretary under the volume control method.
As detailed later in this section, after consideration of public
comments, we are continuing the second year of the two-year phase-in as
adopted in CY 2019 rulemaking. We will continue to take information
submitted by the commenters into consideration for future analysis.
Comment: MedPAC supported the proposal to adjust the OPPS payment
rate for clinic visits that are provided in excepted off-campus PBDs so
that it is the same as the payment rate for clinic visits provided in
nonexcepted off-campus PBDs. They note that this policy would be
consistent with past Commission recommendations for site-neutral
payments between HOPDs and freestanding physician offices, although the
recommendations it put forth in 2012 and 2014 would have applied to
several services that met certain criteria and would have adjusted
payment so that it equaled the total payment had the services been
furnished in a freestanding office and did not distinguish between on-
and off-campus services. MedPAC further noted that it shares CMS'
concerns about the rate of growth in volume and spending under the
OPPS. MedPAC also stated, perhaps inadvertently, that ``CMS proposes to
implement this policy in a budget-neutral manner.''
Response: We thank MedPAC for its comments and support of this
policy. To clarify, this policy has been phased-in in a non-budget
neutral manner.
Comment: Some commenters were concerned about the impact this
payment change might have on rural providers and safety net health
systems. Commenters suggested that CMS consider policy modifications to
reduce the impact of the payment reduction. They said this could be
accomplished by ``providing the OPPS rate to outpatient departments
located in federally designated Health Professional Shortage Areas or
Medically Underserved Areas.'' Some commenters also suggested that CMS
monitor for any potential access to care issues in rural and
underserved areas.
Response: We share the commenters' concerns about access to care,
especially in rural areas where access issues may be more pronounced
than in other areas of the country. While we understand the concerns
regarding rural hospitals, we believe that implementing with a phase-in
has helped to mitigate the immediate impact rural hospitals might
otherwise face. We will continue to monitor trends for any access to
care issues and may revisit this policy in future rulemaking.
Comment: One commenter, a large medical association, stated that
while it generally supported site neutral payments, it did not
``believe that it is possible to sustain a high-quality health care
system if site neutrality is defined as shrinking all payments to the
lowest amount paid in any setting.'' The commenter went on to state
that ``any savings from site neutrality proposals derived from OPPS
should be reinvested in improvements elsewhere in Part B, including
payments to physicians as inflation is not a factor in annual physician
payment updates and this contributes to the payment differential.'' The
commenter went on to underscore its position that ``CMS should not
implement site neutrality in a way that reduces payment to the lowest
common denominator and should reinvest savings from lowering facility
payments to other Part B services, including payments under the
physician fee schedule.''
Response: We thank the commenter for its input. As we stated in the
CY 2019 OPPS/ASC final rule with comment period (83 FR 59005), to the
extent that similar services can be safely provided in more than one
setting, we do not believe it is prudent for the Medicare program to
pay more for these services in one setting than another. We believe the
increase in the volume of clinic visits, in particular, is due to the
payment incentive that exists to provide this service in the higher
cost setting. Because these services could likely be safely provided in
a lower cost setting, we believe that the growth in clinic visits paid
under the OPPS is unnecessary. Further, we believe that setting the
OPPS payment at the PFS-equivalent rate would be an effective method to
control the volume of these unnecessary services because the payment
differential that is driving the site-of-service decision will be
removed.
We note that the overall amount of Medicare payments to physicians
and other entities made under the PFS is determined by the PFS statute,
and the rates for individual services are determined based on the
resources involved in furnishing these services relative to other
services paid under the PFS. To the extent the commenter believes that
the PFS rate for a particular service is misvalued relative to other
PFS services, we encourage the commenter to nominate the service for
review as a potentially misvalued service under the PFS.
Comment: We received numerous comments urging CMS not to move
forward with the phase-in of this policy. Many commenters believed that
the final rule should reflect the recent decision from the United
States District Court for the District of Columbia, American Hospital
Association, et al. v. Azar, No. 1:18-cv-02841-RMC (D.D.C. Sept. 17,
2019), and that CMS, at a minimum, should maintain the 2019 payments
and not complete the second year of the phase-in. Others believed the
litigation mandated that CMS revert back to the higher payment rates.
Commenters noted that the advisory Panel on Hospital Outpatient Payment
unanimously recommended that CMS freeze the payment policy for clinic
visits furnished by excepted off-campus PBDs at CY 2019 rates and
evaluate whether beneficiary access has been compromised and whether
the volume of outpatient services has decreased. Many commenters argued
that there are several factors in the Medicare program (and outside of
hospital control) that could influence more services moving to the
hospital outpatient setting, including the hospital readmissions
reduction program, hospital value-based purchasing, and the 2-midnight
rule. Commenters reiterated their comments from the CY 2019 OPPS/ASC
final rule with comment period (83 FR 59005) that, relative to patients
seen in physician offices, patients seen in HOPDs:
Have more severe chronic conditions;
Have higher prior utilization of hospitals and EDs;
Are more likely to live in low-income areas;
Are 1.8 times more likely to be dually eligible for
Medicare and Medicaid;
Are 1.4 times more likely to be nonwhite;
Are 1.6 times more likely to be under age 65 and disabled;
and
Are 1.1 times more likely to be over 85 years old.
Many commenters, including numerous state hospital associations,
stated that making additional cuts to outpatient payment of the
magnitude of the second year of phase-in of the clinic visit policy
would be excessive and harmful. They expressed concern that the cuts
could endanger the critical role that HOPDs play in their communities.
Response: We continue to believe that section 1833(t)(2)(F) of the
Act grants the Secretary the authority to develop a method for
controlling unnecessary increases in the volume of covered OPD
services, including a method that controls unnecessary volume increases
by removing a payment differential that is driving a site-of-service
decision, and as a result, is unnecessarily increasing
[[Page 61368]]
service volume.\78\ We also continue to believe shifts in the sites of
service described in CY 2019 OPPS/ASC final rule with comment period
(83 FR 59013), are inherently unnecessary if the beneficiary can safely
receive the same services in a lower cost setting but instead receives
care in a higher cost setting due to the payment incentives created by
the difference in payment amounts. While we did receive some data
illustrating that certain HOPDs serve unique patient populations and
provide services to medically complex beneficiaries, we continue to
believe that this data has not demonstrated the need for higher payment
for clinic visits furnished in excepted off-campus PBDs. As we asserted
in the 2019 OPPS/ASC final rule with comment period (83 FR 59013), the
fact that the commenters did not supply new or additional data
supporting these assertions suggests that the payment differential is
likely the main driver for unnecessary volume increases in outpatient
department services, particularly clinic visits.
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\78\ Available at: https://www.ssa.gov/OP_Home/ssact/title18/1833.htm.
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On September 17, 2019, the United States District Court for the
District of Columbia (the district court) entered an order vacating the
portion of the CY 2019 OPPS/ASC final rule with comment period that
adopted the volume control method for clinic visit services furnished
by nonexcepted off-campus PBDs and remanded the matter to the Secretary
for further proceedings consistent with the district court's
opinion.\79\ On September 23, 2019, the Department of Health and Human
Services (HHS) filed a motion requesting that the district court modify
its order to remand the matter without vacatur or, alternatively, to
stay the portion of the order vacating the rule for 60 days from the
date of the order to allow the Solicitor General time to determine
whether to authorize appeal. On October 21, 2019, the district court
denied our motion to modify and request for stay, affirmed that the
portion of the 2019 final rule that adopted the volume control method
for clinic visits furnished by excepted off-campus PBDs is vacated, and
entered final judgment. We acknowledge that the district court vacated
the volume control policy for CY 2019 and we are working to ensure
affected 2019 claims for clinic visits are paid consistent with the
court's order. We do not believe it is appropriate at this time to make
a change to the second year of the two-year phase-in of the clinic
visit policy. The government has appeal rights, and is still evaluating
the rulings and considering, at the time of this writing, whether to
appeal from the final judgment.
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\79\ American Hospital Ass'n, et al. v. Azar, No. 1:18-cv-02841-
RMC (D.D.C. Sept. 17, 2019).
---------------------------------------------------------------------------
With respect to the HOP panel, section 1833(t)(9)(A) of the Act
provides that the Secretary shall consult with the Panel on policies
affecting the clinical integrity of the ambulatory payment
classifications and their associated weights under the OPPS. The Panel
met on August 19, 2019, and recommended that CMS freeze the payment
policy for off-campus clinic visits at the calendar year 2019 rates and
evaluate whether beneficiary access has been compromised and whether
the volume of outpatient services has decreased; the panel further
recommended that CMS report its findings back to the Panel for review.
We believe, for reasons outlined in the CY 2019 OPPS/ASC final rule
with comment period (83 FR 59013) and in this final rule that in order
to appropriately control unnecessary increases in the volume of clinic
visits services furnished in HOPDs, we must move forward with phasing-
in this policy. Freezing the payment rate, even at the 2019 rate, still
``traps'' the unnecessary spending within the OPPS.
The HOP Panel's recommendations, along with public comments on
provisions of the proposed rule, have been taken into consideration in
the development of this final rule with comment period. While we are
not accepting the HOP Panel's recommendation, we will continue to
monitor and study the utilization of outpatient services as recommended
by the Panel.
Comment: Many commenters referenced the ongoing litigation
(described earlier in this section) in which the district court found
that CMS exceeded its statutory authority by reducing payments for
clinic visit services furnished in excepted off-campus PBDs as a method
to control what we believe are unnecessary increases in the volume of
those services. Several comments suggested that the continued
implementation of this policy should be suspended until the ongoing
litigation is adjudicated. They stated that ``CMS should not take in
further reductions in the clinic payments for off-campus PBDs in CY
2020 or future years until the matter is resolved.''
Commenters also submitted suggestions on how CMS might remedy
payments following the district court's order vacating the portion of
the CY 2019 OPPS/ASC final rule with comment period that adopted the
volume control method for clinic visits. Some suggested that CMS must
``make whole with interest'' affected PBDs. Others recommended that CMS
``make a lump sum payment to the facilities that were subject to the
2019 payment cut'' and requested that ``no additional copayment be
required from patients'' should CMS apply a retroactive remedy. One
commenter suggested that ``CMS provide as a remedy a lump sum payment
to hospitals for the difference that would have been paid had the rule
not been implemented.'' Some commenters stated that ``the remedy should
be completed at a hospital specific level, on a claim by claim basis,''
so as to ensure hospitals are adequately paid for clinic visits.
Several commenters wrote in urging CMS to restore the higher
payment rates (which they believed would be consistent with the
district court decision), promptly repay hospitals for the 2019 payment
cuts, and abandon the second phase of the payment cut for 2020. Many
noted that should the agency move forward with the second phase of the
cut, it would cause additional harm to many hospitals, and they
intended to continue pursuing legal remedies.
Another commenter suggested that while the court remanded to CMS
the issue of remediation of cuts that occurred since January 1, 2019,
they believe ``at a minimum, the final rule should reflect the court
decision and address the 30 percent cut implemented for calendar year
2019 and ensure the cuts are not finalized for 2020.''
Response: We thank the commenters for their suggestions.
As noted above, on September 23, 2019, HHS filed a motion
requesting that the district court modify its order to remand the
matter without vacatur or alternatively, to stay the portion of the
order vacating the rule for 60 days from the date of the order to allow
the Solicitor General time to determine whether to authorize appeal.
This motion was denied on October 21, 2019. As we stated above, the
government has appeal rights and is still evaluating the rulings and
considering, at the time of this writing, whether to appeal from the
final judgment. For CY 2020, CMS will be going forward with the phase-
in. We respectfully disagree with the district court and continue to
believe the Secretary has the authority to address unnecessary
increases in the volume of outpatient services. CMS is still
considering how we would remedy hospitals if we either do not appeal
this ruling or do not succeed on appeal if one is so authorized.
Comment: One commenter suggested that even with the recent court
decision
[[Page 61369]]
CMS should ``explore regulatory pathways to address site of service
payment differentials in a budget neutral manner.'' Commenters gave the
example of ``prospectively chang[ing] the manner in which hospitals
allocate costs to outpatient cost centers in institutional cost
reports, particularly for cost centers where similar services can be
provided in physician offices which have no comparable overhead
costs.'' Another commenter expressed that ``[p]atients should not be
penalized and pay higher prices simply because a hospital owns the
medical practice where they receive care.'' The commenter encouraged
CMS to ``pursue a staunch defense of this proposal including, but not
limited to, the appeal of recent court rulings that undermine these
changes.'' The commenter went on to say that CMS should ``take the
necessary steps to protect its authority to implement the second year
of the two-year phase-in while the Agency takes an appeal to the D.C.
Circuit.''
Response: We thank the commenters for their submissions and support
of this policy. After consideration of public comments we received, we
will be completing the phase-in of the application of the reduction in
payment for HCPCS code G0463. Specifically, for CY 2020, we will apply
the full amount of the 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 PFS-equivalent rate for CY 2020 is
40 percent of the proposed OPPS payment (that is, 60 percent less than
the proposed OPPS rate). 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. Considering the effects of
estimated changes in enrollment, utilization, and case-mix, this policy
results in an estimated CY 2020 savings of approximately $800 million,
with approximately $640 million of the savings accruing to Medicare,
and approximately $160 million saved by Medicare beneficiaries in the
form of reduced copayments, when compared to if the policy were not
applied. We will continue to monitor the effect of this change in
Medicare payment policy, including the volume of these types of OPD
services. We also will continue to evaluate this policy in light of the
litigation and judicial decision as they may arise.
XI. CY 2020 OPPS Payment Status and Comment Indicators
A. 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 did not propose 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 did not receive any public comments on the proposed 2020
definitions of the OPPS status indicators. We believe that the existing
definitions of the OPPS status indicators will continue to be
appropriate for CY 2020. Therefore, we are finalizing our proposed
policy without modifications.
The complete list of the payment status indicators and their
definitions that apply for CY 2020 is displayed in Addendum D1 to this
final rule with comment period, which is available on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
The CY 2020 payment status indicator assignments for APCs and HCPCS
codes are shown in Addendum A and Addendum B, respectively, to this
final rule with comment period, which are available on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
B. CY 2020 Comment Indicator Definitions
In the proposed rule, we proposed 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 proposed to continue their
use in CY 2020. The 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 OPPS comment indicators for CY 2020 are
listed in Addendum D2 to this final rule with comment period, which is
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
We did not receive any public comments on the proposed use of
comment indicators for CY 2020. We believe that the CY 2019 definitions
of the OPPS comment indicators continue to be appropriate for CY 2020.
Therefore, we are continuing to use those definitions without
modification for CY 2020.
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 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
[[Page 61370]]
by 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 report for a
complete discussion on these recommendations, which is available for
download at www.medpac.gov. We appreciate MedPAC's recommendations, but
as MedPAC acknowledged in its March 2019 report, Congress would need to
change current law to enable us to implement its recommendations.
MedPAC did not comment on the proposed OPPS payment rate update.
Comments received from MedPAC for other OPPS policies are discussed in
the applicable sections of this rule.
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.\80\ 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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\80\ 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.
---------------------------------------------------------------------------
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 readers 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, in the CY 2020 OPPS/ASC proposed rule, we proposed 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.
Comment: MedPAC reiterated their previous comments in their March
2019 report; specifically, that they do not support using the hospital
market basket index as an interim method for updating the ASC
conversion factor because evidence indicates the hospital market basket
index does not accurately reflect the cost of providing services in the
ASC setting.
Response: We believe providing ASCs with the same rate update
mechanism as hospitals could encourage the migration of appropriate
services from the hospital setting to the ASC setting and increase the
presence of ASCs in health care markets or geographic areas where
previously there were none or few, thus promoting better beneficiary
access to care. As published in the FY 2020 IPPS/LTCH PPS final rule
(84 FR 42343), based on IGI's 2019 second quarter forecast with
historical data through the first quarter of 2019, the hospital market
basket update is 3.0 percent, and the MFP adjustment is 0.4 percentage
point. Therefore, for this CY 2020 OPPS/ASC final rule with comment
period we are finalizing the application of a 2.6 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, as discussed at section XXVI of this
final rule with comment period.
C. ASC Cost Data
In the March 2019 MedPAC ``Report to the Congress on Medicare
Payment Policy'', 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.\81\
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\81\ 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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Comment: MedPAC reiterated their previous comments in their March
2019 report and requested that CMS use available authority to act
quickly in gathering ASC cost data to inform ASC input costs and
determine whether an existing Medicare price index is an appropriate
proxy for ASC costs or whether an ASC-specific market basket index
should be developed. Additionally, MedPAC asserts there is sufficient
evidence that ASCs are capable of submitting cost data to CMS.
Response: We did not propose any cost reporting requirements for
ASCs in the CY 2020 OPPS/ASC proposed rule and are not finalizing any
cost reporting requirements for ASCs in this final rule.
The full March 2019 MedPAC Report to Congress can be downloaded
from MedPAC's website at: http://www.medpac.gov.
XIII. 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).
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 42 CFR 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
[[Page 61371]]
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 Current Procedural Terminology (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 American Medical Association (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,
is used to update HCPCS and CPT codes, which we finalized in the CY
2012 OPPS/ASC final rule with comment period (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 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 August 7, 2007 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 OPPS/ASC proposed rule and earlier
OPPS/ASC rulemaking cycles, we revised our definition of a surgical
procedure under the ASC payment system. We now 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 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.
The comments and our responses to the comments are set forth below.
Comment: Commenters supported our revised definition and
recommended that we modify our definition of an ASC covered surgical
procedure for CY 2020 and subsequent years.
Response: We thank the commenters for their support. In review of
the public comments we received, we realized that our modified
definition of an ASC covered surgical procedure was initially
[[Page 61372]]
finalized in the CY 2019 OPPS/ASC final rule with comment period (83 FR
59029 through 59030) but that we only referenced CY 2019 and did not
reference subsequent years. While we did not specifically propose to
continue our modified definition of surgery for CY 2020 in the CY 2020
OPPS/ASC proposed rule, we did not propose to remove any procedures
from the ASC list of covered surgical procedures that we had added as a
result of our modified definition of a surgical procedure, and,
therefore, we intended to continue our modified definition. For this
final rule with comment period, after consideration of the public
comments we are adopting a policy to continue to apply the modified
definition of a surgical procedure for CY 2020, which was finalized for
CY 2019 in our CY 2019 OPPS/ASC final rule with comment period (83 FR
59029 through 59030). We intend to address subsequent calendar years in
future rulemaking.
B. ASC Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised HCPCS
Codes
Payment for ASC items and services 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
codes, a numeric and alphanumeric coding system maintained by the 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
42535) to evaluate each year all new 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
final rule with comment period.
We have separated our discussion below based on when the codes are
released and whether we solicited public comments in the proposed rule
(and respond to those comments in this CY 2020 OPPS/ASC final rule with
comment period) or whether we are soliciting public comments in this CY
2020 OPPS/ASC final rule with comment period (and will respond to those
comments in the CY 2021 OPPS/ASC final rule with comment period).
We note that we sought public comments in the CY 2019 OPPS/ASC
final rule with comment period (83 FR 59034 through 59035) on the new
and revised Level II HCPCS codes effective October 1, 2018 or January
1, 2019. These new and revised codes were flagged with comment
indicator ``NI'' in Addenda AA and BB to the CY 2019 OPPS/ASC final
rule with comment period to indicate that we were assigning them an
interim payment status and payment rate, if applicable, which were
subject to public comment following publication of the CY 2019 OPPS/ASC
final rule with comment period. In the CY 2019 OPPS/ASC proposed rule,
we stated that we will finalize the treatment of these codes under the
ASC payment system in this CY 2020 OPPS/ASC final rule with comment
period.
2. April 2019 HCPCS Codes for Which We Solicited Public Comments in the
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 of the CY 2020 OPPS/ASC proposed rule displayed the
new Level II HCPCS codes that were implemented on April 1, 2019, along
with their proposed payment indicators for CY 2020.
We invited public comments on the 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 of the CY 2020 OPPS/ASC proposed rule. We proposed
to finalize their payment indicators in the CY 2020 OPPS/ASC final rule
with comment period.
We did not receive any public comments on the proposed ASC payment
indicator assignments for the new Level II HCPCS codes implemented in
April 2019. Therefore, we are finalizing the proposed ASC payment
indicator assignments for these codes, as indicated in Table 50 below.
We note that several of the temporary drug HCPCS C-codes have been
replaced with permanent drug HCPCS J-codes, effective January 1, 2020.
Their replacement codes are also listed in Table 50. The final payment
rates for these codes can be found in Addendum BB to this final rule
with comment period (which is available via the internet on the CMS
website). In addition, the status indicator meanings can be found in
Addendum DD1 to this final rule with comment period (which is available
via the internet on the CMS website).
[[Page 61373]]
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3. July 2019 HCPCS Codes for Which We Solicited Public Comments in the
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 of the CY
2020 OPPS/ASC proposed rule displayed the new HCPCS codes that were
effective July 1, 2019.
In addition, through the July 2019 quarterly update CR, we also
implemented an ASC payment for one new Category III CPT code as an ASC
covered ancillary service, effective July 1, 2019. This code was listed
in Table 27 of the CY 2020 OPPS/ASC proposed rule, along with the
proposed comment indicator and payment indicator.
We invited 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 of the proposed rule.
We did not receive any other public comments on the proposed ASC
payment indicator assignments for the new Category III CPT codes or
Level II HCPCS codes implemented in July 2019. Therefore, we are
finalizing the proposed ASC payment indicator assignments for these
codes, as indicated in Table 51 and 52 below. We note that several of
the HCPCS C-codes have been replaced with HCPCS J-codes, effective
January 1, 2020. Their replacement codes are listed in Table 51. The
final payment rates for these codes can be found in Addendum AA and BB
to this final rule with comment period (which is available via the
internet on the CMS website). In addition, the status indicator
meanings can be found in Addendum DD1 to this final rule with comment
period (which is available via the internet on the CMS website).
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4. October 2019 HCPCS Codes for Which We Are Soliciting Public Comments
in This CY 2020 OPPS/ASC Final Rule With Comment Period
In the past, we released new and revised HCPCS codes that are
effective October 1 through the October OPPS quarterly update CRs and
incorporated these new codes in the final rule with comment period.
In the CY 2020 OPPS/ASC proposed rule (84 FR 39534), for CY 2020,
consistent with our established policy, we proposed 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 indicator for CY 2020. We did not receive
any public comments on our proposal. As we stated that we would do in
the CY 2020 OPPS/ASC proposed rule, we are inviting public comments in
this CY 2020 OPPS/ASC final rule with comment period on the interim ASC
payment indicator for these codes that we intend to finalize in the CY
2021 OPPS/ASC final rule with comment period.
5. January 2020 HCPCS Codes
a. New Level II HCPCS Codes for Which We Are Soliciting Public Comments
in the CY 2020 OPPS/ASC Final Rule With Comment Period
Consistent with past practice, we are soliciting comment on the new
Level II HCPCS codes that are effective January 1, 2020 in the CY 2020
OPPS/ASC final rule with comment period, thereby updating the ASC
payment system for the calendar year. These codes are released to the
public via the CMS HCPCS website, and also through the January OPPS
quarterly update CRs. 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 the CY 2020 OPPS/ASC
proposed rule, most Level II HCPCS codes are not released until
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 proposed to continue our established
policy of assigning comment indicator ``NI'' in Addendum AA and
Addendum BB to the CY 2020 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 are 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 Solicited Public Comments in the 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 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 the
proposed rule. The new, revised, and deleted CPT codes were listed in
Addendum AA and Addendum BB to the CY 2020 OPPS/ASC proposed rule. We
note that the new and revised CPT codes were assigned to comment
indicator ``NP'' in Addendum AA and Addendum BB of the CY 2020 OPPS/ASC
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 ASC payment assignment, and that comments
would be accepted on the proposed ASC payment indicator.
Further, we note that the CPT code descriptors that appeared in
Addendum AA and BB were short descriptors and did not accurately
describe the complete procedure, service, or item described by the CPT
code. Therefore, we included the 5-digit placeholder codes and the long
descriptors for the new and revised CY 2020 CPT codes in Addendum O to
the proposed rule so that the public could adequately comment on the
proposed ASC payment indicator assignments. The 5-digit placeholder
codes were listed in Addendum O, specifically under the column labeled
``CY 2020 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code''. The
final CPT code numbers are included in this CY 2020 OPPS/ASC final rule
with comment period, and can be found in Addendum AA, Addendum BB, and
Addendum O.
For new and revised CPT codes effective January 1, 2020 that were
received in time to be included in the CY 2020 OPPS/ASC proposed rule,
we proposed the appropriate payment indicator assignments, and
solicited public comments on the payment assignments. We stated we
would accept comments and finalize the payment indicators in this CY
2020 OPPS/ASC final rule with comment period. We note that we received
comments on the ASC payment indicator for certain new CPT codes that
will be effective January 1, 2020. These comments, and our responses,
can be found in section XIII.C.1.a.(2). of this final rule with comment
period.
Also, we note that we inadvertently omitted new CPT and new HCPCS
codes effective January 1, 2020 from Table 32 (Proposed Additions to
the List of ASC Covered Surgical Procedures for CY 2020) of the CY 2020
OPPS/ASC proposed rule (84 FR 39544), however, we included these 12
procedures in
[[Page 61376]]
Addendum AA to the proposed rule. The procedures described by the 12
new CPT and HCPCS codes are displayed in Table 53 of this CY 2020 OPPS/
ASC final rule with comment period.
Finally, shown in Table 28 of the CY 2020 OPPS/ASC proposed rule
(84 FR 39565) and reprinted in Table 53 below, 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.
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C. 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 non office-based, after taking into account updated
volume and utilization data.
(2) Changes for CY 2020 to Covered Surgical Procedures Designated as
Office-Based
In developing the CY 2020 OPPS/ASC 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.
[[Page 61377]]
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).
Our review of the CY 2018 volume and utilization data resulted in
our identification of 9 covered surgical procedures that we believed
met the criteria for designation as permanently office-based. We
understood the data to indicate that these procedures are performed
more than 50 percent of the time in physicians' offices, and we
believed that the services are of a level of complexity consistent with
other procedures performed routinely in physicians' offices. The CPT
codes that we proposed to permanently designate as office-based for CY
2020 were listed in Table 29 of the CY 2020 OPPS/ASC proposed rule,
which is reprinted below as Table 54.
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As we stated in the CY 2019 OPPS/ASC final rule with comment period
(83 FR 59036), the office-based utilization for CPT codes 36902 and
36905 (dialysis vascular 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 did not propose to designate CPT code
36902 as an office-based procedure, but proposed to 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, in the CY 2020 OPPS/ASC proposed rule,
we did not propose to assign an office-based designation for CPT code
36905. Therefore the procedure will retain its payment indicator of
``G2''--non office-based surgical procedure based on OPPS relative
weights.
The comments and our responses to the comment are set forth below.
Comment: Commenters supported our decision to refrain from
proposing to designate CPT code 36902 as an office-based procedure and
to continue to assign both CPT codes 36902 and 36905 a payment
indicator of ``G2''--nonoffice-based surgical procedure paid based on
OPPS relative weights.
Response: We thank commenters for their support of our proposal.
After reviewing the public comments we received, we are finalizing our
proposal to assign CPT code 36902 a payment indicator of ``G2''--
nonoffice-based surgical procedure paid based on OPPS relative weights.
Comment: Some commenters suggested that CPT codes 31634, 31647,
50727, 59414, and 61880 should not be designated as office-based
procedures and that the level of complexity is not consistent with
other procedures performed routinely in physicians' offices
Response: We agree with the commenters. We inadvertently proposed
to assign office-based designations to CPT codes 31634, 31647, 50727,
59414, and 61880. The volume and utilization data for these procedures
do not suggest the procedures are performed more than 50 percent of the
time in physicians' offices, and we do not believe that the services
are of a level of complexity consistent with other procedures performed
routinely in physicians' offices. Therefore, CPT codes 31634, 50727,
59414, 61880 are assigned payment indicators ``G2''--non office-based
surgical procedure based on OPPS relative weights--for CY 2020.
Additionally, as CPT code 31647 exceeds our device offset percentage
threshold of 30 percent for device-intensive designation, we are
assigning this procedure a payment indicator of ``J8''--device-
intensive procedure; paid at adjusted rate--for CY 2020. These
procedures and their assigned payment indicators can be found in
Addendum AA to the CY 2020 OPPS/ASC final rule with comment period
(which is available via the internet on the CMS website).
After consideration of the public comments we received, we are
finalizing our proposal with modification, to designate the four ASC
covered surgical procedures in Table 55 as permanently office-based for
CY 2020 and subsequent years.
[[Page 61379]]
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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 proposed to maintain the
temporary office-based designations for these 11 CPT codes for CY 2020.
The procedures for which the proposed office-based designations for CY
2020 are temporary are also indicated by asterisks in Addendum AA to
the proposed and final rule (which are 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
proposed to assign a nonoffice-based payment indicator--``G2''--to this
code for CY 2020.
We did not receive any public comments on our proposal. Therefore,
we are finalizing our proposal, without modification, to designate the
procedures shown in Table 56 below as temporarily office-based. The
procedures for which the office-based designation for CY 2020 is
temporary are indicated by an asterisk in Addendum AA to this final
rule with comment period (which is available via the internet on the
CMS website).
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For CY 2020, we proposed to designate 7 new CY 2020 CPT codes for
ASC covered surgical procedures as temporarily office-based, as
displayed in Table P31X. After reviewing the clinical characteristics,
utilization, and volume of related procedure codes, we determined that
the procedures in Table 30 of the CY 2020 OPPS/ASC proposed rule
described by the new CPT codes would be predominantly performed in
physicians' offices. We stated that we believed 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) was
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
proposed to add CPT codes 93X00 and 93X01 in Table 30 of the CY 2020
OPPS/ASC proposed rule 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 proposed 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 the CY 2020 OPPS/ASC proposed
rule (which is available via the internet on the CMS website).
We did not receive any public comments on our proposal. Therefore,
we are finalizing our proposal, without modification, to designate the
procedures shown in Table 57 below as temporarily office-based. The
procedures for which the office-based designation for CY 2020 is
temporary are indicated by an asterisk in Addendum AA to this final
rule with comment period (which is available via the internet on the
CMS website).
[[Page 61382]]
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b. 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) 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.
In addition, as also adopted in section IV.B.2. of CY 2019 OPPS/ASC
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 Food and Drug Administration (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:
++ 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
++ 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
proposed 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 the CY 2020 OPP/ASC proposed rule.
The ASC covered surgical procedures that we proposed 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 the CY 2020
OPPS/ASC 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 are also
included in Addendum AA to the 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 proposed 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
[[Page 61384]]
inserted or implanted device (including single use medical devices).
The payment rate under the ASC payment system for device-intensive
procedures furnished with an implantable or inserted medical device
would be calculated by applying the device offset percentage based on
the standard OPPS APC ratesetting methodology to the OPPS national
unadjusted payment to determine the device cost included in the OPPS
payment rate for a device intensive ASC covered surgical procedure,
which we then set as equal to the device portion of the national
unadjusted ASC payment rate for the procedure. We calculate the service
portion of the ASC payment for device intensive procedures by applying
the uniform ASC conversion factor to the service (non-device) portion
of the OPPS relative payment weight for the device-intensive procedure.
Finally, we sum the ASC device portion and ASC service portion to
establish the full payment for the device-intensive procedure under the
revised ASC payment system. (82 FR 59409)
The comments and our responses to the comments are set forth below.
Comment: Commenters continued to support the policy we implemented
last year to lower the device offset percentage threshold to 30 percent
for purposes of designating device-intensive procedures.
Response: We thank commenters for their support.
Comment: Some commenters requested that device implants, which we
interpret to mean surgically inserted or implanted, single-use devices,
be included in ASC payment at invoice price based on manufacturer
reported pricing or at device pass-through payment as described in
section IV.A of this final rule with comment period so that the payment
rate for these device-intensive procedures would more appropriately
reflect the cost of care and encourage migration from the more
expensive hospital setting to the ASC setting.
Response: We thank the commenters for their recommendation. As
discussed in this section, the ASC payment rate for surgical procedures
includes payment for device costs, which are packaged into the
procedure payment. For device-intensive procedures and procedures using
pass-through devices, the device portion is held equal to the device
portion under the OPPS using the standard ratesetting methodology. We
believe this methodology provides consistency with device-intensive
policies under the OPPS and provides an appropriate payment for the
device costs for device-intensive procedures in the ASC setting.
Comment: Some commenters stated that we calculate the device
portions of a service in two ways. The first, using the device offset
from APC payment rates developed under the comprehensive ratesetting
methodology, and, the second using the device offset from the APC
payment rates developed under the standard (non-comprehensive)
ratesetting methodology. Commenters requested that we designate device-
intensive procedures using only our standard (non-comprehensive)
ratesetting methodology for determining whether the cost of a device
exceeds our device-intensive threshold of 30 percent as they believed
that method is more consistent with the overall ASC payment system.
Response: As we stated in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66924), under 42 CFR 416.167 and 416.171, most
ASC payment rates are based on the OPPS relative payment weights, and
our ASC policy with respect to device-intensive procedures is designed
to be consistent with the OPPS. ``Device-intensive'' identifies those
procedures with significant device costs and applies to services that
are performed both in the hospital outpatient department and the ASC
setting. We believe that the device-intensive methodology for ASCs
should align with the device-intensive policies for OPPS, and,
therefore, procedures should not be device-intensive in the ASC setting
if they are not device-intensive in the hospital outpatient setting.
The device offset percentage for device-intensive procedures under the
OPPS are based on the comprehensive ratesetting methodology. However,
to be assigned device-intensive status in the ASC setting, the
procedure must be identified as device-intensive in the hospital
outpatient setting and have a device offset percentage exceeds the 30
percent threshold as calculated using our standard ratesetting
methodology as stated in 42 CFR 416.171(b)(2). Additionally, for
purposes of the ASC payment system, the device amount is calculated by
applying the device offset percentage calculated under our standard
ratesetting methodology to the APC payment weights calculated under our
standard ratesetting methodology.
Comment: One commenter requested that we re-evaluate the device-
intensive designation for CPT code 22869 (Insertion of interlaminar/
interspinous process stabilization/distraction device, without open
decompression or fusion, including image guidance when performed,
lumbar; single level). The commenter stated the ASC payment rate was
too low to reflect the cost of the device in ASCs in California, and,
therefore, the device offset should be increased.
Response: After reviewing the most recently available claims data
for the CY 2020 OPPS/ASC final rule with comment period, CPT code 22869
has a device offset percentage of 74.0 percent and a device offset
amount of $8,383.12. The offset percentage increased by 2.9 percentage
points from 71.1 percent in the CY 2020 OPPS/ASC proposed rule and the
device offset amount increased by 3.0 percent from $8,141.12. We note
that device cost information for CPT code 22869 has only been available
from CY 2017 claims (for CY 2019 ratesetting) and CY 2018 claims (for
CY 2020 ratesetting) and therefore we are unable to draw any historical
comparisons to determine if the CY 2020 device offset is inconsistent
with historical device offsets for this procedure. For this CY 2020
OPPS/ASC final rule with comment period, the device cost of $8,383.12
for CPT code 22869 is based on 372 claims and we believe represents our
best estimate of the cost of devices for performing the surgical
procedure in CY 2020. Further, we note that 50 percent of the final ASC
payment rate (both the device portion and non-device portion) is
adjusted by the ASC wage index to reflect variation in labor costs. We
believe the ASC payment rate for CPT code 22869 provides an appropriate
payment for both device and non-device costs for facilities in all
areas of the country.
Comment: One commenter requested that CPT code 50590 (Lithotripsy,
extracorporeal shock wave) be assigned device-intensive status.
Response: We thank the commenter for its request. Based on the most
recently available claims data for this CY 2020 OPPS/ASC final rule
with comment period, the device offset percentage for CPT code 50590
continues to be below the 30 percent threshold and, therefore, is
ineligible to be assigned device-intensive status.
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
[[Page 61385]]
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 the CY 2014 OPPS/ASC
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 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 the CY 2020 OPPS/ASC proposed rule, we did not propose any
changes to these policies and we are finalizing continuing our existing
policies for CY 2020.
d. Additions to the List of ASC Covered Surgical Procedures
(1) 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 proposed 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 proposed 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 or medical
practice affected the clinical appropriateness of these procedures for
the ASC setting. Based on this review, we proposed to update the list
of ASC covered surgical procedures by adding total knee arthroplasty, a
knee mosaicplasty procedure and three coronary intervention procedures
(as well as the three associated add-on codes for the coronary
intervention procedures) to the list for CY 2020, as was shown in Table
32 of the CY 2020 OPPS/ASC proposed rule. After
[[Page 61386]]
reviewing the clinical characteristics of these procedures and
consulting with stakeholders and our clinical advisors, we determined
that these eight procedures 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. The regulations at
Sec. 416.166(c) list 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 assessed each of the proposed added
procedures against the regulatory safety criteria and determined 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 proposed to include these three
coronary intervention procedures on the list of ASC covered surgical
procedures for CY 2020. We also proposed 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 stated 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 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 suggestions and recommendations into consideration for
future rulemaking.
In this CY 2020 OPPS/ASC final 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 proposed 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 solicited 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 solicited public comment on methods to ensure
beneficiaries receive surgical procedures in the ASC setting only as
clinically appropriate. For instance, we stated that 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 also stated that we could 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
solicited 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 stated our belief that TKA would
meet our regulatory requirements established under Sec. Sec. 416.2 and
416.166(b) for covered surgical procedures in the ASC setting.
Therefore, we proposed to add TKA to the ASC CPL as shown in Table 32
in the CY 2020 OPPS/ASC proposed rule. At that time we stated our
intent to consider appropriate safeguards and limitations for surgical
procedures furnished in the ASC setting based on public comments we
receive.
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
[[Page 61387]]
review and update the ASC covered surgical procedures list at least
every 2 years.
We also solicited 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 solicited 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 comments and our responses to the comments are set forth below.
Comment: Many commenters supported our proposal to add three
coronary intervention procedures as well as the additional three
procedures that represented their associated add-on procedures to the
ASC CPL. They stated that our proposed additions meet our criteria to
be included on the ASC CPL and that claims analyses, clinical trials,
expert consensus and clinical guidelines, among other materials
supported the inclusion of such coronary intervention procedures on the
ASC CPL. Further, many ASC commenters contended that ASCs are well-
equipped to safely perform these procedures on Medicare beneficiaries.
However, some commenters stated that without defined criteria for risk
stratification, beneficiaries would be exposed to significant risk if
these procedures were added to the ASC CPL. Additionally, some
commenters believed the percutaneous coronary intervention procedures
should be performed in a hospital setting where there is an available
on-site cardiac surgical backup and intensive care unit in the event of
an emergency.
Response: We thank the commenters for their support. We assessed
each of the procedures we proposed to add to the ASC CPL against the
regulatory safety criteria and determined 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. We do
not believe that it is appropriate to exclude certain cardiac
procedures from the list of ASC covered surgical procedures because
they involve 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
three coronary intervention procedures (CPT codes 92920, 92928, and
HCPCS code C9600) and three associated add-on procedures (CPT code
92921, 92929, and HCPCS code C9601) can be safely performed in the ASC
setting, for certain Medicare patients and note that the physician
should determine whether a particular case would be a good candidate to
be furnished in the ASC setting rather than the hospital setting based
on the clinical assessment of the patient. We agree with commenters who
stated that expert consensus, clinical guidelines, and clinical studies
establish that percutaneous coronary interventions can be safely
performed in an ASC setting. While we acknowledge that a majority of
Medicare beneficiaries may not be suitable candidates to receive these
procedures in an ASC setting due to factors such as age and
comorbidities, we believe it is important to make these procedures
payable in the ASC setting, in order to ensure access to these coronary
intervention procedures for those beneficiaries who are appropriate
candidates to receive them in an ASC setting.
Therefore, in this final rule with comment period, we are
finalizing our proposal without modification to add three coronary
intervention procedures as well as three associated add-on procedures.
These procedures are:
CPT code 92920 (Percutaneous transluminal coronary
angioplasty; single major coronary artery or branch),
CPT code 92921 (Percutaneous transluminal coronary
angioplasty; each additional branch of a major coronary artery (list
separately in addition to code for primary procedure)),
CPT code 92928 (Percutaneous transcatheter placement of
intracoronary stent(s), with coronary angioplasty when performed;
single major coronary artery or branch),
CPT code 92929 (Percutaneous transcatheter placement of
intracoronary stent(s), with coronary angioplasty when performed; each
additional branch of a major coronary artery (list separately in
addition to code for primary procedure)),
CPT code C9600 (Percutaneous transcatheter placement of
drug eluting intracoronary stent(s), with coronary angioplasty when
performed; single major coronary artery or branch), and
CPT code C9601 (Percutaneous transcatheter placement of
drug-eluting intracoronary stent(s), with coronary angioplasty when
performed; each additional branch of a major coronary artery (list
separately in addition to code for primary procedure)) to the ASC CPL.
Comment: Many commenters supported our proposal to add TKA to the
ASC CPL for CY 2020 and subsequent years.
Response: We thank commenters for their support of our proposal.
Comment: One commenter requested that we delay adding TKA to the
ASC CPL until more data can be collected on the impact of case-mix and
patient populations for participants in the CMS Innovation Center's
Bundled Payments for Care Improvement Initiative.
Response: We believe there are a small number of less medically
complex TKA patients that could appropriately receive TKA in an ASC
setting. Because we believe this group will be small, we do not believe
our proposal would have a substantial impact on the patient-mix for the
Bundled Payments for Care Improvement Advanced (BPCI Advanced) or the
Initiative and Comprehensive Care Joint Replacement (CJR) models.
Therefore, we do not believe any delay in the implementation of our
proposed addition to the ASC CPL is warranted.
Comment: Some commenters opposed our proposal to add TKA to the ASC
CPL. These commenters stated that the Medicare population would not be
suitable candidates to receive TKA in an ASC setting and that
complications arising from TKA could be devastating and life-
threatening if not performed in a hospital setting. Specifically,
patients could be at risk for the development of deep vein thrombosis
with the potential to propagate lethal pulmonary embolus, anesthesia-
related risks, as well as other risks. Some commenters also noted that
CMS eliminated the requirement that ASCs have a written transfer
agreement with a nearby hospital and the requirement that their
physicians have admitting privileges at a hospital. Further, some
commenters noted that in the absence of the physician self-referral
law, which does not apply to
[[Page 61388]]
procedures performed in an ASC, there will be no other safeguard
against a physician's profitable, but clinically inappropriate,
referral to an ASC in which the physician has an ownership interest.
Response: We agree with commenters that the majority of Medicare
beneficiaries would not be suitable candidates to receive TKA
procedures in an ASC setting. Factors such as age, comorbidity, and
body mass index are among the many factors that must be taken into
account to determine if performing a TKA procedure in an ASC would be
appropriate for a particular Medicare beneficiary. However, we believe
there are a small number of less medically complex beneficiaries that
could appropriately receive the TKA procedure in an ASC setting and we
believe physicians should continue to play an important role in
exercising their clinical judgment when making site-of-service
determinations, including for TKA. While we acknowledge that the
physician self-referral law does not apply to TKA performed in an ASC,
physicians should be aware of other Federal and state laws that may
potentially limit this activity, such as the Anti-Kickback Statute.
Comment: Commenters also noted that beneficiary coinsurance for TKA
procedures could be higher in the ASC setting and therefore did not
support our proposal, or recommended that we notify beneficiaries that
the coinsurance for a TKA procedure could be lower in a hospital
outpatient setting.
Response: We are aware that beneficiaries may incur greater cost-
sharing for TKA procedures in an ASC setting under our proposal.
However, this would not be an occurrence that is unique to TKA. Section
1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment
that may be collected for a procedure paid under the OPPS (including
items such as drugs and biologicals) performed in a year to the amount
of the inpatient hospital deductible for that year. We note that this
section of the Act does not apply to the ASC payment system. Rather,
ASC cost-sharing is described by 1833(a)(4) of the Act and there may be
instances where beneficiary cost-sharing in an ASC may be higher than
beneficiary cost-sharing in a hospital outpatient department for the
same procedure. We note that the ASC payment rate for a TKA procedure
is $8,609.17 for CY 2020 while the CY 2020 OPPS payment rate is
$11,899.39. This means that ASC coinsurance would be $1,721.83 while
hospital OPPS coinsurance would have been $2,379.88, but for the
statutory cap limiting it to the inpatient deductible amount ($1,364 in
CY 2019). However, the payment rates are publicly available and despite
the higher cost-sharing, some beneficiaries, especially those with
supplemental insurance, may still choose to have their procedure
performed in the ASC setting.
In addition, as we stated in the CY 2018 OPPS/ASC final rule with
comment period (82 FR 59389), section 4011 of the 21st Century Cures
Act (Pub. L. 114-255) requires the Secretary to make available to the
public via a searchable website, with respect to an appropriate number
of items and services, the estimated payment amount for the item or
service under the OPPS and ASC payment system and the estimated
beneficiary liability applicable to the item or service. We implemented
this provision by providing our Outpatient Procedure Price Lookup tool
available via the internet at https://www.medicare.gov/procedure-price-lookup. This web page allows beneficiaries to compare their potential
cost-sharing liability for procedures performed in the hospital
outpatient setting versus the ASC setting. We believe this tool allows
beneficiaries to be informed of potential cost-sharing amounts and
therefore mitigates the commenters' concern about providing payment for
procedures in an ASC setting even if the beneficiary cost-sharing in an
ASC would be greater than in the hospital outpatient department
setting.
Comment: Some commenters suggested that CMS work closely with
specialty societies regarding best practices and any appropriate
limitations or conditions for Medicare Part B payment for TKA in the
ASC setting. Other commenters stated that our suggestions, such as
requiring a modifier or a plan of care, were unnecessary and would
increase administrative burden by complicating the processes for
scheduling, performing and billing for ASCs, without improving
beneficiary safety because physicians are best-equipped to determine
the clinical appropriateness of the site of service for their patients.
Some commenters did not support our suggested approaches and believed
that such requirements would be superfluous and provide no beneficial
oversight to ensure patient safety. Two orthopedic specialty societies
supported the concept of having defined plans of care for each
beneficiary following a surgical procedure. One orthopedic specialty
society requested that we re-establish the requirement that ASCs have
formal arrangements with a nearby hospital in case a patient is unable
to go home following a procedure. Other commenters suggested that a
defined plan of care requirement is already an existing Condition for
Coverage for ASCs.
Response: We agree with commenters that ASCs are currently required
to follow the discharge protocols following a surgical procedure, as
set out at 42 CFR 416.52(c). For example, our regulations require that
each patient be provided written discharge instructions and overnight
supplies; prescription and physician contact information; and post-
operative instructions; and that patients be discharged in the company
of a responsible adult, except those patients exempted by the attending
physician.
We remind ASCs that beneficiaries should receive discharge care
instructions that meet our requirements following a TKA procedure as
well as other surgical procedures. ASCs should also review our State
Operations Manual for further guidance on this condition for coverage,
as well as others.
With respect to reinstating the requirement that ASCs have a formal
transfer agreement with a nearby hospital, we note that such issue is
related to Conditions for Coverage and is outside the scope of this
final rule with comment.
After considering the public comments we received, and in response
to commenters' support for this proposal, we are finalizing our
proposal without modification to add TKA, CPT code 27447 (Arthroplasty,
knee, condyle and plateau; medial and lateral compartments with or
without patella resurfacing (total knee arthroplasty)), to the ASC CPL
for CY 2020 and subsequent years.
Based on the public comments we received, we are not finalizing any
of the additional requirements on which we sought comment, such as
adding a modifier or 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.
Comment: Commenters who responded to the CY 2020 OPPS/ASC proposed
rule also requested that CMS add several additional procedures to the
ASC CPL, which we had not proposed to add to the ASC CPL in the CY 2020
OPPS/ASC proposed rule. These additional procedures are listed in Table
58.
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Response: We appreciate the commenters' recommendations. We
reviewed all of the services that commenters requested that we add to
the ASC CPL. Of these procedures, we did not consider procedures that
are unconditionally packaged under the OPPS (identified by status
indicator ``N'' in addendum B of this final rule with comment period)
as such procedures would not meet our requirement for ASC covered
surgical procedures at Sec. 416.166(b) that the procedure be
separately paid under the OPPS.
Of the procedures listed in Table 58, CPT codes 57267, 62290,
62291, 92938, 92973, 92978, 92979, 93463, 93563, 93564, 93565, 93566,
93567, 93568, 93571, 93572, and C9605 are unconditionally packaged
under the ASC payment system. For the procedures identified by CPT
codes 92960, 93312, 93313, 93315, and 93530, we do not believe these
procedures meet our criteria as established under Sec. 416.166(b) and
would pose a significant safety risk to beneficiaries if performed in
an ASC setting. For the procedures identified by CPT codes 27412,
57282, 57283, 57425, 62365, 62367, and 62368, we will continue to
review whether these procedures meet the criteria to be added to the
ASC CPL and take commenters input into consideration in future
rulemaking.
(2) Comment Solicitation on Coronary Intervention Procedures
For CY 2020, as discussed above, we proposed 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. In the CY 2020 OPPS/ASC proposed rule, in addition to the
three coronary intervention procedures (and their three add-on codes)
we proposed to add to the ASC CPL, we also reviewed several other
coronary intervention procedures. While we did not believe the
procedures included in Table P33 of the CY 2020 OPPS/ASC proposed rule
met our criteria for inclusion on the ASC CPL at that time, and we did
not propose to add such procedures to the ASC CPL for CY 2020, we
solicited public comments on whether stakeholders believe these
procedures can be safely performed in an ASC setting. Additionally, we
requested that commenters provide any materials supporting their
position, in particular information and data that specifically address
the requirements in our regulations at Sec. Sec. 416.2 and 416.166 (84
FR 39544). For example, we requested that commenters provide
information that supports 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 Sec. 416.166(c)
(for example, would it generally result in extensive blood loss). We
stated that we would consider public comments we receive in future
rulemaking cycles.
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Comment: Some commenters supported adding all of the procedures
listed in Table 33 of the CY 2020 OPPS/ASC proposed rule. Other
commenters recommended adding CPT codes 92937, 92938, 92973, C9604, and
C9605. These commenters stated these percutaneous transluminal
revascularization procedures through coronary artery bypass graft meet
our established criteria for addition to the ASC CPL and that claims
data, clinical trials, and clinical guidelines support their addition.
Other commenters did not support adding any of the procedures list
in Table 59 as listed above. The commenters stated that these
procedures often carry the risk of serious possible complications, such
as in-facility death, damage to or perforations of coronary arteries,
and intramural hematoma, among others. Therefore, commenters indicated,
such procedures should only be performed in hospital settings that
include rapid access to on-site cardiac surgery as well as intensive
care units.
Response: We appreciate the commenters' feedback and
recommendations. Additionally, we note that we had the incorrect long
descriptor for CPT 92973 displayed in our CY 2020 OPPS/ASC proposed
rule. In the proposed rule, we had the long descriptor as
``Percutaneous transcatheter placement of drug eluting intracoronary
stent(s), with coronary angioplasty when performed; single major
coronary artery or branch.'' The correct long descriptor for CPT 92973
should be ``Percutaneous transluminal coronary thrombectomy mechanical
(list separately in addition to code for primary procedure)'' and is
displayed in Table 59 of this final rule with comment period.
Based on the public comments we received, we believe the procedures
listed in Table 59 would expose beneficiaries to significant safety
risk if performed in an ASC setting at this time and would not meet our
criteria established under Sec. 416.166(b). Specifically, we believe
that transluminal revascularization of a bypass graft carries an
inherent higher risk of complication and may require the assistance of
on-site cardiac surgical backup. Additionally, we believe atherectomy
procedures carry a greater risk of complication than coronary
intervention procedures without an atherectomy procedure. Therefore, at
this time, we believe that adding any of the procedures identified in
Table 59 of this final rule with comment period to the ASC CPL would
expose
[[Page 61394]]
beneficiaries to significant risk. We believe that such procedures
should be performed in a hospital setting with an immediate response
available in case of emergencies.
We received no comments on our proposal to add CPT code 29867
(Arthroscopy, knee, surgical; osteochondral allograft (for example,
mosaicplasty)) to the ASC CPL for CY 2020 and subsequent years.
After consideration of the public comments we received, we are
finalizing our proposal without modification to add CPT codes: 27447,
29867, 92920, 92921, 92928, 92929, and HCPCS codes C9600 and C9601 to
the ASC CPL. We have determined these procedures would not be expected
to pose a significant risk to beneficiary safety when performed in an
ASC, that standard medical practice would not dictate that the
beneficiary would typically be expected to require active medical
monitoring and care at midnight following the procedure, and are
separately paid under the OPPS. The 8 procedures we are adding to the
ASC CPL, including the long descriptors and the final CY 2020 payment
indicators, are displayed in Table 60.
Additionally, we note that we inadvertently omitted new CPT and new
HCPCS codes effective January 1, 2020 from Table 32, Proposed Additions
to the List of ASC Covered Surgical Procedures for CY 2020, of our CY
2020 OPPS/ASC proposed rule (84 FR 39544); however, we included these
12 procedures in Addendum AA to our proposed rule. The procedures
described by the 12 new CPT and HCPCS codes meet our criteria
established under Sec. Sec. 416.2 and 416.166 for addition to the ASC
CPL and are displayed in Table 60. These 12 procedures include--
CPT code 15769 (Grafting of autologous soft tissue, other,
harvested by direct excision (for example, fat, dermis, fascia));
CPT code 15771 (Grafting of autologous fat harvested by
liposuction technique to trunk, breasts, scalp, arms, and/or legs; 50
cc or less injectate);
CPT code 15773 (Grafting of autologous fat harvested by
liposuction technique to face, eyelids, mouth, neck, ears, orbits,
genitalia, hands, and/or feet; 25 cc or less injectate);
CPT code 33016 (Pericardiocentesis, including imaging
guidance, when performed);
CPT code 46948 (Hemorrhoidectomy, internal, by transanal
hemorrhoidal dearterialization, 2 or more hemorrhoid columns/groups,
including ultrasound guidance, with mucopexy, when performed);
CPT code 62328 (Spinal puncture, lumbar, diagnostic; with
fluoroscopic or CT guidance);
CPT code 62329 (Spinal puncture, therapeutic, for drainage
of cerebrospinal fluid (by needle or catheter); with fluoroscopic or CT
guidance);
CPT Code 64451 (Injection(s), anesthetic agent(s) and/or
steroid; nerves innervating the sacroiliac joint, with image guidance
(that is, fluoroscopy or computed tomography));
CPT Code 64625 (Radiofrequency ablation, nerves
innervating the sacroiliac joint, with image guidance (that is,
fluoroscopy or computed tomography));
CPT Code 66987 (Extracapsular cataract removal with
insertion of intraocular lens prosthesis (1-stage procedure), manual or
mechanical technique (for example, irrigation and aspiration or
phacoemulsification), complex, requiring devices or techniques not
generally used in routine cataract surgery (for example, iris expansion
device, suture support for intraocular lens, or primary posterior
capsulorrhexis) or performed on patients in the amblyogenic
developmental stage; with endoscopic cyclophotocoagulation);
CPT Code 66988 (Extracapsular cataract removal with
insertion of intraocular lens prosthesis (1 stage procedure), manual or
mechanical technique (for example, irrigation and aspiration or
phacoemulsification); with endoscopic cyclophotocoagulation); and
CPT code 0587T (Percutaneous implantation or replacement
of integrated single device neurostimulation system including electrode
array and receiver or pulse generator, including analysis, programming,
and imaging guidance when performed, posterior tibial nerve).
We did not receive comments on the addition of these codes to the
ASC CPL and are finalizing without modification. The table below shows
all additions to the ASC CPL for CY 2020, these additions are also
reflected in Addendum AA.
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2. Covered Ancillary Services
Consistent with the established ASC payment system policy (72 FR
42497), we proposed to update the ASC list of covered ancillary
services to reflect the payment status for the services under the CY
2020 OPPS. We stated in the proposed rule that 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
proposed to continue this reconciliation of packaged status for
subsequent calendar years. Comment indicator ``CH'', which is discussed
in section XIII.F. of the CY 2020 OPPS/ASC proposed rule, is used in
Addendum BB to the CY 2020 OPPS/ASC proposed rule (which is available
via the internet on the CMS website) to indicate covered ancillary
services for which we proposed a change in the ASC payment indicator to
reflect a proposed change in the OPPS treatment of the service for CY
2020.
Comment: One commenter requested that we add CPT code 91040
(Esophageal balloon distension study, diagnostic, with provocation when
performed) to our list of covered ancillary services. Commenter stated
that esophageal balloon distension studies are often performed in
conjunction with esophagogastroduodenoscopy procedures.
Response: Services listed in our list of covered ancillary services
must be integral to the performance of a covered surgical procedure.
Based on the description of the procedure, we do not believe this
service is integral to the performance of the surgical procedures
identified by the commenter, specifically CPT codes 43235
(Esophagogastroduodenoscopy, flexible, transoral; diagnostic, including
collection of specimen(s) by brushing or washing, when performed
(separate procedure)), 43236 (Esophagogastroduodenoscopy, flexible,
transoral; with directed submucosal injection(s), any substance), or
43239 (Esophagogastroduodenoscopy, flexible, transoral; with biopsy,
single or multiple), or other surgical procedures. Therefore, we are
not adding CPT code 91040 to the list of ASC covered ancillary services
for CY 2020.
All ASC covered ancillary services and their proposed payment
indicators for CY 2020 are included in Addendum BB to the CY 2020 OPPS/
ASC proposed rule (which is available via the internet on the CMS
website).
D. Update and Payment for ASC Covered Surgical Procedures and Covered
Ancillary Services
1. 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
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.
[[Page 61398]]
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. Update to ASC Covered Surgical Procedure Payment Rates for CY 2020
We proposed 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 the CY 2020 OPPS/ASC 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 proposed to continue to use the amount
calculated under the ASC standard ratesetting methodology for
procedures assigned payment indicators ``A2'' and ``G2''.
We proposed 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 the CY 2020 OPPS/ASC proposed rule. Therefore, we
proposed 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 proposed 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.
Our responses to the comments are set forth below.
Comment: We received several comments from professional societies
expressing concern about assigning CPT codes 36465, 36466, and 31298 to
a P2 payment indicator and CPT code 36482 to a P3 payment indicator.
Commenters also expressed concerns with the appropriateness of the ASC
payment policy to assign procedures to the lowest published payment
rate across multiple payment systems, based upon CMS's determination
that the level of complexity for a procedure is consistent with
procedures performed in a physician's office. Commenters agreed with
the proposal not 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.
Response: We appreciate the commenters' input. Based on our
analysis of the latest hospital outpatient and ASC claims data used for
this final rule with comment period, we are updating ASC payment rates
for CY 2020 using the established rate calculation methodologies under
Sec. 416.171 of the regulations and using our finalized modified
definition of device-intensive procedures, as discussed in section
XIII.C.1.b of this final rule with comment period. We do not generally
make additional payment adjustments to specific procedures. As such, we
are finalizing the proposed APC assignment and payment indicators for
CPT codes 36465, 36466, 31298, 36482, and 36902 as discussed in
XIII.C.1.A of this final rule with comment period.
Comment: Several commenters disagreed with the proposed CY 2020 ASC
payment rates for the surgical procedures described by the following
CPT/HCPCS codes, requesting that CMS increase payment in the ASC
setting:
HCPCS code C9754 (Creation of arteriovenous fistula,
percutaneous; direct, any site, including all imaging and radiologic
supervision and interpretation, when performed and secondary procedures
to redirect blood flow)
HCPCS code C9755 (Creation of arteriovenous fistula,
percutaneous using magnetic-guided arterial and venous catheters and
radiofrequency energy, including flow-directing procedures (for
example, vascular coil embolization with radiologic supervision and
interpretation, when performed) and fistulogram(s), angiography,
venography, and/or ultrasound, with radiologic supervision and
interpretation, when performed)
CPT code 37243 (Vascular embolization or occlusion,
inclusive of all radiological supervision and interpretation,
intraprocedural roadmapping, and imaging guidance necessary to complete
the intervention; for tumors, organ ischemia, or infarction)
CPT code 53854 (Transurethral destruction of prostate
tissue by radiofrequency generated water vapor thermotherapy)
CPT code 22869 (Insertion of interlaminar/interspinous
process stabilization/distraction device, without open decompression or
fusion, including image guidance when performed, lumbar; single level)
CPT code 22870 (Insertion of interlaminar/interspinous
process stabilization/distraction device, without open decompression or
fusion, including image guidance when performed, lumbar; second level
(List separately in addition to code for primary procedure)
Response: We update the data on which we establish payment rates
each year through rulemaking and note that ASC rates are derived from
OPPS payment rates which are required to be reviewed and updated at
least annually under section 1833(t)(9) of the Act. ASC payment is
dependent upon the APC assignment for each procedure. Based on our
analysis of the latest hospital OPPS and ASC claims data used for this
final rule with comment period, we are updating ASC payment rates for
CY 2020 using the established rate calculation methodologies under
Sec. 416.171 of the regulations and our
[[Page 61399]]
definition of device-intensive procedures, as discussed in section
XII.C.1.b. of this CY 2020 OPPS/ASC final rule with comment period. We
do not generally make additional payment adjustments to specific
procedures. Therefore, we are finalizing the payment indicators for
HCPCS codes C9754 and C9755 and CPT codes 37243, 53854, 22869, and
22870 for CY 2020.
Comment: One commenter recommended that CMS eliminate the
prohibition against billing for services using an unlisted CPT surgical
procedure code.
Response: Under Sec. 416.166(c)(7), covered surgical procedures do
not include procedures that can only be reported using a CPT unlisted
surgical procedure code. Therefore, such procedures are not currently
payable under the ASC payment system. As discussed in the August 2,
2008 final rule (72 FR 42484 through 42486), it is not possible to know
what specific procedure would be represented by an unlisted code. We
are required to evaluate each surgical procedure for potential safety
risk and the expected need for overnight monitoring and to exclude such
procedures from ASC payment. It is not possible to evaluate procedures
reported by unlisted CPT codes according to these criteria. Therefore,
we are not accepting this recommendation.
After consideration of the public comments we received, we are
finalizing our proposed policies without modification, to calculate the
CY 2020 payment rates for ASC covered surgical procedures according to
our established methodologies using the modified definition of device-
intensive procedures. For covered office-based surgical procedures, the
payment rate is the lesser of the final CY 2020 MPFS nonfacility PE
RVU-based amount or the final CY 2020 ASC payment amount calculated
according to the ASC standard ratesetting methodology, the final
payment indicators and rates set forth in this final rule with comment
period are based on a comparison using the PFS PE RVUs and the
conversion factor effective January 1, 2020. For a discussion of the
PFS rates, we refer readers to the CY 2020 PFS final rule with comment
period.
c. Limit on ASC Payment Rates for Low Volume Device-Intensive
Procedures
As stated in section XIII.D.1.b. of the CY 2020 OPPS/ASC 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 the CY 2020 OPPS/ASC 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 the 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 the CY 2020 OPPS/ASC
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 proposed to limit
the ASC payment rate for low-volume device-intensive procedures to a
payment rate equal to the OPPS 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
proposed to establish an ASC payment rate for such procedures equal to
the OPPS payment rate for the same procedure. In the CY 2020 OPPS/ASC
proposed rule, we noted that this policy would only affect HCPCS code
0308T, which has very low claims volume (7 claims used for ratesetting
in the OPPS). We proposed to amend Sec. 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 Sec.
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 proposed 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 equivalent 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 of the CY 2020 OPPS/ASC proposed rule
(which is available via the internet on the CMS website).
Comment: One commenter requested that CMS consider adopting a
consistent payment methodology for low volume procedures, regardless of
whether a procedure is assigned to a clinical or New Technology APC.
The commenter noted that 0308T is one of only two procedures to which
CMS has applied
[[Page 61400]]
either of the low volume payment methodologies. The commenter suggested
CMS could determine the payment rate for low volume, device-intensive
procedures in clinical APCs by using 4 years of claims data and
gathering input through the public comment period on whether arithmetic
mean, geometric mean, or median should be the basis for the payment
amount.
Response: We appreciate the stakeholder's comments regarding
changes in estimated costs based on the claims data available for
ratesetting. In our CY 2017 OPPS/ASC final rule with comment period (81
FR 79660 through 79661), we finalized our 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. We
believe using the median cost instead of the geometric mean cost has
generally provided an appropriate payment for low-volume device-
intensive procedures in cases where there are no data anomalies.
However, we note that we are adding paragraph (b)(4) to Sec. 416.171
to require that, notwithstanding paragraph (b)(2), low volume device-
intensive procedures where the otherwise applicable ASC payment rate
calculated based on the standard methodology for device-intensive
procedures would exceed the payment rate for the equivalent 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 to address such data anomalies in the future.
Additionally, as we noted in our CY 2020 OPPS/ASC proposed rule (84
FR 39453-39454), 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. In cases where
procedures are assigned to New Technology APCs have very low annual
volume, we may use up to 4 years of claims data in calculating the
applicable payment rate for the prospective year. We believe our
payment policy for low-volume new technology procedures provides an
appropriate payment for new technology procedures so that they may be
assigned to an appropriate clinical APC in the future. Further, we
believe this payment policy should only be applicable to procedures
assigned to New Technology APCs and not to all clinical APCs since we
believe it would be less common for a clinical APC to have fewer than
100 total claims than a new technology APC.
After consideration of the public comment we received, we are
finalizing our proposed policy without modification, to limit the ASC
payment rate for a low-volume device-intensive procedure to a payment
rate equal to the OPPS payment rate for that procedure, including our
proposed regulation text at Sec. 416.171(b)(4).
2. 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 the CY 2020 OPPS/ASC 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 the CY 2020 OPPS/ASC proposed rule, 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 (Sec.
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; Sec. 416.164(b)). Under the ASC payment system, we have
designated corneal tissue
[[Page 61401]]
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 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. Payment for Covered Ancillary Services for CY 2020
We proposed 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 proposed 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 did not propose 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 of the CY 2020 OPPS/ASC 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 final rates, the proposed payment indicators and rates set
forth in the 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 is available
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
3. 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 Sec.
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 Sec. 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 Sec.
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 the CY 2019 OPPS/ASC 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 or SUPPORT 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 the CY 2020 OPPS/ASC proposed
rule.
The comments and our responses are set forth below.
[[Page 61402]]
Comment: Multiple commenters, including individual stakeholders,
hospital and physician groups, national medical associations, device
manufacturers, and groups representing the pharmaceutical industry,
supported the proposal to continue unpackage and pay separately for the
cost of non-opioid pain management drugs that function as surgical
supplies, such as Exparel, in the ASC setting for CY 2020. These
commenters believed that packaged payment for non-opioid alternatives
presents a barrier to care and that separate payment for non-opioid
pain management drugs would be an appropriate response to the opioid
drug abuse epidemic.
Other commenters, including MedPAC, did not support this proposal
and stated that the policy was counter to the OPPS packaging policies
created to increase the size of payment bundles in the OPPS, which
increases incentives for efficient delivery of care. MedPAC noted that
they prefer a policy that maintains the packaging of drugs that
function as supplies in surgical procedures.
Response: We appreciate these comments. After reviewing the
information provided by the commenters, we continue to believe the
separate payment is appropriate for non-opioid pain management drugs
that function as surgical supplies when furnished in the ASC setting
for CY 2020. We note that preliminary data suggest that utilization of
Exparel has increased significantly in the ASC setting in 2019. We
intend to continue to monitor Exparel utilization in the ASC setting
and monitor whether there is an associated decrease under Part B or D
in opioids once more data are available.
Comment: Several commenters supported the assignment of status
indicator ``K'' (Nonpass-Through Drugs and Nonimplantable Biologicals,
Including Therapeutic Radiopharmaceuticals) and continuing to pay
separately for the drug Prialt (HCPCS J2278, injection, ziconitide), a
non-narcotic pain reliever administered via intrathecal injection. The
commenters discussed data indicating that Prialt potentially could
lower opioid use, including opioids such as morphine. In addition to
continued separate payment, several commenters recommended CMS reduce
or eliminate the coinsurance for the drug in order to increase
beneficiary access. The commenters noted due to the drug's significant
cost, the 20 percent coinsurance would put the drug out of reach for
beneficiaries. Additionally, the commenters discussed that there is not
enough financial incentive for providers to use Prialt in their
patients compared to lower cost opioids. Commenters claimed that Prialt
is only paid at invoice costs, which they believe discourages provider
use.
Response: We thank commenters for their feedback and for their
support of the continued assignment of status indicator ``K'' to HCPCS
J2278. The corresponding ASC payment indicator for HCPCS J2278 would be
``K2''. Prialt is paid at its average sales price (ASP) plus 6 percent
according to the ASP methodology under the OPPS, and therefore, is also
paid at ASP plus 6 percent in the ASC setting. We note that under
1833(a)(1)(G) of the Act, the payment is subject to applicable
deductible and coinsurance, and we are unaware of statutory authority
to alter beneficiary coinsurance for payments made in the ASC setting.
We note that because the dollar value of beneficiary coinsurance is
directly proportionate to the payment rate (which is ASP+6 percent for
HCPCS code J2278), a lower sales price for the drug (which would lead
to a lower Medicare payment rate under the current policy) would be
necessary for beneficiaries to have a lower coinsurance amount.
Comment: Many commenters requested that the drug Omidria (HCPCS
code C9447, injection, phenylephrine ketorolac), be excluded from the
packaging policy once its pass-through status expires on September 30,
2020. Omidria is indicated for maintaining pupil size by preventing
intraoperative miosis and reducing postoperative ocular pain in
cataract or intraocular surgeries. The commenters stated that the
available data and multiple peer-reviewed articles on Omidria support
the packaging exclusion. Commenters asserted the use of Omidria
decreases patients' need for fentanyl during surgeries and another
commenter believes that Omidria reduces opioid use after cataract
surgeries. In addition, commenters asserted that the OPPS and ASC
payment system do not address the cost of packaged products used by
small patient populations. Therefore, the OPPS and ASC payment
structures for packaged supplies creates an access barrier and patients
are forced to use inferior products that have increased complication
risk and require the continued use of opioids to manage pain. One
commenter referenced the results of a study that Omidria reduces the
need for opioids during cataract surgery by nearly 80 percent while
decreasing pain scores by more than 50 percent.
Response: We thank commenters for their feedback on Omidria.
Omidria received pass-through status for a 3-year period from 2015 to
2017. After expiration of its pass-through status, it was packaged
under both the OPPS and ASC payment system. Subsequently, Omidria's
pass-through status under the OPPS was reinstated in October 2018
through September 30, 2020 as required by 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), which means that Omidria
continues to be paid separately under the ASC payment system through
September 30, 2020. While our analysis supports the commenter's
assertion that there was a decrease in the utilization of Omidria in
2018 following its pass-through expiration, we note that there could be
many reasons that utilization declines after the pass-through period,
including the availability of other alternatives on the market (many of
which had been used for several years before Omidria came on the market
and are sold for a lower price), the lack of separate payment being
available, or physician preference.
Further, our clinical advisors' review of the clinical evidence
submitted concluded that the study the commenter submitted was not
sufficiently compelling or authoritative to overcome contrary evidence.
Moreover, the results of a CMS analysis of cataract procedures
performed on Medicare beneficiaries in the OPPS between January 2015
and July 2019 comparing procedures performed with Omidria to procedures
performed without Omidria did not demonstrate a significant decrease in
fentanyl utilization during the cataract surgeries in the OPPS when
Omidria was used. Our findings also did not suggest any decrease in
opioid utilization post-surgery for procedures involving Omidria. As a
result, we do not have compelling evidence to exclude Omidria from
packaging after its current pass-through expires on September 30, 2020.
While we were not able to perform similar analysis using ASC data, we
expect that the results may be similar. We will continue to analyze the
evidence and monitor utilization of this drug.
Comment: One commenter requested that MKO Melt, a non FDA-approved,
compounded drug comprised of midazolam/ketamine/ondansetron for
exclusion from the packaging policy per section 1833(t)(22)(A)(i) of
the Act. The commenter contended that MKO Melt is a drug functioning as
surgical supply in the ASC setting. The commenter provided a reference
to a study titled, ``Anesthesia for opioid addicts: Challenges for
perioperative physician''
[[Page 61403]]
by Goyal et al., on the need for pain management in the opioid-
dependent patient. The commenter also referenced a review article,
``Perioperative Management of Acute Pain in the Opioid-dependent
Patient,'' by Mitra et al., on the special needs of opioid-dependent
patients in surgeries and the potential opioid relapse in those
patients who are recovering from opioid use disorder. Additionally, the
commenter referenced a clinical trial registered in clinicaltrials.gov
(NCT03653520) that supports sublingual MKO Melt for use during cataract
surgeries to replace opioids. The study looked at 611 patients that
were divided into three arms: (1) MKO melt arm, (2) diazepam/tramadol/
ondansetron arm, (3) diazepam only arm. The study concluded that the
MKO melt arm had the lowest incidence for supplemental injectable
anesthesia to control pain.
Response: We thank the commenter for the comment. Based on
information submitted, we are not able to validate that MKO Melt
reduces the use of opioids. We note that ketamine, one component of MKO
melt, exhibits some addictive properties. Moreover, we did not identify
any evidence that MKO Melt is effective for patients with a prior
opioid addiction nor did we receive any data demonstrating that the
current ASC packaging policy incentivized providers to use opioids over
MKO Melt. In accordance with section 1833(i)(8) of the Act, the fact
that there is no HPCPS code for the drug, and lack of FDA approval, we
were not able to identify any compelling evidence that MKO Melt should
be excluded from packaged payment.
Comment: Several commenters, including individual physicians,
medical associations, and device manufacturers commented supporting
separate payment for continuous peripheral nerve blocks as they
significantly reduce opioid use. One commenter suggested that CMS
provide separate payment for HCPCS code A4306 (Disposable drug delivery
system, flow rate of less than 50 ml per hour) in the hospital
outpatient department setting and the ASC setting because packaging
represents a cost barrier for providers. The commenter contended that
continuous nerve block procedures have been shown in high quality
clinical studies to reduce the use of opioids, attaching studies for
review. They believe that separate payment for A4306 will remove the
financial disincentive for HOPDs and ASCs, encouraging continuous nerve
blocks as a non-opioid alternative for post-surgical pain management.
Response: We appreciate the commenter's suggestion. We examined the
data for A4306 and noted an overall trend of increasing utilization
from CY 2014 through CY 2017. Additionally, the geometric mean cost for
A4306 was approximately $30 each year during that four-year period. We
acknowledge that use of these items may help in the reduction of opioid
use. However, we note that packaged payment of such an item does not
prevent the use of these items. We do not believe that the current
utilization trends for HCPCS code A4306 in the ASC setting suggest that
the packaged payment is preventing use and remind readers that payment
for packaged items is included in the payment for the primary service.
We share the commenter's concern about the need to reduce opioid use
and will take the commenter's suggestion regarding the need for
separate payment for HCPCS code A4306 in the ASC setting into
consideration for future rulemaking.
Comment: Multiple commenters identified other non-opioid pain
management alternatives that they believe decrease the dose, duration,
and/or number of opioid prescriptions beneficiaries receive during and
following an outpatient visit or procedure (especially for
beneficiaries at high-risk for opioid addiction) and may warrant
separate payment for CY 2020. Commenters representing various
stakeholders requested separate payments for various non-opioid pain
management treatments, such as continuous nerve blocks
(neuromodulation, radiofrequency ablation, implants for lumbar
stenosis, protocols (ERAS[supreg]) IV acetaminophen, IV ibuprofen,
Polar ice devices for postoperative pain relief, THC oil, acupuncture,
and dry needling procedures.
For neuromodulation, several commenters noted that spinal cord
stimulators (SCS) may lead to a reduction in the use of opioids for
chronic pain patients. One manufacturer of SCS devices commented that
SCS provides the opportunity to potentially stabilize or decrease
opioid usage and that neuromodulation retains its efficacy over
multiple years. Regarding barriers to access, the commenter noted that
Medicare beneficiaries often do not have access to SCS until after they
have exhausted other treatments, which often includes opioids. The
commenter presented evidence from observational studies that use of SCS
earlier in a patient's treatment could help reduce opioid use while
controlling pain, and suggested that CMS look for ways to incorporate
SCS earlier in the treatment continuum, suggesting CMS develop
additional education and outreach efforts and incentives for
appropriate referrals of patients with chronic pain to comprehensive
pain management practices for consultation and evaluation prior to the
administration of opioids. The commenter suggested that CMS could
provide alerts to providers regarding the benefits of pain management
consultation with a qualified pain management professional prior to the
administration of opioids for chronic conditions.
Another commenter asserted that the standard endpoints, such as a
greater than 50 percent reduction in pain, that are used to determine
if a neuromodulation-based non-opioid pain alternative therapy is
effective are well-established and validated in all types of clinical
trials and that CMS should establish a general, national coverage
determination for neuromodulation-based non-opioid pain therapy based
on these endpoints, rather than taking the time to create and process
specific national coverage determinations or local coverage
determinations. The commenter suggested that this would be a much
faster and streamlined process for enhancing Medicare beneficiary
access to neuromodulation-based pain management therapies.
One manufacturer of a high-frequency SCS device stated that
additional payment was warranted for non-opioid pain management
treatments because they provide an alternative treatment option to
opioids for patients with chronic leg or back pain. The commenter
provided supporting studies which claimed that patients treated with
their high-frequency SCS device reported a statistically significant
average decrease in opioid use compared to the control group. This
commenter also submitted data that showed a decline in the mean daily
dosage of opioid medication taken and that fewer patients were relying
on opioids at all to manage their pain when they used the
manufacturer's device.
Other commenters wrote regarding their personal experiences in
regards to radiofrequency ablation for sacral iliac joints and knees.
One commenter referenced several studies, one of which found a decrease
in analgesic medications associated with radiofrequency ablation;
however, it did not provide evidence regarding a decrease in opioid
usage.
One national hospital association commenter recommended that while
``certainly not a solution to the opioid epidemic, unpackaging
appropriate non-opioid therapies, like Exparel, is a low-cost tactic
that could change long-
[[Page 61404]]
standing practice patterns without major negative consequences.'' This
same commenter suggested that Medicare consider separate payment for IV
acetaminophen, IV ibuprofen, and Polar ice devices for postoperative
pain relief after knee procedures. The commenter also noted that
therapeutic massage, topically applied THC oil, acupuncture, and dry
needling procedures are very effective therapies for relief of both
postoperative pain and long-term and chronic pain. Several other
commenters expressed support for IV acetaminophen.
Response: We appreciate the detailed responses from commenters on
this topic. At this time, we have not found compelling evidence for
other non-opioid pain management alternatives described above to
warrant separate payment under the OPPS or ASC payment systems for CY
2020, however we plan to take these comments and suggestions into
consideration for future rulemaking. We agree that providing incentives
to avoid or reduce opioid prescriptions may be one of several
strategies for addressing the opioid epidemic. To the extent that the
items and services mentioned by the commenters are effective
alternatives to opioid drugs, we encourage providers to use them when
medically appropriate. We note that some of the items and services
mentioned by commenters are not covered by Medicare, and we do not
intend to establish payment for noncovered items and services. We look
forward to working with stakeholders as we further consider suggested
refinements to the OPPS and the ASC payment system that will encourage
use of medically necessary items and services that have demonstrated
efficacy in decreasing opioid prescriptions or opioid abuse or misuse
during or after an outpatient visit or procedure.
After reviewing the non-opioid pain management alternatives
suggested by the commenters as well as the studies and other data
provided to support the request for separate payment, we have not
determined that separate payment is warranted at this time for most of
the non-opioid pain management alternatives discussed above. However,
we continue to believe the separate payment is appropriate for non-
opioid pain management drugs that function as surgical supplies, like
Exparel, when furnished in the ASC setting and are finalizing this
policy for CY 2020.
Comment: Several commenters addressed payment barriers that may
inhibit access to non-opioid pain management treatments previously
discussed throughout this section. Several commenters disagreed with
CMS's assessment that current payment policies do not represent
barriers to access for certain non-opioid pain management alternatives.
One commenter encouraged CMS to provide timely insurance coverage for
evidence-informed interventional procedures early in the course of
treatment when clinically appropriate, noting that they hope CMS will
reconsider its position and provide mechanisms for separate payment and
patient access to evidence-based, FDA approved and cleared medical
device enabled interventions that would provide alternatives to opioid
pain management interventions. Several other commenters encouraged CMS
to more broadly evaluate all of its packaging policies to help ensure
patient access to appropriate therapies and to assess how packaging
affects the utilization of a medicine and use the results of that
evaluation to guide future policy development.
Response: We appreciate the various, insightful comments we
received from stakeholders regarding barriers that may inhibit access
to non-opioid alternatives for pain treatment and management in order
to more effectively address the opioid epidemic. We will take these
comments into consideration for future consideration. Many of these
comments have been previously addressed throughout this section.
After consideration of the public comments that we received, we are
finalizing the policy to continue 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 2020 as proposed. 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 SUPPORT Act and section 1833(i)(8). This
policy is also discussed in section II.A.3.b. of this final rule with
comment period.
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
Sec. 416.185(b), the deadline for receipt of public comments is 30
days following publication of the list of requests in the proposed
rule.
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 did not proposing to
[[Page 61405]]
revise the payment adjustment amount for CY 2020.
The comments and our responses to the comments are set forth below.
Comment: Two commenters requested that we re-evaluate our payment
adjustment for new NTIOL class. Commenters noted that our $50 payment
adjustment has not been adjusted since CY 1999 and that the stagnant
payment adjustment has been a barrier to intraocular lens innovation.
One commenter requested that the $50 be inflated to 2020 dollars and
updated by inflation in subsequent years. Another commenter requested
that we updated the $50 payment adjustment to $100, which is the
approximate dollar amount of our $50 payment adjustment had we
increased the adjustment based on the increase in CPI-U for medical
care.
Response: We thank the commenters for their recommendation. We did
not propose revising the payment adjustment amount for CY 2020.
However, we will take commenters recommendations into consideration in
future rulemaking.
After consideration of the public comments we received, we are
finalizing our proposal to maintain the payment adjustment of a new
NTIOL class at $50 per lens for CY 2020 without modification.
F. ASC Payment and Comment Indicators
1. Background
In addition to the payment indicators that we introduced in the
August 2, 2007 final rule, we 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 CY 2010 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 the
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. ASC Payment and Comment Indicators for CY 2020
In the CY 2020 OPPS/ASC proposed rule, we 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 2020 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 are included in ASC Addenda AA and BB to
this proposed rule were labeled with proposed comment indicator ``NP''
to indicate that these CPT and Level II HCPCS codes were open for
comment as part of the proposed rule. Proposed comment indicator ``NP''
meant 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 denoted that comments would
be accepted on the proposed ASC payment indicator for the new code.
In the CY 2020 OPPS/ASC proposed rule, we stated that we would
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 referred readers to Addenda DD1 and DD2 of the CY
2020 OPPS/ASC 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. We did not receive any
public comments on the ASC payment and comment indicators. Therefore,
we are finalizing their use as proposed without modification. Addenda
DD1 and DD2 to this final rule with comment period (which are available
via the internet on the CMS website) contain the complete list of ASC
payment and comment indicators for CY 2020.
G. 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 2008 being
equal to aggregate Medicare
[[Page 61406]]
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; Sec. 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 the CY 2020 OPPS/ASC 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 calculating the average of the wage indexes for CBSAs (or
metropolitan
[[Page 61407]]
divisions where applicable) that are contiguous to the area with no
wage index.)
2. 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 proposed 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 proposed 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 proposed 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 the proposed rule, we had available 98
percent of CY 2018 ASC claims data.
The comments and our responses to the comments are set forth below.
Comment: A majority of commenters believe that CMS needs to reduce
the disparity in payments between ASCs and HOPDs. Commenters stated
that ASC payment rates are less than 50 percent of the HOPD payment
rates for some high volume procedures. Many of these same commenters
support the discontinuation of the ASC weight scalar, which they
believe is the cause of the payment gap between ASCs and HOPDs.
Commenters suggested that the ASC weight scalar as currently applied
may make it economically infeasible for ASC facilities to continue to
perform Medicare cases, which would hurt beneficiaries and limit their
access to high-quality outpatient surgical care. They suggested that
eliminating the secondary rescaling that is currently applied to ASC
payments would allow ASCs to continue to provide quality surgical care
for Medicare patients.
Several commenters requested that CMS apply the same OPPS relative
weights to ASC services and discontinue rescaling the ASC relative
weights. They provided that while they understand the additional
scaling factor that CMS applies to the ASC APC weight maintains budget
neutrality within the ASC payment system, this scaling contributes to
the large payment differentials for similar services between the ASC
and HOPD systems.
Response: We note that applying the weight scalar in calculation of
ASC payment rates, for this final rule with comment period it is
0.8550, ensures that the ASC payment system remains budget neutral. We
understand the commenters do not believe that calculation of the weight
scalar in the ASC is necessary and their belief that its application
leads to large payment differentials for similar services between the
OPPS and ASC payment systems. However, as noted in previous rulemaking
(83 FR 59076), we do not believe that the ASC cost structure is
identical to the hospital cost structure. Further, we do not collect
cost data from ASCs, and therefore we are unsure of the actual
differences in costs between the two sites of service. We have not
witnessed beneficiary access issues when it comes to receiving care in
an ASC and note that there are more ASCs than there are hospitals; we
do not agree that the current ASC payment methodology has created an
access to care issue for ASCs. Additionally, the ASC payment system was
not designed to mirror that of the OPPS; a large part of the value of
ASCs is that they provide a lower cost option for surgical procedures
than some other settings.
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 the 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
[[Page 61408]]
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
Sec. 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
Sec. 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.
As stated in the CY 2020 OPPS/ASC proposed rule (84 FR 39552), the
hospital market basket update for CY 2020 was 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. For this CY 2020
OPPS/ASC final rule with comment period, as published in the FY 2019
IPPS/LTCH PPS final rule (84 FR 42343), based on IGI's 2019 second
quarter forecast with historical data through the first quarter of
2019, the hospital market basket update for CY 2020 is 3.0 percent.
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). As stated in the CY 2020
OPPS/ASC proposed rule (84 FR 39553), the proposed MFP adjustment for
CY 2020 was 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 this CY 2020 OPPS/ASC final rule with
comment period, as published in the FY 2020 IPPS/LTCH PPS final rule
(84 FR 42343) based on IGI's 2019 second quarter forecast, the final
MFP adjustment for CY 2020 is 0.4 percentage point.
For CY 2020, we proposed 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 proposed 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 referred 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 the CY 2020 OPPS/ASC proposed rule
for a detailed discussion of our policies regarding payment reduction
for ASCs that fail to meet ASCQR Program requirements. We proposed 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 proposed 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 proposed
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 CY 2020 OPPS/ASC final rule with comment period.
For CY 2020, we proposed 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 proposed 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.
The comments and our responses are set forth below.
Comment: The majority of commenters supported continued use of the
hospital market basket for updating ASC payments on an annual basis.
Some commenters suggested that aligning the update factors between the
OPPS and ASC settings will encourage the migration of care to the ASC
setting by making ASC payment more competitive with hospital payment,
while other commenters supported the decision as it would promote site-
neutrality between the two settings of care through more competitive
payment. However, other commenters, despite their support for the use
of the hospital market basket to update ASC payment rates, believed
that the migration of services to ASCs would be limited due to the ASC
budget neutrality adjustments. Commenters stated that CMS' current
approach to maintaining budget neutrality in the ASC payment system
caused increasing differentials in payment for services provided in the
ASC and HOPD settings, and there was no evidence of corresponding
changes in capital and operating costs between the ASC and HOPD
settings to support this growing payment differential. Commenters noted
that widening the gap in payments could make it economically difficult
for ASCs to perform certain procedures, discouraging ASCs from
furnishing those procedures and thereby discouraging the migration of
services from the HOPD to the ASC setting. MedPAC did not support using
the hospital market basket index as an interim method for updating the
ASC
[[Page 61409]]
conversion factor, noting that evidence has indicated the hospital
market basket index does not accurately reflect the costs of ASCs.
MedPAC noted the differences in cost structure between the HOPD and ASC
settings could be attributed to a number of factors, including
different patient populations, expenses, employee compensation, and
regulations.
Response: We appreciate the commenters' support. We believe
providing ASCs with the same rate update as hospitals encourages the
migration of services from the hospital setting to the ASC setting and
could increase the presence of ASCs in health care markets or
geographic areas where previously there were none or few. The migration
of services from the higher cost hospital outpatient setting to the ASC
setting is likely to result in savings to beneficiaries and the
Medicare program. This policy also gives both physicians and
beneficiaries greater choice in selecting the best care setting.
In addition, we acknowledge MedPAC's comment regarding the
collection of ASC cost data and differences in cost structure between
the HOPD and ASC settings. We appreciate these comments and will take
these comments into consideration in future policy development.
Comment: Multiple commenters expressed their opposition to
collecting ASC cost data, due to the anticipated administrative burden
associated with collecting this data. Commenters suggested that
collecting ASC cost data would prevent ASCs from providing efficient
low-cost care. MedPAC suggested that CMS begin collecting ASC cost data
immediately, forgoing the final four years of its planned five-year
period to assess the feasibility of collaborating with stakeholders to
collect ASC cost data in a minimally burdensome manner and potentially
to propose a plan to collect such information. MedPAC suggested that
CMS use its existing authority and resources to act quickly in
gathering ASC cost data. MedPAC noted that beneficial information could
be gathered to inform ASC payment updates and asserted that there is
sufficient evidence that ASC can capably submit cost data.
Response: We thank the commenters for their input. As discussed in
the CY 2019 OPPS/ASC final rule with comment period, we intend to
assess the feasibility of collaborating with stakeholders to collect
ASC cost data in a minimally burdensome manner and potentially propose
a plan to collect such information over a 5-year period (83 FR 59077).
We will continue to assess the feasibility of collaborating with
stakeholders to collect ASC cost data in a minimally burdensome manner
for future policy development.
After consideration of the public comments we received, consistent
with our proposal 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 CY 2020 OPPS/ASC final rule with comment
period, we are incorporating more recent data to determine the final CY
2020 ASC update. Therefore, for this CY 2020 OPPS/ASC final rule with
comment period, the hospital market basket update for CY 2020 is 3.0
percent, as published in the FY 2020 IPPS/LTCH PPS final rule (84 FR
42343), based on IGI's 2019 second quarter forecast with historical
data through the first quarter of 2019. The MFP adjustment for this CY
2020 OPPS/ASC final rule with comment period is 0.4 percentage point,
as published in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42343)
based on IGI's 2019 second quarter forecast.
For CY 2020, we are finalizing the hospital market basket update of
3.0 percent minus the MFP adjustment of 0.4 percentage point, resulting
in an MFP-adjusted hospital market basket update factor of 2.6 percent
for ASCs meeting the quality reporting requirements. Therefore, we
apply a 2.6 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 rates.
3. Display of Final CY 2020 ASC Payment Rates
Addenda AA and BB to this final rule (which are available on the
CMS website) display the final 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 final
rates, the final payment indicators and rates set forth in this final
rule are based on a comparison using the finalized PFS rates that would
be effective January 1, 2020. For a discussion of the PFS rates, we
refer readers to the CY 2020 PFS final 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 final payment rates included in addenda AA and BB to this final
rule 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 ``Final 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
[[Page 61410]]
includes separate payment for non-opioid pain management drugs.
To derive the final CY 2020 payment rate displayed in the ``Final
CY 2020 Payment Rate'' column, each ASC payment weight in the ``Final
CY 2020 Payment Weight'' column was multiplied by the final CY 2020
conversion factor of $47.747. The 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. The
final CY 2020 ASC conversion factor uses the CY 2020 MFP-adjusted
hospital market basket update factor of 2.6 percent (which is equal to
the projected hospital market basket update of 3.0 percent minus a
projected MFP adjustment of 0.4 percentage point).
In Addendum BB, there are no relative payment weights displayed in
the ``Final CY 2020 Payment Weight'' column for items and services with
predetermined national payment amounts, such as separately payable
drugs and biologicals. The ``Final 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 for payment in physicians' offices in 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) 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 did not propose any changes to these policies in the CY
2020 OPPS/ASC proposed rule (84 FR 39554).
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). We did not propose any changes to
these policies in the CY 2020 OPPS/ASC proposed rule (84 FR 39554).
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.\82\
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). We did not propose any
changes to these policies in the CY 2020 OPPS/ASC proposed rule (84 FR
39554).
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\82\ 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.\83\ 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). We did not propose any changes to these policies in the CY
2020 OPPS/ASC proposed rule (84 FR 39554).
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\83\ 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 \84\ 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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\84\ 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
[[Page 61411]]
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. Removal of Quality Measure From the Hospital OQR Program Measure
Set: OP-33: External Beam Radiotherapy (NQF# 1822)
In the CY 2020 OPPS/ASC proposed rule (84 FR 39554 through 39556),
we proposed 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 determination, we proposed 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 External Beam Radiotherapy
(EBRT) with an acceptable dosing schedule.'' \85\ We adopted this
measure to address the performance gap in EBRT treatment variation,
ensure appropriate use of EBRT, and prevent the overuse of radiation
therapy (80 FR 70508).
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\85\ 80 FR 70508.
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We believe that removing OP-33 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 OP-33 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 OP-33 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 OP-33 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, and 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.\86\ 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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\86\ National Quality Forum. NQF #1822 External Beam
Radiotherapy for Bone Metastases. Available at: http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=70374.
---------------------------------------------------------------------------
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 overly 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 PPS-Exempt Cancer Hospital Quality Reporting
(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.\87\ In the FY 2020
IPPS/LTCH PPS final rule (84 FR 42513), we finalized the removal of 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 removed 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 42513). We note that while the version of the measure
using ``radiation planning'' CPT codes is less burdensome, Hospital
Outpatient
[[Page 61412]]
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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\87\ 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,\88\ 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).
---------------------------------------------------------------------------
\88\ 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.
---------------------------------------------------------------------------
Therefore, in the CY 2020 OPPS/ASC proposed rule (84 FR 39554
through 39556), we proposed to remove the measure beginning with
October 2020 encounters used in the CY 2022 payment determination and
for subsequent years. We wish to clarify here in this final rule that
the measure would be removed beginning with CY 2020 encounters (January
2020) used in the CY 2022 payment determination and for subsequent
years rather than beginning in October 2020 as incorrectly noted in the
proposed rule. We refer readers to our response to comments below. We
considered removing this measure beginning with the CY 2021 payment
determination, but we decided to propose to delay removal until the CY
2022 payment determination to be sensitive to facilities' planning and
operational procedures given that data collection for this measure
began 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 proposed 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.
We provided a summary of the comments received and our responses to
those comments.
Comment: Many commenters supported the proposal to remove EBRT for
Bone Metastases (OP-33) from the Hospital OQR Program beginning in CY
2022. Several commenters stated that they support the removal of OP-33
from the Hospital OQR Program for the reasons CMS outlined in the
proposed rule. Specifically, several commenters stated that they
support the removal of OP-33 from the Hospital OQR Program because the
measure is burdensome and because it is no longer being maintained by
the measure steward so it may no longer be aligned with clinical
guidelines. A few commenters stated that they support the removal of
OP-33 to align with the removal of the measure from PCHQR and because
the measure is no longer endorsed by the National Quality Forum (NQF).
Response: We thank the commenters for their support to remove EBRT
for Bone Metastases (OP-33) from the Hospital OQR Program due to burden
and alignment issues. While NQF endorsement is not a requirement for
measure inclusion in the Hospital OQR Program, it can be considered
when assessing a measure (section 1833(t)(17)(C)(i) of the Act).
Comment: Several commenters requested that CMS clarify the last
reporting date for EBRT for Bone Metastases (OP-33) if it is removed
and recommended that removal should begin with January 1, 2020
encounters rather than October 2020 encounters. A few commenters
requested that the removal of OP-33 begin with the Calendar Year 2021
payment determination rather than the Calendar Year 2022 payment
determination due to the significant burden of the reporting
requirements. One commenter recommended CMS to remove OP-33 as soon as
possible.
Response: Regarding the timeframe for measure removal, in the CY
2020 OPPS/ASC proposed rule (84 FR 39554 through 39556), we proposed 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. We chose
this timeframe to be sensitive to facilities' planning and operational
procedures given that data collection for this measure began during CY
2019 for the CY 2021 payment determination. We realize that in our
proposal on pages 84 FR 39554 through 39556, we inadvertently stated
that we wished to remove the measure beginning with October 2020
encounters used in the CY 2022 payment determination and for subsequent
years. We refer readers to the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70521 through 70522) where we finalized that beginning
with the CY 2017 payment determination, hospitals must report data
submitted via a Web-based tool between January 1 and May 15 of the year
prior to the payment determination with respect to the encounter period
of January 1 to December 31 of 2 years prior to the payment
determination year. For the CY 2022 payment determination, the data
submission window for this measure would then be January 1, 2021 to May
15, 2021 for the January 1, 2020 through December 31, 2020 encounter
period. Thus, as OP-33 is a Web-based measure, its removal from the
Hospital OQR Program beginning with the CY 2022 payment determination
would also begin with January 1, 2020 encounters rather than October
2020 encounters. So, we are finalizing a modification of what was
proposed to correct that we are removing the measure beginning with
January 2020 encounters used for the CY 2022 payment determination and
for subsequent years. For the OP-33 measure, the final data submission
of data collected for CY 2019 encounters will be required by May 15,
2020 for use toward CY 2021 payment determinations; hospitals would not
be required to collect data for OP-33 as of January 1, 2020 encounters.
Comment: A few commenters expressed concern about the proposal to
remove EBRT for Bone Metastases (OP-33) from the Hospital OQR Program.
One commenter stated that the OP-33 measure gives valuable information
for monitoring hospital performance improvement. One commenter stated
that the OP-33 measure is valuable because it gauges overuse of health
services in a setting where overuse exposes people unnecessarily to
radiation, putting patients at risk of harm. This commenter stated that
though one of the reasons provided for the removal of OP-33 is that it
is difficult and burdensome for healthcare providers to report; the
commenter recommends that CMS adopt a measurement framework that
prioritizes consumer needs over industry preference. The commenter also
stated that because the measure steward is no longer maintaining the
measure, CMS should either continue to maintain the measure or identify
an entity to act as the measure steward to allow the
[[Page 61413]]
measure to remain in the Hospital OQR Program.
Response: We thank the commenters for these suggestions regarding
EBRT for Bone Metastases (OP-33). We agree that ensuring appropriate
use of EBRT and preventing the overuse of radiation therapy which were
goals of the OP-33 measure are important for safeguarding patients and
consumers. We proposed to remove OP-33 under removal Factor 8, the
costs associated with a measure outweigh the benefit of its continued
use in the program as stakeholder feedback has shown that this measure
is burdensome and difficult to report. Regarding measure maintenance,
as stated, the measure steward is no longer maintaining this measure
and there are issues with the measure as specified. We do not seek to
become the steward for this measure as we do not believe that we can
maintain this measure in the Hospital OQR Program in a way that ensures
that the measure is in line with clinical guidelines and standards and
has specifications that are not overly burdensome for which to collect
data. Our Meaningful Measures Initiative provides a measurement
framework that prioritizes patient and consumer needs while limiting
provider burden. Consistent with this framework, we note that the
Hospital OQR Program continues to have quality measures that assess
appropriate use of radiation (OP-8: MRI Lumbar Spine for Low Back Pain,
OP-10: Abdomen CT--Use of Contrast Material, OP-13: Cardiac Imaging for
Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery, and OP-
23: Head CT or MRI Scan Results for Acute Ischemic Stroke or
Hemorrhagic Stroke who Received Head CT or MRI Scan Interpretation
Within 45 minutes of ED Arrival).
After consideration of the public comments, we are finalizing a
modification of what was proposed for the removal of OP-33 from the
Hospital OQR Program. Instead of removing the measure beginning with
October 2020 encounters as inadvertently stated, we are finalizing
removal beginning with January 2020 encounters used in the CY 2022
payment determination and for subsequent years.
4. Summary of 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 did not propose to add any measures; however, we did propose and
are finalizing the removal of one measure for the CY 2022 payment
determination and subsequent years for the Hospital OQR Program. Table
61 summarizes the finalized Hospital OQR Program measure set for the CY
2022 payment determination and subsequent years (including previously
adopted measures and excluding one measure finalized for removal in
this final rule).
[GRAPHIC] [TIFF OMITTED] TR12NO19.102
[[Page 61414]]
[GRAPHIC] [TIFF OMITTED] TR12NO19.103
5. Hospital OQR Program Measures and Topics for Future Consideration
In the CY 2020 OPPS/ASC proposed rule (84 FR 39557), we requested
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
In the CY 2020 OPPS/ASC proposed rule (84 FR 39557) we sought
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.\89\ 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 the CY 2020 OPPS/ASC proposed rule
(84 FR 39567), in which the ASCQR Program requested public comment on
updating the submission method for these measures in the future. We
requested 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. If specified for the hospital
outpatient setting, we would seek collaboration with the measure
steward.
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\89\ 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.\90\ 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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\90\ 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;
\91\ in May 2016 for the Patient
[[Page 61415]]
Burn \92\ and the Wrong Site, Wrong Side, Wrong Patient, Wrong
Procedure, Wrong Implant \93\ measures; and in June 2018 for the
Patient Fall measure \94\), 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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\91\ National Quality Forum. 0265 All-Cause Hospital Transfer/
Admission. Available at: http://www.qualityforum.org/QPS/0265.
\92\ National Quality Forum. 0263 Patient Burn. Available at:
http://www.qualityforum.org/QPS/0263.
\93\ National Quality Forum. 0267 Wrong Site, Wrong Side, Wrong
Patient, Wrong Procedure, Wrong Implant. Available at: http://www.qualityforum.org/QPS/0267.
\94\ 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.\95\ 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 \96\ and because patient burns are
preventable.97 98
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\95\ 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.
\96\ 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.
\97\ ECRI Institute. New clinical guide to surgical fire
prevention. Health Devices 2009 Oct;38(10):314-32.
\98\ 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.\99\ 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 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
\100\ and because patient falls are preventable.\101\
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\99\ 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.
\100\ 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.
\101\ 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 Program 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.\102\ 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 \103\ and because these errors are
preventable.\104\
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\102\ 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.
\103\ 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.
\104\ 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.\105\ 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,
[[Page 61416]]
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.106 107
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\105\ 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.
\106\ 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.
\107\ 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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We have provided a summary of the comments received and our
responses to those comments.
Comment: Many commenters were supportive of the potential future
specification of ASC-1, ASC-2, ASC-3, and ASC-4 for the hospital
outpatient setting and the potential future addition of these measures
to the Hospital OQR Program. Several commenters stated that these four
measures should be adopted in the Hospital OQR Program in order to
align with the ASCQR Program and to provide meaningful data for
patients to compare performance in ASCs and HOPDs. A few commenters
stated that these four patient safety measures should be adopted in the
Hospital OQR Program because they focus on areas of critical
importance. A few commenters supported the plan for CMS to work with
the measure developer to improve the data submission methods and to
ensure the measures are appropriately specified for the hospital
outpatient setting. A few commenters recommended expedited development
and implementation of these measures in the hospital outpatient
setting.
Response: We thank the commenters for their support for the
potential future specification of ASC-1, ASC-2, ASC-3, and ASC-4 for
the hospital outpatient setting and the potential future addition of
these measures to the Hospital OQR Program.
Comment: Many commenters provided recommendations regarding
potentially specifying ASC-1, ASC-2, ASC-3, and ASC-4 for the hospital
outpatient setting and potentially adding these measures to the
Hospital OQR Program in the future. Several commenters stated that
decisions made by the NQF about these measures should be considered and
prioritized by CMS. Several commenters suggested that these measures
should be specified for the HOPD setting, field tested, reliability
tested, and reviewed by the Measure Applications Partnership (MAP)
before inclusion in the Hospital OQR Program. Several commenters
suggested that, with respect to ASC-4, CMS should consider overlap with
OP-36 Hospital Visits after Hospital Outpatient Surgery and should
assess the need for clinical risk adjustment in the HOPD setting. A few
commenters provided recommendations about potential data submission
methods for these measures in the Hospital OQR Program, with some
specifically supporting the use of an online data submission tool such
as QualityNet. However, several commenters did not support using the
QualityNet online tool (or a similar online tool) for submission, and
one commenter suggested that if a manual abstraction process is
required, hospitals should be provided ample time to test and implement
the measures. One commenter recommended that CMS work with HOPDs and
ASCs to identify current forums where these safety issues are
documented, discussed, and remedied. One commenter recommended that
these measures should apply to all adult patients, not just Medicare
fee-for-service patients.
Response: We thank the commenters for their recommendations
regarding potentially specifying ASC-1, ASC-2, ASC-3, and ASC-4 for the
hospital outpatient setting, interface with existing ASCQR Program
measures, data submission methods, risk adjustment issues, and
potentially adding these measures to the Hospital OQR Program in the
future. We note that as currently specified, these measures apply to
all patients and they are not limited to fee-for-service Medicare
patients.\108\
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\108\ ASCQR Specifications Manuals are available at https://www.qualitynet.org/asc/specifications-manuals.
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Comment: Many commenters expressed concern to the potential future
specification of ASC-1, ASC-2, ASC-3, and ASC-4 for the hospital
outpatient setting and the potential future addition of these measures
to the Hospital OQR Program. Several expressed concern that the
measures are not endorsed by the National Quality Forum. A few
commenters stated that they believe because these measures were
designed specifically for ASCs, they would not be appropriate for use
in the hospital outpatient setting. Several commenters expressed
concern about adding these measures to the Hospital OQR Program because
the events of interest are already rare, and a few pointed out that
hospitals are already required to implement policies and processes to
mitigate the risk of these events and several states have mandatory
reporting of these types of events. A few commenters stated concerns
about the burden that would be created if these measures are added to
the Hospital OQR Program. One commenter stated that because these
events are rare in the outpatient setting, the data is at risk of
becoming identifiable if disclosed and publicly reported. One commenter
stated that adding these measures to the Hospital OQR Program would not
contribute to the CMS Meaningful Measurement goal.
Response: We thank the commenters for their recommendations and
raising these important concerns regarding the use of the ASC-1 through
ASC-4 measures for the Hospital OQR Program. We will take these
suggestions into consideration as we consider adding these measures to
the Hospital OQR Program in the future.
b. Future Outcome Measures
In the CY 2020 OPPS/ASC proposed rule (84 FR 39558), we also
requested public comment on future measure topics for the Hospital OQR
Program. Specifically, we requested 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, (Emergency
Department) 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.
[[Page 61417]]
Comment: A few commenters recommended that CMS add more measures to
the Hospital OQR Program that would align with the ASCQR Program. One
commenter suggested that CMS incorporate patient experience, safety and
reliability, clinical quality, and provider engagement measures in the
Hospital OQR Program. One commenter recommended that CMS include the
Adult Immunization Status measure in the Hospital OQR Program.
Response: We thank the commenters for these recommendations for
additional measures for the Hospital OQR Program. We agree that
alignment with the ASCQR Program is an important consideration; to that
end, as discussed in section XIV.B.a of this final rule with comment
period, we requested comment on the use of the ASCQR Program's ASC-1
through ASC-4 measures for the Hospital OQR Program.
We thank the commenters for their responses and will take these
suggestions into consideration as we develop future Hospital OQR
Program measures and topics.
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 did not
propose any changes to these policies in the CY 2020 OPPS/ASC proposed
rule (84 FR 39558).
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 the CY 2020 OPPS/ASC proposed rule (84 FR 39558), we did
not propose any changes to our previously finalized public display
policies.
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 did not propose any changes to our requirements for
the QualityNet account and security administrator in the CY 2020 OPPS/
ASC proposed rule (84 FR 39559).
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 did not propose any changes to our participation
status policies in the CY 2020 OPPS/ASC proposed rule (84 FR 39559).
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 62.
[GRAPHIC] [TIFF OMITTED] TR12NO19.104
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
did not propose any changes to these policies in the CY 2020 OPPS/ASC
proposed rule (84 FR 39559).
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
[[Page 61418]]
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. We did not propose any changes to
these policies in the CY 2020 OPPS/ASC proposed rule (84 FR 39559).
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 3-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. We did not propose any changes to these
policies in the CY 2020 OPPS/ASC proposed rule (84 FR 39559).
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 the CY 2020 OPPS/ASC proposed rule (84 FR 39560),
we did not propose 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 the CY 2020 OPPS/ASC proposed rule (84 FR 39560), we
did not propose 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 final rule, we are finalizing our proposal
with modification to remove OP-33: EBRT for Bone Metastases beginning
with the CY 2022 payment determination and for subsequent years; so 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 with the exception of OP-31: Cataracts:
Improvement in Patient's Visual Function within 90 Days Following
Cataract Surgery (NQF #1536): for which data submission remains
voluntary:
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 did not propose any changes to
our population and sampling requirements for chart-abstracted measures
in the CY 2020 OPPS/ASC proposed rule (84 FR 39560).
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 did not propose any
changes to these policies in the CY 2020 OPPS/ASC proposed rule (84 FR
39560).
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
[[Page 61419]]
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 did not propose any changes to our
ECE policy in the CY 2020 OPPS/ASC proposed rule (84 FR 39560).
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 did not propose any
changes to our reconsideration and appeals procedures in the CY 2020
OPPS/ASC proposed rule (84 FR 39560).
E. 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 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 the 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
[[Page 61420]]
refer readers to section II.G. of the proposed rule.
2. Reporting Ratio Application and Associated Adjustment Policy for CY
2020
We proposed to continue our established policy of applying the
reduction of the OPD fee schedule increase factor through the use of a
reporting ratio for those hospitals that fail to meet the Hospital OQR
Program requirements for the full CY 2020 annual payment update factor.
For the CY 2020 OPPS/ASC proposed rule (84 FR 39560), the proposed
reporting ratio was 0.980, which when multiplied by the proposed full
conversion factor of $81.398 equaled a proposed conversion factor for
hospitals that fail to meet the requirements of the Hospital OQR
Program (that is, the reduced conversion factor) of $79.770. We
proposed to continue to apply the reporting ratio to all services
calculated using the OPPS conversion factor. For the CY 2020 OPPS/ASC
proposed rule (84 FR 39560), we proposed 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 proposed to continue to exclude services paid under New
Technology APCs. We proposed to continue to apply the reporting ratio
to the national unadjusted payment rates and the minimum unadjusted and
national unadjusted copayment rates of all applicable services for
those hospitals that fail to meet the Hospital OQR Program reporting
requirements. We also proposed to continue to apply all other
applicable standard adjustments to the OPPS national unadjusted payment
rates for hospitals that fail to meet the requirements of the Hospital
OQR Program. Similarly, we proposed to continue to calculate OPPS
outlier eligibility and outlier payment based on the reduced payment
rates for those hospitals that fail to meet the reporting requirements.
For the CY 2020 OPPS/ASC final rule, the final reporting ratio is
0.981, which when multiplied by the final full conversion factor of
80.784 equals a final conversion factor for hospitals that fail to meet
the requirements of the Hospital OQR Program (that is, the reduced
conversion factor) of 79.250. We also are finalizing the remainder of
our proposals regarding the payment reduction for hospitals that fail
to meet the Hospital OQR Program requirements for CY 2019 payment.
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 final rule with
comment period 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) where we discuss our Meaningful Measures Initiative and
our approach in evaluating quality program measures.
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
did not propose any changes to these policies in the CY 2020 OPPS/ASC
proposed rule (84 FR 39562).
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 did not propose
any changes to this policy in the CY 2020 OPPS/ASC proposed rule (83 FR
39562).
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 \109\ and the process for removing measures
from the ASCQR Program. The factors are:
---------------------------------------------------------------------------
\109\ 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.
---------------------------------------------------------------------------
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.
[[Page 61421]]