[Federal Register Volume 86, Number 88 (Monday, May 10, 2021)]
[Proposed Rules]
[Pages 25070-25790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08888]
[[Page 25069]]
Vol. 86
Monday,
No. 88
May 10, 2021
Part II
Book 2 of 2 Books
Pages 25069-26798
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 412, 413, 425, et al.
Medicare Program; Hospital Inpatient Prospective Payment Systems for
Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates;
Quality Programs and Medicare Promoting Interoperability Program
Requirements for Eligible Hospitals and Critical Access Hospitals;
Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes
to the Medicare Shared Savings Program; Proposed Rule
Federal Register / Vol. 86 , No. 88 / Monday, May 10, 2021 / Proposed
Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412, 413, 425, 455, and 495
[CMS-1752-P]
RIN 0938-AU44
Medicare Program; Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates;
Quality Programs and Medicare Promoting Interoperability Program
Requirements for Eligible Hospitals and Critical Access Hospitals;
Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes
to the Medicare Shared Savings Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: We are proposing to revise the Medicare hospital inpatient
prospective payment systems (IPPS) for operating and capital-related
costs of acute care hospitals to implement changes arising from our
continuing experience with these systems for FY 2022 and to implement
certain recent legislation. In addition, we are proposing to rebase and
revise the hospital market baskets for acute care hospitals, update the
labor-related share, and provide the market basket update that would
apply to the rate-of-increase limits for certain hospitals excluded
from the IPPS that are paid on a reasonable cost basis, subject to
these limits for FY 2022. We are also proposing policies relating to
Medicare graduate medical education (GME) for teaching hospitals to
implement certain recent legislation. The proposed rule would also
update the payment policies and the annual payment rates for the
Medicare prospective payment system (PPS) for inpatient hospital
services provided by long-term care hospitals (LTCHs) for FY 2022. In
this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing to extend
New COVID-19 Treatments Add-on Payment (NCTAP) for certain eligible
products through the end of the fiscal year in which the PHE ends and
to discontinue the NCTAP for discharges on or after October 1, 2021 for
a product that is approved for new technology add-on payments beginning
FY 2022. We are also proposing to repeal the collection of market-based
rate information on the Medicare cost report and the market-based MS-
DRG relative weight methodology, as finalized in the FY 2021 IPPS/LTCH
PPS final rule.
We are proposing to establish new requirements and revise existing
requirements for eligible hospitals and critical access hospitals
(CAHs) participating in the Medicare Promoting Interoperability
Program. We are also providing estimated and newly established
performance standards for the Hospital Value-Based Purchasing (VBP)
Program, and proposing updated policies for the Hospital Readmissions
Reduction Program, Hospital Inpatient Quality Reporting (IQR) Program,
Hospital VBP Program, Hospital-Acquired Condition (HAC) Reduction
Program, and the PPS-Exempt Cancer Hospital Reporting (PCHQR) Program,
and the Long-Term Care Hospital Quality Reporting Program (LTCH QRP).
Additionally, due to the impact of the COVID-19 PHE on measure data
used in our value-based purchasing programs, we are proposing to
suppress several measures in the Hospital VBP, HAC Reduction, and
Hospital Readmissions Reduction Programs. In connection with our
measure suppression proposals for the FY 2022 Hospital VBP Program, we
are also proposing to revise the scoring and payment methodology for
the FY 2022 program year such that hospitals will not be scored using
quality measure data that are distorted by the effects of the COVID-19
public health emergency (PHE) and will not receive Total Performance
Scores or adjustments to their payments as a result. Similarly, we are
proposing to suppress affected measures for the FY 2022 HAC Reduction
Program such that hospitals will not be scored using distorted quality
measure data and will not receive Total HAC Scores based on those data.
For the Hospital Readmissions Reduction Program, we are proposing to
suppress one affected measure under the proposed measure suppression
policy for the FY 2023 applicable period such that hospitals will not
be assessed using distorted quality measure data and will not receive
payment reductions based on those data.
In addition, we are proposing to change, clarify, and codify
Medicare organ acquisition payment policies relative to organ
procurement organizations (OPOs), transplant hospitals, and donor
community hospitals. Also, we are proposing to add regulation requiring
that state Medicaid agencies accept valid enrollments from all
Medicare-enrolled providers and suppliers for purposes of processing
claims for Medicare cost-sharing liability for services furnished to
Medicare-Medicaid dually eligible individuals in order to alleviate a
long-standing problem related to claiming Medicare bad debt.
Additionally, we are proposing to amend the Medicare Shared Savings
Program regulations to allow eligible accountable care organizations
(ACOs) participating in the BASIC track's glide path the opportunity to
maintain their current level of participation for performance year (PY)
2022.
DATES: To be assured consideration, comments must be received at one of
the addresses provided in the ADDRESSES section, no later than 5 p.m.
EDT on June 28, 2021.
ADDRESSES: In commenting, please refer to file code CMS-1752-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may (and we encourage you to) submit
electronic comments on this regulation to http://www.regulations.gov.
Follow the instructions under the ``submit a comment'' tab.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1752-P, P.O. Box 8013,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments via
express or overnight mail to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1752-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
For information on viewing public comments, we refer readers to the
beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Donald Thompson, (410) 786-4487, and Michele Hudson, (410) 786-
4487, Operating Prospective Payment, MS-DRG Relative Weights, Wage
Index, Hospital Geographic Reclassifications, Graduate Medical
Education, Capital Prospective Payment, Excluded Hospitals, Medicare
Disproportionate Share Hospital (DSH) Payment
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Adjustment, Sole Community Hospitals (SCHs), Medicare-Dependent Small
Rural Hospital (MDH) Program, Low-Volume Hospital Payment Adjustment,
and Critical Access Hospital (CAH) Issues.
Emily Lipkin, (410) 786-3633 and Jim Mildenberger, (410) 786-4551,
Long-Term Care Hospital Prospective Payment System and MS-LTC-DRG
Relative Weights Issues.
Emily Forrest, (202) 205-1922, Market-Based Data Collection and
Market-Based MS-DRG Relative Weight Methodology Issues.
Allison Pompey, (410) 786-2348, New Technology Add On Payments and
New COVID-19 Treatments Add-on Payments Issues.
Mady Hue, (410) 786-4510, and Andrea Hazeley, (410) 786-3543, MS-
DRG Classifications Issues.
Mollie Knight, (410) 786-7948, and Bridget Dickensheets, (410) 786-
8670, Rebasing and Revising the Hospital Market Baskets Issues.
Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital
Demonstration Program Issues.
Jeris Smith, (410) 786-0110, Frontier Community Health Integration
Project Demonstration Issues.
Pamela Brown, [email protected], Hospital Readmissions
Reduction Program--Administration Issues.
Jim Poyer, [email protected], Hospital Readmissions Reduction
Program--Readmissions--Measures Issues.
Jennifer Tate, [email protected], Hospital-Acquired
Condition Reduction Program--Administration Issues.
Yuling Li, (410) 786-8421, Hospital-Acquired Condition Reduction
Program--Measures Issues.
Julia Venanzi, [email protected], Hospital Inpatient
Quality Reporting and Hospital Value-Based Purchasing Programs--
Administration Issues.
Katrina Hoadley, [email protected], Hospital Inpatient
Quality Reporting and Hospital Value-Based Purchasing Programs--
Measures Issues Except Hospital Consumer Assessment of Healthcare
Providers and Systems Issues.
Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality
Reporting and Hospital Value-Based Purchasing--Hospital Consumer
Assessment of Healthcare Providers and Systems Measures Issues.
Annie Hollis, [email protected], PPS-Exempt Cancer Hospital
Quality Reporting--Administration Issues.
Katrina Hoadley, [email protected], PPS-Exempt Cancer
Hospital Quality Reporting Program-Measure Issues.
Christy Hughes, (410) 786-5662, Long-Term Care Hospital Quality
Reporting Program--Data Reporting Issues.
Jessica Warren, [email protected], Dylan Podson,
[email protected], and Elizabeth Holland,
[email protected], Promoting Interoperability Programs.
Candace Anderson, (410) 786-1553, Medicaid Enrollment of Medicare
Providers and Suppliers for Purposes of Processing Claims for Cost-
Sharing for Services Furnished to Dually Eligible Beneficiaries.
Katie Lucas, (410) 786-7723, Amanda Michael, (410) 786-5834, and
Kellie Shannon (410) 786-0416, Organ Acquisition Payment Issues.
Naseem Tarmohamed, (410) 786-0814, or
[email protected], for issues related to the Shared
Savings Program.
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.
Tables Available Through the Internet on the CMS Website
The IPPS tables for this FY 2022 proposed rule are available
through the internet on the CMS website at: https://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 2022 IPPS
Proposed rule Home Page'' or ``Acute Inpatient--Files for Download.''
The LTCH PPS tables for this FY 2022 proposed rule are available
through the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation Number CMS-1752-P. For
further details on the contents of the tables referenced in this
proposed rule, we refer readers to section VI. of the Addendum to this
FY 2022 IPPS/LTCH PPS proposed rule.
Readers who experience any problems accessing any of the tables
that are posted on the CMS websites, as previously identified, should
contact Michael Treitel at (410) 786-4552.
Table of Contents
I. Executive Summary and Background
A. Executive Summary
B. Background Summary
C. Summary of Provisions of Recent Legislation That Would Be
Implemented in This Proposed Rule
D. Summary of the Provisions of This Proposed Rule
E. Advancing Health Information Exchange
F. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH
PPS Ratesetting
II. Proposed Changes to Medicare Severity Diagnosis-Related Group
(MS-DRG) Classifications and Relative Weights
A. Background
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
C. Proposed FY 2022 MS-DRG Documentation and Coding Adjustment
D. Proposed Changes to Specific MS-DRG Classifications
E. Recalibration of the FY 2022 MS-DRG Relative Weights
F. Proposed Add-On Payments for New Services and Technologies
for FY 2022
III. Proposed Changes to the Hospital Wage Index for Acute Care
Hospitals
A. Background
B. Worksheet S-3 Wage Data for the Proposed FY 2022 Wage Index
C. Verification of Worksheet S-3 Wage Data
D. Method for Computing the Proposed FY 2022 Unadjusted Wage
Index
E. Proposed Occupational Mix Adjustment to the FY 2022 Wage
Index
F. Analysis and Implementation of the Proposed Occupational Mix
Adjustment and the Proposed FY 2022 Occupational Mix Adjusted Wage
Index
G. Application of the Rural Floor, Application of the State
Frontier Floor, and Continuation of the Low Wage Index Hospital
Policy, and Proposed Budget Neutrality Adjustment
H. Proposed FY 2022 Wage Index Tables
I. Proposed Revisions to the Wage Index Based on Hospital
Redesignations and Reclassifications
J. Proposed Out-Migration Adjustment Based on Commuting Patterns
of Hospital Employees
K. Reclassification From Urban to Rural Under Section
1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103
L. Process for Requests for Wage Index Data Corrections
M. Proposed Labor-Related Share for the FY 2022 Wage Index
IV. Proposed Rebasing and Revising of the Hospital Market Baskets
for Acute Care Hospitals
A. Background
B. Rebasing and Revising the IPPS Market Basket
C. Market Basket for Certain Hospitals Presently Excluded From
the IPPS
D. Rebasing and Revising the Capital Input Price Index (CIPI)
V. Other Decisions and Changes to the IPPS for Operating System
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A. Proposed Changes in the Inpatient Hospital Updates for FY
2021 (Sec. 412.64(d))
B. Rural Referral Centers (RRCs)--Proposed Annual Updates to
Case-Mix Index and Discharge Criteria (Sec. 412.96)
C. Proposed Payment Adjustment for Low-Volume Hospitals (Sec.
412.101)
D. Proposed Indirect Medical Education (IME) Payment Adjustment
Factor (Sec. 412.105)
E. Proposed Payment Adjustment for Medicare Disproportionate
Share Hospitals (DSHs) for FY 2022 (Sec. 412.106)
F. Counting Days Associated With Section 1115 Demonstration
Projects in the Medicaid Fraction
G. Hospital Readmissions Reduction Program: Proposed Updates and
Changes (Sec. Sec. 412.150 Through 412.154)
H. Hospital Value-Based Purchasing (VBP) Program: Proposed
Updates and Changes (Sec. Sec. 412.160 Through 412.167)
I. Hospital-Acquired Conditions (HAC) Reduction Program:
Proposed Updates and Changes (Sec. 412.170)
J. Proposed Payments for Indirect and Direct Graduate Medical
Education Costs (Sec. Sec. 412.105 and 413.75 through 413.83)
K. Rural Community Hospital Demonstration Program
L. Market-Based MS-DRG Relative Weight--Proposed Policy Changes
(Sec. 413.20)
M. Payment Adjustment for CAR T-cell Clinical Trial and Expanded
Use for Immunotherapy Cases (Sec. Sec. 412.85 and 412.312)
VI. Proposed Changes to the IPPS for Capital-Related Costs
A. Overview
B. Additional Provisions
C. Proposed Annual Update for FY 2022
VII. Proposed Changes for Hospitals Excluded From the IPPS
A. Proposed Rate-of-Increase in Payments to Excluded Hospitals
for FY 2022
B. Critical Access Hospitals (CAHs)
VIII. Proposed Changes to the Long-Term Care Hospital Prospective
Payment System (LTCH PPS) for FY 2022
A. Background of the LTCH PPS
B. Medicare Severity Long-Term Care Diagnosis-Related Group (MS-
LTC-DRG) Classifications and Relative Weights for FY 2021
C. Proposed Changes to the LTCH PPS Payment Rates and Other
Proposed Changes to the LTCH PPS for FY 2022
IX. Proposed Quality Data Reporting Requirements for Specific
Providers and Suppliers
A. Advancing to Digital Quality Measurement and the Use of Fast
Healthcare Interoperability Resources (FHIR) in Hospital Quality
Programs--Request for Information
B. Closing the Health Equity Gap in CMS Hospital Quality
Programs--Request For Information
C. Hospital Inpatient Quality Reporting (IQR) Program
D. Changes to the PPS-Exempt Cancer Hospital Quality Reporting
(PCHQR) Program
E. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
F. Proposed Changes to the Medicare Promoting Interoperability
Programs
X. Proposed Changes for Hospitals and Other Providers and Suppliers
A. Medicaid Enrollment of Medicare Providers and Suppliers for
Purposes of Processing Claims for Cost-Sharing for Services
Furnished to Dually Eligible Beneficiaries--Proposed Policy Changes
(Sec. 455.410)
B. Organ Acquisition Payment--Proposed Policy Changes (Part 413,
Subpart L)
C. Medicare Shared Savings Program--Proposed Policy Changes
(Sec. 425.600)
XI. MedPAC Recommendations
XII. Other Required Information
A. Publicly Available Files
B. Collection of Information Requirements
C. Response to Public Comments
Regulation Text
Addendum--Schedule of Standardized Amounts, Update Factors, and
Rate-of-Increase Percentages Effective With Cost Reporting Periods
Beginning on or After October 1, 2021 and Payment Rates for LTCHs
Effective for Discharges Occurring on or After October 1, 2021
I. Summary and Background
II. Proposed Changes to Prospective Payment Rates for Hospital
Inpatient Operating Costs for Acute Care Hospitals for FY 2022
A. Calculation of the Proposed Adjusted Standardized Amount
B. Proposed Adjustments for Area Wage Levels and Cost-of-Living
C. Calculation of the Proposed Prospective Payment Rates
III. Proposed Changes to Payment Rates for Acute Care Hospital
Inpatient Capital-Related Costs for FY 2022
A. Determination of the Proposed Federal Hospital Inpatient
Capital-Related Prospective Payment Rate Update for FY 2022
B. Calculation of the Proposed Inpatient Capital-Related
Prospective Payments for FY 2022
C. Capital Input Price Index
IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-
of-Increase Percentages for FY 2022
V. Proposed Changes to the Payment Rates for the LTCH PPS for FY
2022
A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2022
B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS
for FY 2022
C. Proposed Cost-of-Living Adjustment (COLA) for LTCHs Located
in Alaska and Hawaii
D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO)
Cases
E. Proposed Update to the IPPS Comparable/Equivalent Amounts to
Reflect the Statutory Changes to the IPPS DSH Payment Adjustment
Methodology
F. Computing the Proposed Adjusted LTCH PPS Federal Prospective
Payments for FY 2022
VI. Tables Referenced in This Proposed Rule Generally Available
Through the Internet on the CMS Website
Appendix A--Economic Analyses
I. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Objectives of the IPPS and the LTCH PPS
D. Limitations of Our Analysis
E. Hospitals Included in and Excluded From the IPPS
F. Effects on Hospitals and Hospital Units Excluded From the
IPPS
G. Quantitative Effects of the Policy Changes Under the IPPS for
Operating Costs
H. Effects of Other Proposed Policy Changes
I. Effects of Proposed Changes in the Capital IPPS
J. Effects of Proposed Payment Rate Changes and Policy Changes
Under the LTCH PPS
K. Effects of Proposed Requirements for Hospital Inpatient
Quality Reporting (IQR) Program
L. Effects of Proposed Requirements for the PPS-Exempt Cancer
Hospital Quality Reporting (PCHQR) Program
M. Effects of Proposed Requirements for the Long-Term Care
Hospital Quality Reporting Program (LTCH QRP)
N. Effects of Proposed Requirements Regarding the Promoting
Interoperability Program
O. Alternatives Considered
P. Overall Conclusion
Q. Regulatory Review Costs
II. Accounting Statements and Tables
A. Acute Care Hospitals
B. LTCHs
III. Regulatory Flexibility Act (RFA) Analysis
IV. Impact on Small Rural Hospitals
V. Unfunded Mandate Reform Act (UMRA) Analysis
VI. Executive Order 13175
VII. Executive Order 12866
Appendix B: Recommendation of Update Factors for Operating Cost
Rates of Payment for Inpatient Hospital Services
I. Background
II. Inpatient Hospital Update for FY 2022
A. Proposed FY 2022 Inpatient Hospital Update
B. Proposed Update for SCHs and MDHs for FY 2022
C. Proposed FY 2022 Puerto Rico Hospital Update
D. Proposed Update for Hospitals Excluded From the IPPS for FY
2022
E. Proposed Update for LTCHs for FY 2022
III. Secretary's Recommendation
IV. MedPAC Recommendation for Assessing Payment Adequacy and
Updating Payments in Traditional Medicare
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
This FY 2022 IPPS/LTCH PPS proposed rule would make payment and
policy changes under the Medicare inpatient prospective payment systems
(IPPS) for operating and capital-related costs of acute care hospitals
as well as for certain hospitals and hospital units excluded from the
IPPS. In addition, it would make payment and policy changes for
inpatient hospital services
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provided by long-term care hospitals (LTCHs) under the long-term care
hospital prospective payment system (LTCH PPS). This proposed rule also
would make policy changes to programs associated with Medicare IPPS
hospitals, IPPS-excluded hospitals, and LTCHs. In this FY 2022 proposed
rule, we are continuing policies to address wage index disparities
impacting low wage index hospitals; including a proposal to implement
the imputed floor wage index provision of the American Rescue Plan Act
of 2021; including proposals related to new technology add-on payments;
and proposing to repeal the collection of market-based rate information
on the Medicare cost report and the market-based MS-DRG relative weight
methodology, as finalized in the FY 2021 IPPS/LTCH PPS final rule. This
proposed rule also includes proposals to implement provisions of the
Consolidated Appropriations Act of 2021 relating to payments to
hospitals for direct graduate medical education (GME) and indirect
medical education (IME) costs.
We are proposing to establish new requirements and revise existing
requirements for eligible hospitals and CAHs participating in the
Medicare Promoting Interoperability Program.
We are providing estimated and newly established performance
standards for the Hospital Value-Based Purchasing (VBP) Program, and
proposing updated policies for the Hospital Readmissions Reduction
Program, Hospital Inpatient Quality Reporting (IQR) Program, Hospital
VBP Program, Hospital-Acquired Condition (HAC) Reduction Program, Long
Term Care Hospital Quality Reporting Program (LTCH QRP), and the PPS-
Exempt Cancer Hospital Reporting (PCHQR) Program. Additionally, due to
the impact of the COVID-19 PHE on measure data used in our value-based
purchasing programs, we are proposing to suppress several measures in
the Hospital VBP, HAC Reduction, and Hospital Readmissions Reduction
Programs. As a result of these measure suppressions for the Hospital
VBP Program we are also proposing a special scoring methodology for FY
2022 that results in a value-based incentive payment amount that
matches the 2 percent reduction to the base operating DRG payment
amount.
Under various statutory authorities, we either discuss continued
program implementation or are proposing to make changes to the Medicare
IPPS, to the LTCH PPS, other related payment methodologies and programs
for FY 2022 and subsequent fiscal years, and other policies and
provisions included in this rule. These statutory authorities include,
but are not limited to, the following:
Section 1886(d) of the Social Security Act (the Act),
which sets forth a system of payment for the operating costs of acute
care hospital inpatient stays under Medicare Part A (Hospital
Insurance) based on prospectively set rates. Section 1886(g) of the Act
requires that, instead of paying for capital-related costs of inpatient
hospital services on a reasonable cost basis, the Secretary use a
prospective payment system (PPS).
Section 1886(d)(1)(B) of the Act, which specifies that
certain hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: Rehabilitation hospitals and units; LTCHs;
psychiatric hospitals and units; children's hospitals; cancer
hospitals; extended neoplastic disease care hospitals, and hospitals
located outside the 50 States, the District of Columbia, and Puerto
Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa). Religious nonmedical
health care institutions (RNHCIs) are also excluded from the IPPS.
Sections 123(a) and (c) of the BBRA (Public Law (Pub. L.)
106-113) and section 307(b)(1) of the BIPA (Pub. L. 106-554) (as
codified under section 1886(m)(1) of the Act), which provide for the
development and implementation of a prospective payment system for
payment for inpatient hospital services of LTCHs described in section
1886(d)(1)(B)(iv) of the Act.
Sections 1814(l), 1820, and 1834(g) of the Act, which
specify that payments are made to critical access hospitals (CAHs)
(that is, rural hospitals or facilities that meet certain statutory
requirements) for inpatient and outpatient services and that these
payments are generally based on 101 percent of reasonable cost.
Section 1886(a)(4) of the Act, which specifies that costs
of approved educational activities are excluded from the operating
costs of inpatient hospital services. Hospitals with approved graduate
medical education (GME) programs are paid for the direct costs of GME
in accordance with section 1886(h) of the Act.
Section 1886(b)(3)(B)(viii) of the Act, which requires the
Secretary to reduce the applicable percentage increase that would
otherwise apply to the standardized amount applicable to a subsection
(d) hospital for discharges occurring in a fiscal year if the hospital
does not submit data on measures in a form and manner, and at a time,
specified by the Secretary.
Section 1866(k) of the Act, which provides for the
establishment of a quality reporting program for hospitals described in
section 1886(d)(1)(B)(v) of the Act, referred to as ``PPS-exempt cancer
hospitals.''
Section 1886(o) of the Act, which requires the Secretary
to establish a Hospital Value-Based Purchasing (VBP) Program, under
which value-based incentive payments are made in a fiscal year to
hospitals meeting performance standards established for a performance
period for such fiscal year.
Section 1886(p) of the Act, which establishes a Hospital-
Acquired Condition (HAC) Reduction Program, under which payments to
applicable hospitals are adjusted to provide an incentive to reduce
hospital-acquired conditions.
Section 1886(q) of the Act, as amended by section 15002 of
the 21st Century Cures Act, which establishes the Hospital Readmissions
Reduction Program. Under the program, payments for discharges from an
applicable hospital as defined under section 1886(d) of the Act will be
reduced to account for certain excess readmissions. Section 15002 of
the 21st Century Cures Act directs the Secretary to compare hospitals
with respect to the number of their Medicare-Medicaid dual-eligible
beneficiaries (dual-eligibles) in determining the extent of excess
readmissions.
Section 1886(r) of the Act, as added by section 3133 of
the Affordable Care Act, which provides for a reduction to
disproportionate share hospital (DSH) payments under section
1886(d)(5)(F) of the Act and for a new uncompensated care payment to
eligible hospitals. Specifically, section 1886(r) of the Act requires
that, for fiscal year 2014 and each subsequent fiscal year, subsection
(d) hospitals that would otherwise receive a DSH payment made under
section 1886(d)(5)(F) of the Act will receive two separate payments:
(1) 25 percent of the amount they previously would have received under
section 1886(d)(5)(F) of the Act for DSH (``the empirically justified
amount''), and (2) an additional payment for the DSH hospital's
proportion of uncompensated care, determined as the product of three
factors. These three factors are: (1) 75 percent of the payments that
would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1
minus the percent change in the percent of individuals who are
uninsured; and (3) a hospital's uncompensated care amount relative to
the uncompensated
[[Page 25074]]
care amount of all DSH hospitals expressed as a percentage.
Section 1886(m)(5) of the Act, which requires the
Secretary to reduce by two percentage points the annual update to the
standard Federal rate for discharges for a long-term care hospital
(LTCH) during the rate year for LTCHs that do not submit data in the
form, manner, and at a time, specified by the Secretary.
Section 1886(m)(6) of the Act, as added by section
1206(a)(1) of the Pathway for Sustainable Growth Rate (SGR) Reform Act
of 2013 (Pub. L. 113-67) and amended by section 51005(a) of the
Bipartisan Budget Act of 2018 (Pub. L. 115-123), which provided for the
establishment of site neutral payment rate criteria under the LTCH PPS,
with implementation beginning in FY 2016. Section 51005(b) of the
Bipartisan Budget Act of 2018 amended section 1886(m)(6)(B) by adding
new clause (iv), which specifies that the IPPS comparable amount
defined in clause (ii)(I) shall be reduced by 4.6 percent for FYs 2018
through 2026.
Section 1899B of the Act, as added by section 2(a) of the
Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT
Act) (Pub. L. 113-185), which provides for the establishment of
standardized data reporting for certain post-acute care providers,
including LTCHs.
Section 1899 of the Act which established the Medicare
Shared Savings Program (Shared Savings Program) to facilitate
coordination and cooperation among providers and suppliers to improve
the quality of care for Medicare fee-for-service (FFS) beneficiaries
and reduce the rate of growth in expenditures under Medicare Parts A
and B.
Section 1902(a)(23) of the Act, which specifies Medicaid
provider enrollment requirements. States may set reasonable standards
relating to the qualifications of providers but may not restrict the
right of beneficiaries to obtain services from any person or entity
that is both qualified and willing to furnish such services.
2. Summary of the Major Provisions
The following is a summary of the major provisions in this proposed
rule. In general, these major provisions are being proposed as part of
the annual update to the payment policies and payment rates, consistent
with the applicable statutory provisions. A general summary of the
proposed changes in this proposed rule is presented in section I.D. of
the preamble of this proposed rule.
a. Proposed MS-DRG Documentation and Coding Adjustment
Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub.
L. 112- 240) amended section 7(b)(1)(B) of Public Law 110-90 to require
the Secretary to make a recoupment adjustment to the standardized
amount of Medicare payments to acute care hospitals to account for
changes in MS-DRG documentation and coding that do not reflect real
changes in case-mix, totaling $11 billion over a 4-year period of FYs
2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments
represented the amount of the increase in aggregate payments as a
result of not completing the prospective adjustment authorized under
section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the
ATRA, this amount could not have been recovered under Public Law 110
90. Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment
we intended to make in FY 2018 with a 0.5 percent positive adjustment
to the standardized amount of Medicare payments to acute care hospitals
for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently
adjusted to 0.4588 percent by section 15005 of the 21st Century Cures
Act.) Therefore, for FY 2022, we are proposing to make an adjustment of
+0.5 percent to the standardized amount.
b. Proposed Changes to the New COVID-19 Treatments Add-On Payment
(NCTAP)
In response to the COVID-19 PHE, we established the New COVID-19
Treatments Add-on Payment (NCTAP) under the IPPS for COVID-19 cases
that meet certain criteria (85 FR 71157 and 71158). We believe that as
drugs and biological products become available and are authorized for
emergency use or approved by Food and Drug Administration (FDA) for the
treatment of COVID-19 in the inpatient setting, it is appropriate to
increase the current IPPS payment amounts to mitigate any potential
financial disincentives for hospitals to provide new COVID-19
treatments during the PHE. Therefore, effective for discharges
occurring on or after November 2, 2020 and until the end of the PHE for
COVID-19, CMS established the NCTAP.
We anticipate that there might be inpatient cases of COVID-19,
beyond the end of the PHE, for which payment based on the assigned MS-
DRG may not adequately reflect the additional cost of new COVID-19
treatments. In order to continue to mitigate potential financial
disincentives for hospitals to provide these new treatments, and to
minimize any potential payment disruption immediately following the end
of the PHE, we believe that the NCTAP should remain available for cases
involving eligible treatments for the remainder of the fiscal year in
which the PHE ends (for example, until September 30, 2022). At the same
time, we also believe that any new technology add-on payments that may
be approved for a COVID-19 treatment would also serve to mitigate any
potential financial disincentives for hospitals to provide that new
COVID-19 treatment, such that the NCTAP would no longer be needed for
that same product.
Therefore, we are proposing to extend NCTAP for eligible products
that are not approved for new technology add-on payments through the
end of the fiscal year in which the PHE ends (for example, September
30, 2022). We also are proposing to discontinue the NCTAP for
discharges on or after October 1, 2021 for a product that is approved
for new technology add-on payments beginning FY 2022.
c. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH PPS
Ratesetting
For the IPPS and LTCH PPS ratesetting, our longstanding goal is
always to use the best available data overall. In section I.F. of the
preamble of this proposed rule we discuss our analysis of the best
available data for use in the development of this FY 2022 IPPS/LTCH PPS
proposed rule given the potential impact of the public health emergency
(PHE) for the Coronavirus Disease (COVID-19). As discussed in section
I.F of the preamble of this proposed rule, we are proposing to use the
FY 2019 data, such as the FY 2019 MedPAR file, for the FY 2022
ratesetting for circumstances where the FY 2020 data is significantly
impacted by the COVID-19 PHE, primarily in that the utilization of
inpatient services reflect generally markedly different utilization for
certain types of services in FY 2020 than would have been expected in
the absence of the PHE. In section I.O. of Appendix A of this proposed
rule, we are also considering, as an alternative to this proposal, the
use of the same FY 2020 data that we would ordinarily use for purposes
of FY 2022 ratesetting, and which we may consider finalizing based on
consideration of comments received.
d. Proposed Continuation of the Low Wage Index Hospital Policy
To help mitigate wage index disparities between high wage and low
hospitals, in the FY 2020 IPPS/LTCH
[[Page 25075]]
PPS rule (84 FR 42326 through 42332), we adopted a policy to increase
the wage index values for certain hospitals with low wage index values
(the low wage index hospital policy). This policy was adopted in a
budget neutral manner through an adjustment applied to the standardized
amounts for all hospitals. We also indicated that this policy would be
effective for at least 4 years, beginning in FY 2020, in order to allow
employee compensation increases implemented by these hospitals
sufficient time to be reflected in the wage index calculation.
Therefore, for FY 2022, we are continuing the low wage index hospital
policy, and are also proposing to apply this policy in a budget neutral
manner by applying an adjustment to the standardized amounts.
e. Proposed Implementation of Section 9831 of the American Rescue Plan
Act of 2021 (Pub. L. 117-2) Imputed Floor Wage Index Policy for All-
Urban States
Section 9831 of the American Rescue Plan Act of 2021 (Pub. L. 117-
2) amended section 1886(d)(3)(E) of the Act (42 U.S.C. 1395ww(d)(3)(E))
to establish a minimum area wage index for hospitals in all-urban
States. Specifically, section 1886(d)(3)(E)(iv) of the Act (as added by
section 9831(a)(2) of Pub. L. 117-2) reinstates the imputed floor wage
index policy for all-urban states effective for discharges on or after
October 1, 2021 (FY 2022) with no expiration date using the methodology
described in 42 CFR 412.64(h)(4)(vi) as in effect for FY 2018.
Furthermore, section 1886(d)(3)(E)(iv)(III) of the Act provides that
the imputed floor wage index shall not be applied in a budget neutral
manner. We refer readers to section III.G.2. of this proposed rule for
a summary of the provisions of section 9831 of Public Law 117-2 that we
are proposing to implement in this proposed rule.
f. Proposed DSH Payment Adjustment and Additional Payment for
Uncompensated Care
Section 3133 of the Affordable Care Act modified the Medicare
disproportionate share hospital (DSH) payment methodology beginning in
FY 2014. Under section 1886(r) of the Act, which was added by section
3133 of the Affordable Care Act, starting in FY 2014, FY 2014, Medicare
DSHs receive 25 percent of the amount they previously would have
received under the statutory formula for Medicare DSH payments in
section 1886(d)(5)(F) of the Act. The remaining amount, equal to 75
percent of the amount that otherwise would have been paid as Medicare
DSH payments, is paid as additional payments after the amount is
reduced for changes in the percentage of individuals that are
uninsured. Each Medicare DSH will receive an additional payment based
on its share of the total amount of uncompensated care for all Medicare
DSHs for a given time period.
In this proposed rule, we are proposing to update our estimates of
the three factors used to determine uncompensated care payments for FY
2022. We are also proposing to continue to use uninsured estimates
produced by CMS' Office of the Actuary (OACT) as part of the
development of the National Health Expenditure Accounts (NHEA) in the
calculation of Factor 2. Consistent with the policy adopted in the FY
2021 IPPS/LTCH PPS final rule for FY 2022 and subsequent fiscal years,
we are using a single year of data on uncompensated care costs from
Worksheet S-10 of the FY 2018 cost reports to calculate Factor 3 in the
FY 2022 methodology for all eligible hospitals with the exception of
Indian Health Service (IHS) and Tribal hospitals and Puerto Rico
hospitals. For IHS and Tribal hospitals and Puerto Rico hospitals we
are proposing to continue to use the low-income insured days proxy to
calculate Factor 3 for these hospitals for FY 2022. We are proposing
certain methodological changes for calculating Factor 3 for FY 2022.
Additionally, we are proposing to revise our regulation governing
the calculation of the Medicaid fraction of the DSH calculation. Under
this proposal, patient days of individuals receiving benefits under a
section 1115 waiver program would be counted in the numerator of the
Medicaid fraction only if the patient directly receives inpatient
hospital insurance coverage on that day under a waiver authorized under
section 1115(a)(2) of the Act.
g. Reduction of Hospital Payments for Excess Readmissions
We are proposing to make changes to policies for the Hospital
Readmissions Reduction Program, which was established under section
1886(q) of the Act, as amended by section 15002 of the 21st Century
Cures Act. The Hospital Readmissions Reduction Program requires a
reduction to a hospital's base operating DRG payment to account for
excess readmissions of selected applicable conditions. For FY 2017 and
subsequent years, the reduction is based on a hospital's risk-adjusted
readmission rate during a 3-year period for acute myocardial infarction
(AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary
disease (COPD), elective primary total hip arthroplasty/total knee
arthroplasty (THA/TKA), and coronary artery bypass graft (CABG)
surgery. In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing
the following policies: (1) To adopt a cross-program measure
suppression policy; (2) to suppress the Hospital 30-Day, All-Cause,
Risk-Standardized Readmission Rate (RSRR) following Pneumonia
Hospitalization measure (NQF #0506) for the FY 2023 program year; (3)
to modify the remaining five condition-specific readmission measures to
exclude COVID-19 diagnosed patients from the measure denominators,
beginning with the FY 2023 program year; (4) to use the MedPAR data
that aligns with the applicable period for FY 2022; (5) to
automatically adopt the use of MedPAR data corresponding to the
applicable period beginning with the FY 2023 program year and all
subsequent program years, unless otherwise specified by the Secretary;
and (6) to update the regulatory text to reflect that our Hospital
Compare website has been renamed and is now referred to as Care
Compare. We are clarifying our Extraordinary Circumstances Exceptions
(ECE) policy, and we are also requesting public comment on
opportunities to advance health equity through possible future
stratification of results by race and ethnicity for condition/
procedure-specific readmission measures and by expansion of
standardized data collection to additional social factors, such as
language preference and disability status. We are also seeking comment
on mechanisms of incorporating other demographic characteristics into
analyses that address and advance health equity, such as the potential
to include administrative and self-reported data to measure co-
occurring disability status.
h. Hospital Value-Based Purchasing (VBP) Program
Section 1886(o) of the Act requires the Secretary to establish a
Hospital VBP Program under which value-based incentive payments are
made in a fiscal year to hospitals based on their performance on
measures established for a performance period for such fiscal year. In
this proposed rule, we are proposing to: (1) Establish a measure
suppression policy for the duration of the public health emergency for
COVID-19; (2) suppress the Hospital Consumer Assessment of Healthcare
Providers and Systems (HCAHPS), Medicare Spending Per Beneficiary
(MSPB), and five Healthcare-Associated Infection (HAI) measures, for
the FY 2022 Program year; and (3) suppress the Hospital 30-Day,
[[Page 25076]]
All-Cause, Risk-Standardized Mortality Rate Following Pneumonia (PN)
Hospitalization (MORT-30-PN) measure for the FY 2023 program year. We
are also proposing to revise the scoring and payment methodology for
the FY 2022 program year such that hospitals' Total Performance Scores
will not include calculations based on these measures. We believe that
awarding a TPS to any hospital based off the remaining measures that
are not suppressed would not result in a fair national comparison and,
as a result, are proposing not to award a TPS to any hospital for the
FY 2022 program year. Instead, we are proposing to award each hospital
a payment incentive multiplier that results in a value-based incentive
payment that is equal to the amount withheld for the fiscal year (2
percent). We are proposing to remove the CMS Patient Safety and Adverse
Events Composite (PSI 90) measure beginning with FY 2023 because the
costs associated with the measure outweigh the benefit of its use in
the program. We are also proposing to update the baseline periods for
certain measures affected by the ECE granted in response to the COVID-
19 PHE and to make a technical update to our terminology used in the
Hospital VBP Program regulations.
i. Hospital-Acquired Condition (HAC) Reduction Program
Section 1886(p) of the Act establishes an incentive to hospitals to
reduce the incidence of hospital-acquired conditions by requiring the
Secretary to make an adjustment to payments to applicable hospitals,
effective for discharges beginning on October 1, 2014. This 1-percent
payment reduction applies to hospitals that rank in the worst-
performing quartile (25 percent) of all applicable hospitals, relative
to the national average, of conditions acquired during the applicable
period and on all of the hospital's discharges for the specified fiscal
year. In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing to:
(1) Clarify our ECE policy; (2) adopt a cross-program measure
suppression policy; (3) apply that measure suppression policy to
suppress certain program data; and (4) update the regulatory text to
reflect that our Hospital Compare website has been renamed and is now
referred to as Care Compare.
j. Hospital Inpatient Quality Reporting (IQR) Program
Under section 1886(b)(3)(B)(viii) of the Act, subsection (d)
hospitals are required to report data on measures selected by the
Secretary for a fiscal year in order to receive the full annual
percentage increase that would otherwise apply to the standardized
amount applicable to discharges occurring in that fiscal year.
In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing to
make several changes. We are proposing to adopt five new measures: (1)
A new structural measure--Maternal Morbidity Structural Measure--
beginning with a shortened reporting period from October 1, 2021
through December 31, 2021 affecting the CY 2021 reporting period/FY
2023 payment determination; (2) the Hybrid Hospital-Wide All-Cause Risk
Standardized Mortality (Hybrid HWM) measure in a stepwise fashion,
beginning with a voluntary reporting period from July 1, 2022 through
June 30, 2023, and followed by mandatory reporting from July 1, 2023
through June 30, 2024, affecting the FY 2026 payment determination and
for subsequent years; (3) the COVID-19 Vaccination Coverage Among
Health Care Personnel (HCP) measure beginning with a shortened
reporting period from October 1, 2021 through December 31, 2021,
affecting the CY 2021 reporting period/FY 2023 payment determination
and with quarterly reporting beginning with the FY 2024 payment
determination and for subsequent years; and two medication-related
adverse event eCQMs beginning with the CY 2023 reporting period/FY 2025
payment determination; (4) Hospital Harm-Severe Hypoglycemia eCQM (NQF
#3503e); and (5) Hospital Harm-Severe Hyperglycemia eCQM (NQF #3533e).
We are also proposing to remove five measures: (1) Death Among
Surgical Inpatients with Serious Treatable Complications (CMS PSI-04)
beginning with the FY 2023 payment determination; (2) Exclusive Breast
Milk Feeding (PC-05) (NQF #0480) beginning with the FY 2026 payment
determination; (3) Admit Decision Time to ED Departure Time for
Admitted Patients (ED-2) (NQF #0497) beginning with the FY 2026 payment
determination; and two stroke-related eCQMs beginning with the FY 2026
payment determination; (4) Anticoagulation Therapy for Atrial
Fibrillation/Flutter eCQM (STK-03) (NQF #0436); and (5) Discharged on
Statin Medication eCQM (STK-06) (NQF #0439).
We are requesting comment from stakeholders on the potential future
development and inclusion of two measures: (1) A mortality measure for
patients admitted with COVID-19; and (2) a patient-reported outcomes
measure following elective total hip and/or total knee arthroplasty
(THA/TKA). We are also requesting comment from stakeholders on ways we
can leverage measures to address gaps in existing health equity
generally as well as comment on: (1) Potential future confidential
stratified reporting for the Hospital-Wide All-Cause Unplanned
Readmission (HWR) measure using both dual eligibility and race/
ethnicity; and (2) potential future reporting of a structural measure
to assess the degree of hospital leadership engagement in health equity
performance data. In this proposed rule, we are also requesting
feedback across programs on potential actions and priority areas that
would enable the continued transformation of our quality measurement
toward greater digital capture of data and use of the FHIR standard.
In addition, beginning with the CY 2023 reporting period/FY 2025
payment determination, we are proposing to require hospitals to use
certified technology that has been updated consistent with the 2015
Edition Cures Update and clarifying that certified technology must
support the reporting requirements for all available eCQMs. We also are
proposing that hybrid measures comply with the same certification
requirements as eCQMs, specifically that EHR technology must be
certified to the 2015 Edition Cures Update. We are proposing an update
to revise 42 CFR 412.140(a)(2) and 42 CFR 412.140(e)(2)(iii) replacing
the terms ``Security Administrator'' and ``System Administrator'' with
the term ``security official'' in alignment with other CMS quality
programs. Due to an updated URL for the QualityNet website from
QualityNet.org to QualityNet.cms.gov, we are also proposing to revise
Hospital IQR Program regulations at 42 CFR 412.140(a)(1) and 42 CFR
412.140(c)(2)(i) to reflect updates to the QualityNet website. Lastly,
we are proposing to extend the effects of the educational review
process for chart-abstracted measures beginning with validations
affecting the FY 2024 payment determination.
k. PPS-Exempt Cancer Hospital Quality Reporting Program
Section 1866(k)(1) of the Act requires, for purposes of FY 2014 and
each subsequent fiscal year, that a hospital described in section
1886(d)(1)(B)(v) of the Act (a PPS-exempt cancer hospital, or a PCH)
submit data in accordance with section 1866(k)(2) of the Act with
respect to such fiscal year. There is no financial impact to PCH
Medicare payment if a PCH does not participate.
In this proposed rule, we are proposing to remove the Oncology:
Plan of Care for Pain--Medical Oncology and
[[Page 25077]]
Radiation Oncology (NQF #0383) (PCH-15) measure beginning with the FY
2024 program year, adopt the COVID-19 Vaccination Coverage Among
Healthcare Personnel measure beginning with the FY 2023 program year,
make a technical update to the terminology we use in the program, and
codify existing PCHQR Program policies in our regulations.
l. Medicare Promoting Interoperability Program
For purposes of reducing the burden on eligible hospitals and CAHs,
we are proposing several changes to the Medicare Promoting
Interoperability Program. Specifically, we are proposing: (1) To
continue the EHR reporting period of a minimum of any continuous 90-day
period for new and returning eligible hospitals and CAHs for CY 2023
and to increase the EHR reporting period to a minimum of any continuous
180-day period for new and returning eligible hospitals and CAHs for CY
2024; (2) to maintain the Electronic Prescribing Objective's Query of
PDMP measure as optional while increasing its available bonus from five
points to 10 points for the EHR reporting period in CY 2022; (3) to
modify the Provide Patient's Electronic Access to Their Health
Information measure to establish a data availability requirement
beginning with encounters with a date of service on or after January 1,
2016, beginning with the EHR reporting period in CY 2022; (4) to add a
new Health Information Exchange (HIE) Bi-Directional Exchange measure
as a yes/no attestation, to the HIE objective as an optional
alternative to the two existing measures beginning with the EHR
reporting period in CY 2022; (5) to require reporting a ``yes'' on four
of the existing Public Health and Clinical Data Exchange Objective
measures (Syndromic Surveillance Reporting, Immunization Registry
Reporting, Electronic Case Reporting, and Electronic Reportable
Laboratory Result Reporting) or requesting the applicable exclusion(s);
(6) adding a new measure to the Protect Patient Health Information
objective that requires eligible hospitals and CAHs to attest to having
completed an annual assessment of SAFER Guides beginning with the EHR
reporting period in CY 2022; (7) to remove attestation statements 2 and
3 from the Promoting Interoperability Program's prevention of
information blocking requirement; (8) to increase the minimum required
score for the objectives and measures from 50 points to 60 points (out
of 100 points) in order to be considered a meaningful EHR user; and (9)
to adopt two new eCQMs to the Medicare Promoting Interoperability
Program's eCQM measure set beginning with the reporting period in CY
2023, in addition to removing four eCQMs from the measure set beginning
with the reporting period in CY 2024 which is in alignment with the
proposals for the Hospital IQR Program. We are amending our regulation
texts as necessary to incorporate several of these proposed changes.
m. Proposed Repeal of Market-Based Data Collection and Market-Based MS-
DRG Relative Weight Methodology
As discussed in section V.L. of the preamble of this proposed rule,
we are proposing to repeal the requirement that a hospital report on
the Medicare cost report the median payer-specific negotiated charge
that the hospital has negotiated with all of its MA organization
payers, by MS-DRG, for cost reporting periods ending on or after
January 1, 2021. We are also proposing to repeal the market-based MS-
DRG relative weight methodology adopted for calculating the MS-DRG
relative weights effective in FY 2024, and to continue using the
existing cost-based methodology for calculating the MS-DRG relative
weights for FY 2024 and subsequent fiscal years. Lastly, we are
soliciting comment on alternative approaches or data sources that could
be used in Medicare fee-for-service (FFS) ratesetting. The proposed
repeal of these policies would result in a reduction of 63,780 annual
burden hours for all hospitals.
n. Proposed Implementation of Sections 126, 127 and 131 of the
Consolidated Appropriations Act (CAA) of 2021
In this proposed rule, we are including proposals to implement
sections 126, 127 and 131 of the Consolidated Appropriations Act (CAA)
of 2021. Section 126(a) of the CAA amended section 1886(h) of the Act
by adding a new section 1886(h)(9) of the Act requiring the
distribution of additional residency positions to qualifying hospitals.
Section 127 of the CAA amended section 1886(h)(4)(H)(iv) of the Act to
specify that in the case of a hospital not located in a rural area that
established or establishes a medical residency training program (or
rural track) in a rural area, the hospital, and each such hospital
located in a rural area that participates in such a training, is
allowed to receive an adjustment to its full-time equivalent (FTE)
resident limit. Section 131 of the CAA amended section 1886(h)(2)(F) of
the Act to provide an opportunity to hospitals with such extremely low
or $0 per resident amounts (PRAs) that meet certain criteria to reset
and establish new PRAs if the hospital trains resident(s) in a cost
reporting period beginning on or after enactment [December 27, 2020]
and before the date that is 5 years after enactment [December 26,
2025]. Section 131 also amended section 1886(h)(4)(H)(i) of the Act to
provide an opportunity for hospitals that meet certain criteria and
that have very small FTE resident caps to replace those caps if the
Secretary determines the hospital begins training residents in a new
program beginning on or after enactment (December 27, 2020) and before
5 years after enactment (December 26, 2025). We refer readers to
section V.J.2. of this proposed rule for rule for a summary of the
provisions of sections 126, 127, and 131 of the CAA that we are
proposing to implement in this proposed rule.
o. Proposed Changes to Organ Acquisition Payment Policy
In section X.B.2.h. of the preamble of this proposed rule, we are
proposing to revise and codify the Medicare usable organ counting
policy to count only organs transplanted into Medicare beneficiaries so
that Medicare more accurately records and pays its share of organ
acquisition costs.
p. Medicare Shared Savings Program
We are proposing to make changes to policies for the Shared Savings
Program, which was established under section 1899 of the Act, to allow
eligible ACOs participating in the BASIC track's glide path the option
to elect to forgo automatic advancement along the glide path's
increasing levels of risk and potential reward for performance year
(PY) 2022. Under this proposal, prior to the automatic advancement for
PY 2022, an eligible ACO may elect to remain in the same level of the
BASIC track's glide path in which it participated during PY 2021. For
PY 2023, an ACO that elects this advancement deferral option would be
automatically advanced to the level of the BASIC track's glide path in
which it would have participated during PY 2023 if it had advanced
automatically to the required level for PY 2022 (unless the ACO elects
to advance more quickly before the start of PY 2023).
3. Summary of Costs and Benefits
The following table provides a summary of the costs, savings,
benefits associated with the major provisions described in section
I.A.3. of the preamble of this proposed rule.
BILLING CODE 4120-01-P
[[Page 25078]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.000
[[Page 25079]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.001
[[Page 25080]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.002
[[Page 25081]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.003
[[Page 25082]]
BILLING CODE 4120-01-C
B. Background Summary
1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
Section 1886(d) of the Act sets forth a system of payment for the
operating costs of acute care hospital inpatient stays under Medicare
Part A (Hospital Insurance) based on prospectively set rates. Section
1886(g) of the Act requires the Secretary to use a prospective payment
system (PPS) to pay for the capital-related costs of inpatient hospital
services for these ``subsection (d) hospitals.'' Under these PPSs,
Medicare payment for hospital inpatient operating and capital-related
costs is made at predetermined, specific rates for each hospital
discharge. Discharges are classified according to a list of diagnosis-
related groups (DRGs).
The base payment rate is comprised of a standardized amount that is
divided into a labor-related share and a nonlabor-related share. The
labor-related share is adjusted by the wage index applicable to the
area where the hospital is located. If the hospital is located in
Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-
living adjustment factor. This base payment rate is multiplied by the
DRG relative weight.
If the hospital treats a high percentage of certain low-income
patients, it receives a percentage add-on payment applied to the DRG-
adjusted base payment rate. This add-on payment, known as the
disproportionate share hospital (DSH) adjustment, provides for a
percentage increase in Medicare payments to hospitals that qualify
under either of two statutory formulas designed to identify hospitals
that serve a disproportionate share of low-income patients. For
qualifying hospitals, the amount of this adjustment varies based on the
outcome of the statutory calculations. The Affordable Care Act revised
the Medicare DSH payment methodology and provides for a new additional
Medicare payment beginning on October 1, 2013, that considers the
amount of uncompensated care furnished by the hospital relative to all
other qualifying hospitals.
If the hospital is training residents in an approved residency
program(s), it receives a percentage add-on payment for each case paid
under the IPPS, known as the indirect medical education (IME)
adjustment. This percentage varies, depending on the ratio of residents
to beds.
Additional payments may be made for cases that involve new
technologies or medical services that have been approved for special
add-on payments. In general, to qualify, a new technology or medical
service must demonstrate that it is a substantial clinical improvement
over technologies or services otherwise available, and that, absent an
add-on payment, it would be inadequately paid under the regular DRG
payment. In addition, certain transformative new devices and certain
antimicrobial products may qualify under an alternative inpatient new
technology add-on payment pathway by demonstrating that, absent an add-
on payment, they would be inadequately paid under the regular DRG
payment.
The costs incurred by the hospital for a case are evaluated to
determine whether the hospital is eligible for an additional payment as
an outlier case. This additional payment is designed to protect the
hospital from large financial losses due to unusually expensive cases.
Any eligible outlier payment is added to the DRG-adjusted base payment
rate, plus any DSH, IME, and new technology or medical service add-on
adjustments.
Although payments to most hospitals under the IPPS are made on the
basis of the standardized amounts, some categories of hospitals are
paid in whole or in part based on their hospital-specific rate, which
is determined from their costs in a base year. For example, sole
community hospitals (SCHs) receive the higher of a hospital-specific
rate based on their costs in a base year (the highest of FY 1982, FY
1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the
standardized amount. SCHs are the sole source of care in their areas.
Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a
hospital that is located more than 35 road miles from another hospital
or that, by reason of factors such as an isolated location, weather
conditions, travel conditions, or absence of other like hospitals (as
determined by the Secretary), is the sole source of hospital inpatient
services reasonably available to Medicare beneficiaries. In addition,
certain rural hospitals previously designated by the Secretary as
essential access community hospitals are considered SCHs.
Under current law, the Medicare-dependent, small rural hospital
(MDH) program is effective through FY 2022. For discharges occurring on
or after October 1, 2007, but before October 1, 2022, an MDH receives
the higher of the Federal rate or the Federal rate plus 75 percent of
the amount by which the Federal rate is exceeded by the highest of its
FY 1982, FY 1987, or FY 2002 hospital-specific rate. MDHs are a major
source of care for Medicare beneficiaries in their areas. Section
1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is
located in a rural area (or, as amended by the Bipartisan Budget Act of
2018, a hospital located in a State with no rural area that meets
certain statutory criteria), has not more than 100 beds, is not an SCH,
and has a high percentage of Medicare discharges (not less than 60
percent of its inpatient days or discharges in its cost reporting year
beginning in FY 1987 or in two of its three most recently settled
Medicare cost reporting years).
Section 1886(g) of the Act requires the Secretary to pay for the
capital-related costs of inpatient hospital services in accordance with
a prospective payment system established by the Secretary. The basic
methodology for determining capital prospective payments is set forth
in our regulations at 42 CFR 412.308 and 412.312. Under the capital
IPPS, payments are adjusted by the same DRG for the case as they are
under the operating IPPS. Capital IPPS payments are also adjusted for
IME and DSH, similar to the adjustments made under the operating IPPS.
In addition, hospitals may receive outlier payments for those cases
that have unusually high costs.
The existing regulations governing payments to hospitals under the
IPPS are located in 42 CFR part 412, subparts A through M.
2. Hospitals and Hospital Units Excluded From the IPPS
Under section 1886(d)(1)(B) of the Act, as amended, certain
hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: Inpatient rehabilitation facility (IRF)
hospitals and units; long-term care hospitals (LTCHs); psychiatric
hospitals and units; children's hospitals; cancer hospitals; extended
neoplastic disease care hospitals, and hospitals located outside the 50
States, the District of Columbia, and Puerto Rico (that is, hospitals
located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands,
and American Samoa). Religious nonmedical health care institutions
(RNHCIs) are also excluded from the IPPS. Various sections of the
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), the Medicare,
Medicaid and SCHIP [State Children's Health Insurance Program] Balanced
Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs
for IRF hospitals and units, LTCHs, and psychiatric hospitals and units
(referred to as inpatient psychiatric facilities (IPFs)). (We note that
the annual
[[Page 25083]]
updates to the LTCH PPS are included along with the IPPS annual update
in this document. Updates to the IRF PPS and IPF PPS are issued as
separate documents.) Children's hospitals, cancer hospitals, hospitals
located outside the 50 States, the District of Columbia, and Puerto
Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa), and RNHCIs continue to
be paid solely under a reasonable cost-based system, subject to a rate-
of-increase ceiling on inpatient operating costs. Similarly, extended
neoplastic disease care hospitals are paid on a reasonable cost basis,
subject to a rate-of-increase ceiling on inpatient operating costs.
The existing regulations governing payments to excluded hospitals
and hospital units are located in 42 CFR parts 412 and 413.
3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
The Medicare prospective payment system (PPS) for LTCHs applies to
hospitals described in section 1886(d)(1)(B)(iv) of the Act, effective
for cost reporting periods beginning on or after October 1, 2002. The
LTCH PPS was established under the authority of sections 123 of the
BBRA and section 307(b) of the BIPA (as codified under section
1886(m)(1) of the Act). Section 1206(a) of the Pathway for SGR Reform
Act of 2013 (Pub. L. 113-67) established the site neutral payment rate
under the LTCH PPS, which made the LTCH PPS a dual rate payment system
beginning in FY 2016. Under this statute, effective for LTCH's cost
reporting periods beginning in FY 2016 cost reporting period, LTCHs are
generally paid for discharges at the site neutral payment rate unless
the discharge meets the patient criteria for payment at the LTCH PPS
standard Federal payment rate. The existing regulations governing
payment under the LTCH PPS are located in 42 CFR part 412, subpart O.
Beginning October 1, 2009, we issue the annual updates to the LTCH PPS
in the same documents that update the IPPS.
4. Critical Access Hospitals (CAHs)
Under sections 1814(l), 1820, and 1834(g) of the Act, payments made
to critical access hospitals (CAHs) (that is, rural hospitals or
facilities that meet certain statutory requirements) for inpatient and
outpatient services are generally based on 101 percent of reasonable
cost. Reasonable cost is determined under the provisions of section
1861(v) of the Act and existing regulations under 42 CFR part 413.
5. Payments for Graduate Medical Education (GME)
Under section 1886(a)(4) of the Act, costs of approved educational
activities are excluded from the operating costs of inpatient hospital
services. Hospitals with approved graduate medical education (GME)
programs are paid for the direct costs of GME in accordance with
section 1886(h) of the Act. The amount of payment for direct GME costs
for a cost reporting period is based on the hospital's number of
residents in that period and the hospital's costs per resident in a
base year. The existing regulations governing payments to the various
types of hospitals are located in 42 CFR part 413.
C. Summary of Provisions of Recent Legislation That Would Be
Implemented in This Proposed Rule
1. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L.
114-10)
Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive
adjustment to the standardized amount of Medicare payments to acute
care hospitals for FYs 2018 through 2023. These adjustments follow the
recoupment adjustment to the standardized amounts under section 1886(d)
of the Act based upon the Secretary's estimates for discharges
occurring from FYs 2014 through 2017 to fully offset $11 billion, in
accordance with section 631 of the ATRA. The FY 2018 adjustment was
subsequently adjusted to 0.4588 percent by section 15005 of the 21st
Century Cures Act.
2. Consolidated Appropriations Act, 2021 (Pub. L. 116-260)
Sections 126, 127 and 131 of the Consolidated Appropriations Act,
2021 made a number of changes to various sections of the Act relating
to payment for direct GME and IME costs to hospitals.
a. Section 126 of the Consolidated Appropriations Act, 2021
Section 126 amended section 1886(h) of the Act by adding a new
section 1886(h)(9) requiring the distribution of additional residency
positions to qualifying hospitals. Section 1886(h)(9)(A) requires that
for FY 2023, and for each succeeding fiscal year until the aggregate
number of full-time equivalent residency positions distributed is equal
to 1,000, the Secretary shall initiate separate rounds of applications
from hospitals for these additional residency positions. The Secretary
is required, subject to certain provisions in the law, to increase the
otherwise applicable resident limit for each qualifying hospital that
submits a timely application by the number of positions that may be
approved by the Secretary for that hospital. The Secretary is required
to notify hospitals of the number of positions distributed to them by
January 31 of the fiscal year of the increase, and the increase is
effective beginning July 1 of that fiscal year. Section 1886(h)(9)(A)
also limits the aggregate number of such positions made available in a
single fiscal year across all hospitals to no more than 200.
In determining the qualifying hospitals for which an increase is
provided, section 1886(h)(9)(B) requires the Secretary to take into
account the demonstrated likelihood of the hospital filling the
positions made available within the first 5 training years beginning
after the date the increase would be effective, as determined by the
Secretary.
Section 1886(h)(9)(B) of the Act also requires a minimum
distribution for certain categories of hospitals. Specifically, the
Secretary is required to distribute at least 10 percent of the
aggregate number of total residency positions available to each of four
categories of hospitals. Stated briefly, and discussed in greater
detail in later in this proposed rule, the categories are as follows:
(1) Hospitals located in rural areas or that are treated as being
located in a rural area; (2) hospitals in which the reference resident
level of the hospital is greater than the otherwise applicable resident
limit; (3) hospitals in states with new medical schools or additional
locations and branches of existing medical schools; and (4) hospitals
that serve areas designated as Health Professional Shortage Areas
(HPSAs). Additionally, section 1886(h)(9)(F)(ii) of the Act defines a
qualifying hospital as a hospital in one of these four categories.
Section 1886(h)(9)(C) of the Act places certain limitations on the
distribution of the residency positions. First, a hospital may not
receive more than 25 additional full-time equivalent residency
positions. Second, no increase in the otherwise applicable resident
limit of a hospital may be made unless the hospital agrees to increase
the total number of full-time equivalent residency positions under the
approved medical residency training program of the hospital by the
number of positions made available to that hospital.
b. Section 127 of the Consolidated Appropriations Act, 2021
Section 127 of the CAA amended section 1886(h)(4)(H)(iv) of the Act
to
[[Page 25084]]
specify that in the case of a hospital not located in a rural area that
established or establishes a medical residency training program (or
rural tracks) in a rural area, the hospital, and each such hospital
located in a rural areas that participates in such a training, is
allowed to receive an adjustment to its full-time equivalent (FTE)
resident limit.
c. Sections 131 of the Consolidated Appropriations Act, 2021
Section 131 of the CAA amended section 1886(h)(2)(F) of the Act to
provide an opportunity to hospitals with such extremely low or $0 per
resident amounts (PRAs) that meet certain criteria to reset and
establish new PRAs if the hospital trains resident(s) in a cost
reporting period beginning on or after enactment [December 27, 2020]
and before the date that is 5 years after enactment [December 26,
2025]. Section 131 of the CAA also amended section 1886(h)(4)(H)(i) of
the Act to provide an opportunity for hospitals that meet certain
criteria and that have very small FTE resident caps to replace those
caps if the Secretary determines the hospital begins training residents
in a program year beginning on or after enactment (December 27, 2020)
and before 5 years after enactment (December 26, 2025).
D. Summary of the Provisions of This Proposed Rule
In this proposed rule, we set forth proposed payment and policy
changes to the Medicare IPPS for FY 2022 operating costs and capital-
related costs of acute care hospitals and certain hospitals and
hospital units that are excluded from IPPS. In addition, we set forth
proposed changes to the payment rates, factors, and other payment and
policy-related changes to programs associated with payment rate
policies under the LTCH PPS for FY 2022.
The following is a general summary of the changes that we are
proposing to make in this proposed rule.
1. Proposed Changes to MS-DRG Classifications and Recalibrations of
Relative Weights
In section II. of the preamble of this proposed rule, we include--
Proposed changes to MS-DRG classifications based on our
yearly review for FY 2022.
Proposed adjustment to the standardized amounts under
section 1886(d) of the Act for FY 2022 in accordance with the
amendments made to section 7(b)(1)(B) of Public Law 110-90 by section
414 of the MACRA.
Proposed recalibration of the MS-DRG relative weights.
A discussion of the proposed FY 2022 status of new
technologies approved for add-on payments for FY 2022, a presentation
of our evaluation and analysis of the FY 2022 applicants for add-on
payments for high-cost new medical services and technologies (including
public input, as directed by Public Law 108-173, obtained in a town
hall meeting) for applications not submitted under an alternative
pathway, and a discussion of the proposed status of FY 2022 new
technology applicants under the alternative pathways for certain
medical devices and certain antimicrobial products.
A proposal to extend the New COVID-19 Treatments Add-on
Payment (NCTAP) through the end of the fiscal year in which the PHE
ends for certain products and discontinue NCTAP for products approved
for new technology add-on payments in FY 2022.
2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
In section III. of the preamble of this proposed rule we are
proposing to make revisions to the wage index for acute care hospitals
and the annual update of the wage data. Specific issues addressed
include, but were not limited to, the following:
The proposed FY 2022 wage index update using wage data
from cost reporting periods beginning in FY 2018.
Calculation, analysis, and implementation of the proposed
occupational mix adjustment to the wage index for acute care hospitals
for FY 2022 based on the 2019 Occupational Mix Survey.
Proposed application of the rural floor and the frontier
State floor, and continuation of the low wage index hospital policy.
Proposed implementation of the imputed floor wage index
policy for all-urban states under section 9831 of the American Rescue
Plan Act of 2021 (Pub. L. 117-2).
Proposed revisions to the wage index for acute care
hospitals, based on hospital redesignations and reclassifications under
sections 1886(d)(8)(B), (d)(8)(E), and (d)(10) of the Act.
Proposed revisions to the regulations at Sec. 412.278
regarding the Administrator's Review of MGCRB decisions.
Proposed changes to rural reclassification cancellation
requirements at Sec. 412.103(g).
Proposed adjustment to the wage index for acute care
hospitals for FY 2022 based on commuting patterns of hospital employees
who reside in a county and work in a different area with a higher wage
index.
Proposed labor-related share for the proposed FY 2022 wage
index.
3. Proposed Rebasing and Revising of the Hospital Market Baskets
In section IV. of the preamble of this proposed rule, we are
proposing to rebase and revise the hospital market baskets for acute
care hospitals and update the labor-related share.
4. Other Decisions and Proposed Changes to the IPPS for Operating Costs
In section V. of the preamble of this proposed rule, we discuss
proposed changes or clarifications of a number of the provisions of the
regulations in 42 CFR parts 412 and 413, including the following:
Proposed inpatient hospital update for FY 2022.
Proposed updated national and regional case-mix values and
discharges for purposes of determining RRC status.
The statutorily required IME adjustment factor for FY
2022.
Proposed changes to the methodologies for determining
Medicare DSH payments and the additional payments for uncompensated
care.
Proposed requirements for payment adjustments under the
Hospital Readmissions Reduction Program for FY 2022.
The provision of estimated and newly established
performance standards for the calculation of value-based incentive
payments, as well as a proposal to suppress multiple measures and
provide net-neutral payment adjustments under the Hospital Value-Based
Purchasing Program.
Proposed requirements for payment adjustments to hospitals
under the HAC Reduction Program for FY 2022.
Discussion of and proposed changes relating to the
implementation of the Rural Community Hospital Demonstration Program in
FY 2022.
Proposed revisions to the regulations regarding the
counting of days associated with section 1115 demonstration projects in
the Medicaid fraction.
Proposals to implement provisions of the Consolidated
Appropriations Act relating to payments to hospitals for direct
graduate medical education (GME) and indirect medical education (IME)
costs.
Proposed repeal of the market-based data collection
requirement and market-based MS-DRG relative weight methodology.
[[Page 25085]]
5. Proposed FY 2022 Policy Governing the IPPS for Capital-Related Costs
In section VI. of the preamble to this proposed rule, we discuss
the proposed payment policy requirements for capital-related costs and
capital payments to hospitals for FY 2022.
6. Proposed Changes to the Payment Rates for Certain Excluded
Hospitals: Rate-of-Increase Percentages
In section VII. of the preamble of this proposed rule, we discuss--
Proposed changes to payments to certain excluded hospitals
for FY 2022.
Proposed continued implementation of the Frontier
Community Health Integration Project (FCHIP) Demonstration.
7. Proposed Changes to the LTCH PPS
In section VIII. of the preamble of this proposed rule, we set
forth proposed changes to the LTCH PPS Federal payment rates, factors,
and other payment rate policies under the LTCH PPS for FY 2022.
8. Proposed Changes Relating to Quality Data Reporting for Specific
Providers and Suppliers
In section IX. of the preamble of this proposed rule, we address
the following:
Proposed requirements for the Hospital Inpatient Quality
Reporting (IQR) Program.
Proposed changes to the requirements for the quality
reporting program for PPS-exempt cancer hospitals (PCHQR Program).
Proposed changes to the requirements under the LTCH
Quality Reporting Program (QRP). We are also seeking information on
CMS's future plans to define digital quality measures (dQMs) for the
LTCH QRP and on CMS' continued efforts to close the health equity gap.
Proposed changes to requirements pertaining to eligible
hospitals and CAHs participating in the Medicare Promoting
Interoperability Program.
9. Other Proposals Included in This Proposed Rule
Section X. of the preamble to this proposed rule includes the
following proposals:
Proposed changes pertaining to Medicaid enrollment of
Medicare-enrolled providers and suppliers to 42 CFR part 455.410 and
request for comment on provider experiences where state Medicaid
agencies apply the Medicaid payment and coverage rules to a claim for a
Medicare service rather than adjudicating the claim for Medicare cost-
sharing liability.
Proposed changes pertaining to Medicare's share of organ
acquisition costs transplanted into Medicare beneficiaries and the
charges for services provided to cadaveric organ donors by donor
community hospitals and transplants hospitals.
Proposed changes pertaining to the Shared Savings Program
that would allow eligible ACOs participating in the BASIC track's glide
path to maintain their current level of participation for PY 2022.
10. Other Provisions of This Proposed Rule
Section XI. of the preamble to this proposed rule includes our
discussion of the MedPAC Recommendations.
Section XII. of the preamble to this proposed rule includes the
following:
A descriptive listing of the public use files associated
with the proposed rule.
The collection of information requirements for entities
based on our proposals.
Information regarding our responses to public comments.
11. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits for Acute Care Hospitals
In sections II. and III. of the Addendum to this proposed rule, we
set forth proposed changes to the amounts and factors for determining
the proposed FY 2022 prospective payment rates for operating costs and
capital-related costs for acute care hospitals. We proposed to
establish the threshold amounts for outlier cases. In addition, in
section IV. of the Addendum to this proposed rule, we address the
proposed update factors for determining the rate-of-increase limits for
cost reporting periods beginning in FY 2022 for certain hospitals
excluded from the IPPS.
12. Determining Prospective Payment Rates for LTCHs
In section V. of the Addendum to the proposed rule, we set forth
proposed changes to the amounts and factors for determining the
proposed FY 2022 LTCH PPS standard Federal payment rate and other
factors used to determine LTCH PPS payments under both the LTCH PPS
standard Federal payment rate and the site neutral payment rate in FY
2022. We are proposing to establish the adjustments for the wage index,
labor-related share, the cost-of-living adjustment, and high-cost
outliers, including the applicable fixed-loss amounts and the LTCH
cost-to-charge ratios (CCRs) for both payment rates.
13. Impact Analysis
In Appendix A of the proposed rule, we set forth an analysis of the
impact the proposed changes would have on affected acute care
hospitals, CAHs, LTCHs, PCHs and other entities.
14. Recommendation of Update Factors for Operating Cost Rates of
Payment for Hospital Inpatient Services
In Appendix B of the proposed rule, as required by sections
1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the
appropriate percentage changes for FY 2022 for the following:
A single average standardized amount for all areas for
hospital inpatient services paid under the IPPS for operating costs of
acute care hospitals (and hospital-specific rates applicable to SCHs
and MDHs).
Target rate-of-increase limits to the allowable operating
costs of hospital inpatient services furnished by certain hospitals
excluded from the IPPS.
The LTCH PPS standard Federal payment rate and the site
neutral payment rate for hospital inpatient services provided for LTCH
PPS discharges.
15. Discussion of Medicare Payment Advisory Commission Recommendations
Under section 1805(b) of the Act, MedPAC is required to submit a
report to Congress, no later than March 15 of each year, in which
MedPAC reviews and makes recommendations on Medicare payment policies.
MedPAC's March 2021 recommendations concerning hospital inpatient
payment policies address the update factor for hospital inpatient
operating costs and capital-related costs for hospitals under the IPPS.
We address these recommendations in Appendix B of this proposed rule.
For further information relating specifically to the MedPAC March 2021
report or to obtain a copy of the report, contact MedPAC at (202) 220-
3700 or visit MedPAC's website at: http://www.medpac.gov.
E. Advancing Health Information Exchange
The Department of Health and Human Services (HHS) has a number of
initiatives designed to encourage and support the adoption of
interoperable health information technology and to promote nationwide
health information exchange to improve health care and patient access
to their health information.
To further interoperability in post-acute care settings, CMS and
the Office of the National Coordinator for Health
[[Page 25086]]
Information Technology (ONC) participate inin the Post-Acute Care
Interoperability Workgroup (PACIO http://pacioproject.org/) to
facilitate collaboration with industry stakeholders to develop FHIR
standards. These standards could support the exchange and reuse of
patient assessment data derived from the Minimum Data Set (MDS),
Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-
PAI), LTCH Continuity Assessment Record and Evaluation (CARE Data Set
(LCDS), Outcome and Assessment Information Set (OASIS), and other
sources. The PACIO Project has focused on FHIR implementation guides
for functional status, cognitive status and new use cases on advance
directives and speech language pathology. We encourage post-acute care
(PAC) provider and health information technology (IT) vendor
participation as the efforts advance.
The CMS Data Element Library (DEL) continues to be updated and
serves as the authoritative resource for PAC assessment data elements
and their associated mappings to health IT standards, such as Logical
Observation Identifiers Names and Codes (LOINC) and Systematized
Nomenclature of Medicine Clinical Terms (SNOMED). The DEL furthers CMS'
goal of data standardization and interoperability. These interoperable
data elements can reduce provider burden by allowing the use and
exchange of healthcare data; supporting provider exchange of electronic
health information for care coordination, person-centered care; and
supporting real-time, data driven, clinical decision-making. Standards
in the Data Element Library (https://del.cms.gov/DELWeb/pubHome)can be
referenced on the CMS website and in the ONC Interoperability Standards
Advisory (ISA). The 2021 ISA is available at https://www.healthit.gov/isa.
The 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted
December 13, 2016) requires HHS to take new steps to enable the
electronic sharing of health information ensuring interoperability for
providers and settings across the care continuum. The Cures Act
includes a trusted exchange framework and common agreement (TEFCA)
provision \1\ that will enable the nationwide exchange of electronic
health information across health information networks and provide an
important way to enable bi-directional health information exchange in
the future. For more information on current developments related to
TEFCA, we refer readers to https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement and
https://rce.sequoiaproject.org/.
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\1\ ONC, Draft 2 Trusted Exchange Framework and Common
Agreement, https://www.healthit.gov/sites/default/files/page/2019-04/FINALTEFCAQTF41719508version.pdf.
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The ONC final rule entitled ``21st Century Cures Act:
Interoperability, Information Blocking, and the ONC Health IT
Certification Program'' (85 FR 25642) published in the May 1, 2020
Federal Register, (hereinafter referred to as ``ONC Cures Act Final
Rule'') implemented policies related to information blocking as
authorized under section 4004 of the 21st Century Cures Act.
Information blocking is generally defined as a practice by a health IT
developer of certified health IT, health information network, health
information exchange, or health care provider that, except as required
by law or specified by the HHS Secretary as a reasonable and necessary
activity, is likely to interfere with access, exchange, or use of
electronic health information. For a health care provider (as defined
in 45 CFR 171.102), the definition of information blocking (see 45 CFR
171.103) specifies that the provider knows that the practice is
unreasonable, as well as likely to interfere with access, exchange, or
use of electronic health information.\2\ To deter information blocking,
health IT developers of certified health IT, health information
networks and health information exchanges whom the HHS Inspector
General determines, following an investigation, have committed
information blocking, are subject to civil monetary penalties of up to
$1 million per violation. Appropriate disincentives for health care
providers need to be established by the Secretary through rulemaking.
Stakeholders can learn more about information blocking at https://www.healthit.gov/curesrule/final-rule-policy/information-blocking. ONC
has posted information resources including fact sheets (https://www.healthit.gov/curesrule/resources/fact-sheets), frequently asked
questions (https://www.healthit.gov/curesrule/resources/information-blocking-faqs), and recorded webinars (https://www.healthit.gov/curesrule/resources/webinars).
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\2\ For other types of actors (health IT developers of certified
health IT and health information network or health information
exchange, as defined in 45 CFR 171.102), the definition of
``information blocking'' (see 45 CFR 171.103) specifies that the
actor ``knows, or should know, that such practice is likely to
interfere with access, exchange, or use of electronic health
information.''
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We invite providers to learn more about these important
developments and how they are likely to affect LTCHs.
F. Use of FY 2020 or FY 2019 Data in the FY 2022 IPPS and LTCH PPS
Ratesetting
We primarily use two data sources in the IPPS and LTCH PPS
ratesetting: Claims data and cost report data. The claims data source
is the MedPAR file, which includes fully coded diagnostic and procedure
data for all Medicare inpatient hospital bills for discharges in a
fiscal year. Our goal is always to use the best available data overall
for ratesetting. Ordinarily, the best available MedPAR data would be
the most recent MedPAR file that contains claims from discharges for
the fiscal year that is 2 years prior to the fiscal year that is the
subject of the rulemaking. For FY 2022 ratesetting, under ordinary
circumstances, the best available data would be the FY 2020 MedPAR
file. The cost report data source is the Medicare hospital cost report
data files from the most recent quarterly HCRIS release. For example,
ordinarily, the best available cost report data used in relative weight
calculations would be based on the cost reports beginning 3 fiscal
years prior to the fiscal year that is the subject of the rulemaking.
For the FY 2022 ratesetting, under ordinary circumstances, that would
be the FY 2019 cost report data from HCRIS, which would contain many
cost reports ending in FY 2020 based on each hospital's cost reporting
period.
The FY 2020 MedPAR claims file and the FY 2019 HCRIS dataset both
contain data significantly impacted by the COVID-19 PHE, primarily in
that the utilization of inpatient services was generally markedly
different for certain types of services in FY 2020 than would have been
expected in the absence of the PHE, as we discuss in this section.
Accordingly, we question whether these data sources are the best
available data to use for the FY 2022 ratesetting. One factor in
assessing whether these data sources represent the best available data
is to what extent the FY 2019 data from before the COVID-19 PHE is a
better overall approximation of FY 2022 inpatient experience (for
example, whether the share of total inpatient utilization for elective
surgeries will be more similar to FY 2019 than to FY 2020), or
alternatively, to what extent the FY 2020 data which include the COVID-
19 PHE time period is a better overall approximation of FY 2022
inpatient experience (for example, whether the share of total inpatient
utilization for respiratory infections will be more similar to FY 2020
than to FY
[[Page 25087]]
2019). Another factor is to what extent the decision to use the FY 2019
or FY 2020 data differentially impacts the FY 2022 IPPS ratesetting.
In order to help assess likely inpatient utilization in FY 2022, we
examined the trend in the number of COVID-19 vaccinations in the United
States as reported to the Centers for Disease Control (CDC) (see
https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html, accessed April 16, 2021).
The U.S. COVID-19 Vaccination Program began December 14, 2020. As
of April 15, 2021, 198.3 million vaccine doses have been administered.
Overall, about 125.8 million people, or 37.9 percent of the U.S.
population, have received at least one dose of vaccine as of this date.
About 78.5 million people, or 23.6 percent of the U.S. population have
been fully vaccinated.\3\ As of April 15, the 7-day average number of
administered vaccine doses reported to CDC per day was 3.3 million, a
10.3 percent increase from the previous week. As of April 15, 80
percent of people 65 or older have received at least one dose of
vaccine; 63.7 percent are fully vaccinated. Nearly one-half (48.3
percent) of people 18 or older have received at least one dose of
vaccine; 30.3 percent are fully vaccinated. Nationally, COVID-19-
related emergency department visits as well as both hospital admissions
and current hospitalizations have risen among patients ages 18 to 64
years in recent weeks, but emergency department visits and
hospitalizations among people ages 65 years and older have decreased,
likely demonstrating the important role vaccination plays in protecting
against COVID-19.
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\3\ People who are fully vaccinated (formerly receiving 2 doses)
represents the number of people who have received the second dose in
a two-dose COVID-19 vaccine series or one dose of the single-dose
J&J/Janssen COVID-19 vaccine.
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As indicated by the CDC, COVID-19 vaccines are effective at
preventing COVID-19.\4\ For example, a recent CDC report on the
effectiveness of the Pfizer-BioNTech and Moderna COVID-19 vaccines when
administered in real-world conditions found that after being fully
vaccinated with either of these vaccines a person's risk of infection
is reduced by up to 90 percent. With respect to inpatient utilization
in FY 2020, we believe that COVID-19 and the risk of disease were
drivers of the different utilization patterns observed. Therefore, the
continuing rapid increase in vaccinations coupled with the overall
effectiveness of the vaccines leads us to conclude based on the
information available to us at this time that there will be
significantly lower risk of COVID-19 in FY 2022 and fewer
hospitalizations for COVID-19 for Medicare beneficiaries in FY 2022
than there were in FY 2020. This calls into question the applicability
of inpatient data from FY 2020 to the FY 2022 time period for hospitals
paid under the IPPS and LTCH PPS.
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\4\ Interim Estimates of Vaccine Effectiveness of BNT162b2 and
mRNA-1273 COVID-19 Vaccines in Preventing SARS-CoV-2 Infection Among
Health Care Personnel, First Responders, and Other Essential and
Frontline Workers--Eight U.S. Locations, December 2020-March 2021,
available at https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e3.htm?s_cid=mm7013e3_e&ACSTrackingID=USCDC_921-DM53321&ACSTrackingLabel=MMWR%20Early%20Release%20-%20Vol.%2070%2C%20March%2029%2C%202021&deliveryName=USCDC_921-DM53321, accessed April 2, 2021).
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We also reviewed CDC guidance to healthcare facilities during the
COVID-19 PHE (see https://www.cdc.gov/coronavirus/2019-ncov/hcp/guidance-hcf.html). In its most recent guidance, the CDC described how
the COVID-19 pandemic has changed how health care is delivered in the
United States and has affected the operations of healthcare facilities.
Effects cited by the CDC include increases in patients seeking care for
respiratory illnesses, patients deferring and delaying non-COVID-19
care, disruptions in supply chains, fluctuations in facilities'
occupancy, absenteeism among staff because of illness or caregiving
responsibilities, and increases in mental health concerns.
In order to investigate the effects cited by the CDC, we examined
the claims data from the FY 2020 MedPAR compared to the FY 2019 MedPAR.
Overall, in FY 2020, inpatient admissions under the IPPS dropped by
approximately 14 percent compared to FY 2019. Elective surgeries
declined significantly, and the share of admissions for MS-DRGs
associated with the treatment of COVID-19 increased. For example, the
number of inpatient admissions for MS-DRG 470 (Major Hip and Knee Joint
Replacement or Reattachment of Lower Extremity without MCC) dropped by
40 percent in FY 2020. Its share of inpatient admissions dropped from
4.0 percent in FY 2019 to 2.8 percent in FY 2020. The number of
inpatient admissions for MS-DRG 177 (Respiratory Infections and
Inflammations with MCC) increased by +133 percent. Its share of
inpatient admissions increased from 0.8 percent in FY 2019 to 2.2
percent in FY 2020. This data analysis is consistent with the
observations in the CDC's guidance that COVID-19 increased the number
of patients seeking care for respiratory illnesses, and caused patients
to defer and delay non-COVID-19 care. We note that these observed
changes in the claims data also extend to the cost reports submitted by
hospitals that include the COVID-19 PHE time period, since those cost
reports that extend into the COVID-19 PHE are based in part on the
discharges that occurred during that time.
The effects noted by the CDC are specific to the pandemic and to
the extent that the effects on healthcare facilities noted by the CDC
are not expected to continue into FY 2022, it would suggest that the
inpatient data from FY 2020 impacted by the COVID-19 PHE may be less
suitable for use in the FY 2022 ratesetting.
We also considered the analysis of 2020 IPPS real case-mix included
in the notice titled ``CY 2021 Inpatient Hospital Deductible and
Hospital and Extended Care Services Coinsurance Amounts'' that appeared
in the Federal Register on November 12, 2020 (85 FR 71916). Section
1813(b) of the Act prescribes the method for computing the amount of
the inpatient hospital deductible. The inpatient hospital deductible is
an amount equal to the inpatient hospital deductible for the preceding
CY, adjusted by the best estimate of the payment-weighted average of
the applicable percentage increases used for updating the payment rates
to hospitals, and adjusted to reflect changes in real case-mix.
To develop the adjustment to reflect changes in real case-mix, we
first calculated an average case-mix for each hospital that reflected
the relative costliness of that hospital's mix of cases compared to
those of other hospitals. We then computed the change in average case-
mix for hospitals paid under the IPPS in FY 2020 compared to FY 2019,
using Medicare bills from IPPS hospitals received as of July 2020.
Those bills represented a total of about 6.1 million Medicare
discharges for FY 2020 and provided the most recent case-mix data
available at the time of that analysis. Based on these bills, the
change in average case-mix in FY 2020 was 2.8 percent. Based on these
bills and past experience, we expected the overall case-mix change to
be 3.8 percent as the year progressed and more FY 2020 data became
available.
Real case-mix is that portion of case-mix that is due to changes in
the mix of cases in the hospital and not due to coding optimization. As
stated in the November 2020 notice, COVID-19 has complicated the
determination of real case-mix increase. COVID-19 cases typically group
to higher-weighted MS-DRGs, and hospitals have experienced a concurrent
reduction in cases that group
[[Page 25088]]
to lower weighted MS-DRGs. Both of these factors cause a real increase
in case-mix. We compared the average case-mix for February 2020 through
July 2020 (COVID-19 period) with average case-mix for October 2019
through January 2020 (pre-COVID-19 period). Since this increase applies
for only a portion of CY 2020, we allocated this increase by the
estimated discharges over the 2 periods--a 2.5 percent increase for FY
2020. The 1.3-percent residual case-mix increase is a mixture of real
case-mix and coding optimization. Over the past several years, we have
observed total case-mix increases of about 0.5 percent per year and
have assumed that they are real. Thus, based on the information
available, we expect that 0.5 percent of the residual 1.3 percent
change in average case-mix for FY 2020 will be real. The combination of
the 2.5 percent COVID-19 effect and the remaining residual 0.5-percent
real case-mix increase results in an estimated 3.0 percent increase in
real case-mix for FY 2020.
Because this analysis was based on Medicare bills from IPPS
hospitals received as of July 2020, for this proposed rule, we
calculated case-mix values for FY 2019 and FY 2020 based on the full
year FY 2019 and FY 2020 MedPAR files to help assess the change in
case-mix based on more complete data. For FY 2019 we calculated a case-
mix value of 1.813 and for FY 2020 we calculated a case-mix value of
1.883, an increase in total case-mix of 3.9 percent. These were
calculated using the MS-DRG relative weights in effect for those time
periods.\5\ This is consistent with the estimate in the Notice of the
CY 2021 Inpatient Hospital Deductible and Hospital and Extended Care
Services Coinsurance Amounts that the change in total case-mix for FY
2020 would be 3.8 percent when more complete data was available.
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\5\ Section 3710 of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act directs the Secretary of HHS to increase the
weighting factor of the assigned DRG by 20 percent for an individual
diagnosed with COVID-19 discharged during the COVID-19 PHE period.
In order to make the case-mix values more comparable, the 20 percent
increase is not included.
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The increases in patients seeking care for respiratory illnesses
and patients deferring and delaying non-COVID-19 care during FY 2020,
the increasing number of vaccinations for COVID-19, and the high
estimate of FY 2020 real case-mix growth all lead us to believe that FY
2020 is not the best overall approximation of inpatient experience in
FY 2022. We believe that FY 2019 as the most recent complete FY prior
to the COVID-19 PHE is a better approximation of FY 2022 inpatient
experience.
As we indicated earlier, whether the data is a better overall
approximation of FY 2022 inpatient experience is one factor in
assessing which data source represents the best available data for the
FY 2022 rulemaking. Another factor is to what extent the decision to
use the FY 2019 or FY 2020 data differentially impacts the FY 2022
ratesetting. One way to assess this factor is to model the change in
the total case-mix, which is a driver of spending, if our assumption
regarding the FY 2022 inpatient experience used in calculating the MS-
DRG relative weights turns out to be less accurate based on actual FY
2022 experience. We estimated the difference in the total case-mix if
we calculated the MS-DRG relative weights based on the FY 2019 claims
data and the actual utilization is ultimately more similar to the FY
2020 data, as compared to if we calculated the MS-DRG relative weights
based on the FY 2020 data and the actual utilization is ultimately more
similar to the FY 2019 data.
We first calculated a set of MS-DRG relative weights using an
assumption that the FY 2022 inpatient experience would be similar to
the FY 2019 data. Specifically, we used the proposed version 39 GROUPER
(which would be applicable to discharges occurring in FY 2022) and the
FY 2019 MedPAR data to calculate MS-DRG relative weights. We refer to
these MS-DRG relative weights as the FY 2019-based weights.
We next calculated a set of MS-DRG relative weights using an
assumption that the FY 2022 inpatient experience would be more similar
to the FY 2020 data. Specifically, we used the proposed version 39
GROUPER and the FY 2020 MedPAR data to calculate MS-DRG relative
weights. This is how we would ordinarily calculate the proposed FY 2022
MS-DRG relative weights. We refer to these MS-DRG relative weights as
the FY 2020-based weights.
We then estimated the difference in case-mix under the FY 2019-
based weights and the FY 2020-based weights if the FY 2022 inpatient
experience ended up being the reverse of the assumption made when
calculating that set of relative weights. In other words, we compared
estimated case-mix calculated under four different scenarios. For the
FY 2019-based weights, we calculated the case-mix using claims from the
FY 2019 MedPAR as an approximation of the actual FY 2022 experience
(Scenario A), and using claims from the FY 2020 MedPAR as an
approximation of the actual FY 2022 experience (Scenario B). For the FY
2020-based weights, we calculated the case-mix using claims from the FY
2020 MedPAR as an approximation of the actual FY 2022 experience
(Scenario C), and using claims from the FY 2019 MedPAR as an
approximation of the actual FY 2022 experience (Scenario D).
The results are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.004
[[Page 25089]]
In Scenario A and Scenario C, there is by definition no
differential impact on total case-mix due to a less accurate assumption
made when the MS-DRG relative weights were calculated: The FY 2022
inpatient experience matches the assumption used when the MS-DRG
relative weights were calculated. In Scenario B and Scenario D, it is
the reverse of the assumption used when the MS-DRG relative weights
were calculated.
In Scenario B, when the FY 2019-based weights were used, but the FY
2022 inpatient experience turns out to be more similar to FY 2020 data,
the less accurate assumption does not differentially impact the
modelled case-mix. This can be seen by comparing the modelled case-mix
under Scenario B (1.885) with the modelled case-mix under Scenario C
(also 1.885). In other words, if the FY 2019-based weights and
inpatient experience turn out to be more similar to the FY 2020 data,
then the modelled case-mix is approximately the same as if we had used
the FY 2020-based weights. The results show that use of the FY 2019-
based weights did not impact the modelled case-mix compared to using
the FY 2020-based weights.
The same conclusion is not true of Scenario D where the FY 2020-
based weights were used, but the FY 2022 inpatient experience turns out
to be more similar to FY 2019 data. Here the less accurate assumption
does differentially impact the modelled case-mix, by -0.2 percent. This
can be seen by comparing the modelled case-mix under Scenario D (1.816)
with the modelled case-mix under Scenario A (1.820). In other words, if
we use the FY 2020-based weights, and FY 2022 inpatient experience
turns out to be more similar to FY 2019 data, the modelled case-mix is
-0.2 percent lower than if we had used the FY 2019-based weights. This
shows that use of the FY 2020-based weights does impact the modelled
case-mix compared to a result from using the FY 2019-based weights.
Putting aside that we believe FY 2019 is a more likely
approximation of the FY 2022 inpatient experience for the reasons
discussed earlier, the previous analysis indicates that the
differential effect of the FY 2022 MS-DRG relative weights is more
limited if the FY 2019-based weights are used than it is if the FY
2020-based weights are used, should the FY 2022 inpatient experience
not match the assumption used to calculate the MS-DRG relative weights.
Another payment factor that is impacted by the use of the FY 2019
or FY 2020 data in the FY 2022 ratesetting is the outlier fixed-loss
threshold. As discussed in section II.A.4.j. of this proposed rule,
section 1886(d)(5)(A) of the Act provides for payments in addition to
the basic prospective payments for ``outlier'' cases involving
extraordinarily high costs. To qualify for outlier payments, a case
must have costs greater than the sum of certain payments and the
``outlier threshold'' or ``fixed-loss'' amount (a dollar amount by
which the costs of a case must exceed payments in order to qualify for
an outlier payment). In accordance with section 1886(d)(5)(A)(iv) of
the Act, outlier payments for any year are projected to be not less
than 5 percent nor more than 6 percent of total operating DRG payments
plus outlier payments. We target 5.1 percent within this range. Section
1886(d)(3)(B) of the Act requires the Secretary to reduce the average
standardized amount by a factor to account for the estimated proportion
of total DRG payments made to outlier cases. In other words, outlier
payments are prospectively estimated to be budget neutral overall under
the IPPS.\6\
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\6\ More information on outlier payments may be found on the CMS
website at: http://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/AcuteInpatientPPS/outlier.html.
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Under an assumption that the FY 2022 inpatient experience will be
more similar to FY 2019 data, we estimate an outlier fixed-loss amount
of $30,967. Under an assumption that FY 2022 inpatient experience will
be more similar to FY 2020 data, we estimate an outlier fixed-loss
amount of $36,843, a difference of $5,876 or approximately 20 percent
higher. Again, putting aside that we believe FY 2019 is a better
approximation of the FY 2022 inpatient experience for the reasons
discussed earlier, the difference between the two estimated outlier
fixed-loss amounts means there is a consequence to making a decision as
to the best available data for estimating the FY 2022 outlier fixed-
loss amount in the form of potentially exceeding or falling short of
the targeted 5.1 percent of total operating DRG payments plus outlier
payments.
In summary, we have highlighted two factors in the decision
regarding the best available data to use in the FY 2022 ratesetting.
The first factor is to what extent the FY 2019 data from before the
COVID-19 PHE is a better overall approximation of FY 2022 inpatient
experience, or alternatively, to what extent the FY 2020 data including
the COVID-19 PHE time period is a better overall approximation of FY
2022 inpatient experience. After analyzing this issue and for the
reasons discussed, we believe for purposes of this proposed rule that
FY 2019 is generally a better overall approximation of FY 2022. The
second factor is to what extent the decision to use the FY 2019 or FY
2020 data differentially impacts the FY 2022 IPPS ratesetting. After
analyzing this issue, and as discussed previously, we have determined
that the decision does differentially impact the overall FY 2022 IPPS
ratesetting in two primary ways. First, a decision to base the MS-DRG
relative weights on the FY 2020 data has an impact of -0.2 percent if
the FY 2022 inpatient experience is more like FY 2019 data. Second, the
decision to use the FY 2019 or FY 2020 data results in an approximately
20 percent difference in the estimate of the outlier fixed-loss amount.
Taking these factors into account, we are proposing to use the FY
2019 data for the FY 2022 ratesetting for circumstances where the FY
2020 data is significantly impacted by the COVID-19 PHE, primarily in
that the data reflect generally markedly different utilization for
certain types of services in FY 2020 than would have been expected in
the absence of the PHE, as discussed previously. For example, we are
proposing to use the FY 2019 MedPAR claims data for purposes where we
ordinarily would have used the FY 2020 MedPAR claims data, such as in
our analysis of changes to MS-DRG classifications (as discussed in
greater detail section II.D. of the preamble of this proposed rule).
Similarly, we are proposing to use cost report data from the FY 2018
HCRIS file for purposes where we ordinarily would have used the FY 2019
HCRIS file, such as in determining the proposed FY 2022 IPPS MS-DRG
relative weights (as discussed in greater detail section II.E. of the
preamble of this proposed rule). (As noted previously, the FY 2019
HCRIS data would contain many cost reports ending in FY 2020 based on
each hospital's cost reporting period.) We note that MedPAR claims data
and cost report data from the HCRIS file are examples of the data
sources for which we discuss the proposed use of the FY 2019 data for
the FY 2022 ratesetting in this proposed rule. We have clearly
identified throughout this proposed rule where and how we are proposing
to use alternative data than what ordinarily would be used for the
proposed FY 2022 IPPS and LTCH PPS ratesetting, including certain
provider specific information.
As discussed in section I.O. of Appendix A of this proposed rule,
we are also considering, as an alternative to this proposal, the use of
the same FY 2020 data that we would ordinarily use for purposes of FY
2022 ratesetting, and
[[Page 25090]]
which we may consider finalizing based on consideration of comments
received. To facilitate comment on this alternative for FY 2022, we are
making available the FY 2020 MedPAR file and the FY 2019 HCRIS file
that we would ordinarily have provided in conjunction with this
proposed rule. We are also making available the MS-DRG and MS-LTC-DRG
relative weighting factors and length of stay information calculated
using the FY 2020 data we would have ordinarily used. We are providing
a file comparing the budget neutrality and other ratesetting
adjustments calculated under our proposal with those adjustments
calculated under this alternative approach. Finally, we are making
available other proposed rule supporting data files based on the use of
the FY 2020 data that we ordinarily would have provided, including: The
IPPS and LTCH PPS Impact Files; the AOR/BOR File; the Case Mix Index
File; and, the Standardizing File. We refer the reader to section I.O.
of Appendix A of this proposed rule for more information on where these
supplemental files may be found.
II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-
DRG) Classifications and Relative Weights
A. Background
Section 1886(d) of the Act specifies that the Secretary shall
establish a classification system (referred to as diagnosis-related
groups (DRGs) for inpatient discharges and adjust payments under the
IPPS based on appropriate weighting factors assigned to each DRG.
Therefore, under the IPPS, Medicare pays for inpatient hospital
services on a rate per discharge basis that varies according to the DRG
to which a beneficiary's stay is assigned. The formula used to
calculate payment for a specific case multiplies an individual
hospital's payment rate per case by the weight of the DRG to which the
case is assigned. Each DRG weight represents the average resources
required to care for cases in that particular DRG, relative to the
average resources used to treat cases in all DRGs.
Section 1886(d)(4)(C) of the Act requires that the Secretary adjust
the DRG classifications and relative weights at least annually to
account for changes in resource consumption. These adjustments are made
to reflect changes in treatment patterns, technology, and any other
factors that may change the relative use of hospital resources.
B. Adoption of the MS-DRGs and MS-DRG Reclassifications
For information on the adoption of the MS-DRGs in FY 2008, we refer
readers to the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189).
For general information about the MS-DRG system, including yearly
reviews and changes to the MS-DRGs, we refer readers to the previous
discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR
43764 through 43766) and the FYs 2011 through 2021 IPPS/LTCH PPS final
rules (75 FR 50053 through 50055; 76 FR 51485 through 51487; 77 FR
53273; 78 FR 50512; 79 FR 49871; 80 FR 49342; 81 FR 56787 through
56872; 82 FR 38010 through 38085, 83 FR 41158 through 41258, 84 FR
42058 through 42165, and 85 FR 58445 through 58596 respectively).
C. Proposed FY 2022 MS-DRG Documentation and Coding Adjustment
1. Background on the Prospective MS-DRG Documentation and Coding
Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90 and
the Recoupment or Repayment Adjustment Authorized by Section 631 of the
American Taxpayer Relief Act of 2012 (ATRA)
In the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189), we adopted the MS-DRG patient classification system for
the IPPS, effective October 1, 2007, to better recognize severity of
illness in Medicare payment rates for acute care hospitals. The
adoption of the MS-DRG system resulted in the expansion of the number
of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number
of MS-DRGs and more fully taking into account patient severity of
illness in Medicare payment rates for acute care hospitals, MS-DRGs
encourage hospitals to improve their documentation and coding of
patient diagnoses.
In the FY 2008 IPPS final rule with comment period (72 FR 47175
through 47186), we indicated that the adoption of the MS-DRGs had the
potential to lead to increases in aggregate payments without a
corresponding increase in actual patient severity of illness due to the
incentives for additional documentation and coding. In that final rule
with comment period, we exercised our authority under section
1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget
neutrality by adjusting the national standardized amount, to eliminate
the estimated effect of changes in coding or classification that do not
reflect real changes in case-mix. Our actuaries estimated that
maintaining budget neutrality required an adjustment of -4.8 percentage
points to the national standardized amount. We provided for phasing in
this -4.8 percentage point adjustment over 3 years. Specifically, we
established prospective documentation and coding adjustments of -1.2
percentage points for FY 2008, -1.8 percentage points for FY 2009, and
-1.8 percentage points for FY 2010.
On September 29, 2007, Congress enacted the TMA [Transitional
Medical Assistance], Abstinence Education, and QI [Qualifying
Individuals] Programs Extension Act of 2007 (Pub. L. 110-90). Section
7(a) of Public Law 110-90 reduced the documentation and coding
adjustment made as a result of the MS-DRG system that we adopted in the
FY 2008 IPPS final rule with comment period to -0.6 percentage point
for FY 2008 and -0.9 percentage point for FY 2009.
As discussed in prior year rulemakings, and most recently in the FY
2017 IPPS/LTCH PPS final rule (81 FR 56780 through 56782), we
implemented a series of adjustments required under sections 7(b)(1)(A)
and 7(b)(1)(B) of Public Law 110-90, based on a retrospective review of
FY 2008 and FY 2009 claims data. We completed these adjustments in FY
2013 but indicated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274
through 53275) that delaying full implementation of the adjustment
required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013
resulted in payments in FY 2010 through FY 2012 being overstated, and
that these overpayments could not be recovered under Public Law 110-90.
In addition, as discussed in prior rulemakings and most recently in
the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009),
section 631 of the American Taxpayer Relief Act of 2012 (ATRA) amended
section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to
make a recoupment adjustment or adjustments totaling $11 billion by FY
2017. This adjustment represented the amount of the increase in
aggregate payments as a result of not completing the prospective
adjustment authorized under section 7(b)(1)(A) of Public Law 110-90
until FY 2013.
[[Page 25091]]
2. Adjustments Made for FYs 2018, 2019, 2020 and 2021 as Required Under
Section 414 of Public Law 114-10 (MACRA) and Section 15005 of Public
Law 114-255
As stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785),
once the recoupment required under section 631 of the ATRA was
complete, we had anticipated making a single positive adjustment in FY
2018 to offset the reductions required to recoup the $11 billion under
section 631 of the ATRA. However, section 414 of the MACRA (which was
enacted on April 16, 2015) replaced the single positive adjustment we
intended to make in FY 2018 with a 0.5 percentage point positive
adjustment for each of FYs 2018 through 2023. In the FY 2017
rulemaking, we indicated that we would address the adjustments for FY
2018 and later fiscal years in future rulemaking. Section 15005 of the
21st Century Cures Act (Pub. L. 114-255), which was enacted on December
13, 2016, amended section 7(b)(1)(B) of the TMA, as amended by section
631 of the ATRA and section 414 of the MACRA, to reduce the adjustment
for FY 2018 from a 0.5 percentage point positive adjustment to a 0.4588
percentage point positive adjustment. As we discussed in the FY 2018
rulemaking, we believe the directive under section 15005 of Public Law
114-255 is clear. Therefore, in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38009) for FY 2018, we implemented the required +0.4588
percentage point adjustment to the standardized amount. In the FY 2019
IPPS/LTCH PPS final rule (83 FR 41157), the FY 2020 IPPS/LTCH PPS final
rule (84 FR 42057), and the FY 2021 IPPS/LTCH PPS final rule (85 FR
58444-58445), consistent with the requirements of section 414 of the
MACRA, we implemented 0.5 percentage point positive adjustments to the
standardized amount for FY 2019, FY 2020, and FY 2021, respectively. We
indicated the FY 2018, FY 2019, FY 2020, and FY 2021 adjustments were
permanent adjustments to payment rates. We also stated that we plan to
propose future adjustments required under section 414 of the MACRA for
FYs 2022 and 2023 in future rulemaking.
3. Proposed Adjustment for FY 2022
Consistent with the requirements of section 414 of the MACRA, we
are proposing to implement a 0.5 percentage point positive adjustment
to the standardized amount for FY 2022. This would constitute a
permanent adjustment to payment rates. We plan to propose the final
adjustment required under section 414 of the MACRA for FY 2023 in
future rulemaking.
D. Proposed Changes to Specific MS-DRG Classifications
1. Discussion of Changes to Coding System and Basis for Proposed FY
2022 MS-DRG Updates
a. Conversion of MS-DRGs to the International Classification of
Diseases, 10th Revision (ICD-10)
As of October 1, 2015, providers use the International
Classification of Diseases, 10th Revision (ICD-10) coding system to
report diagnoses and procedures for Medicare hospital inpatient
services under the MS-DRG system instead of the ICD-9-CM coding system,
which was used through September 30, 2015. The ICD-10 coding system
includes the International Classification of Diseases, 10th Revision,
Clinical Modification (ICD-10-CM) for diagnosis coding and the
International Classification of Diseases, 10th Revision, Procedure
Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as
well as the ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and
Reporting. For a detailed discussion of the conversion of the MS-DRGs
to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81
FR 56787 through 56789).
b. Basis for Proposed FY 2022 MS-DRG Updates
Given the need for more time to carefully evaluate requests and
propose updates, as discussed in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38010), we changed the deadline to request updates to the MS-
DRGs to November 1 of each year, which provided an additional five
weeks for the data analysis and review process. In the FY 2021 IPPS/
LTCH PPS proposed rule (85 FR 32472), we stated that with the continued
increase in the number and complexity of the requested changes to the
MS-DRG classifications since the adoption of ICD-10 MS-DRGs, and in
order to consider as many requests as possible, more time is needed to
carefully evaluate the requested changes, analyze claims data, and
consider any proposed updates. We further stated we were changing the
deadline to request changes to the MS-DRGs to October 20 of each year
to allow for additional time for the review and consideration of any
proposed updates. However, in the FY 2021 IPPS/LTCH PPS final rule (85
FR 58445), due to the unique circumstances for the FY 2021 IPPS/LTCH
PPS final rule for which we waived the delayed effective date, we
maintained the deadline of November 1, 2020 for FY 2022 MS-DRG
classification change requests. We also noted that we expected to
reconsider a change in the deadline beginning with comments and
suggestions submitted for FY 2023. While we continue to believe that a
change in the deadline from November 1 to October 20 will provide
hospitals sufficient time to assess potential impacts and inform future
MS-DRG recommendations, we are maintaining the deadline of November 1
for FY 2023 MS-DRG classification change requests.
As noted, interested parties had to submit MS-DRG classification
change requests for FY 2022 by November 1, 2020, and the comments that
were submitted in a timely manner for FY 2022 are discussed in this
section of the preamble of this proposed rule. As we discuss in the
sections that follow, we may not be able to fully consider all of the
requests that we receive for the upcoming fiscal year. We have found
that, with the implementation of ICD-10, some types of requested
changes to the MS-DRG classifications require more extensive research
to identify and analyze all of the data that are relevant to evaluating
the potential change. We note in the discussion that follows those
topics for which further research and analysis are required, and which
we will continue to consider in connection with future rulemaking.
Interested parties should continue to submit any comments and
suggestions for FY 2023 by November 1, 2021 via the CMS MS-DRG
Classification Change Request Mailbox located at:
[email protected].
As we did for the FY 2021 IPPS/LTCH PPS proposed rule, for this FY
2022 IPPS/LTCH PPS proposed rule we are providing a test version of the
ICD-10 MS-DRG GROUPER Software, Version 39, so that the public can
better analyze and understand the impact of the proposals included in
this proposed rule. We note that this test software reflects the
proposed GROUPER logic for FY 2022. Therefore, it includes the new
diagnosis and procedure codes that are effective for FY 2022 as
reflected in Table 6A.--New Diagnosis Codes--FY 2022 and Table 6B.--New
Procedure Codes--FY 2022 associated with this proposed rule and does
not include the diagnosis codes that are invalid beginning in FY 2022
as reflected in Table 6C.--Invalid Diagnosis Codes--FY 2022 and Table
6D.--Invalid Procedure Codes--FY 2022 associated with this proposed
rule. These tables are not published in the Addendum to this proposed
rule, but are available via the
[[Page 25092]]
internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html as described in
section VI. of the Addendum to this proposed rule. Because the
diagnosis and procedure codes no longer valid for FY 2022 are not
reflected in the test software, we are making available a supplemental
file in Table 6P.1a that includes the mapped Version 39 FY 2022 ICD-10-
CM codes and the deleted Version 38 FY 2021 ICD-10-CM codes that should
be used for testing purposes with users' available claims data. In
addition, we are making available a supplemental file in Table 6P.1b
that includes the mapped Version 39 FY 2022 ICD-10-PCS codes and the
deleted Version 38 FY 2021 ICD-10-PCS codes that should be used for
testing purposes with users' available claims data. Therefore, users
will have access to the test software allowing them to build case
examples that reflect the proposals included in this proposed rule. In
addition, users will be able to view the draft version of the ICD-10
MS-DRG Definitions Manual, Version 39.
The test version of the ICD-10 MS-DRG GROUPER Software, Version 39,
the draft version of the ICD-10 MS-DRG Definitions Manual, Version 39,
and the supplemental mapping files in Table 6P.1a and Table 6P.1b of
the FY 2021 and FY 2022 ICD-10-CM diagnosis and ICD-10-PCS procedure
codes are available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
Following are the changes that we are proposing to the MS-DRGs for
FY 2022. We are inviting public comments on each of the MS-DRG
classification proposed changes, as well as our proposals to maintain
certain existing MS-DRG classifications discussed in this proposed
rule. In some cases, we are proposing changes to the MS-DRG
classifications based on our analysis of claims data and consultation
with our clinical advisors. In other cases, we are proposing to
maintain the existing MS-DRG classifications based on our analysis of
claims data and consultation with our clinical advisors. As discussed
in section I.F of the preamble of this proposed rule, we are proposing
to use claims data from the March 2020 update of the FY 2019 MedPAR
file in our analysis of proposed MS-DRG classification changes for FY
2022, consistent with our goal of using the best available data overall
for ratesetting. Alternatively, we are also providing the results of
our analysis of proposed MS-DRG classification changes using claims
data from the September 2020 update of the FY 2020 MedPAR file. As a
result, for this FY 2022 IPPS/LTCH PPS proposed rule, our MS-DRG
analysis was based on ICD-10 claims data from the March 2020 update of
the FY 2019 MedPAR file, which contains hospital bills received from
October 1, 2018 through March 31, 2020, for discharges occurring
through September 30, 2019. In addition, we also analyzed ICD-10 claims
data from the September 2020 update of the FY 2020 MedPAR file, which
contains hospital bills received from October 1, 2019 through September
30, 2020, for discharges occurring through September 30, 2020. In our
discussion of the proposed MS-DRG reclassification changes, we refer to
these claims data as the ``March 2020 update of the FY 2019 MedPAR
file'' and ``the September 2020 update of the FY 2020 MedPAR file.''
As explained in previous rulemaking (76 FR 51487), in deciding
whether to propose to make further modifications to the MS-DRGs for
particular circumstances brought to our attention, we consider whether
the resource consumption and clinical characteristics of the patients
with a given set of conditions are significantly different than the
remaining patients represented in the MS-DRG. We evaluate patient care
costs using average costs and lengths of stay and rely on the judgment
of our clinical advisors to determine whether patients are clinically
distinct or similar to other patients represented in the MS-DRG. In
evaluating resource costs, we consider both the absolute and percentage
differences in average costs between the cases we select for review and
the remainder of cases in the MS-DRG. We also consider variation in
costs within these groups; that is, whether observed average
differences are consistent across patients or attributable to cases
that are extreme in terms of costs or length of stay, or both. Further,
we consider the number of patients who will have a given set of
characteristics and generally prefer not to create a new MS-DRG unless
it would include a substantial number of cases.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448), we finalized
our proposal to expand our existing criteria to create a new
complication or comorbidity (CC) or major complication or comorbidity
(MCC) subgroup within a base MS-DRG. Specifically, we finalized the
expansion of the criteria to include the NonCC subgroup for a three-way
severity level split. We stated we believed that applying these
criteria to the NonCC subgroup would better reflect resource
stratification as well as promote stability in the relative weights by
avoiding low volume counts for the NonCC level MS-DRGs. We noted that
in our analysis of MS-DRG classification requests for FY 2021 that were
received by November 1, 2019, as well as any additional analyses that
were conducted in connection with those requests, we applied these
criteria to each of the MCC, CC, and NonCC subgroups. We also noted
that the application of the NonCC subgroup criteria going forward may
result in modifications to certain MS-DRGs that are currently split
into three severity levels and result in MS-DRGs that are split into
two severity levels. We stated that any proposed modifications to the
MS-DRGs would be addressed in future rulemaking consistent with our
annual process and reflected in Table 5--Proposed List of Medicare
Severity Diagnosis Related Groups (MS-DRGs), Relative Weighting
Factors, and Geometric and Arithmetic Mean Length of Stay for the
applicable fiscal year.
In our analysis of the MS-DRG classification requests for FY 2022
that we received by November 1, 2020, as well as any additional
analyses that were conducted in connection with those requests, we
applied these criteria to each of the MCC, CC, and NonCC subgroups, as
described in the following table.
[[Page 25093]]
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In general, once the decision has been made to propose to make
further modifications to the MS-DRGs as described previously, such as
creating a new base MS-DRG, or in our evaluation of a specific MS-DRG
classification request to split (or subdivide) an existing base MS-DRG
into severity levels, all five criteria must be met for the base MS-DRG
to be split (or subdivided) by a CC subgroup. We note that in our
analysis of requests to create a new MS-DRG, we typically evaluate the
most recent year of MedPAR claims data available. For example, we
stated earlier that for this FY 2022 IPPS/LTCH PPS proposed rule, our
MS-DRG analysis was based on ICD-10 claims data from both the March
2020 update of the FY 2019 MedPAR file and the September 2020 update of
the FY 2020 MedPAR file. However, in our evaluation of requests to
split an existing base MS-DRG into severity levels, as noted in prior
rulemaking (80 FR 49368), we typically analyze the most recent two
years of data. This analysis includes 2 years of MedPAR claims data to
compare the data results from 1 year to the next to avoid making
determinations about whether additional severity levels are warranted
based on an isolated year's data fluctuation and also, to validate that
the established severity levels within a base MS-DRG are supported. The
first step in our process of evaluating if the creation of a new CC
subgroup within a base MS-DRG is warranted is to determine if all the
criteria is satisfied for a three way split. If the criteria fail, the
next step is to determine if the criteria are satisfied for a two way
split. If the criteria for both of the two way splits fail, then a
split (or CC subgroup) would generally not be warranted for that base
MS-DRG. If the three way split fails on any one of the five criteria
and all five criteria for both two way splits (1_23 and 12_3) are met,
we would apply the two way split with the highest R2 value. We note
that if the request to split (or subdivide) an existing base MS-DRG
into severity levels specifies the request is for either one of the two
way splits (1_23 or 12_3), in response to the specific request, we will
evaluate the criteria for both of the two way splits, however we do not
also evaluate the criteria for a three way split.
For this FY 2022 IPPS/LTCH PPS proposed rule, using the March 2020
update of the FY 2019 MedPAR file and the September 2020 update of the
FY 2020 MedPAR file, we also analyzed how applying the NonCC subgroup
criteria to all MS-DRGs currently split into three severity levels
would affect the MS-DRG structure beginning in FY 2022. Findings from
our analysis indicated that approximately 32 MS-DRGs would be subject
to change based on the three-way severity level split criterion
finalized in FY 2021. Specifically, we found that applying the NonCC
subgroup criteria to all MS-DRGs currently split into three severity
levels would result in the deletion of 96 MS-DRGs (32 MS-DRGs x 3
severity levels = 96) and the creation of 58 new MS-DRGs. These updates
would also involve a redistribution of cases, which would impact the
relative weights, and, thus, the payment rates proposed for particular
types of cases. We refer the reader to Table 6P.1c for the list of the
96 MS-DRGs that would be subject to deletion and the list of the 58 new
MS-DRGs that would be proposed for creation for FY 2022 under this
policy if the NonCC subgroup criteria were applied.
[[Page 25094]]
In light of the public health emergency (PHE), we have concerns
about the impact of implementing this volume of MS-DRG changes at this
time, and believe it may be appropriate to delay application of the
NonCC subgroup criteria to existing MS-DRGs in order to maintain more
stability in the current MS-DRG structure. Therefore, we are proposing
to delay the application of the NonCC subgroup criteria to existing MS-
DRGs with a three-way severity level split until FY 2023, and proposing
for FY 2022 to maintain the current structure of the 32 MS-DRGs that
currently have a three-way severity level split (total of 96 MS-DRGs)
that would otherwise be subject to these criteria.
2. Pre-MDC: MS-DRG 018 Chimeric Antigen Receptor (CAR) T-Cell Therapy
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58451 through
58453), we finalized our proposal to create Pre-MDC MS-DRG 018
(Chimeric Antigen Receptor (CAR) T-cell Immunotherapy) and to reassign
cases reporting ICD-10-PCS procedure codes XW033C3 (Introduction of
engineered autologous chimeric antigen receptor t-cell immunotherapy
into peripheral vein, percutaneous approach, new technology group 3) or
XW043C3 (Introduction of engineered autologous chimeric antigen
receptor t-cell immunotherapy into central vein, percutaneous approach,
new technology group 3) from Pre-MDC MS-DRG 016 (Autologous Bone Marrow
Transplant with CC/MCC or T-cell Immunotherapy), to new Pre-MDC MS-DRG
018 effective with discharges on and after October 1, 2020. We also
finalized our proposal to revise the title for MS-DRG 016 from
``Autologous Bone Marrow Transplant with CC/MCC or T-cell
Immunotherapy'' to ``Autologous Bone Marrow Transplant with CC/MCC'' to
reflect these changes.
Additionally, in the FY 2021 IPPS/LTCH PPS final rule in response
to public comments expressing concern that Pre-MDC MS-DRG 018 is
specific to one mechanistic approach to cellular therapy, and in
response to commenters who sought clarification on how future CAR T-
cell and non-CAR T-cell therapy products would be assigned, we stated
that if additional cellular therapies should become available, we would
use our established process to determine the MS-DRG assignment. The
commenters requested that CMS provide flexibility for future cellular
therapies, as they are made available and not restrict Pre-MDC MS-DRG
018 to CAR T-cell therapies alone. In this section of this rule, we
discuss the assignment of these therapies in more detail.
During the September 8-9, 2020 ICD-10 Coordination and Maintenance
Committee meeting, several topics involving requests for new procedure
codes related to CAR T-cell therapies, non-CAR T-cell therapies and
other immunotherapies were discussed. We refer the reader to the CMS
website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials for additional detailed information regarding these requests
for new procedure codes. As noted in prior rulemaking (85 FR 32543),
for new procedure codes that have been finalized through the ICD-10
Coordination and Maintenance Committee meeting process and are proposed
to be classified as O.R. procedures or non-O.R. procedures affecting
the MS-DRG, our clinical advisors recommend the MS-DRG assignment which
is then made available in association with the proposed rule (Table
6B.--New Procedure Codes) and subject to public comment. These proposed
assignments are generally based on the assignment of predecessor codes
or the assignment of similar codes. As discussed in section II.D.13 of
the preamble of this proposed rule, Table 6B.--New Procedure Codes,
lists the new procedure codes that have been approved to date that will
be effective with discharges on and after October 1, 2021. Included in
Table 6B are the following new procedure codes that describe the
administration of CAR T-cell and non-CAR T-cell therapies and other
immunotherapies. Consistent with our established process, we examined
the MS-DRG assignment for the predecessor codes to determine the most
appropriate MS-DRG assignment and, consistent with the assignment of
those predecessor codes, we are proposing to classify the following new
procedure codes as non-O.R. procedures affecting Pre-MDC MS-DRG 018, as
shown in Table 6B.--New Procedure Codes associated with this proposed
rule and available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index/.
[[Page 25095]]
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In connection with our proposed assignment of the listed procedure
codes to Pre-MDC MS-DRG 018, we are also proposing to revise the title
for Pre-MDC MS-DRG 018 ``Chimeric Antigen Receptor (CAR) T-cell
Immunotherapy'' to ``Chimeric Antigen Receptor (CAR) T-cell and Other
Immunotherapies'' to better reflect the cases reporting the
administration of non-CAR T-cell therapies and other immunotherapies
that would also be assigned to this MS-DRG (for example, Introduction
of lifileucel immunotherapy into peripheral vein, percutaneous
approach, new technology group 7), in addition to CAR T-cell therapies.
3. MDC 03 (Diseases and Disorders of Ear, Nose and Throat)
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58462 through
58471), we finalized our proposal to create two new base MS-DRGs, 140
and 143, with a three-way severity level split for new MS-DRGs 140,
141, and 142 (Major Head and Neck Procedures with MCC, with CC, and
without CC/MCC, respectively) and new MS-DRGs 143, 144, and 145 (Other
Ear, Nose, Mouth And Throat O.R. Procedures with MCC, with CC, and
without CC/MCC, respectively). We provided the list of procedure codes
that were finalized to define the logic for the new MS-DRGs in Tables
6P.2a, 6P.2b, and 6P.2c associated with the final rule and available
via the internet on the CMS website at https://www.cms.gov/
[[Page 25096]]
Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index/. We
received two separate but related requests to review and reconsider the
MS-DRG assignments for a subset of the procedure codes listed in Table
6P.2a (procedure codes assigned to MS-DRGs 140, 141, and 142) and Table
6P.2b (procedure codes assigned to MS-DRGs 143, 144, and 145). In this
section of this proposed rule, we discuss each of these separate, but
related requests.
a. Major Head and Neck Procedures
The requestor provided the following procedure codes from Table
6P.2a associated with the FY 2021 IPPS/LTCH PPS final rule for CMS to
examine.
[GRAPHIC] [TIFF OMITTED] TP10MY21.368
The requestor stated that the listed procedure codes do not appear
appropriately assigned to MS-DRGs 140, 141, and 142. According to the
requestor, if any one of the five procedure codes describing a
procedure performed on the cranial cavity (0W9100Z, 0W910ZZ, 0WC10ZZ,
0WC13ZZ, or 0WX14ZZ) is assigned in conjunction with a principal
diagnosis from MDC 03 (Diseases and Disorders of Ear, Nose, Mouth, and
Throat), it appears more appropriate that cases reporting the diagnosis
and procedure combination would group to MS-DRGs 25, 26, and 27
(Craniotomy and Endovascular Intracranial Procedures with MCC, with CC,
and without CC/MCC, respectively) (for example, ``craniotomy'' MS-DRGs)
in MDC 01 (Diseases and Disorders of the Central Nervous System) or to
MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively). The requestor stated that drainage and extirpation from
the cranial cavity always involves drilling or cutting through the
skull regardless of the approach, therefore the five procedure codes
identified warrant assignment to the ``craniotomy'' MS-DRGs. For the
three procedure codes describing excision of subcutaneous tissue of
chest, back, or abdomen (0JB60ZZ, 0JB70ZZ, and 0JB80ZZ), the requestor
stated those codes should group to MS-DRGs 987, 988, and 989 (Non-
extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) because they are not
pertinent to the ear, nose, mouth, or throat.
We reviewed this request and note that the five procedure codes
describing procedures performed on the cranial cavity are already
assigned to MDC 01 and group to the ``craniotomy'' MS-DRGs (25, 26, and
27) when reported with a principal diagnosis from MDC 01, and are also
currently classified as Extensive O.R. procedures, resulting in
assignment to MS-DRGs 981, 982, and 983 when any one of the five
procedure codes is reported on the claim and is unrelated to the MDC to
which the case was assigned based on the principal diagnosis. We also
note that in addition to MS-DRGs 25, 26, and 27, MS-DRG 23 (Craniotomy
with Major Device Implant or Acute Complex CNS Principal Diagnosis with
MCC or Chemotherapy Implant or Epilepsy with Neurostimulator) and MS-
DRG 24 (Craniotomy with Major Device Implant or Acute Complex CNS
Principal Diagnosis without MCC) include procedures performed on
structures located within the cranial cavity, are included in the range
of MS-DRGs known as the ``craniotomy'' MS-DRGs in MDC 01, and the five
procedure codes submitted by the requestor describing procedures
performed on the cranial cavity are also assigned to these MS-DRGs. We
refer the requestor to Appendix E of the ICD-10 MS-DRG Definitions
Manual for further discussion of how each procedure code may be
assigned to multiple MDCs and MS-DRGs under the IPPS. The ICD-10 MS-DRG
Definitions Manual is located on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software. We also note
that these five procedure codes were previously assigned to MS-DRGs 131
and 132 (Cranial and Facial Procedures with and without CC/MCC,
respectively) in MDC 03 under version 37 of the ICD-10 MS-DRGs prior to
the restructuring that was finalized effective FY 2021 for MS-DRG 129
(Major Head and Neck Procedures with CC/MCC or Major Device) and MS-DRG
130 (Major Head and Neck Procedures without CC/MCC), MS-DRGs 131 and
132, and MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R.
Procedures with and without CC/MCC, respectively).
With regard to the three procedure codes describing excision of
subcutaneous tissue of chest, back, or abdomen (0JB60ZZ, 0JB70ZZ, and
0JB80ZZ), the requestor suggested that the codes should group to MS-
DRGs 987, 988, and 989 (Non-extensive O.R. Procedures Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) specifically because they are not pertinent to the ear,
nose, mouth, or throat, however, it is unclear if the requestor was
concerned more broadly that the three procedure codes should not group
to any MS-DRGs in MDC 03 (Diseases and Disorders of Ear, Nose and
Throat), given the stated rationale for the request.
Upon our review, we believe that the three procedure codes
describing excision of subcutaneous tissue of chest, back, and abdomen
(0JB60ZZ, 0JB70ZZ, and 0JB80ZZ), which do not describe major head and
neck procedures, were inadvertently included in Table 6P.2a for
assignment to MS-DRGs 140, 141, and 142. However, we also believe that
the codes are appropriate for assignment
[[Page 25097]]
in MDC 03 and note that the three procedure codes were previously
assigned to MS-DRGs 133 and 134 (Other Ear, Nose, Mouth and Throat O.R.
Procedures with and without CC/MCC, respectively) in MDC 03 prior to
the restructuring that was finalized effective FY 2021 for MS-DRGs 129,
130, 131, 132, 133, and 134. We also provided the following
clarification in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58470), as
stated in the ICD-10 MS-DRG Definitions Manual, ``In each MDC there is
usually a medical and a surgical class referred to as ``other medical
diseases'' and ``other surgical procedures,'' respectively. The
``other'' medical and surgical classes are not as precisely defined
from a clinical perspective. The other classes would include diagnoses
or procedures, which were infrequently encountered or not well defined
clinically. For example, the ``other'' medical class for the
Respiratory System MDC would contain the diagnoses ``other somatoform
disorders'' and ``congenital malformation of the respiratory system,''
while the ``other'' surgical class for the female reproductive MDC
would contain the surgical procedures ``excision of liver'' (liver
biopsy in ICD-9-CM) and ``inspection of peritoneal cavity''
(exploratory laparotomy in ICD-9-CM). The ``other'' surgical category
contains surgical procedures which, while infrequent, could still
reasonably be expected to be performed for a patient in the particular
MDC.''
During our review of procedure codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ
(describing excision of subcutaneous tissue of chest, back, and
abdomen, respectively) we also confirmed that these procedures are
currently designated as Extensive O.R. procedures. Consistent with
other procedure codes on the Non-extensive procedure code list, we do
not believe the procedures described by these procedure codes
necessarily utilize the resources or have the level of technical
complexity as the procedures on the Extensive O.R. procedures list.
Therefore, we agree that the procedure codes describing these
procedures would be more appropriately designated as Non-extensive
procedures and group to MS-DRGs 987, 988, and 989 (Non-extensive O.R.
Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
without CC/MCC, respectively) when any one of the three procedure codes
is reported on a claim and is unrelated to the MDC to which the case
was assigned based on the principal diagnosis. We refer the reader to
section II.D.10. of the preamble of this proposed rule for further
discussion regarding our proposal to reassign these procedure codes
from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R.
Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
without CC/MCC, respectively) for FY 2022.
Therefore, we are proposing to reassign the three procedure codes
describing excision of subcutaneous tissue of chest, back, or abdomen
(0JB60ZZ, 0JB70ZZ, and 0JB80ZZ) from MS-DRGs 140, 141, and 142 (Major
Head and Neck Procedures with MCC, with CC, and without CC/MCC,
respectively) to MS-DRGs 143, 144, and 145 (Other Ear, Nose, Mouth And
Throat O.R. Procedures with MCC, with CC, and without CC/MCC,
respectively) in MDC 03 for FY 2022. We refer the reader to section
II.D.10. of the preamble of this proposed rule for further discussion
regarding the designation of these codes as Extensive O.R. procedures
versus Non-extensive O.R. procedures and our proposed reassignment of
these codes from MS-DRGs 981, 982, and 983 to MS-DRGs 987, 988, and 989
for FY 2022.
b. Other Ear, Nose, Mouth and Throat O.R. Procedures
As stated earlier, we received two separate but related requests to
review and reconsider the MS-DRG assignments for a subset of the
procedure codes listed in Table 6P.2a and Table 6P.2b. In this section
of this proposed rule, we discuss the second request related to
procedure codes listed in Table 6P.2b associated with the FY 2021 IPPS/
LTCH PPS final rule and currently assigned to MS-DRGs 143, 144 and 145.
The requestor provided a list of 82 procedure codes from Table
6P.2b associated with the FY 2021 IPPS/LTCH PPS final rule for CMS to
examine. We refer the reader to Table 6P.1d associated with this FY
2022 IPPS/LTCH PPS proposed rule and available via the internet at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index/ for the list of procedure codes that were
provided by the requestor. According to the requestor, if any one of
the 82 procedure codes is assigned in conjunction with a principal
diagnosis code from MDC 03, it appears more appropriate that cases
reporting the diagnosis and procedure code combination would group to
MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) or to MS-DRGs 987, 988, and 989 (Non-extensive O.R.
Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
without CC/MCC, respectively) versus MS-DRGs 143, 144, and 145 (Other
Ear, Nose, Mouth And Throat O.R. Procedures with MCC, with CC, and
without CC/MCC, respectively). However, the requestor also stated that
of the 82 procedure codes, the following three procedure codes
describing control of bleeding in the cranial cavity warrant grouping
to MS-DRGs 25, 26, and 27 (for example, ``craniotomy'' MS-DRGs) in MDC
01, for the same reasons previously described in the prior section
pertaining to the five other procedures performed on the cranial
cavity.
[GRAPHIC] [TIFF OMITTED] TP10MY21.007
We reviewed this request and similar to the discussion in the prior
section for the separate but related request, we note that the
``other'' surgical category contains surgical procedures which, while
infrequent, could still reasonably be expected to be performed for a
patient in the particular MDC. We continue to believe that the 82
[[Page 25098]]
procedure codes provided by the requestor are appropriately assigned to
MS-DRGs 143, 144, and 145 in MDC 03. With regard to the requestor's
assertion that cases reporting any one of the 82 procedure codes would
more appropriately group to the MS-DRGs for Extensive O.R. procedures
or Non-extensive O.R. procedures when reported in conjunction with a
principal diagnosis from MDC 03, we note that, as shown in Table 6P.2b
associated with the FY 2021 IPPS/LTCH PPS final rule, the procedure
codes that were finalized for assignment to MS-DRGs 143, 144, and 145
were previously assigned to MS-DRGs 129 and 130, 131 and 132, or 133
and 134 in MDC 03. We also note that, as discussed in prior rulemaking,
cases that contain O.R. procedures will map to MS-DRG 981, 982, or 983
(Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) or MS-DRG 987, 988, or 989
(Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis with
MCC, with CC, and without CC/MCC, respectively) when they do not
contain a principal diagnosis that corresponds to one of the MDCs to
which that procedure is assigned. For these reasons, we are proposing
to maintain the current structure for MS-DRGs 143, 144, and 145 for FY
2022.
With regard to the three procedure codes describing control of
bleeding in the cranial cavity (0W310ZZ, 0W313ZZ, and 0W314ZZ), and the
requestor's suggestion that the codes should group to MS-DRGs 25, 26,
and 27 in MDC 01, we consulted with our clinical advisors who stated
these procedures are consistent with the existing procedure codes
included in the logic for case assignment to MS-DRGs 25, 26, and 27. We
refer the reader to section II.D.10. of the preamble of this proposed
rule for further discussion of this request, as well as our proposed
assignment of these codes to MS-DRGs 23, 24, 25, 26, and 27 for FY
2022.
4. MDC 04 (Diseases and Disorders of the Respiratory System)
a. Bronchiectasis
We received a request to reassign cases reporting diagnosis codes
describing bronchiectasis from MS-DRGs 190, 191, and 192 (Chronic
Obstructive Pulmonary Disease with MCC, with CC, and without CC/MCC,
respectively) to MS-DRGs 177, 178, and 179 (Respiratory Infections and
Inflammation with MCC, with CC, and without CC/MCC, respectively).
Bronchiectasis is described by the following diagnosis codes
[GRAPHIC] [TIFF OMITTED] TP10MY21.008
According to the requestor, the underlying pathophysiology of
bronchiectasis is more similar to cystic fibrosis than it is to chronic
obstructive pulmonary disease (COPD). The requestor stated that in
bronchiectasis, there is an inciting event that creates scarring in the
lung which prevents the lung from clearing out mucous like it normally
would. The accumulation of abnormal mucous results in an environment
conducive to bacterial growth and commonly found bacteria in this
setting is very similar to those of cystic fibrosis with staphylococcus
aureus, pseudomonas aeruginosa, and non-tuberculous mycobacterium. The
requestor reported that when patients develop an exacerbation of
bronchiectasis, this is because of a buildup of mucous compounded by
overwhelming growth of the previously mentioned bacteria. The requestor
also stated that patients admitted to the hospital for bronchiectasis
exacerbation are treated aggressively with intravenous (IV) antibiotics
to suppress the bacterial infection in combination with airway
clearance therapies. The requestor further stated that, unlike in an
acute COPD exacerbation, these patients do not always require steroids
as there is not necessarily airway reactivity.
The requestor maintained that the underlying reason for admission
to the hospital for these patients is the bacterial infection component
of the exacerbation, with the standard course of treatment for these
pulmonary bacterial infections averaging a minimum of 10-14 days due to
the slow growing nature of the bacteria commonly encountered in these
patients.
We reviewed this request and believe that bronchiectasis is
appropriately assigned to MS-DRGs 190, 191, and 192 (Chronic
Obstructive Pulmonary Disease with MCC, with CC, and without CC/MCC,
respectively) because bronchiectasis, like COPD, is a chronic
condition. With respect to the requestor's comments, cystic fibrosis, a
genetic disease that affects mucous producing cells resulting in
recurring lung infections, can lead to bronchiectasis. However, our
clinical advisors indicated that the cause of bronchiectasis can be
multifactorial or even remain undefined. Regardless of the cause, when
present, bronchiectasis is an irreversible chronic pulmonary condition
due to abnormal change to or destruction of normal pulmonary anatomy
(the major bronchi and bronchiole walls), resulting in impaired air
movement in and out of the lungs. COPD, regardless of the cause
(smoking, pollution, other exposures), is a chronic pulmonary condition
due to change/destruction of normal pulmonary anatomy, resulting in
impaired air movement in and out of the lungs. Both bronchiectasis and
COPD patients have abnormal pulmonary function tests and abnormal
anatomic findings on chest x-ray and/or chest CT. Therefore, for these
reasons, we are proposing to maintain the structure of MS-DRGs 190,
191, and 192 for FY 2022.
b. Major Chest Procedures
In the FY 2020 IPPS/LTCH PPS proposed (84 FR 19234) and final rules
(84 FR 42148), we stated that in review of the procedures that are
currently assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures
with MCC, with CC and without CC/MCC, respectively) and 166, 167, and
168 (Other Respiratory System O.R. Procedures with MCC, with CC, and
without CC/MCC, respectively), that further refinement of these MS-DRGs
may be warranted. In this section of this proposed rule, we discuss our
review of the procedures and our proposal for
[[Page 25099]]
restructuring these MS-DRGs for FY 2022.
We began our review of MS-DRGs 163, 164, 165, 166, 167, and 168 by
first examining all the procedures currently assigned to these MS-DRGs.
We refer the reader to the ICD-10 MS-DRG Definitions Manual Version
38.1, which is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS for complete documentation of the GROUPER logic for
MS-DRGs 163, 164, 165, 166, 167, and 168.
In our review of the procedures currently assigned to MS-DRGs 163,
164, 165, 166, 167, and 168, we found 17 procedure codes in MS-DRGs
163, 164, and 165 describing laser interstitial thermal therapy (LITT)
of body parts that do not describe areas within the respiratory system,
which would not be clinically appropriate to maintain in the logic.
These procedure codes are listed in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.009
During our review of these 17 procedure codes, we identified
additional MDCs and MS-DRG assignments that are also not clinically
appropriate to maintain in the logic because the body parts described
by the codes are not consistent with the organ system, etiology or
clinical specialty of the MDC to which the procedure code is currently
assigned. For example, 16 of the 17 procedure codes (all except
procedure code DVY0KZZ) are included in the logic for case assignment
to MDC 12 (Diseases and Disorders of the Male Reproductive System) in
MS-DRGs 715 and 716 (Other Male Reproductive System O.R. Procedures for
Malignancy with and without CC/MCC, respectively) and MS-DRGs 717 and
718 (Other Male Reproductive System O.R. Procedures Except Malignancy
with and without CC/MCC, respectively) which is not clinically
appropriate. Therefore, we are proposing to reassign these 17 procedure
codes from their current MS-DRG assignments in MDC 04, and from the
additional MDCs and MS-DRGs identified during our review that were
found to be clinically inappropriate, to their clinically appropriate
MDC and MS-DRGs as shown in Table 6P.2b associated with this proposed
rule (which is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS).
During our review of the procedure codes describing LITT of various
body parts we also confirmed that these procedures are currently
designated as Extensive O.R. procedures. We do not believe the
procedures described by these procedure codes necessarily utilize the
resources or have the level of technical complexity as the other
procedures on the Extensive O.R. procedures list. We believe that the
procedure codes describing these procedures would be more appropriately
designated as Non-extensive procedures and group to MS-DRGs 987, 988,
and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis
with MCC, with CC, and without CC/MCC, respectively) when any one of
the procedure codes is reported on a claim and is unrelated to the MDC
to which the case was assigned based on the principal diagnosis. We
refer the reader to section II.D.10. of the preamble of this proposed
rule for further discussion regarding our proposal to reassign these
procedure codes from MS-DRGs 981, 982, and 983 (Extensive O.R.
Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
without CC/MCC, respectively) to MS-DRGs 987, 988, and 989 (Non-
extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) for FY 2022.
We also identified five procedure codes describing repair of the
esophagus procedures currently assigned to MS-DRGs 163, 164, and 165
that would not be clinically appropriate to maintain in the logic. The
procedure codes are 0DQ50ZZ (Repair esophagus, open approach), 0DQ53ZZ
(Repair esophagus, percutaneous approach), 0DQ54ZZ (Repair esophagus,
percutaneous
[[Page 25100]]
endoscopic approach), 0DQ57ZZ (Repair esophagus, via natural or
artificial opening), and 0DQ58ZZ (Repair esophagus, via natural or
artificial opening endoscopic), and are currently assigned to the
following MDCs and MS-DRGs.
BILLING CODE 4120-01-P
[[Page 25101]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.010
[[Page 25102]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.011
BILLING CODE 4120-01-C
The five procedure codes describing repair of esophagus procedures
are not clinically coherent with the other procedures in MS-DRGs 163,
164, and 165 that describe procedures performed on major chest
structures. Therefore, we are proposing to remove procedure codes
0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ, 0DQ57ZZ, and 0DQ58ZZ from the logic in MDC
04 for FY 2022.
During our review of procedure codes 0DQ50ZZ, 0DQ53ZZ, 0DQ54ZZ,
0DQ57ZZ, and 0DQ58ZZ (describing repair of esophagus procedures) we
also confirmed that these procedures are currently designated as
Extensive O.R. procedures. We do not believe the procedures described
by procedure codes 0DQ53ZZ, 0DQ57ZZ, and 0DQ58ZZ necessarily utilize
the resources or have the level of technical complexity as the other
procedures on the Extensive O.R. procedures list. We believe that the
procedure codes describing these procedures would be more appropriately
designated as Non-extensive procedures and group to MS-DRGs 987, 988,
and 989 (Non-extensive O.R. Procedures Unrelated to Principal Diagnosis
with MCC, with CC, and without CC/MCC, respectively) when any one of
the three procedure codes is reported on a claim and is unrelated to
the MDC to which the case was assigned based on the principal
diagnosis. We refer the reader to section II.D.10. of the preamble of
this proposed rule for further discussion regarding our proposal to
reassign these procedure codes from MS-DRGs 981, 982, and 983
(Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989
(Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with
MCC, with CC, and without CC/MCC, respectively) for FY 2022.
Next, we examined claims data from the March 2020 update of the FY
2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR
file for all cases in MS-DRGs 163, 164, 165, 166, 167, and 168. Our
findings are shown in the following tables.
[GRAPHIC] [TIFF OMITTED] TP10MY21.012
[[Page 25103]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.013
As shown in the tables, there were a higher number of cases
reported in MS-DRGs 163, 164, 165, 166, 167, and 168 from the March
2020 update of the FY 2019 MedPAR file in comparison to the September
2020 update of the FY 2020 MedPAR file and overall, the cases reported
have comparable average lengths of stay and comparable average costs
for both fiscal years.
We then examined claims data from both the March 2020 update of the
FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR
file for MS-DRGs 163, 164, 165, 166, 167, and 168 to compare costs,
complexity of service and clinical coherence for each procedure code
currently assigned to these MS-DRGs to assess any potential
reassignment of the procedures. We refer the reader to Table 6P.1e and
Table 6P.1f associated with this proposed rule (which is available via
the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the detailed
claims data analysis. Table 6P.1e contains the data analysis findings
of procedure codes currently assigned to MS-DRGs 163, 164, 165, 166,
167, and 168 from the March 2020 update of the FY 2019 MedPAR file and
Table 6P.1f contains the data analysis findings of procedure codes
currently assigned to MS-DRGs 163, 164, 165, 166, 167, and 168 from the
September 2020 update of the FY 2020 MedPAR file. We note that if a
procedure code that is currently assigned to MS-DRGs 163, 164, 165,
166, 167, or 168 is not displayed, it is because there were no cases
found reporting that code in the assigned MS-DRG.
As shown in Table 6P.1e and Table 6P.1f associated with this
proposed rule, in our examination of the claims data from both the
March 2020 update of the FY 2019 MedPAR file and September 2020 update
of the FY 2020 MedPAR file, we found there is wide variation in the
volume, length of stay, and average costs for the procedures currently
assigned to MS-DRGs 163, 164, 165, 166, 167, and 168. There were
several instances in which only one occurrence of a procedure was
reported with a procedure code from MS-DRGs 163, 164, 165, 166, 167, or
168, and the average length of stay for these specific cases ranged
from 1 day to 97 days. For example, in the analysis of claims data from
the March 2020 update of the FY 2019 MedPAR file, during our review of
MS-DRG 163, we found 153 procedures for which only one occurrence of
the procedure was reported with the average length of stay ranging from
2 days to 65 days and the average costs ranging from $3,760 to $195,447
for these cases. For MS-DRG 164, we found 145 procedures for which only
one occurrence of the procedure was reported with the average length of
stay ranging from 1 day to 28 days and the average costs ranging from
$1,886 to $137,810 for these cases. For MS-DRG 165, we found 111
procedures for which only one occurrence of the procedure was reported
with the average length of stay ranging from 1 day to 23 days and the
average costs ranging from $2,656 to $73,092 for these cases. For MS-
DRG 166, we found 150 procedures for which only one occurrence of the
procedure was reported with the average length of stay ranging from 1
day to 61 days and the average costs ranging from $3,230 to $246,679
for these cases. For MS-DRG 167, we found 110 procedures for which only
one occurrence of the procedure was reported with the average length of
stay ranging from 1 day to 23 days and the average costs ranging from
$2,058 to $149,220 for these cases. For MS-DRG 168, we found 68
procedures for which only one occurrence of the procedure was reported
with the average length of stay ranging from 1 day to 18 days and the
average costs ranging from $2,033 to $35,576 for these cases.
Our analysis of the claims data from the September 2020 update of
the FY 2020 MedPAR file resulted in similar findings to those from the
March 2020 update of the FY 2019 MedPAR file; there were several
instances in which only one occurrence of a procedure was reported with
a procedure code from MS-DRGs 163, 164, 165, 166, 167, or 168. During
our review of MS-DRG 163, we found 139 procedures for which only one
occurrence of the procedure was reported with the average length of
stay ranging from 2 days to 97 days and the average costs ranging from
$5,697 to $205,696 for these cases. For MS-DRG 164, we found 122
procedures for which only one occurrence of the procedure was reported
with the average length of stay ranging from 1 day to 35 days and the
average costs ranging from $3,204 to $120,128 for these cases. For MS-
DRG 165, we found 92 procedures for which only one occurrence of the
procedure was reported with the average length of stay ranging from 1
day to 16 days and the average costs ranging from $2,682 to $164,014
for these cases. For MS-DRG 166, we found 141 procedures for which only
one occurrence of the procedure was reported with the average length of
stay ranging from 1 day to 45 days and the average costs ranging from
$3,230 to $246,679 for these cases. For MS-DRG 167, we found 105
procedures for which only one occurrence of the procedure was reported
with the average length of stay ranging from 1 day to 22 days and the
average costs ranging from $2,150 to $112,465 for these cases. For MS-
DRG 168, we found 72 procedures for which only one occurrence of the
procedure was reported with the average length of stay ranging from 1
day to 9 days and the average costs ranging from $1,563 to $76,061 for
these cases.
Our clinical advisors reviewed the procedures currently assigned to
MS-DRGs 163, 164, 165, 166, 167, and 168 to identify the patient
attributes that currently define each of these procedures and to group
them with respect to complexity of service and resource intensity. This
process included separating the procedures according to the surgical
approach (open, percutaneous, percutaneous endoscopic, via natural or
artificial opening, via natural or artificial opening endoscopic, and
external).
[[Page 25104]]
We also considered the claims data from the March 2020 update of
the FY 2019 MedPAR file and the September 2020 update of the FY 2020
MedPAR file for MS-DRGs 163, 164, 165, 166, 167, and 168 to further
analyze the average length of stay and average costs for the cases
reporting procedures assigned to any one of these MS-DRGs as well as
clinical coherence for these cases. For example, procedures that we
believe represent greater treatment difficulty and reflect a class of
patients who are similar clinically with regard to consumption of
hospital resources were grouped separately from procedures that we
believe to be less complex but still reflect patients who are similar
clinically with regard to consumption of hospital resources. This
approach differentiated the more complex procedures, such as procedures
performed on the sternum and ribs (for example, major chest) from the
less complex procedures such as bypass procedures performed on
peripheral vessels or diagnostic biopsies.
As an initial step in our proposed restructuring of these MS-DRGs,
we identified the following 26 procedure codes that are currently
assigned to MS-DRGs 166, 167, and 168 that we believe represent
procedures performed on structures that align more appropriately with
the procedures assigned to MS-DRGs 163, 164, and 165 that describe
major chest procedures.
[GRAPHIC] [TIFF OMITTED] TP10MY21.014
We analyzed claims data from the March 2020 update of the FY 2019
MedPAR file for the listed procedure codes in MS-DRGs 166, 167, and
168. We note that if a listed procedure code is not displayed, it is
because there were no cases found reporting that code among MS-DRGs
166, 167, and 168. Our findings are shown in the following table.
[[Page 25105]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.015
We then analyzed claims data from the September 2020 update of the
FY 2020 MedPAR file for the listed procedure codes in MS-DRGs 166, 167,
and 168. We note that if a listed procedure code is not displayed, it
is because there were no cases found reporting that code among MS-DRGs
166, 167, and 168. Our findings are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.016
[[Page 25106]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.017
We refer the reader to Tables 6P.1e and 6P.1f for detailed claims
data for the previously listed procedures in MS-DRGs 163, 164, 165,
166, 167, and 168 from the March 2020 update of the FY 2019 MedPAR file
and the September 2020 update of the FY 2020 MedPAR file, respectively,
and note that while some of the 26 listed procedure codes identified in
MS-DRGs 166, 167, and 168 may not have been reported in either year's
MedPAR claims data or only had one occurrence in which the procedure
was reported, we believe these procedures described by the listed 26
procedure codes are clinically coherent with the other procedures that
are currently assigned to MS-DRGs 163, 164, and 165. For example, in
our analysis of the March 2020 update of the FY 2019 MedPAR file, as
shown in the table, we found procedure code 02QW0ZZ reported with one
occurrence with an average length of stay of 15 days and average costs
of $46,829. Despite finding only one case, we believe procedures
described by this procedure code, as well as related procedure codes
describing procedures performed on the great vessels, are more
clinically coherent with the procedures assigned to MS-DRGs 163, 164,
and 165 and align more appropriately with the average length of stay
and average costs of those MS-DRGs. Similarly, in our analysis of the
September 2020 update of the FY 2020 MedPAR file, as shown in the
table, we found procedure code 0PS204Z reported with 344 occurrences
with an average length of stay of 9.6 days and average costs of
$48,340. We believe procedures described by this procedure code, as
well as related procedure codes describing procedures performed to
repair or resect the ribs, are more clinically coherent with the
procedures assigned to MS-DRGs 163, 164, and 165 and also align more
appropriately with the average length of stay and average costs of
those MS-DRGs.
As a result of our preliminary review of MS-DRGs 163, 164, 165,
166, 167, and 168, for FY 2022 we are proposing the reassignment of the
listed 26 procedure codes (9 procedure codes describing repair of
pulmonary or thoracic structures, and 17 procedure codes describing
procedures performed on the sternum or ribs) from MS-DRGs 166, 167, and
168 to MS-DRGs 163, 164, and 165 in MDC 04. Our data analysis shows
that for the cases reporting any one of the 26 procedure codes,
generally, they have an average length of stay and average costs that
appear more consistent with the average length of stay and average
costs of cases in MS-DRGs 163, 164, and 165. Our clinical advisors also
agree that these procedures clinically align with the other procedures
that are currently assigned to MS-DRGs 163, 164, and 165. We refer the
reader to Table 6P.2c associated with this proposed rule for the list
of procedure codes we are proposing for reassignment from MS-DRGs 166,
167, and 168 to MS-DRGs 163, 164, and 165 in MDC 04.
After this initial review of all the procedures currently assigned
to MS-DRGs 163, 164, 165, 166, 167, and 168, in combination with the
results of the data analysis as reflected in Tables 6P.1e and 6P.1f,
our clinical advisors support a phased restructuring of these MS-DRGs.
We believe further analysis of the procedures assigned to these MS-DRGs
is warranted based on the creation of new procedure codes that have
been assigned to these MS-DRGs in recent years for which claims data
are not yet available and the need for additional time to examine the
procedures currently assigned to those MS-DRGs by clinical intensity,
complexity of service and resource utilization. We will continue to
evaluate the procedures assigned to these MS-DRGs as additional claims
data become available.
5. MDC 05 (Diseases and Disorders of the Circulatory System)
a. Short-Term External Heart Assist Device
Impella[supreg] Ventricular Support Systems are temporary heart
assist devices intended to support blood pressure and provide increased
blood flow to critical organs in patients with cardiogenic shock, by
drawing blood out of the heart and pumping it into the aorta, partially
or fully bypassing the left ventricle to provide adequate circulation
of blood (replace or supplement left ventricle pumping) while also
allowing damaged heart muscle the opportunity to rest and recover in
patients who need short-term support for up to 6 days. The ICD-10-PCS
codes that describe the insertion of Impella[supreg] heart assist
devices are
[[Page 25107]]
currently assigned to MS-DRG 215 (Other Heart Assist System Implant).
We refer the reader to the ICD-10 MS-DRG Definitions Manual Version
38.1, which is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete
documentation of the GROUPER logic for MS-DRG 215.
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41159 through
41170), we discussed public comments that recommended that CMS continue
to monitor the data in MS-DRG 215 for future consideration of
distinctions (for example, different approaches and evolving
technologies) that may impact the clinical and resource use of
procedures utilizing heart assist devices. Our data analysis showed a
wide range in the average length of stay and the average costs for
cases reporting procedures that involve a biventricular short-term
external heart assist system versus a short-term external heart assist
system. We noted we were aware that the AHA published Coding Clinic
advice that clarified coding and reporting for certain external heart
assist devices due to the technology being approved for new indications
but the claims data current at that time did not yet reflect that
updated guidance. We also noted that there had been recent updates to
the descriptions of the codes for heart assist devices. The qualifier
``intraoperative'' was added effective October 1, 2017 (FY 2018) to the
procedure codes describing the insertion of short-term external heart
assist system procedures to distinguish between procedures where the
device was only used intraoperatively and was removed at the conclusion
of the procedure versus procedures where the device was not removed at
the conclusion of the procedure and for which that qualifier would not
be reported. We agreed with the commenters that continued monitoring of
the data and further analysis was necessary prior to proposing any
modifications to MS-DRG 215 and finalized our proposal to maintain the
current structure of MS-DRG 215 for FY 2019.
In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42167) we discussed
public comments on our proposals related to recalibration of the FY
2020 relative weights and the changes in relative weights from FY 2019.
Several commenters expressed concern about significant reductions to
the relative weight for MS-DRG 215. Commenters stated that the
reduction in the proposed relative weight was 29 percent, the largest
decrease of any MS-DRG; commenters also noted that the cumulative
decrease to the relative weight for MS-DRG 215 would be 43 percent
since FY 2017. Commenters stated that the proposed relative weights
would result in significant underpayments to facilities, which would in
turn limit access to heart assist devices. After reviewing the comments
received and the data used in our ratesetting calculations, we
acknowledged an outlier circumstance where the weight for a MS-DRG was
seeing a significant reduction for each of the 3 years since CMS began
using the ICD-10 data in calculating the relative weights. Therefore,
for the reasons discussed in the FY 2020 final rule, we adopted a
temporary one-time measure for FY 2020 where the FY 2020 relative
weight was set equal to the FY 2019 relative weight, which in turn had
been set equal to the FY 2018 relative weight.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58598) we again
acknowledged an outlier circumstance where the weight for MS-DRG 215
was seeing a significant reduction for each of the 4 years since CMS
began using the ICD-10 data in calculating the relative weights. We
stated while we would ordinarily consider this weight change to be
appropriately driven by the underlying data, given the comments
received, and in an abundance of caution because this may be the MS-DRG
assigned when a hospital provides temporary right ventricular support
for up to 14 days in critical care patients for the treatment of acute
right heart failure or decompensation caused by complications related
to COVID-19, including pulmonary embolism, we adopted a temporary one-
time measure for FY 2021 for MS-DRG 215. Specifically, we set the 2021
relative weight for MS-DRG 215 equal to the average of the FY 2020
relative weight and the otherwise applicable FY 2021 weight.
For this FY 2022 IPPS/LTCH PPS proposed rule, we received a request
to reassign certain cases reporting procedure codes describing the
insertion of a percutaneous short-term external heart assist device
from MS-DRG 215 to MS-DRGs 216, 217, and 218 (Cardiac Valve and Other
Major Cardiothoracic Procedures with Cardiac Catheterization with MCC,
with CC, and without CC/MCC, respectively). According to the requestor,
there are two distinct clinical populations within MS-DRG 215: High-
risk Percutaneous Coronary Intervention (PCI) patients receiving short
term ``intraoperative'' external heart assist systems where the device
is only used intraoperatively and is removed at the conclusion of the
procedure, and those patients in or at risk of cardiogenic shock
requiring longer heart pump support and ICU stays. The requestor stated
that cases in which short-term external heart assist systems are placed
intraoperatively require fewer resources. The requestor suggested that
moving the less resource intensive cases that report a procedure code
that describes the intraoperative insertion of short-term external
heart assist systems from MS-DRG 215 into MS-DRG 216, 217, and 218,
will clinically align the two distinctly different patient populations,
and consequently will address the potential decrease in the relative
weight of MS-DRG 215.
The requestor stated it performed its own analysis of claims in MS-
DRG 215 that involve the intraoperative insertion of a short-term
external heart assist device (as identified by the presence of ICD-10-
PCS codes 02HA3RJ (Insertion of short-term external heart assist system
into heart, intraoperative, percutaneous approach) and 5A0221D
(Assistance with cardiac output using impeller pump, continuous). The
requestor stated that its analysis found that if procedures involving
intraoperative placement of a short-term external heart assist device
were moved into MS-DRGs 216, 217 and 218, it would result in an
increase in the average costs and average lengths of stay for the cases
that would remain to be assigned to MS-DRG 215.
During our review of this issue, we noted that when a patient is
admitted and has an Impella[supreg] external heart assist device
inserted two ICD-10-PCS codes are assigned: A code that describes the
insertion of the device and code 5A0221D that describes assistance with
an impeller pump. Therefore, our analysis included procedure code
02HA3RJ as identified by the requestor as well as similar procedure
codes 02HA0RJ (Insertion of short-term external heart assist system
into heart, intraoperative, open approach) and 02HA4RJ (Insertion of
short-term external heart assist system into heart, intraoperative,
percutaneous endoscopic approach) that also describe the intraoperative
insertion of a short-term heart assist device, differing only in
approach. Because the assistance with an Impella[supreg] is coded with
ICD-10-PCS code 5A0221D whether the device is used only
intraoperatively or in instances where the device is left in place at
the conclusion of the procedure, we did not include this code in our
analysis. We also note that the requestor suggested that the cases
reporting a procedure code describing
[[Page 25108]]
the intraoperative insertion of a short-term external heart assist
device be moved to MS-DRGs 216, 217 and 218 but these MS-DRGs are
defined by the performance of cardiac catheterization. Therefore, we
expanded our analysis to also include MS-DRGs 219, 220 and 221 (Cardiac
Valve and Other Major Cardiothoracic Procedures without Cardiac
Catheterization with MCC, with CC, and without CC/MCC, respectively).
First, we examined claims data from the March 2020 update of the FY
2019 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS
codes 02HA0RJ, 02HA3RJ or 02HA4RJ and a procedure code describing the
performance of a cardiac catheterization. Our findings are shown in the
following table:
[GRAPHIC] [TIFF OMITTED] TP10MY21.018
As shown in the table, we identified a total of 7,741 cases within
MS-DRG 215 with an average length of stay of 7.8 days and average costs
of $68,234. Of these 7,741 cases, there are 2,943 cases that include
both a procedure code describing the intraoperative insertion of a
short-term external heart assist device and a procedure code describing
the performance of a cardiac catheterization with an average length of
stay of 7.1 days and average costs of $60,449. Of these 2,943 cases,
there are 23 cases reporting a procedure code describing the open
intraoperative insertion of a short-term external heart assist device
with a procedure code describing the performance of a cardiac
catheterization with an average length of stay of 8.9 days and average
costs of $85,806. There are 2,904 cases reporting a procedure code
describing a percutaneous intraoperative insertion of a short-term
external heart assist device with a procedure code describing the
performance of a cardiac catheterization with an average length of stay
of 7.1 days and average costs of $60,227. There are 16 cases reporting
a procedure code describing a percutaneous endoscopic intraoperative
insertion of a short-term external heart assist device with a procedure
code describing the performance of a cardiac catheterization approach
with an average length of stay of 6.4 days and average costs of
$64,217. The data analysis shows that for the cases in MS-DRG 215
reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure
code describing the performance of a cardiac catheterization,
generally, the average length of stay is shorter and the average costs
are lower than the average length of stay and average costs (with the
exception of the average costs and length of stay for the 23 cases
reporting a procedure code describing the open intraoperative insertion
of a short-term external heart assist device with a procedure code
describing the performance of a cardiac catheterization which are
higher) compared to all cases in that MS-DRG.
We also examined claims data from the March 2020 update of the FY
2019 MedPAR file for MS-DRGs 216, 217 and 218. Our findings are shown
in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.019
Because MS-DRG 215 is a base DRG and there is a three-way split
within MS-DRGs 216, 217, and 218, we also analyzed the cases reporting
a procedure code describing the intraoperative insertion of a short-
term external heart assist device with a procedure code describing the
performance of a cardiac catheterization for the presence or absence of
a secondary diagnosis designated as a complication or comorbidity (CC)
or a major complication or comorbidity (MCC).
[[Page 25109]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.020
This data analysis shows the cases in MS-DRG 215 reporting ICD-10-
PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing
the performance of a cardiac catheterization when distributed based on
the presence or absence of a secondary diagnosis designated as a
complication or comorbidity (CC) or a major complication or comorbidity
(MCC) have average costs generally more similar to the average costs in
the FY 2019 MedPAR file for MS-DRGs 216, 217 and 218 respectively,
while the average lengths of stay are shorter. While the cases from MS-
DRG 215 reporting a procedure code describing the intraoperative
insertion of a short-term external heart assist device with a procedure
code describing the performance of a cardiac catheterization ``with
CC'' and ``without CC/MCC'' have higher average costs than the average
costs of MS-DRGs 217 and 218, these costs are closer to the average
costs of those MS-DRGs than they are to the average costs of MS-DRG
215. The average costs of the cases from MS-DRG 215 reporting a
procedure code describing the intraoperative insertion of a short-term
external heart assist device with a procedure code describing the
performance of a cardiac catheterization ``with MCC'' are lower than
the average costs of both MS-DRGs 215 and 216.
Next, we examined claims data from the March 2020 update of the FY
2019 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-PCS
codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code describing
the performance of a cardiac catheterization. Our findings are shown in
the following table:
[GRAPHIC] [TIFF OMITTED] TP10MY21.021
As shown in the table, of the 7,741 cases within MS-DRG 215, there
are 432 cases that include a procedure code describing the
intraoperative insertion of a short-term external heart assist device
without a procedure code describing the performance of a cardiac
catheterization with an average length of stay of 4.8 days and average
costs of $53,607. Of these 432 cases, there are eight cases reporting a
procedure code describing the open intraoperative insertion of a short-
term external heart assist device without a procedure code describing
the performance of a cardiac catheterization with an average length of
stay of 8.8 days and average costs of $141,242. There are 423 cases
reporting a procedure code describing a percutaneous intraoperative
insertion of a short-term external heart assist device without a
procedure code describing the performance of a cardiac catheterization
with an average length of stay of 4.7 days and average costs of
$51,964. There is one case reporting a procedure code describing a
percutaneous endoscopic intraoperative insertion of a short-term
external heart assist device without a procedure code describing the
performance of a cardiac catheterization approach with a length of stay
of 2 days and costs of $47,289. The data analysis shows that for the
cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or
02HA4RJ without a
[[Page 25110]]
procedure code describing the performance of a cardiac catheterization,
generally, the average length of stay is shorter and the average costs
are lower than the average length of stay and average costs (with the
exception of the average costs and length of stay for the eight cases
describing the open intraoperative insertion of a short-term external
heart assist device without a procedure code describing the performance
of a cardiac catheterization which are higher) compared to all cases in
that MS-DRG.
We also examined claims data from the March 2020 update of the FY
2019 MedPAR file for MS-DRGs 219, 220 and 221. Our findings are shown
in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.022
Similarly, because MS-DRG 215 is a base DRG and there is a three-
way split within MS-DRGs 219, 220 and 221, we also analyzed the cases
reporting a procedure code describing the intraoperative insertion of a
short-term external heart assist device without a procedure code
describing the performance of a cardiac catheterization for the
presence or absence of a secondary diagnosis designated as a
complication or comorbidity (CC) or a major complication or comorbidity
(MCC).
[GRAPHIC] [TIFF OMITTED] TP10MY21.023
This data analysis shows the cases in MS-DRG 215 reporting ICD-10-
PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code
describing the performance of a cardiac catheterization when
distributed based on the presence or absence of a secondary diagnosis
designated as a complication or comorbidity (CC) or a major
complication or comorbidity (MCC) have average costs generally more
similar to the average costs in the FY 2019 MedPAR file for MS-DRGs
219, 220 and 221 respectively, while the average lengths of stay are
shorter. While the cases from MS-DRG 215 reporting a procedure code
describing the intraoperative insertion of a short-term external heart
assist device, without a procedure code describing the performance of a
cardiac catheterization ``with MCC'', ``with CC'' and ``without CC/
MCC'' have higher average costs than the average costs MS-DRGs 219, 220
and 221, respectively, these costs are closer to the average costs of
those MS-DRGs than they are to the average costs of MS-DRG 215.
We also examined claims data from the September 2020 update of the
FY 2020 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-
PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing
the performance of a cardiac catheterization. Our findings are shown in
the following table:
[[Page 25111]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.024
As shown in the table, we identified a total of 6,275 cases within
MS-DRG 215 with an average length of stay of 7.9 days and average costs
of $72,144. Of these 6,275 cases, there are 2,395 cases that include
both a procedure code describing the intraoperative insertion of a
short-term external heart assist device and a procedure code describing
the performance of a cardiac catheterization with an average length of
stay of 6.8 days and average costs of $62,260. Of these 2,395 cases,
there were 25 cases reporting a procedure code describing the open
intraoperative insertion of a short-term external heart assist device
with a procedure code describing the performance of a cardiac
catheterization with an average length of stay of 8.2 days and average
costs of $85,954. There are 2,360 cases reporting a procedure code
describing a percutaneous intraoperative insertion of a short-term
external heart assist device with a procedure code describing the
performance of a cardiac catheterization with an average length of stay
of 6.8 days and average costs of $61,965. There are 10 cases reporting
a procedure code describing a percutaneous endoscopic intraoperative
insertion of a short-term external heart assist device with a procedure
code describing the performance of a cardiac catheterization approach
with an average length of stay of 6.9 days and average costs of
$72,564. The data analysis shows that for the cases in MS-DRG 215
reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure
code describing the performance of a cardiac catheterization, when
examined collectively, the average length of stay is shorter (6.8 days
versus 7.9 days) and the average costs are lower ($62,260 versus
$72,144) than the average length of stay and average costs (of all
cases in that MS-DRG). There were some differences noted in cases
reporting a procedure code describing the intraoperative insertion of a
short-term external heart assist device with a procedure code
describing the performance of a cardiac catheterization when examined
by operative approach. For the 25 cases reporting a procedure code
describing the open intraoperative insertion of a short-term external
heart assist device with a procedure code describing the performance of
a cardiac catheterization, the average costs were higher ($85,954
versus $72,144) and average length of stay was slightly longer (8.2
days versus 7.9 days) when compared to all cases in that MS-DRG. For
the 10 cases reporting a procedure code describing the percutaneous
endoscopic intraoperative insertion of a short-term external heart
assist device with a procedure code describing the performance of a
cardiac catheterization, the average costs were nearly equal ($72,564
versus $72,144) and average length of stay was shorter (6.9 days versus
7.9 days) when compared to all cases in that MS-DRG.
We also examined claims data from the September 2020 update of the
FY 2020 MedPAR file for MS-DRGs 216, 217 and 218. Our findings are
shown in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.025
Because MS-DRG 215 is a base DRG and there is a three-way split
within MS-DRGs 216, 217, and 218, we also analyzed the cases reporting
a procedure code describing the intraoperative insertion of a short-
term external heart assist device with a procedure code describing the
performance of a cardiac catheterization for the presence or absence of
a secondary diagnosis designated as a complication or comorbidity (CC)
or a major complication or comorbidity (MCC).
[[Page 25112]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.026
This data analysis shows the cases in MS-DRG 215 reporting ICD-10-
PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ with a procedure code describing
the performance of a cardiac catheterization when distributed based on
the presence or absence of a secondary diagnosis designated as a
complication or comorbidity (CC) or a major complication or comorbidity
(MCC) have average costs generally more similar to the average costs in
the FY 2020 MedPAR file for MS-DRGs 216, 217 and 218 respectively,
while the average lengths of stay are shorter. While the cases from MS-
DRG 215 reporting a procedure code describing the intraoperative
insertion of a short-term external heart assist device with a procedure
code describing the performance of a cardiac catheterization ``with
CC'' and ``without CC/MCC'' have higher average costs than the average
costs of MS-DRGs 217 and 218, these costs are closer to the average
costs of those MS-DRGs than they are to the average costs of MS-DRG
215. The average costs of the cases from MS-DRG 215 reporting a
procedure code describing the intraoperative insertion of a short-term
external heart assist device with a procedure code describing the
performance of a cardiac catheterization ``with MCC'' are lower than
the average costs of both MS-DRGs 215 and 216.
Next, we examined claims data from the September 2020 update of the
FY 2020 MedPAR file for MS-DRG 215 to identify cases reporting ICD-10-
PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code
describing the performance of a cardiac catheterization. Our findings
are shown in the following table:
[GRAPHIC] [TIFF OMITTED] TP10MY21.027
As shown in the table, of the 6,275 cases within MS-DRG 215, there
are 331 cases that include a procedure code describing the
intraoperative insertion of a short-term external heart assist device
without a procedure code describing the performance of a cardiac
catheterization with an average length of stay of 4.5 days and average
costs of $52,181. Of these 331 cases, there are eight cases reporting a
procedure code describing the open intraoperative insertion of a short-
term external heart assist device without a procedure code describing
the performance of a cardiac catheterization with an average length of
stay of 8.9 days and average costs of $80,314. There are 332 cases
reporting a procedure code describing a percutaneous intraoperative
insertion of a short-term external heart assist device without a
procedure code describing the performance of a cardiac catheterization
with an average length of stay of 4.4 days and average costs of
$51,569. There is one case reporting a procedure code describing a
percutaneous endoscopic intraoperative insertion of a short-term
external heart assist device without a procedure code describing the
performance of a cardiac catheterization approach with a length of stay
of 2 days and costs of $24,379. The data analysis shows that for the
cases in MS-DRG 215 reporting ICD-10-PCS codes 02HA0RJ, 02HA3RJ or
02HA4RJ without a
[[Page 25113]]
procedure code describing the performance of a cardiac catheterization,
generally, the average length of stay is shorter and the average costs
are lower than the average length of stay and average costs (with the
exception of the average costs and length of stay for the eight cases
reporting a procedure code describing the open intraoperative insertion
of a short-term external heart assist device without a procedure code
describing the performance of a cardiac catheterization which are
higher) compared to all cases in that MS-DRG.
We also examined claims data from the September 2020 update of the
FY 2020 MedPAR file for MS-DRGs 219, 220 and 221. Our findings are
shown in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.028
Similarly, because MS-DRG 215 is a base DRG and there is a three-
way split within MS-DRGs 219, 220 and 221, we also analyzed the 331
cases reporting a procedure code describing the intraoperative
insertion of a short-term external heart assist device without a
procedure code describing the performance of a cardiac catheterization
for the presence or absence of a secondary diagnosis designated as a
complication or comorbidity (CC) or a major complication or comorbidity
(MCC).
[GRAPHIC] [TIFF OMITTED] TP10MY21.029
This data analysis shows the cases in MS-DRG 215 reporting ICD-10-
PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ without a procedure code
describing the performance of a cardiac catheterization when
distributed based on the presence or absence of a secondary diagnosis
designated as a complication or comorbidity (CC) or a major
complication or comorbidity (MCC) have average costs generally more
similar to the average costs in the FY 2020 MedPAR file for MS-DRGs
219, 220 and 221 respectively, while the average lengths of stay are
shorter. While the cases from MS-DRG 215 reporting a procedure code
describing the intraoperative insertion of a short-term external heart
assist device without a procedure code describing the performance of a
cardiac catheterization ``with CC'' and ``without CC/MCC'' have higher
average costs than the average costs of MS-DRGs 220 and 221, these
costs are closer to the average costs of those MS-DRGs than they are to
the average costs of MS-DRG 215. The average costs of the cases from
MS-DRG 215 reporting a procedure code describing the intraoperative
insertion of a short-term external heart assist device without a
procedure code describing the performance of a cardiac catheterization
``with MCC'' are lower than the average costs of both MS-DRGs 215 and
219.
Our clinical advisors reviewed the clinical issues and the claims
data and agreed that cases reporting a procedure code that describes
the intraoperative insertion of a short-term external heart assist
device are generally less resource intensive and are clinically
distinct from other cases reporting procedure codes describing the
insertion of other types of heart assist devices currently assigned to
MS-DRG 215. Our clinical advisors state that critically ill patients
who are experiencing or at risk for cardiogenic shock from an emergent
event such as heart attack or virus that impacts the functioning of the
heart and requires longer heart pump support are different from those
patients who require intraoperative support only. Patients receiving a
short-term external heart assist device intraoperatively during
coronary interventions often have an underlying disease pathology such
as heart failure related to occluded coronary vessels that is broadly
similar in kind to other patients also receiving these interventions
without the need for an insertion of a short-term external heart assist
device. In the post-operative period, these patients can recover and
can be sufficiently rehabilitated prior to discharge. For these
reasons, our clinical advisors support reassigning
[[Page 25114]]
ICD-10-PCS codes 02HA0RJ, 02HA3RJ, and 02HA4RJ that describe the
intraoperative insertion of a short-term external heart assist device
to MS-DRGs 216, 217, 218, 219, 220 and 221 in MDC 05. They stated this
reassignment would improve clinical coherence in these MS-DRGs.
To compare and analyze the impact of our suggested modifications,
we ran a simulation using the Version 38.1 ICD-10 MS-DRG GROUPER and
the claims data from the March 2020 update of the FY 2019 MedPAR file.
The following table reflects our simulation for ICD-10-PCS procedure
codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the intraoperative
insertion of a short-term external heart assist device if they were
moved to MS-DRGS 216, 217, 218, 219, 220 and 221.
[GRAPHIC] [TIFF OMITTED] TP10MY21.030
We believe the resulting proposed MS-DRG assignments would be more
clinically homogeneous, coherent and better reflect hospital resource
use while at the same time addressing concerns related to the relative
weight of MS-DRG 215. A review of this simulation shows that this
distribution of ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ that
describe the intraoperative insertion of a short-term external heart
assist device if moved to MS-DRGs 216, 217, 218, 219, 220 and 221,
increases the average costs of the cases remaining in MS-DRG 215 by
over $4,500, while generally having a more limited effect on the
average costs of MS-DRGs 216, 217, 218, 219, 220 and 221.
We also ran a simulation using the Version 38.1 ICD-10 MS-DRG
GROUPER and the claims data from the September 2020 update of the FY
2020 MedPAR file. The following table reflects our simulation for ICD-
10-PCS procedure codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the
intraoperative insertion of a short-term external heart assist device
if they were moved to MS-DRGS 216, 217, 218, 219, 220 and 221.
[[Page 25115]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.031
As with our simulation based on the March 2020 update of the FY
2019 MedPAR file, we believe that this simulation supports that the
resulting proposed MS-DRG assignments would be more clinically
homogeneous, coherent and better reflect hospital resource use while at
the same time addressing concerns related to the relative weight of MS-
DRG 215. A review of this simulation shows that this distribution of
ICD-10-PCS codes 02HA0RJ, 02HA3RJ or 02HA4RJ that describe the
intraoperative insertion of a short-term external heart assist device
if moved to MS-DRGs 216, 217, 218, 219, 220 and 221, increases the
average costs of the cases remaining in MS-DRG 215 by over $6,000,
while generally having a more limited effect on the average costs of
MS-DRGS 216, 217, 218, 219, 220 and 221.
Therefore, for FY 2022, we are proposing to reassign ICD-10-PCS
codes 02HA0RJ, 02HA3RJ, and 02HA4RJ from MDC 05 in MS-DRG 215 to MS-
DRGs 216, 217, 218, 219, 220 and 221 in MDC 05.
b. Type II Myocardial Infarction
We received a request to review the MS-DRG assignment of ICD-10-CM
diagnosis code I21.A1 (Myocardial infarction type 2). The requestor
stated that when a type 2 myocardial infarction is documented, per
coding guidelines, it is to be coded as a secondary diagnosis since it
is due to an underlying cause. This requestor also noted that when a
type 2 myocardial infarction is coded with a principal diagnosis in MDC
05 (Diseases and Disorders of the Circulatory System), the GROUPER
logic assigns MS-DRGs 280 through 282 (Acute Myocardial Infarction,
Discharged Alive with MCC, with CC, and without CC/MCC, respectively).
The requestor questioned if this GROUPER logic was correct or if the
logic should be changed so that a type 2 myocardial infarction, coded
as a secondary diagnosis, does not result in the assignment of a MS-DRG
that describes an acute myocardial infarction.
To begin our analysis, we reviewed the GROUPER logic. The requestor
is correct that when diagnosis code I21.A1 is reported as a secondary
diagnosis in combination with a principal diagnosis in MDC 05, the case
currently groups to medical MS-DRGs 280 through 282 in the absence of a
surgical procedure, when the patient is discharged alive. We note that
if the patient expires, GROUPER logic instead will assign MS-DRGs 283
through 285 (Acute Myocardial Infarction, Expired with MCC, with CC,
and without CC/MCC, respectively) when diagnosis code I21.A1 is
reported as a secondary diagnosis in combination with a principal
diagnosis in MDC 05.
According to the Universal Definition of Myocardial Infarction
(MI), developed by a global task force that included the European
Society of Cardiology, the American College of Cardiology, the American
Heart Association and the World Heart Federation (WHF), the diagnosis
of MI requires the rise and/or fall of cardiac biomarkers with clinical
evidence of ischemia in which there is evidence of myocardial injury or
necrosis, defined by symptoms, electrocardiographic (ECG) changes, or
new regional wall motion abnormalities. Since 2007, this definition
further classifies myocardial infarctions into five distinct subtypes.
While a type 1 MI is defined as a MI due to an acute coronary syndrome,
type 2 MI is defined as a mismatch in myocardial oxygen supply and
demand due to other causes such as coronary dissection, vasospasm,
emboli, or hypotension that is not attributed to unstable coronary
artery disease (CAD).
Our clinical advisors reviewed this issue and do not recommend
changing the current MS-DRG assignment of ICD-10-CM diagnosis code
I21.A1. As noted by the requestor, the ICD-10-CM Official Guidelines
for Coding and Reporting state ``Type 2 myocardial infarction,
(myocardial infarction due to demand ischemia or secondary to ischemic
imbalance) is assigned to code I21.A1, Myocardial infarction type 2
with a code for the underlying cause coded first.'' Our clinical
advisors believe that cases reporting diagnosis code I21.A1 as a
secondary diagnosis are associated with a severity of illness on par
with cases reporting a principal diagnosis of another type myocardial
infarction. They state the diagnosis of myocardial infarction describes
myocardial cell death due to inadequate
[[Page 25116]]
oxygen supply to the myocardium for a prolonged period, regardless of
the subtype. Our clinical advisors state, for clinical consistency, it
is more appropriate to maintain the current assignment of ICD-10-CM
diagnosis code I21.A1 with the other codes that describe myocardial
infarction. Therefore, we are not proposing to reassign diagnosis code
I21.A1 from MS-DRGs 280 through 285.
During our review of this issue we noted that code I21.A1
(Myocardial infarction type 2) is currently one of the listed principal
diagnoses in the GROUPER logic for MS-DRGs 222 and 223 (Cardiac
Defibrillator Implant with Cardiac Catheterization with AMI, HF or
Shock with and without MCC, respectively). However, code I21.A1 is not
currently recognized in these same MS-DRGs when coded as a secondary
diagnosis. As a result, when coded as a secondary diagnosis in
combination with a principal diagnosis in MDC 05, MS-DRGs 224 and 225
(Cardiac Defibrillator Implant with Cardiac Catheterization without
AMI, HF, or Shock with and without MCC, respectively) are instead
assigned when reported with a listed procedure code. We refer the
reader to the ICD-10 MS-DRG Definitions Manual Version 38.1, which is
available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software for complete documentation of the GROUPER
logic for MS-DRGs 222, 223, 224, and 225.
Acknowledging that coding guidelines instruct to code I21.A1 after
the diagnosis code that describes the underlying cause, our clinical
advisors recommend adding special logic in MS-DRGs 222 and 223 to have
code I21.A1 also qualify when coded as a secondary diagnosis in
combination with a principal diagnosis in MDC 05 since these diagnosis
code combinations also describe acute myocardial infarctions.
As a result, we are proposing modifications to the GROUPER logic to
allow cases reporting diagnosis code I21.A1 (Myocardial infarction type
2) as a secondary diagnosis to group to MS-DRGs 222 and 223 when
reported with a listed procedure code for clinical consistency with the
other MS-DRGs describing acute myocardial infarction.
A diagnosis code may define the logic for a specific MS-DRG
assignment in three different ways. The diagnosis code may be listed as
principal or as any one of the secondary diagnoses, as a secondary
diagnosis, or only as a secondary diagnosis as noted in more detail in
this proposed rule.
Principal or secondary diagnoses. Indicates that a
specific set of diagnoses are used in the definition of the MS-DRG. The
diagnoses may be listed as principal or as any one of the secondary
diagnoses. A special case of this condition is MS-DRG 008 in which two
diagnoses (for example, renal and diabetic) must both be present
somewhere in the list of diagnoses in order to be assigned to MS-DRG
008.
Secondary diagnoses. Indicates that a specific set of
secondary diagnoses are used in the definition of the MS-DRG. For
example, a secondary diagnosis of acute leukemia with chemotherapy is
used to define MS-DRG 839.
Only secondary diagnoses. Indicates that in order to be
assigned to the specified MS-DRG no secondary diagnoses other than
those in the specified list may appear on the patient's record. For
example, in order to be assigned to MS-DRG 795, only secondary
diagnoses from the specified list may appear on the patient's record.
We note that whenever there is a secondary diagnosis component to
the MS-DRG logic, the diagnosis code can either be used in the logic
for assignment to the MS-DRG or to act as a CC/MCC. For this specific
scenario, we propose that code I21.A1, as a secondary diagnosis, be
used in the definition of the logic for assignment to MS-DRGs 222 and
223, similar to the example described previously, where a secondary
diagnosis of acute leukemia with chemotherapy is used to define MS-DRG
839, and therefore will not act as a MCC in these MS-DRGs.
In summary, for FY 2022, we are proposing to maintain the current
structure of MS-DRGs 280 through 285. We are also proposing to modify
the GROUPER logic to allow cases reporting diagnosis code I21.A1
(Myocardial infarction type 2) as a secondary diagnosis to group to MS-
DRGs 222 and 223 when reported with qualifying procedures.
c. Viral Cardiomyopathy
We received three separate but related requests to add ICD-10-CM
diagnosis code B33.24 (Viral cardiomyopathy) to the list of principal
diagnoses for MS-DRGs 314, 315, and 316 (Other Circulatory System
Diagnoses with MCC, with CC, and without CC/MCC, respectively) in MDC
05. The requestors noted that a discontinuity exists in the current MDC
assignment of diagnosis codes in ICD-10-CM subcategory B33.2. The list
of the five ICD-10-CM diagnosis codes in subcategory B33.2, as well as
their current MDC assignments, is found in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.369
A requestor noted ICD-10-CM codes B33.20, B33.21, B33.22, and
B33.23 are assigned to MDC 05 (Diseases and Disorders of the
Circulatory System), while code B33.24 is assigned to MDC 18
(Infectious and Parasitic Diseases, Systemic or Unspecified Sites). The
requestor stated that the placement of ICD-10-CM diagnosis code B33.24
within subcategory B33.2 is clinically appropriate, as all the
diagnoses within this subcategory share a common etiology, involve the
heart and supporting structures, and require the same intensity of
hospital care. However, the assignment of code B33.24 to a different
MDC is clinically incongruous with the placement of the other codes in
the subcategory. According to the requestor, all of the conditions
share similar etiology, anatomic location, and needs for care,
therefore the five codes should all be assigned to MDC 05. This
requestor also stated that reassigning code B33.24 to MDC 05 would
ensure both clinical continuity and coding consistency within the B33.2
subcategory. Another requestor stated MDC 05 surgical MS-DRGs should be
assigned when
[[Page 25117]]
procedures such as cardiac catheterization or coronary angioplasty are
performed for a principal diagnosis of viral cardiomyopathy.
To begin our analysis, we reviewed the GROUPER logic. Currently,
cases reporting ICD-10-CM diagnosis code B33.24 as a principal
diagnosis group to medical MS-DRGs 865 and 866 (Viral Illness with and
without MCC, respectively) in MDC 18 in the absence of a surgical
procedure. Our clinical advisors reviewed this issue and noted viral
cardiac infections may present as endocarditis (inflammation of the
heart's inner lining), myocarditis (inflammation of the middle layer of
the heart), pericarditis (inflammation of the pericardium), or
cardiomyopathy (disease of the heart muscle). The infection usually
begins somewhere other than the heart, often in the nose, lungs, or
stomach. As the infection progresses, and the microbe multiplies and
gets into the bloodstream, it can infiltrate the heart muscle. The
growth and replication of viruses inside the heart can endanger the
heart by destroying heart cells. The management of viral cardiomyopathy
is similar to the management of other viral cardiac infections and can
include bed rest, control of pain with non-steroidal anti-inflammatory
agents and anti-microbial therapy to avoid permanent myocardial damage,
cardiomegaly, and/or congestive cardiac failure.
Our clinical advisors agree that the diagnosis of viral
cardiomyopathy is clinically related to the other diagnoses in ICD-10-
CM subcategory B33.2. They believe it is clinically appropriate for all
five diagnoses in subcategory B33.2 to group to MDC 05 (Diseases and
Disorders of the Circulatory System) as these conditions describe
circulatory system conditions and complications and that this
modification will improve clinical coherence. Therefore, we are
proposing to reassign ICD-10-CM diagnosis code B33.24 from MDC 18 in MS
DRGs 865 and 866 (Viral Illness with and without MCC, respectively) to
MDC 05 in MS DRGs 314, 315, and 316 (Other Circulatory System Diagnoses
with MCC, with CC, and without CC/MCC, respectively). Under this
proposal, cases reporting procedure codes from MDC 05 in conjunction
with principal diagnosis B33.24, would group to MS-DRGs in MDC 05.
d. Left Atrial Appendage Closure (LAAC)
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58471 through
58477), we identified nine ICD-10-PCS procedure codes that describe
Left Atrial Appendage Closure (LAAC) procedures and noted their
corresponding MS-DRG assignments in the ICD-10 MS-DRGs Version 37 as
listed in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.032
As discussed in the FY 2021 IPPS/LTCH PPS final rule, we examined
claims data from the September 2019 update of the FY 2019 MedPAR file
for cases reporting LAAC procedures with an open approach in MS-DRGs
250 and 251 (Percutaneous Cardiovascular Procedures without Coronary
Artery Stent with and without MCC, respectively). Our analysis showed
that the cases reporting a LAAC procedure with an open approach in MS-
DRGs 250 and 251 had higher average costs and longer average length of
stay compared to all cases in MS-DRGs 250 and 251. We also stated our
clinical advisors believed that ICD-10-PCS codes 02L70CK, 02L70DK, and
02L70ZK that describe a LAAC procedure with an open approach were more
suitably grouped to MS-DRGs 273 and 274 (Percutaneous Intracardiac
Procedures with and without MCC, respectfully). Therefore, we finalized
our proposal to reassign ICD-10-PCS procedure codes 02L70CK, 02L70DK,
and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs 273 and 274. We also
finalized a revision to the titles for MS-DRG 273 and 274 to
Percutaneous and Other Intracardiac Procedures with and without MCC,
respectively to reflect this reassignment for FY 2021.
In response to this final policy, for this FY 2022 IPPS/LTCH PPS
proposed rule, we received a request to again review the MS-DRG
assignment of cases involving LAAC procedures with an open approach.
The requestor disagreed with CMS's FY 2021 IPPS/LTCH PPS final rule
decision to move the three procedure codes describing the open
occlusion of left atrial appendage to MS-DRGs 273 and 274 (Percutaneous
and Other Intracardiac Procedures with and without MCC, respectively).
The requestor stated they believe that MS-DRGs 228 and 229 (Other
Cardiothoracic Procedures with and without MCC, respectively), would
more appropriately correspond with the open procedural resources and
longer length of stay expected with open heart procedures.
Our clinical advisors reviewed this request and continue to support
the reassignment of ICD-10-PCS procedure
[[Page 25118]]
codes 02L70CK, 02L70DK, and 02L70ZK from MS-DRGs 250 and 251 to MS-DRGs
273 and 274 because it allows all LAAC procedures to be grouped
together under the same MS-DRGs and improves clinical coherence. Our
clinical advisors state open LAAC procedures are primarily performed in
the absence of another O.R. procedure and generally are not performed
with a more intensive open chest procedure. When performed as
standalone procedures, open LAAC procedures share similar factors such
as complexity and resource utilization with all other LAAC procedures.
Our clinical advisors continue to state our FY 2021 final policy
results in MS-DRG assignments that are more clinically homogeneous and
better reflect hospital resource use. Therefore, we are proposing to
maintain the assignment of codes 02L70CK, 02L70DK, and 02L70ZK that
describe the open occlusion of the left atrial appendage in MS-DRGs 273
and 274.
e. Surgical Ablation
We received a two-part request to review the MS-DRG assignments for
cases involving the surgical ablation procedure for atrial
fibrillation. Atrial fibrillation (AF) is an irregular and often rapid
heart rate that occurs when the two upper chambers of the heart
experience chaotic electrical signals. AF presents as either paroxysmal
(lasting <7 days), persistent (lasting >7 days, but less than 1 year),
or long standing persistent (chronic) (lasting >1 year) based on time
duration and can increase the risk for stroke, heart failure, and
mortality. Management of AF has two primary goals: Optimizing cardiac
output through rhythm or rate control, and decreasing the risk of
cerebral and systemic thromboembolism. Patients that worsen in
symptomology or fail to respond to pharmacological treatment or other
interventions may be referred for surgical ablation to treat their AF.
Surgical ablation is a procedure that works by burning or freezing
tissue on the inside of the heart to disrupt faulty electrical signals
causing the arrhythmia, which can help the heart maintain a normal
heart rhythm.
The first part of this request was to create a new classification
of surgical ablation MS-DRGs to better accommodate the costs of open
concomitant surgical ablations. According to the requestor, patients
undergoing surgical ablation are treated under two potential scenarios:
(1) Open concomitant (combination) surgical ablation, meaning open
surgical ablation performed during another open-heart surgical
procedure such as mitral valve repair or replacement (MVR), aortic
valve repair or replacement (AVR), or coronary artery bypass grafting
(CABG) and (2) minimally invasive, percutaneous endoscopic, standalone
surgical ablation as the sole therapeutic procedure performed.
According to the requestor, open concomitant surgical ablation is an
efficient procedure, as it allows treatment of AF and another clinical
pathology in one procedure thereby decreasing the risk of future
readmits, need for future repeat catheter ablation procedures, and
patient mortality.
The requestor identified the following potential procedure
combinations that would comprise an ``open concomitant surgical
ablation'' procedure.
Open CABG + open surgical ablation
Open MVR + open surgical ablation
Open AVR + open surgical ablation
Open MVR + open AVR + open surgical ablation
Open MVR + open CABG + open surgical ablation
Open MVR + open AVR + open CABG + open surgical ablation
Open AVR + open CABG + open surgical ablation
The requestor performed its own analysis of these procedure code
combinations and stated that it found the average costs for open
concomitant surgical ablation procedures were consistently higher
compared to the average costs within their respective MS-DRGs, which
could limit beneficiary access to these procedures.
The requestor suggested that the following four MS-DRGs be created
to address the differences in average costs and average lengths of stay
it found in its data analysis:
Suggested New MS-DRG XXX--Open Surgical Ablation with or
without Other Cardiothoracic Procedure with Cardiac Catheterization
with MCC;
Suggested New MS-DRG XXX--Open Surgical Ablation with or
without Other Cardiothoracic Procedure with Cardiac Catheterization
without MCC;
Suggested New MS-DRG XXX--Open Surgical Ablation with or
without Other Cardiothoracic Procedure without Cardiac Catheterization
with MCC; and
Suggested New MS-DRG XXX--Open Surgical Ablation with or
without Other Cardiothoracic Procedure without Cardiac Catheterization
without MCC.
In reviewing this request, we identified nine ICD-10-PCS codes that
describe open surgical ablation. These codes and their corresponding
MDC and MS-DRG assignments are listed in the following table.
[[Page 25119]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.033
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, for open
concomitant surgical ablation procedures, the GROUPER logic assigns MS-
DRGs 228 and 229 (Other Cardiothoracic Procedures with and without MCC,
respectively) in most instances because MS-DRGs 228 and 229 are high in
the surgical hierarchy GROUPER logic of MDC 05 (Diseases and Disorders
of the Circulatory System). Since patients can have multiple procedures
reported with a principal diagnosis during a particular hospital stay,
and a patient can be assigned to only one MS-DRG, the surgical
hierarchy GROUPER logic provides a hierarchical order of surgical
classes from the most resource-intensive to the least resource-
intensive. Patients with multiple procedures are generally assigned to
the MS-DRG that correlates to the most resource-intensive surgical
class.
Our clinical advisors reviewed this grouping issue and noted in
open concomitant surgical ablation procedures, the CABG, MVR, and/or
AVR components of the procedure are more technically complex than the
open surgical ablation procedure. Our clinical advisors stated that in
open concomitant surgical ablation procedures, the MS-DRG assigned
should be based on the most resource-intensive procedure performed.
Therefore, we believe this request would be better addressed by
proposing to revise the surgical hierarchy in MDC 05 rather than
creating four new MS-DRGs. For FY 2022, we are proposing to revise the
surgical hierarchy for the MS-DRGs in MDC 05 to sequence MS-DRGs 231-
236 (Coronary Bypass) above MS-DRGs 228 and 229 to enable more
appropriate MS-DRG assignment for these types of cases. Under this
proposal, if a procedure code describing a CABG and a procedure code
describing an open surgical ablation are present, the GROUPER logic
would assign the CABG surgical class because a CABG would be sequenced
higher in the hierarchy than an open surgical ablation. We refer the
reader to section II.D.15. of the preamble of this proposed rule for
the discussion of the surgical hierarchy and the complete list of our
proposed modifications to the surgical hierarchy in MDC 05.
As mentioned earlier in this section, this request involved two
parts. The second part of the request was to reassign cases describing
standalone percutaneous endoscopic surgical ablation. According to the
requestor, standalone, percutaneous endoscopic surgical ablation is a
rapidly growing therapy, indicated for highly symptomatic patients that
have already failed medical management and/or percutaneous catheter
ablation procedures. The requestor identified nine ICD-10-PCS codes
that they stated describe percutaneous endoscopic surgical ablation.
These codes and their corresponding MDC and MS-DRG assignments are
listed in the following table.
[[Page 25120]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.034
The requestor performed its own analysis and stated that it found
the most common MS-DRG assignment for cases describing standalone
percutaneous endoscopic surgical ablation was MS-DRGs 228 and 229
(Other Cardiothoracic Procedures with and without MCC, respectively)
and that in those MS-DRGs, the standalone surgical ablation procedures
cost more than all the procedures in their currently assigned MS-DRGs
228 and 229. Therefore, the requestor recommended CMS reassign these
procedures to higher weighted MS-DRGs 219 and 220 (Cardiac Valve and
Other Major Cardiothoracic Procedures without Cardiac Catheterization
with MCC and with CC, respectively).
We examined claims data from the March 2020 update of the FY 2019
MedPAR file for all cases in MS-DRGs 228 and 229 and compared the
results to cases with a procedure code describing a standalone
percutaneous endoscopic surgical ablation procedure. Our findings are
shown in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.035
As shown in the table, the data analysis performed indicates that
the 99 cases in MS-DRG 228 reporting a procedure code that describes
percutaneous endoscopic surgical ablation have an average length of
stay that is shorter than the average length of stay for all the cases
in MS-DRG 228 (7.1 days versus 10.7 days) and higher average costs when
compared to all the cases in MS-DRG 228 ($48,281 versus $45,772). The
497 cases in MS-DRG 229 reporting a procedure code that describes
percutaneous endoscopic surgical ablation have an average length of
stay that is shorter than the average length of stay for all the cases
in MS-DRG 229 (3.7 days versus 5.8 days) and higher average costs when
compared to all the cases in MS-DRG 229 ($35,516 versus $29,454).
We then examined the claims data from the March 2020 update of the
FY 2019 MedPAR file to identify the average length of stay and average
costs for all cases in MS-DRGs 219 and 220. Our findings are shown in
the table.
[[Page 25121]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.036
As shown in the table, for MS-DRG 219, there were a total of 15,597
cases with an average length of stay of 10.9 days and average costs of
$57,845. For MS-DRG 220, there were a total of 15,074 cases with an
average length of stay of 6.5 days and average costs of $39,565.
We also examined claims data from the September 2020 update of the
FY 2020 MedPAR file for all cases in MS-DRGs 228 and 229 and compared
the results to cases with a procedure code describing a standalone
percutaneous endoscopic surgical ablation procedure. Our findings are
shown in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.037
As shown in the table, the data analysis performed indicates that
the 84 cases in MS-DRG 228 reporting a procedure code that describes
percutaneous endoscopic surgical ablation have an average length of
stay that is shorter than the average length of stay for all the cases
in MS-DRG 228 (6.9 days versus 10.2 days) and lower average costs when
compared to all the cases in MS-DRG 228 ($44,710 versus $46,508). The
393 cases in MS-DRG 229 reporting a procedure code that describes
percutaneous endoscopic surgical ablation have an average length of
stay that is shorter than the average length of stay for all the cases
in MS-DRG 229 (3.4 days versus 4.9 days) and higher average costs when
compared to all the cases in MS-DRG 229 ($34,237 versus $29,885).
We then examined the claims data from the September 2020 update of
the FY 2020 MedPAR file to identify the average length of stay and
average costs for all cases in MS-DRGs 219 and 220. Our findings are
shown in the table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.038
As shown in the table, for MS-DRG 219, there were a total of 11,863
cases with an average length of stay of 10.9 days and average costs of
$61,934. For MS-DRG 220, there were a total of 10,072 cases with an
average length of stay of 6.5 days and average costs of $41,800.
Our analysis indicates that MS-DRGs 219 and 220 generally have much
higher average costs and longer average lengths of stay than the cases
with a procedure code describing a standalone percutaneous endoscopic
surgical ablation procedure currently assigned to MS-DRGs 228 and 229.
Instead, the average costs and average length of stay for cases
reporting a standalone percutaneous endoscopic surgical ablation appear
to be generally more aligned with the average costs and average length
of stay for all cases in MS-DRGs 228 and 229, where they are currently
assigned. Our clinical advisors reviewed this issue and do not
recommend changing the assignment of procedure codes describing
percutaneous endoscopic surgical ablation. Therefore, for these
reasons, we are proposing to maintain the current structure of MS-DRGs
219 and 220.
f. Drug-Eluting Stents
We received a request to review the MS-DRG assignments of claims
involving the insertion of coronary stents in percutaneous coronary
interventions. The requestor suggested that CMS eliminate the
distinction between drug-eluting and bare-metal coronary stents in the
MS-DRG classification. According to the requestor, coated stents have a
clinical performance comparable to drug-eluting stents however they are
grouped with bare-metal stents because they do not contain a drug. The
requestor asserted that this comingling muddies the
[[Page 25122]]
clinical coherence of the MS-DRG structure, as one cannot infer
distinctions in clinical performance or benefits among the groups and
potentially creates a barrier (based on hospital decision-making) to
patient access to modern coated stents.
The requestor listed the following MS-DRGs in its request.
MS-DRG 246 (Percutaneous Cardiovascular Procedures with
Drug-Eluting Stent with MCC or 4+ Arteries or Stents);
MS-DRG 247 (Percutaneous Cardiovascular Procedures with
Drug-Eluting Stent without MCC);
MS-DRG 248 (Percutaneous Cardiovascular Procedures with
Non-Drug-Eluting Stent with MCC or 4+ Arteries or Stents); and
MS-DRG 249 (Percutaneous Cardiovascular Procedures with
Non-Drug-Eluting Stent without MCC).
According to the requestor, the non-drug-eluting stent MS-DRGs have
outlived their usefulness in the stent market. The requestor performed
its own analysis of MedPAR data from FY 2015 through FY 2019 and stated
that it found the volume of cases describing non-drug-eluting coronary
stents has declined since 2015, culminating in FY 2019, with drug-
eluting stents accounting for 96.1% of all stent cases within the
Medicare program, while non-drug-eluting stents accounted for only 3.9%
that year. The requestor asserted that the assignment of coated stents
to the non-drug-eluting stent category creates a market distortion as
this newer technology is being comingled with very old technology at a
payment disadvantage large enough to influence hospitals' willingness
to prescribe, while at the same time acknowledging that the separation
in average charges and costs between the non-drug-eluting stent
category and the drug-eluting stent category is minimal in their
analysis of the claims data.
Based on a review of the procedure codes that are currently
assigned to MS-DRGs 246, 247, 248 and 249, our clinical advisors agree
that further refinement of these MS-DRGs may be warranted. However, in
ICD-10-PCS, a stent is considered an intraluminal device. The
distinction between drug-eluting and non-drug eluting intraluminal
devices is found elsewhere in the ICD-10-PCS procedure code
classification and evaluating this request requires a more extensive
analysis to assess potential impacts across the MS-DRGs. For these
reasons, at this time, our clinical advisors recommend that rather than
evaluating the procedure codes assigned to MS-DRGs 246, 247, 248 and
249 in isolation, additional analysis should be performed for this
subset of procedure codes across the MS-DRGs, as part of the
comprehensive procedure code review described in section II.D.11. of
the preamble of this proposed rule. Therefore, we believe it would be
more appropriate to consider this request further during our
comprehensive procedure code review in future rulemaking.
6. MDC 08 (Diseases and Disorders of the Musculoskeletal System and
Connective Tissue)
a. Knee Joint Procedures
We received a request to examine the procedure code combinations
for procedures describing a right knee joint removal and replacement
and procedures describing a left knee joint removal and replacement in
MS-DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with
MCC, with CC, and without CC/MCC, respectively). According to the
requestor, when using the MS-DRG GROUPER software version 37, the left
knee joint procedure combinations group correctly to MS-DRG 468, while
the exact same right knee procedure code combinations group incorrectly
to MS-DRG 465 (Wound Debridement and Skin Graft Except Hand for
Musculoskeletal and Connective Tissue Disorders without CC/MCC).
The requestor provided the following procedure codes that describe
the procedure code combinations for the left knee joint removal and
replacement procedures currently assigned to MS-DRGs 466, 467, and 468.
[GRAPHIC] [TIFF OMITTED] TP10MY21.039
The requestor also provided the following procedure codes that
describe the procedure code combinations for right knee joint removal
and replacement procedures for CMS's review and consideration.
[[Page 25123]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.040
We reviewed the procedure code combinations listed and agree with
the requestor that the procedure codes that describe the procedure code
combinations for right knee joint removal and replacement procedures
were inadvertently excluded from the logic for MS-DRGs 466, 467, and
468.
During our review of the previously listed procedure code
combinations describing removal and replacement of the right and left
knee joints, we identified additional MS-DRGs in which the listed
procedure code combinations for the left knee joint are in the logic,
however, the listed procedure code combinations for the right knee
joint were inadvertently excluded from the logic. Specifically, the
listed procedure code combinations describing removal and replacement
of the left knee joint are also included in the logic for case
assignment to MS-DRGs 461 and 462 (Bilateral or Multiple Major Joint
Procedures of Lower Extremity with and without MCC, respectively) in
MDC 08 and in the logic for case assignment to MS-DRGs 628, 629, and
630 (Other Endocrine, Nutritional and Metabolic O.R. Procedures with
MCC, with CC, and without CC/MCC, respectively) in MDC 10 (Endocrine,
Nutritional and Metabolic Diseases and Disorders). Our clinical
advisors stated that the procedure code combinations describing removal
and replacement of the right knee joint should be added to MS-DRGs 461,
462, 466, 467, and 468 in MDC 08 and MS-DRGs 628, 629, and 630 in MDC
10 for consistency with the procedure code combinations describing
removal and replacement of the left knee joint that are currently
assigned to those MS-DRGs. Adding these procedure codes will improve
clinical coherence and ensure more appropriate MS-DRG assignment for
these cases.
Therefore, for FY 2022, we are proposing to add the three procedure
code combinations listed previously describing removal and replacement
of the right knee joint that were inadvertently omitted from the logic
to MS-DRGs 461, 462, 466, 467, and 468 in MDC 08 and MS-DRGs 628, 629,
and 630 in MDC 10.
b. Pelvic Trauma With Internal Fixation
We received a request to reassign cases reporting a diagnosis code
describing a pelvic fracture in combination with a procedure code
describing repair of a pelvic fracture with internal fixation, from the
lower (NonCC) severity level MS-DRG of its current base MS-DRG
assignment to the higher (MCC) severity level MS-DRG of its current
base MS-DRG assignment. According to the requestor, there has been
steady growth in the volume of internal fixation procedures performed
for pelvic fractures since 2008. The requestor stated that due to this
growth rate and the anticipated increase in utilization of these
internal fixation devices in these procedures in the future that CMS
should reconsider the payment structure for these cases it referred to
as ``internal fixation for pelvic trauma''.
The requestor provided data for the Healthcare Common Procedural
Coding System (HCPCS) code G0413 (Percutaneous skeletal fixation of
posterior pelvic bone fracture and/or dislocation, for fracture
patterns which disrupt the pelvic ring, unilateral or bilateral,
(includes ileum, sacroiliac joint and/or sacrum) and current procedural
terminology (CPT) code 22848 (Pelvic fixation (attachment of caudal end
of instrumentation to pelvic bony structures) other than sacrum) from
2008 through 2018 that it crosswalked to ICD-10-PCS procedure codes.
The requestor stated that this CPT coded data indicated that physicians
have used pelvic fracture fixation, and pelvic instrumentation, for an
increasing number of trauma/fracture repair cases, demonstrating
expanded use of these devices in the pelvic area overall.
The requestor reported that sacral fractures are often
underdiagnosed and once the diagnosis is made, bedrest is common,
although prolonged bedrest is not recommended for the elderly. In
addition, the requestor stated that pelvic fractures may be isolated or
they may be associated with surrounding structures. For example, the
requester reported that the sacroiliac joint is involved in
approximately 30 to 35% of pelvic fracture cases. According to the
requestor, the standard of care has also transitioned, from bedrest-
only to surgery, and current medical practice has evolved to lower the
threshold for fracture repair surgery. For instance, the requestor
stated that smaller 5mm
[[Page 25124]]
fractures that were once left untreated now have standard treatment
protocols involving the use of pelvic instrumentation. As a result, the
requestor asserted that there will be greater utilization of internal
fixation devices to treat these smaller pelvic fractures.
The requestor provided the following procedure codes that it stated
describe procedures involving the use of internal fixation devices for
pelvic fracture repair.
[GRAPHIC] [TIFF OMITTED] TP10MY21.041
The requestor also provided the following diagnosis code
subcategories that it stated identify diagnoses describing pelvic
fracture.
[GRAPHIC] [TIFF OMITTED] TP10MY21.042
The requestor performed its own analysis of claims data and
reported findings for cases reporting a combination of the diagnosis
codes found in the listed diagnosis code subcategories and the listed
procedure codes (internal fixation for pelvic trauma) for MS-DRGs 515,
516, and 517 (Other Musculoskeletal System and Connective Tissue O.R.
Procedures with MCC, with CC, and without CC/MCC, respectively); MS-
DRGs 907, 908, and 909 (Other O.R. Procedures for Injuries with MCC,
with CC, and without CC/MCC, respectively); and MS-DRGs 957, 958, and
959 (Other O.R. Procedures for Multiple Significant Trauma with MCC,
with CC, and without CC/MCC, respectively). According to the requestor,
its findings support reassignment of these internal fixation for pelvic
trauma cases from the lower severity level MS-DRG 517 to the higher
severity level MS-DRG 515, from the lower severity level MS-DRG 909 to
the higher severity level 907, and from the lower severity level MS-DRG
959 to the higher severity level 957. The requestor suggested that
approximately 2,000 cases would be impacted by its recommendation to
reassign internal fixation for pelvic trauma cases. The requestor also
stated that these internal fixation for pelvic trauma cases currently
result in a high rate of CMS outlier payments to institutions that
perform a high volume of these procedures. Finally, the requestor
stated that there is precedent for reassignment of cases from the lower
severity level MS-DRGs to the higher severity level MS-DRG for cases
involving the use of a device in orthopedic surgery. The requestor
provided the examples of total ankle replacement procedures, spinal
disc replacement procedures and neurostimulator implantation procedures
to demonstrate how CMS has previously reassigned cases from the lower
severity level MS-DRG to the higher severity level MS-DRG.
We first examined the claims data from the March 2020 update of the
FY 2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR
file for all cases in MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and
909; and MS-DRGs 957, 958, and 959. Our findings are shown in the
following tables.
[[Page 25125]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.043
[GRAPHIC] [TIFF OMITTED] TP10MY21.044
We then examined claims data from the March 2020 update of the FY
2019 MedPAR file and the September 2020 update of the FY 2020 MedPAR
file for cases reporting any combination of the diagnosis and procedure
codes that the requestor provided to identify internal fixation for
pelvic trauma cases in MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and
909; and MS-DRGs 957, 958, and 959.
We note that our analysis identified two types of cases in which
the combination of a diagnosis code and a procedure code (that the
requestor provided to identify internal fixation for pelvic trauma
cases) was reported. The first type of case consisted of a diagnosis
code describing a pelvic fracture reported in combination with a single
procedure code describing repair of a pelvic fracture with internal
fixation on a claim, and the second type of case consisted of a
diagnosis code describing a pelvic fracture reported in combination
with two procedure codes describing repair of a pelvic fracture with
internal fixation (for example, one for the right side and one for the
left side) on a claim. These cases are described as single and
bilateral internal fixation procedures for pelvic trauma, respectively.
We refer the reader to Tables 6P.1h and 6P.1i associated with this
proposed rule (which are available via the internet on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the list of diagnosis and procedure code
combinations reflecting single internal fixation for pelvic trauma
procedures reported by case ID in each MS-DRG, by fiscal year, along
with the detailed claims analysis. We refer the reader to Tables 6P.1j
and 6P.1k associated with this proposed rule (which are available via
the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS) for the list of
diagnosis and procedure code combinations reflecting bilateral internal
fixation for pelvic trauma procedures reported by case ID in each MS-
DRG, by fiscal year, along with the detailed claims analysis. For
example, Table 6P.1h shows the claims data analysis findings from the
March 2020 update of the FY 2019 MedPAR file. Line 2 identifies the
section for single cases reported in MS-DRG 515, line 13 identifies the
section for single cases reported in MS-DRG 516, and line 42 identifies
the single cases reported in MS-DRG 517. The following table summarizes
the information found in each column of the tables.
[[Page 25126]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.045
As shown in Table 6P.1h, line 4, column A, displays the Case ID
``Single-A'' for the first case; column B displays MS-DRG 515; column C
displays the diagnosis code S32.111A; column D displays the description
of the diagnosis code (Minimally displaced Zone 1 fracture of sacrum,
initial encounter for closed fracture); column E displays the procedure
code 0QS234Z; column F displays the description of the procedure code
(Reposition right pelvic bone with internal fixation device,
percutaneous approach); column G displays the case count 1; column H
displays an average length of stay of 3.0 days; column I displays
average costs of $8,433 for the case; column J displays the frequency
of the procedure reported was one (1) occurrence; column K displays a
3.0 day length of stay for the case; and column L displays $8,433 for
the cost of the case.
In our analysis of the claims data from the March 2020 update of
the FY 2019 MedPAR file, we found that there were no cases reporting
any combination of the diagnosis codes and procedure codes previously
listed in MS-DRGs 907, 908, and 909 or MS-DRGs 957, 958, and 959. Our
findings are shown in the following table for any cases found to report
a diagnosis code describing a pelvic trauma in combination with a
procedure code describing single internal fixation in MS-DRGs 515, 516,
and 517.
[GRAPHIC] [TIFF OMITTED] TP10MY21.046
[[Page 25127]]
As shown in the table, there were only three cases found in MS-DRG
517 reporting single internal fixation for pelvic trauma procedures,
with an average length of stay of 5.33 days and average costs of
$12,147. The average length of stay is longer and the average costs of
these three cases higher compared to the average length of stay and the
average costs for all cases in MS-DRG 517 (5.33 days versus 2.6 days
and $12,147 versus $10,316, respectively); however, overall, we believe
the data findings are comparable. Our clinical advisors did not support
reassignment of the three cases from MS-DRG 517 to MS-DRG 515 based on
the claims data analysis and also stated it would not be appropriate to
reassign these cases into the higher severity level MS-DRG in the
absence of a MCC and noted that the cases would not be clinically
coherent with regard to resource utilization.
In our analysis of the claims data from the March 2020 update of
the FY 2019 MedPAR file for cases in which a bilateral internal
fixation for pelvic trauma procedure was performed, we identified one
case in MS-DRG 517. As shown in Table 6P.1j, the average length of stay
for this case was 4.0 days and the average costs were $24,258, which is
longer than the average length of stay and greater than the average
costs for all cases in MS-DRG 517 (2.6 days and $10,316, respectively).
We also identified cases reporting various code combinations for MS-
DRGs 515 and 516, and provide the details in Table 6P.1j associated
with this proposed rule (which is available via the internet on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS).
In our analysis of the claims data from the September 2020 update
of the FY 2020 MedPAR file we found that there were no cases reporting
any combination of the diagnosis codes and procedure codes previously
listed in MS-DRG 909 or in MS-DRGs 957, 958, and 959. Our findings are
shown in the following table for any cases found to report a diagnosis
code describing a pelvic trauma in combination with a procedure code
describing single internal fixation in MS-DRGs 515, 516, 517, 907, and
908.
[GRAPHIC] [TIFF OMITTED] TP10MY21.047
As shown in the table, there were only four cases found in MS-DRG
517 reporting single internal fixation for pelvic trauma procedures,
with an average length of stay of 2.5 days and average costs of
$10,136. For the same reasons described previously based on the FY 2019
analysis, our clinical advisors did not support reassignment of the
cases in the lower severity level MS-DRG 517 to the higher severity
level MS-DRG 515. In addition, the average length of stay and average
costs for these four cases reporting single internal fixation for
pelvic trauma procedures are less than the average length of stay and
average costs for all the cases in MS-DRG 517 (2.5 days versus 2.6 days
and $10,136 versus $11,301, respectively)); however, overall, we
believe the data findings are comparable.
In our analysis of the claims data from the September 2020 update
of the FY 2020 MedPAR file for cases in which a bilateral internal
fixation for pelvic trauma procedure was performed, we identified one
case in MS-DRG 517. As shown in Table 6P.1k, the average length of stay
for this case was 2.0 days and the average costs were $10,103, which is
shorter than the average length of stay and less than the average costs
for all cases in MS-DRG 517 (2.6 days and $11,301, respectively). We
also identified cases reporting various combinations for MS-DRGs 515,
516 and MS-DRG 907, and provide the details in Table 6P.1k associated
with this proposed rule (which is available via the internet on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS).
We believe further analyses of these internal fixation for pelvic
trauma cases in the claims data is warranted. We note that our analysis
for both the single and bilateral cases was centered on the reporting
of a principal diagnosis code describing a pelvic trauma (fracture) in
combination with a procedure code describing internal fixation based on
the codes provided by the requestor. However, we also identified cases
in the claims data in which a pelvic trauma diagnosis code was reported
as a secondary diagnosis code in combination with a procedure code
describing internal fixation and believe these cases require further
evaluation. In addition, during our review of the diagnosis and
procedure codes that the requestor provided, we identified diagnosis
codes that we believe do not warrant consideration for purposes of this
request and additional procedure codes that describe internal fixation
for pelvic trauma procedures, which we believe do warrant further
analysis. For example, as previously noted, the requestor provided the
subcategories for
[[Page 25128]]
the diagnosis codes that it requested we consider for analysis. We do
not agree that diagnosis codes describing a pelvic fracture that
include the term ``sequela'' should be considered in the analysis to
examine this request because, in the ICD-10-CM classification, the term
sequela is defined as the residual effect (condition produced) after
the acute phase of an illness or injury has terminated.
We refer the reader to Table 6P.1g for the list of diagnosis codes
that are included in the diagnosis subcategories provided by the
requestor and the list of procedure codes provided by the requestor,
which also contains the procedure codes we identified. Additional time
is needed for data analysis given the volume of these code combinations
and corresponding data. We also believe that additional time is needed
to allow for further analysis of the claims data to determine the
causes of the fractures and other possible contributing factors with
respect to the length of stay and costs of these cases, as well as the
rate of outlier payments as identified by the requestor. Our clinical
advisors also believe that future data findings may demonstrate
additional variance in resource utilization for this patient
population. We further note that, as discussed in the FY 2021 IPPS/LTCH
PPS final rule, we finalized the addition of 161 procedure codes to MS-
DRGs 957, 958, and 959 in MDC 24 (Multiple Significant Trauma) that
include the insertion of internal fixation devices. We believe it would
be beneficial to examine future claims data to determine if there is a
change in the volume of cases in those specific MS-DRGs as a result of
that update. For these reasons, we are proposing to maintain the
structure of MS-DRGs 515, 516, and 517; MS-DRGs 907, 908, and 909; and
MS-DRGs 957, 958, and 959 for FY 2022.
7. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract):
Chronic Renal Replacement Therapy (CRRT)
We received a request to create new MS-DRGs for cases where the
patient receives continuous renal replacement therapy (CRRT) during the
inpatient stay. According to the requestor, hospitals incur higher
costs related to CRRT and current MS-DRG definitions do not adequately
account for the clinical and resource requirements of CRRT. The
requestor stated Medicare reimbursement is insufficient to cover the
costs of administering CRRT, creating a disincentive in offering this
dialysis modality and is a barrier to further adoption of CRRT. The
requestor suggested that the following two new MS-DRGs be created:
Suggested New MS-DRG XXX--Continuous Renal Replacement
Therapy with CC/MCC; and
Suggested New MS-DRG XXX--Continuous Renal Replacement
Therapy without CC/MCC.
Renal replacement therapy (RRT) replaces kidney function by
exchanging solute and removing fluid from the blood as a means to
prevent or treat renal failure in patients with acute kidney injury
(AKI). Modalities of renal support include CRRT, conventional
intermittent hemodialysis (IHD), and prolonged intermittent renal
replacement therapies (PIRRTs), which are a hybrid of CRRT and IHD. IHD
provides solute clearance and filtration during relatively brief
treatment sessions, generally lasting from three to five hours. CRRT
provides gradual fluid removal and solute clearance over prolonged
treatment times, typically over a 24-hour period, mimicking the natural
function of the kidney to allow for the continuous removal or
replacement of fluid. The most common CRRT modalities are continuous
venovenous hemofiltration, continuous venovenous hemodialysis, and
continuous venovenous hemodiafiltration.
According to the requestor, CRRT is used primarily to treat
critically ill, hospitalized patients who experience AKI requiring more
intensive and continuous treatment than other dialysis modalities. The
requestor stated that CRRT offers fluid balance and convective
clearance that may be precisely adjusted for each patient, and has been
associated with a higher likelihood of kidney recovery as compared to
other modalities of RRT. The requestor asserted that IHD may worsen the
neurological status of patients with acute brain injury or other causes
of increased intracranial pressure by compromising their cerebral
perfusion by raising intracranial pressure. The ongoing modulation of
fluid balance and targeted fluid management capabilities of CRRT
enables its use in situations other than renal failure. According to
the requestor, CRRT, a slow continuous therapy, is preferred for
patients who are hemodynamically unstable because it helps prevent the
hemodynamic fluctuations common with the more rapid IHD. In light of
the COVID-19 pandemic, the requestor noted the National Institutes of
Health's Coronavirus Disease 2019 (COVID-19) Treatment Guidelines and
The American Society of Nephrology recommend CRRT as the preferred
renal replacement therapy for critically ill, COVID-19 patients
experiencing AKI, who develop indications for renal replacement
therapy, due to the hemodynamic instability often experienced in this
condition.
The requestor acknowledged that under the current MS-DRG
definitions, Medicare cases with beneficiaries receiving CRRT are
assigned to more than 300 MS-DRGs. Although these beneficiaries are
clinically similar in that they are critically ill patients who
experience AKI requiring more intensive and continuous treatment than
other dialysis modalities, the principal diagnoses for their inpatient
stays vary. The requestor stated their analysis of the variability in
principal diagnosis of the cases examined with beneficiaries receiving
CRRT indicated that, in general, IHD tends to be used more for patients
with chronic illnesses, and CRRT tends to be used for more acute
injuries and end of life scenarios. Therefore, the requestor suggested
that CMS create new MS-DRGs specific to CRRT, without regard to
principal diagnosis, in order to group the resource intensive,
clinically coherent, CRRT cases together in contrast to the existing
GROUPER definitions.
According to the requestor, continuing to assign CRRT to existing
MS-DRGs would be clinically inappropriate and remain financially
devastating to providers even when treating the most routine,
uncomplicated CRRT patients. The requestor performed its own data
analysis and stated hospitals lose over $22,000 per CRRT case on
average, even when outliers are considered, which they state is a
shortfall of more than 30 percent. The requestor asserted these losses
create a disincentive for providers to offer CRRT despite its clinical
benefits. The requestor also asserted the magnitude of financial losses
associated with the provision of CRRT at the current level of MS-DRG
payment could force many hospitals to examine the capacity and scope of
their CRRT programs if facilities continue to determine that the
financial burden of treating Medicare beneficiaries with CRRT is more
than the facility can sustain. As COVID-19 continues to strain hospital
resources, the requestor asserts the availability of CRRT should not be
impeded by inadequate MS-DRG payments related to CRRT.
The following ICD-10-PCS procedure code identifies the performance
of CRRT.
[[Page 25129]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.048
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
code 5A1D90Z is currently recognized as a non-O.R. procedure that
affects the MS-DRG to which it is assigned. Our clinical advisors agree
that the principal diagnosis assigned for inpatient admissions where
continuous renal replacement of therapy is utilized can vary. To
examine the impact of the use of CRRT, we examined claims data from the
March 2020 update of the FY 2019 MedPAR file for the top ten MS-DRGs
reporting the use of CRRT. Our findings are reflected in the following
table:
[GRAPHIC] [TIFF OMITTED] TP10MY21.049
[[Page 25130]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.050
As shown in this table, our data findings demonstrate the average
lengths of stay were longer and the average costs were higher for the
cases reporting the use of CRRT when compared to all cases in their
respective MS-DRG. We note that the claims data demonstrate that the
MS-DRG with the largest number of cases reporting CRRT is MS-DRG 871
with 2,912 cases. Of the top 10 MS-DRGs reporting CRRT, the MS-DRG with
the smallest number of cases is MS-DRG 682 with 401 cases. The average
length of stay of this subset of cases ranges from a high of 35.5 days
in MS-DRG 004 to a low of 7.9 days in MS-DRG 871 for cases reporting
the use of CRRT. The average costs of this subset of cases ranges from
a high of $174,085 in MS-DRG 003 to a low of $27,681 in MS-DRG 871 for
cases reporting the use of CRRT.
We also examined claims data from the September 2020 update of the
FY 2020 MedPAR file for the top ten MS-DRGs reporting the use of CRRT.
Our similar findings are reflected in the following table:
[[Page 25131]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.051
As shown in this table, our data findings show that the average
lengths of stay were longer and the average costs were higher for the
cases reporting the use of CRRT when compared to all cases in their
respective MS-DRG. We note that the claims data demonstrate that the
MS-DRG with the largest number of cases reporting CRRT is MS-DRG 871
with 3,023 cases. Of the top 10 MS-DRGs reporting CRRT, the MS-DRG with
the smallest number of cases is MS-DRG 219 with 374 cases. The average
length of stay of this subset of cases ranges from a high of 34.9 days
in MS-DRG 004 to a low of 7.9 days in MS-DRG 871 for cases reporting
the use of CRRT. The average costs of this subset of cases ranges from
a high of $182,952 in MS-DRG 003 to a low of $29,248 in MS-DRG 871 for
cases reporting the use of CRRT.
While the results of the claims analysis indicate that the average
costs and average lengths of stay for cases reporting the use of CRRT
are higher compared to the average costs for all cases in their
assigned MS-DRG, we are unable to ascertain from the claims data the
resource use specifically attributable to CRRT during a hospital stay.
There is large variability in the differences in average costs from MS-
DRG to MS-DRG, indicating there may have been other factors
contributing to the higher costs. When reviewing consumption of
hospital resources for this subset of cases, the claims data clearly
demonstrate the patients typically have a major complication or co-
morbid (MCC) condition reported based on the MS-DRGs assigned. The
claims data also reflects, based on the top ten MS-DRGS, that the
procedure frequently occurs in cases with other procedures with higher
than average resource use such as mechanical ventilation, tracheostomy,
extracorporeal membrane oxygenation (ECMO) and other major
cardiovascular procedures that also may be contributing to the higher
average costs for these cases.
To further examine the variability in cases reporting the use of
CRRT, we also reviewed the claims data to identify the number
(frequency) and types of principal diagnoses that were reported to
determine what factors may also be contributing to the higher average
costs for these cases.
[[Page 25132]]
Our findings for the top 10 principal diagnoses that were reported
within the claims data from the March 2020 update of the FY 2019 MedPAR
file for this subset of cases is shown in the following table:
[GRAPHIC] [TIFF OMITTED] TP10MY21.052
The claims data in this table reflects a wide variance with regard
to the frequency and types of principal diagnoses that were reported
along with the procedure code describing the use of CRRT. We note that
the claims data demonstrate that the diagnosis with the largest number
of cases reporting CRRT is A41.9 (Sepsis, unspecified organism) with
4,226 cases. Of the top 10 principal diagnoses reporting CRRT, the
diagnosis with the smallest number of cases is A41.01 (Sepsis due to
Methicillin susceptible Staphylococcus aureus) with 271 cases. The
average length of stay of this subset of cases ranges from a high of 20
days with a diagnosis of I13.0 (Hypertensive heart and chronic kidney
disease with heart failure and stage 1 through stage 4 chronic kidney
disease, or unspecified chronic kidney disease) to a low of 12.6 days
with a diagnosis of A41.9 (Sepsis, unspecified organism) for cases
reporting the use of CRRT. The average costs of this subset of cases
ranges from a high of $85,557 with a diagnosis of I21.4 (Non-ST
elevation (NSTEMI) myocardial infarction) to a low of $40,908 with a
diagnosis of N17.9 (Acute kidney failure, unspecified) for cases
reporting the use of CRRT.
Our findings for the top 10 principal diagnoses that were reported
within the claims data from the September 2020 update of the FY 2020
MedPAR file for this subset of cases is shown in the following table:
[[Page 25133]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.053
The claims data in this table also reflects a wide variance with
regard to the frequency and types of principal diagnoses that were
reported along with the procedure code describing the use of CRRT. As
shown, the claims data demonstrate that the diagnosis with the largest
number of cases reporting CRRT is A41.9 (Sepsis, unspecified organism)
with 4,128 cases. Of the top 10 principal diagnoses reporting CRRT, the
diagnosis with the smallest number of cases is N17.0 (Acute kidney
failure with tubular necrosis) with 270 cases. The average length of
stay of this subset of cases ranges from a high of 21.4 days with a
diagnosis of U07.1 (COVID-19) to a low of 11.8 days with a diagnosis of
J96.01 (Acute respiratory failure with hypoxia) for cases reporting the
use of CRRT. The average costs of this subset of cases ranges from a
high of $ 86,717 with a diagnosis of I21.4 (Non-ST elevation (NSTEMI)
myocardial infarction) to a low of $ 48,882 with a diagnosis of J96.01
(Acute respiratory failure with hypoxia) for cases reporting the use of
CRRT.
To evaluate the frequency with which the use of CRRT is reported
for different clinical scenarios, we examined claims from the March
2020 update of the FY 2019 MedPAR file across each of the 25 MDCs to
determine the number of cases reporting the use of CRRT. Our findings
are shown in this table.
BILLING CODE 4120-01-P
[[Page 25134]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.054
[[Page 25135]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.055
As shown in the table, the top five MDCs with the largest number of
cases reporting CRRT are MDC 18, with 6,761 cases; MDC 05, with 6,027
cases; MDC 04, with 1,370 cases; MDC 11, with 1,134 cases; and MDC 06,
with 987 cases. The top five MDCs with the highest average costs for
cases reporting the use of CRRT were MDC 13, with average costs of
$131,252; MDC 22, with average costs of $104,749; MDC 17, with average
costs of $95,309; MDC 07, with average costs of $87,272; and MDC 05,
with average costs of $86,024. The claims data indicate that the
average length of stay ranges from a high of 47.3 days in MDC 13 to a
low of 8 days in MDC 14 for cases reporting the use of CRRT across each
of the 25 MDCs.
We also examined claims from the September 2020 update of the FY
2020 MedPAR file across each of the 25 MDCs to determine the number of
cases
[[Page 25136]]
reporting the use of CRRT. Our findings are shown in this table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.056
[[Page 25137]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.057
BILLING CODE 4120-01-C
As shown in the table, the top five MDCs with the largest number of
cases reporting CRRT are MDC 18, with 7,678 cases; MDC 05, with 5,516
cases; MDC
[[Page 25138]]
04, with 2,191 cases; MDC 11, with 1,066 cases; and MDC 06, with 838
cases. The top five MDCs with the highest average costs for cases
reporting the use of CRRT were MDC 22, with average costs of $139,244;
MDC 17, with average costs of $88,182; MDC 05, with average costs of
$87,875; MDC 07, with average costs of $86,894; and MDC 08, with
average costs of $ 77,515. The claims data indicate that the average
length of stay ranges from a high of 26.7 days in MDC 22 to a low of 11
days in MDC 20 for cases reporting the use of CRRT across each of the
25 MDCs.
Our clinical advisors reviewed the clinical issues and the claims
data, and did not support creating new MS-DRGs for CRRT without regard
to principal diagnosis. Our clinical advisors noted that more than one
modality for RRT can be utilized for managing patients with AKI given
the needs of the patient. For example, a patient may initially start on
CRRT when they are hemodynamically unstable, but transition to IHD as
their condition is managed during the admission. While patients
requiring CRRT can be more resource intensive, it would not be
practical to create new MS-DRGs specifically for this subset of
patients given the various clinical presentations for which CRRT may be
utilized, and the variation of costs in their assigned MS-DRGs. We
believe that additional analysis and efforts toward a broader approach
to refining the MS-DRGs for cases of patients requiring renal
replacement therapy would be needed to address the concerns expressed
by the requestor. These data do show cases reporting the use of CRRT
can present greater treatment difficulty. However, when reviewing
consumption of hospital resources for this subset of cases, the claims
data also suggest that the increased costs may be attributable to the
severity of illness of the patient and other circumstances of the
admission.
In summary, the claims data reflect a wide variance with regard to
the frequency and average costs for cases reporting the use of CRRT.
Depending on the number of cases in each MS-DRG, it is difficult to
detect patterns of complexity and resource intensity. We believe the
creation of new MS-DRGs for cases with procedure codes reporting the
use of CRRT has the potential for creating instability in the relative
weights and disrupting the integrity of the MS-DRG system. Therefore,
we are not proposing to create new MS-DRGs for cases reporting the use
of continuous renal replacement therapy.
8. MDC 16 (Diseases and Disorders of Blood, Blood Forming Organs and
Immunologic Disorders)
a. ANDEXXA[supreg] (Coagulation Factor Xa (Recombinant), Inactivated-
zhzo)
ANDEXXA[supreg] (coagulation factor Xa (recombinant), inactivated-
zhzo) is a recombinant decoy protein that rapidly reverses the
anticoagulant effects of two direct oral anticoagulants, apixaban and
rivaroxaban, when reversal of anticoagulation is needed due to life-
threatening or uncontrolled bleeding in indications such as
intracranial hemorrhages (ICHs) and gastrointestinal bleeds (GIBs).
ANDEXXA[supreg] received FDA approval on May 3, 2018. When administered
as a bolus followed by continuous infusion, ANDEXXA[supreg] blocks the
anticoagulants ability to inhibit FXa. ANDEXXA[supreg] was approved for
new technology add on payments in FY 2019 (83 FR 41362). We refer
readers to section II.H.5.j. of the preamble of the FY 2019 IPPS/LTCH
PPS final rule (83 FR 41355 through 41362), and section II.H.4.k. of
the preamble of the FY 2020 IPPS/LTCH PPS final rule (84 FR 42193
through 42194) for a complete discussion of the new technology add on
payment application and payment amount for ANDEXXA[supreg] for FY 2019
and FY 2020.
In section II.H.4.i. of the preamble of the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58614 through 58615), we noted the 3-year anniversary
date of the entry of ANDEXXA[supreg] onto the U.S. market (May 3, 2021)
will occur in the second half of FY 2021. We stated in general, we
extend new technology add-on payments for an additional year only if
the 3-year anniversary date of the product's entry onto the U.S. market
occurs in the latter half of the upcoming fiscal year. After
consideration of the public comments received, we finalized our
proposal to continue new technology add-on payments for this technology
for FY 2021.
We received a request from the manufacturer to review potential
access issues in the inpatient setting for this drug in the future. The
requestor acknowledged that CMS approved the new technology add-on
payment for ANDEXXA[supreg] beginning in FY 2019 and noted that FY 2021
will be the last year before the add-on payments expire. According to
the requestor, ANDEXXA[supreg] is the only indicated factor Xa
inhibitor reversal agent, and the requestor stated a concern for the
future of access to ANDEXXA[supreg] for patients experiencing
uncontrolled bleeds caused by factor Xa inhibitors. The requestor
stated their claims modeling showed a significant drop in hospital
payment for cases involving use of ANDEXXA[supreg] following the
expiration of new technology add-on payments. Specifically, after new
technology add-on payments expire, the requestor stated their model
projects that approximately 59% of cases are likely to be paid less
than the wholesale acquisition costs for ANDEXXA[supreg].
The following ICD-10-PCS procedure codes identify the intravenous
administration of ANDEXXA[supreg].
[GRAPHIC] [TIFF OMITTED] TP10MY21.058
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes XW03372 and XW04372 are designated as non-O.R. procedures for
purposes of MS-DRG assignment. Our clinical advisors agree that the
principal diagnosis assigned for inpatient admissions where the
intravenous administration of ANDEXXA[supreg] is indicated can vary.
To evaluate the frequency with which the intravenous administration
of
[[Page 25139]]
ANDEXXA[supreg] is reported for different clinical scenarios, we
examined claims data from the March 2020 update of the FY 2019 MedPAR
file across the Pre-MDC category, each of the 25 MDCs and the surgical
class referred to as ``unrelated operating room procedures'' to
determine the number of cases reporting the use of ANDEXXA[supreg]. Our
findings are shown in the following table.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP10MY21.059
[[Page 25140]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.060
BILLING CODE 4120-01-C
As shown in the table, there were 461 cases reporting the
intravenous administration of ANDEXXA[supreg] with procedure codes
XW03372 or XW04372. The top five MDCs with the largest number of cases
reporting ANDEXXA[supreg] are MDC 01, with 250 cases; MDC 06 with 53
cases; MDC 05, with 33 cases; MDC 18, with 25 cases; and the Pre-MDC
category, with 16 cases. The claims data indicate that the average
costs range from a high of $107,741 in the Pre-MDC category to a low of
$22,242 in MDC 09 for cases reporting the use of ANDEXXA[supreg] across
the claims data. The claims data also indicates that the average length
of stay ranges from a high of 19.9 days in the Pre-MDC category to a
low of 4 days in MDC 09 for cases reporting the use of ANDEXXA[supreg].
We also examined claims data from the September 2020 update of the
FY 2020 MedPAR file across the Pre-MDC category, each of the 25 MDCs
and the surgical class referred to as ``unrelated operating room
procedures'' to determine the number of cases reporting the use of
ANDEXXA[supreg]. Our findings are shown in the following table.
BILLING CODE 4120-01-P
[[Page 25141]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.061
[[Page 25142]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.062
BILLING CODE 4120-01-C
As shown in the table, there were 719 cases reporting the
intravenous administration of ANDEXXA[supreg] with procedure codes
XW03372 or XW04372. The top five MDCs with the largest number of cases
reporting ANDEXXA[supreg] are MDC 01, with 364 cases; MDC 06 with 98
cases; MDC 18, with 52 cases; MDC 05, with 50 cases; and MDC 24, with
30 cases. The claims data indicate that the average costs range from a
high
[[Page 25143]]
of $123,750 in the Pre-MDC category to a low of $27,922 in MDC 09 for
cases reporting the use of ANDEXXA[supreg] across the claims data. The
claims data also indicates that the average length of stay ranges from
a high of 25 days in the Pre-MDC category to a low of 4.2 days in MDC
21 for cases reporting the use of ANDEXXA[supreg] across the claims
data.
To further examine the impact of the intravenous administration of
ANDEXXA[supreg], we examined claims data from the March 2020 update of
the FY 2019 MedPAR file for the top ten MS-DRGs reporting procedure
codes XW03372 or XW04372. Our findings are reflected in the following
table:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP10MY21.063
[[Page 25144]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.064
BILLING CODE 4120-01-C
As shown in this table, the claims data demonstrate that the MS-DRG
with the largest number of cases reporting ANDEXXA[supreg] is MS-DRG
064 with 78 cases. Of the top 10 MS-DRGs reporting ANDEXXA[supreg], the
MS-DRG with the smallest number of cases is MS-DRG 003 with 13 cases.
The average length of stay of this subset of cases ranges from a high
of 21.5 days in MS-DRG 003 to a low of 4.2 days in MS-DRG 086 for cases
reporting the use of ANDEXXA[supreg]. The average costs of this subset
of cases ranges from a high of $117,265 in MS-DRG 003 to a low of
$26,992 in MS-DRG 083 for cases reporting the use of ANDEXXA[supreg].
We note while our data findings demonstrate the average costs were
higher for the cases reporting the intravenous administration of
ANDEXXA[supreg] when compared to all cases in their respective MS-DRG,
these cases represent a very small percentage of the total number of
cases reported in these MS-DRGs. We also note that the top 10 MS-DRGs
identified only account for 239 of the 461 cases in total that were
identified in the March 2020 update of the FY 2019 MedPAR file
reporting ICD-10-PCS codes XW03372 or XW04372. The remainder of the
cases are distributed in small numbers across the MS-DRGs.
We also examined claims data from the September 2020 update of the
FY 2020 MedPAR file for the top ten MS-DRGs reporting procedure codes
XW03372 or XW04372. Our findings are reflected in the following table:
BILLING CODE 4120-01-P
[[Page 25145]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.065
BILLING CODE 4120-01-C
As shown in this table, the claims data demonstrate that the MS-DRG
with the largest number of cases reporting ANDEXXA[supreg] is MS-DRG
064 with 111 cases. Of the top 10 MS-DRGs reporting ANDEXXA[supreg],
the MS-DRG with the smallest number of cases is MS-DRG 083 with 23
cases. The average length of stay of this subset of cases ranges from a
high of 10 days in MS-DRG 023 to a low of 3.5 days in MS-DRG 378 for
cases reporting the use of ANDEXXA[supreg]. The average costs of this
subset of cases ranges from a high of $59,478 in MS-DRG 025 to a low of
$24,348 in MS-DRG 378 for cases reporting the use of ANDEXXA[supreg].
As with our analysis of the
[[Page 25146]]
FY 2019 claims data, while these data findings demonstrate the average
costs were higher for the cases reporting the intravenous
administration of ANDEXXA[supreg] when compared to all cases in their
respective MS-DRG, these cases represent a very small percentage of the
total number of cases reported in these MS-DRGs. We also note that the
top 10 MS-DRGs identified only account for 385 of the 719 cases in
total that were identified in the September 2020 update of the FY 2020
MedPAR file reporting ICD-10-PCS codes XW03372 or XW04372. The
remainder of the cases are distributed in small numbers across the MS-
DRGs.
After reviewing the claims data, we believe it is premature to
consider a proposal for cases involving ANDEXXA[supreg] therapy for FY
2022. While the March 2020 update of the FY 2019 MedPAR file and the
September 2020 update of the FY 2020 MedPAR file do contain claims
reporting the procedure codes identifying the intravenous
administration of ANDEXXA[supreg], the number of cases is small across
the MDCs and MS-DRGs. The claims data also reflect a wide variance with
regard to the frequency and average costs for these cases reporting the
use of ANDEXXA[supreg]. Moreover, we were unable to identify another
MS-DRG that would be a more appropriate MS-DRG assignment for these
cases based on the indication for this therapeutic drug. As noted
previously, ANDEXXA[supreg] reverses the anticoagulant effects of
apixaban and rivaroxaban, when reversal of anticoagulation is needed
due to life-threatening or uncontrolled bleeding. The underlying cause
of the life-threatening or uncontrolled bleeding can vary which means
the principal diagnosis assigned for inpatient admissions where
ANDEXXA[supreg] is administered can vary. The MS-DRGs are a
classification system intended to group together diagnoses and
procedures with similar clinical characteristics and utilization of
resources. We generally seek to identify sufficiently large sets of
claims data with a resource/cost similarity and clinical similarity in
developing diagnostic-related groups rather than smaller subsets based
on the drugs administered. In reviewing this issue, our clinical
advisors expressed concern regarding making potential MS-DRG changes
based on a specific, single therapeutic agent, identified by unique
procedure codes rather than based on a group of related procedure codes
that can be reported to describe that same type or class of treatment
or technology, which is more consistent with the intent of the MS-DRGs.
We recognize the average costs of the small numbers of cases
involving the intravenous administration of ANDEXXA[supreg] are greater
when compared to the average costs of all cases in their respective MS-
DRG. The MS-DRG system is a system of averages and it is expected that
within the diagnostic related groups, some cases may demonstrate higher
than average costs, while other cases may demonstrate lower than
average costs. We further note that section 1886(d)(5)(A) of the Act
provides for Medicare payments to Medicare-participating hospitals in
addition to the basic prospective payments for cases incurring
extraordinarily high costs.
We acknowledge the importance of ensuring that patients diagnosed
with an indication for a factor Xa inhibitor reversal agent have
adequate access to care and receive the necessary treatment. While we
are sensitive to the requestors' concerns about continued access to
treatment for beneficiaries who require the reversal of anticoagulation
due to life-threatening or uncontrolled bleeding, additional time is
needed to explore options and other mechanisms through which to address
low volume high-cost drugs outside of the MS-DRGs.
Furthermore, we note that we are proposing to continue new
technology add-on payments for ANDEXXA[supreg] for FY 2022. We refer
the reader to section II.F.4.b of the preamble of this proposed rule
for further discussion regarding our proposal to allow a one-time
extension of new technology add-on payments for FY 2022 for 15
technologies for which the new technology add-on payment would
otherwise be discontinued, in connection with our proposal to use the
FY 2019 data to develop the proposed FY 2022 relative weights.
Therefore for the reasons stated previously, for FY 2022 we are not
proposing any MS-DRG changes for cases involving the intravenous
administration of ANDEXXA[supreg].
b. Cytokine Release Syndrome (CRS) Logic
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58557 through
58561), we finalized modifications to the proposed severity level
designations for a subset of the diagnosis codes describing Cytokine
Release Syndrome (CRS) based upon further review of the conditions and
in response to public comments. We provided the following table to
display the finalized severity level designations and stated that we
will continue to monitor the CRS codes and their impact on resource use
once the claims data becomes available to determine if further
modifications to the severity level are warranted.
[GRAPHIC] [TIFF OMITTED] TP10MY21.066
In connection with the finalized severity level designations for
the listed CRS codes, we also finalized modifications to the ICD-10 MS-
DRG GROUPER logic V38 for MS-DRGs 814, 815, and 816
(Reticuloendothelial and Immunity Disorders with MCC, with CC, and
without CC/MCC, respectively) to conform to the updates the CDC
finalized in the ICD-10-CM Tabular List instructions for assigning and
reporting the CRS codes effective with discharges on and after October
1, 2020. The following modifications to the GROUPER logic were
finalized effective with discharges on and after October 1, 2020, for
case assignment involving CRS following CAR T-cell therapy to MS-
[[Page 25147]]
DRGs 814, 815, and 816. We noted that the GROUPER logic for MS-DRGs
814, 815, and 816 will include a principal diagnosis of T89.89XA with a
secondary diagnosis of any CRS code as shown in this section of this
proposed rule.
Principal Diagnosis
T80.89XA Other complications following infusion, transfusion and
therapeutic injection, initial encounter
with
Secondary Diagnosis
D89.831 Cytokine release syndrome, grade 1
D89.832 Cytokine release syndrome, grade 2
D89.833 Cytokine release syndrome, grade 3
D89.834 Cytokine release syndrome, grade 4
D89.835 Cytokine release syndrome, grade 5
D89.839 Cytokine release syndrome, grade unspecified
As discussed in section II.D.13 of the preamble of this proposed
rule, Table 6A.-New Diagnosis Codes, lists the new diagnosis codes that
have been approved to date and will be effective with discharges on and
after October 1, 2021. Included in Table 6A are the following codes
that describe complication of immune effector cellular therapy
identifying the timeframe of the encounter.
[GRAPHIC] [TIFF OMITTED] TP10MY21.067
Also included in Table 6A are the following diagnosis codes that
describe immune effector cell-associated neurotoxicity syndrome
(ICANS), with varying degrees of severity.
[GRAPHIC] [TIFF OMITTED] TP10MY21.068
Consistent with the Tabular List instruction for these two sets of
diagnosis codes as presented and discussed by the CDC at the September
8-9, 2020 ICD-10 Coordination and Maintenance Committee meeting, the
diagnosis codes describing a complication of the immune effector
cellular therapy (T80.82XA, T80.82XD, and T80.82XS) are to be sequenced
first, followed by the applicable diagnosis code to identify the
specified condition resulting from the complication. For example, the
types of complications that may result from immune effector cellular
therapy treatment (for example, CAR T-cell therapy) include ICANS or
CRS, as described by the listed diagnosis codes. Accordingly, the CDC
included the following instructional note in the Tabular List
modifications for code T80.82-
``Use additional code to identify the specific complication, such
as:
cytokine release syndrome (D89.83-) immune effector cell-associated
neurotoxicity syndrome (G92.0-)''
Materials relating to the discussions involving the diagnosis codes
from the September 8-9, 2020 ICD-10 Coordination and Maintenance
Committee meeting can be obtained from the CDC website at: https://www.cdc.gov/nchs/icd/icd10cm_maintenance.htm.
As noted previously, the current logic for case assignment
involving CRS following CAR T-cell therapy to MS-DRGs 814, 815, and 816
includes a principal diagnosis of T89.89XA with a secondary diagnosis
of any CRS code. However, with the finalization of new diagnosis code
T80.82-, diagnosis code T89.89XA would no longer be reported and these
cases would instead report new diagnosis code T80.82XA, effective with
discharges on and after October 1, 2020. As shown in Table 6A
associated with this proposed rule, we are proposing to assign
diagnosis code T80.82XA to MDC 16 (Diseases and Disorders of Blood,
Blood Forming Organs, and Immunologic Disorders) in MS-DRGs 814, 815,
and 816. If the MDC and MS-DRG assignment for new diagnosis code
T80.82XA is finalized, the current logic for MS-DRGs 814, 815, and 816
that includes a principal diagnosis code of T89.89XA with a secondary
diagnosis code of any CRS code would no longer be appropriate or
necessary.
Therefore, we are proposing to revise the structure of MS-DRGs 814,
815, and 816 by removing the logic that includes a principal diagnosis
of T89.89XA with a secondary diagnosis of any CRS code from MS-DRGs
814, 815, and 816 effective FY 2022.
9. MDC 17 (Myeloproliferative Diseases and Disorders, and Poorly
Differentiated Neoplasms): Inferior Vena Cava Filter Procedures
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58517 through
58520), we
[[Page 25148]]
discussed the ICD-10-PCS codes that describe the insertion of an
intraluminal device into the inferior vena cava that are listed in the
following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.069
We finalized a change in the designation of ICD-10-PCS procedure
code 06H03DZ from O.R. procedure to non-O.R. procedure and maintained
the O.R. designation of procedure codes 06H00DZ and 06H04DZ. In that
discussion, we noted our clinical advisors supported changing the O.R.
designation of procedures describing insertion of an intraluminal
device into the inferior vena cava performed via a percutaneous
approach since the procedure does not require the resources of an
operating room, while concurring that procedures describing the
insertion of an intraluminal device into the inferior vena cava
performed via an open or a percutaneous endoscopic approach could
require greater resources than a procedure describing insertion of an
intraluminal device into the inferior vena cava performed via a
percutaneous approach. We also noted that the goals of changing the
designation of procedures from non-O.R. to O.R., or vice versa, are to
better clinically represent the resources involved in caring for these
patients and to enhance the overall accuracy of the system and not
whether the change in designation would impact payment in a particular
direction.
In response to this final policy, for this FY 2022 IPPS/LTCH PPS
proposed rule, we received a request to revise MS-DRGs 829 and 830
(Myeloproliferative Disorders or Poorly Differentiated Neoplasms with
Other Procedures with and without CC/MCC, respectively) by removing the
current two-way severity level split and creating a three-way severity
level split. The requestor respectfully disagreed with the FY 2021
IPPS/LTCH PPS final rule decision to change the designation of the
procedure code describing the insertion of an inferior vena cava
intraluminal device via percutaneous approach to a non-O.R. procedure,
and stated vena cava filters are most often placed in interventional
radiology suites and require a high level of skill to prevent rupture
of the vena cava; and although they are long-term devices, they must be
placed skillfully to allow for removal later if needed.
According to the requestor, it is a conundrum that patients with
principal and secondary diagnoses that qualify for medical MS-DRGs 837
(Chemotherapy with Acute Leukemia as Secondary Diagnosis or with High
Dose Chemotherapy Agent with MCC), MS-DRG 838 (Chemotherapy with Acute
Leukemia as Secondary Diagnosis with CC or High Dose Chemotherapy
Agent), and MS-DRG 839 (Chemotherapy with Acute Leukemia as Secondary
Diagnosis without CC/MCC) group to lower weighted surgical MS-DRGs 829
and 830 (Myeloproliferative Disorders or Poorly Differentiated
Neoplasms with Other Procedures with and without CC/MCC, respectively)
when a non-major O.R. procedure is performed. The requestor stated the
difference in relative weights might be occurring because of the two-
way split within MS-DRGs 829 and 830 and the three-way split within MS-
DRGs 837, 838 and 839. The requestor theorized that removing the
current two-way severity level split of MS-DRGs 829 and 830 and
creating a three-way severity level split could help resolve the
relative weight discrepancy when any non-major O.R. procedures are
performed during hospitalizations for chemotherapy for acute leukemia.
This requestor also suggested that if CMS' analysis did not support
creating a three-way split for MS-DRGs 829 and 830, exclusion of PCS
code 06H03DZ from the list of qualifying procedures and reinstatement
of O.R. procedure status to appropriately compensate providers for the
cost of devices and resources to place inferior vena cava filters
across the patient population should be proposed.
To evaluate the request to create a three-way severity split MS-DRG
for cases reporting myeloproliferative disorders or poorly
differentiated neoplasms with other procedures, we conducted an
analysis of base MS-DRG 829. This analysis includes 2 years of MedPAR
claims data to compare the data results from 1 year to the next to
avoid making determinations about whether additional severity levels
are warranted based on an isolated year's data fluctuation and also, to
validate that the established severity levels within a base MS-DRG are
supported.
Therefore, we reviewed the claims data for base MS-DRG 829 using
the September 2018 update of the FY 2018 MedPAR file and the March 2020
update of the FY 2019 MedPAR file, which were used in our analysis of
claims data for MS-DRG reclassification requests for FY 2020 and FY
2022, respectively. Our findings are shown in the table:
[[Page 25149]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.070
We applied the criteria to create subgroups for the three-way
severity level split. We found that the criterion that there be at
least 500 cases for each subgroup was not met based on the data in both
the FY 2018 and FY 2019 MedPAR files, as shown in the table for both
years. Specifically, for the ``with MCC'', ``with CC'', and ``without
CC/MCC'' split, there were only 333 cases in the ``without CC/MCC''
subgroup based on the data in the FY 2019 MedPAR file and only 333
cases in the ``without CC/MCC'' subgroup based on the data in the FY
2018 MedPAR file. Accordingly, the claims data do not support a three-
way severity level split for base MS-DRG 829.
We also reviewed the claims data for base MS-DRG 829 using the
September 2019 update of the FY 2019 MedPAR file and the September 2020
update of the FY 2020 MedPAR file, which were used in our analysis of
claims data for MS-DRG reclassification requests for FY 2021 and FY
2022, respectively. Our findings are shown in the table:
[GRAPHIC] [TIFF OMITTED] TP10MY21.071
We applied the criteria to create subgroups for the three-way
severity level split. We found that the criterion that there be at
least 500 cases for each subgroup was not met based on the data in both
the FY 2019 and FY 2020 MedPAR files, as shown in the table for both
years. Specifically, for the ``with MCC'', ``with CC'', and ``without
CC/MCC'' split, there were only 303 cases in the ``without CC/MCC''
subgroup based on the data in the FY 2020 MedPAR file and, as
previously noted, only 333 cases in the ``without CC/MCC'' subgroup
based on the data in the FY 2019 MedPAR file. As shown in both sets of
data and stated previously, the claims data do not support a three-way
severity level split for base MS-DRG 829.
In response to the request to exclude ICD-10-PCS code 06H03DZ from
a list of qualifying procedures if CMS's analysis did not support
creating a three-way split for MS-DRGs 829 and 830, by definition,
procedure codes designated as non-O.R. procedures, not further
classified as ``affecting the MS-DRG assignment'', do not influence the
MS-DRG assignment. As stated previously, in the FY 2021 IPPS/LTCH PPS
final rule we finalized our proposal to change the designation of ICD-
10-PCS procedure code 06H03DZ from O.R. procedure to non-O.R.
procedure, therefore as a non-O.R. procedure, there is no need to
exclude ICD-10-PCS code 06H03DZ from a list of qualifying procedure
codes for MS-DRGs 829 and 830.
In response to the request to reinstate the O.R. procedure
designation of ICD-10-PCS code 06H03DZ if CMS's analysis did not
support creating a three-way split for MS-DRGs 829 and 830, the change
in designation from O.R. procedure to non-O.R. procedure is recent,
only becoming effective October 1, 2020. Our clinical advisors continue
to indicate that code 06H03DZ, describing the percutaneous insertion of
an intraluminal device into the inferior vena cava, does not require
the resources of an operating room, that the procedure to insert an IVC
filter percutaneously is not surgical in nature and that the resources
involved in furnishing this procedure are comparable to the related
ICD-10-PCS procedure codes that describe the insertion of infusion
devices into the inferior vena cava that are currently designated as
non-O.R. procedures. Our clinical advisors state our FY 2021 final
policy results in an O.R. designation of 06H03DZ that better reflects
the associated technical complexity and hospital resource use of this
procedure. We continue to explore alternatives on how we may
restructure the current O.R. and non-O.R. designations for procedures
by leveraging the detail that is now available in the ICD-10 claims
data, as discussed in the FY 2021 IPPS/LTCH PPS final rule and in
section II.D.11. of the preamble of this proposed rule. We continue to
develop our process and methodology, and will provide more detail in
future rulemaking.
In summary, based on the results of our analysis, for FY 2022, we
are proposing to maintain the current structure of MS-DRGs 829 and 830.
10. Review of Procedure Codes in MS-DRGs 981 Through 983 and 987
Through 989
We annually conduct a review of procedures producing assignment to
MS-DRGs 981 through 983 (Extensive O.R. Procedure Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) or MS-DRGs 987 through 989 (Non-Extensive O.R. Procedure
Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) on the basis of volume, by procedure, to see if it would
be appropriate to move cases reporting these procedure codes out of
these MS-DRGs into one of the surgical MS-DRGs for the MDC into which
the principal diagnosis falls. The data are arrayed in two ways for
comparison purposes. We look at a frequency count of each major
operative procedure code. We also compare procedures across MDCs by
volume of procedure codes within each MDC. We use this information to
determine which procedure codes and diagnosis codes to examine.
We identify those procedures occurring in conjunction with certain
principal diagnoses with sufficient frequency to justify adding them to
one of the surgical MS-DRGs for the MDC in which the diagnosis falls.
We also consider whether it would be more appropriate to move the
principal diagnosis codes into the MDC to which the procedure is
currently assigned.
In addition to this internal review, we also consider requests that
we receive to examine cases found to group to MS-DRGs 981 through 983
or MS-DRGs 987 through 989 to determine if it would be appropriate to
add procedure codes to one of the surgical MS DRGs for the MDC into
which the principal diagnosis falls or to move the principal diagnosis
to the surgical MS DRGs to which the procedure codes are assigned.
[[Page 25150]]
Based on the results of our review of the claims data from the
March 2020 update of the FY 2019 MedPAR file and the September 2020
update of the FY 2020 MedPAR file, as well as our review of the
requests that we received to examine cases found to group to MS-DRGs
981 through 983 or MS-DRGs 987 through 989, we are proposing to move
the cases reporting the procedures and/or principal diagnosis codes
described in this section of this rule from MS-DRGs 981 through 983 or
MS-DRGs 987 through 989 into one of the surgical MS-DRGs for the MDC
into which the principal diagnosis or procedure is assigned.
As discussed in section II.D.3.b. of the preamble of this proposed
rule, we received a request to reassign cases with procedures
describing control of bleeding in the cranial cavity when reported with
a central nervous system diagnosis from MS-DRGs 981, 982, and 983
(Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) to MDC 01 (Diseases and
Disorders of the Central Nervous System) in MS-DRGs 25, 26, and 27
(Craniotomy and Endovascular Intracranial Procedures with MCC, with CC,
and without CC/MCC, respectively (for example, ``craniotomy'' MS-DRGs).
We note that in addition to MS-DRGs 25, 26, and 27, MS-DRG 23
(Craniotomy with Major Device Implant or Acute Complex CNS Principal
Diagnosis with MCC or Chemotherapy Implant or Epilepsy with
Neurostimulator) and MS-DRG 24 (Craniotomy with Major Device Implant or
Acute Complex CNS Principal Diagnosis without MCC) also include
procedures performed on structures located within the cranial cavity
and are included in the range of MS-DRGs known as the ``craniotomy''
MS-DRGs in MDC 01.
The management and treatment for bleeding (or hemorrhage) within
the cranial cavity varies depending on the location, cause and the
severity (or extent) of the bleed. Common causes include head trauma or
cerebral aneurysm. Control of bleeding in the cranial cavity procedures
are identified by ICD-10-PCS procedure codes 0W310ZZ (Control bleeding
in cranial cavity, open approach), 0W313ZZ (Control bleeding in cranial
cavity, percutaneous approach) and 0W314ZZ (Control bleeding in cranial
cavity, percutaneous endoscopic approach) and are currently assigned to
the following MDCs and MS-DRGs.
BILLING CODE 4120-01-P
[[Page 25151]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.072
BILLING CODE 4120-01-C
According to the requestor, procedures performed within the cranial
cavity always involve drilling or cutting through the skull regardless
of the
[[Page 25152]]
approach, therefore the three procedure codes identified (0W310ZZ,
0W313ZZ, and 0W314ZZ) warrant assignment to the ``craniotomy'' MS-DRGs.
Our analysis of this grouping issue confirmed that when a procedure
describing control of bleeding in the cranial cavity is reported with a
principal diagnosis from MDC 01, these cases group to MS-DRGs 981, 982,
and 983. Whenever there is a surgical procedure reported on the claim
that is unrelated to the MDC to which the case was assigned based on
the principal diagnosis, it results in a MS-DRG assignment to a
surgical class referred to as ``unrelated operating room procedures''.
We examined claims data from the March 2020 update of the FY 2019
MedPAR file and the September 2020 update of the FY 2020 MedPAR file
for cases reporting any one of the three procedure codes (0W310ZZ,
0W313ZZ or 0W314ZZ) in MS-DRGs 981 through 983 with a principal
diagnosis from MDC 01. Our findings are shown in the following tables.
[GRAPHIC] [TIFF OMITTED] TP10MY21.074
[GRAPHIC] [TIFF OMITTED] TP10MY21.075
As noted previously, the requestor asked that we consider
reassignment of these cases to the craniotomy MS-DRGs (identified as
MS-DRGs 23, 24, 25, 26, and 27). We therefore examined the data for all
cases in MS-DRGs 23, 24, 25, 26, and 27. Our findings are shown in the
following tables.
[[Page 25153]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.076
[GRAPHIC] [TIFF OMITTED] TP10MY21.077
As shown, in our analyses of the claims data for MS-DRGs 981
through 983, we found a total of ten cases reporting procedures
describing control of bleeding in cranial cavity with a principal
diagnosis from MDC 01 in the March 2020 update of the FY 2019 MedPAR
file, and a total of two cases reporting procedures describing control
of bleeding in cranial cavity with a principal diagnosis from MDC 01 in
the September 2020 update of the FY 2020 MedPAR file.
Our clinical advisors stated these procedures describing control of
bleeding in the cranial cavity are consistent with the existing
procedure codes included in the logic for case assignment to MS-DRGs
25, 26, and 27, in addition to MS-DRG 23 (Craniotomy with Major Device
Implant or Acute Complex CNS Principal Diagnosis with MCC or
Chemotherapy Implant or Epilepsy with Neurostimulator) and MS-DRG 24
(Craniotomy with Major Device Implant or Acute Complex CNS Principal
Diagnosis without MCC) that also describe procedures performed on
structures located within the cranial cavity and are included in the
range of MS-DRGs known as the ``craniotomy'' MS-DRGs. While the claims
analysis based on the March 2020 update of the FY 2019 MedPAR file
identified only ten cases and the September 2020 update of the FY 2020
MedPAR file identified only two cases for which these procedures were
reported as a stand-alone procedure resulting in assignment to MS-DRGs
981 through 983, and the average length of stay and average costs for
these cases vary in comparison to the average length of stay and
average costs of all cases in MS-DRGs 23, 24, 25, 26, and 27, given the
nature of head trauma cases, the resource use would be expected to vary
based on the extent of the patient's injuries. We believe it is
clinically appropriate to add these procedure codes describing control
of bleeding in the cranial cavity to MS-DRGs 23, 24, 25, 26, and 27 in
MDC 01.
Therefore, we are proposing to add procedure codes 0W310ZZ,
0W313ZZ, and 0W314ZZ to MDC 01 in MS-DRGs 23, 24, 25, 26, and 27
(``craniotomy'' MS-DRGs) for FY 2022.
We also review the list of ICD-10-PCS procedures that, when in
combination with their principal diagnosis code, result in assignment
to MS-DRGs 981 through 983, or 987 through 989, to ascertain whether
any of those procedures should be reassigned from one of those two
groups of MS-DRGs to the other group of MS-DRGs based on average costs
and the length of stay. We look at the data for trends such as shifts
in treatment practice or reporting practice that would make the
resulting MS-DRG assignment illogical. If we find these shifts, we
would propose to move cases to keep the MS-DRGs clinically similar or
to provide payment for the cases in a similar manner.
In addition to this internal review, we also consider requests that
we receive to examine cases found to group to MS-DRGs 981 through 983
or MS-DRGs 987 through 989 to determine if it would be appropriate for
the cases to be reassigned from one of the MS-DRG groups to the other.
Based on the results of our review of the claims data from the
March 2020 update of the FY 2019 MedPAR file and the September 2020
update of the FY 2020 MedPAR file, as well as our review of the
requests that we received to examine cases found to group to MS-DRGs
981 through 983 or MS-DRGs 987 through 989, we are proposing to move
the cases reporting the procedures codes described in this section of
this rule from MS-DRGs 981 through 983 to MS-DRGs 987 through 989.
[[Page 25154]]
As discussed in section II.D.3.a. of the preamble of this proposed
rule, we received a request that we understood to be for our
consideration of the reassignment of the following three procedure
codes from Extensive O.R. procedures to Non-extensive O.R. procedures.
[GRAPHIC] [TIFF OMITTED] TP10MY21.078
In conducting our review of this request, our clinical advisors
noted that ICD-10-PCS codes 0JB60ZZ, 0JB70ZZ, and 0JB80ZZ currently
group to MS-DRGs 981 through 983 when reported with a principal
diagnosis that is not assigned to one of the MDCs to which these
procedure codes are assigned. While our claims analysis of both the
March 2020 update of the FY 2019 MedPAR file and the September 2020
update of the FY 2020 MedPAR file did not identify any cases reporting
any one of the three listed procedure codes in MS-DRGs 981, 982, or
983, our clinical advisors believe that these procedures would be more
appropriately designated as Non-extensive procedures because they are
more consistent with other procedures on the Non-extensive procedure
code list. They stated that these procedures do not consume the
resources or require a similar level of technical complexity as the
procedures on the Extensive O.R. procedures list.
Therefore, we are proposing to reassign the three procedure codes
listed from MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure
Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC,
respectively) to MS-DRGs 987, 988, and 989 (Non-Extensive Procedure
Unrelated to Principal Diagnosis with MCC, with CC, without CC/MCC,
respectively) for FY 2022.
As discussed in section II.D.4.b. of the preamble of this proposed
rule, we identified 17 procedure codes describing laser interstitial
thermal therapy (LITT) that are currently designated as extensive O.R.
procedures. In addition to those 17 procedure codes, we identified
additional procedure codes describing LITT of various body parts that
are also designated as extensive O.R. procedures. The ICD-10-PCS codes
describing LITT of various body parts are as follows.
[[Page 25155]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.079
Whenever one of these listed procedure codes is reported on a claim
that is unrelated to the MDC to which the case was assigned based on
the principal diagnosis, it currently results in assignment to MS-DRGs
981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal
Diagnosis with MCC, with CC, without CC/MCC, respectively). Our
clinical advisors stated that all of the listed procedure codes warrant
redesignation from the extensive procedure list and MS-DRGs 981, 982,
and 983 to the non-extensive procedure list and to MS-DRGs 987, 988,
and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with
MCC, with CC, without CC/MCC, respectively). Specifically, our clinical
advisors stated the procedures described by these codes are minimally
invasive and are consistent with other ablation (root operation
Destruction) type procedures that are designated as non-extensive
procedures in the ICD-10-PCS classification.
In our analysis of claims from the March 2020 update of the FY 2019
MedPAR file, we identified a total of six cases reporting procedure
codes describing LITT of various body sites in MS-DRGs 981, 982, and
983 with an average length of stay of 2.5 days and average costs of
$7,734. Specifically, we found one case reporting procedure code
DVY0KZZ (Laser interstitial thermal therapy of prostate) in MS-DRG 981
with an average length of stay of 4.0 days and average costs of $7,348.
For MS-DRG 982, we found five cases in which procedure codes describing
LITT of various body sites were reported. The first case reported
procedure code D0Y0KZZ (Laser interstitial thermal therapy of brain)
with an average length of stay of 1.0 day and average costs of $4,142,
the second case reported procedure code D0Y6KZZ (Laser interstitial
thermal therapy of spinal cord) with an average length of stay of 3.0
days and average costs of $20,007, the third case reported procedure
code DDY1KZZ (Laser interstitial thermal therapy of stomach) with an
average length of stay of 2.0 days and average costs of $3,424, the
fourth case reported procedure code DDY7KZZ (Laser interstitial thermal
therapy of rectum) with an average length of stay of 3.0 days and
average costs of $3,735, and
[[Page 25156]]
the fifth case reported procedure code DVY0KZZ (Laser interstitial
thermal therapy of prostate) with an average length of stay of 2.0 days
and average costs of $7,750. There were no cases found to report
procedures describing LITT in MS-DRG 983. Our findings are summarized
in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.081
In our analysis of claims from the September 2020 update of the FY
2020 MedPAR file, we identified one case reporting procedure code
D0Y6KZZ (Laser interstitial thermal therapy of spinal cord) with an
average length of stay of 6 days and average costs of $5,130, and two
cases reporting procedure code DVY0KZZ (Laser interstitial thermal
therapy of prostate) with an average length of stay of 8.5 days and
average costs of $20,329 in MS-DRGs 981, 982, or 983. Although our
claims analysis identified a limited number of cases reporting
procedures describing LITT, our clinical advisors believe that these
procedures would be more appropriately designated as Non-extensive
procedures because they are more consistent with other procedures on
the Non-extensive procedure code list.
Therefore, we are proposing to reassign the listed procedure codes
describing LITT of various body parts from MS-DRGs 981, 982, and 983
(Extensive O.R. Procedures Unrelated to Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) to MS-DRGs 987, 988, and 989
(Non-extensive O.R. Procedures Unrelated to Principal Diagnosis with
MCC, with CC, and without CC/MCC, respectively) for FY 2022.
As also discussed in section II.D.4.b. of the preamble of this
proposed rule, we identified five procedure codes describing repair of
the esophagus that are currently designated as extensive O.R.
procedures. The procedure codes are 0DQ50ZZ (Repair esophagus, open
approach), 0DQ53ZZ (Repair esophagus, percutaneous approach), 0DQ54ZZ
(Repair esophagus, percutaneous endoscopic approach), 0DQ57ZZ (Repair
esophagus, via natural or artificial opening), and 0DQ58ZZ (Repair
esophagus, via natural or artificial opening endoscopic). Whenever one
of these five procedure codes is reported on a claim that is unrelated
to the MDC to which the case was assigned based on the principal
diagnosis, it currently results in assignment to MS-DRGs 981, 982, and
983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with
MCC, with CC, without CC/MCC, respectively). Our clinical advisors
stated that three of these five procedures warrant redesignation from
the extensive procedure list and MS-DRGs 981, 982, and 983 to the non-
extensive procedure list and to MS-DRGs 987, 988, and 989 (Non-
Extensive Procedure Unrelated to Principal Diagnosis with MCC, with CC,
without CC/MCC, respectively). Specifically, our clinical advisors
stated the procedures identified by procedure codes 0DQ53ZZ, 0DQ57ZZ,
and 0DQ58ZZ do not involve the same utilization of resources with
respect to the performance of the procedure in comparison to the
procedures identified by procedure codes 0DQ50ZZ and 0DQ540ZZ. In our
analysis of claims from the March 2020 update of the FY 2019 MedPAR
file, we identified three cases reporting procedure code 0DQ58ZZ in MS-
DRGs 981, 982, and 983 with an average length of stay of 14 days and
average costs of $34,894. In our analysis of claims from the September
2020 update of the FY 2020 MedPAR file, we identified two cases
reporting procedure code 0DQ58ZZ in MS-DRGs 981, 982, or 983 with an
average length of stay of 8 days and average costs of $12,037. Our
clinical advisors believe that these procedures would be more
appropriately designated as Non-extensive procedures because they are
more consistent with other procedures on the Non-extensive procedure
code list. Therefore, we are proposing to reassign these three
procedure codes (0DQ53ZZ, 0DQ57ZZ, and 0DQ58ZZ) from MS-DRGs 981, 982,
and 983 (Extensive O.R. Procedures Unrelated to Principal Diagnosis
with MCC, with CC, and without CC/MCC, respectively) to MS-DRGs 987,
988, and 989 (Non-extensive O.R. Procedures Unrelated to Principal
Diagnosis with MCC, with CC, and without CC/MCC, respectively) for FY
2022.
As discussed in section II.D.11.c.24. of the preamble of this
proposed rule, we identified procedure code 0T9D0ZZ (Drainage of
urethra, open approach) during our review of procedure code 0U9L0ZZ
(Drainage of vestibular gland, open approach), which is currently
designated as a non-O.R. procedure. We noted that the procedure
described by procedure code 0T9D0ZZ represents the male equivalent of
the female procedure described by procedure code 0U9L0ZZ. Procedure
code 0T9D0ZZ is currently designated as an extensive O.R. procedure and
is reported to describe procedures performed on the Cowper's
(bulbourethral) gland in males. Whenever this procedure code is
reported on a claim that is unrelated to the MDC to which the case was
assigned based on the principal diagnosis, it currently results in
assignment to MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure
Unrelated to Principal
[[Page 25157]]
Diagnosis with MCC, with CC, without CC/MCC, respectively).
Our clinical advisors stated that this procedure warrants
redesignation from the extensive procedure list and MS-DRGs 981, 982,
and 983 to the non-extensive procedure list and to MS-DRGs 987, 988,
and 989 (Non-Extensive Procedure Unrelated to Principal Diagnosis with
MCC, with CC, without CC/MCC, respectively). Specifically, our clinical
advisors stated that the procedure described by procedure code 0T9D0ZZ
continues to warrant an O.R. designation because it is performed on
deeper structures and requires a higher level of technical skill and it
is a more complex procedure when compared to the non-O.R. procedure
described by procedure code 0U9L0ZZ, however, abscess formation in the
Cowper's (bulbourethral) glands is uncommon and can often be treated
with ultrasound guided percutaneous aspiration. The need for open
surgical management is rare and includes chronic infection unresponsive
to non-operative management and complicated acute infection such as
perineal fistula formation. Open surgical management would require use
of the operating room for both appropriate anesthesia and for the
resources required to perform the more invasive perineal surgical
dissection. Therefore, our clinical advisors believe a non-extensive
O.R. designation is suitable for this procedure.
We analyzed claims data from the March 2020 update of the FY 2019
MedPAR file and the September 2020 update of the FY 2020 MedPAR file
for cases reporting procedure code 0T9D0ZZ in MS-DRGs 981, 982, and
983. We found one case in MS-DRG 981 with an average length of stay of
8.0 days and average costs of $23,566 in the March 2020 update of the
FY 2019 MedPAR file, and no cases in the September 2020 update of the
FY 2020 MedPAR file. Although our claims analysis identified only one
case reporting procedure code 0T9D0ZZ, our clinical advisors believe
that these procedures would be more appropriately designated as Non-
extensive procedures because they are more consistent with other
procedures on the Non-extensive procedure code list.
Therefore, we are proposing to reassign procedure code 0T9D0ZZ from
MS-DRGs 981, 982, and 983 (Extensive O.R. Procedures Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) to MS-DRGs 987, 988, and 989 (Non-extensive O.R.
Procedures Unrelated to Principal Diagnosis with MCC, with CC, and
without CC/MCC, respectively) for FY 2022.
11. Operating Room (O.R.) and Non-O.R. Issues
a. Background
Under the IPPS MS-DRGs (and former CMS MS-DRGs), we have a list of
procedure codes that are considered operating room (O.R.) procedures.
Historically, we developed this list using physician panels that
classified each procedure code based on the procedure and its effect on
consumption of hospital resources. For example, generally the presence
of a surgical procedure which required the use of the operating room
would be expected to have a significant effect on the type of hospital
resources (for example, operating room, recovery room, and anesthesia)
used by a patient, and therefore, these patients were considered
surgical. Because the claims data generally available do not precisely
indicate whether a patient was taken to the operating room, surgical
patients were identified based on the procedures that were performed.
Generally, if the procedure was not expected to require the use of the
operating room, the patient would be considered medical (non-O.R.).
Currently, each ICD-10-PCS procedure code has designations that
determine whether and in what way the presence of that procedure on a
claim impacts the MS-DRG assignment. First, each ICD-10-PCS procedure
code is either designated as an O.R. procedure for purposes of MS-DRG
assignment (``O.R. procedures'') or is not designated as an O.R.
procedure for purposes of MS-DRG assignment (``non-O.R. procedures'').
Second, for each procedure that is designated as an O.R. procedure,
that O.R. procedure is further classified as either extensive or non-
extensive. Third, for each procedure that is designated as a non-O.R.
procedure, that non-O.R. procedure is further classified as either
affecting the MS-DRG assignment or not affecting the MS-DRG assignment.
We refer to these designations that do affect MS-DRG assignment as
``non O.R. affecting the MS-DRG.'' For new procedure codes that have
been finalized through the ICD-10 Coordination and Maintenance
Committee meeting process and are proposed to be classified as O.R.
procedures or non-O.R. procedures affecting the MS-DRG, our clinical
advisors recommend the MS-DRG assignment which is then made available
in association with the proposed rule (Table 6B.--New Procedure Codes)
and subject to public comment. These proposed assignments are generally
based on the assignment of predecessor codes or the assignment of
similar codes. For example, we generally examine the MS-DRG assignment
for similar procedures, such as the other approaches for that
procedure, to determine the most appropriate MS-DRG assignment for
procedures proposed to be newly designated as O.R. procedures. As
discussed in section II.D.13 of the preamble of this proposed rule, we
are making Table 6B.--New Procedure Codes--FY 2022 available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. We also refer readers to the ICD-
10 MS-DRG Version 38.1 Definitions Manual at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html for detailed information regarding
the designation of procedures as O.R. or non-O.R. (affecting the MS-
DRG) in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG
Index.
In the FY 2020 IPPS/LTCH PPS proposed rule, we stated that, given
the long period of time that has elapsed since the original O.R.
(extensive and non-extensive) and non-O.R. designations were
established, the incremental changes that have occurred to these O.R.
and non-O.R. procedure code lists, and changes in the way inpatient
care is delivered, we plan to conduct a comprehensive, systematic
review of the ICD-10-PCS procedure codes. This will be a multi year
project during which we will also review the process for determining
when a procedure is considered an operating room procedure. For
example, we may restructure the current O.R. and non O.R. designations
for procedures by leveraging the detail that is now available in the
ICD-10 claims data. We refer readers to the discussion regarding the
designation of procedure codes in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38066) where we stated that the determination of when a
procedure code should be designated as an O.R. procedure has become a
much more complex task. This is, in part, due to the number of various
approaches available in the ICD-10-PCS classification, as well as
changes in medical practice. While we have typically evaluated
procedures on the basis of whether or not they would be performed in an
operating room, we believe that there may be other factors to consider
with regard to resource utilization,
[[Page 25158]]
particularly with the implementation of ICD-10.
We discussed in the FY 2020 IPPS/LTCH PPS proposed rule that as a
result of this planned review and potential restructuring, procedures
that are currently designated as O.R. procedures may no longer warrant
that designation, and conversely, procedures that are currently
designated as non-O.R. procedures may warrant an O.R. type of
designation. We intend to consider the resources used and how a
procedure should affect the MS-DRG assignment. We may also consider the
effect of specific surgical approaches to evaluate whether to subdivide
specific MS DRGs based on a specific surgical approach. We plan to
utilize our available MedPAR claims data as a basis for this review and
the input of our clinical advisors. As part of this comprehensive
review of the procedure codes, we also intend to evaluate the MS-DRG
assignment of the procedures and the current surgical hierarchy because
both of these factor into the process of refining the ICD-10 MS-DRGs to
better recognize complexity of service and resource utilization.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58540 through
58541), we provided a summary of the comments we had received in
response to our request for feedback on what factors or criteria to
consider in determining whether a procedure is designated as an O.R.
procedure in the ICD-10-PCS classification system for future
consideration.
In consideration of the PHE, we believe it may be appropriate to
allow additional time for the claims data to stabilize prior to
selecting the timeframe to analyze for this review. Additional time is
also necessary as we continue to develop our process and methodology.
Therefore, we will provide more detail on this analysis and the
methodology for conducting this review in future rulemaking.
In this proposed rule, we are addressing requests that we received
regarding changing the designation of specific ICD-10-PCS procedure
codes from non-O.R. to O.R. procedures, or changing the designation
from O.R. procedure to non-O.R. procedure. In this section of the rule
we discuss the process that was utilized for evaluating the requests
that were received for FY 2022 consideration. For each procedure, our
clinical advisors considered--
Whether the procedure would typically require the
resources of an operating room;
Whether it is an extensive or a nonextensive procedure;
and
To which MS-DRGs the procedure should be assigned.
We note that many MS-DRGs require the presence of any O.R.
procedure. As a result, cases with a principal diagnosis associated
with a particular MS-DRG would, by default, be grouped to that MS-DRG.
Therefore, we do not list these MS-DRGs in our discussion in this
section of this rule. Instead, we only discuss MS-DRGs that require
explicitly adding the relevant procedure codes to the GROUPER logic in
order for those procedure codes to affect the MS-DRG assignment as
intended. In cases where we are proposing to change the designation of
procedure codes from non-O.R. procedures to O.R. procedures, we also
are proposing one or more MS-DRGs with which these procedures are
clinically aligned and to which the procedure code would be assigned.
In addition, cases that contain O.R. procedures will map to MS-DRG
981, 982, or 983 (Extensive O.R. Procedure Unrelated to Principal
Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-
DRG 987, 988, or 989 (Non-Extensive O.R. Procedure Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) when they do not contain a principal diagnosis that
corresponds to one of the MDCs to which that procedure is assigned.
These procedures need not be assigned to MS-DRGs 981 through 989 in
order for this to occur. Therefore, if requestors included some or all
of MS-DRGs 981 through 989 in their request or included MS-DRGs that
require the presence of any O.R. procedure, we did not specifically
address that aspect in summarizing their request or our response to the
request in this section of this rule.
For procedures that would not typically require the resources of an
operating room, our clinical advisors determined if the procedure
should affect the MS-DRG assignment.
We received several requests to change the designation of specific
ICD-10-PCS procedure codes from non-O.R. procedures to O.R. procedures,
or to change the designation from O.R. procedures to non-O.R.
procedures. In this section of this rule, we detail and respond to some
of those requests. With regard to the remaining requests, our clinical
advisors believe it is appropriate to consider these requests as part
of our comprehensive review of the procedure codes as previously
discussed.
b. O.R. Procedures to Non-O.R. Procedures
(1) Open Drainage of Subcutaneous Tissue and Fascia
One requestor identified the following ICD-10-PCS procedure code
that describes the open drainage of right lower leg subcutaneous tissue
and fascia, shown in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.082
In the ICD-10 MS-DRG Version 38.1 Definitions Manual, this ICD-10-
PCS procedure code is currently recognized as an O.R. procedure for
purposes of MS-DRG assignment. The requestor noted that this procedure
consumes resources comparable to related ICD-10-PCS procedure code
0J9N00Z (Drainage of right lower leg subcutaneous tissue and fascia
with drainage device, open approach) that describes the open drainage
of right lower leg subcutaneous tissue and fascia with a drainage
device, which is currently designated as a Non-O.R. procedure. The
requestor stated that these comparable procedures should be recognized
similarly for purposes of MS-DRG assignment.
During our review of this issue, we identified 21 ICD-10-PCS
procedure codes that describe the open drainage of subcutaneous tissue
and fascia, shown in the following table that are clinically similar to
ICD-10-PCS code 0J9N0ZZ, and are also designated as O.R.
[[Page 25159]]
procedures in the ICD-10 MS-DRG Version 38.1 Definitions Manual.
[GRAPHIC] [TIFF OMITTED] TP10MY21.083
We reviewed these procedures and our clinical advisors agree that
procedures that describe the open drainage of subcutaneous tissue and
fascia consume resources comparable to the related ICD-10-PCS procedure
codes that describe the open drainage of subcutaneous tissue and fascia
with a drainage device that are currently designated as non-O.R.
procedures. These procedures do not typically require the resources of
an operating room, and are not surgical in nature. Therefore, we are
proposing to remove the 22 codes listed in the following table from the
FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix E--
Operating Room Procedures and Procedure Code/MS-DRG Index as O.R.
procedures. Under this proposal, these procedures would no longer
impact MS-DRG assignment.
[[Page 25160]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.084
[GRAPHIC] [TIFF OMITTED] TP10MY21.085
[[Page 25161]]
c. Non-O.R. Procedures to O.R. Procedures
(1) Percutaneous Introduction of Substance Into Cranial Cavity and
Brain
One requestor identified ICD-10-PCS procedure code XW0Q316
(Introduction of eladocagene exuparvovec into cranial cavity and brain,
percutaneous approach, new technology group 6) that the requestor
stated is currently not recognized as an O.R. procedure for purposes of
MS-DRG assignment. The requestor recommended that this procedure be
designated as an O.R. procedure because the procedure requires
traversing the skull in order to place a substance within the cranial
cavity or brain. The requestor noted that CMS disagreed with
designating this procedure as an O.R. procedure last year in the
absence of claims data; however, the requestor stated that because the
skull must be opened by drilling or cutting a burr hole through the
skull, this procedure warrants O.R. status similar to other
transcranial procedures performed with an open or percutaneous approach
that are classified as O.R. procedures.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
code XW0Q316 is currently designated as a non-O.R. procedure for
purposes of MS-DRG assignment. We agree with the requestor that
procedure code XW0Q316 describes a procedure that involves the creation
of a burr hole in the skull. In the FY 2021 IPPS/LTCH PPS final rule
(85 FR 58579 through 58580), we stated that, consistent with our annual
process of assigning new procedure codes to MDCs and MS-DRGs, and
designating a procedure as an O.R. or non-O.R. procedure, we reviewed
the predecessor procedure code assignment. The predecessor code for
procedure code XW0Q316 is procedure code 3E0Q3GC (Introduction of other
therapeutic substance into cranial cavity and brain, percutaneous
approach) which is designated as a non-O.R. procedure. In the absence
of claims data, our clinical advisors also considered the indication
for the specific procedure being described by the new procedure code,
the treatment difficulty, and the resources utilized.
Upon further review and consideration, our clinical advisors agree
that procedure code XW0Q316 describing a procedure that is performed by
creating a burr hole in the skull warrants designation as an O.R.
procedure consistent with other percutaneous procedures performed on
the cranial cavity and brain body parts. Therefore, we are proposing to
add this procedure code to the FY 2022 ICD-10 MS-DRGs Version 39
Definitions Manual in Appendix E- Operating Room Procedures and
Procedure Code/MS-DRG Index as an O.R. procedure, assigned to MS-DRGs
628, 629, and 630 (Other Endocrine, Nutritional and Metabolic O.R.
Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC
10 (Endocrine, Nutritional and Metabolic Diseases and Disorders) and to
MS-DRGs 987, 988, and 989 (Non-Extensive O.R. Procedure Unrelated to
Principal Diagnosis with MCC, with CC and without MCC/CC,
respectively).
(2) Open Drainage of Maxilla and Mandible
One requestor identified three ICD-10-PCS procedure codes that
describe the open drainage of maxilla or mandible that the requestor
stated are currently not recognized as O.R. procedures for purposes of
MS-DRG assignment. The three procedure codes are listed in the
following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.086
The requestor stated that procedures that describe the open
drainage of the maxilla or mandible should be designated as O.R.
procedures because these procedures, indicated for diagnoses such as
subperiosteal abscesses, are performed in the operating room under
general anesthesia and involve making open incisions through muscle and
stripping away the periosteum. The requestor identified procedure codes
0W950ZZ (Drainage of lower jaw, open approach) and 0W940ZZ (Drainage of
upper jaw, open approach) that are currently designated as O.R.
procedures. The requestor noted that ICD-10-PCS guidelines instruct
that the procedure codes in Anatomical Regions, General, can be used
when the procedure is performed on an anatomical region rather than a
specific body part, or on the rare occasion when no information is
available to support assignment of a code to a specific body part. The
requestor stated that because bone is a specific body part in ICD-10-
PCS, procedure codes should be assigned for subperiosteal drainage of
mandible and maxilla bones from table 0N9, Drainage of Head and Facial
Bones, instead of codes from table 0W9, Drainage of Anatomical Regions,
General, when these procedures are performed. Therefore, the requestor
stated that procedure codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ should also
be recognized as O.R. procedures for purposes of MS-DRG assignment.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 0N9R0ZZ, 0N9T0ZZ, and 0N9V0ZZ are currently designated as non-
O.R. procedures for purposes of MS-DRG assignment. Our clinical
advisors reviewed this issue and disagree that the procedures
describing the open drainage of the maxilla or mandible are typically
performed in the operating room under general anesthesia. Our clinical
advisors state that these procedures can be done in an oral surgeon's
office or an outpatient setting and are rarely performed in the
inpatient setting. Our clinical advisors also state a correlation
cannot be made between procedures performed in general anatomic regions
and procedures performed in specific body parts because these
procedures coded with the general anatomic regions body part represent
a broader range of procedures that cannot be coded to a specific body
part. Therefore, we are proposing to maintain the current non-O.R.
designation of ICD-10-PCS procedure codes 0N9R0ZZ, 0N9T0ZZ, and
0N9V0ZZ.
(3) Thoracoscopic Extirpation of Pleural Cavities
One requestor identified ICD-10-PCS procedure codes 0WC94ZZ
(Extirpation of matter from right pleural cavity, percutaneous
endoscopic approach) and 0WCB4ZZ (Extirpation of matter from left
pleural cavity, percutaneous
[[Page 25162]]
endoscopic approach) that the requestor stated are currently not
recognized as O.R. procedures for purposes of MS-DRG assignment. The
requestor stated that these procedures should be designated as O.R.
procedures because they are thoracoscopic procedures that are always
performed in the operating room under general anesthesia. The requestor
stated procedure codes 0W994ZZ (Drainage of right pleural cavity,
percutaneous endoscopic approach) and 0W9B4ZZ (Drainage of left pleural
cavity, percutaneous endoscopic approach) are currently designated as
O.R. procedures, therefore procedure codes 0WC94ZZ and 0WCB4ZZ should
also be recognized as O.R. procedures for purposes of MS-DRG assignment
because they utilize the same resources.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 0WC94ZZ and 0WCB4ZZ are currently designated as non-O.R.
procedures for purposes of MS-DRG assignment. Our clinical advisors
reviewed this issue and disagree that procedure codes describing the
thoracoscopic drainage of the pleural cavities should necessarily have
the same designation as procedure codes describing the thoracoscopic
extirpation of matter from the pleural cavities. We note that our
review of the designation of ICD-10-PCS codes as an O.R. procedure or a
non-O.R. procedure considers the resources used as well as whether that
procedure should affect the MS-DRG assignment, and if so, in what way.
Our clinical advisors state that thoracoscopic drainage of the pleural
cavities is performed for distinct indications in clinically different
scenarios. Our clinical advisors state that drainage is the process of
taking out, or letting out, fluids and/or gases from a body part and is
typically performed in the pleural cavity for indications such as
congestive heart failure, infection, hemothorax and empyema. In
contrast, the procedures describing the thoracoscopic extirpation of
the pleural cavities are performed for a wider range of indications
because the solid matter removed may be an abnormal byproduct of a
biological function or a foreign body. Our clinical advisors note that
the thoracoscopic extirpation of the pleural cavities is generally
performed with other procedures such as heart transplant, lung
transplant mechanical ventilation, and other major chest procedures and
would not be the main reason for inpatient hospitalization or be
considered the principal driver of resource expenditure.
Therefore, we are proposing to maintain the current non-O.R.
designation of ICD-10-PCS procedure codes 0WC94ZZ and 0WCB4ZZ.
(4) Open Pleural Biopsy
One requestor identified ICD-10-PCS procedure codes 0BBN0ZX
(Excision of right pleura, open approach, diagnostic) and 0BBP0ZX
(Excision of left pleura, open approach, diagnostic), that describe an
open pleural biopsy that the requestor stated are performed in the
operating room with general anesthesia. The requestor also stated that
procedure codes 0BBN0ZZ (Excision of right pleura, open approach) and
0BBP0ZZ (Excision of left pleura, open approach) describing open
pleural biopsy for non-diagnostic purposes are justifiably designated
as O.R. procedures. According to the requestor, these procedure codes
describing an open pleural biopsy should be designated as O.R.
procedures regardless of whether they are performed for diagnostic or
therapeutic purposes.
We note that under the ICD-10-PCS procedure classification, biopsy
procedures are identified by the 7th digit qualifier value
``diagnostic'' in the code description. In response to the requestor's
suggestion that procedures performed for a pleural biopsy by an open
approach, regardless of whether it is a diagnostic or therapeutic
procedure, should be designated as an O.R. procedure, we examined
procedure codes 0BBN0ZX, 0BBN0ZZ, 0BBP0ZX, and 0BBP0ZZ.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 0BBN0ZZ and 0BBP0ZZ are currently designated as O.R. procedures,
however, procedure codes 0BBN0ZX and 0BBP0ZX are not recognized as O.R.
procedures for purposes of MS-DRG assignment. We agree with the
requestor that procedure codes 0BBN0ZX and 0BBP0ZX would typically
require the resources of an operating room. Our clinical advisors also
agree that procedure codes 0BBN0ZX and 0BBP0ZX would typically require
the resources of an operating room. Therefore, we are proposing to add
these 2 procedure codes to the FY 2022 ICD-10 MS-DRGs Version 39
Definitions Manual in Appendix E--Operating Room Procedures and
Procedure Code/MS- DRG Index as O.R. procedures, assigned to MS-DRGs
166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC,
with CC, and without CC/MCC, respectively) in MDC 04 (Diseases and
Disorders of the Respiratory System).
(5) Percutaneous Revision of Intraluminal Devices
One requestor identified five ICD-10-PCS procedure codes that
describe the percutaneous revision of intraluminal vascular devices
that the requestor stated are currently not recognized as O.R.
procedures for purposes of MS-DRG assignment. The five procedure codes
are listed in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.087
The requestor stated that the procedure codes that describe the
percutaneous revision of intraluminal vascular devices within arteries,
veins, and great vessels should be designated as O.R. procedures to
compensate for the resources needed to perform these procedures. The
requestor also stated procedures to reattach, realign, or otherwise
revise intraluminal devices percutaneously require anesthesia,
specialized equipment for intravascular visualization, significant
skill, and time, therefore, it is important for these codes
[[Page 25163]]
to be designated with O.R. procedure status.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 02WY3DZ, 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ are currently
designated as non-O.R. procedures for purposes of MS-DRG assignment. We
agree with the requestor that these five ICD-10-PCS procedure codes
typically require the resources of an operating room. Therefore, to the
FY 2022 ICD-10 MS-DRG Version 39 Definitions Manual in Appendix E--
Operating Room Procedures and Procedure Code/MS-DRG Index, we are
proposing to add code 02WY3DZ as an O.R. procedure assigned to MS-DRGs
270, 271, and 272 (Other Major Cardiovascular Procedures, with MCC,
with CC, and without CC/MCC, respectively) in MDC 05 (Diseases and
Disorders of the Circulatory System). We are also proposing to add
codes 03WY3DZ, 04WY3DZ, 05WY3DZ, and 06WY3DZ as O.R. procedures
assigned to MS-DRGs 252, 253, and 254 (Other Vascular Procedures with
MCC, with CC, and without CC/MCC, respectively) in MDC 05 (Diseases and
Disorders of the Circulatory System).
(6) Occlusion of Left Atrial Appendage
One requestor identified nine ICD-10-PCS procedure codes that
describe left atrial appendage closure (LAAC) procedures that the
requestor stated are currently not recognized as O.R. procedures for
purposes of MS-DRG assignment in all instances. The nine procedure
codes are listed in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.088
The requestor stated that these procedures are currently designated
as non-O.R. procedures that route to surgical MS-DRGs only when
assigned in combination with a principal diagnosis within MDC 05
(Diseases and Disorders of the Circulatory System). The requestor
stated these procedures should also be designated as O.R. procedures
when assigned in combination with diagnoses outside of the circulatory
system, such as sepsis or trauma, to compensate for the associated
resource use, skill requirements, and device costs.
In the ICD-10 MS-DRG Version 38.1 Definitions Manual, the nine ICD-
10-PCS procedure codes that describe left atrial appendage closure are
currently recognized as non-O.R. procedures that affect the MS-DRG to
which they are assigned. We refer readers to section II.D.5.d of the
preamble of this proposed rule, where we address ICD-10-PCS procedure
codes 02L70CK, 02L70DK, and 02L70ZK that describe a LAAC procedure
performed with an open approach. These codes were discussed in response
to a request to reassign these codes to MS-DRGs 228 and 229 (Other
Cardiothoracic Procedures with and without MCC, respectively) and, for
the reasons discussed, we are proposing to maintain the assignment in
MS-DRGs 273 and 274 (Percutaneous and Other Intracardiac Procedures
with and without MCC, respectively) in MDC 05.
Our clinical advisors reviewed this related issue and believe the
current designation of LAAC procedures as non-O.R. procedures that
affect the assignment for MS-DRGs 273 and 274 is clinically appropriate
to account for the subset of patients undergoing left atrial appendage
closure specifically. LAAC is indicated and approved as a treatment
option for patients diagnosed with atrial fibrillation, a heart rhythm
disorder that can lead to cardiovascular blood clot formation, who are
also at increased risk for stroke. LAAC procedures block off the left
atrial appendage to prevent emboli that may form in the left atrial
appendage from exiting and traveling to other sites in the vascular
system, thereby preventing the occurrence of ischemic stroke and
systemic thromboembolism. The ICD-10-CM diagnosis codes used to report
atrial fibrillation are currently assigned to MDC 05 (Diseases and
Disorders of the Circulatory System). Our clinical advisors believe
that circumstances in which a patient is admitted for a principal
diagnosis outside of MDC 05 and a left atrial appendage closure is
performed as the only surgical procedure in the same admission are
infrequent, and if they do occur, the LAAC procedure would not be a
significant contributing factor in the increased intensity of resources
needed for facilities to manage these complex cases. Our clinical
advisors state LAAC procedures generally do not require the resources
of an operating room. LAAC procedures are most often performed
percutaneously in settings such as cardiac catheterization laboratories
and take approximately one hour. When performed with an open approach
or percutaneous endoscopic approach, these procedures share similar
factors such as complexity, and resource
[[Page 25164]]
utilization with all other LAAC procedures. Therefore, we are proposing
to maintain the current designation of ICD-10-PCS procedure codes
02L70CK, 02L70DK, 02L70ZK, 02L73CK, 02L73DK, 02L73ZK, 02L74CK, 02L74DK,
and 02L74ZK as non-O.R. procedures affecting the MS-DRGs to which they
are assigned.
(7) Arthroscopic Drainage of Joints
One requestor identified six ICD-10-PCS procedure codes that
describe the percutaneous endoscopic drainage of joints that the
requestor stated are currently not recognized as O.R. procedures for
purposes of MS-DRG assignment. The six procedure codes are listed in
the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.089
The requestor stated that these procedures should be designated as
O.R. procedures because procedures describing the arthroscopic drainage
of major joints such as knee, hip, and shoulder are performed in the
operating room under general anesthesia. The requestor stated these
procedures are indicated for conditions such as symptomatic septic/
pyogenic arthritis, which can require inpatient admission for
intravenous antibiotics and arthroscopic drainage to resolve infection.
Therefore, the requestor stated it is reasonable for these arthroscopic
procedures to be designated as O.R. procedures to compensate for
operating room resources.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 0S9C4ZZ, 0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ are
currently designated as non-O.R. procedures for purposes of MS-DRG
assignment. Our clinical advisors reviewed this issue and disagree that
procedures describing the percutaneous endoscopic drainage of major
joints such as knee, hip, and shoulder are typically performed in the
operating room under general anesthesia. With development of better
instrumentation and surgical techniques, many patients now have
arthroscopic procedures performed in an outpatient setting and return
home several hours after the procedure. Our clinical advisors also
state the percutaneous endoscopic drainage of joints can be performed
using local or regional anesthesia, and general anesthesia is not
always required. In cases where the patient is admitted for diagnoses
such as septic/pyogenic arthritis, as identified by the requestor, the
requirement for intravenous antibiotics would be the main reason for
admission because the percutaneous endoscopic drainage procedure could
be done as an outpatient. Therefore, we are proposing to maintain the
current non-O.R. designation of ICD-10-PCS procedure codes 0S9C4ZZ,
0S9D4ZZ, 0S994ZZ, 0S9B4ZZ, 0R9J4ZZ, and 0R9K4ZZ.
(8) Arthroscopic Irrigation of Joints
One requestor identified ICD-10-PCS procedure codes 3E1U48X
(Irrigation of joints using irrigating substance, percutaneous
endoscopic approach, diagnostic) and 3E1U48Z (Irrigation of joints
using irrigating substance, percutaneous endoscopic approach) that the
requestor stated are currently not recognized as O.R. procedures for
purposes of MS-DRG assignment. The requestor stated that these
procedures should be designated as O.R. procedures because the
arthroscopic irrigation of joints such as knee, hip, and shoulder is
performed in the operating room under general anesthesia. The requestor
states procedure codes 3E1U48X and 3E1U48Z are used to describe
surgical joint irrigations in the absence of more definitive
procedures, therefore procedure codes 3E1U48X and 3E1U48Z should be
recognized as O.R. procedures for purposes of MS-DRG assignment.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 3E1U48X and 3E1U48Z are currently designated as non-O.R.
procedures for purposes of MS-DRG assignment. Our clinical advisors
reviewed this issue and disagree that procedure codes describing the
arthroscopic irrigation of joints should be designated as O.R.
procedures. Our clinical advisors note the arthroscopic irrigation of
joints is rarely performed independently as a standalone procedure in
the inpatient setting to be considered the principal driver of resource
expenditure in those admissions. Instead, the arthroscopic irrigation
of joints is generally performed with other definitive procedures such
as debridement or synovectomy. We note that in the operative note sent
by the requestor to support the requested change in O.R. status, the
arthroscopic irrigation of the joint was performed along with a
surgical debridement procedure. Therefore, we are proposing to maintain
the current non-O.R. designation of ICD-10-PCS procedure codes 3E1U48X
and 3E1U48Z.
(9) Percutaneous Reposition With Internal Fixation
One requestor identified four ICD-10-PCS procedure codes describing
procedures performed on the sacroiliac and hip joints that involve
percutaneous repositioning with internal fixation that the requestor
stated are not recognized as O.R. procedures for purposes of MS-DRG
assignment but warrant an O.R. designation. The procedure codes are
listed in the following table.
[[Page 25165]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.090
Our clinical advisors reviewed the procedures described by these
four procedure codes and agree that these percutaneous reposition
procedures involving internal fixation in the sacroiliac and hip joint
warrant an O.R. designation. They noted that these procedures are major
operations that would require the resources of an operating room,
involve a higher level of technical complexity and a greater
utilization of hospital resources.
Therefore, we are proposing to add the two procedure codes
describing percutaneous reposition of the sacroiliac joint with
internal fixation procedures (0SS734Z and 0SS834Z) to the FY 2022 ICD-
10 MS-DRGs Version 39 Definitions Manual in Appendix E--Operating Room
Procedures and Procedure Code/MS-DRG Index as O.R. procedures, assigned
to MS-DRGs 515, 516, and 517 (Other Musculoskeletal System and
Connective Tissue O.R. Procedures with MCC, with CC, and without CC/
MCC, respectively) in MDC 08 (Diseases and Disorders of the
Musculoskeletal System and Connective Tissue) and to MS-DRGs 987, 988,
and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis
with MCC, with CC and without MCC/CC, respectively). We are also
proposing to add the two procedure codes describing percutaneous
reposition of the hip joint with internal fixation procedures (0SS934Z
and 0SSB34Z) to the FY 2022 ICD-10 MS-DRGs Version 39 Definitions
Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-
DRG Index as O.R. procedures, assigned to MS-DRGs 480, 481, and 482
(Hip and Femur Procedures Except Major Joint with MCC, with CC, and
without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of the
Musculoskeletal System and Connective Tissue) and to MS-DRGs 987, 988,
and 989 (Non-Extensive O.R. Procedure Unrelated to Principal Diagnosis
with MCC, with CC and without MCC/CC, respectively).
(10) Open Insertion and Removal of Spacer Into Shoulder Joint
One requestor identified four ICD-10-PCS procedure codes describing
procedures performed on the shoulder joint that involve the insertion
or removal of a spacer by an open approach that the requestor stated
are not recognized as O.R. procedures for purposes of MS-DRG
assignment. The procedure codes are listed in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.091
According to the requestor, insertion and removal of joint spacers
from the hips and knees are designated with an O.R. procedure status
and although similar procedures performed on the shoulder joint may be
performed less frequently, these procedures warrant an O.R. designation
because they are performed in the operating room under general
anesthesia. During our review, we noted that the following procedure
codes describing procedures performed on the shoulder joint that
involve the insertion or removal of a spacer by a percutaneous
endoscopic approach are also not recognized as O.R. procedures for
purposes of MS-DRG assignment.
[GRAPHIC] [TIFF OMITTED] TP10MY21.092
[[Page 25166]]
Our clinical advisors reviewed the procedures described by these
eight procedure codes and agree that these procedures involving the
insertion or removal of a spacer in the shoulder joint with an open or
percutaneous endoscopic approach warrant an O.R. designation. They
noted that the insertion of a spacer is typically performed to treat an
infection at the site of a previously placed prosthesis and the removal
of a spacer is typically performed once the infection is healed and the
site is ready for a new prosthetic replacement or to exchange for a new
spacer if the infection is not yet healed.
Therefore, we are proposing to add the listed procedure codes
describing the insertion or removal of spacer in the shoulder joint to
the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual in Appendix
E--Operating Room Procedures and Procedure Code/MS-DRG Index as O.R.
procedures, assigned to MS-DRGs 510, 511, and 512 (Shoulder, Elbow or
Forearm Procedures, Except Major Joint Procedures with MCC, with CC,
and without CC/MCC, respectively) in MDC 08 (Diseases and Disorders of
the Musculoskeletal System and Connective Tissue) and to MS-DRGs 987,
988, and 989 (Non-Extensive O.R. Procedure Unrelated to Principal
Diagnosis with MCC, with CC and without MCC/CC, respectively).
(11) Open/Percutaneous Extirpation of Jaw
One requestor identified four ICD-10-PCS procedure codes that
describe the extirpation of matter from the upper or lower jaw that the
requestor stated are currently not recognized as O.R. procedures for
purposes of MS-DRG assignment. The four procedure codes are listed in
the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.093
The requestor stated that the procedure codes that describe the
extirpation of matter from the upper or lower jaw by an open or
percutaneous endoscopic approach should be designated as O.R.
procedures. The requestor stated these procedures would commonly be
performed under general anesthesia and require the resources of an
operating room. The requestor also stated that these ICD-10-PCS codes
were specifically created to describe the surgical evacuation of solid
matter from deep jaw structures therefore, it is important for these
codes to be designated with O.R. procedure status.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, 0WC54ZZ are currently designated as
non-O.R. procedures for purposes of MS-DRG assignment. We agree with
the requestor that these four ICD-10-PCS procedure codes typically
require the resources of an operating room. Therefore, to the FY 2022
ICD-10 MS-DRG Version 39 Definitions Manual in Appendix E--Operating
Room Procedures and Procedure Code/MS-DRG Index, we are proposing to
add codes 0WC40ZZ, 0WC44ZZ, 0WC50ZZ, 0WC54ZZ as O.R. procedures
assigned to MS-DRGs 143, 144 and 145 (Other Ear, Nose, Mouth and Throat
O.R. procedures, with MCC, with CC, and without CC/MCC, respectively)
in MDC 03 (Diseases and Disorders of the Ear, Nose, Mouth and Throat).
(12) Open Extirpation of Subcutaneous Tissue and Fascia
One requestor identified 22 ICD-10-PCS procedure codes that
describe the open extirpation of matter from the subcutaneous tissue
and fascia that the requestor stated are currently not recognized as
O.R. procedures for purposes of MS-DRG assignment. The 22 procedure
codes are listed in the following table.
[[Page 25167]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.094
The requestor stated that procedure codes that describe the open
extirpation of matter from the subcutaneous tissue and fascia should be
designated as O.R. procedures because these procedures are performed
through open incisions with direct visualization of subcutaneous tissue
and fascia in the operating room under general anesthesia. The
requestor noted procedure codes that describe the open drainage of
subcutaneous tissue and fascia and use comparable resources are
currently designated as O.R. procedures. The requestor noted that root
operation ``Drainage'' is assigned when fluid is drained; and root
operation of ``Extirpation'' is assigned when any of the substance
evacuated is solid. The requestor stated whether the evacuated
substance is fluid, gelatinous, or solid, a procedure involving an open
incision with direct visualization of subcutaneous tissue and fascia
for evacuation of substances should be classified as an O.R. procedure.
Therefore, the requestor stated that these procedures should also be
recognized as O.R. procedures for purposes of MS-DRG assignment.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, the 22 ICD-
10-PCS procedure codes listed in the table are currently designated as
non-O.R. procedures for purposes of MS-DRG assignment. While we
disagree that drainage procedures are comparable to extirpation
procedures, we agree with the requestor that these 22 ICD-10-PCS
procedure codes typically require the resources of an operating room.
Our clinical advisors state that drainage is the process of taking out,
or letting out, fluids and/or gases from a body part and is typically
performed for indications such as abscess, infection, and other
systemic conditions. In contrast, extirpation procedures are performed
for a wider range of indications because the solid matter removed may
be an abnormal byproduct of a biological function or a retained foreign
body. Therefore, to the FY 2022 ICD-10 MS-DRG Version 39 Definitions
Manual in Appendix E--Operating Room Procedures and Procedure Code/MS-
DRG Index, we are proposing to add the 22 ICD-10-PCS listed previously
as O.R. procedures assigned to MS-DRGs 579, 580 and 581 (Other Skin,
Subcutaneous Tissue and Breast Procedures, with MCC, with CC, and
without CC/MCC, respectively) in MDC 09 (Diseases and Disorders of the
Skin, Subcutaneous Tissue and Breast) and MS-DRGs 907, 908, and 909
(Other O.R. Procedures for Injuries with MCC, with CC, and without CC/
MCC, respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of
Drugs).
(13) Open Revision and Removal of Devices From Subcutaneous Tissue and
Fascia
One requestor identified six ICD-10-PCS procedure codes describing
open revision and removal of neurostimulator generators, monitoring
devices, and totally implantable vascular access devices (TIVADs)
procedures that are not currently designated as O.R. procedures for
purposes of MS-DRG assignment. The six procedure codes are listed in
the following table.
[[Page 25168]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.096
The requestor stated that although removal of these devices is
often performed in outpatient surgery, device complications can require
removal or revision during inpatient hospitalizations. The requestor
indicated it is reasonable for these open procedures to be designated
as O.R. procedures to compensate for operating room resources during
such inpatient stays.
Our clinical advisors reviewed this request and do not agree that
these procedures warrant an O.R. designation. They noted that these
procedures are generally performed in the outpatient setting and when
performed during a hospitalization, it is typically in conjunction with
another O.R. procedure. Therefore, we are proposing to maintain the
current non-O.R. designation for procedure codes 0JPT0MZ, 0JPT02Z,
0JPT0WZ, 0JWT0MZ, 0JWT0WZ, and 0JWT03Z for FY 2022.
(14) Open Insertion of Feeding Device
One requestor identified ICD-10-PCS procedure code 0DHA0UZ
(Insertion of feeding device into jejunum, open approach) that the
requestor stated is currently not recognized as an O.R. procedure for
purposes of MS-DRG assignment. The requestor stated the open insertion
of a feeding device into the jejunum should be designated as an O.R.
procedure because this procedure is performed in the operating room
under general anesthesia. The requestor noted comparable procedure code
0DH60UZ (Insertion of feeding device into stomach, open approach) is
currently designated as an O.R. procedure. Therefore, the requestor
stated that procedure code 0DHA0UZ should also be recognized as an O.R.
procedure for purposes of MS-DRG assignment.
Our analysis of this issue confirmed that in the ICD-10 MS-DRG
Version 38.1 Definitions Manual, for purposes of MS-DRG assignment,
0DHA0UZ is recognized as a non-O.R. procedure and 0DH60UZ is currently
recognized as an O.R. procedure. In reviewing this request, we also
identified the following four related codes:
[GRAPHIC] [TIFF OMITTED] TP10MY21.097
In the ICD-10 MS-DRGs Version 38.1, these four ICD-10-PCS codes are
currently recognized as non-O.R. procedure for purposes of MS-DRG
assignment. While we agree with the requestor that procedures
describing the open insertion of a feeding device into the jejunum are
comparable to procedures describing the open insertion of a feeding
device into the stomach, we do not agree that these procedures should
be designated as O.R. procedures. Our clinical advisors state the
procedures that describe the open insertion of a feeding device into
the jejunum or the stomach should instead have the same designation as
the related ICD-10-PCS procedure codes that describe the open insertion
of a feeding device into the esophagus, small intestine, duodenum and
ileum that are currently designated as non-O.R. procedures.
With advancements in procedural techniques, feeding devices are
most commonly placed using a percutaneous endoscopic approach. Our
clinical advisors state feeding devices are usually not placed using an
open surgical approach; this approach is
[[Page 25169]]
generally only used if the patient requires another surgical procedure
at the same time. When placed at the same time as another surgical
procedure, our clinical advisors state the surgical procedure, as the
main determinant of resource use for those cases, should drive the MS-
DRG assignment, not the procedure that describes the open insertion of
a feeding device. For these reasons, our clinical advisors state
procedures that describe the open insertion of a feeding device in the
gastrointestinal system should all have the same non-O.R. designation
in the ICD-10 MS-DRGs Version 39 for coherence.
Therefore, we are proposing to maintain the current non-O.R.
designation of ICD-10-PCS procedure code 0DHA0UZ. We are also proposing
to remove ICD-10-PCS procedure code 0DH60UZ from the FY 2022 ICD-10 MS-
DRG Version 39 Definitions Manual in Appendix E--Operating Room
Procedures and Procedure Code/MS-DRG Index as an O.R. procedure. Under
this proposal, this procedure would no longer impact MS-DRG assignment.
(15) Laparoscopic Insertion of Feeding Tube
One requestor identified ICD-10-PCS procedure codes 0DH64UZ
(Insertion of feeding device into stomach, percutaneous endoscopic
approach) and 0DHA4UZ (Insertion of feeding device into jejunum,
percutaneous endoscopic approach) that the requestor stated are
currently not recognized as O.R. procedures for purposes of MS-DRG
assignment. The requestor stated the procedures describing the
percutaneous endoscopic insertion of a feeding device into the stomach
or the jejunum should be designated as O.R. procedures because these
procedures are performed in the operating room under general
anesthesia. The requestor stated all laparoscopic procedures,
regardless if they are diagnostic or therapeutic, should be classified
as O.R. procedures to compensate for operating room resources.
Our analysis of this issue confirmed that in the ICD-10 MS-DRG
Version 38.1 Definitions Manual, 0DH64UZ and 0DHA4UZ are currently
designated as non-O.R. procedures for purposes of MS-DRG assignment. In
reviewing this request, we also identified the following four related
codes:
[GRAPHIC] [TIFF OMITTED] TP10MY21.098
In the ICD-10 MS-DRGs Version 38.1, these four ICD-10-PCS codes are
currently recognized as non-O.R. procedures for purposes of MS-DRG
assignment. Our clinical advisors reviewed this request and do not
agree that unilaterally all laparoscopic procedures should be
designated as O.R. procedures. While the procedural approach is an
important consideration in the designation of a procedure, there are
other clinical factors such as the site of procedure, the procedure
complexity, and resource utilization that should also be considered. In
this regard, our clinical advisors indicated that codes 0DH64UZ and
0DHA4UZ describing the percutaneous endoscopic insertion of a feeding
device into the stomach or the jejunum, do not require the resources of
an operating room, are not surgical in nature, and are generally
performed in the outpatient setting. The percutaneous endoscopic
insertion of a feeding device also does not require general anesthesia.
As opposed to being rendered unconscious, patients can receive a local
anesthetic (usually a lidocaine spray), an intravenous (IV) pain
reliever, and a mild sedative if needed. Patients receiving these
devices usually return home the same day after placement, unless they
are in the hospital for treatment of another condition.
Our clinical advisors state the percutaneous endoscopic insertion
of a feeding device into the stomach or the jejunum is comparable to
the related ICD-10-PCS procedure codes that describe the insertion of
feeding devices of other gastrointestinal system body parts that are
currently designated as non-O.R. procedures. Our clinical advisors
believe all procedures that describe the percutaneous endoscopic
insertion of a feeding device in the gastrointestinal system should
continue to have the same non-O.R. designation in the ICD-10 MS-DRGs
Version 39 for coherence. Therefore, for the reasons discussed, we are
proposing to maintain the current non-O.R. designation of ICD-10-PCS
procedure codes 0DH64UZ and 0DHA4UZ.
(16) Endoscopic Fragmentation and Extirpation of Matter of Urinary
Tract
One requestor sent two separate but related requests related to
endoscopic procedures performed in the urinary system. With regard to
the first request, the requestor identified six ICD-10-PCS procedure
codes that describe endoscopic fragmentation in the kidney pelvis,
ureter, bladder, and bladder neck that the requestor stated are
currently not recognized as O.R. procedures for purposes of MS-DRG
assignment. The six procedure codes are listed in the following table.
[[Page 25170]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.099
The requestor stated that these procedures should be designated as
O.R. procedures because procedures such as the endoscopic fragmentation
of calculi within the kidney pelvis, ureter, bladder, and bladder neck
are performed in the operating room under anesthesia. The requestor
stated that procedures that describe the endoscopic extirpation of
calculi from the kidney pelvis or ureter use comparable resources, and
are designated as O.R. procedures. Therefore, the requestor asserted it
is reasonable that procedure codes that describe endoscopic
fragmentation in kidney pelvis, ureter, bladder, and bladder neck also
be designated as O.R. procedures.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 0TF38ZZ, 0TF48ZZ, 0TF68ZZ, 0TF78ZZ, 0TFB8ZZ, and 0TFC8ZZ are
designated as non-O.R. procedures for purposes of MS-DRG assignment.
Our clinical advisors reviewed this issue and disagree that procedures
describing the endoscopic fragmentation of calculi within the kidney
pelvis, ureter, bladder, and bladder neck are typically performed in
the operating room. In endoscopic fragmentation procedures in the
kidney pelvis, ureter, bladder, and bladder neck, the scope is passed
through a natural or artificial orifice. The procedure is not surgical
in nature and involves no skin incisions. With advancements in scope
size, deflection capabilities, video imaging, and instrumentation, many
patients now have these endoscopic urinary procedures performed in an
outpatient setting, instead of the inpatient setting. Therefore, we are
proposing to maintain the current non-O.R. designation of ICD-10-PCS
procedure codes 0TF38ZZ, 0TF48ZZ, 0TF68ZZ, 0TF78ZZ, 0TFB8ZZ, and
0TFC8ZZ.
In the second request, the requestor also identified two ICD-10-PCS
procedure codes that describe endoscopic extirpation of matter from the
bladder and bladder neck that the requestor stated are also currently
not recognized as O.R. procedures for purposes of MS-DRG assignment.
The two procedure codes are listed in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.100
The requestor stated that these procedures also should be
designated as O.R. procedures because they performed in the operating
room under anesthesia.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 0TCB8ZZ and 0TCC8ZZ are currently designated as a non-O.R.
procedure for purposes of MS-DRG assignment. To review the request to
designate 0TCB8ZZ and 0TCC8ZZ as O.R. procedures and in response to the
requestor's suggestion that resource consumption is comparable in
procedures describing endoscopic fragmentation in the urinary system
and procedures describing the endoscopic extirpation in the urinary
system, we examined the following procedure codes:
[[Page 25171]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.101
In the ICD-10 MS-DRG Version 38.1 Definitions Manual, these six
ICD-10-PCS procedure codes are currently recognized as O.R. procedures
for purposes of MS-DRG assignment. Our clinical advisors indicated that
these procedures are not surgical in nature. In endoscopic extirpation
procedures, the scope enters the urinary tract through the urethra,
which is the tube that carries urine out of the body, or through an
artificial orifice. Our clinical advisors state the urinary system is
one conduit so the scope continues to pass through the urethra,
bladder, and into the ureter or kidney (if necessary) to access the
stone. For that reason, the procedures describing endoscopic
extirpation from a urinary body part should all have the same non-O.R.
designation in the ICD-10 MS-DRGs Version 39 for coherence.
Therefore, we are proposing to maintain the current non-O.R.
designation of ICD-10-PCS procedure codes 0TCB8ZZ and 0TCC8ZZ. We are
also proposing to remove ICD-10-PCS procedure codes 0TC08ZZ, 0TC18ZZ,
0TC38ZZ, 0TC48ZZ, 0TC68ZZ, and 0TC78ZZ from the FY 2022 ICD-10 MS-DRG
Version 39 Definitions Manual in Appendix E--Operating Room Procedures
and Procedure Code/MS-DRG Index as O.R. procedures. Under this
proposal, these procedures would no longer impact MS-DRG assignment.
(17) Endoscopic Removal of Ureteral Stent
One requestor identified ICD-10-PCS procedure code 0TP98DZ (Removal
of intraluminal device from ureter, via natural or artificial opening
endoscopic) that the requestor stated is not recognized as an O.R.
procedure for purposes of MS-DRG assignment. The requestor suggested
that this procedure warrants an O.R. designation because the procedure
code describes a procedure that is performed in the operating room with
anesthesia. The requestor stated that while most ureteral stents can be
removed by string, some complicated cases require endoscopic removal
using forceps in the operating room under general anesthesia and may be
performed during inpatient stays precipitated by severe urinary tract
infection, sepsis, or urinary obstructions. The requestor asserted that
procedure codes for insertion of ureteral stent(s) via a ureteroscopic,
endoscopic approach have been justifiably designated as O.R. procedures
because they are performed in the O.R. under anesthesia. Therefore, the
requestor suggested it is reasonable for endoscopic removal of the
stent to be designated with OR procedure status to compensate for
operating room resources and anesthesia.
Our clinical advisors reviewed this procedure and do not agree that
it warrants an O.R. designation. They noted that this procedure is
generally not the focus of the admission when it is performed and does
not reflect the technical complexity or resource intensity in
comparison to other procedures that are designated as O.R. procedures.
Therefore, we are proposing to maintain the current non-O.R.
designation for procedure code 0TP98DZ for FY 2022.
(18) Endoscopic/Transorifice Inspection of Ureter
One requestor identified ICD-10-PCS procedure code 0TJ98ZZ
(Inspection of ureter, via natural or artificial opening endoscopic),
that describes procedures involving endoscopic viewing of the ureter
that the requestor stated is currently not recognized as an O.R.
procedure for purposes of MS-DRG assignment.
The requestor stated this ureteroscopy procedure is performed in
the operating room with anesthesia. According to the requestor, the
inspection of ureter procedure code is assigned when obstruction is
found during the ureteroscopy and procedures to break up
(fragmentation), remove calculi (extirpation), or place a ureteral
stent cannot be performed.
Our clinical advisors reviewed this procedure and disagree that it
warrants an O.R. designation. They noted that this procedure typically
does not require hospitalization and is generally not the reason for
the patient's admission since it is often performed in connection with
another O.R. procedure when it is performed. Therefore, we are
proposing to maintain the current non-O.R. designation for procedure
code 0TJ789ZZ for FY 2022.
(19) Endoscopic Biopsy of Ureter and Kidney
One requestor identified six ICD-10-PCS procedure codes that
describe endoscopic biopsy procedures performed on the ureter and
kidney structures that the requestor stated are currently not
recognized as O.R. procedures for purposes of MS-DRG assignment.
According to the requestor, regardless of whether it is a diagnostic or
therapeutic procedure, these procedures should be designated as O.R.
procedures because the procedures utilize operating room, anesthesia
and recovery room resources. The requestor stated that after the
surgeon places the scope into the bladder that ureteral orifices must
be identified and instruments carefully navigated to obtain excisional
biopsies from within the ureter or further within the kidney.
[[Page 25172]]
The six procedure codes are listed in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.102
We note that under the ICD-10-PCS procedure classification, biopsy
procedures are identified by the 7th digit qualifier value
``diagnostic'' in the code description.
Our clinical advisors do not agree that endoscopic biopsy
procedures performed on the ureter and kidney structures warrant an
O.R. designation. They stated these procedures are typically not the
focus for the patient's admission and are frequently performed in
conjunction with another O.R. procedure. Therefore, we are proposing to
maintain the current non-O.R. designation for procedure codes 0TB08ZX,
0TB18ZX, 0TB38ZX, 0TB48ZX, 0TB68ZX, and 0TB78ZX for FY 2022.
(20) Transorifice Insertion of Ureteral Stent
One requestor identified three ICD-10-PCS procedure codes that the
requestor stated are not recognized as O.R. procedures for purposes of
MS-DRG assignment. The requestor suggested that the procedure described
by these procedure codes warrants an O.R. designation because it
involves the insertion of an indwelling ureteral stent through a
nephrostomy with image-guidance in the interventional radiology suite.
According to the requestor, image-guided technology now allows
placement of ureteral stents through nephrostomy tracts. The requestor
stated this procedure may or may not be performed in the operating
room, however, it involves placement of device(s), interventional
radiology resources, sedation, and continuous monitoring of vital
signs. The three procedure codes are shown in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.103
Our clinical advisors reviewed this request and do not agree that
this procedure warrants an O.R. designation. They noted that this
procedure is not surgical in nature, does not require the resources of
an operating room and is not a technically complex procedure requiring
increased hospital resources. Therefore, we are proposing to maintain
the current non-O.R. designation for procedure codes 0T767DZ, 0T777DZ,
and 0T787DZ for FY 2022.
(21) Percutaneous Insertion of Ureteral Stent
One requestor identified three ICD-10-PCS procedure codes that the
requestor stated are not recognized as O.R. procedures for purposes of
MS-DRG assignment. The requestor suggested that the procedure described
by these procedure codes warrants an O.R. designation because the
procedure is typically performed following a failed ureteral stent
insertion procedure in the operating room, which can only be reported
as a cystoscopy or ureteroscopy, neither of which are designated as
O.R. procedures. According to the requestor, percutaneous ureteral
stenting through the abdominal wall is subsequently performed in an
interventional radiology suite with image-guidance, sedation, and
continuous vital sign monitoring. The three procedure codes are shown
in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.104
[[Page 25173]]
Our clinical advisors reviewed this request and do not agree that
the procedure warrants an O.R. designation. They noted that this
procedure is not surgical in nature, does not involve technical
complexity or require the resources of an operating rom. Therefore, we
are proposing to maintain the current non-O.R. designation for
procedure codes 0T763DZ, 0T773DZ, and 0T783DZ for FY 2022.
(22) Endoscopic Dilation of Urethra
One requestor identified ICD-10-PCS procedure code 0T7D8DZ
(Dilation of urethra with intraluminal device, via natural or
artificial opening endoscopic) that the requestor stated is not
recognized as an O.R. procedure for purposes of MS-DRG assignment. The
requestor suggested that this procedure warrants an O.R. designation
because the procedure code describes a procedure that utilizes the
UroLift[supreg] System, a minimally invasive technology to treat lower
urinary tract symptoms (LUTS) due to benign prostatic hyperplasia
(BPH). According to the requestor, the technology is placed
endoscopically within the prostatic urethra in the operating room under
anesthesia.
Our clinical advisors reviewed this request and do not agree that
the procedure warrants an O.R. designation. They noted that this
procedure is performed without incision, resection or thermal injury to
the prostate and is primarily performed in the outpatient setting. It
is generally not the cause for the patient's admission and utilization
of resources when it is performed. Therefore, we are proposing to
maintain the current non-O.R. designation for procedure code 00T7D8DZ
for FY 2022.
(23) Open Repair of Scrotum
One requestor identified ICD-10-PCS procedure code 0VQ50ZZ (Repair
scrotum, open approach) that the requestor stated is not recognized as
an O.R. procedure for purposes of MS-DRG assignment. The requestor
suggested that this procedure warrants an O.R. designation because it
involves repair of scrotal tissue deeper than the skin with direct
visualization and utilizes general anesthesia in the operating room.
Our clinical advisors do not agree that open repair of the scrotum
merits an O.R. designation. They stated this procedure would not
typically require the resources of an operating room and would
generally not be a contributing factor impacting hospital resource use
during the patient's admission when it is performed. Therefore, we are
proposing to maintain the current non-O.R. designation for procedure
code 0VQ50ZZ for FY 2022.
(24) Open Drainage of Vestibular Gland
One requestor identified ICD-10-PCS procedure code 0U9L0ZZ
(Drainage of vestibular gland, open approach) that describes a
procedure commonly performed for the treatment of an abscess that the
requestor stated is performed in the operating room under general
anesthesia and therefore warrants an O.R designation. The requestor
stated this procedure is comparable to the procedure described by
procedure code 0UBL0ZZ (Excision of vestibular gland, open approach)
which is currently designated as an O.R. procedure.
During our review of procedure code 0U9L0ZZ, we also examined
procedure codes 0U9L0ZX (Drainage of vestibular gland, open approach,
diagnostic), 0U9LXZX (Drainage of vestibular gland, external approach,
diagnostic), and 0UBL0ZZ. Separately, we reviewed procedure code
0T9D0ZZ (Drainage of urethra, open approach) because it represents the
male equivalent of the female procedure described by procedure code
0U9L0ZZ.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
codes 0T9D0ZZ, 0U9L0ZX, 0U9LXZX, and 0UBL0ZZ are currently designated
as O.R. procedures, however, procedure code 0U9L0ZZ is not recognized
as an O.R. procedure for purposes of MS-DRG assignment. We examined
procedure code 0U9L0ZZ and do not believe this drainage procedure
warrants an O.R. designation, nor do we agree that this drainage of the
vestibular gland procedure (0U9L0ZZ) is comparable to an excision of
the vestibular gland procedure (0UBL0ZZ), which is currently designated
as an O.R. procedure.
In the ICD-10-PCS classification, drainage is defined as taking or
letting out fluids and/or gases from a body part and excision is
defined as cutting out or off, without replacement, a portion of a body
part. Therefore, the classification specifically defines and
distinguishes the underlying objectives of each distinct procedure. Our
clinical advisors stated a drainage procedure is frequently performed
in the outpatient setting and is generally not the cause for the
patient's admission and utilization of resources when it is performed.
Drainage of the vestibular gland, also known as Bartholin's glands, is
typically indicated when a cyst or abscess is present and may or may
not involve the placement of a Word catheter. Conversely, excision of
the vestibular gland is not considered an office-based procedure and is
generally reserved for a vulvar mass or for patients who have not
responded to more conservative attempts to create a drainage tract. In
addition, after review, our clinical advisors recommended changing the
O.R. status for procedure codes 0U9L0ZX and 0U9LXZX from O.R. to non-
O.R. for similar reasons. These procedures do not typically require the
resources of an operating room.
Therefore, we are proposing to remove procedure codes 0U9L0ZX and
0U9LXZX from the FY 2022 ICD-10 MS-DRGs Version 39 Definitions Manual
in Appendix E- Operating Room Procedures and Procedure Code/MS-DRG
Index as O.R. procedures. Under this proposal, these procedure codes
would no longer impact MS-DRG assignment. We refer the reader to
section II.D.10 of the preamble of this proposed rule for further
discussion related to procedure code 0T9D0ZZ.
(25) Transvaginal Repair of Vagina
One requestor identified ICD-10-PCS procedure code 0UQG7ZZ (Repair
vagina, via natural or artificial opening) that the requestor stated is
currently not recognized as an O.R. procedure for purposes of MS-DRG
assignment. The requestor stated that procedures described by this code
such as the non-obstetric transvaginal repair of the vaginal cuff and
the non-obstetric transvaginal repair of vaginal lacerations should be
designated as O.R. procedures because these procedures are performed in
the operating room under general anesthesia. The requestor noted
procedure codes 0USG7ZZ (Reposition vagina, via natural or artificial
opening), 0UBG7ZZ (Excision of vagina, via natural or artificial
opening), and 0UQG8ZZ (Repair vagina, via natural or artificial opening
endoscopic) are currently designated as O.R. procedures, therefore
procedure code 0UQG7ZZ should also be recognized as an O.R. procedure
for purposes of MS-DRG assignment.
In the ICD-10 MS-DRGs Definitions Manual Version 38.1, procedure
code 0UQG7ZZ is currently designated as a non-O.R. procedure for
purposes of MS-DRG assignment. Our clinical advisors reviewed this
issue and disagree that a correlation can be made between procedures
described as the transvaginal repair of the vagina and the procedures
described by ICD-10-PCS codes 0USG7ZZ, 0UBG7ZZ, and 0UQG8ZZ. The root
operation ``repair'' represents a broad range of procedures for
restoring the anatomic structure of a body part such as suture of
lacerations, while the root operations ``reposition,'' and ``excision''
define procedures with more
[[Page 25174]]
distinct objectives. Also the approach ``via natural or artificial
opening'', for example, transvaginal, is defined as the entry of
instrumentation through a natural or artificial external opening to
reach the site of the procedure while the ``via natural or artificial
opening endoscopic approach'' is defined as the entry of
instrumentation (for example a scope) through a natural or artificial
external opening to both reach and visualize the site of the procedure.
Our clinical advisors also disagree that procedures described as the
transvaginal repair of the vagina are typically performed in the
operating room under general anesthesia. Our clinical advisors state
transvaginal repair can be performed using regional anesthesia, used to
numb only the area of the body that requires surgery instead of
rendering the patient unconscious. Therefore, for the reasons
described, we are proposing to maintain the current non-O.R.
designation of ICD-10-PCS procedure code 0UQG7ZZ.
(26) Percutaneous Tunneled Vascular Access Devices
One requestor identified ten ICD-10-PCS procedure codes describing
percutaneous insertion of tunneled vascular access devices into various
body parts that the requestor stated are not recognized as an O.R.
procedure for purposes of MS-DRG assignment. The requestor suggested
that these procedures warrant an O.R. designation because they are
placed in an interventional radiology suite or in the operating room
under anesthesia. The ten procedure codes are shown in the following
table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.105
According to the requestor, it does not make sense for tunneled
vascular access devices to group to procedural MS-DRGs in limited
circumstances as is the case currently with the logic in MDC 9
(Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast)
and MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract).
The requestor stated that these procedures should be grouping to
procedural MS-DRGs across all MDCs.
We note that we have addressed requests related to these procedures
in previous rulemaking (85 FR 58511 through 58517). Our clinical
advisors reviewed this request and disagree that procedures performed
to insert a tunneled vascular access device should group to procedural
MS-DRGs across all MDCs. They stated that these percutaneous procedures
are generally performed in the outpatient setting and when performed
during a hospitalization, they are frequently performed in combination
with another O.R. procedure. Therefore, we are proposing to maintain
the current non-O.R. status for the ten procedure codes listed
previously for FY 2022.
12. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2022
a. Background of the CC List and the CC Exclusions List
Under the IPPS MS-DRG classification system, we have developed a
standard list of diagnoses that are considered CCs. Historically, we
developed this list using physician panels that classified each
diagnosis code based on whether the diagnosis, when present as a
secondary condition, would be considered a substantial complication or
comorbidity. A substantial complication or comorbidity was defined as a
condition that, because
[[Page 25175]]
of its presence with a specific principal diagnosis, would cause an
increase in the length-of-stay by at least 1 day in at least 75 percent
of the patients. However, depending on the principal diagnosis of the
patient, some diagnoses on the basic list of complications and
comorbidities may be excluded if they are closely related to the
principal diagnosis. In FY 2008, we evaluated each diagnosis code to
determine its impact on resource use and to determine the most
appropriate CC subclassification (NonCC, CC, or MCC) assignment. We
refer readers to sections II.D.2. and 3. of the preamble of the FY 2008
IPPS final rule with comment period for a discussion of the refinement
of CCs in relation to the MS-DRGs we adopted for FY 2008 (72 FR 47152
through 47171).
b. Overview of Comprehensive CC/MCC Analysis
In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described
our process for establishing three different levels of CC severity into
which we would subdivide the diagnosis codes. The categorization of
diagnoses as a MCC, a CC, or a NonCC was accomplished using an
iterative approach in which each diagnosis was evaluated to determine
the extent to which its presence as a secondary diagnosis resulted in
increased hospital resource use. We refer readers to the FY 2008 IPPS/
LTCH PPS final rule (72 FR 47159) for a complete discussion of our
approach. Since the comprehensive analysis was completed for FY 2008,
we have evaluated diagnosis codes individually when assigning severity
levels to new codes and when receiving requests to change the severity
level of specific diagnosis codes.
We noted in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235
through 19246) that with the transition to ICD-10-CM and the
significant changes that have occurred to diagnosis codes since the FY
2008 review, we believed it was necessary to conduct a comprehensive
analysis once again. Based on this analysis, we proposed changes to the
severity level designations for 1,492 ICD-10-CM diagnosis codes and
invited public comments on those proposals. As summarized in the FY
2020 IPPS/LTCH PPS final rule, many commenters expressed concern with
the proposed severity level designation changes overall and recommended
that CMS conduct further analysis prior to finalizing any proposals.
After careful consideration of the public comments we received, as
discussed further in the FY 2020 final rule, we generally did not
finalize our proposed changes to the severity designations for the ICD-
10-CM diagnosis codes, other than the changes to the severity level
designations for the diagnosis codes in category Z16- (Resistance to
antimicrobial drugs) from a NonCC to a CC. We stated that postponing
adoption of the proposed comprehensive changes in the severity level
designations would allow further opportunity to provide additional
background to the public on the methodology utilized and clinical
rationale applied across diagnostic categories to assist the public in
its review. We refer readers to the FY 2020 IPPS/LTCH PPS final rule
(84 FR 42150 through 42152) for a complete discussion of our response
to public comments regarding the proposed severity level designation
changes for FY 2020.
We discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58550
through 58554) that we plan to continue a comprehensive CC/MCC
analysis, using a combination of mathematical analysis of claims data
as discussed in the FY 2020 IPPS/LTCH PPS proposed rule (84 FR 19235)
and the application of nine guiding principles and plan to present the
findings and proposals in future rulemaking. The nine guiding
principles are as follows:
Represents end of life/near death or has reached an
advanced stage associated with systemic physiologic decompensation and
debility.
Denotes organ system instability or failure.
Involves a chronic illness with susceptibility to
exacerbations or abrupt decline.
Serves as a marker for advanced disease states across
multiple different comorbid conditions.
Reflects systemic impact.
Post-operative/post-procedure condition/complication
impacting recovery.
Typically requires higher level of care (that is,
intensive monitoring, greater number of caregivers, additional testing,
intensive care unit care, extended length of stay).
Impedes patient cooperation and/or management of care.
Recent (last 10 years) change in best practice, or in
practice guidelines and review of the extent to which these changes
have led to concomitant changes in expected resource use.
We refer readers to the FY 2021 IPPS/LTCH PPS final rule for a
complete discussion of our response to public comments regarding the
nine guiding principles. We continue to solicit feedback regarding
these guiding principles, as well as other possible ways we can
incorporate meaningful indicators of clinical severity. When providing
additional feedback or comments, we encourage the public to provide a
detailed explanation of how applying a suggested concept or principle
would ensure that the severity designation appropriately reflects
resource use for any diagnosis code.
For new diagnosis codes approved for FY 2022, consistent with our
annual process for designating a severity level (MCC, CC or NonCC) for
new diagnosis codes, we first review the predecessor code designation,
followed by review and consideration of other factors that may be
relevant to the severity level designation, including the severity of
illness, treatment difficulty, complexity of service and the resources
utilized in the diagnosis and/or treatment of the condition. We note
that this process does not automatically result in the new diagnosis
code having the same designation as the predecessor code. We refer the
reader to II.D.13 of this proposed rule for the discussion of the
proposed changes to the ICD-10-CM and ICD-10-PCS coding systems for FY
2022.
For this FY 2022 IPPS/LTCH PPS proposed rule, we received several
requests to change the severity level designations of specific ICD-10-
CM diagnosis codes. Our clinical advisors believe it is appropriate to
consider these requests in connection with our continued comprehensive
CC/MCC analysis in future rulemaking, rather than proposing to change
the designation of individual ICD-10-CM diagnosis codes at this time.
As stated earlier in this section, we plan to continue a comprehensive
CC/MCC analysis, using a combination of mathematical analysis of claims
data and the application of nine guiding principles. We will consider
these individual requests received for changes to severity level
designations as we continue our comprehensive CC/MCC analysis and will
provide more detail in future rulemaking.
c. Potential Change to Severity Level Designation for Unspecified
Diagnosis Codes for FY 2022
For this FY 2022 IPPS/LTCH PPS proposed rule, as another interval
step as we continue to address the comprehensive review of the severity
designations of ICD-10-CM diagnosis codes in which we have been engaged
over the past two years, we are requesting public comments on a
potential change to the severity level designations for ``unspecified''
ICD-10-CM diagnosis codes that we are considering adopting for FY 2022.
[[Page 25176]]
Specifically, we are considering changing the severity level
designation of all ``unspecified'' diagnosis codes to a NonCC where
there are other codes available in that code subcategory that further
specify the anatomic site, effective for FY 2022, after consideration
of the public comments we receive in response to this proposed rule.
According to the ICD-10-CM Official Guidelines for Coding and
Reporting, codes titled ``unspecified'' are for use when the
information in the medical record is insufficient to assign a more
specific code. In our review of severity level designation of the codes
in the ICD-10-CM classification, we noted 3,490 ``unspecified''
diagnosis codes designated as either CC or MCC, where there are other
codes available in that code subcategory that further specify the
anatomic site with an equivalent severity level designation. For
example, ICD-10-CM code L89.003 (Pressure ulcer of unspecified elbow,
stage 3) is currently designated as a MCC. In the same code subcategory
of L89.0- (Pressure ulcer of elbow), ICD-10-CM codes L89.013 (Pressure
ulcer of right elbow, stage 3) and code L89.023 (Pressure ulcer of left
elbow, stage 3) are also designed as MCCs.
In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described
the categorization of diagnoses as an MCC, a CC, or a NonCC,
accomplished using an iterative approach in which each diagnosis was
evaluated to determine the extent to which its presence as a secondary
diagnosis resulted in increased hospital resource use. As such, the
designation of CC or MCC is intended to account for the increased
resources required to address a condition as a secondary diagnosis. The
usage of ``unspecified'' diagnosis codes where there are other codes
available in that code subcategory that further specify the anatomic
site may contribute to and eventually result in less reliable data for
researching clinical outcomes. If documentation is not available to
code to the highest level of specificity as to the laterality of the
condition treated, and an unspecified code is reported by the hospital,
it may be harder to quantify in the claims data what additional
resources were expended to address that condition in terms of requiring
clinical evaluation, therapeutic treatment, diagnostic procedures,
extended length of hospital stay, increased nursing care and/or
monitoring.
As stated previously, we discussed in the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58550 through 58554) that we plan to continue a
comprehensive CC/MCC analysis, using a combination of mathematical
analysis of claims data, and the application of nine guiding
principles, and plan to present the findings and proposals in future
rulemaking. As patients present with a variety of diagnoses, in
examining the secondary diagnoses, we stated we would consider what
additional resources are required, that surpasses those that are
already being utilized to address the principal diagnosis and/or other
secondary diagnoses that might also be present on the claim. The goal
of our comprehensive analysis is to create stratification for
reimbursing inpatient hospitalization in the fewest amount of
categories with the most explanatory power in a clinically cohesive
way. We believe more robust claims data would facilitate this effort to
determine the impact on resource use and inform our decision-making in
determining the most appropriate CC subclass (NonCC, CC, or MCC)
assignment for each diagnosis as a secondary diagnosis. As part of this
effort, we are soliciting comments on adopting a change to the severity
level designation of the 3,490 ``unspecified'' diagnosis codes
currently designated as either CC or MCC, where there are other codes
available in that code subcategory that further specify the anatomic
site, to a NonCC for FY 2022.
As discussed in the HIPAA Administrative Simplification:
Modification to Medical Data Code Set Standards To Adopt ICD-10-CM and
ICD-10-PCS proposed rule (73 FR 49796 through 49803), in proposing the
adoption of ICD-10-CM and ICD-10-PCS, we listed that the addition of
laterality in ICD-10-CM-- specifying which organ or part of the body is
involved when the location could be on the right, the left, or could be
bilateral, was one of several improvements over ICD-9-CM. We also noted
that in comparison to ICD-9-CM, ICD-10-CM diagnosis codes are very
specific and that this specificity improves the richness of data for
analysis and improves the accuracy of data used for medical research.
In the Modifications to Medical Data Code Set Standards To Adopt ICD-
10-CM and ICD-10-PCS final rule (74 FR 3328 through 3362), we adopted
the ICD-10-CM and ICD-10-PCS as medical data code sets under HIPAA,
replacing ICD-9-CM Volumes 1 and 2, and Volume 3 and noted that ICD-10-
CM and ICD-10-PCS provide specific diagnosis and treatment information
that can improve quality measurements and patient safety, and the
evaluation of medical processes and outcomes. We continue to believe
that reporting the most specific diagnosis codes supported by the
available medical record documentation and clinical knowledge of the
patient's health condition would more accurately reflect the health
care encounter and improve the reliability and validity of the coded
data.
We believe that changing the severity level for these ``unspecified
codes'' as compared to the more specific codes in the same subcategory
recognizing laterality would leverage the additional specificity
available under the ICD-10 system, by fostering the reporting of the
most specific diagnosis codes supported by the available medical record
documentation and clinical knowledge of the patient's health condition
to more accurately reflect each health care encounter and improve the
reliability and validity of the coded data. However in consideration of
the PHE, and to the extent that some providers may not currently have
programs in place that focus on improving documentation, we are
requesting public comments on making this change to the severity level
designation for these unspecified ICD-10-CM diagnosis codes for FY
2022.
The diagnosis codes for which we are soliciting comments on a
change in severity level designation as described in this proposed rule
are shown in Table 6P.2a (which is available via the internet on the
CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). We note we are also
making available the data describing the impact on resource use when
reported as a secondary diagnosis for all 3,490 ICD-10-CM unspecified
diagnosis codes. While these claims data were not used in our
identification of the ``unspecified'' diagnosis codes for which there
are other codes available in the code subcategory that further specify
the anatomic site, as mentioned earlier in this section, these data are
consistent with data historically used to mathematically measure impact
on resource use for secondary diagnoses, and the data which we plan to
use in combination with application of the nine guiding principles as
we continue a comprehensive CC/MCC analysis. Therefore, we are
displaying the data on these unspecified codes in order to facilitate
public comment on these potential changes in the severity level
designation for these codes.
In Table 6P.2a associated with this proposed rule, column C
displays the FY 2020 severity level designation for these diagnosis
codes in MS-DRG Grouper Version 37.2. Column D displays CMS' current FY
2021 severity level designation in MS-DRG Grouper
[[Page 25177]]
Version 38.1 and column E displays the potential changes to the
severity level designation that we are considering adopting. Columns F-
O show data on the impact on resource use generated using discharge
claims from the September 2019 update of the FY 2019 MedPAR file and
MS-DRG Grouper Version 37.2. Columns Q-Z show data on the impact on
resource use generated using discharge claims from the September 2020
update of the FY 2020 MedPAR file and MS-DRG Grouper Version 38.1.
For further information on the data on the impact on resource use
as displayed in Columns F-O and Columns Q-Z, we refer readers to the FY
2008 IPPS/LTCH PPS final rule (72 FR 47159) for a complete discussion
of the methodology utilized to mathematically measure the impact on
resource use. Also, as discussed in the FY 2021 IPPS/LTCH PPS proposed
rule (85 FR 32550), to provide the public with more information on the
CC/MCC comprehensive analysis discussed in the FY 2020 IPPS/LTCH PPS
proposed and final rules, CMS hosted a listening session on October 8,
2019. The listening session included a review of this methodology
utilized to mathematically measure the impact on resource use. We refer
readers to https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/PodcastAndTranscripts.html for the transcript and audio
file of the listening session. We also refer readers to https://www.cms.gov/Medicare/MedicareFee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html for the supplementary file
containing the data describing the impact on resource use of specific
ICD-10-CM diagnosis codes when reported as a secondary diagnosis that
was made available for the listening session.
This table shows the Version 38.1 ICD-10 MS-DRG categorization of
diagnosis codes by severity level.
[GRAPHIC] [TIFF OMITTED] TP10MY21.106
We are requesting public comments on a modification to the Version
38.1 severity level subclass assignments for 4.8 percent of the ICD-10-
CM diagnosis codes, potentially effective with the Version 39 ICD-10
MS-DRG MCC/CC list. The following table compares the Version 38.1 ICD-
10 MS-DRG MCC/CC list and the potential Version 39 ICD-10 MS-DRG MCC/CC
list. There are 17,957 diagnosis codes on the Version 38.1 MCC/CC
lists. These potential MCC/CC severity level changes would reduce the
number of diagnosis codes on the MCC/CC lists to 14,467 (2,771+
11,696).
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The net result of these potential changes to the Version 39 ICD-10
MS-DRG MCC/CC list, for the 72,621 diagnosis codes in the ICD-10-CM
classification, would be a decrease of 507 (3,278-2,771) codes
designated as an MCC, a decrease of 2,983 (14,679-11,696) codes
designated as a CC, and an increase of 3,490 (58,154-54,664) codes
designated as a NonCC.
The following table compares the Version 38.1 ICD-10 MS-DRG
severity level list and the potential Version 39 ICD-10 MS-DRG severity
level list by each of the 22 chapters of the ICD-10-CM classification
to display how each chapter of ICD-10-CM might be affected by these
modifications.
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As shown in the table, the Diseases of the Musculoskeletal System
and Connective Tissue (M00-M99) chapter of ICD-10-CM would have the
largest percentage reduction in codes designated as CC/MCC. Twelve
chapters would have a zero percentage change to the percentage of codes
designated as CC/MCC.
As stated previously, we are requesting public comments on our
possible adoption of a change to the severity level designation of
these 3,490 ``unspecified'' diagnosis codes currently designated as
either CC or MCC, where there are other codes available in that code
subcategory that further specify the anatomic site, to a NonCC,
potentially effective with the Version 39 ICD-10 MS-DRG MCC/CC list. As
part of this request, we would be interested in comments regarding
whether this modification might present operational challenges and how
we might otherwise foster the reporting of the most specific diagnosis
codes supported by the available medical record documentation and
clinical knowledge of the patient's health condition to more accurately
[[Page 25180]]
reflect each health care encounter and improve the reliability and
validity of the coded data.
d. Proposed Additions and Deletions to the Diagnosis Code Severity
Levels for FY 2022
The following tables identify the proposed additions and deletions
to the diagnosis code MCC severity levels list and the proposed
additions to the diagnosis code CC severity levels list for FY 2022 and
are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
Table 6I.1--Proposed Additions to the MCC List--FY2022;
Table 6I.2-- Proposed Deletions to the MCC List--FY2022; and
Table 6J.1-- Proposed Additions to the CC List--FY2022.
e. Proposed CC Exclusions List for FY 2022
In the September 1, 1987 final notice (52 FR 33143) concerning
changes to the DRG classification system, we modified the GROUPER logic
so that certain diagnoses included on the standard list of CCs would
not be considered valid CCs in combination with a particular principal
diagnosis. We created the CC Exclusions List for the following reasons:
(1) To preclude coding of CCs for closely related conditions; (2) to
preclude duplicative or inconsistent coding from being treated as CCs;
and (3) to ensure that cases are appropriately classified between the
complicated and uncomplicated DRGs in a pair.
In the May 19, 1987 proposed notice (52 FR 18877) and the September
1, 1987 final notice (52 FR 33154), we explained that the excluded
secondary diagnoses were established using the following five
principles:
Chronic and acute manifestations of the same condition
should not be considered CCs for one another;
Specific and nonspecific (that is, not otherwise specified
(NOS)) diagnosis codes for the same condition should not be considered
CCs for one another;
Codes for the same condition that cannot coexist, such as
partial/total, unilateral/bilateral, obstructed/unobstructed, and
benign/malignant, should not be considered CCs for one another;
Codes for the same condition in anatomically proximal
sites should not be considered CCs for one another; and
Closely related conditions should not be considered CCs
for one another.
The creation of the CC Exclusions List was a major project
involving hundreds of codes. We have continued to review the remaining
CCs to identify additional exclusions and to remove diagnoses from the
master list that have been shown not to meet the definition of a CC. We
refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50541
through 50544) for detailed information regarding revisions that were
made to the CC and CC Exclusion Lists under the ICD-9-CM MS-DRGs.
The ICD-10 MS-DRGs Version 38.1 CC Exclusion List is included as
Appendix C in the ICD-10 MS-DRG Definitions Manual, which is available
via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html, and
includes two lists identified as Part 1 and Part 2. Part 1 is the list
of all diagnosis codes that are defined as a CC or MCC when reported as
a secondary diagnosis. For all diagnosis codes on the list, a link is
provided to a collection of diagnosis codes which, when reported as the
principal diagnosis, would cause the CC or MCC diagnosis to be
considered as a NonCC. Part 2 is the list of diagnosis codes designated
as a MCC only for patients discharged alive; otherwise, they are
assigned as a NonCC.
As discussed in section II.D.12.c. of the preamble of this proposed
rule, we are requesting public comments on potential changes to the
severity level for 3,490 diagnosis codes describing an ``unspecified''
anatomic site, from a CC severity level to a NonCC severity level, for
FY 2022. We refer the reader to Table 6P.3a associated with this
proposed rule (which is available via the internet on the CMS website
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) for the list of the 3,490 diagnosis codes
that are currently listed in Part 1 of the CC Exclusions List and are
defined as a CC when reported as a secondary diagnosis. Table 6P.3a is
divided into several tabs, with the first tab titled ``SDX Codes and
Exclu Categories'' containing columns A, B, and C. Column A (titled
``ICD-10-CM Code'') lists the ``unspecified'' diagnosis codes that are
currently listed in Part 1 of Appendix C of the CC Exclusions List,
column B (titled ``Description'') lists the narrative description of
each diagnosis code, and column C (titled Exclusion Category) contains
a hyperlink to the collection of diagnosis codes which, when reported
as the principal diagnosis, would cause the CC diagnosis to be
considered as a NonCC. For example, for line 2, Column A displays
diagnosis code C34.00, column B displays ``Malignant neoplasm of
unspecified main bronchus'' and column C displays a hyperlink to
Exclusion Category number 280. When the user clicks on the hyperlink
for number 280, they are directed to another tab labeled ``PDX Category
280'' that contains the list of diagnosis codes which, when reported as
the principal diagnosis, would cause the corresponding CC diagnosis to
be considered as a NonCC. In connection with the request for public
comments on the potential changes to the severity level for 3,490
diagnosis codes describing an ``unspecified'' anatomic site, from a CC
severity level to a NonCC severity level for FY 2022, Table 6P.3a is
being made available for readers to review and consider the list of the
3,490 ``unspecified'' diagnosis codes that are currently included in
Part 1 of the CC Exclusions List and the principal diagnosis exclusion
category with which they are currently associated. If we were to
finalize the potential changes to the severity level for the 3,490
diagnosis codes describing an ``unspecified'' anatomic site from a CC
severity level to a NonCC severity level for FY 2022, we would also
finalize the removal of these codes from the CC Exclusions List for FY
2022.
We received three requests related to the CC Exclusions List logic,
as we discuss in this section of this proposed rule.
We received a request to review the secondary diagnoses that are
excluded as a CC or MCC in the CC Exclusions List logic when any one of
the following three diagnosis codes is reported as the principal
diagnosis.
[[Page 25181]]
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According to the requestor, in the ICD-10 MS-DRGs version 37.2 CC
Exclusions List logic, the predecessor code for the listed diagnosis
codes, diagnosis code O99.89 (Other specified diseases and conditions
complicating pregnancy, childbirth and the puerperium) is listed in the
collection of principal diagnosis list number 1000, therefore, when a
CC or MCC secondary diagnosis associated with that principal diagnosis
list describes a condition as occurring in pregnancy, childbirth or the
puerperium, the CC Exclusions List logic will render that diagnosis
code as a NonCC. The requestor stated that because diagnosis code
O99.89 under version 37.2 of the ICD-10 MS-DRGs is now a subcategory
under version 38.1 of the ICD-10 MS-DRGs, with three unique diagnosis
codes to specify which obstetric stage the patient is in, that further
analysis of the new diagnosis codes (O99.891, O99.892, and O99.893)
should occur to determine if changes to the collection of principal
diagnosis list is warranted. The requestor provided three examples for
CMS to review and consider for possible changes to the CC Exclusions
List logic.
In the first example, the requestor noted that diagnosis code O72.1
(Other immediate postpartum hemorrhage) is listed as a CC secondary
diagnosis associated with the collection of principal diagnosis list
number 1000, and that under the ICD-10 MS-DRGs version 38.1 CC
Exclusions List logic, the diagnosis listed in principal diagnosis
collection 1000 is now diagnosis code O99.893 (Other specified diseases
and conditions complicating puerperium). Thus, both diagnosis codes
(O72.1 and O99.893) are describing conditions occurring specifically in
the postpartum or puerperium period. The postpartum period is defined
as the period beginning immediately after delivery and continues for
six weeks following delivery. A postpartum complication is any
complication occurring within the six-week period. The requestor stated
that because diagnosis code O72.1 is assigned for documented postpartum
uterine atony with hemorrhage when it occurs immediately following the
delivery of the baby and placenta, that CMS should review diagnosis
code O99.892 (Other specified diseases and conditions complicating
childbirth) and determine if it should be added to the collection of
principal diagnosis list number 1000 to cause diagnosis code O72.1 to
be considered as a NonCC when diagnosis code O99.892 is reported as the
principal diagnosis.
In the second example, the requestor noted that diagnosis code
O98.32 (Other infections with a predominantly sexual mode of
transmission complicating childbirth) is associated with principal
diagnosis collection number 1012. The requestor also noted that
principal diagnosis collection number 1012 does not list diagnosis
codes O99.891, O99.892, or O99.893 as a principal diagnosis to exclude
the CC secondary diagnosis code O98.32, however, it does list diagnosis
codes O98.311 (Other infections with a predominantly sexual mode of
transmission complicating pregnancy, first trimester), O98.312 (Other
infections with a predominantly sexual mode of transmission
complicating pregnancy, second trimester), and O98.313 (Other
infections with a predominantly sexual mode of transmission
complicating pregnancy, third trimester) as a principal diagnosis to
exclude the CC secondary diagnosis code O98.32. The requestor
recommended CMS review diagnosis codes O98.32 (Other infections with a
predominantly sexual mode of transmission complicating childbirth) and
O98.33 (Other infections with a predominantly sexual mode of
transmission complicating the puerperium), to determine if diagnosis
codes O99.891, O99.892 or O99.893, when reported as a principal
diagnosis, should exclude CC secondary diagnosis codes O98.32 and
O98.33. Thus, the requestor suggested CMS consider if it is appropriate
to add diagnosis codes O99.891, O99.892 and O99.893 to principal
diagnosis collection number 1012 to cause diagnosis code O98.32 to be
considered as a NonCC when diagnosis codes O99.891, O99.892 or O99.893
are reported as the principal diagnosis.
In the third example, the requestor noted that diagnosis code O87.2
(Hemorrhoids in the puerperium) is associated with principal diagnosis
collection number 4041. The requestor also noted that principal
diagnosis collection number 4041 lists diagnosis code O99.893 as a
principal diagnosis to exclude the CC diagnosis code O87.2, however, it
does not list diagnosis code O99.892. The requestor further noted that
the ``Includes'' note at Category O87 (Venous complications and
hemorrhoids in the puerperium) in the FY 2021 ICD-10-CM Tabular List
includes ``venous complications in labor, delivery and the
puerperium'', therefore, diagnosis code O87.2 would also be reported
for documented hemorrhoids during labor and delivery. The requestor
recommended CMS review diagnosis code O99.892 to determine if, when
reported as a principal diagnosis, it should exclude CC diagnosis code
O87.2. Thus, the requestor suggested CMS consider if it is appropriate
to add diagnosis code O99.892 to principal diagnosis collection number
4041 to cause diagnosis code O87.2 to be considered as a NonCC when
diagnosis code O99.892 is reported as the principal diagnosis.
We reviewed diagnosis codes O99.891, O99.892 and O99.893 with
respect to the principal diagnosis collection list and because these
diagnosis codes are specifically describing ``other specified diseases
and conditions complicating pregnancy, childbirth, and the
puerperium,'' respectively, we do not believe that any of these three
diagnosis codes, when reported as a principal diagnosis, should exclude
any CC secondary diagnosis. In cases where any one of these three
diagnosis codes is reported as a principal diagnosis, which are
generally anticipated to be rare, it is understood that there is not a
more specific diagnosis code available in the classification to report
as the principal diagnosis that identifies the underlying or associated
cause of the disease or the condition complicating the specific
obstetric stage (pregnancy, childbirth, or puerperium), hence the
``other specified'' in the code title. Specifically, the title of
category O99 is ``Other maternal diseases classifiable elsewhere but
complicating pregnancy, childbirth and the puerperium'' and there are
nine subcategories, each of which is generally associated with a single
organ
[[Page 25182]]
system or etiology, with the exception of the ``other specified''
subcategory (O99.8) as displayed in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.111
The instructional note at category O99 states ``use additional code
to identify specific condition'' and included at each subcategory
(O99.0-O99.7) are a range of codes that refer to diagnoses that are
associated with the condition in the title of the subcategory that are
to be reported in addition to the applicable code within the respective
subcategory. For example, at subcategory O99.0 (Anemia complicating
pregnancy, childbirth, and the puerperium), the range of associated
codes to identify the specific condition (for example, type of anemia)
includes conditions in diagnosis code range D50-D64, meaning that when
any one of the diagnosis codes under subcategory O99.0 describing
anemia complicating a specific obstetric stage (pregnancy, childbirth,
or puerperium) is reported, a code within the D50-D64 code range to
identify the specific type of anemia would also be expected to be
reported when supported by the medical record documentation. It is
therefore reasonable to associate the two conditions (one from
subcategory O99.0 and one from code range D50-D64) when reported on a
claim. However, the same cannot be stated for subcategory O99.8. There
is no range of associated codes from which users are instructed to
report located at this particular subcategory in addition to the
specific code under sub-subcategory O99.89 (Other specified diseases
and conditions complicating pregnancy, childbirth and the puerperium).
We note that subcategory O99.8 and sub-subcategory O99.89 have the same
title. Therefore, when a diagnosis code from other than that sub-
subcategory is reported that describes a condition occurring in any one
of the obstetric stages (pregnancy, childbirth, or puerperium) it is
not clear if the condition can reasonably be associated to correspond
to the ``other specified diseases and conditions'' diagnosis. In
addition, the code ranges included at subcategory O99.8 are D00-D48,
H00-H95, M00-N99, and Q00-Q99. Consequently, diagnosis codes within
those code ranges would be expected to be reported with one of the
diagnosis codes under subcategory O99.8 when reported as a principal
diagnosis.
In all three of the requestor's examples, the diagnosis codes
provided for CMS to review and consider are located in the ``O'' code
range (O72.1, O98.32, and O87.2 in addition to O99.891, O99.892, and
O99.893). As noted previously, the code ranges included at subcategory
O99.8 as listed, do not include any codes in ``O'' code range. Upon
review of the diagnosis codes provided by the requestor, it is also
reasonable to expect that any one of those diagnosis codes (O72.1,
O98.32, and O87.2) could be reported as a principal diagnosis alone.
For instance, there are no instructional notes at diagnosis code O72.1
that preclude that diagnosis code from being reported as the principal
diagnosis.
During our review of the CC Exclusions List logic in response to
the requestor's recommendations, we also identified some diagnosis
codes describing the specific trimester of pregnancy that we believe
warrant further examination. We are unable to fully evaluate these
conditions for FY 2022, therefore, we will continue to analyze for
future rulemaking.
For the reasons discussed, we do not believe that any of the three
diagnosis codes (O99.891, O99.892, and O99.893), when reported as a
principal diagnosis, should exclude any CC secondary diagnosis.
Therefore, we are proposing to remove diagnosis codes O99.891, O99.892,
and O99.893 from the CC Exclusions List logic principal diagnosis
collection lists. Specifically, we are proposing to remove those
diagnosis codes from the following principal
[[Page 25183]]
diagnosis collection list numbers 0085, 0954, 0956 through 0963, 0972,
0988, 0991 through 0998, 1000 through 1002, 1004, 1006, 1009, 1011,
1014, 1015, 1019, 3999, 4000, 4002 through 4006, 4008, 4010, through
4013, 4017, 4020, 4021, 4023 through 4026, 4030, 4031, 4033 through
4043, 4050 through 4054, 4059 through 4063, 4065 and 4067, effective FY
2022.
We also received a request to review diagnosis codes describing
oxygen dependence, chronic obstructive pulmonary disease with
exacerbation, and chronic respiratory failure with regard to assignment
in MS-DRG 191 (Chronic Obstructive Pulmonary Disease with CC) and to
consider whether any changes to principal diagnosis collection number
0744 in the CC Exclusions List logic are warranted.
The requestor provided diagnosis codes J44.1 (Chronic obstructive
pulmonary disease with (acute) exacerbation), J96.11 (Chronic
respiratory failure with hypoxia (CC)) and Z99.81 (Dependence on
supplemental oxygen) for CMS to review. Specifically, the requestor
suggested that if oxygen dependence, by definition, is clinically
inherent to chronic respiratory failure, then CMS should consider
adding diagnosis code J44.1 to the CC Exclusions List logic principal
diagnosis collection list number 0744 and cause diagnosis code J96.11
to be considered as a NonCC when J44.1 is reported as the principal
diagnosis.
We reviewed the diagnosis codes and MS-DRG assignment as the
requestor suggested. We confirmed that when diagnosis code J44.1 is
reported as the principal diagnosis with the CC secondary diagnosis
code J96.11, and secondary diagnosis code Z99.81, the resulting MS-DRG
assignment is MS-DRG 191. We believe that diagnosis code J96.11 should
continue to group as a CC, to the ``with CC'' MS-DRG 191, when reported
as a secondary diagnosis code with diagnosis code J44.1 reported as the
principal diagnosis. We disagree with the requestor's suggestion that
every oxygen-dependent COPD patient has chronic respiratory failure,
and that separately reporting the chronic respiratory failure is
clinically redundant. Patients can be oxygen-dependent with COPD and
not have a diagnosis of chronic respiratory failure. Therefore, we are
proposing to maintain the structure of principal diagnosis collection
list number 0744 in the CC Exclusions List logic for FY 2022.
Finally, we received a request to reconsider the MCC exclusions for
diagnosis code I11.0 (Hypertensive heart disease with heart failure)
when reported as the principal diagnosis. According to the requestor,
there appears to be an inconsistency for the CC Exclusions List logic.
Specifically, the requestor noted that when diagnosis code I11.0 is
reported as the principal diagnosis, it causes the following MCC
secondary diagnosis codes to be considered as a NonCC.
[GRAPHIC] [TIFF OMITTED] TP10MY21.112
However, the requestor stated that diagnosis codes I50.21 (Acute
systolic (congestive) heart failure) and I50.31 (Acute diastolic
(congestive) heart failure) are not excluded from acting as MCCs when
diagnosis code I11.0 is reported as the principal diagnosis. The
requestor also stated that all diagnosis codes in category I50 (Heart
Failure) share common etiologies and demonstrate comparable severity of
illness. Therefore, the requestor suggested that none of the conditions
in this category (I50) should be excluded from acting as a MCC when
diagnosis code I11.0 is reported as a principal diagnosis.
We examined all the diagnosis codes in category I50 with regard to
the CC Exclusions List logic. In addition to diagnosis code I11.0, we
also reviewed diagnosis code I13.2 (Hypertensive heart and chronic
kidney disease with heart failure and with stage 5 chronic kidney
disease, or end stage renal disease) when reported as a principal
diagnosis because that diagnosis code also has the Tabular instruction
``use additional code to identify the type of heart failure''.
We found additional inconsistencies in the CC secondary diagnosis
heart failure codes where some diagnoses were excluded depending on the
principal diagnosis reported and others were not excluded. As a result,
we are proposing to revise the CC Exclusions Logic list for diagnosis
codes I11.0 and I13.2 when reported as a principal diagnosis to ensure
they are consistent in the CC and MCC diagnoses they exclude. In the
following table we show the findings for each diagnosis code in
category I50 with respect to the current severity level (MCC, CC or
NonCC), if it is currently excluded as a CC or MCC when reported with
either diagnosis code I11.0 or I13.2 as the principal diagnosis, and
what our proposal is under the CC Exclusions List logic for FY 2022.
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We are proposing additional changes to the ICD-10 MS-DRGs Version
39 CC Exclusion List based on the diagnosis and procedure code updates
as discussed in section II.D.13. of this FY 2022 IPPS/LTCH PPS proposed
rule. Therefore, we have developed Table 6G.1.--Proposed Secondary
Diagnosis Order Additions to the CC Exclusions List--FY 2022; Table
6G.2.--Proposed Principal Diagnosis Order Additions to the CC
Exclusions List--FY 2022; Table 6H.1.--Proposed Secondary Diagnosis
Order Deletions to the CC Exclusions List--FY 2022; and Table 6H.2.--
Proposed Principal Diagnosis Order Deletions to the CC Exclusions
List--FY 2022. For Table 6G.1, each secondary diagnosis code proposed
for addition to the CC Exclusion List is shown with an asterisk and the
principal diagnoses proposed to exclude the secondary diagnosis code
are provided in the indented column immediately following it. For Table
6G.2, each of the principal diagnosis codes for which there is a CC
exclusion is shown with an asterisk and the conditions proposed for
addition to the CC Exclusion List that will not count as a CC are
provided in an indented column immediately following the affected
principal diagnosis. For Table 6H.1, each secondary diagnosis code
proposed for deletion from the CC Exclusion List is shown with an
asterisk followed by the principal diagnosis codes that currently
exclude it. For Table 6H.2, each of the principal diagnosis codes is
shown with an asterisk and the proposed deletions to the CC Exclusions
List are provided in an indented column immediately following the
affected principal diagnosis. Tables 6G.1., 6G.2., 6H.1., and 6H.2.
associated with this proposed rule are available via the internet on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
[[Page 25186]]
13. Proposed Changes to the ICD-10-CM and ICD-10-PCS Coding Systems
To identify new, revised and deleted diagnosis and procedure codes,
for FY 2022, we have developed Table 6A.--New Diagnosis Codes, Table
6B.--New Procedure Codes, Table 6C.--Invalid Diagnosis Codes, Table
6D.--Invalid Procedure Codes and Table 6E.--Revised Diagnosis Code
Titles for this proposed rule.
These tables are not published in the Addendum to this proposed
rule, but are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html as described in section VI. of the
Addendum to this proposed rule. As discussed in section II.D.16. of the
preamble of this proposed rule, the code titles are adopted as part of
the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee
meeting process. Therefore, although we publish the code titles in the
IPPS proposed and final rules, they are not subject to comment in the
proposed or final rules.
We are proposing the MDC and MS-DRG assignments for the new
diagnosis codes and procedure codes as set forth in Table 6A.--New
Diagnosis Codes and Table 6B.--New Procedure Codes. In addition, the
proposed severity level designations for the new diagnosis codes are
set forth in Table 6A. and the proposed O.R. status for the new
procedure codes are set forth in Table 6B. Consistent with our
established process, we examined the MS-DRG assignment and the
attributes (severity level and O.R. status) of the predecessor
diagnosis or procedure code, as applicable, to inform our proposed
assignments and designations. Specifically, we review the predecessor
code and MS-DRG assignment most closely associated with the new
diagnosis or procedure code, and in the absence of claims data, we
consider other factors that may be relevant to the MS-DRG assignment,
including the severity of illness, treatment difficulty, complexity of
service and the resources utilized in the diagnosis and/or treatment of
the condition. We note that this process does not automatically result
in the new diagnosis or procedure code being proposed for assignment to
the same MS-DRG or to have the same designation as the predecessor
code.
We are making available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html
the following tables associated with this proposed rule:
Table 6A.--New Diagnosis Codes--FY 2022;
Table 6B.--New Procedure Codes--FY 2022;
Table 6C.--Invalid Diagnosis Codes--FY 2022;
Table 6D.--Invalid Procedure Codes--FY 2022;
Table 6E.--Revised Diagnosis Code Titles--FY 2022;
Table 6G.1.--Proposed Secondary Diagnosis Order Additions
to the CC Exclusions List--FY 2022;
Table 6G.2.--Proposed Principal Diagnosis Order Additions
to the CC Exclusions List--FY 2022;
Table 6H.1.--Proposed Secondary Diagnosis Order Deletions
to the CC Exclusions List--FY 2022;
Table 6H.2.--Proposed Principal Diagnosis Order Deletions
to the CC Exclusions List--FY 2022;
Table 6I.1.--Proposed Additions to the MCC List--FY 2022;
Table 6I.2.--Proposed Deletions to the MCC List--FY 2022;
and
Table 6J.1.--Proposed Additions to the CC List--FY 2022.
14. Proposed Changes to the Medicare Code Editor (MCE)
The Medicare Code Editor (MCE) is a software program that detects
and reports errors in the coding of Medicare claims data. Patient
diagnoses, procedure(s), and demographic information are entered into
the Medicare claims processing systems and are subjected to a series of
automated screens. The MCE screens are designed to identify cases that
require further review before classification into an MS-DRG.
As discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58448),
we made available the FY 2021 ICD-10 MCE Version 38 manual file. The
manual contains the definitions of the Medicare code edits, including a
description of each coding edit with the corresponding diagnosis and
procedure code edit lists. The link to this MCE manual file, along with
the link to the mainframe and computer software for the MCE Version 38
(and ICD-10 MS-DRGs) are posted on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
For this FY 2022 IPPS/LTCH PPS proposed rule, we address the MCE
requests we received by the November 1, 2020 deadline. We also discuss
the proposals we are making based on our internal review and analysis.
a. External Causes of Morbidity Codes as Principal Diagnosis
In the MCE, the external cause codes (V, W, X, or Y codes) describe
the circumstance causing an injury, not the nature of the injury, and
therefore should not be used as a principal diagnosis.
As discussed in section II.D.13. of the preamble of this proposed
rule, Table 6A.--New Diagnosis Codes, lists the diagnosis codes that
have been approved to date which will be effective with discharges on
and after October 1, 2021. We are proposing to add the following new
ICD-10-CM diagnosis codes to the External Causes of Morbidity edit code
list.
[GRAPHIC] [TIFF OMITTED] TP10MY21.115
[[Page 25187]]
b. Age Conflict Edit
In the MCE, the Age conflict edit exists to detect inconsistencies
between a patient's age and any diagnosis on the patient's record; for
example, a 5-year-old patient with benign prostatic hypertrophy or a
78-year-old patient coded with a delivery. In these cases, the
diagnosis is clinically and virtually impossible for a patient of the
stated age. Therefore, either the diagnosis or the age is presumed to
be incorrect. Currently, in the MCE, the following four age diagnosis
categories appear under the Age conflict edit and are listed in the
manual and written in the software program:
Perinatal/Newborn--Age 0 years only; a subset of diagnoses
which will only occur during the perinatal or newborn period of age 0
(for example, tetanus neonatorum, health examination for newborn under
8 days old).
Pediatric--Age is 0-17 years inclusive (for example,
Reye's syndrome, routine child health exam).
Maternity--Age range is 9-64 years inclusive (for example,
diabetes in pregnancy, antepartum pulmonary complication).
Adult--Age range is 15-124 years inclusive (for example,
senile delirium, mature cataract).
(1) Pediatric Diagnoses
Under the ICD-10 MCE, the Pediatric diagnoses category for the Age
conflict edit considers the age range of 0 to 17 years inclusive. For
that reason, the diagnosis codes on this Age conflict edit list would
be expected to apply to conditions or disorders specific to that age
group only.
As discussed in section II.D.13. of the preamble of this proposed
rule, Table 6A.--New Diagnosis Codes, lists the diagnosis codes that
have been approved to date which will be effective with discharges on
and after October 1, 2021. We are proposing to add the following new
ICD-10-CM diagnosis codes to the Pediatric diagnoses category code list
under the Age conflict edit.
[GRAPHIC] [TIFF OMITTED] TP10MY21.116
c. Sex Conflict Edit
In the MCE, the Sex conflict edit detects inconsistencies between a
patient's sex and any diagnosis or procedure on the patient's record;
for example, a male patient with cervical cancer (diagnosis) or a
female patient with a prostatectomy (procedure). In both instances, the
indicated diagnosis or the procedure conflicts with the stated sex of
the patient. Therefore, the patient's diagnosis, procedure, or sex is
presumed to be incorrect.
(1) Diagnoses for Females Only Edit
As discussed in section II.D.13. of the preamble of this proposed
rule, Table 6A.--New Diagnosis Codes, lists the new diagnosis codes
that have been approved to date which will be effective with discharges
on and after October 1, 2021. We are proposing to add the following new
ICD-10-CM diagnosis codes to the edit code list for the Diagnoses for
Females Only edit.
[GRAPHIC] [TIFF OMITTED] TP10MY21.117
d. Unacceptable Principal Diagnosis Edit
In the MCE, there are select codes that describe a circumstance
which influences an individual's health status but does not actually
describe a current illness or injury. There also are codes that are not
specific manifestations but may be due to an underlying cause. These
codes are considered unacceptable as a principal diagnosis. In limited
situations, there are a few codes on the MCE Unacceptable Principal
Diagnosis edit code list that are considered ``acceptable'' when a
specified secondary diagnosis is also coded and reported on the claim.
As discussed in Section II.D.13. of the preamble of this proposed
rule, Table 6A.--New Diagnosis Codes, lists the new diagnosis codes
that have been approved to date which will be effective with discharges
on and after October 1, 2021. In addition, as a result of proposed new
instructional notes to ``Code first underlying disease'' (which
indicate the proper sequencing order of the codes) for existing
diagnosis codes found at subcategory M40.1 (Other secondary kyphosis)
and subcategory M41.5 (Other secondary scoliosis) discussed at the
September 8-9, 2020 ICD-10 Coordination and Maintenance Committee
meeting, we are proposing to add the following new and, if these
instructional notes are finalized, existing ICD-10-CM diagnosis codes
at subcategories M40.1 and M41.5, to the Unacceptable Principal
Diagnosis edit code list.
BILLING CODE 4120-01-P
[[Page 25188]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.118
BILLING CODE 4120-01-C
In addition, as discussed in section II.D.13. of the preamble of
this proposed rule, Table 6C.--Invalid Diagnosis Codes, lists the
diagnosis codes that are
[[Page 25189]]
no longer effective October 1, 2021. Included in this table are the
following ICD-10-CM diagnosis codes that are currently listed on the
Unacceptable Principal Diagnosis edit code list. We are proposing to
delete these codes from the Unacceptable Principal Diagnosis edit code
list.
[GRAPHIC] [TIFF OMITTED] TP10MY21.119
e. Unspecified Codes
As discussed in section II.D.12.c. of the preamble of this proposed
rule, we are requesting public comments on a potential change to the
severity level designations for ``unspecified'' ICD-10-CM diagnosis
codes that we are considering adopting for FY 2022. In connection with
that request, we are also requesting public comments on the potential
creation of a new MCE code edit involving these ``unspecified'' codes
for FY 2022. Specifically, this MCE code edit could trigger when an
``unspecified'' diagnosis code currently designated as either a CC or
MCC, that includes other codes available in that code subcategory that
further specify the anatomic site, is entered. We refer the reader to
table 6P.3a (which is available via the internet on the CMS website at:
http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) for the list of unspecified diagnosis
codes that would be subject to this edit. This edit could signal to the
provider that a more specific code is available to report. We believe
this edit aligns with documentation improvement efforts and leverages
the specificity within ICD-10. As part of our request for comment on
the potential creation of this new MCE code edit for these
``unspecified'' codes, we are interested in comments on how this MCE
code edit may be developed for FY 2022 to more accurately reflect each
health care encounter and improve the reliability and validity of the
coded data.
f. Future Enhancement
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38053 through 38054)
we noted the importance of ensuring accuracy of the coded data from the
reporting, collection, processing, coverage, payment and analysis
aspects. Subsequently, in the FY 2019 IPPS/LTCH PPS proposed rule (83
FR 20235) we stated that we engaged a contractor to assist in the
review of the limited coverage and non-covered procedure edits in the
MCE that may also be present in other claims processing systems that
are utilized by our MACs. The MACs must adhere to criteria specified
within the National Coverage Determinations (NCDs) and may implement
their own edits in addition to what is already incorporated into the
MCE, resulting in duplicate edits. The objective of this review is to
identify where duplicate edits may exist and to determine what the
impact might be if these edits were to be removed from the MCE.
We have also noted that the purpose of the MCE is to ensure that
errors and inconsistencies in the coded data are recognized during
Medicare claims processing. As we indicated in the FY 2019 IPPS/LTCH
PPS final rule (83 FR 41228), we are considering whether the inclusion
of coverage edits in the MCE necessarily aligns with that specific goal
because the focus of coverage edits is on whether or not a particular
service is covered for payment purposes and not whether it was coded
correctly.
As we continue to evaluate the purpose and function of the MCE with
respect to ICD-10, we encourage public input for future discussion. As
we have discussed in prior rulemaking, we recognize a need to further
examine the current list of edits and the definitions of those edits.
We continue to encourage public comments on whether there are
additional concerns with the current edits, including specific edits or
language that should be removed or revised, edits that should be
combined, or new edits that should be added to assist in detecting
errors or inaccuracies in the coded data. Comments should be directed
to the MS-DRG Classification Change Mailbox located at
[email protected] by November 1, 2021.
15. Proposed Changes to Surgical Hierarchies
Some inpatient stays entail multiple surgical procedures, each one
of which, occurring by itself, could result in assignment of the case
to a different MS-DRG within the MDC to which the principal diagnosis
is assigned. Therefore, it is necessary to have a decision rule within
the GROUPER by which these cases are assigned to a single MS-DRG. The
surgical hierarchy, an ordering of surgical classes from most resource-
intensive to least resource-intensive, performs that function.
Application of this hierarchy ensures that cases involving multiple
surgical procedures are assigned to the MS-DRG associated with the most
resource-intensive surgical class.
A surgical class can be composed of one or more MS-DRGs. For
example, in MDC 11, the surgical class ``kidney transplant'' consists
of a single MS-DRG (MS-DRG 652) and the class ``major bladder
procedures'' consists of three MS-DRGs (MS-DRGs 653, 654, and 655).
Consequently, in many cases, the surgical hierarchy has an impact on
more than one MS-DRG. The methodology for determining the most
resource-intensive surgical class involves weighting the average
resources for each MS-DRG by frequency to determine the weighted
average resources for each surgical class. For example, assume surgical
class A includes MS-DRGs 001 and 002 and surgical class B includes MS-
DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG
001 are higher than that of MS-DRG 003, but the average costs of MS-
DRGs 004 and 005
[[Page 25190]]
are higher than the average costs of MS-DRG 002. To determine whether
surgical class A should be higher or lower than surgical class B in the
surgical hierarchy, we would weigh the average costs of each MS-DRG in
the class by frequency (that is, by the number of cases in the MS-DRG)
to determine average resource consumption for the surgical class. The
surgical classes would then be ordered from the class with the highest
average resource utilization to that with the lowest, with the
exception of ``other O.R. procedures'' as discussed in this proposed
rule.
This methodology may occasionally result in assignment of a case
involving multiple procedures to the lower-weighted MS-DRG (in the
highest, most resource-intensive surgical class) of the available
alternatives. However, given that the logic underlying the surgical
hierarchy provides that the GROUPER search for the procedure in the
most resource-intensive surgical class, in cases involving multiple
procedures, this result is sometimes unavoidable.
We note that, notwithstanding the foregoing discussion, there are a
few instances when a surgical class with a lower average cost is
ordered above a surgical class with a higher average cost. For example,
the ``other O.R. procedures'' surgical class is uniformly ordered last
in the surgical hierarchy of each MDC in which it occurs, regardless of
the fact that the average costs for the MS-DRG or MS-DRGs in that
surgical class may be higher than those for other surgical classes in
the MDC. The ``other O.R. procedures'' class is a group of procedures
that are only infrequently related to the diagnoses in the MDC, but are
still occasionally performed on patients with cases assigned to the MDC
with these diagnoses. Therefore, assignment to these surgical classes
should only occur if no other surgical class more closely related to
the diagnoses in the MDC is appropriate.
A second example occurs when the difference between the average
costs for two surgical classes is very small. We have found that small
differences generally do not warrant reordering of the hierarchy
because, as a result of reassigning cases on the basis of the hierarchy
change, the average costs are likely to shift such that the higher-
ordered surgical class has lower average costs than the class ordered
below it.
For this FY 2022 IPPS/LTCH PPS proposed rule, we received a request
to examine the MS-DRG hierarchy within MDC 05 (Diseases and Disorders
of the Circulatory System). The requestor stated its request to review
the hierarchy within MDC 05 was based on the relative weights within
each MS-DRG subdivision which they stated are supportive of higher
position within the hierarchy. The requestor stated that when multiple
procedures are performed, it is reasonable for providers to be
compensated for the highest weighted procedure. The requestor did not
specify which data year it analyzed to identify the relative weights.
As discussed in this section, in reviewing the surgical hierarchy, we
weigh the average costs of each MS-DRG in the class by frequency (that
is, by the number of cases in the MS-DRG), not the relative weights of
each MS-DRG as suggested by the requestor, to determine average
resource consumption for the surgical class; therefore, consistent with
our annual process, we used the methodology as described previously to
review the surgical hierarchy within MDC 05.
Based on our review of the surgical hierarchy within MDC 05 in
response to this request, and in response to the request we received to
review the MS-DRG assignments for cases involving the surgical ablation
procedure for atrial fibrillation as discussed in section II.D.5.e. of
the preamble of this proposed rule, we are proposing to revise the
surgical hierarchy for the MS-DRGs in MDC 05 for FY 2022. Specifically,
we are proposing to sequence MS-DRGs 231-236 above MS-DRGs 222-227 and
below MS-DRGs 216-221, sequence MS-DRGs 222-227 above MS-DRGs 266-227
and below MS-DRGs 231-236, sequence MS-DRGs 266-267 above MS-DRGs 268-
269 and below MS-DRGs 222-227, sequence MS-DRGs 228-229 above MS-DRGs
319-320 and below MS-DRGs 268-269.
Our proposal for Appendix D MS-DRG Surgical Hierarchy by MDC and
MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 39 is
illustrated in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.120
16. Maintenance of the ICD-10-CM and ICD-10-PCS Coding Systems
In September 1985, the ICD-9-CM Coordination and Maintenance
Committee was formed. This is a Federal interdepartmental committee,
co-chaired by the Centers for Disease Control and Prevention's (CDC)
National Center for Health Statistics (NCHS) and CMS, charged with
maintaining and updating the ICD-9-CM system. The final update to ICD-
9-CM codes was made on October 1, 2013. Thereafter, the name of the
Committee was changed to the ICD-10 Coordination and Maintenance
Committee, effective with the March 19-20, 2014 meeting. The ICD-10
Coordination and Maintenance Committee addresses updates to the ICD-10-
CM and ICD-10-PCS coding systems. The Committee is jointly responsible
for approving coding changes, and developing errata, addenda, and other
modifications to the coding systems to reflect newly developed
procedures and technologies and newly identified diseases. The
Committee is also responsible for promoting the use of Federal and non-
Federal educational programs and other communication techniques with a
view toward standardizing coding applications and upgrading the quality
of the classification system.
The official list of ICD-9-CM diagnosis and procedure codes by
fiscal year can be found on the CMS website at: http://cms.hhs.gov/
Medicare/Coding/ICD9ProviderDiagnosticCodes/
[[Page 25191]]
codes.html. The official list of ICD-10-CM and ICD-10-PCS codes can be
found on the CMS website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html.
The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM
diagnosis codes included in the Tabular List and Alphabetic Index for
Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD-
9-CM procedure codes included in the Tabular List and Alphabetic Index
for Procedures.
The Committee encourages participation in the previously mentioned
process by health-related organizations. In this regard, the Committee
holds public meetings for discussion of educational issues and proposed
coding changes. These meetings provide an opportunity for
representatives of recognized organizations in the coding field, such
as the American Health Information Management Association (AHIMA), the
American Hospital Association (AHA), and various physician specialty
groups, as well as individual physicians, health information management
professionals, and other members of the public, to contribute ideas on
coding matters. After considering the opinions expressed during the
public meetings and in writing, the Committee formulates
recommendations, which then must be approved by the agencies.
The Committee presented proposals for coding changes for
implementation in FY 2022 at a public meeting held on September 8-9,
2020 and finalized the coding changes after consideration of comments
received at the meetings and in writing by November 09, 2020.
The Committee held its 2021 meeting on March 9-10, 2021. The
deadline for submitting comments on these code proposals was April 9,
2021. It was announced at this meeting that any new diagnosis and
procedure codes for which there was consensus of public support and for
which complete tabular and indexing changes would be made by June 2021
would be included in the October 1, 2021 update to the ICD-10-CM
diagnosis and ICD-10-PCS procedure code sets. As discussed in earlier
sections of the preamble of this proposed rule, there are new, revised,
and deleted ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes
that are captured in Table 6A.--New Diagnosis Codes, Table 6B.--New
Procedure Codes, Table 6C.--Invalid Diagnosis Codes, Table 6D.--Invalid
Procedure Codes, and Table 6E.--Revised Diagnosis Code Titles for this
proposed rule, which are available via the internet on the CMS website
at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. The code titles are adopted as part of
the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee
process. Therefore, although we make the code titles available for the
IPPS proposed rule, they are not subject to comment in the proposed
rule. Because of the length of these tables, they are not published in
the Addendum to the proposed rule. Rather, they are available via the
internet as discussed in section VI. of the Addendum to the proposed
rule.
Recordings for the virtual meeting discussions of the procedure
codes at the Committee's September 8-9, 2020 meeting and the March 9-
10, 2021 meeting can be obtained from the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials. The
materials for the discussions relating to diagnosis codes at the
September 8-9, 2020 meeting and March 9-10, 2021 meeting can be found
at: http://www.cdc.gov/nchs/icd/icd10cm_maintenance.html. These
websites also provide detailed information about the Committee,
including information on requesting a new code, participating in a
Committee meeting, timeline requirements and meeting dates.
We encourage commenters to submit questions and comments on coding
issues involving diagnosis codes via Email to: cdc.gov">nchsicd10cm@cdc.gov.
Questions and comments concerning the procedure codes should be
submitted via Email to: [email protected].
As a result of the ongoing COVID-19 public health emergency, the
CDC implemented six new diagnosis codes describing conditions related
to COVID-19 into the ICD-10-CM effective with discharges on and after
January 1, 2021. The diagnosis codes are
[GRAPHIC] [TIFF OMITTED] TP10MY21.121
We refer the reader to the CDC web page at https://www.cdc.gov/nchs/icd/icd10cm.htm for additional details regarding the
implementation of these new diagnosis codes.
We provided the MS-DRG assignments for the six diagnosis codes
effective with discharges on and after January 1, 2021, consistent with
our established process for assigning new diagnosis codes.
Specifically, we review the predecessor diagnosis code and MS-DRG
assignment most closely associated with the new diagnosis code, and
consider other factors that may be relevant to the MS-DRG assignment,
including the severity of illness, treatment difficulty, and the
resources utilized for the specific condition/diagnosis. We note that
this process does not automatically result in the new
[[Page 25192]]
diagnosis code being assigned to the same MS-DRG as the predecessor
code. The assignments for the previously listed diagnosis codes are
reflected in Table 6A- New Diagnosis Codes (which is available via the
internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS). As with the other new
diagnosis codes and MS-DRG assignments included in Table 6A of this
proposed rule, we are soliciting public comments on the most
appropriate MDC, MS-DRG, and severity level assignments for these codes
for FY 2022, as well as any other options for the GROUPER logic.
In addition, CMS implemented 21 new procedure codes describing the
introduction or infusion of therapeutics, including monoclonal
antibodies and vaccines for COVID-19 treatment, into the ICD-10-PCS
effective with discharges on and after January 01, 2021. The 21
procedure codes listed in this section of this rule are designated as
non-O.R. and do not affect any MDC or MS-DRG assignment as shown in the
following table
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP10MY21.122
[[Page 25193]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.123
BILLING CODE 4120-01-C
The ICD-10 MS-DRG assignment for cases reporting any one of the 21
procedure codes is dependent on the reported principal diagnosis, any
secondary diagnoses defined as a CC or MCC, procedures or services
performed, age, sex, and discharge status. The 21 procedure codes are
reflected in Table 6B--New Procedure Codes (which is available via the
internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS.) As with the other new
procedure codes and MS-DRG assignments included in Table 6B of this
proposed rule, we are soliciting public comments on the most
appropriate MDC, MS-DRG, and operating room status assignments for
[[Page 25194]]
these codes for FY 2022, as well as any other options for the GROUPER
logic.
We note that Change Request (CR) 11895, Transmittal 10654, titled
``Fiscal Year (FY) 2021 Annual Update to the Medicare Code Editor (MCE)
and International Classification of Diseases, Tenth Revision, Clinical
Modification (ICD-10-CM) and Procedure Coding System (ICD-10-PCS)'',
was issued on March 12, 2021 (available via the internet on the CMS
website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r10654cp) regarding the release of an updated
version of the ICD-10 MS-DRG GROUPER and Medicare Code Editor software,
Version 38.1, effective with discharges on and after January 1, 2021,
reflecting the new diagnosis and procedure codes. The updated software,
along with the updated ICD-10 MS-DRG V38.1 Definitions Manual and the
Definitions of Medicare Code Edits V38.1 manual is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.
In the September 7, 2001 final rule implementing the IPPS new
technology add-on payments (66 FR 46906), we indicated we would attempt
to include proposals for procedure codes that would describe new
technology discussed and approved at the Spring meeting as part of the
code revisions effective the following October.
Section 503(a) of Public Law 108-173 included a requirement for
updating diagnosis and procedure codes twice a year instead of a single
update on October 1 of each year. This requirement was included as part
of the amendments to the Act relating to recognition of new technology
under the IPPS. Section 503(a) of Public Law 108-173 amended section
1886(d)(5)(K) of the Act by adding a clause (vii) which states that the
Secretary shall provide for the addition of new diagnosis and procedure
codes on April 1 of each year, but the addition of such codes shall not
require the Secretary to adjust the payment (or diagnosis-related group
classification) until the fiscal year that begins after such date. This
requirement improves the recognition of new technologies under the IPPS
by providing information on these new technologies at an earlier date.
Data will be available 6 months earlier than would be possible with
updates occurring only once a year on October 1.
While section 1886(d)(5)(K)(vii) of the Act states that the
addition of new diagnosis and procedure codes on April 1 of each year
shall not require the Secretary to adjust the payment, or DRG
classification, under section 1886(d) of the Act until the fiscal year
that begins after such date, we have to update the DRG software and
other systems in order to recognize and accept the new codes. We also
publicize the code changes and the need for a mid-year systems update
by providers to identify the new codes. Hospitals also have to obtain
the new code books and encoder updates, and make other system changes
in order to identify and report the new codes.
The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance
Committee holds its meetings in the spring and fall in order to update
the codes and the applicable payment and reporting systems by October 1
of each year. Items are placed on the agenda for the Committee meeting
if the request is received at least 3 months prior to the meeting. This
requirement allows time for staff to review and research the coding
issues and prepare material for discussion at the meeting. It also
allows time for the topic to be publicized in meeting announcements in
the Federal Register as well as on the CMS website. A complete addendum
describing details of all diagnosis and procedure coding changes, both
tabular and index, is published on the CMS and NCHS websites in June of
each year. Publishers of coding books and software use this information
to modify their products that are used by health care providers.
Historically, this 5-month time period has proved to be necessary for
hospitals and other providers to update their systems.
A discussion of this timeline and the need for changes are included
in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance
Committee Meeting minutes. The public agreed that there was a need to
hold the fall meetings earlier, in September or October, in order to
meet the new implementation dates. The public provided comment that
additional time would be needed to update hospital systems and obtain
new code books and coding software. There was considerable concern
expressed about the impact this April update would have on providers.
In the FY 2005 IPPS final rule, we implemented section
1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law
108-173, by developing a mechanism for approving, in time for the April
update, diagnosis and procedure code revisions needed to describe new
technologies and medical services for purposes of the new technology
add-on payment process. We also established the following process for
making these determinations. Topics considered during the Fall ICD-10
(previously ICD-9-CM) Coordination and Maintenance Committee meeting
are considered for an April 1 update if a strong and convincing case is
made by the requestor during the Committee's public meeting. The
request must identify the reason why a new code is needed in April for
purposes of the new technology process. Meeting participants and those
reviewing the Committee meeting materials are provided the opportunity
to comment on this expedited request. All other topics are considered
for the October 1 update. Participants of the Committee meeting and
those reviewing the Committee meeting materials are encouraged to
comment on all such requests. There were no code requests approved for
an expedited April 1, 2021 implementation at the September 8-9, 2020
Committee meetings. Therefore, there were no new codes implemented
April 1, 2021.
At the March 9-10, 2021 ICD-10 Coordination and Maintenance
Committee meeting we announced our consideration of an April 1
implementation date for ICD-10-CM diagnosis and ICD-10-PCS procedure
code updates, in addition to the current October 1 annual update for
ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes. We stated
that this April 1 code update would be in addition to the existing
April 1 update under section 1886(d)(5)(k)(vii) of the Act for
diagnosis or procedure code revisions needed to describe new
technologies and medical services for purposes of the new technology
add-on payment process. As explained during the March 9-10, 2021
meeting, we believe this additional April 1 implementation date for new
codes would allow for earlier recognition of diagnoses, conditions, and
illnesses as well as procedures, services, and treatments in the claims
data. We also believe this earlier recognition would be beneficial for
purposes of reporting, data collection, tracking clinical outcomes,
claims processing, surveillance, research, policy decisions and data
interoperability. We note, as previously summarized, that in 2005, in
connection with the implementation of the current April 1 update for
diagnosis or procedure code revisions for purposes of the new
technology add-on payment process, stakeholders expressed concerns with
an April 1 update, specifically with regard to the time needed to
update hospital systems and obtain new code books and coding software.
We believe that the advances in technology that have occurred since
[[Page 25195]]
that time, including the use of electronic health records (EHRs),
electronic coding books, and updated encoder software that are now
utilized by the majority of providers, would alleviate those concerns
and make a broader April 1 update more feasible today. Consistent with
our established process for the existing April 1 update under section
1886(d)(5)(k)(vii) of the Act, if adopted, any new ICD-10 code updates
finalized for implementation on the following April 1 would be
announced in November of the prior year, which would provide a 4-month
timeframe for the public to receive notice about the diagnosis and/or
procedure code updates with respect to the codes, code descriptions,
code designations (severity level for diagnosis codes or O.R. status
for procedure code) and code assignment under the ICD-10 MS-DRGs. As
discussed during the March 9-10, 2021 meeting, all April 1 code update
files would be made publicly available by February 1, providing a 2-
month timeframe for providers to incorporate systems updates. We also
do not anticipate any need for code book publishers to issue new code
books as a result of an April 1 code update, if adopted. Rather, as was
done in the past at the publisher's discretion, supplemental pages
containing the code update information were made available and sent to
purchasers of the code book products. We further note that
historically, coders would hand-write any updates or notes directly
into their code books. In addition, with the availability of electronic
code book files, we would anticipate any April 1 code updates, if
adopted, could be reasonably completed in the allotted timeframe. For
these same reasons, we also do not believe a 5-month time period would
continue to be needed to update providers' systems to reflect newly
approved coding changes. We further note that if an April 1 update were
to be adopted, it could be through a phased approach, such that
initially, the number and nature of the code updates would be fewer and
less comprehensive as compared to the existing October 1 update. For
example, it was discussed during the meeting that consideration could
first be given to proposals identified as ``Addenda''. For diagnosis
codes, the proposed addenda updates typically consist primarily of
minor revisions to the Index and Tabular List, such as corrections to
typos and changes to instructional notes. For procedure codes, the
proposed addenda updates typically consist primarily of minor revisions
to the Index and Tables, such as adding or deleting entries to describe
a body part or approach value or making changes to the Substance and
Device Keys. We would use our established process to implement an April
1 code update, which would include presenting proposals for April 1
consideration at the September ICD-10 Coordination and Maintenance
Committee meeting, requesting public comments, reviewing the public
comments, finalizing codes, and announcing the new codes with their
assignments consistent with the new GROUPER release information. Under
our contemplated process, requestors would indicate whether they are
submitting their code request for consideration for an April 1
implementation date, if adopted, or an October 1 implementation date.
The ICD-10 Coordination and Maintenance Committee would make efforts to
accommodate the requested implementation date for each request
submitted. However, the Committee would determine which requests would
be presented for consideration for an April 1 implementation date or an
October 1 implementation date. We refer the reader to the Agenda packet
from the meeting at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials for additional information regarding this
announcement and our request for comments.
If this new April 1 implementation date is adopted, we would assign
the codes approved for the April 1 update to an MS-DRG(s) using our
established process for GROUPER assignments for new diagnosis and
procedure codes. Specifically, consistent with our established process
for assigning new diagnosis and procedure codes, we would review the
predecessor code and MS-DRG assignment most closely associated with the
new diagnosis or procedure code, and in the absence of claims data, we
would consider other factors that may be relevant to the MS-DRG
assignment, including the severity of illness, treatment difficulty,
complexity of service and the resources utilized in the diagnosis and/
or treatment of the condition. We note that this process would not
automatically result in the new diagnosis or procedure code being
assigned to the same MS-DRG or having the same designation as the
predecessor code.
ICD-9-CM addendum and code title information is published on the
CMS website at: http://www.cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/01overview.asp#TopofPage. ICD-10-CM and
ICD-10-PCS addendum and code title information is published on the CMS
website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html. CMS
also sends electronic files containing all ICD-10-CM and ICD-10-PCS
coding changes to its Medicare contractors for use in updating their
systems and providing education to providers.
Information on ICD-10-CM diagnosis codes, along with the Official
ICD-10-CM Coding Guidelines, can be found on the CDC website at:
https://www.cdc.gov/nchs/icd/icd10cm.htm.
Additionally, information on new, revised, and deleted ICD-10-CM
diagnosis and ICD-10-PCS procedure codes is provided to the AHA for
publication in the Coding Clinic for ICD-10. The AHA also distributes
coding update information to publishers and software vendors.
For FY 2021, there are currently 72,621 diagnosis codes and 78,136
ICD-10-PCS procedure codes. As displayed in Table 6A.--New Diagnosis
Codes and in Table 6B.--New Procedure Codes associated with this
proposed rule (and available via the internet on the CMS website at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index/, there are 147 new diagnosis codes and 106 new
procedure codes that have been finalized for FY 2022 at the time of the
development of this proposed rule. The code titles are adopted as part
of the ICD-10 Coordination and Maintenance Committee process. Thus,
although we publish the code titles in the IPPS proposed and final
rules, they are not subject to comment in the proposed or final rules.
We will continue to provide the October updates in this manner in the
IPPS proposed and final rules.
17. Replaced Devices Offered Without Cost or With a Credit
a. Background
In the FY 2008 IPPS final rule with comment period (72 FR 47246
through 47251), we discussed the topic of Medicare payment for devices
that are replaced without cost or where credit for a replaced device is
furnished to the hospital. We implemented a policy to reduce a
hospital's IPPS payment for certain MS-DRGs where the implantation of a
device that subsequently failed or was recalled determined the base MS-
DRG assignment. At that time, we specified that we will reduce a
hospital's IPPS payment for those MS-DRGs where the hospital received a
credit for a replaced device equal to 50 percent or more of the cost of
the device.
[[Page 25196]]
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 through
51557), we clarified this policy to state that the policy applies if
the hospital received a credit equal to 50 percent or more of the cost
of the replacement device and issued instructions to hospitals
accordingly.
b. Proposed Changes for FY 2022
For FY 2022 we are proposing not to add any MS-DRGs to the policy
for replaced devices offered without cost or with a credit. We are
proposing to continue to include the existing MS-DRGs currently subject
to the policy as displayed in the following table.
BILLING CODE 4120-01-P
[[Page 25197]]
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[[Page 25198]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.125
BILLING CODE 4120-01-C
The final list of MS-DRGs subject to the IPPS policy for replaced
devices offered without cost or with a credit will be included in the
FY 2022 IPPS/LTCH PPS final rule and also will be issued to providers
in the form of a Change Request (CR).
II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-
DRG) Classifications and Relative Weights
E. Recalibration of the FY 2022 MS-DRG Relative Weights
1. Data Sources for Developing the Relative Weights
In accordance with our proposal as discussed in section I.F. of
this proposed rule, for the purposes of establishing the FY 2022 MS-DRG
relative weights, we are proposing to use the FY 2019 MedPAR claims
data, based on claims received by CMS through March 31, 2020, and the
March 2020 update of the FY 2018 HCRIS file where we ordinarily would
have used the FY 2020 MedPAR claims data, based on claims received by
CMS through December 31, 2020, and the December 2020 update of the FY
2019 HCRIS file. We refer the reader to section I.F. of this
[[Page 25199]]
proposed rule for further discussion of our analysis of the best
available data for purposes of the FY 2022 ratesetting and our related
proposals.
Consistent with our established policy, in developing the MS-DRG
relative weights for FY 2022, we are proposing to use two data sources:
Claims data and cost report data. The claims data source is the MedPAR
file, which includes fully coded diagnostic and procedure data for all
Medicare inpatient hospital bills. The FY 2019 MedPAR data used in this
proposed rule include discharges occurring on October 1, 2018, through
September 30, 2019, based on bills received by CMS through March 31,
2020, from all hospitals subject to the IPPS and short-term, acute care
hospitals in Maryland (which at that time were under a waiver from the
IPPS).
The FY 2019 MedPAR file used in calculating the proposed relative
weights includes data for approximately 9,217,828 Medicare discharges
from IPPS providers. Discharges for Medicare beneficiaries enrolled in
a Medicare Advantage managed care plan are excluded from this analysis.
These discharges are excluded when the MedPAR ``GHO Paid'' indicator
field on the claim record is equal to ``1'' or when the MedPAR DRG
payment field, which represents the total payment for the claim, is
equal to the MedPAR ``Indirect Medical Education (IME)'' payment field,
indicating that the claim was an ``IME only'' claim submitted by a
teaching hospital on behalf of a beneficiary enrolled in a Medicare
Advantage managed care plan. In addition, the March 31, 2020 update of
the FY 2019 MedPAR file complies with version 5010 of the X12 HIPAA
Transaction and Code Set Standards, and includes a variable called
``claim type.'' Claim type ``60'' indicates that the claim was an
inpatient claim paid as fee-for-service. Claim types ``61,'' ``62,''
``63,'' and ``64'' relate to encounter claims, Medicare Advantage IME
claims, and HMO no-pay claims. Therefore, the calculation of the
proposed relative weights for FY 2022 also excludes claims with claim
type values not equal to ``60.'' The data exclude CAHs, including
hospitals that subsequently became CAHs after the period from which the
data were taken. We note that the proposed FY 2022 relative weights are
based on the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes
from the FY 2019 MedPAR claims data, grouped through the ICD-10 version
of the proposed FY 2022 GROUPER (Version 39).
The second data source used in the cost-based relative weighting
methodology is the Medicare cost report data files from the HCRIS.
Normally, we use the HCRIS dataset that is 3 years prior to the IPPS
fiscal year. However, as discussed earlier in this section, we are
proposing to use the March 31, 2020 update of the FY 2018 HCRIS for
calculating the proposed FY 2022 cost-based relative weights.
Consistent with our historical practice, for this FY 2022 proposed
rule, we are providing the version of the HCRIS from which we
calculated these proposed 19 CCRs on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the
screen titled ``FY 2022 IPPS Proposed Rule Home Page'' or ``Acute
Inpatient Files for Download.'' We note that this file is identical to
the file used for the FY 2021 IPPS/LTCH PPS final rule. As discussed
previously, we are also making available the FY 2019 HCRIS and the FY
2020 MedPAR file as well as other related information and data files
for purposes of public comment on our alternative approach of using the
same FY 2020 data that we would ordinarily use for purposes of FY 2022
ratesetting.
2. Methodology for Calculation of the Relative Weights
a. General
We calculated the proposed FY 2022 relative weights based on 19
CCRs, as we did for FY 2021. The methodology we are proposing to use to
calculate the FY 2022 MS-DRG cost-based relative weights based on
claims data in the FY 2019 MedPAR file and data from the FY 2018
Medicare cost reports is as follows:
To the extent possible, all the claims were regrouped
using the proposed FY 2022 MS-DRG classifications discussed in sections
II.B. and II.F. of the preamble of this proposed rule.
The transplant cases that were used to establish the
relative weights for heart and heart-lung, liver and/or intestinal, and
lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively)
were limited to those Medicare-approved transplant centers that have
cases in the FY 2019 MedPAR file. (Medicare coverage for heart, heart-
lung, liver and/or intestinal, and lung transplants is limited to those
facilities that have received approval from CMS as transplant centers.)
Organ acquisition costs for kidney, heart, heart-lung,
liver, lung, pancreas, and intestinal (or multivisceral organs)
transplants continue to be paid on a reasonable cost basis.
Because these acquisition costs are paid separately from the
prospective payment rate, it is necessary to subtract the acquisition
charges from the total charges on each transplant bill that showed
acquisition charges before computing the average cost for each MS-DRG
and before eliminating statistical outliers.
Section 108 of the Further Consolidated Appropriations Act, 2020
provides that, for cost reporting periods beginning on or after October
1, 2020, costs related to hematopoietic stem cell acquisition for the
purpose of an allogeneic hematopoietic stem cell transplant shall be
paid on a reasonable cost basis. We refer the reader to the FY 2021
IPPS/LTCH PPS final rule for further discussion of the reasonable cost
basis payment for cost reporting periods beginning on or after October
1, 2020 (85 FR 58835 to 58842). For FY 2022 and subsequent years, we
are proposing to subtract the hematopoietic stem cell acquisition
charges from the total charges on each transplant bill that showed
hematopoietic stem cell acquisition charges before computing the
average cost for each MS-DRG and before eliminating statistical
outliers.
Claims with total charges or total lengths of stay less
than or equal to zero were deleted. Claims that had an amount in the
total charge field that differed by more than $30.00 from the sum of
the routine day charges, intensive care charges, pharmacy charges,
implantable devices charges, supplies and equipment charges, therapy
services charges, operating room charges, cardiology charges,
laboratory charges, radiology charges, other service charges, labor and
delivery charges, inhalation therapy charges, emergency room charges,
blood and blood products charges, anesthesia charges, cardiac
catheterization charges, CT scan charges, and MRI charges were also
deleted.
At least 92.8 percent of the providers in the MedPAR file
had charges for 14 of the 19 cost centers. All claims of providers that
did not have charges greater than zero for at least 14 of the 19 cost
centers were deleted. In other words, a provider must have no more than
five blank cost centers. If a provider did not have charges greater
than zero in more than five cost centers, the claims for the provider
were deleted.
Statistical outliers were eliminated by removing all cases
that were beyond 3.0 standard deviations from the geometric mean of the
log distribution of both the total charges per case and the total
charges per day for each MS-DRG.
[[Page 25200]]
Effective October 1, 2008, because hospital inpatient
claims include a POA indicator field for each diagnosis present on the
claim, only for purposes of relative weight-setting, the POA indicator
field was reset to ``Y'' for ``Yes'' for all claims that otherwise have
an ``N'' (No) or a ``U'' (documentation insufficient to determine if
the condition was present at the time of inpatient admission) in the
POA field.
Under current payment policy, the presence of specific HAC codes,
as indicated by the POA field values, can generate a lower payment for
the claim. Specifically, if the particular condition is present on
admission (that is, a ``Y'' indicator is associated with the diagnosis
on the claim), it is not a HAC, and the hospital is paid for the higher
severity (and, therefore, the higher weighted MS-DRG). If the
particular condition is not present on admission (that is, an ``N''
indicator is associated with the diagnosis on the claim) and there are
no other complicating conditions, the DRG GROUPER assigns the claim to
a lower severity (and, therefore, the lower weighted MS-DRG) as a
penalty for allowing a Medicare inpatient to contract a HAC. While the
POA reporting meets policy goals of encouraging quality care and
generates program savings, it presents an issue for the relative
weight-setting process. Because cases identified as HACs are likely to
be more complex than similar cases that are not identified as HACs, the
charges associated with HAC cases are likely to be higher as well.
Therefore, if the higher charges of these HAC claims are grouped into
lower severity MS-DRGs prior to the relative weight-setting process,
the relative weights of these particular MS-DRGs would become
artificially inflated, potentially skewing the relative weights. In
addition, we want to protect the integrity of the budget neutrality
process by ensuring that, in estimating payments, no increase to the
standardized amount occurs as a result of lower overall payments in a
previous year that stem from using weights and case-mix that are based
on lower severity MS-DRG assignments. If this would occur, the
anticipated cost savings from the HAC policy would be lost.
To avoid these problems, we reset the POA indicator field to ``Y''
only for relative weight-setting purposes for all claims that otherwise
have an ``N'' or a ``U'' in the POA field. This resetting ``forced''
the more costly HAC claims into the higher severity MS-DRGs as
appropriate, and the relative weights calculated for each MS-DRG more
closely reflect the true costs of those cases.
In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013
and subsequent fiscal years, we finalized a policy to treat hospitals
that participate in the Bundled Payments for Care Improvement (BPCI)
initiative the same as prior fiscal years for the IPPS payment modeling
and ratesetting process without regard to hospitals' participation
within these bundled payment models (77 FR 53341 through 53343).
Specifically, because acute care hospitals participating in the BPCI
Initiative still receive IPPS payments under section 1886(d) of the
Act, we include all applicable data from these subsection (d) hospitals
in our IPPS payment modeling and ratesetting calculations as if the
hospitals were not participating in those models under the BPCI
initiative. We refer readers to the FY 2013 IPPS/LTCH PPS final rule
for a complete discussion on our final policy for the treatment of
hospitals participating in the BPCI initiative in our ratesetting
process. For additional information on the BPCI initiative, we refer
readers to the CMS' Center for Medicare and Medicaid Innovation's
website at: http://innovation.cms.gov/initiatives/Bundled-Payments/index.html and to section IV.H.4. of the preamble of the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53341 through 53343).
The participation of hospitals in the BPCI initiative concluded on
September 30, 2018. The participation of hospitals in the BPCI Advanced
model started on October 1, 2018. The BPCI Advanced model, tested under
the authority of section 1115A of the Act, is comprised of a single
payment and risk track, which bundles payments for multiple services
beneficiaries receive during a Clinical Episode. Acute care hospitals
may participate in BPCI Advanced in one of two capacities: As a model
Participant or as a downstream Episode Initiator. Regardless of the
capacity in which they participate in the BPCI Advanced model,
participating acute care hospitals will continue to receive IPPS
payments under section 1886(d) of the Act. Acute care hospitals that
are Participants also assume financial and quality performance
accountability for Clinical Episodes in the form of a reconciliation
payment. For additional information on the BPCI Advanced model, we
refer readers to the BPCI Advanced web page on the CMS Center for
Medicare and Medicaid Innovation's website at: https://innovation.cms.gov/initiatives/bpci-advanced/. Consistent with our
policy for FY 2021, and consistent with how we have treated hospitals
that participated in the BPCI Initiative, for FY 2022, we continue to
believe it is appropriate to include all applicable data from the
subsection (d) hospitals participating in the BPCI Advanced model in
our IPPS payment modeling and ratesetting calculations because, as
noted previously, these hospitals are still receiving IPPS payments
under section 1886(d) of the Act. Consistent with the FY 2021 IPPS/LTCH
PPS final rule, we are also proposing to include all applicable data
from subsection (d) hospitals participating in the Comprehensive Care
for Joint Replacement (CJR) Model in our IPPS payment modeling and
ratesetting calculations. The charges for each of the 19 cost groups
for each claim were standardized to remove the effects of differences
in area wage levels, IME and DSH payments, and for hospitals located in
Alaska and Hawaii, the applicable cost-of-living adjustment. Because
hospital charges include charges for both operating and capital costs,
we standardized total charges to remove the effects of differences in
geographic adjustment factors, cost-of-living adjustments, and DSH
payments under the capital IPPS as well. Charges were then summed by
MS-DRG for each of the 19 cost groups so that each MS-DRG had 19
standardized charge totals. Statistical outliers were then removed.
These charges were then adjusted to cost by applying the proposed
national average CCRs developed from the FY 2018 cost report data,
consistent with our proposed FY 2022 ratesetting discussed in section
II.A.4 of the Addendum of this proposed rule.
The 19 cost centers that we used in the proposed relative weight
calculation are shown in a supplemental data file, Cost Center HCRIS
Lines Supplemental Data File, posted via the internet on the CMS
website for this proposed rule and available at http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
The supplemental data file shows the lines on the cost report and the
corresponding revenue codes that we used to create the proposed 19
national cost center CCRs. If we receive comments about the groupings
in this supplemental data file, we may consider these comments as we
finalize our policy.
Consistent with historical practice, we account for rare situations
of non-monotonicity in a base MS-DRG and its severity levels, where the
mean cost in the higher severity level is less than the mean cost in
the lower severity level, in determining the relative weights for the
different severity levels. If there are initially non-monotonic
relative weights
[[Page 25201]]
in the same base DRG and its severity levels, then we combine the cases
that group to the specific non-monotonic MS-DRGs for purposes of
relative weight calculations. For example, if there are two non-
monotonic MS-DRGs, combining the cases across those two MS-DRGs results
in the same relative weight for both MS-DRGs. The relative weight
calculated using the combined cases for those severity levels is
monotonic, effectively removing any non-monotonicity with the base DRG
and its severity levels. For this FY 2022 proposed rule, this
calculation was applied to address non-monotonicity for cases that
grouped to MS-DRG 504 and MS-DRG 505. We note that cases were also
combined in calculating the relative weights for these two MS-DRGs for
FY 2021. In the supplemental file titled AOR/BOR File, we include
statistics for the affected MS-DRGs both separately and with cases
combined.
We are inviting public comments on our proposals related to
recalibration of the proposed FY 2022 relative weights and the changes
in relative weights from FY 2021.
b. Relative Weight Calculation for MS-DRG 018
As discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58599
through 58600), we created MS-DRG 018 for cases that include procedures
describing CAR T-cell therapies, which were reported using ICD-10-PCS
procedure codes XW033C3 or XW043C3. We refer the reader to section
II.D.2. of this proposed rule for discussion of the procedure codes for
CAR T-cell and non-CAR T-cell therapies and other immunotherapies that
we are proposing for assignment to MS-DRG 018 for FY 2022.
In the FY 2021 IPPS/LTCH PPS final rule, we finalized our proposals
to modify our existing relative weight methodology to ensure that the
relative weight for new MS-DRG 018 appropriately reflects the relative
resources required for providing CAR T-cell therapy outside of a
clinical trial, while still accounting for the clinical trial cases in
the overall average cost for all MS-DRGs, with additional refinements
in response to comments. For cases that group to MS-DRG 018, we
finalized to not include claims determined to be clinical trial claims
that group to new MS-DRG 018 when calculating the average cost for new
MS-DRG 018 that is used to calculate the relative weight for this MS-
DRG, with the additional refinements that (a) when the CAR T-cell
therapy product is purchased in the usual manner, but the case involves
a clinical trial of a different product, the claim will be included
when calculating the average cost for new MS-DRG 018 to the extent such
claims can be identified in the historical data, and (b) when there is
expanded access use of immunotherapy, these cases will not be included
when calculating the average cost for new MS-DRG 018 to the extent such
claims can be identified in the historical data (85 FR 58600). We also
finalized our proposal to calculate an adjustment to account for the
CAR T-cell therapy cases determined to be clinical trial cases, as
described in the FY 2021 IPPS/LTCH PPS final rule, with the additional
refinement of including revenue center 891 in our calculation of
standardized drug charges for MS-DRG 018. Applying this finalized
methodology, based on the March 2020 update of the FY 2019 MedPAR file
for the FY 2021 IPPS/LTCH PPS final rule, we estimated that the average
costs of CAR T-cell therapy cases determined to be clinical trial cases
($46,062) were 17 percent of the average costs of CAR T cell therapy
cases determined to be non-clinical trial cases ($276,042), and
therefore, in calculating the national average cost per case for
purposes of the FY 2021 IPPS/LTCH PPS final rule, each case identified
as a clinical trial case was adjusted by 0.17. We also noted that we
were applying this adjustor for cases determined to be CAR T-cell
therapy clinical trial cases for purposes of budget neutrality and
outlier simulations. We refer the reader to the FY 2021 IPPS/LTCH PPS
final rule for complete discussion of our finalized modifications to
the relative weight calculation for MS-DRG 018.
Since we are proposing to use the same FY 2019 MedPAR claims data
for FY 2022 ratesetting that we did for the FY 2021 final rule, we are
also proposing to continue to use the same process to identify clinical
trial claims in the FY 2019 MedPAR for purposes of calculating the FY
2022 relative weights. We continue to use the proxy of standardized
drug charges of less than $373,000, which was the average sales price
of KYMRIAH and YESCARTA, which are the two CAR T-cell biological
products in the MedPAR data used for the FY 2021 final rule and this
proposed rule. Using the same methodology from the FY 2021 IPPS/LTCH
PPS final rule, we are proposing to apply an adjustment to account for
the CAR T cell therapy cases identified as clinical trial cases in
calculating the national average standardized cost per case that is
used to calculate the relative weights for all MS-DRGs:
Calculate the average cost for cases to be assigned to new
MS-DRG 018 that contain ICD-10-CM diagnosis code Z00.6 or contain
standardized drug charges of less than $373,000.
Calculate the average cost for cases to be assigned to new
MS-DRG 018 that do not contain ICD-10-CM diagnosis code Z00.6 or
standardized drug charges of at least $373,000.
Calculate an adjustor by dividing the average cost
calculated in step 1 by the average cost calculated in step 2.
Apply the adjustor calculated in step 3 to the cases
identified in step 1 as clinical trial cases, then add this adjusted
case count to the non-clinical trial case count prior to calculating
the average cost across all MS-DRGs.
Additionally, we are continuing our finalized methodology for
calculating this payment adjustment, such that: (a) When the CAR T-cell
therapy product is purchased in the usual manner, but the case involves
a clinical trial of a different product, the claim will be included
when calculating the average cost for cases not determined to be
clinical trial cases and (b) when there is expanded access use of
immunotherapy, these cases will be included when calculating the
average cost for cases determined to be clinical trial cases. However,
we continue to believe to the best of our knowledge there are no claims
in the historical data (FY 2019 MedPAR) used in the calculation of the
adjustment for cases involving a clinical trial of a different product,
and to the extent the historical data contain claims for cases
involving expanded access use of immunotherapy we believe those claims
would have drug charges less than $373,000. Consistent with our
proposal to use the FY 2019 data for the FY 2022 ratesetting, we are
also proposing to calculate this adjustor based on the March 2020
update of the FY 2019 MedPAR file for purposes of establishing the FY
2022 relative weights. Accordingly, as we did for FY 2021, we are
proposing to adjust the transfer-adjusted case count for MS-DRG 018 by
applying the proposed adjustor of 17 percent to the applicable clinical
trial cases, and to use this adjusted case count for MS-DRG 018 in
calculating the national average cost per case, which is used in the
calculation of the relative weights. Therefore, in calculating the
national average cost per case for purposes of this proposed rule, each
case identified as a clinical trial case was adjusted by 17 percent. As
we did for FY 2021, we are proposing to apply this same adjustor for
the applicable cases that group to MS-DRG 018 for purposes of budget
neutrality and outlier simulations.
As discussed in section I.F. of this proposed rule, we are also
soliciting
[[Page 25202]]
comments on an alternative approach of using the same FY 2020 data that
we would ordinarily use for purposes of the FY 2022 rulemaking, which
we may consider finalizing for FY 2022 based on consideration of
comments received. We note that using the methodology as finalized in
the FY 2021 IPPS/LTCH PPS final rule, we calculated an adjustor of 0.25
based on this alternative approach of using the FY 2020 MedPAR file.
3. Development of Proposed National Average CCRs
Consistent with our proposal to use the FY 2019 data for the FY
2022 ratesetting, as discussed earlier in this section, we are
proposing to continue to use the national average CCRs that were
calculated for the FY 2021 final rule using that same data.
Specifically, we calculated these national average CCRs as follows:
Using the FY 2018 cost report data, we removed CAHs, Indian Health
Service hospitals, all-inclusive rate hospitals, and cost reports that
represented time periods of less than 1 year (365 days). We included
hospitals located in Maryland because we include their charges in our
claims database. Then we created CCRs for each provider for each cost
center (see the supplemental data file for line items used in the
calculations) and removed any CCRs that were greater than 10 or less
than 0.01. We normalized the departmental CCRs by dividing the CCR for
each department by the total CCR for the hospital for the purpose of
trimming the data. Then we took the logs of the normalized cost center
CCRs and removed any cost center CCRs where the log of the cost center
CCR was greater or less than the mean log plus/minus 3 times the
standard deviation for the log of that cost center CCR. Once the cost
report data were trimmed, we calculated a Medicare-specific CCR. The
Medicare-specific CCR was determined by taking the Medicare charges for
each line item from Worksheet D-3 and deriving the Medicare-specific
costs by applying the hospital-specific departmental CCRs to the
Medicare-specific charges for each line item from Worksheet D-3. Once
each hospital's Medicare-specific costs were established, we summed the
total Medicare-specific costs and divided by the sum of the total
Medicare-specific charges to produce national average, charge-weighted
CCRs.
After we multiplied the total charges for each MS-DRG in each of
the 19 cost centers by the corresponding national average CCR, we
summed the 19 ``costs'' across each MS-DRG to produce a total
standardized cost for the MS-DRG. The average standardized cost for
each MS-DRG was then computed as the total standardized cost for the
MS-DRG divided by the transfer-adjusted case count for the MS-DRG. The
average cost for each MS-DRG was then divided by the national average
standardized cost per case to determine the proposed relative weight.
The proposed FY 2022 cost-based relative weights were then
normalized by an adjustment factor of 1.820783 so that the average case
weight after recalibration was equal to the average case weight before
recalibration. The normalization adjustment is intended to ensure that
recalibration by itself neither increases nor decreases total payments
under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.
The proposed 19 national average CCRs for FY 2022 are as follows:
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[[Page 25203]]
Since FY 2009, the relative weights have been based on 100 percent
cost weights based on our MS-DRG grouping system.
When we recalibrated the DRG weights for previous years, we set a
threshold of 10 cases as the minimum number of cases required to
compute a reasonable weight. We are proposing to use that same case
threshold in recalibrating the proposed MS-DRG relative weights for FY
2022. Using data from the FY 2019 MedPAR file, there were 7 MS-DRGs
that contain fewer than 10 cases. For FY 2022, because we do not have
sufficient MedPAR data to set accurate and stable cost relative weights
for these low-volume MS-DRGs, we are proposing to compute relative
weights for the low-volume MS-DRGs by adjusting their final FY 2021
relative weights by the percentage change in the average weight of the
cases in other MS-DRGs from FY 2021 to FY 2022. The crosswalk table is
as follows.
[GRAPHIC] [TIFF OMITTED] TP10MY21.128
F. Add-On Payments for New Services and Technologies for FY 2022
1. Background
Sections 1886(d)(5)(K) and (L) of the Act establish a process of
identifying and ensuring adequate payment for new medical services and
technologies (sometimes collectively referred to in this section as
``new technologies'') under the IPPS. Section 1886(d)(5)(K)(vi) of the
Act specifies that a medical service or technology will be considered
new if it meets criteria established by the Secretary after notice and
opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act
specifies that a new medical service or technology may be considered
for new technology add-on payment if, based on the estimated costs
incurred with respect to discharges involving such service or
technology, the DRG prospective payment rate otherwise applicable to
such discharges under this subsection is inadequate. We note that,
beginning with discharges occurring in FY 2008, CMS transitioned from
CMS-DRGs to MS-DRGs. The regulations at 42 CFR 412.87 implement these
provisions and 42 CFR 412.87(b) specifies three criteria for a new
medical service or technology to receive the additional payment: (1)
The medical service or technology must be new; (2) the medical service
or technology must be costly such that the DRG rate otherwise
applicable to discharges involving the medical service or technology is
determined to be inadequate; and (3) the service or technology must
demonstrate a substantial clinical improvement over existing services
or technologies. In addition, certain transformative new devices and
antimicrobial products may qualify under an alternative inpatient new
technology add-on payment pathway, as set forth in the regulations at
Sec. 412.87(c) and (d). We note that section 1886(d)(5)(K)(i) of the
Act requires that the Secretary establish a mechanism to recognize the
costs of new medical services and technologies under the payment system
established under that subsection, which establishes the system for
paying for the operating costs of inpatient hospital services. The
system of payment for capital costs is established under section
1886(g) of the Act. Therefore, as discussed in prior rulemaking (72 FR
47307 through 47308), we do not include capital costs in the add-on
payments for a new medical service or technology or make new technology
add-on payments under the IPPS for capital-related costs. In this rule,
we highlight some of the major statutory and regulatory provisions
relevant to the new technology add-on payment criteria, as well as
other information. For a complete discussion of the new technology add-
on payment criteria, we refer readers to the FY 2012 IPPS/LTCH PPS
final rule (76 FR 51572 through 51574), FY 2020 IPPS/LTCH PPS final
rule (84 FR 42288 through 42300) and the FY 2021 IPPS/LTCH PPS final
rule (85 FR 58736 through 58742).
a. New Technology Add On Payment Criteria
(1) Newness Criterion
Under the first criterion, as reflected in Sec. 412.87(b)(2), a
specific medical service or technology will no longer be considered
``new'' for purposes of new medical service or technology add-on
payments after CMS has recalibrated the MS-DRGs, based on available
data, to reflect the cost of the technology. We note that we do not
consider a service or technology to be new if it is substantially
similar to one or more existing technologies. That is, even if a
medical product receives a new FDA approval or clearance, it may not
necessarily be considered ``new'' for purposes of new technology add-on
payments if it is ``substantially similar'' to another medical product
that was approved or cleared by FDA and has been on the market for more
than 2 to 3 years. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74
FR 43813 through 43814), we established criteria for evaluating whether
a new technology is substantially similar to an existing technology,
specifically: (1)
[[Page 25204]]
Whether a product uses the same or a similar mechanism of action to
achieve a therapeutic outcome; (2) whether a product is assigned to the
same or a different MS-DRG; and (3) whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population. If a technology
meets all three of these criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments. For a detailed
discussion of the criteria for substantial similarity, we refer readers
to the FY 2006 IPPS final rule (70 FR 47351 through 47352) and the FY
2010 IPPS/LTCH PPS final rule (74 FR 43813 through 43814).
(2) Cost Criterion
Under the second criterion, Sec. 412.87(b)(3) further provides
that, to be eligible for the add-on payment for new medical services or
technologies, the MS-DRG prospective payment rate otherwise applicable
to discharges involving the new medical service or technology must be
assessed for adequacy. Under the cost criterion, consistent with the
formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess
the adequacy of payment for a new technology paid under the applicable
MS-DRG prospective payment rate, we evaluate whether the charges of the
cases involving a new medical service or technology will exceed a
threshold amount that is the lesser of 75 percent of the standardized
amount (increased to reflect the difference between cost and charges)
or 75 percent of one standard deviation beyond the geometric mean
standardized charge for all cases in the MS-DRG to which the new
medical service or technology is assigned (or the case-weighted average
of all relevant MS-DRGs if the new medical service or technology occurs
in many different MS-DRGs). The MS-DRG threshold amounts generally used
in evaluating new technology add-on payment applications for FY 2022
are presented in a data file that is available, along with the other
data files associated with the FY 2021 IPPS/LTCH PPS final rule and
correction notice, on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.
We note that, under the policy finalized in the FY 2021 IPPS/LTCH
PPS final rule (85 FR 58603 through 58605), beginning with FY 2022, we
use the proposed threshold values associated with the proposed rule for
that fiscal year to evaluate the cost criterion for all applications
for new technology add-on payments and previously approved technologies
that may continue to receive new technology add-on payments, if those
technologies would be assigned to a proposed new MS-DRG for that same
fiscal year.
As finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41275),
beginning with FY 2020, we include the thresholds applicable to the
next fiscal year (previously included in Table 10 of the annual IPPS/
LTCH PPS proposed and final rules) in the data files associated with
the prior fiscal year. Accordingly, the proposed thresholds for
applications for new technology add-on payments for FY 2023 are
presented in a data file that is available on the CMS website, along
with the other data files associated with this FY 2022 proposed rule,
by clicking on the FY 2022 IPPS Proposed Rule Home Page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index. We note, for the reasons discussed in section
I.F of the preamble of this proposed rule, we are proposing to use the
FY 2019 MedPAR claims data where we ordinarily would have used the FY
2020 MedPAR claims data for purposes of proposed FY 2022 ratesetting.
We refer the reader to section I.F. of the preamble of this proposed
rule for further discussion of our analysis of the best available data
for FY 2022 ratesetting and our related proposals. For the FY 2023
proposed threshold values, consistent with our proposal, we are
proposing to use FY 2019 claims data to evaluate whether the charges of
the cases involving a new medical service or technology will exceed a
threshold amount that is the lesser of 75 percent of the proposed FY
2022 standardized amount (increased to reflect the difference between
cost and charges) or 75 percent of one standard deviation beyond the
geometric mean standardized charge (using FY 2019 claims data) for all
cases in the MS-DRG (using FY 2019 claims data) to which the new
medical service or technology is assigned (or the case-weighted average
of all relevant MS-DRGs if the new medical service or technology occurs
in many different MS-DRGs), rather than the FY 2020 data we would
otherwise use. As discussed in section I.F of the preamble of this
proposed rule, we are also considering, as an alternative to our
proposal, the use of the same FY 2020 data that we would ordinarily use
for purposes of FY 2022 ratesetting. If we were to finalize this
alternative approach for FY 2022, we would use the FY 2020 claims data
for purposes of the final thresholds for applications for new
technology add-on payments for FY 2023 in the FY 2022 IPPS/LTCH PPS
final rule. We are making available the threshold values calculated
using the FY 2020 claims data at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS. In the September 7, 2001
final rule that established the new technology add-on payment
regulations (66 FR 46917), we discussed that applicants should submit a
significant sample of data to demonstrate that the medical service or
technology meets the high-cost threshold. Specifically, applicants
should submit a sample of sufficient size to enable us to undertake an
initial validation and analysis of the data. We also discussed in the
September 7, 2001 final rule (66 FR 46917) the issue of whether the
Health Insurance Portability and Accountability Act (HIPAA) Privacy
Rule at 45 CFR parts 160 and 164 applies to claims information that
providers submit with applications for new medical service or
technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH
PPS final rule (76 FR 51573) for complete information on this issue.
(3) Substantial Clinical Improvement Criterion
Under the third criterion at Sec. 412.87(b)(1), a medical service
or technology must represent an advance that substantially improves,
relative to technologies previously available, the diagnosis or
treatment of Medicare beneficiaries. In the FY 2020 IPPS/LTCH PPS final
rule (84 FR 42288 through 42292), we prospectively codified in our
regulations at Sec. 412.87(b) the following aspects of how we evaluate
substantial clinical improvement for purposes of new technology add-on
payments under the IPPS:
The totality of the circumstances is considered when
making a determination that a new medical service or technology
represents an advance that substantially improves, relative to services
or technologies previously available, the diagnosis or treatment of
Medicare beneficiaries.
A determination that a new medical service or technology
represents an advance that substantially improves, relative to services
or technologies previously available, the diagnosis or treatment of
Medicare beneficiaries means--
++ The new medical service or technology offers a treatment option
for a patient population unresponsive to, or
[[Page 25205]]
ineligible for, currently available treatments;
++ The new medical service or technology offers the ability to
diagnose a medical condition in a patient population where that medical
condition is currently undetectable, or offers the ability to diagnose
a medical condition earlier in a patient population than allowed by
currently available methods, and there must also be evidence that use
of the new medical service or technology to make a diagnosis affects
the management of the patient;
++ The use of the new medical service or technology significantly
improves clinical outcomes relative to services or technologies
previously available as demonstrated by one or more of the following: A
reduction in at least one clinically significant adverse event,
including a reduction in mortality or a clinically significant
complication; a decreased rate of at least one subsequent diagnostic or
therapeutic intervention; a decreased number of future hospitalizations
or physician visits; a more rapid beneficial resolution of the disease
process treatment including, but not limited to, a reduced length of
stay or recovery time; an improvement in one or more activities of
daily living; an improved quality of life; or, a demonstrated greater
medication adherence or compliance; or
++ The totality of the circumstances otherwise demonstrates that
the new medical service or technology substantially improves, relative
to technologies previously available, the diagnosis or treatment of
Medicare beneficiaries.
Evidence from the following published or unpublished
information sources from within the United States or elsewhere may be
sufficient to establish that a new medical service or technology
represents an advance that substantially improves, relative to services
or technologies previously available, the diagnosis or treatment of
Medicare beneficiaries: Cinical trials, peer reviewed journal articles;
study results; meta-analyses; consensus statements; white papers;
patient surveys; case studies; reports; systematic literature reviews;
letters from major healthcare associations; editorials and letters to
the editor; and public comments. Other appropriate information sources
may be considered.
The medical condition diagnosed or treated by the new
medical service or technology may have a low prevalence among Medicare
beneficiaries.
The new medical service or technology may represent an
advance that substantially improves, relative to services or
technologies previously available, the diagnosis or treatment of a
subpopulation of patients with the medical condition diagnosed or
treated by the new medical service or technology.
We refer the reader to the FY 2020 IPPS/LTCH PPS final rule for
additional discussion of the evaluation of substantial clinical
improvement for purposes of new technology add-on payments under the
IPPS.
We note, consistent with the discussion in the FY 2003 IPPS final
rule (67 FR 50015), that although we are affiliated with the FDA and we
do not question the FDA's regulatory responsibility for decisions
related to marketing authorization (for example, approval, clearance,
etc.), we do not rely upon FDA criteria in our determination of what
drugs, devices, or technologies qualify for new technology add-on
payments under Medicare. Our criteria do not depend on the standard of
safety and efficacy on which the FDA relies but on a demonstration of
substantial clinical improvement in the Medicare population
(particularly patients over age 65).
c. Alternative Inpatient New Technology Add-On Payment Pathway
Beginning with applications for FY 2021 new technology add-on
payments, under the regulations at Sec. 412.87(c), a medical device
that is part of FDA's Breakthrough Devices Program may qualify for the
new technology add-on payment under an alternative pathway.
Additionally, under the regulations at Sec. 412.87(d) for certain
antimicrobial products, beginning with FY 2021, a drug that is
designated by the FDA as a Qualified Infectious Disease Product (QIDP),
and, beginning with FY 2022, a drug that is approved by the FDA under
the Limited Population Pathway for Antibacterial and Antifungal Drugs
(LPAD), may also qualify for the new technology add-on payment under an
alternative pathway. We refer the reader to the FY 2020 IPPS/LTCH PPS
final rule (84 FR 42292 through 42297) and the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58737 through 58739) for a complete discussion on
this policy. We note that a technology is not required to have the
specified FDA designation at the time the new technology add-on payment
application is submitted. CMS will review the application based on the
information provided by the applicant under the alternative pathway
specified by the applicant. However, to receive approval for the new
technology add-on payment under that alternative pathway, the
technology must have the applicable FDA designation and meet all other
requirements in the regulations in Sec. 412.87(c) and (d), as
applicable.
(1) Alternative Pathway for Certain Transformative New Devices
For applications received for new technology add-on payments for FY
2021 and subsequent fiscal years, if a medical device is part of FDA's
Breakthrough Devices Program and received FDA marketing authorization,
it will be considered new and not substantially similar to an existing
technology for purposes of the new technology add-on payment under the
IPPS, and will not need to meet the requirement under Sec.
412.87(b)(1) that it represent an advance that substantially improves,
relative to technologies previously available, the diagnosis or
treatment of Medicare beneficiaries. This policy is codified at Sec.
412.87(c). Under this 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 will need to
meet the cost criterion under Sec. 412.87(b)(3), and will be
considered new as reflected in Sec. 412.87(c)(2). We note, in the FY
2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736), we clarified
our policy that a new medical device under this alternative pathway
must receive marketing authorization for the indication covered by the
Breakthrough Devices Program designation. We refer the reader to the FY
2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736) for a
complete discussion regarding this clarification.
(2) Alternative Pathway for Certain Antimicrobial Products
For applications received for new technology add-on payments for
certain antimicrobial products, beginning with FY 2021, if a technology
is designated by FDA as a QIDP and received FDA marketing
authorization, and, beginning with FY 2022, if a drug is approved under
FDA's LPAD pathway and used for the indication approved under the LPAD
pathway, it will be considered new and not substantially similar to an
existing technology for purposes of new technology add-on payments and
will not need to meet the requirement that it represent an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries. We codified this
policy at Sec. 412.87(d). Under this alternative pathway for QIDPs and
LPADs, a medical product that has received FDA marketing authorization
and is designated by FDA
[[Page 25206]]
as a QIDP or approved under the LPAD pathway will need to meet the cost
criterion under Sec. 412.87(b)(3), and will be considered new as
reflected in Sec. 412.87(d)(2).
We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR
42292 through 42297) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58737
through 58739) for a complete discussion on this policy. We note, in
the FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739), we
clarified that a new medical product seeking approval for the new
technology add-on payment under the alternative pathway for QIDPs must
receive marketing authorization for the indication covered by the QIDP
designation. We also finalized our policy to expand our alternative new
technology add-on payment pathway for certain antimicrobial products to
include products approved under the LPAD pathway and used for the
indication approved under the LPAD pathway.
d. Additional Payment for New Medical Service or Technology
The new medical service or technology add-on payment policy under
the IPPS provides additional payments for cases with relatively high
costs involving eligible new medical services or technologies, while
preserving some of the incentives inherent under an average-based
prospective payment system. The payment mechanism is based on the cost
to hospitals for the new medical service or technology. As noted
previously, we do not include capital costs in the add-on payments for
a new medical service or technology or make new technology add-on
payments under the IPPS for capital-related costs (72 FR 47307 through
47308).
For discharges occurring before October 1, 2019, under Sec.
412.88, if the costs of the discharge (determined by applying operating
cost-to-charge ratios (CCRs) as described in Sec. 412.84(h)) exceed
the full DRG payment (including payments for IME and DSH, but excluding
outlier payments), CMS made an add-on payment equal to the lesser of:
(1) 50 percent of the costs of the new medical service or technology;
or (2) 50 percent of the amount by which the costs of the case exceed
the standard DRG payment.
Beginning with discharges on or after October 1, 2019, for the
reasons discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297
through 42300), we finalized an increase in the new technology add-on
payment percentage, as reflected at Sec. 412.88(a)(2)(ii).
Specifically, for a new technology other than a medical product
designated by FDA as a QIDP, beginning with discharges on or after
October 1, 2019, if the costs of a discharge involving a new technology
(determined by applying CCRs as described in Sec. 412.84(h)) exceed
the full DRG payment (including payments for IME and DSH, but excluding
outlier payments), Medicare will make an add-on payment equal to the
lesser of: (1) 65 percent of the costs of the new medical service or
technology; or (2) 65 percent of the amount by which the costs of the
case exceed the standard DRG payment. For a new technology that is a
medical product designated by FDA as a QIDP, beginning with discharges
on or after October 1, 2019, if the costs of a discharge involving a
new technology (determined by applying CCRs as described in Sec.
412.84(h)) exceed the full DRG payment (including payments for IME and
DSH, but excluding outlier payments), Medicare will make an add-on
payment equal to the lesser of: (1) 75 percent of the costs of the new
medical service or technology; or (2) 75 percent of the amount by which
the costs of the case exceed the standard DRG payment. For a new
technology that is a medical product approved under FDA's LPAD pathway,
beginning with discharges on or after October 1, 2020, if the costs of
a discharge involving a new technology (determined by applying CCRs as
described in Sec. 412.84(h)) exceed the full DRG payment (including
payments for IME and DSH, but excluding outlier payments), Medicare
will make an add-on payment equal to the lesser of: (1) 75 percent of
the costs of the new medical service or technology; or (2) 75 percent
of the amount by which the costs of the case exceed the standard DRG
payment. As set forth in Sec. 412.88(b)(2), unless the discharge
qualifies for an outlier payment, the additional Medicare payment will
be limited to the full MS-DRG payment plus 65 percent (or 75 percent
for certain antimicrobial products (QIDPs and LPADs)) of the estimated
costs of the new technology or medical service.
We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR
42297 through 42300) for complete discussion on the increase in the new
technology add on payment beginning with discharges on or after October
1, 2019.
Section 503(d)(2) of Public Law 108-173 provides that there shall
be no reduction or adjustment in aggregate payments under the IPPS due
to add-on payments for new medical services and technologies.
Therefore, in accordance with section 503(d)(2) of Public Law 108-173,
add-on payments for new medical services or technologies for FY 2005
and subsequent years have not been subjected to budget neutrality.
e. Evaluation of Eligibility Criteria for New Medical Service or
Technology Applications
In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we
modified our regulations at Sec. 412.87 to codify our longstanding
practice of how CMS evaluates the eligibility criteria for new medical
service or technology add-on payment applications. That is, we first
determine whether a medical service or technology meets the newness
criterion, and only if so, do we then make a determination as to
whether the technology meets the cost threshold and represents a
substantial clinical improvement over existing medical services or
technologies. We specified that all applicants for new technology add-
on payments must have FDA approval or clearance by July 1 of the year
prior to the beginning of the fiscal year for which the application is
being considered. In the FY 2021 IPPS final rule, to more precisely
describe the various types of FDA approvals, clearances and
classifications that we consider under our new technology add-on
payment policy, we finalized a technical clarification to the
regulation to indicate that new technologies must receive FDA marketing
authorization (such as pre-market approval (PMA); 510(k) clearance; the
granting of a De Novo classification request, or approval of a New Drug
Application (NDA)) by July 1 of the year prior to the beginning of the
fiscal year for which the application is being considered. Consistent
with our longstanding policy, we consider FDA marketing authorization
as representing that a product has received FDA approval or clearance
when considering eligibility for the new technology add-on payment
under Sec. 412.87(e)(2) (85 FR 58742).
Additionally, in the FY 2021 IPPS final rule (85 FR 58739 through
58742), we finalized our proposal to provide conditional approval for
new technology add-on payment for a technology for which an application
is submitted under the alternative pathway for certain antimicrobial
products at Sec. 412.87(d) that does not receive FDA marketing
authorization by the July 1 deadline specified in Sec. 412.87(e)(2),
provided that the technology otherwise meets the applicable add-on
payment criteria. Under this policy, cases involving eligible
antimicrobial products would begin receiving the new technology add-on
payment sooner, effective for discharges the quarter after the date of
FDA marketing authorization provided
[[Page 25207]]
that the technology receives FDA marketing authorization by July 1 of
the particular fiscal year for which the applicant applied for new
technology add-on payments.
f. Council on Technology and Innovation (CTI)
The Council on Technology and Innovation at CMS oversees the
agency's cross-cutting priority on coordinating coverage, coding and
payment processes for Medicare with respect to new technologies and
procedures, including new drug therapies, as well as promoting the
exchange of information on new technologies and medical services
between CMS and other entities. The CTI, composed of senior CMS staff
and clinicians, was established under section 942(a) of Public Law 108-
173. The Council is co-chaired by the Director of the Center for
Clinical Standards and Quality (CCSQ) and the Director of the Center
for Medicare (CM), who is also designated as the CTI's Executive
Coordinator.
The specific processes for coverage, coding, and payment are
implemented by CM, CCSQ, and the local Medicare Administrative
Contractors (MACs) (in the case of local coverage and payment
decisions). The CTI supplements, rather than replaces, these processes
by working to assure that all of these activities reflect the agency-
wide priority to promote high-quality, innovative care. At the same
time, the CTI also works to streamline, accelerate, and improve
coordination of these processes to ensure that they remain up to date
as new issues arise. To achieve its goals, the CTI works to streamline
and create a more transparent coding and payment process, improve the
quality of medical decisions, and speed patient access to effective new
treatments. It is also dedicated to supporting better decisions by
patients and doctors in using Medicare-covered services through the
promotion of better evidence development, which is critical for
improving the quality of care for Medicare beneficiaries.
To improve the understanding of CMS' processes for coverage,
coding, and payment and how to access them, the CTI has developed an
``Innovator's Guide'' to these processes. The intent is to consolidate
this information, much of which is already available in a variety of
CMS documents and in various places on the CMS website, in a user
friendly format. This guide was published in 2010 and is available on
the CMS website at: https://www.cms.gov/Medicare/Coverage/CouncilonTechInnov/Downloads/Innovators-Guide-Master-7-23-15.pdf.
As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we
invite any product developers or manufacturers of new medical services
or technologies to contact the agency early in the process of product
development if they have questions or concerns about the evidence that
would be needed later in the development process for the agency's
coverage decisions for Medicare.
The CTI aims to provide useful information on its activities and
initiatives to stakeholders, including Medicare beneficiaries,
advocates, medical product manufacturers, providers, and health policy
experts. Stakeholders with further questions about Medicare's coverage,
coding, and payment processes, or who want further guidance about how
they can navigate these processes, can contact the CTI at
[email protected].
g. Application Information for New Medical Services or Technologies
Applicants for add-on payments for new medical services or
technologies for FY 2023 must submit a formal request, including a full
description of the clinical applications of the medical service or
technology and the results of any clinical evaluations demonstrating
that the new medical service or technology represents a substantial
clinical improvement (unless the application is under one of the
alternative pathways as previously described), along with a significant
sample of data to demonstrate that the medical service or technology
meets the high-cost threshold. Complete application information, along
with final deadlines for submitting a full application, will be posted
as it becomes available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html. To allow interested parties to identify the new medical
services or technologies under review before the publication of the
proposed rule for FY 2023, the CMS website also will post the tracking
forms completed by each applicant. We note that the burden associated
with this information collection requirement is the time and effort
required to collect and submit the data in the formal request for add-
on payments for new medical services and technologies to CMS. The
aforementioned burden is subject to the PRA and approved under OMB
control number 0938-1347.
As discussed previously, in the FY 2020 IPPS/LTCH PPS final rule,
we adopted an alternative inpatient new technology add-on payment
pathway for certain transformative new devices and for Qualified
Infectious Disease Products, as set forth in the regulations at Sec.
412.87(c) and (d). The change in burden associated with these changes
to the new technology add-on payment application process were discussed
in a revision of the information collection requirement (ICR) request
currently approved under OMB control number 0938-1347. In accordance
with the implementing regulations of the PRA, we detailed the revisions
of the ICR and published the required 60-day notice on August 15, 2019
(84 FR 41723) and 30-day notice on December 17, 2019 (84 FR 68936) to
solicit public comments.
2. Public Input Before Publication of a Notice of Proposed Rulemaking
on Add-On Payments
Section 1886(d)(5)(K)(viii) of the Act, as amended by section
503(b)(2) of Public Law 108-173, provides for a mechanism for public
input before publication of a notice of proposed rulemaking regarding
whether a medical service or technology represents a substantial
clinical improvement or advancement. The process for evaluating new
medical service and technology applications requires the Secretary to--
Provide, before publication of a proposed rule, for public
input regarding whether a new service or technology represents an
advance in medical technology that substantially improves the diagnosis
or treatment of Medicare beneficiaries;
Make public and periodically update a list of the services
and technologies for which applications for add-on payments are
pending;
Accept comments, recommendations, and data from the public
regarding whether a service or technology represents a substantial
clinical improvement; and
Provide, before publication of a proposed rule, for a
meeting at which organizations representing hospitals, physicians,
manufacturers, and any other interested party may present comments,
recommendations, and data regarding whether a new medical service or
technology represents a substantial clinical improvement to the
clinical staff of CMS.
In order to provide an opportunity for public input regarding add-
on payments for new medical services and technologies for FY 2022 prior
to publication of this FY 2022 IPPS/LTCH PPS proposed rule, we
published a notice in the Federal Register on October 16, 2020 (85 FR
65815), and held a virtual town hall meeting on December 15 and 16,
2020. In the announcement notice for the meeting,
[[Page 25208]]
we stated that the opinions and presentations provided during the
meeting would assist us in our evaluations of applications by allowing
public discussion of the substantial clinical improvement criterion for
the FY 2022 new medical service and technology add on payment
applications before the publication of the FY 2022 IPPS/LTCH PPS
proposed rule.
Approximately 330 individuals registered to attend the 2-day
virtual town hall meeting. We posted the recordings of the 2-day
virtual town hall on the CMS web page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech. We
considered each applicant's presentation made at the town hall meeting,
as well as written comments received by the December 28, 2020 deadline,
in our evaluation of the new technology add on payment applications for
FY 2022 in the development of this FY 2022 IPPS/LTCH PPS proposed rule.
In response to the published notice and the December 15-16, 2020
New Technology Town Hall meeting, we received written comments
regarding the applications for FY 2022 new technology add on payments.
As explained earlier and in the Federal Register notice announcing the
New Technology Town Hall meeting (85 FR 65815 through 65817), the
purpose of the meeting was specifically to discuss the substantial
clinical improvement criterion with regard to pending new technology
add-on payment applications for FY 2022. Therefore, we are not
summarizing those written comments in this proposed rule that are
unrelated to the substantial clinical improvement criterion. In section
II.H.5. of the preamble of this proposed rule, we are summarizing
comments regarding individual applications, or, if applicable,
indicating that there were no comments received in response to the New
Technology Town Hall meeting notice or New Technology Town Hall
meeting, at the end of each discussion of the individual applications.
3. ICD-10-PCS Section ``X'' Codes for Certain New Medical Services and
Technologies
As discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49434),
the ICD-10-PCS includes a new section containing the new Section ``X''
codes, which began being used with discharges occurring on or after
October 1, 2015. Decisions regarding changes to ICD-10-PCS Section
``X'' codes will be handled in the same manner as the decisions for all
of the other ICD-10-PCS code changes. That is, proposals to create,
delete, or revise Section ``X'' codes under the ICD-10-PCS structure
will be referred to the ICD-10 Coordination and Maintenance Committee.
In addition, several of the new medical services and technologies that
have been, or may be, approved for new technology add-on payments may
now, and in the future, be assigned a Section ``X'' code within the
structure of the ICD-10-PCS. We posted ICD-10-PCS Guidelines on the CMS
website at: https://www.cms.gov/medicare/icd-10/2021-icd-10-pcs,
including guidelines for ICD-10-PCS Section ``X'' codes. We encourage
providers to view the material provided on ICD-10-PCS Section ``X''
codes.
4. Proposed FY 2022 Status of Technologies Approved for FY 2021 New
Technology Add-On Payments
In this section of the proposed rule, we discuss the proposed FY
2022 status of 23 technologies approved for FY 2021 new technology add-
on payments, as set forth in the tables that follow. In general, we
extend new technology add-on payments for an additional year only if
the 3-year anniversary date of the product's entry onto the U.S. market
occurs in the latter half of the upcoming fiscal year. We refer the
reader to section II.F.6.b.(1). of the preamble of this proposed rule
for discussion of CONTEPO, which we conditionally approved for FY 2021
new technology add-on payments under the alternative pathway for
certain antimicrobial products, subject to the technology receiving FDA
marketing authorization by July 1, 2021. As of the time of the
development of this proposed rule, CONTEPO has not yet received FDA
marketing authorization.
a. Proposed Continuation of New Technology Add-On Payments for FY 2022
for Technologies Still Considered To Be New
In the table in this section of the proposed rule, we present our
proposals to continue the new technology add-on payment for FY 2022 for
those technologies that were approved for the new technology add-on
payment for FY 2021 and which would still considered ``new'' for
purposes of new technology add-on payments for FY 2022.
Our policy is that a medical service or technology may continue to
be considered ``new'' for purposes of new technology add-on payments
within 2 or 3 years after the point at which data begin to become
available reflecting the inpatient hospital code assigned to the new
service or technology. Our practice has been to begin and end new
technology add-on payments on the basis of a fiscal year, and we have
generally followed a guideline that uses a 6-month window before and
after the start of the fiscal year to determine whether to extend the
new technology add-on payment for an additional fiscal year. In
general, we extend new technology add-on payments for an additional
year only if the 3-year anniversary date of the product's entry onto
the U.S. market occurs in the latter half of the fiscal year (70 FR
47362).
The table in this section lists the technologies for which we are
proposing to continue making new technology add-on payments for FY 2022
because they would still be considered new for purposes of new
technology add-on payments. This table also presents the newness start
date, new technology add-on payment start date, relevant final rule
citations from prior fiscal years, proposed maximum add-on payment
amount, and coding assignments. We refer readers to the cited final
rules in the following table for a complete discussion of the new
technology add-on payment application, coding and payment amount for
these technologies, including the applicable indications and discussion
of the newness start date.
BILLING CODE 4120-01-P
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b. Proposal To Extend New Technology Add-On Payments
Section 1886(d)(5)(K)(ii)(II) of the Act provides for the
collection of data with respect to the costs of a new medical service
or technology described in subclause (I) for a period of not less than
2 years and not more than 3 years beginning on the date on which an
inpatient hospital code is issued with respect to the service or
technology. As explained in the FY 2005 IPPS final rule (69 FR 49002),
the intent of section 1886(d)(5)(K) of the Act and regulations under
Sec. 412.87(b)(2) is to pay for new medical services and technologies
for the first 2 to 3 years that a product comes on the market, during
the period when the costs of the new technology are not yet fully
reflected in the DRG weights. Generally, we use FDA approval (that is,
marketing authorization) as the indicator of the time when a technology
begins to become available on the market and data reflecting the costs
of the technology begin to become available for recalibration of the
DRGs. The costs of the new medical service or technology, once paid for
by Medicare for this 2-year to 3-year period, are accounted for in the
MedPAR data that are used to recalibrate the DRG weights on an annual
basis. Therefore, we limit the add-on payment window for those
technologies that have passed this 2- to 3-year timeframe.
As discussed in the FY 2006 IPPS final rule (70 FR 47349) and
subsequent years, we do not believe that case volume is a relevant
consideration for making the determination as to whether a product is
``new.'' Consistent with the statute, a technology no longer qualifies
as ``new'' once it is more than 2 to 3 years old, irrespective of how
frequently it has been used in the Medicare population. Therefore, if a
product is more than 2 to 3 years old, we have historically considered
its costs to be included in the MS-DRG relative weights whether its use
in the Medicare population has been frequent or infrequent.
However, in light of the unique circumstances for FY 2022
ratesetting, for which we are proposing to use the FY 2019 MedPAR
claims data where we ordinarily would have used the FY 2020 MedPAR
claims data for purposes of developing the FY 2022 relative weights,
for the reasons discussed in section I.F. of the preamble of this
proposed rule, we believe it may be appropriate to make a one-time
exception to this long-standing policy for all technologies approved
for new technology add-on payments for FY 2021, but for which the add-
on payments would otherwise be discontinued beginning in FY 2022
because the technologies would no longer be considered new.
As discussed in section I.F. of the preamble of this proposed rule,
ordinarily, the best available MedPAR data for ratesetting would be the
most recent MedPAR file that contains claims from discharges for the
fiscal year that is 2 years prior to the fiscal year that is the
subject of the rulemaking. For FY 2022 ratesetting, under ordinary
circumstances, the best available data would be the FY 2020 MedPAR
file. As discussed in section I.F. of the preamble of this proposed
rule, the FY 2020 MedPAR claims file contains data significantly
impacted by the COVID-19 PHE, primarily in that the utilization of
inpatient services was generally markedly different for certain types
of services in FY 2020 than would have been expected in the absence of
the PHE. Accordingly, we question whether the FY 2020 MedPAR claims
file is the best available data to use for the FY 2022 ratesetting.
In our discussion in section I.F. of the preamble of this proposed
rule, we highlighted two factors we considered in assessing which data
sources would represent the best available data to use in the FY 2022
ratesetting. The first factor is whether the FY 2019 data, which is
from before the COVID-19 PHE, or the FY 2020 data, which includes the
COVID-19 PHE time period, is a better overall approximation of the FY
2022 inpatient experience. After analyzing this issue, for the reasons
discussed in section I.F. of the preamble of this proposed rule, we
believe for purposes of this proposed rule that FY 2019 data are
generally a better overall approximation of FY 2022. The second factor
is to what extent the decision to use the FY 2019 or FY 2020 data
differentially impacts the FY 2022 IPPS ratesetting. As discussed more
fully in section I.F of the preamble of this proposed rule, after
analyzing this issue, we determined that the decision does
differentially impact the overall FY 2022 IPPS ratesetting. For
example, we determined that the effect on the FY 2022 MS-DRG relative
weights is more limited if the FY 2019-based weights are used rather
than the FY 2020-based weights, should the FY 2022 inpatient experience
not match the assumption used to calculate the MS-DRG relative weights.
Based on our analyses, we are proposing to use FY 2019 data for the
FY 2022 ratesetting for circumstances
[[Page 25212]]
where the FY 2020 data is significantly impacted by the COVID-19 PHE.
Because we believe the FY 2020 MedPAR claims data is significantly
impacted by the COVID-19 PHE, we are proposing to use the FY 2019
MedPAR claims data for purposes where we ordinarily would have used the
FY 2020 MedPAR claims data, including for purposes of developing the FY
2022 relative weights. We refer the reader to section I.F. of the
preamble of this proposed rule for a further discussion on our analysis
of the best available data for FY 2022 ratesetting.
As discussed previously, in general, we extend new technology add-
on payments for an additional year only if the 3-year anniversary date
of the product's entry onto the U.S. market occurs in the latter half
of the upcoming fiscal year. Because we are proposing to use FY 2019
MedPAR data instead of FY 2020 MedPAR data for the FY 2022 IPPS
ratesetting, the costs for a new technology for which the 3-year
anniversary date of the product's entry onto the U.S. market occurs
prior to the latter half of the upcoming fiscal year (FY 2022) may not
be fully reflected in the MedPAR data used to recalibrate the MS-DRG
relative weights for FY 2022. Therefore, in light of our proposal to
use FY 2019 data instead of FY 2020 data to develop the FY 2022
relative weights, we believe it would be appropriate to allow for a
one-year extension of new technology add-on payments for those
technologies for which the new technology add-on payment would
otherwise be discontinued beginning with FY 2022. Accordingly, we are
proposing to use our authority under section 1886(d)(5)(I) of the Act
to provide for a one-year extension of new technology add-on payments
for FY 2022 for those technologies listed in the table that follows. We
note that if we were to finalize our alternative approach of using the
same FY 2020 data that we would ordinarily use for purposes of FY 2022
ratesetting, including development of the FY 2022 relative weights, as
discussed in section I.F. of the preamble of this proposed rule, we
would also finalize to discontinue the new technology add-on payments
for these expiring technologies beginning in FY 2022, consistent with
our historic policies.
We note that this table also presents the newness start date, new
technology add-on payment start date, relevant final rule citations
from prior fiscal years, proposed maximum add-on payment amount, and
coding assignments for these technologies. We refer readers to the
final rules cited in the table for a complete discussion of the new
technology add-on payment application, coding and payment amount for
these technologies, including the applicable indications and discussion
of the newness start date.
We are inviting public comment on our proposal to use our authority
under section 1886(d)(5)(I) of the Act to provide for a 1-year
extension of new technology add-on payments for FY 2022 for those
technologies for which the new technology add-on payment would
otherwise be discontinued beginning with FY 2022.
We finally note, with regard to ContaCT which is a technology sold
on a subscription basis, we continue to welcome comments from the
public as to the appropriate method to determine a cost per case for
technologies sold on a subscription basis, including comments on
whether the cost per case should be estimated based on subscriber
hospital data as described previously, and if so, whether the cost
analysis should be updated based on the most recent subscriber data for
each year for which the technology may be eligible for the new
technology add-on payment.
[[Page 25213]]
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BILLING CODE 4120-01-C
5. FY 2022 Applications for New Technology Add-On Payments (Traditional
Pathway)
a. Aidoc Briefcase for PE
Aidoc Medical Ltd. (Aidoc) submitted an application for new
technology add-on payments for Aidoc Briefcase for PE (``Briefcase for
PE'') for FY 2022. According to the applicant, Briefcase for PE is an
FDA cleared, artificial intelligence (AI)-based solution for triage and
notification of suspected pulmonary embolism (PE) cases.
The applicant stated that the device assists hospitals and
radiologists by flagging and communicating suspected positive findings
of PE in computed tomography (CT) pulmonary angiography (CTPA)
examinations, which prompts the radiologist to assess relevant Digital
Imaging and Communications in Medicine (DICOM) imaging files, allowing
suspect cases to receive attention sooner than otherwise would have
occurred, which in turn improves clinical outcomes. According to the
applicant, patients with PE or suspected PE typically present at
hospital emergency departments (EDs). The applicant stated that for
these patients, ED physicians complete a brief evaluation and order
imaging, which typically includes CTPA. With Briefcase for PE, CTPA
images are automatically forwarded to the applicant's cloud-based
engine where they are analyzed by an AI algorithm. The applicant claims
that when Briefcase for PE detects a suspected PE, the radiologist is
alerted via the user interface of the Aidoc Worklist Application that
is installed on the radiologist's desktop. The applicant asserted that
the notification prompts the radiologist to review the CTPA images and
communicate with the emergency room team currently caring for the
patient so that the appropriate clinical action may be taken sooner
than it would otherwise have occurred in the absence of the tool.
The applicant stated that acute PE is a severe manifestation of
venous thromboembolism (VTE) and occurs when a blood clot (thrombus)
forms in a vein and then dislodges and travels to the pulmonary
arteries in the lungs. The applicant stated acute symptomatic PE can
cause death within 1 hour of onset in up to 10 percent of cases \7\ and
it is estimated to be the third largest cause of cardiovascular death
after coronary artery disease and stroke.8 9 10 11 The
applicant further noted that acute PE is a life-threatening medical
emergency that demands urgent intervention and clinical studies have
demonstrated a strong correlation between time to communication of PE
findings, treatment, and clinical outcomes.12 13 14
According to the applicant, in a typical workflow, a patient presenting
to a hospital with signs or symptoms of PE would move through the
system as follows: (1) Patient presents with suspected PE to the ED;
(2) Patient receives contrast-enhanced CTPA imaging; (3) Technologist
processes and reconstructs the CT images and manually routes them to
the hospital picture archiving and communication system (PACS); (4) The
exam enters a first-in-first-out (FIFO) reading queue, where it awaits
radiological interpretation; (5) Radiologist reads the CT images and
makes the diagnosis of PE; (6) The radiologist informs the referring
physician of positive PE either verbally or through the radiologist
report; (7) ED physician and/or on-call pulmonologist decide on the
management strategy; (8) If appropriate, the patient proceeds to
treatment.
---------------------------------------------------------------------------
\7\ Naess IA, Christiansen SC, Romundstad P, Cannegieter SC,
Rosendaal FR, Hammerstr[oslash]m J. Incidence and mortality of
venous thrombosis: A population-based study. J Thromb Haemost. 2007
Apr;5(4):692-9. doi: 10.1111/j.1538-7836.2007.02450.x. PMID:
17367492.
\8\ Giuntini C, Di Ricco G, Marini C, Melillo E, Palla A.
Pulmonary embolism: Epidemiology. Chest. 1995 Jan;107(1 Suppl):3S-
9S. doi: 10.1378/chest.107.1_supplement.3s. PMID: 7813326.
\9\ Becattini C, Agnelli G. Risk factors for adverse short-term
outcome in patients with pulmonary embolism. Thromb Res. 2001 Sep
15;103(6):V239-44. doi: 10.1016/s0049-3848(01)00291-2. PMID:
11567661.
\10\ Goldhaber SZ, Visani L, De Rosa M. Acute pulmonary
embolism: Clinical outcomes in the International Cooperative
Pulmonary Embolism Registry (ICOPER). Lancet. 1999 Apr
24;353(9162):1386-9. doi: 10.1016/s0140-6736(98)07534-5. PMID:
10227218.
\11\ Klok FA, Mos IC, Huisman MV. Brain-type natriuretic peptide
levels in the prediction of adverse outcome in patients with
pulmonary embolism: A systematic review and meta-analysis. Am J
Respir Crit Care Med. 2008 Aug 15;178(4):425-30. doi: 10.1164/
rccm.200803-459OC. Epub 2008 Jun 12. PMID: 18556626.
\12\ Smith SB, Geske JB, Maguire JM, Zane NA, Carter RE,
Morgenthaler TI. Early anticoagulation is associated with reduced
mortality for acute pulmonary embolism. Chest. 2010 Jun;137(6):1382-
90. doi: 10.1378/chest.09-0959. Epub 2010 Jan 15. PMID: 20081101;
PMCID: PMC3021363.
\13\ Soh S, Kim JM, Park JH, Koh SO, Na S. Delayed
anticoagulation is associated with poor outcomes in high-risk acute
pulmonary embolism. J Crit Care. 2016 Apr;32:21-5. doi: 10.1016/
j.jcrc.2015.11.024. Epub 2015 Dec 8. PMID: 26764578.
\14\ Wood KE. Major pulmonary embolism: Review of a
pathophysiologic approach to the golden hour of hemodynamically
significant pulmonary embolism. Chest. 2002 Mar;121(3):877-905.
PMID: 11888976.
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The applicant asserted that the FIFO workflow is the standard of
care. The applicant stated that Briefcase for PE allows facilities to
substantially shorten the period of time between when the patient
receives CTPA imaging (Step 2) and when the radiologist informs the
referring physician of positive PE (Step 5). The applicant stated that
Briefcase for PE streamlines this workflow using AI to analyze CTPA
images of the chest automatically and notifies the radiologist that a
suspected PE has been identified, enabling the radiologist to review
imaging and make diagnostic decisions faster by prioritizing these
images for review in the queue.
With respect to the newness criterion, Briefcase for PE received
FDA 510(k) clearance on April 15, 2019 to market the device under FDA
510(k) number K190072. The FDA clearance for Briefcase for PE was based
on substantial equivalence to the legally marketed predicate device,
Briefcase for Intracranial Hemorrhage (ICH) (FDA 510(k) number
K180647), as both of these devices use AI algorithms to analyze images
and highlight cases for further action based on CT images. Briefcase
for ICH received FDA 510(k) clearance on August 1, 2018. The predicate
device for Briefcase for ICH is Viz.AI's ContaCT, which received De
Novo premarket approval in February of 2018. The applicant asserted
Briefcase for ICH is indicated for use in the analysis of non-enhanced
head CT images, whereas Briefcase for PE is indicated for use in the
analysis of non-enhanced CTPA images. According to the applicant, there
are currently no ICD-10-PCS procedure codes to adequately describe
Briefcase for PE. The applicant submitted a request for approval of a
unique ICD-10-PCS procedure code to identify use of the technology
beginning FY 2022.
Under the newness criterion, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With respect to the first criterion, whether a product uses the
same or similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, Briefcase for PE is the only FDA-cleared
technology that uses computer-aided triage and notification to rapidly
detect PE and shorten time to notification of the radiologist. The
applicant claimed that no other FDA approved or cleared technology uses
the same mechanism of action for computer-aided triage and
prioritization of PE.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated it expects that
patients evaluated for PE or suspected PE using Briefcase for PE will
be assigned to the
[[Page 25218]]
same DRGs as patients evaluated for PE or suspected PE under the
current workflow or standard of care. The applicant estimates that
under the MS-DRG grouper for FY 2021, Briefcase for PE could map to 279
different MS-DRGs, with MS-DRGs 175 (Pulmonary embolism with major
complication or comorbidity (MCC) or acute cor pulmonale) and 176
(Pulmonary embolism without MCC) accounting for approximately 45
percent of the estimated cases.
With respect to the third criterion, whether the new use of
technology involves the treatment of the same or similar type of
disease and the same or similar patient population when compared to an
existing technology, the applicant did not directly respond to the
criterion but reiterated that no other existing technology is
comparable to Briefcase for PE and that Briefcase for PE is the only
FDA-cleared technology that uses computer aided triage and notification
to rapidly detect PE and shorten time to notification of the
radiologist.
We have the following concerns regarding whether the technology
meets the substantial similarity criteria and whether it should be
considered new. We note that the applicant asserted that Briefcase for
ICH, the predicate device for Briefcase for PE, is identical in all
aspects and differs only with respect to the training of the algorithm
on PE (that is, non-enhanced head CT) and ICH (that is, non-enhanced
CTPA) images. We are unclear whether the training of the algorithim on
PE and ICH images would distinguish the mechanism of action for
Briefcase for PE from Briefcase for ICH, or its predicate device,
ContaCT, and we invite comment on whether Briefcase for PE represents a
new mechanism of action. We note that although the applicant did not
directly state whether Briefcase for PE involves the treatment of the
same or similar type of disease and the same or similar patient
population, we believe that Briefcase for PE would be used for a
different disease and patient population than Briefcase for ICH and
ContaCT.
We continue to be interested in public comments regarding issues
related to determining newness for technologies that use AI, an
algorithm, or software, as discussed in the FY 2021 IPPS/LTCH PPS final
rule (85 FR 58628). Specifically, we are interested in public comment
on how these technologies, including devices classified as radiological
computer aided triage and notification software and radiological
computer-assisted diagnostic software, may be considered for the
purpose of identifying a unique mechanism of action; how updates to AI,
an algorithm or software would affect an already approved technology or
a competing technology; whether software changes for an already
approved technology could be considered a new mechanism of action, and
whether an improved algorithm by competing technologies would represent
a unique mechanism of action if the outcome is the same as an already
approved AI new technology.
We invite public comments on whether Briefcase for PE meets the
newness criterion.
With regard to the cost criterion, the applicant presented the
following analysis. The applicant first identified the principal
diagnoses associated with the PE-related MS-DRGs 175 (``Pulmonary
embolism with MCC or acute cor pulmonale'') and 176 (``Pulmonary
embolism without MCC''). The applicant then searched the FY 2019
proposed rule MedPAR Limited Data Set (LDS) for claims where the
principal diagnoses were listed in any position on an inpatient claim.
The applicant mapped the 2,517 identified claims to the list of unique
MS-DRGs corresponding to these claims and aggregated the claims by MS-
DRG. Per the applicant, under the MS-DRG grouper for FY 2021, potential
cases representing patients who may be eligible for treatment using
Briefcase for PE map to 279 MS-DRGs, with MS-DRGs 175 and 176
accounting for approximately 45 percent of estimated cases. The
applicant also provided a table of the top 10 MS-DRGs, which represent
approximately 69 percent of estimated cases.
[GRAPHIC] [TIFF OMITTED] TP10MY21.136
The applicant standardized the charges and applied the 2-year
charge inflation factor used to adjust the outlier threshold
determination, which the applicant stated was 10.22 percent. We note
that the actual 2-year inflation factor in the FY 2021 IPPS/LTCH PPS
final rule was 13.2 percent (85 FR 59039), which would have increased
the inflated charges figure. The applicant did not remove charges for
prior technology as the applicant maintained that no existing
technology is comparable to Briefcase for PE. However, the applicant
removed 31.9 percent of total accommodation charges, which the
applicant maintained is consistent with their internal study which
indicated that Briefcase for PE reduced the length of stay for PE-
diagnosed patients.\15\ Per the applicant, the study demonstrated a
mean length of stay of 8.77 and 5.97 days for pre-AI and post-AI time
periods, respectively.\16\
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\15\ Maya M. et al. Artificial Intelligence Software for
Flagging Pulmonary Embolism on CTPA Associated with Reduced Length
of Stay. Abstract draft of an internal study performed by the
applicant (unpublished).
\16\ Ibid.
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Next, the applicant added charges for the new technology. To
calculate the charges for the new technology, the applicant multiplied
the cases involving Briefcase for PE from each of its subscribing
providers by a Medicare share of 52 percent to obtain the total
estimated Medicare and non-Medicare cases. The applicant obtained the
52 percent Medicare share figure from a
[[Page 25219]]
nationwide sample of inpatient claims provided by the Agency for
Healthcare Research and Quality (AHRQ). Specifically, the applicant
searched data from the Healthcare Cost and Utilization Project for
discharges with the following codes: I2699, I2609, I2692, I2602, I2782,
T790XXA, T800XXA, T791XXA, I2693, I2694, and I2601.\17\ The applicant
found 189,575 discharges, of which 52 percent identified Medicare as
the payer. The applicant divided the total cost of the technology by
the estimated total number of cases for each customer to obtain a
provider-specific cost per case, which it then averaged across all
customers to obtain an overall average cost per case. Finally, the
applicant divided the average cost per case by the national average CCR
for the CT cost center of 0.034 from the FY 2021 IPPS/LTCH PPS final
rule (85 FR 58601).
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\17\ Healthcare Cost and Utilization Project. Free Health Care
Statistics. https://hcupnet.ahrq.gov/#setup.
---------------------------------------------------------------------------
The applicant calculated a final inflated average case-weighted
standardized charge per case of $87,483, which exceeded the average
case-weighted threshold amount of $71,312. Because the final inflated
average case-weighted standardized charge per case exceeded the average
case-weighted threshold amount, the applicant maintained that Briefcase
for PE meets the cost criterion.
We would like more information regarding the methodology by which
the applicant selected the diagnosis codes associated with MS-DRGs 175
and 176, as well as subanalyses that limit the cases to MS-DRGs 175 and
176 and the top 10 MS-DRGs, which per the applicant represent 45
percent of estimated cases and 69 percent of estimated cases,
respectively. Additionally, the applicant appears to have used a single
list price of Briefcase for PE per hospital with a cost per patient
that can vary based on the volume of cases. We question whether the
cost per patient varies based on the utilization of the technology by
the hospitals. We are interested in more information about the
applicant's cost per case calculation, including how the applicant
selected the codes it used to search for discharges from the Healthcare
Cost and Utilization Project, as well as the per unit cost of Briefcase
for PE and how the total cost of the technology was calculated for each
subscribing provider.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58630), we stated
our understanding that there are unique circumstances to determining a
cost per case for a technology that utilizes a subscription for its
cost. We stated our intent to continue to consider the issues relating
to the calculation of the cost per unit of technologies sold on a
subscription basis as we gain more experience in this area. We continue
to welcome comments from the public as to the appropriate method to
determine a cost per case for such technologies, including comments on
whether the cost per case should be estimated based on subscriber
hospital data as described previously, and if so, whether the cost
analysis should be updated based on the most recent subscriber data for
each year for which the technology may be eligible for the new
technology add-on payment. We also invite public comment on whether
Briefcase for PE meets the cost criterion, particularly in light of the
subscription model, for which the number of subscribers and the
estimated cost per case based on that subscriber data may change over
time.
With regard to the substantial clinical improvement criterion, the
applicant claimed that Briefcase for PE represents an advance that
substantially improves the ability to diagnose pulmonary embolism by
pre-reading images of CTPAs, automatically identifying suspected PE in
CTPA images, and notifying the radiologist before the radiologist would
have opened the study in the standard of care, which the applicant
claims is the FIFO workflow. The applicant also asserted that because
of a reduction in time-to-exam-open, where Briefcase for PE notifies
the radiologist to open and read CTPA studies that have a high
probability of being positive for PE sooner than the radiologist would
have under the FIFO workflow, the treating physician can initiate
treatment sooner, which can reduce mortality and reduce length of stay
related to PE.
The applicant provided data from an FDA pivotal study in support of
its assertion that Briefcase for PE reduces time-to-exam-open compared
to the standard of care and helps in prioritization of diagnosis.\18\
For the FDA pivotal study, the applicant conducted a retrospective,
blinded, multicenter, multinational study of the assessment of 184
CTPAs from 3 clinical sites (2 US and 1 outside US) using Briefcase for
PE. The primary endpoint was to evaluate the software's performance in
identifying pulmonary embolism on an approximately equal number of
positive and negative cases (images with PE versus without PE), with a
performance goal of at least 80 percent sensitivity (true positive
rate) and specificity (true negative rate). Per the applicant, both
measures exceeded the performance goal, with 90.6 percent sensitivity
(95 percent CI: 82.2 percent-95.9 percent) and 89.9 percent specificity
(95 percent CI: 82.2 percent-95.1 percent).
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\18\ Aidoc Briefcase for PE--Pivotal Study 1--FDA 510(k)--
K190072. http://www.accessdata.fda.gov/cdrh_docs/pdf19/K190072.pdf.
---------------------------------------------------------------------------
According to the applicant, the secondary endpoint of the FDA
pivotal study was to evaluate time-to-notification for true positive PE
cases compared to the FIFO workflow. The study showed that time-to-
notification with Briefcase for PE is 3.9 minutes (95 percent CI: 3.7-
4.1). The applicant noted that, in contrast, the time-to-exam-open in
the FIFO workflow was significantly longer at 64.1 minutes (95 percent
CI 36.6-91.5). The applicant stated the mean difference of 60.2 minutes
(95 percent CI 32.7-87.6) for these two metrics is statistically
significant, and assuming the radiologist receives a notification on a
true positive PE case and acts on it immediately, it can save an
average of 60.2 minutes (95 percent CI 32.7-87.6) compared to the time-
to exam-open in a FIFO reading queue. Based on this data, the applicant
concluded Briefcase for PE substantially shortened the time to
diagnosis for PE cases as compared with the FIFO workflow.
The applicant further claimed that clinical studies and other real-
world data have demonstrated comparable performance characteristics and
shown that the integration of the Briefcase for PE software into the
radiology workflow markedly improves time to notification for PE
patients across a variety of clinical settings, geographies, and
facilities. The applicant submitted a retrospective, single-site study
by Weikert T., et al., which evaluated Briefcase for PE performance on
1,465 retrospective CTPA examinations from 2017 in an academic center
outside the US.\19\ The sensitivity and specificity were measured to be
92.7 percent (95 percent CI: 88.3-95.5 percent) and 95.5 percent (95
percent CI: 94.2-96.6 percent), respectively. The researchers concluded
that the system has high diagnostic performance for the automatic
detection of PE on CTPA exams and as such, speeds up the diagnostic
workup of critical cases.
---------------------------------------------------------------------------
\19\ Weikert T, Winkel DJ, Bremerich J, Stieltjes B, Parmar V,
Sauter AW, Sommer G. Automated detection of pulmonary embolism in CT
pulmonary angiograms using an AI-powered algorithm. Eur Radiol. 2020
Jul 3. doi: 10.1007/s00330-020-06998-0. Epub ahead of print. PMID:
32621243
---------------------------------------------------------------------------
The applicant stated that unpublished data maintained by Aidoc
suggest that real-world performance of Briefcase for PE is consistent
with what was found in
[[Page 25220]]
the FDA pivotal study.20 21 The applicant stated that across
26 sites encompassing a variety of geographic locations across the
United States, a total of 36,084 CTPA examinations were analyzed over a
90-day period (July 13, 2020-October 11, 2020). Time-to-notification
metrics were calculated for all 4,748 CTPAs analyzed by the software
and identified as positive for PE. Time-to-notification was calculated
as the time to get the DICOM exam, de-identify it, upload it to the
cloud, analyze and send a notification back to the worklist
application. The applicant claimed that the mean time-to-notification
for PE was 7.0 minutes (median: 6.1/IQR: 4.8). According to the
applicant, over 85 percent of CTPA examinations identified as positive
for PE were notified in under 10 minutes. The applicant concluded that
the study demonstrates the ability of Briefcase for PE to provide fast
time-to-notification on positive PE cases and its generalizability
across different centers and patient populations.
---------------------------------------------------------------------------
\20\ Avondo, J. Yalon R., Ashkenasi C. Time-to-notification
Analysis Across US Facilities with Aidoc Briefcase for PE. Internal
study performed by the applicant (unpublished).
\21\ Ibid.
---------------------------------------------------------------------------
The applicant submitted additional unpublished data from the 26
sites spread across a variety of geographic locations of the United
States aggregated over a different 90-day period (September 17, 2020 to
December 17, 2020).\22\ Seven sites were excluded from the analysis due
to having third-party integrations that prevented the ability to
capture engagement metrics. Two engagement metrics were calculated: The
open percentage and the time-to-open. The open percentage metric was
calculated as the percentage of notifications that were presented to
the radiologist and opened by at least one radiologist. The time-to-
open metric was measured by calculating the time between the arrival of
the Briefcase for PE notification and the time first opened by a
radiologist. A total of 2,138 notifications for CTPA examinations found
to be positive for PE by Briefcase for PE were analyzed. The open
percentage was found to be 97 percent across all sites (min: 80
percent, max: 100 percent), and the mean time-to-open was found to be
2.13 minutes (median: 1.0/interquartile range: 2.0). The data provided
by the applicant indicated over 90 percent of notifications were found
to be opened in under 5 minutes. Based on this data, the study
concluded that radiologists in the US readily engage with notifications
for positive PE cases provided by Briefcase for PE and do so in a
timely manner. The study asserted that engagement is an important
metric to assess radiologist adoption of this technology, which is
critical to its practical utility in shortening time to diagnosis and
communication of PE to reduce the time to treatment and improve
clinical outcomes.
---------------------------------------------------------------------------
\22\ Avondo, J. Yalon R., Ashkenasi C. Radiologist Engagement
Analysis Across US Facilities with Aidoc Briefcase for PE. Internal
study performed by the applicant (unpublished).
---------------------------------------------------------------------------
The applicant also claimed that Briefcase for PE significantly
improves clinical outcomes relative to the current standard of care
using the FIFO workflow because the use of Briefcase for PE reduces
time to diagnosis and treatment by notifying the radiologist to review
the image for suspected PE faster in the workflow. The applicant
claimed early diagnosis and treatment is important in acute PE where
there exists a ``golden hour,'' during which a timely approach to
diagnosis and therapy can affect outcomes by reducing mortality and
reducing length of stay.\23\
---------------------------------------------------------------------------
\23\ The term ``golden hour'' references a critical period of
time which may be longer or shorter than a literal hour.
---------------------------------------------------------------------------
The applicant provided two unpublished internal studies in support
of the impact of Briefcase for PE on clinical outcomes. The applicant
stated that in a single-site retrospective study, Maya M., et al. have
shown a reduction in hospital length of stay for PE patients following
the use of the Briefcase for PE system, compared to an equivalent time
period prior to the use of the system.\24\ The applicant stated that
Maya M., et al. compared mean length of stay for 366 patients with a
positive PE diagnosis during 10-month periods before and after
Briefcase for PE was implemented at Cedars-Sinai Medical Center in
December 2018 (206 patients before the use of Briefcase for PE and 160
patients after the AI intervention). 3,997 patient encounters that
underwent CTPA imaging but that were not diagnosed with PE were split
as 1,926 and 2,071 patient encounters for the pre/post-AI periods based
on the admission dates. Hip fracture was chosen as a comparison group
due to acuity, treatment-related factors, and similar length of stay to
PE. 2,422 patient encounters for patients diagnosed with hip fractures,
identified by ICD9 code 820 and 821, were split as 1,279 and 1,143
patient encounters for the pre/post-AI periods based on the admission
dates. According to the applicant, the pre- and post-implementation had
similar seasonality and numbers of ``hospital-wide patient encounters''
(103,626 vs 104,733 encounters). The applicant noted that for the PE
diagnosed patients, a mean length of stay of 8.77 and 5.97 days was
observed for the pre-AI and post-AI time periods, respectively. The
applicant stated that the mean difference was 2.80 days (p-value
<0.05). For the group that underwent related PE imaging but was not
diagnosed with PE, a mean length of stay of 9.28 and 9.70 days was
observed for the pre-AI and post-AI time periods, respectively (mean
difference was -0.42 days (p-value <0.05)). For the hip fracture
diagnosed patients, a mean length of stay of 6.90 and 6.69 days was
observed for the pre-AI and post-AI time periods, respectively. The
mean difference was 0.21 days (p-value >0.05). Additionally, for the
hospital wide patients, a mean length of stay of 5.78 and 5.96 days was
observed for the pre-AI and post-AI time periods, respectively. The
mean difference was -0.18 days (p-value <0.05). According to the
applicant, Maya et al. concluded that implementation of Briefcase for
PE for flagging and prioritization of patients with PE resulted in
significant reduction of length of stay that was not observed in other
control groups.
---------------------------------------------------------------------------
\24\ Maya M. et al. Artificial Intelligence Software for
Flagging Pulmonary Embolism on CTPA Associated with Reduced Length
of Stay. Abstract draft of an internal study performed by the
applicant (unpublished).
---------------------------------------------------------------------------
The applicant also submitted a study by Raskin D., et al. which
completed an additional retrospective, single-armed, single-site, study
that indicated improved outcomes in PE patients, compared to a time
period prior to the use of Briefcase for PE.\25\ In Raskin D., et al.,
data for all patients older than 18 years with a diagnosis of PE on
CTPA and admitted to the institution's ED was collected for the period
before the use of the AI software (January 1, 2016-January 1, 2018;
pre-AI) and afterwards (January 1, 2019-December 6, 2019; post-AI).
According to the applicant, study variables included demographics,
clinical data, and imaging data. The applicant stated the primary
variables for outcomes were 30- and 120-day all-cause mortality. 175
patients were eligible for the entire analyzed period (123 pre-AI, 52
Post-AI). The study found that 30- and 120-day all-cause mortality were
significantly reduced post-AI (8.1 percent vs 7.7 percent, 15.5 percent
vs 9.6 percent, respectively, p<0.05). According to the applicant,
Raskin D., et al. concluded that
[[Page 25221]]
implementation of Briefcase for PE for flagging patients with PE
resulted in significant reduction of 30- and 120-day all-cause
mortality.
---------------------------------------------------------------------------
\25\ Daniel Raskin D.,MD, Chen Hoffmann C.,MD, Gilad Twig G.,MD
Ph.D., Eli Konen E.,MD, Gal Yaniv GMD Ph.D. Artificial Intelligence
Software for Flagging Pulmonary Embolism on CTPA Associated with
Reduction of Mortality. Abstract draft of an internal study
performed by the applicant (unpublished).
---------------------------------------------------------------------------
The applicant submitted five additional clinical studies that do
not directly involve the use of Briefcase for PE to demonstrate a
strong correlation between time to communication of PE findings,
initiation of treatment, and clinical outcomes. The applicants
submitted a review by Kenneth E. Wood, further establishing a ``golden
hour'' of PE during which a timely approach to diagnosis and therapy
can potentially impact outcomes. According to the applicant, Wood
states that major PE results whenever the combination of embolism size
and underlying cardiopulmonary status interact to produce hemodynamic
instability and that most deaths in patients occur within the first few
hours after presentation, and rapid diagnosis and treatment is
therefore essential to save patients' lives. One prospective, single-
site study, Kumamaru K., et al. indicates the prevalence of a ``golden
hour'' for PE diagnosis and treatment and concluded that delay (>1.5
hours of CTPA acquisition) in direct communication of acute PE
diagnosis from radiologists to referring physicians was significantly
correlated with a higher risk of delayed treatment initiation and death
within 30 days. Another prospective, single-site study, Kline J., et
al., concluded that patients with a delayed diagnosis had a higher rate
of in-hospital adverse events (9 percent vs. 30 percent; p = 0.01). An
additional retrospective, single-site study by Smith S., et al.
observed an association between early administration of anticoagulation
therapy and reduced mortality for patients with acute PE. Lastly, a
retrospective, single-site study asserting a ``golden hour'' by Soh S.,
et al. was submitted by the applicant to demonstrate an association
between early initiation of anticoagulation therapy and in-hospital
mortality in high-risk PE patients who needed ICU care. According to
the applicant, Soh S., et al. concluded that their analysis showed that
the cutoff point of anticoagulation initiation to achieve improved
survival rates was 5.2 hours (that is, golden hour). The applicant
stated that the study observed an association between early
anticoagulation and reduced mortality for patients with acute PE.
In reviewing the information submitted by the applicant as part of
its FY 2022 new technology add-on payment application for Briefcase for
PE, we note that the clinical literature provided by the applicant only
compares the technology to unassisted FIFO workflows and not against
existing electronic (for example, EHR ``stat'' orders) or manual (for
example, verbal communication to radiologist) forms of prioritization,
or other types of existing risk stratification tools or features
currently available in EHRs. Additionally, we note that some of the
studies provided by the applicant that took place over many years may
not have accounted for confounding variables (for example, improvements
in care for patients with suspected PE) that may have occurred during
the study period. Comparing to the FIFO workflow alone assumes that no
other changes occurred before and after the adoption of the system and
that the hospitals in question did not implement any other changes to
their standard operating procedures to stratify suspected PE cases over
the period of time many of the provided studies took place. We also
note that the applicant has not provided data on potential outcome
concerns associated with this type of clinical decision support tool
(for example, treatment delays due to false negatives, false positives,
or multiple workflow prioritization alerts presented to the physician
at the same time). We invite public comment on whether these issues may
affect the tool's ability to help diagnose a medical condition earlier
in a patient population.
Lastly, we note that the applicant does not measure the effect of
its technology on actual treatment outcomes, instead relying on the
assumption that faster treatment results in better outcomes. Without
measuring this impact on treatment outcomes, we are uncertain if the
technology will lead to substantive clinical outcomes. Given that the
applicant references a critical ``golden hour'' which may be as long as
5.2 hours, the potential time savings resulting from the use of
Briefcase for PE may be insubstantial in relation to the time within
which outcomes are affected in the setting of PE.
We are inviting public comments on whether Briefcase for PE meets
the substantial clinical improvement criterion.
We received a written public comment from the applicant in response
to the New Technology Town Hall meeting regarding the application of
Briefcase for PE for new technology add-on payments.
Comment: The applicant responded to questions received at the New
Technology Town Hall Meeting. First the applicant was asked what the
sensitivity and specificity of the standalone device is for identifying
pulmonary embolism and how the sensitivity and specificity of the
radiologist alone compare to the sensitivity and specificity of the
radiologist when using the device. The applicant responded by
reiterating the sensitivity and specificity data provided in the FDA
pivotal study and restating that Briefcase for PE is a computer-aided
triage and notification system that is not intended to aid in the
diagnosis of PE but rather, Briefcase for PE identifies cases of
suspected PE on CTPAs and, via triage and notification, prioritizes
these cases for radiologist review.26 27 The applicant
further restated that this triage and notification modifies the
traditional radiology workflow in which images are reviewed on a FIFO
basis to reduce the time-to-open-exam from over one hour to several
minutes (standard of care vs. Briefcase for PE). The applicant restated
that this reduction in time-to-open-exam has been demonstrated to
improve patient outcomes, including hospital length of stay and post-
discharge mortality. The applicant further noted that, because
Briefcase for PE is a triage and notification system, no patient harm
results from false positives or false negatives that may occur. The
applicant explained that with respect to false positives, these
suspected cases of PE will be triaged and the radiologist will be
notified, prompting earlier review and diagnosis of the CTPA image by
the radiologist. The applicant explained that for cases of PE that are
missed by Briefcase for PE (that is, false negatives), the radiologist
will review these CTPA images on a FIFO basis the same as today's
standard of care and that triage and notification do not occur in the
standard of care.
---------------------------------------------------------------------------
\26\ Aidoc Briefcase for PE--Pivotal Study 1--FDA 510(k)--
K190072. http://www.accessdata.fda.gov/cdrh_docs/pdf19/K190072.pdf.
\27\ Weikert T, Winkel DJ, Bremerich J, et al. Automated
detection of pulmonary embolism in CT pulmonary angiograms using an
AI-powered algorithm. Eur Radiol. 2020;30(12):6545-6553.
doi:10.1007/s00330-020-06998-0.
---------------------------------------------------------------------------
Second, the applicant was asked if Briefcase for PE decreased time
outside of clinical trial protocols and how the applicant can be
certain reducing time-to-notification affects the time period between
when the CTPA is completed and the study is interpreted. In response,
the applicant again reiterated data from the FDA pivotal study in
restating that implementation of Briefcase for PE saves on average 60.2
minutes relative to the standard of care FIFO clinical workflow and
that data maintained by Aidoc demonstrate that real-world performance
of Briefcase for PE is consistent with the results achieved in the FDA
study. The
[[Page 25222]]
applicant also submitted data summarized previously indicating mean
time-to-open, as measured by calculating the time between when a
notification first became available in the application and the time of
open, was 2.13 minutes (median: 1.0/IQR: 2.0). The applicant restated
that in addition to measuring the mean time-to-open, the open rate, or
the percentage of notifications opened, was measured for this same
population and the open rate was found to be 97 percent (min: 80
percent, max: 100 percent), with over 90 percent of notifications found
to be opened in under 5 minutes.\28\
---------------------------------------------------------------------------
\28\ Avondo, J. Yalon R., Ashkenasi C. Radiologist Engagement
Analysis Across US Facilities with Aidoc Briefcase for PE. Internal
study performed by the applicant (unpublished).
---------------------------------------------------------------------------
Also in response to this second question, the applicant reiterated
data describing an independent analysis performed by Raskin, et al.,
examining the impact of Briefcase for PE implementation on 30- and 120-
day all-cause mortality for all patients age 18 years or older with a
diagnosis of PE on CTPA and admitted to Sheba Medical Center in Tel
Aviv, Israel. The applicant restated data described previously
indicating that investigators found that the post- Briefcase cohort had
significantly reduced 30- and 120-day all-cause mortality compared to
the pre-Briefcase cohort--14.9 percent vs 11.0 percent and 26.1 percent
vs 20.4 percent, respectively. The applicant stated these observed
effects equate to a reduction ratio of 26.6 percent (p <0.05) and an
odds-ratio of 1.425 (95 CI: 1.01-2.02) for 30-day all-cause mortality
and a reduction ratio of 21.8 percent (p <0.05) and an odds-ratio of
1.34 (95 percent CI: 1.05-1.81) for 120-day all-cause mortality.\29\
---------------------------------------------------------------------------
\29\ Daniel Raskin D.,MD, Chen Hoffmann C.,MD, Gilad Twig G.,MD
Ph.D., Eli Konen E.,MD, Gal Yaniv GMD Ph.D. Artificial Intelligence
Software for Flagging Pulmonary Embolism on CTPA Associated with
Reduction of Mortality. Abstract draft of an internal study
performed by the applicant (unpublished).
---------------------------------------------------------------------------
Response: We appreciate the applicant's comments. We will take
these comments into consideration when deciding whether to approve new
technology add-on payments for Briefcase for PE.
b. Amivantamab
Johnson & Johnson Health Care Systems, Inc. submitted an
application for new technology add-on payments for amivantamab for FY
2022. Amivantamab is intended for the treatment of metastatic non-small
cell lung cancer (NSCLC). The applicant stated amivantamab is a
bispecific monoclonal antibody able to inhibit the epidermal growth
factor receptor (EGFR) and c-MET tyrosine kinase signaling pathways
known to be involved in the pathogenesis of NSCLC. Per the applicant,
amivantamab works by binding EGFR and c-MET targets present on the
outside of the cell. The applicant noted lung cancer is the second most
common cancer in the U.S., and approximately 85 percent of all lung
cancers are NSCLC. The applicant stated EGFR mutations are present in
10 to 15 percent of patients with NSCLC and are categorized as either
common EGFR mutations or atypical EGFR mutations. Per the applicant,
common EGFR mutations in patients with NSCLC can be treated with small
molecule, oral tyrosine kinase inhibitors that work inside the cell
while patients with atypical EGFR mutations, such as exon 20 insertion
mutations, do not respond well to small-molecule, oral EGFR inhibitors
or to chemotherapy. The applicant stated exon 20 insertion mutations
are the most frequently observed atypical EGFR mutations affecting 4 to
10 percent of NSCLC patients with an EGFR mutation, but there are no
FDA approved targeted therapies for NSCLC patients with exon 20
insertion mutations.
With respect to the newness criterion, the applicant stated that,
in March 2020, amivantamab (also known as JNJ-61186372) received
Breakthrough Therapy designation from the FDA for the treatment of
patients with metastatic NSCLC with EGFR exon 20 insertion mutation
whose disease has progressed on or after platinum-based chemotherapy.
The applicant stated they are seeking a Biologics License Application
(BLA) for amivantamab for the treatment of patients with metastatic
NSCLC with EGFR exon 20 insertion mutations whose disease has
progressed on or after platinum-based chemotherapy and have not yet
received FDA marketing authorization. Per the applicant, amivantamab is
administered as an infusion on a 28 day cycle; weekly for the first
cycle and then every 2 weeks, and continued until disease progression
or unacceptable toxicity. The applicant stated there are currently no
ICD-10-PCS procedure codes that uniquely identify the use of
amivantamab. We note the applicant submitted a request for approval of
a unique ICD-10-PCS procedure code to identify use of the technology
beginning in FY 2022.
As previously discussed, if a technology meets all three of the
substantial similarity criteria under the newness criterion, it would
be considered substantially similar to an existing technology and would
not be considered ``new'' for the purpose of new technology add-on
payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that the mechanism of action of amivantamab for
treating NSCLC is unique as amivantamab is anticipated to be the first
FDA-approved bispecific antibody therapy targeting EGFR and MET
mutations simultaneously. The applicant asserted that both EGFR and MET
are involved in NSCLC pathogenesis, progression, and development of
resistance to other therapies. According to the applicant, the most
common first-line treatment for atypical EGFR-positive patients due to
exon 20 insertion mutations is platinum-based chemotherapy. Per the
applicant, there is no standard of care after progression for second-
line treatment, and patients receive a variety of therapies such as
chemotherapy, immunotherapy, and tyrosine kinase inhibitors, as well as
combinations of these therapies. The applicant reiterated that none of
these treatments are FDA approved for this patient population and that
they are associated with limited efficacy for these patients.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated that the use of
amivantamab is not expected to affect the DRG assignment. In their cost
analysis, as shown below, the applicant identified several MS-DRGs
relevant to this technology.
[[Page 25223]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.137
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or a similar type of
disease and the same or similar patient population, the applicant
stated that amivantamab treats a distinct patient population with
metastatic NSCLC: Metastatic NSCLC with exon 20 insertion mutations
whose disease has progressed on or after platinum-based chemotherapy.
Per the applicant, there is currently no FDA-approved therapy for this
patient population, and the most commonly used therapies are associated
with limited efficacy.
In summary, the applicant asserted that amivantamab should be
considered new and not substantially similar to an existing technology
because the mechanism of action of amivantamab for treating NSCLC is
unique and it treats a distinct patient population.
We are inviting public comments on whether amivantamab is
substantially similar to other currently available therapies and/or
technologies and whether this technology meets the newness criterion.
With regard to the cost criterion, the applicant provided the
following analysis to demonstrate that the technology meets the cost
criterion. The applicant searched the FY 2019 Medicare Provider
Analysis and Review (MedPAR) final rule file for cases based on the
presence of one of the following ICD-10-CM diagnosis codes for lung
cancer:
[GRAPHIC] [TIFF OMITTED] TP10MY21.138
We note that the applicant also provided the following ICD-10-PCS
procedure codes, which the applicant stated could be used to identify
cases involving amivantamab in the absence of a unique ICD-10-PCS code.
[[Page 25224]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.139
To further refine the cases used in the analysis, the applicant
used the following methodology. Per the applicant, clinical data
suggests 80 to 85 percent of lung cancer patients are NSCLC
patients.\30\ The applicant stated that, of those patients, 10-15
percent are EGFR-mutations patients,31 32 and of those, at
least 9 percent have atypical EGFR mutations like exon 20 ins.\33\ The
applicant selected 0.93% (82.5% * 12.5% * 9%) of the cases identified
based on the lung cancer diagnosis codes listed previously. The
applicant stated this is the target population for amivantamab, which
the applicant used for the cost analysis.
---------------------------------------------------------------------------
\30\ ``What is Lung Cancer?'' American Cancer Society. 1 October
2019: https://www.cancer.org/content/cancer/en/cancer/lung- cancer/
about/what-is.html.
\31\ Wee, P., & Wang, Z. (2017). Epidermal growth factor
receptor cell proliferation signaling pathways. Cancers, 9(5), 52.
\32\ Pao, W., & Girard, N. (2011). New driver mutations in non-
small-cell lung cancer. The Lancet Oncology, 12(2), 175-180.
\33\ Arcila, M. E., Nafa, K., Chaft, J. E., Rekhtman, N., Lau,
C., Reva, B. A., and Ladanyi, M. (2013). EGFR exon 20 insertion
mutations in lung adenocarcinomas: Prevalence, molecular
heterogeneity, and clinicopathologic characteristics. Molecular
Cancer Therapeutics, 12(2), 220-229.
---------------------------------------------------------------------------
The applicant then accounted for the circumstances where
amivantamab would be administered during an inpatient stay. The
applicant stated that amivantamab will typically be administered in the
outpatient setting, and that it assumed that amivantamab would be
administered during an inpatient stay, possibly for care unrelated to a
patient's cancer treatment, when that stay coincided with the 2-week
cycle during which a patient receiving amivantamab would undergo an
infusion in the outpatient setting were it not for their inpatient
admission. The applicant stated that, because it is very important that
patients receive continuity of cancer care, it assumed that some
patients would receive their amivantamab infusion during their hospital
stay. To account for this scenario, the applicant calculated the
average length of stay for all of the cases in its patient population,
which it asserted was about 5.862 days. The applicant then divided the
average length of stay for all of the cases by 14, as per the applicant
amivantamab is administered on 28-day cycle, with a weekly
administration for the first cycle, and an administration every 2 weeks
thereafter.
The applicant stated that current clinical guidelines are expected
to give medical professionals discretion to administer amivantamab
during the hospitalization or pause the treatment cycle. To account for
physician discretion, the applicant included only 50 percent of these
cases in the final cost analysis.
The applicant identified 349 cases mapping to the following MS-
DRGs. The applicant has not made a request for amivantamab to map to a
new or different MS-DRG for FY 2022.
[GRAPHIC] [TIFF OMITTED] TP10MY21.140
The applicant assumed patients receiving amivantamab would receive
one dose of the drug during their inpatient stay. Because amivantamab
would be administered in addition to any other drugs the patient was
receiving during their inpatient admission, the applicant did not
remove costs associated with any previous technology. The applicant
then standardized the charges using the FY 2019 IPPS/LTCH PPS final
rule Impact file. Then the applicant applied the 2-year inflation
factor of 13.2 percent (1.13218) from the FY 2021 IPPS/LTCH PPS final
rule (85 FR 59039). The applicant then added charges for amivantamab,
which the applicant determined using the inverse of the FY 2021 IPPS/
LTCH PPS final rule pharmacy national average cost to charge ratio
(CCR) of 0.187 (85 FR 58601).
Because the applicant calculated a final inflated average case-
weighted standardized charge per case of $108,159, which exceeds the
case weighted threshold of $64,736, the applicant maintains the
technology meets the cost criterion.
Based on the information provided by the applicant, we have several
concerns with regard to whether the technology meets the cost
criterion. In its cost analysis, the applicant combined 234 cases from
multiple MS-DRGs into one group with a case-weight of 67 percent of
cases. We do not believe this is appropriate for the cost analysis. As
reflected in Sec. 412.87(b)(3), where cases eligible for a particular
technology may be assigned to multiple MS-DRGs, in performing the cost
analysis, the applicant should compare the charges of the cases to a
threshold amount that is the lesser of 75 percent of the standardized
amount or 75 percent of one standard deviation beyond the case-weighted
average of all MS-DRGs to which the cases map. In the event that a
single MS-DRG has fewer than 11 cases, the applicant should impute a
minimum case number of 11 rather than the actual value. In this way,
the appropriate threshold and case weighted threshold value can be
calculated.
[[Page 25225]]
In its analysis, the applicant appears to take a sample of a larger
case population based on clinical data. It is unclear whether the
applicant is taking a simple random sample or a targeted sample of
cases. We note that, if the applicant obtained a random sample, this
sample may not be any more representative of the larger population of
cases identified by the lung cancer diagnosis codes listed previously.
If the applicant instead non-randomly sampled cases from the larger
population, we would like to understand the process used by the
applicant to identify this targeted sample. Under either approach, we
would request information on how a sampling of cases from the greater
population is more representative of potential amivantamab patients.
We are inviting public comments on whether amivantamab meets the
cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that amivantamab represents a substantial clinical
improvement over existing technologies. The applicant asserted several
claims of substantial clinical improvement for amivantamab: (1)
Amivantamab is anticipated to be the first therapy to treat the
metastatic NSCLC with exon 20 insertion mutations for patients whose
disease has progressed on or after platinum-based chemotherapy; (2) the
objective response rate (ORR) was higher than what would be expected
with chemotherapy or immunotherapy; (3) a clinical benefit rate higher
than what would be expected with chemotherapy or immunotherapy; (4) a
duration of response higher than what would be expected with
chemotherapy or immunotherapy; (5) the median progression free survival
was higher than what would be expected with chemotherapy or
immunotherapy; and (6) the incidence and severity of diarrhea was lower
than what would be expected with any oral EGFR inhibitor.
The applicant stated that patients with NSCLC and EGFR exon 20
insertion mutations have a form of disease that is generally
insensitive to available EGFR TKI treatments and, as a result, carries
a worse prognosis compared to patients with more common EGFR
mutations.\34\ Per the applicant, the current standard of care for the
initial treatment of exon 20 insertion metastatic NSCLC is platinum-
based chemotherapy; \35\ and, after a patient with EGFR exon 20
insertion metastatic NSCLC disease progresses on or during platinum-
based chemotherapy, there is no standard of care. The applicant stated
there are currently no FDA-approved targeted therapies for patients
with lung cancer who have EGFR exon 20 insertion mutations.\36\ The
applicant cited an analysis of the Flatiron Health database, which
includes electronic health data records from over 265 cancer clinics
representing over 2 million active US cancer patients, that found
prescribers use a wide variety of treatment strategies, all of which
have an unclear role in the second-line treatment of exon 20 insertion
mutated metastatic NSCLC or are known to be ineffective and/or have
potential tolerability issues.\37\ Specifically, the analysis showed
that in the second-line treatment of exon 20 insertion metastatic
NSCLC, approximately 33 percent of patients received single-agent
immunotherapy, 14.1 percent received an EGFR-targeting oral agent, 5.9
percent received chemoimmunotherapy combination, 5.9 percent received
chemotherapy with a VEGF inhibitor, 5.9 percent received a clinical
study drug, and the remainder received a variety of single-agent
chemotherapies or other regimens. The applicant stated this re-iterates
the lack of an accepted standard of care for the second-line treatment
of exon 20 insertion metastatic NSCLC and thus underscores the unmet
need of these patients. According to the applicant, based on the
Breakthrough Therapy designation for amivantamab, it is anticipated
that amivantamab's first expected approval will be for the second-line
treatment of exon 20 insertion metastatic NSCLC.
---------------------------------------------------------------------------
\34\ Vyse, S., and Huang, P. H. (2019). Targeting EGFR exon 20
insertion mutations in non-small cell lung cancer. Signal
Transduction and Targeted Therapy, 4(1), 1-10.
\35\ Chantharasamee, J., Poungvarin, N., Danchaivijitr, P., and
Techawatanawanna, S. (2019). Clinical outcome of treatment of
metastatic non-small cell lung cancer in patients harboring uncommon
EGFR mutation. BMC Cancer, 19(1), 701.
\36\ Yasuda, H., Kobayashi, S., and Costa, D. B. (2012). EGFR
exon 20 insertion mutations in non-small-cell lung cancer:
Preclinical data and clinical implications. The Lancet Oncology,
13(1), e23-e31.
\37\ Flatiron Health database, Second Line Treatment Regimens in
Advanced NSCLC (January 2015-October 2019).
---------------------------------------------------------------------------
The applicant provided three references to support a finding of
substantial clinical improvement for amivantamab as well as some
supplementary information in the application itself. The first
reference was a conference presentation given at the 2019 Annual
Meeting of the Society for Clinical Oncology titled ``JNJ-61186372
(JNJ-372), an EGFR-cMet bispecific antibody, in EGFR-driven advanced
non-small cell lung cancer (NSCLC)'' by Haura et al. The second was a
poster presented at the 2020 Annual Meeting of the American Society for
Clinical Oncology titled ``Amivantamab (JNJ-61186372), an anti-EGFR-MET
bispecific antibody, in patients with EGFR Exon 20 insertion
(Exon20ins)-mutated non-small cell lung cancer (NSCLC)'' by Park et al.
The third was a conference presentation given in January 2021 at the
World Conference on Lung Cancer titled ``Amivantamab in Post-platinum
EGFR Exon 20 Insertion Mutant Non-small Cell Lung Cancer'' by Sabari et
al.
These three references all describe the ongoing Phase 1 trial
titled ``A Phase 1, First-in-Human, Open-Label, Dose Escalation Study
of JNJ-61186372, a Human Bispecific EGFR and cMet Antibody, in Subjects
With Advanced Non-Small Cell Lung Cancer'' (https://clinicaltrials.gov/ct2/show/NCT02609776). This open label, multicenter, first-in-human
study, also known as ``CHRYSALIS,'' consists of two parts.\38\ Part 1
was a dose escalation study used to establish the recommended Phase 2
dosing regimen.\39\ Part 2 was a dose expansion study to assess safety
and efficacy at the recommended Phase 2 dosing regimen.\40\ The primary
efficacy endpoint was the overall response rate per Response Evaluation
Criteria in Solid Tumors v1.1.\41\ Key secondary endpoints included
clinical benefit rate (CBR), duration of response (DOR), progression-
free survival (PFS), and overall survival (OS).\42\
---------------------------------------------------------------------------
\38\ https://clinicaltrials.gov/ct2/show/study/NCT02609776
https://clinicaltrials.gov/ct2/show/study/NCT02609776
\39\ Sabari JK, Shu CA, Park K, et al. Amivantamab in post-
platinum EGFR exon 20 insertion mutant non-small cell lung cancer.
Oral presentation presented at: International Association for the
Study of Lung Cancer (IASLC) 2020 World Conference on Lung Cancer
Singapore (WCLC 2020); January 28-31, 2021; Worldwide Virtual Event.
\40\ Ibid.
\41\ Ibid.
\42\ Ibid.
---------------------------------------------------------------------------
Key eligibility criteria for the post-platinum population of
patients enrolled in the study included: Metastatic/unresectable NSCLC,
EGFR exon 20 insertion mutation, and progression on platinum-based
chemotherapy.\43\ Patients received the recommended Phase 2 dose of
1050 mg (1400 mg for patients >=80 kg) amivantamab intravenously once
weekly for the first cycle and biweekly thereafter.\44\ The safety
population
[[Page 25226]]
(N=114) included all post-platinum exon 20 ins patients who received
amivantamab at the recommended Phase 2 dose, and the response-evaluable
population (n=81) included post-platinum exon 20 ins patients who had
at least three disease assessments or had discontinued, progressed, or
died prior to the third post-baseline assessment at the time of
clinical cut-off.\45\
---------------------------------------------------------------------------
\43\ Ibid.
\44\ Ibid.
\45\ Ibid.
---------------------------------------------------------------------------
In the efficacy population, the median age was 62.\46\ In addition,
59 percent of the patients were female, 49 percent of the patients were
Asian, and 47 percent had a history of smoking.\47\ Median time from
initial diagnosis was 17 months with a range of 1-130 months.\48\ All
patients, by definition, had a prior history of platinum-based
chemotherapy while 46 percent had prior immuno-oncology therapy and 25
percent had a history of EGFR TKI treatment.\49\
---------------------------------------------------------------------------
\46\ Ibid.
\47\ Ibid.
\48\ Ibid.
\49\ Ibid.
---------------------------------------------------------------------------
In the safety population, 98 percent of patients experienced a
treatment-related adverse event.\50\ Of these, 16 percent were Grade 3
or higher, 9 percent were serious, 4 percent led to discontinuation, 13
percent led to dose reduction, and 21 percent led to dose
interruption.\51\ Of note, 2 percent discontinued due to rash and 10
percent had treatment-related diarrhea with 8.5 percent at grade 1-2
and 3.5 percent at grade 3.\52\
---------------------------------------------------------------------------
\50\ Ibid.
\51\ Ibid.
\52\ Ibid.
---------------------------------------------------------------------------
The applicant stated that preliminary safety results from the
CHRYSALIS trial presented at the 2020 ASCO meeting appear to
demonstrate that amivantamab has a manageable safety profile, with 60%
of adverse events at grade 1 to 2.\53\ Per the applicant, this appears
to be an improvement relative to the types and frequency of adverse
events reported for platinum based chemotherapies overall in advanced
NSCLC, with over half of patients reporting adverse events of grade 3
to 5, such as neutropenia, nausea, and vomiting.\54\ The applicant
noted the best tolerated EGFR-targeting oral agent osimertinib was
associated with a rate of discontinuation due to adverse events of 13
percent in the phase 3 FLAURA study.\55\ In addition, the applicant
noted osimertinib was associated with a rate of any grade diarrhea of
58 percent with 2 percent of patients having grade 3 or higher in this
study.\56\ In the same phase 3 FLAURA study, the applicant noted the
comparator arm (gefitinib or erlotinib) was associated with a 57
percent incidence of any grade diarrhea with 2 percent of patients
experiencing grade 3 or higher.
---------------------------------------------------------------------------
\53\ 2020 ASCO Annual Meeting: Park, K, et al. J Clin Oncol
38:2020 (suppl; abstr 9512).
\54\ Schiller, JH et al. (2002). Comparison of four chemotherapy
regimens for advanced non-small-cell lung cancer. New England
Journal of Medicine, 346(2), 92-98.
\55\ Ibid.
\56\ Ibid.
---------------------------------------------------------------------------
Regarding efficacy, in the Sabari et al reference, a blinded
independent central review found an ORR in the efficacy population of
40 percent (95 percent CI 29-51) and a median DOR of 11.1 months (95
percent CI 6.9-not reached).\57\ Patients experienced a complete
response in 4 percent of cases, partial response in 36 percent of
cases, stable disease in 48 percent of cases, progressive disease in 10
percent of cases, and one percent of patients was not evaluable.\58\
Finally, the CBR (defined as complete response, partial response, or
stable disease for at least two disease assessments) was 74 percent (95
percent CI 63-83).\59\ The median patient follow-up in this most recent
analysis was 9.7 months (range 1.1-29.3). Of note, 47 percent of
patients remained on treatment at time of data cutoff and 63 percent
had responses of at least six months.\60\ The median PFS was 8.3 months
(95 percent CI 6.5-10.9), and the median overall survival was 22.8
months (95 percent CI 14.6-not reached).\61\
---------------------------------------------------------------------------
\57\ Sabari JK, Shu CA, Park K, et al. Amivantamab in post-
platinum EGFR exon 20 insertion mutant non-small cell lung cancer.
Oral presentation presented at: International Association for the
Study of Lung Cancer (IASLC) 2020 World Conference on Lung Cancer
Singapore (WCLC 2020); January 28-31, 2021; Worldwide Virtual Event.
\58\ Ibid.
\59\ Ibid.
\60\ Ibid.
\61\ Ibid.
---------------------------------------------------------------------------
The applicant stated that, while direct comparison between
therapies cannot be definitively made in the absence of comparative
trials, amivantamab results appear promising and numerically better
than those expected with current therapies (chemotherapy,
immunotherapy, chemoimmunotherapy combination, or oral EGFR tyrosine
kinase inhibitors) based on available data. The applicant stated
platinum-based chemotherapy has been associated with a median
progression free survival of 5.1 to 6.0 months in patients with exon 20
T790m mutations-the most common mutation observed following resistance
to small molecule TKI inhibitors commonly used in advanced EGFR
mutation positive NSCLC.\62\ The applicant stated that oral EGFR
tyrosine kinase inhibitors (for example, erlotinib, gefitinib,
afatinib, dacomitinib, osimertinib) and immunotherapies are also used
to treat patients with exon 20 insertion metastatic NSCLC but generally
have limited efficacy as exon 20 insertion mutations have been
associated with resistance to EGFR tyrosine kinase inhibitors.\63\ The
applicant stated most immunotherapy and chemoimmunotherapy studies have
excluded patients with EGFR mutation because single-agent
immunotherapies have very limited efficacy in patients with EGFR-
mutated NSCLC.
---------------------------------------------------------------------------
\62\ Yoshida, T., Kuroda, H., Oya, Y., Shimizu, J., Horio, Y.,
Sakao, Y., et al. . . . and Yatabe, Y. (2017). Clinical outcomes of
platinum-based chemotherapy according to T790M mutation status in
EGFR-positive non-small cell lung cancer patients after initial
EGFR-TKI failure. Lung Cancer, 109, 89-91.
\63\ Vyse, S., & Huang, P. H. (2019). Targeting EGFR exon 20
insertion mutations in non-small cell lung cancer. Signal
Transduction and Targeted Therapy, 4(1), 1-10.
---------------------------------------------------------------------------
The applicant provided the following table 1, which outlines median
progression free survival (mPFS) and response rate (ORR) data among
patients with exon 20 insertion mutation for amivantamab and some of
the currently existing therapies. The applicant noted this table is
intended to provide general information about individual therapies and
is not intended for making direct comparisons between therapies as
differences between study populations, follow-up time, prior
treatments, and other factors may exist.
[GRAPHIC] [TIFF OMITTED] TP10MY21.141
[[Page 25227]]
Finally, the applicant cited an analysis presented at the 2020
American Society of Clinical Oncology (ASCO) Annual Meeting, which
found patients experienced a median ORR of 13% and PFS of 3.5 months
when receiving a wide variety of different therapies, including
immunotherapies, chemoimmunotherapies, EGFR-targeting TKIs, and other
chemotherapy regimens as second-line treatment.\64\
---------------------------------------------------------------------------
\64\ Park, K. (2020, May). Amivantamab (JNJ-61186372), an anti-
EGFR-MET bispecific antibody, in patients with EGFR Exon 20
insertion (Exon20ins)-mutated non-small cell lung cancer (NSCLC).
Poster presented at the 2020 Annual Meeting of the American Society
of Clinical Oncology.
---------------------------------------------------------------------------
After review of the information provided by the applicant, we have
the following concerns regarding whether the technology meets the
substantial clinical improvement criterion. Currently, results provided
by the applicant are based on an ongoing Phase 1 trial. We are
concerned that these are potentially partial results, from which end
conclusions may not be drawn, and also about the potential for
overestimating treatment effects when trials stop early or report
interim results. We further note that the only study cited by the
application to establish substantial clinical improvement is a single-
armed study assessing the safety and efficacy of amivantamab in the
target population. As noted by the applicant, no formal comparisons to
other therapies have been made. Without the ability to control for
factors such as study design, patient characteristics, etc., we may be
unable to determine whether any differences seen are the result of
amivantamab's potentially superior efficacy or confounding variables.
We also note that the single-arm study design results in an inability
to distinguish between the effect of amivantamab treatment, a placebo
effect, and the effect of natural course of the disease.
We are inviting public comments on whether amivantamab meets the
substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
amivantamab.
c. Breyanzi[supreg] (lisocabtagene maraleucel)
Juno Therapeutics, a Bristol-Myers Squibb Company, submitted an
application for new technology add-on payment for FY 2022 for
Breyanzi[supreg]. Breyanzi[supreg] is a CD19-directed, autologous
chimeric antigen receptor (CAR) T-cell immunotherapy that is comprised
of individually formulated CD8 (killer) and CD4 (helper) CAR T-cells
indicated for the treatment of adult patients with relapsed or
refractory (r/r) large B-cell lymphoma after at least two prior
therapies. We note that Juno Therapeutics previously submitted an
application for new technology add-on payments for Breyanzi[supreg] for
FY 2021, as summarized in the FY 2021 IPPS/LTCH PPS proposed rule,
under the name lisocabtagene maraleucel (85 FR 32647-32652).
According to the National Comprehensive Cancer Network, Diffuse
Large B-cell lymphoma (DLBCL) is the most common type of Non-Hodgkin's
Lymphoma (NHL) in the U.S. and worldwide, accounting for nearly 30% of
newly diagnosed cases of B-cell NHL in U.S.\65\ DLBCL is characterized
by spreading of B-cells through the body that have either arrived de
novo or by the transformation from indolent lymphoma.
---------------------------------------------------------------------------
\65\ Ferlay J, Colombet M, Soerjomataram, et al., Estimating the
global cancer incidence and mortality in 2018: GLOBOCAN sources and
methods, Int J Cancer. 144: 1941-1953 (Ferlay, 2019); NCCN Clinical
Practice Guidelines in Oncology (NCCN Guidelines[supreg]) for B-Cell
Lymphomas V. 5.2019. (copyright) National Comprehensive Cancer
Network, Inc. 2019 (NCCN, 2019).
---------------------------------------------------------------------------
According to the applicant, the standard-of-care, first-line
immune-chemotherapy for DLBCL includes regimens such as
cyclophosphamide, doxorubicin, vincristine, and prednisone plus
rituximab (R-CHOP).\66\ These regimens result in long-lasting remission
in more than 50% of patients.\67\ However, approximately 10% to 15% of
patients will have primary refractory disease (that is, nonresponse or
relapse within 3 months of first-line therapy), and an additional 20%
to 25% will relapse following an initial response to therapy.\68\
Patients with relapses of aggressive B-cell lymphomas are believed to
have a poor prognosis because of potential treatment resistance and
rapid tumor growth, with only about 30% to 40% responding to salvage
chemotherapy (for example, R-ICE, DHAP, or Gem-ox) followed by high-
dose therapy and autologous stem cell transplantation for patients
demonstrating chemotherapy-sensitive disease.69 70 Among
patients eligible to undergo autologous stem cell transplantation
(ASCT), only 50% will achieve a remission adequate to proceed to ASCT,
and approximately 50% will relapse after transplantation.\71\ The
applicant also noted that transplant eligibility is also restricted
based on age and tolerance to high dose chemotherapy and thus excludes
a moderate subset of patients with r/r DLBCL.
---------------------------------------------------------------------------
\66\ Coiffier, BBertrand et. al, Long-term outcome of patients
in the LNH-98.5 trial, the first randomized study comparing
rituximab-CHOP to standard CHOP chemotherapy in DLBCL patients: a
study by Group d'Etudes des Lymphomes de l'Adulte, blood 2010 116:
2040-2045. (Coiffier, 2010).
\67\ Ibid
\68\ Ibid
\69\ Crump M, Neelapu SS, Farooq U, et al., Outcomes in
refractory diffuse large B-cell lymphoma: results from the
international SCHOLAR-1 study, Blood. 2017; 130(16): 1800-1808
(Crump, 2017).);
\70\ Cunningham D, Hawkes EA, Jack A, et al. Rituximab plus
cyclophosphamide, doxorubicin, vincristine, and prednisolone in
patients with newly diagnosed diffuse large B-cell non-Hodgkin
lymphoma: a phase 3 comparison of dose intensification with 14-day
versus 21-day cycles Lancet. 2013; 381: 1817-1826 (Cunningham,
2013).
\71\ Ibid
---------------------------------------------------------------------------
Additionally, the applicant explained that the available therapies
for 3L+ large B-cell lymphoma include the following:
CD19-directed genetically modified autologous CAR T-cell
immunotherapy axicabtagene ciloleucel (YESCARTA[supreg]), approved in
October 2017 for the treatment of adult patients with r/r large B-cell
lymphoma after two or more lines of systemic therapy, including DLBCL
not otherwise specified, primary mediastinal large B-cell lymphoma,
high grade B-cell lymphoma, and DLBCL arising from follicular lymphoma
(FL).\72\
---------------------------------------------------------------------------
\72\ YESCARTA[supreg]'s approval was based on a single arm study
(ZUMA-1) demonstrating an IRC-assessed ORR of 72%, CR of 51%, and an
estimated median DOR of 9.2 months in 101 subjects included in the
modified intent-to-treat (mITT population).
---------------------------------------------------------------------------
CAR T-cell therapy tisagenlecluecel (KYMRIAH[supreg]),
approved in May 2018, for the treatment of adult patients with r/r
large B-cell lymphoma after two or more lines of systemic therapy,
including DLBCL not otherwise specified, high grade B-cell lymphoma,
and DLBCL arising from FL.\73\
---------------------------------------------------------------------------
\73\ KYMRIAH[supreg]'s approval was based on a single-arm study
(JULIET) demonstrating an ORR of 50% and a CR rate of 32% in 68
efficacy-evaluable subjects. A median DOR was not reached with a
median follow-up of 9.4 months.
---------------------------------------------------------------------------
Programmed death receptor-1 (PD-1)-blocking antibody
(KEYTRUDA[supreg]), approved in 2018, for the treatment of adult and
pediatric patients with refractory primary mediastinal B-cell lymphoma
(PMBCL), or who have relapsed after two or more prior lines of
therapy.\74\
---------------------------------------------------------------------------
\74\ KEYTRUDA is not recommended for treatment of patients with
PMBCL who require urgent cytoreductive therapy. Keytruda USPI
(2019).
---------------------------------------------------------------------------
CD79b-directed antibody-drug conjugate polatuzumab vedotin
(POLIVY[supreg]), in combination with bendamustine and rituximab,
approved in 2019, for the treatment of adult patients with r/r DLBCL,
not otherwise specified, after at least two prior therapies.
[[Page 25228]]
According to the applicant, despite the availability of these
therapies, r/r large B-cell lymphoma remains a major cause of morbidity
and mortality due to the aggressive disease course. The applicant noted
that the safety profiles of these therapies exclude many r/r large B-
cell lymphoma patients from being able to undergo treatment with these
therapies.\75\
---------------------------------------------------------------------------
\75\ Smith SD, Reddy P, Sokolova A, et al., Eligibility for CAR
T-cell therapy: An analysis of selection criteria and survival
outcomes in chemorefractory DLBCL, Am. J. Hematol. 2019; E119: 1-4
(Smith, 2019).
---------------------------------------------------------------------------
With respect to the newness criterion, the applicant submitted a
BLA for Breyanzi[supreg] in October 2019, and was approved by FDA on
February 5, 2021. Breyanzi[supreg] was granted Breakthrough Therapy
Designation (BTD) on December 15, 2016 and Regenerative Medicine
Advanced Therapy (RMAT) designation on October 20, 2017, for the
treatment of patients with r/r aggressive large B-cell NHL, including
DLBCL, not otherwise specified (DLBCL NOS; de novo or transformed from
indolent lymphoma), primary mediastinal B-cell lymphoma (PMBCL), or
follicular lymphoma Grade 3B (FL3B)). Breyanzi[supreg] is a CD19-
directed genetically modified autologous T cell immunotherapy indicated
for the 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) not otherwise specified
(including DLBCL arising from indolent lymphoma), high-grade B-cell
lymphoma, primary mediastinal large B-cell lymphoma, and follicular
lymphoma grade 3B. Breyanzi[supreg] is not indicated for the treatment
of patients with primary central nervous system lymphoma. We note that
effective October 1, 2021 the following ICD-10-PCS codes may be used to
uniquely describe procedures involving the infusion of
Breyanzi[supreg]: XW033N7 (Introduction of lisocabtagene maraleucel
immunotherapy into peripheral vein, percutaneous approach, new
technology group 7) and XW043N7 (Introduction of lisocabtagene
maraleucel immunotherapy into central vein, percutaneous approach, new
technology group 7). The applicant also submitted a request for a new
HCPCS code, which will uniquely describe procedures involving the use
of Breyanzi[supreg]. The applicant noted in their application that
Breyanzi[supreg] would likely map to the same MS-DRG as other CAR T-
cell therapies, MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell
Immunotherapy).
As previously discussed, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant described two ways in which it believes the mechanism of
action for Breyanzi[supreg] differs from previously approved therapies
for DLBCL. First, the applicant described the therapy as being
comprised of individually formulated cryopreserved patient-specific
helper (CD4) and killer (CD8) CAR T-cells in suspension that are
administered as a defined composition of CAR-positive viable T-cells
(from individually formulated CD8 and CD4 components). The applicant
stated that the therapy involves a different mechanism of action from
other CAR-T cell therapies because the CD4 and CD8 T-cells are purified
and cultured separately to maintain compositional control of each cell
type. Furthermore, during culture, each cell type is separately
modified to have the CAR on the cell surface, expanded and quantified,
and frozen in two separate cell suspensions. The applicant then
described how Breyanzi[supreg] is infused with the same target dose of
CD4 and CD8 CAR T-cells for every patient. The applicant asserted that
because Breyanzi[supreg] controls the same dosage for both CD4 and CD8,
it differs from other CAR T-cell therapies for DLBCL and could
potentially provide for higher safety and efficacy; the applicant
stated that CAR T-cell therapies that do not control for CD8 CAR T-cell
dosage have demonstrated higher rates of severe and life-threatening
toxicities, such as cytokine release syndrome (CRS) and neurotoxicity
(NT).
The second feature the applicant described as distinguishing
Breyanzi[supreg]'s mechanism of action from existing CD19-directed CAR
T-cell therapies was the presence of an EGFRt cell surface tag. The
applicant explained that the EGFRt cell surface tag could
hypothetically be targeted for CAR T-cell clearance by separately
administering cetuximab, a monoclonal antibody. According to the
applicant, if the patient was separately administered cetuximab, the
presence of the EGFRt cell surface tag within Breyanzi[supreg] would
allow cetuximba to bind to the CAR T-cells and clear the cells from the
patient. The applicant highlighted studies that showed that persistent
functional CD19-directed CAR T-cells in patients caused sustained
depletion of a patient's normal B-cells that expressed CD19, resulting
in hypogammaglobulinemia and an increased risk of life-threatening or
chronic infections.\76\ The applicant further explained that such
prolonged low levels of normal B-cells could place a patient at risk of
life-threatening or chronic infections. According to the applicant, the
ability to deplete CAR T-cells, via the administration of cetuximab,
when a patient achieves a long-term remission could hypothetically
allow recovery of normal B-cells and potentially reduce the risk of
life-threatening or chronic infections. The applicant noted that
experiments in a laboratory setting showed that targeting EGFRt with
the monoclonal antibody cetuximab eliminated CAR T-cells expressing the
EGFRt marker, which resulted in long-term reversal of B-cell aplasia in
mice.\77\ However, the applicant noted that this mechanism of CAR T-
cell clearance, via administration of cetuximab and EGFRt cell surface
tags/markers, has not been tested in humans, including patients treated
with Breyanzi[supreg].
---------------------------------------------------------------------------
\76\ Kalos M, Levine BL, Porter DL, et al., T Cells with
Chimeric Antigen Receptors Have Potent Antitumor Effects and Can
Establish Memory in Patients with Advanced Leukemia, Sci Transl Med.
2011; 3(95): 1-21 (Kalos, 2011).
\77\ Paszkiewicz PJ, Frable SP, Srivastava S, et al., Targeted
antibody-mediated depletion of murine CD19 CAR T cells permanently
reverses B cell aplasia, J Clin Invest. 2016; 126(11): 4262-4272
(Paszkiewicz, 2016).
---------------------------------------------------------------------------
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant acknowledged that the
ICD-10-PCS procedure codes used to uniquely identify procedures
involving the administration of Breyanzi[supreg] XW033N7 (Introduction
of lisocabtagene maraleucel Immunotherapy into peripheral vein,
percutaneous approach, new technology group 7) and XW043N7
(Introduction of lisocabtagene maraleucel Immunotherapy into central
vein, percutaneous approach, new technology group 7) are assigned to
MS-DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy). The
applicant has not made a request for the technology to map to a new or
different MS-DRG for FY 2022.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, Breyanzi[supreg] fills an unmet need in the treatment of
large B-cell lymphoma because Breyanzi[supreg] would be indicated as a
third-line treatment option for patients with r/r DLBCL, who cannot be
treated with existing CAR T-
[[Page 25229]]
cell therapies. The applicant asserted that Breyanzi[supreg] would be
able to treat these patients that present with uncommon subtypes of
DLBCL including, PMBCL, FL3B, and DLBCL transformed from indolent
lymphoma from other follicular lymphoma, elderly patients (>= 65 years
old), patients with secondary CNS involvement by lymphoma, and those
with moderate renal or cardiac comorbidities. The applicant asserted
that these patient populations were excluded from registrational trials
for YESCARTA[supreg] and KYMRIAH[supreg], and therefore represent an
unmet patient need.
Regarding newness, we are concerned whether a differing production
and/or dosage represents a different mechanism of action as compared to
previously FDA-approved CAR T-cell therapies. We are also concerned
about whether the existence of an EGFRt cell surface tag equates to a
new mechanism of action given that in order to activate this cell
surface tag, an additional medication, cetuximab, which targets the CAR
T-cells for clearance, would be needed. We also express concern that,
based on our understanding, the presence of the EGFRt cell surface tag
is a potential way to treat an adverse event of the Breyanzi[supreg]
therapy and is not critical to the way the drug treats the underlying
disease. We note that the applicant referenced that while this EGFRt
cell surface tag is included within the Breyanzi[supreg] compound, it
remains dormant without activation by cetuximab. Finally, the applicant
noted that Breyanzi[supreg] has been shown safe and effective for
patient populations excluded from registrational trials for
YESCARTA[supreg] and KYMRIAH[supreg], including patients with uncommon
subtypes of large B-cell lymphoma, including PMBCL, FL3B, and DLBCL
transformed from indolent lymphoma other than FL, elderly patients (>=
65 years old), patients with secondary CNS involvement by lymphoma and
those with moderate renal or cardiac comorbidities.\78\ We note that
the FDA label for YESCARTA[supreg] and KYMRIAH[supreg] does not appear
to specifically exclude these patient populations or NHL subtypes. As
such, it is unclear whether Breyanzi[supreg] would in fact treat a
patient population different from other CAR T-cell therapies that treat
patients with DLBCL.
---------------------------------------------------------------------------
\78\ Lisocabtagene maraleucel Biologics License Application
(BLA).
---------------------------------------------------------------------------
We are inviting public comments on whether Breyanzi[supreg] is
substantially similar to other technologies and whether
Breyanzi[supreg] meets the newness criterion.
With regard to the cost criterion, the applicant searched the FY
2019 MedPAR correction notice (December 1, 2020) data file to identify
potential cases representing patients who may be eligible for treatment
using Breyanzi[supreg]. The applicant identified claims that reported
an ICD-10-CM diagnosis code of: C83.30 (DLBCL, unspecified site);
C83.31 (DLBCL, lymph nodes of head, face and neck); C83.32 (DLBCL,
intrathoracic lymph nodes); C83.33 (DLBCL, intra-abdominal lymph
nodes); C83.34 (DLBCL, lymph nodes of axilla and upper limb); C83.35
(DLBCL, lymph nodes of inquinal region and lower limb); C83.36 (DLBCL,
intrapelvic lymph nodes); C83.37 (DLBCL, spleen); or C83.38 (DLBCL,
lymph nodes of multiple sites) in one of the first five diagnosis code
positions on the claim. The applicant excluded claims if they had one
or more diagnoses from the list below because these conditions would
preclude use of Breyanzi[supreg].
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP10MY21.142
[[Page 25230]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.143
[[Page 25231]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.144
BILLING CODE 4120-01-C
However, the applicant noted that the aforementioned C83.XX ICD-10-
CM codes do not differentiate r/r patients from the broader DLBCL
population. A clinical literature search completed by the applicant
found that the r/r population makes up one-fourth of the DLBCL
population, but since r/r patients typically have higher inpatient
costs the applicant selected 19.36 percent of the cases with the
highest total charges for their cost analysis. Applying the previously
mentioned parameters, the applicant found a total of 991 cases mapped
to 12 MS-DRGs.
The applicant stated that the use of Breyanzi[supreg]'s therapy
would replace chemotherapy or other drug therapies, including other CAR
T-cell therapies. Because of this, the applicant stated they removed
all charges in the drug cost center since it was not possible to
differentiate between different drugs on inpatient claims. The
standardized charges per case were then calculated using the 2019 IPPS/
LTCH PPS final rule Impact file and the 2-year inflation factor of 13.2
percent (1.3218) was applied. Finally, to determine the charges for
Breyanzi[supreg], the applicant used the inverse of a simulated
alternative cost-to-charge ratio (CCR) specifically for CAR T-CELL
therapies to account for CAR T-cell therapies' higher costs compared to
other drugs. To determine this alternative CCR for CAR T-cell
therapies, the applicant referred to the FY 2021 IPPS final rule AOR/
BOR file and calculated an alternative markup percentage by dividing
the AOR drug charges within MS-DRG 018 by the number of cases to
determine a per case drug charge. The applicant then divided the drug
charges per case by $373,000, the acquisition cost of YESCARTA and
KYMRIAH, the CAR T-cell products used in those claims, to arrive at a
CCR of 0.295. The applicant noted that the cost of Breyanzi[supreg] had
not yet been determined at the time of application. However, for the
purposes of its cost analysis, the applicant assumed the per-patient
cost to the hospital will be $373,000. Based on the FY 2021 IPPS/LTCH
PPS final rule correction notice data file thresholds for FY 2022, the
applicant calculated a final inflated average case-weighted
standardized charge per case of $1,377,616 which exceeded the MS-DRG
018 average case-weighted threshold of $1,251,127 by $126,489.
Therefore, the applicant stated that Breyanzi[supreg] met the cost
criterion.
As noted in previous discussions, the submitted costs for CAR T-
cell therapies vary widely due to differences in provider billing and
charging practices for this therapy. Therefore, with regard to the use
of this data for purposes of calculating a CAR T-cell CCR, we are
uncertain how representative this data is for use in the applicant's
cost analyses given this potential for variability.
We continue to be interested in public comments regarding the
eligibility of CAR T-cell technologies for new technology add-on
payments when assigned to MS-DRG 018. As we have noted in prior
rulemaking with regard to the CAR T-cell therapies (83 FR 41172 and 85
FR 58603 through 58608), if a new MS-DRG were to be created, then
consistent with section 1886(d)(5)(K)(ix) of the Act, there may no
longer be a need for a new technology add-on payment under section
1886(d)(5)(K)(ii)(III) of the Act. We welcome comment on this issue.
[[Page 25232]]
We invite public comment on whether Breyanzi[supreg] meets the cost
criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that Breyanzi[supreg] represents a substantial
clinical improvement over existing technologies because: (1) The
totality of the circumstances regarding Breyanzi[supreg]'s clinical
efficacy, safety, and data make clear that Breyanzi[supreg]
substantially improves, relative to services or technologies previously
available, the treatment of Medicare beneficiaries with R/R NHL; (2)
Breyanzi[supreg] offers a treatment option for a patient population
unresponsive to, or ineligible for, currently available treatments; (3)
Breyanzi[supreg] has, overall, an improved safety profile compared to
YESCARTA and KYMRIAH; (4) Breyanzi[supreg] has a comparable or superior
effectiveness compared to existing therapies; and (5)
Breyanzi[supreg]'s patient population in its registrational study more
accurately reflects real-world NHL patients compared to the studies of
currently available CAR T-cell therapies.
The applicant asserts that the totality of the clinical efficacy
and safety data from the TRANSCEND NHL 001 trial, which is a
prospective, single arm, multicenter study of Breyanzi[supreg] in
patients with r/r aggressive B-cell NHL, and the supportive safety data
from the Breyanzi[supreg] clinical studies included in their Biologics
License Application (BLA) submission demonstrate that Breyanzi[supreg]
has equal or better efficacy and a better safety profile in a broad R/R
patient population that better approximates the real world large B-cell
lymphoma patient population--a population that the applicant asserted
includes NHL subtypes not studied or approved for treatment with
current approved or conditionally approved agents.
The applicant shared the results of the Phase I TRANSCEND NHL 001
trial, which was a prospective, single arm, multicenter study of
lisocabtagene maraleucel in patients with relapsed/refractory
aggressive B-cell NHL. The applicant noted that TRANSCEND NHL 001
included subjects with the average age of 63 years with 111 subjects
(41%) over 65 years of age and 27 (10%) subjects older than 75 years of
age. These patients also failed previous therapies. Of the total number
of subjects studied (efficacy: n=256; safety: n=269), 137 subjects
(51%) had DLBCL, 60 (22%) had DLBCL transformed from FL, 18 (7%) had
DLBCL transformed other indolent lymphomas, 36 patients (13%) had high
grade lymphoma, 15 (6%) had PMBCL and 3 (1%) had FL3B.\79\
Additionally, the applicant explained that TRANSCEND NHL 001 was more
inclusive, compared to the registrational trials for KYMRIAH[supreg]
and YESCARTA[supreg], of Medicare aged patients with comorbidities and
NHL disease subtypes seen in the real world presentation of the
disease. To support this, the applicant referenced that within this
study, between 40% to 50% of subjects studied had cardiac ejection
fraction, 3% had secondary CNS lymphoma, 51 patients (19%) had a
creatinine clearance between 30-60 mL/min and 39 patients (14.6%) had
grade >= 3 cytopenias. Furthermore, the applicant noted that 51
patients (19%) had decreased renal function and 13 patients (4.9%) had
decreased cardiac function. The applicant stated that the TRANSCEND NHL
001 study showcased that the patient population treated during the
study better reflected the real world large B-cell lymphoma patient
population, a population that the applicant asserted included NHL
subtypes not studied or approved for treatment with currently approved
or conditionally approved agents, while providing similar safety and
efficacy. The applicant contended that these high-unmet need large B-
cell lymphoma subsets included patients with DLBCL transformed from
rare indolent lymphomas other than FL, patients with FL3B, patients 65
years of age and older, as well as patients with moderate comorbidities
of renal and cardiac insufficiency.
---------------------------------------------------------------------------
\79\ Ibid.
---------------------------------------------------------------------------
The applicant further explained that Breyanzi[supreg] provided
improved effectiveness as compared to existing therapies. Patients with
aggressive large B-cell NHL who have failed at least 2 prior therapies
or SCT are treated with combinations of agents or monotherapy based on
institutional preferences, but there is no standard of care for salvage
therapies beyond first treatment therapy.\80\ The applicant noted that
commonly used salvage therapies (non-CAR T-cell therapies) for
relapsed, large B-cell lymphoma demonstrated objective response rates
(ORRs) in the range of 12% to 46% and complete response (CR) rates of
6% to 38%. Among the patients who did achieve a response, the median
duration of response (DOR) ranges from approximately 6 to 17 months and
median overall survival was generally less than 12
months.81 82 83 84 85 86 87 Comparatively, TRANSCEND NHL
001, which provided subjects with Breyanzi[supreg], met its primary
endpoint of Independent Review Committee (IRC)-assessed ORR in adult
patients with r/r large lymphoma after at least 2 prior therapies, as
reported by the applicant. In the 256 efficacy evaluable patients, the
ORR was 73% (95% confidence interval (CI): 67.0% to 78.3%), and the CR
rate was 53% (95% CI: 46.6% to 59.2%). With a median follow-up of 10.8
months, the median DOR per IRC assessment was 13.3 months and the
median DOR for CR was not reached. By comparison, the applicant
summarized that YESCARTA[supreg], as demonstrated in the Phase I-II
ZUMA-1 study (see the FY 2019 IPPS/LTCH PPS final rule 83 FR 41295 for
a description of this study), had an ORR of 72.0% (95% confidence
interval (CI: 62.0% to 81.0%)). Also, according to the applicant,
KYMRIAH[supreg], as demonstrated by the Phase II JULIET study (see the
FY 2019 IPPS/LTCH PPS final rule 83 FR 41293 for a description of this
study), had an ORR of 50.0% (95% confidence interval (CI: 38.0% to
62.0%)). The applicant contended that the results for Breyanzi[supreg]
(ORR of 73% (95% confidence interval (CI): 67.0% to 78.3%), and the CR
rate of 53% (95% CI: 46.6% to 59.2%) were observed across all subgroups
tested, including
[[Page 25233]]
elderly subjects, those with high burden disease or high baseline
inflammatory biomarkers, those requiring anti-lymphoma therapy for
disease control, as well as rare patient populations with a high unmet
medical need (for example, PMBCL, DLBCL transformed from indolent
lymphoma other than FL, and FL3B). The applicant contended that this
data supports that Breyanzi[supreg] demonstrates comparable or superior
effectiveness compared to existing therapies for patients with r/r
large B-cell NHL.88 89
---------------------------------------------------------------------------
\80\ National Comprehensive CancerNetwork Treatment of Cancer:
Guidelines, 2019. NCCN, 2019.
\81\ Czuczman MS, Davies A, Linton KM, et al., A Phase 2/3
Multicenter, Randomized Study Comparing the Efficacy and Safety of
Lenalidomide Versus Investigator's Choice in Relapsed/Refractory
DLBCL, Blood. 2014; 124: 628 (Czuczman, 2014).
\82\ Jacobsen ED, Sharman JP, Oki Y, et al., Brentuximab vedotin
demonstrates objective responses in a phase 2 study of relapsed/
refractory DLBCL with variable CD30 expression, Blood. 2015; 125(9):
1394-1402 (Jacobsen, 2015).
\83\ Nagle SJ, Woo K, Schuster SJ, et al., Outcomes of patients
with relapsed/refractory diffuse large B-cell lymphoma with
progression of lymphoma after autologous stem cell transplantation
in the rituximab era, Am. J. Hematol. 2013; 88: 890-894 (Nagle,
2013).
\84\ Pettengell R, Coiffier B, Narayanan G, et al., Pixantrone
dimaleate versus other chemotherapeutic agents as a single-agent
salvage treatment in patients with relapsed or refractory aggressive
non-Hodgkin lymphoma: a phase 3, multicenter, open-label, randomised
trial, Lancet Oncol. 2012; 13: 696-706 (Pettengell, 2012).
\85\ Rigacci L, Puccini B, Cortelazzo S, et al., Bendamustine
with or without rituximab for the treatment of heavily pretreated
non-Hodgkin's lymphoma patients, Ann Hematol. 2012; 91: 1013-1022
(Rigacci, 2012).
\86\ Van Den Neste E, Schmitz N, Mounier N, et al., Outcome of
patients with relapsed diffuse large B-cell lymphoma who fail
second-line salvage regimens in the International CORAL study, Bone
Marrow Transplantation. 2016; 51: 51-57 (Van Den Neste, 2016).
\87\ Wang M, Fowler N, Wagner-Bartak N, et al., Oral
lenalidomide with rituximab in relapsed or refractory diffuse large
cell, follicular and transformed lymphoma: a phase II clinical
trial, Leukemia. 2013; 27: 1902-1909 (Wang, 2013).
\88\ YESCARTA[supreg] United States Prescribing Information USPI
(2019).
\89\ KYMRIAH[supreg] United States Prescribing Information USPI
(2018).
---------------------------------------------------------------------------
Furthermore, the applicant stated that Breyanzi[supreg] had an
improved safety profile in comparison to YESCARTA[supreg] and
KYMRIAH[supreg]. The applicant stated that both of these FDA-approved
CAR T-cell therapies had higher rates of toxicity as compared to
Breyanzi[supreg]. In the TRANSCEND NHL 001 registrational study
(n=268), 42% and 2% of subjects developed all-grade and Grade > 3 CRS,
respectively, and 30% and 10% developed all-grade and Grade > 3 NT. The
applicant compared these results to the results of the JULIET study as
found in KYMRIAH's[supreg] prescribing information and summarized that
KYMRIAH[supreg] had higher rates of all-grade and Grade > 3 CRS (74%
and 23%, respectively) and all-grade and Grade > 3 NT (58% and 18%,
respectively). The applicant provided the same comparison of the
toxicity results of Breyanzi[supreg] to the results showcased in the
ZUMA-1 study featuring YESCARTA[supreg] as found in YESCARTA[supreg]'s
prescribing information and summarized that YESCARTA[supreg] had higher
rates of all-grade and Grade > 3 CRS (94% and 13%, respectively) and
all-grade and Grade > 3 NT (87% and 31%, respectively).90 91
---------------------------------------------------------------------------
\90\ YESCARTA[supreg] USPI (2019).
\91\ KYMRIAH[supreg] USPI (2018).
---------------------------------------------------------------------------
After reviewing the information submitted by the applicant as part
of its FY 2022 new technology add-on payment application, we are
concerned that there are no published studies directly comparing
Breyanzi[supreg] and the two currently available CAR T-cell therapies
for r/r DLBCL, YESCARTA[supreg] and KYMRIAH[supreg]. Additionally, we
are concerned with the lack of long-term data supporting the
effectiveness and efficacy of Breyanzi[supreg] and whether the lack of
long-term data may limit the generalizability of the findings from the
TRANSCEND NHL 001 study to the general Medicare population. While there
have been no direct comparison studies of Breyanzi[supreg],
YESCARTA[supreg] and KYMRIAH[supreg], the applicant does provide a
comparison of the ORR, CR, PR and DOR across all three CAR T-cell
therapies. While we note that Breyanzi[supreg] does appear to provide
an improved ORR, CR, PR, and DOR compared to the other FDA-approved CAR
T-cell therapies based on the data presented by the applicant, we
further note that these differences appear to be small in magnitude,
between 1-2% for the ORR, CR, and PR. Without a direct comparison of
outcomes between these therapies, we are concerned as to whether these
differences translate to clinically meaningful differences or
improvements. Breyanzi[supreg] appears to demonstrate similar patient
outcomes to that of YESCARTA[supreg] and we question whether the
TRANSCEND NHL 001 study is evidence that Breyanzi[supreg] is a more
effective therapy to treat DLBCL over existing CAR T-cell therapies.
Additionally, as previously discussed, the applicant noted that
Breyanzi[supreg] has been shown safe and effective for patient
populations excluded from registrational trials for YESCARTA[supreg]
and KYMRIAH[supreg]. However, it is unclear whether this suggests that
Breyanzi[supreg] is a treatment option for patients who cannot be
treated with these existing CAR T-cell therapies, given that the FDA
label for YESCARTA[supreg] and KYMRIAH[supreg] appears to not
specifically exclude these patient populations. Finally, we are
concerned that the use of the EGFRt cell surface tag was not activated
in patients receiving Breyanzi[supreg] to study the impact of clearing
these CAR T-cells after remission and that this feature has not yet
been tested on humans or in conjunction with patients treated with
Breyanzi[supreg]. We express concern regarding the safety and efficacy
of this feature given its lack of testing.
We are inviting public comments on whether Breyanzi[supreg] meets
the substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
Breyanzi[supreg] or at the New Technology Town Hall meeting.
d. Ciltacabtagene Autoleucel
Janssen Biotech, Inc., submitted an application for new technology
add-on payments for ciltacabtagene autoleucel for FY 2022.
Ciltacabtagene autoleucel is an autologous chimeric-antigen receptor
(CAR) T-cell therapy directed against B cell maturation antigen (BCMA)
for the treatment of patients with multiple myeloma.
Ciltacabtagene autoleucel refers to both JNJ-4528, an
investigational BCMA-directed CAR T-cell therapy for previously treated
patients with multiple myeloma, and LCAR-B38M, the investigational
product (ciltacabtagene autoleucel) being studied in China. Both JNJ-
4528 and LACAR-B38M are representative of the same CAR T-cell therapy,
ciltacabtagene autoleucel. Ciltacabtagene autoleucel has not yet
received FDA approval.
Multiple myeloma (MM) is typically characterized by the neoplastic
proliferation of plasma cells producing a monoclonal immunoglobulin.
The plasma cells proliferate in the bone marrow and can result in
extensive skeletal destruction with osteolytic lesions, osteopenia,
and/or pathologic fractures. The diagnosis of MM is often suspected
because of one (or more) of the following clinical presentations:
Bone pain with lytic lesions discovered on routine
skeletal films or other imaging modalities.
An increased total serum protein concentration and/or the
presence of a monoclonal protein in the urine or serum.
Systemic signs or symptoms suggestive of malignancy, such
as unexplained anemia.
Hypercalcemia, which is either symptomatic or discovered
incidentally.
Acute renal failure with a bland urinalysis or rarely
nephrotic syndrome due to concurrent immunoglobulin light chain (AL)
amyloidosis.
It is important to distinguish MM both from other causes of the
clinical presentations mentioned previously and from other plasma cell
dyscrasias for the purposes of prognosis and treatment.\92\ Data from
the US Surveillance, Epidemiology, and End Results (SEER) registry
estimate 32,000 new cases of MM and 13,000 deaths from MM annually in
the U.S. This correlates with an annual incidence of approximately 7
per 100,000 men and women per year. MM is largely a disease of older
adults. The median age at diagnosis is 65 to 74 years. MM is also
slightly more frequent in men than in women (approximately 1.4:1). MM
is associated with substantial morbidity and mortality \93\
[[Page 25234]]
and approximately 25% of patients have a median survival of 2 years or
less.\94\
---------------------------------------------------------------------------
\92\ Laubauch, J.P. (2021). Multiple myeloma: Clinical features,
laboratory manifestations, and diagnosis. UptoDate. Available from
https://www.uptodate.com/contents/multiple-myeloma-clinical-
features-laboratory-manifestations-
anddiagnosis?search=multiple%20myeloma&source=search_result&selectedT
itle=1~150& usage_type=default&display_rank=1.
\93\ Cowan AJ, Allen C, Barac A, Basaleem H, Bensenor I, Curado
MP, Foreman K, Gupta R, Harvey J, Hosgood HD, Jakovljevic M, Khader
Y, Linn S, Lad D, Mantovani L, Nong VM, Mokdad A, Naghavi M, Postma
M, Roshandel G, Shackelford K, Sisay M, Nguyen CT, Tran TT, Xuan BT,
Ukwaja KN, Vollset SE, Weiderpass E, Libby EN, Fitzmaurice C. Global
Burden of Multiple Myeloma: A Systematic Analysis for the Global
Burden of Disease Study 2016. JAMA Oncol. 2018 Sep 1;4(9):1221-1227.
\94\ Biran N, Jagannath S, Chari A. Risk stratification in
multiple myeloma, part 1: characterization of high-risk disease.
Clin Adv Hematol Oncol. 2013 Aug;11(8):489-503.
---------------------------------------------------------------------------
According to the applicant, introduction of new treatment options
in the last 2 decades has extended the median survival of multiple
myeloma patients. The applicant asserted that the introduction of
proteasome inhibitors (PI) (e.g., bortezomib, carfilzomib, and
ixazomib), histone deacetylase inhibitors (e.g., panobinostat,
vorinostat), immunomodulatory agents (IMiD) (e.g., thalidomide,
lenalidomide, and pomalidomide), monoclonal antibodies (daratumumab and
elotuzumab), and stem cell transplantation, have allowed numerous
therapeutic options for patients with multiple myeloma (Rajkumar 2020).
According to the applicant, the National Comprehensive Cancer Network
(NCCN) recommended treatment regimen for first-line therapy of multiple
myeloma is Bortezomib (a proteosome inhibitor (PI)), lenalidomide (an
immunomodulatory agent (IMiD)) and dexamethasone.\95\ The strategy of
triplet therapies for patients with newly diagnosed multiple myeloma,
followed by high-dose chemotherapy and autologous stem-cell
transplantation for eligible patients, and subsequently consolidation
and maintenance therapy, is the current treatment roadmap for
patients.\96\ However, despite these treatments, according to the
applicant, most patients will relapse after first-line treatment and
require further treatment \97\ with only 50% survival of relapsed
patients after 5 years.98 99 As multiple myeloma progresses,
each subsequent line of treatment is associated with shorter
progression free survival (PFS) and decreased rate, depth, and
durability of response and worsening of quality of life.\100\ In
addition, cumulative and long-term toxicities are often associated with
long-term therapy (Ludwig, 2018). Thus, according to the applicant,
there remains an ongoing need for additional therapeutic approaches
when the disease is resistant to available therapy.
---------------------------------------------------------------------------
\95\ National Comprehensive Cancer Network (NCCN) NCCN clinical
practice guidelines in oncology. Multiple Myeloma. Version 2. 2021-
September 9, 2020.
\96\ Branagan A, Lei M, Lou U, Raje N. Current Treatment
Strategies for Multiple Myeloma. JCO Oncol Pract. 2020 Jan;16(1):5-
14.
\97\ Sonneveld P, Broij lA. Treatment of relapsed and refractory
multiple myeloma. Haematologica. 2016;101(4):396-406.
\98\ SEER database 2020; https://seer.cancer.gov/statfacts/html/mulmy.html.
\99\ GLOBOCAN database 2018; https://gco.iarc.fr/today/data/factsheets/populations/900-world-fact-sheets.pdf.
\100\ Yong K, Delforge M, Driessen C, Fink L, Flinois A,
Gonzalez-McQuire S, Safaei R, Karlin L, Mateos MV, Raab MS, Schoen
P, Cavo M. Multiple myeloma: patient outcomes in real-world
practice. Br J Haematol. 2016 Oct;175(2):252-264.
---------------------------------------------------------------------------
The applicant asserts that relapsed and refractory multiple myeloma
(RRMM) constitutes a specific unmet medical need. According to the
applicant, patients with r/r disease are defined as those who, having
achieved a minor response or better, relapse and then progress while on
therapy, or experience progression within 60 days of their last
therapy.\101\ The introduction of a new class of agents, CD38-targeting
monoclonal antibodies (CD38 MoABs), daratumumab and isatuximab, have
improved options in r/r patients.\102\ The applicant asserts that given
these advances, guideline recommendations following first-line therapy
are varied, with treatment options including combinations of novel
agents with existing standard of care regimens, and triplet and
quadruplet regimens, creating a complex treatment landscape.\103\
According to the applicant, while triplet regimens should be used as
the standard therapy for patients with multiple myeloma, elderly or
frail patients may be treated with double regimens.104 95
The applicant further states that for patients with RRMM who have
received at least 3 prior lines of therapy including a PI, an IMiD and
an anti-CD38, there does not exist a standard or consensus for
treatment at this time, and often, supportive care/palliative care is
the only option.\105\
---------------------------------------------------------------------------
\101\ Castelli R, Orofino N, Losurdo A, Gualtierotti R, Cugno M.
Choosing treatment options for patients with relapsed/refractory
multiple myeloma. Expert Rev Anticancer Ther. 2014 Feb;14(2):199-
215.
\102\ Van de Donk NWCJ, Richardson PG, Malavasi F. CD38
antibodies in multiple myeloma: back to the future. Blood. 2018 Jan
4;131(1):13-29.
\103\ National Comprehensive Cancer Network (NCCN) NCCN clinical
practice guidelines in oncology. Multiple Myeloma. Version 2. 2021--
September 9, 2020.
\104\ Ibid.
\105\ Maples KT, Joseph NS, Harvey RD. Current developments in
the combination therapy of relapsed/refractory multiple myeloma.
Expert Rev Anticancer Ther. 2020 Sep 24.
---------------------------------------------------------------------------
According to the applicant, multiple myeloma remains incurable and
most patients eventually relapse, even with the advent of new
treatments.\106\ The applicant further states that novel, innovative
therapies are needed to improve long-term survival and outcomes. The
applicant asserts that CAR T-cell-based therapies offer potential
advantages over current therapeutic strategies. According to the
applicant, while other therapies require long-term repetitive
administration generally until progression of disease, CAR T-cell
therapy is a single infusion treatment due to live T-cell expansion in
the patient and long-term disease response. The applicant asserts that
ciltacabtagene autoleucel is an autologous CAR T-cell therapy directed
against B cell maturation antigen (BCMA) for the treatment of patients
with multiple myeloma. The applicant states that BCMA, a protein that
is highly expressed on myeloma cells \107\ and is a member of the tumor
necrosis factor (TNF) receptor family, plays a central role in
regulating B-cell maturation and differentiation into plasma
cells.\108\ BCMA is selectively expressed on a subset of B cells
(plasma cell neoplasms including myeloma cells) and is more stably
expressed specifically on the B cell lineage, compared with key plasma
cell marker CD138 which is also expressed on normal fibroblasts and
epithelial cells.109 110 111 These expression
characteristics, per the applicant, make BCMA an ideal therapeutic
target for the treatment of multiple myeloma.112 113
Ciltacabtagene autoleucel, according to the applicant, is a unique,
structurally differentiated BCMA-targeting chimeric antigen receptor
with two distinct BCMA-binding domains that can identify and eliminate
myeloma cells.
---------------------------------------------------------------------------
\106\ Rajkumar SV, Kumar S. Multiple myeloma current treatment
algorithms. Blood Cancer J. 2020 Sep 28;10(9):94.
\107\ Cho SF, Anderson KC, Tai YT. Targeting B Cell Maturation
Antigen (BCMA) in Multiple Myeloma: Potential Uses of BCMA-Based
Immunotherapy. Front Immunol. 2018 Aug 10;9:1821.
\108\ Ibid.
\109\ Ibid.
\110\ Tai YT, Anderson KC. Targeting B-cell maturation antigen
in multiple myeloma. Immunotherapy. 2015;7(11):1187-99.
\111\ Palaiologou M, Delladetsima I, Tiniakos D. CD138
(syndecan-1) expression in health and disease. Histol Histopathol.
2014 Feb;29(2):177-89.
\112\ Ibid.
\113\ Frigyesi I, Adolfsson J, Ali M, Christophersen MK,
Johnsson E, Turesson I, Gullberg U, Hansson M, Nilsson B. Robust
isolation of malignant plasma cells in multiple myeloma. Blood. 2014
Feb 27;123(9):1336-40.
---------------------------------------------------------------------------
The applicant asserts that CAR T-cell technology is a form of
immunotherapy and is a ``living drug'' that utilizes specially altered
T cells, part of the immune system, to fight cancer. A
[[Page 25235]]
sample of the patient's T cells are collected from the blood, then
modified in a laboratory setting to express a chimeric antigen receptor
(CAR).\114\ Chimeric antigen receptors are specifically designed
receptor proteins that are made up of three distinct features: (1) A
target recognition domain (typically derived from a single domain of an
antibody) that sits on the cell's exterior, (2) a co-stimulatory domain
on the cell's interior that boosts activation, enhances survival and
expansion of the modified cells, and (3) an interior stimulatory domain
that supports activation and target killing.\115\ The binding domain
expressed on the surface of T cells gives them the new ability to
target a specific protein. When the target is recognized, the
intracellular portions of the receptor send signals within the T cells
to destroy the target cells. These engineered CAR T-cells are reinfused
back into the same patient which enables these specialized T cells to
latch onto the target antigen and abolish the tumor cells.
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\114\ June CH, Sadelain M. Chimeric Antigen Receptor Therapy. N
Engl J Med. 2018 Jul 5;379(1):64-73.
\115\ Sadelain M. Chimeric antigen receptors: driving immunology
towards synthetic biology. Curr Opin Immunol. 2016 Aug;41:68-76.
---------------------------------------------------------------------------
According to the applicant, ciltacabtagene autoleucel is a CAR T-
cell immunotherapy designed to recognize myeloma cells and target their
destruction. Ciltacabtagene autoleucel's CAR T-cell technology consists
of harvesting the patient's own T cells, programming them to express a
chimeric antigen receptor that identifies BCMA, a protein highly
expressed on the surface of malignant multiple myeloma B-lineage cells,
and reinfusing these modified cells back into the patient where they
bind to and eliminate myeloma tumor cells. The applicant asserts that,
unlike the chimeric antigen receptor design of currently approved CAR
T-cell immunotherapies, which are composed of a single-domain antibody
(sdAbs), ciltacabtagene autoleucel is composed of two antibody binding
domains that allow for high recognition of human BCMA (CD269) and
elimination of BCMA expressing myeloma cells. The two distinct BCMA-
binding domains, according to the applicant, confer avidity and
distinguish ciltacabtagene autoleucel from other BCMA-targeting
products. The BCMA binding domains are linked to the receptor's
interior costimulatory (4-1BB) and signaling (CD3[zeta]) domains
through a transmembrane linker (CD8a). These intracellular domains are
critical components for T cell growth and anti-tumor activity \116\ in
the body once CAR T-cells are bound to a BCMA target on multiple
myeloma cells.
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\116\ Maher J, Brentjens RJ, Gunset G, Rivi[egrave]re I,
Sadelain M. Human T-lymphocyte cytotoxicity and proliferation
directed by a single chimeric TCRzeta/CD28 receptor.
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With respect to the newness criterion, according to the applicant,
ciltacabtagene autoleucel was granted Breakthrough Therapy designation
in December 2019 for the treatment of patients with RRMM who have
previously received a PI, an IMiD, and an anti-CD38 antibody. In
December 2020, the applicant submitted a Biologic License Application
(BLA) with the FDA but at the time of the development of this proposed
rule, it has not yet received FDA approval. The applicant stated that
procedures involving the administration of ciltacabtagene autoleucel
can be reported using the following ICD-10-PCS procedure codes: XW033C3
(Introduction of engineered autologous chimeric antigen receptor t-cell
immunotherapy into peripheral vein, percutaneous approach, new
technology group 3); and XW043C3 (Introduction of engineered autologous
chimeric antigen receptor t-cell immunotherapy into central vein,
percutaneous approach, new technology group 3). The applicant noted
that there are currently no ICD-10-PCS codes that uniquely identify
procedures involving the use of ciltacabtagene autoleucel. The
applicant submitted a request for unique ICD-10-PCS codes to describe
the administration of ciltacabtagene autoleucel beginning in FY 2022.
The applicant also noted that they will submit a request for a
Healthcare Common Procedure Coding System (HCPCS) code specific to the
administration of ciltacabtagene autoleucel once the product is
eligible for such a code.
As previously stated, if a technology meets all three of the
substantial similarity criteria as previously described, it would be
considered substantially similar to an existing technology and
therefore would not be considered ``new'' for purposes of new
technology add-on payments.
With respect to whether a product uses the same or a similar
mechanism of action when compared to an existing technology to achieve
a therapeutic outcome, the applicant asserts that ciltacabtagene
autoleucel has a unique mechanism of action because it has two distinct
binding domains that confer avidity to the BCMA antigen, a 4-1BB
costimulatory domain and a CD3z signaling domain, whereas other CAR T-
cell products have only one target binding domain. However, we note
that idecabtagnene vicleucel, another CAR T-cell therapy for which an
application for new technology add-on payments was submitted for FY
2022, as discussed later in this section, appears to have a mechanism
of action that is similar to that of ciltabatagene: A chimeric antigen
receptor (CAR)-positive T cell therapy targeting B-cell maturation
antigen (BCMA), which is expressed on the surface of normal and
malignant plasma cells. The idecabtagene vicleucel CAR construct
includes an anti-BCMA scFv-targeting domain for antigen specificity, a
transmembrane domain, a CD3-zeta T cell activation domain, and a 4-1BB
costimulatory domain. Antigen-specific activation of idecabtagene
vicleucel results in CAR-positive T cell proliferation, cytokine
secretion, and subsequent cytolytic killing of BCMA-expressing cells.
The applicant also asserts that its mechanism of action differs
from Blenrep's mechanism of action. Blenrep is a BCMA-targeting agent
indicated in the treatment of RRMM. According to the applicant, Blenrep
belongs to the class of antibody-drug conjugates, which are therapies
that are essentially composed of a monoclonal antibody linked to a
toxic drug. Once the antibody portion of Blenrep recognizes BCMA on
multiple myeloma cells, the toxin is released into cells, resulting in
cell death. Therefore, according to the applicant, ciltacbtagene
autoleucel's mechanism of action differs from Blenrep's. Additionally,
the applicant states that there is currently no commercially available
CAR T-cell product that binds to the BCMA antigen. Lastly, the
applicant provided a list of other currently available treatments for
multiple myeloma and a description of their mechanisms of action (Table
1).
[[Page 25236]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.145
With regard to whether a product is assigned to the same DRG when
compared to an existing technology, the applicant expects that cases
involving the administration of ciltacabtagene autoleucel will be
assigned to the same MS-DRG, MS-DRG 018 (Chimeric Antigen Receptor
(CAR) T-cell Immunotherapy), as other CAR T-cell therapies.
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\117\ Cook G, et al. Crit Rev Oncol Hematol. 2018;121:74-89.
\118\ Nejadmoghaddam MR, et al. Avicennna J Med Biotechnol.
2019;11(1):3-23.
\119\ Pufall MA. Adv Exp Med Biol. 2015;872:315-33.
\120\ Siddik ZH. The Cancer Handbook. New York: John Wiley &
Sons, Ltd; 2002.
\121\ Podar K, et al. Expert Opin Pharmacother. 2020
Mar;21(4):399-408.
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With regard to whether the new use of the technology involves the
treatment of the same or similar type of disease and the same or
similar patient population when compared to an existing technology, the
applicant asserts that ciltacabtagene autoleucel is indicated for a
broader population than other available therapies, specifically
multiple myeloma patients having received three prior therapies.
In summary, the applicant asserts that ciltacabtagene autoleucel
meets the newness criterion and is not substantially similar to other
available therapies because it has a unique mechanism of action with
two distinct binding domains that confer avidity to the BCMA antigen,
and because it treats a different patient population, RRMM patients who
received three prior therapies. However, we note that ciltacabtagene
autoleucel may have a similar mechanism of action to that of
idecabtagene vicleucel, for which we received an application for new
technology add-on payments for FY 2022 for the treatment of adult
patients with relapsed or refractory multiple myeloma after four or
more prior lines of therapy, including an immunomodulatory agent, a
proteasome inhibitor, and an anti-CD38 monoclonal antibody. Per the new
technology add-on payment application for idecabtagene vicleucel, the
technology's mechanism of action is described as targeting B-cell
maturation antigen (BCMA), which is expressed on the surface of normal
and malignant plasma cells. The chimeric antigen receptor (CAR)
construct includes an anti-BCMA scFv-targeting domain for antigen
specificity, a transmembrane domain, a CD3-zeta T cell activation
domain, and a 4-1BB costimulatory domain. Antigen-specific activation
of idecabtagene vicleucel results in CAR-positive T cell proliferation,
cytokine secretion, and subsequent cytolytic killing of BCMA-expressing
cells. Because of the potential similarity with the BCMA antigen and
other actions, we believe that the mechanism of action for
ciltacabtagene autoleucel may be the same or similar to that of
idecabtagene vicleucel.
We believe that ciltacabtagene autoleucel may not treat the same or
similar patient population as currently existing treatments. However,
we believe that ciltacabtagene autoleucel and idecabtagene vicleucel
may treat the same or similar disease (RRMM) in the same or similar
patient population (patients who have previously received a proteasome
inhibitor (PI), and immunomodulatory agent (IMiD) and an anti-CD38
antibody). Accordingly, as it appears that ciltacabtagene autoleucel
and idecabtagene vicleucel are purposed to achieve the same therapeutic
outcome using the same or similar mechanism of action and would be
assigned to the same MS-DRG, we believe that these technologies may be
substantially similar to each other such that they should be considered
as a single application for purposes of new technology add-on payments.
We are interested in information on how these two technologies may
differ from each other with respect to the substantial similarity
criteria and newness criterion, to inform our analysis of whether
idecabtagene vicleucel and ciltacabtagne autoleucel are substantially
similar to each other and therefore should be considered as a single
application for purposes of new technology add-on payments.
We are inviting public comment on whether ciltacabtagene autoleucel
meets the newness criterion, including whether ciltacabtagene
autoleucel is substantially similar to idecabtagene vicleucel and
whether these technologies should be evaluated as a single technology
for purposes of new technology add-on payments.
[[Page 25237]]
With regard to the cost criterion, the applicant searched the FY
2019 MedPAR correction notice (December 1, 2020) file to identify
potential cases representing patients who may be eligible for treatment
using Ciltacabtagene autoleucel. In its analysis, the applicant
identified a primary cohort to assess whether this therapy met the cost
criterion. The following ICD-10-CM diagnosis codes were used to
identify claims involving multiple myeloma procedures.
[GRAPHIC] [TIFF OMITTED] TP10MY21.146
The applicant chose to limit its analysis to MS-DRG 016 (Autologous
Bone Marrow Transplant W CC/MCC or T-Cell Immunotherapy) because
patients receiving autologous bone marrow transplant (BMT) are
generally patients with relapsed or refractory multiple myeloma and are
most similar to patients who would be eligible to receive CAR T-cell
therapy. The claim search conducted by the applicant resulted in 1,215
claims mapped to MS-DRG 016 using the FY 2019 MedPAR. The applicant
determined an average unstandardized case weighted charge per case of
$1,237,393. The applicant used the New Technology Threshold for FY 2022
from the FY 2021 IPPS/LTCH PPS final rule for MS-DRG 018. The applicant
removed all charges in the drug cost center for the prior technology
because, according to the applicant, it is not possible to
differentiate between different drugs on inpatient claims. The
applicant added that this is likely an overestimate of the charges that
would be replaced by the use of ciltacabtagene autoleucel. The
applicant then standardized the charges using the FY 2019 final rule
impact file. Next, the applicant applied the 2-year inflation factor
used in the FY 2021 IPPS/LTCH PPS final rule to calculate outlier
threshold charges (1.13218). To calculate the charges for the new
technology, the applicant used the inverse of a simulated alternative
cost-to-charge ratio (CCR) specifically for CAR T cell therapies to
account for CAR T-cell therapies' higher costs compared to other drugs
and the potential for hospitals' charging practices to differ for these
drugs. To determine this alternative CCR for CAR T-cell therapies, the
applicant referred to the FY 2021 IPPS final rule AOR/BOR file and
calculated an alternative markup percentage by dividing the AOR drug
charges within MS-DRG 018 by the number of cases to determine a per
case drug charge. The applicant then divided the drug charges per case
by $373,000, the acquisition cost of YESCARTA and KYMRIAH, the CAR T-
cell products used in those claims, to arrive at a CCR of 0.295. The
applicant calculated a final inflated average case-weighted
standardized charge per case of $1,646,522, which it stated exceeded
the average case-weighted threshold amount of $1,251,126. The applicant
stated that because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the therapy meets the cost criterion.
As noted in previous discussions, the submitted costs for CAR T-
cell therapies vary widely due to differences in provider billing and
charging practices for this therapy. Therefore, with regard to the use
of this data for purposes of calculating a CAR T-cell CCR, we are
uncertain how representative this data is for use in the applicant's
cost analyses given this potential for variability.
We continue to be interested in public comments regarding the
eligibility of CAR T-cell technologies for new technology add-on
payments when assigned to MS-DRG 018. As we have noted in prior
rulemaking with regard to the CAR T-cell therapies (83 FR 41172 and 85
FR 58603 through 58608), if a new MS-DRG were to be created, then
consistent with section 1886(d)(5)(K)(ix) of the Act, there may no
longer be a need for a new technology add-on payment under section
1886(d)(5)(K)(ii)(III) of the Act.
We invite public comment on whether ciltacabtagene autoleucel meets
the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that it believes that ciltacabtagene autoleucel
represents a substantial clinical improvement over existing
technologies because it: (1) Offers a treatment for a patient
population with limited options and continued disease progression,
despite having been treated with multiple prior therapies; and (2)
provides a significantly improved clinical outcome relative to other
therapies, either approved or still under FDA review, used in the
relapsed and refractory multiple myeloma setting. With regard to the
applicant's assertion that ciltacabtagene autoleucel offers a treatment
for a patient population with limited options and continued disease
progression, despite having been treated with multiple prior therapies,
the applicant cited results from the CARTITUDE-1 STUDY, a Phase 1b/2,
open-label, multicenter, multi-national (including US) study to
evaluate the safety and efficacy of ciltacabtagene autoleucel in adult
patients who have RRMM who have previously received a PI, an IMiD, and
an anti-CD38 antibody. The applicant asserts that ciltacabtagene
autoleucel was granted Breakthrough Therapy designation for patients
who have RRMM who have previously received a PI, an IMiD, and an anti-
CD38 antibody, based on data from the Phase1b/2 CARTITUDE-1 study. One
hundred thirteen patients were enrolled in the study. Sixteen patients
discontinued the study, including 9 patients who died due to
progressive disease. Ninety-seven patients received ciltacabtagene
autoleucel. The Phase 1b portion of the study included 29 of the 97
patients.
Two patients died during the study: one due to CRS and one due to
acute myeloid leukemia (not treatment-related). Twenty-four of the
remaining patients were ongoing in the Phase 1b dose confirmation
period, with an additional 59 patients ongoing in the Phase 2 portion.
The primary objective of the Phase 1b portion of the trial was to
confirm the safety of the selected dose based on the data from the
ongoing Phase 1 trial in China (Legend-2), as discussed later in this
section. The primary objective of the Phase 2 portion of the trial is
to evaluate the efficacy of ciltacabtagene autoleucel.
The applicant asserts that at median follow-up of 12.4 months,
ciltacabtagene autoleucel led to a 97% overall response rate (ORR) in
all 97 study patients who
[[Page 25238]]
received ciltacabtagene autoleucel.\122\ The applicant asserts that
this unprecedented overall response rate of (97%), represents early,
deep, and durable responses in all patients, minimal residual disease
negativity (meaning minimal residual cancer cells after treatment to
the -nth degree) in the majority of patients who achieved a complete
response (CR) and a very manageable toxicity profile. The applicant
provided a comparison of the ORR in phase 1 studies for other therapies
used to treat RRMM and noted the following: idecabtagene vicleucel ORR
73%,\123\ daratumumab ORR 31%,\124\ Selinexor ORR 26% \125\ and Blenrep
ORR 31%.\126\
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\122\ Madduri D et. al. CARTITUDE-1: Phase 1b/2 Study of
Ciltacabtagene Autoleucel, a B-Cell Maturation Antigen-Directed
Chimeric Antigen Receptor T-Cell Therapy, in Relapsed/Refractory
Multiple Myeloma
\123\ Munshi et al. ASCO 2020
\124\ Usmari et al. Blood 2016, 128(1), 37-44.
\125\ Chari A et al N Engl J Med 22019, 38 2(8);727-738
\126\ DREAMM2 Lonai S et al Lancet 2019.
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The applicant further asserts that ciltacabtagene autoleucel led to
early and deep clinical responses in the phase1b/2 portion of the
CARTITUDE-1 study at median follow up of 12.4 months. Results of
CARTITUDE-1 showed a 97% overall response rate (ORR) with 67% of
patients attaining a stringent complete response (sCR) and 93% of
patients attaining a very good partial response (VGPR) or better after
receiving a low dose (median of 0.72 million CAR T-cells per kilogram)
of ciltacabtagene autoleucel within approximately a year. ORR and depth
of response were independent of BCMA expression on myeloma cells at
baseline. The median time to first response was one month (range, 0.9-
8.5).\127\
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\127\ Berdeja JG, Madduri D, Usmani SZ, Singh I, Zudaire E, Yeh
TM, Allred AJ, Olyslager Y, Banerjee A, Goldberg JD, Schecter S,
Geng D, Wu X, Carrasco-Alfonso M, Rizvi S, Fan F, Jakubowiak AJ,
Jagannath S. Update of CARTITUDE-1: A phase Ib/II study of JNJ-4528,
a B-cell maturation antigen (BCMA)-directed CAR-T cell therapy, in
relapsed/refractory multiple myeloma. Journal of Clinical Oncology.
2020 38:15_suppl, 8505-8505.
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The applicant also asserted that most patients attained a status of
minimal residual disease (MRD)-negativity by the time they were
evaluable for a complete response (CR). Of evaluable patients, 93.0%
achieved MRD 10-5 negativity. Fifty-eight percent of
patients were both MRD negative and in sCR at MRD detection level of
10-5. Median time to MRD 10-5 negativity: 1 month
(0.8-7.7). Among patients with 6 months individual follow-up, most had
ciltacabtagene autoleucel CAR+ T-cells below the level of
quantification (2 cells/[mu]L) in peripheral blood.
In addition, progression-free survival (PFS) at 12 months was 77%
(95% CI; 66.0-84.37).\128\ The applicant believes this represents a
substantial clinical improvement when compared to existing technologies
that treat RRMM. The applicant further asserts that nearly all of the
individuals participating in the study (22 of the 29 patients) were
alive and continued showing no signs of disease progression after a
period of 9 months. Median PFS was not reached. At median follow-up of
12.4 months, there were 14 deaths during the Phase 1b/2 study: One due
to cytokine release syndrome (CRS) and hemophagocytic
lymphohistiocytosis (HLH), one due to neurotoxicity, and 12 due to
other causes.\98\ The applicant asserts that the CRS was manageable in
most patients. CRS was the most common adverse event (AE) (94.8%)
observed in the CARTITUDE-1 study. The median time to onset of CRS was
7 days (range 1-12 days) post ciltacabtagene autoleucel infusion. The
median duration of CRS was 4 days. Eighty-seven patients (94.6%)
experienced Grade 1-2 CRS and 5 patients (5% experienced grade 3 or
greater CRS)122.
---------------------------------------------------------------------------
\128\ Ibid.
---------------------------------------------------------------------------
The applicant noted that neurotoxicity with immune effector cell-
associated neurotoxicity syndrome (ICANS) was infrequently observed in
the context of CRS and was generally low grade. Neurotoxicity with
ICANS was observed in 20 patients (20.6%) including 10 patients (10.3%)
with Grade 3 or above toxicity.122
The LEGEND-2 study \129\ is an ongoing Phase 1, single-arm, open-
label, multicenter, first-in-human trial to determine the safety and
efficacy of ciltacabtagene autoleucel (LCAR-B38M in China) in the
treatment of patients with relapsed or refractory multiple myeloma.
Enrollment in this investigator-initiated study (study proposed,
initiated, and conducted by an investigator that is funded by industry)
completed in November 2017; a total of 74 patients with RRMM have been
treated with ciltacabtagene autoleucel CAR T-cell therapy. The clinical
cutoff for the analysis of these 74 patients was February 6, 2018 with
updated survival and efficacy data as of November 26, 2019 (which
represents 2 years of follow-up from the date of the last subject's
infusion). Seventeen patients (17/57-29%) died during the study and
follow up period (19 months) mostly due to progressive disease. None
were related to cytokine release syndrome or neurotoxicity, the two
most common adverse events associated with CAR T-cell therapy. At data
cutoff, 57 patients had received LCAR-B38M CAR T-cells.
---------------------------------------------------------------------------
\129\ Zhao et al. Journal of Hematology and Oncology. (2018)
11:141.
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The applicant further asserts that outcomes from the LEGEND-2 study
show that cilltacabtagene autoleucel provides a significantly improved
clinical outcome relative to other therapies, either approved or still
under FDA review, used in the RRMM setting. At cutoff, the median
follow-up was 19 months [17-22]. The overall survival (OS) rate at 18
months was 68% with a median duration of response (mDOR) of 22 months.
Of MRD-negative patients with CR, 91% were still alive at data cut,
with a 27 month mDOR. The median time to first response was 1.1 months.
There was no relationship between best response and baseline BCMA
expression level or weight-adjusted CAR T-cells infused.\105\
The applicant asserts that of patients in the LEGEND-2 study with
CR, 39 of 42 were minimal residual disease negative (MRD-neg) and
remained RRMM progression-free. The median PFS rate for all treated
patients was 20 months; median PFS for MRD-neg patients with CR was 28
months. At 18 months, the PFS rate was 50% for all patients and 71% for
MRD-neg patients with CR. Seventeen patients died during the study and
the follow-up period. The causes of death included progressive disease
(PD; n=11), disease relapse, PD with lung infection, suicide after PD,
esophageal carcinoma, infection, pulmonary embolism and acute coronary
syndrome (n=1 each). Of these, 4 did not achieve partial response (PR)
or better; and 1 was not evaluable.
From the LEGEND-2 study, the median time to onset of CRS was 9 days
(range, 1-19) with a median duration of 9 days (range, 3-57); all but 1
CRS events resolved. Tocilizumab (46%), oxygen (35%), vasopressor
(11%), and intubation (1 patient) were used to treat CRS. Neurotoxicity
with grade 1 aphasia, agitation and seizure-like activity was observed
in 1 patient in the LEGEND-2 study. The applicant believes that since
ciltacabtagene autoleucel displayed a manageable CRS safety profile
that it represents a substantial clinical improvement over existing
therapies.
After reviewing the information submitted by the applicant as part
of its FY 2022 new technology add-on payment application for
ciltacabtagene autoleucel, we note that there are no head-to-head
comparisons of ciltacabtagene autoleucel and other CAR T-cell therapies
and BCMA-targeted
[[Page 25239]]
therapies. We also note that the applicant chose to use ORR data as a
measure of substantial clinical improvement rather than the available,
and more clinically relevant, OS data.
We are inviting public comment on whether ciltacabtagene autolecuel
meets the substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
ciltacabtagene autoleucel.
e. COSELA (trilaciclib)
G1 Therapeutics submitted an application for new technology add-on
payments for Trilaciclib for FY 2022. COSELA (trilaciclib) is indicated
to decrease the incidence of chemotherapy-induced myelosuppression in
adult patients when administered prior to a platinum/etoposide-
containing regimen or topotecan-containing regimen for extensive-stage
small cell lung cancer (ES-SCLC).\130\
---------------------------------------------------------------------------
\130\ G1 Therapeutics Inc., Rev. 2/2021, COSELA prescribing
information: https://www.g1therapeutics.com/cosela/pi/
#:~:text=COSELA%20is%20indicated%20to%20decrease,cancer%20(ES%2DSCLC)
.&text=The%20recommended%20dose%20of%20COSELA%20is%20240%20mg%2Fm2%20
per%20dose.
---------------------------------------------------------------------------
According to the applicant, Trilaciclib is a first-in-class
myelopreservation therapy that has the potential to mitigate
chemotherapy-induced myelosuppression (CIM). Trilaciclib is a
selective, transient inhibitor of cyclin dependent kinases 4 and 6
(CDK4/6) with potential antineoplastic and chemoprotective activities.
CDK4 and CDK6 are key regulators of the G1 cell-cycle checkpoint and
play important roles in cell proliferation and associated biological
processes. One of the most common pathways dysregulated in cancer is
the cyclin D-cyclin-dependent kinase four or six (CDK4/6)-
retinoblastoma (RB) pathway. Trilaciclib arrests hematopoietic stem and
progenitor (HSPCs) bone marrow cells in the G1 phase of the cell cycle
during chemotherapy exposure, protecting them from chemotherapy-induced
damage.
According to the applicant, the defining characteristic of cancer
is uncontrolled cellular proliferation, a phenomenon that requires
tumor cells to avoid or disable normal, physiologic cell-cycle
regulation. While there are both CDK 4/6 independent and dependent
cells, HSPCs and immune cells are CDK 4/6 dependent whereas SCLC cells
are CDK 4/6 independent. According to the applicant, the transient
arrest of HSPCs and lymphocytes by trilaciclib during the
administration of chemotherapy is thought to have a number of
beneficial effects, including a reduction in chemotherapy-induced
myelosuppression and preservation of immune function, as well as an
enhanced immune response.131 132 133 Specifically, SCLC
cells replicate independently of CDK 4/6 and therefore these cells are
damaged by chemotherapy. Because HSPCs and lymphocytes are CDK 4/6
dependent, trilaciclib's mechanism of action is believed to preserve
these cells by temporarily arresting their proliferation during
chemotherapy. In this way, trilaciclib reduces chemotherapy-induced
myelosuppression in patients with extensive-stage small-cell lung
cancer (ES-SCLC).\134\ The applicant also asserted that in preclinical
models, CDK4/6 inhibition by trilaciclib also alters the tumor immune
microenvironment through transient inhibition of the immune cells known
as lymphocytes that are also dependent on CDK4/6 activity for
proliferation.\135\
---------------------------------------------------------------------------
\131\ Daniel D, Kuchava V, Bondarenko I, et al. Trilaciclib (T)
decreases myelosuppression in extensive-stage small cell lung cancer
(ES-SCLC) patients receiving first-line chemotherapy plus
atezolizumab. Ann Oncol. 2019;30:v713, Abstract 1742PD: https://www.g1741therapeutics.com/file.cfm/1734/docs/tr-G1741_ESMO2019_Daniel.pdf.
\132\ Weiss JM, Csoszi T, Maglakelidze M, et al.
Myelopreservation with the CDK4/6 inhibitor trilaciclib in patients
with small-cell lung cancer receiving first-line chemotherapy: a
phase Ib/randomized phase II trial. Ann Oncol. 2019;30(10):1613-
1621.
\133\ Hart LL, Andric ZG, Hussein MA, et al. Effect of
trilaciclib, a CDK 4/6 inhibitor, on myelosuppression in patients
with previously treated extensive-stage small cell lung cancer
receiving topotecan. J Clin Oncol. 2019;37(15_suppl): Abstract 8505:
https://www.g8501therapeutics.com/file.cfm/8534/docs/tr-G8501T8528-8503%8520ASCO%202019%202020Oral%202020Presentation%20060119-20060111.pdf.
\134\ Donjerkovic D, Scott DW. Regulation of the G1 phase of the
mammalian cell cycle. Cell Res. 2000;10(1):1-16.
\135\ Lai AY, Sorrentino JA, Dragnev KH, et al. CDK4/6
inhibition enhances antitumor efficacy of chemotherapy and immune
checkpoint inhibitor combinations in preclinical models and enhances
T-cell activation in patients with SCLC receiving chemotherapy. J
Immunother Cancer. 2020;0:e000847. doi:10.1136/jitc-2020-000847.
---------------------------------------------------------------------------
According to the applicant, chemotherapy remains the cornerstone of
treatment for extensive stage small cell lung cancer (ES-SCLC). The
applicant asserted that almost all of the ~18,600 ES-SCLC patients
diagnosed each year are treated with platinum/etoposide-containing or
topotecan-containing chemotherapy regimens. Chemotherapy drugs target
cells at different phases of the cell cycle. According to the
applicant, systemic chemotherapy, alone or in combination with immune
checkpoint inhibitors, is the standard of care for patients with
advanced SCLC. Additionally, per the applicant, rescue interventions,
including growth factors and blood transfusions, are commonly routine
therapies for SCLC. The applicant also indicated that granulocyte
colony-stimulating factors (G-CSFs) only address neutropenia, while
erythropoiesis stimulating agent (ESAs) and red blood cell (RBC)
transfusions only address anemia, and there is no available treatment
that broadly mitigates myelosuppressive effects and their corresponding
impact on patient well-being before chemotherapy damage occurs.
COSELA (trilaciclib) received FDA's New Drug Application approval
on February 12, 2021. COSELA is for intravenous use only. The
recommended dose of COSELA is 240 mg/m2 as a 30-minute intravenous
infusion completed within four hours prior to the start of chemotherapy
on each day chemotherapy is administered.\136\ The applicant also
stated that in 2019, trilaciclib was granted Breakthrough Therapy
Designation for the mitigation of clinically significant chemotherapy-
induced myelosuppression in adult patients with SCLC. The applicant
submitted a request for a new ICD-10-PCS code as the applicant states
that there are no existing ICD-10-PCS codes that uniquely identify the
administration of trilaciclib.
---------------------------------------------------------------------------
\136\ G1 Therapeutics Inc., Rev. 2/2021, COSELA prescribing
information: https://www.g1therapeutics.com/cosela/pi/
#:~:text=COSELA%20is%20indicated%20to%20decrease,cancer%20(ES%2DSCLC)
.&text=The%20recommended%20dose%20of%20COSELA%20is%20240%20mg%2Fm2%20
per%20dose.
---------------------------------------------------------------------------
As previously discussed, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and, therefore, would not be
considered ``new'' for purposes of new technology add-on payments.
With respect to the first criterion, whether a product uses the
same or a similar mechanism of action to achieve a therapeutic outcome,
the applicant asserted that trilaciclib, also referred to as G1T28, has
a unique mechanism of action as a small molecule, competitive inhibitor
of CDK4/6, with potential antineoplastic and chemoprotective
activities. The applicant stated that upon administration, trilaciclib
binds to and inhibits the activity of CDK4/6, thereby blocking the
phosphorylation of
[[Page 25240]]
the retinoblastoma protein (Rb) in early G1. This prevents G1/S phase
transition, causing cell cycle arrest in the G1 phase and induced
apoptosis, which inhibits the proliferation of CDK4/6-overexpressing
tumor cells. In patients with CDK4/6-independent tumor cells, G1T28 may
protect against multi-lineage chemotherapy-induced myelosuppression
(CIM) by transiently and reversibly inducing G1 cell cycle arrest in
hematopoietic stem and progenitor cells (HSPCs) and preventing
transition to the S phase. Per the applicant, this protects all
hematopoietic lineages, including red blood cells, platelets,
neutrophils and lymphocytes, from the DNA-damaging effects of certain
chemotherapeutics and preserves the function of the bone marrow and the
immune system.
The applicant stated that the cell cycle consists of four distinct
phases, Gap 1 phase (G1), S phase, Gap 2 (G2)
post-synthesis phase, and the M phase.\137\ Regulation of this process
is maintained by a series of highly conserved proteins referred to as
cyclins, and their catalytic binding partners, CDKs. The CDKs are a
family of enzymes that control several cellular processes in mammalian
cells, including the modulation of the cell cycle via binding to
cyclins A-E, which results in the activation of transcription factors
that regulate the cellular transition from G1 (growth phase) to S (DNA
replication) and G2 (growth phase) to M (mitosis).\138\
---------------------------------------------------------------------------
\137\ Ferrarotto R, Anderson I, Medgyasszay B, et al.
Trilaciclib reduces the need for growth factors and red blood cell
transfusions to manage chemotherapy-induced myelosuppression. Poster
presented at: IASLC: 2020 North America Conference on Lung Cancer;
October 16-17, 2020; Virtual congress.
\138\ Asghar U, Witkiewicz AK, Turner NC, Knudsen ES. The
history and future of targeting cyclin-dependent kinases in cancer
therapy. Nat Rev Drug Discov. 2015;14(2):130-146.
---------------------------------------------------------------------------
According to the applicant, the G1-to-S checkpoint is a critical
restriction point in the process of cell division. Cells are maintained
in a quiescent state until the proper signal is achieved for reentry
into the cell cycle. Throughout G1, expression of the D-type cyclins
(D1, D2, D3) increases until active complexes with CDK4/6 are formed.
Active CDK4/6 complexes partially phosphorylate RB, which allows
partial depression of the transcription factor E2F. This induces
additional transcript production of cyclin E1, which binds CDK2 to form
active complexes that result in the hyperphosphorylation of RB and
drives the cells through late G1 into S phase. Inhibition of cyclin D-
CDK4/6 by the tumor suppressor CDKN2A leads to a G1 arrest and cell-
cycle progression is halted.\139\
---------------------------------------------------------------------------
\139\ Donjerkovic D, Scott DW. Regulation of the G1 phase of the
mammalian cell cycle. Cell Res. 2000;10(1):1-16.
---------------------------------------------------------------------------
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant asserted that
trilaciclib will be assigned the same MS-DRG as existing technologies.
The applicant did not explicitly state to which MS-DRG(s) trilaciclib
would be assigned, but included MS-DRGs 180 (Respiratory Neoplasms with
MCC), 181 (Respiratory Neoplasms with CC), and 182 (Respiratory
Neoplasms without CC/MCC) in its cost analysis.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population when compared to an
existing technology, the applicant stated that trilaciclib is the only
proactive (preventive) multilineage (erythrocytes, leukocytes, and
thrombocytes, neutrophils and lymphocytes) therapy given as a 30-minute
infusion administered prior to chemotherapy on each day of
chemotherapy. Due to its mechanism of action, trilaciclib's benefit is
coupled to its administration schedule (that is, trilaciclib must be
administered prior to chemotherapy to ensure G1 arrest of HSPCs when
those cells are exposed to cytotoxic chemotherapy). According to the
applicant, this therapeutic paradigm contrasts with standard available
treatment options and interventions that are administered after
chemotherapy to reactively reduce or treat chemotherapy side effects.
The applicant asserted that typical supportive care rescue
interventions such as growth factors (G-CSFs, ESAs) and red blood cell
(RBC) transfusions are used after chemotherapy causes damage to stem
cells. Current supportive care therapies are used reactively to treat
single cell lineage specific (leukocytes and erythrocytes)
complications,\140\ such as neutropenia and anemia. Additionally, the
applicant indicated that growth factor and RBC transfusion use are
known to carry a number of risks and cause complications and adverse
events.
---------------------------------------------------------------------------
\140\ National Comprehensive Cancer Network. NCCN Clinical
Practice Guidelines in Oncology. Hematopoietic Growth Factors.
Version 1.2020. 27 January. 2020.
---------------------------------------------------------------------------
We note that the information provided by the applicant in response
to whether trilaciclib treats the same or similar type of disease or
the same or similar patient population, appears to only speak to the
first criterion and whether trilaciclib has a mechanism of action that
is different than existing technologies; however, we believe
trilaciclib appears to treat the same patient population and disease as
existing therapies. We are inviting public comments on whether
trilaciclib is substantially similar to an existing technology and
whether it meets the newness criterion.
With respect to the cost criterion, the applicant conducted the
following analysis to demonstrate that trilaciclib meets the cost
criterion. In identifying the cost of trilaciclib, the applicant stated
that dosing is based on body surface area, 240 mg/m\2\ with an average
of two vials (300mg each) per patient per dose. To identify cases that
may be eligible for the use of trilaciclib, the applicant searched the
FY 2019 MedPAR LDS file for claims reporting an ICD-10-PCS code of
category C34 through C34.92 (Malignant neoplasm related to the
bronchus, lobe, or lung) as noted in the following table.
[[Page 25241]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.147
[GRAPHIC] [TIFF OMITTED] TP10MY21.148
According to the applicant, based on the advice of clinical
experts, it limited case selection criteria to claims that included one
of MS-DRGs 180, 181, or 182. The applicant then randomly selected 15%
of the claims from the sample to account for the fact that SCLC
comprises 15% of lung cancer cases.\141\ Based on the FY 2019 MedPAR
LDS file, the applicant identified 3,500 cases. The applicant noted
that 2,346 cases mapped to MS-DRG 180; 1,085 cases
[[Page 25242]]
mapped to MS-DRG 181; and 69 cases mapped to MS-DRG 182.
---------------------------------------------------------------------------
\141\ Govindan R, et al. J Clin Oncol. 2006;24:4539-44. Byers
LA, Rudin CM. Cancer. 2015;121:664-72.
---------------------------------------------------------------------------
Using these 3,500 cases, the applicant then calculated the
unstandardized average charges per case for each MS-DRG. Because the
use of trilaciclib results in approximately half of patients no longer
needing drugs used to counter the effects of chemotherapy during the
inpatient stay, the applicant removed 50% of the drug charges for the
technology being replaced.
The applicant then standardized the charges using the 2019 IPPS/
LTCH PPS final rule impact file and inflated the charges by 1.13218 or
13.2 percent, the same inflation factor used by CMS to update the
outlier threshold in the FY 2021 IPPS/LTCH PPS final rule. The
applicant then added the charges for trilaciclib by converting the
costs to a charge by dividing the cost by the national average cost-to-
charge ratio of 0.187 for pharmacy from the FY 2021 IPPS/LTCH PPS final
rule.
Using the data file thresholds associated with the FY 2021 IPPS/
LTCH PPS final rule correction notice, the average case-weighted
threshold amount was $57,031. In the applicant's analysis, the final
inflated average case-weighted standardized charge per case was
$95,701. Because the final inflated average case-weighted standardized
charge per case exceeds the average case-weighted threshold amount, the
applicant maintained that the technology meets the cost criterion.
With respect to the cost criterion, we note that in listing the
codes it used to identify cases that may be eligible for the use of
trilaciclib, the applicant provided several ICD-10 codes that lack four
digits and thus, are considered invalid. We would be interested in
understanding the basis for the applicant's choice of codes. We also
note that in its analysis, the applicant randomly selected 15% of the
claims from the sample to account for the fact that SCLC comprises 15%
of lung cancer cases. In so doing, the applicant is making the
assumption that SCLC cases are randomly distributed amongst all cases
from which the applicant sampled. By randomly sampling the population,
the applicant is selecting a subsample that is ideally similar to the
population with less variance. It may be the case that SCLC cases are
systematically different from other cases in the population. If this is
true, then a random sample may not be appropriate. Accordingly, we
question the appropriateness of the sampling used and whether it
accurately represents cases that would use the technology.
Finally, with respect to pricing, it appears that the applicant's
final inflated average case-weighted standardized charge per case
reflects pricing prior to the availability of more current total
wholesale acquisition cost. We therefore request that the applicant
update its cost analysis to reflect the final inflated average case
weighted standardized charge per case based on this more current
information. We are inviting public comment on whether trilaciclib
meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that trilaciclib represents a substantial clinical
improvement over existing technologies because it offers a treatment
option for patients unresponsive to or ineligible for currently
available treatments and improves clinical outcomes for a patient
population as compared to currently available treatments. The applicant
stated that chemotherapy-induced myelosuppression (CIM) is typically
managed with treatment dose delays and reductions due to the slow
recovery of bone marrow after a course of chemotherapy.\142\ The
applicant also stated that CIM is managed with rescue interventions
including hematopoietic growth factors (G-CSFs and ESAs) and by RBC and
platelet transfusions.143 144 Per the applicant, despite the
availability and use of these treatment options, CIM continues to be of
clinical significance and remains a central concern in the delivery of
chemotherapy.145 146 The applicant further stated that
myelosuppression results in dose reductions, dose delays, and/or dose
discontinuations, affecting the dose intensity and intended antitumor
efficacy of chemotherapy.\147\ Per the applicant, the supportive care
interventions for treatment of myelosuppression are suboptimal and are
often administered reactively, do not protect the bone marrow from
chemotherapy-induced cytotoxic effects, are specific to single
hematopoietic lineages, and impart their own risks for adverse
reactions.\148\ The applicant concluded by stating that new approaches
that proactively prevent chemotherapy-induced damage and its associated
consequences, whilst not decreasing the efficacy of chemotherapy, are
urgently needed to improve care of patients with ES-SCLC.\149\
---------------------------------------------------------------------------
\142\ Crawford J, Dale DC, Lyman GH. Chemotherapy-induced
neutropenia: Risks, consequences, and new directions for its
management. Cancer. 2004;100(2):228.
\143\ Kurtin S. Myeloid Toxicity of Cancer Treatment. J Adv
Pract Oncol 2012;3:209-24.
\144\ Asghar U, Witkiewicz AK, Turner NC, Knudsen ES. The
history and future of targeting cyclin-dependent kinases in cancer
therapy. Nat Rev Drug Discov. 2015;14(2):130-46.
\145\ Crawford J, Dale DC, Lyman GH. Chemotherapy-induced
neutropenia: Risks, consequences, and new directions for its
management. Cancer. 2004;100(2):228.
\146\ Lyman GH. Chemotherapy dose intensity and quality cancer
care. Oncology (Williston Park). 2006;20(14 Suppl 9):16-25.
\147\ Smith RE. Trends in recommendations for myelosuppressive
chemotherapy for the treatment of solid tumors. J Natl Compr Canc
Netw. 2006;4(7):649-58.
\148\ Bisi JE, Sorrentino JA, Roberts PJ, Tavares FX, Strum JC.
Preclinical characterization of G1T28: a novel CDK4/6 inhibitor for
reduction of chemotherapy-induced myelosuppression. Mol Cancer Ther.
2016;15(5):783-93.
\149\ Nurgali K, Jagoe T, Raquel Abalo R. Editorial: Adverse
Effects of Cancer Chemotherapy: Anything New to Improve Tolerance
and Reduce Sequelae? Front Pharmacol. 2018;9:245.
---------------------------------------------------------------------------
In regard to the claim that the use of trilaciclib significantly
improves clinical outcomes for a patient population as compared to
currently available treatments, the applicant stated that the
administration of trilaciclib prior to chemotherapy in patients with
SCLC prevented chemotherapy-induced neutropenia, reduced chemotherapy-
induced anemia, reduced CIM or sepsis-related hospitalizations, and has
the potential to improve the management and quality of life of patients
receiving myelosuppressive chemotherapy as compared to placebo.\150\
---------------------------------------------------------------------------
\150\ Ferrarotto R, Anderson I, Medgyasszay B, et al.
Trilaciclib reduces the need for growth factors and red blood cell
transfusions to manage chemotherapy-induced myelosuppression. Poster
presented at: IASLC: 2020 North America Conference on Lung Cancer;
October 16-17, 2020; Virtual congress.
---------------------------------------------------------------------------
The applicant presented eight claims in support of the assertion
that trilaciclib represents substantial clinical improvement over
existing technologies in the mitigation of clinically significant
chemotherapy-induced myelosupression in adult patients with SCLC.
In its first and second claims, the applicant asserted that
trilaciclib reduces the mean duration of severe G4 neutropenia in cycle
1 of chemotherapy and reduces the proportion of patients experiencing
severe G4 neutropenia in comparison to placebo. The applicant submitted
three sources in support of these claims. First, the applicant
submitted a poster presentation from Daniel, et. al., describing a
global, randomized, double-blind, placebo-controlled, multicenter,
phase 2 study that assessed the potential of trilaciclib to reduce the
incidence and consequences of chemotherapy-induced myelosuppression in
patients with newly diagnosed ES-SCLC treated with etoposide,
carboplatin, and atezolizumab. One hundred seven eligible patients were
randomized to
[[Page 25243]]
receive trilaciclib (n = 53) or placebo (n = 54). The primary endpoints
were mean duration of severe neutropenia (SN) in cycle 1 and percent of
patients with grade 4 SN. Results summarized mean duration of SN in
cycle 1 as 0 days with trilaciclib and 4 days with placebo, and percent
of patients with grade 4 SN as 1.9% vs 49.1%, respectively.\151\
---------------------------------------------------------------------------
\151\ Daniel D, Kuchava V, Bondarenko I et al. Trilaciclib
Decreases Myelosuppression in Extensive-Stage Small Cell Lung Cancer
(ES-SCLC) Patients Receiving First-Line Chemotherapy Plus
Atezolizumab [Poster Presentation]. European Society of Medical
Oncology (ESMO). October, 2019; Barcelona, Spain.
---------------------------------------------------------------------------
Second, the applicant submitted an article by Weiss, et. al.,
summarizing a phase II randomized, double-blind placebo-controlled
study of the safety, efficacy and pharmacokinetics (PK) of trilaciclib
in combination with etoposide/carboplatin (E/P) therapy for treatment-
naive extensive-stage small-cell lung cancer patients. Thirty-nine
patients were included in the trilaciclib group versus 38 in the
placebo group. The applicant stated that treatment with trilaciclib
resulted in a reduced mean duration of severe G4 neutropenia in cycle 1
(0 days versus 3 days in placebo) and reduced proportion of patients
experiencing severe G4 neutropenia for trilaciclib (5% versus
43%).\152\
---------------------------------------------------------------------------
\152\ Weiss JM, Csoszi T, Maglakelidze M et al.
Myelopreservation with the CDK4/6 inhibitor Trilaciclib in Patients
with Small-Cell Lung Cancer Receiving First-Line Chemotherapy: A
Phase Ib/Randomized Phase II Trial. Ann Oncol. 2019 ;30(10):1613-
1621.
---------------------------------------------------------------------------
Third, the applicant submitted a presentation from Hart, et. al.,
describing a randomized, double-blind, placebo-controlled, phase 2
study to compare the results of 32 patients receiving Trilaciclib
versus 28 receiving placebo in patients being treated with topotecan
for previously treated ES-SCLC. Primary endpoints were mean duration of
SN in cycle 1 and the percentage of patients with SN. Results
demonstrated that the mean duration of severe G4 neutropenia in cycle 1
was reported at 2 days for trilaciclib versus eight days for placebo.
The proportion of patients experiencing severe G4 neutropenia was
reported at 41% for trilaciclib versus 76% for placebo.\153\
---------------------------------------------------------------------------
\153\ Hart LL, Andric ZG, Hussein MA et al. Effect of
Trilaciclib, a CDK4/6 Inhibitor, on Myelosuppression in Patients
with Previously Treated Extensive-Stage Small Cell Lung Cancer [Oral
Presentation]. Presented at: American Society of Clinical Oncology
(ASCO). June 2019; Chicago, US.
---------------------------------------------------------------------------
In the third claim, the applicant asserted that trilaciclib reduces
the proportion of patients experiencing febrile neutropenia treatment
emergent adverse events (TEAE) in comparison to placebo. In the fourth
claim, the applicant asserted that trilaciclib decreases the rate of
therapeutic intervention with G-CSF in comparison to placebo, noting
that growth factors are known to carry a number of risks, cause
complications and adverse events. In the fifth claim, the applicant
asserted that trilaciclib reduces the proportion of patients
experiencing grade 3/4 anemia in comparison to placebo. In the sixth
claim, the applicant asserted that trilaciclib decreases the rate of
therapeutic intervention with red blood cell transfusions in comparison
to placebo. To support these claims, the applicant submitted a 2020
poster presentation from Weiss, et. al., describing a pooled analysis
across three RCTs that compared the proportion of ES-SCLC patients
experiencing febrile neutropenia between trilaciclib and placebo. The
trilaciclib group included 122 patients and the placebo group included
118 patients. The presentation reflected the following results: The
proportion of patients experiencing febrile neutropenia for trilaciclib
was 3% versus placebo at 9%; the rate of therapeutic intervention with
G-CSF for trilaciclib at 29% versus 56% for placebo; the proportion of
patients experiencing grade 3/4 anemia for trilaciclib at 20% versus
32% for placebo; and the rate of therapeutic intervention with red
blood cell transfusions for trilaciclib at 15% versus 26% for
placebo.\154\
---------------------------------------------------------------------------
\154\ Weiss J, Goldschmidt J, Andric Z et al. Myelopreservation
and Reduced Use of Supportive Care with Trilaciclib in Patients with
Small Cell Lung Cancer [Poster Presentation]. Presented at: American
Society of Clinical Oncology (ASCO). May 2020.
---------------------------------------------------------------------------
In the seventh claim, the applicant asserted that trilaciclib
delays time to deterioration in symptoms and functioning domains of
patient-reported quality of life measures on Functional Assessment of
Cancer Therapy (FACT) scores. The applicant submitted a 2019
presentation from Weiss, et. al., describing a pooled analysis across
three RCTs. The applicant stated that trilaciclib delays time to
confirmed deterioration in a variety of symptoms and functioning
domains compared to placebo, for example: median of 4.7 months delay to
deterioration for fatigue; median of 3.5 months delay for anemia; and
median of 4 months delay for functional well-being.\155\
---------------------------------------------------------------------------
\155\ Weiss J, Skaltsa K, Gwaltney C, et al: Results from three
phase 2 randomized, double-blind, placebo-controlled small cell lung
cancer trials. 2019 Multinational Association of Supportive Care in
Cancer/International Society of Oral Oncology International
Symposium on Supportive Care in Cancer. Abstract eP723. Presented
June 21, 2019.
---------------------------------------------------------------------------
In the eighth claim, the applicant asserted that trilaciclib
decreases the number of hospitalizations due to myelosuppression or
sepsis. The applicant submitted a conference agenda referring to an
oral presentation by Ferrarotto, et. al., at the North America
Conference on Lung Cancer, October 16, 2020. The applicant stated that
hospitalizations due to myelosuppression or sepsis occurred in
significantly fewer patients and significantly less often among
patients receiving trilaciclib prior to chemotherapy versus placebo
though we were unable to locate support for this claim in the
conference agenda submitted with the application.\156\
---------------------------------------------------------------------------
\156\ Ferrarotto R, Anderson I, Medgyasszay B, et al.
Trilaciclib reduces the need for growth factors and red blood cell
transfusions to manage chemotherapy-induced myelosuppression. [Oral
Presentation]. Presented at: North America Conference on Lung
Cancer, October 2020. https://naclc2020.iaslc.org/program-at-a-glance/.
---------------------------------------------------------------------------
With respect to the substantial clinical improvement criterion, we
note that the data submitted by the applicant included one published
peer reviewed article from Weiss, et. al.,\157\ abstracts from Daniel,
et. al.,\158\ and Hart, et. al.,\159\ and references to trials
exploring broader cohorts of small cell lung cancer, breast cancer and
colon cancer patients. In addition, as summarized previously, we note
that most of the studies submitted by the applicant had sample sizes
fewer than 100 participants which may limit generalizability of the
studies. With respect to the Weiss, et. al., study, we note that
trilaciclib was compared with placebo at a significance level of two-
sided [alpha] = 0.2 which is much lower than the typical cutoff of 0.05
and may have increased the risk of false positives and interfered with
the ability to draw conclusions that are based on statistical methods.
We also note the lack of any statistical correction for multiple
comparisons. We note that
[[Page 25244]]
in sources provided by the applicant, mean duration of severe
neutropenia was assessed in day increments.160 161 162 163
However, it is not clear that zero days would indicate that those
patients experienced no severe neutropenia. Specifically, we question
whether mean hours in severe neutropenia was evaluated or whether, in
addition to the groupings by days, one day or less would be an
appropriate value for inclusion. Finally, while the applicant referred
to decreases in the number of hospitalizations, we note that the source
provided was limited to a conference agenda that only linked to an
abstract pertaining to reductions in utilization of supportive care
interventions but did not reflect hospitalization rates.\164\
---------------------------------------------------------------------------
\157\ Weiss JM, Csoszi T, Maglakelidze M, et al.
Myelopreservation with the CDK4/6 inhibitor trilaciclib in patients
with small-cell lung cancer receiving first-line chemotherapy: A
phase Ib/randomized phase II trial. Ann Oncol. 2019;30(10):1613-
1621.
\158\ Daniel D, Kuchava V, Bondarenko I, et al. Trilaciclib (T)
decreases myelosuppression in extensive-stage small cell lung cancer
(ES-SCLC) patients receiving first-line chemotherapy plus
atezolizumab. Ann Oncol. 2019;30:v713, Abstract 1742PD. https://www.g1741therapeutics.com/file.cfm/1734/docs/tr-G1741_ESMO2019_Daniel.pdf.
\159\ Hart LL, Andric ZG, Hussein MA, et al. Effect of
trilaciclib, a CDK \4/6\ inhibitor, on myelosuppression in patients
with previously treated extensive-stage small cell lung cancer
receiving topotecan. J Clin Oncol. 2019;37(15_suppl): Abstract 8505:
https://www.g8501therapeutics.com/file.cfm/8534/docs/tr-G8501T8528-8503%8520ASCO%202019%202020Oral%202020Presentation%20060119-20060111.pdf.
\160\ Weiss JM, Csoszi T, Maglakelidze M, et al.
Myelopreservation with the CDK4/6 inhibitor trilaciclib in patients
with small-cell lung cancer receiving first-line chemotherapy: A
phase Ib/randomized phase II trial. Ann Oncol. 2019;30(10):1613-
1621.
\161\ Daniel D, Kuchava V, Bondarenko I, et al. Trilaciclib (T)
decreases myelosuppression in extensive-stage small cell lung cancer
(ES-SCLC) patients receiving first-line chemotherapy plus
atezolizumab. Ann Oncol. 2019;30:v713, Abstract 1742PD: https://www.g1741therapeutics.com/file.cfm/1734/docs/tr-G1741_ESMO2019_Daniel.pdf.
\162\ Hart LL, Andric ZG, Hussein MA et al. Effect of
Trilaciclib, a CDK4/6 Inhibitor, on Myelosuppression in Patients
with Previously Treated Extensive-Stage Small Cell Lung Cancer [Oral
Presentation]. Presented at: American Society of Clinical Oncology
(ASCO). June 2019; Chicago, US.
\163\ Weiss J, Goldschmidt J, Andric Z et al. Myelopreservation
and Reduced Use of Supportive Care with Trilaciclib in Patients with
Small Cell Lung Cancer [Poster Presentation]. Presented at: American
Society of Clinical Oncology (ASCO). May 2020.
\164\ Ferrarotto R, Anderson I, Medgyasszay B, et al.
Trilaciclib reduces the need for growth factors and red blood cell
transfusions to manage chemotherapy-induced myelosuppression. [Oral
Presentation]. Presented at: North America Conference on Lung
Cancer, October 2020. https://naclc2020.iaslc.org/program-at-a-glance/.
---------------------------------------------------------------------------
We invite public comments as to whether trilaciclib meets the
substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
trilaciclib.
f. Ellipsys[supreg] Vascular Access System
Avenu Medical, Inc. submitted an application for new technology
add-on payments for the Ellipsys[supreg] Vascular Access System
(``Ellipsys'') for FY 2022. Ellipsys is a device that enables
percutaneous creation of an arteriovenous fistula (AVF), which is used
to access the bloodstream for hemodialysis for the treatment of end-
stage renal disease (ESRD). According to the applicant, to create the
fistula, a physician inserts a crossing needle through the perforating
vein and into the proximal radial artery in the forearm. A specialized
catheter is then used to bring the artery and vein together. The two
vessels are ``welded'' together with thermal resistance energy,
creating an anastomosis. According to the applicant, the only means of
creating an AVF was through open surgery before the approval of
Ellipsys, and percutaneous AVF (pAVF) offers a number of advantages
over surgical AVF (sAVF).
With respect to the newness criterion, the applicant for Ellipsys
received 510(k) clearance from the FDA on August 9, 2019, with an
indication for the creation of a proximal radial artery to perforating
vein anastomosis via a retrograde venous access approach in patients
with a minimum vessel diameter of 2.0mm and less than 1.5mm of
separation between the artery and vein at the fistula creation site who
have chronic kidney disease requiring dialysis.\165\ The subject of
this 510(k) clearance was an update to the Instructions for Use (IFU)
to allow an additional procedural step for balloon dilation of the
anastomosis junction at the radial artery and adjacent outflow vein of
the AVF immediately after creation with the Ellipsys catheter. Per the
applicant, the device was immediately available on the market. The
applicant further stated that the device was originally approved under
a De Novo clearance on June 22, 2018. Ellipsys also received two
additional 510(k) clearances dated January 25, 2019 (minor change in
the packaging of components) and October 5, 2018 (minor technological
differences in the power control unit and minor enhancements to the
catheter design) but the applicant states they are not regarded as
material for this application. The FDA has classified Ellipsys as a
Class II device under the generic name percutaneous catheter for
creation of an arteriovenous fistula for hemodialysis access. The
applicant stated that currently, two ICD-10-PCS codes identify
procedures using Ellipsys: 031B3ZF (Bypass right radial artery to lower
arm vein, percutaneous approach); and 031C3ZF (Bypass left radial
artery to lower arm vein, percutaneous approach). However, since these
codes also identify the WavelinQTM EndoAVF System
(``WavelinQ''), another percutaneous fistula device, Avenu Medical
submitted a code request for a unique ICD-10-PCS code to distinctly
identify Ellipsys beginning in FY 2022. The applicant stated this
technology was first assigned HCPCS code C9754 on January 1, 2019,
which was then replaced by HCPCS code G2170 on July 1, 2020. Per the
applicant, WavelinQ was assigned HCPCS codes (C9755 replaced by G2171)
with the same timing, and the codes for the 2 pAVF technologies are
differentiated by the use of thermal resistance energy for Ellipsys and
the use of radiofrequency energy for WavelinQ.
---------------------------------------------------------------------------
\165\ U.S. Food and Drug Administration (FDA). Center for
Devices and Radiological Health. 510(k) Summary No. K1191114. 2019.
Retrieved from: https://www.accessdata.fda.gov/cdrh_docs/pdf19/K191114.pdf.
---------------------------------------------------------------------------
The applicant stated that hemodialysis access for the treatment of
ESRD can be provided by catheter, graft, or AVF, of which AVF is
generally preferred for patients whose vascular anatomy and condition
permit it. Per the applicant, the only method for creating an AVF was
through an open surgical approach until the introduction of Ellipsys
and WavelinQ, two devices that use a percutaneous approach.
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that Ellipsys uses a new mechanism of action
compared to its initial clearance. Per the applicant, the current
device included an additional step in the IFU, creating a different
procedure profile and a different mechanism of action. The applicant
states that the addition of this step, a balloon angioplasty performed
within the same operative session as the creation of the pAVF, instead
of days or weeks later, typically contributes to decreased time to
maturation, improved initial flow, and helps avoid early thrombosis of
the newly-created access, in addition to decreasing the number of
secondary procedures required for maturation and maintenance. According
to the applicant, the explicit inclusion of the step in the IFU, where
it was not previously explicitly included, represents a new mechanism
of action.
With respect to the second criterion, whether a product is assigned
to the same or different MS-DRG, the applicant generally stated that
Ellipsys is assigned to the same MS-DRGs as existing technologies.
According to information provided by the applicant,
[[Page 25245]]
these MS-DRGs appear to be MS-DRGs 264, 356, 357, 358, 628, 629, 630,
673, 674, 675, 907, 908, 909, 981, 982, and 983. With respect to the
third criterion, whether the new use of the technology involves the
treatment of the same or similar type of disease and the same or
similar patient population, the applicant generally stated that
Ellipsys will be used to treat the same or similar type of disease and
the same or similar patient population as the current standard-of-care
treatments.
In summary, the applicant believes that Ellipsys is not
substantially similar to other currently available therapies and/or
technologies because it uses a new mechanism of action and that
therefore, the technology meets the ``newness'' criterion. However, we
believe that the mechanism of action for Ellipsys may be the same or
similar to the original version of the Ellipsys system, which received
FDA approval on June 22, 2018. Though the current IFU includes an
additional procedure as part of the index procedure, it is not clear
that this step of balloon angioplasty done concurrently changes the
mechanism of action of the Ellipsys system. Per the FDA's 510(k)
summary, compared to the predicate device, there were no changes to the
device or the manner in which it creates a percutaneous anastomosis,
and other than the additional procedural step of balloon dilation, all
characteristics remain unchanged.\166\ In addition, clinicians were not
precluded from performing this step before the change in the IFU, and
in fact, balloon dilation was already performed during the index
procedure in some cases.\167\ Though the applicant maintains that
performing this additional step in all cases, as opposed to some, leads
to superior clinical outcomes, we are unclear if this has any bearing
on newness for this technology or if it represents a change in the
mechanism of action of this device. We note that if the current device
is substantially similar to the original version of Ellipsys, we
believe the newness period for this technology would begin on June 22,
2018 with the De Novo approval date and, therefore, because the 3-year
anniversary date of the technology's entry onto the U.S. market (June
22, 2021) would occur in FY 2021, the technology would no longer be
considered new and would not be eligible for new technology add-on
payments for FY 2022. We welcome public comments on whether the change
in the Ellipsys IFU represents a change to the device's mechanism of
action.
---------------------------------------------------------------------------
\166\ U.S. Food and Drug Administration (FDA). Center for
Devices and Radiological Health. 510(k) Summary No. K1191114. 2019.
Retrieved from: https://www.accessdata.fda.gov/cdrh_docs/pdf19/K191114.pdf.
\167\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
Creation for Hemodialysis Access,'' Journal of Vascular and
Interventional Radiology 2018; 29: 149-158.
---------------------------------------------------------------------------
We also note that differences in mechanism of action between
Ellipsys and WavelinQ were not included. We note that CMS stated in the
FY 2021 IPPS/LTCH PPS final rule (85 FR 58702) that WavelinQ uses a
unique mechanism of action that differed from that of other
commercially available devices.
We are inviting public comments on whether Ellipsys is
substantially similar to other currently available therapies and/or
technologies and whether this technology meets the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion.
The applicant searched the FY 2019 MedPAR claims data file with the
FY 2019 IPPS/LTCH PPS final rule correction notice IPPS Impact File to
identify potential cases representing patients who may be eligible for
treatment using the Ellipsys. The applicant stated that currently,
there are two ICD-10-PCS procedure codes that describe percutaneous AVF
in the radial artery: 031B3ZF (Bypass right radial artery to lower arm
vein, percutaneous approach) and 031C3ZF (Bypass left radial artery to
lower arm vein, percutaneous approach). The applicant stated that these
codes are not specific to percutaneous AVF formation using thermal
energy. We note that the applicant submitted a request for approval for
a unique ICD-10-PCS code for the use of the Ellipsys beginning FY 2022.
The applicant stated that if the procedure were reported with the
previously mentioned procedure codes, Ellipsys would be mapped to the
following MS-DRGs:
[GRAPHIC] [TIFF OMITTED] TP10MY21.149
The applicant added that ICD-10 codes 031B3ZF and 031C3ZF were new
effective October 1, 2019 and therefore do not appear in the 2019
claims data. According to the applicant, the most common MS-DRGs for
patients admitted with chronic kidney disease and who received an open
procedure for creation of an AVF are shown below.
[[Page 25246]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.150
The applicant has not made a request for Ellipsys to be mapped to a
new MS-DRG for FY 2022.
The applicant stated that claims which had a diagnosis code for
Chronic Kidney Disease (CKD) stage IV, CKD stage V, or ESRD and which
included an open bypass of the subclavian artery to upper arm vein or
the radial artery to lower arm vein during the same stage were included
in the cost analysis. The applicant stated they used the following ICD-
10 codes in their analysis to identify claims.
[GRAPHIC] [TIFF OMITTED] TP10MY21.151
Cases mapping to the top five MS-DRGs by volume were selected,
which resulted in 689 cases or 79% of case volume.
The applicant determined an average unstandardized case weighted
charge per case of $91,190.
The applicant did not remove charges for prior technology because
the cases identified included an open procedure that is not performed
using a specific device. However, the applicant stated that all charges
for the operating room (OR) were removed as the procedures involving
the technology would not always be performed in an OR. The applicant
stated that departmental charges were standardized using the factors
from the standardization file released with the FY 2021 final rule. The
applicant then standardized the charges using the FY 2019 Final Rule
with Correction Notice Impact File. Next, the applicant applied the 2-
year inflation factor used in the FY 2021 IPPS/LTCH PPS final rule to
calculate outlier threshold charges (1.13218). To calculate the charges
for the technology, the applicant used the national average CCR for the
Supplies and Equipment cost center of 0.297 from the FY 2021 IPPS/LTCH
PPS final rule. The applicant added charges for other items and
services related to the technology; half of the average departmental
charges for the OR removed in a prior step were added back to the per
case charge, by MS-DRG, as procedures using the technology would
sometimes be performed in an OR. The applicant calculated a final
inflated average case-weighted standardized charge per case of
$119,158, which exceeded the average case-weighted threshold amount of
$91,190 by $27,967. The applicant stated that because the final
inflated average case-weighted standardized charge per case exceeded
the average case-weighted threshold amount, the therapy meets the cost
criterion.
We note that the applicant used claims with open subclavian artery
bypass to upper arm vein, in addition to radial lower arm fistulas, as
a proxy for Ellipsys cases. The applicant stated that Ellipsys may
provide an alternative to these cases in some instances where AVF
placement in the radial arteries is possible but the surgeons are
unfamiliar with the procedure. However, we question if these are the
most appropriate proxy, as Ellipsys should not replace radiocephalic
fistulas, per standard guidelines that recommend wrist fistulas first;
and it would be more likely that surgeons would use Ellipsys over upper
arm fistulas than a subclavian fistula, which is used rarely in
standard practice.
We are inviting public comments on whether the Ellipsys[supreg]
Vascular Access System meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that the Ellipsys[supreg] Vascular Access System
represents a substantial clinical improvement over existing
technologies. Broadly, the applicant outlined three comparators with
respect to which it asserted Ellipsys provides a substantial clinical
improvement: (1) Percutaneous AVF with the WavelinQTM (4F)
EndoAVF System; (2) percutaneous AVF (pAVF) with the prior version of
Ellipsys; and (3) surgical AVF (sAVF).
With respect to the first comparison, Ellipsys as compared to
WavelinQ, the applicant stated that Ellipsys has improved outcomes
including technical success and cumulative patency. The applicant cited
the following to support superiority of Ellipsys over WavelinQ: (1)
Higher fraction of cases with clinically functional AVFs; (2) speedier
maturation; (3) more durable AVFs; and (4) smaller failure rate.
According to the applicant, no head-to-head clinical trial is
available, but they provided one retrospective study that provides a
direct comparison between the two pAVF systems to support their claims.
Shahverdyan et al. performed a retrospective review of 100 patients
undergoing percutaneous fistula creation at a single site in Germany
between December 2017 and December 2019 to compare outcomes with pAVF
[[Page 25247]]
creation using the Ellipsys and WavelinQ systems.\168\ In this single-
operator, comparative case series, 65 Ellipsys procedures and 35
WavelinQ procedures were completed, following a procedure sequence
algorithm for selecting the type of vascular access. Per the study,
wrist sAVF was the first choice as per standard practice guidelines,
followed by proximal forearm pAVF, resulting in 100 pAVFs using
Ellipsys (n=65) and WavelinQ (n=35). Demographics for the study
patients included 69 percent male and median age of 64.1 years. There
were no significant differences between WavelinQ and Ellipsys patients
in age, Body Mass Index (BMI), Chronic Kidney Disease (CKD) status, AVF
history, or presence of diabetes, though the WavelinQ group had a
higher proportion of males. The primary endpoints were technical
success, time to maturation, functional patency, and time to first
clinical use, and median follow-up was 186.5 days. The study reported
technical success, defined as post-procedure ultrasound examination
demonstrating a patent anastomosis and fistula flow, with Ellipsys at
100 percent vs. 97 percent with WavelinQ (p=0.35). Interventions were
performed in approximately 27 percent of cases for both technologies,
and the number of interventions per patient-year was 0.96 vs. 0.46,
respectively.
---------------------------------------------------------------------------
\168\ Shahverdyan et al., ``Comparison of Outcomes of
Percutaneous Arteriovenous Fistulae Creation by Ellipsys and
WavelinQ Devices,'' Journal of Vascular and Interventional Radiology
2020; 31(9): 1365-1372. (Published on-line August 11, 2020.)
---------------------------------------------------------------------------
Per the applicant, the study demonstrated a higher fraction of
cases with clinically functional AVFs using Ellipsys, as fistula
maturation at four weeks was 68.3 percent with Ellipsys vs. 54.3
percent with WavelinQ (p=0.1709), and at the end of the study period,
83.3% and 71.4% respectively. In addition, the applicant stated that
successful dialysis access was achieved in 79.5 percent of Ellipsys
cases vs. 60.9 percent for WavelinQ cases among patients on dialysis
(p=0.0711). The applicant also stated that the study demonstrated that
Ellipsys results in speedier maturation with Ellipsys demonstrating a
median time to cannulation of 60 days vs. 90 days with WavelinQ
(p=0.3676). Next, the applicant stated that use of Ellipsys
demonstrated more durable AVFs, with a secondary patency rate (the time
from fistula creation to fistula abandonment, including any
interventions) at 12 months of 82 percent as compared to 60 percent
with WavelinQ, and a functional patency rate of 100% vs 85.7%,
respectively. We note that primary patency (the time from fistula
creation to the first intervention) between groups was not
significantly different. Lastly, access failure occurred in 15.4
percent of Ellipsys patients vs 37.1 percent of WavelinQ patients
(p=0.0137), which demonstrated that use of Ellipsys results in a
smaller failure rate, according to the applicant.
With regard to the second comparison, Ellipsys compared to the
previous version of the technology, the applicant states that since the
IFU dated 8/9/19 now states that balloon angioplasty should be
performed at the time of the creation procedure, they believe that
Ellipsys should be considered a different device. Per the applicant,
this subtle difference is of key clinical importance to successful use
of Ellipsys, as this method decreases the time to two-needle
cannulation (2NC) and also improves initial flow, resolving vascular
spasm at the time of the procedure and reducing early thrombosis. The
applicant further states that performing balloon angioplasty 100
percent of the time also decreases the number of secondary procedures.
To support these claims, the applicant compared results from the
Ellipsys pivotal trial that used the earlier IFU, in which angioplasty
was performed simultaneously on 19% of patients, with the Ellipsys
post-market registry that implemented the change and performed the
additional step on 100% of patients.
Ellipsys's pivotal trial was a prospective, single-arm, non-
inferiority study of 107 patients at five sites to compare Ellipsys
with a 90-day performance goal based on a meta-analysis of surgical
results from the literature.\169\ Inclusion criteria included vascular
anatomy specific to the indications for Ellipsys, age between 18 and 80
years old, and CKD stage IV or V. Exclusion criteria included recent
surgery or major illness within 6 weeks, acute or active infection, and
use of immunosuppressive medication. Of 261 patients evaluated, a total
of 117 met inclusion and exclusion criteria, with 28 percent excluded
due to unsuitable anatomy. 107 were included in the intent to treat
(ITT) population after each study site completed 2 proctored
procedures. Demographics included 73 percent male, mean patient age of
56.7 years, and mean BMI of 31.2 percent. All patients in the ITT
population received a pAVF with Ellipsys between the proximal radial
artery and perforating vein, followed by separate maturation
procedures. The primary efficacy endpoint of the study was maturation
success, defined as brachial artery flow volume greater than or equal
to 500ml/min and target vein diameter greater than or equal to 4mm in
more than 49 percent of patients at 90 days. This performance goal was
obtained from a meta-analysis of 8 studies of open sAVF, where the
weighted least squares mean success rate was 62 percent, and the lower
bound from a 2-sided 95 percent lower confidence interval was 49
percent. The primary safety endpoint was the absence of device-related
complications at 90 days. Access failure occurred in 4/107, with a
technical success rate of 95 percent. The primary endpoint was met by
86 percent at 90 days (the 97.5 percent lower confidence interval was
77.9 percent), exceeding the 49 percent performance goal (p<0.0001).
Cumulative patency was 91.6 percent at 90 days and 86.7 percent at 1
year. During the 12-month study, 88 percent of the patients on
hemodialysis (71 of 81) had successful 2-needle cannulation, including
63 patients on dialysis at enrollment and 18 who initiated dialysis
during the study. The mean time to cannulation was 114.3 days 66.2 (34-345 days). Per the authors, spasm of the perforating
vein was easily treated with vasodilators and balloon dilation as a
matter of routine care. Nineteen percent of patients (20/107) received
balloon dilation during the index procedure, and second stage
maturation procedures included 113 balloon dilations in 77 patients. A
total of 205 maturation procedures were performed on 99 patients at a
mean of 35.1 days. An additional 66 maintenance procedures were
performed in 35 patients at a mean of 17 days, for a total of 271
secondary procedures during the 12 months of the study (2.7 per patient
year).
---------------------------------------------------------------------------
\169\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
Creation for Hemodialysis Access,'' Journal of Vascular and
Interventional Radiology 2018; 29: 149-158.et al.,
---------------------------------------------------------------------------
The Ellipsys post-market registry by Hull et al. was a prospective
single-operator study of 60 patients receiving a pAVF with Ellipsys at
a single outpatient US site in an attempt to understand patient
selection, maturation, and cannulation with pAVFs.\170\ Patient
demographics included 57 percent male, mean age of 64, and mean BMI of
30.7. 123 patients with ESRD stages IV and V were evaluated by
ultrasound to determine suitability for AVF. Ninety-two percent were
eligible for sAVF and 61 percent
[[Page 25248]]
were eligible for pAVF. Of the 95 patients who received an AVF, 63
percent (60) received pAVF and 37 percent (35) received sAVF. All 60
pAVF patients underwent pAVF creation under ultrasound guidance,
followed by balloon dilation, as compared to the pivotal trial where
only 19 percent had balloon dilation as part of the index procedure.
After 4 weeks, maturation and suitability for dialysis were assessed.
The fistulas were considered suitable when palpable on examination and
the target vein had 500ml/min flow volume and 5mm diameter. Fifty-two
additional maturation procedures, including balloon dilation in 62
percent, were performed in 40 of 60 patients to achieve adequate flow
volume and diameter in the target vein. Physiologic maturation was
achieved in 93 percent (56 of 60 patients) with a mean time of 40.4
days 4.3, and of the remaining 4 patients, one thrombosed
and three died prior to maturation. In the 54 patients requiring
dialysis, 87 percent achieved 2NC at a mean of 76.8 days. Six month
cumulative patency and functional patency were both 94 percent. 70
maintenance procedures were performed in 63 percent. Only 2 patients
achieved 2NC without an additional procedure. The authors noted that
this study is limited by a modest sample size and single-site study
with surgeons experienced in pAVF creation, and that results were not
compared to surgery.
---------------------------------------------------------------------------
\170\ Hull JE, Deitrick J, Groome K, ``Maturation for
Hemodialysis in the Ellipsys[supreg] EndoAVF Post-Market Registry,''
Journal of Vascular and Interventional Radiology 2020; 31(9): 1373-
1381. (Published on-line August 13, 2020.)
---------------------------------------------------------------------------
According to the applicant, the post-market registry demonstrated
the significant clinical differences between performing balloon
angioplasty as part of the index procedure 19 percent of the time (as
seen in the pivotal trial) compared to 100 percent of the time. The
results showed that the average time to 2NC decreased from 100 days to
70 days. The study also compared initial AVF flow between the studies,
which increased to 649 ml/min from 330.4 ml/min, attributed to the
reduction in instances of venospasm due to balloon dilation.\171\
According to the study investigators, this decrease in venospasm and
higher flow led to a reduction in early thrombosis from 11 percent to 2
percent. Lastly, the applicant compared the number of secondary
procedures between the two studies with the following table:
---------------------------------------------------------------------------
\171\ Hull JE, Deitrick J, Groome K, ``Maturation for
Hemodialysis in the Ellipsys[supreg] EndoAVF Post-Market Registry,''
Journal of Vascular and Interventional Radiology 2020; 31(9): 1373-
1381. (Published on-line August 13, 2020.)
[GRAPHIC] [TIFF OMITTED] TP10MY21.152
Per the applicant, despite the higher standard for maturation in
the second study (5mm target vein diameter vs 4mm in the pivotal
study), the number of maturation procedures decreased, while
maintenance procedures increased. Overall, secondary procedures
decreased with the new protocol, as described in the table submitted by
the applicant.
With respect to the third comparison, Ellipsys as compared to sAVF,
the applicant stated that Ellipsys creates a side-to-side fistula with
a percutaneous approach while sAVFs for the most part create end-to-
side fistulas. According to the applicant, in patients that have
suitable anatomy for pAVF creation, this method of fistula creation
contributes to improved outcomes in five ways: (1) Higher fraction of
cases with clinically functional AVFs; (2) decreased time to two-needle
cannulation; (3) more durable AVFs; (4) decreased need for secondary
interventions; and (5) patient satisfaction with Ellipsys AVFs.
According to the applicant, no head-to-head studies or randomized
trials between Ellipsys and sAVFs are available, and instead, results
of key variables of interest were compared using studies with
comparable results for sAVFs from published literature. The applicant
provided 2 prospective single-arm studies and 5 retrospective studies,
including the studies previously discussed, to support these claims.
They also submitted data from one unpublished study. Aside from the
Ellipsys pivotal trial, the Ellipsys post-market registry, and the
comparison study with WavelinQ already summarized, the remaining
studies are summarized below.
The 2-year results of the pivotal trial were analyzed
retrospectively by Beathard.\172\ 105 patients with 2 year follow-up
data were included, and of these, 103 had functioning fistulas and all
were receiving dialysis except 3. Cumulative patency at 18 and 24
months was 92.8 percent and 91.6 percent, respectively. Patient
experience with pAVF was assessed among those who had received a
previous access procedure (\1/3\). When compared to their previous
procedure, patients rated Ellipsys as the same in 68 percent, better or
much better in 29 percent, and worse in 3 percent. Patients mentioned
difficulty with cannulation due to unfamiliarity of dialysis staff with
pAVF, but commented on the lack of surgical scar and short recovery
time. Among all patients who responded, 93 percent rated their access
as very good or excellent.
---------------------------------------------------------------------------
\172\ Beathard et al., ``Two-year cumulative patency of
endovascular AVF'' JVA 2020; 21: 350-356.
---------------------------------------------------------------------------
A retrospective review of 34 patients who received pAVF between May
2017 and November 2018 at a clinic in France was submitted.\173\
Patients included had ESRD, were not candidates for wrist fistulas, and
met the anatomic criteria for use of Ellipsys. Demographics included
patients that were 58 percent male, 65 percent Caucasian and 35 percent
African, and a mean age of 62 years old. After fistula creation with
Ellipsys, all anastomoses received balloon dilation. Twenty-four of 34
patients had successful 2NC within 6 weeks. Forty-four percent of
patients did not require secondary interventions, and 12 percent
required additional dilation within 4 weeks to improve maturation. Two
patients converted to a surgical fistula due to cannulation
difficulties. No patients developed steal syndrome or aneurysmal
changes in the one year follow-up period. Study authors noted that one
benefit of pAVF over sAVF is the potential for multiple outflow
cannulation veins, as compared to a sAVF in the same location, where
the median cubital vein is ligated to augment flow into a single
vessel.
---------------------------------------------------------------------------
\173\ Hebibi et al, ``Clinical hemodialysis experience with
percutaneous arteriovenous fistulas created using the
Ellipsys[supreg] vascular access system,'' Hemodialysis
International 2019; 23(2): 168-172.
---------------------------------------------------------------------------
Another study provided was a retrospective cohort study of 232
[[Page 25249]]
consecutive patients who underwent pAVF creation with Ellipsys at a
single center in France.\174\ An Ellipsys pAVF was the second choice
after a radiocephalic surgical wrist fistula. Patients were 63 percent
male, with a mean age of 64 years old (25-92). Balloon angioplasty was
considered part of the index procedure and performed in all cases.
Technical success was achieved in 99 percent. At 1 year, the primary
patency rate was 54 percent and the secondary patency rate was 96
percent with a mean follow up of 252 days. The most frequent
intervention (35 percent of patients) was additional balloon
angioplasty. Eleven percent of patients underwent procedures for
superficialization of deep veins. Average maturation time by clinical
or ultrasound criteria was 4 weeks, and successful cannulation was
established in less than 2 weeks in 10 percent of patients. No
significant adverse events related to the procedures occurred. Three
patients (1 percent) required later conversion to sAVF, two due to
occlusion of the anastomosis and one due to rupture of the perforator
during an angioplasty procedure and pseudoaneurysm. The authors
conclude that pAVFs have reduced need for reinterventions and result in
a moderate-flow fistula with shared venous drainage. They further state
that minimally invasive AVF creation with the low risk of complications
seen using Ellipsys can be particularly beneficial in older patients,
especially since the lower flow fistula as compared to brachial artery
inflow AVFs decreases the risk of cardiac issues. They conclude that
large-scale randomized studies are needed to confirm their findings.
---------------------------------------------------------------------------
\174\ Mallios et al., ``Mid-term results of percutaneous
arteriovenous fistula creation with Ellipsys vascular access system,
technical recommendations and an algorithm for maintenance,''
Journal of Vascular Surgery 2020; 72(6): 2097-2106. (Published on-
line April 7, 2020.).
---------------------------------------------------------------------------
In another study, a case series of 14 patients who achieved early
cannulation with an Ellipsys pAVF underwent retrospective review at an
outpatient department in Europe.\175\ In these patients, cannulation
within 14 days post creation was performed using plastic cannulas in
order to avoid catheter insertion or replacement for dialysis. The
procedure was successful in all except one case. Primary patency at 12
months was 66 percent and cumulative patency was 100 percent, with the
authors concluding that this success suggests that pAVF could serve as
an alternative to catheter for immediate dialysis.
---------------------------------------------------------------------------
\175\ Mallios et al., ``Early cannulation of percutaneously
created AVFs'', Journal of Vascular Access 2020; 21(6): 997-1002.
(Published on-line December 19, 2019.)
---------------------------------------------------------------------------
The applicant also submitted preliminary unpublished results from a
3-year follow up of 99 of the pivotal trial patients, stating that
while Ellipsys AVFs required more maturation procedures, in the 2 years
following creation they required fewer maintenance procedures as
compared to results for sAVF reported in the literature, with an
average of 0.83 vs. 3.41, respectively. Additionally, they stated that
at every follow-up period, Ellipsys showed improved cumulative patency
over sAVF results from the literature, with rates of 90 percent vs 46
percent at 36 months.
The applicant summarized results from all of the studies to support
each claim of Ellipsys's superiority over sAVF by comparing to
historical controls in the literature. For the claim of more clinically
functional AVFs, the applicant summarized results from 4 studies,
demonstrating 2NC in 88 percent at one year and 95 percent at 2 years,
87 percent with an average follow up of 282 days, and 82 percent within
6 weeks.176 177 178 179 This was compared to a value of 53.4
percent successful cannulation for sAVF from a study that looked at the
effect of age over 65 on clinical outcomes for radiocephalic and
brachiocephalic AVF.\180\ For the claim of decreased time to 2NC, the
applicant summarized the results from 5 studies, demonstrating a mean
time to 2NC for Ellipsys of 100.2 days, 65.5 45.7 days, a
range of 10 days to 6 weeks, 4 weeks, and 60
days.181 182 183 184 185 This was compared to a mean of 136
days for sAVFs, taken from the United States Renal Data System.\186\
For the claim of more durable AVFs, the applicant summarized results
from 5 studies demonstrating Ellipsys's cumulative patency at 12
months, ranging from 82 percent to 100 percent, and 91.6 percent at 24
months.187 188 189 190 The applicant compared these results
to a patency rate of 65 percent for sAVFs found in the USRDS
database.\191\ The applicant further stated that preliminary results
from the pivotal trial 3 year follow-up reinforce this claim, as they
found that the cumulative patency using Ellipsys was 90 percent at 36
months, compared to a historical value of 46 percent for sAVFs. For the
claim of decreased secondary interventions (including maturation and
maintenance procedures), the applicant summarized outcomes from 3
studies demonstrating 0.96 secondary interventions per patient year in
the study by Shahverdyan et al.; 2.63 interventions per year in the
pivotal trial; and an average of 0.83 maintenance inventions per
patient in the 2 years following creation in the preliminary results of
the 3 year follow-up by Hull et al. The applicant stated that a
comparable value for sAVFs is
[[Page 25250]]
3.41 over 2 years.\192\ Finally, for the claim of patient satisfaction,
the applicant cited results of the patient survey performed by Beathard
et al., stating that the survey indicated a high level of satisfaction
with Ellipsys, with 93 percent rating their access as very good or
excellent, and 95 percent rating their lack of pain as very good or
excellent. Additionally, patients noted the lack of scar, short
recovery time, and ease of use with Ellipsys.\193\
---------------------------------------------------------------------------
\176\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
Creation for Hemodialysis Access,'' Journal of Vascular and
Interventional Radiology 2018; 29: 149-158.
\177\ Beathard GA, et al., ``Two-year cumulative patency of
endovascular arteriovenous fistula,'' Journal of Vascular Access
2020; 21: 350-356.
\178\ Hull JE, Deitrick J, Groome K, ``Maturation for
Hemodialysis in the Ellipsys[supreg] EndoAVF Post-Market Registry,''
Journal of Vascular and Interventional Radiology 2020; 31(9): 1373-
1381. (Published on-line August 13, 2020.)
\179\ Hebibi H, et al., ``Clinical hemodialysis experience with
percutaneous arteriovenous fistulas created using the
Ellipsys[supreg] vascular access system,'' Hemodialysis
International 2019; 23(2): 16 8-172.
\180\ Weale A, et al., ``Radiocephalic and Brachiocephalic
Arteriovenous Fistula Outcomes in the Elderly,'' Journal of Vascular
Surgery 2008; 47(1): 144-150.
\181\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
Creation for Hemodialysis Access,'' Journal of Vascular and
Interventional Radiology 2018; 29: 149-158.
\182\ Hull JE, Deitrick J, Groome K, ``Maturation for
Hemodialysis in the Ellipsys[supreg] EndoAVF Post-Market Registry,''
Journal of Vascular and Interventional Radiology 2020; 31(9): 1373-
1381. (Published on-line August 13, 2020.)
\183\ Hebibi H, et al., ``Clinical hemodialysis experience with
percutaneous arteriovenous fistulas created using the
Ellipsys[supreg] vascular access system,'' Hemodialysis
International 2019; 23(2): 168-172.
\184\ Mallios A, Bourquelot P, Franco G, et al., ``Mid-term
results of percutaneous arteriovenous fistula creation with Ellipsys
vascular access system, technical recommendations and an algorithm
for maintenance,'' Journal of Vascular Surgery 2020; 72(6): 2097-
2106. (Published on-line April 7, 2020.)
\185\ Shahverdyan R, et al., ``Comparison of Outcomes of
Percutaneous Arteriovenous Fistulae Creation by Ellipsys and
WavelinQ Devices,'' Journal of Vascular and Interventional Radiology
2020; 31(9): 1365-1372. (Published on-line August 11, 2020.)
\186\ United States Renal Data System. 2016 USRDS Annual Data
Report: Epidemiology of kidney disease in the United States.
National Institutes of Health, National Institute of Diabetes and
Digestive and Kidney Diseases, Bethesda, MD, 2016.
\187\ Beathard GA, et al., ``Two-year cumulative patency of
endovascular arteriovenous fistula,'' Journal of Vascular Access
2020; 21: 350-356.
\188\ Mallios A, Bourquelot P, Franco G, et al., ``Mid-term
results of percutaneous arteriovenous fistula creation with Ellipsys
vascular access system, technical recommendations and an algorithm
for maintenance,'' Journal of Vascular Surgery 2020; 72(6): 2097-
2106. (Published on-line April 7, 2020.)
\189\ Shahverdyan R, et al., ``Comparison of Outcomes of
Percutaneous Arteriovenous Fistulae Creation by Ellipsys and
WavelinQ Devices,'' Journal of Vascular and Interventional Radiology
2020; 31(9): 1365-1372. (Published on-line August 11, 2020.)
\190\ Mallios A, et al., ``Early cannulation of percutaneously
created arteriovenous hemodialysis fistulae,'' Journal of Vascular
Access 2020; 21(6): 997-1002. (Published on-line December 19, 2019.)
\191\ Al-Jaishi, Ahmed A., et al. ``Patency rates of the
arteriovenous fistula for hemodialysis: a systematic review and
meta-analysis.'' American Journal of Kidney Diseases (2014) 63(3):
464-47.
\192\ Lee T, et al., ``Long-Term Outcomes of Arteriovenous
Fistulas with Unassisted versus Assisted Maturation: A Retrospective
National Hemodialysis Cohort Study,'' Journal on American Nephrology
2019; 30(11):2209-2218.
\193\ Beathard GA, et al., ``Two-year cumulative patency of
endovascular arteriovenous fistula,'' Journal of Vascular Access
2020; 21: 350-356.
---------------------------------------------------------------------------
We note that only one of the studies submitted by the applicant in
support of a finding of substantial clinical improvement for Ellipsys
has a comparator arm (retrospective comparison), and none were created
with a methodology to demonstrate superiority. In addition, some
studies may be limited by potential bias due to single operator and/or
single site design, and comparisons to sAVF were made using various
historical controls from different studies with no statistical
analyses, making it difficult to account for confounding variables. We
further note that the studies used physiologic endpoints as a surrogate
outcome for fistula maturity instead of a clinically functional fistula
as determined by successful 2-needle cannulation. Of interest, a number
of the studies submitted concluded that there is a further need for
head-to-head, larger scale, or longer trials to confirm claims of
superiority of pAVF over surgical AVF and other pAVF devices. We note
that the applicant provided one retrospective study with a small sample
size to support the claim of superiority of Ellipsys over WavelinQ.
Though this study by Shahverdyan et al. demonstrated numerically better
outcomes for multiple endpoints with Ellipsys, we note that outcomes
did not reach statistical significance for primary patency, technical
success, maturation rates, time to cannulation, or fistula success, and
we note the potential for bias with the single operator/single site
study design.
We note that the decreased interventions and time to 2NC using
Ellipsys were reported from studies performed outside of the US, where
practice patterns are different. Per the Hull et al. study, practice in
the US is to direct flow into a single upper arm vein to meet
established guidelines for fistula flow diameter depth and length,
whereas in the European studies, multiple outflow veins were
accepted.\194\ The authors further state that allowing multiple outflow
veins decreases the number of secondary maturation procedures used to
direct flow, but requires advanced cannulation techniques, ultrasound
guidance, and plastic access cannulas that are not available in the US.
These techniques and the use of plastic cannulas also allow for early
cannulation of the fistula in European studies. For these reasons, we
question whether the European results are generalizable to the US
population.
---------------------------------------------------------------------------
\194\ Hull et al., ``Maturation for Hemodialysis in the Ellipsys
EndoAVF Post-Market Registry,'' Journal of Vascular and
Interventional Radiology 2020; 31(9): 1373-1381. (Published on-line
August 13, 2020.)
---------------------------------------------------------------------------
When comparing the new protocol for Ellipsys (always performing
balloon angioplasty) to the De Novo protocol (sometimes performing
balloon angioplasty), Ellipsys demonstrated a reduced number of
maturation procedures and faster time to cannulation; however, more
maintenance procedures were required than the De Novo protocol. In
addition, the investigators did not account for potential confounding
variables between the different studies, which could have affected
outcomes in order to compare the two studies used to claim superiority.
We further note that previously, balloon angioplasty was nearly always
performed, whether as part of the index procedure, as a maturation
procedure, or as a maintenance procedure, and it continued to be a
necessary secondary intervention after adoption of the new procedural
step.
We are inviting public comments on whether the Ellipsys[supreg]
Vascular Access System demonstrates improvement over each of the three
comparators and meets the substantial clinical improvement criterion.
We received public comments in response to the New Technology Town
Hall meeting regarding the application of the Ellipsys[supreg] Vascular
Access System for new technology add-on payments.
Comment: The applicant submitted a public comment providing an
additional study and addressing questions posed at the town hall
meeting. The study provided is a single-center retrospective comparison
article in press of Ellipsys and sAVF by Harika et al. 107 patients who
received pAVF with Ellipsys at this center between May 2017 and May
2018 were compared to an equal number of consecutive patients who
received a surgical fistula in the same time period. Patients with
grafts or lower extremity fistulae were excluded and baseline
characteristics and demographics were comparable between groups. All
pAVFs were created by a single surgeon, while the sAVFs were created by
4 surgeons. Primary outcomes were primary and secondary patency rates,
as well as maturation as determined by AVF utilization, or >4mm
diameter and >500ml/lt flow for pre-dialysis patients. Secondary
outcomes assessed secondary interventions and rate of complications.
Per the applicant, at 6 weeks, pAVF maturation rates were higher
compared to the sAVF arm (65 percent vs 50 percent, p=0.01). In
addition, primary patency in the sAVF group was higher than pAVF at 12
months (86 percent vs 61 percent, p<0.01) but comparable at 24 months
(52 percent vs 55 percent, p=0.48), and secondary patency rates were
not significantly different between groups at 12 or 24 months. Rates of
secondary interventions were divided between percutaneous and surgical
interventions. At 2 years, the rate of percutaneous reinterventions was
similar but the sAVFs required more surgical revisions (36% vs. 17%).
Differences in total interventions between groups did not reach
statistical significance at 12 and 24 months. The study authors
conclude that pAVF's better aesthetic result, short procedure time, and
ability to perform easily in an outpatient office procedure center
indicates that Ellipsys has many benefits, but large prospective
randomized multicenter studies are needed to confirm the outcomes
demonstrated in this study.\195\
---------------------------------------------------------------------------
\195\ Harika G, et al., ``Comparison of surgical versus
percutaneously created arteriovenous hemodialysis fistulae,''
Journal of Vascular Surgery 2020; accepted for publication December
5, 2020, in press.
---------------------------------------------------------------------------
In response to a question regarding the need for a head-to-head
comparison between WavelinQ and Ellipsys to determine superiority, the
applicant stated that there are no randomized controlled trials
available but the study (summarized previously) by Shahverdyan et al.
provides a reasonable comparison of the two. Per the applicant, the
algorithm to choose which procedure to perform reflected ``real-world''
choices, and the results demonstrated that Ellipsys offers substantial
clinical improvement over WavelinQ. In response to a comment
questioning the available 2-year data using the current version of
Ellipsys, the applicant stated that the 2-year follow up study
(Beathard et al.) of the pivotal trial captured results of patients
treated with immediate angioplasty, as that was done in 19 percent of
patients even
[[Page 25251]]
before the procedural change. The applicant further stated that the
current version of Ellipsys differs only by the addition of this
procedural step, and studies after the pivotal trial adopted this
practice to better results, with this combination of results indicating
that the balloon angioplasty step improves outcomes over a multi-year
period. In addition, the applicant stated that the Harika et al. study
(summarized previously) had a 2-year study period, and all patients had
immediate balloon angioplasty. In response to a question regarding the
comparability of pAVF in the proximal radial artery with a sAVF in the
same location, the applicant stated though they are created
differently, they are functionally comparable once mature, and neither
typically requires superficialization.
Next, in response to a question regarding what the fewer short-term
complications using Ellipsys are as compared to sAVF, the applicant
stated that these include lower wound morbidity due to minimal
incisions, fewer aneurysms, avoidance of vasospasm, and lower incidence
of clinically significant steal syndrome. The applicant stated that in
sAVF, clinically significant steal syndrome can occur in as many as 11
percent of cases, but it is rare in reports of pAVFs placed with
Ellipsys. The applicant summarized information on complications with
Ellipsys from the studies previously discussed and stated that (1)
Harika et al \196\ reported that sAVFs had a substantially higher rate
of wound healing and infections, as well as more occurrences of steal
syndrome and aneurysm; (2) Hull et al's prospective safety and efficacy
study \197\ examined possible complications in detail and most
complications did not appear at all; (3) the Ellipsys pivotal trial
\198\ reported no complications due to vessel perforation, dissection,
or distal embolization were reported; (4) in the Hull et al. Maturation
Study,\199\ several adverse events were reported including one
hematoma, one arm swelling, and one case of steal syndrome; and (5)
Mallios et al's report on mid-term results \200\ reported no
complications, other than cases treated with balloon angioplasty and
one case of arm swelling.
---------------------------------------------------------------------------
\196\ Harika G, et al., ``Comparison of surgical versus
percutaneously created arteriovenous hemodialysis fistulae,''
Journal of Vascular Surgery 2020; accepted for publication December
5, 2020, in press.
\197\ Hull JE, Elizondo-Riojas G, et al., ``Thermal resistance
anastomosis device for the percutaneous creation of arteriovenous
fistulae for hemodialysis,'' Journal of Vascular and Interventional
Radiology 2017; 28: 380-387.
\198\ Hull JE, Jennings W, et al., ``The Pivotal Multicenter
Trial of Ultrasound-Guided Percutaneous Arteriovenous Fistula
Creation for Hemodialysis Access,'' Journal of Vascular and
Interventional Radiology 2018; 29: 149-158.
\199\ Hull et al., ``Maturation for Hemodialysis in the Ellipsys
EndoAVF Post-Market Registry,'' Journal of Vascular and
Interventional Radiology 2020; 31(9): 1373-1381. (Published on-line
August 13, 2020.)
\200\ Mallios et al., ``Mid-term results of percutaneous
arteriovenous fistula creation with Ellipsys vascular access system,
technical recommendations and an algorithm for maintenance,''
Journal of Vascular Surgery 2020; 72(6): 2097-2106. (Published on-
line April 7, 2020.)
---------------------------------------------------------------------------
The applicant also addressed a final question in its public comment
regarding the definition of improved durability. The applicant stated
that this is an umbrella term used to reflect the useful life of an AVF
for dialysis, and can include different patency measures.
Response: We thank the applicant for its comments and will take
this information into consideration when deciding whether to approve
new technology add-on payments for the Ellipsys[supreg] Vascular Access
System. With regard to the Harika et al. study provided, we note that
prespecified subgroup analyses of pAVF vs elbow fistulae (e-AVF) and
pAVF vs wrist fistulae were also compared, with elbow fistula
considered to be the most similar comparator to ``real world'' vascular
access practice patterns. When comparing outcomes between e-AVF and p-
AVF groups in this study, differences in total interventions,
maturation at 6 weeks, and secondary patency rates were not
significantly different. e-AVF also demonstrated higher 12 month
primary patency (p=0.02). We further note that though the applicant
asserted that Ellipsys decreases the need for secondary interventions
as compared to sAVF, this study did not demonstrate a statistically
significant difference between arms for total interventions at 12 or 24
months, and we are concerned that this may not demonstrate a
substantial clinical improvement for Ellipsys over sAVF.
Comment: Another public comment was submitted in response to the
Town Hall meeting. The commenter stated that during the FY 2022 New
Technology Town Hall Meeting, Avenu Medical relied upon a single
published study to support claims of substantial clinical improvement
for Ellipsys over WavelinQ. Per the commenter, this study indicated
that limitations of the review include those of any retrospective
analysis on nonrandomized data and possible selection bias.\201\ Per
the commenter, the authors of the study concluded that both of the
devices had high technical success rates and adequate flow volumes, as
well as no significant difference in primary patency, and that the
devices may serve different patient populations, since patients can be
anatomically eligible for one or the other. The commenter concludes
that it is important that both technologies are available as treatment
options for Medicare beneficiaries and they believe CMS should consider
new technology add-on payments for the two pAVF systems together. They
also stated that CMS should designate a new technology add-on payment
category for devices used in percutaneous creation of an AVF.
---------------------------------------------------------------------------
\201\ Shahverdyan R., et al. ``Comparison of Outcomes of
Percutaneous Arteriovenous Fistulae Creation by Ellipsys and
WavelinQ Devices,'' Journal of Vascular and Interventional Radiology
2020; 31(9): 1365-1372. (Published on-line August 11, 2020.)
---------------------------------------------------------------------------
Response: We thank the commenter for their input and will take this
information into consideration when deciding whether to approve new
technology add-on payments for the Ellipsys[supreg] Vascular Access
System. We note that we are unclear with regard to the commenter's
request for a new technology add-on payment category, as the IPPS
payment system does not utilize categories, and this request may be
referring to another payment system.
g. ENSPRYNG\TM\ (satralizumab-mwge)
Genentech, Inc. submitted an application for new technology add-on
payments for the ENSPRYNG\TM\ (satralizumab-mwge) injection (ENSPRYNG)
for FY 2022. According to the applicant, ENSPRYNG is indicated by the
FDA for the treatment of neuromyelitis optica spectrum disorder (NMOSD)
in adult patients who are anti-aquaporin-4 (AQP4) antibody positive.
ENSPRYNG is the first subcutaneous, first self-administered, and third
FDA-approved drug for the treatment of this severe chronic autoimmune
disease of the central nervous system.\202\ The applicant states, due
to the severity of relapses, relapse prevention is a key disease
management priority. Patients who relapse are often admitted to the
hospital for acute treatment. According to the applicant, with every
relapse, patients are at risk of becoming blind or paralyzed, and thus
it is critical to minimize the risk of future relapses by initiating
maintenance treatment with a therapy such as ENSPRYNG in a timely
manner while the patient is still
[[Page 25252]]
admitted. Therefore, according to the applicant, ENSPRYNG should be
approved for new technology add-on payments in order to maximize the
likelihood that this especially sick patient population can start the
treatment they need while in the inpatient setting.
---------------------------------------------------------------------------
\202\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020. SOLIRIS (eculizumab)
[prescribing information]. Boston, MA: Alexion Pharmaceuticals,
Inc.; 2019. UPLIZNA (inebilizumab) [prescribing information].
Gaithersburg, MD: Viela Bio, Inc.; 2020.
---------------------------------------------------------------------------
According to the applicant, NMOSD is a rare, inflammatory,
potentially life-threatening autoimmune central nervous system (CNS)
disorder characterized primarily by severe, unpredictable relapses of
optic neuritis and/or acute longitudinally extensive transverse
myelitis (LETM).\203\ The applicant asserts that NMOSD has an estimated
prevalence of 0.1-10 per 100,000 individuals, affecting nearly 15,000
individuals in the United States.\204\ NMOSD occurs in children \205\
and adults \206\ of all races \207\ and disproportionately affects
African and Asian females aged 30 to 40 years.\208\ According to the
applicant, the (bilateral) optic neuritis and/or LETM that are
characteristic of NMOSD result from inflammation of the optic nerve,
spinal cord,\209\ and brainstem,\210\ but other regions of the CNS may
be affected as well. The vast majority of patients (80%-90%) experience
repeated relapses, and disability accumulates with each relapse.\211\
Around 60% of patients relapse within one year of diagnosis, and 90%
relapse within 3 years.\212\ Compared with patients who experience an
isolated attack, patients with relapsing disease have greater disease-
related clinical burden, and upward of 83% of patients do not fully
recover after subsequent relapses.\213\
---------------------------------------------------------------------------
\203\ Jarius S, Ruprecht K, Wildemann B, et al. Contrasting
disease patterns in seropositive and seronegative neuromyelitis
optica: A multicentre study of 175 patients. J. Neuroinflammation
2012;9(1) doi:10.1186/1742-2094-9-14.
\204\ Flanagan EP, Cabre P, Weinshenker BG, et al. Epidemiology
of Aquaporin-4 Autoimmunity And Neuromyelitis Optica Spectrum. Ann
Neurol. 2016;79(5):775-783. doi:10.1002/ana.24617.
\205\ Siegel Rare Neuroimmune Association. Neuromyelitis Optica
Spectrum Disorder (NMOSD). https://wearesrna.org/living-with-myelitis/disease-information/neuromyelitis-optica-spectrum-disorder/diagnosis/#nmosd. Accessed August 19, 2020.
\206\ Etemadifar M, Nasr Z, Khalili B, Taherioun M, Vosoughi R.
Epidemiology of Neuromyelitis Optica in the World: A Systematic
Review and Meta-analysis. Mult Scler Int. 2015;2015:174720.
doi:10.1155/2015/174720.
\207\ Simon KC, Schmidt H, Loud S, Ascherio A. Risk Factors For
Multiple Sclerosis, Neuromyelitis Optica And Transverse Myelitis.
Mult Scler. 2015;21(6):703-709. doi:10.1177/1352458514551780.
\208\ Wingerchuk DM, Lennon VA, Lucchinetti CF, et al. The
spectrum of neuromyelitis optica. Lancet Neurol. 2007;6(9)805-815.
doi:10.1016/s1474-4422(07)70216-8.
\209\ Siegel Rare Neuroimmune Association. Neuromyelitis Optica
Spectrum Disorder (NMOSD). https://wearesrna.org/living-with-myelitis/disease-information/neuromyelitis-optica-spectrum-disorder/diagnosis/#nmosd. Accessed August 19, 2020.
\210\ National Organization for Rare Disorders (NORD[supreg]).
Neuromyelitis Optica Spectrum Disorder. https://rarediseases.org/rare-diseases/neuromyelitis-optica/. Accessed August 19, 2020.
\211\ Wingerchuk DM. Diagnosis and Treatment of Neuromyelitis
Optica. Neurologist 2007;13(1)2-11. doi:10.1097/
01.nrl.0000250927.21903.f8.
\212\ Wingerchuk DM, Lennon VA, Lucchinetti CF, et al. The
spectrum of neuromyelitis optica. Lancet Neurol. 2007;6(9)805-815.
doi:10.1016/s1474-4422(07)70216-8.
\213\ Jarius S, Ruprecht K, Wildemann B, et al. Contrasting
disease patterns in seropositive and seronegative neuromyelitis
optica: A multicentre study of 175 patients. J. Neuroinflammation
2012;9(1) doi:10.1186/1742-2094-9-14.
---------------------------------------------------------------------------
According to the applicant, the negative impact of NMOSD on patient
quality of life (QoL) is predominantly a result of physical disability,
pain, vision impairment, and bowel and bladder dysfunction.\214\
Disease-induced disability and symptoms have a considerable impact on
patients' ability to work and thrive in social activities and personal
relationships.\215\ The applicant added that the loss of motor and
sensory function leads to approximately 50% of patients requiring a
wheelchair \216\ and 62% of patients becoming functionally blind \217\
within 5 years of diagnosis.\218\ Therefore, according to the
applicant, it is critical that treatments that consistently and
effectively reduce the risk of relapse are initiated rapidly in
patients diagnosed with NMOSD.
---------------------------------------------------------------------------
\214\ Beekman J, Keisler A, Pedraza O, et al. Neuromyelitis
optica spectrum disorder. Neurol.-Neuroimmunol. Neuroinflammation
2019;6(4)e580. doi:10.1212/nxi.0000000000000580.
\215\ Ibid.
\216\ Kessler RA, Mealy MA, Levy M. Treatment of Neuromyelitis
Optica Spectrum Disorder: Acute, Preventive, and Symptomatic. Curr.
Treat. Options Neurol. 2015;18(1) doi:10.1007/s11940-015-0387-9.
\217\ Wingerchuk DM, Hogancamp WF, O'Brien PC, et al. The
clinical course of neuromyelitis optica (Devic's syndrome).
Neurology 2012;53(5)1107-1107. doi:10.1212/wnl.53.5.1107.
\218\ Wingerchuk DM, Weinshenker BG. Neuromyelitis optica:
Clinical predictors of a relapsing course and survival. Neurology
2012;60(5)848-853. doi:10.1212/01.wnl.0000049912.02954.2c.
---------------------------------------------------------------------------
With respect to the newness criterion, ENSPRYNG received FDA BLA
approval on August 14, 2020. The applicant added that ENSPRYNG was
granted Fast Track designation \219\ and Breakthrough Therapy
designation \220\ by the FDA. The applicant stated that ENSPRYNG was
not commercially available until August 24, 2020 because the applicant
had to wait for final approval for printing and labeling as well as
customs and importation. The recommended loading dosage of ENSPRYNG for
the first three administrations is 120 mg by subcutaneous injection at
Weeks 0, 2, and 4, followed by a maintenance dosage of 120 mg every
four weeks. The applicant submitted a request for an ICD-10-PCS code to
uniquely identify the administration of ENSPRYNG beginning FY 2022.
---------------------------------------------------------------------------
\219\ US Department of Health and Human Services. FDA Approves
Treatment for Rare Disease Affecting Optic Nerves, Spinal Cord.
https://www.fda.gov/news-events/press-announcements/fda-approves-treatment-rare-disease-affecting-optic-nerves-spinal-cord. Accessed
September 10, 2020.
\220\ Genentech, USA Inc. FDA Approves Genentech's Enspryng for
Neuromyelitis Optica Spectrum Disorder. https://www.gene.com/media/press-releases/14873/2020-08-14/fda-approves-genentechs-enspryng-for-neu. Accessed September 10, 2020.
---------------------------------------------------------------------------
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposed of new technology add-on payments. The applicant stated
that there are limited treatment guidelines available for NMOSD with
the most recent US guidelines published in 2012. These US NMOSD
treatment guidelines exclusively recommend off-label drugs:
Azathioprine, with or without prednisone; mycophenolate mofetil, with
or without prednisone; rituximab; or prednisone alone.\221\ The
applicant stated that there are presently two other FDA-approved
therapies for patients with AQP4-IgG positive NMOSD: SOLIRIS
(eculizumab),\222\ which was approved in 2019, and UPLIZNA
(inebilizumab-cdon), which was approved in 2020.\223\
---------------------------------------------------------------------------
\221\ Kimbrough DJ, Fujihara K, Jacob A, et al. Treatment of
Neuromyelitis Optica: Review And Recommendations. Mult Scler Relat
Disord. 2012;1(4):180-187. doi:10.1016/j.msard.2012.06.002.
\222\ SOLIRIS (eculizumab) [prescribing information]. Boston,
MA: Alexion Pharmaceuticals, Inc.; 2019.
\223\ UPLIZNA (inebilizumab) [prescribing information].
Gaithersburg, MD: Viela Bio, Inc.; 2020.
---------------------------------------------------------------------------
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome, the
application stated that ENSPRYNG is an interleukin-6 (IL-6) receptor
antagonist indicated for the treatment of NMOSD in adult patients who
are AQP4-IgG positive.\224\ According to the applicant, ENSPRYNG
targets soluble and membrane-bound IL-6 receptors to inhibit IL-6
signaling and subsequently disrupt downstream inflammatory
[[Page 25253]]
effects that contribute to the pathophysiology of NMOSD; \225\ ENSPRYNG
dissociates from the IL-6 receptor at an acidic pH within endosomes and
is recycled to circulation, prolonging the plasma half-life of the
drug.\226\
---------------------------------------------------------------------------
\224\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020.
\225\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
\226\ Igawa T, Ishii S, Tachibana T, et al. Antibody Recycling
By Engineered Ph-Dependent Antigen Binding Improves The Duration of
Antigen Neutralization. Nat Biotechnol. 2010;28(11):1203-1207.
doi:10.1038/nbt.1691. Heo Y. Satralizumab: First Approval. Drugs
2020;80(14)1477-1482. doi:10.1007/s40265-020-01380-2.
---------------------------------------------------------------------------
The applicant next identified other drugs used to treat NMOSD and
their corresponding mechanisms of action. According to the applicant,
these current treatments include: SOLIRIS, for which a precise
mechanism of action is unknown but is presumed to involve inhibition of
AQP4-IgG-induced terminal complement C5b-9 deposition; \227\ UPLIZNA,
for which a precise mechanism of action is unknown but is presumed to
involve binding to CD19, a surface antigen present on pre-B and mature
B cells; \228\ azathioprine, for which a precise mechanism of action is
unknown; \229\ Rituxan, which targets CD20 antigen on B cells and leads
to profound B cell depletion, principally over an antibody-dependent
cell cytotoxicity mechanism; \230\ mycophenolate mofetil, which is an
immunosuppressive and an inhibitor of inosine monophosphate
dehydrogenase and therefore of the guanosine nucleotide synthesis
pathway upon which T and B cells depend; \231\ and prednisone, which is
a synthetic adrenocortical steroid drug with predominately
corticosteroid properties.\232\ The applicant concluded that none of
these current drugs are characterized by their binding and blocking of
soluble and membrane-bound IL-6 receptors to inhibit IL-6 signaling.
Therefore, the applicant believes ENSPRYNG has a unique and distinct
mechanism of action.
---------------------------------------------------------------------------
\227\ SOLIRIS (eculizumab) [prescribing information]. Boston,
MA: Alexion Pharmaceuticals, Inc.; 2019.
\228\ UPLIZNA (inebilizumab) [prescribing information].
Gaithersburg, MD: Viela Bio, Inc.; 2020.
\229\ IMURAN (azathioprine) [prescribing information]. Roswell,
GA: Sebela Pharmaceuticals Inc.; 2018.
\230\ RITUXAN (rituximab) [prescribing information]. South San
Francisco, CA: Genentech, Inc.; 2019.
\231\ Allison AC, Eugui EM. Mycophenolate Mofetil And Its
Mechanisms of Action. Immunopharmacology 2000;47(2-3)85-118.
doi:10.1016/s0162-3109(00)00188-0.
\232\ RAYOS (prednisone) [prescribing information]. Lake Forest,
IL: Horizon Therapeutics USA, Inc.; 2019.
---------------------------------------------------------------------------
With respect to the second criterion, whether a product is assigned
to the same or different MS-DRG, the applicant acknowledged that
ENSPRYNG may be assigned to the same MS-DRG when compared to existing
technology. Per the applicant, cases representing patients who may be
eligible for treatment with ENSPRYNG map to MS-DRGs 058, 059, and 060.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
stated that the use of ENSPRYNG may not involve the treatment of the
same or similar patient population when compared with an existing
technology because: (1) Current technologies such as SOLIRIS may be
contraindicated in patients with unresolved serious Neisseria
meningitidis infections; and (2) SOLIRIS and UPLIZNA are administered
as IV infusions which not all patients may be willing to receive.
In summary, the applicant asserts ENSPRYNG meets the newness
criterion because it is the only treatment for NMOSD that works
specifically by suppressing IL-6 signaling, and because it may not
involve the treatment of the same or similar patient population as
existing technology. We note that the applicant states that the use of
ENSPRYNG may not involve treatment of the same or similar patient
population when compared to SOLIRIS with regard to the treatment of
patients with unresolved serious Neisseria meningitidis infection and
with regard to the treatment of patients unwilling to receive an IV
infusion. However, we question if UPLIZNA may also be a treatment
option for patients with meningococcal disease. We further question
whether patients who are unwilling to receive an IV infusion would
constitute a new patient population for NMOSD. We invite public comment
on whether ENSPRYNG involves the treatment of the same or similar
patient population when compared to existing technologies.
We are inviting public comments on whether ENSPRYNG is
substantially similar to other technologies and whether ENSPRYNG meets
the newness criterion. With regard to the cost criterion, the applicant
provided two cost analyses, with the first being an update of the
analysis used in FY 2021 by the applicant for SOLIRIS, which is also
indicated for NMOSD, and the second which is specific to ENSPRYNG.
Under the first analysis, the applicant searched the FY 2019 MedPAR
database for cases reporting ICD-10-CM code G36.0 in the primary and/or
admitting position, which resulted in 583 cases. The applicant imputed
one case where an MS-DRG had a case volume lower than 11, resulting in
556 cases mapping to 30 MS-DRGs. The applicant stated that it
restricted the analysis to MS-DRGs 058, 059, and 060, which accounted
for 92.1% of all cases identified. The applicant also excluded cases
that were not included in the FY 2021 Proposed Rule Impact File from
this analysis, resulting in a final case count of 466 cases mapping to
three MS-DRGs. Using a CCR of 0.343 (national other services average
CCR), the applicant then removed all charges in the drug cost center,
all charges in the blood cost center, and an additional $12,000 of cost
for plasma exchange procedural costs for cases with non-zero charges in
the blood cost center, for charges for related and prior technologies.
The applicant applied an inflation factor of 13.1%, which per the
applicant is the outlier charge inflation factor used in the FY 2021
IPPS/LTCH PPS final rule, to update the standardized charges from FY
2019 to FY 2021. We note that the applicant appears to have used the FY
2021 IPPS/LTCH PPS proposed rule inflation factor rather than the 2-
year inflation factor from the FY 2021 IPPS/LTCH PPS final rule of 13.2
percent (85 FR 59038), which would have increased the inflated charges.
Finally, the applicant added charges for the technology by multiplying
the cost of ENSPRYNG, based on an average of 1.22 doses per patient, by
the inverse of the national average drug CCR of 0.187 from the FY 2021
IPPS/LTCH PPS final rule (85 FR 58601). The applicant calculated a
final inflated average case-weighted standardized charge per case of
$150,154, which exceeds the case-weighted threshold of $47,813.
For the second analysis, the applicant used the same sample of
cases (466) from the first analysis, as identified in the FY 2019
MedPAR database with the ICD-10-CM code G36.0 and with the same sample
restrictions. In this analysis, the applicant did not remove charges
for related or prior technologies because, per the applicant, ENSPRYNG
is anticipated to neither replace plasma exchange nor be used as a
monotherapy in all patients. The applicant standardized and inflated
the charges, as well as added charges for ENSPRYNG using the same
methodology as the first analysis, described previously. The applicant
calculated a final inflated
[[Page 25254]]
average case-weighted standardized charge per case of $175,021, which
exceeded the case-weighted threshold of $47,813. The applicant asserted
that ENSPRYNG meets the cost criterion based on these analyses.
Based on the information provided by the applicant, it is uncertain
to us why the national other services average CCR was used to inflate
costs to charges in the first analysis when the applicant indicated
that it removed charges from the drugs cost center and blood cost
center. We are seeking public comment on whether this or another CCR,
such as a CCR for drugs or blood and blood products, would be more
appropriate. Furthermore, in the event that a MS-DRG has fewer than 11
cases, the applicant should impute a minimum case number of 11. We are
inviting public comments on whether ENSPRYNG meets the cost criterion,
including whether the use of another CCR would substantially alter the
results of the applicant's analysis.
With regard to the substantial clinical improvement criterion, the
applicant asserts that ENSPRYNG represents a substantial clinical
improvement in the following ways: (1) It significantly improves
clinical outcomes relative to services or technologies previously
available for the treatment of NMOSD in adult patients who are AQP4-IgG
positive; (2) these improvements are not accompanied by serious safety
concerns; (3) ENSPRYNG is the only FDA-approved treatment for NMOSD
that is subcutaneously administered; \233\ and (4) the totality of
circumstances demonstrates ENSPRYNG, relative to technologies
previously available, substantially improves the treatment of Medicare
beneficiaries. The applicant submitted two recent studies to support
their claims of substantial clinical improvement over existing
technologies.
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\233\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020.
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The SAkuraStar (NCT02073279) \234\ study was a Phase 3, double-
blind, placebo-controlled, parallel-group trial at 44 investigational
sites in 13 countries to assess the safety and efficacy of ENSPRYNG
monotherapy in patients with NMOSD. 95 (57%) of 168 screened
participants aged 18-74 years with AQP4-IgG positive or negative NMOSD
met the inclusion criteria and were randomly assigned (2:1) to
treatment with ENSPRYNG 120mg (n=63) or visually matched placebo
(n=32). Inclusion criteria included participants who had experienced at
least one documented NMOSD attack or relapse in the previous 12 months
and had a score of 6.5 or less on the Expanded Disability Status Scale,
while exclusion criteria included clinical relapse 30 days or fewer
before baseline. The primary endpoint was time to the first protocol-
defined relapse, based on the intention-to-treat (ITT) population
(AQP4-IgG positive and negative) (n=95), and analyzed with
stratification for two randomization factors (previous therapy for
prevention of attacks and nature of the most recent attack). Treatment
in both arms was given subcutaneously at weeks 0, 2, 4, and every 4
weeks thereafter. The double-blind phase was due to last until 44
protocol-defined relapses occurred or 1.5 years after random assignment
of the last patient enrolled, whichever occurred first. Participants
could enter an open-label phase after the occurrence of a protocol-
defined relapse or at the end of the double-blind phase. Protocol-
defined relapses occurred in 19 (30%) patients receiving satralizumab
and 16 (50%) receiving placebo (hazard ratio 0.45, 95% CI 0.23-0.89;
p=0.018). 473.9 adverse events per 100 patient-years occurred in the
satralizumab group and 495.2 per 100 patient-years in the placebo
group. The authors noted that the incidence of serious adverse events
and adverse events leading to withdrawal was similar between groups.
---------------------------------------------------------------------------
\234\ Traboulsee A, Greenberg BM, Bennett JL, et al. Safety And
Efficacy of Satralizumab Monotherapy In Neuromyelitis Optica
Spectrum Disorder: A Randomised, Double-Blind, Multicentre, Placebo-
Controlled Phase 3 Trial. Lancet Neurol. 2020;19(5):402-412.
doi:10.1016/S1474-4422(20)30078-8.
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According to the applicant, this study demonstrated that the time
to the first relapse was significantly longer in ENSPRYNG-treated
patients compared with patients who received a placebo (risk reduction,
55%; hazard ratio, 0.45 (95% CI 0.23, 0.89); p = 0.0184). In the AQP4-
IgG positive population, there was a 74% risk reduction and a hazard
ratio of 0.26 (95% CI 0.11, 0.63; p = 0.0014). The results in the
subgroup of AQP4-IgG negative patients were not statistically
significant.235 236 The annualized relapse rate for AQP4-IgG
positive patients was 0.1 (95% CI, 0.05-0.2) in the ENSPRYNG group and
0.5 (95% CI, 0.3-0.9) in the placebo group.\237\ The proportion of
relapse-free AQP4-IgG positive patients at week 96 was 77% in the
ENSPRYNG group and 41% in the placebo group.\238\ According to the
applicant, the study concluded that ENSPRYNG monotherapy reduced the
rate of NMOSD relapse compared with placebo in the overall trial
population and had a favorable safety profile.
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\235\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020. Traboulsee A, et al.
Efficacy of satralizumab monotherapy in prespecified subgroups of
SAkuraStar, a phase 3 study in patients with neuromyelitis optica
spectrum disorder. Oral Presentation at: Annual Americas Committee
for Treatment and Research in Multiple Sclerosis (ACTRIMS) Forum;
West Palm Beach, FL, USA; February 27-29, 2020.
\236\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020. Traboulsee A, et al.
Efficacy of satralizumab monotherapy in prespecified subgroups of
SAkuraStar, a phase 3 study in patients with neuromyelitis optica
spectrum disorder. Oral Presentation at: Annual Americas Committee
for Treatment and Research in Multiple Sclerosis (ACTRIMS) Forum;
West Palm Beach, FL, USA; February 27-29, 2020.
\237\ Traboulsee A, et al. Efficacy of satralizumab monotherapy
in prespecified subgroups of SAkuraStar, a phase 3 study in patients
with neuromyelitis optica spectrum disorder. Oral Presentation at:
Annual Americas Committee for Treatment and Research in Multiple
Sclerosis (ACTRIMS) Forum; West Palm Beach, FL, USA; February 27-29,
2020.
\238\ Traboulsee A, Greenberg BM, Bennett JL, et al. Safety And
Efficacy of Satralizumab Monotherapy In Neuromyelitis Optica
Spectrum Disorder: A Randomised, Double-Blind, Multicentre, Placebo-
Controlled Phase 3 Trial. Lancet Neurol. 2020;19(5):402-412.
doi:10.1016/S1474-4422(20)30078-8.
---------------------------------------------------------------------------
In the second Phase 3, randomized, double-blind, placebo controlled
study submitted by the applicant, the SAkuraSky (NCT02028884) \239\
trial, 83 patients with NMOSD who were seropositive or seronegative for
AQP4-IgG were randomly assigned (1:1) to receive either 120 mg of
satralizumab (n=41) or placebo (n=42) administered subcutaneously at
weeks 0, 2, and 4 and every 4 weeks thereafter, in addition to stable
IST. The primary end point was the first protocol-defined relapse in a
time-to-event analysis. Key secondary end points were the change from
baseline to week 24 in the visual-analogue scale (VAS) pain score
(range, 0 to 100, with higher scores indicating more pain) and the
Functional Assessment of Chronic Illness Therapy-Fatigue (FACIT-F)
score (range, 0 to 52, with lower scores indicating more fatigue).
Safety was also assessed.
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\239\ US Department of Health and Human Services. Active Study
Neuromyelitis Optica Spectrum Disorder. https://clinicaltrials.gov/ct2/results?cond=&term=NCT02028884&cntry=&state=&city=&dist=. Accessed
August 14, 2020.
---------------------------------------------------------------------------
The results of the SAkuraSky trial demonstrated that the median
treatment duration with satralizumab in the double-blind period was
107.4 weeks. Relapse occurred in 8 patients (20%) receiving
satralizumab and in 18 (43%) receiving placebo (hazard ratio, 0.38; 95%
confidence interval [CI], 0.16 to 0.88). Multiple imputations for
censored data (including patients who discontinued the trial, received
rescue therapy, had a change in baseline treatment, or were continuing
in the
[[Page 25255]]
trial at the data-cutoff date) resulted in hazard ratios ranging from
0.34 to 0.44 (with corresponding P values of 0.01 to 0.04). Among the
55 AQP4-IgG-seropositive patients, relapse occurred in 11% of those in
the satralizumab group and in 43% of those in the placebo group (hazard
ratio, 0.21; 95% CI, 0.06 to 0.75); among 28 AQP4-IgG-seronegative
patients, relapse occurred in 36% and 43%, respectively (hazard ratio,
0.66; 95% CI, 0.20 to 2.24). The between-group difference in the change
in the mean VAS pain score was 4.08 (95% CI, -8.44 to 16.61); the
between-group difference in the change in the mean FACIT-F score was -
3.10 (95% CI, -8.38 to 2.18). The rates of serious adverse events and
infections did not differ between groups.
In support of the applicant's claim that ENSPRYNG significantly
improves clinical outcomes relative to services or technologies
previously available for the treatment of NMOSD in adult patients who
are AQP4-IgG positive, the applicant stated that patients treated with
ENSPRYNG plus IST exhibited a significantly longer time to first
relapse when compared to placebo. This also included a risk reduction
of 62% in patients treated with ENSPRYNG plus IST when compared with
patients who received a placebo plus IST and a 79% risk reduction in
the AQP4-IgG positive population. Results in the AQP4-IgG negative
patient subgroup were not statistically significant.\240\ The
proportion of relapse free AQP4-IgG positive patients at week 96 was
92% in ENSPRYNG plus IST group and 53% in the placebo plus IST
group.\241\
---------------------------------------------------------------------------
\240\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020.
\241\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
---------------------------------------------------------------------------
According to the applicant's second claim, substantial improvements
in clinical efficacy are not accompanied by serious concerns. In the
SAkuraSky trial, 90% of patients in the ENSPRYNG plus IST group had at
least one adverse event compared to 95% in the placebo plus IST
group.\242\ The safety profile of ENSPRYNG in the OST period was
consistent with the double-blind period. There were no deaths or
anaphylactic reactions, rates of AEs and serious AEs did not increase
with longer exposure to ENSPRYNG; and the most frequently reported AEs
in the OST period were consistent with the double-blind period.\243\
---------------------------------------------------------------------------
\242\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
\243\ Greenberg B, Seze JD, Fox E. et al. Safety of satralizumab
in neuromyelitis optica spectrum disorder (NMOSD): Results from the
open-label extension periods of SAkuraSky and SAkuraStar
Presentation at: Americas Committee for treatment and research in
Multiple Sclerosis (ACTRIMS); September 2020; Virtual.
---------------------------------------------------------------------------
The applicant's third claim concerns the flexibility provided to
patients by the option to self-administer ENSPRYNG. According to the
applicant, ENSPRYNG is the only FDA-approved treatment for NMOSD that
is administered subcutaneously.\244\ Once treatment is initiated during
inpatient hospital admission, upon discharge and having received
adequate training on how to perform the injection, an adult patient/
caregiver may administer all subsequent doses of ENSPRYNG at home if
the treating physician determines that it is appropriate and the adult
patient/caregiver can perform the injection technique. According to the
applicant, self-administration provides the patient the option to
continue the therapy initiated in the hospital while in the convenience
of their own home, with reduced disruption to daily life. The applicant
states that additionally, the option to self-administer provides
flexibility to patients, as they can bring their medication with them
while traveling without having to worry if there is an infusion site
nearby. The applicant claims this may potentially reduce the rate of
hospital readmissions.
---------------------------------------------------------------------------
\244\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020.
---------------------------------------------------------------------------
In their fourth claim, the applicant states the totality of
circumstances otherwise demonstrate that ENSPRYNG, relative to
technologies previously available, substantially improves the treatment
of Medicare beneficiaries. The applicant asserts that a cross trial
comparison between ENSPRYNG and SOLIRIS (approved for new technology
add-on payment in FY 2021) cannot be made due to differences in trial
design and study population. However, the applicant noted the following
distinctions between ENSPRYNG and SOLIRIS and their clinical trials.
Per the applicant, the first distinction is that in the registrational
study for SOLIRIS, a higher proportion of patients receiving SOLIRIS
than those receiving a placebo discontinued their participation in the
clinical trial (17% vs 6%).\245\ During the double-blind period of
SAkuraSky trial, however, a total of three patients (7%) in the
ENSPRYNG group and 10 patients (24%) in the placebo group discontinued
the trial agent.\246\ The applicant states that discontinuation of
SOLIRIS may be associated with relapse and hospitalization. The second
distinction made by the applicant is that the prescribing information
for ENSPRYNG \247\ does not bear a black-box warning, in contrast to
that of SOLIRIS.\248\ The third distinction is that patients must be
vaccinated against Neisseria meningitidis before receiving SOLIRIS
\249\ and no such requirement applies to ENSPRYNG.\250\ The fourth and
final distinction made by the applicant highlights duration of
treatment. In the SAkuraSky trial, the mean period of treatment in the
double-blind period was 94.172.6 weeks in the ENSPRYNG
group and 66.061.4 weeks in the placebo group.\251\
However, the median trial durations were shorter in the SOLIRIS trial,
at 90.93 and 43.14 weeks (minimum-maximum, 6.4-211.1 and 8.0-208.6) for
the SOLIRIS and placebo groups, respectively.\252\
---------------------------------------------------------------------------
\245\ Pittock SJ, Berthele A, Fujihara K, et al. Eculizumab in
Aquaporin-4-Positive Neuromyelitis Optica Spectrum Disorder. N.
Engl. J. Med. 2019;381(7)614-625. doi:10.1056/nejmoa1900866.
\246\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
\247\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020.
\248\ SOLIRIS (eculizumab) [prescribing information]. Boston,
MA: Alexion Pharmaceuticals, Inc.; 2019.
\249\ SOLIRIS (eculizumab) [prescribing information]. Boston,
MA: Alexion Pharmaceuticals, Inc.; 2019.
\250\ ENSPRYNG (satralizumab) [prescribing information]. South
San Francisco, CA: Genentech USA, Inc.; 2020.
\251\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
\252\ Pittock SJ, Berthele A, Fujihara K, et al. Eculizumab in
Aquaporin-4-Positive Neuromyelitis Optica Spectrum Disorder. N.
Engl. J. Med. 2019;381(7)614-625. doi:10.1056/nejmoa1900866.
---------------------------------------------------------------------------
In connection with the applicant's fourth claim to support
substantial clinical improvement, the applicant stated that both the
SAkuraStar \253\ and SAkuraSky \254\ clinical trials included
comparator arms. In SAkuraStar, an exclusion criterion was IST use,
whereas in SAkuraSky, patients were permitted to continue baseline
treatment with a stable dose of the IST agents in addition to the trial
drug. This allowed the efficacy of ENSPRYNG to be assessed both in
patients who were
[[Page 25256]]
receiving one of the IST agents for their NMOSD and in the others who
were receiving nothing at all. The applicant stated that in contrast,
SOLIRIS was tested only in a single Phase 3 clinical trial where the
primary end point was the first adjudicated relapse in the population
of patients taking stable-dose IST and either SOLIRIS or placebo; the
efficacy of SOLIRIS monotherapy was a sub analysis,\255\ and UPLIZNA
was tested only in a single Phase 3 clinical trial as a monotherapy
with only a 28-week randomized, controlled period.\256\ According to
the applicant, ENSPRYNG has received approval by regulatory authorities
in Japan,\257\ Canada, and Switzerland \258\ for the treatment of both
adults and adolescents (12-17 years of age) with NMOSD. The applicant
asserts that patients in the ENSPRYNG clinical trials likely are
representative of Medicare patients despite their mean ages (45.3 years
for the ENSPRYNG arm of SAkuraStar \259\ and 40.8 years for the
ENSPRYNG arm of SAkuraSky \260\) being less than 65, as NMOSD is so
severe that patients may qualify for disability accompanied by Medicare
benefits regardless of their age.\261\ The applicant explained that a
severe onset attack causing increased disability is reported to occur
in 45% of patients with NMOSD \262\ and that 52.4% of US-based NMOSD
patients report severe problems with mobility,\263\ which is consistent
with definitions of disability used by the Social Security
Administration (SSA).\264\ Per the applicant, SSA maintains a list of
impairments considered severe enough to prevent gainful activity.
Though NMOSD is not listed, multiple sclerosis (MS) is,\265\ and the
two conditions are frequently confused due to similarities between
clinical presentations.\266\ According to the applicant, the SSA is
open to allowing people to qualify for disability by showing their
condition is as severe as one that is on the list.\267\
---------------------------------------------------------------------------
\253\ Traboulsee A, Greenberg BM, Bennett JL, et al. Safety And
Efficacy of Satralizumab Monotherapy In Neuromyelitis Optica
Spectrum Disorder: A Randomised, Double-Blind, Multicentre, Placebo-
Controlled Phase 3 Trial. Lancet Neurol. 2020;19(5):402-412.
doi:10.1016/S1474-4422(20)30078-8.
\254\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
Med. 2019; 381(22)2114-2124. doi:10.1056/nejmoa1901747.
\255\ Pittock SJ, Berthele A, Fujihara K, et al. Eculizumab in
Aquaporin-4-Positive Neuromyelitis Optica Spectrum Disorder. N.
Engl. J. Med. 2019;381(7)614-625. doi:10.1056/nejmoa1900866.
\256\ Cree BAC, Bennett JL, Kim HJ, et al. Inebilizumab for the
treatment of neuromyelitis optica spectrum disorder (N-MOmentum): a
double-blind, randomised placebo-controlled phase 2/3 trial. Lancet
2019;394(10206)1352-1363. doi:10.1016/s0140-6736(19)31817-3.
\257\ F. Hoffmann-La Roche Ltd. Roche's ENSPRYNG (satralizumab)
Approved In Japan For Adults And Children With Neuromyelitis Optica
Spectrum Disorder. https://www.roche.com/media/releases/med-cor-2020-06-29.htm. Accessed August 14, 2020.
\258\ Heo Y. Satralizumab: First Approval. Drugs
2020;80(14)1477-1482. doi:10.1007/s40265-020-01380-2.
\259\ Traboulsee A, Greenberg BM, Bennett JL, et al. Safety And
Efficacy of Satralizumab Monotherapy In Neuromyelitis Optica
Spectrum Disorder: A Randomised, Double-Blind, Multicentre, Placebo-
Controlled Phase 3 Trial. Lancet Neurol. 2020;19(5):402-412.
doi:10.1016/S1474-4422(20)30078-8.
\260\ Yamamura T, Kleiter I, Fujihara K, et al. Trial of
Satralizumab in Neuromyelitis Optica Spectrum Disorder. N. Engl. J.
Med. 2019;381(22)2114-2124. doi:10.1056/nejmoa1901747.
\261\ Social Security Administration. Medicare Information.
https://www.ssa.gov/disabilityresearch/wi/medicare.htm. Accessed
September 10, 2020.
\262\ Kim S, Mealy MA, Levy M, et al. Racial differences in
neuromyelitis optica spectrum disorder. Neurology 2018;91(22)e2089-
e2099. doi:10.1212/wnl.0000000000006574.
\263\ Mealy MA, Boscoe A, Caro J, et al. Assessment of Patients
with Neuromyelitis Optica Spectrum Disorder Using the EQ-5D. Int. J.
MS Care 2018; 21(3)129-134. doi:10.7224/1537-2073.2017-076.
\264\ Social Security Administration. How You Qualify. https://www.ssa.gov/benefits/disability/qualify.html. Accessed October 2,
2020.
\265\ Social Security Administration. Disability Evaluation
Under Social Security. https://www.ssa.gov/disability/professionals/bluebook/11.00-Neurological-Adult.htm#11_09. Accessed September 10,
2020.
\266\ Etemadifar M, Nasr Z, Khalili B, Taherioun M, Vosoughi R.
Epidemiology of Neuromyelitis Optica In The World: A Systematic
Review And Meta-Analysis. Mult Scler Int. 2015;2015:174720.
doi:10.1155/2015/174720.
\267\ Social Security Administration. How You Qualify. https://www.ssa.gov/benefits/disability/qualify.html. Accessed October 2,
2020.
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After reviewing the information submitted by the applicant as part
of its FY 2022 new technology add-on payment application for ENSPRYNG,
we note that while the applicant provided data comparing ENSPRYNG to
placebo with or without IST, the applicant did not provide data to
demonstrate improved outcomes over existing FDA approved treatments for
NMOSD. While the applicant states reasons why a comparison could not be
made, additional information would help inform our assessment of
whether ENSPRYNG demonstrates a significant clinical improvement over
existing technologies for outcomes such as time to first relapse and
annual relapse rate. In addition, while we understand that there may be
potential benefits related to the self-administrative delivery of
ENSPRYNG, we question if the benefits are related only to the
outpatient administration of the medication and whether they would
demonstrate improved clinical outcomes that represent a substantial
clinical improvement in the inpatient setting. We are inviting public
comments on whether ENSPRYNG meets the substantial clinical improvement
criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for ENSPRYNG.
h. ABECMA[supreg] (idecabtagene vicleucel)
Celgene Corporation, a wholly owned subsidiary of Bristol-Myers
Squibb (BMS), submitted an application for new technology add-on
payment for idecabtagene vicleucel for FY 2022. Idecabtagene viclecuel
is a, B-cell maturation antigen (BCMA)-directed genetically modified
autologous chimeric antigen receptor (CAR) T-cell immunotherapy for the
treatment of adult patients with relapsed or refractory (RR) multiple
myeloma (MM) (RRMM) who have received at least four prior therapies
including an immunomodulatory agent (IMiD), a proteasome inhibitor
(PI), and an anti-CD38 antibody (for example, triple-class-exposed).
Idecabtagene vicleucel is expected to be a 5th line plus (5L+)
treatment.
Multiple myeloma (MM) is typically characterized by the neoplastic
proliferation of plasma cells producing a monoclonal immunoglobulin.
The plasma cells proliferate in the bone marrow and can result in
extensive skeletal destruction with osteolytic lesions, osteopenia,
and/or pathologic fractures. The diagnosis of MM is often suspected
because of one (or more) of the following clinical presentations:
Bone pain with lytic lesions discovered on routine skeletal
films or other imaging modalities
An increased total serum protein concentration and/or the
presence of a monoclonal protein in the urine or serum
Systemic signs or symptoms suggestive of malignancy, such as
unexplained anemia
Hypercalcemia, which is either symptomatic or discovered
incidentally
Acute renal failure with a bland urinalysis or rarely
nephrotic syndrome due to concurrent immunoglobulin light chain (AL)
amyloidosis
It is important to distinguish MM both from other causes of these
clinical presentations and from other plasma cell dyscrasias for the
purposes of prognosis and treatment.\268\ Data from the U.S.
Surveillance, Epidemiology, and End Results (SEER) registry estimate
32,000 new cases of MM and
[[Page 25257]]
13,000 deaths from MM annually in the U.S. This correlates with an
annual incidence of approximately 7 per 100,000 men and women per year.
MM is largely a disease of older adults. The median age at diagnosis is
65 to 74 years. MM is also slightly more frequent in men than in women
(approximately 1.4:1). MM is associated with substantial morbidity and
mortality \269\ and approximately 25% of patients have a median
survival of 2 years or less.\270\ With respect to the newness
criterion, idecabtagene vicleucel received FDA approval on March 26,
2021, and has marketing authorization under the name of Abecma[supreg]
and is indicated for the treatment of adult patients with relapsed or
refractory multiple myeloma after four or more prior lines of therapy,
including an immunomodulatory agent, a proteasome inhibitor, and an
anti-CD38 monoclonal antibody. A single dose of idecabtagene vicleucel
contains a cell suspension of 300 to 460 x 106 CAR T-cells.
---------------------------------------------------------------------------
\268\ Laubauch, J.P. (2021). Multiple myeloma: Clinical
features, laboratory manifestations, and diagnosis. UptoDate.
Available from https://www.uptodate.com/contents/multiple-myeloma-clinical-features-laboratory-manifestations-and-diagnosis?search=multiple%20myeloma&;source=search_result&selectedTit
le=1~150&usage_type=default&display_rank=1.
\269\ R?owan AJ, Allen C, Barac A, et al. Global Burden of
Multiple Myeloma: A Systematic Analysis for the Global Burden of
Disease Study 2016. JAMA Oncol. 2018;4(9):1221-1227. doi:10.1001/
jamaoncol.2018.2128.
\270\ Biran, N., Jagannath, S., Risk Stratification in Multiple
Myeloma, Part 1: Characterization of High-Risk Disease 2013.
Clinical Adv in Hematology & Oncology 11(8); 489-503.
---------------------------------------------------------------------------
The applicant submitted a request for unique ICD-10-PCS codes that
describe the administration of idecabtagene vicleducel at the September
2020 Coordination and Maintenance Committee meeting. The following
codes were approved to describe procedures involving the administration
of idecabtagene vicleucel: XW033L7 (Introduction of idecabtagene
vicleucel immunotherapy into peripheral vein, percutaneous approach,
new technology group 7) and XW043L7 (Introduction of idecabtagene
vicleucel immunotherapy into central vein, percutaneous approach, new
technology group 7). These codes will be effective starting October 1,
2021.
As previously stated, if a technology meets all three of the
substantial similarity criteria as previously described, it would be
considered substantially similar to an existing technology and
therefore would not be considered ``new'' for purposes of new
technology add-on payments.
With respect to whether a product uses the same or a similar
mechanism of action when compared to an existing technology to achieve
a therapeutic outcome, the applicant asserts that idecabtagene
viceleucel does not use the same or similar mechanism of action as
other therapies approved to treat 4L+ RRMM or CAR T-cell therapies
approved to treat different diseases. According to the applicant, with
regard to its mechanism of action, idecabtagene viceleucel is a
chimeric antigen receptor (CAR)-positive T cell therapy targeting B-
cell maturation antigen (BCMA), which is expressed on the surface of
normal and malignant plasma cells. The CAR construct includes an anti-
BCMA scFv-targeting domain for antigen specificity, a transmembrane
domain, a CD3-zeta T cell activation domain, and a 4-1BB costimulatory
domain. Antigen-specific activation of idecabtagene viceleucel results
in CAR-positive T cell proliferation, cytokine secretion, and
subsequent cytolytic killing of BCMA-expressing cells.
According to the applicant, with respect to the non-CAR T-cell
therapies to treat 4L+ RRMM, specifically Xpovio[supreg], Blenrep, and
chemotherapy, idecabtagene vicleucel's mechanism of action is different
because it is a CAR T-cell therapy. The applicant states that the
mechanism of action for Xpovio[supreg] is reversible inhibition of
nuclear export of tumor suppressor proteins (TSPs), growth regulators,
and mRNAs of oncogenic proteins by blocking exportin 1 (XPO1). XPO1
inhibition by Xpovio[supreg] leads to accumulation of TSPs in the
nucleus, reductions in several oncoproteins, such as c-myc (a ``master
regulator'' which controls many aspects of cellular growth regulation
and cellular metabolism) and cyclin D1, cell cycle arrest, and
apoptosis of cancer cells. The applicant states that Blenrep's
mechanism of action is cell destruction via microtubule inhibition,
where the microtubule inhibitor is conjugated to a BCMA-specific
antibody (antibody-drug conjugate). The applicant further states that
the mechanism of action for chemotherapy regimens generally is
disruption of normal processes required for cell survival, such as
deoxyribonucleic acid (DNA) replication and protein synthesis or
degradation.
With respect to the mechanism of action of other currently FDA
approved CAR T-cell therapies, according to the applicant, there are no
other FDA approved CAR T-cell therapies that are indicated for
treatment of RRMM with the same or similar mechanism of action as
idecabtagene vicleucel. The applicant stated that CAR T-cell therapies
employ a unique mechanism of action which modifies the patient's own T-
cell to express a chimeric antigen receptor (CAR) that programs T-cells
to destroy cells that express a specific target. In the case of
idecabtagene vicleucel, this target is BCMA, which is a protein that is
highly expressed on the surface of MM cells making it an ideal target
for the treatment of MM. The applicant asserts that the key feature
that distinguishes idecabtagene vicleucel from CD-19 directed CAR T-
cell therapies is the BCMA targeting domain. According to the
applicant, idecabtagene vicleucel's BCMA targeting domain means that
idecabtagene vicleucel has a completely different mechanism of action
from other currently FDA approved CAR T-cell therapies. In its
application, the applicant asserted that since there are currently no
FDA approved anti-BCMA CAR T-cell therapies, if approved, idecabtagene
vicleucel is the first CAR T-cell therapy approved for the treatment of
RRMM and the only approved CAR T-cell therapy with a BCMA targeting
domain which makes it unique as compared to other currently approved
FDA therapies used to treat RRMM.
With regard to whether a product is assigned to the same DRG when
compared to an existing technology, the applicant stated that it
expects that cases involving the administration idecabtagene vicleucel
will be assigned to the same MS-DRG, MS-DRG 018 (Chimeric Antigen
Receptor (CAR) T-cell Immunotherapy), as other CAR T-cell therapies.
With regard to whether the new use of the technology involves the
treatment of the same or similar type of disease and the same or
similar patient population when compared to an existing technology, the
applicant asserted that, if FDA approved, idecabtagene vicleucel will
be the first and only anti-BCMA CAR T-cell therapy available to treat
RRMM. The applicant further asserted that idecabtagene vicleucel would
be indicated for a broader population than other currently FDA-approved
available therapies, specifically multiple myeloma patients having
received four prior therapies.
In summary, according to the applicant, because idecabtagene
vicleucel has a unique mechanism of action when compared to other
currently FDA approved treatments for RRMM, and does not involve the
treatment of the same or similar type of disease (RRMM) or the same or
similar patient population (triple-class-exposed adult patients with
RRMM), the technology is not substantially similar to an existing
technology and therefore meets the newness criterion. However, we
question whether idecabtagnene vicleucel's mechanism of action may be
similar to that of ciltacabtagene autoleucel, another CAR T-cell
therapy for which an application for new technology add-on payments was
[[Page 25258]]
submitted for FY 2022 as discussed previously. Both idecabtagene
vicleucel and ciltacabtagene autoleucel seem to be intended for similar
patient populations; multiple myeloma patients with three or more prior
therapies, and would involve the treatment of the same conditions;
adult patients with relapsed or refractory multiple myeloma. We are
interested in information on how these two technologies may differ from
each other with respect to the substantial similarity criteria and
newness criterion, to inform our analysis of whether idecabtagene
vicleucel and ciltacabtagne autoleucel, if approved by July 1, 2021,
are substantially similar to each other and therefore should be
considered as a single application for purposes of new technology add-
on payments.
We are inviting public comments on whether idecabtagene vicleucel
is substantially similar to an existing technology and whether it meets
the newness criterion.
With regard to the cost criterion, the applicant searched the FY
2019 MedPAR correction notice (December 1, 2020) file to identify
potential cases representing patients who may be eligible for treatment
using idecabtagene vicleucel. In its analysis, the applicant identified
a primary cohort to assess whether this therapy met the cost criterion.
The following ICD-10-CM diagnosis codes were used to identify claims
involving multiple myeloma procedures.
[GRAPHIC] [TIFF OMITTED] TP10MY21.153
The applicant chose to limit its analysis to MS-DRG 016 (Autologous
Bone Marrow Transplant W CC/MCC or T-Cell Immunotherapy, MS-DRG 840
(Lymphoma & Non-Acute Leukemia W MCC) and MS-DRG 841 (Lymphoma & Non-
Acute Leukemia W CC). The claim search conducted by the applicant
resulted in 1,955 claims mapped to MS-DRG 016, MS-DRG 840 and MS-DRG
841 using the FY 2019 MedPAR. The applicant determined an average
unstandardized case weighted charge per case of $1,237,393. The
applicant used the MS-DRG-018 New Technology Threshold for FY 2022 from
the FY 2021 IPPS/LTCH PPS final rule.
The applicant removed all charges in the drug cost center for the
prior technology because, according to the applicant, it is not
possible to differentiate between different drugs on inpatient claims.
The applicant added that this is likely an overestimate of the charges
that would be replaced by the use of idecabtagene vicleucel. The
applicant then standardized the charges using the FY 2019 final rule
impact file. Next, the applicant applied the 2-year inflation factor
used in the FY 2021 IPPS/LTCH PPS final rule to calculate outlier
threshold charges (1.13218). To calculate the charges for the new
technology, the applicant used a national average CCR for the CAR T-
cell therapies of 0.295. To determine this alternative CCR for CAR T-
cell therapies, the applicant referred to the FY 2021 IPPS/LTCH PPS
final rule AOR/BOR file and calculated an alternative markup percentage
by dividing the AOR drug charges within DRG 018 by the number of cases
to determine a per case drug charge. The applicant then divided the
drug charges per case by $373,000, the acquisition cost of YESCARTA and
KYMRIAH. The applicant calculated a final inflated average case-
weighted standardized charge per case of $1,329,540, which exceeded the
average case-weighted threshold amount of $1,251,127 by $78,413. The
applicant stated that because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the therapy meets the cost criterion.
As noted in previous discussions, the submitted costs for CAR T-
cell therapies vary widely due to differences in provider billing and
charging practices for this therapy. Therefore, with regard to the use
of this data for purposes of calculating a CAR T-cell CCR, we are
uncertain how representative this data is for use in the applicant's
cost analyses given the potential for variability.
We continue to be interested in public comments regarding the
eligibility of CAR T-cell technologies for new technology add-on
payments when assigned to MS-DRG 018. As we have noted in prior
rulemaking with regard to the CAR T-cell therapies (83 FR 41172 and 85
FR 58603 through 58608), if a new MS-DRG were to be created, then
consistent with section 1886(d)(5)(K)(ix) of the Act, there may no
longer be a need for a new technology add-on payment under section
1886(d)(5)(K)(ii)(III) of the Act.
We invite public comment on whether idecabtagene vicleucel meets
the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that it believes that idecabtagene vicelucel
represents a substantial clinical improvement over existing
technologies because: (1) The totality of the circumstances regarding
idecabtagene vicleucel's clinical efficacy, safety, and data make clear
that idecabtagene vicleucel substantially improves, relative to
services or technologies currently available, the treatment of Medicare
beneficiaries with RRMM; (2) idecabtagene vicleucel has superior
effectiveness compared to existing therapies; (3) idecabtagene
vicleucel fills an unmet need as demonstrated by the patient population
in its registrational study, which is reflective of real-world RRMM
patients and (4) idecabtagene vicleucel improves quality of life for
patients with RRMM.
In support of its assertion that the totality of the circumstances
regarding idecabtagene vicleucel's clinical efficacy, safety, and data
make clear that idecabtagene vicleucel substantially improves, relative
to services or technologies currently available, the treatment of
Medicare beneficiaries with RRMM, the applicant cited results from the
KarMMA study, a single-arm, open-label, phase 2 trial of idecabtagene
vicleucel. The primary outcome measure for the KarMMA study was overall
response rate (ORR). Secondary endpoints were; complete response rate
(CRR) (key secondary; null hypothesis <=10%), safety, duration of
response (DOR), progression-free survival (PFS), overall survival (OS),
pharmacokinetics (PK), minimum residual disease (MRD), quality of life
(QOL) and health economics and outcomes research (HEOR). The study
enrolled 140 patients and 128 received treatment. Patients were treated
at target dose between 150 and 450 x 10 \6\ CAR T-cells. Treated
patients had received three or more prior lines of therapy including an
immunomodulatory drug (IMiD), a proteasome inhibitor (PI), and an anti-
CD38 antibody. All patients were refractory to the last regimen (94%
were refractory to anti-CD38 and 84% were
[[Page 25259]]
refractory to triple therapy). Efficacy results showed an ORR of 50%
for patients (n=4) receiving the target idecabtagene vicleucel dose of
150 x10\6\; 68.6% for patients (n=70) receiving the target dose of 300
x10\6\; 81.5% for patients (n=54) receiving the target dose of 450 x
10\6\. The overall ORR for all patients (n=128) who received
idecabtagene vicleucel was 73.4%.
The applicant asserts that in the KarMMA study, patients who
received idecabtagene vicleucel achieved numerically superior response
rates, duration of response, and overall survival compared with
outcomes seen for alternative therapies (belantamab-mafodotin and
selinexor) in other trials.271 272 273 274 275 276 Response
rates, according to the applicant, were also high even in patients
refractory to five therapies (defined as 2 IMiD agents, 2 PIs, and 1
anti-CD38 antibody), reflecting the novel mechanism of action,
according to the applicant. The applicant asserts that compared with
anti-CD-19 CAR T-cell therapies, the adverse event profile revealed low
rates of grade 3+ CRS (5%) and neurotoxicity (NT) (3%).\277\ According
to the applicant, these safety results confirm that idecabtagene
vicleucel has the potential to offer a meaningful benefit to Medicare
beneficiaries. The applicant also asserts that idecabtagene vicluecel
has been demonstrated to be effective and with a manageable safety
profile for patients with a high-unmet need (older age, aggressive
disease). The applicant asserts that the results from the pivotal
KarMMa study confirm the clinical benefit of idecabtagene vicleucel in
a heavily pre-treated RRMM patient population.
---------------------------------------------------------------------------
\271\ Munshi NC, Anderson, Jr LD, Shah N, et al. Idecabtagene
vicleucel (ide-cel; bb2121), a BCMA-targeted CAR T-cell therapy, in
patients with relapsed and refractory multiple myeloma (RRMM):
Initial KarMMa results. J Clin Oncol. 2020;38(15_suppl):8503-8503.
doi:10.1200/JCO.2020.38.15_suppl.8503.
\272\ Rodriguez-Otero P, Weisel K, Davies F, et al. Matching-
adjusted indirect comparisons of efficacy outcomes for idecabtagene
vicleucel from the KARMMA study vs selinexor plus dexamethasone
(STORM part 2) and belantamab mafodotin (DREAMM-2). In: European
Hematology Association.; 2020.
\273\ Jagannath S, Lin Y, Goldschmidt H, et al. KarMMa-RW: A
study of real-world treatment patterns in heavily pretreated
patients with relapsed and refractory multiple myeloma (RRMM) and
comparison of outcomes to KarMMa. J Clin Oncol.
2020;38(15_suppl):8525-8525. doi:10.1200/jco.2020.38.15_suppl.8525.
\274\ Raje N, Berdeja J, Lin Y, et al. Anti-BCMA CAR T-cell
therapy bb2121 in relapsed or refractory multiple myeloma. N Engl J
Med. 2019;380(18):1726-1737. doi:10.1056/NEJMoa1817226.
\275\ Lonial S, Lee HC, Badros A, et al. Belantamab mafodotin
for relapsed or refractory multiple myeloma (DREAMM-2): a two-arm,
randomised, open-label, phase 2 study. Lancet Oncol. 2020;21(2):207-
221. doi:10.1016/S1470-2045(19)30788-0.
\276\ Chari A, Vogl DT, Gavriatopoulou M, et al. Oral Selinexor-
Dexamethasone for Triple-Class Refractory Multiple Myeloma. N Engl J
Med. 2019;381(8):727-738. doi:10.1056/nejmoa1903455.
\277\ Munshi NC, Anderson, Jr LD, Shah N, et al. Idecabtagene
vicleucel (ide-cel; bb2121), a BCMA-targeted CAR T-cell therapy, in
patients with relapsed and refractory multiple myeloma (RRMM):
Initial KarMMa results. J Clin Oncol. 2020;38(15_suppl):8503-8503.
---------------------------------------------------------------------------
We note that in contrast with anti-CD-19 CAR T-cell therapies (for
leukemia or lymphoma) where a high fraction of responders remained in
remission even after 5 years, idecabtagene vicleucel does not appear to
result in long-term remission. In the KarMMA study, among responding
patients, over 75% relapsed by 20 months, with no plateauing of the
response curve.\278\
---------------------------------------------------------------------------
\278\ Ibid.
---------------------------------------------------------------------------
To support its assertion that idecabtagene vicleucel has superior
effectiveness compared to existing therapies, the applicant provided
results from the KarMMa-RW study,\279\ a single-arm, open-label, phase
2 trial, examining real-world treatment patterns in heavily pretreated
patients with RRMM. The study also provides a comparison against
outcomes in the KarMMa study. The KarMMa-RW study was conducted to
assess treatment patterns in real-world RRMM patients with
characteristics similar to the KarMMa population and to compare
outcomes with currently available therapies in this synthetic cohort vs
idecabtagene vicleucel therapy in the KarMMa study. The primary
endpoint of the KarMMA-RW study was overall response rate (ORR).
Secondary endpoints of the study were complete response rate (CRR),
very good partial response (VGPR) rate, progression free survival (PFS)
and overall survival (OS). Subgroup analyses by age, sex, double-class
refractory (IMiD agents and PIs) and number of prior anti-myeloma
regimens per year (<=1 per year or >1) were conducted to compare ORR
and PFS between the KarMMa cohort and eligible RRMM cohort. Since
complete response assessment requires a bone marrow biopsy evaluation,
per International Myeloma Working Group (IMWG) uniform response
criteria for multiple myeloma, when data to assess a complete response
were not available in eligible RRMM cohort, analyses were summarized
for VGPR or better (>=VGPR) to avoid underestimating the response in
the eligible RRMM cohort.
---------------------------------------------------------------------------
\279\ Jagannath S, Lin Y, Goldschmidt H, et al. KarMMa-RW: A
study of real-world treatment patterns in heavily pretreated
patients with relapsed and refractory multiple myeloma (RRMM) and
comparison of outcomes to KarMMa. J Clin Oncol.
2020;38(15_suppl):8525-8525.
---------------------------------------------------------------------------
Of 1,949 real-world RRMM patients, 1,171 were refractory to their
last treatment regimen at baseline. Patients who had exposure to any
BCMA-directed therapy or gene-modified therapy were excluded. Of the
1,171 patients in the refractory RRMM cohort, 528 received the next
line of therapy; 643 patients were excluded due to no new treatment due
to death (n = 441) and no new treatment due to no follow-up (n = 202).
Of the remaining 528 patients, 190 triple class exposed patients were
selected as the eligible RRMM cohort based on the KarMMa eligibility
criteria. The ORR in the KarMMa and eligible RRMM cohorts was 76% and
32% (p= <0.0001), respectively. The VGPR in the KarMMa and eligible
RRMM cohorts was 57% and 14% (p= <0.0001), respectively.
A matched-paired analysis was conducted and ORR was adjusted for
matching. Results from the matched-paired analysis were consistent with
the primary analysis: the ORR for the matched KarMMa cohort (n = 76-80)
and matched eligible RRMM (n = 76-80) was 72% and 29% (p=<0.0001),
respectively. According to the applicant, PFS was significantly
improved in KarMMa vs the eligible RRMM cohort; median PFS was 11.3
months and 3.5 months in the KarMMa and Eligible RRMM cohorts,
respectively (p= <0.0001). Median follow-up was 11.3 months (KarMMa)
and 10.2 months (eligible RRMM cohort) at data cutoff. According to the
applicant, OS was significantly improved in KarMMa vs the eligible RRMM
cohort. OR was 18.2 months for the KarMMa cohort (across all target
doses from 150-450 x 10\6\ CAR T-cells) and 14.7 months for the
eligible RRMM cohort. The estimated 12-month probability of surviving
was 80% in the KarMMa cohort and 56% in the eligible RRMM cohort.
Median follow-up was 12.0 months (KarMMa) and 15.0 months (eligible
RRMM cohort) among surviving patients at data cutoff.
The applicant asserts that the results from the KarMMa-RW study
confirm that there is no clear standard of care for RRMM patients who
received at least 3 prior therapies, including IMiD agents, PIs, and
anti-CD38 antibodies. Patients in the eligible RRMM cohort received 94
different treatment regimens as next-line therapy and according to the
applicant, outcomes were sub-optimal with currently available therapies
in the real-world RRMM patients. The applicant asserts that
significantly improved outcomes were demonstrated with idecabtagene
vicleucel treatment in the KarMMa cohort vs the similar real-
[[Page 25260]]
world population (eligible RRMM cohort). The applicant noted that the
real world myeloma patient population is older (MM incidence is known
to increase with age, with over 60 percent of all new cases occurring
in adults aged 65+years).\280\ The applicant asserts that results were
consistent across subgroups including patients aged >=65 years.
---------------------------------------------------------------------------
\280\ Cancer Stat Facts: Myeloma, NCI SEER, https://seer.cancer.gov/statfacts/html/mulmy.html (last visited October. 7,
2020).
---------------------------------------------------------------------------
The applicant also provided a comparison of the efficacy of
idecabtagene and Xpovio[supreg] from the STORM study and Blenrep from
the DREAMM-2 study. STORM is a prospective, multicenter phase 2 study
of Xpovio[supreg] and dexamethasone in patients with RRMM (n=122) in
the 4L+ setting. The STORM trial served as the basis for regulatory
approval in the US and demonstrated the clinical efficacy and safety of
Xpovio[supreg]. The ORR was 26% for patients in the STORM study vs 73%
for patients treated with idecabtagene vicleucel in the KarMMa study,
CR was 1% for patients in the STORM study vs 33% for patients treated
with idecabtagene vicleucel in the KarMMa study, medium duration of
response (mDOR) was 4.4 months for patients in the STORM study vs 10.7
months for patients treated with idecabtagene vicleucel in the KarMMa
study, and PFS was 3.7 months for patients in the STORM study vs 8.8
months for patients treated with idecabtagene vicleucel in the KarMMa
study. The DREAMM-2 study is a prospective, multicenter Phase 2 study
of Blenrep in patients with RRMM (n=122) in the 4L+ setting. The ORR
was 31% for patients in the DREAMM-2 study vs 73% for patients treated
with idecabtagene vicleucel in the KarMMa study, CR was 3% for patients
in the DREAMM-2 study vs 33% for patients treated with idecabtagene
vicleucel in the KarMMa study, medium duration of response (mDOR) was
not reached in the Blenrep group whereas it was 10.7 months for
patients treated with idecabtagene vicleucel in the KarMMa study, and
PFS was 2.9 months for patients in the DREAMM-2 study vs 8.8 months for
patients treated with idecabtagene vicleucel in the KarMMa study.
Because idecabtagne vicleucel showed improved ORR, CR, medDOR and
PFS when compared to Xpovio[supreg] and Blenrep, the applicant asserts
that idecabtagne vicleucel provides a substantial clinical improvement
over these existing therapies.
To support that idecabtagene vicleucel fills an unmet need as
demonstrated by the patient population in its registrational study, the
Phase 2 KarMMa study, the applicant asserts that in addition to showing
deep and durable responses and a manageable safety profile in heavily
pretreated, highly refractory RRMM patients in the context of
controlled clinical studies, comparisons of outcomes in real world
patients (that is, patients not enrolled in clinical trials) support
the assertion that idecabtagene vicleucel offers significantly improved
outcomes for RRMM compared with currently available therapies. The
applicant asserts that when compared to myeloma patients generally
included in clinical studies, the real world myeloma patient population
is older (MM incidence is known to increase with age, with over 60
percent of all new cases occurring in adults aged >=65 years) \281\ and
sicker (due to the high proportion of elderly patients in this
population, those with MM commonly also have additional comorbidities
associated with increased age, including conditions such as
osteoporosis, arthritis, diabetes, additional malignancies,
cardiovascular disease, and renal dysfunction, amongst others).\282\
The applicant provided an abstract from the MAMMOTH study, a
noninterventional, retrospective cohort analysis conducted to assess
outcomes in patients after they become refractory to anti-CD38
monoclonal antibodies, including a subset of patients who were triple-
class-exposed. Patients in STORM (analyzing Xpovio[supreg] plus
dexamethasone) had an ORR of 32.8% versus 25% for patients receiving
conventional care in MAMMOTH (p=0.078) and STORM patients had better OS
than patients in MAMMOTH (median 10.4 vs 6.9 months) (p=0.043). The
applicant asserts that these results highlight a high unmet need in a
patient population refractory to anti-CD38 monoclonal antibody,
including a subset of triple-class exposed patients.
---------------------------------------------------------------------------
\281\ Cancer Stat Facts: Myeloma, NCI SEER, https://seer.cancer.gov/statfacts/html/mulmy.html (last visited Oct. 7,
2020).
\282\ Hari P et al. The impact of age and comorbidities on
practice patterns and outcomes in patients with relapsed/refractory
multiple myeloma in the era of novel therapies. Journal of Geriatric
Oncology. 2018;9(2):138-144 (Hari, 2018).
---------------------------------------------------------------------------
To support the assertion that idecabtagene vicleucel improves
quality of life for patients with RRMM, the applicant referenced
idecabtagene vicleucel's impact on Health-related quality of life
(HRQoL) as assessed in the KarMMa study as a secondary endpoint. HRQoL
was assessed using the European Organization for Research and Treatment
of Cancer (EORTC) Quality of Life C30 Questionnaire (QLQ-C30) and the
EORTC Multiple Myeloma Module (MY20). The QLQ-C30 consists of 30
questions addressing 5 functional domain scales, 3 symptom scales, a
Global ealth/QoL scale, and 6 single item measures.\283\ The QLQ-MY20
consists of 20 questions addressing 4 myeloma-specific HRQoL domains
(disease symptoms, side effects of treatment, future perspectives, and
body image).\283\ Primary subscales of interest were QLQ-C30 Fatigue,
Pain, Physical Functioning, Cognitive Functioning, and Global Health/
QoL subscales and QLQ-MY20 Symptom and Side Effects subscales.
Subscales were preselected based on their relevance to this patient
population. The data are based on a minimum of 10 months post-infusion.
Median follow-up durations at the target dose levels of 150, 300, and
450 x 10\6\ CAR T-cells were 17.8, 13.9, and 9.7 months, respectively.
Of 140 patients enrolled in KarMMa, 128 received idecabtagene
vicleucel, of whom 121 (94.5%) and 120 (93.8%) were evaluable for HRQoL
by QLQ-C30 and QLQ-MY20, respectively. At baseline, idecabtagene
vicleucel treated patients had less favorable scores for all QLQ-C30
domains of interest (fatigue, pain, Global Health/QoL, physical
functioning and cognitive functioning) than the general population.
From baseline at multiple time points through month 9 post-infusion,
the applicant asserts that clinically meaningful improvements were
observed in QLQ-C30 Fatigue, Pain, Physical Functioning, and Global
Health subscale scores relative to baseline, as the mean score from
baseline showed improvement in all domains. The applicant asserts that
these results support that idecabtagene vicleucel provides meaningful
improvements in HRQoL and self-reported symptoms associated with
heavily pretreated RRMM and demonstrate that idecabtagene vicleucel
provides meaningful improvement in both global function and symptoms
related to MM.
---------------------------------------------------------------------------
\283\ Helena Maes & Michel Delforge (2015) Optimizing quality of
life in multiple myeloma patients: current options, challenges and
recommendations, Expert Review of Hematology, 8:3, 355-366, DOI:
10.1586/17474086.2015.1021772.
---------------------------------------------------------------------------
After reviewing the information submitted by the applicant as part
of its FY 2022 new technology add-on payment application for
idecabtagene vicleucel, we question whether, due to the lack of
randomization, there is sufficient evidence to establish the efficacy
of idecabtagene vicleucel compared with current alternatives. It is
unknown whether the superior
[[Page 25261]]
outcomes for idecabtagene vicleucel in the KarMMA study, which has not
been peer-reviewed, were due to more effective therapy or other
factors, such as differences in patient population or treating
oncologist. We also note that the applicant chose to use ORR data as a
measure of substantial clinical improvement rather than the more
clinically relevant and available OS data.
We are inviting public comment on whether idecabtagene vicleucel
meets the substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Techology Add-on Payment Town Hall meeting notice published in the
Federal Register regarding the substantial clinical improvement
criterion for idecabtagene vicleucel.
i. INDIGO Aspiration System With Lightning Aspiration Tubing
Penumbra, Inc. submitted an application for the INDIGO[supreg]
Aspiration System with Lightning Tubing (``INDIGO[supreg] with
Lightning'') for FY 2022. Per the applicant, INDIGO[supreg] with
Lightning is a mechanical thrombectomy aspiration system used in the
treatment of pulmonary embolism, deep vein thrombosis and peripheral
arterial thromboembolism that optimizes thrombus removal by
differentiating between thrombus and blood.
According to the applicant, INDIGO[supreg] with Lightning performs
clot detection and removal via smart technology which enables the
physician to determine when the catheter is in thrombus and when it is
in patent flow resulting in blood loss reduction through intermittent
aspiration mechanical thrombectomy. The applicant stated that
INDIGO[supreg] with Lightning is used for the removal of fresh, soft
emboli and thrombi from vessels of the peripheral arterial and venous
systems, and for the treatment of pulmonary embolism. The applicant
stated that the INDIGO[supreg] with Lightning is composed of a
mechanical thrombectomy aspiration pump (known as the Penumbra Engine)
that is packaged with INDIGO[supreg] CAT12 (12 French) and CAT8 (8
French) catheters as well as Lightning, a clot detection/blood loss
reduction technology embedded in the Penumbra Engine pump and tubing.
Arterial thromboembolism can result in acute limb ischemia (ALI)
which requires emergent treatment. Venous thromboembolism is a
condition which includes both deep vein thrombosis (DVT) and pulmonary
embolism (PE) and occurs in 1 to 2 individuals per 1000 per year and is
predominantly a disease of older age.\284\ The 2020 American Society of
Hematology guidelines for venous thromboembolism include
recommendations for the treatment of patients with both pulmonary
embolism and deep vein thrombosis, and recommended treatments include
home care, systemic pharmacological thrombolysis, and procedural
care.\285\
---------------------------------------------------------------------------
\284\ Heit, John A. ``Epidemiology of venous thromboembolism.''
Nature reviews. Cardiology vol. 12,8 (2015): 464-74. doi:10.1038/
nrcardio.2015.83
\285\ Thomas L. Ortel, Ignacio Neumann, Walter Ageno, Rebecca
Beyth, Nathan P. Clark, Adam Cuker, Barbara A. Hutten, Michael R.
Jaff, Veena Manja, Sam Schulman, Caitlin Thurston, Suresh Vedantham,
Peter Verhamme, Daniel M. Witt, Ivan D. Florez, Ariel Izcovich,
Robby Nieuwlaat, Stephanie Ross, Holger J. Sch[uuml]nemann, Wojtek
Wiercioch, Yuan Zhang, Yuqing Zhang; American Society of Hematology
2020 guidelines for management of venous thromboembolism: treatment
of deep vein thrombosis and pulmonary embolism. Blood Adv 2020; 4
(19): 4693-4738. doi: https://doi.org/10.1182/bloodadvances.2020001830.
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Procedural care may include open procedures as well as catheter-
directed thrombolysis and percutaneous mechanical thrombectomy.\286\ In
catheter-directed thrombolysis, a thrombolytic agent is infused
intravascularly adjacent to the clot burden through a percutaneous
transcatheter.\287\ In percutaneous mechanical thrombectomy, the
thrombus is lysed or removed mechanically. The therapies may be used
separately or in conjunction with one another.\288\
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\286\ Karthikesalingam A, Young EL, Hinchliffe RJ, Loftus IM,
Thompson MM, Holt PJ. A systematic review of percutaneous mechanical
thrombectomy in the treatment of deep venous thrombosis. Eur J Vasc
Endovasc Surg. 2011 Apr;41(4):554-65. doi: 10.1016/
j.ejvs.2011.01.010. Epub 2011 Feb 1. PMID: 21288745.
\287\ Brown KN, Devarapally SR, Lee L, et al. Catheter Directed
Thrombolysis Of Pulmonary Embolism. [Updated 2020 Apr 10]. In:
StatPearls [internet]. Treasure Island (FL): StatPearls Publishing;
2020 Jan. https://www.ncbi.nlm.nih.gov/books/NBK536918/.
\288\ Karthikesalingam A, Young EL, Hinchliffe RJ, Loftus IM,
Thompson MM, Holt PJ. A systematic review of percutaneous mechanical
thrombectomy in the treatment of deep venous thrombosis. Eur J Vasc
Endovasc Surg. 2011 Apr;41(4):554-65. doi: 10.1016/
j.ejvs.2011.01.010. Epub 2011 Feb 1. PMID: 21288745.
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The applicant stated that mechanical thrombectomy may be performed
with a variety of devices. These methods include aspiration
thrombectomy, rheolytic thrombectomy, and fragmentation
thrombectomy.\289\
---------------------------------------------------------------------------
\289\ Haude, M. Mechanical thrombectomy catheter systems.
Interventional Cardiology 2007;2(1):58-60.
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The applicant stated that INDIGO[supreg] with Lightning differs
from other mechanical thrombectomy devices on the basis of the use of a
mechanical pump to generate a vacuum for aspiration and ``intelligent
aspiration'' which differentiates clots and patient blood flow, thereby
limiting blood loss. The applicant states that other endovascular
mechanical thrombectomy devices do not provide aspiration using a
vacuum. According to the applicant, the Lightning tubing performs clot
detection using a proprietary algorithm. According to the applicant,
once this ``smart technology'' detects free-flowing blood, it indicates
patent flow to the physician and begins intermittent aspiration
resulting in less blood loss during the procedure.
The applicant indicated that there is no unique ICD-10-PCS
procedure code to describe the use of INDIGO[supreg] with Lightning.
The applicant submitted a request for a unique ICD-10-PCS code to
identify the technology beginning FY 2022.
INDIGO[supreg] with Lightning is a system with multiple components
which have been reviewed by FDA both separately and as part of an
overall system which includes catheters, tubing, and a vacuum pump. For
the catheter portion of the system, INDIGO[supreg] aspiration catheter
12 (12 French) and separator 12 received FDA 510(k) clearance on May
28, 2020 for the removal of fresh, soft emboli and thrombi from vessels
of the peripheral arterial and venous systems under FDA submission
number K192981. The applicant states that they submitted an application
for FDA 510(k) clearance for that same technology (with a predicate
which received clearance mentioned previously under submission number
K192981) for indication of pulmonary embolism under FDA submission
number K202821 for which clearance was completed on November 18, 2020.
The INDIGO[supreg] aspiration catheter 12 and separator 12 received FDA
510(k) clearance for the peripheral arterial and venous system on the
basis of similarity to an earlier version of the same catheter and
separator, which itself received FDA 510(k) clearance on May 26, 2015
under FDA 510(k) number K142870 as part of the Penumbra Embolectomy
System for the same indication. We note that the overall system
received a second 510(k) clearance on December 20, 2019 under FDA
510(k) number K192833 for the added indication of PE.
With respect to the newness criterion for the tubing, the Lightning
tubing received FDA 510(k) authorization for the removal of fresh, soft
emboli and thrombi from vessels of the peripheral arterial and venous
systems on March 13, 2020 under FDA 510(k) number K193244. The same
tubing received FDA 510(k) authorization for pulmonary embolism on
April 22, 2020 under FDA
[[Page 25262]]
510(k) number K200771, which was granted based on substantial
similarity to the same manufacturer's device. The predicate device for
the peripheral arterial and venous system was an earlier version of the
tubing without Lighting which itself received FDA 510(k) authorization
on May 3, 2018 under FDA 510(k) number K180939.
With respect to the newness criterion for the vacuum pump, the
Penumbra Engine Pump and Canister received FDA 510(k) clearance for use
in the peripheral arterial and venous systems (PAVS) on March 8, 2018
under FDA 510(k) number K180105. The following table summarizes the FDA
approval information listed in this section.
[GRAPHIC] [TIFF OMITTED] TP10MY21.154
The applicant has applied for new technology add-on payments for
INDIGO[supreg] with Lightning when used for the treatment of venous
thromboembolism, arterial thromboembolism, and pulmonary
thromboembolism.
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome, the
applicant stated that INDIGO[supreg] with Lightning does not use the
same or a similar mechanism of action when compared to an existing
technology to achieve a therapeutic outcome. The applicant described
differences between INDIGO[supreg] with Lightning and existing
technologies based on the use of a mechanical pump to generate a vacuum
for aspiration and the Lightning tubing, which the applicant stated
limits blood loss and indicates clot versus patent flow. For pulmonary
embolism and the peripheral system, the applicant identified Inari
Flowtriever as an existing technology and noted that any aspiration
provided using this system is provided via syringe as opposed to a
vacuum pump. For the peripheral system, the applicant also identified
Inari Flowtriever as using the same syringe method of aspiration. The
applicant also identified two additional aspiration thrombectomy
catheters, Angiojet[supreg] and Angiovac[supreg], used in the
peripheral system and suggested that Angiojet[supreg] also uses a
syringe for aspiration and that Angiovac[supreg] utilizes an
extracorporeal bypass circuit that is created outside the body
consisting of an outflow line, a centrifugal pump, a filter and an
inflow line.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated that services
provided using this device would be captured under MS-DRGs 163-165 and
270-272. MS-DRGs 163-165 address major chest procedures and MS-DRGs
270-272 address other major cardiovascular procedures.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population when compared to an
existing technology, the applicant did not address this criterion
directly in the application, but stated that the new use of the
INDIGO[supreg] System with Lighting is for the most recent FDA
indication (April 2020) in PE. The applicant further states that PE is
not the same disease as arterial and venous thromboembolism; the
patient populations may overlap, but are not identical.
We have the following concerns regarding whether the technology
meets the substantial similarity criteria and whether it should be
considered new. While the applicant discussed the differences between
INDIGO[supreg] with Lighting and products made by other manufacturers,
the applicant does not provide enough information regarding how
INDIGO[supreg] with Lightning differs in its components from the
existing aspiration thrombectomy catheters on the market to determine
whether the technology uses a unique mechanism of action. We question
whether the mechanism of action of the pump is different than that of
the existing aspiration thrombectomy systems that also use a pump
rather than a syringe, and how the mechanism of action of the
separator, which is part of the catheter portion of the device, is
different from that of existing thrombectomy systems that deploy a
device through the lumen of the catheter to break up the thrombus. It
is also unclear what mechanism of action is used within the ``smart
technology'' and how it may differ from other products which are
intended to similarly reduce blood loss during the procedure. It is
unclear if the ``smart technology'' resides within the pump, which was
cleared by FDA 510(k) on March 8, 2018, or within the tubing, which was
most recently cleared by FDA 510(k) on April 22, 2020. We note that
while the applicant did not directly address the third criterion within
the application, based on the clinical uses of the device described in
the application, we believe the INDIGO[supreg] with Lightning is
intended for a patient population that is similar to the patient
population treated by existing thrombectomy devices, including patients
who receive percutaneous interventions for PE and peripheral arterial
thromboembolism.
We note that the predicate device for the vacuum pump, the Penumbra
Engine Pump and Canister, received FDA 510(k) clearance for use in the
peripheral arterial and venous systems on March 8, 2018 under FDA
510(k) number K180105 and therefore appears to no longer be considered
new. We further note that the catheter and tubing, as described in the
510(k) applications, appear to only have minor differences from their
predicate devices such as length of tubing and shelf life, as opposed
to elements that would affect the mechanism of action. If we determine
that the catheter and tubing are substantially similar to the predicate
[[Page 25263]]
devices cleared under FDA 510(k) numbers K142870 (May 26, 2015) and
K180939 (May 3, 2018), respectively, the newness date of the
INDIGO[supreg] with Lightning would correspond to the dates listed and
therefore may no longer be considered new. We also note that it is
unclear whether the components of the system may be substantially
similar to the overall system and whether the applicable newness date
for each indication would therefore be the date of the overall system
clearance for each indication, specifically May 26, 2015 for peripheral
arterial and venous systems and December 20, 2019 for pulmonary
embolism.
We invite public comment on whether INDIGO[supreg] with Lightning
is substantially similar to other technologies and whether
INDIGO[supreg] with Lightning meets the newness criterion.
With regard to the cost criterion, the applicant searched the FY
2019 MedPAR claims data file with the FY 2019 Final Rule with
Correction Notice IPPS Impact File to identify potential cases
representing patients who may be eligible for treatment using the
INDIGO[supreg] System. The applicant identified claims with any one of
the following ICD-10-PCS codes for percutaneous mechanical
thrombectomy:
[[Page 25264]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.155
In its analysis, the applicant identified a primary cohort to
assess whether this therapy met the cost criterion. The previously
listed ICD-10-PCS procedure codes were used to identify claims
involving percutaneous procedures. The claim search conducted by the
applicant resulted in 15,580 claims mapping to six MS-DRGs: 270 (Other
Major Cardiovascular Procedures with MCC), 271 (Other Major
Cardiovascular Procedures with CC), 272 (Other Major Cardiovascular
Procedures without CC/MCC), 163 (Major Chest Procedures with MCC), 164
(Major Chest Procedures with CC), and 165 (Major Chest Procedures
without CC/MCC).
The applicant determined an average unstandardized case weighted
charge per case of $126,211.
[[Page 25265]]
The applicant did not remove charges for prior technology. The
applicant stated that no prior technology is being replaced. The
applicant then standardized the charges using the FY 2019 Final Rule
with Correction Notice Impact File. Next, the applicant applied the 2-
year inflation factor used in the FY 2021 IPPS/LTCH PPS final rule to
calculate outlier threshold charges (1.13218). To calculate the charges
for the new technology, the applicant used what it stated was the
national average CCR for the Supplies and Equipment cost center of
0.299 from the FY 2021 IPPS final rule. However, we note that the
actual value for this cost center for FY 2021 was 0.297. The applicant
calculated a final inflated average case-weighted standardized charge
per case of $180,036, which exceeded the average case-weighted
threshold amount of $126,211 by $53,825. The applicant stated that
because the final inflated average case-weighted standardized charge
per case exceeded the average case-weighted threshold amount, the
therapy meets the cost criterion.
We invite public comment on whether INDIGO[supreg] with Lightning
meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that the INDIGO[supreg] with Lightning represents a
substantial clinical improvement over existing technologies because it
results in lower rates of aspirated blood loss during the procedure,
low major bleeding event rate, reduces blood loss, reduces ICU stays,
and reduces procedure time. The applicant also suggested that the
technology allows for revascularization without thrombolytics and no
recurrence of pulmonary embolism after 30 days.
To support its application, the applicant submitted a reference to
the EXTRACT-PE prospective, single-arm study across 22 sites comparing
the use of INDIGO[supreg] without Lightning to systemic thrombolysis in
119 patients with PE who had not been previously treated with anti-
thrombolytics or an adjunctive device within 48 hours. The applicant
stated that this study was completed under FDA Investigational Device
Exception (IDE) G170064. The applicant claimed that the EXTRACT-PE
study showed the INDIGO[supreg] without Lightning led to a significant
mean reduction of 0.43 in right ventricle/left ventricle (RV/LV) ratio
(a measure associated with poor clinical outcomes when greater than 1)
that corresponded to a 27.3 percent reduction at 48 hours after
intervention. They also cited a low major adverse event composite rate
of 1.7 percent within 48 hours, device usage of only 37 minutes and
median ICU length of stay of 1 day. According to the applicant, rates
of cardiac injury, pulmonary vascular injury, clinical deterioration,
major bleeding, and device-related death at 48 hours were 0%, 1.7%,
1.7%, 1.7%, and 0.8%, respectively.
The applicant cited a poster of an unpublished retrospective case
review study by Hastings \290\ of 18 patients with DVT treated with
INDIGO[supreg] followed by anticoagulation. Primary technical success
(defined as restoration of blood flow with minimal residual thrombus
(<10%) without the need for a second session of treatment) was achieved
in 15 patients. Three patients required adjunctive methods for
successful clearance of thrombus, undergoing two sessions of treatment.
Two patients had recurrence of DVT following single-session treatment,
both of whom were asymptomatic at time of diagnosis.
---------------------------------------------------------------------------
\290\ Hastings, L.H., Perkowski, P.E. Single Session
Percutaneous Mechanical Aspiration Thrombectomy for Symptomatic
Proximal Deep Vein Thrombosis. Poster.
---------------------------------------------------------------------------
The applicant cited the PRISM study,\291\ a single-arm,
multicenter, retrospective analysis of 79 patients with arterial
occlusion from 2018, to provide evidence that use of INDIGO[supreg]
with Lightning has a low major bleeding event rate, can result in
revascularization without thrombolytics, and causes no clinically
significant distal embolization. The applicant also stated that the
interim results of the INDIAN study, a prospective trial using
INDIGO[supreg] without Lightning to treat patients with ALI showed no
device-related adverse events or major bleeding complications.\292\
---------------------------------------------------------------------------
\291\ Saxon, R.R., Benenati, J.F., Teigen, C., Adams, G.K.,
Sewall, L.E., and Trialists, P. (2018). Utility of a power
aspiration-based extraction technique as an initial and secondary
approach in the treatment of peripheral arterial thromboembolism:
Results of the multicenter prism trial. J Vasc Interv Radiol. 29(1):
p. 92-100
\292\ Donato, et al. Acute Lower Limb Malperfusion--(INDIAN)
Registry: Protocol (as presented at VEITHsymposium 2019).
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The applicant asserted that an unpublished laboratory bench test
using water found that the 20.3 mL/sec average flow rate of catheter
with Lightning generates 18-fold reduction in blood loss when compared
to the use of the same catheter and Penumbra engine pump without the
Lightning technology. The applicant asserted that a bench test showed
that the Penumbra aspiration pump demonstrates continuous pressure, as
evidenced by a sustained -29 inHg (inches of Mercury) through 60
seconds versus a 60-ml syringe which starts at -27 Hg and drops to 0 in
Hg within 18 seconds.
The applicant also asserted that an abstract of a single-center
retrospective case-control trial of 38 patients by Muck, P., et al.
comparing two versions of INDIGO[supreg] catheters (12F and 8F) showed
that median blood loss was 250mL in the larger Lightning 12F arm (n=9,
larger catheter) and 375mL in the 8F arm without Lightning (n=27,
smaller catheter). Technical success (defined as greater than 70
percent thrombus reduction) was achieved in 77 percent of patients in
the Lightning 12F arm compared to 18.5 percent in the 8F arm without
Lightning. The applicant also asserted that this study showed that none
(0/9) of the patients in the INDIGO[supreg] with Lightning group
required post-procedure transfusion, whereas 18.5 percent (5/27) of the
INDIGO[supreg] without Lightning group required post-procedure
transfusion.
We note that in its application, the applicant did not explicitly
state what the comparator was for each of its claims in support of
substantial clinical improvement; for example, whether INDIGO[supreg]
is being compared to systemic thrombolysis, percutaneous catheter
directed thrombolysis, or other aspiration thrombectomy catheters.
Comparing INDIGO[supreg] to a medical treatment modality may not be
appropriate since percutaneous interventions for PE and DVT have
different clinical indications, risks, and benefits compared to medical
or surgical interventions.
We also note that the applicant relies mostly on studies of
INDIGO[supreg] without Lightning to substantiate its claims regarding
INDIGO[supreg] with Lightning. Of all the studies provided by the
applicant, only one small, unpublished study of DVT patients by Muck,
P., et al. includes patients treated with INDIGO[supreg] with Lightning
(which has the intelligent aspiration) versus earlier versions of the
applicant's device. The applicant did not demonstrate superior outcomes
using INDIGO[supreg] with Lightning compared to INDIGO[supreg] without
Lightning.
We note that outcomes for INDIGO[supreg] for the rates of pulmonary
vascular injury at 48 hours, clinical deterioration, major bleeding and
device-related deaths were stated by the applicant as low compared to
systemic thrombolysis, but were not compared to outcomes for existing
aspiration thrombectomy devices which may be a more appropriate
comparator. We further note that in the poster study, all patients were
maintained on anticoagulation following thrombectomy with
INDIGO[supreg], so it is difficult to assess the DVT
[[Page 25266]]
recurrence rate (using INDIGO[supreg] alone) to support the claim that
INDIGO[supreg] can be used with patients with high risk of bleeding.
We also note that suction generated through a vacuum may not be
superior to other mechanisms of generating negative pressure used in
other existing aspiration catheters. A study comparing suction forces
and vacuum pressure of Penumbra pump to a 60-mL syringe and pumps
manufactured by several other manufacturers showed that all catheters
transmit similar vacuum pressure regardless of pump or 60-mL
syringe.\293\
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\293\ Froehler, M.T. (2017). Comparison of vacuum pressures and
forces generated by different catheters and pumps for aspiration
thrombectomy in acute ischemic stroke. Interventional neurology,
6(3-4), 199-206.
---------------------------------------------------------------------------
Finally, we question whether there is enough evidence to support
that ``intelligent aspiration'' associated with INDIGO with Lightning
provides a substantial clinical improvement over existing aspiration
catheters from INDIGO[supreg] and existing devices where the aspiration
is controlled manually. No direct comparison of blood loss between
INDIGO[supreg] with Lightning catheter and existing aspiration
thrombectomy devices from other manufacturers was provided,
specifically catheters that reduce blood loss by returning the
aspirated blood back to the patient. The unpublished bench test
included with the application may have demonstrated a reduction in
average volume of water aspirated using the INDIGO[supreg] Catheter
with Lightning fully functional compared to the INDIGO[supreg] catheter
with Lightning deactivated (valve pin fixed to the open position).
However, this study was not designed to compare blood loss during a
thrombectomy procedure between aspiration controlled by a human versus
by the Lightning ``intelligent aspiration.''
We invite public comment on whether INDIGO[supreg] with Lightning
meets the substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
INDIGO[supreg] with Lightning or at the New Technology Town Hall
meeting.
j. Ischemia Care Respiratory and Stroke Test Kit or ISC-REST
Ischemia Care submitted an application for new technology add-on
payment for Ischemia Care Respiratory and Stroke Test Kit (ISC-REST)
for FY 2022. Per the applicant, ISC-REST is a test kit composed of
three tests to stratify the cause of ischemic strokes by
differentiating those that originate in the heart, called cardioembolic
(CE) strokes, and those that originate in the arteries, called large
artery atherosclerotic (LA) strokes, once it has been determined that a
patient has not suffered a hemorrhagic stroke. According to the
applicant, ISC-REST is made up of three tests: (1) ISCDx, (2) the
QIAstat-Dx Respiratory SARS-CoV-2 Panel, and (3) the QIAGEN Access
Anti-SARS-CoV-2 Total Test. According to the applicant, the three test
results provide information related to the cause of ischemic stroke and
coronavirus disease 2019 (COVID-19) status to prevent a recurrent
stroke. Per the applicant, the first of the three tests, ISCDx, is a
blood test that uses RNA expression from whole blood to differentiate
between CE and LA stroke, two types of ischemic stroke. According to
the applicant, once blood is drawn, the RNA expression in the blood
sample is analyzed and matched to the gene expression signatures and
patterns associated with CE stroke and LA stroke. Per the applicant,
the second test, the QIAstat-DX respiratory SARS-CoV-2 Panel, is a
multiplexed nucleic acid real-time polymerase chain reaction (PCR) test
intended for the qualitative detection and differentiation of nucleic
acid from 22 respiratory pathogens, including the SARS-CoV-2 virus, in
nasopharyngeal swabs. According to the applicant, the third test is the
QIAGEN Access Anti-SARS-CoV-2 Total Test, a rapid, digital lateral flow
serological test to detect antibodies to SARS-CoV-2 in human serum and
plasma.
According to the applicant, the ISC-REST kit is intended to be used
when a patient presents at the hospital with an ischemic stroke, within
30 hours of symptom onset and with a National Institutes of Health
Stroke Scale (NIHSS) score of >=5. The NIHSS measures stroke-related
neurologic deficit and has predictive validity for long-term stroke
outcome.\294\ Per the applicant, the ISC-REST kit is intended for use
at the time of the standard evaluation, at the same time that normal
blood samples are collected when a patient is admitted to the hospital
for stroke. According to the applicant, to use the ISC-REST kit, blood
is drawn into a PaxGene tube (for the ISCDx test), a nasal swab is
obtained (for the QIAstat-Dx Respiratory SARS-CoV-2 Panel), and an
additional blood sample is drawn (for the QIAGEN Access Anti-SARS-CoV-2
Total Test). Per the applicant, the hospital sends all three samples to
a single laboratory, the Clinical Laboratory Improvement Amendments
(CLIA) certified Ischemia Care laboratory, for processing and
reporting. According to the applicant, three results are reported: (1)
A result for whether the gene expression in the blood sample was
consistent with CE stroke or LA stroke, (2) a result for respiratory
screening that includes COVID-19, influenza, and other respiratory
illnesses, and (3) a result for COVID-19 antibodies to determine
whether the patient previously had COVID-19.
---------------------------------------------------------------------------
\294\ Schlegel, Daniel et al., ``Utility of the NIH Stroke Scale
as a Predictor of Hospital Disposition,'' Stroke, 2003;34:134-137,
https://doi.org/10.1161/01.STR.0000048217.44714.02.
---------------------------------------------------------------------------
According to the applicant, the number of cryptogenic ischemic
strokes, or ischemic strokes where the cause is unknown, is concerning.
The applicant states that there are 695,000 ischemic strokes each year
in the United States, with 185,000 of these events being recurrent
strokes. Per the applicant, for up to 40% of ischemic strokes, or
roughly 250,000 ischemic strokes, the cause is cryptogenic.\295\ The
applicant states that when the cause of stroke is identified, secondary
stroke prevention protocols may be adapted to prevent a bigger, more
costly, and severe recurrent stroke. The applicant explains that
cryptogenic stroke leads to high recurrence risk in cases of undetected
atrial fibrillation. The applicant also explains that typically the
diagnosis of the causes of stroke is complex, inconsistent across
hospitals, expensive, and inconclusive. Further, the applicant claims
that the cryptogenic rate is higher for stroke patients with COVID-19
than stroke patients without COVID-19, citing a retrospective study of
patients hospitalized at a major New York health system between March
and April 2020 that found that the cryptogenic rate was 65% for COVID-
19 positive patients.\296\ In that study, out of 3,556 patients that
were hospitalized and diagnosed with COVID-19 during that time, 32
patients or under 1% of the sample size experienced an ischemic stroke.
The study found that the standard stroke diagnostic workup did not
establish the ischemic stroke etiology for a significant proportion of
patients in the study with concurrent
[[Page 25267]]
COVID-19 infection and ischemic stroke: cryptogenic stroke diagnosis
was twice more prevalent in COVID-19-positive patients (65.6%),
compared with both COVID-19-negative contemporary stroke patients
(30.4%) and ischemic stroke patients hospitalized in the same hospital
system during the same time period the year prior (25.0%).
---------------------------------------------------------------------------
\295\ Saver, Jeffrey L., ``Cryptogenic Stroke,'' N Engl J Med,
May 26, 2016, [374:2065-2074] DOI: 10.1056/NEJMcp1503946, available
at: https://www.nejm.org/doi/10.1056/NEJMcp1503946.
\296\ Shadi Yaghi, et al. SARS-CoV-2 and Stroke in a New York
Healthcare System, Stroke. 2020; 51:2002-2011. DOI: 10.1161/
STROKEAHA.120.030335, available at: https://www.ahajournals.org/doi/10.1161/STROKEAHA.120.030791.
---------------------------------------------------------------------------
While the applicant states in the application that there is no
standard of care pathway to determine the cause of stroke, a stroke
patient presenting at the hospital is typically evaluated using a
standard evaluation that includes imaging and hematologic testing to
determine if the patient is a candidate for intervention. Diagnosing
the cause of stroke, per the applicant, often requires expensive
testing, risk to the patient, and invasive procedures, without a
guarantee of a definitive diagnosis. The applicant explains that each
suspected cause requires a focused workup to confirm the suspicion.
Additionally, the applicant points out, a negative result in one
pathway does not mean a positive result in another pathway. The
applicant claims that the inability to accurately stratify patients by
cause of stroke often results in either limiting use of advanced
patient testing or performing too many tests. The applicant further
claims that diagnosing the cause of stroke and preventing recurrent
stroke using a standard evaluation is even more challenging for
ischemic stroke patients with COVID-19 because these patients are
presenting at younger ages and without traditional comorbidities,
eliminating many of the traditional causes of stroke.
While the applicant states that it is unclear to clinicians whether
COVID-19 is a separate cause of stroke or aggravates comorbidities to
cause a stroke, the applicant claims that the information that the ISC-
REST kit would provide is important, as clinicians currently know very
little about the vascular effects of COVID-19. The applicant states
that the ISC-REST kit ties all of the clinical diagnosis pieces
together: Respiratory viral and bacterial organism presence, COVID-19
antibody presence, and CE or LA stroke. Per the applicant, this
combined testing is convenient for the clinician and also raises
awareness about the COVID-stroke connection by providing real world
evidence.297 298 Additionally, the applicant explains that
traditional diagnosis of ischemic stroke cause is often complex,
inconsistent, expensive, inconclusive and may require more invasive
diagnosis procedures, such as implantable cardiac monitoring or
transcranial doppler. Ultimately, according to the applicant, the
traditional process to stratify the cause of stroke may require months
or years of additional tests post event.
---------------------------------------------------------------------------
\297\ Patients with Coronavirus Disease 2019 (COVID-19) vs
Patients With Influenza, JAMA Neurol. 2020;77(11):1366-1372.
\298\ COVID-19 Is an Independent Risk Factor for Acute Ischemic
Stroke, American Journal of Neuroradiology, August 2020, 41(8):1361-
1364.
---------------------------------------------------------------------------
With respect to the newness criterion, each of the three tests in
ISC-REST, as well as the ISC-REST test kit as a whole, have varying FDA
authorization statuses and separate indications. The applicant stated
in their application that they are seeking Emergency Use Authorization
(EUA) from the FDA for the ISC-REST test kit. The applicant shared that
the intended indication of ISC-REST is to provide three critical
diagnostic tests in the same kit for convenience of the user during the
COVID-19 public health emergency. For the ISCDx test, the applicant
stated that the test had completed the requirements of the Clinical
Laboratories Improvement Amendments (CLIA) analytical validations and
is available as a Laboratory Developed Test. ISCDx's intended
indication is to aid in the diagnosis of CE and LA stroke, when
hemorrhagic stroke is ruled out, in conjunction with standard clinical
evaluation and in the context of the patient's clinical history and
other diagnostic test results. The test could also be used as part of
the clinical evaluation and patient risk assessment. The QIAstat-Dx
Respiratory SARS-CoV-2 Panel was granted an EUA on March 30, 2020 and
is intended for patients suspected of COVID-19 by their healthcare
provider for the detection and differentiation of nucleic acid from
SARS-CoV-2 and the following organism types and subtypes: Adenovirus,
Coronavirus 229E, Coronavirus HKU1, Coronavirus NL63, Coronavirus OC43,
SARS-CoV-2, Human Metapneumovirus A+B, Influenza A, Influenza A H1,
Influenza A H3, Influenza A H1N1/pdm09, Influenza B, Parainfluenza
virus 1, Parainfluenza virus 2, Parainfluenza virus 3, Parainfluenza
virus 4, Rhinovirus/Enterovirus, Respiratory Syncytial Virus A+B,
Bordetella pertussis, Chlamydophila pneumoniae, and Mycoplasma
pneumoniae. The applicant states that results are for the
identification of SARS-CoV-2 RNA, however, negative results do not
preclude SARS-CoV-2 infection and should not be used as the sole basis
for patient management decisions. According to the applicant, there is
no EUA request pending approval for the QIAGEN Access Anti-SARS-CoV-2
Total Test.
The applicant stated that there are currently no ICD-10-PCS
procedure codes that uniquely identify the use of ISC-REST. The
applicant submitted a request for approval of a unique ICD-10-PCS
procedure code to identify use of the technology beginning FY 2022. The
applicant provided 81 ICD-10-PCS codes that they stated could be used
to identify cases involving the use of ISC-REST in the interim. These
81 ICD-10-CM diagnosis codes are associated with cerebral infarctions,
occlusions, and other neurological conditions consistent with ischemic
stroke presentations.
As previously discussed, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, there are no blood tests for stroke or its
causes. The applicant also stated that there is no blood testing for
the cause of stroke combined with COVID-19 screening.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG when compared to an existing
technology, the applicant stated that the ISC-REST kit is not replacing
an existing technology and reiterated that ISCDx is a blood test that
stratifies ischemic stroke patients into CE and LA stroke causes The
applicant stated that the technology would map to MS-DRGs 061,062, 063,
064, 065, 066, 067, 068 and that it is not requesting for ISC-REST to
map to a new or different MS-DRG for FY 2022.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
stated that there are no existing technologies to stratify stroke
populations by cause.
We note the following concerns regarding whether the applicant
meets the newness criterion. Under the regulations at 42 CFR
412.87(e)(2), CMS only considers, for add-on payments for a particular
fiscal year, an application for which the new technology has received
FDA marketing authorization by July 1 prior to the particular fiscal
year. While the applicant stated that ISCDx, one of the three tests in
ISC-REST test kit, has completed the requirements of the Clinical
Laboratories Improvement
[[Page 25268]]
Amendments, we note that this is not considered FDA marketing
authorization as required in our regulations for the new technology
add-on payment.\299\
---------------------------------------------------------------------------
\299\ 42 CFR 412.87(e)(2).
---------------------------------------------------------------------------
In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we
revised our regulations at Sec. 412.87 to codify our longstanding
practice of how CMS evaluates the eligibility criteria for new medical
service or technology add-on payment applications. We stated that new
technologies that have not received FDA approval do not meet the
newness criterion. In addition, we stated we do not believe it is
appropriate for CMS to determine whether a medical service or
technology represents a substantial clinical improvement over existing
technologies before the FDA makes a determination as to whether the
medical service or technology is safe and effective. For these reasons,
we first determine whether a new technology meets the newness
criterion, and only if so, do we make a determination as to whether the
technology meets the cost threshold and represents a substantial
clinical improvement over existing medical services or technologies. We
also finalized at 42 CFR 412.87(c) (subsequently redesignated as
412.87(e)) that all applicants for new technology add-on payments must
have FDA approval or clearance by July 1 of the year prior to the
beginning of the fiscal year for which the application is being
considered.
In the FY 2021 IPPS/LTCH PPS final rule, to more precisely describe
the various types of FDA approvals, clearances, licensures, and
classifications that we consider under our new technology add-on
payment policy, we finalized a technical clarification to Sec.
412.87(e)(2) to indicate that new technologies must receive FDA
marketing authorization (for example, pre-market approval (PMA); 510(k)
clearance; the granting of a De Novo classification request; approval
of a New Drug Application (NDA); or Biologics License Application (BLA)
licensure) by July 1 of the year prior to the beginning of the fiscal
year for which the application is being considered. As noted in the FY
2021 IPPS/LTCH PPS final rule, this technical clarification did not
change our longstanding policy for evaluating whether a technology is
eligible for new technology add-on payment for a given fiscal year, and
we continue to consider FDA marketing authorization as representing
that a product has received FDA approval or clearance for purposes of
eligibility for the new technology add-on payment under Sec.
412.87(e)(2) (85 FR 58742).
As previously summarized, the applicant is seeking an EUA from the
FDA for the ISC-REST test kit. An EUA by the FDA allows a product to be
used for emergency use, but under our longstanding policy, we believe
it would not be considered an FDA marketing authorization for the
purpose of new technology add-on payments, as a product that is
available only through an EUA is not considered to have an FDA approval
or clearance. Therefore, under the current regulations at 42 CFR
412.87(e)(2) and consistent with our longstanding policy of not
considering eligibility for new technology add-on payments prior to a
product receiving FDA approval or clearance, we believe a product
available only through an EUA would not be eligible for new technology
add-on payments.
We also refer the reader to our comment solicitation in section
II.F.7 of the preamble of this proposed rule regarding how data
reflecting the costs of a product with an EUA, which may become
available upon authorization of the product for emergency use (but
prior to FDA approval or clearance), should be considered for purposes
of the 2-year to 3-year period of newness for new technology add-on
payments for a product with or expected to receive an EUA, including
whether the newness period should begin with the date of the EUA.
Additionally, we are uncertain whether the mechanism of action of
ISC-REST can be considered new. While the applicant claims that there
is currently no other blood test available that identifies the cause of
ischemic stroke through RNA biomarkers, we note that clinicians may
order blood tests as part of the stroke consultation to gather
information about stroke risk factors and other medical problems which
may have caused the stroke.\300\ In addition, we note that there are
several types of RNA biomarker tests for stroke that have been
developed and used in other settings, and we therefore note that this
may not represent a new mechanism of action for ISC-REST. Similarly, we
are not certain whether the QIAstat-Dx Respiratory SARS-CoV-2 Panel and
QIAGEN Access Anti-SARS-CoV-2 Total Test components of ISC-REST have
unique mechanisms of action, as they may be similar to other PCR nasal
swabs and serology tests for COVID-19 that are currently in use during
the COVID-19 public health emergency. We welcome public comment
regarding whether ISC-REST has a unique mechanism of action even if
some or all of its test components do not have unique mechanisms of
action individually. Because ISC-REST delivers three separate test
results through three separate tests, it is unclear whether the
combination of the tests in one kit could be viewed as representing a
unique mechanism of action over and above the mechanisms of action of
the tests if they were to be performed separately.
---------------------------------------------------------------------------
\300\ Mayo Clinic Staff, Stroke Diagnosis, Feb. 9, 2021, https://www.mayoclinic.org/diseases-conditions/stroke/diagnosis-treatment/drc-20350119.
---------------------------------------------------------------------------
With regard to whether the technology maps to the same or different
MS-DRG as existing technologies, though the applicant did not state
whether it believes the technology meets this criterion, we believe
that under the proposed indication for ISCDx, ISC-REST would not be
used until a patient had a confirmed ischemic stroke. Therefore, under
the proposed indication, it seems that the technology would map to the
same MS-DRGs as cases involving the standard of care for ischemic
stroke and cerebral infarction. However, it appears that there may be
scenarios where a patient has an occlusion or some other neurological
condition that makes the patient present with stroke-like symptoms,
without having had a stroke or infarction. We invite comments on
whether, for this reason, cases involving the use of the technology may
be assigned to the same or different MS-DRGs as cases not only
involving the standard of care for ischemic stroke and cerebral
infarction, but also nonspecific cerebrovascular accidents and pre-
cerebral occlusions.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, we note the
applicant's statement that there are no existing technologies to
stratify stroke populations by cause does not address whether the
technology meets this criterion. CMS requests comments on whether ISC-
REST kit would be used as a diagnostic aid in the treatment of similar
diseases and patient populations as the current standard-of-care
ischemic stroke diagnosis evaluation.
We are inviting public comments on whether ISC-REST is
substantially similar to other currently available therapies and/or
technologies and whether this technology meets the newness criterion.
With regard to the cost criterion, the applicant provided the
following analysis. The applicant used claims data from one hospital
system, made up of
[[Page 25269]]
three hospitals with a total of 87 health care providers. The average
percentage of patients across the three hospitals with Medicare or
Medicare Advantage coverage was 69%, per the applicant. The applicant
stated that raw data was provided from January 2020 through September
2020, then annualized for 2020. Per the applicant, the average
standardized charges were calculated per MS-DRG by the hospital system
that provided the data.
As mentioned previously, the applicant stated that the technology
would map to the following MS-DRGs: MS-DRG 061 (Ischemic Stroke,
Precerebral Occlusion or Transient Ischemia with Thrombolytic Agent
with MCC), 062 (Ischemic Stroke, Precerebral Occlusion or Transient
Ischemia with Thrombolytic Agent with CC), 063 (Ischemic Stroke,
Precerebral Occlusion or Transient Ischemia with Thrombolytic Agent
without CC/MCC), 064 (Intracranial Hemorrhage Or Cerebral Infarction
with MCC), 065 (Intracranial Hemorrhage or Cerebral Infarction with CC
or TPA in 24 Hours), 066 (Intracranial Hemorrhage or Cerebral
Infarction without CC/MCC), 067 (Nonspecific CVA And Precerebral
Occlusion without Infarction with MCC), and 068 (Nonspecific CVA And
Precerebral Occlusion Without Infarction Without MCC). The applicant's
data included a total of 385 cases mapping to those MS-DRGs. The
applicant did not submit claims data for two of the listed MS-DRGs, MS-
DRG 063 and 067, because the data source that the applicant used did
not have any cases under those MS-DRGs for the time period that the
sample data was collected. The applicant imputed 11 claims for two
other MS-DRGs, 061 and 068, because there were fewer than 11 claims
submitted for these MS-DRGs.
The applicant stated that it compared the distribution of MS-DRGs
in the hospital data to the distribution of MS-DRGs in the FY 2022 New
Technology Add-On Payment thresholds, which includes the number of
cases per MS-DRG. The applicant asserted that because the MS-DRG
distributions were highly similar, the data sample obtained from the
hospital system was representative of the distribution of MS-DRGs
nationally.
The applicant did not remove charges for a prior technology
because, as the applicant noted, ISC-REST is not replacing any other
technology. The applicant then applied the one-year charge inflation
factor of 1.06353 included in the FY 2021 IPPS/LTCH PPS proposed rule
(85 FR 59039) to inflate the charges from FY 2020 to FY 2021. To add
charges for the new technology, the applicant multiplied the cost of
ISC-REST by the cost-to-charge ratio for acute care hospitals found in
the FY 2020 IPPS/LTCH PPS final rule. The applicant explained that the
urban and rural hospital cost-to-charge ratios were combined to yield a
national average of 0.3095. However, we note that the applicant appears
to have used the cost-to-charge ratios in Table 8A, which lists the
statewide average operating cost-to-charge ratios for acute care
hospitals.
The applicant calculated a final inflated average case-weighted
standardized charge per case of $87,842 which exceeds the average case-
weighted threshold amount, $57,110. The applicant contended that ISC-
REST meets the cost criterion based on these analyses.
We have the following concerns regarding the cost criterion. It is
not clear whether the applicant's use of private data from three
hospitals is representative of the Medicare population. While the
applicant states that the average Medicare and Medicare Advantage
percentage of patients across the 3 hospitals was 69%, CMS is unsure
whether the claims under the MS-DRGs the applicant provided are for
Medicare patients, or private insurance patients in those hospitals.
Similarly, because the applicant annualized data from the months of
January to September 2020, it is not clear whether the portion of time
selected by the applicant is representative of the entire year.
Additionally, while the applicant points to the fact that the sample of
claims data from the 3 hospitals had similar MS-DRG distributions as
the FY 2022 New Technology Add-on Payment Thresholds, it is not clear
whether this would indicate that the charging practices of the
hospitals or their patient costs are similar to Medicare claims data
nationally. It is also not clear whether the applicant's cost analysis
is representative of the cost of the technology as the applicant did
not use the applicable cost-to-charge ratio of 0.107 for laboratory
services as provided in the FY 2021 IPPS/LTCH PPS final rule (85 FR
58601). Finally, we note that it is not possible for CMS to verify the
claims data submitted, as the applicant used hospital claims data that
is not publicly available and did not identify the source. We are
inviting public comments on whether ISC-REST meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that ISC-REST represents a substantial clinical
improvement over existing technologies for several reasons. First, the
applicant asserts that ISC-REST has the ability to stratify ischemic
stroke patients early in the diagnosis process to reduce the number of
cryptogenic stroke diagnoses, which leads to appropriate medical
management that can better reduce the risk of a recurrent stroke.
Second, the applicant asserts that ISC-REST will lead to appropriate
utilization of subsequent diagnostic testing, or decrease the necessary
use of subsequent diagnostic testing, to determine stroke etiology,
including: Implantable cardiac monitoring, hypercoagulation panels,
magnetic resonance angiography, and other commonly used tests for
ischemic stroke. Third, the applicant asserts that use of ISC-REST will
lead to a reduction in at least one clinically significant adverse
event, a recurrent stroke, including a reduction in mortality or a
clinically significant complication. Fourth, the applicant further
asserts that use of ISC-REST will result in a decreased use of, or more
appropriate utilization of, therapeutic intervention, in cases where
patients are medically managed for a comorbidity and a stroke occurs.
Fifth, the applicant asserts that use of ISC-REST will result in a
decreased number of future hospitalizations by reducing recurrent
stroke risk and physician visits, as in some cases ISC-REST will result
in a diagnosis pathway that will not require surgical or invasive
procedures. Additionally, once ISC-REST identifies the cause of the
stroke, the applicant asserts that the opportunity to manage a chronic
population may include telemedicine approach, rather than in-person
physician visits. Finally, the applicant asserts that ISC-REST will
result in improved quality of life by helping avoid a recurrent stroke.
The applicant submitted five information sources to address the
substantial clinical improvement criterion, as well as supplementary
information in the application itself and additional narrative
responses. First, the applicant submitted a poster presentation by
Jauch E.C., on the results and methodology of a Biomarkers of Acute
Stroke Etiology (BASE) study to determine whether RNA expression can
accurately differentiate LA stroke from CE stroke in the acute
setting.\301\ Similarly, the applicant submitted an unpublished
manuscript detailing another BASE study on stroke biomarkers to
determine
[[Page 25270]]
if the etiology of acute ischemic stroke could be objectively
determined by RNA expression using BASE blood samples.\302\ Third, the
applicant submitted a published study methodology paper by Jauch et
al., on the methodology of an ongoing (at the time of publication) BASE
study to identify serum markers defining the etiology of acute ischemic
stroke.\303\ The fourth information source, by Jickling et al., was a
published article from 2010 on a study to design genetic probes for
ischemic stroke. The fifth and final information source submitted was a
2016 journal article by Jeffrey L. Saver, with background information
on etiologies of stroke.\304\
---------------------------------------------------------------------------
\301\ Jauch, Edward C., on behalf of BASE clinical trial
principal investigators, ``RNA Expression for Diagnosis of Stroke
Etiology Differentiating Large Artery and Cardioembolic Stroke:
Analytical Validation of Testing From the BASE Clinical Trial,''
2020 AHA International Stroke Conference.
\302\ Peacock, W.F. and Edward Jauch., ``Cardioembolic vs Large
Artery Atherosclerotic Stroke: Can we answer Hobson's question?'',
pre-publication manuscript.
\303\ Jauch, Edward C., et al. ``Biomarkers of Acute Stroke
Etiology (BASE) Study Methodology,'' May 5, 2017.
\304\ Saver, Jeffrey L., ``Cryptogenic Stroke,'' N Engl J Med,
May 26, 2016.
---------------------------------------------------------------------------
The first three information sources all describe the BASE trial
(NCT02014896), a prospective, multicenter, observational, convenience,
sample cohort study of patients presenting to the hospital within 24
hours of stroke onset, which looked to determine if the etiology of
acute ischemic stroke can be objectively determined by RNA expression
from patient blood samples.305 306 307 The primary objective
of the BASE study was to confirm the diagnostic accuracy of the ISCDx
test to identify stroke subtypes in patients with acute ischemic
stroke. According to the BASE Study Methodology paper by Jauch et al.,
while enrollment for this multisite study was ongoing at the time of
publication, it was expected to hit 1000 patients by March 2017.\308\
The Base Study Methodology paper explains that blood samples were first
collected from patients presenting to the hospital within 24 hours of
stroke onset, and then again collected 24 hours and 48 hours
later.\309\ The tubes were kept at room temperature for up to 24 hours
and then frozen -20 [deg]C until shipped to the Ischemia Care CLIA
laboratory where the ISCDx testing was performed. From these blood
samples, RNA gene expression was utilized to identify stroke etiology
marker candidates. Patients who met the inclusion criteria: (1) Had
experienced a suspected acute ischemic stroke within 24(+/-6) hours of
symptom onset; (2) had a normal baseline CT, without hemorrhage or
alternate explanation for symptoms; (3) were older than 18 years old;
and (4) gave informed consent. Control samples consisted of 100 non-
stroke Emergency Department patients matched on clinical risk factors
of age, race, gender, smoking history, diabetes, hypertension, atrial
fibrillation, and hyperlipidemia. We note that there are changes from
the previously stated study methodology in the two sources the
applicant included with BASE study results.310 311 For
example, while the study methodology as described in the Jauch et al.
paper stated that the blood samples were kept at room temperature for
up to 24 hours and then frozen,\312\ in the poster presentation by
Jauch, E.C., the samples were frozen within 72 hours of
collection.\313\
---------------------------------------------------------------------------
\305\ Jauch, Edward C., on behalf of BASE clinical trial
principal investigators, ``RNA Expression for Diagnosis of Stroke
Etiology Differentiating Large Artery and Cardioembolic Stroke:
Analytical Validation of Testing From the BASE Clinical Trial,''
2020 AHA International Stroke Conference.
\306\ Peacock, W.F. and Edward Jauch., ``Cardioembolic vs Large
Artery Atherosclerotic Stroke: Can we answer Hobson's question?'',
pre- publication manuscript.
\307\ Jauch, Edward C., et al. ``Biomarkers of Acute Stroke
Etiology (BASE) Study Methodology,'' May 5, 2017.
\308\ Jauch, Edward C., et al. ``Biomarkers of Acute Stroke
Etiology (BASE) Study Methodology,'' May 5, 2017.
\309\ Ibid.
\310\ Peacock, W.F. and Edward Jauch., ``Cardioembolic vs Large
Artery Atherosclerotic Stroke: Can we answer Hobson's question?'',
pre- publication manuscript.
\311\ Jauch, Edward C., on behalf of BASE clinical trial
principal investigators, ``RNA Expression for Diagnosis of Stroke
Etiology Differentiating Large Artery and Cardioembolic Stroke:
Analytical Validation of Testing From the BASE Clinical Trial,''
2020 AHA International Stroke Conference.
\312\ Jauch, Edward C., et al. ``Biomarkers of Acute Stroke
Etiology (BASE) Study Methodology,'' May 5, 2017.
\313\ Jauch, Edward C., on behalf of BASE clinical trial
principal investigators, ``RNA Expression for Diagnosis of Stroke
Etiology Differentiating Large Artery and Cardioembolic Stroke:
Analytical Validation of Testing From the BASE Clinical Trial,''
2020 AHA International Stroke Conference.
---------------------------------------------------------------------------
The applicant describes a set of study results, which are detailed
in the unpublished manuscript by Peacock et al. and the poster
presentation by Jauch, E.C.314 315 These analyses used
adjudicated stroke diagnoses, classified as CE and LA, and determined
by two board-certified neurologists blinded to each other's diagnosis
and biomarker results. The 218 patients enrolled were randomly assigned
to a derivation cohort (70%) or validation cohort (30%). Using the
derivation set gene expression levels, a signature was created to
distinguish between CE and LA ischemic stroke, with the derived model
then applied to the validation cohort. 59% of the participants in the
study were male with a median age of 70.7 years. The median time from
symptom onset to blood collection was 1200 minutes (ranging from 448 to
1568 minutes). The applicant explains that, of the 218 patients
enrolled with an NIHSS>5, 149 were adjudicated as CE and 69 were
adjudicated as LA. Additionally, sample analysis of the derivation
cohort resulted in 9,513 unique gene-level probe-sets for signature
inclusion, with the best set containing 45 genes. The diagnostic gene
signature results in the early validation cohort distinguished CE
stroke from LA stroke with a C-statistic of 0.78 (0.50-1.0, 95% CI),
sensitivity of 0.90 and specificity of 0.70. The study concluded that
RNA expression accurately identifies stroke etiology.
---------------------------------------------------------------------------
\314\ Peacock, W.F. and Edward Jauch., ``Cardioembolic vs Large
Artery Atherosclerotic Stroke: Can we answer Hobson's question?'',
pre- publication manuscript.
\315\ Jauch, Edward C., on behalf of BASE clinical trial
principal investigators, ``RNA Expression for Diagnosis of Stroke
Etiology Differentiating Large Artery and Cardioembolic Stroke:
Analytical Validation of Testing From the BASE Clinical Trial,''
2020 AHA International Stroke Conference.
---------------------------------------------------------------------------
The applicant also provided the following supplemental information
to support that combining three tests in the ISC-REST kit improves
patient outcomes over performing the lab tests separately. Though the
applicant noted that there is no direct evidence currently available
regarding the impact of using the ISC-REST kit, they explain that, in
their experience, clinical supporters of the ISC-REST kit claim that
they would order ISC-REST kit testing 100% of the time versus ordering
three separate tests. The applicant claims that there is a convenience,
cost effectiveness, and time savings associated with ISC-REST during a
time when hospital resources are limited. Second, the applicant states
that because the QIAstat-Dx Respiratory SARS-CoV-2 Panel tests for
COVID-19 as well as 12 other common respiratory illnesses, in testing
for several respiratory illnesses, ISC-REST may inform care decisions.
Third, the applicant states that collecting the samples for each test
together and testing them in the same laboratory will ensure high
levels of quality control. The applicant also claims that using the
ISC-REST test kit has investigative benefits, including the ability to
help track and study how long the COVID-19 antibodies last in a chronic
population based upon consistent measurement of the index events
(stroke and COVID-19). Finally, the applicant states that the ISC-REST
kit and adoption of guideline-directed appropriate care will result in
prevention of recurrent strokes because it will impact clinician choice
of therapeutics.
After a review of the information provided by the applicant, we
have the
[[Page 25271]]
following concerns with regard to the substantial clinical improvement
criterion.
We note that all of the BASE study results that the applicant
submitted provide information on the ISCDx test on its own rather than
the ISC-REST test kit, for which the applicant has submitted an
application for new technology add-on payment
consideration.316 317 As stated in the BASE Study
methodology paper by Jauch, et al., the primary objective of the BASE
study is to confirm the diagnostic accuracy of the ISCDx test to
identify stroke subtypes in patients with acute ischemic stroke.\318\
No data were provided with regard to the complete ISC-REST kit, the
other components individually, or any combination. We are therefore
unclear as to whether it is possible to draw conclusions about
substantial clinical improvement for the ISC-REST kit using the limited
data provided on the ISCDx test and without any data or studies on the
ISC-REST kit. Specifically, the applicant did not submit data or
studies on how treatment decisions are impacted after the ISC-REST kit
is used or if there is any impact on patient outcomes as a result of
using the technology. While the applicant has made claims regarding
reducing downstream diagnostic tests and avoiding inappropriate medical
intervention by using the ISC-REST kit, it did not provide any studies
or data regarding these claims. The applicant also made claims as to
how the individual parts of the test impact care decisions, but
similarly did not provide data to demonstrate this. For example, the
applicant claimed that, in testing for several respiratory illnesses,
the QIAstat-Dx Respiratory SARS-CoV-2 Panel will inform care decisions,
but did not submit any evidence that this is the case. We also note
that, because the applicant has not submitted evidence to demonstrate
the utility of the ISC-REST kit, it seems that the additional tests
outside of the ISCDx test could result in clinical burden and
additional cost without demonstrated benefits.
---------------------------------------------------------------------------
\316\ Ibid.
\317\ Peacock, W.F. and Edward Jauch., ``Cardioembolic vs Large
Artery Atherosclerotic Stroke: Can we answer Hobson's question?'',
pre- publication manuscript.
\318\ Jauch, Edward C., et al. ``Biomarkers of Acute Stroke
Etiology (BASE) Study Methodology,'' May 5, 2017.
---------------------------------------------------------------------------
With regard to the studies submitted on ISCDx, we are unsure
whether they demonstrate or examine the impacts of using the test on
patient care and clinical outcomes. The applicant did not submit
evidence to demonstrate that a recurrent stroke did not happen, that
the use of more invasive investigational or further diagnostic tools
was avoided, or that there was an increase in appropriate treatment and
recurrent stroke prevention protocols after using the test. In the
study methodology paper by Jauch et al., the applicant did not include
full survey results because they were not available at the time the
application was submitted. Additionally, we are unsure how to interpret
the results from the small BASE study for ISCDx because there are
variations between the study methodology as explained in the Jauch,
E.C. et al. paper and the way the studies were actually conducted. For
example, while the study methodology as described in the Jauch et al.,
paper stated that the blood samples were kept at room temperature for
up to 24 hours and then frozen,\319\ in the poster presentation by
Jauch, E.C., the samples were frozen within 72 hours of
collection.\320\ We also have concerns regarding the testing accuracy
of the ISCDx test. In the BASE study results that were submitted on the
ISCDx test, the sensitivity was 0.90 and specificity was 0.70 for a
sample size of 218 survey subjects.\321\ Due to these figures, we
question whether ISC-REST would alter the standard care ischemic stroke
patients receive. Further, we note that the only trials submitted on
the ISCDx test included patients whose cause of stroke was already
determined. While the applicant claims that ISC-REST has the ability to
stratify ischemic stroke patients early in the diagnosis process to
reduce the number of cryptogenic stroke diagnoses and more
appropriately manage stroke to reduce secondary recurrence, we question
if there is sufficient evidence to evaluate this claim because the
cause of stroke had already been determined in the study results the
applicant submitted.
---------------------------------------------------------------------------
\319\ Ibid.
\320\ Jauch, Edward C., on behalf of BASE clinical trial
principal investigators, ``RNA Expression for Diagnosis of Stroke
Etiology Differentiating Large Artery and Cardioembolic Stroke:
Analytical Validation of Testing From the BASE Clinical Trial,''
2020 AHA International Stroke Conference.
\321\ Ibid.
---------------------------------------------------------------------------
The applicant stated that there is no guideline standard of care
pathway to determine cause of stroke, and uses this assertion as an
underlying assumption for its claims in support of substantial clinical
improvement. CMS notes that while there is room for clinicians to order
certain additional tests over others depending on a patient's
circumstances, there are algorithms developed by professional societies
for the diagnosis and treatment of ischemic stroke.\322\ These best
practices are updated frequently to reflect current clinical research,
and detail prehospital care, urgent and emergency evaluation and
treatment, and in-hospital management, including early secondary
prevention measures. CMS notes that by assuming that there is no
guideline standard of care to determine the cause of stroke, the
applicant has not presented information to compare the technology
against a standard of care or other technology to allow for an
assessment of whether the technology is a substantial clinical
improvement over existing technologies to diagnose the cause of stroke.
---------------------------------------------------------------------------
\322\ Power, William J. ``Guidelines for the Early Management of
Patients With Acute Ischemic Stroke: 2019 Update to the 2018
Guidelines for the Early Management of Acute Ischemic Stroke: A
Guideline for Healthcare Professionals From the American Heart
Association/American Stroke Association,'' Stroke. 2019 Dec; 50:e344
https://doi.org/10.1161/STR.0000000000000211.
---------------------------------------------------------------------------
We are also unsure whether the way the ISC-REST test kit is used
will limit its ability to impact any care decisions and prevent
hospital use. Specifically, we question if the extended 30-hour window
for obtaining the patient samples, as well as the added element of
shipping the ISC-REST kit to a single laboratory, is in line with
stroke protocols, which focus on diagnosing a stroke as quickly as
possible to maximize patient outcomes. There has been extensive
research regarding the time-outcome relationship for stroke; because
brain cells die rapidly after the event of the stroke, effective
treatment must start as early as possible.\323\ Since every minute
matters in stroke treatment and secondary prevention, we believe that
clinicians may order further diagnostic tests and begin a treatment
plan before the ISC-REST kit results become available, which may limit
the utility of the technology and its ability to impact care decisions.
In other words, CMS questions whether ISC-REST would improve or alter
the standard course of treatment for ischemic stroke due to the delay
in receiving test results. We further note that sending the ISC-REST
test kit to an external lab may cause a delay in COVID-19 test results
as well. Therefore, we remain unclear as to the clinical benefit of
combining these tests and are unsure how this potential for delay in
results affects the technology's ability to impact care decisions.
---------------------------------------------------------------------------
\323\ Harpaz, Dorin., et al., ``Point-of-Care-Testing in Acute
Stroke Management: An Unmet Need Ripe for Technological Harvest,''
Biosensors (Basel), 2017 Sep; 7(3): 30. Published online 2017 Aug 3.
DOI: 10.3390/bios7030030.
---------------------------------------------------------------------------
[[Page 25272]]
The applicant also submitted various narrative responses claiming
that testing for COVID-19 at the same time as testing for the cause of
the ischemic stroke constitutes substantial clinical improvement over
existing technologies. Regarding the applicant's claims that the ISC-
REST test kit is convenient for clinicians, CMS is unsure whether there
is currently a need to order testing for COVID-19 along with the ISCDx
test because, during the COVID-19 public health emergency, many
hospitals automatically test for COVID-19 upon hospital admission to
ensure proper treatment and containment. Further, CMS is unsure whether
convenience for clinicians is evidence of substantial clinical
improvement. With regard to the applicant's claim that, in its
experience, clinical supporters of the ISC-REST kit claim that they
would order ISC-REST kit testing 100% of the time versus ordering three
separate tests, it is unclear whether clinical supporters of the ISC-
REST kit are representative of all providers, including those
participating in Medicare. Similarly, the applicant did not provide
evidence to support its claim that ISC-REST will help gather data on
any connection between COVID-19 and stroke, including a tracking
mechanism for how long COVID-19 antibodies last, such as how ISC-REST
would be better at gathering data on COVID-19 and stroke than other
COVID-19 diagnostics.
Regarding the applicant's claims that knowing the results of all
three tests in the ISC-REST kit, including COVID-19 status, impacts
clinicians' choice of therapeutics for secondary stroke prevention or
other treatment decisions, we are not sure that this conclusion can be
reached as the connection between COVID-19 and stroke has not been
established. As evidence of the connection between COVID-19 and stroke,
the applicant claims that the cryptogenic rate is higher for stroke
patients with COVID-19 than stroke patients without COVID-19 and
references a study of one hospital, where 32 patients hospitalized for
COVID-19 or positive for COVID-19 experienced an ischemic stroke during
a one-month period of time in the spring of 2020. Other studies have
been conducted researching the possible link between COVID-19 and
stroke, including one study with a larger sample size, analyzing over
27,000 participants across 54 health care facilities, that suggests
that stroke in COVID-19 patients is infrequent, and is associated with
typical stroke risk factors.\324\ Another study, analyzing data from
close to 25,000 discharges from a large New York-based health care
system from January to April 2020, did not identify a positive
association between ischemic stroke and COVID-19.\325\ Based on the
information that the applicant submitted, it is also unclear whether
stroke treatment for an ischemic stroke patient, who is also COVID-19
positive, would be different than for an ischemic stroke patient who is
COVID-19 negative. For example, it is unclear whether a stroke patient
would not receive antiplatelet or anticoagulative treatment due to a
COVID-19 diagnosis. Because the connection between stroke and COVID-19
is unclear and is still in the preliminary stages of research, we are
unsure whether testing for the type of ischemic stroke as well as
COVID-19 status is a substantial clinical improvement over existing
technologies. As stated previously, the applicant did not submit
studies or data on how using the ISC-REST kit has an impact on
downstream treatment decisions or patient outcomes to determine whether
knowing a patient's COVID-19 status and the type of ischemic stroke
they experienced is a substantial clinical improvement over existing
technologies. Furthermore, as there is research that casts doubt on the
connection between COVID-19 and stroke,326 327 we question
whether placing an emphasis on COVID-19 status and stroke may
discourage a clinician from continuing to investigate the cause or
treat an underlying predisposing condition for stroke, once the patient
has recovered from COVID-19, and whether this could potentially lead to
negative patient outcomes.
---------------------------------------------------------------------------
\324\ Qureshi, et al. ``Acute Ischemic Stroke and COVID-19: An
Analysis of 27,676 Patients,'' Stroke, 4 Feb 2021, https://www.ahajournals.org/doi/abs/10.1161/STROKEAHA.120.031786.
\325\ Bekelis, et al. Ischemic Stroke Occurs Less Frequently in
Patients With COVID-19: A Multicenter Cross-Sectional Study, Stroke,
51(12):3570-3476, 27 Oct 2020, https://pubmed.ncbi.nlm.nih.gov/33106109/#affiliation-1.
\326\ Qureshi, et al. ``Acute Ischemic Stroke and COVID-19: An
Analysis of 27,676 Patients,'' Stroke, 4 Feb 2021, https://www.ahajournals.org/doi/abs/10.1161/STROKEAHA.120.031786. Qureshi,
et al., 2021, Ibid.
\327\ Bekelis, et al. Ischemic Stroke Occurs Less Frequently in
Patients With COVID-19: A Multicenter Cross-Sectional Study, Stroke,
51(12):3570-3476, 27 Oct 2020, https://pubmed.ncbi.nlm.nih.gov/33106109/#affiliation-1. Bekelis, et al., 2020, Ibid.
---------------------------------------------------------------------------
We are inviting public comments on whether ISC-REST meets the
substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for ISC-REST.
j. Lifileucel
Iovance Biotherapeutics submitted an application for new technology
add-on payments for lifileucel for FY 2022. According to the applicant,
lifileucel is a proprietary, one-time autologous Tumor Infiltrating
Lymphocytes (TIL) cell-based therapy being studied for effectiveness in
solid tumors. TIL cell therapy with lifileucel involves the adoptive
cell transfer (ACT) of autologous T-cells directly isolated from the
tumor tissue and expanded ex vivo without any prior selection or
genetic modification. Tumor antigen-specific T-cells are located within
tumor lesions, where a dysfunctional state and low numbers prevent them
from effectively eradicating the tumor. By isolating autologous TIL
from the tumor microenvironment and expanding them, the lifileucel
manufacturing process produces large numbers of reinvigorated T-cells.
Following the infusion of lifileucel, the TIL migrate back into the
tumor, including metastases, where they trigger specific tumor cell
killing upon recognition of tumor antigens.
According to the applicant, relapsed and refractory metastatic
melanoma presents a high unmet medical need with low survival rates and
limited durable treatment options.\328\ Despite the advances in
available treatments, responses in patients with metastatic melanoma
are at times inadequate, with many patients either not responding (40%
to 65%) 329 330 or displaying primary or acquired resistance
(>70%) and the disease progresses.331 332 333 334 335 The
applicant
[[Page 25273]]
stated there are currently no approved agents for the treatment of
patients with metastatic melanoma who fail available standard-of-care
therapies, which include immune checkpoint inhibitors (ICI) and BRAF/
MEK inhibitors. According to the applicant, the only commonly used
available therapy for these patients post progression is chemotherapy.
The applicant stated that as demonstrated in the literature referenced
previously, retreatment with chemotherapy 336 337 338 or
experimental combined ICIs \339\ offers a poor Objective Response Rate
(ORR) \340\ of 4%-10%,341 342 a median PFS of 2.7-3.7 months
343 344 345 and a median OS of ~7-8
months.346 347
---------------------------------------------------------------------------
\328\ Sarnaik A, et al. Safety and efficacy of lifileucel (LN-
144) tumor infiltrating lymphocyte therapy in metastatic melanoma
patients after progression on multiple therapies--independent review
committee data update. Poster presented at SITC 2019. Poster Number:
P865 and abstract; Journal: J Immunotherapy Cancer 2020;8:A12.
\329\ Mooradian MJ and Sullivan RJ. What to do when anti-PD-1
therapy fails in patients with melanoma. Oncology (Williston Park)
2019;33:141-8.
\330\ Gide TN, et al. Primary and acquired resistance to immune
checkpoint inhibitors in metastatic melanoma. Clin Cancer Res
2018;24:1260-70.
\331\ Luke JJ, et al. Targeted agents and immunotherapies:
Optimizing outcomes in melanoma. Nature Reviews Clinical Oncology.
Doi:10.1038/ncrclinonc.2017.43. Published online April 4, 2017.
\332\ Mooradian MJ and Sullivan RJ. What to do when anti-PD-1
therapy fails in patients with melanoma. Oncology (Williston Park)
2019;33:141-8.
\333\ Gide TN, et al. Primary and acquired resistance to immune
checkpoint inhibitors in metastatic melanoma. Clin Cancer Res
2018;24:1260-70.
\334\ Schachter J, et al. Pembrolizumab versus ipilimumab for
advanced melanoma: Final overall survival results of a multicenter,
randomized, open-label phase 3 study (KEYNOTE-006). Lancet 2017;
390:1853-62.
\335\ Ugurel S, et al. Survival of patients with advanced
metastatic melanoma: The impact of novel therapies-update 2017. Eur
J Cancer 2017; 83:247-257.
\336\ Goldinger SM, et al. The utility of chemotherapy after
immunotherapy failure in metastatic melanoma: A multicenter case
series. J Clin Oncol 2018;36:e21588-e.
\337\ Larkin J, et al. Overall survival in patients with
advanced melanoma who received nivolumab versus investigator's
Choice chemotherapy in CheckMate 037: A randomized, controlled,
open-label Phase III trial. J Clin Oncol 2018;36:383-90.
\338\ Ribas A, et al. Pembrolizumab versus investigator-choice
chemotherapy for ipilimumab-refractory melanoma (KEYNOTE-002): A
randomised, controlled, phase 2 trial. Lancet Oncol. 2015; 16(8):
908-18.
\339\ Kirchberger MC, et al. Combined low-dose ipilimumab and
pembrolizumab after sequential ipilimumab and pembrolizumab failure
in advanced melanoma. Eur J Cancer. 2016;65:182-184. doi:10.1016/
j.ejca. 2016.07.003.
\340\ As used by the applicant and the studies provided,
Objective Response Rate (ORR) is the combination of Complete and
Partial Responses.
\341\ Larkin J, et al. Overall survival in patients with
advanced melanoma who received nivolumab versus investigator's
Choice chemotherapy in CheckMate 037: A randomized, controlled,
open-label Phase III trial. J Clin Oncol 2018;36:383-90.
\342\ Ribas A, et al. Pembrolizumab versus investigator-choice
chemotherapy for ipilimumab-refractory melanoma (KEYNOTE-002): A
randomised, controlled, phase 2 trial. Lancet Oncol. 2015; 16(8):
908-18.
\343\ Goldinger SM, et al. The utility of chemotherapy after
immunotherapy failure in metastatic melanoma: A multicenter case
series. J Clin Oncol 2018;36:e21588-e.
\344\ Larkin J, et al. Overall survival in patients with
advanced melanoma who received nivolumab versus investigator's
Choice chemotherapy in CheckMate 037: A randomized, controlled,
open-label Phase III trial. J Clin Oncol 2018;36:383-90.
\345\ Ribas A, et al. Pembrolizumab versus investigator-choice
chemotherapy for ipilimumab-refractory melanoma (KEYNOTE-002): A
randomised, controlled, phase 2 trial. Lancet Oncol. 2015; 16(8):
908-18.
\346\ Kirchberger MC, et al. Combined low-dose ipilimumab and
pembrolizumab after sequential ipilimumab and pembrolizumab failure
in advanced melanoma. Eur J Cancer. 2016;65:182-184. doi:10.1016/
j.ejca. 2016.07.003.
\347\ Goldinger SM, et al. The utility of chemotherapy after
immunotherapy failure in metastatic melanoma: A multicenter case
series. J Clin Oncol 2018;36:e21588-e.
---------------------------------------------------------------------------
With respect to the newness criterion, the applicant stated that
they are currently awaiting FDA approval of the Biologics License
Application (BLA) for lifileucel as an autologous TIL immunotherapy
indicated for the treatment of patients with unresectable or metastatic
melanoma who have been previously treated with at least one systemic
therapy, including a PD-1 blocking antibody and, if BRAF V600 mutation
positive, a BRAF inhibitor or BRAF inhibitor with MEK inhibitor. The
applicant stated that currently, there are no ICD-10-PCS procedure
codes to uniquely identify procedures involving lifileucel. We note
that the applicant has submitted a request for approval for a unique
ICD-10-PCS code for the administration of lifileucel beginning in FY
2022.
If a technology meets all three of the substantial similarity
criteria, it would be considered substantially similar to an existing
technology and would not be considered ``new'' for purposes of new
technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that lifileucel is not the same or similar to the
mechanism of action of currently available products used in the
treatment of advanced melanoma. According to the applicant, prior to
2011, the most common first-line treatment for patients with Stage III
unresectable or Stage IV unresectable metastatic melanoma was single-
agent therapy using dacarbazine (DTIC) or another alkylating agent, or
combination chemotherapy using DTIC together with a platinum-based drug
such as carboplatin and/or a microtubule inhibitor such as
paclitaxel.348 349 350 IL-2 therapy has also been used as
part of a biochemotherapy (BCT) antineoplastic regimen. The applicant
asserted that since 2011, treatment options for advanced-stage melanoma
have included kinase inhibitors such as BRAF and MEK inhibitors,
cytotoxic T-lymphocyte-associated antigen 4 (CTLA-4) and programmed
cell-death protein 1 (PD-1) blocking antibodies. According to the
applicant, the currently available first and second line treatments for
advanced melanoma include kinase inhibitors (BRAF and MEK inhibitors)
and ICIs (anti-CTLA-4 antibody and anti-PD1 antibody).\351\ The
applicant asserts that there are no approved treatment options for
patients with metastatic melanoma that have progressed after two lines
of therapy.
---------------------------------------------------------------------------
\348\ Gogas HD, et al. The role of taxanes in the treatment of
metastatic melanoma. Melanoma Res. 2004;14(5): 415-420.
\349\ Yang AS and Chapman PB. The history and future of
chemotherapy for melanoma. Hematol Oncol Clin North Am. 2009;23(3):
583-597.
\350\ Yushak M, et al. Advances in the systemic treatment of
metastatic melanoma. Oncology (Williston Park). 2013; 27(5).
\351\ Luke JJ, et al. Targeted agents and immunotherapies:
Optimizing outcomes in melanoma. Nature Reviews Clinical Oncology.
Doi:10.1038/ncrclinonc.2017.43. Published online April 4, 2017.
---------------------------------------------------------------------------
According to the applicant, TIL cell therapy with lifileucel uses a
novel and distinct mechanism of action which delivers a highly
customized, personalized, and targeted treatment for unresectable or
metastatic melanoma. Lifileucel TIL cell therapy involves the ACT of
autologous T-cells directly isolated from the patient's tumor tissue
and expanded ex vivo. Following the infusion of lifileucel, the TIL
migrates back into the patient's tumor deposits, including metastases,
where they trigger specific tumor cell killing upon recognition of
tumor antigens. According to the applicant, after approval, lifileucel
will be the only personalized, cellular therapy indicated for the
treatment of unresectable or metastatic melanoma.
The applicant asserted TIL cell therapy with lifileucel is also
highly differentiated from currently approved chimeric antigen receptor
(CAR) T-cell therapies which treat liquid tumors: YESCARTA[supreg]
(axicabtagene ciloleucel) and KYMRIAH[supreg] (tisagenlecleucel), both
approved for the treatment of large B-cell lymphoma in adults, and
recently approved TECARTUSTM (brexucabtagene autoleucel)
indicated for the treatment of relapsed/refractory mantle cell lymphoma
(MCL). According to the applicant, CAR T-cell therapies mainly target
only single/surface tumor antigens, versus TIL cell therapy which
targets multiple tumor antigens. The applicant stated that there are no
examples of successful utility of CAR T-cell therapy in solid tumors.
The applicant further stated that the TIL mechanism of action does not
rely on genetically engineered receptors, but maintains some
physiologic control and therefore avoids hyperactivation that may be
responsible for complications from CAR T-cell therapy such as cytokine
release syndrome (CRS) or neurotoxicity.\352\ Per the applicant,
[[Page 25274]]
there have been no off-tissue effects found to date following treatment
with TIL cell therapy, and TIL therefore offers a differentiated safety
profile compared to CAR T-cell products or ICIs and confirms the
mechanism of action differentiation discussed previously.
---------------------------------------------------------------------------
\352\ Fardis M, et al. Current and future directions for tumor
infiltrating lymphocyte therapy for the treatment of solid tumors.
Cell and Gene Therapy Insights, 2020; 6(6), 855-863.
---------------------------------------------------------------------------
With respect to the second criterion, whether a product is assigned
to the same or different MS-DRG, the applicant stated that CMS has not
yet determined the MS-DRG mapping for cellular therapies such as
lifileucel. The applicant asserted that while TIL cell therapy is
different from CAR T-cell therapy mechanistically, from tumor (solid
vs. liquid) activity, and from a safety perspective, there are other
similarities that support grouping the two technologies into a common
MS-DRG for autologous T-cell immunotherapy. The applicant asserted that
both CAR T-cell and TIL require collection of a patient's lymphocyte
cells which are the core component of a complicated and lengthy
manufacturing process to produce a patient-specific therapeutic dose.
The applicant added that both are primarily administered in a hospital
inpatient setting because of the risk of significant but treatable
adverse events. Lastly, the applicant stated because of the complex
process required to develop a personalized treatment and the total cost
of caring for patients who have received TIL cell therapy that is
similar to CAR T-cell therapy, these cases are expected to be
comparably resource intensive.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
stated that with FDA approval, lifileucel will be the only FDA-approved
cellular treatment for patients with unresectable or metastatic
melanoma who have been previously treated with at least one systemic
therapy.
Based on the information provided by the applicant, we have several
questions with regard to the newness criterion. With respect to the
first criterion for substantial similarity, we note that for FY 2019
(83 FR 41299), CMS approved two CD19 directed CAR T-cell therapies,
YESCARTA[supreg] and KYMRIAH[supreg], for new technology add-on
payments. The applicant asserted that CAR T-cell therapies and TIL
therapies can be differentiated by multiple criteria as listed
previously. We are seeking public comment on whether the mechanism of
action for lifileucel is different from existing therapies, in
particular whether the distinguishing criteria identified by the
applicant are sufficient to differentiate the mechanism of action of
TIL from CAR T-cell therapies.
We are inviting public comments on whether lifileucel is
substantially similar to other currently available therapies and/or
technologies and whether this technology meets the newness criterion.
With regard to the cost criterion, the applicant provided the
following analysis to demonstrate the technology meets the cost
criterion. The applicant conducted multiple analyses to include a
primary cohort, a cohort with a principle or admitting ICD-10 diagnosis
of melanoma and metastasis and a cohort with any ICD-10 diagnosis of
melanoma and metastasis. The ICD-10 codes and MS-DRGs identified by the
applicant (for the primary cohort) are listed in the following tables.
[GRAPHIC] [TIFF OMITTED] TP10MY21.156
To conduct the primary analysis, the applicant identified a cohort
of patients that would be eligible for lifileucel that met the criteria
of having any ICD-10 diagnosis of melanoma from the following table,
and any ICD-10 diagnosis of metastasis from the following table, and
any ICD-10 procedure code indicating administration of IL-2 or other
chemotherapy via central or peripheral vein from the following table.
BILLING CODE 4120-01-P
[[Page 25275]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.157
[[Page 25276]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.158
[[Page 25277]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.159
[[Page 25278]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.160
[GRAPHIC] [TIFF OMITTED] TP10MY21.161
BILLING CODE 4120-01-C
The applicant used the FY 2019 MedPAR file dataset with the FY 2019
Final Rule with Correction Notice IPPS Impact File and the FY 2022 New
Technology Thresholds to perform their cost analyses. Using the FY 2019
MedPAR file dataset, the applicant's search resulted in the
identification of 20 MS-DRGs to which cases in the primary cohort
mapped, as previously listed. The applicant provided two sensitivity
cohorts: (1) A principal or admitting ICD-10 diagnosis of melanoma and
metastasis; and (2) any ICD-10 diagnosis of melanoma and metastasis.
The applicant stated that the analysis was limited to Medicare
discharges from facilities paid under the IPPS by only including
hospitals listed in the FY 2019 Final Rule IPPS Impact File. The
previously discussed criteria resulted in 220 claims from 20 MS-DRGs in
the primary cohort, 1,052 claims from 79 MS-DRGs in the sensitivity
cohort 1, and 6,988 claims from 369 MS-DRGs in sensitivity cohort 2.
The applicant imputed a case count of 11 for those MS-DRGs with fewer
than 11 cases, which per the applicant resulted in a significantly
higher case count than if it used the actual case counts. The applicant
stated that imputing the cases did not change the results of the charge
threshold analyses presented below, and the final inflated average
case-weighted standardized charge per case exceeded the case-weighted
threshold in all scenarios regardless of whether the actual case count
or minimimum case count of 11 is used. For each cohort, the applicant
provided multiple analyses, by first using the threshold from each MS-
DRG included, second using the MS-DRG 018 threshold for all included
MS-DRGs and the national pharmacy CCR (0.187) to calculate charges, and
lastly using the MS-DRG 018 threshold for all included MS-DRGs and the
applicant-calculated CAR T-cell CCR (0.314) to calculate charges. For
example, in the first analysis, the applicant used a threshold amount
of $62,724 for MS-DRG 838 but in second and third analyses the
applicant used a threshold of $1,251,126 for MS-DRG 838 (the same
threshold for MS-DRG 018). The applicant first calculated a case
weighted threshold of $70,220, $72,889, and $67,947 for the primary,
sensitivity one, and sensitivity two cohorts respectively based on a
case-weighted average of the threshold amounts for the MS-DRGs to which
the cases identified based on the claims data search mapped. The
applicant calculated a case weighted threshold of $1,251,126 for all
secondary calculations where the MS-DRG 018 threshold was applied for
all MS-DRGs identified. We note, in section II.D. of this proposed
rule, we are proposing to assign other immunotherapies MS-DRG 018 (for
example Introduction of lifileucel immunotherapy into peripheral vein,
percutaneous approach, new technology group 7), in addition to CAR T-
cell therapies. Therefore, it seems the appropriate threshold for
comparison is that of MS-DRG 018, with an average case-weighted
threshold amount of $1,251,126.
For the analyses using the MS-DRG 018 thresholds, to calculate the
average charge per case, the applicant used the cases identified based
on the claims data search and mapped them to the MS-DRG 018 threshold.
To determine the charges for lifileucel, the applicant converted cost
to charges by dividing by the FY 2021 IPPS/LTCH PPS final rule national
average pharmacy CCR of 0.187, and in secondary analyses, by a CAR T-
cell CCR of 0.314 calculated by the applicant. To estimate the CAR T-
cell CCR, the applicant obtained the MS-DRG 018 arithmetic mean charge
in the AOR/BOR FY2021 Proposed Rule File released by CMS ($1,387,946).
The applicant subtracted publicly reported non-drug charges for
TECARTUS of $201,610 from the total arithmetic mean charge to estimate
CAR T-cell charges (approximately $1,186,336). The applicant then
divided a CAR T-cell wholesale acquisition cost of $373,000 (WAC for
those CAR T-cell products approved as of FY 2019) by the estimated CAR
T-cell charges, to estimate a CAR T-cell CCR of 0.314 (CCR = 373,000/
1,186,336).
The applicant stated no charges were removed for the prior
technology because previous treatments will continue to be reflected in
cases where
[[Page 25279]]
lifileucel is administered. Next the applicant calculated the average
standardized charge per case using the FY 2019 IPPS/LTCH PPS final rule
Impact file. The 2-year inflation factor of 13.2% (1.13218) was
obtained from the FY 2021 IPPS/LTCH PPS final rule and applied to the
average standardized charge per case.
The applicant calculated the final inflated average case-weighted
standardized charge per case by adding the estimated charges for the
technology to the inflated average standardized charge per case. The
applicant determined a final inflated average case-weighted
standardized charge per case of $2,188,043 and $1,355,334 from the
primary cohort, pharmacy and CAR T-cell CCR analyses with CAR T-cell
thresholds respectively, which both exceed the average case-weighted
threshold amount of $1,251,126.
The applicant determined a final inflated average case-weighted
standardized charge per case of $2,134,830 and $1,302,121 from the
sensitivity cohort one using the pharmacy and CAR T-cell CCR analyses
with CAR T-cell thresholds respectively, which both exceed the average
case-weighted threshold amount of $1,251,126.
The applicant determined a final inflated average case-weighted
standardized charge per case of $2,131,524 and $1,298,815 from the
sensitivity cohort two using the pharmacy and CAR T-cell CCR analyses
with CAR T-cell thresholds respectively, which both exceed the average
case-weighted threshold amount of $1,251,126. Because the final
inflated average case-weighted standardized charge per case for all the
analyses exceeded the average case-weighted threshold amount, the
applicant maintained that the technology meets the cost criterion.
Based on the information provided by the applicant, we have the
following concerns regarding the cost analysis.
As noted in previous discussions, the submitted costs for CAR T-
cell therapies vary widely due to differences in provider billing and
charging practices for this therapy. Therefore, with regard to the use
of this data for purposes of calculating a CAR T-cell CCR, we are
uncertain how representative this data is for use in the applicant's
cost analyses given this potential for variability.
The applicant also uses both ICD-10 diagnosis code categories and
subcategories which are not valid diagnosis codes and therefore, not
appropriate to include for purposes of the cost analysis. There is a
potential that inappropriately including ICD-10 diagnosis code
categories and subcategories may alter the number of cases identified
for inclusion in the cost analysis. We are seeking public comment on
whether this issue may affect the cost analysis.
We continue to be interested in public comments regarding the
eligibility of CAR T-cell technologies for new technology add-on
payments when assigned to MS-DRG 018. As we have noted in prior
rulemaking with regard to the CAR T-cell therapies (83 FR 41172 and 85
FR 58603 through 58608), if a new MS-DRG were to be created, then
consistent with section 1886(d)(5)(K)(ix) of the Act, there may no
longer be a need for a new technology add-on payment under section
1886(d)(5)(K)(ii)(III) of the Act. We invite public comments on whether
lifileucel meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that lifileucel represents a substantial clinical
improvement over existing technologies. In support of this assertion,
the applicant provided data from two cohorts of the C-144-01 study, an
ongoing phase 2, multicenter study (NCT02360579) consisting of four
cohorts:
Cohort 1 (n=30 generation 1 non-cryopreserved TIL
product), not included for review as part of the applicant's new
technology add-on payment application.
Cohort 2 (n=60 generation 2 cryopreserved TIL product),
included for review as part of the applicant's new technology add-on
payment application.
Cohort 3 (a sub-sample of n=10 from cohorts 1, 2, and 4),
not included for review as part of the applicant's new technology add-
on payment application.
Cohort 4 (n=75 generation 2 cryopreserved TIL product),
included for review as part of the applicant's new technology add-on
payment application and also provided to the FDA as part of the
applicant's BLA application.
The applicant stated that C-144-01 (NCT02360579) is a multi-cohort,
Phase 2 clinical trial evaluating the safety and efficacy of lifileucel
in patients that have been diagnosed with unresectable or metastatic
Stage IIIc or IV melanoma. In addition to what the applicant previously
described, the authors stated that in a sub-group analysis of 42
patients who were primary refractory to anti-PD-1, the ORR was 40.5%
comparable to the overall cohort.
According to the applicant, the primary objective of this study was
to evaluate the efficacy of lifileucel in patients with unresectable or
metastatic melanoma using the objective response rate (ORR), as
assessed by the independent review committee (IRC) per Response
Evaluation Criteria in Solid Tumors (RECIST) version 1.1.\353\ The
applicant added that secondary objectives were to: (1) Evaluate the
efficacy endpoints of duration of response (DOR), disease control rate
(DCR), and progression free survival (PFS); (2) further evaluate the
efficacy of lifileucel in patients with unresectable or metatstatic
melanoma by assessing ORR, DOR, DCR, and PFS; (3) to evaluate overall
survival (OS); and (4) to characterize the safety profile of
lifileucel. For cohort 2, 60 patients were determined to allow
estimation of the ORR using the maximum half width of the two-sided 95%
confidence limit of less than 13.2% when ORR is expected to range from
20-50%. For cohort 4, approximately 75 patients were planned to be
infused based on the null hypothesis of 10% ORR (based on historical
control) which resulted in over 90% power to demonstrate superiority to
this control. Patients included in this study were 18 years or older,
had an ECOG (Eastern Cooperative Oncology Group) performance status of
0 or 1 upon entry, an estimated life expectancy of less than or equal
to 3 months, and had unresectable or metastatic melanoma (stage IIIC or
IV) treated with at least one prior systemic therapy including an anti-
PD-1 antibody and a BRAF/MEK inhibitor. Patients were required to have
a washout period of at least 28 days from prior anticancer therapy(ies)
to the start of the planned nonmyeloablative lymphodeletion (NMA-LD)
preconditioning regimen. The applicant explained that prior to the
infusion of lifileucel, the patient receives NMA-LD with
cyclophosphamide (60 mg/kg) intravenously daily for 2 days followed by
fludarabine (25 mg/m\2\) intravenously for 5 days to eliminate
potentially suppressive immune cells which support the tumor and to
maximize engraftment and potency of the lifileucel therapy through
homeostatic proliferation.\354\
---------------------------------------------------------------------------
\353\ Eisenhauer EA, et al. New response evaluation criteria in
solid tumours: Revised RECIST guideline (version 1.1). European
Journal of Cancer. 45 (2009) 228-247.
\354\ Rosenberg, SA and Restifo, N. Adoptive cell transfer as
personalized immunotherapy for human cancer, Science. 2015;348
(6230):62-68.
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The applicant stated that the patients in this study had a high
tumor burden at baseline and had received a mean of 3.3 lines (range,
1-9) of prior therapies. Twenty-eight patients (42%) had liver and/or
brain lesions at baseline. Each prior line of therapy was defined as
any
[[Page 25280]]
concomitant therapy given to the patient even if more than one target
for each treatment was involved.\355\ The applicant added that 77% of
patients had progressed on prior anti-CTLA-4 blockade therapy, 99% had
progressed on prior anti-PD-1/PD-L1 therapy, and 23% had received BRAF/
MEK inhibitors. All patients had received PD on their prior therapy
before study entry.
---------------------------------------------------------------------------
\355\ Ghate S, et al. Patterns of treatment and BRAF testing
with immune checkpoint inhibitors and targeted therapy in patients
with metastatic melanoma presumed to be BRAF positive. Melanoma Res
2019;29:301-10.
---------------------------------------------------------------------------
As justification for the null hypothesis of ORR less than or equal
to 10%, the applicant stated that according to the NCCN guideline for
metastatic melanoma, the only approved treatment is dacarbazine (DTIC)
whereas other agents such as carboplatin, paclitaxel, docetaxel, nab-
paclitaxel, and temozolomide are not approved by the FDA and are not
appropriate as comparators. The applicant next presented the results
from four studies which had at least one treatment arm receiving DTIC:
(1) An abstract of a sample with metastatic melanoma previously treated
with post-anti-PD-1 (no prior BRAF/MEK, metastatic melanoma) which
resulted in a 10% ORR in the DTIC arm; \356\ (2) a sample with advanced
melanoma previously treated with post-ipilimumab (+/- BRAF inhibitor)
which resulted in a 10.6% ORR in the DTIC arm, (3) a sample of
treatment-na[iuml]ve patients with unresectable stage IIIc or IV
melanoma which resulted in a 9.8% ORR in the DTIC arm,\357\ and (4) a
sample of chemo-na[iuml]ve patients with metastatic melanoma of which
9% had received prior therapy for metastatic disease which resulted in
an 11% ORR in the DTIC arm.\358\ The applicant stated that the
historical control ORR of 10% for advanced melanoma was used for two
reasons. First, the results from the first study (post-anti-PD-1) \359\
most closely represent patients in the C-144-01 study because they
received prior anti-PD-1 treatment while the other studies did not.
Second, the applicant stated that response rates to chemotherapy,
including DTIC, in recent phase 3 melanoma trials ranged from 4% to
10%.\360\ \361\ Also included in the application is a summary of
results from six studies in patients treated with a DTIC monotherapy in
advanced or metastatic melanoma prior to checkpoint inhibitor FDA
approval which showed ORRs ranging from 5%-20%.
---------------------------------------------------------------------------
\356\ Goldinger SM, et al. The utility of chemotherapy after
immunotherapy failure in metastatic melanoma: A multicenter case
series. J Clin Oncol 2018;36:e21588-e.
\357\ Ribas A, et al. Phase III randomized clinical trial
comparing tremelimumab with standard-of-care chemotherapy in
patients with advanced melanoma. J Clin Oncol. 2013;31(5):616-622.
\358\ Hersh EM, et al. A randomized, controlled phase III trial
of nab-Paclitaxel versus dacarbazine in chemotherapynaive patients
with metastatic melanoma. Ann Oncol. 2015;26(11):2267-2274.
\359\ Goldinger SM, et al. The utility of chemotherapy after
immunotherapy failure in metastatic melanoma: A multicenter case
series. J Clin Oncol 2018;36:e21588-e.
\360\ NCCN Clinical Guidelines in Oncology (NCCN Guidelines.
Cutaneous Melanoma. Versions 2018 and 2019. https://www.nccn.org/professionals/physician_gls/#site.
\361\ Ribas A, et al. Pembrolizumab versus investigator-choice
chemotherapy for ipilimumab-refractory melanoma (KEYNOTE-002): A
randomised, controlled, phase 2 trial. Lancet Oncol. 2015; 16(8):
908-18.
---------------------------------------------------------------------------
Next, the applicant discussed the efficacy results from the C-144-
01 study. The applicant stated that regardless of location of tumor
resected and BRAF mutational status, and across ages (20-79), patients
responded to lifileucel therapy. Among patients in cohort 2 (n=66)
there was an ORR of 36% (95% CI 25, 49) and a DCR of 80% (95% CI 69,
89). When considering best overall response, two patients (3%) achieved
complete response (CR), 22 patients (33%) achieved partial response
(PR), 29 patients (44%) achieved stable disease, 9 patients (14%) had
progressive disease, and 4 patients (6%) were non-evaluable. The
applicant highlighted that the ORR (36.5% for those less than 65 years
and 35.7% for those 65 and older) and DCR (71.2% for those less than 65
years and 78.6% for those 65 and older) were consistent across age
groups. The applicant contends that these results following the one-
time, single infusion of lifileucel represent a substantial improvement
over chemotherapy which offers poor ORR of 4%-10%.\362\ \363\
---------------------------------------------------------------------------
\362\ Larkin J, et al. Overall survival in patients with
advanced melanoma who received nivolumab versus investigator's
Choice chemotherapy in CheckMate 037: a randomized, controlled,
open-label Phase III trial. J Clin Oncol 2018;36:383-90.
\363\ Ribas A, et al. Pembrolizumab versus investigator-choice
chemotherapy for ipilimumab-refractory melanoma (KEYNOTE-002): A
randomised, controlled, phase 2 trial. Lancet Oncol. 2015; 16(8):
908-18.
---------------------------------------------------------------------------
Next, the applicant asserted that, because the median duration of
response (DOR) had not been reached at a median follow-up of 18.7
months, the treatment effect will be durable and provide long-term
benefit to those treated with lifileucel. The applicant stated that at
the median follow-up, 50% (n=12) of responders showed ongoing response
to lifileucel. The applicant added that the median DOR for treatment
with DTIC is 5 to 6 months \364\ \365\ and that retreatment with an
immune checkpoint inhibitor or chemotherapy has demonstrated a median
overall survival of around 7-8 months.\366\ \367\
---------------------------------------------------------------------------
\364\ Gogas HJ, et al. Chemotherapy for metastatic melanoma:
Time for a change? Cancer 2007;109:455-64.
\365\ Serrone L, et al. Dacarbazine-based chemotherapy for
metastatic melanoma: Thirty-year experience overview. J Exp Clin
Cancer Res 2000;19: 21-34.
\366\ Kirchberger MC, et al. Combined low-dose ipilimumab and
pembrolizumab after sequential ipilimumab and pembrolizumab failure
in advanced melanoma. Eur J Cancer. 2016;65: 182-184. doi:10.1016/
j.ejca. 2016.07.003.
\367\ Goldinger SM, et al. The utility of chemotherapy after
immunotherapy failure in metastatic melanoma: A multicenter case
series. J Clin Oncol 2018;36:e21588-e.
---------------------------------------------------------------------------
Lastly, the applicant stated that the safety profile of lifileucel
was consistent with the underlying advanced disease and the known
toxicities associated with the single course of lymphodepleting
preconditioning regimen and IL-2. The applicant stated that all
patients experienced at least one treatment-emergent adverse event
(TAEA) during the course of the study with the most common adverse
event of any grade being hematologic along with chills, pyrexia,
fatigue, tachycardia, and hypotension.\368\ The applicant added that
the most common grade \3/4\ TEAEs included thrombocytopenia (82%),
anemia (56%), febrile neutropenia (55%), neutropenia (39%),
hypophosphatemia (35%), leukopenia (35%), and lymphopenia (32%),\369\
which were consistent with the lymphodepletion regimen and known
profile of IL-2.\370\ \371\ \372\ One patient died due to intra-
abdominal hemorrhage reported as possibly related to TIL and one due to
acute respiratory failure
[[Page 25281]]
assessed as not related to TIL.\373\ The applicant stated that there
was no difference in the incidence of TEAEs (for example any grade,
among grades 3 to 4, and among grade 5) in patients 65 or older as
compared to those younger than 65. Furthermore, the applicant stated
that AEs occurred and generally resolved within the first 14 days
following TIL infusion and IL-2 administration, during which time
patients typically remained in the inpatient setting.
---------------------------------------------------------------------------
\368\ Sarnaik A, et al. Long-term follow up of lifileucel (LN-
144) cryopreserved autologous tumor infiltrating lymphocyte therapy
in patients with advance melanoma progressed on multiple prior
therapies. Oral presentation at ASCO2020. Abstract Number: 10006;
Journal: J Clin Oncol 38:2020.
\369\ Sarnaik A, et al. Long-term follow up of lifileucel (LN-
144) cryopreserved autologous tumor infiltrating lymphocyte therapy
in patients with advance melanoma progressed on multiple prior
therapies. Oral presentation at ASCO2020. Abstract Number: 10006;
Journal: J Clin Oncol 38:2020.
\370\ Rosenberg SA, et al. Durable complete responses in heavily
pretreated patients with metastatic melanoma using Tcell transfer
Immunotherapy. Clinical Cancer Research. 2011; 17(13):4550-4557.
doi:10.1158/1078-0432.CCR-11-0116. 2,75,101
\371\ Goff SL, et al. Randomized, prospective evaluation
comparing intensity of lymphodepletion before adoptive transfer of
tumor-infiltrating lymphocytes for patients with metastatic
melanoma. J Clin Oncol. 2016 Jul 10;34(20):2389-97. PubMed PMID:
27217459. Pubmed Central PMCID:PMC4981979.
\372\ Dudley ME, et al. Adoptive cell therapy for patients with
metastatic melanoma: Evaluation of intensive myeloablative
chemoradiation preparative regimens. J Clin Oncol. 2008; 26(32):
5233-5239.
\373\ Sarnaik A, et al. Long-term follow up of lifileucel (LN-
144) cryopreserved autologous tumor infiltrating lymphocyte therapy
in patients with advance melanoma progressed on multiple prior
therapies. Oral presentation at ASCO2020. Abstract Number: 10006;
Journal: J Clin Oncol 38:2020.
---------------------------------------------------------------------------
In support of its claims regarding substantial clinical
improvement, the applicant submitted four additional pieces of
evidence.\374\ \375\ \376\ \377\ First is an article which describes
the tumor-infiltrating lymphocytes (TIL) manufacturing process, the
mechanism of action of these products, what the authors identify as
clear advantages of TIL in the treatment of solid tumors, and lastly
the results of C-144-01.\378\ The authors stated that this onetime
autologous treatment involves a product individually derived for each
patient, is not selected for the recognition of shared antigens that
would be expressed in normal tissues, and is specific to the tumor
neoantigens, reducing the risk for autoimmune toxicity. The authors
also stated that the TIL mechanism of action does not rely on
engineered receptors but maintains some physiologic control and avoids
hyperactivation, which therefore suggests that TIL offers a different
safety profile compared to CAR T-cell products or ICIs.
---------------------------------------------------------------------------
\374\ Fardis M, et al. Current and future directions for tumor
infiltrating lymphocyte therapy for the treatment of solid tumors.
Cell and Gene Therapy Insights, 2020; 6(6), 855-863.
\375\ Sarnaik A, et al. Long-term follow up of lifileucel (LN-
144) cryopreserved autologous tumor infiltrating lymphocyte therapy
in patients with advance melanoma progressed on multiple prior
therapies. Oral presentation at ASCO2020. Abstract Number: 10006;
Journal: J Clin Oncol 38:2020.
\376\ Sarnaik A, et al. Safety and efficacy of lifileucel (LN-
144) tumor infiltrating lymphocyte therapy in metastatic melanoma
patients after progression on multiple therapies--independent review
committee data update. Poster presented at SITC 2019. Poster Number:
P865 and abstract; Journal: J Immunotherapy Cancer 2020;8:A12.
Sarnaik, et al. SITC 2019
\377\ Sarnaik A, et al. Lifileucel therapy leads to durable
response in heavily pretreated, refractory, advanced melanoma.
Poster presented at SMR 2019. Pending publication; online access:
Advanced Melanoma, Practice Update, March 11, 2020.
\378\ Fardis M, et al. Current and future directions for tumor
infiltrating lymphocyte therapy for the treatment of solid tumors.
Cell and Gene Therapy Insights, 2020; 6(6), 855-863.
---------------------------------------------------------------------------
The second piece of evidence provided by the applicant is a
presentation given at the 2020 ASCO annual meeting \379\ which, per the
applicant, focused on the C-144-01 study design, overview, patient
procedures, TIL manufacturing, and patient characteristics of cohort 2.
The presentation asserts, as the applicant has previously, that there
are currently no approved agents for patients with metastatic melanoma
whose disease progressed after ICIs and BRAF/MEK inhibitors. The
presentation repeats study design, patient characteristics of cohort 2,
safety outcomes, and efficacy outcomes, as previously described by the
applicant. The presentation states that the adverse event profile was
consistent with the underlying advanced disease and the safety profile
of the lymphodepletion and IL-2 regimens and adds that the median
number of IL-2 doses administered was six. The author concluded that
lifileucel had demonstrated potential efficacy and durability of
response for patients with metastatic melanoma and that it represented
a viable therapeutic option warranting further investigation (that is,
pivotal Cohort 4).
---------------------------------------------------------------------------
\379\ Sarnaik A, et al. Long-term follow up of lifileucel (LN-
144) cryopreserved autologous tumor infiltrating lymphocyte therapy
in patients with advance melanoma progressed on multiple prior
therapies. Oral presentation at ASCO2020. Abstract Number: 10006;
Journal: J Clin Oncol 38:2020.
---------------------------------------------------------------------------
The applicant next submitted an abstract from a poster presentation
\380\ that discusses the TIL manufacturing process and the previously
discussed study C-144-01. The presentation adds that tumors resected at
local institutions were processed in central Good Manufacturing
Practice (GMP) facilities for TIL production in a 22-day process. Final
TIL infusion product was cryopreserved and shipped to sites. Patients
received one week of cyclophosphamide/fludarabine preconditioning
lymphodepletion, a single lifileucel infusion, followed by up to 6
doses of IL-2. The authors conclude by stating that response per IRC
assessment and concordance between investigator read ORR and IRC will
be reported.
---------------------------------------------------------------------------
\380\ Sarnaik A, et al. Safety and efficacy of lifileucel (LN-
144) tumor infiltrating lymphocyte therapy in metastatic melanoma
patients after progression on multiple therapies--independent review
committee data update. Poster presented at SITC 2019. Poster Number:
P865 and abstract; Journal: J Immunotherapy Cancer 2020;8:A12.
---------------------------------------------------------------------------
Lastly, the applicant submitted a peer-reviewed and published post
summary presented at the Society for Melanoma Research 2019 annual
meeting \381\ that discusses the results of the C-144-01 study as
previously discussed by the applicant and other presentations. The
author added that TIL therapy uses a patient's own immune cells to
attack cancer. Tumor-infiltrating lymphocyte cells are extracted from a
patient's own tumor tissue, expanded through a proprietary process, and
infused back into the patient. After infusion, tumor-infiltrating
lymphocytes reach tumor tissue, where they attack tumor cells. Lastly
the author concluded that lifileucel treatment resulted in a 36.4%
overall response rate with a median duration of response having not
been reached after a median of one year in patients with heavily
pretreated metastatic melanoma with high baseline disease burden who
received prior anti-PD-1 and BRAF/MEK inhibitors.
---------------------------------------------------------------------------
\381\ Sarnaik A, et al. Lifileucel therapy leads to durable
response in heavily pretreated, refractory, advanced melanoma.
Poster presented at SMR 2019. Pending publication; online access:
Advanced Melanoma, Practice Update, March 11, 2020.
---------------------------------------------------------------------------
After review of the information provided by the applicant, we have
the following concerns concerning the substantial clinical improvement
criterion. We note that results provided by the applicant are based on
an ongoing phase two trial, C-144-01, and that these are potentially
partial results from which we may not be able to draw end conclusions.
We also note the potential for overestimating treatment effects when
trials stop early or report interim results.\382\ \383\ \384\
---------------------------------------------------------------------------
\382\ Pocock SJ. When (not) to stop a clinical trial for
benefit. JAMA 2005; 294:2228e30.
\383\ Pocock SJ, Hughes MD. Practical problems in interim
analyses, with particular regard to estimation. Control Clin Trials
1989; 10(4 Suppl): 209Se21S.
\384\ Montori VM, Devereaux PJ, Adhikari NK, Burns KE, Eggert
CH, Briel M, et al. Randomized trials stopped early for benefit: A
systematic review. JAMA 2005; 294:2203e9.
---------------------------------------------------------------------------
We question the selection of ORR as the primary outcome, which
combines the results of complete and partial responders. Specifically,
we question if the results experienced by those who are complete
responders may substantially differ from those who are partial
responders. We also question the appropriateness of combining these two
groups together. Further, we note that the applicant used a surrogate
endpoint (ORR) rather than overall survival or other measure. We
believe that this measure may not be the most appropriate measure with
which to evaluate substantial clinical improvement in this patient
population because it may not capture patients' clinical experience as
fully as a measure of overall survival at some later time point. We are
seeking public comment on whether the ORR is an appropriate measure of
efficacy of this and other treatments when considering substantial
clinical improvement.
[[Page 25282]]
Lastly, we note that a historical control is used for all of the
studies provided and that the analyses using this historical control do
not account for baseline differences between the groups being compared.
This makes it difficult to determine if the results seen are due to the
treatment, random occurrences, or bias. Further, we note that the
patient sample or samples used to construct the historical control may
not be representative of the C-144-01 cohort. We are unable to verify
the appropriateness of this historical control because the evidence
describing the historical control takes the form of abstracts or was
not provided.
We are inviting public comments on whether lifileucel meets the
substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
lifileucel.
k. Narsoplimab
The Omeros Corporation submitted an application for new technology
add-on payments for narsoplimab for FY 2022. Narsoplimab is a fully
human monoclonal antibody for the treatment of HSCT-TMA, also known as
transplant-associated thrombotic microangiopathy (TA-TMA), for which
the applicant has submitted a Biologics License Application (BLA).
According to the applicant, narsoplimab inhibits mannan-binding lectin
serine protease 2 (MASP-2), the effector enzyme of the lectin pathway
of the complement system, and activation of the lectin pathway that
prevents complement-mediated inflammation and exhibits anticoagulant
effects while leaving intact the respective functions of the classical
and alternative pathways of innate immunity. According to the
applicant, there are currently no FDA-approved products indicated for
the treatment of hematopoietic stem cell transplantation-associated
thrombotic microangiopathy (HSCT-TMA).
According to the applicant, HSCT-TMA is a lethal complication of
hematopoietic stem cell transplantation (HSCT) that results in
thrombosis in the small blood vessels, leading to organ failure.\385\
\386\ \387\ According to the applicant, clinical guidelines for the
treatment of HSCT-TMA are being developed by members of the American
Society for Transplant and Cellular Therapy (ASTCT) and are expected to
be published in 2021. The applicant stated that current management of
HSCT-TMA includes modification or cessation of any immune-suppressive
regimen, appropriate treatment of infections and/or graft-versus-host
disease (GvHD) if present, aggressive control of hypertension, and
other supportive therapy as deemed appropriate by the treating
physician.\388\ However, according to the applicant, the withdrawal of
immunosuppressive therapies and ongoing monitoring for resolution of
TMA symptoms has been determined to be ineffective.\389\ The applicant
stated that there are multiple off-label treatments for HSCT-TMA which
have either not been reviewed by the FDA or have been reviewed and not
deemed adequate for registration purposes; these unapproved treatments
include therapeutic plasma exchange (TPE), eculizumab, defibrotide
sodium, rituximab, and vincristine sulfate. The applicant asserted that
available evidence for agents used off-label to treat HSCT-TMA is
derived from observational studies and case series with mixed results,
and none of the agents have been evaluated for efficacy or safety in a
robust clinical trial in patients with HSCT-TMA.\390\ In summary, the
applicant stated with regard to these unapproved therapies that: (1)
The use of TPE is based on the extrapolation of its effectiveness for
thrombocytopenic purpura with poor outcomes leading the Blood and
Marrow Transplant Clinical Trials Network Toxicity Committee in 2005 to
recommend that TPE not be considered as a standard of care for HSCT-
TMA; \391\ (2) eculizumab is a C5 inhibitor that blocks activation of
the terminal cascade of complement \392\ of which the use is
constrained by lack of efficacy and safety evaluations by the FDA \393\
and associated increased susceptibility to infections; \394\ \395\ (3)
defibrotide (Defitelio[supreg]), an oligonucleotide mixture with
profibrinolytic properties whose mechanism of action has not been fully
elucidated \396\ is not approved by the FDA for the treatment of HSCT-
TMA nor considered a standard of care; (4) rituximab (Rituxan[supreg]),
a monoclonal antibody that targets the CD20 antigen expressed on the
surface of pre-B and mature B-lymphocytes,\397\ is not approved by the
FDA for the treatment of HSCT-TMA; and (5) Vincristine sulfate, a vinca
alkaloid isolated as a 1:1 sulfate salt from the periwinkle plant is
not approved by the FDA for the treatment of HSCT-TMA.\398\
---------------------------------------------------------------------------
\385\ Gavriilaki, E et al. Transplant-associated thrombotic
microangiopathy: Opening Pandora's box. Bone Marrow Transplantation
(2017) 52, 1355-1360.
\386\ Jodele, S et al (2016). New approaches in the diagnosis,
pathophysiology, and treatment of pediatric hematopoietic stem cell
transplantation-associated thrombotic microangiopathy. Transfus
Apher Sci. 2016 April; 54(2): 181-190.
\387\ Rosenthal, J Hematopoietic cell transplantation-associated
thrombotic microangiopathy: A review of pathophysiology, diagnosis,
and treatment. Journal of Blood Medicine 2016:7 181-186.
\388\ Khosla J et al. Hematopoietic stem cell transplant-
associated thrombotic microangiopathy: Current paradigm and novel
therapies. Bone Marrow Transplant. 2018; 53(2):129-137.
\389\ Li A et al. Transplant-associated thrombotic
microangiopathy is a multifactorial disease unresponsive to
immunosuppressant withdrawal. Biol Blood Marrow Transplant. 2019;
25(3):570-576.
\390\ Li A et al. Transplant-associated thrombotic
microangiopathy is a multifactorial disease unresponsive to
immunosuppressant withdrawal. Biol Blood Marrow Transplant. 2019;
25(3):570-576.
\391\ Schwatz, J et al. Guidelines on the Use of Therapeutic
Apheresis in Clinical Practice-- Evidence-Based Approach from the
Writing Committee of the American Society for Apheresis: The Seventh
Special Issue. Journal of Clinical Apheresis 31:149-338 (2016).
\392\ FDA. (2019, june). Soliris Prescribing Information.
Retrieved from Highlights of Prescribing Information: https://www.accessdata.fda.gov/drugsatfda_docs/label/2019/125166s431lbl.pdf.
\393\ Li A et al. Transplant-associated thrombotic
microangiopathy is a multifactorial disease unresponsive to
immunosuppressant withdrawal. Biol Blood Marrow Transplant.
2019;25(3):570-576.
\394\ Bohl SR, Kuchenbauer F, von Harsdorf S, Kloevekorn N,
Schonsteiner SS, Rouhi A, et al. Thrombotic Microangiopathy after
Allogeneic Stem Cell Transplantation: A Comparison of Eculizumab
Therapy and Conventional Therapy. Biol Blood Marrow Transplant.
2017; 23(12):2172-7.
\395\ Khosla J et al. Hematopoietic stem cell transplant-
associated thrombotic microangiopathy: Current paradigm and novel
therapies. Bone Marrow Transplant. 2018; 53(2):129-137.
\396\ FDA. (2016, march). Defitelio Prescribing Information.
Retrieved from Highlights of Prescribing Information: https://www.accessdata.fda.gov/drugsatfda_docs/label/2016/208114lbl.pdf
Defitelio PI. 3/2016.
\397\ FDA. (2019, september). Rituxan Prescribing Information.
Retrieved from Highlights of Prescribing Information: https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/103705s5450lbl.pdf
Rituxan PI. 9/2019.
\398\ FDA. (2020, july). Vincristine Prescribing Information.
Retrieved from Highlights of Prescribing Information: https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/202497s011lbl.pdf
Vincristine PI. 7/2020.
---------------------------------------------------------------------------
With respect to the newness criterion, the applicant stated in its
application that it is in the process of completing a rolling
submission of a Biologics License Application (BLA) to the FDA for
narsoplimab for the treatment of HSCT-TMA. According to the applicant,
narsoplimab has received Orphan Drug designation and Breakthrough
Therapy Designation from FDA for the treatment of patients with HSCT-
TMA who have persistent thrombotic microangiopathy despite modification
of immunosuppressive therapy. The applicant submitted a request for
approval for a unique ICD-10-CM code for HSCT-TMA and an
[[Page 25283]]
ICD-10-PCS code for the administration of narsoplimab; there are
currently no ICD-10-CM codes that describe HSCT-TMA or ICD-10-PCS codes
that describe narsoplimab.
If a technology meets all three of the substantial similarity
criteria, it would be considered substantially similar to an existing
technology and would not be considered ``new'' for purposes of new
technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that narsoplimab has a unique mechanism of action as
it is the first therapeutic to target mannan-binding lectin serine
protease 2 (MASP-2) and the first to inhibit the lectin pathway of the
complement system. The applicant stated that MASP-2 inhibition
specifically blocks the lectin pathway of complement but does not
inhibit the classical and alternative pathways, leaving the complement
system's effector function in adaptive immunity intact, which is
important for fighting infection.\399\ \400\ According to the
applicant, the mechanism of action of narsoplimab not only results in
inhibition of lectin pathway-mediated activation of complement, but
also blocks the MASP-2 mediated procoagulant activities in the
coagulation cascade. The procoagulant effects of MASP-2, independent of
its role in the complement system, include the conversion of
prothrombin to thrombin as well as the activation of Factor XII to
XIIa.\401\ \402\ \403\ In addition, MASP-2 is activated by fibrin and
activated platelets, further augmenting a procoagulant state.\404\ The
applicant asserted that by inhibiting these procoagulant activities of
MASP-2, narsoplimab provides important anticoagulant benefits, without
affecting bleeding parameters (that is, prothrombin time, activated
partial thromboplastin time, international normalized ratio, or
bleeding time). According to the applicant, narsoplimab is the only
drug that addresses all the components of HSCT-TMA and is the only
product that inhibits complement activation and has anticoagulant
activity. Therefore, the applicant asserts that the mechanism of action
of narsoplimab differs from that of the products occasionally used off
label: eculizumab, defibrotide sodium, rituximab, and vincristine.
---------------------------------------------------------------------------
\399\ Rambaldi, A et al. Improved survival following OMS721
treatment following hematopoietic stem cell transplant-associated
thrombotic microangiopathy (HCTTMA). European Hematology Society.
Stockholm, June 15, 2018. Abstract PF724.
\400\ Elhadad, S et al 2020. MASP2 levels are elevated in
thrombotic microangiopathies: association with microvascular
endothelial cell injury and suppression by anti-MASP2 antibody
narsoplimab. Clinical and Experimental Immunology, 0: 2-9.
\401\ Demopulos, Gregory, A. Dudler, Thomas, Nilsson, Bo.
Compositions and methods of inhibiting MASP-2 for the treatment of
various thrombotic diseases and disorders. WO2019246367
(US20200140570A1). World International Property Organization. 26
December 2019.
\402\ Krarup, A et al. Simultaneous Activation of Complement and
Coagulation by MBLAssociated Serine Protease 2. 2007. PLoS ONE 2(7):
e623.
\403\ Gulla, KC et al. Activation of mannan-binding lectin-
associated serine proteases leads to generation of a fibrin clot.
Immunology, 2009. 129, 482-495.
\404\ Kozarcanin, H et al. The lectin complement pathway serine
proteases (MASPs) represent a possible crossroad between the
coagulation and complement systems in thromboinflammation. Journal
of Thrombosis and Haemostasis, 2016. 14: 531-545.
---------------------------------------------------------------------------
With respect to the second criterion, whether a product is assigned
to the same or different MS-DRG, the applicant stated that patients who
receive narsoplimab will be assigned to the same DRGs as patients who
are diagnosed with HSCT-TMA/transplant-associated thrombotic
microangiopathy (TA-TMA) regardless of the treatment.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
stated that narsoplimab treats a different disease than existing
technologies. According to the applicant, when treating HSCT-TMA,
clinicians may rely on approaches that have limited efficacy \405\ such
as to reduce or discontinue anti-GVHD therapies (for example,
calcineurin inhibitors), initiate therapeutic plasma exchange (TPE),
and/or administer anti-CD20 antibody therapies, terminal complement
inhibitors and/or oligonucleotide therapies.\406\ \407\ \408\ The
applicant stated that narsoplimab will be the first technology
specifically indicated to treat HSCT-TMA.
---------------------------------------------------------------------------
\405\ Li A et al. Transplant-associated thrombotic
microangiopathy is a multifactorial disease unresponsive to
immunosuppressant withdrawal. Biol Blood Marrow Transplant. 2019;
25(3):570-576.
\406\ Dhakal P et al. Is complement blockade an acceptable
therapeutic strategy for hematopoietic cell transplant-associated
thrombotic microangiopathy? Bone Marrow Transplant. 2017; 52(3):352-
356.
\407\ Khosla J et al. Hematopoietic stem cell transplant-
associated thrombotic microangiopathy: current paradigm and novel
therapies. Bone Marrow Transplant. 2018; 53(2):129-137.
\408\ Li A et al. Transplant-associated thrombotic
microangiopathy is a multifactorial disease unresponsive to
immunosuppressant withdrawal. Biol Blood Marrow Transplant. 2019;
25(3):570-576.
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According to the applicant, existing products that are currently
used off-label to treat HSCT-TMA patients are indicated for the
treatment of other distinct diseases. Eculizumab is indicated for: (1)
The treatment of patients with paroxysmal nocturnal hemoglobinuria
(PNH) to reduce hemolysis; (2) the treatment of patients with atypical
hemolytic uremic syndrome (aHUS) to inhibit complement-mediated
thrombotic microangiopathy; (3) the treatment of anti-acetylcholine
antibody-positive generalized myasthenia gravis; and (4) the treatment
of anti-aquaporin-4 (AQP4) antibody-positive neuromyelitis optica
spectrum disorder (NMOSD).\409\ Defibrotide sodium is indicated for the
treatment of adult and pediatric patients with hepatic veno-occlusive
disease (VOD) with renal or pulmonary dysfunction following HSCT.\410\
The applicant further asserted that HSCT-TMA is different from aHUS due
to varying underlying causes (that is, Shiga toxin infection, genetic
mutation),\411\ its association with receipt of a stem cell transplant
and associated endothelial cell injury,\412\ and aHUS resulting from
mutations and/or polymorphisms in complement genes rather than having
received an HSCT.\413\ \414\ In regard to VOD, the applicant asserts
that while this patient population is similar to HSCT-TMA patients with
regard to both having received HSCT, VOD is a separate disease
affecting only the liver whereas HSCT-TMA is a multi-factorial disease
impacting many organ systems, such as the kidneys, the lungs, the CNS
and the gastrointestinal tract.\415\
---------------------------------------------------------------------------
\409\ FDA. (2019, june). Soliris Prescribing Information.
Retrieved from Highlights of Prescribing Information: https://www.accessdata.fda.gov/drugsatfda_docs/label/2019/125166s431lbl.pdf
Soliris PI. 6/2019.
\410\ FDA. (2016, march). Defitelio Prescribing Information.
Retrieved from Highlights of Prescribing Information: https://www.accessdata.fda.gov/drugsatfda_docs/label/2016/208114lbl.pdf
Defitelio PI. 3/2016.
\411\ Lee, H et al. Consensus regarding diagnosis and management
of atypical hemolytic uremic syndrome. 2020. Korean J Intern Med
2020; 35:25-40.
\412\ Rosenthal, J Hematopoietic cell transplantation-associated
thrombotic microangiopathy: a review of pathophysiology, diagnosis,
and treatment. Journal of Blood Medicine 2016:7 181-186.
\413\ Rosenthal, J Hematopoietic cell transplantation-associated
thrombotic microangiopathy: a review of pathophysiology, diagnosis,
and treatment. Journal of Blood Medicine 2016:7 181-186.
\414\ Masias, C et al. None of the above: thrombotic
microangiopathy beyond TTP and HUS. Blood. 2017; 129(21):2857-2863.
\415\ Bonifazi, F et al. Diagnosis and Treatment of VOD/SOS
After Allogeneic Hematopoietic Stem Cell Transplantation. Front
Immunol. 2020; 11: 489.
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Furthermore, the applicant summarized key distinctions between
HSCT-TMA and the diseases for which
[[Page 25284]]
the other off-label therapeutics are indicated (eculizumab, defibrotide
sodium, plasmapheresis with fresh frozen plasma and rituximab).
According to the applicant, HSCT-TMA is associated with HSCT
endothelial cell injury, has unique triggers such as immune
dysregulation caused by infection, chemotherapy, and GVHD, and involves
the initiation of the complement system including the lectin pathway.
Atypical hemolytic uremic syndrome (aHUS), treated by eculizumab, is
associated with unchecked abnormal activation of alternative complement
system due to genetic mutations in complement factors or inhibitory
autoantibodies to factor H and I and has an onset that is idiopathic or
secondary to triggers such as infection, fever, pregnancy, malignant
hypertension, transplant, and diarrheal illnesses. Veno-occlusive
disease (VOD), treated by defibrotide sodium, is a complication
observed after HSCT where sinusoidal endothelial cells and hepatocytes
in zone 3 of the hepatic acinus are damaged by toxic metabolites
generated during the conditioning regimen. Thrombocytopenic purpura
(TTP), treated by plasmapheresis with fresh frozen plasma and
rituximab, is characterized by an ADAMTS-13 deficiency that is not
commonly seen in HSCT-TMA with decreased ADAMTS activity due to genetic
alterations to the gene or presence of inhibitory autoantibodies.
In summary, the applicant believes that narsoplimab is not
substantially similar to other currently available therapies and/or
technologies and meets the ``newness'' criterion. We note that the
applicant asserts that there are no FDA-approved products indicated for
the treatment of HSCT-TMA and we are inviting public comment on whether
narsoplimab therefore has a unique mechanism of action. In addition, we
note that although the cause or triggers of thrombotic microangiopathy
may be different between HSCT and for example HUS or TTP, the resulting
disease may be similar. We welcome public comments on whether HSCT-TMA
is a similar disease to other forms of TMA.
We are inviting public comments on whether narsoplimab is
substantially similar to other currently available therapies and/or
technologies and whether this technology meets the newness criterion.
With regard to the cost criterion, the applicant provided the
following analysis to demonstrate the technology meets the cost
criterion. The applicant stated that due to what it described as a lack
of sufficient coding in the HSCT-TMA space, the applicant provided
multiple scenarios to show that narsoplimab meets the cost criterion.
The applicant stated they are not requesting that narsoplimab map to a
new or different MS-DRG.
The applicant used the full calendar year 2019 National Medicare
100% inpatient Limited Dataset to identify patients with a combined
diagnosis of history of stem cell transplantation (SCT, ICD-10 code
Z94.84) OR complications of stem cell transplant (ICD-10 code T86.5)
AND thrombotic microangiopathy (TMA, ICD-10 code M31.1) OR hemolytic-
uremic syndrome (HUS, ICD-10 code D59.3). Claims from PPS-exempt
hospitals were excluded. In the base case analysis where all MS-DRGs
were included, a total of 83 cases across 38 MS-DRGs were identified.
The applicant imputed a case count of 11 for those MS-DRGs with fewer
than 11 cases, which increased the number of claims from 83 to 396
because all MS-DRGs had fewer than 11 claims. The applicant then varied
this initial analysis in two ways. First, sensitivity analyses one and
two varied the reduction for the charges related to the prior
technology to 25 percent and 50 percent of prior related therapy
charges, respectively, which are possibly tied to decreased length of
stay and/or decreased ICU utilization. Second, the applicant provided
four scenarios which varied the price of narsoplimab from zero to three
greater values.
The applicant first calculated a case weighted threshold of $96,810
for all scenarios based upon the dollar threshold for each MS-DRG
grouping and the proportion of cases in each MS-DRG. The applicant then
calculated the average charge per case. The applicant stated that
because narsoplimab is an adjunctive therapy, no charges for a prior
technology or a technology being replaced were removed. In the base
case analysis, no charges related to the prior technology were removed
because narsoplimab is not anticipated to offset standard of care
costs. However, according to the applicant, because of a reduction in
complications leading to mortality and other clinically significant
complications, narsoplimab is anticipated to decrease the rate of
hospitalization and length of stay. Therefore, two sensitivity analyses
were included which removed 25 percent and 50 percent of prior related
therapy charges which could potentially be related to a decrease in
length of stay and/or decrease in ICU utilization in sensitivity
analyses one and two, respectively. The applicant stated the 50% charge
reduction analysis was performed as an extreme analysis to examine the
unlikely possibility that narsoplimab offsets a considerable amount of
costs associated with treating TMA. Because of the reduction in
complications leading to mortality and other clinically significant
complications, the applicant asserted that for many with long-term
sequelae, narsoplimab is anticipated to decrease the rate of
hospitalization and length of stay. Next the applicant calculated the
average standardized charge per case using the FY 2021 IPPS/LTCH PPS
final rule Impact file. The 2-year inflation factor of 13.2% (1.13218)
was obtained from the FY 2021 IPPS/LTCH PPS final rule and applied to
the average standardized charge per case.
To determine the charges for narsoplimab, the applicant converted
cost to charges by dividing by the FY 2021 IPPS/LTCH PPS final rule
national average drug CCR of 0.187. No charges related to the use of
the technology were added by the applicant because utilization of
narsoplimab is not anticipated to result in incremental costs. The
applicant calculated the final inflated average case-weighted
standardized charge per case by adding the charges for the technology
to the inflated average standardized charge per case. In the base
analysis where a technology related price of $0 was used, the applicant
determined a final inflated average case-weighted standardized charge
per case of $363,815, which exceeds the average case-weighted threshold
amount of $96,810. In the same base analysis, the applicant determined
a final inflated average case-weighted standardized charge per case of
$272,861 in scenario one of the sensitivity analyses, which exceeds the
average case-weighted threshold amount of $96,810. Lastly, in the same
base analysis, the applicant determined a final inflated average case-
weighted standardized charge per case of $181,908 in scenario two of
the sensitivity analyses, which exceeds the average case-weighted
threshold amount of $96,810. The applicant then provided a secondary
cost analysis where the price of narsoplimab was the average of the
three greater values used as the charges for the technology, and
identified a final inflated average case-weighted standardized charge
per case of $898,574, $807,621, and $716,667 in the base, 25 percent
sensitivity, and 50 percent sensitivity analyses respectively.
We note that in its application, the applicant only provided, in
Excel format, the primary base analysis without sensitivity scenarios.
We are therefore unable to verify all other analyses, to include the
sensitivity
[[Page 25285]]
analyses, discussed in this section and in the application. The
applicant includes many MS-DRGs which are defined by other factors
which may or may not be related to the intended indication for
narsoplimab. For instance, the applicant identified MS-DRG 193 (Simple
Pneumonia and Pleurisy with MCC) for inclusion in the cost analysis.
Therefore, we are uncertain if the cases identified in the preceding
cost analysis adequately identify potential cases eligible for
narsoplimab. We are seeking public comment with regard to whether the
MS-DRGs used in these cost analyses are appropriately representative of
the cases that would be eligible for use of the technology. We invite
public comments on whether narsoplimab meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that narsoplimab represents a substantial clinical
improvement over existing technologies. According to the applicant,
compared to the current recommendation of cessation of
immunosuppressive therapies, narsoplimab demonstrates a substantial
clinical improvement for the treatment of HSCT-TMA because it fulfills
an unmet need for patients, demonstrated a statistically significant
complete response rate in the pivotal clinical trial, provides a
reduction in clinically significant adverse events, resulted in higher
100-day survival rates, decreases the rate of subsequent therapeutic
interventions, and is anticipated to decrease the rate of
hospitalizations and length of stay.
The applicant asserts that narsoplimab offers a treatment option
for a patient population unresponsive to current available treatments.
According to the applicant, the FDA awarded narsoplimab Breakthrough
Therapy designation after reviewing literature for patients similar to
those in the applicant's pivotal trial. The applicant states that if
approved by the FDA, narsoplimab will be the only drug or biological
approved for the treatment of HSCT-TMA.
In support of the assertion that narsoplimab offers a treatment
option for patients unresponsive to currently available treatments, the
applicant provided an abstract of their pivotal trial, a single-arm
trial of 28 adult HSCT-TMA patients.\416\ The abstract states that
patients who had not responded to immunosuppression modification and
who had thrombocytopenia, evidence of microangiopathic hemolytic
anemia, and increased creatinine were included in the study. The
applicant adds that patients with mild disease were excluded from the
study. Patients received narsoplimab intravenously once weekly for four
or eight weeks with a 6-week follow up period. The primary endpoint was
a response-based composite measure requiring improvement both in
laboratory TMA markers (platelet count and Lactate Dehydrogenase (LDH))
and in clinical status (that is organ function). Secondary endpoints
were surivival and changes in laboratory TMA markers. The applicant
asserts that a complete response rate of 15% was identified in
conjunction with the FDA as the threshold to demonstrate efficacy for
narsoplimab. The applicant states that narsoplimab resulted in a 61%
complete response rate (CRR) in patients with HSCT-TMA who received at
least one dose of the drug; the per protocol analysis (that is,
patients who received at least the per-protocol-specified 4 weeks of
treatment) resulted in a 74% complete response rate. The applicant
states that these complete response rates are higher than the expected
response of 10% to 15% in the absence of narsoplimab.
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\416\ Rambaldi, A et al. Narsoplimab for the treatment of Adult
Hematopoietic Stem Cell Transplant-Associated Thrombotic
Microangiopathy European Hematology Society. Abstract S262. 2020.
---------------------------------------------------------------------------
In applying for Breakthrough Therapy designation, the applicant
states that a literature review was conducted to identify studies in a
patient population similar to that in the pivotal trial. Searching in
PubMed using pre-identified search terms (transplant-associated
thrombotic microangiopathy; thrombotic microangiopathy stem cell; and
cancer-associated thrombotic microangiopathy), the applicant identified
nine references that met inclusion criteria and excluded an unknown
number of articles because the patient data was not included in the
publication. Studies were included if they were published in the year
2000 or later and included: (1) Survival data for patients; (2)
documentation that immunosuppression was modified; and (3)
documentation of patient response to immunosuppression
modification.\417\
---------------------------------------------------------------------------
\417\ Rambaldi, A et al. Improved survival following OMS721
treatment following hematopoietic stem cell transplant-associated
thrombotic microangiopathy (HCTTMA). European Hematology Society.
Stockholm, June 15, 2018. Abstract PF724.
---------------------------------------------------------------------------
Of the nine studies included, there was a mean sample size of 7.4
ranging from 1-17 totaling 67 participants. The applicant identified a
median overall survival of 21 days (95% CI 15-29) which ranged from 7
to 43 days. The applicant compared these results to those of the
pivotal trial, where 16 of 28 patients died with a median overall
survival of 274 days (p < 0.0001) compared via a log-rank test to that
identified in the literature review. The applicant stated that a one-
hundred-day survival post HSCT-TMA diagnosis was observed in 68% (n=28)
of the full analysis set, 83% (n=23) in the patients treated per the
protocol, and 94% (n=17) of complete responders.
The applicant asserted that in a high-risk study population,
narsoplimab demonstrated substantial clinical improvement compared to
current treatment approaches, meaningfully decreasing the rates of
clinically significant complications, including mortality, and reducing
the need for subsequent interventions; as a result, narsoplimab is
anticipated to decrease the rate of hospitalization and length of stay.
The applicant stated that the primary objectives in the pivotal study
for narsoplimab were to evaluate safety, tolerability, and response-
based efficacy requiring improvement in TMA laboratory markers of
platelet count and LDH and improvement in clinical status on the basis
of transfusions, renal, pulmonary, gastrointestinal, and neurological
symptoms. The applicant stated that platelet count on average increased
from baseline over time, LDH decreased from baseline, haptoglobin
steadily increased from baseline, and hemoglobin increased over time
with the use of narsoplimab. The applicant reported that overall 48%
and 55% of patients had freedom from red blood cell and platelet
transfusions, respectively. The applicant asserted that due to the
decreased rate of complications, narsoplimab has the potential to lead
to decreased hospital length of stay as well as decreased intensive
care usage.
Lastly, the applicant asserted that narsoplimab is well tolerated
with no treatment related complications. The applicant stated that the
most common adverse events in the pivotal trial were nausea, vomiting,
diarrhea, hypokalemia, neutropenia, and fever, which are comparable to
those typically seen in the post-transplant population. Six deaths
(21%) occurred, collectively, from sepsis, AML progression, and graft-
versus host disease, which according to the applicant are causes of
death common in patients with HSCT.
In addition to the previously discussed pivotal trial abstract, the
applicant submitted four additional citations (three case studies and
one case series) in support of the substantial clinical improvement of
narsoplimab. The first citation is described by the
[[Page 25286]]
applicant as a case study of an 18-year-old patient with biopsy-proven
HSCT-TMA of the gastrointestinal tract which required transfusions. The
applicant states that the patient received narsoplimab which led to the
resolution of TMA and all transfusions were discontinued. The applicant
submitted an educational agenda in support of this citation which does
not provide any additional information.\418\
---------------------------------------------------------------------------
\418\ Rafael Duarte, Diagnosis and treatment options for
transplant-associated microangiopathy. European Society for Blood
and Marrow Transplantation (EBMT). Abstract 2019.
---------------------------------------------------------------------------
The second citation concerns the results of a case study of a 14
year-old patient who did not tolerate eculizumab for the treatment of
HSCT-TMA and was treated successfully with OMS721 (i.e., narsoplimab).
The applicant submitted the abstract which states that after receiving
allogeneic HSCT, the patient began to show progressive
deterioration.\419\ The patient was treated twice with eculizumab at
months seven and eleven both resulting in pulmonary edema. The patient
next received narsoplimab after which he began to improve and did not
experience any adverse events.
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\419\ Zecca, et al. Resolution of acute kidney injury secondary
to HSCT-TMA by the anti-MASP-2 monoclonal antibody OMS721 in
pediatric HSCT recipient. European Society for Blood and Marrow
Transplantation (EBMT). Abstract 2017.
---------------------------------------------------------------------------
The third citation is a presentation given at the European Society
for Blood and Marrow Transplantation in 2017 \420\ which discusses a
46-year-old patient with T-acute lymphoblastic leukemia who received
HSCT. The applicant states this case study is about a patient with
HSCT-TMA and late-onset acute GI GVHD who was treated with narsoplimab
which resulted in the resolution of melena and hemolysis, increased
platelets, and neurologic improvements over 354 days.
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\420\ Caprioli, et al. Effective treatment of GVHD-associated
transplant-associated microangiopathy Transplant Complications
Working Party. Crash course on diagnosis and treatment of non-
infectious complications after HCT. 19-20 October 2017 in Granada,
Spain in conjunction with the European Society for Blood and Marrow
Transplantation (EBMT). Abstract 2017.
---------------------------------------------------------------------------
Lastly, the applicant submitted a presentation which discusses the
results of a case series.\421\ The applicant states that laboratory
marker and clinical improvement were seen following narsoplimab
treatment in severely ill, complex patients with HSCT-TMA. The case
series included results from 2 patients (age 19 and age 48), both of
whom underwent HSCT, the latter of which was HIV positive. The 19-year-
old patient received 18 doses of narsoplimab showing favorable response
with resolution of gastrointestinal bleeding and microangiopathic
hemolytic anemia. The 48-year-old patient received eight doses of
narsoplimab, but despite partial improvement remained on transfusions
and dialysis until sudden death on day 31.
---------------------------------------------------------------------------
\421\ Duarte, et al. Treatment of severe hematopoietic stem cell
transplant-associated thrombotic microangiopathy (HSCT-TMA) with the
MASP-2 inhibitor narsoplimab (OMS721). European Society for Blood
and Marrow Transplantation (EBMT). Abstract 2020.
---------------------------------------------------------------------------
After review of the provided information and citations we have
concerns with regard to the substantial clinical improvement criterion.
Firstly, the sample from which the applicant draws conclusions is small
(sample size of pivotal trial 28, plus five case studies). Furthermore,
we are unable to verify the methods, results, and conclusions of these
studies as the applicant only provided evidence in the form of
abstracts and presentations. For example, one citation provided by the
applicant in the form of a non-peer-reviewed conference poster details
interim results from what appear to be the pivotal trial.
With regard to methodological concerns, first, we note the
potential for overestimating treatment effects when trials stop early
or report interim results.\422\ \423\ \424\ Second, the authors pool
data from an historical cohort of patients drawn from published
literature to calculate survival rates in patients with HSCT-TMA and
then retrospectively compare these rates to the survival in their
treated cohort. We are unable to evaluate the appropriateness of this
historical comparison cohort based on the evidence provided in the form
of two citations, an abstract \425\ and a poster.\426\ This analysis
may not adequately account for baseline differences between the
patients treated with narsoplimab and the patients across the articles
from which a historical control was developed. In addition, we note
that we may lack the ability to evaluate whether this literature review
to obtain the historical control effectively identified the historical
control, as the applicant only provided general details on how the
search was performed.
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\422\ Pocock SJ. When (not) to stop a clinical trial for
benefit. JAMA 2005; 294:2228e30.
\423\ Pocock SJ, Hughes MD. Practical problems in interim
analyses, with particular regard to estimation. Control Clin Trials
1989; 10(4 Suppl): 209Se21S.
\424\ Montori VM, Devereaux PJ, Adhikari NK, Burns KE, Eggert
CH,Briel M, et al. Randomized trials stopped early for benefit: a
systematic review. JAMA 2005; 294:2203e9.
\425\ Rambaldi, A et al. Improved survival following OMS721
treatment following hematopoietic stem cell transplant-associated
thrombotic microangiopathy (HCTTMA). European Hematology Society.
Stockholm, June 15, 2018. Abstract PF724.
\426\ Rambaldi, A et al. Improved survival following oms721
treatment of hematopoietic stem cell transplant-associated
thrombotic microangiopathy (hct-tma). European Hematology
Association (poster). Stockholm, June 15, 2018. Abstract PF724.
---------------------------------------------------------------------------
We further note that the study design described in the pivotal
trial, upon which the applicant bases its claims for substantial
clinical improvement, was not appropriately designed to test for
comparisons with another treatment such as an historical control.
Furthermore, the methods utilized in the pivotal trial do not lend
themselves to making statistical inferences based on the provided
protocol (for example, no power assessment performed, no assessment for
multiple comparisons, no pre-identified alpha).
We are inviting public comments on whether narsoplimab meets the
substantial clinical improvement criterion.
We received one written comment in response to the New Technology
Town Hall meeting notice published in the Federal Register. The
commenter stated that they are enthusiastic about the results of the
single arm open-label trial OMS721-TMA-001 evaluating narsoplimab for
the treatment of HSCT-TMA. The commenter added that narsoplimab offers
a treatment option for these high-risk patients that appears to
markedly increase complete response rates with a substantial reduction
in clinically significant complications including mortality. The
commenter stated that the approval of the application for new
technology add-on payments will help ensure appropriate patients will
get the benefit of narsoplimab for treatment of HSCT-TMA.
Response: We appreciate the commenter's input and will take this
comment into consideration when deciding whether to approve new
technology add-on payments for narsoplimab for FY 2022.
l. NexoBridTM
Vericel Corporation submitted an application for
NexoBridTM for new technology add-on payments for FY 2022.
According to the applicant, NexoBridTM is a novel, non-
surgical option for eschar removal (debridement). Eschar is the dead
tissue and dried secretions from a skin wound following a burn, and
removal is essential for wound healing. According to the applicant,
NexoBridTM is a mixture of proteolytic enzymes (enriched in
bromelain) and has been developed for patients with deep partial
thickness (DPT) and/or full thickness
[[Page 25287]]
(FT) thermal burns. According to the applicant, NexoBridTM
has not yet received approval from FDA. The applicant further noted
that NexoBridTM was approved by the European Medicines
Agency (EMA) in 2012 and is currently commercially available in many
countries.
The applicant stated that timely, rapid debridement of eschar in
burn patients is necessary for assessing the burn injury, initiating
the wound healing process, and preventing further complications, such
as local infection, sepsis and extension of the burn
injury.427 428 429 The applicant stated that
NexoBridTM has been identified by the Biomedical Advanced
Research and Development Authority (BARDA) as a critical medical
countermeasure to address the public health emergency need for a
debridement product for the treatment of burns in adults, especially
for mass casualty events, where surgical capacity is limited, and rapid
assessment of burn severity and intervention are imperative.\430\
---------------------------------------------------------------------------
\427\ Edmondson, S. J., Jumabhoy, I. A., & Murray, A. (2018).
Time to start putting down the knife: A systematic review of burns
excision tools of randomised and non-randomised trials. Burns,
44(7), 1721-1737.
\428\ Gibran, N. S., et al. (2013). Summary of the 2012 ABA burn
quality consensus conference. Journal of Burn Care & Research,
34(4), 361-385.
\429\ Xiao-Wu, et al. (2002). Effects of delayed wound excision
and grafting in severely burned children. Archives of surgery,
137(9), 1049-1054.
\430\ BARDA Initiates the Procurement of NexoBrid for Emergency
Response. http://ir.mediwound.com/newsreleases/news-release-details/barda-initiates-procurement-nexobrid-emergency-response.
---------------------------------------------------------------------------
The applicant stated that the current standard of care for burn
debridement includes surgical and non-surgical approaches. The
applicant stated that the surgical approach relies primarily on
surgical tangential excision through use of sharp instruments such as
scalpels and dermatomes.431 432 The applicant stated that
surgical procedures include minor excision, avulsion, hydrosurgery (for
example, VERSAJETTM), scraping, brushing, dermabrasion, and
excisions.\433\ The applicant stated that non-surgical standard of care
treatments include enzymatic debridement such as clostridial
collagenase ointment (example, SANTYL[supreg]), antimicrobial agents
such as silver sulfadiazine (example, SILVADENE[supreg]), or various
hydrogels.434 435 436 437 438 439
---------------------------------------------------------------------------
\431\ Edmondson, S. J., et al. (2018). Time to start putting
down the knife: A systematic review of burns excision tools of
randomised and non-randomised trials. Burns, 44(7), 1721-1737.
\432\ Hindocha, S., et al. (2013). Burn eschar debridement: a
review. J. Wound. Technol. July, 12-14.
\433\ Legemate, C. M., et al. ``Application of hydrosurgery for
burn wound debridement: an 8-year cohort analysis.'' Burns 45.1
(2019): 88-96.
\434\ Loo, Y. L., Goh, B. K., & Jeffery, S. (2018). An overview
of the use of bromelain-based enzymatic debridement
(NexoBrid[supreg]) in deep partial and full thickness burns:
appraising the evidence. Journal of Burn Care & Research, 39(6),
932-938.
\435\ Pham, C. H., et al. (2019). The role of collagenase
ointment in acute burns: a systematic review and meta-analysis.
Journal of wound care, 28(Sup2), S9-S15.
\436\ Cancio, L. C., Barillo, D. J., Kearns, R. D., Holmes IV,
J. H., Conlon, K. M., Matherly, A. F., . . . & Palmieri, T. (2017).
Guidelines for burn care under austere conditions: surgical and
nonsurgical wound management. Journal of Burn Care & Research,
38(4), 203-214.
\437\ Hansbrough, J. F., et al (1995). Wound healing in partial-
thickness burn wounds treated with collagenase ointment versus
silver sulfadiazine cream. The Journal of burn care &
rehabilitation, 16(suppl_3_pt_1), 241-247.,
\438\ Klasen, H. J. (2000). A historical review of the use of
silver in the treatment of burns. II. Renewed interest for silver.
Burns, 26(2), 131-138.,
\439\ Soroff, H. S., & Sasvary, D. H. (1994). Collagenase
ointment and polymyxin B sulfate/bacitracin spray versus silver
sulfadiazine cream in partial-thickness burns: A pilot study. The
Journal of burn care & rehabilitation, 15(1), 13-17.
---------------------------------------------------------------------------
According to the applicant, NexoBridTM is a botanical
and biologic product for topical use and is comprised of two
components: The NexoBridTM powder that contains the active
pharmaceutical ingredient (API) and a Gel Vehicle. The
NexoBridTM API is a concentrate of proteolytic enzymes
enriched in bromelain extracted from pineapple stems. The applicant
stated that the mechanism of action of NexoBridTM is
mediated by the proteolytic activity of its enzymes and is associated
with selective debridement of eschar and denatured collagen while
sparing healthy tissue.
The applicant stated that according to the American Hospital
Association (AHA) Coding Clinic, ``Non-excisional debridement is coded
with root operation `extraction' ''.\440\ The applicant added that
NexoBridTM could be identified with ICD-10-PCS code series
0HD Extraction of Skin or 0JD Extraction of subcutaneous tissue and
fascia. The applicant stated that it has not requested that its
technology map to a new or different MS-DRG.
---------------------------------------------------------------------------
\440\ American Hospital Association (AHA) Coding Clinic, Volume
2, number 1, 2015, pg 23
---------------------------------------------------------------------------
With respect to the newness criterion, the applicant stated they
have not yet received FDA approval. The applicant submitted a Biologic
License Application (BLA) for NexoBridTM for FDA approval on
June 30, 2020 on the basis of two pivotal Phase 3 clinical trials. In
September 2020, the FDA accepted the application and communicated a
PDUFA date of June 29, 2021.
The applicant indicated that the ICD-10-PCS code series for non-
excisional debridement, 0HD (Extraction of Skin) or 0JD (Extraction of
subcutaneous tissue and fascia) could be used to identify
NexoBridTM use. The applicant indicated that
NexoBridTM is not separately identified with a unique ICD-
10-PCS code. The applicant submitted a request for an ICD-10-PCS code
to uniquely identify the use of NexoBridTM beginning in FY
2022.
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would, therefore, not be
considered ``new'' for purposes of new technology add-on payments.
With respect to the first criterion, whether a product uses the
same or similar mechanism of action to achieve a therapeutic outcome,
the applicant stated that NexoBridTM is unique due to the
bromelain active ingredient, which is extracted from pineapple stems.
The applicant claimed that a search of the FDA website for the key
words ``bromelain'' and ``pineapple'' did not yield any approved
applications under section 505(b)(1) of the Federal Food, Drug, and
Cosmetic (FD&C Act) or section 351(a) of the Public Health Service
(PHS) Act.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant did not address the
question directly, but stated that no existing technology used now or
previously is similar to NexoBridTM that would be captured
under burn MS-DRGs as identified in the following table.
[GRAPHIC] [TIFF OMITTED] TP10MY21.162
[[Page 25288]]
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease, and the same or similar patient population when compared to an
existing technology, the applicant stated that NexoBridTM
does treat the same patient population as existing approaches to eschar
removal. The applicant further stated that the ability to use
NexoBridTM at the bedside offers an effective option for
rapid eschar removal that avoids the operating room, and that the
ability to use NexoBridTM in delicate areas offers
particular value in burn treatment.
We have the following concerns regarding whether the technology
meets the substantial similarity criteria and whether it should be
considered new. While the applicant discussed the differences between
NexoBridTM and products made by other manufacturers, we note
the applicant does not provide enough information regarding the
composition of the proteolytic enzymes used within the
NexoBridTM active pharmaceutical ingredient, its mechanism
of action, and how the ingredient(s) differs from other enzymatic
debridement products on the market. Specifically, it is not clear
whether the proteolytic enzyme is a type of collagenase similar to
existing collagenase based enzymatic debridement products, since the
applicant claimed that NexoBridTM debrides denatured
collagen in the wound. In addition, the applicant states that
NexoBridTM uses a new ingredient but does not explain how
this represents a new mechanism of action. We also note that, while the
applicant did not state so directly, we believe that patients treated
using NexoBridTM would be assigned to the same MS-DRGs as
those patients who were treated with competitive products or services
used for burns. We further note that the applicant did not suggest that
NexoBridTM was used to treat a different population from
existing treatments.
We are inviting public comments on whether NexoBridTM is
substantially similar to other currently available therapies and/or
technologies, and whether NexoBridTM meets the newness
criterion.
With regard to the cost criterion, the applicant provided two
scenarios: Scenario 1: without grafting, which excluded cases with an
ICD-10-PCS code for replacement of skin, and Scenario 2: with grafting,
which required at least one ICD-10-PCS code for replacement of skin.
Under the first scenario, the applicant searched the FY 2019 MedPAR
dataset for cases reporting ICD-10-CM diagnosis codes for second- or
third-degree burns as a primary diagnosis, and an ICD-10-PCS code(s)
for excision or extraction of skin or subcutaneous tissue and fascia;
these criteria resulted in the identification of 347 cases mapping to
three unique MS-DRGs. Under the second scenario, the applicant again
searched the FY 2019 MedPAR dataset for the same ICD-10 codes but with
an additional ICD-10-PCS code for replacement of skin. Under the second
scenario, the applicant identified 1,283 cases mapping to five unique
MS-DRGs. In the following tables the applicant lists the MS-DRGs to
which cases are assigned in each scenario:
[GRAPHIC] [TIFF OMITTED] TP10MY21.163
[GRAPHIC] [TIFF OMITTED] TP10MY21.164
With respect to the MS-DRGs identified based on the claims search
and included in the cost analysis, particularly MS-DRG 003, the
applicant confirmed that this MS-DRG was appropriately representative
of potential NexoBridTM patients.
The applicant used the FY 2019 MedPAR LDS file with the FY 2022 New
Technology thresholds to calculate the case-weighted thresholds, and
the FY 2019 FR IPPS/LTCH PPS standardizing file to standardize charges.
The applicant then removed 100 percent of the operating room charges
and 24.5 percent of the blood charges from the identified cases to
conservatively estimate the charges that potentially may be avoided
through the use of NexoBridTM. After standardizing the
charges, the applicant applied what it indicated was the 2-year
inflation factor used in the FY 2021 IPPS/LTCH PPS final rule to
calculate outlier threshold charges of 13.1 percent. We note that the
inflation factor was 13.2 percent (1.13218) for FY 2021 (85 FR 59039),
which would have resulted in higher inflated charges. To calculate the
charges for the technology, the applicant divided the cost of the
technology by the national average CCR for the Drugs cost center of
0.187 from the FY 2021 IPPS/LTCH PPS final rule.
Under scenario one, the applicant calculated a final inflated case-
weighted average standardized charge per case of $95,828, which
exceeded the average case-weighted threshold amount of $55,536. Under
scenario two, the final inflated average case-weighted standardized
charge per case of $334,405 exceeded the average case-weighted
threshold amount of $168,985. The applicant stated that because the
final inflated average case-weighted standardized charge per case
exceeded the average case-weighted threshold amount for both scenarios,
the technology meets the cost criterion.
[[Page 25289]]
According to the applicant, NexoBridTM is indicated for
the treatment of thermal burns. The cost analysis performed by the
applicant includes MS-DRG 003 (ECMO or Tracheostomy w MV >96 Hours or
Principal Diagnosis Except Face, Mouth and Neck w Major O.R.
Procedures), which per the applicant is appropriately representative of
potential NexoBridTM patients. However, MS-DRG 003 does not
appear to be representative of the target patient population for
NexoBridTM. We are seeking public comment on whether the use
of this MS-DRG and others for the cost analysis appropriately reflects
the potential cases treated by the technology.
We are inviting public comment on whether NexoBrid[supreg] meets
the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that NexoBridTM can be used in a patient
population that is unresponsive to, or ineligible for currently
available treatments because NexoBridTM can be used at the
bedside and is therefore an effective eschar removal option for
patients for whom surgery or general anesthesia may be contraindicated.
The applicant asserted that NexoBridTM allows for the
diagnosis of a medical condition in a manner different from existing
technology because it allows for depth-of-burn diagnoses of
indeterminant depth and/or mixed depth wounds. The applicant also
asserted that NexoBridTM represents a substantial clinical
improvement due to significantly improved clinical outcomes in the
following ways: (1) Reduction in clinically significant adverse events
by reducing the surgical burden associated with surgical excision,
reducing donor site morbidity due to reduced autografting, reducing
blood loss due to adoption of a non-surgical approach, and reduced
usage of surgical escharotomies; (2) decreased rate in a subsequent
diagnostic or therapeutic intervention by reducing the need for
surgical excision and reducing the need for autografts; (3) improved
quality of life due to reduced scarring associated with reduction in
autografting; and (4) NexoBridTM is aligned with key
benefits to elderly burn patients who may be too unwell for surgical
excision.
The applicant asserted that because NexoBridTM can be
used at the bedside, it provides a unique non-surgical option for
rapid, consistent eschar removal in patients for whom surgery or
general anesthesia may be contraindicated. The applicant claimed that
currently available non-surgical eschar removal procedures are
generally considered inefficient, can result in a lengthy sloughing
period, and have the potential for development of granulation tissue
and increased infection and scarring.441 442 443
---------------------------------------------------------------------------
\441\ Hansbrough, J. F., et al. (1995). Wound healing in
partial-thickness burn wounds treated with collagenase ointment
versus silver sulfadiazine cream. The Journal of burn care &
rehabilitation, 16(suppl_3_pt_1), 241-247.
\442\ Klasen, H. J. (2000). A historical review of the use of
silver in the treatment of burns. II. Renewed interest for silver.
Burns, 26(2), 131-138.
\443\ Soroff, H. S., & Sasvary, D. H. (1994). Collagenase
ointment and polymyxin B sulfate/bacitracin spray versus silver
sulfadiazine cream in partial-thickness burns: a pilot study. The
Journal of burn care & rehabilitation, 15(1), 13-17.
---------------------------------------------------------------------------
The applicant submitted two pivotal Phase 3 clinical trials to
primarily support its claims of substantial clinical improvement. The
DETECT study (NCT02148705) is a multi-center, multi-national, assessor
blinded, randomized, 3:3:1 controlled, three-arm study from which data
is not yet publicly available. Per the applicant, this study aimed to
demonstrate superiority of NexoBridTM treatment over Gel
Vehicle (placebo) control and standard of care treatment, in
hospitalized adult subjects with DPT and/or FT thermal burn of 3-30%
total body surface area (TBSA) and total burn wounds of no more than
30% TBSA. A total of 175 subjects were randomized in to the DETECT
study with 169 subjects being treated with NexoBrid, SOC consisting of
surgical and/or nonsurgical treatment as per the investigators'
discretion, or placebo.\444\ NCT00324311 is an earlier multi-center,
open-label, randomized, controlled clinical trial including 156
patients aged 4-55 years with deep partial and full thickness burns
covering 5-30% TBSA. Patients were randomly assigned to burn
debridement with NexoBridTM or standard of care, which
included surgical excisional or non-surgical debridement.\445\
---------------------------------------------------------------------------
\444\ NexoBrid Draft Labeling Text
\445\ Rosenberg, L., et al, A novel rapid and selective
enzymatic debridement agent for burn wound management: A multi-
center RCT. Burns 2014, Vol 40(3): 466-474.
---------------------------------------------------------------------------
The applicant asserted that in patients with indeterminant partial-
thickness and/or mixed depth burns, NexoBridTM debridement
allows for a more accurate assessment of burn depth. The applicant
stated, ``each additional non-autografted NexoBridTM-treated
patient (relative to standard of care eschar removal) has an
indeterminate superficial partial thickness wound that would otherwise
have been incorrectly diagnosed as a deep partial thickness wound.''
The applicant suggested that deep partial thickness wounds require
autografting. The applicant noted that the Phase 3 clinical trial
NCT00324311 of patients with DPT and FT thickness had burns ranging
from 5-30%TBSA.\446\ The applicant claimed that it can be estimated
that approximately 16.2% of NexoBridTM treated wounds (34.1%
autograft rate in standard of care group minus 17.9% autograft rate in
the NexoBridTM treated group) would have been autografted
had other standard of care methods for burn debridement been used.
---------------------------------------------------------------------------
\446\ Ibid. Rosenberg, L., et al, A novel rapid and selective
enzymatic debridement agent for burn wound management: A multi-
center RCT. Burns 2014, Vol 40(3): 466-474.
---------------------------------------------------------------------------
The applicant asserted that the use of NexoBridTM as a
non-surgical option for treatment reduces potential adverse events that
may be associated with surgery or general anesthesia such as blood
loss. The applicant noted that in the DETECT trial, median blood loss
during eschar removal was significantly higher in the standard of care
arm compared with NexoBridTM. It also noted that the
NCT00324311 trial demonstrated smaller reductions in hemoglobin and
hematocrit values before and after treatment in the
NexoBridTM arm compared to the standard of care arm.
The applicant asserted that the use of NexoBridTM may
reduce instances of surgical escharotomies which may be needed when a
circumferential eschar produces a tourniquet effect that compromises
circulation or movement.447 448 449 According to the
applicant, this requires an emergency escharotomy involving incising
through areas of burnt skin to release the eschar and its constrictive
effects, restore distal circulation, and allow adequate ventilation.
The applicant claimed that reducing the need for an escharotomy also
reduces the need for subsequent surgical reconstruction of the
escharotomy wound, and potential complications, including uncontrolled
bleeding, incomplete release, damage to deep structures, functional
deficits, and scarring.
---------------------------------------------------------------------------
\447\ Kreiger et al, Efficacy of enzymatic debridement of deeply
burned hands. Burns 2012, Vol 38: 108-112.
\448\ Giudice et al, Cost Analysis of a Novel Enzymatic
Debriding Agent for Management of Burn Wounds. Biomed Res Int 2017,
Vol 2017.
\449\ Palao et al, Use of a selective enzymatic debridement
agent (NexoBrid[supreg]) for wound management: Learning curve. World
J of Dermatology 2017, Vol 6(2): 32-41.
---------------------------------------------------------------------------
To support the claim that NexoBridTM reduces the time to
eschar removal, the applicant asserted that NexoBridTM has
been shown in the two phase 3 multi-center, randomized-controlled
trials to have a lower average time of eschar removal compared to the
standard of
[[Page 25290]]
care, with the DETECT study demonstrating 1.0 day eschar removal versus
3.8 days and NCT00324311 demonstrating 2.2 days versus 8.7 days
(p<0.0001) for treated and control groups respectively.\450\
---------------------------------------------------------------------------
\450\ Rosenberg, L., et al, A novel rapid and selective
enzymatic debridement agent for burn wound management: A multi-
center RCT. Burns 2014, Vol 40(3): 466-474.
---------------------------------------------------------------------------
The applicant also included a systematic review and meta-analysis
of clostridial collagenase ointment (CCO) studies by Pham, C. H., et
al. to support its claim of decreased eschar removal time as compared
to existing non-surgical therapies.\451\ Per the study, the reported
average time to clean wound bed (complete eschar removal) for CCO
ranged from 6 days to 9.3 days with daily dressing changes among the
prospective studies included in the systematic review. We note that the
literature review was limited to the efficacy and use of CCO in burn
patients and did not discuss other standard of care therapies.
---------------------------------------------------------------------------
\451\ [Insert cite]
---------------------------------------------------------------------------
The applicant asserted that the use of NexoBridTM can
lead to decreased need for surgical excision. The applicant stated that
in a pooled analysis of both Phase 3 clinical trials,
NexoBridTM exhibited lower incidence of surgical excision to
complete eschar removal (26.9% vs 70.6%), lower mean percent wound area
surgically excised (11.5% vs 55.1%), and a higher rate of complete
eschar removal without rescue surgical excision (90.5% vs 70.1%)
compared to standard of care. The applicant cited these results as
proof of the tissue-sparing effects compared with standard of care. The
applicant further stated that the NCT00324311 study \452\ showed that
among patients with wounds comprised entirely of deep partial thickness
(DPT) burns in this study, the incidence of excision or dermabrasion
after debridement was statistically significantly lower with
NexoBridTM compared with standard of care (15.1% vs 65.5%,
p<0.0001), and that the mean percent wound area excised was also
statistically significantly lower with NexoBridTM, 14.6%
versus 44.5% in standard of care group (p <0.0001). The applicant
stated that in the DETECT study, the incidence of complete eschar
removal in the NexoBridTM group was 93.35% (70 of 75
patients) versus 100% in the standard of care group (which included
both surgical and non-surgical debridement) versus 4.0% in the gel
vehicle placebo group. The applicant stated that the incidence of
excision to complete eschar removal was statistically significantly
lower with NexoBridTM, 4.0% versus 72% for the standard of
care group (p<0.0001).
---------------------------------------------------------------------------
\452\ Rosenberg, L., et al, A novel rapid and selective
enzymatic debridement agent for burn wound management: A multi-
center RCT. Burns 2014, Vol 40(3): 466-474.
---------------------------------------------------------------------------
The applicant asserted that the shorter time to complete eschar
removal for patients treated with NexoBridTM has been shown
to be associated with effective prevention of the subsequent need for
autografting. The applicant stated that in the first published Phase 3
pivotal clinical trial NCT00324311,\453\ the autograft rate was 17.9%
in the NexoBridTM treated arm vs. 34.1% in the standard of
care treated group (p=0.009), and the percentage of wound autografted
was lower in the NexoBridTM group, 8.4% vs. 21.5% in the
standard of care group (p=0.0054). The applicant further stated that
among patients with at least one wound that was entirely a DPT burn,
significantly fewer wound autografts were performed in the
NexoBridTM group, 17.9% (19/106 wounds) versus 34% (30/88
wounds) in the standard of care group (p=0.0099), and the percent
treated wound area autografted was also significantly lower in the
NexoBridTM group, 8.4% versus 21.5% in the standard of care
group (p=0.0054).
---------------------------------------------------------------------------
\453\ Rosenberg, L., et al, A novel rapid and selective
enzymatic debridement agent for burn wound management: A multi-
center RCT. Burns 2014, Vol 40(3): 466-474.
---------------------------------------------------------------------------
The applicant also stated that a prospective single-arm study of
NexoBridTM showed that 25 patients with partial thickness
burns who were treated with NexoBridTM experienced a
reduction in the need for autografting compared to patients treated
with standard of care.\454\
---------------------------------------------------------------------------
\454\ Palao, R., et al. (2017). Use of a selective enzymatic
debridement agent (NexoBrid[supreg]) for wound management: Learning
curve. World Journal of Dermatology, 6(2), 32-41.
---------------------------------------------------------------------------
The applicant also cited studies comparing NexoBridTM to
surgical debridement in hand and facial burns. The applicant stated
that a single center controlled study of 40 hand burns demonstrated a
reduced need for autografting with NexoBridTM, with 15% of
patients receiving NexoBridTM compared to 95% of patients
treated with the standard of care (excisional surgical debridement)
requiring autografting (p=0.034).\455\ The single center controlled
study of 26 face burns demonstrated a reduced need for autografting
with NexoBrid[supreg], with 15% of patients receiving
NexoBridTM compared to 77% of patients treated with the
standard of care requiring autografting (p=-0.002).\456\
---------------------------------------------------------------------------
\455\ Schulz, A., et al. (2017). Enzymatic versus traditional
surgical debridement of severely burned hands: a comparison of
selectivity, efficacy, healing time, and three-month scar quality.
Journal of Burn Care & Research, 38(4), e745-e755.
\456\ Schulz, A., et al. (2017). Enzymatic debridement of deeply
burned faces: healing and early scarring based on tissue
preservation compared to traditional surgical debridement. Burns,
43(6), 1233-1243.
---------------------------------------------------------------------------
The applicant asserted that because the use of
NexoBridTM reduces areas that require autografting, this
results in decreased donor site morbidity, which is particularly useful
for patients with limited donor site area (example, high total body
surface area burns), or risk factors for delayed wound healing
(example, advanced age).457 458
---------------------------------------------------------------------------
\457\ Holmes Iv, J. H., et al. (2018). A comparative study of
the ReCell[supreg] device and autologous split-thickness meshed skin
graft in the treatment of acute burn injuries. Journal of Burn Care
& Research, 39(5), 694-702.
\458\ Gould, L., et al. (2015). Chronic wound repair and healing
in older adults: current status and future research. Wound Repair
and Regeneration, 23(1), 1-13.
---------------------------------------------------------------------------
Per the applicant, by selectively debriding only non-viable tissue,
NexoBridTM reduces the area of burn that requires
autografting compared to surgical excision and other non-surgical
approaches of eschar debridement. Per the applicant,
NexoBridTM's selective debridement of non-viable tissue is
especially useful in delicate areas such as face,\459\
hands,460 461 feet, and genitals which are difficult areas
to excise eschar surgically.462 463 The applicant also
claimed that the use of NexoBridTM results in decreased
scarring from the reduced need for autografting.
---------------------------------------------------------------------------
\459\ Schulz, A., et al. (2017). Enzymatic debridement of deeply
burned faces: healing and early scarring based on tissue
preservation compared to traditional surgical debridement. Burns,
43(6), 1233-1243.
\459\ Rosenberg et al, A novel rapid and selective enzymatic
debridement agent for burn wound management: A multi-center RCT.
Burns 2014, Vol 40(3): 466-474.
\460\ Schulz, A., et al. (2017). Enzymatic versus traditional
surgical debridement of severely burned hands: a comparison of
selectivity, efficacy, healing time, and three-month scar quality.
Journal of Burn Care & Research, 38(4), e745-e755.
\461\ Krieger, Y., et al. (2012). Efficacy of enzymatic
debridement of deeply burned hands. Burns, 38(1), 108-112.
\462\ Cordts, T., et al. (2016). Enzymatic debridement for the
treatment of severely burned upper extremities-early single center
experiences. BMC dermatology, 16(1), 1-7.
\463\ Hirche, C., et al. (2020). Eschar removal by bromelain
based enzymatic debridement (NexoBrid[supreg]) in burns: European
consensus guidelines update. Burns.
---------------------------------------------------------------------------
The applicant asserted that the two single-center controlled trials
discussed in this section, one of patients with hand burns\464\ and one
of patients with
[[Page 25291]]
facial burns,\465\ demonstrated that cosmesis of the healed wound using
NexoBridTM was comparable if not better than traditional
surgical debridement (standard of care arm). In addition, per the
applicant, a single arm prospective study of 36 patients showed that
only 11.1% of patients treated with NexoBridTM developed
hypertrophic scars.\466\
---------------------------------------------------------------------------
\464\ Schultz et al, Enzymatic Versus Traditional Surgical
Debridement of Severely Burned Hands: A Comparison of Selectivity,
Efficacy, Healing Time, and Three-Month Scar Quality. J Burn Care
and Research 2016, Vol 38(4): 745-755.
\465\ Schultz et al, Enzymatic debridement of deeply burned
faces: Healing and early scarring based on tissue preservation
compared to traditional surgical debridement. Burns 2017b, Vol
43(2017): 1233-1243.
\466\ Corrales-Benitez et al, Reduced need for grafting and low
incidence of hypertrophic scarring in burns after enzymatic
debridement. J. Plastic Surgery Latin America 2016, Vol 42(4).
---------------------------------------------------------------------------
In further support of their statements suggesting that the use of
NexoBridTM results in reduced time to complete debridement,
reduced need for surgery, and reduced need for autografting, the
applicant submitted a literature review that identified studies
published between 2012 and 2017 involving the use of
NexoBridTM in deep partial and full thickness burns.\467\ In
this article, studies were evaluated for proposed benefits of
NexoBridTM and categorized under supporting evidence,
contradicting evidence, and anecdotal opinions. Seven prospective
studies met the inclusion criteria including four randomized controlled
trials. Six proposed benefits associated with the use of
NexoBridTM were extracted from the studies including reduced
time to complete debridement, need for surgery, area of burns excised,
need for autograft, time to wound closure, and improved scar quality.
The authors of the literature review stated that most of the proposed
benefits had strong supporting evidence from controlled trials as well
as some anecdotal data. The authors further stated that for the
proposed benefits of scar quality improvement and reduced time to wound
healing, three sources and one anecdotal study provided refuting
evidence. Incidence of pain was also evaluated and was mainly
anecdotal, lacking formal objective assessment or cohort study.\468\
---------------------------------------------------------------------------
\467\ Loo, Y. L., Goh, B. K., & Jeffery, S. (2018). An overview
of the use of bromelain-based enzymatic debridement
(NexoBrid[supreg]) in deep partial and full thickness burns:
appraising the evidence. Journal of Burn Care & Research, 39(6),
932-938.
\468\ Loo, Y. L., Goh, B. K., & Jeffery, S. (2018). An overview
of the use of bromelain-based enzymatic debridement
(NexoBrid[supreg]) in deep partial and full thickness burns:
appraising the evidence. Journal of Burn Care & Research, 39(6),
932-938.
---------------------------------------------------------------------------
Regarding the substantial clinical improvement criterion, we have
the following concerns. We note that the applicant's claims of
superiority of NexoBridTM to standard of care debridement
methods are non-specific because the studies cited were not designed to
compare NexoBridTM to a specific non-surgical method or an
enzymatic debridement product. In addition, we are unclear whether
comparing NexoBridTM to a surgical treatment modality is the
most appropriate comparator since mechanical means of debridement have
different clinical indications, risks, and benefits compared to
enzymatic debridement. We note that studies also did not demonstrate
that NexoBridTM selectively debrides eschar and does not
injure viable skin. In addition, it may be difficult to generalize
across studies of NexoBridTM because the wound care and
timing of the debridement and subsequent autografting varies across
different burn centers and studies. We note that we are unable to
verify the results of the DETECT study as it does not appear that this
data has been published or provided by the applicant. Finally, we note
that a review of seven studies of NexoBridTM \469\ observed
that when compared to the standard of care, there were variable reports
of the cosmetic outcome of NexoBridTM, prolonged wound
closure, longer lengths of stay, and significant pain associated with
NexoBridTM eschar debridement.
---------------------------------------------------------------------------
\469\ Loo, Y.L., et al, An Overview of the Use of Bromelain-
Based Enzymatic Debridement (NexoBrid[supreg]) in Deep Partial and
Full Thickness Burns: Appraising the Evidence. J Burn Care and
Research 2018, Vol 39(6): 932-938.
---------------------------------------------------------------------------
We invite public comment on whether NexoBridTM meets the
substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for the
NexoBridTM.
m. Olumiant[supreg] (baricitinib)
Eli Lilly and Company submitted an application for new technology
add-on payments for Olumiant[supreg] (baricitinib) for FY 2022.
Olumiant[supreg] is a Janus kinase (JAK) 1 and 2 inhibitor used in
combination with remdesivir as a treatment option for coronavirus
disease 2019 (COVID-19), a respiratory disease caused by severe acute
respiratory syndrome coronavirus 2 (SARS-CoV-2). Olumiant[supreg] has
not yet received marketing approval from FDA to treat COVID-19, but has
received an emergency use authorization (EUA) by the FDA.
Olumiant[supreg] has been previously approved by FDA for the treatment
of adult patients with moderately to severely active rheumatoid
arthritis, who have had inadequate response to one or more tumor
necrosis factor (TNF) antagonist therapies.\470\
---------------------------------------------------------------------------
\470\ Olumiant (baricitinib) [package insert]. US Food and Drug
Administration. Available at https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/207924s002lbl.pdf. Revised July 8, 2020.
Accessed October 8, 2020.
---------------------------------------------------------------------------
The applicant stated that patients diagnosed with COVID-19 are at
an elevated risk for excess morbidity and mortality due to the
underlying SARS-CoV-2 infection and subsequent cytokine activation. The
applicant stated that the cause of respiratory failure in COVID-19 is a
hyperinflammatory state characterized by upregulation of multiple
cytokines and that Olumiant[supreg] may be a viable treatment in
patients with COVID-19 requiring supplemental oxygen, invasive
mechanical ventilation, or extracorporeal membrane oxygenation (ECMO)
because of its anti-inflammatory activity and ability to reverse
dysregulated inflammatory markers in patients with COVID-19.\471\ The
applicant noted treatment with baricitinib 4 mg resulted in reduced
plasma levels of the cytokine IL-6 in hospitalized patients with COVID-
19, a finding that was replicated after being observed in patients with
rheumatoid arthritis.472 473 474 The applicant also claimed
that Olumiant[supreg] potentially has anti-viral activity in inhibiting
SARS-CoV-2 from entering and infecting lung cells due to its affinity
for adaptor-associated kinase-1 (AAK1).\475\ The applicant noted that
there are ongoing
[[Page 25292]]
studies to evaluate the impact of the antiviral host activity of
Olumiant[supreg].
---------------------------------------------------------------------------
\471\ McInnes IB, Byers NL, Higgs RE, et al. Comparison of
baricitinib, upadacitinib, and tofacitinib mediated regulation of
cytokine signaling in human leukocyte subpopulations. Arthritis Res
Ther. 2019;21(1):183. https://doi.org/10.1186/s13075-019-1964-1.
\472\ Bronte V, Ugel S, Tinazzi E, et al. Baricitinib restrains
the immune dysregulation in severe COVID-19 patients [published
online August 18, 2020]. J Clin Invest. https://doi.org/10.1172/JCI141772.
\473\ Sims JT, Krishnan V, Chang CY, et al. Characterization of
the cytokine storm reflects hyperinflammatory endothelial
dysfunction in COVID-19 [published online September 10, 2020]. J
Allergy Clin Immunol. https://doi.org/10.1016/j.jaci.2020.08.031.
\474\ Stebbing J, Krishnan V, de Bono S, et al; Sacco
Baricitinib Study Group. Mechanism of baricitinib supports
artificial intelligence-predicted testing in COVID-19 patients. EMBO
Mol Med. 2020;12(8):e12697. https://doi.org/10.15252/emmm.202012697.
\475\ Richardson P, Griffin I, Tucker C, Smith D, Oechsle O,
Phelan A, Rawling M, Savory E, Stebbing J. Baricitinib as potential
treatment for 2019-nCoV acute respiratory disease. Lancet. 2020 Feb
15; 395(10223):e30-e31. doi: 10.1016/S0140-6736(20)30304-4. Epub
2020 Feb 4. Erratum in: Lancet. 2020 Jun 20; 395(10241):1906. PMID:
32032529; PMCID: PMC7137985.
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With respect to the newness criterion, Olumiant[supreg] received
Emergency Use Authorization (EUA) from FDA on November 19, 2020 for the
emergency use of Olumiant[supreg], indicated for use in combination
with remdesivir for the treatment of suspected or laboratory confirmed
COVID-19 in certain hospitalized patients requiring supplemental
oxygen, invasive mechanical ventilation, or extracorporeal membrane
oxygenation (ECMO). The applicant stated that it intends to submit a
supplemental new drug application (sNDA) for Olumiant[supreg].
In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we
revised our regulations at Sec. 412.87 to codify our longstanding
practice of how CMS evaluates the eligibility criteria for new medical
service or technology add-on payment applications. We stated that new
technologies that have not received FDA approval do not meet the
newness criterion. In addition, we stated we do not believe it is
appropriate for CMS to determine whether a medical service or
technology represents a substantial clinical improvement over existing
technologies before the FDA makes a determination as to whether the
medical service or technology is safe and effective. For these reasons,
we first determine whether a new technology meets the newness
criterion, and only if so, do we make a determination as to whether the
technology meets the cost threshold and represents a substantial
clinical improvement over existing medical services or technologies. We
also finalized at 42 CFR 412.87(c) (subsequently redesignated as
412.87(e)) that all applicants for new technology add-on payments must
have FDA approval or clearance by July 1 of the year prior to the
beginning of the fiscal year for which the application is being
considered.
In the FY 2021 IPPS/LTCH PPS final rule, to more precisely describe
the various types of FDA approvals, clearances, licensures, and
classifications that we consider under our new technology add-on
payment policy, we finalized a technical clarification to Sec.
412.87(e)(2) to indicate that new technologies must receive FDA
marketing authorization (for example, pre-market approval (PMA); 510(k)
clearance; the granting of a De Novo classification request; approval
of a New Drug Application (NDA); or Biologics License Application (BLA)
licensure) by July 1 of the year prior to the beginning of the fiscal
year for which the application is being considered. As noted in the FY
2021 IPPS/LTCH PPS final rule, this technical clarification did not
change our longstanding policy for evaluating whether a technology is
eligible for new technology add-on payment for a given fiscal year, and
we continue to consider FDA marketing authorization as representing
that a product has received FDA approval or clearance for purposes of
eligibility for the new technology add-on payment under Sec.
412.87(e)(2) (85 FR 58742).
An EUA by the FDA allows a product to be used for emergency use,
but under our longstanding policy, we believe it would not be
considered an FDA marketing authorization for the purpose of new
technology add-on payments, as a product that is available only through
an EUA is not considered to have FDA approval or clearance. Therefore,
under the current regulations at 42 CFR 412.87(e)(2) and consistent
with our longstanding policy of not considering eligibility for new
technology add-on payments prior to a product receiving FDA approval or
clearance, we believe a product available only through an EUA would not
be eligible for new technology add-on payments.
We also refer the reader to our comment solicitation in section
II.F.7 of the preamble of this proposed rule regarding how data
reflecting the costs of a product with an EUA, which may become
available upon authorization of the product for emergency use (but
prior to FDA approval or clearance), should be considered for purposes
of the 2-year to 3-year period of newness for new technology add-on
payments for a product with or expected to receive an EUA, including
whether the newness period should begin with the date of the EUA. With
respect to Olumiant[supreg], we are specifically requesting comment on
whether the newness period for this technology would begin on November
19, 2020, the date of its EUA, when the product became available on the
market.
In response to the COVID-19 public health emergency (PHE), we
established the New COVID-19 Treatments Add-on Payment (NCTAP) under
the IPPS for COVID-19 cases that meet certain criteria (85 FR 71155).
We believe that as drugs and biological products become available and
are authorized for emergency use or approved by FDA for the treatment
of COVID-19 in the inpatient setting, it is appropriate to increase the
current IPPS payment amounts to mitigate any potential financial
disincentives for hospitals to provide new COVID-19 treatments during
the PHE. Therefore, effective for discharges occurring on or after
November 2, 2020 and until the end of the PHE for COVID-19, we
established the NCTAP to pay hospitals the lesser of (1) 65 percent of
the operating outlier threshold for the claim or (2) 65 percent of the
amount by which the costs of the case exceed the standard DRG payment,
including the adjustment to the relative weight under section 3710 of
the Coronavirus Aid, Relief, and Economic Security (CARES) Act, for
certain cases that include the use of a drug or biological product
currently authorized for emergency use or approved for treating COVID-
19.\476\ Qualifying inpatient cases involving the use of
Olumiant[supreg], in combination with VEKLURY[supreg], are currently
eligible for NCTAP beginning November 19, 2020, the date
Olumiant[supreg] received EUA, through the end of the PHE.
---------------------------------------------------------------------------
\476\ Additional Policy and Regulatory Revisions in Response to
the COVID-19 Public Health Emergency, 85 FR 71142, 71155 (November
6, 2020). https://www.govinfo.gov/content/pkg/FR-2020-11-06/pdf/2020-24332.pdf.; For more information on NCTAP, refer to CMS'
provider toolkit at https://www.cms.gov/medicare/covid-19/new-covid-19-treatments-add-payment-nctap.
---------------------------------------------------------------------------
We anticipate that there might be inpatient cases of COVID-19,
beyond the end of the PHE, for which payment based on the assigned MS-
DRG may not adequately reflect the additional cost of new COVID-19
treatments. In order to continue to mitigate potential financial
disincentives for hospitals to provide new treatments, and to minimize
any potential payment disruption immediately following the end of the
PHE, we believe that the NCTAP should remain available for cases
involving eligible treatments, including Olumiant[supreg], in
combination with VEKLURY[supreg], for the remainder of the fiscal year
in which the PHE ends (for example, until September 30, 2022). We refer
the reader to our proposal in section II.F.8. of the preamble of this
proposed rule to extend the NCTAP through the end of the fiscal year in
which the PHE ends for certain products and discontinue the NCTAP for
products approved for new technology add-on payments in FY 2022.
The applicant indicated that Olumiant[supreg] could be reported
using the ICD-10-PCS codes 3E0DXGC (Introduction of other therapeutic
substance into mouth and pharynx, external approach) or 3E0G7GC
(Introduction of other therapeutic substance into upper GI, via natural
or artificial opening) but stated that these codes do not uniquely
identify the administration of Olumiant[supreg]. We note that ICD-10-
PCS codes XW0DXF5 (Introduction of other new technology therapeutic
substance into mouth and pharynx, external approach, new technology
group 5) and 3E0H7GC (Introduction of other therapeutic
[[Page 25293]]
substance into lower G.I. via natural or artificial opening) could also
be used to report use of Olumiant[supreg]. We note that as of January
1, 2021, Olumiant[supreg] is uniquely identified by ICD-10-PCS codes
XW0DXM6 (Introduction of baricitinib into mouth and pharynx, external
approach, new technology group 6), XW0G7M6 (Introduction of baricitinib
into upper GI, via natural or artificial opening, new technology group
6), and XW0H7M6 (Introduction of baricitinib into lower GI, via natural
or artificial opening, new technology group 6).
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With respect to the first criterion, whether a product uses the
same or similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, Olumiant[supreg] does not use the same or a
similar mechanism of action when compared to an existing technology to
achieve a therapeutic outcome, as there are no JAK inhibitor therapies
that have received an EUA or an approval from FDA to treat COVID-19.
The applicant notes that currently there is one therapy approved by
FDA to treat COVID-19 in hospital inpatients, remdesivir, and one
therapy, besides Olumiant[supreg], that has received EUA for the
treatment of COVID-19, convalescent plasma.\477\ The applicant claims
that the mechanism of action for both of these treatments differs from
Olumiant[supreg], which works as a JAK inhibitor.
---------------------------------------------------------------------------
\477\ The Federal Drug and Food Administration. Emergency Use
Authorizations: Drug and Biological Products. 2020. https://www.fda.gov/emergency-preparedness-andresponse/mcm-legal-regulatory-and-policy-framework/emergency-useauthorization#coviddrugs.
---------------------------------------------------------------------------
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated that there are
no JAK inhibitor therapies that have received an EUA or an approval
from FDA for the treatment of patients with COVID-19 and that
Olumiant[supreg] could therefore not be assigned to the same MS-DRG as
existing technologies.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, Olumiant[supreg] represents a potential new treatment option
for adult and pediatric patients 2 years or older with suspected or
laboratory-confirmed COVID-19 requiring supplemental oxygen, invasive
mechanical ventilation, or extracorporeal membrane oxygenation (ECMO).
The applicant also stated that COVID-19 is an entirely distinct disease
from those caused by other coronaviruses including severe acute
respiratory syndrome (SARS) and the Middle East respiratory syndrome
coronavirus (MERS-CoV).
In summary, the applicant asserted that Olumiant[supreg] is not
substantially similar to other available therapies because, as a JAK
inhibitor, it has a unique mechanism of action; there are no other
products assigned to the same MS-DRG; and it treats a different patient
population and disease--COVID-19. However, although there may not be
any other JAK inhibitors for the treatment of COVID-19 assigned to the
same MS-DRG as Olumiant[supreg], we note that Olumiant[supreg] may map
to the same MS-DRG as other existing COVID-19 treatments. We also note
that Olumiant[supreg] involves the treatment of the same patient
population and disease as other treatments for COVID-19, as
Olumiant[supreg] is given to the same patients as remdesivir due to the
EUA indication.
As discussed in section II.F.7 of the preamble, we are requesting
comment regarding how data reflecting the costs of a product with an
EUA, which may become available upon authorization of the product for
emergency use (but prior to FDA approval or clearance), should be
considered for purposes of the 2-year to 3-year period of newness for
new technology add-on payments for a product with or expected to
receive an EUA, including whether the newness period should begin with
the date of the EUA. We are also specifically requesting comment on
whether the newness period for Olumiant[supreg] would begin on November
19, 2020, the date of its EUA, when the product became available on the
market.
As previously discussed, under the regulations at 42 CFR
412.87(e)(2) and consistent with our longstanding policy of not
considering eligibility for new technology add-on payments prior to a
product receiving FDA approval or clearance, we believe a product
available only through an EUA would not be eligible for new technology
add-on payments.
We are inviting public comment on whether Olumiant[supreg] meets
the newness criterion.
With respect to the cost criterion, the applicant performed four
analyses. Two of these analyses were based on proxy COVID-19 cases
using ICD-10-CM B97.29 with additional coding to identify
manifestation. The applicant stated that these cases were then
differentiated into proxy COVID-19 cases with supplemental oxygen and
all proxy COVID-19 cases. The applicant stated that they also conducted
two supplemental analyses to confirm that actual COVID-19 cases using
Olumiant[supreg] would meet the cost threshold using linked 837 and 835
inpatient Electronic Data Interchange (EDI) transaction sets that were
processed during February through June of 2020. The applicant then
identified COVID-19 cases with supplemental oxygen and all COVID-19
cases.
For the first analysis, the applicant searched the FY 2019 MedPAR
LDS claims data file for potential cases representing patients who may
be eligible for treatment using Olumiant[supreg]. The applicant
identified proxy COVID-19 cases with supplemental oxygen by using ICD-
10-CM diagnosis code B97.29 with one of the following ICD-10-CM codes:
J12.89, J20.8, J40, J22, J98.8, and J80. The applicant excluded ICD-10-
CM codes B34.2 and Z03.818. The applicant stated that this coding
methodology was based on CDC guidance for coding COVID-19 cases prior
to April 1, 2020. The applicant then limited the group to those cases
that had ICD-10-PCS codes for supplemental oxygen. The ICD-10-PCS codes
included ventilation (5A1935Z, 5A1945Z, 5A1955Z, 5A09357, 5A09358,
5A09359, 5A0935B, 5A0935Z, 5A09457, 5A09458, 5A09459, 5A0945B, 5A0945Z,
5A09557, 5A09558, 5A09559, 5A0955B, and 5A0955Z), extracorporeal
membrane oxygenation (5A15223, 5A1522F, 5A1522G, 5A1522H, 5A15A2F,
5A15A2G, and 5A15A2H), and ICD-10-CM code Z99.81. This resulted in 473
cases mapping to the 11 MS-DRGs listed below.
[[Page 25294]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.165
For the second analysis, the applicant identified all proxy COVID-
19 cases using the same ICD-10-CM codes that were previously described;
however, the applicant did not include or exclude any cases based on
the ICD-10-PCS codes listed in claims. This resulted in 1,726 cases
mapping to the following 25 MS-DRGs.
[GRAPHIC] [TIFF OMITTED] TP10MY21.166
[GRAPHIC] [TIFF OMITTED] TP10MY21.167
For the third analysis, the applicant used Inovalon provider-
sourced pre- and post-adjudicated claims data to identify CY 2020
claims for COVID-19 cases that may be eligible for treatment involving
Olumiant[supreg]. Specifically, the applicant used linked 837 and 835
inpatient Electronic Data Interchange (EDI) transaction sets that were
processed between February and June of 2020. For discharges prior to
April 1, 2020, the applicant identified cases using ICD-10-CM diagnosis
code B97.29 with one of the following ICD-10-CM codes: J12.89, J20.8,
J40, J22, J98.8, and J80. The applicant excluded ICD-10-CM codes B34.2
and Z03.818. For cases discharged on or after April 1, 2020, the
applicant identified cases using ICD-10-CM code U07.1 and excluded
codes B34.2 and Z03.818. The applicant then limited the group to those
cases that had ICD-10-PCS codes for supplemental oxygen. The ICD-10-PCS
codes included ventilation (5A1935Z, 5A1945Z, 5A1955Z, 5A09357,
5A09358, 5A09359, 5A0935B, 5A0935Z, 5A09457, 5A09458, 5A09459, 5A0945B,
5A0945Z, 5A09557, 5A09558, 5A09559, 5A0955B, and 5A0955Z) and
extracorporeal membrane oxygenation (5A15223, 5A1522F, 5A1522G,
5A1522H, 5A15A2F, 5A15A2G, and 5A15A2H), and ICD-10-CM code Z99.81
Dependence on supplemental oxygen. This resulted in 966 cases, which
were mapped to the following 7 MS-DRGs:
[[Page 25295]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.168
For the fourth analysis, the applicant identified all COVID-19
cases using the same ICD-10-CM diagnosis codes as previously described.
For discharges prior to April 1, 2020, the applicant identified cases
using ICD-10-CM diagnosis code B97.29 with one of the following ICD-10-
CM codes: J12.89, J20.8, J40, J22, J98.8, and J80. The applicant
excluded ICD-10-CM codes B34.2 and Z03.818. For cases discharged on or
after April 1, 2020, the applicant identified cases using ICD-10-CM
code U07.1 and excluded codes B34.2 and Z03.818. The applicant did not
include or exclude any cases based on the ICD-10-PCS codes listed in
claims. Based on this analysis, the applicant found 3,826 cases, which
map to 21 MS-DRGs listed below.
[GRAPHIC] [TIFF OMITTED] TP10MY21.169
For each analysis, the applicant then removed 12.5 percent of the
length of stay charges from the relevant cases to estimate the
reduction in charges due to decrease in number of hospitalization days
that may be avoided through use of baricitinib. The applicant
determined this percentage based on findings from the ACTT-2
trial,\478\ sponsored by the National Institute of Allergy and
Infection Diseases (NIAID), which found an improved median time to
recovery from 8 to 7 days (that is, a 12.5 percent improvement).
---------------------------------------------------------------------------
\478\ Kalil, A.C., Patterson, T.F., Mehta, A.K., et al.
Baricitinib plus remdesivir for adults with Covid-19. (2020). New
England Journal of Medicine. DOI: 10.1056/NEJMoa2031994
---------------------------------------------------------------------------
For the first two analyses, the applicant then standardized the
charges and applied a 2-year inflation factor of 1.131096 that the
applicant stated was used in the FY 2021 IPPS/LTCH PPS final rule to
calculate outlier threshold charges. We note that the 2-year inflation
factor used in the FY 2021 IPPS/LTCH PPS final rule to calculate
outlier threshold charges is 1.13218, which would have increased the
inflated charges figure. For analysis three and four, the applicant
standardized the charges and applied a one-year inflation factor of 6.4
percent, the one-year inflation factor published in the FY 2021 IPPS/
LTCH PPS final rule.
For each analysis, the applicant then calculated and added the
charges for Olumiant[supreg] by taking the estimated per patient cost
of the drug, and converting it to a charge by dividing the costs by the
national average CCR (cost-to-charge ratio) of 0.187 for drugs from the
FY 2021 IPPS/LTCH PPS final rule (85 FR 58601).
In the first analysis, which included proxy COVID-19 with
supplemental oxygen cases, the applicant computed a final inflated
average case-weighted standardized charge per case of $88,728, which
exceeded the average case-weighted threshold amount of $69,276.
In the second analysis, which included all proxy COVID-19 cases,
the applicant computed a final inflated average case-weighted
standardized charge per case of $68,562, which exceeded the average
case-weighted threshold amount of $56,643.
In the third analysis, which included COVID-19 with supplemental
oxygen cases, the applicant computed a final inflated average case-
weighted
[[Page 25296]]
standardized charge per case of $198,114, which exceeded the average
case-weighted threshold amount of $123,238.
In the fourth analysis, which included all COVID-19 cases, the
applicant computed a final inflated average case-weighted standardized
charge per case of $99,870, which exceeded the average case-weighted
threshold amount of $75,891.
Because the final inflated average case-weighted standardized
charge per case exceeded the average case-weighted threshold amount
under both analyses described previously, the applicant asserted that
the technology meets the cost criterion.
We invite public comments on whether Olumiant[supreg] meets the
cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that Olumiant[supreg] in combination with remdesivir
represents a substantial clinical improvement over existing
technologies because it improves time to recovery, improves the odds of
improvement in clinical status at Day 15 after enrollment, and reduces
mortality in the treatment of COVID-19 compared to remdesivir
alone.\479\ The applicant also stated that the combination of
Olumiant[supreg] and remdesivir has a favorable risk/benefit profile in
comparison to remdesivir alone. The applicant also claimed that
Olumiant[supreg] improves respiratory function in patients treated with
corticosteroids for SARS-CoV-2 pneumonia when compared with
corticosteroids alone.
---------------------------------------------------------------------------
\479\ Kalil, A.C., Patterson, T.F., Mehta, A.K., et al.
Baricitinib plus remdesivir for adults with Covid-19. (2020). New
England Journal of Medicine. DOI: 10.1056/NEJMoa2031994.
---------------------------------------------------------------------------
In support of these claims, the applicant submitted the results of
the Adaptive COVID-19 Treatment Trial (ACTT-2) \480\ which was a
randomized, double-blind, placebo-controlled clinical trial sponsored
by the National Institute of Allergy and Infectious Diseases (NIAID),
part of the National Institutes of Health (NIH). The ACTT-2 trial
included 1,033 hospitalized patients with COVID-19 and assessed whether
the combination of Olumiant[supreg] plus remdesivir was superior to
remdesivir + placebo. There were 515 patients randomized to the
treatment group and 518 to the control group. Of those in the treatment
group, 507 (98.4 percent) received treatment as assigned. Of those in
the control group, 509 (98.3 percent) received treatment as assigned. A
total of 498 patients in the treatment group and 495 in the control
group completed the trial through day 29, recovered, or died. The mean
age of the patients was 55.4 years, and 63.1 percent were male. An
ordinal scale was used in the study that identified the patient's
baseline disease severity at enrollment and ranged from 1 (not
hospitalized, no limitations on activities) to 8 (death). This scale is
displayed in the table below. The intention-to-treat population
included 706 patients with moderate disease (ordinal score of 4
[hospitalized, not requiring supplemental oxygen--requiring ongoing
medical care] or 5 [hospitalized, requiring supplemental oxygen]) and
327 with severe disease (ordinal score of 6 [hospitalized, on non-
invasive ventilation or high flow oxygen devices] or 7 [hospitalized,
on mechanical ventilation or ECMO]). Patients received remdesivir
intravenously as a 200-mg loading dose on day 1, followed by a 100-mg
maintenance dose administered daily on days 2 through 10 or until
hospital discharge or death. Baricitinib was administered as a 4-mg
daily dose (either orally [two 2-mg tablets] or through a nasogastric
tube) for 14 days or until hospital discharge.
---------------------------------------------------------------------------
\480\ Ibid.
[GRAPHIC] [TIFF OMITTED] TP10MY21.170
In support of its claim that Olumiant[supreg] in combination with
remdesivir improves time to recovery from COVID-19 compared to
remdesivir alone, the applicant cited the primary outcome of the ACTT-2
study, which showed that the median time to recovery for the
Olumiant[supreg] plus remdesivir (treatment) group was 7 days and the
median time to recovery for remdesivir plus placebo (control) group was
8 days (rate ratio for recovery, 1.16 (1.01-1.32); p=0.03). Recovery
was defined as the participant being well enough for hospital
discharge, meaning the participant either no longer required
supplemental oxygen or ongoing medical care in the hospital, or was no
longer hospitalized at Day 29.
The applicant also stated that the median time to recovery among
patients receiving noninvasive ventilation or high-flow oxygen
(baseline ordinal score of 6) was 10 days for the treatment group and
18 days in the control group (rate ratio for recovery, 1.51; 95 percent
CI, 1.10-2.08). The applicant stated that the median time to recovery
was one day shorter among patients receiving supplemental oxygen
(baseline ordinal score of 5) in the Olumiant[supreg] and remdesivir
group (5 days vs. 6 days) rate ratio 1.17; CI, 0.98-1.39). The
applicant noted that for those receiving mechanical ventilation or ECMO
at enrollment (baseline ordinal score of 7), the rate ratio for
recovery was 1.08 (95 percent CI, 0.59 to 1.97).
The applicant asserted that the secondary outcome of the ACTT-2
study supports its claim of improved odds of improvement in clinical
status at Day 15 based on the eight-category ordinal scale. The
applicant summarized the results of the study which showed that the
odds of improvement in clinical status at Day 15 were greater in the
Olumiant[supreg] group compared to the placebo group (odds ratio 1.3;
95 percent CI, 1.0-1.6). The applicant also stated that the odds of
[[Page 25297]]
improvement in clinical status at Day 15 were greater for patients
receiving noninvasive ventilation or high-flow oxygen (baseline ordinal
score of 6) in the Olumiant[supreg] group versus the control group
(odds ratio 2.2; 95 percent CI, 1.4-3.6).
The applicant asserted that the study conducted by Kalil et al.
(2020) supports its claim of reduced mortality in the Olumiant[supreg]
and remdesivir group compared to the control group because the Kaplan-
Meier estimates of mortality at day 28 after randomization were 5.1
percent (95 percent CI, 3.5-7.6) in the combination (Olumiant[supreg]
and remdesivir) group and 7.8 percent (95 percent CI, 5.7 to 10.6) in
the control group (hazard ratio for death, 0.65; 95 percent CI, 0.39 to
1.09). The applicant also stated that the greatest numerical
differences in mortality between patients in the combination group and
those in the control group were observed among those with a baseline
ordinal score of 5 (1.9 percent vs. 4.7 percent; hazard ratio, 0.40; 95
percent CI, 0.14 to 1.14) or 6 (7.5 percent vs. 12.9 percent; hazard
ratio, 0.55; 95 percent CI, 0.22 to 1.38). The applicant also cited the
Kaplan-Meier estimates of mortality at 14 days after randomization,
which were 1.6 percent in the combination group and 3.0 percent in the
control group (hazard ratio, 0.54; 95 percent CI, 0.23 to 1.28).
The applicant also asserted that the incidence of new use of oxygen
was lower in patients treated with Olumiant[supreg] in combination with
remdesivir compared to remdesivir alone (22.9 percent vs. 40.3 percent
respectively; difference, -17.4 percentage points; 95 percent CI, -31.6
to -2.1) and that the incidence of new use of mechanical ventilation or
ECMO was lower in the combination group (10.0 percent vs. 15.2 percent;
difference, -5.2 percentage points; 95 percent CI, -9.5 to -0.9) based
on Kalil et al. (2020). The applicant also stated that there were fewer
median days of receipt of mechanical ventilation or ECMO among the 128
patients for which these interventions were started after enrollment or
who died with no observed new use in the Olumiant[supreg] in
combination with remdesivir group compared to the remdesivir group (16
median days in the combination group and 27 median days in the control
group (difference, -11.0; 95 percent CI, -18.3 to -3.7)). The applicant
also stated that the incidence of progression to death or noninvasive
or invasive ventilation was lower in the combination group than in the
control group (22.5 percent vs. 28.4 percent; rate ratio, 0.77; 95
percent CI, 0.60 to 0.98) and that the incidence of progression to
death or invasive ventilation was also lower (12.2 percent vs. 17.2
percent; rate ratio, 0.69; 95 percent CI, 0.50 to 0.95).
The applicant asserted that the study conducted by Kalil et al.
(2020) supports its claim that the combination of Olumiant[supreg] in
combination with remdesivir has a favorable benefit/risk profile
compared to remdesivir alone. The applicant states that serious adverse
events occurred in 81 patients (16.0 percent) in the combination group
(six of these were thought to be related to the trial product) and in
107 patients (21.0 percent) in the control group (five of these were
thought to be related to the trial product) and the between-group
difference was -5.0 percentage points (95 percent CI, -9.8 to -0.3; P =
0.03). The applicant also states that Grade 3 or 4 adverse events
occurred in 207 patients (40.7 percent) in the combination group and
238 (46.8 percent) in the control group.
The applicant also cited an observational study \481\ to support
the claim that there was greater improvement in pulmonary function in
patients receiving lopinavir/ritonavir and hydroxychloroquine with
Olumiant[supreg] and corticosteroids when compared to patients
receiving lopinavir/ritonavir and hydroxychloroquine with
corticosteroids alone. In this study, the primary end point was the
change in oxygen saturation as measured by pulse oximetry (SpO2)/FiO2
from hospitalization to discharge. The applicant stated that there was
a greater improvement in SpO2/FiO2 from hospitalization to discharge
observed in the Olumiant[supreg] in combination with corticosteriods
versus the corticosteroids alone group (mean differences adjusted for
IPSW, 49; 95 percent CI: 22, 77; p<0.001).
---------------------------------------------------------------------------
\481\ Rodriguez, J.L., Sanchez-Niveas, G., Arevalo-Serrano, J.,
et al. (2020). Baricitinib improves respiratory function in patients
treated with corticosteroids for SARS-CoV-2 pneumonia: An
observational study. Rheumatology. 00:1-9.
---------------------------------------------------------------------------
In our assessment of the applicant's claims in support of
substantial clinical improvement, we have the following concerns. With
regard to the ACTT-2 trial, we note that there were no statistically
significant differences in time to recovery or odds of improvement in
clinical status at Day 15 between the Olumiant[supreg]+remdesivir group
compared to the remdesivir+placebo group for patients with a baseline
ordinal score of 4, 5, or 7. We further note that although the
applicant asserted that Olumiant[supreg]+remdesivir reduces mortality
compared to remdesivir alone, the difference between the treatment and
control groups was not statistically significant. We also note that the
ACTT-2 study protocol prohibited the use of systemic corticosteroids
for the treatment of COVID-19 but allowed systemic steroids for
standard indications such as asthma exacerbation, acute respiratory
distress syndrome (ARDS), chronic obstructive pulmonary disease (COPD),
laryngeal edema, adrenal insufficiency and shock \482\ and we are
therefore unsure if the use of corticosteroids among the patient
population may be a confounding factor. With regard to the Rodriguez-
Garcia (2020) study, we note that this study did not involve the
treatment of patients with Olumiant[supreg] in combination with
remdesivir, which is the authorized use per its EUA, and the use of
multiple treatments in this trial may make the effect of
Olumiant[supreg] on greater improvement in pulmonary function unclear.
Finally, we note that the current clinical guidelines from the
Infectious Diseases Society of America (IDSA) recommend the use of
Olumiant[supreg] with remdesivir rather than remdesivir alone among
hospitalized patients with severe COVID-19 who cannot receive
corticosteroids because of a contraindication.\483\ In addition,
guidelines from the National Institutes of Health (NIH) state that
there are insufficient data to recommend for or against the use of
Olumiant[supreg] in combination with remdesivir, where corticosteroids
can be used instead, and there is insufficient data to recommend for or
against the use of Olumiant[supreg], in combination with
corticosteroids.\484\ We are therefore interested in data regarding the
use of Olumiant[supreg] in combination with remdesivir over
corticosteroids.
---------------------------------------------------------------------------
\482\ Ibid.
\483\ Infectious Diseases Society of America. (2021, March 18).
Recommendations 15-16: Baricitinib with remdesivir vs. remdesivir
alone for hospitilized patients who cannot recieve corticosteriods
due to contraindication. IDSA Guidelines on the Treatment and
Management of Patients with COVID-19. Retrieved from https://www.idsociety.org/practice-guideline/covid-19-guideline-treatment-and-management/. * Severe patients defined as defined as patients
with SpO2 <=94% on room air, including patients on
supplemental oxygen, oxygen through a high-flow device, or non-
invasive ventilation.
\484\ National Institutes of Health. (2021, February 11). Kinase
Inhibitors: Baricitinib and Other Janus Kinase Inhibitors, and
Bruton's Tyrosine Kinase Inhibitors., COVID-19 Treatment Guidelines.
Retrieved from https://www.covid19treatmentguidelines.nih.gov/immunomodulators/kinase-inhibitors/.
---------------------------------------------------------------------------
We welcome public comment on whether Olumiant[supreg] meets the
substantial clinical improvement criterion.
In this section, we summarize and respond to written public
comments
[[Page 25298]]
received in response to the New Technology Town Hall meeting notice
published in the Federal Register regarding the substantial clinical
improvement criterion for Olumiant[supreg].
Comment: The applicant responded to questions elicited by its
presentation at the New Technology Town Hall Meeting held in December
2020.
The applicant was asked to elaborate on the efficacy of
Olumiant[supreg] and remdesivir as monotherapies versus in combination
and how to think about appropriate use. The applicant stated that the
evidence generated in randomized controlled clinical trials designed to
evaluate remdesivir, Olumiant[supreg], and the combination of
Olumiant[supreg] and remdesivir has come primarily from the Adaptive
Covid-19 Treatment Trial (ACTT) trials sponsored by NIAID. The
applicant also stated that ACTT-1 was the first trial of the ACTT
program and showed that remdesivir, when compared to placebo, is an
effective treatment for hospitalized adult patients with coronavirus
disease 2019 (Covid-19) pneumonia who were receiving standard of care
as background treatment. The applicant stated that to address unmet
medical needs still identified after the completion of ACTT-1 (namely
morbidity and mortality due to Covid-19), ACTT-2 was designed to
evaluate the combination of Olumiant[supreg] and remdesivir versus
remdesivir in hospitalized adult patients with Covid-19 pneumonia who
were receiving standard of care as background treatment. The applicant
stated that the study did not evaluate Olumiant[supreg] alone;
therefore, they do not have results generated by a RCT on the efficacy
and safety profile of Olumiant[supreg] alone for the treatment of
Covid-19 patients. The applicant stated that the ACTT-2 trial results
show that the combination of Olumiant[supreg] was superior to
remdesivir and placebo in reducing recovery time and accelerating
improvement in clinical status among hospitalized patients with Covid-
19, notably among those receiving high-flow oxygen or noninvasive
ventilation.
The applicant was asked what the mechanism of action is for
baricinitib's antiviral activity. The applicant stated that patients
diagnosed with COVID-19 are at an elevated risk for excess morbidity
and mortality due to the underlying severe acute respiratory syndrome
coronavirus 2 (SARS-CoV-2) infection and subsequent cytokine
activation. Management of COVID-19 is supportive; and respiratory
failure from acute respiratory distress syndrome (ARDS) is the leading
cause of mortality. The cause of respiratory failure in COVID-19 is a
hyperinflammatory state characterized by upregulation of multiple
cytokines. The applicant stated that in Wuhan, China, COVID-19-infected
patients admitted to the ICU exhibited increased plasma concentrations
of IL-2, IL-7, IL-10, GM-CSF, IP-10, MCP-1, MIP1-[alpha], and TNF-
[alpha], compared with the non-ICU patients. Elevated IL-6 and
hyperferritinemia were predictors of death in these patients with
COVID-19.485 486 487
---------------------------------------------------------------------------
\485\ Huang C, Wang Y, Li X, et al. Clinical features of
patients infected with 2019 novel coronavirus in Wuhan, China.
Lancet. 2020; 395(10223):497-506. https://doi.org/10.1016/S0140-6736(20)30183-5.
\486\ Ruan Q, Yang K, Wang W, et al. Clinical predictors of
mortality due to COVID-19 based on an analysis of data of 150
patients from Wuhan, China. Intensive Care Med. 2020; 46(5):846-848.
https://doi.org/10.1007/s00134-020-05991-x.
\487\ Zhou F, Yu T, Du R, et al. Clinical course and risk
factors for mortality of adult inpatients with COVID-19 in Wuhan,
China: A retrospective cohort study. Lancet. 2020;395(10229):1054-
1062. https://doi.org/10.1016/S0140-6736(20)30566-3.
---------------------------------------------------------------------------
The applicant stated that Olumiant[supreg] may be a viable
treatment in patients with COVID-19 requiring supplemental oxygen,
invasive mechanical ventilation, or ECMO because of its anti-
inflammatory activity and ability to reverse dysregulated inflammatory
markers in patients with COVID-19.488 489 Relevant to COVID-
19 and the potential role played by IL-6, the applicant stated that it
is notable that treatment with Olumiant[supreg] 4 mg resulted in
reduced plasma levels of IL-6 in hospitalized patients with COVID-19, a
finding that was replicated after being observed in patients with
RA.490 491 492
---------------------------------------------------------------------------
\488\ McInnes IB, Byers NL, Higgs RE, et al. Comparison of
baricitinib, upadacitinib, and tofacitinib mediated regulation of
cytokine signaling in human leukocyte subpopulations. Arthritis Res
Ther. 2019; 21(1):183. https://doi.org/10.1186/s13075-019-1964-1.
\489\ Sims JT, Krishnan V, Chang CY, et al. Characterization of
the cytokine storm reflects hyperinflammatory endothelial
dysfunction in COVID-19 [published online September 10, 2020]. J
Allergy Clin Immunol. https://doi.org/10.1016/j.jaci.2020.08.031.
\490\ Bronte V, Ugel S, Tinazzi E, et al. Baricitinib restrains
the immune dysregulation in severe COVID-19 patients [published
online August 18, 2020]. J Clin Invest. https://doi.org/10.1172/JCI141772.
\491\ Sims JT, Krishnan V, Chang CY, et al. Characterization of
the cytokine storm reflects hyperinflammatory endothelial
dysfunction in COVID-19 [published online September 10, 2020]. J
Allergy Clin Immunol. https://doi.org/10.1016/j.jaci.2020.08.031.
\492\ Stebbing J, Krishnan V, de Bono S, et al; Sacco
Baricitinib Study Group. Mechanism of baricitinib supports
artificial intelligence-predicted testing in COVID-19 patients. EMBO
Mol Med. 2020; 12(8):e12697. https://doi.org/10.15252/emmm.202012697.
---------------------------------------------------------------------------
The applicant stated that the biochemical inhibitory effects of
Olumiant[supreg] on human numb-associated kinase (NAK) members,
responsible for SARS-CoV-2 viral propagation, measuring nanomolar
affinities for AAK1, BIKE, and GAK were recently confirmed.\493\ In
addition, the applicant noted that some plasma markers that were
dysregulated in moderate to severe hospitalized patients with COVID-19,
that represent myeloid dysregulation, endothelial and cardiovascular
inflammation, along with reduced antigen presenting plasmacytoid
dendritic cells, were normalized over time with Olumiant[supreg]
treatment.\494\ The applicant stated that the impact of this antiviral
host activity in patients with COVID-19 is being evaluated through
collection of nasopharyngeal swabs, serum and whole blood for RNA,
epigenetic analysis, and cellular phenotyping in the ongoing randomized
Study KHAA.
---------------------------------------------------------------------------
\493\ Stebbing J, Krishnan V, de Bono S, et al; Sacco
Baricitinib Study Group. Mechanism of baricitinib supports
artificial intelligence-predicted testing in COVID-19 patients. EMBO
Mol Med. 2020; 12(8):e12697. https://doi.org/10.15252/emmm.202012697.
\494\ Sims JT, Krishnan V, Chang CY, et al. Characterization of
the cytokine storm reflects hyperinflammatory endothelial
dysfunction in COVID-19 [published online September 10, 2020]. J
Allergy Clin Immunol. https://doi.org/10.1016/j.jaci.2020.08.031.
---------------------------------------------------------------------------
The applicant stated that previous studies of corticosteroids in
other viral pneumonias, especially SARS and Middle East respiratory
syndrome (MERS), found an association with delayed viral clearance, and
reinforced concerns that corticosteroids may impair host response to
SARS-CoV-2.495 496 In contrast, treatment with
Olumiant[supreg] from 2 distinct clinical case series indicate that the
adaptive immune response responsible to generate IgG antibodies against
SARS-CoV-2-specific spike proteins remains intact after treatment with
Olumiant[supreg].497 498 The applicant stated that the
effects of corticosteroid treatment on adaptive immunity are
[[Page 25299]]
believed to occur through the non-canonical signaling pathways. The
applicant asserted that the immunomodulatory pathway targeted by
Olumiant[supreg], JAK1/JAK2 signaling, opposed to NFKB (nuclear factor
kappa-B cells) signaling targeted by corticosteroids, may offer an
explanation to these effects.
---------------------------------------------------------------------------
\495\ Lee N, Allen Chan KC, Hui DS, et al. Effects of early
corticosteroid treatment on plasma SARS associated coronavirus RNA
concentrations in adult patients. J Clin Virol. 2004; 31(4):304-309.
https://doi.org/10.1016/j.jcv.2004.07.006.
\496\ Arabi YM, Mandourah Y, Al-Hameed F, et al; Saudi Critical
Care Trial Group. Corticosteroid therapy for critically ill patients
with Middle East Respiratory Syndrome. Am J Respir Crit Care Med.
2018; 197(6):757-767. https://doi.org/10.1164/rccm.201706-1172OC.
\497\ Bronte V, Ugel S, Tinazzi E, et al. Baricitinib restrains
the immune dysregulation in severe COVID-19 patients [published
online August 18, 2020]. J Clin Invest. https://doi.org/10.1172/JCI141772.
\498\ Stebbing J, Krishnan V, de Bono S, et al; Sacco
Baricitinib Study Group. Mechanism of baricitinib supports
artificial intelligence-predicted testing in COVID-19 patients. EMBO
Mol Med. 2020; 12(8):e12697. https://doi.org/10.15252/emmm.202012697.
---------------------------------------------------------------------------
The applicant also noted differences between Olumiant[supreg] and
dexamethasone. The applicant stated that drugs acting on glucocorticoid
receptors, such as dexamethasone, have a broad pathway approach to
reduce inflammation that is known to be associated with profound
immunosuppression, secondary hospital-acquired infections,
gastrointestinal bleeding, hyperglycemia, and post-hospital
neuromuscular weakness. JAK inhibitors, such as Olumiant[supreg], act
on several critical pathways to reduce inflammation while minimizing
biological redundancy and have favorable PK properties and less
immunosuppression.\499\
---------------------------------------------------------------------------
\499\ Stebbing J, Krishnan V, de Bono S, et al; Sacco
Baricitinib Study Group. Mechanism of baricitinib supports
artificial intelligence-predicted testing in COVID-19 patients. EMBO
Mol Med. 2020; 12(8):e12697. https://doi.org/10.15252/emmm.202012697.
---------------------------------------------------------------------------
The applicant stated that the anti-inflammatory effects of
Olumiant[supreg] have also been demonstrated by the reduction of serum
levels of IFN-[gamma], IP-10, GM-CSF, and MCP-1 in pediatric patients
with steroid-dependent chronic inflammation, resulting in control of
disease activity and the ability to wean or taper steroids.\500\ The
applicant went on to state that, furthermore, dose[hyphen]dependent
decreases in IFN biomarkers confirmed an in vivo effect of
Olumiant[supreg] on type[hyphen]1 IFN signaling in pediatric patients
suffering from CANDLE and SAVI.\501\
---------------------------------------------------------------------------
\500\ Sanchez GAM, Reinhardt A, Ramsey S, et al. JAK1/2
inhibition with baricitinib in the treatment of autoinflammatory
interferonopathies. J Clin Invest. 2018; 128(7):3041-3052. https://doi.org/10.1172/JCI98814.
\501\ Kim H, Brooks KM, Tang CC, et al. Pharmacokinetics,
pharmacodynamics, and proposed dosing of the oral JAK1 and JAK2
inhibitor baricitinib in pediatric and young adult CANDLE and SAVI
patients. Clin Pharmacol Ther. 2018; 104(2):364-373. https://doi.org/10.1002/cpt.936.
---------------------------------------------------------------------------
The applicant was asked if the adverse events were higher or
unchanged among at risk subgroup populations over 65 years with
comorbidities such as diabetes or chronic lung or renal disease in
patients with COVID-19 and treated with Olumiant[supreg]. The applicant
responded that there were 71 and 78 patients in the remdesivir+placebo
groups and Olumiant[supreg]+remdesivir groups, respectively, who were
over 65 years of age and had diabetes, chronic lung disease or renal
disease in ACTT-2. The applicant stated that treatment emergent adverse
events were reported in 62.0 percent of remdesivir+placebo and 57.7
percent of Olumiant[supreg]+remdesivir patients. Serious adverse events
were reported in 33.8 percent of remdesivir+placebo and 28.2 percent of
Olumiant[supreg]+remdesivir patients. The applicant stated that these
findings are consistent with that in the overall population; fewer
events in the Olumiant[supreg]+remdesivir group compared to remdesivir
and placebo group.
Lastly, the applicant was asked to explain the difference in median
time to recovery between patients who did not receive oxygen, which was
5 days in the Olumiant[supreg] and remdesivir group, and 4 days in the
remdesivir and placebo group. For patients that did receive
supplemental O2 and other respiratory interventions, the median time to
recovery was shorter in those patients who received Olumiant[supreg]
and remdesivir compared to the remdesivir and placebo group. The
applicant replied that across all outcome measures, a more pronounced
treatment effect was observed in patients with more severe disease at
baseline. These data did not show additional benefit of adding
Olumiant[supreg] to remdesivir for patients in the milder disease
status. The applicant also stated that the ACTT-2 trial was not
designed or powered to evaluate efficacy in each subgroup of patients
per baseline ordinal scale. The applicant stated that these data led
the applicant to request Emergency Use Authorization for
Olumiant[supreg] and FDA authorized the use of Olumiant[supreg] in
combination with remdesivir, for treatment of suspected or laboratory
confirmed COVID-19 in hospitalized adults and pediatric patients 2
years of age or older, requiring supplemental oxygen, invasive
mechanical ventilation, or extracorporeal membrane oxygenation (ECMO).
Response: We appreciate the applicant's comment. We will take the
responses into consideration when deciding whether to approve new
technology add-on payments for Olumiant[supreg].
n. Pure-Vu[supreg] System
Motus GI holdings, Inc. submitted an application for new technology
add-on payments for the Pure-Vu[supreg] System for FY 2022. The Pure-
Vu[supreg] System is an FDA cleared system designed to connect to
currently marketed colonoscopes to provide high intensity, intra-
procedural cleansing of the colon during a colonoscopy. According to
the applicant, the Pure-Vu[supreg] System is indicated for use in
patients requiring therapeutic or diagnostic colonoscopies where the
bowel has not been adequately prepared. The applicant asserted that the
Pure-Vu[supreg] System would be used in situations such as a lower
gastrointestinal bleed (LGIB), as LGIB does not allow for adequate
bowel preparation.
The applicant asserted that the Pure-Vu[supreg] System device helps
to avoid aborted and delayed colonoscopy procedures due to poor
visualization of the colon mucosa by creating a unique High Intensity,
Pulsed Vortex Irrigation Jet that consists of a mixture of air and
water to break-up fecal matter, blood clots, and other debris, and
scrub the walls of the colon while simultaneously removing the debris
through two suction channels. The applicant stated that the suction
channels have a sensor to detect the formation of a clog in the
channels, triggering the system to automatically purge and then revert
to suction mode once the channel is clear. According to the applicant,
this combination of the agitation of the fluid in the colon via the
pulsed vortex irrigation and simultaneous removal of the debris allows
the physician to visualize the colon and achieve a successful
colonoscopy or other advanced procedure through the colonoscope even if
the patient is not properly prepped and has debris either blocking the
ability to navigate the colon or covering the colon wall obscuring the
mucosa and any pathology that may be present. The applicant asserted
that the constant volume suction pumps do not cause the colon to
collapse, which allows the physician to continue to navigate the colon
while cleansing and avoids the need to constantly insufflate the colon,
which may be required with other colonoscopy irrigation systems.
The applicant stated that the Pure-Vu[supreg] System is comprised
of a workstation that controls the function of the system, a disposable
oversleeve that is mounted on a colonoscope and inserted into the
patient, and a disposable connector with tubing (umbilical tubing with
main connector) that provides the interface between the workstation,
the oversleeve, and off the shelf waste containers.
The applicant explained that the workstation has two main
functions: Cleansing via irrigation and evacuation, and acting as the
user interface of the system. The applicant explained that the
irrigation into the colon is achieved by an electrical pump that
supplies pressurized gas (air) and a peristaltic
[[Page 25300]]
pump that supplies the liquid (water or saline). According to the
applicant, the pressurized gas and liquid flow through the ``main
connector'' and are mixed upon entry into the umbilical tubing that
connects to the oversleeve. The applicant explained that the gas
pressure and flow are controlled via regulators and the flow is
adjusted up or down depending on the cleansing mode selected. The
applicant stated that a foot pedal connected to the user interface
activates the main functions of the system so that the user's hands are
free to perform the colonoscope procedure in a standard fashion.
The applicant stated that the evacuation mode (also referred to as
suction) removes fecal matter and fluids out of the colon. The
applicant noted that the evacuation function is active during cleansing
so that fluid is inserted and removed from the colon simultaneously.
The applicant explained that the evacuation pumps are designed in a
manner that prevents the colon from collapsing when suctioning, which
facilitates the ability to simultaneously irrigate and evacuate the
colon. According to the applicant, during evacuation, the system
continuously monitors the pressure in the evacuation channels of the
oversleeve and if the pressure drops below pre-set limits the pumps
will automatically reverse the flow. The applicant explained that the
clog sensor triggers the system to automatically purge the material out
of the channel and back into the colon where it can be further
emulsified by the Pulsed Vortex Irrigation Jet, and then automatically
reverts back into evacuation mode once the channel is cleared. The
applicant stated that the evacuation (suction) that drains fecal matter
and fluids out of the colon is generated by peristaltic pumps that can
rotate in both directions, either to evacuate fluids and fecal matter
from the colon through the evacuation tubes and into a waste container,
or while in the reverse direction, to purge the evacuation tubes. The
applicant claimed the suction created by this type of pump creates a
constant volume draw of material from the colon and therefore prevents
the colon from collapsing rapidly. According to the applicant, purging
of evacuation tubes may be activated in two ways: The purging cycle is
automatically activated when low pressure is noted by the evacuation-
line sensor (it is also activated for the first 0.5 seconds when
evacuation is activated to make sure the line is clear from the start);
or a manual purge may be activated by the user by pushing the ``manual
purge'' button on the foot pedal. The applicant claimed the pressure-
sensing channel is kept patent by using an air perfusion mechanism
where an electrical pump is used to perfuse air through the main
connector and into the oversleeve, while the sensor located in the
workstation calculates the pressure via sensing of the channel.
The applicant explained the Pure-Vu[supreg] System is loaded over a
colonoscope and that the colonoscope with the Pure-Vu[supreg]
Oversleeve is advanced through the colon in the same manner as a
standard colonoscopy. The applicant stated that the body of the
oversleeve consists of inner and outer sleeves with tubes intended for
providing fluid path for the cleansing irrigation (2X), the evacuation
of fluids (2X), the evacuation sensor (1X) and that the flexible head
is at the distal end of the oversleeve and is designed to align with
the colonoscope's distal end in a consistent orientation. The applicant
explained that the distal cleansing and evacuation head contains the
irrigation ports, evacuation openings, and a sensing port. According to
the applicant, the system gives the physician the control to cleanse
the colon as needed based on visual feedback from the colonoscope to
make sure they have an unobstructed view of the colon mucosa to detect
and treat any pathology. The applicant noted that since the Pure-
Vu[supreg] System does not interfere with the working channel of the
colonoscope, the physician is able to perform all diagnostic or
therapeutic interventions in a standard fashion with an unobstructed
field of view.
According to the applicant, multiple studies have shown that
inadequate bowel visualization leads to missed pathology, delayed
diagnosis, extended hospital stay, and in some cases, additional
therapy being administered, especially in the acute LGIB population,
which is the most common indication for inpatients that require
colonoscopy.502 503 Unknown abdominal pain, infection, and
foreign body removal were also cited by the applicant as being common
indications for an inpatient colonoscopy.
---------------------------------------------------------------------------
\502\ Garber A, Sarvepalli S, Burke CA, Bhatt A, Ibrahim M,
McMichael J, et al. Modifiable Factors Associated with Quality of
Bowel Preparation Among Hospitalized Patients Undergoing
Colonoscopy. J Hosp Med. 2019; 14(5):278-83.
\503\ Yadlapati R, Johnston ER, Gregory DL, Ciolino JD, Cooper
A, Keswani RN. Predictors of Inadequate Inpatient Colonoscopy
Preparation and Its Association with Hospital Length of Stay and
Costs. Dig Dis Sci. 2015; 60(11):3482-90.
---------------------------------------------------------------------------
The applicant explained that when a patient with LGIB is admitted
to the hospital, they are stabilized and then started on bowel
preparation for the colonoscopy procedure. The applicant claimed that
the patient typically is placed on a liquid-only diet while consuming
4-6 liters of polyethylene glycol (PEG) based solution until the rectal
effluent is clear. If the rectal effluent is not clear, additional
bowel preparation is prescribed. The applicant stated that for severe
LGIB cases, a patient is prescribed to consume a rapid purge of 1 liter
every 30-45 minutes with a total volume of 4-14 liters, which could
lead to purgative intolerance or vomiting. The applicant claimed that
even in situations where bowel preparation has been completed, and
clear rectal effluent while on a clear liquid diet has been confirmed,
there are no guarantees that a patient's bowel is clean for a
successful colonoscopy. The applicant submitted data from a study by
the Cleveland Clinic showing 51 percent of 8,819 patients observed over
a 4-year period were inadequately prepared for colonoscopies, leading
to one extra day in the hospital compared to patients that were
adequately prepared.\504\ The applicant cited another study, by
Northwestern University, demonstrating an association between
inadequate bowel preparation and increased length of stay (LOS) in
hospitals, with inadequately prepared patients staying two more days
than adequately prepared patients on average.\505\ The applicant
claimed additional time spent in hospitals increases the patient's
exposure to risks of hospital-acquired infections. The applicant
claimed this risk is especially impactful to patients who are admitted
for LGIB, which is seen at a higher prevalence in the elderly
population.506 507 The applicant stated in the elderly
population, continuous bowel preparation also poses increased risk due
to their higher comorbidities and potential for electrolyte imbalances
such as hyperphosphatemia, hypocalcemia, and hypokalemia.\508\
---------------------------------------------------------------------------
\504\ Garber A, Sarvepalli S, Burke CA, Bhatt A, Ibrahim M,
McMichael J, et al. Modifiable Factors Associated with Quality of
Bowel Preparation Among Hospitalized Patients Undergoing
Colonoscopy. J Hosp Med. 2019; 14(5):278-83.
\505\ Yadlapati R, Johnston ER, Gregory DL, Ciolino JD, Cooper
A, Keswani RN. Predictors of Inadequate Inpatient Colonoscopy
Preparation and Its Association with Hospital Length of Stay and
Costs. Dig Dis Sci. 2015; 60(11):3482-90.
\506\ Parra-Blanco A, Ruiz A, Alvarez-Lobos M, Amoros A, Gana
JC, Ibanez P, et al. Achieving the best bowel preparation for
colonoscopy. World J Gastroenterol. 2014; 20(47):17709-26.
\507\ Hauck K, Zhao X. How dangerous is a day in hospital? A
model of adverse events and length of stay for medical inpatients.
Med Care. 2011; 49(12):1068-75.
\508\ Parra-Blanco A, Ruiz A, Alvarez-Lobos M, Amoros A, Gana
JC, Ibanez P, et al. Achieving the best bowel preparation for
colonoscopy. World J Gastroenterol. 2014; 20(47):17709-26.
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[[Page 25301]]
The applicant cited a practical guide authored by Kim B., et al.,
to assert that poor visualization of the colon mucosa has a direct
effect on the ability to detect the presence of a GI bleed or the
aftermath stigmata and administer treatment successfully.\509\ The
applicant used the Boston Bowel Preparation Scale (BBPS), developed by
Lai E. et al,\510\ as a reliable method to measure bowel preparation.
The applicant stated that the scale is a range (0-9) of dirtiest to
cleanest for the whole colon and 0 to 3 for each of the 3 segments of
the colon; the right colon (including the cecum and ascending colon),
the transverse colon (including the hepatic and splenic flexures), and
the left colon (including the descending colon, sigmoid colon, and
rectum). Therefore, the maximum BBPS score for a perfectly clean colon
without any residual liquid is nine and the minimum BBPS score for an
unprepared colon is zero. The points are assigned as follows: Zero =
Unprepared colon segment with mucosa not seen due to solid stool that
cannot be cleared; one = Portion of mucosa of the colon segment seen,
but other areas of the colon segment not well seen due to staining,
residual stool and/or opaque liquid; two = Minor amount of residual
staining, small fragments of stool and/or opaque liquid, but mucosa of
colon segment seen well; three = Entire mucosa of colon segment seen
well with no residual staining, small fragments of stool or opaque
liquid.
---------------------------------------------------------------------------
\509\ Kim BS, Li BT, Engel A, et al. Diagnosis of
gastrointestinal bleeding: A practical guide for clinicians. World J
Gastrointest Pathophysiol. 2014; 5(4):467-478.doi:10.4291/
wjgp.v5.i4.467.
\510\ Lai EJ, Calderwood AH, Doros G, Fix OK, Jacobson BC. The
Boston Bowel Preparation Scale: A valid and reliable instrument for
colonoscopy-oriented research. Gastrointestinal Endoscopy. 2009;
69(3):620-625.
---------------------------------------------------------------------------
The applicant stated that evidence-based guidelines and clinical
reviews in high impact biomedical journals recommend colonoscopy as the
preferred initial modality for the diagnosis and treatment of acute
lower gastrointestinal bleeding.511 512 The applicant stated
that colonoscopy has been less frequently utilized than might otherwise
be indicated because it suffers from the significant disadvantage of
requiring the need for a large volume bowel preparation.\513\ The
applicant states that even with a bowel preparation, poor visualization
often occurs because of a poorly prepared colon. Based on these
assertions, the applicant inferred that colonoscopy for acute lower
gastrointestinal bleeding would be much more utilized and lead to more
diagnoses and interventions with intraprocedural bowel preparation,
which puts the control of the visualization (cleanliness) of the colon
mucosa in the hands of the endoscopist. The applicant further stated it
is important to appreciate that alternatives to colonoscopy, including
angiography and vascular embolization treatments to create hemostasis,
have risks of ischemic vascular injury, retroperitoneal bleeding and
acute renal injury.\514\ The applicant stated that aside from the
colonoscopy, other modalities such as tagged red blood cell scans,
computed tomography (CT) angiograms, and mesenteric angiographies all
require an active source of bleed in order to achieve a successful
diagnostic yield. The applicant claimed that even when diagnosis is
achieved using these modalities, a colonoscopy may still be ordered to
treat the source of the bleed via epinephrine injections and clipping
and thermal therapies, to prevent potential surgical interventions.
---------------------------------------------------------------------------
\511\ Strate LL, Gralnek IM. ACG Clinical Guideline: Management
of Patients With Acute Lower Gastrointestinal Bleeding. Am J
Gastroenterol. 2016 Apr;111(4):459-74. doi: 10.1038/ajg.2016.41.
Epub 2016 Mar 1. Erratum in: Am J Gastroenterol. 2016
May;111(5):755. PMID: 26925883; PMCID: PMC5099081.
\512\ Gralnek IM, Neeman Z, Strate LL. Acute Lower
Gastrointestinal Bleeding. N Engl J Med. 2017 Mar 16;376(11):1054-
1063. doi: 10.1056/NEJMcp1603455. PMID: 28296600.
\513\ Carney BW, Khatri G, Shenoy-Bhangle AS. The role of
imaging in gastrointestinal bleed. Cardiovasc Diagn Ther. 2019
Aug;9(Suppl 1):S88-S96. doi: 10.21037/cdt.2018.12.07. PMID:
31559156; PMCID: PMC6732104.
\514\ Ibid. Carney BW, Khatri G, Shenoy-Bhangle AS. The role of
imaging in gastrointestinal bleed. Cardiovasc Diagn Ther. 2019
Aug;9(Suppl 1):S88-S96. doi: 10.21037/cdt.2018.12.07. PMID:
31559156; PMCID: PMC6732104.
---------------------------------------------------------------------------
With respect to the newness criterion, the Pure-Vu[supreg] System
first received FDA 510(k) clearance on September 22, 2016 under 510(k)
number K60015. Per the applicant, this initial device was very
cumbersome to set up and required direct support from the company and
therefore was not viable for a small company with limited resources to
market the device. The applicant noted that the initial device could
have been sold starting on January 27, 2017 when the first device came
off the manufacturing line. Per the applicant, the device was allocated
for clinical evaluations but 10 institutions throughout the country
purchased the device outside of a clinical study, primarily to allow
physicians to try the product prior to committing to a clinical trial.
The applicant further noted that minor modifications were made to the
Pure-Vu System in additional 510(k) clearances dated December 12, 2017
and June 21, 2018. The current marketed Pure-Vu System was then granted
510(k) clearance on June 6, 2019 under 510(k) number K191220. Per the
applicant, this clearance changed the entire set-up of the device,
redesigned the user interface, and reduced the size, among other
changes. According to the applicant, this updated version was
commercially available as of September 19, 2019.
Currently, there are no ICD-10-PCS procedure codes to uniquely
identify procedures involving the Pure-Vu[supreg] System. We note that
the applicant has submitted a request for approval for a unique ICD-10-
PCS code for the use of the Pure-Vu[supreg] System beginning FY 2022.
If a technology meets all three of the substantial similarity
criteria, it would be considered substantially similar to an existing
technology and therefore would not be considered ``new'' for purposes
of new technology add-on payments.
With respect to the first criterion, whether a product uses the
same or similar mechanism of action to achieve a therapeutic outcome,
the applicant asserted that the Pure-Vu[supreg] System has a different
mechanism of action than existing technologies due to its ability to
break up and remove a high volume of debris from the colon and dislodge
adherent films from the colon wall in a safe manner that cannot be
achieved with irrigation done through the working channel of a
colonoscope. The applicant also asserted that due to the controlled
simultaneous removal of the debris and fluid by the evacuation pumps in
the system, the Pure-Vu[supreg] System eliminates the likelihood of
creating a fluid load in the colon, which cannot be achieved with any
other device on the market. The applicant further asserted a differing
mechanism of action via the ability to sense and automatically clear a
blockage versus manual suction through the working channel of a
colonoscope, which can clog quickly if there is any appreciable debris.
Lastly, the applicant explained that the Pure-Vu[supreg] System is an
oversleeve device that allows use of the working channel of the
colonoscope to be open and allows therapy to be administered in tandem
with cleansing, unlike existing technologies on the market.
The applicant noted that the ClearPath system, a colonoscopy system
by the company Easy Glide, received FDA clearance, but according to the
applicant, was never fully brought to the US market. ClearPath was
listed as the predicate device for the initial version of the Pure-Vu
System[supreg] approved on September 22, 2016 (FDA 510(K) number
K160015), in which both
[[Page 25302]]
devices are described as able to irrigate and suction at any time
during the procedure without any tools needing to be removed from the
colonoscope working channel.\515\ The applicant claimed that this
system did not have the High Intensity Pulsed Vortex Irrigation Jet and
controlled suction capabilities with the sensing and auto purge
technology that is critical to get the desired clinical outcome.
---------------------------------------------------------------------------
\515\ FDA. 2016, September. Pure Vu System 510(k) premarket
notification. Deparment of Health and Human Services. Accessed at
https://www.accessdata.fda.gov/cdrh_docs/pdf16/K160015.pdf.
---------------------------------------------------------------------------
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated that the Pure-
Vu System is assigned to the same MS-DRGs as existing technologies. The
applicant lists 21 MS-DRGs as being applicable, with MS-DRG 378
(gastrointestinal hemorrhage with complication or comorbidity (CC))
accounting for 37.1 percent of cases, and MS-DRG 377 (gastrointestinal
hemorrhage with major complication or comorbidity (MCC)) accounting for
18.9 percent of total cases.
With respect to the third criterion, whether the new use of
technology involves the treatment of the same or similar type of
disease and the same or similar patient population when compared to an
existing technology, the applicant stated that the Pure-Vu
System[supreg] does involve treatment of the same or similar type of
disease and patient population as existing technology.
After reviewing the information submitted by the applicant, we are
unclear whether the Pure-Vu[supreg] System's mechanism of action is
similar to that of the version of the product that received initial
510(k) clearance that was approved on September 22, 2016 or other
versions of the system. In addition, with regard to the previous
versions of Pure-Vu, we are unsure if the limited availability noted by
the applicant would allow the technology to be considered commercially
available. We are also unclear what the applicant means regarding the
ClearPath system being not fully brought to the U.S. market. If the
ClearPath system and/or earlier versions of the Pure-Vu System were
considered to be available on the U.S. market, then we are concerned
that the current version of Pure-Vu[supreg] would no longer be
considered new, as we believe it may be substantially similar to
ClearPath and/or earlier versions of the Pure-Vu[supreg] System because
they also allow for irrigation and suction of the colon without
utilizing the working channel. If the current version of Pure-Vu is
substantially similar to ClearPath and/or previous versions, then it
appears that the current Pure-Vu system may no longer be within the
newness period. We further note that though the applicant states the
Pure-Vu[supreg] System features a high intensity pulsed vortex
irrigation jet and controlled suction capabilities with sensing and
auto purge technology, the Pure-Vu[supreg] System irrigates the colon
using water and gas like other existing irrigation methods. We are
therefore uncertain as to whether these features of the Pure-Vu[supreg]
System result in a new mechanism of action. We invite public comment on
whether the Pure-Vu[supreg] System has a new mechanism of action
compared to these predicate devices.
We are inviting public comments on whether the Pure-Vu[supreg]
System is substantially similar to existing technologies and whether it
meets the newness criterion.
With regard to the cost criterion, the applicant searched the FY
2019 MedPAR claims data file with the FY 2019 Final Rule with
Correction Notice IPPS Impact File to identify potential cases
representing patients who may be eligible for treatment using the Pure-
Vu[supreg] System. The applicant identified claims that reported an
ICD-10-CM diagnosis code of ICD-10-CM Z12.11 (Encounter for screening
for malignant neoplasm of colon), K92.2 (Gastrointestinal hemorrhage,
unspecified), D50.0 (Iron deficiency anemia secondary to blood loss
(chronic)), and C18._ 516 (malignant neoplasm of colon). The
ICD-10-PCS procedure codes listed in the following table were used to
identify claims involving colonoscopy procedures.
---------------------------------------------------------------------------
\516\ Fourth character is required to describe specific location
of neoplasm.
[GRAPHIC] [TIFF OMITTED] TP10MY21.171
The claim search conducted by the applicant resulted in 163,236
claims mapping to 633 MS-DRGs. The applicant stated that MS-DRGs 377
(G.I. Hemorrhage W MCC), 378 (G.I. Hemorrhage W CC), and 379 (G.I.
Hemorrhage W/O CC/MCC) were the most common MS-DRGs to which cases
reporting the listed ICD-10-PCS codes were assigned. The applicant
stated that the large number of DRGs to which these cases were assigned
suggests that patients were admitted to the hospital for a wide variety
of reasons, but during the course of their hospital stay the patients
received a colonoscopy. According to the applicant, since GI bleeding
is among the most common reasons for a patient needing an urgent
colonoscopy, MS-DRGs 377-379 would be expected to be the most common
MS-DRGs to which cases involving the Pure-Vu technology would be
assigned. Lastly, the applicant did not have any data available to
suggest any specific reasons why potential patients who would be
eligible for the Pure-Vu technology would map to specific MS-DRGs
identified based on the claims search, such as MS-DRG 291 (Heart
Failure and Stroke).
The applicant determined an average unstandardized case weighted
charge per case of $63,265.
The applicant did not remove charges for prior technology. The
applicant stated that no prior technology is being replaced. The
applicant then standardized the charges using the FY 2019 Final Rule
with Correction Notice Impact File. Next, the applicant applied the 2-
year inflation factor used in the FY 2021 IPPS/LTCH PPS final rule to
calculate outlier threshold charges (1.13218). To calculate the charges
for the new technology, the applicant used the national average CCR for
the
[[Page 25303]]
Supplies and Equipment cost center of 0.297 from the FY 2021 Final IPPS
rule. The applicant calculated a final inflated average case-weighted
standardized charge per case of $93,914, which exceeded the average
case-weighted threshold amount of $63,265 by $30,649. The applicant
stated that because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the therapy meets the cost criterion.
After reviewing the information submitted by the applicant as part
of its FY 2022 new technology add-on payment application for the Pure-
Vu[supreg] System, we note that the MS-DRGs used in the cost analysis
were not limited to those describing conditions likely to require a
colonoscopy. For example, the applicant included cases assigned to MS-
DRG 291 (Heart Failure and Shock with MCC). When included in the cost
analysis, the assumption made is that all 1,948 cases for heart failure
also had a colonoscopy performed where the technology could have
potentially been utilized. We question whether all cases identified by
the applicant appropriately represent potential cases eligible for the
Pure-Vu[supreg] System. We invite public comment on whether the Pure-
Vu[supreg] System meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that the Pure-Vu[supreg] System offers the ability
to achieve rapid beneficial resolution of the disease process treatment
by achieving rapid and full visualization of the colon, which will
improve diagnostic yield and the effectiveness of treatment of diseases
of the bowel. The applicant claimed that due to the Pure-Vu[supreg]
System's ability to cleanse the colon during the colonoscopy procedure
in conjunction with a standard bowel preparation, or with an enema (to
allow entry into the rectum) and without any purgative based
preparation, the technology allows for earlier intervention. The
applicant stated that in the case of an LGIB, this will reduce bleeding
by achieving more rapid hemostasis and reduce the overall length of
stay in the hospital for a portion of this population. The applicant
also asserted the technology reduces the subsequent diagnostic and, in
some instances, therapeutic interventions by minimizing aborted and
early repeat procedures due to poor visualization caused by inadequate
preparation. The applicant stated that the system can provide cleansing
and removal of fecal matter, blood and other debris while maintaining
the visibility of the colonoscope's camera and availability of the
working channel to apply critical therapies.
In support of its claims, the applicant submitted a self-sponsored,
U.S.-based, multicenter, prospective, single arm study in the inpatient
setting, analyzing 94 patients, 65 of which (68 percent) had a GI
bleed.\517\ Of the 94 patients (41 percent females/59 percent males),
the mean age was 62 years. According to the applicant, the study's
primary endpoint was the rate of improved bowel cleansing level from
baseline to after use of the Pure-Vu[supreg] System per colon segment
using the Boston Bowel Preparation Scale (BBPS). The BBPS score was
recorded for each colorectal segment (left colon, transverse colon, and
right colon segments) both prior to (baseline) and after colon
cleansing with the Pure-Vu[supreg] System. An adequate cleansing level
was a priori defined as a BBPS >=2 in all evaluated colon segments. The
study found that in 79 of the 94 patients (84 percent), the physician
was able to successfully diagnose or rule out a GI bleed in the colon
per the patients' colonoscopy indication using only the Pure-Vu[supreg]
System. The analysis showed statistically significant visualization
improvement in each colon segment after Pure-Vu[supreg] use with a mean
BBPS score in the descending colon, sigmoid, and rectum of 1.74 pre-
Pure-Vu[supreg] use and 2.89 post-Pure-Vu[supreg] use (P<0.001); in the
transverse colon of 1.74 pre-Pure-Vu[supreg] use and 2.91 post Pure-
Vu[supreg] use (P<0.001); and the ascending colon and cecum of 1.50
pre-Pure-Vu[supreg] use and 2.86 post Pure-Vu[supreg] use (P<0.001).
The study found only 2 percent of cases where the diagnosis could not
be achieved due to inadequate preparation. Overall, the 84 (89.4
percent) patients that received the Pure-Vu[supreg] System within the
study improved BBPS scores from 38 percent (95 percent CI 28, 49) to 96
percent (95 percent CI 90, 99) in segments evaluated. The study noted
one procedure related perforation which required surgical repair, and
the patient was discharged 48 hours post operatively and recovered
fully.
---------------------------------------------------------------------------
\517\ Helmut Neumann ML, Tim Zimmermann, Gabriel Lang, Jason B.
Samarasena, Seth A. Gross, Bhaumik Brahmbhatt, Haleh Pazwash,
Vladimir Kushnir. Evaluation of bowel cleansing efficacy in
hospitalized patient population using the pure-vu system.
Gastrointestinal Endoscopy. 2019;89(6).
---------------------------------------------------------------------------
The applicant also provided three outpatient clinical studies to
demonstrate the Pure-Vu[supreg] System's capability to convert patients
to adequate preparation where preparation was previously inadequate,
and the visualization was poor based on the BBPS. In the first study,
Perez J., et al. conducted an outpatient prospective pilot study using
the Pure-Vu[supreg] System.\518\ The study observed 50 patients with
poorly prepared colons undergoing colonoscopy at two outpatient
clinical sites in Spain and Israel, respectively. The applicant claimed
study patients underwent a reduced bowel preparation consisting of the
following: No dried fruits, seeds, or nuts starting 2 days before the
colonoscopy, a clear liquid diet starting 18 to 24 hours before
colonoscopy, and a split dose of 20mg oral bisacodyl. The study found
the number of patients with an adequate cleansing level (BBPS>=2 in
each colon segment) increased significantly from 31 percent (15/49)
prior to use of the Pure-Vu System (baseline) to 98 percent (48/49)
after use of the Pure-Vu[supreg] System (P<0.001), with no serious
adverse events reported.
---------------------------------------------------------------------------
\518\ Perez Jimenez J, Diego Bermudez L, Gralnek IM, Martin
Herrera L, Libes M. An Intraprocedural Endoscopic Cleansing Device
for Achieving Adequate Colon Preparation in Poorly Prepped Patients.
J Clin Gastroenterol. 2019;53(7):530-4.
---------------------------------------------------------------------------
In the second study provided by the applicant, van Keulen, et al.
also conducted a single-arm, prospective study on 47 patients with a
median age of 61 years in the outpatient setting in the Netherlands
using the Pure-Vu[supreg] System.\519\ Within the study, cecal
intubation was achieved in 46/47 patients. This multicenter feasibility
study found that the Pure-Vu[supreg] System significantly improved the
proportion of patients with adequate bowel cleansing from 19.1 percent
prior to the use of the Pure-Vu[supreg] System to 97.9 percent after
its use (P<0.001) and median BBPS score (from 3.0 [IQR 0.0-5.0] to 9.0
[IQR 8.0-9.0]).
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\519\ Van Keulen KE, Neumann H, Schattenberg JM, Van Esch AAJ,
Kievit W, Spaander MCW, Siersema PD. A novel device for
intracolonoscopy cleansing of inadequately prepared colonoscopy
patients: A feasibility study. Endoscopy. 2019 Jan;51(1):85-92. doi:
10.1055/a-0632-1927. Epub 2018 Jul 11.
---------------------------------------------------------------------------
In the third study provided by the applicant that directly
evaluated the Pure-Vu[supreg] System in a clinical setting, Bertiger
G., et al. performed a United States-based single center, prospective,
outpatient study investigating regimes of reduced outpatient bowel
preparations, which included low doses of over-the-counter laxatives,
and eliminating the typical 24 hour clear liquid diet restriction,
which was replaced by a low residue diet the day before the procedure.
In this study, 46 of a possible 49 patients received a colonoscopy, 8
of which took the over-the-counter laxative (``MiraLAX arm''), 21
patients ingested two doses of 7.5 oz Magnesium Citrate (MgC) each
taken with 19.5 oz of clear liquid (``Mag Citrate 15 oz arm''), and 18
patients
[[Page 25304]]
ingested 2 doses of 5 oz MgC taken with 16 oz of clear liquid (``Mag
Citrate 10 oz arm''). Of the 46 subjects, 59 percent were males and
there was a mean age of 619.48 years. The study found that
each of the 3 study arms revealed significant differences in BBPS score
between the baseline preparation and post-cleansing via Pure-Vu. All
the preparation regimens resulted in inadequately prepped colons.
Comparing the mean BBPS rating for both pre- and post- Pure-Vu[supreg]
use, the MiraLAX arm was inferior (P <0.05) to both Mag Citrate arms.
For the MiraLAX arm, the mean BBPS Score improved from 1.50 to 8.63.
For the Mag Citrate 15 oz arm, the mean BBPS score improved from 3.62
to 8.95. For the Mag Citrate 10 oz arm, the mean BBPS Score improved
from 4.76 to 9.0.
In addition to the retrospective studies provided, the applicant
also submitted three case studies to highlight the various clinical
presentations of LGIB with the use of the Pure-Vu[supreg] System. In
the first case, the applicant presented a 71-year-old woman with
multiple episodes of bloody bowel movements and low hemoglobin levels
for 2 days after a screening colonoscopy where 8 polyps were removed.
The applicant stated that the patient underwent a successful
colonoscopy using Pure-Vu without standard inpatient bowel preparation
within 5 hours, and in addition to expediting the colonoscopy, four
significant post-polypectomy ulcers were found and clipped by allowing
the physician to cleanse the area and place the clips simultaneously.
The applicant claimed that since the Pure-Vu[supreg] System does not
impact the use of the endoscope's working channel, the physician was
able to cleanse the area as needed during the intervention to allow
precise placement of the clips applied to achieve hemostasis and the
patient was discharged that same day.
The applicant submitted another case example where a 52-year-old
male was admitted from the emergency department to the ICU due to
significant GI bleeding, hemorrhagic shock, and acute kidney injury
(AKI) six days after a colonoscopy where nine polyps were removed,
including two polyps greater than 2 cm. The applicant stated that
angiographic control of the bleeding was not considered due to AKI with
rising creatinine, and bedside colonoscopy was immediately performed
with the Pure-Vu[supreg] System without any bowel prep. Per the
applicant, the physician was able to visualize the entire colon to
confirm all sources of bleeding and place two clips to obtain
hemostasis, and the patient was downgraded out of the ICU that day and
discharged from the hospital the following day.
In the third case study submitted by the applicant, a 64-year-old
male was admitted to the ICU with one day of bright red blood per
rectum (BRBPR) along with a complex set of disorders including but not
limited to alcohol use disorder, heart failure with reduced ejection
fraction of 30 percent, and multidrug resistant tuberculosis. The Pure-
Vu[supreg] System was used to attempt to definitively identify the
bleeding source in the ICU. The applicant stated that although no
active sites of bleeding were seen, red blood was found in the entire
colon, and the patient was transferred out of the ICU 2 days later and
discharged 3 days after transfer to the floor. The applicant claimed
that while the patient's bleeding had stopped by the time the colon was
examined, the ability to directly visualize the entire colon using the
Pure-Vu[supreg] System helped avoid a third CT angiography during this
hospitalization and helped the physicians to confirm that prior coil
embolization had not resulted in focal colonic ischemia. The applicant
asserted that this case showed that the Pure-Vu[supreg] System can be
used with minimal preparation, enabling rapid investigation of LGIB in
a very complex patient. The applicant concluded that these case studies
demonstrate that a change in patient management occurs when the option
of the Pure-Vu[supreg] System is available, especially when there is an
urgent or severe GI bleed, where circumstances where other procedures
(such as CT angiography) are insufficient and the option to perform the
colonoscopy sooner is preferred.
After reviewing the information submitted by the applicant as part
of its FY 2022 new technology add-on payment application for the Pure-
Vu[supreg] System, we have the following concerns. While the studies
provided in support of the Pure-Vu[supreg] System measure improvement
of bowel preparation using the BBPS, the applicant did not provide data
indicating that the improved BBPS directly leads to improved clinical
outcomes (for example, reduction of blood loss in LGIB or reduction of
missed polyps) based on use of the Pure-Vu[supreg] System.
Additionally, we note that the applicant has not provided any studies
comparing the efficacy of the Pure-Vu[supreg] System to other existing
methods or products for irrigation in support of its claims that the
product is superior at removing debris from the colon while
simultaneously preventing the colon from collapsing, allowing use of
the working channel, or improving outcomes. Furthermore, we note that
many of the provided studies were based on small sample sizes, which
may affect the quality and reliability of the data provided in support
of the technology. In addition, we note that the methodology described
in the provided studies often involved time to adequately prepare the
colon and included outpatient planned procedures, which may not reflect
the emergent situations that the applicant states the Pure-Vu[supreg]
System is intended to address in the inpatient setting. We also note
that the Helmut, et al. study noted one procedure related perforation
which required surgical repair and we invite public comments regarding
the concern of procedure related perforation.
We are inviting public comments on whether the Pure-Vu[supreg]
System meets the substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for the Pure-
Vu[supreg] System.
o. Rapid ASPECTS
iSchemaView (which is in the process of a name change to RapidAI)
submitted an application for new technology add-on payments for Rapid
ASPECTS for FY 2022. According to the applicant, Rapid ASPECTS is a
computer-aided diagnosis (CADx) software device used to assist the
clinician in the assessment and characterization of brain tissue
abnormalities using computed tomography (CT) image data. The applicant
asserted that the software automatically registers images and segments
and analyzes ASPECTS Regions of Interest (ROIs). According to the
applicant, Rapid ASPECTS extracts image data for the ROI(s) to provide
analysis and computer analytics based on morphological characteristics.
The applicant stated that the imaging features are then synthesized by
an artificial intelligence algorithm into a single ASPECT Score.
The applicant stated Rapid ASPECTS is indicated for evaluation of
patients presenting for diagnostic imaging workup with known Middle
Cerebral Artery (MCA) or Internal Carotid Artery (ICA) occlusion, for
evaluation of extent of disease. The applicant stated that extent of
disease refers to the number of ASPECTS regions affected, which is
reflected in the total score.
According to the applicant, the Rapid ASPECTS device provides
information that may be useful in the
[[Page 25305]]
characterization of early ischemic brain tissue injury during image
interpretation (within 6 hours). The applicant stated Rapid ASPECTS
provides a comparative analysis to the ASPECTS standard of care
radiologist assessment using the ASPECTS atlas definitions and atlas
display including highlighted ROIs and numerical scoring. The applicant
stated that Rapid ASPECTS is not intended for primary interpretation of
CT images; it is used to assist physician evaluation. The applicant
asserted Rapid ASPECTS has been validated in patients with known MCA or
ICA occlusion prior to ASPECT scoring.
According to the applicant, when patients with a suspected stroke
arrive at an emergency department, they are rapidly triaged to the CT
scanner for a non-contrast CT (NCCT) and CT angiography (CTA). The
applicant stated that CTA directly images large vessel occlusions and
the NCCT can exclude brain hemorrhage and identify early signs of brain
infarction. The applicant asserted that automated large vessel
occlusion (LVO) detection software is now used at many sites to quickly
identify LVOs on CTA and provide physicians with early notification
that an LVO has been identified. The applicant stated that following
identification of an LVO, the next imaging evaluation required is for a
physician, typically a radiologist or neuroradiologist, to determine
the ASPECT score by taking a close look at the NCCT for evidence of
early infarct signs. The applicant stated that patients with an ASPECT
score between 6 and 10 who meet clinical criteria for thrombectomy
should receive thrombectomy as soon as possible, if treatment can occur
within 6 hours of symptoms onset. The applicant asserted that for
patients who present beyond 6 hours, a CT perfusion or MRI scan are
required to identify which patients are eligible for thrombectomy.
The applicant stated approximately 800,000 primary (first-time) or
secondary (recurrent) strokes occur each year in the U.S., with the
majority being primary strokes (roughly 600,000). Of these strokes,
approximately 87% are ischemic infarctions, 10% are primary
hemorrhages, and 3% are subarachnoid hemorrhage.\520\ According to the
applicant, the incidence of stroke rapidly increases with age, doubling
for each decade after age 55. The applicant asserted that among adults
ages 35 to 44, the incidence of stroke is 30 to 120 in 100,000 per
year, and for those ages 65 to 74, the incidence is 670 to 970 in
100,000 per year. Therefore, according to the applicant, the primary
burden of stroke affects the Medicare-age population. The applicant
stated the most disabling strokes are those due to large vessel
occlusions (LVOs), and treatment of these strokes has the largest
therapeutic benefits.\521\
---------------------------------------------------------------------------
\520\ Ovbiagele B, et al. Stroke Epidemiology: Advancing Our
Understanding of Disease Mechanism and Therapy Neurotherapeutics.
(2011) 8:319-329.
\521\ Ovbiagele B, et al. Stroke Epidemiology: Advancing Our
Understanding of Disease Mechanism and Therapy Neurotherapeutics.
(2011) 8:319-329.
---------------------------------------------------------------------------
The applicant stated that Rapid ASPECTS received FDA 510(k)
clearance as a CADx software device on June 26, 2020 and provided a
date of first installation of September 1, 2020. The applicant
described Rapid ASPECTS as a machine learning-based automated software
for assessment of ASPECTS. The applicant asserted that Rapid ASPECTS
remains the only cleared ASPECTS software and the only stroke imaging
software to receive a CADx clearance by the FDA. The legally marketed
predicate device that Rapid ASPECTS is substantially equivalent to, per
FDA, is QuantX,\522\ which was granted De Novo authorization on July
19, 2017. QuantX is a CADx software device used to assist radiologists
in the assessment and characterization of breast abnormalities using
magnetic resonance (MR) image data and is indicated for evaluation of
patients presenting for high-risk screening, diagnostic imaging workup,
or evaluation of extent of known disease.\523\
---------------------------------------------------------------------------
\522\ Rapid ASPECTS 510(k) clearance letter from FDA: https://www.accessdata.fda.gov/cdrh_docs/pdf20/K200760.pdf.
\523\ QuantX De Novo decision summary from FDA: https://www.accessdata.fda.gov/cdrh_docs/reviews/DEN170022.pdf.
---------------------------------------------------------------------------
We note the applicant submitted a request for approval of a unique
ICD-10-PCS procedure code to identify use of the technology beginning
FY 2022. According to the applicant, this new ICD-10-PCS code would be
reported in addition to the non-contrast CT using the appropriate code
as listed in current coding systems.
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted Rapid ASPECTS uses a new mechanism of action
(machine learning) to assess CT scans and synthesize a single ASPECT
score when compared to existing options which are limited to clinical
assessment by a human reader. According to the applicant, this software
remains the only FDA-cleared ASPECTS software and the only stroke
imaging software to receive a CADx clearance by the FDA. The applicant
asserted Rapid ASPECTS is fully automated and produces a score for each
of the 10 ASPECTS regions, as well as a total score in approximately 2
minutes.
With regard to the second criterion, whether the technology is
assigned to the same or a different MS-DRG, the applicant stated that
cases involving Rapid ASPECTS would be assigned to the same MS-DRGs as
cases involving patients confirmed with an eligible LVO by a positive
CTA. According to the applicant, in these cases, the traditional
clinical pathway requires a physician to determine the ASPECT score
through an imaging evaluation. The applicant noted that Rapid ASPECTS
may result in patients being assigned to a different MS-DRG depending
on whether or not a mechanical thrombectomy is performed as a result of
the Rapid ASPECTS results.
With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
asserted Rapid ASPECTS addresses the current stroke population.
In summary, the applicant believes that Rapid ASPECTS is not
substantially similar to other currently available therapies because
Rapid ASPECTS uses a new mechanism of action (machine learning) to
assess CT scans and synthesize a single ASPECT score. We are unclear as
to whether machine learning to assess CT scans and synthesize a single
ASPECT score would represent a unique mechanism of action, or how the
mechanism of action by which Rapid ASPECTS assesses stroke imaging is
distinct from other automated stroke imaging analysis tools, or the
traditional hospital workflow.
We continue to be interested in public comments regarding issues
related to determining newness for technologies that use AI, an
algorithm or software, as discussed in the FY 2021 IPPS/LTCH PPS final
rule (85 FR 58628). Specifically, we are interested in public comment
on how these technologies, including devices classified as radiological
computer aided triage and notification software and radiological
computer-assisted diagnostic software, may be considered for the
purpose of identifying a unique mechanism of
[[Page 25306]]
action; how updates to AI, an algorithm or software would affect an
already approved technology or a competing technology; whether software
changes for an already approved technology could be considered a new
mechanism of action, and whether an improved algorithm by competing
technologies would represent a unique mechanism of action if the
outcome is the same as an already approved AI new technology.
We invite public comments on whether Rapid ASPECTS is substantially
similar to existing technologies, including specifically with respect
to the mechanism of action, and whether it meets the newness criterion.
With respect to the cost criterion, the applicant provided three
analyses: (1) A baseline analysis containing all cases reporting one of
the targeted ICD-10-CM codes below as the principal diagnosis code for
cerebral infarction that map to one of the applicant's targeted MS-
DRGs; (2) an analysis limited to MS-DRGs with a case volume over 100;
and (3) an analysis limited to MS-DRGs 023, 062, 064, 065, and 066,
which per the applicant would reflect 80 percent of all stays. For the
baseline analysis, the applicant first extracted all inpatient stays
from the CY 2018 Limited Data Set Standard Analytic File (LDS SAF) that
contained a principal ICD-10-CM diagnosis code for cerebral infarction.
The applicant used the following ICD-10-CM diagnosis codes.
[[Page 25307]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.172
[[Page 25308]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.173
The applicant then removed cases for hospitals that are not paid
under the IPPS. The applicant also removed inpatient stays and their
assigned MS-DRGs from its analysis where the assigned MS-DRG met any of
the following conditions: (1) The MS-DRG is for a part of the body not
related to the head; (2) the MS-DRG is a psychiatric MS-DRG, alcohol-
related MS-DRG, or a catchall MS-DRG; (3) the MS-DRG has a very small
number of cases; or (4) the MS-DRG is unlikely to involve an LVO. The
applicant identified 66,990 cases mapping to 27 MS-DRGs, as listed in
the following table, in descending order by volume:
[GRAPHIC] [TIFF OMITTED] TP10MY21.174
The applicant then standardized the charges and applied the 2-year
charge inflation factor of 13.2 percent used to adjust the outlier
threshold determination (85 FR 59039). The applicant did not remove
charges for prior technology, as the applicant believes Rapid ASPECTS
does not eliminate or replace any prior technology or services. The
applicant also noted that it did not remove charges related to the
prior technology, as the applicant believes Rapid ASPECTS does not
reduce costs during the inpatient stay.
[[Page 25309]]
The applicant then added charges for the technology. The applicant
stated that it estimated the cost per case of Rapid ASPECTS using
historical utilization data gathered from its Rapid CTA module. The
applicant anticipates Rapid ASPECTS will be used in the same hospital
sites as Rapid CTA, which also provides the applicant with a baseline
number of Medicare and non-Medicare patients who were identified with a
suspected LVO. The applicant estimated that approximately 20.5 percent
of all patients who received a RAPID CTA scan qualified as inpatients
eligible for a Rapid ASPECTS scan. The applicant divided the total
number of qualified Medicare and non-Medicare inpatients by the total
number of subscriber hospitals to arrive at an average number of
inpatients eligible to be scanned with Rapid ASPECTS per subscriber
hospital per year. The applicant then took the estimated average sales
price per annual contract of Rapid ASPECTS per hospital and divided it
across the estimated annual number of Rapid ASPECTS inpatients per site
to estimate the average cost per case per subscriber hospital. Finally,
the applicant divided the average cost per case by the national average
CCR for radiology of 0.136 (85 FR 58601).
The applicant calculated a case-weighted threshold amount of
$76,398 and a final inflated average case-weighted standardized charge
per case of $90,097. Based on this analysis, the applicant asserted
that Rapid ASPECTS meets the cost criterion because the final inflated
average case-weighted standardized charge per case exceeds the case-
weighted threshold amount. The applicant submitted two additional
scenarios to demonstrate that the technology meets the cost criterion
using the same methodology described but with limits on the cases. The
first scenario limited the analysis to MS-DRGs with at least 100 cases.
This resulted in a case-weighted threshold of $76,457 and a final
inflated average case weighted standardized charge per case of $90,172.
The second scenario limited the analysis to MS-DRGs 023, 062, 064, 065,
and 066, which per the applicant reflect 80 percent of all stays. This
second alternative method resulted in a case-weighted threshold of
$67,890 and a final inflated average case-weighted standardized charge
per case of $77,614. Across all three analyses, the applicant
maintained that the technology meets the cost criterion because the
final inflated average case-weighted standardized charge per case
exceeds the average case-weighted threshold amount.
We note the following concerns regarding the cost analysis for
Rapid ASPECTS. The applicant stated it removed from its analysis those
cases and their assigned MS-DRG where the assigned MS-DRG was for a
body part that is not the head; however the list of MS-DRGs the
applicant presented included MS-DRGs 37 (Extracranial Procedures w/MCC)
and 38 (Extracranial Procedures w/CC), which by definition describe
procedures outside of the head. We would like to understand why these
MS-DRGs and their assigned cases were included in the baseline
analysis. We would also like to understand the time period of the
claims the applicant selected from the CY 2018 SAF, as this could have
implications for the inflation factor used to update charges if the
applicant selected claims from FY 2018 as opposed to FY 2019.
The applicant appears to have used a single list price of Rapid
ASPECTS per hospital with a cost per patient that can vary based on the
volume of cases. We note that the cost per patient varies based on the
utilization of the technology by the hospitals. The cost per patient
could be skewed by the small number of hospitals utilizing the
technology and their low case volumes. It is possible, if hospitals
with large patient populations adopt Rapid ASPECTS, the cost per
patient would be significantly lower.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58630), we stated
our understanding that there are unique circumstances to determining a
cost per case for a technology that utilizes a subscription for its
cost. We stated our intent to continue to consider the issues relating
to the calculation of the cost per unit of technologies sold on a
subscription basis as we gain more experience in this area. We continue
to welcome comments from the public as to the appropriate method to
determine a cost per case for such technologies, including comments on
whether the cost per case should be estimated based on subscriber
hospital data as described previously, and if so, whether the cost
analysis should be updated based on the most recent subscriber data for
each year for which the technology may be eligible for the new
technology add-on payment.
We invite public comment on whether Rapid ASPECTS meets the cost
criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted Rapid ASPECTS represents a substantial clinical
improvement over existing technologies because it improves diagnostic
decisions by improving accuracy of ASPECT scoring. The applicant also
asserted it improves diagnostic decisions by reducing inter-rater
variability of ASPECT scoring. The applicant also asserted it
represents a substantial clinical improvement by improving treatment
decisions and by improving time to treatment.
According to the applicant, the first stroke treatment, tissue
plasminogen activator (tPA), was first approved in the United States
for intravenous administration to patients with acute stroke in 1996,
and a study demonstrating successful catheter-directed intra-arterial
infusion of a thrombolytic agent for this indication was first
published in 1999.\524\ The applicant asserted that the first positive
randomized controlled studies using modern mechanical thrombectomy
devices for LVO stroke were published in 2015 and support combined
treatment with tPA and catheter-based thrombectomy as the most
effective treatment approach for patients who can be treated within six
hours of symptom onset.\525\ According to the applicant, following the
publication of these trials, the American Heart Association (AHA) and
American Stroke Association (ASA) released new guidelines in 2016, 2018
and 2019 that all specified the following Level 1A recommendation:
---------------------------------------------------------------------------
\524\ Furlan A, Higashida R, et al. Intra[hyphen]arterial
prourokinase for acute ischemic stroke: the PROACT II study: a
randomized controlled trial: Prolyse in Acute Cerebral
Thromboembolism. JAMA. 1999;282:2003-2011.
\525\ Goyal M, Menon BK, et al for the HERMES collaborators.
Endovascular thrombectomy after large[hyphen]vessel ischaemic
stroke: a meta[hyphen]analysis of individual patient data from five
randomised trials. Lancet 2016; 387: 1723-31.
---------------------------------------------------------------------------
Patients should receive mechanical thrombectomy with a stent
retriever if they meet all the following criteria:
Pre-stroke modified Rankin Score (mRS) score of 0 to 1.
Causative occlusion of the internal carotid artery (ICA)
or middle cerebral artery (MCA) segment 1 (M1).
Age >=18 years.
NIH Stroke Scale (NIHSS) score of >=6.
Alberta stroke program early CT score (ASPECTS) of >=6.
Treatment can be initiated (groin puncture) within 6 hours
of symptom onset.\526\
---------------------------------------------------------------------------
\526\ Powers WJ, Rabinstein A, Ackerson T, et al. Guidelines for
the Early Management of Patients With Acute Ischemic Stroke: 2019
Update to the 2018 Guidelines for the Early Management of Acute
Ischemic Stroke A Guideline for Healthcare Professionals From the
American Heart Association/American Stroke Association. Stroke.
2019;50:e344-e418.
---------------------------------------------------------------------------
According to the applicant, the above-recommended guidelines from
the
[[Page 25310]]
AHA/ASA have been widely accepted and outline the key requirements that
are still used today to select early window (less than 6 hours)
candidates for thrombectomy. The applicant asserted the imaging
requirements (the second and the fifth criterion) require that patients
be screened for an LVO with CTA and then once an LVO in the ICA or MCA
is discovered, the ASPECTS score must be assessed to verify that it is
6 or higher. According to the applicant, the ASPECTS score is an
assessment of the CT scan in a stroke patient to determine if there is
evidence of irreversible injury in ten different brain regions. The
applicant stated that patients who have more than five regions that are
already irreversibly injured are not candidates for thrombectomy.
According to the applicant, it is well validated in the stroke
literature that faster treatment leads to better outcomes. The
applicant stated that compared with the best medical therapy alone, in
the first five positive LVO endovascular thrombectomy trials that were
published in the New England Journal of Medicine and subsequently
summarized in a pooled analysis by the HERMES group, thrombectomy was
associated with improved outcomes when procedure start (arterial
puncture) could be performed within the first 7.3 hours after symptom
onset among patients meeting the brain imaging entry criteria for
inclusion in these randomized trials.\527\ The applicant asserted that
within this period, functional outcomes were better the sooner after
symptom onset that endovascular reperfusion was achieved, emphasizing
the importance of programs to enhance patient awareness, out-of-
hospital care, and in-hospital management to shorten symptom onset-to-
treatment times. The applicant asserted that the magnitude of the
association between time to treatment and outcome is clinically
meaningful. According to the applicant, in patients with acute ischemic
stroke due to LVO, among every 1000 patients achieving substantial
endovascular reperfusion, for every 15-minutes faster emergency
department door-to-reperfusion time, an estimated 39 patients would
have a less-disabled outcome at 3 months, including 25 more who would
achieve functional independence (mRS 0-2).\528\ The applicant stated
that in addition to faster time from emergency department door to
reperfusion, faster time from brain imaging to reperfusion was
associated with better 3-month functional outcomes.\529\
---------------------------------------------------------------------------
\527\ Goyal M, Menon BK, et al for the HERMES collaborators.
Endovascular thrombectomy after large[hyphen]vessel ischaemic
stroke: a meta[hyphen]analysis of individual patient data from five
randomised trials. Lancet 2016; 387: 1723-31.
\528\ Goyal M, Menon BK, et al for the HERMES collaborators.
Endovascular thrombectomy after large[hyphen]vessel ischaemic
stroke: a meta[hyphen]analysis of individual patient data from five
randomised trials. Lancet 2016; 387: 1723-31.
\529\ Ibid. Goyal M, Menon BK, et al for the HERMES
collaborators. Endovascular thrombectomy after large[hyphen]vessel
ischaemic stroke: a meta[hyphen]analysis of individual patient data
from five randomised trials. Lancet 2016; 387: 1723-31.
---------------------------------------------------------------------------
According to the applicant, the interpretation of early infarct
signs in CT first became clinically important following the FDA
approval of tPA for stroke treatment in 1996 because it was shown that
the response to tPA could be predicted based on the degree of early
brain injury that could be visualized on the CT scan. The applicant
asserted it was clear that intravenous tPA could be harmful in patients
with advanced early infarct signs because they had a high risk of
intracranial hemorrhage. The applicant stated, however, only rough
qualitative estimates of the degree of early infarct signs were
performed. The applicant asserted stroke clinicians generally felt safe
to give tPA if the early infarct signs were confined to less than one-
third of the middle cerebral artery territory.\530\
---------------------------------------------------------------------------
\530\ von Kummer R, Allen KL, Holle R, et al. Acute stroke:
usefulness of early CT findings before thrombolytic therapy.
Radiology 1997; 205:327-33.
---------------------------------------------------------------------------
According to the applicant, beginning in the 2000s, a more detailed
and quantitative analysis of early infarct signs was proposed: The
Alberta Stroke Program Early CT score (ASPECTS).\531\ The applicant
stated this score requires the evaluation of 10 pre-defined MCA
vascular territories. The applicant asserted these individual regions
are assessed for focal hypoattenuation of the cortex and in the basal
ganglia, reduction of gray and white matter differentiation, and the
loss of the insular ribbon sign. According to the applicant, ASPECTS is
calculated by subtracting 1 point for each involved region; scores less
than 6 typically signify patients with an irreversible large
hemispheric infarction.\532\
---------------------------------------------------------------------------
\531\ Barber PA, Demchuk AM, et al. Validity and reliability of
a quantitative computed tomography score in predicting outcome of
hyperacute stroke before thrombolytic therapy. ASPECTS Study Group.
Alberta Stroke Programme Early CT Score. Lancet. 2000 May
13;355(9216):1670-4.
\532\ Albers GW, MD, Wald MJ, Mlynash M, et al. Automated
Calculation of Alberta Stroke Program Early CT Score Validation in
Patients With Large Hemispheric Infarct. Stroke. 2019;50:3277-3279.
---------------------------------------------------------------------------
According to the applicant, the ASPECTS evaluation became
clinically essential in 2015 after mechanical thrombectomy was found to
be effective for treatment of patients with a large vessel occlusion
within the 6-hour time frame.533 534 The applicant stated
that some of the large randomized controlled trials that ultimately led
to the establishment of thrombectomy as a standard procedure required
an ASPECTS greater than or equal to 6 for inclusion. According to the
applicant, the MR CLEAN trial, which enrolled patients with lower
ASPECT scores than the other four trials, reported the smallest overall
treatment effect and in particular, patients with an ASPECT score less
than 5 did not show benefit with an adjusted odds ratio close to
1.0.\535\ The applicant asserted that for these reasons, an ASPECTS
evaluation is required in most national and international thrombectomy
guidelines. The applicant stated most guidelines, including the AHA/ASA
guidelines discussed above, require an ASPECT score greater than or
equal to six 6 for a patient to qualify for thrombectomy in the early
treatment window.\536\
---------------------------------------------------------------------------
\533\ Goyal M, Menon BK, et al for the HERMES collaborators.
Endovascular thrombectomy after large-vessel ischaemic stroke: A
meta[hyphen]analysis of individual patient data from five randomised
trials. Lancet 2016; 387: 1723-31.
\534\ Powers WJ, Rabinstein A, Ackerson T, et al. Guidelines for
the Early Management of Patients With Acute Ischemic Stroke: 2019
Update to the 2018 Guidelines for the Early Management of Acute
Ischemic Stroke A Guideline for Healthcare Professionals From the
American Heart Association/American Stroke Association. Stroke.
2019;50:e344-e418.
\535\ Berkhemer OA, Fransen PS, et al; MR CLEAN Investigators. A
randomized trial of intraarterial treatment for acute ischemic
stroke. N Engl J Med. 2015;372:11-20.
\536\ Powers WJ, Rabinstein A, Ackerson T, et al. Guidelines for
the Early Management of Patients With Acute Ischemic Stroke: 2019
Update to the 2018 Guidelines for the Early Management of Acute
Ischemic Stroke A Guideline for Healthcare Professionals From the
American Heart Association/American Stroke Association. Stroke.
2019;50:e344-e418.
---------------------------------------------------------------------------
The applicant asserted ASPECT score determination is challenging
because early infarct signs are often very subtle and challenging to
interpret correctly. According to the applicant, there is often
disagreement between experts on the exact score and sometimes these
disagreements preclude a definite answer regarding if the patient
qualifies for thrombectomy or not. The applicant asserted these
interpretation challenges are manifested by limited inter-rater
[[Page 25311]]
agreement, even among experts.537 538 539 The applicant
cited the DEFUSE 2 study in which two expert readers graded ischemic
change on NCCT using the ASPECT score. The applicant asserted that
full-scale agreement (measured by the intraclass correlation
coefficient) for CT-ASPECTS was only moderate at 0.579.\540\ According
to the applicant, these inter-rater differences can have important
clinical implications, as discussed further. The applicant asserted
that many physicians who evaluate acute stroke patients are not
confident that they can accurately determine an ASPECT score, and
oftentimes there are significant delays before a radiologist reads the
scan.
The applicant stated current AHA/ASA guidelines recommend a CT scan
be performed within 25 minutes of Emergency Department arrival and the
radiologist interpretation of the scan occur within 45 minutes of
arrival.\541\ According to the applicant, based on these guidelines,
radiologists have about 20 minutes to read the scan, however, many
hospitals, especially community and primary stroke centers, do not meet
these guidelines. The applicant asserted Medicare data indicate that
only 72% of patients meet these guidelines. The applicant stated that
automated software, such as Rapid ICH, Rapid LVO and Rapid ASPECTS can
assess CT and CTA findings (both to rule out hemorrhage, confirm an LVO
and to assess early signs of infarction with ASPECTS) within minutes.
---------------------------------------------------------------------------
\537\ Albers GW, MD, Wald MJ, Mlynash M, et al. Automated
Calculation of Alberta Stroke Program Early CT Score Validation in
Patients With Large Hemispheric Infarct. Stroke. 2019;50:3277-3279.
\538\ Kobkitsuksakul C, Tritanon O, Suraratdecha V.
Interobserver agreement between senior radiology resident,
neuroradiology fellow, and experienced neuroradiologist in the
rating of Alberta Stroke Program Early Computed Tomography Score
(ASPECTS). Diagn Interv Radiol. 2018.
\539\ McTaggart RA, Jovin TG, Lansberg MG, et al. Alberta stroke
program early computed tomographic scoring performance in a series
of patients undergoing computed tomography and MRI: Reader
agreement, modality agreement, and outcome prediction. Stroke. 2015
Feb;46(2):407[hyphen]12.
\540\ McTaggart RA, Jovin TG, Lansberg MG, et al. Alberta stroke
program early computed tomographic scoring performance in a series
of patients undergoing computed tomography and MRI: Reader
agreement, modality agreement, and outcome prediction. Stroke 2015
Feb;46(2):407[hyphen]12.
\541\ AHA/ASA. Target: Stroke Campaign Manual, published 2010.
http://www.strokeassociation.org/idc/groups/heart-public/@wcm/@hcm/@gwtg/documents/downloadable/ucm_308277.pdf.
---------------------------------------------------------------------------
According to the applicant, the limited inter-rater agreement for
traditional ASPECT scoring can lead to triaging ineligible patients to
thrombectomy or failing to treat eligible patients. The applicant cited
a study in which four experienced readers rated ASPECT scores in
patients who presented with LVO and severe strokes. The applicant
stated the inter-rater agreement between these raters was poor with an
interclass correlation of 0.32.\542\ According to the applicant, the
range of agreement for individual raters with the gold standard
assessment of the score (obtained with a concurrent MRI) for
identifying patients with a score less than six 6 ranged from 35% to
94%. The applicant asserted this study demonstrates there can be
substantial disagreement between physicians regarding if a patient is
eligible for thrombectomy based on their assessment of the ASPECT
score, which can lead to eligible patients not receiving this highly
effective therapy, as well as the performance of unnecessary
procedures.
---------------------------------------------------------------------------
\542\ Albers GW, MD, Wald MJ, Mlynash M, et al. Automated
Calculation of Alberta Stroke Program Early CT Score Validation in
Patients with Large Hemispheric Infarct. Stroke. 2019;50:3277-3279.
---------------------------------------------------------------------------
The applicant asserted that particularly the Medicare population
might be at risk and impacted by these limitations as the majority of
LVOs occur in the Medicare population. The applicant stated that the
average age of patients in the HERMES pooled analysis of thrombectomy
studies was 68 years.\543\ Therefore, according to the applicant,
inaccuracy of traditional ASPECT scoring translates into a substantial
percentage of Medicare patients having erroneous triage decisions made
regarding their eligibility for thrombectomy, which it asserted can
result in unnecessary procedures and increased Medicare costs, as well
as increased disability in eligible patients who are not treated
because of inaccurate ASPECT scoring.
---------------------------------------------------------------------------
\543\ Goyal M, Menon BK, et al for the HERMES collaborators.
Endovascular thrombectomy after large[hyphen]vessel ischaemic
stroke: a meta-analysis of individual patient data from five
randomised trials. Lancet 2016; 387: 1723-31.
---------------------------------------------------------------------------
As stated previously, the applicant asserted Rapid ASPECTS
represents a substantial clinical improvement over existing
technologies because it improves diagnostic decisions by improving
accuracy of ASPECT scoring. The applicant presented three retrospective
cohort studies (two peer-reviewed and one under review) to support the
claim that diagnostic decisions made by clinicians would have been
improved with use of Rapid ASPECTS. According to the applicant, two of
the studies showed that the automated Rapid ASPECTS score is
significantly more accurate than the scores obtained by experienced
clinicians.544 545
---------------------------------------------------------------------------
\544\ Maegerlein C, Fischer J, M[ouml]nch S, MD et al. Automated
Calculation of the Alberta Stroke Program Early CT Score:
Feasibility and Reliability. Radiology 2019; 291:141-148.
\545\ Albers GW, MD, Wald MJ, Mlynash M, et al. Automated
Calculation of Alberta Stroke Program Early CT Score Validation in
Patients With Large Hemispheric Infarct. Stroke. 2019;50:3277-3279.
---------------------------------------------------------------------------
The applicant submitted a retrospective cohort study which compared
ASPECT scoring of CT images from patients with MCA occlusion (n=100)
between Rapid ASPECTS software and two expert neuroradiologist reads.
According to the applicant, Rapid ASPECTS showed a substantial
agreement (k=0.78) when imaging took place more than 1 hour after
symptom onset, which increased to high agreement (k=0.92) for imaging
occurring after 4 hours. The applicant asserted that the
neuroradiologist raters did not achieve comparable results to the
software until the time interval of greater than 4 hours (k=0.83 and
k=0.76). In this study, experts developed the reference consensus score
and then, after 6 weeks, the same two neuroradiologists again
determined ASPECTS by using only the baseline CT. The experts had
moderate agreement with the consensus score (k=0.57 and k=0.57) while
Rapid ASPECTS had better agreement (k=0.9). There was minimal agreement
across experts and software in the timeframe of less than 1 hour
between symptom onset and imaging, but better software agreement when
the time was between 1 and 4 hours. There was agreement across experts
for imaging occurring after 4 hours. According to the applicant, this
study showed that in acute stroke of the MCA, Rapid ASPECTS had better
agreement than that of human readers with a predefined consensus
score.\546\
---------------------------------------------------------------------------
\546\ Maegerlein C, Fischer J, M[ouml]nch S, MD et al. Automated
Calculation of the Alberta Stroke Program Early CT Score:
Feasibility and Reliability. Radiology 2019; 291:141-148.
---------------------------------------------------------------------------
The applicant submitted another retrospective cohort study to
compare Rapid ASPECTS, as well as the mean score from four experienced
readers, with a diffusion-weighted magnetic resonance imaging (DW-MRI)
ASPECTS obtained following the baseline CT in patients (n=65) with
large hemispheric infarcts.\547\ DW-MRI is sensitive in the detection
of small and early infarcts. Small infarcts might not appear on CT
scans for days. The AHA/ASA guidelines state that DW-MRI can be useful
for selecting candidates for mechanical thrombectomy between 6 and 24
hours after the patient was last known well (that is, the time at which
the patient was known to be without signs and symptoms of the current
stroke).\548\
---------------------------------------------------------------------------
\547\ Albers GW, MD, Wald MJ, Mlynash M, et al. Automated
Calculation of Alberta Stroke Program Early CT Score Validation in
Patients With Large Hemispheric Infarct. Stroke. 2019;50:3277-3279.
\548\ Powers WJ, Rabinstein A, Ackerson T, et al. Guidelines for
the Early Management of Patients With Acute Ischemic Stroke: 2019
Update to the 2018 Guidelines for the Early Management of Acute
Ischemic Stroke A Guideline for Healthcare Professionals From the
American Heart Association/American Stroke Association. Stroke.
2019;50:e344-e418.
---------------------------------------------------------------------------
[[Page 25312]]
According to the applicant, Rapid ASPECTS' automated score had a
higher level of agreement with the mean of the DW-MRI ASPECTS, both for
the full scale and for the dichotomized scale of either <6 or >=6 which
is the difference for treatment/no treatment (difference in intraclass
correlation coefficient, p<0.001). The applicant stated that the mean
DW-MRI ASPECT score was <6 in 63/65 (97%) of the cases; of these, RAPID
ASPECTS agreed with the DW-MRI score in 46/63 (73%) of the cases (95%
confidence interval [CI] 60-83%) vs. 35/63 56% of the cases (95% CI 44-
69%) for the median score of the two experienced readers (p=0.027). The
range of agreement for individual clinician CT ASPECTS with the median
DW-MRI score for identifying patients with a score <6 was 35% to 94%.
According to the applicant, this study demonstrated the accuracy for
determining which patients have an ASPECTS <6 (which would exclude them
from thrombectomy) was significantly higher with the software.\549\
---------------------------------------------------------------------------
\549\ Albers GW, MD, Wald MJ, Mlynash M, et al. Automated
Calculation of Alberta Stroke Program Early CT Score Validation in
Patients With Large Hemispheric Infarct. Stroke. 2019;50:3277-3279.
---------------------------------------------------------------------------
The applicant submitted an additional retrospective cohort study
under review for publication which compared physicians' (two expert
neuroradiologists and six typical readers) ability to read ASPECTS in
patients with an LVO (n=50; 10 regions in each patients' scan for a
total of 500 individual regions) within 6 hours of symptom onset when
assisted by Rapid ASPECTS, compared with their unassisted score. The
applicant stated that the average ASPECT score of three additional
experienced neuroradiologists who were provided access to a follow-up
MRI was used as the reference standard. The applicant asserted that
when typical readers read the scan in conjunction with the Rapid
ASPECTS software, their agreement with the expert reads improved from
72% to 78% (p<0.0001, test of proportions). According to the applicant,
Rapid ASPECTS alone achieved correlations for total ASPECT scores that
were similar to the three experienced neuroradiologist readers who had
access to a follow-up MRI scan to help enhance the quality of their
reads. The applicant asserted the results from this study showed that
the aid of Rapid ASPECTS can significantly improve typical readers'
scores and that the automated scores generated by Rapid ASPECTS are
interchangeable with the scores generated by expert
neuroradiologists.\550\
---------------------------------------------------------------------------
\550\ Delio PR, Wong ML, Tsai JP, et al. Assistance from
Automated ASPECTS Software Improves Reader Performance (under review
2020).
---------------------------------------------------------------------------
As stated previously, the applicant asserted Rapid ASPECTS
represents a substantial clinical improvement over existing
technologies because it improves diagnostic decisions by reducing
inter-rater variability of ASPECT scoring. To support this claim the
applicant submitted the study performed by iSchemaView and analyzed by
an independent statistician that led to the FDA clearance of Rapid
ASPECTS. According to the applicant, acute CT scans in patients with
LVO (n=50) were read by eight readers both with and without Rapid
ASPECTS. The applicant asserted that the standard deviation of ASPECT
scores ranged from 0.35 to 4.5 without assistance as compared to 0.46
to 4.7 with assistance. The applicant stated that the median standard
deviation dropped from 2.2 to 1.4 when assistance was used to read the
scans. According to the applicant, a t-test to evaluate the hypothesis
of equal standard deviations supported a significant difference in
standard deviations (p=0.0002), and non-parametric tests arrived at the
same conclusion (p<0.0001 for a Wilcoxon Rank Sum Test).\551\
---------------------------------------------------------------------------
\551\ Copeland K. Variability of ASPECT Scores Internal Analysis
iSchemaView of data submitted to U.S. Food and Drug Administration
(FDA) Center for Devices and Radiological Health, 2020a.
---------------------------------------------------------------------------
As stated previously, the applicant asserted Rapid ASPECTS
represents a substantial clinical improvement by improving treatment
decisions and by improving time to treatment. The applicant asserted
that in the study performed by iSchemaView of the acute CT scans in
patients with LVO (n=50) which were read by eight readers both with and
without Rapid ASPECTS, a Receiver Operating Characteristic (ROC)
analysis demonstrated significant improvement in typical readers'
ability to identify patients who have a score of 6 to 10 if they read
the scan in conjunction with the automated score. According to the
applicant, the area under the curve (AUC) improved from 0.78 without
Rapid ASPECTS to 0.85 with Rapid ASPECTS (p=0.0049).
The applicant asserted that of the 400 treatment assessments (50
scans * 8 readers) in this study, 7% were changed from an incorrect
assessment to a correct assessment when the scan was read in
conjunction with the automated score compared with traditional scoring,
a statistically significant difference.\552\
---------------------------------------------------------------------------
\552\ Copeland K. Treat/No Treat Analysis, Internal Analysis
iSchemaView of data submitted to U.S. Food and Drug Administration
(FDA) Center for Devices and Radiological Health, 2020.
---------------------------------------------------------------------------
The applicant cited three retrospective studies that, according to
the applicant, have shown treatment decisions made by experienced
clinicians would have been improved with the use of Rapid
ASPECTS.553 554 555 As stated previously, the applicant
asserted that one study showed that agreement regarding whether a
patient had a treatment-eligible score based on a concurrent MRI scan
interpreted by two experts was significantly higher for the Rapid
ASPECTS score than for experienced clinicians.\556\ According to the
applicant, Rapid ASPECTS has also been shown to improve the reads of a
typical CT scan reader to become as accurate as a neuroradiologist
read.\557\ The applicant asserted that since radiologists are not
immediately available at the time when many LVO patients present, and
obtaining a read from a neuroradiologist often takes even longer, the
time to determine an ASPECT score will be substantially improved with
the software, leading to faster treatment times which have been shown
to reduce disability. According to the applicant, Rapid ASPECTS
provides an opportunity to impact the current selection and allocation
pathway for stroke care.
---------------------------------------------------------------------------
\553\ Albers GW, MD, Wald MJ, Mlynash M, et al. Automated
Calculation of Alberta Stroke Program Early CT Score Validation in
Patients With Large Hemispheric Infarct. Stroke. 2019;50:3277-3279.
\554\ Delio PR, Wong ML, Tsai JP, et al. Assistance from
Automated ASPECTS Software Improves Reader Performance (under review
2020).
\555\ Maegerlein C, Fischer J, M[ouml]nch S, MD et al. Automated
Calculation of the Alberta Stroke Program Early CT Score:
Feasibility and Reliability. Radiology 2019; 291:141-148.
\556\ Albers GW, MD, Wald MJ, Mlynash M, et al. Automated
Calculation of Alberta Stroke Program Early CT Score Validation in
Patients With Large Hemispheric Infarct. Stroke. 2019;50:3277-3279.
\557\ Delio PR, Wong ML, Tsai JP, et al. Assistance from
Automated ASPECTS Software Improves Reader Performance (under review
2020).
---------------------------------------------------------------------------
After reviewing the information submitted by the applicant, we have
the following questions regarding whether Rapid ASPECTS meets the
substantial clinical improvement criterion.
In the studies provided by the applicant, the reference ASPECT
score to which Rapid ASPECTS was compared was generally derived from a
mean value of the ASPECT scores rated from a small sample of expert
radiologists. We note that the radiologists used to identify the
reference to which Rapid ASPECTS was compared may not be representative
of radiologists in the United States. We are also unclear whether a
mean ASPECT score, identified from radiologists whom
[[Page 25313]]
the applicant describes as having low levels of agreement, is
representative of a meaningful value as it does not represent the score
of any particular radiologist. We further question whether individuals
participating in these studies may have altered their behavior in a
substantive way by interacting with computer-generated ratings, which
would complicate study findings.
We further note that the correlation between the ASPECT scoring of
expert and Rapid ASPECTS is the primary outcome in many of the articles
provided. Though this information may be important and informative, it
is not clear that a high correlation between expert and Rapid ASPECTS
scoring is necessarily indicative of substantial clinical improvement.
Furthermore, whether these providers agree with the technology does not
determine whether they are correct, and it could be the case that both
AI and radiologists agree on an incorrect score.
We note that the applicant stated that inter-rater disagreement
with ASPECT scores leads to erroneous triage and treatment of Medicare
patients. It is unclear how the applicant determined that disagreement
between scores translates into inappropriate treatment, or necessarily
shows that the scoring class (<6 vs >=6) was inaccurate. The applicant
also asserted that many physicians who evaluate acute stroke patients
are not confident that they can accurately determine an ASPECT score,
but it did not provide evidence to support this claim. Additionally, we
observe that the studies provided did not demonstrate improvements in
clinical outcomes such as disability, mortality, or length of stay;
rather, improved outcomes were inferred by relying on the assumption
that faster treatment results in better outcomes. Without measuring the
impact of the technology on treatment outcomes, we are uncertain
whether Rapid ASPECTS represents a substantial clinical improvement.
Lastly, we note that the applicant submitted the AHA/ASA guidelines
and a review of stroke literature as support for clinical improvement.
It is unclear how the guidelines support a finding of substantial
clinical improvement for Rapid ASPECTS because the guidelines are for
the current standard of care. Additionally, the applicant did not
provide evidence to support its assertion that hospitals are not
meeting the AHA/ASA guideline that radiologists read the CT scan of
acute ischemic stroke patients within 20 minutes. The stroke literature
review identified the inter-rater differences among ASPECT scoring, but
did not demonstrate that inter-rater disagreements have led to triaging
ineligible patients to thrombectomy or failing to treat eligible
patients in clinical practice. It is unclear how the literature on
inter-rater reliability for ASPECT scoring would demonstrate a
substantial clinical improvement in how Rapid ASPECTS supports improved
triaging of stroke care. The applicant's stroke literature review also
identified that faster treatment leads to better outcomes. While this
supports the urgency of stroke care, we are unsure how it demonstrates
a substantial clinical improvement in how Rapid ASPECTS supports the
urgency of stroke care.
We are inviting public comments on whether Rapid ASPECTS meets the
substantial clinical improvement criterion.
In this section, we summarize and respond to written public
comments received in response to the New Technology Town Hall meeting
notice published in the Federal Register regarding the substantial
clinical improvement criterion for Rapid ASPECTS.
Comment: Several commenters, some of whom participated in one of
the retrospective studies assessing Rapid ASPECTS, asserted that Rapid
ASPECTS offers a substantial clinical improvement over the current
standard of care for evaluation and treatment of patients diagnosed
with LVO. They cited the studies summarized in this section and their
clinical experience with Rapid ASPECTS and stated that Rapid ASPECTS
improves treatment decisions by improving the accuracy of the
assessment of candidates eligible for thrombectomy as well as reducing
the time to appropriate treatment, which leads to better outcomes.
Response: We thank the commenters for their input and will take
this information into consideration when deciding whether to approve
new technology add-on payments for Rapid ASPECTS.
Comment: The applicant responded to the questions received at the
New Technology Town Hall Meeting held in December 2020.
First, the applicant was asked if an ROC analysis had been
performed with Rapid ASPECTS. The applicant stated that an ROC analysis
had been performed for one of the retrospective studies assessing Rapid
ASPECTS (Delio et al., 2020, under review). According to the applicant,
using the scores for the 500 ASPECT regions for all 8 readers shows the
AUC improved from 0.78 without RAPID to 0.85 with RAPID-assisted reads.
The applicant stated the reference standard was the read from three
experienced neuroradiologists who were provided access to a follow-up
MRI scan to help enhance the accurary of the reference standard. The
applicant asserted that the difference of 0.06 between the AUCs is
statistically significant (p=0.0049).
Second, the applicant was asked if clinical benefits of RAPID
Aspects were directly observed in prospective studies using the Rapid
ASPECTS software. The applicant cited a recent retrospective study
reporting a series of 176 patients from one hospital in Alexandria,
Egypt diagnosed with Acute Ischemic Stroke (AIS) and subsequently
treated with tPA between January 2018 and December 2019. Results were
reported on 122 of these patients; 36 had their NCCT images analyzed by
Rapid ASPECTS and 86 had their NCCT images analyzed by a remote
neuroradiologist who received the image by the text messaging platform
WhatsApp. The applicant asserted that Rapid ASPECTS had excellent
agreement (k=0.80) with the neuroradiologist's read. The door-to-needle
time for the 86 WhatsApp-read patients was 52.3 16 minutes
and for the 36 Rapid ASPECTS patients was 36.8 11 minutes
(p=0.001), representing a 14-minute reduction in the door-to-treatment
time in Rapid ASPECTS group compared with the WhatsApp standard care
group. According to the applicant, there was also a significantly
increased likelihood of functional independence and fewer hemorrhagic
complications in patients treated with reperfusion therapy in the Rapid
ASPECTS group (p<0.001). The applicant also asserted that the use of
Rapid ASPECTS was shown to be cost-effective in this study.\558\
---------------------------------------------------------------------------
\558\ Mansour, Ossama Yassin, et al. ``Deciding Thrombolysis in
AIS Based on Automated versus on WhatsApp Interpreted ASPECTS, a
Reliability and Cost-Effectiveness Analysis in Developing System of
Care.'' Frontiers in Neurology 11 (2020): 333.
---------------------------------------------------------------------------
Response: We appreciate the applicant's responses to questions
asked at the New Technology Town Hall Meeting. Regarding
generalizability, we note that the study results from a small, non-
randomized sample generated from a single hospital in Alexandria,
Egypt, may limit the ability to assert findings are generalizable
across the variety of health care settings in the United States. We
question whether the fact that the radiologists in this study received
the images via WhatsApp is generalizable to the standard of care in the
United States. We also note the study did not attempt to control for
other variables such as the mix of patients in each group or time of
day or other changes
[[Page 25314]]
in hospital practices over time. Additionally, since only patients with
confirmed acute ischemic stroke were included in the study results, no
information was given about the imaging and interpretation of other
patients imaged. We note that the retrospective study had two
neuroradiologists interpret the NCCT images at a later time and compare
their ASPECT score to the Rapid ASPECTS-generated score reading the
same scans. The study reported that in only one patient, the Rapid
ASPECTS software underestimated the extent of early ischemic changes by
providing an automated ASPECTS >6, while the score was <6 by agreement
read (which would indicate that tPA treatment was not appropriate). We
note that the clinical outcome of that patient was not reported.
We appreciate the information provided by the applicant and will
take these comments into consideration when deciding whether to approve
new technology add-on payments for Rapid ASPECTS.
p. Steripath[supreg] MicroTM Blood Collection System
Magnolia Medical Technologies, Inc. submitted an application for
new technology add-on payments for the Steripath[supreg]
MicroTM Blood Collection System, which is also referred to
as the Steripath[supreg] MicroTM Initial Specimen Diversion
Device (ISDD[supreg]), for FY 2022. The applicant described the
Steripath[supreg] MicroTM ISDD[supreg] (``Steripath Micro'')
as a proprietary and patent-protected single-use, disposable device,
which is indicated for use in the collection of blood cultures by
nurses, phlebotomists, and technicians in emergency departments and
inpatient units in acute care hospitals to reduce blood culture
contamination and false positive diagnostic test results for sepsis.
According to the applicant, Steripath[supreg] MicroTM
ISDD[supreg], along with the Steripath and Steripath[supreg] Gen2, are
part of a product portfolio utilizing their Steripath[supreg]
ISSD[supreg] technology.
The applicant explained that the Steripath[supreg]
MicroTM ISDD[supreg] uses a syringe-driven (or blood culture
bottle-driven) architecture that uses negative pressure to flip a
proprietary internal bladder, which, in turn, creates gentle negative
pressure to divert and sequester the initial 0.6 to 0.9 mL of blood,
the portion known to most likely contain contaminants. According to the
applicant, once diversion is complete, the user presses a side button
to isolate the diverted blood. The applicant further explained that
once the blood is isolated, a second independent blood flow pathway is
opened to collect the blood specimen into the syringe (or blood culture
bottle) for blood culture testing.
The applicant stated that the design and development of the
Steripath[supreg] Micro\TM\ ISDD[supreg] was inspired by patients who
present with symptoms concerning for sepsis and who are hypotensive
(low blood pressure) and hypovolemic (low blood volume), have difficult
intravenous access (DIVA), or are small in stature with lower blood
volume. According to the applicant, clinicians typically utilize a
syringe technique to collect blood from this patient population to
enable management of negative pressure (attempting to avoid vein
collapse) while improving the opportunity to collect a sufficient
volume of blood to culture, which the applicant stated is a critical
determinant of blood culture sensitivity (that is, avoiding false
negative results). The applicant claimed that this patient population
is generally ineligible for existing ISDD[supreg] technologies due to
risk of vein collapse. According to the applicant, the negative
pressure created by Steripath[supreg] Micro\TM\ ISDD[supreg]'s bladder-
driven mechanism is designed to achieve initial specimen diversion
while avoiding collapsing of the veins (losing venous access) of this
patient population. The applicant stated that the Steripath[supreg]
Micro\TM\ ISDD[supreg] is available with a preassembled sterile
integrated syringe for syringe-driven diversion and blood culture
sample collection, and components of the system may be used for
infusion following sample collection after disconnection of the
ISDD[supreg].
According to the applicant, blood culture is the gold standard
diagnostic test for bloodstream infections, including septicemia. The
applicant explained that blood cultures are drawn from patients
displaying symptoms of a potential bloodstream infection with results
guiding therapeutic decisions and influencing outcomes for patients for
their duration in acute care. The applicant stated that the standard of
care is to collect two separate blood cultures, each consisting of two
blood culture bottles containing aerobic or anaerobic medium. The
applicant further noted that the major automated microbial blood
culture detection systems (BACTEC and BacT/ALERT) recommend 8-10 mL of
blood in each of the aerobic and anaerobic bottles--up to 40 mL total
distributed across all four bottles.
The applicant stated that despite the critical role blood culture
plays in providing diagnoses, an estimated 20 percent to over 50
percent of all positive blood culture results for sepsis are suspected
to be false positive due to blood culture contamination, as explained
in greater detail below.\559\ The applicant stated that blood culture
contamination creates clinical confusion which leads to a risk of
inappropriate antibiotic therapy,560 561 562 563 extended
length of stay of an average of 2.0 to 2.4 days,564 565
Clostridium difficile (CDI) infection,566 567 multidrug
resistance organism (MDRO) infections, Acute Kidney Injury (AKI),\568\
hospital-acquired infection (HAI) or hospital-acquired condition
(HAC),\569\ false-positive Central Line-Associated Blood Stream
Infection (CLABSI) treatment, false positives reported to National
Healthcare Safety Network (NHSN)/CMS (thus biasing the data), and
additional lab and/or other diagnostic testing.\570\
---------------------------------------------------------------------------
\559\ Snyder S, et al. Effectiveness of practices to reduce
blood culture contamination: A Laboratory Medicine Best Practices
systematic review and meta-analysis. Clinical Biochemistry. 2012;
45(0):999-1011.
\560\ Rupp M, et al. Reduction in Blood Culture Contamination
Through Use of Initial Specimen Diversion Device. Clinical
Infectious Diseases. 2017; 65(2):201-205.
\561\ Bell M, et al. Effectiveness of a novel specimen
collection system in reducing blood culture contamination rates.
Journal of Emergency Nursing 44.6 (2018): 570-575.
\562\ Doern G, et al. A Comprehensive Update on the Problem of
Blood Culture Contamination and a Discussion of Methods for
Addressing the Problem. Clinical Microbiology Reviews. 2020;
33:e00009-19.
\563\ Chang D, et al. Impact of blood culture diversion device
on molecular pathogen identification on vancomycin use. Poster
presented at: Society for Healthcare Epidemiology of America (2017).
\564\ Skoglund E et al. Estimated Clinical and Economic Impact
through Use of a Novel Blood Collection Device To Reduce Blood
Culture Contamination in the Emergency Department: A Cost-Benefit
Analysis. 2019; 57:e01015-18.
\565\ Geisler B, et al. Model to evaluate the impact of
hospital-based interventions targeting false-positive blood cultures
oneconomic and clinical outcomes. Journal of Hospital Infection.
2019; 102:438-444.
\566\ Ibid. Geisler B, et al. Model to evaluate the impact of
hospital-based interventions targeting false-positive blood cultures
oneconomic and clinical outcomes. Journal of Hospital Infection.
2019; 102:438-444.
\567\ Doern G, et al. A Comprehensive Update on the Problem of
Blood Culture Contamination and a Discussion of Methods for
Addressing the Problem. Clinical Microbiology Reviews. 2020;
33:e00009-19.
\568\ Khalili H, et al. ``Antibiotics induced acute kidney
injury: Incidence, risk factors, onset time and outcome.'' Acta
Medica Iranica (2013): 51(12): 871-878.
\569\ Doern G, et al. A Comprehensive Update on the Problem of
Blood Culture Contamination and a Discussion of Methods for
Addressing the Problem. Clinical Microbiology Reviews. 2020;
33:e00009-19.
\570\ Ibid. Doern G, et al. A Comprehensive Update on the
Problem of Blood Culture Contamination and a Discussion of Methods
for Addressing the Problem. Clinical Microbiology Reviews. 2020;
33:e00009-19.
---------------------------------------------------------------------------
[[Page 25315]]
The applicant explained that the detection of bacteremia is of
particular concern for Medicare beneficiaries, given that the mean age
for United States patients afflicted with sepsis in 2014 was 66.5, with
sepsis present in 35 percent of all United States hospitalizations that
resulted in death.\571\
---------------------------------------------------------------------------
\571\ Rhee C, et al. Incidence and Trends of Sepsis in US
Hospitals Using Clinical vs Claims Data, 2009-2014. JAMA. 2017;
318:1241-1249.
---------------------------------------------------------------------------
With regard to the newness criterion, the Steripath[supreg]
Micro\TM\ ISDD[supreg] is a Class II medical device that received
510(k) clearance from the FDA on October 8, 2020. The 510(k) clearance
was based on substantial equivalence to an earlier version of the
device, Steripath[supreg] Gen2, which received 510(k) clearance on
February 28, 2020. According to the applicant, the Steripath[supreg]
ISDD[supreg] product portfolio, including the Steripath[supreg]
Micro\TM\ ISDD[supreg], is the only FDA 510(k)-cleared family of
devices indicated to reduce blood culture contamination.\572\ According
to the applicant, a supplemental Special 510(k) submission and
clearance is anticipated for an additional configuration of the
Steripath[supreg] Micro\TM\ ISDD[supreg] device that incorporates a
butterfly safety venipuncture needle.
---------------------------------------------------------------------------
\572\ Bell, Mary, et al. Effectiveness of a novel specimen
collection system in reducing blood culture contamination rates.
Journal of Emergency Nursing 44.6 (2018): 570-575.
---------------------------------------------------------------------------
According to the applicant, there are currently no ICD-10-PCS
procedure codes to distinctly identify the use of the Steripath[supreg]
Micro\TM\ ISDD[supreg]. The applicant submitted a request for a new
ICD-10-PCS procedure code for implementation on October 1, 2021.
As discussed above, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
According to the applicant, diversion techniques use the same basic
principle to reduce blood culture contamination by sequestering blood
most likely to contain dislodged skin fragments and/or flora. With
regard to the first criterion, whether a product uses the same or
similar mechanism of action to achieve a therapeutic outcome, the
applicant discussed current/alternative treatments to avoid blood
contamination, but states that manual diversion, passive diversion, and
the Steripath[supreg] Gen2 device are not comparable alternatives to
Steripath[supreg] Micro\TM\.
According to the applicant, manual diversion, which involves the
phlebotomist or other medical professional first collecting blood into
a waste tube and then manually switching to a sample collection tube,
is not a replacement for Steripath[supreg] Micro\TM\ ISDD[supreg]
because manual diversion inherently entails additional opportunities
for human error through touch contamination and process variation,
without the ability to manage and ensure healthcare worker compliance.
The applicant further explained that manual diversion techniques
introduce, at a minimum, one additional surface (waste tube top), which
must either be sterilized (or carefully handled if pre-packaged
sterile) to avoid cross contamination through the inoculation needle.
The applicant noted that if the inoculation needle is contaminated in
this manner, both blood culture bottles can become contaminated, which
can be interpreted (inaccurately) as a true positive through laboratory
testing. The applicant explained that Steripath[supreg] Micro\TM\
ISDD[supreg] is a closed system to prevent opportunities for touch
contamination beyond conventional methods of blood culture sample
acquisition. The applicant further explained that since
Steripath[supreg] Micro\TM\ ISDD[supreg] is a pre-assembled and
packaged sterile kit that does not require manual connections, it
avoids touch-point contamination and prevents the need for additional
time, focus, and manual diversion procedural compliance from the
operator.
The applicant stated that the Kurin product, a competitor diversion
device that uses passive diversion (or relying on the patients blood
pressure), is not a comparable alternative to Steripath[supreg]
Micro\TM\ ISDD[supreg] as it is not FDA-cleared to reduce blood-culture
contamination. The applicant claimed that passive diversion, because of
its limitations, is integrated into the Kurin product to redirect 0.15
mL of blood. The applicant stated that passive devices are susceptible
to bypassing diversion when the culture bottle is inoculated before
diversion is complete, and that this limitation is not present within
the Steripath[supreg] MicroTM ISDD[supreg] architecture. The
applicant asserted that the Steripath[supreg] Micro\TM\ ISDD[supreg]
uses a novel syringe-driven (or blood culture bottle-driven) negative
pressure to flip an internal bladder which, in turn, creates gentle
negative pressure to divert and sequester the initial 0.6 to 0.9 mL of
blood.
The applicant further stated that the Steripath[supreg] Gen2
ISDD[supreg] is not a comparable product to Steripath[supreg] Micro\TM\
ISDD[supreg], as it uses greater negative pressure to divert an initial
1.5-2.0 mL of blood for the adult patient population. According to the
applicant, the Steripath[supreg] MicroTM ISDD[supreg]
platform leverages ISDD[supreg] technology but is smaller, easier-to-
use, and employs a novel proprietary diversion bladder technology to
address patients who are hypotensive and hypovolemic, have difficult
intravenous access, or are small in stature with lower blood volume.
Specifically, the applicant explained that the Steripath[supreg]
Micro\TM\ ISDD[supreg] uses syringe-driven (or blood culture bottle-
driven) negative pressure to flip an internal bladder which in turn
creates gentle negative pressure to effectively and consistently divert
and sequester the initial 0.6 to 0.9 mL of blood, the portion known to
most likely contain contaminants, with this patient population. The
applicant asserts this differentiates the Steripath[supreg] Micro\TM\
from the Steripath[supreg] Gen2. The applicant further explained that
once diversion is complete, the user presses a button to isolate the
diverted blood and, automatically, a second independent blood flow
pathway opens to collect the blood specimen into the syringe (or blood
culture bottle) for culture.
With respect to the second criterion, whether the technology is
assigned to the same or a different MS-DRG, the applicant did not
indicate whether the Steripath[supreg] Micro\TM\ ISDD[supreg] would be
assigned to the same MS-DRGs as cases representing patients who receive
diagnostic information from competing technologies or traditional blood
collection methods.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
stated that the Steripath[supreg] Micro\TM\ ISDD[supreg] was
fundamentally designed to address a specific and broader patient
population than any other technology that is currently available and
FDA 510(k) cleared to prevent blood culture contamination. The
applicant explained that in a certain subset of `hard-stick' (low blood
volume, hypovolemic and hypotensive) patients, blood culture using
passive diversion or the Steripath[supreg] Gen2 ISDD[supreg] is not
possible. According to the applicant, Steripath[supreg]
MicroTM is the first ISDD designed specifically to address
the unmet needs of the low blood volume, hypovolemic and hypotensive,
`hard-stick' patient populations (many requiring integrated sterile
syringe collection) that is FDA 510(k) cleared indicated to reduce
blood culture contamination.
We have the following concerns regarding whether the technology
meets
[[Page 25316]]
the substantial similarity criteria and whether it should be considered
new. Although we understand that the Steripath[supreg] Micro\TM\
ISDD[supreg] version may divert less blood volume and utilize less
negative pressure than the Steripath[supreg] Gen2 ISDD[supreg], we note
that both devices utilize negative pressure and, according to the
applicant, leveraged Magnolia Medical Technologies' foundational
ISDD[supreg] technology, and it is unclear whether this represents a
new mechanism of action. We further note that the applicant also
appears to consider the devices as similar, as they exclusively rely on
studies conducted using the Steripath[supreg] Gen2 ISDD[supreg] to
demonstrate substantial clinical improvement. We therefore believe that
the newness date for Steripath[supreg] Micro\TM\ ISDD[supreg] would
begin on February 28, 2020, the date on which the predicate device
received 510(k) clearance.
We also note that the applicant claimed that the Steripath[supreg]
ISDD[supreg] product portfolio, including the Steripath[supreg]
MicroTM ISDD[supreg], is the only FDA 510(k)-cleared family
of devices indicated to reduce blood culture contamination and we are
inviting public comment on whether there are other FDA-cleared products
designed to reduce blood culture contamination.
We are inviting public comments on whether the Steripath[supreg]
Micro\TM\ ISDD[supreg] is substantially similar to other technologies
and whether the Steripath[supreg] Micro\TM\ ISDD[supreg] meets the
newness criterion.
With regard to the cost criterion, the applicant searched the FY
2019 MedPAR FR claims data file with the FY 2019 Final Rule IPPS Impact
File to identify potential cases representing patients who may be
eligible for treatment using Steripath[supreg] Micro\TM\ ISDD[supreg].
The applicant used 37 Infection ICD-10-CM Diagnosis Codes and 15
Sepsis ICD-10-CM Diagnosis codes to identify patients who could
potentially benefit from the Steripath[supreg] Micro\TM\ ISDD[supreg]
during an inpatient stay. These ICD-10-CM codes are provided in the
following table:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP10MY21.175
[[Page 25317]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.176
[GRAPHIC] [TIFF OMITTED] TP10MY21.177
BILLING CODE 4120-01-C
In its analysis, the applicant identified a primary cohort to
assess whether this therapy met the cost criterion. The applicant
stated that clinical literature suggests the DIVA population represents
anywhere from 17 percent to 59 percent of all patients that present as
symptomatic for sepsis and require blood
cultures.573 574 575 The applicant added that the literature
did not provide any additional information on the distribution of the
DIVA population within the larger infection/sepsis population. To
account for this, the applicant randomly selected 33% of claims that
included one of the ICD-10 codes listed above in one of the first two
diagnosis code positions on the claim to include in the cost analysis.
---------------------------------------------------------------------------
\573\ Sou, V., et al. A clinical pathway for the management of
difficult venous access. BMC Nursing 16, 64 (2017).
\574\ Armenteros-Yeguas V., et al. Prevalence of difficult
venous access and associated risk factors in highly complex
hospitalized patients. J Clin Nurs. 2017;26(23-24):4267-4275.
\575\ Van Loon, FH, et al. Development of the A-DIVA Scale: A
Clinical Predictive Scale to Identify Difficult Intravenous Access
in Adult Patients Based on Clinical Observations. Medicine. 2016
Apr;95(16)e3428.
---------------------------------------------------------------------------
The applicant removed MS-DRGs describing kidney and urinary tract
infections and renal failure because these cases are not likely to
benefit from use of the Steripath[supreg] Micro\TM\ ISDD[supreg]. The
applicant stated that these diagnoses rely on technologies not relevant
to Steripath[supreg] Micro\TM\ ISDD[supreg], such as urine cultures and
blood cultures specific to urea and creatinine. Lastly the applicant
excluded cases in MS-DRGs that accounted for less than 1% of the total
cases in the identified sample.
The claim search conducted by the applicant resulted in 295,790
claims mapping to six MS-DRGs: 871 (Septicemia or severe sepsis w/o mv
>96 hours w mcc), 872 (Septicemia or severe sepsis w/o mv >96 hours w/o
mcc), 853 (Infectious & parasitic diseases w o.r. procedure w mcc), 870
(Septicemia or severe sepsis w mv >96 hours or peripheral
extracorporeal membrane oxygenation (ecmo)), 854 (Infectious &
parasitic diseases w o.r. procedure w cc), and 177 (Respiratory
infections & inflammations w mcc). The applicant determined an average
unstandardized case weighted charge per case of $69,973.
The applicant stated that studies show blood culture contamination
(BCC) increases length of stay (LOS) and leads to unnecessary
antimicrobial therapy and/or hospital-acquired conditions. The
applicant stated that a retrospective analysis involving hospitalized
patients with septicemia-compatible symptoms found that avoiding BCC
would decrease costs by $6,463, including $4,818 in savings for
inpatient care. 53 percent of savings were attributed to reduced LOS
and 26 percent to reduced antibiotic use.\576\ The applicant stated
that to account for these savings, they removed $2,500 by inflating
costs to charges using the national average cost-to-charge ratio (CCR)
for routine days and $2,300 by inflating costs to charges using the
pharmacy national average CCR. Because the previous study cited did not
describe where non-LOS related inpatient savings arose, the applicant
assumed that the savings arose from reduced drug use and therefore the
pharmacy national average CCR was used.
---------------------------------------------------------------------------
\576\ Geisler, BP, et al. Model to evaluate the impact of
hospital-based interventions targeting false-positive blood cultures
on economical and clinical outcomes. J Hosp Infect. 2019
Aug;102(4):438-444.
---------------------------------------------------------------------------
Because, according to the applicant, savings accrue in around 3% of
cases where the Steripath[supreg] Micro\TM\ ISDD[supreg] is used, the
applicant applied three percent of the savings described above to every
case in the sample population. The applicant stated that removing the
$4,800 in cost savings from 3 percent of the cases is mathematically
the same as removing 3 percent of the cost savings from all cases. The
applicant then standardized the charges using the FY 2019 Final Rule
Impact File. Next, the applicant applied the 2-year inflation factor
used in the FY 2021 IPPS/LTCH PPS final rule to calculate outlier
threshold charges (1.13218). To calculate the charges for the
technology, the applicant used the national average CCR for the
Supplies and Equipment cost center of 0.297 from the FY 2021 Final IPPS
rule. The applicant calculated a final inflated average case-
[[Page 25318]]
weighted standardized charge per case of $76,796, which exceeded the
average case-weighted threshold amount of $69,973 by $6,824. The
applicant stated that because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the therapy meets the cost criterion.
Based on the information provided by the applicant, we note the
following concerns with regard to the cost criterion. In its analysis,
the applicant stated it randomly selected 33% of claims that included
one of the ICD-10 codes listed above in one of the first two diagnosis
code positions on the claim to include in the cost analysis. Implicit
in this decision to randomly select a subsample is the belief that
Steripath[supreg] Micro\TM\ ISDD[supreg] cases are randomly distributed
across all cases identified. If performed properly, the intent of
random sampling from a population is to identify a smaller group of
cases which remains representative or similar to the greater
population. An added effect of proper random sampling is that the
sample often has less variance than the population from which it was
drawn. We are therefore concerned that random sampling may be
inappropriate in this situation if the potential cases are not
similarly randomly distributed.
Furthermore, if it is true that a subset of cases would be more
representive of cases eligible for use of the Steripath[supreg] Micro
\TM\ ISDD[supreg], it may be more likely that those cases will be
distributed based on certain characteristics, not randomly distributed.
We are seeking public comment on whether the random sample used by the
applicant would appropriately identify the cases eligible for the use
of Steripath.
In its cost analysis, the applicant stated that, in order to
account for savings from the use of Steripath[supreg] Micro\TM\
ISDD[supreg], it removed $2,500 by inflating costs to charges using the
national average cost-to-charge ratio (CCR) for routine days and $2,300
by inflating costs to charges using the pharmacy national average CCR.
From a methodological standpoint, we are not certain that the data from
which savings were calculated are generalizable to the broader Medicare
population's experience if Steripath[supreg] MicroTM Blood
Collection System is used. Specifically, we are not certain that the
patient population and the resulting conclusions from the
aforementioned study \577\ adequately generalize to the Medicare
population.
Lastly, the applicant stated that because savings accrue in around
three percent of cases where the Steripath[supreg] Micro\TM\
ISDD[supreg] is used, the applicant applied three percent of the
savings described previously to every case in its sample population. We
are unclear whether the three percent of cases which experienced
savings in the one study provided by the applicant is adequately
representative of the Medicare population. We are not certain that
three percent of a sample experiencing some level of savings is the
same as all cases experiencing three percent savings. Therefore, we are
not certain that it is appropriate to apply three percent of savings
across all cases in the applicant's cost analysis. As with the
reduction in charges discussed previously, while the applicant's
approach provides a more conservative estimate for purposes of the cost
criterion, we question whether it accurately reflects the experiences
of providers and Medicare beneficiaries.
We invite public comment on whether Steripath[supreg] Micro\TM\
ISDD[supreg] meets the cost criterion. With respect to the substantial
clinical improvement criterion, the applicant asserted that the
Steripath[supreg] Micro\TM\ ISDD[supreg] represents a substantial
clinical improvement over existing technologies. The applicant stated
that data from studies show that Steripath Micro\TM\ ISDD[supreg]
offers the ability to reduce blood collection contamination with skin
flora and asserted that it improves clinical outcomes relative to
services or technologies previously available as demonstrated by
reducing clinically significant adverse events (that is, a decrease in
inappropriate antibiotic use and a decrease in inappropriate
hospitalizations).
The applicant submitted with its application 17 Steripath[supreg]
ISDD[supreg] technology-specific studies, including 5 peer-reviewed
studies published in scientific journals, that it stated support the
contamination rate reduction with Steripath[supreg] Gen2 ISDD [supreg]
of 73.6 percent to 100 percent, with resulting sustained contamination
rates of 0.97 percent to 0.0 percent, which the applicant stated is
below the 3.0 percent gold standard benchmark rate for blood culture
contamination.\578\
---------------------------------------------------------------------------
\578\ Zimmerman, F. et al. ``Reducing blood culture
contamination using an initial specimen diversion device.''American
Journal of Infection Control 47.7 (2019): 822-826.
---------------------------------------------------------------------------
The applicant submitted a retrospective controlled study by Bell M,
et al.\579\ that showed that investigators seeking to lower the blood
culture contamination rate at four different Lee Health (a healthcare
system in Florida) emergency departments found that Steripath[supreg]
Gen2 ISDD[supreg] implementation reduced their blood culture
contamination rate by 83.0 percent when compared to conventional
methods of sample acquisition, (that is without diversion). The Lee
Health emergency departments compared contamination rates obtained
using Steripath[supreg] Gen2 ISDD[supreg] device as the standard of
care from May 2016 through November 2016 to conventional methods which
were collected from October 2015 through November 2016. The applicant
stated that these findings support their claim that Steripath[supreg]
ISDD[supreg] reduces the risk of blood culture contamination.
---------------------------------------------------------------------------
\579\ Bell M, et al. Effectiveness of a novel specimen
collection system in reducing blood culture contamination rates.
Journal of Emergency Nursing 44.6 (2018): 570-575.
---------------------------------------------------------------------------
The applicant submitted the Bauman, K, poster,\580\ where
investigators seeking to lower the blood culture contamination rate at
the Inova Fairfax Medical Center found that Steripath[supreg] Gen2
implementation reduced their blood culture contamination rate by 81.5%
when compared to conventional methods of sample acquisition. The trial
use of Steripath[supreg] Gen2 lasted for one year, and results were
compared to conventional methods for the year preceding the trial.
According to the applicant, findings support the claim that
Steripath[supreg] reduces the risk of blood culture contamination,
while historical patient data from this hospital supported the claim
that the lower contamination rate Steripath[supreg] enables will
translate into a reduced patient length of stay of one day per avoided
false positive event.
---------------------------------------------------------------------------
\580\ Bauman, K. ``Don't Stick Me Again! Reducing Blood Culture
Contamination'' Poster presented at: Emergency Nursing Annual
Conference.
---------------------------------------------------------------------------
The applicant submitted the Blakeney J, et al.\581\ poster, a
prospective controlled study comparing the use of Steripath[supreg]
ISDD[supreg] to standard collection methods and the effect on blood
culture contamination rates. Over a 16-week period, participants' blood
was collected using both the Steripath[supreg] and conventional
methods, with each being recorded. Per the applicant, outcomes showed
that Steripath[supreg] ISDD[supreg] implementation reduced Beebe
Healthcare's blood culture contamination rate by 74.6 percent when
compared to conventional methods of sample acquisition. The applicant
stated that the findings support the claim that Steripath[supreg]
ISDD[supreg] reduces the risk of blood culture contamination.
---------------------------------------------------------------------------
\581\ Blakeney J, et al. ``Reduction of Blood Culture
Contamination Using Initial Specimen Diversion Device''Poster
presented at: American Society for Microbiology Annual Meeting
(2018).
---------------------------------------------------------------------------
[[Page 25319]]
The applicant submitted the Church K, et al.\582\ prospective
controlled study, which showed that investigators at the Medical
University of South Carolina emergency department found that
Steripath[supreg] Gen2 ISDD[supreg] implementation reduced their blood
culture contamination rate by 73.6 percent when compared to
conventional methods of sample acquisition. In this 20-month study,
nurses were given autonomy to decide if a patient would be best served
by the Steripath[supreg] Gen2 device or conventional methods, with
choices being recorded. The uptake rate of the Steripath[supreg] Gen2
device was 66%, with exclusions being uncooperative patients and
difficult to stick patients.
---------------------------------------------------------------------------
\582\ Church K, et al. ``Novel Blood Culture Collection Device
Reduces False-Positive Blood Cultures, Saves Costs, and Increases
Accuracy of Bloodstream Infection Diagnosis'' Poster presented at:
IHI National Forum (2017).
---------------------------------------------------------------------------
The applicant submitted the Gauld L, et al.\583\ study, an eight
month long prospective controlled study which showed that investigators
seeking to lower the blood culture contamination rate at the Medical
University of South Carolina emergency department found that
Steripath[supreg] Gen2 ISDD[supreg] implementation reduced their blood
culture contamination rate by 86.3 percent when compared to
conventional methods of sample acquisition.
---------------------------------------------------------------------------
\583\ Gauld L, et al. ``Reducing the laboratory cost of false-
positive blood cultures in the adult emergency department.'' Poster
presented at: IHI National Forum on Quality Improvement in
Healthcare (2016).
---------------------------------------------------------------------------
The applicant submitted a poster, Lanteri C, et al.,\584\ with
preliminary data and a paper, Huss, J, et al.,\585\ that includes all
of the poster data with additional data gathered. This prospective
controlled study at Brooke Army Medical Center showed that
Steripath[supreg] Gen2 ISDD[supreg] implementation reduced blood
culture contamination rate by 91.7 percent from September 2015 through
January 2016, and 89.7 percent from September 2015 through March 2016
when compared to conventional methods of sample acquisition.
---------------------------------------------------------------------------
\584\ Lanteri C, et al. ``Reduction of Blood Culture
Contaminations in the Emergency Department.'' Poster presented at:
Department of Defense Healthcare Quality and Safety Awards (2016).
\585\ Huss, Jody L, et al. ``Reducing Blood Culture
Contamination with the Steripath[supreg] Blood Collection Kit.''
Uniformed Services University, 2016
---------------------------------------------------------------------------
The applicant submitted the Rupp M, et al.\586\ paper, which is a
12-month, single center, prospective, controlled, open label trial.
Investigators at the University of Nebraska Medical Center emergency
department seeking to gauge the efficacy of the Steripath[supreg] Gen2
ISDD[supreg] without confounding variables conducted a matched-set
controlled study and found that Steripath[supreg] implementation
reduced their blood culture contamination rate by 87.6 percent when
compared to conventional methods of sample acquisition.
---------------------------------------------------------------------------
\586\ Rupp M, et al. ``Reduction in blood culture contamination
through use of initial specimen diversion device.'' Clinical
Infectious Diseases 65.2 (2017): 201-205.
---------------------------------------------------------------------------
The applicant submitted the Stonecypher K, et al.\587\ 8 week pilot
study, which showed that investigators at the Michael E. DeBakey VA
Medical Center emergency department found that Steripath[supreg] Gen2
ISDD[supreg] implementation reduced their blood culture contamination
rate by 83.1 percent when compared to conventional methods of sample
acquisition.
---------------------------------------------------------------------------
\587\ Stonecypher K, et al. ``ER Pilot Leads to Hospital-wide
Implementation of Blood Culture Device'' Poster presented at:
Emergency Nurses Association Annual Conference (2018)
---------------------------------------------------------------------------
The applicant submitted the Tompkins L, et al.\588\ abstract, which
showed that investigators seeking to lower the blood culture
contamination rate at Stanford Health Care found that Steripath[supreg]
Gen2 ISDD[supreg] implementation reduced their blood culture
contamination rate by 100 percent over a 4-month period when compared
to conventional methods of sample acquisition. According to the
applicant, full results are anticipated but not presently published.
---------------------------------------------------------------------------
\588\ Tompkins L, et al. ``Eliminating Blood Culture
Contamination with an Initial-Specimen Diversion Device'' Abstract
presented at: IDWeek (2020).
---------------------------------------------------------------------------
The applicant submitted the Tongma C, et al.\589\ prospective
controlled study, which showed that investigators seeking to lower the
blood culture contamination rate at Rush University Medical Center
emergency department found that Steripath[supreg] Gen2 ISDD[supreg]
implementation reduced their blood culture contamination rate by 87.0
percent when compared to conventional methods of sample acquisition.
The 6-month study was split into an initial 3 months of usual care and
a subsequent 3 months using the Steripath[supreg] Gen2 ISDD[supreg].
---------------------------------------------------------------------------
\589\ Tongma C, et al. ``Significant Reduction of Blood Culture
Contamination in the Emergency Department (ED) Using the
Steripath[supreg] Blood Diversion Device.'' Poster presented:
Infectious Diseases Society of America IDWeek Conference, Fall
(2017).
---------------------------------------------------------------------------
The applicant provided the following studies to support secondary
claims of substantial clinical improvement:
The applicant submitted the Buchta C, et al.\590\ animal (pig)
model study, in which investigators hypothesized that despite proper
skin antiseptic use, contamination may occur because flora from deeper
regions (such as pores) are not effectively eliminated. The applicant
stated that results confirmed the hypothesis that cannula may cause
tissue fragments to be punched in the process of blood sample
acquisition, supporting the mechanism by which Steripath[supreg] Gen2
ISDD[supreg] primarily addresses blood culture contamination (that is,
diversion).
---------------------------------------------------------------------------
\590\ Buchta C, et al. Skin plugs in phlebotomy puncture for
blood donation. Wiener klinische Wochenschrift 117.4 (2005): 141-
144.
---------------------------------------------------------------------------
The applicant submitted the Rhee C, et al.\591\ retrospective
cohort study, which featured adult patients admitted to 409 academic,
community, and Federal hospitals from 2009-2014. Investigators sought
to estimate national sepsis incidence and trends, concluding that
sepsis was present in 6 percent of adult hospitalizations and 35
percent of hospitalizations resulting in death. According to the
applicant, this helps put into context the role of Steripath[supreg]
ISDD[supreg] in improving the efficacy of the primary tool used to
guide therapy for bloodstream infections: blood culture.
---------------------------------------------------------------------------
\591\ Rhee C, et al. Incidence and trends of sepsis in US
hospitals using clinical vs claims data, 2009-2014. JAMA 318.13
(2017): 1241-1249.
---------------------------------------------------------------------------
The applicant submitted the Zimmerman F, et al.\592\ paper (a
randomized clinical trial) and the Binkhamis K and Forward K \593\
paper (a prospective controlled study), which demonstrated that manual
diversion reduced blood culture contamination rate by 60.0 percent and
28.2 percent, respectively, when compared to conventional methods of
sample acquisition.
---------------------------------------------------------------------------
\592\ Zimmerman F, et al. Modification of blood test draw order
to reduce blood culture contamination: a randomized clinical trial.
Clinical Infectious Diseases 71.5 (2020): 1215-1220.
\593\ Binkhamis K and Forward K. Effect of the initial specimen
diversion technique on blood culture contamination rates. Journal of
Clinical Microbiology 52.3 (2014): 980-981.
---------------------------------------------------------------------------
The applicant also submitted the Patton R and Schmitt T \594\
prospective controlled study, which showed that investigators seeking
to trial manual diversion of 1 mL to lower the blood culture
contamination rate at the Northwest Hospital and Medical Center
Emergency Department found that manual diversion reduced their blood
culture contamination rate by 43.8 percent when compared to
conventional methods of sample acquisition. The applicant further
stated that the findings additionally support the volume of diversion
utilized by Steripath[supreg] Micro\TM\ ISDD[supreg].
---------------------------------------------------------------------------
\594\ Patton R and Schmitt T. Innovation for reducing blood
culture contamination: initial specimen diversion technique. Journal
of Clinical Microbiology 48.12 (2010): 4501-4503.
---------------------------------------------------------------------------
[[Page 25320]]
The applicant also submitted the Syed S, et al.\595\
preintervention and postintervention study, which showed that
investigators at the AMITA Health Saint Francis Hospital Emergency
Department found that manual diversion reduced their blood culture
contamination rate by 30.9 percent when compared to conventional
methods of sample acquisition.
---------------------------------------------------------------------------
\595\ Syed S, et al. Diversion Principle Reduces Skin Flora
Contamination Rates in a Community Hospital. Archives of Pathology &
Laboratory Medicine 144.2 (2020): 215-220.
---------------------------------------------------------------------------
According to the applicant, the findings from these four studies
support the claim that manual diversion reduces the risk of blood
culture contamination relative to conventional methods of sample
acquisition. We note that these studies discussed manual diversion and
not Steripath[supreg] Micro\TM\ or other diversion devices.
The applicant submitted the Alahmadi Y, et al.\596\ study, which is
a retrospective case-control study that showed that false positive
blood cultures were associated with an average 5.4 day increase in
patient length of stay and average increases of more than $7,500 in
total charges to a healthcare system. The applicant also submitted the
Bates D, et al.,\597\ which is a prospective controlled study that
showed false positive blood cultures were associated with an average of
a 4.5 day increase in patient length of stay and average increases of
more than $4,000 in total charges to a healthcare system. According to
the applicant, investigators also noted that contaminants were
independently correlated with a 39 percent increase in antibiotic
charges.
---------------------------------------------------------------------------
\596\ Alahmadi Y, et al. Clinical and economic impact of
contaminated blood cultures within the hospital setting. Journal of
Hospital Infection 77.3 (2011): 233-236.
\597\ Bates D, et al. Contaminant blood cultures and resource
utilization: the true consequences of false-positive results. JAMA
265.3 (1991): 365-369.
---------------------------------------------------------------------------
The applicant provided a study to support its claim that the
Steripath[supreg] ISDD[supreg] reduces the average length of stay for
patients requiring blood culture, thereby lowering their risk of
hospital-acquired infections (HAI) and conditions (HAC). The applicant
explained that the Skoglund E, et al.\598\ decision tree health care
economic model paper showed that investigators found that overall, each
false positive blood culture was on average associated with 2 day
increases in patient length of stay and an average increase of more
than $4,500 in total charges to a healthcare system. According to the
applicant, Steripath[supreg] ISDD[supreg] implementation may reduce
costs associated with contamination and reduce the average patient
length of stay.
---------------------------------------------------------------------------
\598\ Skoglund E, et al. Estimated clinical and economic impact
through use of a novel blood collection device to reduce blood
culture contamination in the emergency department: a cost-benefit
analysis.
Journal of Clinical Microbiology 57.1 (2019).
---------------------------------------------------------------------------
The applicant provided four studies to support its claim that
Steripath[supreg] ISDD[supreg] reduces the inappropriate administration
of vancomycin and other antibiotics to drive antibiotic stewardship.
The applicant submitted the Chang D, et al.\599\ poster, a
retrospective, nonrandomized study that recorded the San Antonio
Military Medical Center Emergency Department's days of therapy (DOT) of
vancomycin for 18 months as a baseline. Then, the hospital implemented
a new blood culture test, and recorded the DOT of vancomycin for 7
months. Subsequently, the hospital implemented the Steripath[supreg]
Gen2 device and recorded the DOT of vancomycin for an additional 14
months to complete the 39-month trial. Investigators found that
Steripath[supreg] Gen2 ISDD[supreg] implementation reduced vancomycin
days of therapy by 14.4 days per 1,000 patient days when compared to
conventional methods of sample acquisition. According to the applicant,
findings from the study, as reported by the study authors, support the
claim that Steripath[supreg] ISDD[supreg] reduces the unnecessary
administration of antibiotics by reducing the rate of false positive
blood cultures.
---------------------------------------------------------------------------
\599\ Chang D, et al. ``Impact of blood culture diversion device
on molecular pathogen identification on vancomycin use.'' Poster
presented at: Society for Healthcare Epidemiology of America (2017).
---------------------------------------------------------------------------
The applicant also submitted the Souvenir D, et al.\600\ cohort
study of 3,276 cultures of blood from 1,433 patients in which
investigators found that physicians treated almost half of all patients
receiving a false positive blood culture result with antibiotics, with
vancomycin misuse occurring in 34 percent of patients. The applicant
also submitted the Heijden Y, et al.\601\ study in which investigators
found that physicians treated 27% of patients receiving a false
positive blood culture result with antibiotics unnecessarily, with the
median antibiotic regimen being 7 days in length. The applicant also
submitted the Bates study,\602\ as discussed previously, which showed
contaminants were independently correlated with a 39 percent increase
in antibiotic charges.
According to the applicant, as Steripath[supreg] ISDD[supreg] is
designed to reduce the incidence of blood culture contamination,
Steripath[supreg] ISDD[supreg] implementation may reduce unnecessary
antibiotic administration while supporting antimicrobial stewardship.
---------------------------------------------------------------------------
\600\ Souvenir D, et al. Blood cultures positive for coagulase-
negative staphylococci: antisepsis, pseudobacteremia, and therapy of
patients. Journal of Clinical Microbiology 36.7 (1998): 1923-1926.
\601\ Heijden, Yuri F., et al. ``Clinical impact of blood
cultures contaminated with coagulase-negative staphylococci at an
academic medical center.'' Infection Control and Hospital
Epidemiology 32.6 (2011): 623.
\602\ Bates D, et al. Contaminant blood cultures and resource
utilization: the true consequences of false-positive results. JAMA
265.3 (1991): 365-369
---------------------------------------------------------------------------
We have the following concerns regarding the substantial clinical
improvement criterion. We note that much of the evidence submitted by
the applicant to support that Steripath[supreg] Micro\TM\ represents a
substantial clinical improvement over existing technologies speaks to
the overall clinical value of reducing blood contamination, or the
benefit of manual diversion over no diversion, but does not directly
link the Steripath[supreg] Micro\TM\ to improved clinical endpoints. We
note that the applicant stated that all of the studies provided that
address the specific technology used to reduce blood contamination
through diversion of the initial sample during blood collection
utilized the Steripath[supreg] Gen2 ISDD[supreg], not the
Steripath[supreg] Micro\TM\ ISDD[supreg] and we therefore question
whether we have sufficient information to assess the clinical impact of
Steripath[supreg] MicroTM. Furthermore, the applicant did
not present any clinical data to compare Steripath[supreg] Micro\TM\
ISDD[supreg] to the Steripath[supreg] Gen2 ISDD[supreg]. We also note
that comparative studies between Steripath[supreg] Micro\TM\ and either
manual diversion or competitor devices were not provided, and we
question whether the standard of care used in the studies (that is, no
diversion) is an appropriate comparator against which to test this
technology. Additionally, we note that the applicant did not provide
any clinical data demonstrating that the Steripath[supreg] Micro\TM\
directly reduced length of stay, C. difficile infections, or other
secondary results of antibiotic overuse. We are interested in any
clinical data that directly links the Steripath[supreg] Micro\TM\ to
these outcomes.
Finally, we note that the claim of gentle negative pressure in
support of the applicant's assertion that the technology would provide
a treatment option for a new patient population was not addressed by
any of the studies submitted. In addition, no data was supplied that
quantified appropriate levels of negative pressure for either the
[[Page 25321]]
typical or DIVA populations. Furthermore, no data was provided which
compared the asserted appropriate level of negative pressure to levels
of negative pressure created by the Steripath[supreg] Micro\TM\ and
Steripath[supreg] Gen2 devices. We are interested in any evidence of
clinical improvement using the Steripath[supreg] Micro\TM\ ISDD[supreg]
in the specific population identified by the applicant, the difficult
intravenous access population.
We are inviting public comments on whether the Steripath[supreg]
Micro\TM\ ISDD[supreg] meets the substantial clinical improvement
criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
Steripath[supreg] Micro\TM\ ISDD[supreg].
q. StrataGraft\TM\ Skin Tissue
Stratatech Corporation, a Mallinckrodt company, submitted an
application for new technology add-on payments for the StrataGraft\TM\
skin tissue (``StrataGraft'') for topical application for FY 2022. The
applicant describes StrataGraft\TM\ skin tissue as a viable,
bioengineered, regenerative skin construct (BRSC) consisting of an
epidermal layer of viable, fully stratified, allogeneic human
NIKS[supreg] \603\ keratinocytes growing on a dermal layer composed of
viable human dermal fibroblasts embedded in a collagen-rich matrix. The
applicant noted that StrataGraft\TM\ is intended for the treatment of
adult patients with severe thermal burns that contain intact dermal
elements and require surgical intervention (hereinafter referred to as
severe thermal burns [STB]). The applicant stated that StrataGraft\TM\
skin tissue is produced in a rectangular format of approximately 100
cm\2\, approximately 8 cm by 12.5 cm.
---------------------------------------------------------------------------
\603\ Registered trademark of Stratatech Corporation, Madison,
WI
---------------------------------------------------------------------------
The applicant explained that the StrataGraft\TM\ skin tissue
promotes durable wound closure and regenerative healing for adult
patients with STB. The applicant stated that in addition to providing
immediate wound coverage and epidermal barrier function, the viable and
metabolically active keratinocytes and fibroblasts in StrataGraft\TM\
skin tissue provide sustained expression and secretion of growth
factors, cytokines, and wound healing factors, which are anticipated to
promote regenerative healing. The applicant stated that the
StrataGraft\TM\ skin tissue does not engraft; rather, it promotes
regenerative healing and is replaced by the patient's own cells,
eliminating the need for autografting to attain definitive closure of
treated wounds.
The applicant explained that a thermal burn is the most common type
of burn injury and accounts for approximately 86 percent of burn
cases.\604\ The applicant noted that burns are classified according to
the depth of tissue injury as superficial (first-degree burns),
partial-thickness (superficial and deep partial-thickness; second-
degree burns), full-thickness (FT, third-degree burns), and fourth-
degree burns (burns that have injured deeper structures such as muscle,
fascia, and bone).605 606 The applicant also noted the
percentage of total body surface area (TBSA) determines burn severity
and directly correlates with mortality.\607\
---------------------------------------------------------------------------
\604\ Schaefer TJ, Tannan SC. Thermal Burns. [Updated 2020 Jun
7]. In: StatPearls [internet]. Treasure Island (FL): StatPearls
Publishing; 2020 Jan-. https://www.ncbi.nlm.nih.gov/books/NBK430773//.
\605\ Kagan RJ, Peck MD, Ahrenholz DH, et al. Surgical
management of the burn wound and use of skin substitutes: an expert
panel white paper. J Burn Care Res. 2013;34(2):e60-e79.
\606\ Rice PL, Orgill DP. Assessment and classification of burn
injury. UpToDate. https://www.uptodate.com/contents/assessment-and-classification-of-burn-injury. Literature review current through
September 2020. Accessed September 25, 2020.
\607\ Girard D, Laverdet B, Buh[eacute] V, et al.
Biotechnological Management of Skin Burn Injuries: Challenges and
Perspectives in Wound Healing and Sensory Recovery. Tissue Eng Part
B Rev. 2017;23(1):59-82.
---------------------------------------------------------------------------
The applicant stated that in the U.S., approximately 500,000 burn
injuries receive emergency medical treatment each year, leading to
40,000 burn injury hospitalizations with 30,000 at hospital burn
centers.608 609 The applicant noted that children and the
elderly represent especially vulnerable populations at increased risk
for death due to the skin loss and its complications.\610\ The
applicant explained that in 2013, the rate of burn-related hospital
stays was highest for infants aged younger than 1 year (29.6 per
100,000 population) and older adults (20.7 per 100,000 population for
adults aged 65-84 and 26.3 per 100,000 population for adults aged 85
and older).\611\ The applicant also stated that unintentional fire or
burn injuries was the 8th leading cause of death in those 65 years or
older.\612\
---------------------------------------------------------------------------
\608\ Burn Injury Fact Sheet. American Burn Association. https://ameriburn.org/wp-content/uploads/2017/12/nbawfactsheet_121417-1.pdf. Published February 2018. Accessed July 1, 2020
\609\ HCUPnet, Healthcare Cost and Utilization Project. Agency
for Healthcare Research and Quality, Rockville, MD. https://hcupnet.ahrq.gov/. Accessed June 5, 2019.
\610\ Burn Injury Fact Sheet. American Burn Association. https://ameriburn.org/wp-content/uploads/2017/12/nbawfactsheet_121417-1.pdf. Published February 2018. Accessed July 1, 2020.
\611\ McDermott KW, Weiss AJ, Elixhauser A. Burn-Related
Hospital Inpatient Stays and Emergency Department Visits, 2013:
Statistical Brief #217. 2016 Dec. In: Healthcare Cost and
Utilization Project (HCUP) Statistical Briefs [internet]. Rockville
(MD): Agency for Healthcare Research and Quality (US); 2006 Feb.
https://www.ncbi.nlm.nih.gov/books/NBK409513/. Accessed September
30, 2020.
\612\ Burn Injury Fact Sheet. American Burn Association. https://ameriburn.org/wp-content/uploads/2017/12/nbawfactsheet_121417-1.pdf. Published February 2018. Accessed July 1, 2020
---------------------------------------------------------------------------
The applicant explained that today, 96.7 percent of burn patients
treated in burn centers will survive. The applicant noted that many of
those survivors will sustain serious scarring and life-long physical
disabilities.\613\ The applicant stated that burn injuries pose a
significant burden to patients; they can have a considerably negative
effect on the patient's health-related quality of life (HRQoL), which
was estimated to be reduced by 30 percent at the time of injury and by
9 percent in the long term.\614\ The applicant explained that although
most functional domains affected by burn injuries recover over time,
HRQoL scores pertaining to physical and emotional role participation,
anxiety, depression, pain, work, and heat sensitivity remained low at
12 months after the injury.\615\
---------------------------------------------------------------------------
\613\ Burn Injury Fact Sheet. American Burn Association. https://ameriburn.org/wp-content/uploads/2017/12/nbawfactsheet_121417-1.pdf. Published February 2018. Accessed July 1, 2020.
\614\ Miller T, Bhattacharya S, Zamula W, et al. Quality-of-life
loss of people admitted to burn centers, United States. Qual Life
Res. 2013;22(9):2293-2305.
\615\ Spronk I, Legemate C, Oen I, van Loey N, Polinder S, van
Baar M. Health related quality of life in adults after burn
injuries: A systematic review. PLoS One. 2018;13(5):e0197507.
Published 2018 May 24.
---------------------------------------------------------------------------
The applicant explained that the standard of care for STB injuries
is early excision and skin grafting. 616 617 618 The
applicant noted that common surgical interventions for burn injury
include: escharotomy, debridement, excision, and skin grafting.\619\
The applicant explained that these burns have been treated with
autografts, allografts, and xenografts in the past. The applicant
stated that autologous grafts (autografts) are used most frequently
because of the
[[Page 25322]]
problems of infection and rejection when using allografts or
xenografts.\620\
---------------------------------------------------------------------------
\616\ Bittner EA, Shank E, Woodson L, Martyn JA. Acute and
perioperative care of the burn-injured patient. Anesthesiology.
2015;122(2):448-464.
\617\ Girard D, Laverdet B, Buh[eacute] V, et al.
Biotechnological Management of Skin Burn Injuries: Challenges and
Perspectives in Wound Healing and Sensory Recovery. Tissue Eng Part
B Rev. 2017;23(1):59-82.
\618\ Ibid.
\619\ Kagan RJ, Peck MD, Ahrenholz DH, et al. Surgical
management of the burn wound and use of skin substitutes: an expert
panel white paper. J Burn Care Res. 2013;34(2):e60-e79.
\620\ Shevchenko RV, James SL, James SE. A review of tissue-
engineered skin bioconstructs available for skin reconstruction. J R
Soc Interface. 2010;7(43):229-258.
---------------------------------------------------------------------------
The applicant explained that autografting involves surgical
harvesting of healthy tissue from the patient (donor site) and
transplantation of this skin to an injured site on the same
patient.\621\ The applicant noted that autografts can be harvested as
split thickness or full thickness. According to the applicant, split-
thickness skin grafts (STSGs), also called partial-thickness grafts,
transfer a portion of the donor site skin, including the epidermis and
some of the underlying dermis. The applicant also explained that this
allows the donor site to heal from the epidermal elements left behind.
The applicant also stated that full-thickness skin grafts (FTSGs)
harvest the entire layer of skin as the graft; no dermal or epidermal
elements remain at the donor site, which must be closed by local
advancement of the adjoining skin or by a secondary local flap. The
applicant stated that the process of revascularization takes longer for
an FTSG than for an STSG because of the increased thickness of the
tissue.\622\
---------------------------------------------------------------------------
\621\ Girard D, Laverdet B, Buh[eacute] V, et al.
Biotechnological Management of Skin Burn Injuries: Challenges and
Perspectives in Wound Healing and Sensory Recovery. Tissue Eng Part
B Rev. 2017;23(1):59-82.
\622\ Leon-Villapalos J. Skin autografting. UpToDate. https://www.uptodate.com/contents/skin-autografting. Literature review
current through September 2020. Accessed October 1, 2020.
---------------------------------------------------------------------------
The applicant explained that early excision and skin grafting
reduce the chance of wound infections and systemic sepsis, and have
become the standard of care.623 624 625 The applicant noted
that without autografting, an STB that contains some dermal elements
usually requires greater than 3 weeks to heal, thereby increasing the
risk for infection and other complications that may lead to the
development of significant scarring and
contracture.626 627 628 The applicant stated that while STBs
require surgical debridement and grafting, superficial first-degree
burns do not; \629\ however, in the acute phase of the burn injury, the
clinical presentation of the severely injured burn patient usually
involves a range of burn depths from a superficial burn to a FT
burn.\630\
---------------------------------------------------------------------------
\623\ Bittner EA, Shank E, Woodson L, Martyn JA. Acute and
perioperative care of the burn-injured patient. Anesthesiology.
2015;122(2):448-464.
\624\ Girard D, Laverdet B, Buh[eacute] V, et al.
Biotechnological Management of Skin Burn Injuries: Challenges and
Perspectives in Wound Healing and Sensory Recovery. Tissue Eng Part
B Rev. 2017;23(1):59-82
\625\ Id.
\626\ Deitch EA, Wheelahan TM, Rose MP, Clothier J, Cotter J.
Hypertrophic burn scars: analysis of variables. J Trauma.
1983;23(10):895-898.
\627\ Kagan RJ, Peck MD, Ahrenholz DH, et al. Surgical
management of the burn wound and use of skin substitutes: an expert
panel white paper. J Burn Care Res. 2013; 34(2):e60-79.
\628\ Shupp JW, Nasabzadeh TJ, Rosenthal DS, Jordan MH, Fidler
P, Jeng JC. A review of the local pathophysiologic bases of burn
wound progression. J. Burn Care Res. 2010; 31(6):849-873.
\629\ Bittner EA, Shank E, Woodson L, Martyn JA. Acute and
perioperative care of the burn-injured patient. Anesthesiology.
2015;122(2):448-464.
\630\ Ibid.
---------------------------------------------------------------------------
The applicant explained that although autografting is effective in
closing wounds and has been a standard treatment for decades, it has
limitations. The applicant stated that donor sites are often associated
with several complications, including excessive pain, pruritus,
infection, dyschromia, hypertrophic scarring, delayed healing, and the
potential for conversion to a FT wound.\631\ The applicant also noted
that donor-site pain is typically more painful than that in the
treatment (burned) site and may become chronic.632 633 In
patients with burns of 50-60 percent TBSA, autograft is limited by
donor-site availability.\634\ The applicant explained that donor sites
may be re-harvested if they heal in time without infection; however,
this practice can lead to prolonged hospitalization and decreased
quality of the skin from re-harvested sites. The applicant stated that
after patients undergo skin grafting, in the long term, both the
grafted wound site and the donor site require continuous physical and
rehabilitative therapy to maintain the range of movement, minimize scar
and contracture development, and maximize functional ability.\635\
---------------------------------------------------------------------------
\631\ 4 Osborne SN, Schmidt MA, Harper JR. An Automated and
Minimally Invasive Tool for Generating Autologous Viable Epidermal
Micrografts. Adv Skin Wound Care. 2016;29(2):57-64.
\632\ Birchall MA, Varma S, Milward TM. The Moriarty sign: an
appraisal. Br J Plast Surg. 1991;44(2):149-150.
\633\ Sinha S, Schreiner AJ, Biernaskie J, et al. Treating pain
on skin graft donor sites. J. Trauma Acute Care Surg. 2017;83(5)954-
964.
\634\ Girard D, Laverdet B, Buh[eacute] V, et al.
Biotechnological Management of Skin Burn Injuries: Challenges and
Perspectives in Wound Healing and Sensory Recovery. Tissue Eng Part
B Rev. 2017;23(1):59-82.
\635\ Procter F. Rehabilitation of the burn patient. Indian J
Plast Surg. 2010;43(Suppl):S101-S113.
---------------------------------------------------------------------------
The applicant noted that autografting is especially undesirable in
vulnerable patient populations, such as the elderly. The applicant
stated that the healing of donor sites may be delayed or even lacking
in elderly patients or patients whose wound-healing capabilities are
compromised.\636\ The applicant explained that because patients in
these populations have thinner dermis and epidermis than non-elderly
adults,637 638 there is a higher likelihood that the donor
sites will go deep into the dermis during harvest or transform into FT
wounds with their anatomical characteristics. The applicant stated that
these patients are disproportionately affected and are at increased
risk for death due to the skin loss and its complications.\639\ The
applicant also noted that the American College of Surgeons (ACS)
developed guidelines to educate surgeons and other medical
professionals about the significance of older adult burns and evidence-
based prevention activities.\640\
---------------------------------------------------------------------------
\636\ Bradow BP, Hallock GG, Wilcock SP. Immediate Regrafting of
the Split Thickness Skin Graft Donor Site Assists Healing. Plast
Reconstr Surg Glob Open. 2017;5(5):e1339. Published 2017 May 23.
\637\ King A, Balaji S, Keswani SG. Biology and function of
fetal and pediatric skin. Facial Plast Surg Clin North Am.
2013;21(1):1-6.
\638\ Wainwright DJ, Bury SB. Acellular dermal matrix in the
management of the burn patient. Aesthet Surg J. 2011;31(7
Suppl):13S-23S.
\639\ Greenhalgh DG. Management of the skin and soft tissue in
the geriatric surgical patient. Surg Clin North Am. 2015;95(1):103-
114
\640\ Statement on Older Adult Burn Prevention. American College
of Surgeons (ACS). https://www.facs.org/aboutacs/statements/81-older-adult-burn. Published January 1, 2018. Accessed September 26,
2020.
---------------------------------------------------------------------------
The applicant stated that burn injuries result in substantial
economic burden for healthcare systems and society. The applicant noted
the average total hospital charges for a surviving patient with burns
was estimated to be $98,062 and a patient who did not survive burns was
estimated at $309,546.\641\ For patients undergoing inpatient
autografting, the applicant asserted that significant healthcare costs
were observed during the first year, including per patient mean all-
cause healthcare costs which ranged from $155,272 to $184,805.\642\ The
applicant explained that the primary cost driver in the first year was
the cost incurred from the initial inpatient episode with autografting,
accounting for 85 percent of the total costs.\643\
---------------------------------------------------------------------------
\641\ American Burn Association. National Burn Repository 2019
update. 2019.
\642\ Yu TC, Zhang X, Smiell J, Zhou H, Tan R, Boing E, Tan H.
Healthcare resource utilization, treatment patterns, and cost of
care among patients with thermal burns and inpatient autografting in
two large privately insured populations in the United States. Burns.
2020;46(4):825-835.
\643\ Ibid.
---------------------------------------------------------------------------
The applicant stated that there is currently no skin replacement
product approved or available that leads to durable wound closure while
[[Page 25323]]
eliminating the need for harvesting an autograft.644 645
---------------------------------------------------------------------------
\644\ Kagan RJ, Peck MD, Ahrenholz DH, et al. Surgical
management of the burn wound and use of skin substitutes: an expert
panel white paper. J Burn Care Res. 2013;34(2):e60-e79.
\645\ Carter JE, Holmes JH. The Surgical Management of Burn
Wounds. 2016.
---------------------------------------------------------------------------
The applicant explained that skin substitutes are a heterogeneous
group of biologic, synthetic, or biosynthetic materials that can
provide temporary or permanent coverage of open skin wounds. The
applicant stated that the aim of skin substitutes is to replicate the
properties of the normal skin,\646\ and to provide the protective
barrier function until definitive closure of the skin.\647\ The
applicant noted that synthetic skin substitutes need to be removed or
undergo biodegradation or resorption so the skin can heal and
regenerate.\648\ The applicant also stated that biological skin
substitutes have an architecture that resembles native skin and may
allow the construction of a more natural new dermis.\649\
---------------------------------------------------------------------------
\646\ Shahrokhi S. Skin substitutes. UpToDate. https://www.uptodate.com/contents/skin-substitutes. Literature review
current through August 2020.
\647\ MacNeil S. Progress and opportunities for tissue-
engineered skin. Nature 2007;445(7130)874-880.
\648\ Halim A, Khoo T, Shah JY. Biologic and synthetic skin
substitutes: An overview. Indian J. Plast. Surg. 2010;43(3)23
\649\ Ibid. Halim A, Khoo T, Shah JY. Biologic and synthetic
skin substitutes: An overview. Indian J. Plast. Surg. 2010;43(3)23.
---------------------------------------------------------------------------
The applicant explained that skin substitutes are an important
adjunct in the management of acute or chronic wounds and can be used to
cover defects following burns or other injuries, or for reconstruction,
such as for release of extensive severe post-burn
contractures.650 651 The applicant also stated that Kumar's
3-category system, as shown in the table that follows, is currently the
most frequently used classification system in the field. However, the
applicant notes that there is no universally accepted classification
system that allows for simple categorization of all the products that
are commercially available.\652\ The applicant stated that several
biologic and biosynthetic materials are currently used as skin
substitutes to temporarily cover wounds. The applicant provided the
following table which, according to the applicant, classifies skin
substitutes according to Kumar (2008) and summarizes the applicant's
assertions regarding existing skin substitute products.
---------------------------------------------------------------------------
\650\ Shahrokhi S. Skin substitutes. UpToDate. https://www.uptodate.com/contents/skin-substitutes. Literature review
current through August 2020.
\651\ Leon-Villapalos J. Skin autografting. UpToDate. https://www.uptodate.com/contents/skin-autografting. Literature review
current through September 2020. Accessed October 1, 2020.
\652\ Shahrokhi S. Skin substitutes. UpToDate. https://www.uptodate.com/contents/skin-substitutes. Literature review
current through August 2020. Accessed September 25, 2020.
\653\ Kumar P. Classification of skin substitutes. Burns.
2008;34(1):148-149.
[GRAPHIC] [TIFF OMITTED] TP10MY21.178
The applicant stated that StrataGraft\TM\ skin tissue is a novel
BRSC which possesses many of the physical and biological properties of
an ideal skin substitute, including both epidermis and dermis with a
barrier function comparable to that of intact human skin.\654\ The
applicant asserted that upon FDA approval, StrataGraft\TM\ skin tissue
will be the only skin substitute for treatment of STB classified by the
FDA as a biologic (as
[[Page 25324]]
opposed to other available treatments that are medical devices) that
promotes durable wound closure and regenerative healing, thereby
reducing or eliminating the need of autologous skin harvesting.
According to the applicant, on June 5, 2020, Mallinckrodt finalized the
rolling submission of a Biologics License Application (BLA) to the FDA
seeking approval to market StrataGraftTM skin tissue for the
treatment of adult patients with STB. Currently, there are no ICD-10-
PCS procedure codes to uniquely identify procedures involving
StratagraftTM. We note that the applicant submitted a
request for approval for a unique ICD-10-PCS code for the use of
StratagraftTM beginning FY 2022.
---------------------------------------------------------------------------
\654\ Schurr MJ, Foster KN, Centanni JM, et al. Phase I/II
clinical evaluation of StrataGraft: a consistent, pathogen-free
human skin substitute. J Trauma. 2009;66(3):866-874.
---------------------------------------------------------------------------
The applicant explained that StrataGraft\TM\ skin tissue is a
viable BRSC that may be applied universally to patients, that is, it is
not a patient-specific product. The applicant stated that the active
cellular components of StrataGraft\TM\ skin tissue are the viable and
metabolically active allogeneic human NIKS[supreg] keratinocytes and
normal human dermal fibroblasts (NHDF).
The applicant noted that StrataGraft\TM\ skin tissue comprises an
epidermal layer and a dermal layer. The applicant explained that the
epidermal layer of StrataGraft\TM\ skin tissue is composed of
differentiated, multilayered, viable epidermal keratinocytes that are
adherent through normal hemidesmosomes to a dermal equivalent.\655\ The
applicant stated that human epidermal keratinocytes used are
NIKS[supreg] keratinocytes, a continuous and consistent source of well-
characterized, non-tumorigenic, long-lived keratinocyte precursors that
are derived from a single neonatal human foreskin donor. The applicant
asserted that NIKS[supreg] keratinocytes have normal steady state of
messenger ribonucleic acid (mRNA) and protein expression levels for
autocrine regulators and growth factors such as transforming growth
factor (TGF)-[alpha], TGF-[beta]1, epidermal growth factor, and c-myc,
providing further evidence of the normal function of these cells.\656\
The applicant also explained that NIKS[supreg] keratinocytes produce
normal adhesion proteins (example, integrins and cadherins) that permit
tight adherence to each other and the dermal equivalent.\657\ The
applicant stated that cell-cell and cell-substratum adhesions confer
excellent handling characteristics to StrataGraft\TM\ skin tissue,
enabling it to be meshed and secured in place as is routinely done with
STSGs. The applicant noted that the dermal layer of StrataGraft\TM\
skin tissue contains NHDF derived from a single healthy tissue donor.
---------------------------------------------------------------------------
\655\ Schurr MJ, Foster KN, Centanni JM, et al. Phase I/II
clinical evaluation of StrataGraft skin tissue: a consistent,
pathogen-free human skin substitute. J Trauma.
2009;66(3):866[hyphen]874.
\656\ Allen-Hoffmann BL, Schlosser SJ, Ivarie CA, Sattler CA,
Meisner LF, O'Connor SL. Normal growth and differentiation in a
spontaneously immortalized near-diploid human keratinocyte cell
line, NIKS. J Invest Dermatol. 2000;114(3):444-455
\657\ Ibid.
---------------------------------------------------------------------------
The applicant explained that viable cells within StrataGraft\TM\
skin tissue express and secrete a wide variety of peptides, growth
factors, and cytokines that are known to promote healing, thereby
reducing or eliminating the need for autograft in the management of
thermal burns.\658\ The applicant also stated that no currently
available technology (competitor) for the treatment of STB is
characterized by the autologous (endogenous) tissue regeneration of the
burned skin.
---------------------------------------------------------------------------
\658\ Harvestine J, Pradhan-Bhatt S, Steiglitz BM, Maher RJ,
Comer AR, Gratz KR, Allen-Hoffmann BL. StrataGraft[supreg] Skin
Tissue, a Bioengineered Regenerative Skin Construct for Severe Acute
Wounds. Poster presented at: 2020 Biomedical Engineering Society
(BMES) Virtual Annual Meeting, October 14-17, 2020.
---------------------------------------------------------------------------
The applicant stated that the StrataGraft\TM\ skin tissue is
manufactured through organotypic culture under aseptic conditions in
compliance with current Good Manufacturing Practices. The applicant
explained that in organotypic culture, NIKS[supreg] keratinocytes
undergo tissue-appropriate differentiation and stratification to
produce a skin tissue that exhibits many of the structural and
biological properties of intact human skin. The applicant noted that
the epidermal layer of StrataGraft\TM\ skin tissue exhibits typical
production and organization of cell-type specific proteins (example,
keratin, filaggrin, involucrin, and transglutaminase), development of a
normal cornified envelope, and production of lipid-filled granules that
are necessary for the generation and maintenance of robust epidermal
barrier function similar to that found in vivo.\659\
---------------------------------------------------------------------------
\659\ Ibid.
---------------------------------------------------------------------------
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, the mechanism of action of StrataGraft\TM\
skin tissue in severe thermal burns is not the same or similar to an
existing technology. The applicant states that StrataGraft\TM\ skin
tissue will be the first and only FDA-approved biologic for the
treatment of STB that reduces or eliminates the need of autograft and
for which the mechanism of action is a sustained expression and
secretion of growth factors, cytokines, and wound healing factors,
which are anticipated to promote regenerative healing and durable wound
closure.660 661 The applicant explains that this unique
mechanism of action is the reason StrataGraft\TM\ skin tissue reduces
or eliminates the need for harvest of donor site tissue.
---------------------------------------------------------------------------
\660\ Proposed prescribing information. for Stratagraft\TM\ skin
tissue;. Submitted to FDA, April 2020.
\661\ Harvestine J, Pradhan-Bhatt S, Steiglitz BM, Maher RJ,
Comer AR, Gratz KR, Allen-Hoffmann BL. StrataGraft[supreg] Skin
Tissue, a Bioengineered Regenerative Skin Construct for Severe Acute
Wounds. Poster presented at: 2020 Biomedical Engineering Society
(BMES) Virtual Annual Meeting, October 14-17, 2020.
---------------------------------------------------------------------------
With respect to the second criterion, whether a product would be
assigned to the same MS-DRGs as existing technologies, the applicant
indicated that the StrataGraft\TM\ skin tissue would be assigned to the
same MS-DRGs as cases representing patients who receive standard of
care (autograft) or existing technologies used to treat STB. The
applicant stated that the MS-DRGs in question do not differentiate
between patients with burns of differential severity degree, in
different body sites, due to thermal injury or corrosion, or with
different percent TBSA involved.\662\
---------------------------------------------------------------------------
\662\ MDC 22 Burns. Non-Extensive Burns. In: ICD-10-CM/PCS MS-
DRG v37.2 Definitions Manual. Centers for Medicare & Medicaid
Services. https://www.cms.gov/icd10m/version372-fullcode-cms/fullcode_cms/P0353.html. Accessed October 1, 2020.
---------------------------------------------------------------------------
With respect to the third criterion, whether a product would be
used to treat the same or similar type of disease and patient
population, the applicant asserted that StrataGraft\TM\ will treat the
same or similar type of disease but not the same or similar patient
population when compared to existing technologies. The applicant
claimed that StrataGraft\TM\ skin tissue will treat a burn patient
population for whom the current standard of care and/or other available
technologies may not be clinically feasible solutions to achieve
durable wound closure. The applicant explains that in patients with
burns of 50-60 percent of the TBSA, donor-site availability is
limited.\663\ The applicant also stated that autografting is especially
[[Page 25325]]
undesirable in vulnerable patient populations, such as the elderly;
healing of donor sites may be delayed or even lacking in elderly
patients or patients whose wound-healing capabilities are
compromised.\664\ The applicant explained that these patients are
disproportionately affected and are at increased risk for death due to
the skin loss and its complications.\665\ The applicant also states
that the label for StrataGraft\TM\ skin tissue will not be reserved for
a patient population diagnosed with STB for whom standard-of-care
treatment is not feasible or clinically desirable. The applicant
asserts that this does not imply that StrataGraft\TM\ skin tissue will
not offer a treatment option to a new patient population.
---------------------------------------------------------------------------
\663\ Girard D, Laverdet B, Buh[eacute] V, et al.
Biotechnological Management of Skin Burn Injuries: Challenges and
Perspectives in Wound Healing and Sensory Recovery. Tissue Eng Part
B Rev. 2017;23(1):59-82.
\664\ Bradow BP, Hallock GG, Wilcock SP. Immediate Regrafting of
the Split Thickness Skin Graft Donor Site Assists Healing. Plast
Reconstr Surg Glob Open. 2017;5(5):e1339. Published 2017 May 23.
\665\ Greenhalgh DG. Management of the skin and soft tissue in
the geriatric surgical patient. Surg Clin North Am. 2015;95(1):103-
114.
---------------------------------------------------------------------------
With respect to the first criterion, we note that there may be
other biologic dressings that use some combination of keratinocytes,
collagen, glycosaminoglycans (GAGs), cytokines, chemokines, and/or
other growth factors in either a single, double, or triple layer
configuration. While StrataGraft\TM\ may have a unique combination of
these features, we are interested in further information on whether
there are any dressings with a regenerative mechanism of action that
may be approved for burns.
With respect to the third criterion, StrataGraft\TM\ may treat the
same or similar patient population as the standard of care or existing
technologies to treat STB. While we agree that in patients with burns
of 50-60 percent of the TBSA, donor-site availability is more limited,
we observe that neither of the two pivotal studies included patients
with burns of 50 percent or greater of the TBSA.\666\ We are unclear
whether this suggests StratagraftTM is intended for
treatment of patients with burns of less than 50 percent TBSA. We also
question whether vulnerable patients, such as the elderly, are a new
population as they are currently treated using standard of care or
other technologies.
---------------------------------------------------------------------------
\666\ Girard D, Laverdet B, Buh[eacute] V, et al.
Biotechnological Management of Skin Burn Injuries: Challenges and
Perspectives in Wound Healing and Sensory Recovery. Tissue Eng Part
B Rev. 2017;23(1):59-82.
---------------------------------------------------------------------------
We are inviting public comments on whether StratagraftTM
is substantially similar to other technologies and whether
StratagraftTM meets the newness criterion.
With regard to the cost criterion, the applicant stated that
StratagraftTM skin tissue is seeking FDA approval for the
proposed indication of treatment of adult patients with STBs that
contain intact dermal elements and require surgical intervention. In
order to identify the range of MS-DRGs that eligible patients may map
to, the applicant conducted a claims search for cases that include ICD-
10-CM codes for thermal burns of second, third degree, or those
classified according to TSBA to identify cases eligible for use of
StratagraftTM skin tissue utilization. The applicant
identified cases reporting ICD-10-CM codes for diagnoses of second-
degree thermal burns, any location (T20.2XXX to T25.2XXX); third-degree
thermal burns, any location (T20.3XXX to T25.3XXX); and thermal burns
classified according to extent of body surface involved (T31.XX).
The applicant used the FY 2019 MedPAR Hospital LDS with the FY 2022
thresholds, and the FY 2019 IPPS/LTCH Final Rule Impact File and
Standardizing File. The appliant's claim search in the aggregate
identified 58,624 cases mapping to 21 MS-DRGs as listed in the
following table. Of the total 21 MS-DRGs, only six had case volume
greater than or equal to one percent across all cohorts and
cumulatively represent 97.54 percent of cases. In cases where MS-DRGs
had fewer than 11 discharges, the applicant imputed a minimum value of
11 cases for each MS-DRG.
[[Page 25326]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.179
To demonstrate that the technology meets the cost criterion, the
applicant first identified four separate patient cohorts: Cohort (1)
Patients with thermal burns of second or third degree in any body area,
or thermal burns classified according to TBSA, who received autograft
for reasons only related to thermal burns (n=14,774, MS-DRGs=21);
Cohort (2) Patients with thermal burns of second or third degree in any
body area, or thermal burns classified according to TBSA, who received
autograft for reasons only related to thermal burns, and who underwent
excisional debridement in the inpatient setting (n= 13,640, MS-
DRGs=20); Cohort (3) Patients with thermal burns of second or third
degree in any body area, or thermal burns classified according to TBSA,
who received autograft for thermal burns, with or without other
conditions (n=15,744, MS-DRGs=21); and Cohort (4) Patients with thermal
burns of second or third degree in any body area, or thermal burns
classified according to TBSA, who received autograft for thermal burns,
with or without other conditions, and who underwent excisional
debridement in the inpatient setting (n= 14,466, MS-DRGs=20). The
applicant then identified eight analyses for the cost criterion: (1)
Calculations for Cohort one (all MS-DRGs); (2) Calculations for cohort
two (all MS-DRGs); (3) Calculations for Cohort three (all MS-DRGs); (4)
Calculations for cohort four (all MS-DRGs); (5) Calculations for Cohort
one (top 4 MS-DRGs by case volume); (6) Calculations for Cohort two
(top 4 MS-DRGs by case volume); (7) Calculations for Cohort three (top
4 MS-DRGs by case volume); and (8) Calculations for Cohort 4 (top 4 MS-
DRGs by case volume).
The applicant determined an average unstandardized case weighted
charge per case of $173,650 for analysis one, $168,282 for analysis
two, $178,530 for analysis three, $172,277 for analysis four, $158,851
for analysis five, $155,700 for analysis six, $162,377 for analysis
seven, and $158,452 for analysis eight.
The applicant stated that charges for and related to the prior
technologies were not removed from the cost analysis.
[[Page 25327]]
After calculating the average standardized charge per case for all
scenarios, the applicant calculated the standardized charge per case
for each MS-DRG. Next, the applicant applied the 2-year inflation
factor used in the FY 2021 IPPS/LTCH PPS final rule to calculate
outlier threshold charges of 13.2 percent (1.13218). The applicant
stated that the price for StratagraftTM skin tissue has not
yet been established and therefore it did not add charges for the
technology. Lastly, the applicant calculated the final average inflated
standardized charge per case and the inflated case weighted
standardized charge per case for each scenario.
The applicant stated that, for analysis one, the final inflated
average case-weighted standardized charge per case of $304,347 exceeded
the average case-weighted threshold amount of $173,650 by $130,697. For
analysis two, the final inflated average case-weighted standardized
charge per case of $279,373 exceeded the average case-weighted
threshold amount of $168,282 by $111,091. For analysis three, the final
inflated average case-weighted standardized charge per case of $332,006
exceeded the average case-weighted threshold amount of $178,530 by
$153,477. For analysis four, the final inflated average case-weighted
standardized charge per case of $299,228 exceeded the average case-
weighted threshold amount of $172,277 by $126,951. For analysis five,
the final inflated average case-weighted standardized charge per case
of $241,186 exceeded the average case-weighted threshold amount of
$158,851 by $82,336. For analysis six, the final inflated average case-
weighted standardized charge per case of $229,661 exceeded the average
case-weighted threshold amount of $155,700 by $73,961. For analysis
seven, the final inflated average case-weighted standardized charge per
case of $257,800 exceeded the average case-weighted threshold amount of
$162,377 by $95,423. For analysis eight, the final inflated average
case-weighted standardized charge per case of $244,042 exceeded the
average case-weighted threshold amount of $158,452 by $85,590.
The applicant stated that because the final inflated average case-
weighted standardized charge per case exceeded the average case-
weighted threshold amount, StratagraftTM meets the cost
criterion.
We invite public comment on whether StratagraftTM meets
the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that StrataGraft\TM\ skin tissue is a substantial
clinical improvement over existing technology for the treatment of
adult patients with severe thermal burns with intact dermal elements
because it achieves a significant rate of durable wound closure for
patients with severe burns while minimizing or eliminating the
complications associated with autograft harvest.
According to the applicant, the totality of the circumstances
otherwise demonstrates that StrataGraft\TM\ skin tissue, relative to
technologies previously available, substantially improves the treatment
of STB patients including Medicare beneficiaries. The applicant stated
that because the benefits associated with its use are not accompanied
by an increased incidence of adverse events as compared to autograft,
StrataGraft\TM\ skin tissue is a substantial clinical improvement.
The applicant explained that by significantly reducing or
eliminating the harvest of donor sites, patients who receive
StrataGraft\TM\ skin tissue are spared short- and long-term sequelae
and complications and, to a lesser extent, infection or conversion to a
full-thickness wound of the donor sites.\667\ The applicant stated that
by significantly reducing or eliminating the need for autograft,\668\
StrataGraft\TM\ skin tissue is especially relevant for the elderly
population where autograft is undesirable; these patients are
disproportionately affected and are at increased risk for death due to
the skin loss and its complications.\669\ The applicant explained that
aging and environmental factors can influence the severity of burns in
vulnerable skin.670 671 The applicant stated that geriatric
skin also exhibits slower wound healing and is at increased risk of
excessive scarring.672 673 674 675 676 According to the
applicant, age-related changes in wound healing capacity can include
delayed infiltration of immune cells, decreased secretion of growth
factors, and altered collagen remodeling.\677\
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\667\ Greenhalgh DG. Management of the skin and soft tissue in
the geriatric surgical patient. Surg Clin North Am. 2015;95(1):103-
114.
\668\ Holmes JH, Shupp JW, Smith DJ, et al. T5: Preliminary
analysis of a phase 3 open-label, controlled, randomized trial
evaluating the efficacy and safety of a bioengineered regenerative
skin construct in patients with deep partialthickness thermal burns.
J. Burn Care Res. 2020;41(Supplement_1)S3-S4.
\669\ Greenhalgh DG. Management of the skin and soft tissue in
the geriatric surgical patient. Surg Clin North Am. 2015;95(1):103-
114
\670\ Gosain A, DiPietro LA. Aging and wound healing. World J
Surg. 2004;28(3):321-326.
\671\ Landau M. Exogenous factors in skin aging. Curr Probl
Dermatol. 2007;35:1-13.
\672\ Greenhalgh DG. Management of the skin and soft tissue in
the geriatric surgical patient. Surg Clin North Am. 2015;95(1):103-
114.
\673\ Gosain A, DiPietro LA. Aging and wound healing. World J
Surg. 2004;28(3):321-326.
\674\ Greenhalgh DG. Management of the skin and soft tissue in
the geriatric surgical patient. Surg Clin North Am. 2015;95(1):103-
114.
\675\ Ibid.
\676\ Gosain A, DiPietro LA. Aging and wound healing. World J
Surg. 2004;28(3):321-326.
\677\ Ibid.
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The applicant further explained that use of StrataGraft\TM\ skin
tissue can preserve limited donor sites for the treatment of other
wounds, such as areas of FT injury and wounds in cosmetically sensitive
areas. The applicant noted that it may also reduce the need for
repeated harvest of autograft donor sites, potentially reducing the
number of surgical procedures and total length of time to wound
closure. The applicant explained that burn injury is associated with a
high prevalence of posttraumatic stress disorder, ranging between 11
percent and 50 percent across studies,\678\ and may also lead to
anxiety and depression due to scarring and body image concerns.\679\
Lastly, the applicant stated that use of StrataGraft\TM\ skin tissue
reduces pain while offering a comparable scar quality to
autograft.\680\
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\678\ Summer GJ, Puntillo KA, Miaskowski C, et al. Burn Injury
Pain: The Continuing Challenge. J. Pain 2007;8(7)533-548.
\679\ Calot[abreve] DR, Ni[tcedil]escu C, Marinescu S, et al.
Correlations between morphological appearance and psychosocial
difficulties in patients with extensive burns who received
allotransplant. Rom J Morphol Embryol. 2012;53(3 Suppl):703-711.
\680\ Holmes JH, Shupp JW, Smith DJ, et al. T5: Preliminary
analysis of a phase 3 open-label, controlled, randomized trial
evaluating the efficacy and safety of a bioengineered regenerative
skin construct in patients with deep partialthickness thermal burns.
J. Burn Care Res. 2020;41(Supplement_1)S3-S4.
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The applicant provided two controlled and randomized studies,
STRATA2011 and STRATA2016, to support its claims of substantial
clinical improvement. The applicant stated that with the exception of
subject age (STRATA2011, 18 to 64 years of age; STRATA2016, >=18 years
of age), the inclusion and exclusion criteria for the two studies were
similar. According to the applicant, the STRATA2016 study
(NCT03005106--Phase 3 trial--71 patients) 681 682 was a 12-
month, open-
[[Page 25328]]
label, multicenter, controlled, randomized study that evaluated the
efficacy and safety of StrataGraft\TM\ skin tissue in promoting
autologous skin tissue regeneration of severe thermal burns. The
applicant explained that the STRATA2011 study (NCT01437852--Phase 1b
trial--30 patients) 683 684 was a 12-month, open-label,
multicenter, controlled, randomized, dose-escalation study that
evaluated the safety, tolerability, and efficacy of StrataGraft\TM\
skin tissue in promoting the healing of the STB component of complex
skin defects due to thermal injury as an alternative to autografting.
The applicant noted that, in both studies, eligible subjects had 3
percent to 49 percent TBSA burns with two comparable treatment sites
that were prospectively identified, and the sites were randomized to
receive either a single topical application of StrataGraft\TM\ skin
tissue or autograft, such that each subject received both treatments.
The applicant noted that in this intrapatient comparator design, the
area that was autografted served as a subject's own paired control.
To support the claim that the use of StrataGraft\TM\ skin tissue
significantly reduces the percent area of the treatment sites
autografted, the applicant explained that the STRATA2016 study showed
the average percent area of the StrataGraft\TM\ skin tissue treatment
site autografted by Month 3 was lower than the average percent area of
the autograft control treatment site autografted by Month 3 (mean
difference: 97.77 percent; P <0.0001).\685\ We note that the applicant
did not provide detailed information regarding the measurement
methodology.
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\681\ StrataGraft skin tissue[supreg] Skin Tissue in the
Promotion of Autologous Skin Regeneration of Complex Skin Defects
Due to Thermal Burns That Contain Intact Dermal Elements.
ClinicalTrials.gov. https://clinicaltrials.gov/ct2/show/NCT03005106.
Accessed June 15, 2020.
\682\ Holmes JH, Shupp JW, Smith DJ, et al. T5: Preliminary
analysis of a phase 3 open-label, controlled, randomized trial
evaluating the efficacy and safety of a bioengineered regenerative
skin construct in patients with deep partialthickness thermal burns.
J. Burn Care Res. 2020;41(Supplement_1)S3-S4.
\683\ StrataGraft skin tissue[supreg] Skin Tissue as an
Alternative to Autografting Deep Partial-Thickness Burns.
ClinicalTrials.gov. https://clinicaltrials.gov/ct2/show/NCT01437852.
Accessed June 15, 2020.
\684\ Holmes JH, Schurr MJ, King BT, et al. An open-label,
prospective, randomized, controlled, multicenter, phase 1b study of
StrataGraft skin tissue versus autografting in patients with deep
partial-thickness thermal burns. Burns 2019;45(8)1749-1758.
\685\ Holmes JH, Shupp JW, Smith DJ, et al. T5: Preliminary
analysis of a phase 3 open-label, controlled, randomized trial
evaluating the efficacy and safety of a bioengineered regenerative
skin construct in patients with deep partialthickness thermal burns.
J. Burn Care Res. 2020;41(Supplement_1)S3-S4.
---------------------------------------------------------------------------
To support the claim that StrataGraft\TM\ skin tissue is effective
in achieving durable wound closure similar to that of autografting, the
applicant states that the STRATA2016 study showed that the majority of
subjects (59 of 71 subjects, or 83.1 percent, with a 95 percent CI of
74.4 to 91.8) achieved durable wound closure of the StrataGraft\TM\
skin tissue-treated site at Month 3 without the need for autograft
harvest and placement.\686\ The applicant also explained that the
STRATA2011 study showed that no StrataGraft\TM\ treatment sites
required autografting by Day 28. The applicant noted that at Month 3 in
the STRATA2016 study, 93.1 percent of StrataGraft\TM\ treatment sites
were assessed as closed. The applicant stated that all StrataGraft\TM\
skin tissue-treated areas evaluated at 6 months and 12 months remained
closed. The applicant noted that, when comparing these results to that
of autografting, the proportion of wounds that achieved closure was not
statistically different.\687\
---------------------------------------------------------------------------
\686\ Ibid.
\687\ Holmes JH, Schurr MJ, King BT, et al. An open-label,
prospective, randomized, controlled, multicenter, phase 1b study of
StrataGraft skin tissue versus autografting in patients with deep
partial-thickness thermal burns. Burns 2019;45(8)1749-1758.
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To support the claim of reduction in donor site pain using
StrataGraft, the applicant stated that the STRATA2016 study showed that
the difference between the donor sites preserved for StrataGraft\TM\
skin tissue treatment site failure and autograft donor sites in the
average pain intensity through Day 14 based on the Wong-Baker
FACES[supreg] Pain Rating Scale (FPRS) \688\ was 2.40
1.313 (P < 0.0001), indicating significantly less mean donor-site pain
intensity in the reserved StrataGraft\TM\ skin tissue donor sites
compared with autograft donor sites.\689\ The applicant also stated
that the STRATA2011 study showed that patients experienced pain at
harvested donor sites used for autograft, but minimal pain at
unharvested donor sites that had been set aside for potential use with
StrataGraft\TM\ skin tissue.\690\
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\688\ Wong-Baker FACES Foundation. https://wongbakerfaces.org/.
Accessed July 1, 2020.
\689\ Holmes JH, Shupp JW, Smith DJ, et al. T5: Preliminary
analysis of a phase 3 open-label, controlled, randomized trial
evaluating the efficacy and safety of a bioengineered regenerative
skin construct in patients with deep partialthickness thermal burns.
J. Burn Care Res. 2020;41(Supplement_1)S3-S4.
\690\ Holmes JH, Schurr MJ, King BT, et al. An open-label,
prospective, randomized, controlled, multicenter, phase 1b study of
StrataGraft skin tissue versus autografting in patients with deep
partial-thickness thermal burns. Burns 2019;45(8)1749-1758.
---------------------------------------------------------------------------
According to the applicant, the elimination of autografting leads
to superior scar quality outcome of the presumptive StrataGraft\TM\
skin tissue donor site (that is lack of scarring in the donor sites
reserved for StrataGraft\TM\ treatment site failure), which is a
substantial clinical improvement. The applicant explained that the
STRATA2016 study showed that the evaluation of scarring using the
Patient and Observer Scar Assessment Scale (POSAS) 691 692
observer total scores demonstrated a significant difference in scar
quality between the StrataGraft\TM\ skin tissue and autograft donor
sites at Month 3, 10.0 7.92 (P < 0.0001), favoring
StrataGraft\TM\ skin tissue.\693\ The applicant stated that the
STRATA2016 study showed scores for every POSAS category were lower for
StrataGraft\TM\ skin tissue donor sites when compared with autograft
donor sites, indicating they were more like normal skin (that is, the
patient's tissue in the donor sites reserved for StrataGraft\TM\
failure were more like normal skin than tissue present in autograft
donor sites that were harvested).\694\ The applicant explained that the
STRATA2011 study showed that observer POSAS total scores from the
StrataGraft\TM\ tissue treatment site and autograft were not
significantly different throughout the study.\695\ The applicant stated
that the STRATA2011 showed that mean overall POSAS opinion scores of
observers or patients decreased (that is, became more favorable) from
Month 3 through Month 12 after application for both the StrataGraft\TM\
tissue and autograft.\696\According to the applicant, although direct
comparisons between StrataGraft\TM\ skin tissue and other skin
substitutes cannot be drawn, StrataGraft\TM\ skin tissue, relative to
device technologies previously available, improves the clinical
outcomes of STB patients. The applicant stated that most skin
substitutes do not claim to promote wound closure without the need for
subsequent autograft because they have not been
[[Page 25329]]
studied in this context,\697\ while clinical studies for
StrataGraft\TM\ skin tissue assessed wound closure as a pre-specified
endpoint.698 699 The applicant further stated that
reparative healing mechanisms, used by most available skin substitutes,
are more likely to result in scarring when compared with regenerative
healing mechanisms used by StrataGraft.\700\
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\691\ Van de Kar AL, Corion LUM, Smeulders MJC, et al. Reliable
and Feasible Evaluation of Linear Scars by the Patient and Observer
Scar Assessment Scale. Plast. Reconstr. Surg. 2005;116(2)514-522.
\692\ The Patient and Observer Scar Assessment Scale (POSAS).
https://www.posas.nl/. Accessed July 1, 2020.
\693\ Holmes JH, Shupp JW, Smith DJ, et al. T5: Preliminary
analysis of a phase 3 open-label, controlled, randomized trial
evaluating the efficacy and safety of a bioengineered regenerative
skin construct in patients with deep partialthickness thermal burns.
J. Burn Care Res. 2020;41(Supplement_1)S3-S4.
\694\ Ibid.
\695\ Holmes JH, Schurr MJ, King BT, et al. An open-label,
prospective, randomized, controlled, multicenter, phase 1b study of
StrataGraft skin tissue versus autografting in patients with deep
partial-thickness thermal burns. Burns 2019;45(8)1749-1758.
\696\ Ibid.
\697\ Stone Ii R, Natesan S, Kowalczewski CJ, et al.
Advancements in Regenerative Strategies Through the Continuum of
Burn Care. Front Pharmacol. 2018;9:672. Published 2018 Jul 9.
\698\ Holmes JH, Schurr MJ, King BT, et al. An open-label,
prospective, randomized, controlled, multicenter, phase 1b study of
StrataGraft skin tissue versus autografting in patients with deep
partial-thickness thermal burns. Burns 2019;45(8)1749-1758.
\699\ Holmes JH, Shupp JW, Smith DJ, et al. T5: Preliminary
analysis of a phase 3 open-label, controlled, randomized trial
evaluating the efficacy and safety of a bioengineered regenerative
skin construct in patients with deep partialthickness thermal burns.
J. Burn Care Res. 2020;41(Supplement_1)S3-S4.
\700\ Hu MS, Maan ZN, Wu JC, et al. Tissue engineering and
regenerative repair in wound healing. Ann Biomed Eng.
2014;42(7):1494-1507.
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After reviewing the information provided by the applicant with
regard to the substantial clinical improvement criterion, we note a
lack of study data provided comparing StrataGraft\TM\ to other biologic
dressings and we are interested in further information related to
whether there are any dressings that may be approved for burns that
demonstrate durable wound closure. The applicant provided published
results of one randomized trial (STRATA2011), but we question whether
the sample size of 30 is adequately generalizable to the larger
Medicare population. In addition, we note that the STRATA2016 study has
not been published and the results of this study were not submitted in
full, and we therefore may not have the complete outcomes and study
results for these additional patients. We further note that in the
studies provided, patients with 50 percent or greater TBSA burns were
excluded. The applicant indicated that the product could be especially
meaningful for patients with burns of 50-60 percent TBSA, but we
question whether we can fully evaluate this claim because these
patients were not assessed.
We are inviting public comments on whether StrataGraftTM
meets the substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
StrataGraftTM skin tissue.
r. TecartusTM (brexucabtagene autoleucel)
Kite Pharma submitted an application for new technology add-on
payment for FY 2022 for Tecartus\TM\ (brexucabtagene autoleucel)
(``Tecartus''). Tecartus is a CD19 directed genetically modified
autologous T-cell immunotherapy for the treatment of adult patients
with relapsed and refractory (r/r) mantle cell lymphoma (MCL). We note
that Kite Pharma previously submitted an application for new technology
add-on payments for Tecartus for FY 2021, as summarized in the FY 2021
IPPS/LTCH PPS proposed rule, under the name KTE-X19 (85 FR 32634).
Tecartus is a form of chimeric antigen receptor (CAR) T-cell
immunotherapy that modifies the patient's own T-cells to target and
eliminate tumor cells. More specifically, according to the applicant,
Tecartus is a single infusion product consisting of autologous T-cells
that have been engineered to express an anti-CD19 chimeric antigen
receptor. According to the applicant, this therapy targets the CD19
antigen on the cell surface of normal and malignant B-cells. The
applicant stated that Tecartus is different from other previously
approved technologies because it has a distinct cellular product that
requires a unique manufacturing process.
According to the applicant, MCL is a rare and aggressive subtype of
non-Hodgkin lymphoma (NHL) with distinct
characteristics701 702 that accounts for 3-10% of all cases
of NHL in the United States and differs from diffuse large B-cell
lymphoma (another subtype of NHL).703 704 705
---------------------------------------------------------------------------
\701\ Fakhri B, Kahl B. Current and emerging treatment options
for mantle cell lymphoma. Ther Adv Hematol. 2017;8(8):223-34.
\702\ National Comprehensive Cancer Network. Clinical Practice
Guidelines in Oncology; B-cell Lymphomas, Version 1.2019 [November
30, 2018]. 2017 Available from: https://www.nccn.org/professionals/physician_gls/pdf/b-cell.pdf.
\703\ The Non-Hodgkin's Lymphoma Classification Project. A
clinical evaluation of the International Lymphoma Study Group
classification of non-Hodgkin's lymphoma. Blood. 1997;89(11):3909-
3918.
\704\ Zhou Y, et al. Incidence trends of mantle cell lymphoma in
the United States between 1992 and 2004. Cancer. 2008;113(4):791-
798.
\705\ Teras LR, et al. 2016 US lymphoid malignancy statistics by
World Health Organization subtypes CA Cancer J Clin. 2016;6:443-459.
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The applicant stated that MCL has an annual incidence of 0.5 to 1
cases per 100,000 population with a male-to-female ratio of 3:1 with a
median age at diagnosis for patients with MCL of 68 years.\706\ MCL
results from a malignant transformation of the B lymphocyle in the
outer edge of a lymph node follicle (the mantle zone). Prognosis varies
for r/r MCL, but the median survival for MCL is 3-5 years depending on
the risk group (the Mantle Cell Lymphoma International Prognostic Index
categorizes patients into low, intermediate and high risk groups),
according to the applicant.\707\ According to the applicant, the
preferred first line therapy is bendamustine-rituximab which has
decreased toxicity and improved progression-free survival as compared
to rituximab with cyclophosphamide, doxorubicin, vincristine, and
prednisone.\708\ According to the applicant, rituximab is also the only
approved therapy for maintenance for patients in remission. The
applicant stated the median progression free survival ranges from 29-51
months with most of MCL patients eventually relapsing. The applicant
contended that approximately 40% of patients end up with durable long-
term remission after a chemoimmunotherapy first line
therapy.709 710 711
---------------------------------------------------------------------------
\706\ Fu S, et al. Trends and variations in mantle cell lymphoma
incidence from 1995 to 2013: A comparative study between Texas and
National SEER areas. Oncotarget. 2017;8(68):112516-29.
\707\ Cheah CY, et al. Mantle cell lymphoma. J Clin Oncol.
2016;34:1256-1269.
\708\ Rummel MJ, et al. Bendamustine plus rituximab versus CHOP
plus rituximab as first-line treatment for patients with indolent
and mantle-cell lymphomas: an open-label, multicentre, randomized,
phase 3 non-inferiority trial. Lancet. 2013;381: 1203-1210.
\709\ Flinn IW, et al. First-line treatment of patients with
indolent non-Hodgkin lymphoma or mantle-cell lymphoma with
bendamustine plus rituximab versus R-CHOP or R-CVP: results of the
BRIGHT 5-year follow-up study. J Clin Oncol. 2019 Apr 20;37(12):984-
991. doi: 10.1200/JCO.18.00605. Epub 2019 Feb 27.
\710\ LaCasce AS, et al. Comparative outcome of initial therapy
for younger patients with mantle cell lymphoma: an analysis from the
NCCN NHL Database. Blood. 2012;19(9):2093-2099.
\711\ Lenz G, et al. Immunochemotherapy with rituximab and
cyclophosphamide, doxorubicin, vincristine, and prednisone
significantly improves response and time to treatment failure, but
not long-term outcome in patients with previously untreated mantle
cell lymphoma: results of a prospective randomized trial of the
German Low Grade Lymphoma Study Group (GLSG). J Clin Oncol.
2005:23(9): 1984-1992.
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The applicant indicated that there is no standard of care that
exists for second-line and higher chemotherapy when a patient has
relapsed or refractory MCL.\712\ According to the applicant, second
line therapies typically depend on the front line therapy utilized,
comorbidities, the tumor's sensitivity to chemotherapy, and overall
risk-benefit. According to the applicant, currently available options
for second line therapy include:
[[Page 25330]]
Cytotoxic chemotherapy, proteasome inhibitors (PI), immunomodulatory
drugs (IMiD), tyrosine kinase inhibitors, and stem cell transplant
(both autologous and allogenic stem cell transplant [ASCT, allo-SCT]).
According to the applicant, Bruton's tyrosine kinase (BTK) inhibitors,
ibrutinib, zanubrutinib, and acalabrutinib, are common third-line
therapy used for patients with r/r MCL and have shown to offer
improvements over other chemotherapy-based regimens for r/r MCL
patients. The applicant performed a literature review and meta-analysis
of patients with r/r MCL whose disease had progressed during or
following treatment with a BTK inhibitor and found that despite high
initial response rates, most patients eventually developed progressive
disease.
---------------------------------------------------------------------------
\712\ Campo E, Rule S. Mantle cell lymphoma: evolving management
strategies. Blood. 2015;125(1):48-55.
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Therefore, according to the applicant, new therapeutic strategies
are needed to improve the prognosis of patients with r/r MCL whose
disease has not been effectively controlled with chemo-immunotherapy,
stem cell transplant, and BTK inhibitors.
With respect to the newness criterion, the applicant indicated that
the FDA approved the Tecartus Biologics License Application (BLA) on
July 24, 2020 for the indication of the treatment of adult patients
with relapsed/refractory mantle cell lymphoma (MCL). According to the
applicant, Tecartus was granted Breakthrough Therapy designation for
the treatment of patients with r/r MCL on June 15, 2018 and received
Orphan Drug designation in 2016 for the treatment of MCL, acute
lymphoblastic leukemia and chronic lymphocytic leukemia. The following
ICD-10-PCS codes were established effective October 1, 2020 to identify
the administration of Tecartus: XW23346 (Transfusion of brexucabtagene
autoleucel immunotherapy into peripheral vein, percutaneous approach,
new technology group 6) and XW24346 (Transfusion of brexucabtagene
autoleucel immunotherapy into central vein, percutaneous approach, new
technology group 6).
As previously discussed, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion for substantial similarity,
whether a product uses the same or similar mechanism of action to
achieve a therapeutic outcome, according to the applicant, Tecartus is
the first CAR T-cell immunotherapy indicated for the treatment of r/r
MCL. The applicant further asserted that it does not use a
substantially similar mechanism of action. The applicant asserts the
FDA concluded and approved Tecartus as distinct from YESCARTA[supreg]
based on differences in the manufacturing process, certain product
specifications and impurities, and formulation of the final products.
Furthermore, the applicant stated that Tecartus is distinct from
currently available CAR T-cell immunotherapies, namely YESCARTA[supreg]
and KYMRIAH[supreg], because neither prior CAR T-cell therapy is
indicated for the treatment of patients with r/r MCL, and other
differences include the manufacturing process, certain product
specifications and impurities, and the final dose formulation as
determined by the FDA. The applicant stated that MCL is a unique
subtype of B-cell Non-Hodgkin's Lymphoma (NHL) and is distinct from
DLBCL as determined by the 2016 WHO classification. The applicant
stated it reviewed data from the FY 2019 100 percent MedPAR Hospital
Limited Data Set to obtain a reference of currently available products
used in the treatment of r/r MCL. The applicant stated that based on
this analysis, available products used in the treatment of r/r MCL
included: chemotherapies, PIs, IMiDs, or BTK inhibitors. The applicant
described Tecartus as an autologous CAR T-cell immunotherapy, which
genetically modifies the patient's own T-cells to target and eliminate
tumor cells for the treatment of r/r MCL and asserted that because
Tecartus is an autologous CAR T-cell immunotherapy, it does not use the
same mechanism of action as other treatments currently used to treat r/
r MCL (chemotherapies, PIs, IMiDs, or BTK inhibitors).
To further note the differences between Tecartus's mechanism of
action and other available therapies for r/r MCL, the applicant stated
that Tecartus represents a unique product that is customized for B-cell
malignancies bearing high levels of circulating CD19-expressing tumor
cells. Given these genetic modifications and differences, as previously
described, the applicant described Tecartus as having a different
mechanism of action from existing r/r MCL therapies.
The applicant stated that Tecartus is a distinct cellular product
and is produced by a unique manufacturing process customized for B-cell
malignancies characterized by circulating tumor cells and is designed
to minimize the number of CD19-expressing tumor cells in the final
product. The T cells in the leukapheresis product are enriched by
positive selection, activated by culturing with anti-CD3 and anti-CD28
antibodies, and then transduced with a retroviral vector containing the
anti-CD19 CAR gene. These engineered T cells are then propagated in
culture to generate a sufficient number of cells to achieve a
therapeutic effect upon infusion back into the patient. The applicant
further stated that Tecartus has a different mechanism of action as
compared to YESCARTA[supreg] given that the European Medicines Agency
(EMA) deemed Tecartus and YESCARTA[supreg] as different products.
With respect to the second criterion for substantial similarity,
whether a product is assigned to the same or a different MS-DRG, the
applicant noted that CMS has established the new MS-DRG 018 (Chimeric
Antigen Receptor (CAR) T-cell Immunotherapies), effective October 1,
2020, for CAR T-cell therapies. However, the applicant asserted that
Tecartus will be uniquely identified by ICD-10-PCS codes different from
those used to identify YESCARTA[supreg] and KYMRIAH[supreg]. As
previously noted, under the current coding system, cases reporting the
use of Tecartus would be coded with ICD-10-PCS codes XW23346 and
XW24346, which are currently assigned to MS-DRG 018, and therefore we
believe that cases reporting the use of Tecartus would be assigned to
the same MS-DRG as existing CAR T-cell therapies.
With respect to the third criterion for substantial similarity,
whether the new use of the technology involves the treatment of the
same or similar type of disease and the same or similar patient
population, the applicant stated that Tecartus is the first and only
CAR T-cell immunotherapy indicated for the treatment of r/r MCL which
is identified by ICD-10-CM C83.1X, mantle cell lymphoma, unspecified
site. The applicant noted that the patients treated by YESCARTA[supreg]
and KYMRIAH[supreg] are not assigned ICD-10-CM diagnosis code C83.1X
(Mantle cell lymphoma, unspecified site), as would patients treated
with Tecartus. As previously mentioned, the applicant described that
MCL results from a malignant transformation of a B lymphocyte in the
outer edge of the lymph node follicle. The applicant further stated
that diffuse large b-cell lymphoma (DLBCL), which YESCARTA[supreg] and
KYMRIAH[supreg] treat, is defined as a neoplasm of large B cells
arranged in a diffuse pattern. The applicant described this distinction
as evidence that Tecartus treats a different subtype of NHL, r/r MCL,
as compared to other FDA approved CAR T-cell therapies. However, we
note that the applicant recognized in its application that MCL and
DLBCL patients share
[[Page 25331]]
similar clinical presentation of lymphadenopathy, splenomegaly and
constitutional symptoms. The applicant also noted that the disease
courses for MCL and DLBCL are different given that MCL has a unique
molecular pathogenesis. The applicant stated that patients with r/r MCL
often present with high levels of circulating tumor cells which are
inherent to the disease 713 714 or due to peripheral
mobilization of tumor cells induced by BTK inhibitor therapy.\715\
According to the applicant, MCL requires a customized CAR T-cell
therapy for B-cell malignancies bearing high levels of circulating
CD19-expressing tumor cells in order to provide a functional autologous
cellular therapy. Unlike MCL, the presence of circulating tumor cells
occurs only rarely in patients with DLBCL.\716\
---------------------------------------------------------------------------
\713\ Argatoff LH, et al. Mantle cell lymphoma: a
clinicopathologic study of 80 cases. Blood. 1997;89 (6):2067-78
\714\ Gu J, et al. Evaluation of peripheral blood involvement of
mantle cell lymphoma by fluorescence in situ hybridization in
comparison with immunophenotypic and morphologic findings. Mod
Pathol. 2004;17 (5):553-60.
\715\ Chang BY, et al. Egress of CD19(+)CD5(+) cells into
peripheral blood following treatment with the Bruton tyrosine kinase
inhibitor ibrutinib in mantle cell lymphoma patients. Blood.
2013;122(14):2412-24.
\716\ Muringampurath-John D, et al. Characteristics and outcomes
of diffuse large B-cell lymphoma presenting in leukaemic phase. B.
J. Haematol. (2012) 158: 608-614
---------------------------------------------------------------------------
With respect to the first criterion, the applicant asserted that
Tecartus would provide a new treatment option for adult patients with
r/r MCL and therefore is not substantially similar to any existing
technologies. We note that for FY 2019 (83 FR 41299), CMS approved two
CD19 directed CAR T-cell therapies, YESCARTA[supreg] and
KYMRIAH[supreg], for new technology add-on payments. In regard to the
mechanism of action, the applicant acknowledged that Tecartus is a form
of CAR T-cell immunotherapy that modifies the patient's own T-cells, as
are YESCARTA[supreg] and KYMRIAH[supreg]. However, the applicant
asserted that the manufacturing process used by Tecartus makes the
therapy significantly different from YESCARTA[supreg]. The applicant
further asserted that its unique manufacturing process which includes a
T-cell selection step for patients with MCL, ALL, and CLL is distinct
from that used for the manufacture of YESCARTA[supreg] for the
treatment of patients with malignancies characterized by high numbers
of circulating tumor types.
Similar to our discussion of the FY 2021 application in the FY 2021
IPPS/LTCH PPS proposed rule (85 FR 32636-32637), we are concerned as to
whether the differences the applicant described in the manufacturing
process should be considered a different mechanism of action as
compared to previous CAR T-cell therapies. We note, in their review,
the FDA identified many similarities between Tecartus and
YESCARTA[supreg] to include that, ``the YESCARTA[supreg] and KTE-X19
final products are very similar and are formulated identically. The
same release testing methods are used for both products.'' \717\
Further, as Tecartus is also a CD19-directed T-cell immunotherapy for
the treatment of patients with an aggressive subtype of NHL, we
continue to question whether the differences identified by the
applicant would mean that Tecartus does not have a similar mechanism of
action to existing CD19-directed CAR T-cell therapies. We are seeking
public comment as to whether the differences the applicant described in
the manufacturing process should be considered a different mechanism of
action, as compared to previous CAR T-cell therapies.
---------------------------------------------------------------------------
\717\ Price G, Reiser J, Salz T. CBER CMC BLA Review Memorandum,
BLA #125703, TECARTUS brexucabtagene autoleucel. FDA.
---------------------------------------------------------------------------
With regard to the third criterion for substantial similarity,
though the applicant described differences between MCL and DLBCL, the
applicant also stated that patients with MCL and DLBCL share similar
clinical presentation of lymphadenopathy, splenomegaly and
constitutional symptoms, and they are both subtypes of NHL. We
therefore question whether this therapy may involve the treatment of a
similar type of disease when compared to existing CAR T-cell therapies.
We are inviting public comments on whether Tecartus is
substantially similar to other technologies and whether Tecartus meets
the newness criterion.
With regard to the cost criterion, the applicant searched the FY
2019 MedPAR claims data file with the FY 2019 Final Rule IPPS Impact
File to identify potential cases representing patients who may be
eligible for treatment using Tecartus.
The applicant identified claims that reported an ICD-10-CM
diagnosis code of ICD-10-CM C83.1X (Mantle cell lymphoma, unspecified
site). The applicant stated that claims reporting ICD-10-CM code C83.1X
would not involve the use of the other two approved CAR T-cell
therapies because those therapies are not used to treat this diagnosis,
MCL. As such, the applicant stated that it used C83.1X to identify
potential MCL cases and ICD-10-PCS codes XW033C3 and XW043C3 to
identify patients receiving CAR T-cell therapy. In its analysis, the
applicant identified two sets of cohorts (Primary Cohort and
Sensitivity Analysis Cohort) to assess whether this therapy met the
cost criterion. The ICD-10-PCS procedure codes listed in the following
table were used to identify claims involving chemotherapy and the
applicant noted that these were used for both cohorts.
[[Page 25332]]
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The applicant identified two cohorts for these analyses and used
two CCRs to account for the cost of their technology. The Primary
Cohort included cases with an ICD-10-CM primary diagnosis of MCL, at
least one procedure code indicating receipt of chemotherapy, and no
ICD-10-PCS procedure codes indicating CAR T-cell therapy. The applicant
believed the Primary Cohort most closely aligned with the
characteristics and health of r/r MCL patients who would receive
Tecartus given that this cohort includes patients with far advanced
disease (comparable to the ZUMA-2 study, as discussed later in this
section). The Sensitivity Analysis Cohort included patients with the
ICD-10-CM principal or secondary diagnosis of MCL, at least one
procedure code indicating receipt of chemotherapy, and no ICD-10-PCS
procedure codes indicating CAR T-cell therapy. For each cohort, the
applicant performed two sub-analyses that varied the CCR used to
calculate Tecartus charges: (1) The national pharmacy CCR of 0.187; and
(2) the applicant calculated CAR T-cell CCR of 0.314.
According to the applicant, based on the primary diagnosis code and
the presence of chemotherapy, these cases signify that the primary
reason for hospitalization was treatment of the patient's MCL,
including the complications of their advancing disease and
chemotherapy-related complications, and resulted in charges and longer
lengths of stay believed to be most reflective of the r/r MCL
population that is treated by TECARTUS. The applicant added that this
group of MCL cases with MCL as a primary diagnosis most closely
compares with the characteristics and health resource utilization of r/
r MCL patients that will receive TECARTUS. Furthermore, the applicant
stated that the cases in the Primary Cohort had higher charges across
all categories than the cases with MCL as a secondary diagnosis. The
cases with MCL as a primary diagnosis are according to the applicant
more reflective of the r/r MCL population as those cases were more
likely being treated for the complications of their advancing disease
and chemotherapy-related complications. The average length of stay for
hospitalizations in the Primary Cohort was 15.1 days. Lastly, in
explaining why CAR T-cell MCL cases from FY 2019 were excluded from the
cost analysis, the applicant stated that they could not identify
specific charges for CAR T-cell therapy, no individual revenue center
had charges similar to those expected for CAR T-cell therapy, and there
were no CAR T-cell therapy products approved for the treatment of MCL
in FY 2019.
The applicant stated that to estimate the CAR T-cell CCR, they
obtained the MS-DRG 018 arithmetic mean charge in the AOR/BOR FY 2021
Proposed Rule File released by CMS ($1,387,946). The applicant
subtracted non-drug charges for TECARTUS of $201,610 (based on the
TECARTUS FY 2021 new technology add-on payment application) from total
arithmetic mean charge to estimate CAR T-cell charges (approximately
$1,186,336). The applicant then divided a WAC of CAR T-cell therapy of
$373,000 by the estimated CAR T-cell charges to estimate a charge-to-
cost ratio of 0.314 (CCR = 373,000/1,186,336).
The claim search conducted by the applicant resulted in 267 claims
in the Primary Cohort, mapped to 13 MS-DRGs, and 1,100 claims in the
Sensitivity Analysis Cohort, mapped to 59 MS-DRGs using the FY 2019
MedPAR Hospital LDS based on the requirements for each cohort outlined
by the applicant. The applicant stated that because TECARTUS cases are
mapped to MS-DRG 018, the cost criterion analysis utilized the
threshold for MS-DRG 018 for all MS-DRGs included in each cohort rather
than the MS-DRG specific threshold. The applicant determined an average
unstandardized case weighted charge per case of $1,251,126 for the
Primary cohort and $1,251,126 for the Sensitivity Analysis Cohort.
BILLING CODE 4120-01-P
[[Page 25333]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.181
[[Page 25334]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.182
[[Page 25335]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.183
BILLING CODE 4120-01-C
The applicant then removed charges for prior technology. The
applicant stated that the cases representing patients who had received
chemotherapy, as reflected by the Medicare claims data, would generally
not receive both chemotherapy and Tecartus as an inpatient because
conditioning chemotherapy would be administered in the outpatient
setting before the patient would be admitted for Tecartus infusion and
monitoring. Otherwise, the applicant asserted that patients receiving
Tecartus would be expected to incur similar charges to those cases in
the Medicare claims data for patients with a primary diagnosis of MCL
and receiving chemotherapy (Primary Cohort). In its analysis, the
applicant noted that in the FY 2019 MedPAR Hospital LDS, charges for
chemotherapy drugs were grouped with charges for oncology, diagnostic
radiology, therapeutic radiology, nuclear medicine, CT scans, and other
imaging services. The applicant believed that removing all radiology
charges would understate the cost of adverse event (AE) clinical
management for Tecartus patients needed. The applicant found that when
using data from the Q4 2017 and Q1 Q3 2018 Standard Analytic files and
comparing total chemotherapy charges to total radiology charges, 2
percent of radiology charges were chemotherapy charges, on average.
Therefore, instead of removing all radiology charges, the applicant
excluded 2 percent of the radiology charge amount to capture the effect
of removing chemotherapy pharmacy charges.
The applicant then standardized the charges and applied the 2-year
inflation factor used in the FY 2021 IPPS/LTCH PPS final rule to
calculate outlier threshold charges (1.13218). For the Primary and
Sensitivity cohorts, the applicant performed two sub-analyses that
varied the CCR used to calculate Tecartus charges: (1) using the
national pharmacy CCR (0.187); and (2) using the CAR T-cell CCR
(0.314).
The applicant stated that when comparing the Primary Cohort to the
MS-DRG 018 average case-weighed threshold amount (based on the FY 2021
IPPS/LTCH PPS final rule) and using the national pharmacy CCR, the
final inflated average case-weighted standardized charge per case of
$2,207,969 exceeded the average case-weighted threshold amount of
$1,251,126 by $956,843. When using the CAR T-cell CCR, the final
inflated average case-weighted standardized charge per case of
$1,399,653 exceeded the average case-weighted threshold amount of
$1,251,126 by $148,527. The applicant stated that because the final
inflated average case-weighted standardized charge per case exceeded
the average case-weighted threshold amount, the therapy meets the cost
criterion.
When conducting the same review to assess cost for the Sensitivity
Analysis Cohort, the applicant noted that the sensitivity analysis
cohort also meets the cost criterion when compared to the MS-DRG 018
average case-weighted threshold amount (based on the FY 2021 IPPS/LTCH
PPS data file thresholds for FY 2022). As reported by the applicant,
when using the national pharmacy CCR in the sensitivity analysis cohort
the final inflated average case-weighted standardized charge per case
of $2,142,149 exceeded the average case-weighted threshold amount of
$1,251,126 by $891,023. When using the CAR T-cell CCR in the
sensitivity analysis cohort, the final inflated average case-weighted
standardized charge per case of $1,333,833 exceeded the average case-
weighted threshold amount of $1,251,126 by $82,707. The applicant
stated that because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the therapy meets the cost criterion. Because the
final inflated average case-weighted standardized charge per case for
both the Primary Cohort and the Sensitivity Analysis Cohort exceeds the
average case-weighted threshold amount for MS-DRG 018, the applicant
maintained that the technology meets the cost criterion. As noted in
previous discussions, the submitted costs for CAR T-cell therapies vary
widely due to differences in provider billing and charging practices
for this therapy. Therefore, with regard to the use of this data for
purposes of calculating a CAR T-cell CCR we are uncertain how
representative this data is for use in the applicant's cost analyses
given this potential for variability.
We continue to be interested in public comments regarding the
eligibility of CAR T-cell technologies for new technology add-on
payments when assigned to MS-DRG 018. As we have noted in prior
rulemaking with regard to the CAR T-cell therapies (83 FR 41172 and 85
FR 58603 through 58608), if a new MS-DRG were to be created, then
consistent with section 1886(d)(5)(K)(ix) of the Act, there may no
longer be a need for a new technology add-on payment under section
1886(d)(5)(K)(ii)(III) of the Act.
We invite public comment on whether Tecartus meets the cost
criterion based on this proposal.
With respect to the substantial clinical improvement criterion, the
applicant asserted that Tecartus represents a new treatment option for
an adult patient population unresponsive to, or ineligible for,
currently available treatments. The applicant also believes that the
use of Tecartus significantly improves clinical outcomes for a patient
with r/r MCL as compared to currently available therapies, including
BTK inhibitors. The applicant stated that Tecartus provides access to a
treatment option for patients with r/r MCL who have not been responsive
to first line or second line therapies. The applicant provided further
detail regarding these
[[Page 25336]]
assertions, referencing the results of a Phase 2 study (Zuma-2) and
historical and meta analyses, which are summarized in this section of
this rule.
According to the applicant, because no effective standard therapy
for subjects with r/r MCL who have progressed following a prior BTK
inhibitor therapy exists, ZUMA-2 lacked a comparison arm. The applicant
described how a historical control was the only ethical and feasible
study design for patients with r/r MCL who had not responded to the
most promising therapies available, including BTK inhibitors.
Therefore, the historical control was identified from prior studies
identified in a meta-analysis of six studies, which included two
studies by Martin et al., (2016) and Cheah et al., (2015), and covered
255 subjects. The ORRs in these six studies ranged from 20%-42% with
the applicant identifying 26% \718\ and 32% \719\ for use as their
comparator.
---------------------------------------------------------------------------
\718\ Martin P, et al. Postibrutinib outcomes in patients with
mantle cell lymphoma. Blood. 2016;127 (12):1559-63.
\719\ Cheah CY, et al. Patients with mantle cell lymphoma
failing ibrutinib are unlikely to respond to salvage chemotherapy
and have poor outcomes. Ann Oncol. 2015;26(6):1175-9.
---------------------------------------------------------------------------
According to the Martin et al. (2016) retrospective cohort study
referenced by the applicant, the investigators reported best response
rate (RR) to ibrutinib was 55% (43% partial response [PR], 12% complete
response [CR]), with 35% of patients having a best response of
progressive disease. But among patients who received subsequent
therapy, local clinicians reported that 13 patients (19%) achieved PR,
and 5 (7%) achieved CR. The median overall survival (OS) following
cessation of ibrutinib was 2.9 months (95% confidence interval [CI],
1.6-4.9). Of the 104 patients with data available, 73 underwent at
least one additional line of currently available treatment after
stopping ibrutinib with a median OS of 5.8 months (95% confidence
interval [CI], 3.7-10.4).\720\
---------------------------------------------------------------------------
\720\ Martin P, et al. Postibrutinib outcomes in patients with
mantle cell lymphoma. Blood. 2016;127 (12):1559-63.
---------------------------------------------------------------------------
A second retrospective study by Cheah et al. identified 42 (54%)
who had discontinued therapy of 78 patients with MCL who had been
treated at MD Anderson Cancer Center between 2011 and 2014. \721\ All
42 patients had received ibrutinib with a median number of cycles of
6.5 (range 1--43). Twenty-eight patients (67%) had disease progression
as the main reason for therapy discontinuation. Of the 31 patients who
experienced disease progression following ibrutinib and underwent
salvage therapy, the overall objective response rate (ORR) and complete
response rate (CRR) was 32% and 19%, respectively. After a median
follow-up of 10.7 (range 2.4-38.9) months from discontinuation of
ibrutinib, the median OS among patients with disease progression was
8.4 months and the estimated one-year OS was 22.1% (95% CI 8.3% to
40.2%).
---------------------------------------------------------------------------
\721\ Cheah CY, et al. Patients with mantle cell lymphoma
failing ibrutinib are unlikely to respond to salvage chemotherapy
and have poor outcomes. Ann Oncol. 2015;26(6):1175-9.
---------------------------------------------------------------------------
The applicant summarized further studies that featured BTK therapy.
Dreyling et al. and Epperla et al. identified ORRs of 20% and 42%
respectively while Wang et al. identified an ORR of 29%, CR rate of
14%, and PR rate of 15% and Jaln et al. identified an ORR of 29%, CR
rate of 14%, and PR rate of 15%.722 723 724 725
---------------------------------------------------------------------------
\722\ Dreyling M, et al. Ibrutinib versus temsirolimus in
patients with relapsed or refractory mantle-cell lymphoma: An
international, randomised, open-label, phase 3 study. Lancet.
2016;387(10020):770-8.
\723\ Epperla N, et al. Predictive factors and outcomes for
ibrutinib therapy in relapsed/refractory mantle cell lymphoma--a
``real world'' study. Hematological Oncology. 2017:1-8.
\724\ Wang M, et al. Observational study of lenalidomide in
patients with mantle cell lymphoma who relapsed/progressed after or
were refractory/intolerant to ibrutinib (MCL-004). J Hematol Oncol.
2017;10:171.
\725\ Jain P, et al. Long-term outcomes and mutation profiling
of patients with mantle cell lymphoma (MCL) who discontinued
ibrutinib. Br J Haematol. 2018a;183:578-87.
---------------------------------------------------------------------------
To evaluate the effectiveness of Tecartus, the applicant noted it
used an ORR comparison of 25%, which was derived from two
aforementioned studies (Martin et al. and Cheah et al.) with patients
with r/r MCL who progressed on the most predominantly prescribed BTK
inhibitor, ibrutinib. The results of these two studies showed a median
OS of 5.8 months after receiving at least 1 additional line of
currently available therapy to treat r/r MCL. Those who did not receive
salvage therapy had a median OS of 0.8 months.\726\
---------------------------------------------------------------------------
\726\ Martin P, et al. Postibrutinib outcomes in patients with
mantle cell lymphoma. Blood. 2016;127 (12):1559-63.
---------------------------------------------------------------------------
According to the applicant, the ZUMA-2 study of Tecartus is the
only pivotal study of CAR T-cell therapy for r/r MCL. ZUMA-2 is a
multicenter, open label, Phase 2 study which evaluated the safety and
efficacy of Tecartus in patients with r/r MCL that relapsed or are
refractory to prior therapy, including BTK inhibitors. The primary
endpoint compared the ORR from the study to the ORR 25% historical
control at a one-sided alpha level of 0.025. The applicant stated that
ZUMA-2 was not designed to compare the efficacy and safety of TECARTUS
to BTK inhibitors, and the results of ZUMA-2 are not intended to
indicate that TECARTUS should definitively be utilized to replace any
existing therapies. Participants were required to have received prior
treatment for MCL, no more than five prior regimens, which must have
included anthracycline (or bendamustine containing chemotherapy), an
anti-CD20 monoclonal antibody and BTK inhibitor. The ZUMA-2 study
included 68 subjects treated with Tecartus out of 75 patients enrolled.
The safety analysis included a review of all 68 subjects, with the
primary analysis of efficacy reviewing the first 60 subjects treated
with Tecartus. ZUMA-2 was conducted at 20 sites in the United States
and Europe. Of the 60 subjects in the primary analysis set, 59 were
from U.S. sites. Of the 68 subjects in the safety analysis set, 62 were
from U.S. sites. Among the 68 subjects, the median age was 65 years
(range 38-79) and 57 subjects (84%) were male. Additionally, 58
subjects (85%) had stage IV disease. The sample had a median of 3 prior
therapies with 55 (81%) having received >=3 prior therapies. In
addition, 43% had relapsed after a prior autologous stem cell
transplant (ASCT); the remaining subjects had either relapsed after or
were refractory to their last therapy for MCL.
The applicant asserted that the use of Tecartus significantly
improves clinical outcomes for a patient population as compared to
currently available treatments. The applicant contended that ibrutinib,
a BTK inhibitor, is the most common third-line therapy used for
patients with r/r MCL 727 728 and has been shown to offer
improvements over other chemotherapy-based regimens for r/r MCL
patients. The applicant also referenced a more selective BTK inhibitor,
acalabrutinib, which was approved in the US for the treatment of
patients with r/r MCL.729 730 In registrational trials, the
ORR and CRR were 66% and 17%, respectively for ibrutinib, and 81% and
40%, respectively, for acalabrutinib.731 732 The
[[Page 25337]]
applicant contended that primary and secondary resistance to BTK
inhibitors \733\ is common, and subsequent therapies currently
available are minimally effective.734 735 736
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\727\ Campo E, Rule S. Mantle cell lymphoma: Evolving management
strategies. Blood. 2015;125(1):48-55.
\728\ Vose JM. Mantle cell lymphoma: 2017 update on diagnosis,
risk-stratification, and clinical management. Am J Hematol.
2017;92(8):806-813.
\729\ Kantar Health. CancerMPact[supreg] United States.
September 2018, v1.2.
\730\ Vose JM. Mantle cell lymphoma: 2017 update on diagnosis,
risk-stratification, and clinical management. Am J Hematol.
2017;92(8):806-813.
\731\ Ibrutinib USPI. Available from: https://www.imbruvica.com/docs/librariesprovider7/default-document-library/prescribing_information.pdf.
\732\ Acalabrutinib USPI. Available from: https://www.azpicentral.com/calquence/calquence.pdf#page=1.
\733\ Rule S, et al. Median 3.5-year follow-up of ibrutinib
treatment in patients with relapsed/refractory Mantle Cell Lymphoma:
A pooled analysis. Blood Dec. 2017;130(Suppl 1):151.
\734\ Cheah CY, et al. Patients with mantle cell lymphoma
failing ibrutinib are unlikely to respond to salvage chemotherapy
and have poor outcomes. Ann Oncol. 2015;26(6):1175-9.
\735\ Martin P, et al. Postibrutinib outcomes in patients with
mantle cell lymphoma. Blood. 2016;127 (12):1559-63.
\736\ DerSimonian R, Laird N. Meta-analysis in clinical trials.
Control Clin Trials. 1986;7(3):177-88.
---------------------------------------------------------------------------
Among the 68 patients treated in the ZUMA-2 study, the primary
efficacy analysis was conducted after 60 patients had been enrolled,
treated, and evaluated for response for six months after the week four
disease assessment. Based on the primary analysis of the 60 subjects
included in the ZUMA-2 study, there was an ORR of 93% after a single
dose of Tecartus (56 of 60 subjects with a 95% CI of 83.8%, 98.2%). The
applicant reported that the complete response rate was 67% (40 of 60
subjects with a 95% CI of 53.3%, 78.3%). The applicant noted the ORR of
93% and CR 67% were observed across age groups (94% ages >=65; 93% ages
<65 and, of the 40 subjects achieving CR, 22 subjects were aged >=65
and 18 were aged <65). The applicant highlighted that the ORR of 93%
was significantly higher than the prespecified historical control rate
of 25%. Furthermore, the applicant noted that among the 42 subjects who
initially had a partial response (PR) or stable disease (SD), 24
subjects (57%) went on to achieve a CR after a median of 2.2 months
(range: 1.8 to 8.3 months). Twenty-one subjects converted from PR to
CR, and 3 subjects converted from stable disease (SD) to CR.
According to the applicant, the median DOR was not reached with a
median follow-up time for DOR of 8.6 months (95% CI: 7.8, 19.6 months)
with a median study follow-up of 12.3 months; this result was
consistent across age groups. Kaplan-Meier estimates of the progression
free survival (PFS) rates at 6 months and 12 months were 77.0% and
60.9%, respectively, and the median PFS was not reached at the median
potential follow-up of 12.3 months. Additionally, 57% of all patients
and 78% of patients with a CR remained in remission (results consistent
across age groups). Furthermore, as reported by the applicant, among
the first 28 subjects studied as part of the interim analysis, 43%
remained in continued remission without additional therapy at the
follow-up period of 27 months (range, 25.3-32.3).
The applicant also conducted an additional analysis of OS among the
first 28 subjects (ZUMA-2 interim analysis) who were treated with
Tecartus and had a potential follow-up of >=24 months. Among these
subjects, the OS rate estimate at 24 months was 67.9% and the median OS
was not reached. In comparison, the Cheah et al. (2015) post-ibrutinib
salvage therapy study reported a lower one-year survival rate of 22%.
Additionally, among the subjects in CR at month 3 who had the
opportunity to be followed to month 12, 90% remained in CR at month 12.
The applicant contended that this statistic showcased that early
responses to Tecartus are likely indicative of long-term remission
after the single infusion of Tecartus. Furthermore, the applicant
suggested that a substantial number of patients with r/r MCL treated
with Tecartus will achieve a CR, and that this suggests these patients
will likely experience a long-term remission after a single infusion of
Tecartus. The applicant also noted that these results were consistent
across age groups at the time of the primary data analysis cut-off
(July 24, 2019). By contrast, the applicant noted that patients with r/
r MCL who had prior BTK inhibitor treatment had CR rates ranging from
7-22%. Additionally, the applicant noted that the majority of patients
on BTK inhibitor treatment go on to have progressive disease given that
the responses achieved with currently available salvage therapies are
short lived and have a DOR ranging from 3 to 5.8
months.737 738 739 740
---------------------------------------------------------------------------
\737\ Kochenderfer JN, et al. Lymphoma Remissions Caused by
Anti-CD19 Chimeric Antigen Receptor T Cells Are Associated With High
Serum Interleukin-15 Levels. J Clin Oncol. 2017a;35(16):1803-13.
\738\ Kochenderfer JN, et al. Long-Duration Complete Remissions
of Diffuse Large B Cell Lymphoma after Anti-CD19 Chimeric Antigen
Receptor T Cell Therapy. Mol Ther. 2017b;25(10):2245-53.
\739\ Gupta S, et al. Recommendations for the design,
optimization, and qualification of cell-based assays used for the
detection of neutralizing antibody responses elicited to biological
therapeutics. Journal of Immunological Methods. 2007;321(1-2):1-18.
\740\ Davila ML, et al. Efficacy and toxicity management of 19-
28z CAR T cell therapy in B cell acute lymphoblastic leukemia. Sci
Transl Med. 2014;6(224):224ra25.
---------------------------------------------------------------------------
With regard to the safety of Tecartus, the applicant argued that
the ZUMA-2 study demonstrated a positive benefit-risk of Tecartus over
the current therapy options for patients with r/r MCL. The applicant
stated that the toxicity profile that is associated with Tecartus
therapy can be managed based upon established guidance. The applicant
further stated that the risk evaluation and mitigation strategies
(REMS) program will ensure that hospitals providing Tecartus therapy
are certified so that all who prescribe, dispense, or administer
Tecartus are aware of how to manage the risk of cytokine release
syndrome (CRS) and neurologic events. However, the applicant notes that
patients who were >=65 years old showed a trend toward a higher
incidence of Grade 3 or higher CRS compared to those <=65 years old.
(21% versus 7%). Additionally, all subjects in the ZUMA-2 primary
analysis had at least one adverse event (AE), 99% of subjects had at
least one AE that was Grade 3 or higher, and 68% of subjects had at
least one serious adverse event (SAE). Among all 68 treated patients,
the most common Grade 3 or higher AEs were anemia (51%), neutropenia
(53%), and leukopenia (41%). Furthermore, CRS occurred in 62 subjects
(91%) in the ZUMA-2 safety analysis. Of these, 10 subjects (15%) had
Grade 3 CRS or higher. No subject had Grade 5 CRS, according to the
applicant. Furthermore, according the applicant, the most common CRS
symptoms of any grade were pyrexia, hypotension, and hypoxia. The most
common Grade 3 or higher CRS symptoms were hypotension (35 subjects,
51%), hypoxia (23 subjects, 34%), and pyrexia (62 subjects, 91%). No
patient in the ZUMA-2 study treated with Tecartus died from CRS.
The applicant mentioned that 43 of the 68 patients (63%) in the
ZUMA-2 study also experienced forms of neurologic events. Of these, 15
subjects (22%) had a worst Grade 3 neurologic event, and 6 subjects
(9%) had a worst Grade 4 neurologic event. Twenty-two subjects (32%)
had serious neurologic events, however, the applicant noted no subject
had a Grade 5 neurologic event. The most common neurologic events of
any grade were encephalopathy (21 subjects, 31%), confusional state (14
subjects, 21%), and tremor (24 subjects, 35%). Compared with subjects
who were <65 years of age, subjects who were >=65 years of age showed a
trend toward a higher incidence of Grade 3 or higher neurologic events
(36% versus 24%). The applicant noted that these neurologic events
resolved for all but 6 subjects and that among those whose neurologic
events had resolved, the median duration was 12 days. Additionally, no
patient died from neurologic events.
[[Page 25338]]
In response to CMS's concern as discussed in the FY 2021 IPPS/LTCH
PPS proposed rule (85 FR 32646-32647) regarding the generalizability of
the findings from ZUMA-2 to the general Medicare population, the
applicant stated that the ZUMA-2 study sample is representative of the
Medicare population. The applicant stated that 57% of the sample were
65 to 79 years of age, and that MCL predominantly affects older adults,
with a median age at diagnosis ranging from 65 to 73.741 742
The applicant asserted that the advanced disease characteristics,
including Stage IV disease in 85%, bone marrow involvement in 54%, and
splenic involvement in 34%, closely align with those observed in the
general MCL population where newly diagnosed and previously untreated
patients present with stage III/IV disease and commonly exhibit
splenomegaly and bone marrow infiltration.\743\ The applicant added
that the key baseline characteristics of the ZUMA-2 population mirror
the r/r MCL Medicare population refractory to BTK inhibitors, including
age of study subjects and stage of disease at study initiation.
Overall, ZUMA-2 primary results showed that at the time of the analysis
cutoff (July 2019), 16 of 68 subjects (24%) had died; 4 deaths occurred
>30 days through 3 months after infusion of Tecartus and 12 deaths
occurred >=3 months after infusion of Tecartus. Fourteen of the 16
subjects died as a result of progressive disease and two of the 16
subjects died due to AEs (Grade 5 AE of staphylococcal bacteremia and
Grade 5 AE of organizing pneumonia).
---------------------------------------------------------------------------
\741\ Smith A, et al. Lymphoma incidence, survival and
prevalence 2004-2014: sub-type analyses from the UK's Haematological
Malignancy Research Network. Br J Cancer. 2015;112(9):1575-84.
\742\ Romaguera JE, et al. High rate of durable remissions after
treatment of newly diagnosed aggressive mantle-cell lymphoma with
rituximab plus hyper-CVAD alternating with rituximab plus high-dose
methotrexate and cytarabine. J Clin Oncol. 2005;23(28):7013-23
\743\ McKay P, et al. Guidelines for investigation and
management of mantle cell lymphoma. Br J Haematol. (2012) 159, 405-
426.
---------------------------------------------------------------------------
Based on the information provided by the applicant, we have several
concerns with regard to the substantial clinical improvement criterion.
As we noted in the FY 2021 IPPS/LTCH PPS proposed rule, the combined
sample size from the literature search and ZUMA-2 study performed by
the applicant is relatively small. While the applicant stated that it
closely communicated with FDA in the development of the ZUMA-2 study,
including in the development of the sample size, we question whether
the ZUMA-2 study results would support a determination of substantial
clinical improvement given the small sample size. Although the
applicant's analysis of the ZUMA-2 study concluded that Tecartus offers
a treatment option for a patient population unresponsive to, or
ineligible for, currently available treatments, we question whether the
sample size and research presented in this application support
extrapolating these results across the Medicare population.
Relatedly, we have concerns regarding the potential for selection
bias and its effects on results from the ZUMA-2 study. Seventy-four
patients were enrolled in the trial and underwent leukapheresis, of
which Tecartus was successfully manufactured for 71 (96%) and
administered for 68 (92%).\744\ According to the authors, the primary
efficacy analysis was performed among the 60 first treated patients who
had at least 7 months of follow up. We also note that the reported ORR
among the first 60 is 93% (95% CI 84-98) and the ORR among all 74
patients enrolled is 85%. We have concerns, given the small sample,
about the potential effects of selection bias and of patients being
selected out of a study on the results of ZUMA-2, which forms the
keystone of the applicant's assertions regarding substantial clinical
improvement. Further, some research suggests that trials stopped early
for benefit overestimate treatment effects 745 746 747 and
that formal stopping rules do not reduce this bias, particularly in
samples less than 500 events or cases.\748\ Given the lack of
confidence intervals around the ORR among all 74 patients and the
potential for the overestimation of treatment effects, it is unclear
whether there is sufficient information to determine a substantial
clinical improvement.
---------------------------------------------------------------------------
\744\ Wang M, et al. KTE-X19 CAR T-Cell therapy in relapsed or
refractory mantle-cell lymphoma. N Engl J Med. (2020) 382(14): 1331-
1342.
\745\ Pocock SJ. When (not) to stop a clinical trial for
benefit. JAMA 2005;294:2228e30.
\746\ Pocock SJ, Hughes MD. Practical problems in interim
analyses, with particular regard to estimation. Control Clin Trials
1989;10(4 Suppl): 209Se21S.
\747\ Montori VM, Devereaux PJ, Adhikari NK, Burns KE, Eggert
CH, Briel M, et al. Randomized trials stopped early for benefit: a
systematic review. JAMA 2005;294:2203e9.
\748\ Bassler D, Briel M, Montori VM, Lane M, Glasziou P, Zhou
Q, et al. Stopping randomized trials early for benefit and
estimation of treatment effects: systematic review and meta-
regression analysis. JAMA 2010;303:1180e7.
---------------------------------------------------------------------------
As noted in the FY 2021 IPPS/LTCH PPS proposed rule, there has not
been a direct study completed comparing outcomes of patients with r/r
MCL treatment with Tecartus and BTK inhibitors. According to the
applicant, ZUMA-2 remains the only study to evaluate patient outcomes
after receiving Tecartus for the treatment of r/r MCL, but this study
does not include a direct comparison to other existing therapies for r/
r MCL. Despite there being no standard of second-line care for r/r MCL
patients that failed on previous therapies, according to the applicant,
a BTK inhibitor reflects the best currently available therapy for
treating r/r MCL.\749\
---------------------------------------------------------------------------
\749\ Campo E, Rule S. Mantle cell lymphoma: evolving management
strategies. Blood. 2015;125(1):48-55.
---------------------------------------------------------------------------
The applicant's assertions of substantial clinical improvement are
based on the ZUMA-2 trial that uses a historical control ORR of 25%.
Given that the ORR in the provided literature review of six articles
ranges from 20%-42%, and that, according to the applicant, two specific
articles were used to develop the pre-specified historical control rate
(26% \750\ and 32% \751\ respectively), it is unclear whether the
historical control is appropriate or representative of r/r MCL
patients. Furthermore, given that the applicant states that ZUMA-2 was
not designed to compare efficacy and safety of Tecartus to BTK
inhibitors, we are uncertain whether it would support a determination
of substantial clinical improvement.
---------------------------------------------------------------------------
\750\ Martin P, et al. Postibrutinib outcomes in patients with
mantle cell lymphoma. Blood. 2016;127 (12):1559-63.
\751\ Cheah CY, et al. Patients with mantle cell lymphoma
failing ibrutinib are unlikely to respond to salvage chemotherapy
and have poor outcomes. Ann Oncol. 2015;26(6):1175-9.
---------------------------------------------------------------------------
As noted in the FY 2021 IPPS/LTCH PPS proposed rule, a longer-term
analysis of this population is not available to evaluate the overall
survival and mortality data. We note that the applicant did conduct an
additional analysis of OS among the first 28 subjects (ZUMA-2 interim
analysis) which showed an OS rate estimate at 24 months of 67.9% while
the median OS was not reached. Additionally, the applicant referenced
that all subjects in the ZUMA-2 primary analysis had at least 1 adverse
event, and that throughout the course of the ZUMA-2 study, 16 deaths
were recorded. However, while the applicant noted only 2 of these 16
deaths were related to adverse events, we remain concerned that further
analysis may be needed to evaluate the safety of Tecartus and the
longer term effects of the CRS and neurological events associated with
the Tecartus therapy.
We are inviting public comments on whether Tecartus meets the
substantial clinical improvement criterion.
We did not receive any written comments in response to the New
[[Page 25339]]
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for Tecartus.
s. TERLIVAZ[supreg] (Terlipressin)
Mallinckrodt Pharmaceuticals submitted an application for new
technology add-on payments for TERLIVAZ[supreg] (terlipressin) for FY
2022. Per the applicant, TERLIVAZ[supreg] is for intravenous use in the
treatment of adults with hepatorenal syndrome type 1 (HRS-1). The
applicant stated that TERLIVAZ[supreg] (N[alpha]-tryglycl-8-lysine-
vasopressin) is a pro-drug for the endogenous/natural porcine hormone
[Lys8]-vasopressin and a synthetic vasopressin analog derived from the
natural/endogenous human hormone [Arg8]-vasopressin.\752\ According to
the applicant, TERLIVAZ[supreg] has greater selectivity for the
vasopressin receptors (V1) versus vasopressin receptors (V2) and
inhibits portal hypertension with simultaneous reduction of blood
circulation in portal vessels.\753\ The applicant stated that the V1
receptor mediated vasoconstrictor activity of TERLIVAZ[supreg],
particularly in the splanchnic area, results in an increase in
effective arterial volume, an increase in mean arterial pressure (MAP),
and normalization of endogenous vasoconstrictor systems (renin-
angiotensin-aldosterone and sympathetic nervous system) resulting in
increased renal blood flow.\754\
---------------------------------------------------------------------------
\752\ Jamil K, Pappas SC, Devarakonda KR. In vitro binding and
receptor-mediated activity of terlipressin at vasopressin receptors
V1 and V2. J Exp Pharmacol. 2017;10:1-7.
\753\ Wong F. Recent advances in our understanding of
hepatorenal syndrome. Nat Rev Gastroenterol Hepatol. 2012;9(7):382-
391.
\754\ Ibid.
---------------------------------------------------------------------------
The applicant described HRS-1 as a serious, life-threatening
condition characterized by development of acute or sub-acute renal
failure in patients with advanced chronic liver disease (CLD). The
applicant stated that HRS-1 is estimated to affect between 30,000 and
40,000 patients in the U.S. annually 755 756 and is the
leading cause of hospitalizations among all patients with advanced
CLD.\757\ The applicant asserted that the high mortality and
significant rates of HRS-1-related readmissions support the need for
better disease awareness and more effective treatment
options.758 759 760 The applicant asserted that there are
currently no FDA-approved medications available in the US indicated
specifically for the treatment of HRS-1,\761\ but several agents are
used off-label. The applicant stated that in the U.S., the standard of
care and initial treatment for HRS-1 is a combination of midodrine and
octreotide, which are used off-label.762 763 According to
the applicant, this combination is concomitantly administered with
albumin. The applicant also stated that in patients who are admitted to
the ICU, initial treatment with norepinephrine, also used off-label, in
combination with albumin is recommended.\764\ The applicant stated that
the ideal therapy for HRS-1 is improvement of liver function from
either recovery of alcoholic hepatitis, treatment of decompensated
hepatitis B with effective antiviral therapy, recovery from acute
hepatic failure, or liver transplantation.\765\ According to the
applicant, TERLIVAZ[supreg] is approved as the first-line treatment for
HRS-1 in European and Asian countries under appropriate marketing
authorizations in those countries.\766\
---------------------------------------------------------------------------
\755\ Pant C, Jani BS, Desai M, et al. Hepatorenal syndrome in
hospitalized patients with chronic liver disease: results from the
Nationwide Inpatient Sample 2002-2012. J Investig Med.
2016;64(1):33-38.
\756\ Quick Facts. The United States Census Bureau. https://www.census.gov/quickfacts/fact/table/US/PST045218. Accessed January
24, 2021.
\757\ Allegretti AS, Ortiz G, Wenger J, et al. Prognosis of
Acute Kidney Injury and Hepatorenal Syndrome in Patients with
Cirrhosis: A Prospective Cohort Study. Int J Nephrol.
2015;2015:108139.
\758\ Rice JB, White AG, Galebach P, et al. The burden of
hepatorenal syndrome among commercially insured and Medicare
patients in the United States. Curr Med Res Opin. 2017;33(8):1473-
1480.
\759\ Low G, Alexander GJ, Lomas DJ. Hepatorenal syndrome:
Aetiology, diagnosis, and treatment. Gastroenterol Res Pract.
2015;2015:207012.
\760\ Angeli P, Bernardi M, Villanueva C, et al. EASL Clinical
Practice Guidelines for the management of patients with
decompensated cirrhosis. J Hepatol. 2018;69(2):406-460.
\761\ Jamil K, Huang X, Lovelace B, Pham AT, Lodaya K, Wan G.
The burden of illness of hepatorenal syndrome (HRS) in the United
States: A retrospective analysis of electronic health records. J Med
Econ. 2019;22(5):421-429.
\762\ Mindikoglu AL, Pappas SC. New Developments in Hepatorenal
Syndrome [published correction appears in Clin Gastroenterol
Hepatol. 2018 Jun;16(6):988]. Clin Gastroenterol Hepatol.
2018;16(2):162-177.e1.
\763\ Runyon BA. Hepatorenal syndrome. UpToDate.com. https://www.uptodate.com/contents/hepatorenal-syndrome. Updated April 13,
2020. Accessed January 26, 2020.
\764\ Ibid.
\765\ Runyon BA. Hepatorenal syndrome. UpToDate.com. https://www.uptodate.com/contents/hepatorenal-syndrome. Updated April 13,
2020. Accessed January 26, 2020.
\766\ Sarin S, Sharma P. Terlipressin: An Asset for
Hepatologists! Hepatology. 2011;54(2):724-728.
---------------------------------------------------------------------------
With respect to the newness criterion, the applicant stated that in
2005, a New Drug Application (NDA) filing for TERLIVAZ[supreg] was
granted Fast Track designation by the FDA and was considered under
Priority Review in May 2008, but a Complete Response Letter (CRL) was
issued by the FDA in November 2009. A CRL indicates that the review
cycle for an application is complete and that the application is not
ready for approval (73 FR 39588). The applicant also stated that in
2016, Mallinckrodt Pharmaceuticals and the FDA reached agreement on
their trial protocol design and data analysis under the agency's
special protocol assessment (SPA) process. In April 2020, the applicant
submitted the current NDA application with FDA as a Class 2
resubmission of the original NDA. On July 15, 2020, the Cardiovascular
and Renal Drugs Advisory Committee of the FDA voted to recommend
approval of the investigational agent TERLIVAZ[supreg] to treat adults
with HRS-1, but on September 14, 2020, Mallinckrodt received a CRL from
the FDA for this NDA. At the time of the development of this proposed
rule, TERLIVAZ[supreg] had not received FDA marketing authorization.
The applicant submitted a request for a unique ICD-10-PCS code to
identify the intravenous infusion of TERLIVAZ[supreg].
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, there are currently no FDA-approved
treatments for HRS-1 that have a mechanism of action of selectivity for
vasopressin V1 receptors. The applicant also stated that
TERLIVAZ[supreg] represents a different compound type, vasoconstrictor
class, and mechanism of action than those of currently available off-
label treatments for HRS-1. The applicant submitted the following table
that compares the mechanism of action for TERLIVAZ[supreg] to the
mechanism of action for existing technologies used off-label to treat
HRS-1 including midodrine, octreotide, and norepinephrine.
[[Page 25340]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.184
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated that
TERLIVAZ[supreg] may be assigned to the same MS-DRG as existing
technologies currently used to treat HRS-1. In particular, the
applicant stated that cases involving the use of Terlivaz[supreg] may
map to the three MS-DRGs included in Major Diagnostic Category (MDC) 7
(Diseases & Disorders of the Hepatobiliary System & Pancreas); MS-DRG
441--Disorders of Liver Except Malignancy, Cirrhosis or Alcoholic
Hepatitis with CC; MS-DRG 442--Disorders of Liver Except Malignancy,
Cirrhosis or Alcoholic Hepatitis with CC; and MS-DRG 443--Disorders of
Liver Except Malignancy, Cirrhosis or Alcoholic Hepatitis without CC/
MCC. The applicant stated that although TERLIVAZ[supreg] may be
assigned to the same MS-DRG when compared with an existing technology,
this does not mean that TERLIVAZ[supreg] is not new for the purposes of
new technology add-on payments because, according to the applicant, the
existing technologies are not specifically indicated for the treatment
of HRS-1. The applicant stated that none of the current standard-of-
care drugs used to treat HRS-1, namely midodrine, octreotide, and
norepinephrine are FDA-approved for the treatment of this disease. The
applicant referenced the discussion in the FY 2016 IPPS/LTCH PPS final
rule (80 FR 49445) of BLINCYTO[supreg], as an example of another
technology that was the only FDA-approved product available on the U.S.
market to treat the relevant indication, and stated that CMS agreed
that eligible cases involving the BLINCYTO technology would map to a
different MS-DRG than cases treated with similar technologies. The
applicant also stated that the MS-DRG system does not differentiate
between patients with HRS and non-HRS conditions that are assigned to
the three MS-DRGs included in Major Diagnostic Category (MDC) 7
(Diseases & Disorders of the Hepatobiliary System & Pancreas) and
further that the current MS-DRGs do not differentiate between HRS type
1 and type 2. The applicant states that because of this, both
TERLIVAZ[supreg] and an existing technology used to treat non-HRS
conditions of HRS type 2 may be assigned to MS-DRGs 441, 442, and 443.
---------------------------------------------------------------------------
\767\ Midodrine. Drugs.com. https://www.drugs.com/pro/midodrine.html. Updated August 1, 2020. Accessed January 25, 2021.
\768\ Compound Summary of Octreotide acetate. U.S. National
Library of Medicine.
\769\ Norepinephrine. Drugs.com. https://www.drugs.com/ppa/norepinephrine.html. Updated June 15, 2020. Accessed January 4,
2021.
\770\ Cavallin M, Kamath PS, Merli M, et al. Terlipressin plus
albumin versus midodrine and octreotide plus albumin in the
treatment of hepatorenal syndrome: a randomized trial. Hepatology.
2015;62:567-574.
---------------------------------------------------------------------------
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, TERLIVAZ[supreg] will treat the same type of disease but
will not treat the same or similar population when compared to existing
technologies currently treating HRS-1 in the U.S. The applicant stated
that TERLIVAZ[supreg] will offer treatment to a new patient population
that is a subset of the larger patient population for which
TERLIVAZ[supreg] will receive an FDA label, if approved, and that this
subset includes patients for which existing technologies offer a lower
rate of recovery of renal function compared to TERLIVAZ[supreg]. The
applicant states that while the FDA label for TERLIVAZ[supreg] will not
be reserved for a subset of the patient population that has been
diagnosed with HRS-1 and has failed to respond to standard-of-care
treatment options, it does not logically follow that because of this
label, TERLIVAZ[supreg] will not offer a treatment option to a new
patient population.
Based on the applicant's statements as summarized above, the
applicant believes that TERLIVAZ[supreg] is not substantially similar
to other currently available therapies and/or technologies and meets
the ``newness'' criterion. We note that while TERLIVAZ[supreg] may
address an unmet need because it will be the first treatment indicated
specifically for the treatment of HRS-1, the applicant's assertion that
TERLIVAZ[supreg] involves the treatment of a different patient
population on the basis that there is a lower rate of renal function
recovery using standard of care treatments does not necessarily support
the unmet need for HRS-1 treatment. We are inviting public comments on
whether TERLIVAZ[supreg] is substantially similar to other technologies
and whether TERLIVAZ[supreg] meets the newness criterion.
With respect to the cost criterion, the applicant searched the FY
2018 MedPAR dataset for cases reporting the ICD-10-CM code K76.7--
Hepatorenal syndrome. The applicant stated that average covered charges
were obtained at the provider level and case counts for provider
instances with fewer than 11
[[Page 25341]]
discharges at the MS-DRG level were redacted and replaced with the
number 1. The applicant initially identified 2,592 providers and 35,806
cases. The applicant excluded 315 providers and 1,149 cases that were
not listed in the Impact File FY 2021 Proposed Rule, as the average
charges for these cases/providers could not be standardized. The
applicant further stated that there were initially 255 MS-DRGs in the
data set. However, three MS-DRGs were not found in FY 2022 New
Technology Thresholds file posted with the FY 2021 IPPS final rule and
correction notice, and an additional three MS-DRGs were excluded
because providers were not listed in the Impact File FY 2021 Proposed
Rule. The exclusion of those 6 MS-DRGs resulted in an additional 6
excluded cases. Thus, the final data set for analysis included 34,651
cases spanning across a total of 249 MS-DRGs.
The applicant then presented six analyses with defined cohorts. The
applicant considered the following factors in defining the cohorts:
The applicant explained that, because HRS is not always
the primary or admitting diagnosis in cases where ICD-10-CM code K76.7
is present, and that K76.7 is commonly coded to cases such as sepsis,
they included cases where HRS is the primary and/or admitting diagnosis
code in cohorts 1, 3, and 5 and cases where HRS can be the primary, the
admitting, or any secondary diagnosis in cohorts 2, 4, and 6.
The applicant stated that it filtered out cases without a
2-day minimum length of inpatient stay. Per the applicant, the ICD-10-
CM diagnosis code K76.7 covers type 1 and type 2 HRS. The applicant
stated that HRS type 1 and type 2 have clinical differentiators that
make HRS-1 the condition requiring greater hospital resource
utilization to treat. The applicant stated that, to produce a cost
threshold calculation for an indication of HRS-1, HRS-2 cases must be
redacted from any inpatient case population used to ensure charge
averages are not dampened by lower costs to treat cases not described
by an HRS-1 indication. The applicant explained that HRS-1 is diagnosed
by the exclusion of other causes of acute kidney injury in cirrhotic
patients, and that no response to 2 consecutive days of diuretic
withdrawal and volume expansion with albumin is one of the diagnostic
criteria in patients with cirrhosis. Accordingly, per the applicant,
patients who do not fulfill this criterion within 48 hours cannot be
considered HRS-1 cases and were excluded from the analysis.
The applicant also stated that the clinical presentation
of HRS-1 means the more serious cases requiring stabilization will be
treated in the ICU and other cases will be treated in the general
medical ward. The applicant included cases with an ICU indicator for
Cohorts 1 and 2, representing serious cases where the patient needed
stabilization procedures and/or conditions needing immediate attention.
The applicant stated that these could be conditions related to, caused
by, or leading to the HRS diagnosis or having no relationship to HRS
other than a concurrent presence. The applicant also included cases
without an ICU indicator for cohorts 3 and 4 and included all cases
without differentiation in ICU utilization for cohorts 5 and 6.
[GRAPHIC] [TIFF OMITTED] TP10MY21.185
The applicant then removed the charges for the technology being
replaced. For analyses 1 and 2, the applicant removed the estimated
cost of generic norepinephrine based on HRS-1 dosing regimens from each
case, which was $1,699 (AnalySource 2018 U.S. Pricing). For analyses 3
and 4, the applicant removed the estimated cost of midodrine plus
octreotide based on HRS-1 dosing regimens from each case, which was
$3,391 (AnalySource 2018 U.S. Pricing). For analyses 5 and 6, the
applicant removed the estimated cost of generic norepinephrine ($1,699)
from ICU cases and the estimated cost of midodrine plus octreotide
($3,391) from non-ICU cases.
Across all analyses, the applicant standardized the charges and
applied a 2-year inflation factor of 13.1 percent that the applicant
stated was used in the FY 2021 IPPS/LTCH PPS final rule to calculate
outlier threshold charges. We note that the 2-year inflation factor
used in the FY 2021 IPPS/LTCH PPS final rule to calculate outlier
threshold charges is 1.13218, which would have increased the inflated
charges. The applicant stated that it did not add any charges for and
related to the new technology or any charges related to the prior
technologies.
In the first analysis, (Cohort 1), the applicant computed a final
inflated average case-weighted standardized charge per case of
$135,189, which exceeded the average case-weighted threshold amount of
$70,629.
In the second analysis, (Cohort 2), the applicant computed a final
inflated average case-weighted standardized charge per case of
$181,617, which exceeded the average case-weighted threshold amount of
$88,445.
In the third analysis, (Cohort 3), the applicant computed a final
inflated average case-weighted standardized charge per case of $59,184,
which exceeded the average case-weighted threshold amount of $56,994.
In the fourth analysis, (Cohort 4), the applicant computed a final
inflated average case-weighted standardized
[[Page 25342]]
charge per case of $66,974, which exceeded the average case-weighted
threshold amount of $63,976.
In the fifth analysis, (Cohort 5), the applicant computed a final
inflated average case-weighted standardized charge per case of $96,783,
which exceeded the average case-weighted threshold amount of $63,738.
In the sixth analysis, (Cohort 6), the applicant computed a final
inflated average case-weighted standardized charge per case of
$132,324, which exceeded the average case-weighted threshold amount of
$78,101.
Because the final inflated average case-weighted standardized
charge per case exceeded the average case-weighted threshold amount
under all analyses, the applicant asserted that the technology meets
the cost criterion. However, based on the information provided by the
applicant, we have the following concerns regarding the cost criterion.
We question whether the analyses conducted by applicant may include MS-
DRGs that are defined by other factors and which may or may not be
related to the intended indication for TERLIVAZ[supreg]. Per the
applicant, on average, MS-DRGs 441 and 442, used for disorders of the
liver, covered 83.41 percent of cases included in cohorts where HRS is
the primary and/or admitting diagnosis code, and may therefore be a
more refined representation of current reimbursement for cases of HRS-
1. We also note that the applicant identified cases using the FY 2018
MedPAR dataset instead of the FY 2019 MedPAR dataset. We invite public
comments on whether TERLIVAZ[supreg] meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserts that TERLIVAZ[supreg] represents a substantial
clinical improvement over existing technologies because the use of
TERLIVAZ[supreg] is associated with a more rapid resolution of the HRS-
1 disease process and a reduced rate of mortality compared to placebo,
midodrine and octreotide, and norepinephrine. The applicant also stated
that the use of TERLIVAZ[supreg] is associated with a decreased rate of
several subsequent diagnostic or therapeutic interventions, compared
with placebo and the overall benefit-risk profile of TERLIVAZ[supreg]
as a treatment for HRS-1 is favorable.
In support of the claim that the use of TERLIVAZ[supreg] is
associated with a more rapid resolution of the HRS-1 disease process
and a reduced rate of mortality compared to placebo, the applicant
submitted a PowerPoint presentation that discussed the results of the
CONFIRM study. The CONFIRM study \771\ was a randomized (2:1), double-
blind, placebo-controlled study comparing TERLIVAZ[supreg] to placebo
in 300 adult patients, 18 years of age or older with HRS-1 (defined as
rapidly progressive worsening in renal function to a serum creatinine
(SCr) >=2.25 mg/dL and meeting a trajectory for SCr to double over 2
weeks). TERLIVAZ[supreg] or placebo were administered as a 1 mg IV
bolus injection every 6 hours for a maximum of 14 days.
---------------------------------------------------------------------------
\771\ U.S. Food and Drug Administration. Terlipressin Briefing
Document. NDA # 022231. Cardiovascular and Renal Drugs Advisory
Committee, July 15, 2020. https://www.fda.gov/media/139963/download.
Accessed February 17, 2021.
---------------------------------------------------------------------------
The primary objective of the study was to confirm the efficacy and
safety of TERLIVAZ[supreg] versus placebo in the treatment of adult
subjects with HRS-1 receiving standard of care albumin therapy. The
primary endpoint was the incidence of verified HRS reversal, defined as
2 consecutive serum creatinine values <=1.5 mg/dL at least 2 hours
apart, while on treatment by Day 14 or discharge, whichever came first
(on treatment defined as up to 24 hours after the final dose of study
drug). In order to be counted in the primary endpoint, patients needed
to be alive without renal replacement therapy (RRT) for at least 10
days after achieving verified HRS reversal. RRT was defined as any
procedure to replace nonendocrine kidney function and included
intermittent hemodialysis, ultrafiltration, continuous hemofiltration
and hemodialysis, peritoneal dialysis, and other dialysis and
filtration techniques. The secondary endpoints and their definitions
are listed in the following table. The statistical analysis plan also
specified that the secondary endpoints were to be tested using the
Hochberg procedure to control the overall type 1 error rate.\772\ A
sample size calculation was conducted and found that a sample size of
300 subjects would provide approximately 90% power with a two-sided
type 1 error rate of 0.05 with a 2:1 randomization and assuming event
rates of verified HRS reversal of approximately 28% and 12.5%.
---------------------------------------------------------------------------
\772\ Ibid.
[GRAPHIC] [TIFF OMITTED] TP10MY21.186
[[Page 25343]]
The applicant \773\ stated that the incidence of verified HRS
reversal was 29.1 percent (n=58) in the TERLIVAZ[supreg] (treatment)
group and 15.8 percent (n=16) in the placebo (control) group
(p=0.012).\774\ According to the applicant, the incidence of subjects
with HRS-1 reversal was 36.2 percent (n=72) in the treatment group and
16.8 percent (n=17) in the control group (p<0.001). The durability of
HRS-1 reversal was 31.7 percent (n=63) in the treatment group and 15.8
percent (n=16) in the control group (p=0.003). The incidence of HRS-1
reversal in SIRS subgroup was 33.3 percent (n=28) in the treatment
group and 6.3 percent (n=3) in the control group (p <0.001). According
to the applicant, the incidence of verified HRS-1 reversal without HRS-
1 recurrence by Day 30 was 24.1 percent (n=48) in the treatment group
and 15.8 percent (n=16) in the control group (p=0.092). The applicant
also claimed that the overall survival up to Day 90 was higher in
responders (subjects who achieved verified HRS reversal or HRS reversal
while receiving treatment) than in non-responders (p<0.001) in both the
treatment and control groups.\775\
---------------------------------------------------------------------------
\773\ Ibid.
\774\ Wong F, Curry MP, Reddy KR, et al, on behalf of the
CONFIRM Study Investigators. The CONFIRM Study: A North American
Randomized Controlled Trial (RCT) of Terlipressin plus Albumin for
the Treatment of Hepatorenal Syndrome Type 1 (HRS-1). Presented at:
The American Association for the Study of Liver Diseases (AASLD)
meeting; November 8-12, 2019; Boston, MA.
\775\ Jamil, K. Terlipressin, a New Investigational Drug for the
Treatment of Hepatorenal Syndrome Type 1. Presented at: New
Technology Town Hall Meeting; December 16, 2019; Centers for
Medicare & Medicaid Services; Baltimore, MD.
---------------------------------------------------------------------------
The applicant asserted that the study conducted by Arora et
al.\776\ supports its claims that the use of TERLIVAZ[supreg] is
associated with a more rapid resolution of the HRS-1 disease process
and a reduced rate of mortality compared to norepinephrine. This study
was an open-label, randomized controlled trial conducted as a single-
center study in India. The study compared a continuous infusion of
TERLIVAZ[supreg] and albumin to a continuous infusion of norepinephrine
and albumin in the management of HRS-acute kidney injury (AKI) in
patients with a diagnosis of acute on chronic liver failure (ACLF).
Patients were randomized to receive either TERLIVAZ[supreg] or
norepinephrine in a 1:1 ratio.\777\
---------------------------------------------------------------------------
\776\ Arora V, Maiwall R, Rajan V, et al. Terlipressin Is
Superior to Noradrenaline in the Management of Acute Kidney Injury
in Acute on Chronic Liver Failure. Hepatology. 2019;71(2):600-610.
\777\ Ibid.
---------------------------------------------------------------------------
ACLF is a distinct diagnosis where, because of severe acute hepatic
injury, a rapid loss of liver function develops in a patient with
previous chronic liver disease. In this study, ACLF was defined as an
acute hepatic insult manifesting as jaundice (serum bilirubin >=5 mg/
dL) and coagulopathy (international normalized ratio [INR] >=1.5)
complicated within 4 weeks by ascites and/or encephalopathy in a
patient with previously diagnosed or undiagnosed chronic liver disease
or cirrhosis. HRS-AKI was defined as ICA-AKI stage >=II when other
causes of AKI were excluded and the patient was nonresponsive to volume
expansion with intravenous albumin.
A total of 120 patients were randomized and 60 patients were
allocated to the intention to treat group for both the TERLIVAZ[supreg]
and norepinephrine arms. Adverse events requiring discontinuation of
the drug were reported in 9 of 60 (15%) patients in the
TERLIVAZ[supreg] arm compared to 5 of 60 (8.3%) in the norepinephrine
arm (P=0.39). These events included diarrhea, abdominal pain, atrial
fibrillation, cyanosis, and chest pain in the TERLIVAZ[supreg] arm. In
the norepinephrine arm, patients experienced the previously mentioned
adverse events as well as ventricular premature complex (VPCs) and
hypertension. The per protocol analysis included 51 patients in the
TERLIVAZ[supreg] arm and 55 patients in the norepinephrine arm. A
response rate of 56% for TERLIVAZ[supreg], a response rate of 43% for
norepinephrine, and a 10% noninferiority margin was assumed. For an
alpha level of 5 percent and power of 80 percent, it was determined
that 57 patients were needed in each arm.
According to the applicant, the results showed that a higher
percentage of patients achieved HRS reversal at day 14 (primary
endpoint) in the TERLIVAZ[supreg] group compared to the norepinephrine
group in both the intention to treat analysis (ITT) and per-protocol
analysis (PPA) (ITT 40 percent (n=24) vs. 16.7 percent (n=10); p=0.004;
PPA 43.13 percent (n=22) vs. 16.3 percent (n=9); p=0.002). Complete
response was defined as return of serum creatinine (SCr) to a value
within 0.3 mg/dL of baseline.
In support of its claims that TERLIVAZ[supreg] is associated with a
more rapid resolution of the HRS-1 disease process and a reduced rate
of mortality compared to midodrine and octreotide, the applicant
summarized the results of the Cavallin et al. study,\778\ which
compared TERLIVAZ[supreg] plus albumin versus midodrine and octreotide
plus albumin in a multi-center randomized controlled trial. Patients in
the study were from eight hospitals in Italy. The researchers
hypothesized a response rate of 60 percent for TERLIVAZ[supreg] and of
30 percent for midodrine plus octreotide (MID/OCT), with an alpha error
of 5 percent and power of 80 percent. An interim analysis after
enrollment of half the sample size set a stopping rule for the
randomized clinical trial if the difference in recovery of renal
function was significant at P<0.01. The study was terminated after 49
patients were included according to the a priori determined stopping
rule. The applicant stated that the results showed that improvement of
renal function was significantly more frequent in patients randomized
to the TERLIVAZ[supreg] group compared to patients randomized to the
MID/OCT group; 70.4 percent of patients in the TERLIVAZ[supreg] group
had a complete or partial response compared with 28.6 percent in the
MID/OCT group (p=0.01); 55.5 percent of patients in the
TERLIVAZ[supreg] group had a complete response compared with 4.8
percent of the MID/OCT group (p<0.001). Complete response was defined
as a decrease in serum creatinine to <=133 [mu]mol/L (<=1.5 mg/dL).
Partial response was defined as a >=50% serum creatinine decrease from
baseline to a final value >133 [micro]mol/L (>1.5 mg/dL). No response
was defined as a serum creatinine decrease of <50% from baseline.
---------------------------------------------------------------------------
\778\ Cavallin M, Kamath PS, Merli M, et al. Terlipressin plus
albumin versus midodrine and octreotide plus albumin in the
treatment of hepatorenal syndrome: a randomized trial. Hepatology.
2015;62:567-574.
---------------------------------------------------------------------------
In this study, some nonresponders to the assigned treatment
received a rescue treatment according to the treating physician's
decision. Seven of 12 (58.3 percent) nonresponders in the MID/OCT group
received a rescue treatment: Six received TERLIVAZ[supreg] plus
albumin, and one received dialysis. An improvement of renal function
was observed in five of six patients (83.3 percent) who received
TERLIVAZ[supreg] plus albumin. Four patients had a complete response
and one patient had a partial response.
In support of its claim that TERLIVAZ[supreg] is associated with a
decreased rate of subsequent diagnostic or therapeutic interventions,
compared with placebo, the applicant cited the results of the CONFIRM
trial. The applicant noted that there was a lower incidence of renal
replacement therapy through the treatment period (14 days) in patients
receiving TERLIVAZ[supreg] (23.1 percent (n=46)) versus the placebo
(34.7 percent (n=35)). The applicant also stated that there was a
decreased incidence of renal replacement therapy (RRT) after liver
transplant in patients treated with TERLIVAZ[supreg] (19.6 percent
[[Page 25344]]
(n=46)) versus 44.8 percent (n=29) in the placebo group (p=0.04). The
applicant stated that the need for RRT post-transplant is predictive of
poor graft function and survival.\779\ The applicant also claimed that
patients receiving TERLIVAZ[supreg] stayed an average of 6.4 days in
the ICU versus 13.2 days in the placebo group.
---------------------------------------------------------------------------
\779\ Watt KDS, Pedersen RA, Kremers WK, et al. Evolution of
Causes and Risk Factors for Mortality Post-Liver Transplant: Results
of the NIDDK Long-Term Follow-Up Study. Am. J. Transplant.
2010;10(6)1420-1427.
---------------------------------------------------------------------------
In support of its assertion that the overall benefit-risk profile
of TERLIVAZ[supreg] as a treatment for HRS-1 is favorable, the
applicant cited the results of the CONFIRM trial. The applicant noted
that the overall incidence of adverse events (AEs) and serious adverse
events (SAEs) were similar between patients receiving TERLIVAZ[supreg]
(n=200) and those receiving placebo (n=99). Further, the applicant
stated that 88.0 percent (n=176) of patients receiving TERLIVAZ[supreg]
reported AEs versus 88.9 percent (n=88) in the placebo group and that
65.0 percent (n=130) of patients receiving TERLIVAZ[supreg] reported
SAEs versus 60.6 percent (n=60) in the placebo group. The applicant
also claimed that the majority of AEs associated with TERLIVAZ[supreg]
are predictable, recognizable, and generally manageable in the hospital
setting where HRS-1 patients are treated.
Finally, the applicant asserted that TERLIVAZ[supreg] represents a
substantial clinical improvement because the totality of the
circumstances otherwise demonstrates that TERLIVAZ[supreg]
substantially improves, relative to technologies previously available,
the treatment of Medicare beneficiaries. The applicant stated that HRS-
1 is a serious, life-threatening condition characterized by development
of acute or sub-acute renal failure in patients with advanced CLD. The
applicant further emphasized that HRS-1 is the leading cause of
hospitalizations among all patients with advanced CLD; therefore,
inpatient care management of patients with HRS-1 is time and resource
intensive, representing a significant cost to hospitals.\780\ Finally,
the applicant reiterated that upon FDA approval, TERLIVAZ[supreg] will
be the only FDA-approved drug for the HRS-1 indication that aligns with
the European Association for the Study of the Liver (EASL) treatment
guidelines for HRS-1: ``Terlipressin plus albumin should be considered
as the first-line therapeutic option for the treatment of HRS-AKI.''
\781\
---------------------------------------------------------------------------
\780\ Jamil K, Huang X, Lovelace B, et al. The Burden of Illness
of Hepatorenal Syndrome (HRS) in the United States: A Retrospective
Analysis of Electronic Health Records. Journal of Medical Economics.
2019;22(5):421-430.
\781\ Angeli P, Bernardi M, Villanueva C, et al. EASL Clinical
Practice Guidelines for the management of patients with
decompensated cirrhosis. Journal of Hepatology. 2018;69(2):406-460.
---------------------------------------------------------------------------
In our assessment of the applicant's claims in support of
substantial clinical improvement, we have the following concerns.
Regarding the CONFIRM trial, we note that at the time of development of
this proposed rule, this study has not been published and we would
appreciate access to additional or more robust materials to facilitate
further review of the CONFIRM trial results. We note that the
proportion of patients with verified HRS reversal without HRS
recurrence by Day 30 was numerically greater in the TERLIVAZ[supreg]
arm, but the difference between groups was not statistically
significant (24 percent vs 16 percent, p=0.09) \782\ and we note that
the potential for HRS-1 recurrence among patients treated with
TERLIVAZ[supreg] after 30 days is unclear. We also note that, though
the applicant claimed a reduction in mortality with the use of
TERLIVAZ[supreg], the mortality rate at Day 90 was higher in the
TERLIVAZ[supreg] group vs the placebo group (51 percent vs 44.4
percent).\783\ We further note that the applicant states that survival
was not defined as a primary or secondary analysis in the CONFIRM trial
and that no overall survival benefit was observed in the CONFIRM trial
because survival is confounded by multiple co-morbidities in patients
with HRS-1.\784\ We note that the primary endpoint of the CONFIRM trial
used a surrogate endpoint of serum creatinine as an indicator of HRS
reversal, and we question whether this correlates to improvements in
clinical outcomes such as mortality and time to transplant. With regard
to the applicant's claims regarding a similar incidence of adverse
events and serious adverse events between groups in the CONFIRM trial,
we note that the results show that the TERLIVAZ[supreg] arm had a
higher incidence of SAEs up to 30 days post-treatment related to
respiratory failure, serious infections such as sepsis and septic
shock, GI bleeding, and abdominal pain. Additionally, 61 percent (\17/
28\) of respiratory events in the treatment arm were fatal versus 20%
(\1/5\) in the placebo arm.\785\ Regarding the study conducted by Arora
et al., we note that this study had an open-label design and included
patients with a diagnosis of ACLF as well as HRS-AKI which may have
contributed to the differences observed between the TERLIVAZ[supreg]
arm and the norepinephrine arm in this study.\786\ Finally, we note
that the results of the Cavallin et al study submitted by the applicant
in support of a substantial clinical improvement over midodrine and
octreotide show that there was no survival benefit for the
TERLIVAZ[supreg] group at months one and three.\787\
---------------------------------------------------------------------------
\782\ Wong F, Curry MP, Reddy KR, et al, on behalf of the
CONFIRM Study Investigators. The CONFIRM Study: A North American
Randomized Controlled Trial (RCT) of Terlipressin plus Albumin for
the Treatment of Hepatorenal Syndrome Type 1 (HRS-1). Presented at:
The American Association for the Study of Liver Diseases (AASLD)
meeting; November 8-12, 2019; Boston, MA.
\783\ U.S. Food and Drug Administration. Terlipressin Briefing
Document. NDA #022231. Cardiovascular and Renal Drugs Advisory
Committee, July 15, 2020. https://www.fda.gov/media/139963/download.
Accessed February 17, 2021.
\784\ Mallinckrodt Pharmaceuticals. Terlipressin Briefing
Document. NDA #022231. Cardiovascular and Renal Drugs Advisory
Committee, July 15, 2020. U.S. Food and Drug Administration. https://www.fda.gov/media/139965/download. Accessed February 18, 2021.
\785\ U.S. Food and Drug Administration. Terlipressin Briefing
Document. NDA #022231. Cardiovascular and Renal Drugs Advisory
Committee, July 15, 2020. https://www.fda.gov/media/139963/download.
Accessed February 17, 2021.
\786\ Israelsen M, Krag A, Allegretti AS, et al. Terlipressin
versus other vasoactive drugs for hepatorenal syndrome. Cochrane
Database Syst Rev [internet] 2017 [cited 2019 Nov 5]; 2017(9).
Available from: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6483765/.
\787\ Cavallin M, Kamath PS, Merli M, et al. Terlipressin plus
albumin versus midodrine and octreotide plus albumin in the
treatment of hepatorenal syndrome: A randomized trial. Hepatology.
2015;62:567-574.
---------------------------------------------------------------------------
We welcome public comment on whether TERLIVAZ[supreg] meets the
substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
TERLIVAZ[supreg].
s. VEKLURY[supreg] (remdesivir)
Gilead Sciences, Inc. submitted an application for new technology
add-on payments for VEKLURY[supreg] (remdesivir) for FY 2022.
VEKLURY[supreg] is a nucleotide analog that inhibits viral RNA-
dependent RNA polymerases, demonstrating activity countering viral
pathogens such as severe acute respiratory syndrome coronavirus 2
(SARS-CoV-2), the virus that causes coronavirus disease 2019 (COVID-
19).
According to the applicant, spread of COVID-19 is presumed largely
to occur through respiratory droplets and approximately 80% is
predicted to occur by pre- and asymptomatic
[[Page 25345]]
individuals. The applicant asserted viral incubation averages 3-7 days
and can occur for up to 2 weeks.\788\ According to the applicant, once
infected, approximately 81% of COVID-19 patients experience mild
disease, 14% experience severe disease, and 5% experience critical
disease.\789\ The applicant stated that severity of disease changes
with age--approximately 113 in 100,000 people aged 18-49 years are
hospitalized, compared to 250 in 100,000 aged 50-64 years and 451 in
100,000 aged 65+.\790\ The applicant asserted that other risk factors
for severity include underlying comorbidities but severe illness can
occur in otherwise healthy individuals at any age.\791\
---------------------------------------------------------------------------
\788\ Cascella M, Rajnik M, Cuomo A, et al. Features,
Evaluation, and Treatment of Coronavirus (COVID-19). StatPearls,
published August 10, 2020. https://www.ncbi.nlm.nih.gov/books/NBK554776/.
\789\ McIntosh K, Hirsch MS (ed), and Bloom A (ed). Coronavirus
disease 2019 (COVID-19): Clinical features. UpToDate, updated
September 14, 2020. https://www.uptodate.com/contents/coronavirusdisease-2019-covid-19-clinical-features.
\790\ Centers for Disease Control and Prevention (CDC).
COVIDView A weekly Surveillance Summary of U.S. COVID-19 Activity,
published September 11, 2020. https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html.
\791\ McIntosh K, Hirsch MS (ed), and Bloom A (ed). Coronavirus
disease 2019 (COVID-19): Clinical features. UpToDate, updated
September 14, 2020. https://www.uptodate.com/contents/coronavirusdisease-2019-covid-19-clinical-features.
---------------------------------------------------------------------------
According to the applicant, patients who present to the hospital
with evidence of pneumonia may require supplemental oxygen in severe
cases, or, those with critical illness may develop hypoxemic
respiratory failure, acute respiratory distress syndrome, and
multiorgan failure that requires ventilation support.\792\ The
applicant cited one study of 2,482 hospitalized COVID-19 patients, in
which 32% of patients were admitted to the intensive care unit (ICU)
for a median stay of 6 days and 19% received invasive mechanical
ventilation, 53% of whom died in the hospital.\793\
---------------------------------------------------------------------------
\792\ Ibid.
\793\ Kim L, Garg S, O'Halloran A, et al. Risk Factors for
Intensive Care Unit Admission and Inhospital Mortality Among
Hospitalized Adults Identified through the US Coronavirus Disease
2019 (COVID-19)-Associated Hospitalization Surveillance Network
(COVID-NET). Clinical Infectious Diseases. 2020; ciaa1012, https://doi.org/10.1093/cid/ciaa1012.
---------------------------------------------------------------------------
According to the applicant, VEKLURY[supreg] received FDA approval
for use in the inpatient setting on October 22, 2020 via Priority
Review and had received Fast Track designation.\794\ Under the New Drug
Application (NDA) FDA approval, VEKLURY[supreg] is indicated for adults
and pediatric patients (12 years of age and older and weighing at least
40 kg) for the treatment of COVID-19 requiring
hospitalization.795 796 Prior to its approval, on May 1,
2020, VEKLURY[supreg] received an Emergency Use Authorization (EUA)
from FDA for the treatment of suspected or laboratory-confirmed COVID-
19 in adults and children hospitalized with severe disease.\797\
VEKLURY[supreg] continues to have an EUA for pediatric patients (12
years of age or younger weighing at least 3.5 kg or weighing 3.5 kg to
less than 40 kgs) for emergency use to treat suspected or laboratory-
confirmed COVID-19 in hospitalized pediatric
patients.798 799
---------------------------------------------------------------------------
\794\ FDA. FDA News Release: FDA Approves First Treatment for
COVID-19, published October 22, 2020. https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-covid-19.
\795\ VEKLURY[supreg] NDA approval: https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/214787Orig1s000ltr.pdf; https://www.fda.gov/media/143189/download.
\796\ FDA. Fact Sheet for Health Care Providers Emergency Use
Authorization (EUA) of VEKLURY[supreg] (remdesivir): https://www.fda.gov/media/137566/download.
\797\ FDA News Release: Coronavirus (COVID-19) Update: FDA
Issues Emergency Use Authorization for Potential COVID-19 Treatment.
Published May 1, 2020. https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-issues-emergency-use-authorization-potential-covid-19-treatment.
\798\ VEKLURY[supreg] EUA: https://www.fda.gov/media/137564/download.
\799\ FDA News Release: COVID-19 Update: FDA Broadens Emergency
Use Authorization for VEKLURY[supreg] (remdesivir) to Include All
Hospitalized Patients for Treatment of COVID-19, published August
28, 2020. https://www.fda.gov/news-events/press-announcements/covid-19-update-fda-broadens-emergency-use-authorization-VEKLURY[supreg]-
remdesivir-include-all-hospitalized.
---------------------------------------------------------------------------
According to the applicant, VEKLURY[supreg] has been available
under the EUA since it was first issued in May 2020 for emergency use
in the inpatient setting for patients with COVID-19. The applicant
asserted that between July 1, 2020 and September 30, 2020, it entered
into an agreement with the U.S. Government to allocate and distribute
commercially-available VEKLURY[supreg] across the country.\800\ The
applicant stated that under this agreement, the first sale of
VEKLURY[supreg] was completed on July 10, 2020. The applicant stated
that they transitioned to a more traditional, unallocated model of
distribution as of October 1, 2020.
---------------------------------------------------------------------------
\800\ Veklury (remdesivir)--ASPR's Portfolio of COVID-19 Medical
Countermeasures Made Available as a Licensed Product https://www.phe.gov/emergency/events/COVID19/investigation-MCM/Pages/Veklury.aspx.
---------------------------------------------------------------------------
According to the applicant, as of August 1, 2020, VEKLURY[supreg]
is uniquely identified by ICD-10-PCS codes XW033E5 (Introduction of
remdesivir anti-infective into peripheral vein, percutaneous approach,
new technology group 5) and XW043E5 (Introduction of remdesivir anti-
infective into central vein, percutaneous approach, new technology
group 5). Prior to August 1, 2020, the generic, non-COVID-19 ICD-10-PCS
codes 3E033GC (Introduction of other therapeutic substance into
peripheral vein, percutaneous approach) and 3E043GC (Introduction of
other therapeutic substance into central vein, percutaneous approach)
could be reported for the use of VEKLURY[supreg].
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted VEKLURY[supreg] is a SARS-CoV-2 nucleotide analog
RNA polymerase inhibitor, and that there are no other antiretroviral
therapies that have received an EUA or an approval from FDA to treat
COVID-19. The applicant stated, however, that convalescent plasma has
also received an EUA for the treatment of hospitalized patients with
COVID-19.801 802 According to the applicant, convalescent
plasma is collected from individuals who have been infected with SARS-
CoV-2 and have developed antibodies to the virus. The applicant stated
that plasma is transfused into infected patients with the expectation
that the antibodies present will neutralize the virus.\803\ The
applicant asserted this mechanism of action is different from
VEKLURY[supreg] which works as a nucleotide analog to inhibit viral
replication. We note that, as a result of their evaluation of the most
recent information available, on February 4, 2021 FDA reissued the EUA
for convalescent plasma. The EUA authorizes only the use of high titer
COVID-19 convalescent plasma, for the treatment of hospitalized
patients early in the course of disease. The use of low titer COVID-19
convalescent plasma is not authorized under the EUA.\804\
---------------------------------------------------------------------------
\801\ Convalescent plasma EUA: https://www.fda.gov/media/141477/download.
\802\ FDA. Emergency Use Authorizations: Drug and Biological
Products. 2020. https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization#coviddrugs.
\803\ Liu STH, Li MH, Baine I, at al. Convalescent plasma
treatment of severe COVID-19: A propensity score-matched control
study. Nature Medicine. 2020. https://doi.org/10.1038/s41591-020-1088-9.
\804\ FDA reissued the EUA on March 9, 2021. FDA In Brief: FDA
Updates Emergency Use Authorization for COVID-19 Convalescent Plasma
to Reflect New Data, published February 4, 2021. https://www.fda.gov/news-events/fda-brief/fda-brief-fda-updates-emergency-use-authorization-covid-19-convalescent-plasma-reflect-new-data and
https://www.fda.gov/media/141477/download.
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[[Page 25346]]
We note that another inpatient treatment for COVID-19,
Olumiant[supreg] (baricitinib), in combination with VEKLURY[supreg],
has received an EUA. Specifically, the EUA for Olumiant[supreg], which
should be administered in combination with VEKLURY[supreg], is for the
treatment of COVID-19 in certain hospitalized patients requiring
supplemental oxygen, invasive mechanical ventilation, or extracorporeal
membrane oxygenation (ECMO).\805\ Olumiant[supreg] is a Janus kinase
(JAK) inhibitor with prior FDA approval for another indication--the
treatment of adult patients with moderately to severely active
rheumatoid arthritis who have had inadequate response to one or more
tumor necrosis factor (TNF) antagonist therapies.\806\
---------------------------------------------------------------------------
\805\ Olumiant[supreg] EUA: https://www.fda.gov/media/143822/download.
\806\ Olumiant[supreg] (baricitinib) [package insert]. FDA,
revised July 8, 2020. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/207924s002lbl.pdf.
---------------------------------------------------------------------------
According to the applicant, because of the rapidly evolving nature
of the COVID-19 pandemic, there is not a current standard of care used
across hospitals in the United States.
With regard to the second criterion, whether the technology is
assigned to the same or a different MS-DRG, the applicant asserted that
as there no other antiretroviral therapies for the treatment of
patients with COVID-19, VEKLURY[supreg] could not be assigned to the
same MS-DRG as existing technologies.
With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
asserted VEKLURY[supreg] represents a novel treatment option for
patients with COVID-19 who are hospitalized. The applicant stated
COVID-19 is a completely separate disease from those caused by other
coronaviruses. The applicant asserted severe acute respiratory syndrome
(SARS) is caused by the coronavirus SARS-CoV and was first reported in
2003. The applicant stated SARS symptoms were similar to COVID-19 and
included high fever, body aches, and mild respiratory symptoms but no
treatments specific to SARS-CoV have been developed.\807\ According to
the applicant, MERS-CoV, the Middle east respiratory syndrome
coronavirus, was first identified in 2012 and has some similarities in
etiology to SARS-CoV-2 but lacks treatment options.\808\
---------------------------------------------------------------------------
\807\ CDC. Severe Acute Respiratory Syndrome (SARS), updated
December 6, 2017. https://www.cdc.gov/sars/index.html.
\808\ CDC. About MERS, Updated August 2, 2019. https://www.cdc.gov/coronavirus/mers/about/index.html.
---------------------------------------------------------------------------
Based on the applicant's statements as summarized previously, the
applicant believes that VEKLURY[supreg] is not substantially similar to
other currently available therapies and/or technologies and meets the
``newness'' criterion. We note that although there may not be other
antiretrovirals available for the treatment of COVID-19, cases
involving VEKLURY[supreg] may map to the same MS-DRGs as other
treatments for COVID-19. We also note that VEKLURY[supreg] may not
treat a different disease or patient population as existing treatments
for COVID-19, as Olumiant[supreg] (administered with VEKLURY[supreg])
and convalescent plasma appear to treat the same disease and similar
patient population.
In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we
revised our regulations at Sec. 412.87 to codify our longstanding
practice of how CMS evaluates the eligibility criteria for new medical
service or technology add-on payment applications. We stated that new
technologies that have not received FDA approval do not meet the
newness criterion. In addition, we stated we do not believe it is
appropriate for CMS to determine whether a medical service or
technology represents a substantial clinical improvement over existing
technologies before the FDA makes a determination as to whether the
medical service or technology is safe and effective. For these reasons,
we first determine whether a new technology meets the newness
criterion, and only if so, do we make a determination as to whether the
technology meets the cost threshold and represents a substantial
clinical improvement over existing medical services or technologies. We
also finalized at 42 CFR 412.87(c) (subsequently redesignated as
412.87(e)) that all applicants for new technology add-on payments must
have FDA approval or clearance by July 1 of the year prior to the
beginning of the fiscal year for which the application is being
considered.
In the FY 2021 IPPS/LTCH PPS final rule, to more precisely describe
the various types of FDA approvals, clearances, licensures, and
classifications that we consider under our new technology add-on
payment policy, we finalized a technical clarification to Sec.
412.87(e)(2) to indicate that new technologies must receive FDA
marketing authorization (for example, pre-market approval (PMA); 510(k)
clearance; the granting of a De Novo classification request; approval
of a New Drug Application (NDA); or Biologics License Application (BLA)
licensure) by July 1 of the year prior to the beginning of the fiscal
year for which the application is being considered. As noted in the FY
2021 IPPS/LTCH PPS final rule, this technical clarification did not
change our longstanding policy for evaluating whether a technology is
eligible for new technology add-on payment for a given fiscal year, and
we continue to consider FDA marketing authorization as representing
that a product has received FDA approval or clearance for purposes of
eligibility for the new technology add-on payment under Sec.
412.87(e)(2) (85 FR 58742).
An EUA by the FDA allows a product to be used for emergency use,
but under our longstanding policy, we believe it would not be
considered an FDA marketing authorization for the purpose of new
technology add-on payments, as a product that is available only through
an EUA is not considered to have FDA approval or clearance. Therefore,
under the current regulations at 42 CFR 412.87(e)(2) and consistent
with our longstanding policy of not considering eligibility for new
technology add-on payments prior to a product receiving FDA approval or
clearance, we believe a product available only through an EUA would not
be eligible for new technology add-on payments. Therefore, cases
involving hospitalized pediatric patients (12 years of age or younger
weighing at least 3.5 kg or weighing 3.5 kg to less than 40 kgs)
receiving VEKLURY[supreg] for emergency use to treat suspected or
laboratory-confirmed COVID-19 would not be eligible for new technology
add-on payment, if VEKLURY[supreg] is approved for new technology add-
on payment for the patient population indicated in its FDA approval.
We refer the reader to our comment solicitation in section II.F.7
of the preamble of this proposed rule regarding how data reflecting the
costs of a product with an EUA, which may become available upon
authorization of the product for emergency use (but prior to FDA
approval or clearance), should be considered for purposes of the 2-year
to 3-year period of newness for new technology add-on payments for a
product with or expected to receive an EUA, including whether the
newness period should begin with the date of the EUA.
We also invite public comments on any implications of the
distribution agreement described previously with regard to the market
availability of VEKLURY[supreg] .
[[Page 25347]]
We also refer the reader to our proposal in section II.F.8 of the
preamble of this proposed rule to extend the new COVID-19 treatments
add-on payment (NCTAP) through the end of the fiscal year in which the
PHE ends for certain products and discontinue NCTAP for products
approved for new technology add-on payments in FY 2022.
We invite public comments on whether VEKLURY[supreg] meets the
newness criterion.
With regard to the cost criterion, the applicant used the FY 2019
MedPAR LDS and the February through June 2020 Electronic Data
Interchange (EDI) transaction data to identify applicable cases. The
applicant used the FY 2022 thresholds and the FY 2019 NPRM IPPS/LTCH
impact file to standardize charges. As COVID-19 is an emergent disease,
the applicant asserted that FY 2019 MedPAR claims may not be reflective
of actual cases. Accordingly, and as summarized below, the applicant
identified the FY 2019 MedPAR cases as proxy COVID-19 cases in its cost
analysis. To supplement and confirm its MedPAR findings, the applicant
used EDI data that includes actual COVID-19 cases from February through
June 2020 to capture what the applicant described as true COVID-19 MS-
DRG mapping and charges.
For the MedPAR LDS cases, the applicant used B97.29 with a
manifestation code (J12.89 or J20.8 or J40 or J22 or J98.8 or J80).
According to the applicant, this is based on the CDC guidance which
specifies use of B97.29 with additional coding to identify the
manifestation prior to the April 1, 2020 COVID-19 code. The applicant
developed 3 sensitivity scenarios to further differentiate the MedPAR
cases; Scenario 1: All Proxy COVID-19, Scenario 2: Proxy COVID-19
without ventilation, and Scenario 3: Proxy COVID19 with ventilation.
Next, the applicant analyzed linked 837 and 835 inpatient EDI
transaction sets that were processed February through June of 2020. The
837 and 835 transaction sets are updated daily and stored in the
Inovalon provider research datasets, accounting for approximately 5-7%
of the total Medicare FFS volume nationally on average. For cases prior
to April 1, the applicant used the same coding as the MedPAR analysis.
For claims on or after April 1, 2020, the applicant used the actual
COVID-19 code U07.1. The applicant then identified cases using the 3
sensitivity scenarios; Scenario 4: All COVID-19, Scenario 5: COVID-19
without ventilation, and Scenario 6: COVID-19 with ventilation.
The claim search conducted by the applicant identified 1,726 cases
mapping to 25 MS-DRGs for scenario one, 274 cases mapping to eight MS-
DRGs for scenario two, 1,393 cases mapping to 21 MS-DRGs for scenario
three, 3,826 cases mapping to 21 MS-DRGs for scenario four, 859 cases
mapping to seven MS-DRGs for scenario five, and 2,917 cases mapping to
14 MS-DRGs for scenario six. The MS-DRGs identified in each scenario
are listed in the following tables.
BILLING CODE 4120-01-P
[[Page 25348]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.187
[GRAPHIC] [TIFF OMITTED] TP10MY21.188
[[Page 25349]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.189
[GRAPHIC] [TIFF OMITTED] TP10MY21.190
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[[Page 25350]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.192
[GRAPHIC] [TIFF OMITTED] TP10MY21.193
BILLING CODE 4120-01-C
The applicant determined an average unstandardized case weighted
charge per case of $56,643 for Scenario 1; $82,733 for Scenario 2;
$51,100 for Scenario 3; $75,891 for Scenario 4; $131,004 for Scenario
5; and $59,393 for Scenario 6.
The applicant stated that 33 percent of the length of stay charges
from relevant cases were removed as charges for and related to the
prior technologies in order to estimate the potential decrease in
length of stay achieved by use of VEKLURY[supreg]. The applicant stated
that these length of stay charges were removed from relevant cases to
conservatively estimate the potential reduction in charges due to
decreased length of stay through use of VEKLURY[supreg]. The applicant
asserted that this offset was determined based on findings from the
Adaptive COVID-19 Treatment Trial (ACTT-1), which found those treated
with VEKLURY[supreg] had a median recovery time of 10 days, as compared
with 15 days for those who received placebo.
After calculating the average standardized charge per case for all
scenarios, the applicant calculated the standardized charge per case
for each MS-DRG. Next, for the analysis involving MedPAR, the applicant
indicated that it applied the 2-year inflation factor used in the FY
2021 IPPS/LTCH PPS final rule to calculate outlier threshold charges of
13.1 percent. We note that the inflation factor used in the FY 2021
IPPS/LTCH PPS final rule was 13.2 percent (1.13218) (85 FR 59039),
which would have increased the inflated charges. For the analysis
involving the EDI, the applicant used an inflation factor of 1.06353 or
6.4%, which it indicated was the same inflation factor used in the FY
2021 IPPS/LTCH PPS final rule (85 FR 59039). We note that the inflation
factor used in the FY 2021 IPPS/LTCH PPS final rule was 6.4% (1.06404)
(85 FR 59039), but this does not affect the cost analysis. To calculate
the charges for the technology, the applicant used the national average
CCR for the Drugs cost center of 0.187 from the FY 2021 Final IPPS
rule. Lastly, the applicant calculated the case-weighted threshold
amount and the final inflated average case-weighted standardized charge
per case for each scenario.
The applicant stated that for Scenario 1, the final inflated
average case-weighted standardized charge per case of $69,741 exceeded
the average case-weighted threshold amount of $56,643 by $13,098. For
Scenario 2, the final inflated average case-weighted standardized
charge per case of $107,860 exceeded the average case-weighted
threshold amount of $82,733 by $25,127. For Scenario 3, the final
inflated average case-weighted standardized charge per case of $60,749
exceeded the average case-weighted threshold amount of $51,100 by
$9,649. For Scenario 4, the final inflated average case-weighted
standardized charge per case of $110,553 exceeded the average case-
weighted threshold amount of $75,891 by $34,662. For Scenario 5, the
final inflated average case-weighted standardized charge per case of
$203,406 exceeded the average case-weighted threshold amount of
$131,004 by $72,402. For Scenario 6, the final inflated average case-
weighted standardized charge per case of $63,915
[[Page 25351]]
exceeded the average case-weighted threshold amount of $59,393 by
$4,522.
The applicant stated that because the final inflated average case-
weighted standardized charge per case exceeded the average case-
weighted threshold amount, VEKLURY[supreg] meets the cost criterion.
We invite public comment on whether VEKLURY[supreg] meets the cost
criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that VEKLURY[supreg] represents a substantial
clinical improvement over existing technologies because it shortens
time to recovery in patients hospitalized with severe COVID-19. The
applicant also asserted that it represents a substantial clinical
improvement because the technology results in improved clinical status
and a trend toward reduced mortality, with the most significant
reduction seen in a post-hoc analysis of patients with COVID-19 on low-
flow oxygen treated with VEKLURY[supreg]. The applicant further
asserted VEKLURY[supreg] results in better clinical status for patients
hospitalized with moderate COVID-19.
As stated above, the applicant asserted that VEKLURY[supreg]
represents a substantial clinical improvement over existing
technologies because it shortens time to recovery in patients
hospitalized with severe COVID-19. To support this claim, the applicant
referenced published, peer-reviewed results from the ACTT-1 study, a
multi-center, multi-country adaptive, double-blinded, placebo-
controlled, randomized clinical trial. Patients with confirmed COVID-19
and evidence of lung involvement were randomly assigned to receive
either VEKLURY[supreg] (n=532; 200 mg loading dose on day 1, followed
by 100 mg daily for up to 9 additional days) or placebo (n=516) for up
to 10 days. Patients could receive other treatments if a participating
hospital had a written policy or guideline for treating COVID-19. The
study was conducted in 60 trial sites across the world with a majority
of trial sites within the United States (45 trial sites plus 13 sub-
sites within the United States). The other sites were in Denmark (8),
the United Kingdom (5), Greece (4), Germany (3), Korea (2), Mexico (2),
Spain (2), Japan (1), and Singapore (1). The primary outcome measure of
the ACTT-1 study was time to recovery, defined as the first day, from
the time of enrollment into the study, that patients exhibited
improvement in conditions based on hospitalization activity limitation,
oxygen requirement, and medical care requirement.\809\
---------------------------------------------------------------------------
\809\ Beigel JH, Tomashek KM, Dodd LE, et al. Remdesivir for the
Treatment of Covid-19--Final Report. N Engl J Med. 2020.
---------------------------------------------------------------------------
According to the applicant, as part of the trial design, an interim
analysis was planned to determine if the study should be stopped early
for futility, efficacy, or safety, if there was clear and substantial
evidence of a treatment difference between study drug and placebo. An
independent data and safety monitoring board met to review interim data
and determined VEKLURY[supreg] was better than a placebo for the
primary endpoint, time to recovery.\810\ The applicant stated those
treated with VEKLURY[supreg] had a median recovery time of 10 days, as
compared with 15 days for those who received placebo (rate ratio for
recovery, 1.29; 95% confidence interval [CI], 1.12 to 1.49; P<0.001),
and the number of serious adverse events was lower in the
VEKLURY[supreg] treated group.\811\
---------------------------------------------------------------------------
\810\ The National Institutes of Health (NIH). NIH clinical
trial shows Remdesivir accelerates recovery from advanced COVID-19,
published April 29, 2020. https://www.nih.gov/news-events/news-releases/nih-clinical-trial-shows-remdesivir-accelerates-recovery-advanced-covid-19.
\811\ Beigel JH, Tomashek KM, Dodd LE, et al. Remdesivir for the
Treatment of Covid-19--Final Report. N Engl J Med. 2020.
---------------------------------------------------------------------------
As stated previously, the applicant asserted VEKLURY[supreg]
represents a substantial clinical improvement over existing
technologies because use of VEKLURY[supreg] results in improved
clinical status and reduced mortality in patients with COVID-19 on low-
flow oxygen. According to the applicant, the pivotal ACTT-1 study
showed an overall trend toward reduction in mortality with the most
significant reduction observed in a post-hoc analysis of patients on
low-flow oxyen treated with VEKLURY[supreg]. The overall mortality
effect was not statistically significant. The applicant stated those
treated with VEKLURY[supreg] continued to receive oxygen for fewer days
(median, 13 days vs. 21 days) and the incidence of new oxygen use was
lower in the VEKLURY[supreg] group (incidence, 36%; 95% CI, 26% to 47%)
compared with the placebo group (incidence, 44%; 95% CI, 33% to 57%).
In the post-hoc analysis, those receiving low-flow supplemental oxygen
(that is, not those receiving noninvasive ventilation or high-flow
oxygen, nor those receiving invasive mechanical ventilation or ECMO)
treated with VEKLURY[supreg] had the largest reduction in mortality
compared to the same cohort receiving the placebo (hazard ratio, 0.30;
95% CI, 0.14 to 0.64).\812\
---------------------------------------------------------------------------
\812\ Ibid.
---------------------------------------------------------------------------
As stated previously, the applicant asserted VEKLURY[supreg]
results in better clinical status for patients hospitalized with
moderate COVID-19. To support this claim, the applicant referenced
published, peer-reviewed results from an open label, placebo
controlled, randomized clinical trial. Patients with moderately severe
COVID-19 (pulmonary infiltrates on imaging but oxygen saturation >94
percent on room air) were randomly assigned to receive either
VEKLURY[supreg] plus continued standard of care for 10 days (n=197),
VEKLURY[supreg] plus continued standard of care for 5 days (n=199), or
continued standard of care (n=200). Standard of care could include use
of concomitant medications such as steroids, hydroxychloroquine/
chloroquine, lopinavir-ritonavir, tocilizumab, and azithromycin. The
median time to start VEKLURY[supreg] treatment was 8 days after start
of symptoms. The median length of treatment in the 10-day group was
actually 6 days. Patients who improved could be discharged from the
hospital before completing their assigned course of treatment. The
study was conducted in 105 trial sites in the United States, Europe and
Asia. The primary end point was assessment of clinical status on day 11
after initiation of treatment. Clinical status was assessed on a 7-
point ordinal scale ranging from death (category 1) to discharged
(category 7).\813\
---------------------------------------------------------------------------
\813\ Spinner CD, Gottlieb RL, Criner GJ, et al. Effect of
Remdesivir vs Standard Care on Clinical Status at 11 Days in
Patients With Moderate COVID-19 A Randomized Clinical Trial. JAMA.
2020; 342(11):1048-1057.
---------------------------------------------------------------------------
According to the applicant, on day 11, patients with moderate
COVID-19 treated with VEKLURY[supreg] for 5 days had a better clinical
status compared with the standard of care (odds ratio 1.65; 95% CI,
1.09 to 2.48, P=0.02). The applicant stated the difference was not
statistically significant between those treated with VEKLURY[supreg]
for 10 days compared with the standard of care (P=0.18 by Wilcoxon rank
sum test; the proportional odds assumption was not met for this
comparison). The applicant asserted that post hoc analyses demonstrated
improved clinical status in both the 5- and 10-day treated cohorts at
14 days (P=.03 for both groups). The applicant stated there were no
significant differences in adverse events for those treated with
Veklury for 5 days.\814\
---------------------------------------------------------------------------
\814\ Ibid. Spinner CD, Gottlieb RL, Criner GJ, et al. Effect of
Remdesivir vs Standard Care on Clinical Status at 11 Days in
Patients With Moderate COVID-19 A Randomized Clinical Trial. JAMA.
2020; 342(11):1048-1057.
---------------------------------------------------------------------------
We note that the articles submitted by the applicant in support of
substantial
[[Page 25352]]
clinical improvement used study designs that may be subject to bias,
such as the adaptive and open label design. The ACTT-1 study included a
prespecified interim analysis as part of its adaptive design but no
changes were made to the placebo arm. We are unclear whether this may
suggest that VEKLURY[supreg] did not demonstrate superiority over the
control. We also note the ACTT-1 study showed considerable differences
between geographic regions in median time to recovery for patients
assigned to VEKLURY[supreg] compared to those assigned to placebo. For
example, for the patient population studied at U.S. sites, the median
time to recovery in the VEKLURY[supreg] group (n=310) vs. the placebo
group (n=271) was 11 days vs. 16 days, respectively, whereas at non-US
sites, patients treated with VEKLURY[supreg] (n=89) vs. placebo (n=81)
experienced a median time to recovery of 8 vs. 12 days,
respectively.\815\ Furthermore, the ACTT-1 study allowed other
simultaneous treatments based on individual hospital policies or
guidelines, which may have potentially confounded the results of the
trial.
---------------------------------------------------------------------------
\815\ Beigel JH, Tomashek KM, Dodd LE, et al. Remdesivir for the
Treatment of Covid-19--Final Report. N Engl J Med. 2020. See
Supplementary Table S6.
---------------------------------------------------------------------------
We are inviting public comments on whether VEKLURY[supreg] meets
the substantial clinical improvement criterion.
In this section, we summarize and respond to written public
comments received in response to the New Technology Town Hall meeting
notice published in the Federal Register regarding the substantial
clinical improvement criterion for VEKLURY[supreg].
Comment: The applicant responded to questions elicited by its
presentation at the New Technology Town Hall Meeting held in December
2020.
First, the applicant was asked to provide information on adverse
events and readmissions specifically in patients over 65 years with co-
morbidities. The applicant stated that in the pivotal ACTT-1 study, the
incidence of overall adverse events was similar among participants >=65
years of age in both the VEKLURY[supreg] and placebo groups
(VEKLURY[supreg] 65.6%; placebo: 69.7%).\816\ The applicant asserted
that reported clinical experience has not identified differences in
responses between patients over 65 years old and patients under 65
years old and no dosage adjustment is required in patients over the age
of 65 years. The applicant stated the NDA for VEKLURY[supreg] notes
that ``appropriate caution should be exercised in the administration of
Veklury and monitoring of elderly patients, reflecting the greater
frequency of decreased hepatic, renal, or cardiac function, and of
concomitant disease or other drug therapy.'' \817\ According to the
applicant, subanalyses of readmission rates among participants who were
at least 65 years of age with comorbidities have not been conducted
because the overall rate of readmission is too low for any subanalyses
to be meaningful. The applicant stated that in the ACTT-1 study
overall, readmittance was reported in 26 participants (5%) in the
VEKLURY[supreg] group and in 15 participants (3%) in the placebo group.
---------------------------------------------------------------------------
\816\ Ibid. Beigel JH, Tomashek KM, Dodd LE, et al. Remdesivir
for the Treatment of Covid-19--Final Report. N Engl J Med. 2020.
\817\ VEKLURY[supreg] NDA approval (re-issued): https://www.fda.gov/media/143189/download.
---------------------------------------------------------------------------
Second, the applicant was asked to comment on findings of the World
Health Organization (WHO)-sponsored SOLIDARITY trial. According to the
applicant, the SOLIDARITY trial is an ongoing, multi center, open-label
global trial that was designed to (1) provide access to treatments that
the WHO expert groups recommended for mortality studies and (2) collect
in-hospital mortality data from a large number of participants without
posing a significant burden on overstressed healthcare systems. The
applicant stated that the trial prioritizes broad access to
investigational treatments, particularly in countries where ongoing
trials of these treatments were not available, resulting in significant
heterogeneity in trial adoption, implementation, controls, and patient
populations.
According to the applicant, interim results from the WHO study were
published in the New England Journal of Medicine (NEJM) on December 2,
2020.\818\ The applicant stated that between March 22, 2020 and October
4, 2020, 11,330 adult participants were enrolled at 405 hospitals in 30
countries with vastly different healthcare systems. Of these, 2,743
participants were treated with VEKLURY[supreg] and 2,708 were
designated as the VEKLURY[supreg] control group (received local
standard of care only without placebo). The primary endpoint of
mortality at Day 28 was 12.5% in the VEKLURY[supreg] group and 12.7% in
the standard of care group (Kaplan-Meier rate ratio: 0.95 [95% CI: 0.81
to 1.11; p=0.50]). The authors also reported progression to ventilation
and time to discharge as secondary endpoints. At the time of the
interim analysis, 11.9% in the VEKLURY[supreg] group and 11.5% in the
standard of care group had progressed to mechanical ventilation and
there were no differences between the VEKLURY[supreg] and standard of
care groups in time to discharge. None of the three drugs evaluated
definitively reduced mortality (overall or in any subgroup), initiation
of ventilation, or duration of hospitalization.
---------------------------------------------------------------------------
\818\ WHO Solidarity Trial Consortium. Repurposed Antiviral
Drugs for Covid-19--Interim WHO Solidarity Trial Results. NEJM.
December 2, 2020. https://www.nejm.org/doi/full/10.1056/NEJMoa2023184.
---------------------------------------------------------------------------
The applicant stated concerns that the data from WHO's open-label
global trial has limitations in light of the trial design. According to
the applicant, the variations in the clinical settings of some
countries may result in heterogeneity in local standards of care,
access to earlier care, or access to mechanical ventilation, which
could account for the high observed mortality rate in ventilated
patients in SOLIDARITY. Additionally, the applicant stated that lack of
detail on the level of oxygen support (low versus high), duration of
symptom onset prior to randomization, and the number of VEKLURY[supreg]
doses administered precludes subanalyses that could elucidate
subpopulations who derived benefit from VEKLURY[supreg] treatment.
Consequently, according to the applicant, it is unclear what conclusive
findings can be drawn from the study results at this time.
The applicant stated that according to a perspective piece by
Rubin, et al., the FDA approval for VEKLURY[supreg] was based on robust
evidence from three pivotal studies, including the randomized, double-
blind, placebo-controlled ACTT-1 study. The applicant stated that in
the opinion of Rubin, et al., the results of SOLIDARITY were not
inconsistent with the results of ACTT-1 and any apparent
inconsistencies arose from differences in the designs and purposes of
the studies. The applicant asserted that the authors of the perspective
piece stated that the effect of VEKLURY[supreg] appears to be on the
course of hospitalization rather than on mortality.\819\
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\819\ Rubin D, Chan-Tack K, Farley J, Sherwat A. FDA approval of
remdesivir--a step in the right direction. N Engl J Med. DOI:
10.1056/NEJMp2032369.
---------------------------------------------------------------------------
According to the applicant, an editorial by Harrington, et al.
indicated that the authors consider it likely that the estimated
treatment effects on mortality that were observed in SOLIDARITY are
largely accurate given the size of the SOLIDARITY study; however,
aspects of the study design that allowed for the rapid execution of the
study undermine the ability of the
[[Page 25353]]
study to evaluate more subtle endpoints, such as time to recovery.\820\
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\820\ Harrington David P., Baden Lindsey R., Hogan Joseph W.
(2020) A Large, Simple Trial Leading to Complex Questions. N Engl J
Med DOI: 10.1056/NEJMe2034294.
---------------------------------------------------------------------------
The applicant noted that treatment guidelines from the US National
Institute of Health and the Infectious Disease Society of America,
which have been updated since publication of the interim data from the
SOLIDARITY study, continue to recommend treatment with VEKLURY[supreg]
in hospitalized patients who require supplemental oxygen. Further, the
applicant asserted, these efficacy and safety data have supported
regulatory approvals or temporary authorizations to treat COVID-19 in
approximately 50 countries worldwide.
Third, the applicant was asked to provide more information on the
evidence showing there was a trend towards lower mortality, notably in
patients who received low flow oxygen. The applicant stated that in the
overall ACTT-1 population, there was a numerical trend toward lower
mortality in the VEKLURY[supreg] group (11.4%) compared to the placebo
group (15.2%), which did not reach statistical significance
(p=0.07).\821\ The applicant asserted that a post-hoc analysis of
participants receiving low-flow supplemental oxygen (baseline ordinal
scale score of 5), revealed that VEKLURY[supreg] reduced mortality by
70% compared with placebo (4.0% vs. 12.7%; hazard ratio: 0.30 [95% CI:
0.14 to 0.64]).
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\821\ Beigel JH, Tomashek KM, Dodd LE, et al. Remdesivir for the
Treatment of Covid-19--Final Report. New England Journal of Medicine
2020.
---------------------------------------------------------------------------
Lastly, the applicant was asked to provide more information to
justify the claim that all subgroups consistently improved with
VEKLURY[supreg], given that Medicare patients are older and frequently
have co-morbidities. According to the applicant, across the clinical
spectrum, hospitalized patients with COVID-19 receiving VEKLURY[supreg]
recovered 5 days faster, on average, than those receiving placebo (10
days vs. 15 days; rate ratio: 1.29; 95% CI: 1.12-1.49; p<0.001),
representing an increased recovery rate of 29%.\822\ The applicant
stated that this clinically meaningful benefit is observed across
subgroups, including among participants at least 65 years of age.
---------------------------------------------------------------------------
\822\ Ibid.
---------------------------------------------------------------------------
Response: We appreciate the applicant's responses to questions
asked at the New Technology Town Hall Meeting and will take this
information into consideration when deciding whether to approve new
technology add-on payments for VEKLURY[supreg].
u. ZEPZELCATM (lurbinectedin)
Jazz Pharmaceuticals submitted an application for new technology
add-on payments for ZEPZELCATM for FY 2022. According to the
applicant, ZEPZELCATM is an alkylating drug indicated for
the treatment of adult patients with metastatic small cell lung cancer
(SCLC) with disease progression on or after platinum-based
chemotherapy. ZEPZELCATM is a marine-derived, synthetic
antineoplastic compound that inhibits transcription-dependent
replication stress and genome instability in tumor cells.
According to the applicant, small cell lung cancer (SCLC) is an
aggressive type of lung cancer where patients that progress after
first-line chemotherapy have a poor prognosis due to limited clinical
benefit from currently available second-line chemotherapy. Patients
relapsing or progressing more than 90 days after completion of first-
line treatment are considered platinum sensitive and may be
rechallenged with platinum-based chemotherapy.\823\ The majority of
SCLC treated patients show disease relapse and are eligible for second-
line therapy; however, few second-line treatment options exist.\824\
---------------------------------------------------------------------------
\823\ Garassino MC, et al. Outcomes of small-cell lung cancer
patients treated with second-line chemotherapy: A multi-
institutional retrospective analysis. Lung Cancer 72 (2011) 378-383.
\824\ Trigo J, et al. Lurbinectedin as second-line treatment for
patients with small-cell lung cancer: a single-arm, open-label,
phase 2 basket trial. Lancet Oncology. www.thelancet.com/oncology,
Published online March 27, 2020. https://doi.org/10.1016/S1470-2045.
---------------------------------------------------------------------------
According to the applicant, lung cancer overall is the second most
common malignancy in the United States with 234,030 new cases and
154,050 deaths estimated in 2018.\825\ Per the applicant, where most
lung cancers are classified as non-SCLC, SCLC now comprises
approximately 15% of all lung cancers. According to the applicant, SCLC
is the most aggressive form of lung cancer characterized by rapid
disease progression and early metastatic spread
826 827 828--doubling in cell number about every 30 days and
spreading quickly to lymph nodes and other organs.\829\ The applicant
stated that the Veterans Lung Cancer Study Group used a two-stage
system for describing SCLC, with a limited-stage (30% of cases) which
is confined to a smaller portion of the body, and an extensive-stage
(70% of cases) where the tumor was widespread.830 831 Many
patients with SCLC have substantial comorbidities that may affect
performance status and treatment options.\832\ A restrospective review
analysis of Extensive-stage SCLC (ES-SCLC) patients found that when
compared to patients at diagnosis, patients receiving second-line
therapy were more likely to have congestive heart failure (67% vs 49%),
thromboembolism (9% vs 2%), and depression (11% vs 7%).\833\ Further,
these patients receiving second-line therapy were more likely to have
infectious disease (57% vs 43%), electrolyte disorders (50% vs 22%),
anemia (45% vs 19%), neutropenia (17% vs <0.2%), thrombocytopenia (12%
vs 2%), and diarrhea (7% vs 3%) compared to the incidence of these
comorbidities at diagnosis of ES-SCLC.\834\
---------------------------------------------------------------------------
\825\ Tan WT, et al. Small Cell Lung Cancer (SCLC), Medscape,
Oncology. Updated June 19, 2020. Emedicine.medscape.com.
\826\ Ibid.
\827\ Naito Y, et al. Rechallenge treatment with a platinum-
based regimen in patients with sensitive relapsed small-cell lung
cancer. Medical Oncology (2018) 35:61.
\828\ Von Pawel J, et al. Randomized phase III trial of
amrubicin versus topotecan as second-line treatment for patients
with small-cell lung cancer. J Clin Oncol. (2014) 32:35.
\829\ Surveillance, Epidemiology, and End Results Program
(SEER). Cancer stat facts: lung and bronchus cancer. https://seer.cancer.gov/statfacts/html/lungb.html. Accessed September 2020.
\830\ Ibid.
\831\ PDQ Adult Treatment Editorial Board. PDQ small cell lung
cancer treatment. Bethesda, MD: National Cancer Institute. Updated
March 20, 2020. https://www.cancer.gov/types/lung/hp/small-cell-lung-treatment-pdq. Accessed March 22, 2020. [PMID: 26389347].
\832\ Kalemkerian GP. Small cell lung cancer. Semin Respir Crit
Care Med. 2016;6(37):783-796.
\833\ Danese M, et al. Comorbidity in patients with extensive
disease small cell lung cancer. Presented at the AMCP Managed Care &
Specialty Pharmacy Annual Meeting; March 27-30, 2017; Denver, CO.
\834\ Ibid. Danese M, et al. Comorbidity in patients with
extensive disease small cell lung cancer. Presented at the AMCP
Managed Care & Specialty Pharmacy Annual Meeting; March 27-30, 2017;
Denver, CO.
---------------------------------------------------------------------------
According to the applicant, the standard of care for first-line
chemotherapy for both limited-stage SCLC and ES-SCLC is platinum
doublet and, in the case of ES-SCLC, platinum doublet in combination
with a checkpoint inhibitor. SCLC is sensitive to platinum-based
chemotherapy in the first-line setting but almost universally relapses,
requiring subsequent lines of therapy.835 836 837 Once a
patient
[[Page 25354]]
relapses, the likelihood of response is highly dependent on time from
initial therapy to relapse,\838\ with survival based on the duration of
remission.\839\ According to the applicant, ES-SCLC is incurable;
patients are treated with palliative intent, with a median survival of
7 to 11 months after diagnosis and with less than 5% survival at 2
years.840 841 Even limited-stage disease is rarely cured
with radical local therapy (surgery or radiotherapy), and systemic
chemotherapy (platinum plus etoposide) remains the cornerstone of
first-line treatment in SCLC.\842\ Despite best management, the 5-year
overall survival (OS) of even limited-stage SCLC is still only 15% to
25%.843 844
---------------------------------------------------------------------------
\835\ Shao C, et al. Chemotherapy treatments, costs of care, and
survival for patients diagnosed with small cell lung cancer: A SEER-
Medicare study. Cancer Med. 2019;8:7613-7622.
\836\ He J, et al. Survival, chemotherapy treatments, and health
care utilization among patients with advanced small cell lung
cancer: An observational study. Adv Ther. 2020;37:552-565.
\837\ Karve SJ, et al. Comparison of demographics, treatment
patterns, health care utilization, and costs among elderly patients
with extensive-stage small cell and metastatic non-small cell lung
cancers. BMC Health Serv Res. 2014;14:555.
\838\ Shao C, et al. Chemotherapy treatments, costs of care, and
survival for patients diagnosed with small cell lung cancer: A SEER-
Medicare study. Cancer Med. 2019;8:7613-7622.
\839\ Pietanza MC, et al. Small cell lung cancer: Will recent
progress lead to improved outcomes? Clin Cancer Res.
2015;21(10):2244-2255.
\840\ Simos D, et al. Third-line chemotherapy in small-cell lung
cancer: An international analysis. Clin Lung Cancer (2014) 15 (2):
110-8.
\841\ Pelayo AM, et al. Chemotherapy versus best supportive care
for extensive small cell lung cancer. Cochrane Database Syst Rev
(2013) 11: CD001990.
\842\ Trigo J, et al. Lurbinectedin as second-line treatment for
patients with small-cell lung cancer: A single-arm, open-label,
phase 2 basket trial. Lancet Oncology. www.thelancet.com/oncology,
Published online March 27, 2020. https://doi.org/10.1016/S1470-2045.
\843\ Simos D, et al. Third-line chemotherapy in small-cell lung
cancer: An international analysis. Clin Lung Cancer (2014) 15 (2):
110-8.
\844\ Pelayo AM, et al. Chemotherapy versus best supportive care
for extensive small cell lung cancer. Cochrane Database Syst Rev
(2013) 11: CD001990.
---------------------------------------------------------------------------
The applicant asserted that while SCLC shows high sensitivity to
first-line chemotherapy and radiotherapy, most patients develop disease
relapse or progression within one year of
treatment.845 846 847 It is reported that about 80% of
limited-disease SCLC patients and almost all patients with ES-SCLC will
develop relapse or progression after first-line treatment. Without
second-line chemotherapy, the median survival time is 2 to 4
months.848 849 The applicant stated that for patients
classified as sensitive to first line treatment, due to remaining
relapse-free for at least 3 months after treatment, rechallenge with
the same chemotherapy regimen given as first line treatment is
reasonable. For those classified as refractory (disease progression
through first line treatment) and resistant (patients who show initial
response to treatment but whose disease progresses within 3 months of
completing chemotherapy), the second line treatment is Hycamtin
(topotecan). According to the applicant, topotecan was the only
preferred agent in the National Comprehensive Cancer Network (NCCN)
Clinical Practice Guidelines for second-line treatment of patients with
a Chemotherapy-free Interval (CTFI) <6 months. In summarizing the
evidence of topotecan efficacy, the applicant stated that studies
showed a median survival of 6.8 to 7.8 months,850 851 852
progression free survival of 2.7 to 3.5 months,853 854 855
and a median time to progression of 13.3 weeks.\856\ Furthermore, the
applicant asserted that topotecan is associated with hematological
toxicities such as anemia, neutropenia, thrombocytopenia, and febrile
neutropenia.857 858 859
---------------------------------------------------------------------------
\845\ Naito Y, et al. Rechallenge treatment with a platinum-
based regimen in patients with sensitive relapsed small-cell lung
cancer. Medical Oncology (2018) 35:61.
15437.
\846\ Shiozawa, T. Rechallenge with first-line platinum
chemotherapy for sensitive-relapsed small-cell lung cancer. Case Rep
Oncol. 2018;11:622-632.
\847\ Horita N, et al. Topotecan for relapsed small-cell lung
cancer: Systematic review and meta-analysis of 1347 patients. Sci
Rep 2015;5: 15437.
\848\ Shiozawa, T. Rechallenge with first-line platinum
chemotherapy for sensitive-relapsed small-cell lung cancer. Case Rep
Oncol. 2018;11:622-632.
\849\ Wakuda K et al. Efficacy of second-line chemotherapy in
patients with sensitive relapsed small-cell lung cancer. In vivo.
33:2229-2234 (2019).
\850\ Evans TL, et al. Cabazitaxel versus topotecan in patients
with small-cell lung cancer with progressive disease during or after
first-line platinum-based chemotherapy. J Thorac Oncol. 2015;10:
1221-1228.
Monnet I, et al. Carboplatin-etoposide versus topotecan as
second-line treatment for sensitive relapsed small-cell lung cancer:
Phase 3 trial (ID 546) IASLC. 2019 World Conference on Lung Cancer;
Barcelona, Spain; September 7-10, 2019 (abstr OA15.02).
von Pawel J TopotecanTopotecancyclophosphamidecyclophosphamide,
doxorubicin, and vincristine for the treatment of recurrent. J
ClinVolVol 17, No 2, 1999: 658-667.
\851\ Von Pawel J, et al. Randomized phase III trial of
amrubicin versus topotecan as second-line treatment for patients
with small-cell lung cancer. J Clin Oncol. (2014) 32:35.
\852\ Von Pawel J, et al. Topotecan versus cyclophosphamide,
doxorubicin, and vincristine for the treatment of recurrent small-
cell lung cancer. J Clin Oncol. Vol 17, No 2, 1999: 658-667.
\853\ vonVon Pawel J, et al. Randomized phase III trial of
amrubicin versus topotecan as second-line treatment for patients
with small-cell lung cancer. J Clin Oncol. (2014) 32:35.
Evans TL, et al. Cabazitaxel versus topotecan in patients with
small-cell lung cancer with progressive disease during or after
first-line platinum-based chemotherapy. J Thorac Oncol. 2015;10:
1221-1228.
Monnet I, et al. Carboplatin-etoposide versus topotecan as
second-line treatment for sensitive relapsed small-cell lung cancer:
Phase 3 trial (ID 546) IASLC. 2019 World Conference on Lung Cancer;
Barcelona, Spain; September 7-10, 2019 (abstr OA15.02).
\854\ Evans TL, et al. Cabazitaxel versus topotecan in patients
with small-cell lung cancer with progressive disease during or after
first-line platinum-based chemotherapy. J Thorac Oncol. 2015;10:
1221-1228.
\855\ von Pawel J, et al. Randomized phase III trial of
amrubicin versus topotecan as second-line treatment for patients
with small-cell lung cancer. J Clin Oncol. (2014) 32:35.
Evans TL, et al. Cabazitaxel versus topotecan in patients with
small-cell lung cancer with progressive disease during or after
first-line platinum-based chemotherapy. J Thorac Oncol. 2015;10:
1221-1228.
Monnet I, et al. Carboplatin-etoposide versus topotecan as
second-line treatment for sensitive relapsed small-cell lung cancer:
Phase 3 trial (ID 546) IASLC. 2019 World Conference on Lung Cancer;
Barcelona, Spain; September 7-10, 2019 (abstr OA15.02).
\856\ vonVvon Pawel J, et al. Topotecan versus cyclophosphamide,
doxorubicin, and vincristine for the treatment of recurrent small-
cell lung cancer. J Clin Oncol. Vol 17, No 2, 1999: 658-667.
\857\ vonvVon Pawel J.
Evans TL, et al. CabazitaxelRandomized phase III trial of
amrubicinCabazitaxel versus topotecan in patients with small-cell
lung cancer with progressive disease during or after first-line
platinum-based chemotherapy. J Thorac Oncol. 2015;10: 1221-1228.
Monnet I, et al. Carboplatin-etoposide versus topotecan as
second-line treatment for patients with small-cell lung cancer. J
Clin Oncol. (2014) 32:35. sensitive relapsed small-cell lung cancer:
Phase 3 trial (ID 546) IASLC. 2019 World Conference on Lung Cancer;
Barcelona, Spain; September 7-10, 2019 (abstr OA15.02).
\858\ Evans TL, et al. Cabazitaxel versus topotecan in patients
with small-cell lung cancer with progressive disease during or after
first-line platinum-based chemotherapy. J Thorac Oncol. 2015;10:
1221-1228.
\859\ Monnet I, et al. Carboplatin-etoposide versus topotecan as
second-line treatment for sensitive relapsed small-cell lung cancer:
Phase 3 trial (ID 546) IASLC. 2019 World Conference on Lung Cancer;
Barcelona, Spain; September 7-10, 2019 (abstr OA15.02).
---------------------------------------------------------------------------
The applicant stated that since topotecan's approval in 1998, no
other second-line SCLC treatment option had been approved until
ZEPZELCATM gained approval in June 2020. According to the
applicant, ZEPZELCATM is the first second-line treatment
option for SCLC since 1998.
According to the applicant, the FDA approved ZEPZELCATM
on June 15, 2020 under the FDA's Accelerated Approval Program with
Priority Review. ZEPZELCATM was also granted Orphan Drug
Designation by the FDA. ZEPZELCATM is administered
intravenously as a 3.2 mg/m\2\ dose over one hour, repeated every 21
days until disease progression or unacceptable toxicity.
ZEPZELCATM will typically be administered in an outpatient
clinic. However, per the applicant, because many patients with SCLC
have substantial comorbidities that may necessitate hospitalization and
initiation of treatment, the first infusion and possibly some
additional infusions will be administered in the inpatient
[[Page 25355]]
hospital setting.\860\ The applicant stated that there are no existing
ICD-10-PCS codes that uniquely identify the administration of
ZEPZELCATM. The applicant submitted a request for a unique
ICD-10-PCS code to identify the technology beginning FY 2022.
---------------------------------------------------------------------------
\860\ Danese M, et al. Comorbidity in patients with extensive
disease small cell lung cancer. Presented at the AMCP Managed Care &
Specialty Pharmacy Annual Meeting; March 27-30, 2017; Denver, CO.
---------------------------------------------------------------------------
As previously discussed, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and, therefore, would not be
considered ``new'' for purposes of new technology add-on payments.
With respect to the first criterion, whether a product uses the
same or a similar mechanism of action to achieve a therapeutic outcome,
the applicant asserted that the mechanism of action of
ZEPZELCATM is not the same or similar to the mechanism of
action of currently available products used in the treatment of
patients with metastatic SCLC with disease progression on or after
platinum-based chemotherapy. Per the applicant, ZEPZELCATM
is a novel synthetic antineoplastic marine derived compound with a
unique mode of action and chemical structure, with a terminal half-life
of 51 hours and total plasma clearance of 11 L/h
(50%).861 862 According to the applicant,
ZEPZELCATM is a transcription inhibitor that binds DNA
preferentially in quinine-rich sequences located within gene regulatory
elements and induces a rapid degradation of transcribing RNA polymerase
II that induces the eviction of oncogenic transcription factors and the
silencing of their transcription program. The applicant states that
ZEPZELCATM has preclinical data which suggests that
oncogenic transcription of DNA to RNA was selectively inhibited via the
dual actions of RNA polymerase II degradation and the formation of DNA
breaks, which leads to apoptosis.\863\ The applicant further states
that ZEPZELCATM has been shown to induce immunogenic cell
death,\864\ and based on preclinical data, impacts the tumor
microenvironment by altering the survival of tumor-associated
macrophages (TAMs) and the production and function of key oncogenic
inflammatory and growth factors.\865\
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\861\ ZEPZELCA website, ZEPZELCATM prescribing
information., Rev. 6/2020: https://www.zepzelcapro.com/.
\862\ Romano M. et al. Travectedin and lurbinectedin are
effective against leukemic cells derived from patients affected by
chronic and juvenile myelomonocytic leukemia. European Journal of
Cancer. 50 (6 Suppl):48.
\863\ Santamaria G, et al. Lurbinectedin reverses platinum
dependent IRFI overexpression and nuclear localization, partially
responsible for resistance to platinum drugs in ovarian cancer.
Proceedings of the American Association for Cancer Research (2017)
58:311.
\864\ Xie W, et al. Lurbinectedin synergizes with immune
checkpoint blockade to generate anticancer immunity. Oncoimmunology.
2019;5;8(11):e1656502.
\865\ Farago AF, et al. ATLANTIS: A phase III study of
lurbinectedin/doxorubicin versus topotecan or cyclophosphamide/
doxorubicin/vincristine in patients with small-cell lung cancer who
have failed one prior platinum-containing line. Future Oncol.
2019;15(3):231-239.
---------------------------------------------------------------------------
According to the applicant, topotecan is a semi-synthetic
derivative of camptothecin with topoisomerase I-inhibitory activity
that relieves torsional strain in DNA by inducing reversible single
strand breaks. The pharmacokinetics of topotecan have been evaluated in
cancer patients following doses of 0.5 to 1.5 mg/m\2\ administered as a
30-minute infusion. Topotecan exhibits multiexponential
pharmacokinetics with a terminal half-life of 2 to 3 hours. Total
exposure area under the curve (AUC) is approximately dose
proportional.\866\ The applicant asserts that a clinical differentiator
of ZEPZELCATM from topotecan is the rate of hematologic
adverse reactions including neutropenia, anemia, thrombocytopenia, and
febrile neutropenia.867 868 869
---------------------------------------------------------------------------
\866\ FDA website, Hycamtin (topotecan) prescribing
information., Rev. 2/2014: https://www.accessdata.fda.gov/drugsatfda_docs/label/2014/022453s002lbl.pdf.
\867\ Von Pawel J, et al. Randomized phase III trial of
amrubicin versus topotecan as second-line treatment for patients
with small-cell lung cancer. J Clin Oncol. (2014) 32:35.
\868\ Evans TL, et al. Cabazitaxel versus topotecan in patients
with small-cell lung cancer with progressive disease during or after
first-line platinum-based chemotherapy. J Thorac Oncol. 2015;10:
1221-1228.
\869\ Monnet I, et al. Carboplatin-etoposide versus topotecan as
second-line treatment for sensitive relapsed small-cell lung cancer:
Phase 3 trial (ID 546) IASLC. 2019 World Conference on Lung Cancer;
Barcelona, Spain; September 7-10, 2019 (abstr OA15.02).
---------------------------------------------------------------------------
Lastly, the applicant asserted that ZEPZELCATM is not
substantially similar to the more recently approved first-line
treatments for ES-SCLC, TECENTRIQ[supreg] (atezolizumab) and
IMFINZI[supreg] (durvalumab), both of which are PD-L1 blocking
antibodies.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated that
ZEPZELCATM will not map to MS-DRGs distinct from other
treatments for SCLC.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population when compared to an
existing technology, the applicant stated that there have been no
approved treatments for second-line treatment of SCLC since 1998 when
topotecan was approved. Topotecan is indicated for the treatment of
small cell lung cancers in patients with chemotherapy-sensitive disease
after failure of first-line chemotherapy.\870\ The applicant states
that topotecan is approved for relapses at least 60 days after
initiation of a platinum-containing first-line regimen.
ZEPZELCATM is indicated for the treatment of adult patients
with metastatic small cell lung cancer (SCLC) with disease progression
on or after platinum-based chemotherapy.\871\ The applicant also stated
that ZEPZELCA was listed as a preferred regimen by the NCCN Clinical
Practice Guidelines for second-line treatment of patients with a
chemotherapy free interval (CTFI) <=6 months and recommended for
patients with a CTFI >6 months.\872\
---------------------------------------------------------------------------
\870\ FDA website, Hycamtin (topotecan) prescribing
information., Rev. 2/2014: https://www.accessdata.fda.gov/drugsatfda_docs/label/2014/022453s002lbl.pdf.
\871\ ZEPZELCA website, ZEPZELCATM prescribing
information., Rev. 6/2020: https://www.zepzelcapro.com/.
\872\ NCCN Clinical Practice Guidelines in Oncology, Small Cell
Lung Cancer. Version 4.2020, July 7, 2020. https://nccn.org.
---------------------------------------------------------------------------
The applicant repeated results concerning the efficacy of topotecan
and asserted that the efficacy results were achieved with a high rate
of grade three and four hematologic Treatment Emergent Adverse Events
(TEAEs).
In summary, the applicant asserted that ZEPZELCATM meets
the newness criterion because its mechanism of action is not the same
or similar to the mechanism of action of currently available products
used in the treatment of adult patients with metastatic SCLC and
because it is indicated in patients with disease progression on or
after platinum-based chemotherapy.
We are inviting public comments on whether ZEPZELCATM is
substantially similar to an existing technology and whether it meets
the newness criterion.
With respect to the cost criterion, the applicant conducted the
following analysis to demonstrate that ZEPZELCATM meets the
cost criterion. For the primary cost analysis cohort the applicant used
the selection criteria of the presence of a lung cancer code as defined
by ICD-10-CM family C34 (Malignant neoplasm of bronchus and lung) as
the principal diagnosis and the presence of any chemotherapy code as
[[Page 25356]]
defined by ICD_10-CM Z51.11 (Encounter for antineoplastic
chemotherapy), ICD-10-CM Z51.12 (Encounter for antineoplastic
immunotherapy), or any ICD-10-PCS chemotherapy code. Additionally, the
applicant performed three sensitivity analyses for the cost criterion.
The first is a broad cohort with the selection criteria of the presence
of at least one lung cancer code (C34xx) and the presence of any
chemotherapy code as defined by ICD-10-CM code Z51.11 (Encounter for
antineoplastic chemotherapy), Z51.12 (Encounter for antineoplastic
immunotherapy), or any ICD-10PCS chemotherapy code. The second and
third analyses involved TECENTRIQ[supreg] and IMFINZI[supreg] which are
both immunotherapy drugs that have FDA approval for use as part of the
first-line treatment in patients with SCLC. These drugs are to be used
along with chemotherapy. The second analysis is the
``TECENTRIQ[supreg]'' cohort with the selection criteria of the
presence of at least one lung cancer code (C34xx) as either the
principal or admitting diagnosis, and excluding cases with any ES-SCLC
surgical codes. The final analysis, the ``IMFINZI[supreg]'' cohort, has
the selection criteria of at least one of the following: (1) Presence
of at least one lung cancer code (C34xx) and presence of any platinum-
based chemotherapy code as defined by ICD-10-CM Z51.11 (Encounter for
antineoplastic chemotherapy) or Z51.12 (Encounter for antineoplastic
immunotherapy); (2) Presence of at least one lung cancer code (C34xx)
and assigned to MS-DRGs for respiratory neoplasms (180-182). The
applicant stated that ZEPZELCATM is supplied in 4 mg single-
dose vials with the recommended dose of 3.2 mg/m\2\ by intravenous
infusion over 60 minutes every 21 days until disease progression or
unacceptable toxicity. Based on clinical study, the applicant stated
that a single dose of ZEPZELCATM ranged from 4.05 mg to 6.4
mg. To identify cases that may be eligible for the use of
ZEPZELCATM, the applicant searched the FY 2019 MedPAR LDS
file using these cohort selection criteria. The applicant stated that
in all analyses, they imputed a case count of 11 for MS-DRGs with fewer
than 11 cases and calculated the weighted average standardized charges
across all MS-DRGs.
Based on the FY 2019 MedPAR LDS file, the applicant identified a
total of 1,100 cases in the primary cohort (mapped to 17 MS-DRGs),
4,034 cases in the first sensitivity cohort (mapped to 195 MS-DRGs),
34,437 cases in the second sensitivity cohort (mapped to 253 MS-DRGs),
and 24,209 cases in the third sensitivity cohort (mapped to 128 MS-
DRGs). The applicant utilized the FY 2019 Final Rule with Correction
Notice IPPS Impact File. Using the cases identified, the applicant then
calculated the unstandardized average charges per case for each MS-DRG.
The applicant expects that ES-SCLC patients will receive their initial
dose of ZEPZELCATM in the inpatient setting. The applicant
then standardized the charges and inflated the charges by 1.13218 or
13.2 percent, the same inflation factor used by CMS to update the
outlier threshold in the FY 2021 IPPS/LTCH PPS final rule. The
applicant removed charges associated with chemotherapy since treatment
with ZEPZELCATM would replace chemotherapy. To do so the
applicant found the ratio of chemotherapy charges to radiology charges
(0.14470075) from claims in the FY 2019 inpatient standard analytic
file with a primary diagnosis of lung cancer (ICD-10-CM C34xx) and
chemotherapy charges greater than zero. The applicant then added the
charges for ZEPZELCATM by converting the costs of a single
treatment (two single-dose vials) to a charge by dividing the cost by
the national average cost-to-charge ratio of 0.187 for pharmacy from
the FY 2021 IPPS/LTCH PPS final rule. The applicant calculated a final
inflated average case weighted standardized charge per case for the
primary cohort as $206,030, and $182,895, $146,174, and $130,975 for
sensitivity cohorts 1, 2 and 3, respectively. The applicant referred to
the FY 2022 New Technology Thresholds data file to determine the
average case-weighted threshold amount for the primary cohort as
$79,420, and $70,499, $70,226, and $57,383 for sensitivity cohorts 1, 2
and 3, respectively. The final inflated average case-weighted
standardized charge per case in the primary cohort and three
sensitivity cohorts exceeded the average case-weighted threshold amount
by $126,610, $112,396, $75,948, and $73,592 respectively. Because the
final inflated average case-weighted standardized charge per case
exceeds in all scenarios the average case-weighted threshold amount,
the applicant maintained that the technology meets the cost criterion.
While we would not expect a significant difference, we note that
instead of referring to the correction notice tab within the FY 2022
New Technology Thresholds data file, the applicant referred to the
final rule tab. The FY 2022 New Technology Thresholds data file is
available on the CMS IPPS home page at: https://www.cms.gov/medicare/acute-inpatient-pps/fy-2021-ipps-final-rule-home-page#Data.
We also note that the analysis provided by the applicant includes
many MS-DRGs that are defined by factors that may or may not be related
to ZEPZELCATM's indication for metastatic SCLC. For example,
it is not clear that MS-DRG 004 Trach w MV >96 Hrs or Pdx Exc Face,
Mouth & Neck w/o Maj O.R has a direct connection to small cell lung
cancer though it may be related.
We are inviting public comment on whether ZEPZELCATM
meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that ZEPZELCATM significantly improves
clinical outcomes over existing treatment options for adult patients
with metastatic SCLC with disease progression on or after platinum-
based chemotherapy in five ways. First, ZEPZELCATM offers an
improved treatment option from both a safety and efficacy standpoint.
Second, ZEPZELCATM offers safety improvement for treatment
of patients with metastatic SCLC with disease progression on or after
platinum-based chemotherapy over safety results previously reported in
the literature for a comparable patient population. Third, patients
with metastatic SCLC whose disease progresses on or after platinum-
based chemotherapy achieved higher overall response rates (ORRs)
following treatment with ZEPZELCATM than ORR that had been
previously reported in the literature for a comparable patient
population. Fourth, overall survival (OS) rates achieved with
ZEPZELCATM are clinically meaningful and are the highest
rates reported for patients with metastatic SCLC whose disease
progresses on or after platinum-based chemotherapy in more than 2
decades. Fifth, the applicant asserted that ZEPZELCATM may
represent a valuable treatment alternative to platinum rechallenge. The
applicant submitted (or in some cases, referred to) multiple sources in
support of these claims including retrospective analyses and other
studies, a meta-analysis, data abstracts, literature reviews,
prescribing information, FDA approved cancer therapies, practice
guidelines, workgroup deliberations, a commentary, and an opinion
regarding survival outcomes.
With regard to the first claim, the applicant stated that
ZEPZELCATM is the first second-line treatment option
approved for SCLC since 1998 and is
[[Page 25357]]
indicated for the treatment of adult patients with metastatic SCLC with
disease progression on or after platinum-based chemotherapy, a patient
population with dismal outcomes. The applicant also stated that
ZEPZELCATM offers an improved treatment option from both a
safety and efficacy standpoint. The applicant outlined the nature of
small cell lung cancer, patient treatment and prognosis. The applicant
also stated that ZEPZELCATM could represent a valuable
option for a patient population with high unmet medical need.\873\
Specifically, the applicant referred to four analyses, an epidemiology
review, prescribing information, practice guidelines, a literature
review inclusive of four articles, and one ZEPZELCATM study.
---------------------------------------------------------------------------
\873\ Trigo J, et al. Lurbinectedin as second-line treatment for
patients with small-cell lung cancer: A single-arm, open-label,
phase 2 basket trial. Lancet Oncology. www.thelancet.com/oncology,
Published online March 27, 2020. https://doi.org/10.1016/S1470-2045.
---------------------------------------------------------------------------
First, an analysis stated that although small cell lung cancer
shows high sensitivity to first-line chemotherapy and radiotherapy,
most patients develop disease relapse or progression.\874\ Another
analysis stated that most patients experience relapse of small cell
lung cancer within 1 year of treatment.\875\ A separate analysis
indicated that most patients who have initially responded to
chemotherapy and radiotherapy eventually experience recurrence of the
cancer in a few months.\876\ The fourth analysis indicated that almost
all patients with extended disease will develop disease relapse or
progression after first-line treatment and that without second-line
chemotherapy, the median survival time is 2 to 4 months.\877\
---------------------------------------------------------------------------
\874\ Shiozawa, T. Rechallenge with first-line platinum
chemotherapy for sensitive-relapsed small-cell lung cancer. Case Rep
Oncol. 2018;11:622-632.
\875\ Naito Y, et al. Rechallenge treatment with a platinum-
based regimen in patients with sensitive relapsed small-cell lung
cancer. Medical Oncology (2018) 35:61.
\876\ Horita N, et al. Topotecan for relapsed small-cell lung
cancer: Systematic review and meta-analysis of 1347 patients. Sci
Rep 2015;5:15437.
\877\ Wakuda K et al. Efficacy of second-line chemotherapy in
patients with sensitive relapsed small-cell lung cancer. In vivo.
33:2229-2234 (2019).
---------------------------------------------------------------------------
Next, in referring to the epidemiology review, the applicant stated
that most cases of small cell lung cancer occur in individuals aged 60-
80.\878\ In referring to prescribing information, the applicant stated
that in 1998, Hycamtin (topotecan) was approved for patients with SCLC
sensitive disease after failure of first-line chemotherapy. The
applicant further stated that in the topotecan Phase 3 clinical study,
sensitive disease was defined as disease responding to chemotherapy,
but subsequently progressing at least 60 days after chemotherapy.\879\
---------------------------------------------------------------------------
\878\ Tan WT, et al. Small Cell Lung Cancer (SCLC), Medscape,
Oncology. Updated June 19, 2020. Emedicine.medscape.com.
\879\ FDA website, Hycamtin (topotecan) prescribing
information., Rev. 2/2014: https://www.accessdata.fda.gov/drugsatfda_docs/label/2014/022453s002lbl.pdf.
---------------------------------------------------------------------------
Next, in referring to practice guidelines, the applicant stated
that ZEPZELCA was studied in a broader (resistant disease and sensitive
disease) population of SCLC patients and that prespecified subgroup
analyses of ZEPZELCA results were done for patients with SCLC by CTFI
in patients with resistant disease (CTFI <90 days) and sensitive
disease (CTFI interval >=90 days). The applicant further noted that
NCCN guidelines list ZEPZELCA as a preferred regimen for second-line
treatment of patients with a CTFI <=6 months and recommended ZEPZELCA
for patients with a CTFI >6 months.\880\
---------------------------------------------------------------------------
\880\ NCCN Clinical Practice Guidelines in Oncology, Small Cell
Lung Cancer. Version 4.2020, July 7, 2020. https://nccn.org.
---------------------------------------------------------------------------
Next, the applicant referred to a literature review and submitted
four sources. First, per the applicant, Iams et. al. describes
available data on clinical efficacy, the emerging evidence regarding
biomarkers and ongoing clinical trials using immune checkpoint
inhibitors and other immunotherapies in patients with SCLC. The article
included a discussion of the significant unmet needs in second-line
therapy for SCLC.\881\ Second, per the applicant, Tsiouprou et. al.
reported on a literature review of immunotherapy in treatment of ES-
SCLC and included a discussion of the significant unmet needs in
second-line therapy for SCLC.\882\ Third, per the applicant, Wang et.
al. presented a review of SCLC development, current therapy and
included a discussion of the significant unmet needs in second-line
therapy for SCLC.\883\ Fourth, per the applicant, Taniguchi et. al., is
an opinion article discussing recent developments in the treatment of
SCLC and includes a discussion of the significant unmet needs in
second-line therapy for SCLC.\884\
---------------------------------------------------------------------------
\881\ Iams WT, et al. Immunotherapeutic approaches for small-
cell lung cancer. Nat Rev Clin Oncol. 2020 May; 17(5):300-312. doi:
10.1038/s41571-019-0316-z. Epub 2020 Feb 13.
\882\ Tsiouprou I, et al. The r[ocirc]le of immunotherapy in
extensive stage small-cell lung cancer: A review of the literature.
Can Respir J. 2019 Nov 3;2019:6860432. doi: 10.1155/2019/6860432.
eCollection 2019.
\883\ Wang Y, et al. New insights into small-cell lung cancer
development and therapy. Cell Biol Int. 2020 Aug;44(8):1564-1576.
doi: 10.1002/cbin.11359. Epub 2020 Apr 18.
\884\ Taniguchi H, et al. Targeted therapies and biomarkers in
small cell lung cancer. Front Oncol. 2020 May 20;10:741. doi:
10.3389/fonc.2020.00741. eCollection 2020.
---------------------------------------------------------------------------
Finally, the applicant referred to Trigo, et. al., and stated that
authors expressed that ZEPZELCA could present a valuable potential new
treatment option after first-line platinum based chemotherapy.\885\
---------------------------------------------------------------------------
\885\ Trigo J, et al. Lurbinectedin as second-line treatment for
patients with small-cell lung cancer: A single-arm, open-label,
phase 2 basket trial. Lancet Oncology. www.thelancet.com/oncology,
Published online March 27, 2020. https://doi.org/10.1016/S1470-2045.
---------------------------------------------------------------------------
With regard to the second claim, the applicant asserted that
ZEPZELCATM offers safety improvement for treatment of
patients with metastatic SCLC with disease progression on or after
platinum-based chemotherapy over safety results previously reported in
the literature for a comparable patient population. The applicant
asserted that safety is of particular importance for patients >=65 with
age being a major patient-related risk factor.\886\ The applicant also
referred to a meeting abstract stating that several acute comorbidities
were more common in Medicare patients initiating second-line
chemotherapy than in all patients at diagnosis: Infectious disease (57%
versus 43%), electrolyte disorder (50% versus 22%), anemia (45% versus
19%), neutropenia (17% versus 0.1%), thrombocytopenia (12% versus 2%),
and diarrhea (7% versus 3%).\887\
---------------------------------------------------------------------------
\886\ Simeone E, et al. Nivolumab for the treatment of small
cell lung cancer. Exp Rev Resp Med. 2020;14(1):5-13.
\887\ Danese M, et al. Comorbidity in patients with extensive
disease small cell lung cancer. Presented at the AMCP Managed Care &
Specialty Pharmacy Annual Meeting; March 27-30, 2017; Denver, CO.
---------------------------------------------------------------------------
The applicant also referred to six studies to support this claim.
First, the applicant submitted Trigo et. al., that was based on Study
B-005 (NCT01454972), a single-arm, open label, phase II basket trial to
evaluate the activity and safety of lurbinectedin in patients with SCLC
after failure of platinum-based chemotherapy. One hundred five patients
with a diagnosis of SCLC and pre-treated with only one previous
chemotherapy-containing line of treatment were included. Treatment
consisted of 3.2mg/m2 lurbinectedin intravenously every 3 weeks until
disease progression or unacceptable toxicity. The safety-related
outcomes demonstrated the following adverse events: Anemia 9%,
leucopenia 29%, neutropenia 46%, and thrombocytopenia 7%. Serious
treatment-related adverse events occurred in 10% of patients, of which
[[Page 25358]]
neutropenia and febrile neutropenia were the most common with 5% of
patients for each.\888\
---------------------------------------------------------------------------
\888\ Trigo J, et al. Lurbinectedin as second-line treatment for
patients with small-cell lung cancer: A single-arm, open-label,
phase 2 basket trial. Lancet Oncology. www.thelancet.com/oncology,
Published online March 27, 2020. https://doi.org/10.1016/S1470-2045.
---------------------------------------------------------------------------
Second, the applicant submitted an article from Von Pawel, et. al.,
of a randomized phase 3 study of a total of 637 patients with
refractory or sensitive SCLC treated with topotecan and reported
hematologic toxicities of grade >=3 anemia, 30.5%; neutropenia, 53.8%;
thrombocytopenia, 54.3%; febrile neutropenia, 3%.\889\
---------------------------------------------------------------------------
\889\ Von Pawel J, et al. Randomized phase III trial of
amrubicin versus topotecan as second-line treatment for patients
with small-cell lung cancer. J Clin Oncol. (2014) 32:35.
---------------------------------------------------------------------------
Third, the applicant submitted an open label phase 2 study of 179
patients with SCLC who relapsed after initial platinum-based
chemotherapy, treated with topotecan and reported hematologic
toxicities of neutropenia, 78.4%; thrombocytopenia, 45.5%; and febrile
neutropenia/neutropenic infection/neutropenic sepsis, 18%.\890\
---------------------------------------------------------------------------
\890\ Evans TL, et al. Cabazitaxel versus topotecan in patients
with small-cell lung cancer with progressive disease during or after
first-line platinum-based chemotherapy. J Thorac Oncol.
2015;10:1221-1228.
---------------------------------------------------------------------------
Fourth, the applicant submitted an abstract from Monnet, et. al. of
an open-label, multicenter, phase 3 trial that randomized patients with
SCLC that responded to first-line platin-etoposide doublet treatment
but showed evidence of disease relapse or progression at least 90 days
after completion of the first-line treatment. Eighty-two patients were
assigned to each treatment group: Those receiving combination
chemotherapy (carboplatin and etoposide) versus those receiving oral
topotecan. The abstract indicated that grade \3/4\ neutropenia was
significantly more common in the topotecan group at 35.8% versus 19.7%;
insignificantly more febrile neutropenia in the topotecan arm at 13.6%
versus 6.2%; no difference for grade \3/4\ thrombocytopenia, 35.8%
versus 30.9%; and anemia, 24.6% versus 21%.\891\
---------------------------------------------------------------------------
\891\ Monnet, 2 L., et. al. Carboplatin-Etoposide Versus
Topotecan as Second-Line Treatment for Sensitive Relapsed Small-Cell
Lung Cancer: Phase 3 Trial. Journal of Thoracic Oncology Vol. 14 No.
10S.
---------------------------------------------------------------------------
Fifth, the applicant submitted an abstract from Leary, et. al.,
that is described as a pooled safety analysis with data from the phase
II, single arm basket study by Trigo, et. al. (discussed previously),
and a phase III RCT, the CORAIL study. The pooled analysis included a
total of 554 patients treated with lurbinectedin. Of the 554, 335 were
from the phase II basket study with selected solid tumors (9
indications including 105 patients with small cell lung cancer) and 219
were from the phase III CORAIL study with platinum resistant ovarian
cancer. Authors presented an indirect exploratory comparison (pooled
data from CORAIL + basket) and a direct comparison (data from CORAIL)
of lurbinectedin vs. topotecan. Authors reported adverse events with
lurbinectedin were grade \1/2\ fatigue, nausea and vomiting. Treatment-
related lurbinectedin/topotecan outcomes showed: Dose reductions: 22.9/
48.3%; delays: 25.8/52.9%; grade >=3 serious adverse events: 15.0/
32.2%; discontinuations: 3.2/5.7%; deaths: 1.3/1.5%; granulocyte colony
stimulating factor (G-CSF) use: 23.8/70.1%; and transfusions: 15.9/
52.9%. Authors concluded by stating that a significant safety advantage
was observed when lurbinectedin was compared with topotecan in the
CORAIL trial in terms of hematological toxicities. Authors also noted
that with the limitations of indirect comparisons, in the pooled safety
analysis, fewer lurbinectedin-treated patients had severe hematological
toxicities, severe adverse events, dose adjustments, treatment
discontinuations and use of supportive treatments than topotecan-
treated patients.\892\
---------------------------------------------------------------------------
\892\ Leary A, et al. Pooled safety analysis of single-agent
lurbinectedin versus topotecan (Results from a randomized phase III
trial CORAIL and a phase II basket trial). ASCO2020 (American
Society of Oncology); May 29-31, 2020. Abstract and poster.
---------------------------------------------------------------------------
Sixth, the applicant provided a presentation summarizing results
from the randomized phase 3 CORAIL study. The patient population was
comprised of platinum resistant ovarian, fallopian or primary
peritoneal cancer. Enrolled patients were randomly assigned to receive
lurbinectedin or investigator choice of pegylated liposomal doxorubicin
(PLD) or topotecan. The applicant stated that ZEPZELCATM was
better tolerated than the control arm and that, overall, the data
support a favorable safety profile for ZEPZELCATM.\893\
---------------------------------------------------------------------------
\893\ Gaillard S, et al. Phase III trial of lurbinectedin versus
PLD or topotecan in platinum-resistant ovarian cancer patients:
Results of the CORAIL trial. 2018 ESMO Presentation.
---------------------------------------------------------------------------
With regard to the third claim, the applicant stated that patients
with metastatic SCLC whose disease progresses on or after platinum-
based chemotherapy achieved higher ORRs following treatment with
ZEPZELCATM than ORR that had been previously reported in the
literature for a comparable patient population. The applicant referred
to four primary resources in support of ZEPZELCATM. First,
as described previously, the applicant submitted Trigo, et. al., in
which the primary endpoint is described as lurbinectedin anti-tumor
activity in terms of investigator-assessed overall response (OR) and
duration of response (DOR) as a secondary endpoint.\894\ The OR rate
was identified as 35.2% and the mean DOR as 5.3 months. Second, the
applicant submitted an abstract from Subbiah, et. al., a sub-study from
Study B-005, that concluded that time from randomization to response
was similar regardless of prior resistance or sensitivity to platinum-
based chemotherapy, and clinically meaningful DOR was noted in both
subgroups of responders.\895\ Third, the applicant submitted an
abstract from a second sub-study from Study B-005, indicating that ORR
was similar across baseline characteristics: Age <65 = 36.8%; age >=65
= 32.4%; female = 31%; male = 38.1%; 1 prior line of therapy = 34.7%;
>=2 prior lines of therapy = 42.9%; BSA <=1.8m2 = 34.5%; and BSA >1.8m2
= 36%. The authors concluded by noting that response to lurbinectedin
appeared consistent regardless of baseline patient
characteristics.\896\ Fourth, the applicant submitted a commentary from
Arrieta, et. al., and stated that ZEPZELCATM outperformed
all previously reported results for topotecan.\897\
---------------------------------------------------------------------------
\894\ Additional secondary endpoints are discussed with the
overall survival claim.
\895\ Subbiah V, et al. Phase 2 basket trial of lurbinectedin in
second-line SCLC: Characteristics and outcomes in treatment
responders. IASLC 2020 North American Conference on Lung Cancer.
Accepted for presentation October 16-17, 2020.
\896\ Sands J, et al. Phase 2 basket trial of lurbinectedin in
small-cell lung cancer (SCLC): Analysis of efficacy by baseline
characteristics. IASLC 2020 North American Conference on Lung
Cancer. Accepted for presentation October 16-17, 2020.
\897\ Arrieta O, et al. New opportunities in a challenging
disease: lurbinectedin for relapsed small-cell lung cancer. Comment
in Lancet Oncology. www.thelancet.com/oncology, Published online
March 27, 2020..https://doi.org/10.1016/S1470-2045(20)30097-8.
---------------------------------------------------------------------------
The applicant also referred to three additional sources reflecting
ORRs following treatment with topotecan. The Phase 3 trial of a total
of 637 patients with refractory or sensitive SCLC treated with
topotecan demonstrated an ORR of 16.9% and DOR of 4.2 months.\898\ In
the open-label, multicenter, phase 3 trial of 164 patients with
sensitive relapsed SCLC that responded to first-line platin etoposide
doublet treatment but showed evidence of disease relapse or progression
at least 90 days after
[[Page 25359]]
completion of the first-line treatment, patients randomized to the
topotecan group demonstrated an ORR of 25%.\899\ Lastly, a randomized,
multi-center phase 3 trial of 107 patients treated with topotecan
reported an ORR of 24.3%.\900\
---------------------------------------------------------------------------
\898\ Von Pawel J, et al. Randomized phase III trial of
amrubicin versus topotecan as second-line treatment for patients
with small-cell lung cancer. J Clin Oncol. (2014) 32:35.
\899\ Monnet, 2 L., et. al. Carboplatin-Etoposide Versus
Topotecan as Second-Line Treatment for Sensitive Relapsed Small-Cell
Lung Cancer: Phase 3 Trial. Journal of Thoracic Oncology Vol. 14 No.
10S
\900\ Von Pawel J, et al. Topotecan versus cyclophosphamide,
doxorubicin, and vincristine for the treatment of recurrent small-
cell lung cancer. J Clin Oncol. Vol 17, No 2, 1999: 658-667.
---------------------------------------------------------------------------
With regard to the fourth claim, the applicant stated that the OS
rates achieved with ZEPZELCATM are clinically meaningful and
are the highest rates reported for patients with metastatic SCLC whose
disease progresses on or after platinum-based chemotherapy in more than
2 decades. The applicant submitted two studies in support of its claim
of improved survival rates in patients treated with
ZEPZELCATM. First, as described previously, the applicant
submitted Trigo, et. al. and highlighted secondary endpoints including
progression-free survival, progression-free survival at 4 and 6 months,
overall survival and overall survival at 6 and 12 months. The mean
progression free survival was identified as 3.5 months, mean overall
survival 9.3 months in the overall population, 11.9 months in patients
with a CTFI >=90 days and 5.0 months in those with CTFI <90 days.\901\
---------------------------------------------------------------------------
\901\ Trigo J, et al. Lurbinectedin as second-line treatment for
patients with small-cell lung cancer: A single-arm, open-label,
phase 2 basket trial. Lancet Oncology. www.thelancet.com/oncology,
Published online March 27, 2020. https://doi.org/10.1016/S1470-2045.
---------------------------------------------------------------------------
Second, the applicant submitted an abstract from Subbiah, et. al.,
that summarized a sub-study from Study B-005 in which overall survival
was a secondary endpoint. Authors report that patients treated with
lurbinectedin had CTFI >=180 days and form the basis for their
analysis. Sixty percent of patients were male, had ECOG PS 0-1, and had
a median age of 57 years. Extensive stage disease at initial diagnosis
was present in 35% of patients. All 20 patients had received prior
platinum/etoposide, with no prior immunotherapy. Authors also reported
that with a censoring of 55.0%, the median overall survival was 16.2
months. Per the abstract, eleven patients (55.0%) were censored for
survival analysis: Eight were on follow-up after disease progression,
two were ongoing lurbinectedin treatment, and one had treatment
discontinuation because of a treatment-related adverse event (worsening
of prior peripheral neuropathy). Median follow-up was 15.6 months.
Authors concluded time from randomization to response was similar
regardless of prior resistance or sensitivity to platinum-based
chemotherapy.\902\
---------------------------------------------------------------------------
\902\ Subbiah V, et al. Activity of lurbinectedin in second-line
SCLC patients who are candidates for platinum rechallenge IASLC 2020
North American Conference on Lung Cancer. Accepted for presentation
October 16-17, 2020.
---------------------------------------------------------------------------
The applicant also referred to several randomized phase I and II
studies of patients undergoing alternate therapies and highlighted
those OS rates. The applicant provided an abstract from Monnet, et.
al., (as mentioned previously with respect to applicant's second and
third claims) summarizing results from a study that investigated
whether the doublet carboplatin-etoposide was superior to topotecan
monotherapy as second-line treatment in patients with sensitive
relapsed SCLC. Authors reported patients treated with topotecan had
progression free survival (PFS) of 2.7 months and OS of 7.4
months.\903\ The applicant also referred to Evans, et. al., summarizing
results from a study of patients with SCLC who relapsed after initial
platinum-based chemotherapy who were divided into subgroups,
chemosensitive vs. chemo-resistant/refractory disease. Patients were
treated with topotecan. Authors reported topotecan PFS of 3.0 months
and OS of 6.8 months.\904\ The applicant referred to Von Pawel, et.
al., summarizing the results of a phase 3 trial of a total of 637
patients with refractory or sensitive SCLC, including topotecan PFS of
3.5 months and OS of 7.8 months (5.7 months for refractory).\905\
Lastly, the applicant referred to Von Pawel, et. al., that reported
randomized, multi-center phase 3 results for topotecan with time to
progression of 13.3 weeks and median OS of 25 weeks.\906\
---------------------------------------------------------------------------
\903\ Monnet, 2 L., et. al. Carboplatin-Etoposide Versus
Topotecan as Second-Line Treatment for Sensitive Relapsed Small-Cell
Lung Cancer: Phase 3 Trial. Journal of Thoracic Oncology Vol. 14 No.
10S.
\904\ Evans TL, et al. Cabazitaxel versus topotecan in patients
with small-cell lung cancer with progressive disease during or after
first-line platinum-based chemotherapy. J Thorac Oncol. 2015;10:
1221-1228.
\905\ Von Pawel J, et al. Randomized phase III trial of
amrubicin versus topotecan as second-line treatment for patients
with small-cell lung cancer. J Clin Oncol. (2014) 32:35.
\906\ Von Pawel J, et al. Topotecan versus cyclophosphamide,
doxorubicin, and vincristine for the treatment of recurrent small-
cell lung cancer. J Clin Oncol. Vol 17, No 2, 1999: 658-667.
---------------------------------------------------------------------------
The applicant explained that a statement from an American Society
of Clinical Oncology (ASCO) workgroup indicated that relative
improvements in median OS of at least 20% are necessary to define a
clinically meaningful improvement in outcome.\907\ The applicant
summarized oncology literature reviews between 2014 and 2016 asserting
that ASCO's threshold for OS was met in only 12% of studies (6 of 49)
and 19% of therapies.908 909
---------------------------------------------------------------------------
\907\ Ellis LM, et al. American Society of Clinical Oncology
perspective: Raising the bar for clinical trials by defining
clinically meaningful outcomes. J Clin Oncol. 2014;32(12:1277-1280).
\908\ Dreicer JJ, et al. Clinically meaningful benefit: real
world use compared against the American and European guidelines.
Blood Cancer Journal. 7,10.1038/s41408-017-0009-8.
\909\ Kumar H, et al. An appraisal of clinically meaningful
outcomes guidelines for oncology clinical trials, JAMA Oncology.
Published online: Vol 2, No 9, 1238-1240.
---------------------------------------------------------------------------
The applicant further stated that ZEPZELCATM's median OS
for the overall population compared to the literature, meets the ASCO
threshold and, for subsets of patient groups, median OS exceeds the
ASCO threshold for clinically meaningful.
The applicant concluded by stating that there is an urgent need for
new treatment options for the SCLC population.\910\ The applicant
asserted that CMS's new technology add-on payment approval of
TECENTRIQ[supreg] for the treatment of patients with ES-SCLC effective
for FY 2021 (85 FR 58684) further supports the urgency, referring to
its 2 month improvement in survival.
---------------------------------------------------------------------------
\910\ NCI Staff. For small cell lung cancer, immunotherapy drug
finally brings improved survival. National Cancer Institute. October
3, 2018. https://www.cancer.gov/news-events/cancer-currents-blog/2018/small-cell-lung-cancer-atezolizumab-survival.
---------------------------------------------------------------------------
The applicant also referred to comments from specialists in the
field of lung cancer stating that despite small trial sizes,
improvement in overall survival is a major achievement and that any
advance in survival is important given that few patients diagnosed with
SCLC survive for even a year despite treatment.\911\
---------------------------------------------------------------------------
\911\ NCI Staff. For small cell lung cancer, immunotherapy drug
finally brings improved survival. National Cancer Institute. October
3, 2018. https://www.cancer.gov/news-events/cancer-currents-blog/2018/small-cell-lung-cancer-atezolizumab-survival.
---------------------------------------------------------------------------
With regard to the fifth claim, that ZEPZELCATM may
represent a valuable treatment alternative to platinum rechallenge, the
applicant submitted several sources pertaining to
ZEPZELCATM. First, the applicant submitted two sub-analyses
from Subbiah, et. al., that were based on Study B-005 as its primary
support for ZEPZELCATM. In both of these sub-analyses,
patients had been pre-treated with one prior platinum-containing line.
The first analysis included 20 patients from a subset of patients with
CTFI >180 and authors report that patients
[[Page 25360]]
treated with lurbinectedin had an ORR at 60.0% and a median DoR of 5.5
months. The second analysis included 60 patients from a SCLC cohort of
the basket trial, with CTFI >90 d (20 pts with CTFI >180 d). The
applicant states that ZEPZELCATM was shown to be effective
and well-tolerated in the platinum-sensitive relapsed SCLC population
especially when CTFI >180 days. From these results, the authors
concluded that ZEPZELCATM may represent a valuable
alternative to platinum rechallenge.912 913 The applicant
also referenced Arrieta et. al., stating that ZEPZELCATM
data outperformed less established treatment schemes including platinum
rechallenge.\914\ The applicant stated that the July 7, 2020 NCCN
Clinical Practice Guidelines in Oncology indicate that lurbinectedin is
identified as a Preferred Regimen in relapse <=6 months and a
Recommended Regimen in relapse >6 months.\915\ The applicant referred
to the authors' conclusion in Genestreti et. al., stating that the
outcome for second line chemotherapy for SCLC is poor and that
rechallenge platinum/etoposide is a reasonable option with potentially
better outcomes than standard chemotherapy.\916\
---------------------------------------------------------------------------
\912\ Subbiah V, et al. Activity of lurbinectedin in second-line
SCLC patients who are candidates for platinum rechallenge IASLC 2020
North American Conference on Lung Cancer. Accepted for presentation
October 16-17, 2020.
\913\ Subbiah V, et al. Activity in second-line SCLC patient
candidates for platinum rechallenge. ESMO (European Society for
Medical Oncology) 2020 Congress; September 19-21, 2020. Poster
1784P.
\914\ Arrieta O, et al. New opportunities in a challenging
disease: Lurbinectedin for relapsed small-cell lung cancer. Comment
in Lancet Oncology. www.thelancet.com/oncology, Published online
March 27, 2020. https://doi.org/10.1016/S1470-2045(20)30097-8.
\915\ NCCN Clinical Practice Guidelines in Oncology, Small Cell
Lung Cancer. Version 4.2020, July 7, 2020. https://nccn.org.
\916\ Genestreti G, et al. Outcomes of platinum-sensitive small-
cell lung cancer patients treated with platinum/etoposide
rechallenge: A multi-institutional retrospective analysis. Clinical
Lung Cancer, Vol. 16, No. 6, e223-8.
---------------------------------------------------------------------------
Finally, the applicant referred to Monnet, et. al., stating that
patients treated with combination therapy, carboplatin and etoposide,
achieved a median OS of 7.4 months and ORR of 49%.\917\
---------------------------------------------------------------------------
\917\ Monnet, 2 L., et. al. Carboplatin-Etoposide Versus
Topotecan as Second-Line Treatment for Sensitive Relapsed Small-Cell
Lung Cancer: Phase 3 Trial. Journal of Thoracic Oncology Vol. 14 No.
10S.
---------------------------------------------------------------------------
After review of the information provided by the applicant, we have
the following concerns. The evidence submitted by the applicant in
support of ZEPZELCATM's improvement in overall response and
survival rates is based on one single-arm, open label, phase II basket
study (Study B-005 (NCT01454972)) and several smaller subsetted
analyses that were based on the basket study, and we note that without
a direct comparison arm it may be more difficult to draw definitive
conclusions.918 919 920 921 We note the following
differences between the historical control patients and patients
treated with ZEPZELCATM in these studies, which may confound
the comparisons: First, patients with central nervous system
involvement (brain metastases) were excluded from ZEPZELCATM
treatment, and we note that Arrieta, et. al., noted that this criterion
is of particular interest when translating results to the clinical
setting, since patients with SCLC are known to be prone to develop
brain metastases, and up to 50% do so throughout the disease
course.\922\ Second, patients treated with ZEPZELCATM had
access to immunotherapy during first line treatment, which may support
patients' immune systems in fighting cancer. Third, the CTFI used in
the single arm basket trial differs from those used in the historical
controls of topotecan studies, and we note that CTFIs can impact
treatment response and outcome. As, per the applicant,
ZEPZELCATM was listed as a preferred regimen by the NCCN
Clinical Practice Guidelines for second-line treatment of patients with
a CTFI <=6 months and recommended for patients with a CTFI >6 months,
while topotecan is only FDA approved for chemotherapy-sensitive cases,
defined using a 60 day CTFI, we note that the appropriate comparator
treatment for ZEPZELCATM would differ depending on the CTFI
subset. However, the historical controls relied on an overall topotecan
population with CTFI >60. To the extent that this group was more
heavily weighted with patients in the lower CTFI group, it is unclear
whether this may partially explain the poorer outcomes of patients in
the historical control groups. We also note that, while the claim of
improved hematological outcomes using ZEPZELCATM appears to
be mostly supported by the female-only arm of the CORAIL study, results
from the pooled sample of the basket trial still appeared to
demonstrate an improvement over the topotecan arm. We believe that this
may suggest that the inclusion of male patients did not alter the
conclusion that patients treated with ZEPZELCATM appeared
more favorable than those treated with topotecan. We further note that
bone marrow stimulating drugs were allowed in the topotecan arm of the
CORAIL study so the observed adverse hematologic effects may have been
the best case for that arm of the study. Finally, we note that the
subsetted analyses generated from the primary basket study have small
sample sizes and the authors of these studies stated that further
research on larger populations is required to draw firm
conclusions.923 924
---------------------------------------------------------------------------
\918\ Sands J, et al. Phase 2 basket trial of lurbinectedin in
small-cell lung cancer (SCLC): Analysis of efficacy by baseline
characteristics. IASLC 2020 North American Conference on Lung
Cancer. Accepted for presentation October 16-17, 2020.
\919\ Subbiah V, et al. Phase 2 basket trial of lurbinectedin in
second-line SCLC: Characteristics and outcomes in treatment
responders. IASLC 2020 North American Conference on Lung Cancer.
Accepted for presentation October 16-17, 2020.
\920\ Subbiah V, et al. Activity of lurbinectedin in second-line
SCLC patients who are candidates for platinum rechallenge IASLC 2020
North American Conference on Lung Cancer. Accepted for presentation
October 16-17, 2020.
\921\ Subbiah V, et al. Activity in second-line SCLC patient
candidates for platinum rechallenge. ESMO (European Society for
Medical Oncology) 2020 Congress; September 19-21, 2020. Poster
1784P.
\922\ Arrieta O, et al. New opportunities in a challenging
disease: Lurbinectedin for relapsed small-cell lung cancer. Comment
in Lancet Oncology. www.thelancet.com/oncology, Published online
March 27, 2020. https://doi.org/10.1016/S1470-2045(20)30097-8.
\923\ Subbiah V, et al. Activity in second-line SCLC patient
candidates for platinum rechallenge. ESMO (European Society for
Medical Oncology) 2020 Congress; September 19-21, 2020. Poster 1784P
\924\ Sands J, et al. Phase 2 basket trial of lurbinectedin in
small-cell lung cancer (SCLC): Analysis of efficacy by baseline
characteristics. IASLC 2020 North American Conference on Lung
Cancer. Accepted for presentation October 16-17, 2020.
---------------------------------------------------------------------------
We invite public comments on whether ZEPZELCATM meets
the substantial clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
ZEPZELCATM.
6. Proposed FY 2022 Applications for New Technology Add-On Payments
(Alternative Pathways)
As discussed previously, beginning with applications for FY 2021, a
medical device that is part of FDA's Breakthrough Devices Program and
has received marketing authorization for the indication covered by the
Breakthrough Device designation may qualify for the new technology add-
on payment under an alternative pathway. Additionally, beginning with
FY 2021, a medical product that is designated by the FDA as a Qualified
Infectious Disease Product (QIDP) and has received marketing
authorization for the indication covered by the QIDP
[[Page 25361]]
designation, and, beginning with FY 2022, a medical product that is a
new medical product approved under FDA's Limited Population Pathway for
Antibacterial and Antifungal Drugs (LPAD) and used for the indication
approved under the LPAD pathway, may also qualify for the new
technology add-on payment under an alternative pathway. Under an
alternative pathway, a technology will be considered new and not
substantially similar to an existing technology for purposes of the new
technology add-on payment under the IPPS and will not need to meet the
requirement that it represents an advance that substantially improves,
relative to technologies previously available, the diagnosis or
treatment of Medicare beneficiaries. These technologies must still meet
the cost criterion.
We note, section 1886(d)(5)(K)(ii)(II) of the Act provides for the
collection of data with respect to the costs of a new medical service
or technology described in subclause (I) for a period of not less than
2 years and not more than 3 years beginning on the date on which an
inpatient hospital code is issued with respect to the service or
technology. Our regulations in Sec. 412.87(c)(2) for breakthrough
devices and Sec. 412.87(d)(2) for certain antimicrobial products state
that a medical device/product that meets the condition in paragraph
(c)(1) or (d)(1) of Sec. 412.87 will be considered new for not less
than 2 years and not more than 3 years after the point at which data
begin to become available reflecting the inpatient hospital code (as
defined in section 1886(d)(5)(K)(iii) of the Act) assigned to the new
technology (depending on when a new code is assigned and data on the
new technology become available for DRG recalibration). After CMS has
recalibrated the DRGs, based on available data, to reflect the costs of
an otherwise new medical technology, the medical technology will no
longer be considered ``new'' under the criterion of this section.
We received 17 applications for new technology add-on payments for
FY 2022 under the alternative new technology add-on payment pathway.
One applicant withdrew its application prior to the issuance of this
proposed rule. Of the remaining 16 applications, 13 of the technologies
received a Breakthrough Device designation from FDA and three were
designated as a QIDP by FDA. We did not receive any applications for
technologies approved through the LPAD pathway.
In accordance with the regulations under Sec. 412.87(e)(2),
applicants for new technology add-on payments, including Breakthrough
Devices, must have FDA marketing authorization by July 1 of the year
prior to the beginning of the fiscal year for which the application is
being considered. Under the policy finalized in the FY 2021 IPPS/LTCH
PPS final rule (85 FR 58742), we revised the regulations at Sec.
412.87(e) by adding a new paragraph (3) which provides for conditional
approval for a technology for which an application is submitted under
the alternative pathway for certain antimicrobial products (QIDPs and
LPADs) at Sec. 412.87(d) that does not receive FDA marketing
authorization by the July 1 deadline specified in Sec. 412.87(e)(2),
provided that the technology receives FDA marketing authorization by
July 1 of the particular fiscal year for which the applicant applied
for new technology add-on payments. We refer the reader to the FY 2021
IPPS/LTCH final rule for a complete discussion of this policy (85 FR
58737 through 58742).
As we did in the FY 2021 IPPS/LTCH PPS proposed rule, for
applications under the alternative new technology add-on payment
pathway, in this proposed rule we are making a proposal to approve or
disapprove each of these 16 applications for FY 2022 new technology
add-on payments. Therefore, in this section of the preamble of this
proposed rule, we provide background information on each alternative
pathway application and propose whether or not each technology would be
eligible for the new technology add-on payment for FY 2022. We refer
readers to section II.H.8. of the preamble of the FY 2020 IPPS/LTCH PPS
final rule (84 FR 42292 through 42297) and FY 2021 IPPS/LTCH PPS final
rule (85 FR 58715 through 58733) for a complete discussion of the
alternative new technology add-on payment pathways for these
technologies.
a. Alternative Pathway for Breakthrough Devices
(1) AprevoTM Intervertebral Body Fusion Device
Carlsmed, Inc. submitted an application for new technology-add on
payments for the aprevoTM Intervertebral Fusion Device
(aprevoTM) for FY 2022. Per the applicant, the device is an
interbody fusion implant that stabilizes the lumbar spinal column and
facilitates fusion during lumbar fusion procedures indicated for the
treatment of spinal deformity. The applicant states that the implant
device is custom made for patient-specific features, by using patient
CT scans to create 3D virtual models of the deformity. The device is
used during anterior lumbar interbody fusion, lateral lumbar interbody
fusion, transforaminal lumbar interbody fusion, or standalone anterior
lumbar interbody fusion procedures. According to the applicant, the
aprevoTM device is additively manufactured and made from
Titanium Alloy (Ti-6Al-4V) per ASTM F3001, and has a cavity intended
for the packing of bone graft. In addition, the applicant explained
that aprevoTM is used with supplemental fixation devices and
bone graft packing. Per the applicant, the device was formerly known as
``CorraTM.''
The aprevoTM device received FDA Breakthrough Device
designation under the name ``Corra'' on July 1, 2020 for the Corra
Anterior, Corra Transforaminal and Corra Lateral Lumbar Fusion System
interbody device which is intended for use in anterior lumbar interbody
fusion (ALIF), lateral lumbar interbody fusion (LLIF), and
transforaminal lumbar interbody fusion (TLIF) under this designation.
The applicant was granted FDA 510(k) clearance as a Class II medical
device for the anterior lumbar interbody fusion and lateral lumbar
interbody fusion indications on December 3, 2020. The applicant
anticipates that the aprevoTM device will receive FDA
marketing authorization by May 2021 for the additional indications of
transforaminal interbody fusion and standalone anterior lumbar
interbody fusion (which incorporates supplemental fixation). Since the
anterior and lateral lumbar fusion indications that received marketing
authorization on December 3, 2020 correspond to the indications that
received Breakthrough Device designation, it appears that the newness
date for these indications would be December 3, 2020. The
transforaminal interbody fusion indication, which also corresponds to
the indication that received Breakthrough Device designation, would
have a different newness date, depending on when marketing
authorization is received for that indication. We note that under the
eligibility criteria for approval under the alternative pathway for
certain transformative new devices, only the use of aprevoTM
for the ALIF, LLIF, and TLIF indications, and the FDA Breakthrough
Device designations it received for these uses, are relevant for
purposes of the new technology add-on payment application for FY 2022.
According to the applicant, there are currently no unique ICD-10-
PCS codes describing the device. The applicant submitted a request to
the ICD-10 Coordination and Maintenance Committee for approval of a
code for FY
[[Page 25362]]
2022 to uniquely identify the technology.
With respect to the cost criterion, the applicant provided the
following analysis. The applicant used the MS-DRG grouping function
within FindACode software in conjunction with the online MS-DRG v37.0
Definitions Manual to identify the appropriate MS-DRGs to which
potential cases that may be eligible for treatment involving
aprevoTM patient-specific interbody cages would most likely
map. The applicant identified the following six relevant MS-DRGs:
[GRAPHIC] [TIFF OMITTED] TP10MY21.194
The applicant conducted a review of ICD-10-PCS codes for procedures
in which the aprevoTM patient-specific intervertebral body
fusion cases might be placed into the lumbar spine of an adult patient
diagnosed with spinal curvature. For MS-DRGs 453, 454, and 455, the
applicant searched the FY 2019 MedPAR dataset for cases with any of the
following procedure codes:
[GRAPHIC] [TIFF OMITTED] TP10MY21.195
For MS-DRGs 456, 457, and 458, the applicant searched the FY 2019
MedPAR dataset for cases reporting a procedure code in Table A in
combination with a primary diagnosis code in Table B or a secondary
diagnosis code in Table C.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP10MY21.196
[[Page 25363]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.197
[[Page 25364]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.198
[GRAPHIC] [TIFF OMITTED] TP10MY21.199
BILLING CODE 4120-01-C
The applicant identified 45,331 cases across all six MS-DRGs. The
applicant first removed charges to account for the two types of prior
technology devices that the applicant asserted are most likely to be
replaced by aprevoTM Intervertebral Body Fusion Device.
Specifically, the applicant calculated an average cost for the top five
selling devices in each category of prior technology, which include
standalone ALIF and LLIF lateral expandable cages.\925\ The applicant
then multiplied the cost of the technology being replaced by three,
which, per the applicant, is the number of lumbar cages implanted for
the correction of spinal curvature, to arrive at an estimated hospital
cost per case.\926\ The applicant converted costs to charges by
weighting the operating cost-to-charge ratios for each of the 3,315
hospitals in the FY 2021 IPPS/LTCH final rule and correction notice
impact file by each hospital's share of the 9,235,824 submitted bills
to obtain a national average CCR of 0.2546, of which the inverse is a
national-average hospital markup of 393 percent. The applicant then
standardized the charges and applied an inflation factor of 13.1
percent, which, per the applicant, is the outlier charge inflation
factor used in the FY 2021 IPPS/LTCH final rule (85 FR 59038), to
update the charges from FY 2019 to FY 2021. We note that the applicant
appears to have used the FY 2021 IPPS/LTCH PPS proposed rule inflation
factor rather than the 2-year inflation factor from the FY 2021 IPPS/
LTCH PPS final rule of 13.2 percent (85 FR 59039), which would have
resulted in a higher inflated charge figure.
The applicant then added charges for the new technology by
multiplying the estimated average cost for the aprevoTM
Intervertebral Body Fusion Device by three devices per case and
converting the cost to charges using the 393 percent hospital charge
markup.
---------------------------------------------------------------------------
\925\ Orthopedic Network News. ``2019 Spinal Surgery update.''
Volume 30, No. 4. October 2019.
\926\ Ibid.
---------------------------------------------------------------------------
The applicant calculated a final inflated case-weighted average
standardized charge per case of $247,648 and an average case-weighted
threshold of $157,600. Because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the applicant asserted that the technology meets the
cost criterion.
We agree with the applicant that the aprevoTM
Intervertebral Body Fusion meets the cost criterion and therefore are
proposing to approve the aprevoTM Intervertebral Body Fusion
device for the indications of ALIF and LLIF, and for the indication of
TLIF, subject to the technology receiving FDA marketing authorization
for that indication by July 1, 2021, as these indications correspond to
the Breakthrough Device designation, for new technology add-on payments
for FY 2022.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of the aprevoTM Intervertebral
Body Fusion is $31,500, or an estimated average cost of $10,500 per
device multiplied by three, which, according to the applicant, is the
average number of devices used per procedure. We note that the cost
information for this technology may be updated in the final rule based
on revised or additional information CMS receives prior to the final
rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments
to the lesser of 65 percent of the average cost of the technology, or
65 percent of the costs in excess of the MS-DRG payment for the case.
As a result, we are proposing that the maximum new technology add-on
payment for a case involving the use of the aprevoTM
Intervertebral Body Fusion Device would be $20,475 for FY 2022
[[Page 25365]]
(that is 65 percent of the average cost of the technology).
We are inviting public comments on whether the aprevoTM
Intervertebral Body Fusion Device meets the cost criterion and our
proposal to approve new technology add-on payments for
aprevoTM Intervertebral Body Fusion Device for FY 2022 for
ALIF and LLIF, and for TLIF, subject to the technology receiving
marketing authorization for that indication by July 1, 2021.
(2) aScopeTM Duodeno
Ambu, Inc. submitted an application for new technology add on
payments for the aScopeTM Duodeno for FY 2022. The device is
a sterile, single-use endoscope for endoscopy and endoscopic surgery
indicated for treatment of the upper gastrointestinal (GI) tract. Per
the applicant, the device includes a flexible insertion tube with a
bendable tip equipped with lighting and camera. According to the
applicant, the aScopeTM Duodeno is inserted into the mouth
of the patient and steered via the esophagus and stomach to the
duodenum. The applicant states that single-use scopes eliminate the
risk of patient-to-patient transmission of infection related to
reprocessing. The applicant also states the device is designed to be
used with aBox Duodeno, which is a video processor that outputs video
imaging for observation and recording. Per the applicant, the device
may also be used with existing external video monitors for image
display as well as other endoscopic accessories and equipment.
The aScopeTM Duodeno (formerly aScope 1 Duo) was
designated as a Breakthrough Device, indicated for use with the aScope
Base (now aBox Duodeno), endo-therapy accessories (for example, biopsy
forceps) and other ancillary equipment (for example, video monitor) for
endoscopy and endoscopic surgery within the duodenum, and received FDA
510(k) clearance as a Class II medical device on July 17, 2020 for the
same indication. Per the applicant, the device was available on the
market immediately after FDA clearance. According to the applicant,
there are currently no unique ICD-10-PCS codes describing the device.
The applicant stated that the applicant for EXALTTM Model D,
another technology discussed in this section, submitted a request to
the ICD-10 Coordination and Maintenance Committee for FY 2022 for a
unique code to identify use of single-use duodenoscopes. The applicant
further stated that since this code would describe and identify use of
aScope, they did not submit a request for approval of a code to
uniquely identify the technology.
To demonstrate that the technology meets the cost criterion, the
applicant searched the FY 2019 MedPAR Limited Data Set (LDS) for cases
reporting one of the following ICD-10-PCS codes commonly used to report
endoscopic retrograde cholangiopancreatography (ERCP) and use of
duodenoscopes:
[GRAPHIC] [TIFF OMITTED] TP10MY21.200
The applicant excluded MS-DRGs that had fewer than 100 cases from
the analysis. The applicant did not say how many cases it excluded
based on this criterion.
In total, the applicant identified 54,848 cases across 40 unique
MS-DRGs. The applicant then removed charges for prior technology by
dividing the per use cost for reusable duodenoscopes and related
components \927\ by the hospital-specific cost-to-charge ratio from the
FY 2021
[[Page 25366]]
IPPS/LTCH Proposed Rule Impact File at the claims level and averaging
the resulting estimated charges by MS-DRG. The applicant then
standardized the charges and applied an inflation factor of 13.2
percent, or the 2-year inflation factor used to update the outlier
threshold in the FY 2021 IPPS/LTCH final rule (85 FR 59039), to update
the charges from FY 2019 to FY 2021. The applicant added charges for
the aScopeTM Duodeno and related components by dividing the
cost per use by the national cost-to-charge ratio of 0.2970 for
Supplies and Equipment (85 FR 58601).
---------------------------------------------------------------------------
\927\ Derived from Travis, et al. minus the 20 percent overhead
cost.
---------------------------------------------------------------------------
The applicant calculated a final inflated average case-weighted
standardized charge per case of $89,945 and an average case-weighted
threshold of $64,894. Because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the applicant asserted that the technology meets the
cost criterion.
We agree with the applicant that the aScopeTM Duodeno
meets the cost criterion; and therefore, we are proposing to approve
the aScopeTM Duodeno for new technology add-on payments for
FY 2022.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of the aScopeTM Duodeno is
$2,184.27. However, the applicant noted in its application that this
cost is broken down into three components, including the disposable
sleeve, the aBox Duodeno (a video processor and light source), and
other endoscopic accessories and equipment. We believe it is
appropriate to only consider the cost of the disposable sleeve as the
cost of the technology, as the other two components, which include the
aBox Duodeno and an external monitor that, per the applicant, do not
incur new costs per use, would thus be paid for under the IPPS for
capital-related costs. As noted previously, because section
1886(d)(5)(K)(i) of the Act requires that the Secretary establish a
mechanism to recognize the costs of new medical services or
technologies under the payment system established under that
subsection, which establishes the system for paying for the operating
costs of inpatient hospital services, we do not include capital costs
in the add-on payments for a new medical service or technology or make
new technology add on payments under the IPPS for capital-related
costs. Thus, we believe the operating cost of the aScopeTM
Duodeno is $1,995.
Based on the information available at the time of this proposed
rule, it appears that both aScopeTM Duodeno and
EXALTTM Model D will be identified by the same ICD-10-PCS
code and share the same indication for endoscopy and endoscopic surgery
within the duodenum. As we are unable to separately identify these
cases to apply two separate payment amounts for these technologies, we
are proposing to use a case-weighted average to calculate a single cost
that would be used to determine the new technology add-on payment
amount for both technologies. To compute the weighted average cost, we
summed the total number of projected cases for each of the applicants,
which equaled 12,064 (3,750 plus 8,314). Then we divided the number of
projected cases for each of the applicants by the total number of
cases, which resulted in the following case-weighted percentages: 31
percent for aScopeTM Duodeno and 69 percent for
EXALTTM Model D. We multiplied the cost per case for the
manufacturer specific technology by the case-weighted percentage (0.31
* $1,995 = $620.13 for aScopeTM Duodeno and 0.69 * $2,930 =
$2,019.23 for EXALTTM Model D). This resulted in a case-
weighted average cost of $2,639.36 for both technologies. We are
inviting public comments on this proposed case-weighted average, as
well as any alternative approaches for determining and applying the new
technology add-on payment amount for cases involving these
technologies, for FY 2022.
We note that the cost information for this technology may be
updated in the final rule based on revised or additional information
CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we
limit new technology add-on payments to the lesser of 65 percent of the
average cost of the technology, or 65 percent of the costs in excess of
the MS-DRG payment for the case. As a result, we are proposing that the
maximum new technology add-on payment for a case involving the use of
aScopeTM Duodeno or EXALTTM Model D would be
$1,715.59 for FY 2022 (that is, 65 percent of the case-weighted average
cost of both technologies).
We are inviting public comments on whether aScopeTM
Duodeno meets the cost criterion and our proposal to approve new
technology add-on payments for aScopeTM Duodeno for FY 2022.
We are further inviting public comments on the calculation of the
maximum new technology add-on payment amount for the
aScopeTM Duodeno.
(3) Caption GuidanceTM
Caption Health, Inc. submitted an application for new technology-
add on payments for Caption GuidanceTM for FY 2022. Per the
applicant, Caption GuidanceTM is an artificial intelligence
(AI) guided medical imaging acquisition software system indicated for
the acquisition of cardiac ultrasound images. The applicant explained
that the system provides real-time guidance during transthoracic
echocardiography (2D-TTE) to assist in obtaining anatomically correct
and optimized images that represent standard 2D echocardiographic
diagnostic views and orientations. The applicant also states that the
technology is classified by FDA as software as a medical device (SaMD),
so in order to use the software, the Caption GuidanceTM
system must be installed on a compatible third-party ultrasound system.
Caption GuidanceTM is designated as a Breakthrough
Device, indicated to assist medical professionals in the acquisition of
cardiac ultrasound images, and received FDA De Novo approval on
February 7, 2020 for the same indication. The applicant stated that an
updated version of the system subsequently received 510(k) clearance
under 510(k) number K200755 on April 16, 2020 on an expedited basis due
to COVID-19. Per the applicant, an interim version of the software
became available on March 17, 2020, though not sold, on an emergency
basis to assist sites in responding to the COVID-19 pandemic. According
to the applicant, the first version of the technology was released
commercially on September 15, 2020 with a first date of sale of
September 29, 2020. Therefore, we believe that the newness date for
this technology is the date on which Caption GuidanceTM
became available on the market, September 15, 2020. The item is a Class
II medical device assigned to product code QJU with descriptor Image
Acquisition And/Or Optimization Guided By Artificial Intelligence.
According to the applicant, there are currently no unique ICD-10-PCS
codes describing the device. The applicant submitted a request to the
ICD-10 Coordination and Maintenance Committee for a new code to
uniquely identify the technology.
With respect to the cost criterion, the applicant searched the CY
2019 Limited Data Set (LDS)--Carrier Standard Analytic File (SAF), 5
percent sample, for beneficiaries receiving limited echocardiography,
as described by Current Procedural Terminology (CPT[supreg]) code 93308
(Echocardiography, transthoracic, real-time with image documentation
(2D), includes M-mode recording, when performed, follow-up or limited
study) with a place of service code 21 (inpatient hospital) or 23
[[Page 25367]]
(emergency department) and the associated inpatient stays. Per the
applicant, limited echocardiography, the procedure most likely to
include Caption Guidance, is not reliably reported in the inpatient
setting. As a result, the applicant used a multi-step approach where
corresponding inpatient stays were identified in the CY 2019 LDS--
Inpatient SAF for the beneficiaries identified in the Carrier SAF.
Inpatient stays were identified by matching on the unique beneficiary
ID and by matching the carrier claim date of service against the
inpatient admission and discharge dates. The applicant counted an
inpatient stay if the date of service for CPT code 93308 occurred on or
after the inpatient admission date (or during the three days preceding
the date of admission), but was also on or before the discharge date of
the hospital stay. The applicant eliminated non-inpatient claims and
claims with a payment amount less than or equal to zero, as well as
claims from hospitals that are not used in the ratesetting process.
The applicant summarized the remaining claims by MS-DRG, and by
principal diagnosis and MS-DRG. The applicant cross-walked the MS-DRG
codes to FY 2021 MS-DRG definitions using the MS-DRG grouper for FY
2021 and identified a list of 461 unique MS-DRGs to which cases
representing patients who may be eligible for use of Caption
GuidanceTM mapped. The applicant also utilized data from
current Caption GuidanceTM customers to obtain a list of
principal diagnoses associated with each MS-DRG. The applicant noted
that, because this analysis began with the CY 2019 LDS Carrier SAF, 5
percent sample, the inpatient claims captured underrepresent the total
number of inpatient stays in which CPT code 93308 is expected to be
performed. The applicant applied the unique MS-DRG and principal
diagnosis combinations to all inpatient claims in the CY 2018 and CY
2019 LDS SAF with a discharge date in FY 2019. The applicant then
removed any claims where there were no billed charges in revenue
centers 0480 (Cardiology-General) and 0483 (Cardiology-Echocardiology).
The applicant explained that MS-DRG and principal diagnosis alone are
unlikely to be a good proxy for performance of CPT code 93308. The
applicant noted that there are charges to revenue centers 0480 and 0483
among nearly 100 percent of cases identified, and that no other revenue
centers were billed at such high frequency. The applicant explained
that it did not use the FY 2021 MedPAR LDS for this reason, as the
dataset does not report charges by revenue center.
The applicant identified 1,932,386 cases mapping to 461 MS-DRGs.
Then the applicant standardized the charges and applied the 2-year
charge inflation factor used to adjust the outlier threshold
determination, which the applicant stated was 10.22 percent. We note
that the applicant appears to have used an inflation factor lower than
the FY 2021 IPPS/LTCH PPS final rule of 13.2 percent (85 FR 59039),
which would have resulted in a higher inflated charge figure. The
applicant did not remove charges for prior technology as the applicant
maintained that no existing technology is comparable to Caption
GuidanceTM.
The applicant then added charges for the new technology. The
applicant calculated the technology's cost per case in a multi-step
process. First, the applicant multiplied the cost of Caption
GuidanceTM by the number of devices under the CCN of each
subscribing provider to obtain a provider-specific total device cost.
Next, for each subscribing provider, the applicant identified Medicare
inpatient cases that would be eligible for Caption
GuidanceTM using the criteria and methodology described
previously. The applicant then multiplied the number of inpatient cases
by 15 percent, which per the applicant is consistent with published
evidence that the percent of limited echocardiography cases ranged from
12 to 15 percent of all inpatient echocardiography services.\928\ The
applicant then added the number of Medicare hospital outpatient cases
for CPT code 93308 for each subscribing provider to the estimated
inpatient limited echocardiography utilization to estimate total
Medicare limited echocardiography by provider. The applicant divided
the total Medicare inpatient and outpatient cases receiving limited
echocardiogram by an average Medicare share of 63 percent, which the
applicant estimated by analyzing discharges reporting three ICD-10-PCS
codes: B244ZZZ (Ultrasonography of right heart), B245ZZZ
(Ultrasonography of left heart), and B246ZZZ (Ultrasonography of right
and left heart) from HCUPnet's Nationwide Inpatient Sample, 2017, to
obtain the total limited echocardiography cases. The applicant then
divided the total device cost by the total limited echocardiography
cases to obtain a provider-specific cost per case, which it then
averaged across all subscriber hospitals. Finally, the applicant
converted the cost per case to charges per case by dividing the cost
per case by the national average cost-to-charge ratio for the
cardiology cost center of 0.094 (85 FR 58601).
---------------------------------------------------------------------------
\928\ Ward RP, Lee L, Ward TJ, Lang RM. Utilization and
Appropriateness of Transthoracic Echocardiography in Response to the
COVID-19 Pandemic. J Am Soc Echocardiogr. 2020 June;33(6):690-691.
doi: 10.1016/j.echo.2020.04.006. Epub 2020 April 10.
---------------------------------------------------------------------------
The applicant calculated a final inflated case-weighted average
standardized charge per case of $113,435 and an average case-weighted
threshold of $69,197. Because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the applicant asserted that the technology meets the
cost criterion.
We agree with the applicant that, using the cost per case provided
by the applicant, the Caption GuidanceTM system would meet
the cost criterion and therefore are proposing to approve the Caption
GuidanceTM system for new technology add-on payments for FY
2022. However, as we note later in this section, because the cost per
case can vary based on utilization of the technology, we would like
further information on whether the Caption GuidanceTM system
would still meet the cost criterion if, for instance, an increase in
utilization resulted in a cost per case that is lower than the figure
the applicant provided.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of the Caption GuidanceTM
system is $2,874. We note that the cost information for this technology
may be updated in the final rule based on revised or additional
information CMS receives prior to the final rule. Under Sec.
412.88(a)(2), we limit new technology add-on payments to the lesser of
65 percent of the average cost of the technology, or 65 percent of the
costs in excess of the MS-DRG payment for the case. As a result, we are
proposing that the maximum new technology add-on payment for a case
involving the use of the Caption GuidanceTM system would be
$1,868.10 for FY 2022 (that is 65 percent of the average cost of the
technology). However, we refer the reader to our discussion and request
for comments regarding our concerns with respect to determining a cost
per case for a technology that utilizes a subscription for its cost,
and note that we may consider finalizing a different add-on payment
amount after consideration of comments received.
The applicant appears to have used a single list price of Caption
GuidanceTM per hospital with a cost per patient that can
vary based on the volume of cases. We are interested in information
about
[[Page 25368]]
whether the cost per patient varies based on the utilization of the
technology by the hospitals. The cost per patient could be skewed by
the small number of hospitals utilizing the technology and their low
case volumes. It is possible, if hospitals with large patient
populations adopt Caption GuidanceTM, the cost per patient
would be significantly lower.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58628), in a similar
instance, we stated our understanding that there are unique
circumstances to determining a cost per case for a technology that
utilizes a subscription for its cost. We continue to welcome comments
from the public as to the appropriate method to determine a cost per
case for such technologies, including comments on whether the cost per
case should be estimated based on subscriber hospital data as described
previously, and if so, whether the cost analysis should be updated
based on the most recent subscriber data for each year for which the
technology may be eligible for the new technology add-on payment.
We invite public comments on whether the Caption
GuidanceTM system meets the cost criterion and our proposal
to approve new technology add-on payments for Caption
GuidanceTM system for FY 2022, including on whether the
newness period for this technology would begin on September 15, 2020.
(4) CERAMENT[supreg] G
BONESUPPORT Inc. submitted an application for new technology-add on
payments for CERAMENT[supreg] G for FY 2022. Per the applicant,
CERAMENT[supreg] G is an injectable bone-void filler made of calcium
sulfate, hydroxyapatite, and gentamicin sulfate indicated for the
surgical treatment of osteomyelitis. Per the applicant, this bone graft
substitute fills gaps resulting from debridement of infected bone and
prevents colonization of sensitive bacteria, promoting bone healing in
two ways. The applicant stated that the primary mode of action is for
CERAMENT[supreg] G to act as a resorbable ceramic bone-void filler
intended to fill gaps and voids in the skeleton system created when
infected bone is debrided. The applicant also stated that the secondary
mode of action is to prevent the colonization of gentamicin-sensitive
microorganisms in order to protect bone healing. Per the applicant,
CERAMENT[supreg] G may eliminate the need to harvest autologous bone,
avoiding pain and infection at the donor site.
CERAMENT[supreg] G is designated as a Breakthrough Device for use
as a bone-void filler as an adjunct to systemic antibiotic therapy and
surgical debridement as part of the surgical treatment of
osteomyelitis. It has not yet received FDA 510(k) clearance. According
to the applicant, there are no available codes that adequately describe
the product CERAMENT[supreg] G. The applicant submitted a request to
the ICD-10 Coordination and Maintenance Committee for approval of a
code to uniquely identify the technology.
With respect to the cost criterion, the applicant used the MS-DRG
grouping function within FindACode software in conjunction with the
online MS-DRG v37.0 Definitions Manual to identify the appropriate MS-
DRGs to which potential cases that may be eligible for treatment with
CERAMENT[supreg] G would most likely map. The applicant identified the
following seven relevant MS-DRGs:
[GRAPHIC] [TIFF OMITTED] TP10MY21.201
The applicant conducted a review of ICD-10-PCS codes for procedures
that would use CERAMENT[supreg] G. For each MS-DRG, the applicant
searched for cases reporting a diagnosis code from the Osteomyelitis
category in combination with one of the procedure codes listed in the
table that follows.
BILLING CODE 4120-01-P
[[Page 25369]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.202
[[Page 25370]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.203
[[Page 25371]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.204
[[Page 25372]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.205
BILLING CODE 4120-01-C
The applicant identified 7,994 cases across the seven MS-DRGs. The
applicant then removed charges for prior technology that may be
replaced by CERAMENT[supreg] G. The applicant conducted a market
analysis that identified 3 types of prior technology devices: Poly
(methyl methacrylate) (PMMA) manually mixed with antibiotics, PMMA pre-
loaded with antibiotics, and calcium sulfate (CaS) mixed with
antibiotics. The applicant researched the average sales price (ASP) for
major competitors for 5cc and 10cc of each device type and calculated a
weighted average cost of $444 per 5cc and $727 per 10 cc.\929\ Then the
applicant converted costs to charges by weighting the operating cost-
to-charge ratios for 3,315 hospitals in the FY 2021 IPPS/LTCH PPS final
rule and correction notice impact file by each hospital's share of the
9,235,824 submitted bills to obtain a national average CCR of 0.2546,
of which the inverse is a national-average hospital markup of 393
percent. The applicant then standardized the charges and applied an
inflation factor of 13.1 percent, or the 2-year inflation factor used
to update the outlier threshold in the FY 2021 IPPS/LTCH PPS final
rule, to update the charges from FY 2019 to FY 2021. We note that the
applicant appears to have used the FY 2021 IPPS/LTCH PPS proposed rule
inflation factor rather than the 2-year inflation factor from the FY
2021 IPPS/LTCH PPS final rule of 13.2 percent (85 FR 59039), which
would have resulted in a higher inflated charge figure. The applicant
added charges for the new technology by multiplying the estimated
average cost for 5cc and 10cc of CERAMENT[supreg] G by the 393 percent
hospital charge markup.
---------------------------------------------------------------------------
\929\ The applicant's analysis was informed by 2019 and 2020
data for its competitors from three sources: an iData Market
Research 2019 Sku Data Report, Global Data US Hospital Bone Grafts
and Substitutes Q3 2019 Report, and feedback from sales
representatives in the field.
---------------------------------------------------------------------------
The applicant calculated a final inflated case-weighted average
standardized charge per case of $107,671 and an average case-weighted
threshold of $76,791. Because the final inflated average case-weighted
standardized charge per case exceeded the average case-weighted
threshold amount, the applicant asserted that the technology meets the
cost criterion.
We agree with the applicant that CERAMENT[supreg] G meets the cost
criterion; and therefore, subject to the technology receiving FDA
marketing authorization for use as a bone-void filler as an adjunct to
systemic antibiotic therapy and surgical debridement as part of the
surgical treatment of osteomyelitis by July 1, 2021, we are proposing
to approve CERAMENT[supreg] G for new technology add-on payments for FY
2022.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of CERAMENT[supreg] G is $6,020 per
procedure. Per the applicant, the amount of CERAMENT[supreg] G used per
patient depends on the location and size of the bone void. The
applicant expects that a typical patient will require 5-10cc per
procedure, with large and more complex cases requiring higher volumes.
The applicant estimated that 70 percent of patients will receive 5cc
and 30 percent of patients will receive 10 cc of CERAMENT[supreg] G,
resulting in a weighted average cost of $6,020 per patient. We note
that the cost information for this technology may be updated in the
final rule based on revised or additional information CMS receives
prior to the final rule. Under Sec. 412.88(a)(2), we limit new
technology add-on payments to the lesser of 65 percent of the average
cost of the technology, or 65 percent of the costs in excess of the MS-
DRG payment for the case. As a result, we are proposing that the
maximum new technology add-on payment for a case involving the use of
the product CERAMENT[supreg] G would be $3,913 for FY 2022 (that is 65
percent of the average cost of the technology).
[[Page 25373]]
We are inviting public comments on whether CERAMENT[supreg] G meets
the cost criterion and our proposal to approve new technology add-on
payments for CERAMENT[supreg] G for FY 2022, subject to
CERAMENT[supreg] G receiving FDA marketing authorization for use as a
bone-void filler as an adjunct to systemic antibiotic therapy and
surgical debridement as part of the surgical treatment of osteomyelitis
by July 1, 2021.
(5) EXALTTM Model D Single-Use Duodenoscope
Boston Scientific Corporation submitted an application for new
technology-add on payments for EXALTTM Model D Single-Use
Duodenoscope (EXALTTM) for FY 2022. Per the applicant,
EXALTTM is a single-use, flexible duodenoscope indicated for
diagnostic and therapeutic treatment of the pancreaticobiliary system
during endoscopic retrograde cholangiopancreatography (ERCP)
procedures. According to the applicant, the scope is most commonly used
to facilitate therapeutic maneuvers such as removal of gallstones from
the bile ducts, dilation of strictures in the bile or pancreatic ducts,
or to relieve an obstruction by inserting a plastic or metal stent. The
applicant states that EXALTTM is intended to eliminate the
risk of patient-to-patient transmission of infection related to
reprocessing of reusable duodenoscopes.
EXALTTM is designated as a Breakthrough Device,
indicated for intended use with a Boston Scientific endoscopic video
imaging system for endoscopy and endoscopic surgery within the
duodenum, and received FDA 510(k) clearance as a Class II medical
device on December 13, 2019 for the same indication. The applicant
indicates that this device is the first FDA-cleared single-use
duodenoscope in the U.S. According to the applicant, EXALTTM
was available on the market immediately after FDA approval. The
applicant listed 50 ICD-10-PCS codes that describe ERCP and other
procedures in which EXALTTM and other duodenoscopes are
used. The applicant submitted a request to the ICD-10 Coordination and
Maintenance Committee for approval of a code to uniquely identify the
technology.
With respect to the cost criterion, the applicant conducted two
analyses based on 100 percent of identified claims and 76 percent of
identified claims, both of which are further described later in this
section. To identify potential cases where EXALTTM could be
utilized, the applicant searched the FY 2019 MedPAR file for the
following ICD-10-PCS codes:
BILLING CODE 4120-01-P
[[Page 25374]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.206
BILLING CODE 4120-01-C
For the analysis using 100 percent of cases, the applicant
identified a total of 59,966 cases spanning 440 MS-DRGs. The applicant
then removed 100 percent of charges associated with the service
Medical/Surgical Supplies and Devices for the prior technology. The
applicant stated that it does not believe use of EXALTTM
will replace any other medical supplies but removed 100 percent of
charges associated with service category Medical/Surgical Supply Charge
Amount, which included the revenue center code 027x, to be as
conservative as possible. The applicant then standardized the charges
and applied an inflation factor of 13.2 percent, which is the same
inflation factor used by CMS to update the outlier threshold in the FY
2021 IPPS/LTCH PPS final rule, to update the charges
[[Page 25375]]
from FY 2019 to FY 2021 (85 FR 59039). The applicant added charges for
the new technology by multiplying the cost of the technology by the
national CCR for implantable devices from the FY 2021 IPPS/LTCH PPS
final rule. Under the analysis based on 100 percent of claims, the
applicant determined an average case-weighted threshold amount of
$66,588 and a final inflated case weighted average standardized charge
per case of $96,079.
For the analysis using 76 percent of cases, which the applicant
conducted due to these cases mapping to just 14 MS-DRGs, the applicant
used the same methodology, which identified 45,530 cases across 14 MS-
DRGs. The applicant determined an average case-weighted threshold
amount of $63,762 and a final inflated case weighted average
standardized charge per case of $84,631. Because the final inflated
case-weighted average standardized charge per case exceeded the average
case-weighted threshold amount for both analyses, the applicant
asserted that the technology meets the cost criterion.
We are concerned that the applicant used the national CCR for
implantable devices from the FY 2021 IPPS/LTCH PPS final rule, as a
duodenoscope is not an implantable device. We note that the cost
analysis for another duodenoscope that is the subject of an application
for new technology add-on payments for FY 2022, the aScopeTM
Duodeno, used the national CCR for supplies and equipment to convert
the cost of the technology to charges, and we believe that the same CCR
should apply for purposes of the cost analysis for EXALTTM
Model D Single-Use Duodenoscope.
We agree with the applicant that EXALTTM Model D Single-
Use Duodenoscope meets the cost criterion and therefore are proposing
to approve EXALTTM Model D Single-Use Duodenoscope for new
technology add on payments for FY 2022.
As discussed previously, based on the information available at the
time of this proposed rule, it appears that both aScopeTM
Duodeno and EXALTTM Model D will be identified by the same
ICD-10-PCS code and share the same indication for endoscopy and
endoscopic surgery within the duodenum. Thus, as we are unable to
separately identify these cases to apply two separate payment amounts
for these technologies, we are proposing to use a case-weighted average
to calculate a single cost that would be used to determine the new
technology add-on payment amount for both technologies. To compute the
weighted average cost, we summed the total number of projected cases
for each of the applicants, which equaled 12,064 (3,750 plus 8,314).
Then we divided the number of projected cases for each of the
applicants by the total number of cases, which resulted in the
following case-weighted percentages: 31 percent for aScopeTM
Duodeno and 69 percent for EXALTTM Model D. We then
multiplied the cost per case for the manufacturer specific technology
by the case-weighted percentage (0.31 * $1,995 = $620.13 for
aScopeTM Duodeno and 0.69 * $2,930 = $2,019.23 for
EXALTTM Model D). This resulted in a case-weighted average
cost of $2,639.36 for both technologies. We are inviting public
comments on this proposed case-weighted average, as well as any
alternative approaches for determining and applying the new technology
add-on payment amount for cases involving these technologies, for FY
2022.
We note that the cost information for this technology may be
updated in the final rule based on revised or additional information
CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we
limit new technology add-on payments to the lesser of 65 percent of the
average cost of the technology, or 65 percent of the costs in excess of
the MS-DRG payment for the case. As a result, we are proposing that the
maximum new technology add-on payment for a case involving the use of
the product EXALTTM Model D Single-Use Duodenoscope or
aScopeTM Duodeno would be $1,715.59 for FY 2022 (that is 65
percent of the case-weighted average cost of both technologies).
We are inviting public comments on whether EXALTTM Model
D Single-Use Duodenoscope meets the cost criterion and our proposal to
approve new technology add-on payments for EXALTTM Model D
Single-Use Duodenoscope for FY 2022. We are further inviting public
comments on our calculation of the maximum new technology add-on
payment amount for the EXALTTM Model D.
(6) FUJIFILM EP-7000X System
Fujifilm Corporation submitted an application for new technology-
add on payments for FUJIFILM EP-7000X System for FY 2022. The FUJIFILM
EP-7000X system is an endoscopic video imaging system used for
endoscopic observation, diagnosis, treatment, and image recording in
minimally invasive surgeries of abdominal gynecologic and thoracic
areas. Per the applicant, this system allows for the visualization of
hemoglobin oxygen saturation levels of blood in superficial tissue
under a 2D endoscopic image, which helps physicians identify tissue
that is not appropriately oxygenated and thus potentially ischemic. The
applicant further explains that the technology consists of four
components: Video Laparoscope EL-R740M, Processor VP-7000, Light Source
BL-7000X, and Image Processing Unit EX-0.
The FUJIFILM EP-7000X system received Breakthrough Device
designation for endoscopic observation, diagnosis, treatment, and image
recording in patients requiring such procedures on September 17, 2020
and has not yet been granted FDA approval. According to the applicant,
there are currently no unique ICD-10-PCS codes describing the system.
The applicant submitted a request to the ICD-10 Coordination and
Maintenance Committee for approval of a unique code for FY 2022 to
identify the technology.
With respect to the cost criterion, the applicant searched the FY
2019 MedPAR claims data file to identify potential cases representing
patients who may be eligible for treatment with the EP-7000X System.
The applicant identified claims that reported an ICD-10-PCS procedure
code for gastrointestinal bypass or hernia repair, which the applicant
listed in the following table:
BILLING CODE 4120-01-P
[[Page 25376]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.207
[[Page 25377]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.208
[[Page 25378]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.209
[[Page 25379]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.210
[[Page 25380]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.211
BILLING CODE 4120-01-C
Per the applicant, oxygen saturation endoscopic imaging would not
be necessary, as both imaging procedures are used to evaluate vascular
perfusion and therefore the applicant excluded cases with the ICD-10-
PCS procedure code 4A1BXSH (Monitoring of Gastrointestinal Vascular
Perfusion using Indocyanine Green Dye, External Approach). In addition,
the applicant compared cases with procedure code 4A1BXSH to cases
without procedure code 4A1BXSH and found that cases with the procedure
code have higher total standardized charges. The applicant further
limited the cases to MS-DRGs with at least one percent of case volume,
leaving 12,020 cases spread across 16 MS-DRGs, or 83 percent of the
14,522 cases initially identified. The applicant standardized the
charges and applied an inflation factor of 13.2 percent, which is the
same inflation factor used by CMS to update the outlier threshold in
the FY 2021 IPPS/LTCH PPS final rule, to update the charges from FY
2019 to FY 2021 (85 FR 59039). The applicant did not remove charges for
the current technology as the applicant believed the use of EP-87000X
System would not replace any other therapies except for the vascular
perfusion monitoring procedure for which cases were already excluded.
The applicant then added charges for the new technology. The
applicant explained that the total cost of the EP-87000X System
consists of the capital equipment as well as a service contract for the
equipment and a calibration fee required to perform a calibration
between a video laparoscope and light source every 6 months. The
applicant stated that it calculated the equipment cost per minute using
the Medicare physician fee schedule formula used for calculating
practice expense relative value units (RVUs). The applicant stated that
it also assumed a 3 percent usage rate, a 5.5 percent interest rate, a
0 percent maintenance factor (as the maintenance fee is built into the
cost of the equipment), and a 5-year useful life. The applicant
multiplied the machine cost per minute by the number of minutes of
procedure time, which the applicant estimated to be 4.5 hours or 270
minutes, to obtain the per patient cost. The applicant then converted
the cost to charges by dividing the cost per patient by the national
average cost-to-charge ratio for supplies and equipment (0.297).
Based on the cost information, the applicant calculated a final
inflated case-weighted average standardized charge per case of $106,603
and an average case-weighted threshold of $80,392. Because the final
inflated case-weighted average standardized charge per case exceeded
the average case-weighted threshold amount, the applicant asserted that
the technology meets the cost criterion.
As noted previously, because section 1886(d)(5)(K)(i) of the Act
requires that the Secretary establish a mechanism to recognize the
costs of new medical services or technologies under the payment system
established under that subsection, which establishes the system for
paying for the operating costs of inpatient hospital services, we do
not include capital costs in the add-on payments for a new medical
service or technology or make new technology add-on payments under the
IPPS for capital-related costs. Based on preliminary information from
the applicant, it appears that the costs of the FUJIFILM EP-7000X
System do not include any operating costs. Therefore, even if the
technology meets the cost criterion, it appears that no new technology
add-on payment would be made for the FUJIFILM EP-7000X System because,
as discussed in prior rulemaking and noted previously, we only make new
technology add-on payments for operating costs (72 FR 47307 through
47308). However, we are inviting public comments on whether the
FUJIFILM EP-7000X System has any operating costs. If the FUJIFILM EP-
7000X System does have operating costs, since it appears to meet the
cost criterion as previously noted, we are proposing to approve new
technology add-on payments for only the operating costs of the FUJIFILM
EP-7000X System for FY 2022, subject to the technology receiving FDA
marketing authorization for endoscopic observation, diagnosis,
treatment, and image recording in patients requiring such procedures by
July 1, 2021.
(7) HarmonyTM Transcatheter Pulmonary Valve (TPV) System
Medtronic submitted an application for new technology-add on
payments for HarmonyTM Transcatheter Pulmonary Valve (TPV)
System (``HarmonyTM'') for FY 2022. The system consists of a
bioprosthetic heart valve developed from porcine pericardial tissue
mounted on self-expanding nitinol struts sewn to a polyester fabric.
According to the applicant, HarmonyTM is implanted in the
patient's heart between the right ventricle and the bifurcation of the
pulmonary arteries to treat patients with congenital heart disease who
are indicated for a pulmonary valve replacement. The applicant states
that HarmonyTM is the first transcatheter pulmonary valve
that is designed to treat the patient's condition at the native site of
the pulmonary valve without a pre-existing valve conduit or pre-
existing bioprosthetic valve.
The HarmonyTM TPV System received designation as a
Breakthrough Device on
[[Page 25381]]
May 1, 2019, with the indication for the treatment of symptomatic
severe pulmonary regurgitation in patients with a surgically-repaired
right ventricular outflow tract. The applicant anticipates receiving
510(k) clearance for Class III medical device by June 2021.
Additionally, the applicant noted that the proposed indication for the
pending FDA marketing authorization is more expansive than the
indication for the FDA Breakthrough Device status, to include patients
who have had a prior transcatheter intervention. We note that under the
eligibility criteria for approval under the alternative pathway for
certain transformative new devices, only the use of the
HarmonyTM TPV System for the treatment of symptomatic severe
pulmonary regurgitation in patients with a surgically-repaired right
ventricular outflow tract, and the FDA Breakthrough Device designation
it received for that use, are relevant for purposes of the new
technology add-on payment application for FY 2022.
According to the applicant, there are currently no unique ICD-10-
PCS codes describing the HarmonyTM Transcatheter Pulmonary
Valve (TPV). The applicant noted that the HarmonyTM TPV
System is currently reported within table 02R of the ICD-10 PCS tabular
list (body part value Pulmonary Valve, approach value Percutaneous,
device value as appropriate, and qualifier value No Qualifier). Per the
applicant, this same code also applies to existing technology for
transcatheter valve replacement within a conduit or a pre-existing
prosthetic valve. The applicant submitted a request to the ICD-10
Coordination and Maintenance Committee for approval of a unique code
for FY 2022 to identify the technology.
With respect to the cost criterion, the applicant searched the FY
2019 MedPAR dataset for claims representing patients with congenital
diagnoses who received a surgical valve or a transcatheter procedure.
The applicant identified claims across five MS-DRGs after excluding
cases with outlier payments. Per the applicant, 6 percent of cases were
in MS-DRG 216, 24 percent of cases were in MS-DRG 219, 12 percent of
cases were in MS-DRG 220, 26 percent of cases were in MS-DRG 266, and
32 percent of cases were in MS-DRG 267. The applicant did not provide
case counts because the volume in each MS-DRG was fewer than 11 cases.
Next, the applicant removed charges for the prior technology and
standardized the charges. The applicant described the charges for the
technology that would be replaced as ``the sum of the medical-surgical
pacemaker amount, the intraocular lens amount, the other implants
amount, and the investigational device amount.'' The applicant also
removed charges related to the prior technology, which it described as
``the sum of the medical surgical supplies amount, the durable medical
equipment amount, and the used durable medical amount minus the prior
technology charges.'' The applicant then applied an inflation factor of
13.1 percent, which per the applicant is the same inflation factor used
by CMS to update the outlier threshold in the FY 2021 IPPS/LTCH PPS
final rule, to update the charges from FY 2019 to FY 2021. We note that
the applicant appears to have used the FY 2021 IPPS/LTCH PPS proposed
rule inflation factor rather than the 2-year inflation factor from the
FY 2021 IPPS/LTCH PPS final rule of 13.2 percent (85 FR 59039), which
would have resulted in a higher inflated charge figure. The applicant
added charges for the new technology by dividing the cost of the
HarmonyTM TPV by the national CCR for implantable devices,
which is 0.293 (85 FR 58601). The applicant also added charges related
to the new technology, which the applicant estimated to be similar to
the charges related to transcatheter procedures within MS-DRGs 266-267.
The applicant calculated a final inflated case-weighted average
standardized charge per case of $257,970 and an average case-weighted
threshold of $202,037. Because the final inflated case-weighted average
standardized charge per case exceeded the average case-weighted
threshold amount, the applicant asserted that the technology meets the
cost criterion.
We are concerned that the applicant's charge threshold analysis
utilized a small sample of 55 cases, given that the applicant projected
a case volume of over 1,000 cases for FY 2022. Subject to the applicant
adequately addressing this concern, we would agree that the technology
meets the cost criterion and therefore are proposing to approve
HarmonyTM Transcatheter Pulmonary Valve (TPV) System for new
technology add-on payments for FY 2022, subject to the technology
receiving FDA marketing authorization for the treatment of symptomatic
severe pulmonary regurgitation in patients with a surgically-repaired
right ventricular outflow tract by July 1, 2021. As noted previously,
only the use of the HarmonyTM TPV System for the treatment
of symptomatic severe pulmonary regurgitation in patients with a
surgically-repaired right ventricular outflow tract, and the FDA
Breakthrough Device designation it received for that use, are relevant
for purposes of the new technology add-on payment application for FY
2022.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of the HarmonyTM Transcatheter
Pulmonary Valve (TPV) System is $41,500. Per the applicant, this cost
is comprised of $33,000 for the HarmonyTM TPV and $8,500 for
the HarmonyTM transcatheter pulmonary valve delivery and
loading system. It is not clear to us whether these costs reflect the
use of capital equipment. We note that the cost information for this
technology may be updated in the final rule based on revised or
additional information CMS receives prior to the final rule. Under
Sec. 412.88(a)(2), we limit new technology add-on payments to the
lesser of 65 percent of the average cost of the technology, or 65
percent of the costs in excess of the MS-DRG payment for the case. As a
result, if both components of the HarmonyTM Transcatheter
Pulmonary Valve (TPV) System are operating costs, we are proposing that
the maximum new technology add-on payment for a case involving the use
of the HarmonyTM Transcatheter Pulmonary Valve (TPV) System
would be $26,975 for FY 2022 (that is 65 percent of the average cost of
the technology).
We are inviting public comments on whether the HarmonyTM
Transcatheter Pulmonary Valve (TPV) System meets the cost criterion and
our proposal to approve new technology add-on payments for
HarmonyTM Transcatheter Pulmonary Valve (TPV) System for FY
2022, subject to FDA marketing authorization of HarmonyTM
Transcatheter Pulmonary Valve (TPV) System by July 1, 2021 for the
treatment of patients with severe pulmonary regurgitation who have had
prior intervention on the right ventricular outflow tract and are
clinically indicated for a pulmonary valve replacement. We are also
inviting public comment on whether the costs of the
HarmonyTM TPV and HarmonyTM transcatheter
pulmonary valve delivery and loading system reflect use of capital
equipment.
(8) Neovasc ReducerTM
Neovasc Inc. submitted an application for new technology-add on
payments for the Neovasc ReducerTM System for FY 2022. The
Neovasc ReducerTM System is a permanent implant inserted
percutaneously into the coronary sinus and indicated for relief of
angina symptoms in patients with refractory
[[Page 25382]]
angina. According to the applicant, the device creates a permanent and
controlled narrowing of the coronary sinus to improve perfusion to
ischemic myocardium with its hourglass shape. Per the applicant, the
focal narrowing works to generate a pressure gradient and redistribute
blood flow to ischemic areas of the heart.
The Neovasc ReducerTM System was designated as a
Breakthrough Device on October 10, 2018, indicated for use in patients
with refractory angina pectoris despite guideline-directed medical
therapy who are unsuitable for revascularization by coronary artery
bypass grafting (CABG) or by percutaneous coronary intervention (PCI),
and anticipates receiving Pre-Market Approval as a Class III medical
device in the first half of 2021.
According to the applicant, there are no unique ICD-10-PCS
procedure codes to report the implantation of the device; however, the
applicant noted that facilities could report the insertion of the
ReducerTM System with ICD-10-PCS code 02H43DZ (Insertion of
intraluminal device into coronary vein, percutaneous approach).
Similarly, the applicant indicated that there are no unique ICD-10-CM
diagnosis codes to report refractory angina; however, facilities might
use ICD-10-CM diagnosis codes I20.8 `Other forms of angina pectoris' or
I20.9 `Angina pectoris, unspecified' to report refractory angina. The
applicant submitted a request to the ICD-10 Coordination and
Maintenance Committee for approval for a new ICD-10-PCS procedure code
for the implantation of the device and a new ICD-10-CM diagnosis code
for refractory angina for FY 2022 to identify the technology.
With respect to the cost criterion, the applicant searched the FY
2019 MedPAR dataset for claims with an ICD-10-PCS procedure code of
02L73DK (Occlusion of left atrial appendage with intraluminal device,
percutaneous approach) and 027034Z (Dilation of coronary artery, one
artery with drug-eluting intraluminal device, percutaneous approach).
The applicant explained that patients who may be eligible for the
Neovasc Reducer would be those diagnosed with refractory angina. The
applicant further explained that because there is by definition no
treatment for refractory angina, cases admitted to an inpatient
hospital with a diagnosis of refractory angina were almost exclusively
assigned to medical MS-DRGs that do not resemble a cardiac procedure in
terms of clinical or resource use.
Per the applicant, Left Atrial Appendage (LAA) Occlusion is most
closely related to the new technology, as it is a venous procedure
using a permanent implant that is generally performed on a stable
patient and requires a 1- to 2-day hospital stay. The applicant used
the refractory angina cases to establish the eligible case count and
the ratio between cases ``with complication and comorbidity (CC)'' and
``with major complication and comorbidity (MCC)'' versus cases
``without CC/MCC''. The applicant stated that it used this ratio to
weight the MS-DRGs to which the LAA procedure cases mapped, as the
refractory angina patient population differs in terms of comorbidities
and severity of illness compared to the patient population receiving
LAA.
The applicant identified a total of 16,182 LAA cases mapping to MS-
DRGs 273 or 274. The applicant then removed the implantable device
charges for the prior technology. The applicant also removed charges
for cardiac catheterization, the operating room, and supplies and
equipment. The applicant then standardized the charges and applied an
inflation factor of 13.2 percent, which is the same inflation factor
used by CMS to update the outlier threshold in the FY 2021 IPPS/LTCH
PPS final rule (85 FR 89039), to update the charges from FY 2019 to FY
2021. The applicant added charges for the new technology, which it
calculated by dividing the cost of the Reducer device by the national
cost-to-charge ratio for implantable devices (0.239). The applicant
noted that the charges for the new technology were not inflated.
As noted previously, the refractory angina patient population
differs in terms of comorbidities and severity of illness compared to
the patient population receiving LAA. Therefore, the applicant adjusted
the volume weights for MS-DRGs 274/273 to reflect the refractory angina
population. The applicant extracted cases with an ICD-10-CM diagnosis
code I20.8 (Other forms of angina pectoris) and I20.9 (Angina pectoris,
unspecified) from the FY 2019 MedPAR dataset. The applicant identified
9,548 cases with a refractory angina diagnosis spread across 513 MS-
DRGs. The applicant divided cases into two groups--those mapping to an
MS-DRG with a CC or MCC designation and those mapping to an MS-DRG
without CC or MCC. The applicant found that the ratio of cases with CC/
MCC to cases without CC/MCC was 61/39. The applicant applied this ratio
to the refractory angina cases assigned to MS-DRGs with no CC/MCC
designation and filled in the volumes by MS-DRG (39 percent of
refractory angina cases were assigned to MS-DRG 274 and 61 percent to
MS-DRG 273).
The applicant calculated a final inflated case-weighted average
standardized charge per case of $141,304 and an average case-weighted
threshold of $127,659. Because the final inflated case-weighted average
standardized charge per case exceeded the average case-weighted
threshold amount, the applicant asserted that the technology meets the
cost criterion.
We agree with the applicant that the Neovasc ReducerTM
System meets the cost criterion and therefore are proposing to approve
the Neovasc ReducerTM System for new technology add-on
payments for FY 2022, subject to the technology receiving FDA marketing
authorization for use in patients with refractory angina pectoris
despite guideline-directed medical therapy who are unsuitable for
revascularization by CABG or by PCI by July 1, 2021.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of the Neovasc ReducerTM System
is $15,000. We note that the cost information for this technology may
be updated in the final rule based on revised or additional information
CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we
limit new technology add-on payments to the lesser of 65 percent of the
average cost of the technology, or 65 percent of the costs in excess of
the MS-DRG payment for the case. As a result, we are proposing that the
maximum new technology add-on payment for a case involving the use of
the Neovasc ReducerTM System would be $9,750 for FY 2022
(that is 65 percent of the average cost of the technology).
We are inviting public comments on whether the Neovasc
ReducerTM System meets the cost criterion and our proposal
to approve new technology add-on payments for Neovasc
ReducerTM System for FY 2022, subject to the Neovasc
ReducerTM receiving FDA marketing authorization by July 1,
2021 for use in patients with refractory angina pectoris despite
guideline-directed medical therapy who are unsuitable for
revascularization by coronary artery bypass grafting (CABG) or by
percutaneous coronary intervention (PCI).
(9) Phagenyx[supreg] System
Phagenesis Ltd. submitted an application for new technology-add on
payments for Phagenyx[supreg] System for FY 2022. The Phagenyx[supreg]
system (Phagenyx[supreg]) is a neurostimulation device for the
treatment of neurogenic dysphagia, which is often seen after
[[Page 25383]]
stroke, traumatic brain injury, or prolonged mechanical ventilation.
Per the applicant, the system is comprised of a sterile single-use per
patient catheter, introduced nasally and extending as far as the
patient's stomach; and a base station, described as a touch screen user
interface that facilitates the optimization of stimulation levels and
stores patient and treatment information. Per the applicant, treatment
involves the use of electric pulses to stimulate sensory nerves in the
oropharynx.
The Phagenyx[supreg] system received Breakthrough Device
designation on December 4, 2019 and anticipates receiving De Novo FDA
clearance by the second quarter of CY 2021. Per the applicant, the FDA
granted Breakthrough Device designation for use in treating neurogenic
dysphagia in adult tracheotomized patients weaned from ventilation. The
applicant noted that their De Novo application to FDA has a broader
proposed indication, which states that it is intended for the treatment
of non-progressive neurogenic dysphagia in adult patients, and
explained that there are current plans to request an expanded
Breakthrough Designation to align with this broader labelling. We note
that, under the eligibility criteria for approval under the alternative
pathway for certain transformative new devices, only the use of the
Phagenyx[supreg] system for the treatment of neurogenic dysphagia in
adult tracheotomized patients weaned from ventilation, and the FDA
Breakthrough Device designation it received for that use, are relevant
for purposes of the new technology add-on payment application for FY
2022, unless an expanded Breakthrough Designation that aligns with FDA
labelling is also granted by the FDA marketing authorization deadline.
According to the applicant, there are currently no unique ICD-10-
PCS codes describing the Phagenyx[supreg] system. The applicant
submitted a request to the ICD-10 Coordination and Maintenance
Committee for approval of a unique code for FY 2022 to identify the
technology.
With respect to the cost criterion, the applicant performed two
analyses based on its Breakthrough Designation indication and the
broader proposed indication. For both scenarios, the applicant used the
FY 2019 MedPAR dataset to assess the MS-DRGs to which potential cases
representing patients who may be eligible for the Phagenyx[supreg]
System would most likely map. Under the first analysis based on the
applicant's Breakthrough designation indication, the applicant searched
for claims reporting an ICD-10-PCS procedure code for tracheostomy in
combination with an ICD-10-CM diagnosis code for dysphagia.
[GRAPHIC] [TIFF OMITTED] TP10MY21.212
[GRAPHIC] [TIFF OMITTED] TP10MY21.213
The applicant identified 8,181 cases spanning 170 MS-DRGs. Per the
applicant, 69 percent of the discharges were in MS-DRGs 003 and 004,
which is consistent with the applicant's assertion that cases involving
tracheostomized patients typically map to these MS-DRGs.
Under the second analysis, based on the applicant's proposed
broader indication, the applicant searched for claims reporting an ICD-
10-CM diagnosis code for dysphagia, then excluded claims reporting an
ICD-10-CM code for CNS disease. The applicant identified 390,328 cases
spanning 722 MS-DRGs.
[[Page 25384]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.214
[GRAPHIC] [TIFF OMITTED] TP10MY21.215
Under both analyses, the applicant did not remove any charges for
prior technology. The applicant standardized the charges and applied an
inflation factor of 13.2 percent, or the 2-year inflation factor used
to update the outlier threshold in the FY 2021 IPPS/LTCH final rule (85
FR 89039), to update the charges from FY 2019 to FY 2021. The applicant
then added charges for the Phagenyx[supreg] System by dividing the cost
by the national cost-to-charge ratio for supplies and equipment of
0.297 (85 FR 58601).
Under the analysis based on the applicant's Breakthrough
Designation indication, the applicant calculated a final inflated case-
weighted average standardized charge per case of $331,860 and an
average case-weighted threshold of $276,624. Under the analysis based
on the applicant's broader proposed indication, the applicant
calculated a final inflated case-weighted average standardized charge
per case of $104,346 and an average case-weighted threshold of $68,799.
Because the final inflated case-weighted average standardized charge
per case exceeded the average case-weighted threshold amount under both
analyses, the applicant asserted that the technology meets the cost
criterion.
We agree with the applicant that Phagenyx[supreg] System meets the
cost criterion and therefore are proposing to approve Phagenyx[supreg]
System for new technology add-on payments for FY 2022, subject to the
technology receiving FDA marketing authorization for the indication
corresponding to the Breakthrough Device designation by July 1, 2021.
As noted previously, only the use of the Phagenyx[supreg] System for
the treatment of neurogenic dysphagia in adult tracheotomized patients
weaned from ventilation, and the FDA Breakthrough Device designation it
received for that use, are relevant for purposes of the new technology
add-on payment application for FY 2022.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of the Phagenyx[supreg] System is $5,000.
We note that the cost information for this technology may be updated in
the final rule based on revised or additional information CMS receives
prior to the final rule. Under Sec. 412.88(a)(2), we limit new
technology add-on payments to the lesser of 65 percent of the average
cost of the technology, or 65 percent of the costs in excess of the MS-
DRG payment for the case. As a result, we are proposing that the
maximum new technology add-on payment for a case involving the use of
the Phagenyx[supreg] System would be $3,250 for FY 2022 (that is, 65
percent of the average cost of the technology).
We are inviting public comments on whether the Phagenyx[supreg]
System meets the cost criterion and our proposal to approve new
technology add-on payments for the Phagenyx[supreg] System for FY 2022
for the indication corresponding to the Breakthrough Device
designation, subject to the Phagenyx[supreg] System receiving FDA
marketing authorization for that indication by July 1, 2021.
(10) PRCFC
Cerus Corporation submitted an application for new technology-add
on payments for FY 2022. PRCFC (pathogen reduced cryoprecipitated
fibrinogen complex) is a blood product indicated for the treatment for
fibrinogen deficiency-related bleeding, including massive hemorrhage.
Per the applicant, this blood product is useful in emergency
departments and operating rooms due to its 5-day shelf life at room
temperature. The applicant stated that the 5-day shelf life of the
blood product makes it immediately available in a ready-to-transfuse
form as a fibrinogen source and thereby provides a significant benefit
for patients with massive hemorrhage in a real time-critical fashion
that is not achievable with other existing fibrinogen replacement
products.
PRCFC is designated as a Breakthrough Device, indicated for control
of massive bleeding associated with fibrinogen (Fg) deficiency, and
received FDA premarket approval (PMA) on November 24, 2020 for the
following indications: (1) Treatment and control of bleeding, including
massive hemorrhage, associated with fibrinogen deficiency; (2) control
of bleeding when recombinant and/or specific virally inactivated
preparations of factor XIII or von Willebrand factor (vWF) are not
available; (3) second-line therapy for von Willebrand disease (vWD);
and (4) control of uremic bleeding after other treatment modalities
have failed. The applicant stated that the product will not be
available for sale until the second quarter of CY 2021 due to
manufacturing lead time for system components as well as validations
and quality control analyses that must be completed by the
manufacturing facilities. We note that, under the eligibility criteria
for approval under the alternative pathway for certain
[[Page 25385]]
transformative new devices, only the use of PRCFC for the control of
massive bleeding associated with fibrinogen (Fg) deficiency, and the
FDA Breakthrough Device designation it received for that use, are
relevant for purposes of the new technology add-on payment application
for FY 2022.
According to the applicant, there are currently no unique ICD-10-
PCS codes that accurately identify the transfusion of this product. The
applicant stated while there are many ICD-10-PCS codes to describe the
transfusion of traditional nonautologous plasma cryoprecipitate, these
codes do not apply to this product. The applicant submitted a request
to the ICD-10 Coordination and Maintenance Committee for approval of a
unique code for FY 2022 to identify the technology.
With respect to the cost criterion, the applicant searched the FY
2019 MedPAR dataset for cases reporting an ICD-10-PCS procedure code
for nonautologous plasma cryoprecipitate. The applicant identified
8,553 cases spanning over 369 MS-DRGs.
[GRAPHIC] [TIFF OMITTED] TP10MY21.216
Per the applicant, the top 5 MS-DRGs were 219 (Cardiac Valve and
Other Major Cardiothoracic Procedures Without Cardiac Catheterization
with MCC), 220 (Cardiac Valve and Other Major Cardiothoracic Procedures
Without Cardiac Catheterization with CC), 871 (Septicemia or Severe
Sepsis Without Mv >96 Hours with MCC), 003 (ECMO or Tracheostomy with
Mv >96 Hours Or Principal Diagnosis Except Face, Mouth And Neck With
Major O.R. Procedure), and 216 (Cardiac Valve and Other Major
Cardiothoracic Procedures with Cardiac Catheterization with MCC) and
accounted for 34 percent of all cases. The applicant then removed
charges for the technology being replaced. Per the applicant, PRCFC
would replace the current nonautologous plasma cryoprecipitate billed
with a blood revenue code. The applicant explained that it could not
separate nonautologous plasma cryoprecipitate from other blood charges
and therefore removed all charges from the blood department. The
applicant then standardized the charges and applied the 2-year outlier
inflation factor of 13.2 percent used to update the outlier threshold
in the FY 2021 IPPS/LTCH final rule (85 FR 59039). To estimate the cost
of the technology, the applicant multiplied the sale price of PRCFC by
an average of 12.9 units of cryoprecipitate required per patient, which
the applicant asserted as equivalent to 5.2 grams of fibrinogen based
on a recent study in adult cardiac surgery patients with clinically
significant bleeding and fibrinogen deficiency.\930\ The applicant
estimated an average per-patient cost of $3,900, which the applicant
converted to charges using the national cost-to-charge ratio for blood
and blood products (0.271) from the FY 2021 IPPS/LTCH PPS final rule
(85 FR 58601). The applicant indicated that the outlier inflation
factor was not applied to charges for PRCFC.
---------------------------------------------------------------------------
\930\ Callum J. et al. (2019). Effect of fibrinogen concentrate
vs cryoprecipitate on blood component transfusion after cardiac
surgery: The FIBRES randomized clinical trial. JAMA, 322(20), 1-11.
---------------------------------------------------------------------------
The applicant calculated a final inflated case-weighted average
standardized charge per case of $299,895 and an average case-weighted
threshold of $183,897. Because the final inflated case-weighted average
standardized charge per case exceeded the average case-weighted
threshold amount, the applicant asserted that the technology meets the
cost criterion.
We agree with the applicant that PRCFC meets the cost criterion and
therefore are proposing to approve PRCFC for new technology add-on
payments for FY 2022 when used for the control of massive bleeding
associated with fibrinogen (Fg) deficiency. Based on preliminary
information from the applicant at the time of this proposed rule, the
cost of PRCFC is $750 per gram x 5.2 grams for the amount of $3,900 per
patient. We note that the cost information for this technology may be
updated in the final rule based on revised or additional information
CMS receives prior to the final rule. Under Sec. 412.88(a)(2), we
limit new technology add-on payments to the lesser of 65 percent of the
average cost of the technology, or 65 percent of the costs in excess of
the MS-DRG payment for the case. As a result, we are proposing that the
maximum new technology add-on payment for a case involving the use of
PRCFC would be $2,535 per patient for FY 2022 (that is, 65 percent of
the average cost of the technology).
We are inviting public comments on whether PRCFC meets the cost
criterion and our proposal to approve new technology add-on payments
for PRCFC for FY 2022 when used for the control of massive bleeding
associated with fibrinogen (Fg) deficiency.
(11) RECELL[supreg] Autologous Cell Harvesting Device
Avita Medical submitted an application for new technology-add on
payments for RECELL[supreg] Autologous Cell Harvesting Device
(RECELL[supreg]). The device is a standalone, single-use, battery-
powered device used to process an autologous skin cell suspension for
the treatment of acute thermal burn wounds. Per the applicant, the
purpose of the device is to assist with harvesting a small graft from
the patient's healthy skin and immediate processing into an autologous
skin cell suspension which is then immediately applied to the patient's
burn wound following surgical preparation of the acute thermal burn
wound. The applicant describes the device components as including a
mechanical scraping tray, wells for incubating the donor graft with a
proprietary enzyme solution, a rinsing well, a cell strainer, a spray
applicator as well as buttons for ``self-test'', and ``run.''
RECELL[supreg] was granted Expedited Access Pathway (EAP) by FDA
(and is therefore considered part of the Breakthrough Devices Program
by
[[Page 25386]]
FDA \931\) on December 10, 2015 with the indication for use at the
patient's point-of care for preparation of an autologous epithelial
cell suspension to be applied to a prepared wound bed; under the
supervision of a healthcare professional, the suspension is used to
achieve epithelial regeneration for definitive closure of burn
injuries, particularly in patients having limited availability of donor
skin for autografting. RECELL[supreg] received FDA premarket approval
(PMA) on September 20, 2018 with the indication for use listed as
indicated for the treatment of acute thermal burn wounds in patients 18
years of age and older. Since the narrower indication for which the
technology received PMA is included within the scope of the EAP
indication, it appears that the PMA indication is appropriate for new
technology add-on payment under the alternative pathway criteria. Per
the applicant, RECELL[supreg] was available for sale upon FDA approval,
albeit on a very limited basis primarily to burn centers involved with
the clinical trials. According to the applicant, new ICD-10-PCS codes
that are specific to RECELL[supreg] were created effective October 1,
2019. Per the applicant, the first three characters of these codes are
``0HR,'' followed by a fourth character signifying which body part is
impacted, then ``X72'' for the final three characters.
---------------------------------------------------------------------------
\931\ https://www.fda.gov/regulatory-information/search-fda-guidance-documents/breakthrough-devices-program.
---------------------------------------------------------------------------
With regard to the newness criterion, we believe that the beginning
of the newness period for RECELL[supreg] commences from the date of
approval by the FDA on September 20, 2018, as the applicant indicated
the technology was available for sale from that date. Because the 3-
year anniversary date of the entry of RECELL[supreg] onto the U.S.
market (September 20, 2021) will occur in FY 2021, we do not believe
that the device is eligible for new technology add on payments for FY
2022. Accordingly, we are proposing to disapprove RECELL[supreg]
Autologous Cell Harvesting Device for new technology add on payments
for FY 2022. We are inviting public comments on our proposal to
disapprove new technology add-on payments for the RECELL Autologous
Cell Harvesting Device for FY 2022, including on whether the technology
meets the newness criterion.
We also present the applicant's analysis of the cost criterion for
this application. With regard to the cost criterion, the applicant
searched the FY 2019 MedPAR dataset for cases representing patients who
may be eligible for treatment with RECELL[supreg]. The applicant noted
that the FY 2019 MedPAR dataset did not contain the ICD-10-PCS code
0HR_X72 (Skin Replacement on the _____, Autologous Tissue Substitute,
using Cell Suspension Technique) that identify RECELL[supreg]
procedures because the code was first effective on October 1, 2019
after the closing date for the FY 2019 file. For purposes of this
application, the applicant searched for cases reporting ICD-10-PCS
codes 0HR_X73 (Skin Replacement on the _____, Autologous Tissue
Substitute, Full Thickness) and 0HR_X74 (Skin Replacement on the _____,
Autologous Tissue Substitute, Partial Thickness) which describe skin
graft procedures used to treat burn injuries. The applicant highlighted
the potential codes in between using the following table:
[GRAPHIC] [TIFF OMITTED] TP10MY21.217
[[Page 25387]]
Per the applicant, skin grafts for burn diagnoses, including
RECELL[supreg] procedures, are assigned to MS-DRGs 927, 928, and 929 in
Major Diagnostic Category (MDC) 22 (Burns). No other MS-DRGs or MDCs
were considered because RECELL[supreg] is only indicated for acute
thermal burns. The applicant presented four analyses based on patient
cases with increasingly conservative inputs to demonstrate that
RECELL[supreg] meets the cost criterion. The applicant indicated that
it varied the combination of the 2-year inflation factor from the FY
2021 IPPS/LTCH PPS final rule and charges for the new technology in
each analysis.
For all four scenarios, the applicant calculated the average charge
per case for each MS-DRG and then standardized the charges. The
applicant did not remove any charges for the technology being replaced,
as the applicant asserted that RECELL[supreg] is not replacing a
technology. However, the applicant removed charges to account for a
reduced length of stay because of utilizing RECELL[supreg]. The
applicant applied the 2-year outlier inflation factor of 13.2 percent
from the FY 2021 IPPS/LTCH PPS final rule (85 FR 59039), to update the
charges from FY 2019 to FY 2021 for two analyses. To provide a
conservative calculation, the applicant submitted two additional
analyses that did not apply an inflation factor to standardized
charges.
The applicant added charges for the new technology after dividing
the cost of RECELL[supreg] by the national average cost-to-charge ratio
for supplies and equipment (0.297). Per the applicant, the anticipated
charges for RECELL[supreg] vary depending on the size and extent of the
burn wound. The applicant noted that one RECELL[supreg] system covers
up to 1,920 square centimeters of body surface area, which equals
approximately 10 percent of the total body surface area (TBSA) of an
average-sized adult. The applicant also noted the ICD-10-CM T21
diagnosis code category (Burn and corrosion of trunk) to describe the
extent of a burn wound in 10 percent TBSA increments and provide an
objective, claims-based index for the approximate number of
RECELL[supreg] systems needed per patient. Per the applicant, more than
one RECELL[supreg] system may be required to provide full coverage of
the patient's burn wounds as indicated by the T31 diagnosis code
category (Burns classified according to extent of body surface
involved).
[GRAPHIC] [TIFF OMITTED] TP10MY21.218
Under the first analysis, which involved a case with a 27 percent
TBSA burn injury requiring three RECELL[supreg] systems and a 13.2
percent charge inflation factor, the applicant calculated a final
inflated case-weighted average standardized charge per case of
$268,119.
Under the second analysis, which involved the same case with a 27
percent TBSA burn injury requiring three RECELL[supreg] systems and no
charge inflation factor, the applicant calculated a final inflated
case-weighted average standardized charge per case of $245,824.
Under the third analysis, which involved a case with a 9 percent
TBSA injury requiring one RECELL[supreg] system and a 13.2 percent
charge inflation factor, the applicant calculated a final inflated
case-weighted average standardized charge per case of $217,614.
Under the fourth analysis, which involved the same case with a 9
percent TBSA burn injury requiring one RECELL[supreg] system and no
charge inflation factor, the applicant calculated a final inflated
case-weighted average standardized charge per case of $195,319.
The applicant calculated a case-weighted threshold of $166,916
under all four analyses.
Because the final inflated case-weighted average standardized
charge per case exceeded the average case-weighted threshold amount
under all four analyses, the applicant asserted that the technology
meets the cost criterion.
We agree with the applicant that RECELL[supreg] meets the cost
criterion. As stated previously, because the 3-year anniversary date of
the entry of RECELL[supreg] onto the U.S. market (September 20, 2021)
will occur in FY
[[Page 25388]]
2021, we do not believe that the device is eligible for new technology
add-on payments for FY 2022. Therefore, we are proposing to disapprove
RECELL[supreg] for new technology add-on payments for FY 2022. However,
in the event we receive updated information to establish that
RECELL[supreg] meets the newness criterion, we are providing the
following information regarding the new technology add-on payment
amount.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost per patient of RECELL[supreg] is $15,000
or an estimated average cost of $7,500 per device multiplied by 2,
which, per the applicant, is the average number of RECELL[supreg] units
used per procedure. Under Sec. 412.88(a)(2), we limit new technology
add-on payments to the lesser of 65 percent of the average cost of the
technology, or 65 percent of the costs in excess of the MS-DRG payment
for the case. In the event we receive supplemental information to
establish that the technology is still within the newness period, and
we were to approve new technology add-on payments for RECELL[supreg] in
the final rule, the maximum new technology add-on payment for
RECELL[supreg] would be $9,570 for FY 2022 (that is, 65 percent of the
average cost of the technology).
(12) Shockwave C2 Intravascular Lithotripsy (IVL) System
Shockwave Medical Inc. submitted an application for new technology-
add on payments for Shockwave C2 Intravascular Lithotripsy (IVL) System
for FY 2022. Per the applicant, the IVL Catheter is intended for
lithotripsy-enabled, low-pressure dilation of calcified, stenotic de
novo coronary arteries prior to stenting. The applicant explained that
the device is delivered through the coronary arterial system, and it
generates intermittent sonic waves within the target treatment site
that disrupt calcium within the lesion, allowing subsequent dilation of
a coronary artery stenosis using low balloon pressure. The applicant
also noted that the procedure can be used for otherwise difficult to
treat calcified stenosis, including calcified stenosis that are
anticipated to exhibit resistance to full balloon dilation or
subsequent uniform coronary stent expansion.
Shockwave C2 Intravascular Lithotripsy (IVL) System was designated
as a Breakthrough Device in August 2019, indicated for lithotripsy-
enabled, low-pressure dilation of calcified, stenotic de novo coronary
arteries prior to stenting. The applicant stated that it anticipates
receiving Pre-Market Approval as a Class III device from the FDA by
March 2021 for the same proposed indication. The applicant stated that
they expect to be shipping product within 1 month of FDA approval and
state that they therefore estimate market availability by April 2021.
According to the applicant, there are currently no unique ICD-10-PCS
codes describing the device. The applicant has submitted a request to
the ICD-10 Coordination and Maintenance Committee for approval of a
unique code for FY 2022 to identify the technology.
With regard to the cost criterion, the applicant conducted two
analyses based on 100 percent of identified claims and 81 percent of
identified claims. To identify potential cases where Coronary IVL could
be utilized, the applicant searched the FY 2019 MedPAR file for ICD-10-
PCS codes for the placement of a coronary stent, consistent with the
anticipated FDA indication for Shockwave C2 Intravascular Lithotripsy
(IVL). The applicant included all codes beginning with ``027'' and
ending with ``6'' or ``Z'' in its search. The applicant highlighted the
potential codes in between using the table that follows:
[[Page 25389]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.219
For the analysis using 100 percent of cases, the applicant
identified 160,901 cases mapping to 209 MS-DRGs. Per the applicant,
Shockwave C2 Intravascular Lithotripsy (IVL) does not replace any
current devices used for indicated patients. However, to be
conservative, the applicant removed 50 percent of charges associated
with revenue center 0278--other implants. The applicant then
standardized the charges and applied the 2-year outlier inflation
factor of 13.2 percent used to update the outlier threshold in the FY
2021 IPPS/LTCH final rule (85 FR 59039), to update the charges from FY
2019 to FY 2021. The applicant added charges for the new technology by
multiplying the cost of the technology by the estimated number of
devices per patient and then dividing by the national CCR for
implantable devices (0.293) from the FY 2021 IPPS/LTCH PPS final rule.
Under the analysis based on 100 percent of identified claims, the
applicant calculated a final inflated case-weighted average
standardized charge per case of $143,805 and an average case-weighted
threshold of $115,693.
For the analysis using 81 percent of cases, the applicant
identified 130,907 cases mapping to MS-DRGs 246 and 247. The applicant
conducted the same analysis noted previously and determined a final
inflated case-weighted average standardized charge per case of $122,020
and an average case-weighted threshold of $104,783. Because the final
inflated case-weighted average standardized charge per case exceeded
the average case-weighted threshold amount under both analyses, the
applicant asserted that the technology meets the cost criterion.
We agree with the applicant that Shockwave C2 Intravascular
Lithotripsy (IVL) System meets the cost criterion and therefore are
proposing to approve Shockwave C2 Intravascular Lithotripsy (IVL)
System for new technology add on payments for FY 2022, subject to the
technology receiving FDA marketing authorization for lithotripsy-
enabled, low-pressure dilation of calcified, stenotic de novo coronary
arteries prior to stenting by July 1, 2021.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of the Shockwave C2 Intravascular
Lithotripsy (IVL) System is $4,700 per device x 1.2 devices required
per case for an amount of $5,640. We note that the cost information for
this technology may be updated in the final rule based on revised or
additional information CMS receives prior to the final rule. Under
Sec. 412.88(a)(2), we limit new technology add-on payments to the
lesser of 65 percent of the average cost of the technology, or 65
percent of the costs in excess of the MS-DRG payment for the case. As a
result, we are proposing that the maximum new technology add-on payment
for a case involving the use of the Shockwave C2 Intravascular
Lithotripsy (IVL) System would be $3,666 for FY 2022 (that is, 65
percent of the average cost of the technology).
We are inviting public comments on whether the Shockwave C2
Intravascular Lithotripsy (IVL) System meets the cost criterion and our
proposal to approve new technology add-on payments for the Shockwave C2
Intravascular Lithotripsy (IVL) System for FY 2022, subject to
Shockwave C2 Intravascular Lithotripsy (IVL) System receiving FDA
marketing authorization by July 1, 2021 for lithotripsy-enabled, low-
pressure dilation of calcified, stenotic de novo coronary arteries
prior to stenting.
[[Page 25390]]
(13) ThoraflexTM Hybrid Device
Terumo Aortic submitted an application for new technology-add on
payments for the ThoraflexTM Hybrid Device
(ThoraflexTM) for FY 2022. Per the applicant, the device is
a sterile single-use, gelatin sealed Frozen Elephant Trunk (FET)
surgical medical device. The applicant explained that the device is
deployed through an opened aortic arch and then positioned into the
descending thoracic aorta. The applicant further explained that, once
it is completely deployed, the collar is sutured to the aorta, and
graft anastomoses are then performed in a manner depending upon the
chosen product design (which the applicant specified as either the
Plexus or the Ante-Flo). The device includes a proximal crimped
polyester surgical graft, central polyester collar, and distal nitinol
ring stents supported by thin-wall polyester fabric. The applicant also
noted that the device has a unique gelatin sealant that acts as a seal,
preventing blood loss through the polyester fabric product wall.
ThoraflexTM Hybrid Device received Breakthrough Device
designation on March 20, 2020 with an indication for the open surgical
repair or replacement of damaged or diseased vessels of the aortic arch
and descending aorta, with or without involvement of the ascending
aorta, in cases of aneurysm and/or dissection. The applicant is seeking
Pre-Market Approval for the device under a Class III device
designation. The applicant stated there are currently no unique ICD-10-
PCS codes that describe the ThoraflexTM Hybrid Device, but
the following codes may be currently utilized: 02RX08Z (Replacement of
thoracic aorta, ascending/arch with zooplastic tissue, open approach);
02RX0JZ (Replacement of thoracic aorta, ascending/arch with synthetic
tissue, open approach); and 02RX0KZ (Replacement of thoracic aorta,
ascending/arch with nonautologous tissue substitute, open approach).
The applicant submitted a request to the ICD-10 Coordination and
Maintenance Committee for approval of a unique code for FY 2022 to
identify the technology.
With regard to the cost criterion, the applicant conducted two
analyses based on 100 percent of identified claims and 74 percent of
identified claims. To identify potential cases where the
ThoraflexTM Hybrid Device could be utilized, the applicant
searched the FY 2019 MedPAR file for claims reporting the ICD-10-PCS
codes for thoracic aortic replacement procedures noted previously. For
the analysis using 100 percent of cases, the applicant identified 5,374
cases mapping to 21 MS-DRGs. The applicant then removed charges for the
technology being replaced. Per the applicant, the use of the
ThoraflexTM Hybrid device is expected to replace a portion
of prior technologies. The applicant explained that because an estimate
of the percentage of these total charges that would be replaced could
not be determined, it removed 100 percent of charges associated with
medical/surgical supplies and devices (revenue centers 027x and 0624).
The applicant then standardized the charges and applied the 2-year
outlier inflation factor of 13.2 percent used to update the outlier
threshold in the FY 2021 IPPS/LTCH PPS final rule (85 FR 59039), to
update the charges from FY 2019 to FY 2021. As the average sales price
of the ThoraflexTM has yet to be determined, the applicant
did not add charges for the new technology. The applicant indicated
that, once the price is determined, it will utilize the national cost-
to-charge ratio for implantable devices from the FY 2021 IPPS/LTCH PPS
final rule (0.293) to calculate estimated average hospital charges
associated with the device. Under this analysis, based on 100 percent
of identified claims, the applicant calculated a final inflated case-
weighted average standardized charge per case of $298,047 and an
average case-weighted threshold of $230,079.
Under the analysis based on 74 percent of cases, the applicant used
the same methodology, which identified 3,978 cases across MS-DRGs 219
and 220. The applicant determined the average case-weighted threshold
of $210,585 and a final inflated average standardized charge per case
of $254,795. Because the final inflated case-weighted average
standardized charge per case exceeded the average case-weighted
threshold amount under both analyses, the applicant asserted that the
technology meets the cost criterion.
We agree with the applicant that the ThoraflexTM Hybrid
Device meets the cost criterion and therefore are proposing to approve
the ThoraflexTM Hybrid Device for new technology add-on
payments for FY 2022, subject to the technology receiving FDA marketing
authorization for the open surgical repair or replacement of damaged or
diseased vessels of the aortic arch and descending aorta, with or
without involvement of the ascending aorta, in cases of aneurysm and/or
dissection by July 1, 2021.
The applicant has not provided an estimate for the cost of the
ThoraflexTM Hybrid Device at the time of this proposed rule.
We expect the applicant to submit cost information prior to the final
rule, and we will provide an update regarding the new technology add-on
payment amount for the technology, if approved, in the final rule. Any
new technology add on payment for the ThoraflexTM Hybrid
Device would be subject to our policy under Sec. 412.88(a)(2) where we
limit new technology add-on payments to the lesser of 65 percent of the
average cost of the technology, or 65 percent of the costs in excess of
the MS-DRG payment for the case.
We are inviting public comments on whether the
ThoraflexTM Hybrid Device meets the cost criterion and our
proposal to approve new technology add-on payments for the
ThoraflexTM Hybrid Device for FY 2022, subject to
ThoraflexTM Hybrid Device receiving FDA marketing
authorization by July 1, 2021 for the open surgical repair or
replacement of damaged or diseased vessels of the aortic arch and
descending aorta, with or without involvement of the ascending aorta,
in cases of aneurysm and/or dissection.
b. Alternative Pathways for Qualified Infectious Disease Products
(QIDPs)
(1) CONTEPOTM (fosfomycin)
Nabriva Therapeutics US, Inc. submitted an application for new
technology-add on payments for CONTEPOTM (fosfomycin) for FY
2022. CONTEPOTM is an intravenously administered epoxide
antibiotic intended for the treatment of complicated urinary tract
infections (cUTI) including acute pyelonephritis (AP) caused by
designated susceptible bacteria. Per the applicant, the drug inhibits
cell wall synthesis at an earlier stage and provides new treatment for
patients with cUTIs including acute pyelonephritis caused by
Escherichia coli and Klebsiella pneumonia that have failed to respond
to other first-line therapies.
CONTEPOTM is designated as a QIDP. The applicant
initially applied for FDA approval when submitting a New Drug
Application (NDA) in October 2018 seeking marketing approval of IV
fosfomycin for injection (ZTI-01) for the treatment of patients 18
years and older with cUTI including acute pyelonephritis caused by
designated susceptible bacteria. According to the applicant, on June
19, 2020, the FDA rejected the applicant's resubmitted NDA due to
unresolved manufacturing issues that required an in-person inspection,
which the FDA was not able to conduct due to travel restrictions. The
applicant plans to resubmit an NDA
[[Page 25391]]
after discussing next steps with the FDA and hopes to receive FDA
approval prior to July 1, 2021.
The applicant previously applied for a new technology add-on
payment for the same indication for FY 2021 and received conditional
approval for new technology add-on payments for FY 2021, subject to
CONTEPOTM receiving FDA marketing authorization before July
1, 2021 (85 FR 58724). If CONTEPOTM receives FDA marketing
authorization before July 1, 2021, the new technology add-on payment
for cases involving the use of this technology would be made effective
for discharges beginning in the first quarter after FDA marketing
authorization is granted. If the FDA marketing authorization is
received on or after July 1, 2021, no new technology add-on payments
will be made for cases involving the use of CONTEPOTM for FY
2021.
If CONTEPOTM receives FDA marketing authorization before
July 1, 2021, the applicant has indicated that it would withdraw its
application for FY 2022 and would instead seek new technology add-on
payments for CONTEPOTM for FY 2022 as a continuation of the
conditional approval for FY 2021. The applicant requested in its
application for FY 2022 that if the technology does not receive FDA
marketing authorization by July 1, 2021, CMS conditionally approve
CONTEPOTM for new technology add-on payments for FY 2022.
The applicant applied for and received a unique ICD-10-PCS
procedure code to identify cases involving the administration of
CONTEPOTM in 2019. Effective October 1, 2019,
CONTEPOTM administration can be identified by ICD-10-PCS
procedure codes XW033K5 (Introduction of fosfomycin anti-infective into
peripheral vein, percutaneous approach, new technology group 5) and
XW043K5 (Introduction of fosfomycin anti-infective into central vein,
percutaneous approach, new technology group 5), which the applicant
states are unique to CONTEPOTM administration.
With regard to the cost criterion, the applicant used the FY 2019
MedPAR Limited Data Set (LDS) to assess the MS-DRGs to which potential
cases representing hospitalized patients who may be eligible for
treatment involving CONTEPOTM would most likely be mapped.
According to the applicant, CONTEPOTM is anticipated to be
indicated for the treatment of hospitalized patients who have been
diagnosed with complicated urinary tract infections (cUTIs). The
applicant identified 199 ICD-10-CM diagnosis code combinations that
identify hospitalized patients who have been diagnosed with a cUTI.
Searching the FY 2019 MedPAR data file for these ICD-10-CM diagnosis
codes resulted in a total of 525,876 potential cases that span 507
unique MS-DRGs. The applicant noted that the cases identified are fewer
than in the FY 2021 new technology add-on payment application. Per the
applicant, this change occurred because the applicant excluded
additional claims for Medicare Advantage and inpatient ``full-
encounter'' claims from all cohorts. The applicant maintained that
while cohorts are smaller, the effects on the results were minimal.
The applicant examined associated charges per MS-DRG and removed
charges for potential antibiotics that may be replaced by the use of
CONTEPOTM. Specifically, the applicant identified 5
antibiotics currently used for the treatment of patients who have been
diagnosed with a cUTI and calculated the cost of each of these drugs
for administration over 14-day inpatient hospitalization. Because
patients who have been diagnosed with a cUTI would typically only be
treated with one of these antibiotics at a time, the applicant
estimated an average of the 14-day cost for the 5 antibiotics. The
applicant then converted the cost to charges by dividing the costs by
the national average CCR of 0.187 for drugs from the FY 2021 IPPS/LTCH
PPS final rule (85 FR 58601). The applicant then standardized the
charges for each case and inflated each case's charges by applying the
FY 2021 IPPS/LTCH PPS final rule outlier charge inflation factor of
13.2 percent (85 FR 59039).
The applicant then added the charges for the new technology by
calculating the per-day cost per patient. The applicant noted that the
duration of therapy of up to 14 days (patients that had a cUTI with
concurrent bacteremia) is consistent with the prospective prescribing
information, and that it used this 14-day duration of therapy to
calculate total inpatient cost. The applicant then converted these
costs to charges by dividing the costs per patient by the national
average cost-to charge ratio of 0.187 for drugs from the FY 2021 IPPS/
LTCH PPS final rule (85 FR 58601). The applicant calculated a final
inflated case-weighted average standardized charge per case of $79,619
and a case weighted threshold of $59,237. Because the final inflated
case-weighted average standardized charge per case for
CONTEPOTM exceeded the average case-weighted threshold
amount, the applicant maintained it meets the cost criterion.
As summarized, the applicant used a 14-day duration of therapy to
calculate total inpatient cost for purposes of its cost analysis.
However, the applicant noted that the average number of days a patient
would be administered CONTEPOTM will most likely fall
between 10 to 14 days of therapy given the current guideline
recommendations. Of these treatment days, the applicant noted that
nearly all would occur during the inpatient hospital stay. Consistent
with our historical practice, and as stated in the FY 2021 IPPS/LTCH
PPS final rule, we believe the new technology add-on payment for
CONTEPOTM, if approved, would be based on the average cost
of the technology and not the maximum (85 FR 58724). Without further
information from the applicant regarding the average number of days
CONTEPOTM is administered, we continue to believe using the
middle ground of 12.5 days, based on the 10-14 day period indicated by
the applicant, is appropriate for this analysis to determine the
average number of days CONTEPOTM is administered in the
hospital. To assess whether the technology would meet the cost
criterion using an average cost for the technology based on this 12.5-
day period for CONTEPOTM administration, we converted the
costs to charges by dividing the costs per patient by the national
average cost-to charge ratio of 0.187 for drugs from the FY 2021 IPPS/
LTCH PPS final rule (85 FR 58601). Based on data from the applicant,
this resulted in a final inflated average case-weighted standardized
charge per case of $77,613, which exceeds the case weighted threshold
of $59,237.
Because of the large number of cases included in this cost
analysis, the applicant supplemented the analysis as described
previously with additional sensitivity analyses. In these analyses, the
previous cost analysis was repeated using only the top 75 percent of
cases and the top 20 MS-DRGs. In these two additional sensitivity
analyses, the final inflated case-weighted average standardized charge
per case for CONTEPOTM of $70,718 and $70,046 exceeded the
average case-weighted threshold amount of $55,388 and $55,468,
respectively. Because the final inflated case-weighted average
standardized charge per case for CONTEPOTM exceeded the
average case-weighted threshold amount, the applicant asserts that
CONTEPOTM meets the cost criterion.
We agree with the applicant that CONTEPOTM (fosfomycin)
meets the cost criterion.
Therefore, if CONTEPOTM does not receive FDA approval by
July 1, 2021 to
[[Page 25392]]
receive new technology add on payments beginning with FY 2021, for FY
2022, per the policy finalized in the FY 2021 IPPS/LTCH PPS final rule
(85 FR 58739 through 58742), we are proposing to conditionally approve
CONTEPOTM for new technology add-on payments, subject to the
technology receiving FDA marketing authorization by July 1, 2022 (that
is, by July 1 of the fiscal year for which the applicant applied for
new technology add-on payments (2022)). If CONTEPOTM
receives FDA marketing authorization before July 1, 2022, the new
technology add-on payment for cases involving the use of this
technology would be made effective for discharges beginning in the
first quarter after FDA marketing authorization is granted. If the FDA
marketing authorization is received on or after July 1, 2022, no new
technology add-on payments would be made for cases involving the use of
CONTEPOTM for FY 2022. As previously noted, the applicant
has received a unique ICD-10-PCS procedure code to identify cases
involving the administration of CONTEPOTM. If
CONTEPOTM receives FDA marketing authorization prior to July
1, 2021, we are proposing to continue making new technology add-on
payments for CONTEPOTM in FY 2022.
As discussed previously, without further information from the
applicant regarding the average number of days CONTEPOTM is
administered, and consistent with our approach for the FY 2021 IPPS/
LTCH PPS final rule, we believe using a 12.5-day duration of therapy is
a reasonable approach for estimating the average cost of the
technology. Based on preliminary information from the applicant at the
time of this proposed rule, the cost of CONTEPOTM
administered over 12.5 days is $3,500. We note that the cost
information for this technology may be updated in the final rule based
on revised or additional information CMS receives prior to the final
rule. Under Sec. 412.88(a)(2), we limit new technology add-on payments
for QIDPs to the lesser of 75 percent of the average cost of the
technology, or 75 percent of the costs in excess of the MS-DRG payment
for the case. As a result, we are proposing that if
CONTEPOTM receives FDA marketing authorization prior to July
1, 2022, the maximum new technology add-on payment for a case involving
the use of CONTEPOTM (fosfomycin) would be $2,625 for FY
2022 (that is, 75 percent of the average cost of the technology). Cases
involving the use of CONTEPOTM that would be eligible for
new technology add-on payments will be identified by ICD-10-PCS
procedure codes XW033K5 (Introduction of Fosfomycin anti-infective into
peripheral vein, percutaneous approach, new technology group 5) or
XW043K5 (Introduction of Fosfomycin antiinfective into central vein,
percutaneous approach, new technology group 5).
We are inviting public comments on whether CONTEPOTM
(fosfomycin) meets the cost criterion and our proposal to approve new
technology add-on payments for CONTEPOTM (fosfomycin) for FY
2022.
(2) FETROJA[supreg] (cefiderocol)
Shionogi & Co., Ltd submitted an application for new technology-add
on payments for FETROJA[supreg] (cefiderocol) for FY 2022.
FETROJA[supreg] is an injectable siderophore cephalosporin indicated
for the treatment of hospital-acquired bacterial pneumonia (HABP)/
ventilator-associated bacterial pneumonia (VABP) on September 25, 2020.
Per the applicant, FETROJA[supreg] should be used to treat infections
where limited or no alternative treatment options are available and
where FETROJA[supreg] (cefiderocol) is likely to be an appropriate
treatment option, which may include use in patients with infections
caused by documented or highly suspected carbapenem-resistant and/or
multidrug-resistant gram-negative (GN) pathogens. The applicant asserts
that the principal antibacterial/bactericidal activity of
FETROJA[supreg] occurs with inhibiting GN bacterial cell wall synthesis
by binding to penicillin-binding proteins.
FETROJA[supreg] was designated as a QIDP for HABP/VABP and received
FDA marketing approval for this indication on September 25, 2020.
FETROJA[supreg] became available on the market for the treatment of
HABP/VABP after FDA approval for this indication. FETROJA[supreg] also
has a QIDP designation and is FDA approved for cUTI, and was granted a
new technology add-on payment under the alternative new technology add-
on payment pathway for certain antimicrobials for this indication in
the FY 2021 IPPS/LTCH final rule (85 FR 58721). The current new
technology add-on payment application for FY2022 is specific to the
indication of HABP/VABP. According to the applicant, the ICD-10
Coordination and Maintenance Committee approved the following ICD-10-
PCS codes to specifically describe the IV administration of FETROJA,
effective October 1, 2020: XW033A6 (Introduction of cefiderocol anti-
infective into peripheral vein, percutaneous approach, new technology
group 6) and XW043A6 (Introduction of cefiderocol anti-infective into
central vein, percutaneous approach, new technology group 6).
With regard to the cost criterion, the applicant conducted two
analyses based on 100 percent and 75 percent of identified claims. For
both scenarios, the applicant used the FY 2019 MedPAR Limited Data Set
(LDS) to assess the MS-DRGs to which potential cases representing
hospitalized patients who may be eligible for FETROJA[supreg] treatment
would be mapped. The applicant identified eligible cases by searching
the FY 2019 MedPAR for cases reporting ICD-10-CM codes for pneumonia
and for resistance to antimicrobial drugs.
Under the first scenario of 100 percent of cases, the applicant
identified 9,595 cases mapping to 203 MS-DRGs. Under the second
scenario of 75 percent of cases, the applicant identified 7,218 cases
mapping to 19 MS-DRGs. The applicant standardized the charges after
calculating the average case-weighted unstandardized charge per case
for both scenarios and removing 50 percent of charges associated with
the drug revenue centers 025x, 026x, and 063x under both scenarios. Per
the applicant, FETROJA[supreg] is expected to replace some of the drugs
that would otherwise be utilized to treat these patients. The applicant
stated that it believes 50 percent of these total charges to be a
conservative estimate as other drugs will still be required for these
patients during their hospital stay. The applicant then applied an
inflation factor of 13.2 percent, which was the 2-year outlier charge
inflation factor used in the FY 2021 IPPS/LTCH PPS final rule (85 FR
59039), to update the charges from FY 2019 to FY 2021. The applicant
then added charges for FETROJA[supreg] by dividing the total average
hospital cost of FETROJA[supreg] by the national average cost-to-charge
ratio (0.187) for drugs published in the FY 2021 IPPS/LTCH PPS final
rule (85 FR 58601).
The applicant calculated a final inflated case-weighted average
standardized charge per case of $164,825 for the first scenario and
$148,821 for the second scenario and an average case-weighted threshold
amount of $78,296 for the first scenario and $73,607 for the second
scenario. Because the final inflated case-weighted average standardized
charge per case for each scenario exceeds the average case-weighted
threshold amount for each scenario, the applicant asserted that the
technology meets the cost criterion.
We agree with the applicant that FETROJA[supreg] (cefiderocol)
meets the cost criterion and therefore are proposing to approve
FETROJA[supreg] for new technology
[[Page 25393]]
add on payments for FY 2022 when used for the treatment of HABP/VABP.
Cases involving the use of FETROJA[supreg] that are eligible for new
technology add-on payments will be identified by ICD-10-PCS procedure
codes XW03366 or XW04366.
Based on preliminary information from the applicant at the time of
this proposed rule, the cost of FETROJA[supreg] administered over an
average of 10.4 days is $11,439.79. We note that the cost information
for this technology may be updated in the final rule based on revised
or additional information CMS receives prior to the final rule. Under
Sec. 412.88(a)(2), we limit new technology add-on payments for QIDPs
to the lesser of 75 percent of the average cost of the technology, or
75 percent of the costs in excess of the MS-DRG payment for the case.
As a result, we are proposing that the maximum new technology add-on
payment for a case involving the use of FETROJA[supreg] when used for
the treatment of HABP/VABP would be $8,579.84 for FY 2022 (that is, 75
percent of the average cost of the technology).
We are inviting public comments on whether FETROJA[supreg]
(cefiderocol) meets the cost criterion and our proposal to approve new
technology add-on payments for FETROJA[supreg] for FY 2022 for the
treatment of HABP/VABP.
(3) RECARBRIOTM (imipenem, cilastatin, and relebactam)
Merck & Co. submitted an application for new technology add-on
payments for RECARBRIOTM for FY 2022. RECARBRIOTM
is a fixed-dose combination of imipenem, a penem antibacterial;
cilastatin, a renal dehydropeptidase inhibitor; and relebactam, a novel
b-lactamase inhibitor (BLI) administered via intravenous infusion. Per
the applicant, RECARBRIOTM is indicated for the treatment of
hospital-acquired bacterial pneumonia (HABP) and ventilator-associated
bacterial pneumonia (VABP) caused by susceptible Gram-negative
bacteria. RECARBRIOTM is also indicated for complicated
urinary tract infections (cUTI) and complicated intra-abdominal
infections (cIAI) and was approved for new technology add-on payment
for these indications in the FY 2021 IPPS/LTCH PPS final rule (85 FR
58728).
The applicant explained that the recommended dose of
RECARBRIOTM is 1.25 grams administered by intravenous
infusion over 30 minutes every 6 hours in patients 18 years of age and
older with creatinine clearance (CrCl) 90 mL/min or greater. Per the
applicant, the recommended treatment course suggests that a patient
will receive 1 vial per dose and 4 doses per day. Per
RECARBRIOTM's prescribing information, the recommended
duration of treatment is 4 days to 14 days.
RECARBRIOTM is designated as a QIDP indicated for the
treatment of HABP/VABP and received FDA approval through a supplemental
NDA on June 4, 2020 for this indication. According to the applicant,
RECARBRIOTM originally submitted an NDA for the cUTI and
cIAI indications and received FDA approval on July 16, 2019. The
applicant previously applied for the new technology add-on payment for
the cUTI and cIAI indications, which CMS approved in the FY 2021 IPPS/
LTCH PPS final rule (85 FR 58728). The application for new technology
add-on payments for FY 2022 is specific to the HABP and VABP
indications. The applicant noted that RECARBRIOTM can be
identified with ICD-10-PCS codes XW033U5 (Introduction of imipenem-
cilastatin-relebactam anti-infective into peripheral vein, percutaneous
approach, new technology group 5) or XW043U5 (Introduction of imipenem-
cilastatin-relebactam anti-infective into central vein, percutaneous
approach, new technology group 5).
To demonstrate that the technology meets the cost criterion, the
applicant searched the FY 2019 MedPAR Limited Data Set (LDS) for cases
reporting ICD-10-CM diagnosis code J95.851(Ventilator assisted
pneumonia) for VABP, and the following list of codes for HABP:
[GRAPHIC] [TIFF OMITTED] TP10MY21.220
Additionally, for HABP, the applicant identified cases that
included present on admission indicators of N (Diagnosis was not
present at time of inpatient admission), U (Documentation insufficient
to determine if condition was present at the time of inpatient
admission), W (Clinically undetermined), or 1 (Unreported/not used).
The applicant identified a total 106,964 cases, which were mapped
to 355 unique MS-DRGs. The applicant removed 88 MS-DRGs with minimal
frequencies (fewer than 11 cases), leaving 106,655 cases mapping to 267
MS-DRGs. Per the applicant, the top 10 MS-DRGs covered approximately
34.1 percent of all patients. The applicant examined associated charges
per MS-DRG and removed all pharmacy charges to be replaced using
RECARBRIOTM. The applicant then standardized and inflated
the charges by applying the FY 2021 IPPS/LTCH PPS final rule outlier
[[Page 25394]]
charge inflation factor of 1.13218 (85 FR 59039).
The applicant estimated an average cost of RECARBRIOTM
for the treatment of HABP and VABP in the inpatient setting based on
the recommended dose of 1.25 grams (imipenem 500 mg, cilastatin 500 mg,
relebactam 250 mg) administered by intravenous infusion over 30 minutes
every 6 hours in patients 18 years of age and older with creatinine
clearance (CLcr) 90 mL/min or greater. As stated previously, according
to the applicant, the recommended treatment course suggests that a
patient will receive 1 vial per dose, 4 doses per day within a
recommended treatment duration of 4 to 14 days. To determine the cost
per patient, the applicant stated it used the FY 2019 MedPAR analysis
of total cases representing hospitalized patients who may be eligible
for treatment involving RECARBRIOTM to identify a percentage
of total cases per indication: HABP 94.07 percent of cases and VABP
5.93 percent. According to the applicant, it next identified the
average length of stay per indication: HABP 14.2 days and VABP 24.2
days. The applicant also assumed that 70 percent of patients would
receive RECARBRIOTM beginning on the fourth day after
admission while the remaining 30 percent of these patients would
receive RECARBRIOTM beginning on the second day of their
hospitalization. The applicant then multiplied the daily dose cost by
the two scenarios for each HABP and VABP indication to determine the
cost per stay for each indication by days of drug use. Next it
multiplied the cost per stay for each indication by the share of cases
by days in use (70/30 percent split) to determine the weighted cost for
days in use estimation. The applicant then summed the 70/30 percent
case breakdown (weighted cost) for patients initiating on day 2 and 4
to determine the average cost per indication for HABP and VABP.
Finally, the applicant multiplied the average cost per indication by
the percent of total cases for HABP and VABP, then summed them to get
the overall average cost. The applicant converted this cost to a charge
by dividing the costs by the national average cost-to-charge ratio of
0.187 for drugs published in the FY 2021 IPPS/LTCH PPS final rule (85
FR 58601) and added the resulting charges to determine the final
inflated case-weighted average standardized charge per case.
The applicant calculated a final inflated case-weighted average
standardized charge per case of $258,946 and an average case-weighted
threshold amount of $123,172. The applicant also calculated an average
case-weighted standardized charge per case for HABP and VABP separately
using the same methodology previously described and determined final
inflated case-weighted average standardized charges per case of
$249,992 for HABP and $394,992 for VABP and average case-weighted
thresholds of $117,466 for HABP and $214,869 for VABP.
In addition, because RECARBRIOTM was previously approved
for a new technology add-on payment for the cUTI and cIAI indications,
the applicant modified the added amount of the charge for
RECARBRIOTM based on the cost calculation of the technology
using all four indications. Using the same methodology previously
described, the applicant determined final inflated case-weighted
average standardized charges per case of $250,209 for HABP and VABP,
$241,255 for HABP, and $386,255 for VABP and average case-weighted
thresholds of $123,172 for HABP and VABP, $117,466 for HABP, and
$214,869 for VABP. Because the final inflated case-weighted average
standardized charge per case exceeded the average case-weighted
threshold amount in each scenario, the applicant maintained that the
technology met the cost criterion.
We agree with the applicant that RECARBRIOTM meets the
cost criterion and therefore are proposing to approve
RECARBRIOTM for new technology add on payments for FY 2022
when used for treatment of HABP and VABP. Based on preliminary
information from the applicant at the time of this proposed rule, the
cost of RECARBRIOTM is $12,768.68 when used for the
treatment of HABP and VABP. We note that the cost information for this
technology may be updated in the final rule based on revised or
additional information CMS receives prior to the final rule. Under
Sec. 412.88(a)(2), we limit new technology add-on payments for QIDPs
to the lesser of 75 percent of the costs of the new medical service or
technology, or 75 percent of the amount by which the costs of the case
exceed the MS-DRG payment. As a result, we are proposing that the
maximum new technology add-on payment for a case involving the use of
RECARBRIOTM would be $9,576.51 for FY 2022 (that is, 75
percent of the average cost of the technology) when used for treatment
of HABP and VABP.
We are inviting public comments on whether RECARBRIOTM
(imipenem, cilastatin, and relebactam) meets the cost criterion and our
proposal to approve new technology add-on payments for the
RECARBRIOTM (imipenem, cilastatin, and relebactam) for the
indications of HABP and VABP for FY 2022.
7. Comment Solicitation on the New Technology Add-On Payment Newness
Period for Products Available Through an Emergency Use Authorization
(EUA) for COVID-19
As noted previously, and explained in the FY 2005 IPPS final rule
(69 FR 49002), the intent of section 1886(d)(5)(K) of the Act and
regulations under Sec. 412.87(b)(2) is to pay for new medical services
and technologies for the first 2 to 3 years that a product comes on the
market, during the period when the costs of the new technology are not
yet fully reflected in the DRG weights.
As we have discussed in prior rulemaking (77 FR 53348), generally,
our policy is to begin the newness period on the date of FDA approval
or clearance or, if later, the date of availability of the product on
the U.S. market, when data reflecting the costs of the technology begin
to become available for recalibration of the DRGs. In some specific
circumstances, we have recognized a date later than FDA approval as the
appropriate starting point for the 2-year to 3-year newness period for
new technologies approved for add-on payments (85 FR 58734).
As discussed previously, in the FY 2009 IPPS final rule (73 FR
48561 through 48563), we revised our regulations at Sec. 412.87 to
codify our longstanding practice of how CMS evaluates the eligibility
criteria for new medical service or technology add-on payment
applications. We stated that new technologies that have not received
FDA approval do not meet the newness criterion. In addition, we stated
we do not believe it is appropriate for CMS to determine whether a
medical service or technology represents a substantial clinical
improvement over existing technologies before the FDA makes a
determination as to whether the medical service or technology is safe
and effective. For these reasons, we first determine whether a new
technology meets the newness criterion, and only if so, do we make a
determination as to whether the technology meets the cost threshold and
represents a substantial clinical improvement over existing medical
services or technologies. We also finalized at 42 CFR 412.87(c)
(subsequently redesignated as 412.87(e)) that all applicants for new
technology add-on payments must have FDA approval or clearance by July
1 of the year prior to the beginning of the fiscal year for which the
application is being considered.
[[Page 25395]]
In the FY 2021 IPPS/LTCH PPS final rule, to more precisely describe
the various types of FDA approvals, clearances, licensures, and
classifications that we consider under our new technology add-on
payment policy, we finalized a technical clarification to Sec.
412.87(e)(2) to indicate that new technologies must receive FDA
marketing authorization (for example, pre-market approval (PMA); 510(k)
clearance; the granting of a De Novo classification request; approval
of a New Drug Application (NDA); or Biologics License Application (BLA)
licensure) by July 1 of the year prior to the beginning of the fiscal
year for which the application is being considered. As noted in the FY
2021 IPPS/LTCH PPS final rule, this technical clarification did not
change our longstanding policy for evaluating whether a technology is
eligible for new technology add-on payment for a given fiscal year, and
we continue to consider FDA marketing authorization as representing
that a product has received FDA approval or clearance for purposes of
eligibility for the new technology add-on payment under Sec.
412.87(e)(2) (85 FR 58742).
An EUA by the FDA allows a product to be used for emergency use,
but under our longstanding policy, we believe it would not be
considered an FDA marketing authorization for the purpose of new
technology add-on payments, as a product that is available only through
an EUA is not considered to have an FDA approval or clearance.
Therefore, under the current regulations at 42 CFR 412.87(e)(2) and
consistent with our longstanding policy of not considering eligibility
for new technology add-on payments prior to a product receiving FDA
approval or clearance, we believe a product available only through an
EUA would not be eligible for new technology add-on payments.
Although an EUA is not an FDA approval or clearance that would be
considered FDA marketing authorization within the meaning of Sec.
412.87(e)(2), data reflecting the costs of products that have received
an EUA could become available as soon as the date of the EUA issuance
and prior to receiving FDA approval or clearance. CMS also recognizes
that the manufacturers of products with EUAs (such as some COVID-19
treatments) might further engage with FDA to seek approval or
clearance, and may be eligible for new technology add-on payments in
the future. We are seeking comment on how data reflecting the costs of
a product with an EUA, which may become available upon authorization of
the product for emergency use (but prior to FDA approval or clearance),
should be considered for purposes of the 2-year to 3-year period of
newness for new technology add-on payments for a product with or
expected to receive an EUA, including whether the newness period should
begin with the date of the EUA.
8. Proposal To Extend the New COVID-19 Treatments Add-On Payment
(NCTAP) Through the End of the FY in Which the PHE Ends for Certain
Products and Discontinue NCTAP for Products Approved for New Technology
Add-on Payments in FY 2022
In response to the COVID-19 PHE, we established the New COVID-19
Treatments Add-on Payment (NCTAP) under the IPPS for COVID-19 cases
that meet certain criteria (85 FR 71157-71158). We believe that as
drugs and biological products become available and are authorized for
emergency use or approved by FDA for the treatment of COVID-19 in the
inpatient setting, it is appropriate to increase the current IPPS
payment amounts to mitigate any potential financial disincentives for
hospitals to provide new COVID-19 treatments during the PHE. Therefore,
effective for discharges occurring on or after November 2, 2020 and
until the end of the PHE for COVID-19, we established the NCTAP to pay
hospitals the lesser of: (1) 65 percent of the operating outlier
threshold for the claim; or (2) 65 percent of the amount by which the
costs of the case exceed the standard DRG payment, including the
adjustment to the relative weight under section 3710 of the Coronavirus
Aid, Relief, and Economic Security (CARES) Act, for certain cases that
include the use of a drug or biological product currently authorized
for emergency use or approved for treating COVID-19.
We anticipate that there might be inpatient cases of COVID-19,
beyond the end of the PHE, for which payment based on the assigned MS-
DRG may not adequately reflect the additional cost of new COVID-19
treatments. In order to continue to mitigate potential financial
disincentives for hospitals to provide these new treatments, and to
minimize any potential payment disruption immediately following the end
of the PHE, we believe that the NCTAP should remain available for cases
involving eligible treatments for the remainder of the fiscal year in
which the PHE ends (for example, if the PHE were to end in FY 2022,
until September 30, 2022).\932\ At the same time, we also believe that
any new technology add-on payments that may be approved for a COVID-19
treatment would also serve to mitigate any potential financial
disincentives for hospitals to provide that new COVID-19 treatment,
such that the NCTAP would no longer be needed for that same product. We
note that a COVID-19 treatment that is the subject of an application
for FY 2022 new technology add-on payments and which receives FDA
approval or clearance by July 1, 2021 would be eligible for
consideration for new technology add-on payments for FY 2022.
---------------------------------------------------------------------------
\932\ On January 22, 2021, former Acting HHS Secretary Norris
Cochran sent a letter to governors announcing that HHS has
determined that the public health emergency will likely remain in
place for the entirety of 2021, and when a decision is made to
terminate the declaration or let it expire, HHS will provide states
with 60 days' notice prior to termination.
---------------------------------------------------------------------------
Therefore, we are proposing to extend the NCTAP for eligible
products that are not approved for new technology add-on payments
through the end of the fiscal year in which the PHE ends (for example,
September 30, 2022). We are also proposing to discontinue the NCTAP for
discharges on or after October 1, 2021 for a product that is approved
for new technology add-on payments beginning FY 2022.
We believe this proposal to extend NCTAP for eligible products
would allow some form of add-on payment (that is, NCTAP or new
technology add-on payment) to continue uninterrupted for some period of
time following the conclusion of the COVID-19 PHE, as we anticipate
that there will continue to be inpatient cases of COVID-19 after the
PHE ends. For example, if a drug or biological product with an EUA to
treat COVID-19 does not receive FDA approval by July 1, 2021, and the
PHE ends on December 31, 2021, this proposal would allow discharges
involving that product to continue to be eligible for the NCTAP through
September 30, 2022 (the end of FY 2022). If that same product receives
FDA approval by July 1, 2022, it would be eligible for consideration of
new technology add-on payments beginning FY 2023, and new technology
add-on payments, if approved, would begin on October 1, 2022 (the
beginning of FY 2023).
We invite public comment on our proposals to continue the NCTAP for
eligible products that are not approved for new technology add-on
payments through the end of the fiscal year in which the PHE ends and
to discontinue the NCTAP for products that are approved for new
technology add-on payments.
[[Page 25396]]
III. Proposed Changes to the Hospital Wage Index for Acute Care
Hospitals
A. Background
1. Legislative Authority
Section 1886(d)(3)(E) of the Act requires that, as part of the
methodology for determining prospective payments to hospitals, the
Secretary adjust the standardized amounts for area differences in
hospital wage levels by a factor (established by the Secretary)
reflecting the relative hospital wage level in the geographic area of
the hospital compared to the national average hospital wage level. We
currently define hospital labor market areas based on the delineations
of statistical areas established by the Office of Management and Budget
(OMB). A discussion of the proposed FY 2022 hospital wage index based
on the statistical areas appears under section III.A.2. of the preamble
of this proposed rule.
Section 1886(d)(3)(E) of the Act requires the Secretary to update
the wage index annually and to base the update on a survey of wages and
wage-related costs of short-term, acute care hospitals. (CMS collects
these data on the Medicare cost report, CMS Form 2552-10, Worksheet S-
3, Parts II, III, and IV. The OMB control number for approved
collection of this information is 0938-0050, which expires on March 31,
2022.) This provision also requires that any updates or adjustments to
the wage index be made in a manner that ensures that aggregate payments
to hospitals are not affected by the change in the wage index. The
proposed adjustment for FY 2022 is discussed in section II.B. of the
Addendum to this proposed rule.
As discussed in section III.I. of the preamble of this proposed
rule, we also take into account the geographic reclassification of
hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of
the Act when calculating IPPS payment amounts. Under section
1886(d)(8)(D) of the Act, the Secretary is required to adjust the
standardized amounts so as to ensure that aggregate payments under the
IPPS after implementation of the provisions of sections 1886(d)(8)(B),
1886(d)(8)(C), and 1886(d)(10) of the Act are equal to the aggregate
prospective payments that would have been made absent these provisions.
The proposed budget neutrality adjustment for FY 2022 is discussed in
section II.A.4.b. of the Addendum to this proposed rule.
Section 1886(d)(3)(E) of the Act also provides for the collection
of data every 3 years on the occupational mix of employees for short-
term, acute care hospitals participating in the Medicare program, in
order to construct an occupational mix adjustment to the wage index. A
discussion of the occupational mix adjustment that we are proposing to
apply to the FY 2022 wage index appears under sections III.E. and F. of
the preamble of this proposed rule.
2. Core-Based Statistical Areas (CBSAs) for the Proposed FY 2022
Hospital Wage Index
The wage index is calculated and assigned to hospitals on the basis
of the labor market area in which the hospital is located. Under
section 1886(d)(3)(E) of the Act, beginning with FY 2005, we delineate
hospital labor market areas based on OMB-established Core-Based
Statistical Areas (CBSAs). The current statistical areas (which were
implemented beginning with FY 2015) are based on revised OMB
delineations issued on February 28, 2013, in OMB Bulletin No. 13-01.
OMB Bulletin No. 13-01 established revised delineations for
Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas in the United States and Puerto Rico based
on the 2010 Census, and provided guidance on the use of the
delineations of these statistical areas using standards published in
the June 28, 2010 Federal Register (75 FR 37246 through 37252). We
refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951
through 49963 and 49973 through 49982)) for a full discussion of our
implementation of the OMB statistical area delineations beginning with
the FY 2015 wage index.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. However, OMB
occasionally issues minor updates and revisions to statistical areas in
the years between the decennial censuses through OMB Bulletins. On July
15, 2015, OMB issued OMB Bulletin No. 15-01, which provided updates to
and superseded OMB Bulletin No. 13-01 that was issued on February 28,
2013. The attachment to OMB Bulletin No. 15-01 provided detailed
information on the update to statistical areas since February 28, 2013.
The updates provided in OMB Bulletin No. 15-01 were based on the
application of the 2010 Standards for Delineating Metropolitan and
Micropolitan Statistical Areas to Census Bureau population estimates
for July 1, 2012 and July 1, 2013. In the FY 2017 IPPS/LTCH PPS final
rule (81 FR 56913), we adopted the updates set forth in OMB Bulletin
No. 15-01 effective October 1, 2016, beginning with the FY 2017 wage
index. For a complete discussion of the adoption of the updates set
forth in OMB Bulletin No. 15-01, we refer readers to the FY 2017 IPPS/
LTCH PPS final rule. In the FY 2018 IPPS/LTCH PPS final rule (82 FR
38130), we continued to use the OMB delineations that were adopted
beginning with FY 2015 to calculate the area wage indexes, with updates
as reflected in OMB Bulletin No. 15-01 specified in the FY 2017 IPPS/
LTCH PPS final rule.
On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which
provided updates to and superseded OMB Bulletin No. 15-01 that was
issued on July 15, 2015. The attachments to OMB Bulletin No. 17-01
provided detailed information on the update to statistical areas since
July 15, 2015, and were based on the application of the 2010 Standards
for Delineating Metropolitan and Micropolitan Statistical Areas to
Census Bureau population estimates for July 1, 2014 and July 1, 2015.
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41362 through 41363), we
adopted the updates set forth in OMB Bulletin No. 17-01 effective
October 1, 2018, beginning with the FY 2019 wage index. For a complete
discussion of the adoption of the updates set forth in OMB Bulletin No.
17-01, we refer readers to the FY 2019 IPPS/LTCH PPS final rule. In the
FY 2020 IPPS/LTCH PPS final rule (84 FR 42300 through 42301), we
continued to use the OMB delineations that were adopted beginning with
FY 2015 (based on the revised delineations issued in OMB Bulletin No.
13-01) to calculate the area wage indexes, with updates as reflected in
OMB Bulletin Nos. 15-01 and 17-01.
On April 10, 2018 OMB issued OMB Bulletin No. 18-03 which
superseded the August 15, 2017 OMB Bulletin No. 17-01. On September 14,
2018, OMB issued OMB Bulletin No. 18-04 which superseded the April 10,
2018 OMB Bulletin No. 18-03. Typically, interim OMB bulletins (those
issued between decennial censuses) have only contained minor
modifications to labor market delineations. However, the April 10, 2018
OMB Bulletin No. 18-03 and the September 14, 2018 OMB Bulletin No. 18-
04 included more modifications to the labor market areas than are
typical for OMB bulletins issued between decennial censuses, including
some material modifications that had a number of downstream effects,
such as reclassification changes. These bulletins established revised
delineations for Metropolitan Statistical Areas, Micropolitan
Statistical Areas, and
[[Page 25397]]
Combined Statistical Areas, and provided guidance on the use of the
delineations of these statistical areas. In the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58743 through 58755) we adopted the updates set forth
in OMB Bulletin No. 18-04 effective October 1, 2018, beginning with the
FY 2021 wage index. For a complete discussion of the adoption of the
updates set forth in OMB Bulletin No. 18-04, we refer readers to the FY
2021 IPPS/LTCH PPS final rule.
On March 6, 2020, OMB issued Bulletin No. 20-01, which provided
updates to and superseded OMB Bulletin No. 18-04 that was issued on
September 14, 2018. The attachments to OMB Bulletin No. 20-01 provided
detailed information on the update to statistical areas since September
14, 2018, and were based on the application of the 2010 Standards for
Delineating Metropolitan and Micropolitan Statistical Areas to Census
Bureau population estimates for July 1, 2017 and July 1, 2018. (For a
copy of this bulletin, we refer readers to the following website:
https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf). In OMB Bulletin No. 20-01, OMB announced one new Micropolitan
Statistical Area, one new component of an existing Combined Statistical
Area and changes to New England City and Town Area (NECTA)
delineations. In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58744), we
stated that if appropriate, we would propose any updates from OMB
Bulletin No. 20-01 in the FY 2022 IPPS/LTCH PPS proposed rule. After
reviewing OMB Bulletin No. 20-01, we have determined that the changes
in Bulletin 20-01 encompassed delineation changes that would not affect
the Medicare wage index for FY 2022. Specifically, the updates
consisted of changes to NECTA delineations and the creation of a new
Micropolitan Statistical Area which was then added as a new component
to an existing Micropolitan Statistical Area. The Medicare wage index
does not utilize NECTA definitions, and, as most recently discussed in
FY 2021 IPPS/LTCH PPS final rule (85 FR 58746), we include hospitals
located in Micropolitan Statistical areas in each State's rural wage
index. Therefore, while we are proposing to adopt the updates set forth
in OMB Bulletin No. 20-01 consistent with our longstanding policy of
adopting OMB delineation updates, we note that specific wage index
updates would not be necessary for FY 2022 as a result of adopting
these OMB updates. In other words, these OMB updates would not affect
any hospital's geographic area for purposes of the wage index
calculation for FY 2022.
For FY 2022, we would continue to use the OMB delineations that
were adopted beginning with FY 2015 (based on the revised delineations
issued in OMB Bulletin No. 13-01) to calculate the area wage indexes,
with updates as reflected in OMB Bulletin Nos. 15-01, 17-01 and 18-04.
We note that, in connection with our adoption in FY 2021 of the
updates in OMB Bulletin 18-04, we adopted a policy to place a 5 percent
cap, for FY 2021, on any decrease in a hospital's wage index from the
hospital's final wage index in FY 2020 so that a hospital's final wage
index for FY 2021 would not be less than 95 percent of its final wage
index for FY 2020. We refer the reader to the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58753 through 58755) for a complete discussion of
this transition. As finalized in the FY 2021 IPPS/LTCH PPS final rule,
this transition is set to expire at the end of FY 2021. However, given
the unprecedented nature of the ongoing COVID-19 PHE, we also seek
comment on whether it would be appropriate to continue to apply a
transition to the FY 2022 wage index for hospitals negatively impacted
by our adoption of the updates in OMB Bulletin 18-04. For example, such
an extended transition could potentially take the form of holding the
FY 2022 wage index for those hospitals harmless from any reduction
relative to their FY 2021 wage index. If we were to apply a transition
to the FY 2022 wage index for hospitals negatively impacted by our
adoption of the updates in OMB Bulletin 18-04, we also seek comment on
making this transition budget neutral, as is our usual practice, in the
same manner that the FY 2021 transition was made budget neutral as
discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58755).
3. Codes for Constituent Counties in CBSAs
CBSAs are made up of one or more constituent counties. Each CBSA
and constituent county has its own unique identifying codes. There are
two different lists of codes associated with counties: Social Security
Administration (SSA) codes and Federal Information Processing Standard
(FIPS) codes. Historically, CMS has listed and used SSA and FIPS county
codes to identify and crosswalk counties to CBSA codes for purposes of
the hospital wage index. As we discussed in the FY 2018 IPPS/LTCH PPS
final rule (82 FR 38129 through 38130), we have learned that SSA county
codes are no longer being maintained and updated. However, the FIPS
codes continue to be maintained by the U.S. Census Bureau. We believe
that using the latest FIPS codes will allow us to maintain a more
accurate and up-to-date payment system that reflects the reality of
population shifts and labor market conditions.
The Census Bureau's most current statistical area information is
derived from ongoing census data received since 2010; the most recent
data are from 2020. The Census Bureau maintains a complete list of
changes to counties or county equivalent entities on the website at:
https://www.census.gov/programs-surveys/geography/technical-documentation/county-changes.html. We believe that it is important to
use the latest counties or county equivalent entities in order to
properly crosswalk hospitals from a county to a CBSA for purposes of
the hospital wage index used under the IPPS.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38129 through
38130), we adopted a policy to discontinue the use of the SSA county
codes and began using only the FIPS county codes for purposes of
crosswalking counties to CBSAs. In addition, in the same rule, we
implemented the latest FIPS code updates, which were effective October
1, 2017, beginning with the FY 2018 wage indexes. These updates have
been used to calculate the wage indexes in a manner generally
consistent with the CBSA-based methodologies finalized in the FY 2005
IPPS final rule and the FY 2015 IPPS/LTCH PPS final rule.
For FY 2022, we are continuing to use only the FIPS county codes
for purposes of crosswalking counties to CBSAs. For FY 2022, Tables 2
and 3 associated with this proposed rule and the County to CBSA
Crosswalk File and Urban CBSAs and Constituent Counties for Acute Care
Hospitals File posted on the CMS website reflect the latest FIPS code
updates.
B. Worksheet S-3 Wage Data for the Proposed FY 2022 Wage Index
The proposed FY 2022 wage index values are based on the data
collected from the Medicare cost reports submitted by hospitals for
cost reporting periods beginning in FY 2018 (the FY 2021 wage indexes
were based on data from cost reporting periods beginning during FY
2017).
1. Included Categories of Costs
The proposed FY 2022 wage index includes all of the following
categories of data associated with costs paid under the IPPS (as well
as outpatient costs):
[[Page 25398]]
Salaries and hours from short-term, acute care hospitals
(including paid lunch hours and hours associated with military leave
and jury duty);
Home office costs and hours;
Certain contract labor costs and hours, which include
direct patient care, certain top management, pharmacy, laboratory, and
nonteaching physician Part A services, and certain contract indirect
patient care services (as discussed in the FY 2008 final rule with
comment period (72 FR 47315 through 47317)); and
Wage-related costs, including pension costs (based on
policies adopted in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51586
through 51590)) and other deferred compensation costs.
2. Excluded Categories of Costs
Consistent with the wage index methodology for FY 2021, the
proposed wage index for FY 2022 also excludes the direct and overhead
salaries and hours for services not subject to IPPS payment, such as
skilled nursing facility (SNF) services, home health services, costs
related to GME (teaching physicians and residents) and certified
registered nurse anesthetists (CRNAs), and other subprovider components
that are not paid under the IPPS. The proposed FY 2022 wage index also
excludes the salaries, hours, and wage-related costs of hospital-based
rural health clinics (RHCs), and Federally qualified health centers
(FQHCs) because Medicare pays for these costs outside of the IPPS (68
FR 45395). In addition, salaries, hours, and wage-related costs of CAHs
are excluded from the wage index for the reasons explained in the FY
2004 IPPS final rule (68 FR 45397 through 45398). For FY 2020 and
subsequent years, other wage-related costs are also excluded from the
calculation of the wage index. As discussed in the FY 2019 IPPS/LTCH
final rule (83 FR 41365 through 41369), other wage-related costs
reported on Worksheet S-3, Part II, Line 18 and Worksheet S-3, Part IV,
Line 25 and subscripts, as well as all other wage-related costs, such
as contract labor costs, are excluded from the calculation of the wage
index.
3. Use of Wage Index Data by Suppliers and Providers Other Than Acute
Care Hospitals Under the IPPS
Data collected for the IPPS wage index also are currently used to
calculate wage indexes applicable to suppliers and other providers,
such as SNFs, home health agencies (HHAs), ambulatory surgical centers
(ASCs), and hospices. In addition, they are used for prospective
payments to IRFs, IPFs, and LTCHs, and for hospital outpatient
services. We note that, in the IPPS rules, we do not address comments
pertaining to the wage indexes of any supplier or provider except IPPS
providers and LTCHs. Such comments should be made in response to
separate proposed rules for those suppliers and providers.
C. Verification of Worksheet S-3 Wage Data
The wage data for the proposed FY 2022 wage index were obtained
from Worksheet S-3, Parts II and III of the Medicare cost report (Form
CMS-2552-10, OMB Control Number 0938-0050 with expiration date March
31, 2022) for cost reporting periods beginning on or after October 1,
2017, and before October 1, 2018. For wage index purposes, we refer to
cost reports during this period as the ``FY 2018 cost report,'' the
``FY 2018 wage data,'' or the ``FY 2018 data.'' Instructions for
completing the wage index sections of Worksheet S-3 are included in the
Provider Reimbursement Manual (PRM), Part 2 (Pub. 15-2), Chapter 40,
Sections 4005.2 through 4005.4. The data file used to construct the
proposed final FY 2022 wage index includes FY 2018 data submitted to us
as of February 5, 2021. As in past years, we performed an extensive
review of the wage data, mostly through the use of edits designed to
identify aberrant data.
We asked our MACs to revise or verify data elements that result in
specific edit failures. For the proposed FY 2022 wage index, we
identified and excluded 86 providers with aberrant data that should not
be included in the wage index. If data elements for some of these
providers are corrected, we intend to include data from those providers
in the final FY 2022 wage index. We also adjusted certain aberrant data
and included these data in the wage index. For example, in situations
where a hospital did not have documentable salaries, wages, and hours
for housekeeping and dietary services, we imputed estimates, in
accordance with policies established in the FY 2015 IPPS/LTCH PPS final
rule (79 FR 49965 through 49967). We instructed MACs to complete their
data verification of questionable data elements and to transmit any
changes to the wage data no later than March 19, 2021.
In constructing the proposed FY 2022 wage index, we included the
wage data for facilities that were IPPS hospitals in FY 2018, inclusive
of those facilities that have since terminated their participation in
the program as hospitals, as long as those data did not fail any of our
edits for reasonableness. We believe including the wage data for these
hospitals is, in general, appropriate to reflect the economic
conditions in the various labor market areas during the relevant past
period and to ensure that the current wage index represents the labor
market area's current wages as compared to the national average of
wages. However, we excluded the wage data for CAHs as discussed in the
FY 2004 IPPS final rule (68 FR 45397 through 45398); that is, any
hospital that is designated as a CAH by 7 days prior to the publication
of the preliminary wage index public use file (PUF) is excluded from
the calculation of the wage index. For the proposed rule, we removed 3
hospitals that converted to CAH status on or after January 24, 2020,
the cut-off date for CAH exclusion from the FY 2021 wage index, and
through and including January 24, 2021, the cut-off date for CAH
exclusion from the FY 2022 wage index. In summary, we calculated the
proposed FY 2021 wage index using the Worksheet S-3, Parts II and III
wage data of 3,159 hospitals.
For the proposed FY 2022 wage index, we allotted the wages and
hours data for a multicampus hospital among the different labor market
areas where its campuses are located using campus full-time equivalent
(FTE) percentages as originally finalized in the FY 2012 IPPS/LTCH PPS
final rule (76 FR 51591). Table 2, which contains the proposed FY 2022
wage index associated with this proposed rule (available via the
internet on the CMS website), includes separate wage data for the
campuses of 16 multicampus hospitals. The following chart lists the
multicampus hospitals by CSA certification number (CCN) and the FTE
percentages on which the wages and hours of each campus were allotted
to their respective labor market areas:
BILLING CODE 4120-01-P
[[Page 25399]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.221
[GRAPHIC] [TIFF OMITTED] TP10MY21.222
BILLING CODE 4120-01-C
We note that, in past years, in Table 2, we have placed a ``B'' to
designate the subordinate campus in the fourth position of the hospital
CCN. However, for the FY 2019 IPPS/LTCH PPS proposed and final rules
and subsequent rules, we have moved the ``B'' to the third position of
the CCN. Because all IPPS hospitals have a ``0'' in the third position
of the CCN, we believe that placement of the ``B'' in this third
[[Page 25400]]
position, instead of the ``0'' for the subordinate campus, is the most
efficient method of identification and interferes the least with the
other, variable, digits in the CCN.
D. Method for Computing the Proposed FY 2022 Unadjusted Wage Index
The method used to compute the proposed FY 2022 wage index without
an occupational mix adjustment follows the same methodology that we
used to compute the wage indexes without an occupational mix adjustment
in the FY 2021 IPPS/LTCH PPS final rule (see 85 FR 58758 through 58761,
September 18, 2020), and we are not proposing any changes to this
methodology. We have restated our methodology in this section of this
rule.
Step 1.--We gathered data from each of the non-Federal, short-term,
acute care hospitals for which data were reported on the Worksheet S-3,
Parts II and III of the Medicare cost report for the hospital's cost
reporting period relevant to the proposed wage index (in this case, for
FY 2022, these were data from cost reports for cost reporting periods
beginning on or after October 1, 2017, and before October 1, 2018). In
addition, we included data from some hospitals that had cost reporting
periods beginning before October 2017 and reported a cost reporting
period covering all of FY 2018. These data were included because no
other data from these hospitals would be available for the cost
reporting period as previously described, and because particular labor
market areas might be affected due to the omission of these hospitals.
However, we generally describe these wage data as FY 2018 data. We note
that, if a hospital had more than one cost reporting period beginning
during FY 2018 (for example, a hospital had two short cost reporting
periods beginning on or after October 1, 2017, and before October 1,
2018), we include wage data from only one of the cost reporting
periods, the longer, in the wage index calculation. If there was more
than one cost reporting period and the periods were equal in length, we
included the wage data from the later period in the wage index
calculation.
Step 2.--Salaries.--The method used to compute a hospital's average
hourly wage excludes certain costs that are not paid under the IPPS.
(We note that, beginning with FY 2008 (72 FR 47315), we included what
were then Lines 22.01, 26.01, and 27.01 of Worksheet S-3, Part II of
CMS Form 2552-96 for overhead services in the wage index. Currently,
these lines are lines 28, 33, and 35 on CMS Form 2552-10. However, we
note that the wages and hours on these lines are not incorporated into
Line 101, Column 1 of Worksheet A, which, through the electronic cost
reporting software, flows directly to Line 1 of Worksheet S-3, Part II.
Therefore, the first step in the wage index calculation is to compute a
``revised'' Line 1, by adding to the Line 1 on Worksheet S-3, Part II
(for wages and hours respectively) the amounts on Lines 28, 33, and
35.) In calculating a hospital's Net Salaries (we note that we
previously used the term ``average'' salaries in the FY 2012 IPPS/LTCH
PPS final rule (76 FR 51592), but we now use the term ``net'' salaries)
plus wage-related costs, we first compute the following: Subtract from
Line 1 (total salaries) the GME and CRNA costs reported on CMS Form
2552-10, Lines 2, 4.01, 7, and 7.01, the Part B salaries reported on
Lines 3, 5 and 6, home office salaries reported on Line 8, and exclude
salaries reported on Lines 9 and 10 (that is, direct salaries
attributable to SNF services, home health services, and other
subprovider components not subject to the IPPS). We also subtract from
Line 1 the salaries for which no hours were reported. Therefore, the
formula for Net Salaries (from Worksheet S-3, Part II) is the
following:
((Line 1 + Line 28 + Line 33 + Line 35)-(Line 2 + Line 3 + Line 4.01 +
Line 5 + Line 6 + Line 7 + Line 7.01 + Line 8 + Line 9 + Line 10)).
To determine Total Salaries plus Wage-Related Costs, we add to the
Net Salaries the costs of contract labor for direct patient care,
certain top management, pharmacy, laboratory, and nonteaching physician
Part A services (Lines 11, 12 and 13), home office salaries and wage-
related costs reported by the hospital on Lines 14.01, 14.02, and 15,
and nonexcluded area wage-related costs (Lines 17, 22, 25.50, 25.51,
and 25.52). We note that contract labor and home office salaries for
which no corresponding hours are reported are not included. In
addition, wage-related costs for nonteaching physician Part A employees
(Line 22) are excluded if no corresponding salaries are reported for
those employees on Line 4. The formula for Total Salaries plus Wage-
Related Costs (from Worksheet S-3, Part II) is the following:
((Line 1 + Line 28 + Line 33 + Line 35)-(Line 2 + Line 3 + Line 4.01 +
Line 5 + Line 6 + Line 7 + Line 7.01 + Line 8 + Line 9 + Line 10)) +
(Line 11 + Line 12 + Line 13 + Line 14.01 + 14.02 + Line 15) + (Line 17
+ Line 22 + 25.50 + 25.51 + 25.52).
Step 3.--Hours.--With the exception of wage-related costs, for
which there are no associated hours, we compute total hours using the
same methods as described for salaries in Step 2. The formula for Total
Hours (from Worksheet S-3, Part II) is the following:
((Line 1 + Line 28 + Line 33 + Line 35)-(Line 2 + Line 3 + Line 4.01 +
Line 5 + Line 6 + Line 7 + Line 7.01 + Line 8 + Line 9 + Line 10)) +
(Line 11 + Line 12 + Line 13 + Line 14.01 + 14.02 + Line 15).
Step 4.--For each hospital reporting both total overhead salaries
and total overhead hours greater than zero, we then allocate overhead
costs to areas of the hospital excluded from the wage index
calculation. First, we determine the ``excluded rate'', which is the
ratio of excluded area hours to Revised Total Hours (from Worksheet S-
3, Part II) with the following formula: (Line 9 + Line 10)/(Line 1 +
Line 28 + Line 33 + Line 35)-(Lines 2, 3, 4.01, 5, 6, 7, 7.01, and 8
and Lines 26 through 43). We then compute the amounts of overhead
salaries and hours to be allocated to the excluded areas by multiplying
the above ratio by the total overhead salaries and hours reported on
Lines 26 through 43 of Worksheet S-3, Part II. Next, we compute the
amounts of overhead wage-related costs to be allocated to the excluded
areas using three steps:
We determine the ``overhead rate'' (from Worksheet S-3,
Part II), which is the ratio of overhead hours (Lines 26 through 43
minus the sum of Lines 28, 33, and 35) to revised hours excluding the
sum of lines 28, 33, and 35 (Line 1 minus the sum of Lines 2, 3, 4.01,
5, 6, 7, 7.01, 8, 9, 10, 28, 33, and 35). We note that, for the FY 2008
and subsequent wage index calculations, we have been excluding the
overhead contract labor (Lines 28, 33, and 35) from the determination
of the ratio of overhead hours to revised hours because hospitals
typically do not provide fringe benefits (wage-related costs) to
contract personnel. Therefore, it is not necessary for the wage index
calculation to exclude overhead wage-related costs for contract
personnel. Further, if a hospital does contribute to wage-related costs
for contracted personnel, the instructions for Lines 28, 33, and 35
require that associated wage-related costs be combined with wages on
the respective contract labor lines. The formula for the Overhead Rate
(from Worksheet S-3, Part II) is the following:
(Lines 26 through 43-Lines 28, 33 and 35)/((((Line 1 + Lines 28, 33,
35)-(Lines 2, 3, 4.01, 5, 6, 7, 7.01, 8, and 26 through 43))-(Lines 9
and 10)) + (Lines 26 through 43-Lines 28, 33, and 35)).
We compute overhead wage-related costs by multiplying the
overhead hours
[[Page 25401]]
ratio by wage-related costs reported on Part II, Lines 17, 22, 25.50,
25.51, and 25.52.
We multiply the computed overhead wage-related costs by
the previously described excluded area hours ratio.
Finally, we subtract the computed overhead salaries, wage-related
costs, and hours associated with excluded areas from the total salaries
(plus wage-related costs) and hours derived in Steps 2 and 3.
Step 5.--For each hospital, we adjust the total salaries plus wage-
related costs to a common period to determine total adjusted salaries
plus wage-related costs. To make the wage adjustment, we estimate the
percentage change in the employment cost index (ECI) for compensation
for each 30-day increment from October 14, 2017 through April 15, 2019,
for private industry hospital workers from the BLS' Compensation and
Working Conditions. We use the ECI because it reflects the price
increase associated with total compensation (salaries plus fringes)
rather than just the increase in salaries. In addition, the ECI
includes managers as well as other hospital workers. This methodology
to compute the monthly update factors uses actual quarterly ECI data
and assures that the update factors match the actual quarterly and
annual percent changes. We also note that, since April 2006 with the
publication of March 2006 data, the BLS' ECI uses a different
classification system, the North American Industrial Classification
System (NAICS), instead of the Standard Industrial Codes (SICs), which
no longer exist. We have consistently used the ECI as the data source
for our wages and salaries and other price proxies in the IPPS market
basket, and we are not proposing to make any changes to the usage of
the ECI for FY 2022. The factors used to adjust the hospital's data are
based on the midpoint of the cost reporting period, as indicated in
this rule.
Step 6.--Each hospital is assigned to its appropriate urban or
rural labor market area before any reclassifications under section
1886(d)(8)(B), 1886(d)(8)(E), or 1886(d)(10) of the Act. Within each
urban or rural labor market area, we add the total adjusted salaries
plus wage-related costs obtained in Step 5 for all hospitals in that
area to determine the total adjusted salaries plus wage-related costs
for the labor market area.
Step 7.--We divide the total adjusted salaries plus wage-related
costs obtained under Step 6 by the sum of the corresponding total hours
(from Step 4) for all hospitals in each labor market area to determine
an average hourly wage for the area.
Step 8.--We add the total adjusted salaries plus wage-related costs
obtained in Step 5 for all hospitals in the Nation and then divide the
sum by the national sum of total hours from Step 4 to arrive at a
national average hourly wage.
Step 9.--For each urban or rural labor market area, we calculate
the hospital wage index value, unadjusted for occupational mix, by
dividing the area average hourly wage obtained in Step 7 by the
national average hourly wage computed in Step 8.
Step 10.--For each urban labor market area for which we do not have
any hospital wage data (either because there are no IPPS hospitals in
that labor market area, or there are IPPS hospitals in that area but
their data are either too new to be reflected in the current year's
wage index calculation, or their data are aberrant and are deleted from
the wage index), we finalized in the FY 2020 IPPS/LTCH PPS final rule
(84 FR 42305) that, for FY 2020 and subsequent years' wage index
calculations, such CBSA's wage index would be equal to total urban
salaries plus wage-related costs (from Step 5) in the State, divided by
the total urban hours (from Step 4) in the State, divided by the
national average hourly wage from Step 8 (see 84 FR 42305 and 42306)
August 16, 2019). We stated that we believe that, in the absence of
wage data for an urban labor market area, it is reasonable to use a
statewide urban average, which is based on actual, acceptable wage data
of hospitals in that State, rather than impute some other type of value
using a different methodology. For calculation of the proposed FY 2022
wage index, we note there is one urban CBSA for which we do not have
IPPS hospital wage data. In Table 3 (which is available via the
internet on the CMS website) which contains the area wage indexes, we
include a footnote to indicate to which CBSAs this policy applies.
These CBSAs' wage indexes would be equal to total urban salaries plus
wage-related costs (from Step 5) in the respective State, divided by
the total urban hours (from Step 4) in the respective State, divided by
the national average hourly wage (from Step 8) (see 84 FR 42305 and
42306) August 16, 2019). Under this step, we also apply our policy with
regard to how dollar amounts, hours, and other numerical values in the
wage index calculations are rounded, as discussed in this section of
this rule.
We refer readers to section II. of the Appendix of the proposed
rule for the policy regarding rural areas that do not have IPPS
hospitals.
Step 11.--Section 4410 of Pub. L. 105-33 provides that, for
discharges on or after October 1, 1997, the area wage index applicable
to any hospital that is located in an urban area of a State may not be
less than the area wage index applicable to hospitals located in rural
areas in that State. The areas affected by this provision are
identified in Table 2 listed in section VI. of the Addendum to the
proposed rule and available via the internet on the CMS website.
Following is our policy with regard to rounding of the wage data
(dollar amounts, hours, and other numerical values) in the calculation
of the unadjusted and adjusted wage index, as finalized in the FY 2020
IPPS/LTCH final rule (84 FR 42306; August 16, 2019). For data that we
consider to be ``raw data,'' such as the cost report data on Worksheets
S-3, Parts II and III, and the occupational mix survey data, we use
such data ``as is,'' and do not round any of the individual line items
or fields. However, for any dollar amounts within the wage index
calculations, including any type of summed wage amount, average hourly
wages, and the national average hourly wage (both the unadjusted and
adjusted for occupational mix), we round the dollar amounts to 2
decimals. For any hour amounts within the wage index calculations, we
round such hour amounts to the nearest whole number. For any numbers
not expressed as dollars or hours within the wage index calculations,
which could include ratios, percentages, or inflation factors, we round
such numbers to 5 decimals. However, we continue rounding the actual
unadjusted and adjusted wage indexes to 4 decimals, as we have done
historically.
As discussed in the FY 2012 IPPS/LTCH PPS final rule, in ``Step
5,'' for each hospital, we adjust the total salaries plus wage-related
costs to a common period to determine total adjusted salaries plus
wage-related costs. To make the wage adjustment, we estimate the
percentage change in the employment cost index (ECI) for compensation
for each 30-day increment from October 14, 2017, through April 15,
2019, for private industry hospital workers from the BLS' Compensation
and Working Conditions. We have consistently used the ECI as the data
source for our wages and salaries and other price proxies in the IPPS
market basket, and we are not proposing any changes to the usage of the
ECI for FY 2022. The factors used to adjust the hospital's data were
based on the midpoint of the cost reporting period, as indicated in the
following table.
[[Page 25402]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.223
For example, the midpoint of a cost reporting period beginning
January 1, 2018, and ending December 31, 2018, is June 30, 2018. An
adjustment factor of 1.01780 was applied to the wages of a hospital
with such a cost reporting period.
Previously, we also would provide a Puerto Rico overall average
hourly wage. As discussed in the FY 2017 IPPS/LTCH PPS final rule (81
FR 56915), prior to January 1, 2017, Puerto Rico hospitals were paid
based on 75 percent of the national standardized amount and 25 percent
of the Puerto Rico-specific standardized amount. As a result, we
calculated a Puerto Rico specific wage index that was applied to the
labor-related share of the Puerto Rico-specific standardized amount.
Section 601 of the Consolidated Appropriations Act, 2016 (Pub. L. 114-
113) amended section 1886(d)(9)(E) of the Act to specify that the
payment calculation with respect to operating costs of inpatient
hospital services of a subsection (d) Puerto Rico hospital for
inpatient hospital discharges on or after January 1, 2016, shall use
100 percent of the national standardized amount. As we stated in the FY
2017 IPPS/LTCH PPS final rule (81 FR 56915 through 56916), because
Puerto Rico hospitals are no longer paid with a Puerto Rico specific
standardized amount as of January 1, 2016, under section 1886(d)(9)(E)
of the Act, as amended by section 601 of the Consolidated
Appropriations Act, 2016, there is no longer a need to calculate a
Puerto Rico specific average hourly wage and wage index. Hospitals in
Puerto Rico are now paid 100 percent of the national standardized
amount and, therefore, are subject to the national average hourly wage
(unadjusted for occupational mix) and the national wage index, which is
applied to the national labor-related share of the national
standardized amount. Therefore, for FY 2022, there is no Puerto Rico-
specific overall average hourly wage or wage index.
Based on the methodology, as previously discussed, the proposed FY
2022 unadjusted national average hourly wage is the following:
[GRAPHIC] [TIFF OMITTED] TP10MY21.224
E. Proposed Occupational Mix Adjustment to the FY 2022 Wage Index
As stated earlier, section 1886(d)(3)(E) of the Act provides for
the collection of data every 3 years on the occupational mix of
employees for each short-term, acute care hospital participating in the
Medicare program, in order to construct an occupational mix adjustment
to the wage index, for application beginning October 1, 2004 (the FY
2005 wage index). The purpose of the occupational mix adjustment is to
control for the effect of hospitals' employment choices on the wage
index. For example, hospitals may choose to employ different
combinations of registered nurses, licensed practical nurses, nursing
aides, and medical assistants for the purpose of providing nursing care
to their patients. The varying labor costs associated with these
choices reflect hospital management decisions rather than geographic
differences in the costs of labor.
1. Use of 2019 Medicare Wage Index Occupational Mix Survey for the FY
2022 Wage Index
Section 304(c) of the Consolidated Appropriations Act, 2001 (Pub.
L. 106- 554) amended section 1886(d)(3)(E) of the Act to require CMS to
collect data every 3 years on the occupational mix of employees for
each short-term, acute care hospital participating in the Medicare
program. As discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR
19903) and final rule (82 FR 38137), we collected data in 2016 to
[[Page 25403]]
compute the occupational mix adjustment for the FY 2019, FY 2020, and
FY 2021 wage indexes. A new measurement of occupational mix is required
for FY 2022.
The FY 2022 occupational mix adjustment is based on a new calendar
year (CY) 2019 survey. Hospitals were required to submit their
completed 2019 surveys (Form CMS-10079, OMB number 0938-0907,
expiration date September 31, 2022) to their MACs by September 3, 2020.
The preliminary, unaudited CY 2019 survey data were posted on the CMS
website on September 8, 2020. As with the Worksheet S-3, Parts II and
III cost report wage data, as part of the FY 2022 desk review process,
the MACs revised or verified data elements in hospitals' occupational
mix surveys that resulted in certain edit failures.
2. Calculation of the Occupational Mix Adjustment for FY 2022
For FY 2022, we are proposing to calculate the occupational mix
adjustment factor using the same methodology that we have used since
the FY 2012 wage index (76 FR 51582 through 51586) and to apply the
occupational mix adjustment to 100 percent of the proposed FY 2022 wage
index. In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42308), we
modified our methodology with regard to how dollar amounts, hours, and
other numerical values in the unadjusted and adjusted wage index
calculation are rounded, in order to ensure consistency in the
calculation. According to the policy finalized in the FY 2020 IPPS/LTCH
PPS final rule (84 FR 42308 and 42309), for data that we consider to be
``raw data,'' such as the cost report data on Worksheets S-3, Parts II
and III, and the occupational mix survey data, we continue to use these
data ``as is'', and not round any of the individual line items or
fields. However, for any dollar amounts within the wage index
calculations, including any type of summed wage amount, average hourly
wages, and the national average hourly wage (both the unadjusted and
adjusted for occupational mix), we round such dollar amounts to 2
decimals. We round any hour amounts within the wage index calculations
to the nearest whole number. We round any numbers not expressed as
dollars or hours in the wage index calculations, which could include
ratios, percentages, or inflation factors, to 5 decimals. However, we
continue rounding the actual unadjusted and adjusted wage indexes to 4
decimals, as we have done historically.
Similar to the method we use for the calculation of the wage index
without occupational mix, salaries and hours for a multicampus hospital
are allotted among the different labor market areas where its campuses
are located. Table 2 associated with this proposed rule (which is
available via the internet on the CMS website), which contains the
proposed FY 2022 occupational mix adjusted wage index, includes
separate wage data for the campuses of multicampus hospitals. We refer
readers to section III.C. of the preamble of this proposed rule for a
chart listing the multicampus hospitals and the FTE percentages used to
allot their occupational mix data.
Because the statute requires that the Secretary measure the
earnings and paid hours of employment by occupational category not less
than once every 3 years, all hospitals that are subject to payments
under the IPPS, or any hospital that would be subject to the IPPS if
not granted a waiver, must complete the occupational mix survey, unless
the hospital has no associated cost report wage data that are included
in the proposed FY 2022 wage index. For the proposed FY 2022 wage
index, we are using the Worksheet S-3, Parts II and III wage data of
3,159 hospitals, and we used the occupational mix surveys of 2,955
hospitals for which we also had Worksheet S-3 wage data, which
represented a ``response'' rate of 94 percent (2,955/3,159). For the
proposed FY 2022 wage index, we are applying proxy data for
noncompliant hospitals, new hospitals, or hospitals that submitted
erroneous or aberrant data in the same manner that we applied proxy
data for such hospitals in the FY 2012 wage index occupational mix
adjustment (76 FR 51586). As a result of applying this methodology, the
proposed FY 2022 occupational mix adjusted national average hourly wage
is the following:
[GRAPHIC] [TIFF OMITTED] TP10MY21.225
F. Analysis and Implementation of the Proposed Occupational Mix
Adjustment and the Proposed FY 2022 Occupational Mix Adjusted Wage
Index
As discussed in section III.E. of the preamble of this proposed
rule, for FY 2022, we are applying the occupational mix adjustment to
100 percent of the FY 2022 wage index. We calculated the occupational
mix adjustment using data from the 2019 occupational mix survey data,
using the methodology described in the FY 2012 IPPS/LTCH PPS final rule
(76 FR 51582 through 51586).
The FY 2022 national average hourly wages for each occupational mix
nursing subcategory as calculated in Step 2 of the occupational mix
calculation are as follows:
[GRAPHIC] [TIFF OMITTED] TP10MY21.226
The proposed national average hourly wage for the entire nurse
category is computed in Step 5 of the occupational mix calculation.
Hospitals with a nurse category average hourly wage (as calculated in
Step 4) of greater than the
[[Page 25404]]
national nurse category average hourly wage receive an occupational mix
adjustment factor (as calculated in Step 6) of less than 1.0. Hospitals
with a nurse category average hourly wage (as calculated in Step 4) of
less than the national nurse category average hourly wage receive an
occupational mix adjustment factor (as calculated in Step 6) of greater
than 1.0.
Based on the 2019 occupational mix survey data, we determined (in
Step 7 of the occupational mix calculation) the following:
[GRAPHIC] [TIFF OMITTED] TP10MY21.227
We compared the proposed FY 2022 occupational mix adjusted wage
indexes for each CBSA to the proposed unadjusted wage indexes for each
CBSA. Applying the occupational mix adjustment to the wage data
resulted in the following:
[GRAPHIC] [TIFF OMITTED] TP10MY21.228
These results indicate that a smaller percentage of urban areas
(54.9 percent) would benefit from the occupational mix adjustment than
would rural areas (57.4 percent).
We also compared the FY 2022 wage data adjusted for occupational
mix from the 2019 survey to the FY 2022 wage data adjusted for
occupational mix from the 2016 survey. This analysis illustrates the
effect on area wage indexes of using the 2019 survey data compared to
the 2016 survey data; that is, it shows whether hospitals' wage indexes
will increase or decrease under the 2019 survey data as compared to the
prior 2016 survey data. Applying the occupational mix adjustment to the
wage data, based on the 2019 survey, resulted in the following:
[[Page 25405]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.229
These results indicate that the wage indexes of 49.3 percent of
CBSAs overall will decrease due to application of the 2019 occupational
mix survey data as compared to the 2016 occupational mix survey data.
Further, a larger percentage of urban areas (50.5 percent) will benefit
from the use of the 2019 occupational mix survey data as compared to
the 2016 occupational mix survey data than will rural areas (40.4
percent).
G. Application of the Rural Floor, Application of the State Frontier
Floor, Continuation of the Low Wage Index Hospital Policy, and Proposed
Budget Neutrality Adjustment
1. Rural Floor
Section 4410(a) of Public Law 105-33 provides that, for discharges
on or after October 1, 1997, the area wage index applicable to any
hospital that is located in an urban area of a State may not be less
than the area wage index applicable to hospitals located in rural areas
in that State. This provision is referred to as the rural floor.
Section 3141 of Public Law 111-148 also requires that a national budget
neutrality adjustment be applied in implementing the rural floor.
In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42332 through
42336), we removed urban to rural reclassifications from the
calculation of the rural floor to prevent inappropriate payment
increases under the rural floor due to rural reclassifications, such
that, beginning in FY 2020, the rural floor is calculated without
including the wage data of hospitals that have reclassified as rural
under section 1886(d)(8)(E) of the Act (as implemented in the
regulations at Sec. 412.103). The rural floor for this FY 2022
proposed rule continues to be calculated without the wage data of
hospitals that have reclassified as rural under Sec. 412.103. We are
not proposing any changes to the rural floor policy for FY 2022. Also,
for the purposes of applying the provisions of section
1886(d)(8)(C)(iii) of the Act, effective beginning in FY 2020, we
remove the data of hospitals reclassified from urban to rural under
section 1886(d)(8)(E) of the Act (as implemented in the regulations at
Sec. 412.103) from the calculation of ``the wage index for rural areas
in the State in which the county is located'' as referred to in section
1886(d)(8)(C)(iii) of the Act. We are not proposing any changes to this
policy for FY 2022.
Based on the FY 2022 wage index associated with this proposed rule
(which is available via the internet on the CMS website) and based on
the calculation of the rural floor without the wage data of hospitals
that have reclassified as rural under Sec. 412.103, we estimate that
287 hospitals would receive an increase in their FY 2022 proposed wage
index due to the application of the rural floor.
2. Imputed Floor
In the FY 2005 IPPS final rule (69 FR 49109 through 49111), we
adopted the imputed floor policy as a temporary 3-year regulatory
measure to address concerns from hospitals in all-urban States that
have argued that they are disadvantaged by the absence of rural
hospitals to set a wage index floor for those States. We extended the
imputed floor policy eight times since its initial
[[Page 25406]]
implementation, the last of which was adopted in the FY 2018 IPPS/LTCH
PPS final rule and expired on September 30, 2018. (We refer readers to
further discussions of the imputed floor in the IPPS/LTCH PPS final
rules from FYs 2014 through 2019 (78 FR 50589 through 50590, 79 FR
49969 through 49971, 80 FR 49497 through 49498, 81 FR 56921 through
56922, 82 FR 38138 through 38142, and 83 FR 41376 through 41380,
respectively) and to the regulations at 42 CFR 412.64(h)(4).) For FYs
2019, 2020, and 2021, hospitals in all-urban states received a wage
index that was calculated without applying an imputed floor, and we no
longer included the imputed floor as a factor in the national budget
neutrality adjustment.
In computing the imputed floor for an all-urban State under the
original methodology established beginning in FY 2005, we calculated
the ratio of the lowest-to-highest CBSA wage index for each all-urban
State as well as the average of the ratios of lowest-to-highest CBSA
wage indexes of those all-urban States. We then compared the State's
own ratio to the average ratio for all-urban States and whichever was
higher was multiplied by the highest CBSA wage index value in the
State--the product of which established the imputed floor for the
State.
We adopted a second, alternative methodology beginning in FY 2013
(77 FR 53368 through 53369) to address the concern that the original
imputed floor methodology guaranteed a benefit for one all-urban State
with multiple wage indexes (New Jersey) but could not benefit another
all-urban State, Rhode Island, which had only one CBSA. Under the
alternative methodology, we first determined the average percentage
difference between the post-reclassified, pre-floor area wage index and
the post-reclassified, rural floor wage index (without rural floor
budget neutrality applied) for all CBSAs receiving the rural floor. The
lowest post-reclassified wage index assigned to a hospital in an all-
urban State having a range of such values then was increased by this
factor, the result of which established the State's alternative imputed
floor. Under the updated OMB labor market area delineations adopted by
CMS beginning in FY 2015, Delaware became an all-urban State, along
with New Jersey and Rhode Island, and was subject to an imputed floor
as well. In addition, we adopted a policy, as reflected at Sec.
412.64(h)(4)(vi), that, for discharges on or after October 1, 2012, and
before October 1, 2018, the minimum wage index value for a State is the
higher of the value determined under the original methodology or the
value determined under the alternative methodology. The regulations
implementing the imputed floor wage index, both the original
methodology and the alternative methodology, were set forth at Sec.
412.64(h)(4).
Section 9831 of the American Rescue Plan Act of 2021 (Pub. L. 117-
2) enacted on March 11, 2021 amended section 1886(d)(3)(E)(i) of the
Act (42 U.S.C. 1395ww(d)(3)(E)(i)) and added section 1886(d)(3)(E)(iv)
of the Act to establish a minimum area wage index for hospitals in all-
urban States for discharges occurring on or after October 1, 2021.
Specifically, section 1886(d)(3)(E)(iv)(I) and (II) of the Act provides
that for discharges occurring on or after October 1, 2021, the area
wage index applicable to any hospital in an all-urban State may not be
less than the minimum area wage index for the fiscal year for hospitals
in that State established using the methodology described in Sec.
412.64(h)(4)(vi) as in effect for FY 2018. Thus, effective beginning
October 1, 2021 (FY 2022), section 1886(d)(3)(E)(iv) of the Act
reinstates the imputed floor wage index policy for all-urban States,
with no expiration date, using the methodology described in 42 CFR
412.64(h)(4)(vi) as in effect for FY 2018. As discussed previously,
under Sec. 412.64(h)(4)(vi), the minimum wage index value for
hospitals in an all-urban State is the higher of the value determined
using the original methodology (as set forth at Sec. 412.64(h)(4)(i)
through (v)) or the value determined using alternative methodology (as
set forth at Sec. 412.64(h)(4)(vi)(A) and (B)) for calculating an
imputed floor. Therefore, as provided in Sec. 412.64(h)(vi), we would
apply the higher of the value determined under original or alternative
methodology for calculating a minimum wage index, or imputed floor, for
all-urban States effective beginning with FY 2022. We note that the
rural floor values used in the alternative methodology at Sec.
412.64(h)(4)(vi)(A) and (B) would not include the wage data of
hospitals reclassified under Sec. 412.103, because we currently
calculate the rural floor without the wage data of such hospitals.
Unlike the imputed floor that was in effect from FYs 2005 through
2018, section 1886(d)(3)(E)(iv)(III) of the Act provides that the
imputed floor wage index shall not be applied in a budget neutral
manner. Specifically, section 9831(b) of Public Law 117-2 amends
section 1886(d)(3)(E)(i) of the Act to exclude the imputed floor from
the budget neutrality requirement under section 1886(d)(3)(E)(i) of the
Act. In other words, the budget neutrality requirement under section
1886(d)(3)(E)(i) of the Act, as amended, must be applied without taking
into account the imputed floor adjustment under section
1886(d)(3)(E)(iv) of the Act. When the imputed floor was in effect from
FY 2005 through FY 2018, to budget neutralize the increase in payments
resulting from application of the imputed floor, we calculated the
increase in payments resulting from the imputed floor together with the
increase in payments resulting from the rural floor and applied an
adjustment to reduce the wage index. By contrast, for FY 2022 and
subsequent years, we are proposing to apply the imputed floor after the
application of the rural floor and to apply no reductions to the
standardized amount or to the wage index to fund the increase in
payments to hospitals in all-urban States resulting from the
application of the imputed floor required under section
1886(d)(3)(E)(iv) of the Act.
We note, given the recent enactment of section 9831 of Public Law
117-2 on March 11, 2021, there was not sufficient time available to
incorporate the changes required by this statutory provision (which
provides for the application of the imputed floor adjustment in a non-
budget neutral manner beginning in FY 2022) into the calculation of the
provider wage index for this proposed rule. We will include the imputed
floor adjustment in the calculation of the provider wage index in the
FY 2022 final rule. We note that CMS has posted, concurrent with the
issuance of this proposed rule, estimated imputed floor values by state
in a separate data file on the FY 2022 IPPS Proposed Rule web page on
the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index, and an aggregate payment
impact for the imputed floor in the Appendix to this proposed rule.
The imputed floor under section 1886(d)(3)(E)(iv) of the Act
applies to all-urban States, as defined in new subclause (IV). Section
1886(d)(3)(E)(iv)(IV) provides that, for purposes of the imputed floor
wage index under clause (iv), the term all-urban State means a State in
which there are no rural areas (as defined in section 1886(d)(2)(D) of
the Act) or a State in which there are no hospitals classified as rural
under section 1886 of the Act. Under this definition, given that it
applies for purposes of the imputed floor wage index, we believe it
would be appropriate to consider a hospital to be classified as rural
under section 1886 of the Act if it is assigned the State's rural area
wage index value.
[[Page 25407]]
Therefore, under the definition at section 1886(d)(3)(E)(iv)(IV) of the
Act, ``a State in which there are no hospitals classified as rural
under this section'' would include a State that has a rural area but no
hospitals that receive the rural area wage index under section 1886(d)
of the Act. For purposes of this definition, hospitals redesignated as
rural under section 1886(d)(8)(E) of the Act (412.103 rural
reclassifications) would be considered classified as rural if they
receive the rural wage index; however, hospitals that are deemed urban
under section 1886(d)(8)(B) of the Act (in Lugar counties), or are
reclassified to an urban area under section 1886(d)(10) of the Act
(MGCRB reclassifications) would not be considered classified as rural
because they do not receive the rural wage index. In contrast, we note
that in the imputed floor policy in effect from FY 2005 through FY
2018, we did not consider a State to qualify for ``all urban status''
if there were one or more hospitals geographically located in the rural
area of the State, even if all such hospitals subsequently reclassified
to receive an urban area wage index. There is currently one State,
Connecticut, that would be eligible for the imputed floor under this
qualification in this proposed rule because there are currently no
hospitals in Connecticut that are classified as rural under section
1886(d) for purposes of the wage index--in other words, there are no
hospitals that receive the rural wage index value. There is one rural
county in Connecticut. All hospitals in this county are either deemed
urban under section 1886(d)(8)(B) of the Act or receive an MGCRB
reclassification under section 1886(d)(10) of the Act. While several
Connecticut hospitals were approved for rural reclassification under
section 1886(d)(8)(E) of the Act, at this point in time, all have
received a subsequent urban reclassification under section 1886(d)(10)
of the Act.
Additionally, under section 1861(x) of the Act, the term State has
the meaning given to it in section 210(h) of the Act. Because section
210(h) of the Act defines the word State to also include the District
of Columbia and the Commonwealth of Puerto Rico, Washington, DC and
Puerto Rico may also qualify as all-urban States for purposes of the
imputed floor if the requirements of section 1886(d)(3)(E)(iv)(IV) of
the Act are met. Based on data available for this proposed rule, the
following States would be all-urban States as defined in section
1886(d)(3)(E)(iv)(IV) of the Act, and thus hospitals in such States
would be eligible to receive an increase in their wage index due to
application of the imputed floor for FY 2022: New Jersey, Rhode Island,
Delaware, Connecticut, and Washington, DC.
We are proposing to revise the regulations at Sec. 412.64(e)(1)
and (4) and (h)(4) and (5) to implement the imputed floor required by
section 1886(d)(3)(E)(iv) of the Act for discharges occurring on or
after October 1, 2021. First, we propose to make the following
revisions to the regulation text to specify that the imputed floor
required under section 1886(d)(3)(E)(iv) of the Act would not be
applied in a budget neutral manner:
We are proposing to revise the introductory language at
Sec. 412.64(e)(4) to state that the budget neutrality adjustment for
the imputed floor under paragraph (h)(4) applies only to discharges on
or after October 1, 2004 and before October 1, 2018.
We are proposing a conforming revision to Sec.
412.64(e)(1)(ii) to refer to Sec. 412.64(h)(4)(vii) (proposed in this
proposed rule) in the introductory phrase that excepts certain
provisions from the budget neutrality requirement specified in
paragraph (e)(1)(ii).
We are proposing to revise Sec. 412.64(h)(4) to add a new
clause (vii) stating that, for discharges on or after October 1, 2021,
the minimum wage index computed under this paragraph may not be applied
in a budget neutral manner.
In addition, we are proposing to revise the introductory language
at Sec. 412.64(h)(4) to specify that the minimum wage index and
methodology described in that paragraph also apply for discharges on or
after October 1, 2021. Further, we are proposing to revise Sec.
412.64(h)(4)(vi) to specify that this clause also applies to discharges
on or after October 1, 2021.
Finally, we are proposing to make the following revisions to Sec.
412.64(h)(5). First, we are proposing to redesignate the current
language at Sec. 412.64(h)(5) as Sec. 412.64(h)(5)(i) and to revise
this language to reflect that it applies for purposes of applying the
imputed floor for discharges on or after October 1, 2004 and before
October 1, 2018. Second, we are proposing to add a new clause (ii) to
Sec. 412.64(h)(5) to reflect the proposed definition of all-urban
State for purposes of applying the imputed floor for discharges on or
after October 1, 2021, as previously discussed. Specifically, we are
proposing at Sec. 412.64(h)(5)(ii) that, for purposes of applying the
imputed floor for discharges on or after October 1, 2021, an all-urban
State is a State with no rural areas, as defined in Sec. 412.64, or a
State in which there are no hospitals classified as rural under section
1886 of the Act. We are further proposing at Sec. 412.64(h)(5)(ii)
that a hospital would be considered classified as rural under section
1886 of the Act if it is assigned the State's rural area wage index
value.
3. State Frontier Floor for FY 2022
Section 10324 of Public Law 111-148 requires that hospitals in
frontier States cannot be assigned a wage index of less than 1.0000.
(We refer readers to the regulations at 42 CFR 412.64(m) and to a
discussion of the implementation of this provision in the FY 2011 IPPS/
LTCH PPS final rule (75 FR 50160 through 50161).) In this FY 2022 IPPS/
LTCH PPS proposed rule, we are not proposing any changes to the
frontier floor policy for FY 2022. In this proposed rule, 44 hospitals
would receive the frontier floor value of 1.0000 for their FY 2022
proposed wage index. These hospitals are located in Montana, North
Dakota, South Dakota, and Wyoming. We note that while Nevada meets the
criteria of a frontier State, all hospitals within the State currently
receive a wage index value greater than 1.0000.
The areas affected by the rural and frontier floor policies for the
proposed FY 2022 wage index are identified in Table 2 associated with
this proposed rule, which is available via the internet on the CMS
website.
4. Continuation of the Low Wage Index Hospital Policy; Proposed Budget
Neutrality Adjustment
To help mitigate wage index disparities, including those resulting
from the inclusion of hospitals with rural reclassifications under 42
CFR 412.103 in the rural floor, in the FY 2020 IPPS/LTCH PPS final rule
(84 FR 42325 through 42339), we finalized policies to reduce the
disparity between high and low wage index hospitals by increasing the
wage index values for certain hospitals with low wage index values and
doing so in a budget neutral manner through an adjustment applied to
the standardized amounts for all hospitals, as well as by changing the
calculation of the rural floor. We also provided for a transition in FY
2020 for hospitals experiencing significant decreases in their wage
index values as compared to their final FY 2019 wage index, and made
these changes in a budget neutral manner.
We increase the wage index for hospitals with a wage index value
below the 25th percentile wage index value for a fiscal year by half
the difference between the otherwise applicable final wage index value
for a year for that
[[Page 25408]]
hospital and the 25th percentile wage index value for that year across
all hospitals (the low wage index hospital policy). We stated in the FY
2020 IPPS/LTCH PPS final rule (84 FR 42326 through 42328) that this
policy will be effective for at least 4 years, beginning in FY 2020, in
order to allow employee compensation increases implemented by these
hospitals sufficient time to be reflected in the wage index
calculation. Therefore, the policy will continue in FY 2022. In order
to offset the estimated increase in IPPS payments to hospitals with
wage index values below the 25th percentile wage index value, for FY
2022 and for subsequent fiscal years during which the low wage index
hospital policy is in effect, we are proposing to apply a budget
neutrality adjustment in the same manner as we applied it in FY 2021,
as a uniform budget neutrality factor applied to the standardized
amount. We refer readers to section II.A.4.b.of the addendum to this
proposed rule for further discussion of the budget neutrality
adjustment for FY 2022. For purposes of the low wage index hospital
policy, based on the data for this proposed rule, the table below
displays the 25th percentile wage index value across all hospitals for
FY 2022.
[GRAPHIC] [TIFF OMITTED] TP10MY21.230
H. Proposed FY 2022 Wage Index Tables
In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49498 and 49807
through 49808), we finalized a proposal to streamline and consolidate
the wage index tables associated with the IPPS proposed and final rules
for FY 2016 and subsequent fiscal years. Effective beginning FY 2016,
with the exception of Table 4E, we streamlined and consolidated 11
tables (Tables 2, 3A, 3B, 4A, 4B, 4C, 4D, 4F, 4J, 9A, and 9C) into 2
tables (Tables 2 and 3). In this FY 2022 IPPS/LTCH PPS proposed rule,
as provided beginning with the FY 2021 IPPS/LTCH PPS final rule, we
have included Table 4A which is titled ``List of Counties Eligible for
the Out-Migration Adjustment under Section 1886(d)(13) of the Act'' and
Table 4B titled ``Counties redesignated under section 1886(d)(8)(B) of
the Act (Lugar Counties).'' We refer readers to section VI. of the
Addendum to this proposed rule for a discussion of the wage index
tables for FY 2022.
I. Proposed Revisions to the Wage Index Based on Hospital
Redesignations and Reclassifications
1. General Policies and Effects of Reclassification and Redesignation
Under section 1886(d)(10) of the Act, the Medicare Geographic
Classification Review Board (MGCRB) considers applications by hospitals
for geographic reclassification for purposes of payment under the IPPS.
Hospitals must apply to the MGCRB to reclassify not later than 13
months prior to the start of the fiscal year for which reclassification
is sought (usually by September 1). We note that this deadline was
extended for applications for FY 2022 reclassifications to 15 days
after the public display date of the FY 2021 IPPS/LTCH final rule at
the Office of the Federal Register, using our authority under Section
1135(b)(5) the Act due to the COVID-19 Public Health Emergency.
Generally, hospitals must be proximate to the labor market area to
which they are seeking reclassification and must demonstrate
characteristics similar to hospitals located in that area. The MGCRB
issues its decisions by the end of February for reclassifications that
become effective for the following fiscal year (beginning October 1).
The regulations applicable to reclassifications by the MGCRB are
located in 42 CFR 412.230 through 412.280. (We refer readers to a
discussion in the FY 2002 IPPS final rule (66 FR 39874 and 39875)
regarding how the MGCRB defines mileage for purposes of the proximity
requirements.) The general policies for reclassifications and
redesignations and the policies for the effects of hospitals'
reclassifications and redesignations on the wage index are discussed in
the FY 2012 IPPS/LTCH PPS final rule for the FY 2012 final wage index
(76 FR 51595 and 51596). We note that rural hospitals reclassifying
under the MGCRB to another State's rural area are not eligible for the
rural floor, because the rural floor may apply only to urban, not
rural, hospitals.
In addition, in the FY 2012 IPPS/LTCH PPS final rule, we discussed
the effects on the wage index of urban hospitals reclassifying to rural
areas under 42 CFR 412.103. In the FY 2020 IPPS/LTCH PPS final rule (84
FR 42332 through 42336), we finalized a policy to exclude the wage data
of urban hospitals reclassifying to rural areas under 42 CFR 412.103
from the calculation of the rural floor. Hospitals that are
geographically located in States without any rural areas are ineligible
to apply for rural reclassification in accordance with the provisions
of 42 CFR 412.103.
On April 21, 2016, we published an interim final rule with comment
period (IFC) in the Federal Register (81 FR 23428 through 23438) that
included provisions amending our regulations to allow hospitals
nationwide to have simultaneous Sec. 412.103 and MGCRB
reclassifications. For reclassifications effective beginning FY 2018, a
hospital may acquire rural status under Sec. 412.103 and subsequently
apply for a reclassification under the MGCRB using distance and average
hourly wage criteria designated for rural hospitals. In addition, we
provided that a hospital that has an active MGCRB reclassification and
is then approved for redesignation under Sec. 412.103 will not lose
its MGCRB reclassification; such a hospital receives a reclassified
urban wage index during the years of its active MGCRB reclassification
and is still considered rural under section 1886(d) of the Act and for
other purposes.
We discussed that when there is both a Sec. 412.103 redesignation
and an MGCRB reclassification, the MGCRB reclassification controls for
wage index calculation and payment purposes. We exclude hospitals with
Sec. 412.103 redesignations from the calculation of the reclassified
rural wage index if they also have an active MGCRB reclassification to
another area. That is, if an application for urban reclassification
through the MGCRB is approved, and is not withdrawn or terminated by
the hospital within the established timelines, we consider the
hospital's geographic CBSA and the urban CBSA to which the hospital is
reclassified under the MGCRB for the wage index calculation. We refer
readers to the April 21, 2016 IFC (81 FR 23428 through 23438) and the
FY 2017 IPPS/LTCH PPS final rule (81 FR 56922
[[Page 25409]]
through 56930) for a full discussion of the effect of simultaneous
reclassifications under both the Sec. 412.103 and the MGCRB processes
on wage index calculations. For a discussion on the effects of
reclassifications under Sec. 412.103 on the rural area wage index and
the calculation of the rural floor, we refer readers to the FY 2020
IPPS/LTCH PPS final rule (84 FR 42332 through 42336).
We refer readers to the interim final rule with comment period
(IFC) (CMS-1762-IFC) simultaneously submitted for public inspection
with this proposed rule and published elsewhere in this issue of the
Federal Register implementing the court's decision in Bates Cnty. Mem'l
Hosp.(``Bates'') v. Azar for further changes to the treatment of Sec.
412.103 hospitals reclassifying under the MGCRB.
2. MGCRB Reclassification and Redesignation Issues for FY 2022
a. FY 2022 Reclassification Application Requirements and Approvals
As previously stated, under section 1886(d)(10) of the Act, the
MGCRB considers applications by hospitals for geographic
reclassification for purposes of payment under the IPPS. The specific
procedures and rules that apply to the geographic reclassification
process are outlined in regulations under 42 CFR 412.230 through
412.280. At the time this proposed rule was drafted, the MGCRB had
completed its review of FY 2022 reclassification requests. Based on
such reviews, there are 496 hospitals approved for wage index
reclassifications by the MGCRB starting in FY 2022. Because MGCRB wage
index reclassifications are effective for 3 years, for FY 2022,
hospitals reclassified beginning in FY 2020 or FY 2021 are eligible to
continue to be reclassified to a particular labor market area based on
such prior reclassifications for the remainder of their 3-year period.
There were 245 hospitals approved for wage index reclassifications in
FY 2020 that will continue for FY 2022, and 317 hospitals approved for
wage index reclassifications in FY 2021 that will continue for FY 2022.
Of all the hospitals approved for reclassification for FY 2020, FY
2021, and FY 2022, based upon the review at the time of this proposed
rule, 1,058 hospitals are in a MGCRB reclassification status for FY
2022 (with 161 of these hospitals reclassified back to their geographic
location).
Under the regulations at 42 CFR 412.273, hospitals that have been
reclassified by the MGCRB are permitted to withdraw their applications
if the request for withdrawal is received by the MGCRB any time before
the MGCRB issues a decision on the application, or after the MGCRB
issues a decision, provided the request for withdrawal is received by
the MGCRB within 45 days of the date that CMS' annual notice of
proposed rulemaking is issued in the Federal Register concerning
changes to the inpatient hospital prospective payment system and
proposed payment rates for the fiscal year for which the application
has been filed. For information about withdrawing, terminating, or
canceling a previous withdrawal or termination of a 3-year
reclassification for wage index purposes, we refer readers to Sec.
412.273, as well as the FY 2002 IPPS final rule (66 FR 39887 through
39888) and the FY 2003 IPPS final rule (67 FR 50065 through 50066).
Additional discussion on withdrawals and terminations, and
clarifications regarding reinstating reclassifications and ``fallback''
reclassifications were included in the FY 2008 IPPS final rule (72 FR
47333) and the FY 2018 IPPS/LTCH PPS final rule (82 FR 38148 through
38150).
Finally, we note that in the FY 2021 IPPS/LTCH final rule (85 FR
58771-58778), CMS finalized an assignment policy for hospitals
reclassified to CBSAs from which one or more counties moved to a new or
different urban CBSA under the revised OMB delineations based on OMB
Bulletin 18-04. We provided a table in that rule (85 FR 58777 and
58778) which described the assigned CBSA for all the MGCRB cases
subject to this policy. For such reclassifications that continue to be
active or are reinstated for FY 2022 (and FY 2023, if applicable), the
CBSAs assigned in the FY 2021 IPPS/LTCH final rule continue to be in
effect.
b. Proposed Revisions to the Regulations at Sec. 412.278 for
Administrator's Review
The regulation at Sec. 412.278(b) addresses the procedure for a
hospital's request for the Administrator's review of an MGCRB decision.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58788), we eliminated
the prohibition on submitting a request by facsimile or other
electronic means so that hospitals may also submit requests for
Administrator review of MGCRB decisions electronically. In addition, we
updated the regulation at Sec. 412.278(b)(1) to require the hospital
to submit an electronic copy of its request for review to CMS's
Hospital and Ambulatory Policy Group. We specified that copies to CMS'
Hospital and Ambulatory Policy Group should be submitted via email to
wage [email protected]. In this proposed rule, we are proposing to
further revise the regulation at Sec. 412.278(b)(1) to specify that
the hospital's request for review must be in writing and sent to the
Administrator, in care of the Office of the Attorney Advisor, in the
manner directed by the Office of the Attorney Advisor. We believe that
this additional language would provide clarity and specificity by
addressing any changes to the future technology platform for submission
of the hospital's request for Administrator review. Hospitals will
continue to be notified of the procedure for requesting Administrator
review in the decision letters issued by the MGCRB.
The regulation at Sec. 412.278(f)(2) addresses the timing for the
Administrator's decision. Specifically, the Administrator issues a
decision in writing to the party with a copy to CMS not later than 90
calendar days following the receipt of the party's request for review
(Sec. 412.278(f)(2)(i)), or not later than 105 calendar days following
issuance of the MGCRB decision in the case of review at the discretion
of the Administrator (Sec. 412.278(f)(2)(ii)). While the regulation at
Sec. 412.278(f)(2)(i) allows the Administrator to toll the 90 day
timeframe for good cause, the regulation at Sec. 412.278(f)(2)(ii)
does not expressly provide for tolling the 105 day timeframe in the
case of review at the discretion of the Administrator. We believe the
policy regarding tolling should be the same regardless of whether the
Administrator exercises review at the request of the hospital or at her
discretion. Therefore, we are proposing to also provide for tolling of
the 105 day timeframe at Sec. 412.278(f)(2)(ii). Specifically, we are
proposing to revise Sec. 412.278(f)(2)(ii) to state that the
Administrator issues a decision in writing to the party with a copy to
CMS not later than 105 days following issuance of the MGCRB decision in
the case of review at the discretion of the Administrator, except the
Administrator may, at his or her discretion, for good cause shown, toll
such 105 days.
3. Redesignations Under Section 1886(d)(8)(B) of the Act (Lugar Status
Determinations)
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51599 through
51600), we adopted the policy that, beginning with FY 2012, an eligible
hospital that waives its Lugar status in order to receive the out-
migration adjustment has effectively waived its deemed urban status
and, thus, is rural for all purposes under the IPPS effective for the
fiscal year in which the hospital receives the outmigration adjustment.
In addition, in
[[Page 25410]]
that rule, we adopted a minor procedural change that would allow a
Lugar hospital that qualifies for and accepts the out-migration
adjustment (through written notification to CMS within 45 days from the
publication of the proposed rule) to waive its urban status for the
full 3-year period for which its out-migration adjustment is effective.
By doing so, such a Lugar hospital would no longer be required during
the second and third years of eligibility for the out-migration
adjustment to advise us annually that it prefers to continue being
treated as rural and receive the out-migration adjustment. In the FY
2017 IPPS/LTCH PPS final rule (81 FR 56930), we further clarified that
if a hospital wishes to reinstate its urban status for any fiscal year
within this 3-year period, it must send a request to CMS within 45 days
of publication of the proposed rule for that particular fiscal year. We
indicated that such reinstatement requests may be sent electronically
to wage[email protected]. In the FY 2018 IPPS/LTCH PPS final rule (82
FR 38147 through 38148), we finalized a policy revision to require a
Lugar hospital that qualifies for and accepts the out-migration
adjustment, or that no longer wishes to accept the out-migration
adjustment and instead elects to return to its deemed urban status, to
notify CMS within 45 days from the date of public display of the
proposed rule at the Office of the Federal Register. These revised
notification timeframes were effective beginning October 1, 2017. In
addition, in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38148), we
clarified that both requests to waive and to reinstate ``Lugar'' status
may be sent to wage[email protected]. To ensure proper accounting, we
request hospitals to include their CCN, and either ``waive Lugar'' or
``reinstate Lugar'', in the subject line of these requests.
In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42314 and 42315), we
clarified that in circumstances where an eligible hospital elects to
receive the outmigration adjustment within 45 days of the public
display date of the proposed rule at the Office of the Federal Register
in lieu of its Lugar wage index reclassification, and the county in
which the hospital is located would no longer qualify for an out-
migration adjustment when the final rule (or a subsequent correction
notice) wage index calculations are completed, the hospital's request
to accept the outmigration adjustment would be denied, and the hospital
would be automatically assigned to its deemed urban status under
section 1886(d)(8)(B) of the Act. We stated that final rule wage index
values would be recalculated to reflect this reclassification, and in
some instances, after taking into account this reclassification, the
out-migration adjustment for the county in question could be restored
in the final rule. However, as the hospital is assigned a Lugar
reclassification under section 1886(d)(8)(B) of the Act, it would be
ineligible to receive the county outmigration adjustment under section
1886(d)(13)(G) of the Act.
J. Proposed Out-Migration Adjustment Based on Commuting Patterns of
Hospital Employees
In accordance with section 1886(d)(13) of the Act, as added by
section 505 of Public Law 108-173, beginning with FY 2005, we
established a process to make adjustments to the hospital wage index
based on commuting patterns of hospital employees (the ``out-
migration'' adjustment). The process, outlined in the FY 2005 IPPS
final rule (69 FR 49061), provides for an increase in the wage index
for hospitals located in certain counties that have a relatively high
percentage of hospital employees who reside in the county but work in a
different county (or counties) with a higher wage index.
Section 1886(d)(13)(B) of the Act requires the Secretary to use
data the Secretary determines to be appropriate to establish the
qualifying counties. When the provision of section 1886(d)(13) of the
Act was implemented for the FY 2005 wage index, we analyzed commuting
data compiled by the U.S. Census Bureau that were derived from a
special tabulation of the 2000 Census journey-to-work data for all
industries (CMS extracted data applicable to hospitals). These data
were compiled from responses to the ``long-form'' survey, which the
Census Bureau used at that time and which contained questions on where
residents in each county worked (69 FR 49062). However, the 2010 Census
was ``short form'' only; information on where residents in each county
worked was not collected as part of the 2010 Census. The Census Bureau
worked with CMS to provide an alternative dataset based on the latest
available data on where residents in each county worked in 2010, for
use in developing a new outmigration adjustment based on new commuting
patterns developed from the 2010 Census data beginning with FY 2016.
To determine the out-migration adjustments and applicable counties
for FY 2016, we analyzed commuting data compiled by the Census Bureau
that were derived from a custom tabulation of the American Community
Survey (ACS), an official Census Bureau survey, utilizing 2008 through
2012 (5-year) Microdata. The data were compiled from responses to the
ACS questions regarding the county where workers reside and the county
to which workers commute. As we discussed in prior IPPS/LTCH PPS final
rules, most recently in the FY 2021 IPPS/LTCH PPS final rule (85 FR
58787), we have applied the same policies, procedures, and computations
since FY 2012. We are proposing to use them again for FY 2022, as we
believe they continue to be appropriate. We refer readers to the FY
2016 IPPS/LTCH PPS final rule (80 FR 49500 through 49502) for a full
explanation of the revised data source.
For FY 2022, the out-migration adjustment will continue to be based
on the data derived from the custom tabulation of the ACS utilizing
2008 through 2012 (5-year) Microdata. For future fiscal years, we may
consider determining out-migration adjustments based on data from the
next Census or other available data, as appropriate. For FY 2022, we
are not proposing any changes to the methodology or data source that we
used for FY 2016 (81 FR 25071). (We refer readers to a full discussion
of the out-migration adjustment, including rules on deeming hospitals
reclassified under section 1886(d)(8) or section 1886(d)(10) of the Act
to have waived the out-migration adjustment, in the FY 2012 IPPS/LTCH
PPS final rule (76 FR 51601 through 51602).)
Table 2 associated with this proposed rule (which is available via
the internet on the CMS website) includes the proposed out-migration
adjustments for the FY 2022 wage index. In addition, Table 4A
associated with this proposed rule, ``List of Counties Eligible for the
Out-Migration Adjustment under Section 1886(d)(13) of the Act'' (also
available via the internet on the CMS website) consists of the
following: A list of counties that are eligible for the out-migration
adjustment for FY 2022 identified by FIPS county code, the proposed FY
2022 out-migration adjustment, and the number of years the adjustment
will be in effect.
K. Reclassification From Urban to Rural Under Section 1886(d)(8)(E) of
the Act Implemented at 42 CFR 412.103
1. Application for Rural Status and Lock-In Date
Under section 1886(d)(8)(E) of the Act, a qualifying prospective
payment hospital located in an urban area may
[[Page 25411]]
apply for rural status for payment purposes separate from
reclassification through the MGCRB. Specifically, section 1886(d)(8)(E)
of the Act provides that, not later than 60 days after the receipt of
an application (in a form and manner determined by the Secretary) from
a subsection (d) hospital that satisfies certain criteria, the
Secretary shall treat the hospital as being located in the rural area
(as defined in paragraph (2)(D)) of the State in which the hospital is
located. We refer readers to the regulations at 42 CFR 412.103 for the
general criteria and application requirements for a subsection (d)
hospital to reclassify from urban to rural status in accordance with
section 1886(d)(8)(E) of the Act. The FY 2012 IPPS/LTCH PPS final rule
(76 FR 51595 through 51596) includes our policies regarding the effect
of wage data from reclassified or redesignated hospitals. We refer
readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42332 through
42336) for a discussion on our current policy to calculate the rural
floor without the wage data of urban hospitals reclassifying to rural
areas under 42 CFR 412.103.
Because the wage index is part of the methodology for determining
the prospective payments to hospitals for each fiscal year, we stated
in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56931) that we believed
there should be a definitive timeframe within which a hospital must
apply for rural status in order for the reclassification to be
reflected in the next Federal fiscal year's wage data used for setting
payment rates. Therefore, in the FY 2017 IPPS/LTCH PPS final rule (81
FR 56931 through 56932), we revised Sec. 412.103(b) by adding
paragraph (6) to add a lock-in date by which a hospital's application
for rural status must be filed in order to be treated as rural in the
wage index and budget neutrality calculations for payment rates for the
next Federal fiscal year. In the FY 2019 IPPS/LTCH PPS final rule (83
FR 41384 through 41386), we changed the lock-in date to provide for
additional time in the ratesetting process and to match the lock-in
date with another existing deadline, the usual public comment deadline
for the IPPS proposed rule. We revised Sec. 412.103(b)(6) to specify
that, in order for a hospital to be treated as rural in the wage index
and budget neutrality calculations under Sec. 412.64(e)(1)(ii), (e)(2)
and (4), and (h) for payment rates for the next Federal fiscal year,
the hospital's application must be approved by the CMS Regional Office
in accordance with the requirements of Sec. 412.103 no later than 60
days after the public display date at the Office of the Federal
Register of the IPPS proposed rule for the next Federal fiscal year.
The lock-in date does not affect the timing of payment changes
occurring at the hospital-specific level as a result of
reclassification from urban to rural under Sec. 412.103. As we
discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56931) and the
FY 2019 IPPS/LTCH PPS final rule (83 FR 41385 through 41386), this
lock-in date also does not change the current regulation that allows
hospitals that qualify under Sec. 412.103(a) to request, at any time
during a cost reporting period, to reclassify from urban to rural. A
hospital's rural status and claims payment reflecting its rural status
continue to be effective on the filing date of its reclassification
application, which is the date the CMS Regional Office receives the
application, in accordance with Sec. 412.103(d). The hospital's IPPS
claims will be paid reflecting its rural status beginning on the filing
date (the effective date) of the reclassification, regardless of when
the hospital applies.
2. Proposed Changes to Cancellation Requirements at Sec. 412.103(g)
In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42322), we noted
that if an application is approved by the CMS Regional Office after our
ratesetting lock-in date, the final rule rural wage index value would
most likely not include the data for this hospital in the ratesetting
calculation. Therefore, we noted that this may incentivize relatively
low wage index hospitals to time their applications to avoid reducing
the State's rural wage index. These hospitals could then conceivably
cancel their rural reclassifications (effective for next FY), and then
reapply again after the `lock-in date.' We stated in the FY 2020 IPPS/
LTCH PPS final rule that we planned to monitor this situation over the
course of FY 2020, and determine if it is necessary to take action to
prevent this type of gaming in future rulemaking.
We stated in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58788)
that hospitals in certain states were indeed timing their rural
reclassifications and applications to exploit the rural
reclassification process in order to obtain higher wage index values.
For example, for FY 2020, at least twenty-one hospitals in one State
obtained Sec. 412.103 rural reclassifications after the FY 2020 lock-
in date, effectively receiving their State's rural wage index without
having their wage data included, which would have lowered their State's
rural wage index. These hospitals then requested to cancel their Sec.
412.103 rural reclassifications effective for FY 2021, in accordance
with Sec. 412.103(g)(3). Similarly, five hospitals in another State,
hospitals with wage data that would have lowered their State's FY 2021
rural wage index, requested to cancel their Sec. 412.103 rural
reclassifications for FY 2021, so that the rural wage index would be
set using the data of one geographically rural hospital and two
hospitals reclassified under Sec. 412.103 that withdrew their MGCRB
reclassifications for FY 2021. All five of these hospitals that
withdrew their rural reclassification effective October 1, 2021 have
since reapplied and been approved for rural reclassification. At least
a dozen additional hospitals in this State were also approved for rural
reclassification during FY 2021. By timing their applications to be
approved after the lock-in date, these hospitals are receiving a higher
rural wage index without having their own data included in the rural
wage index calculation. We believe this practice of applying for and
canceling rural reclassification to manipulate a State's rural wage
index is detrimental to the stability and the accuracy of the Medicare
wage index system.
In the FY 2008 IPPS/LTCH final rule (72 FR 47371 through 47373),
CMS addressed an issue of hospitals applying for rural reclassification
and then requesting cancelation soon after approval. Certain hospitals
were using rural reclassifications to obtain RRC status, then canceling
their rural reclassification so they could obtain an MGCRB
reclassification, and using their prior RRC status in order to benefit
from favorable MGCRB reclassification rules. To address this, CMS
finalized a policy that required such hospitals to maintain rural
status for one full cost reporting year before their rural
reclassification could be canceled (cancelation was not effective until
the hospital had been paid as rural for at least one 12-month cost-
reporting period, and not until the beginning of the FY following the
request for cancelation and the 12-month cost reporting period (Sec.
412.103(g)(2)(ii)). As discussed in the FY 2008 IPPS/LTCH proposed rule
(72 FR 24812), we stated that we believed this policy was reasonable,
given that acquired rural status for IPPS hospitals should be a
considered decision for hospitals that truly wish to be considered as
rural, and not purely as a mechanism for reclassifying. In the April
21, 2016 interim final rule with comment period (81 FR 23428 through
23438)), CMS implemented provisions amending our regulations to allow
[[Page 25412]]
hospitals nationwide to have simultaneous Sec. 412.103 and MGCRB
reclassifications. In the FY 2020 IPPS/LTCH final rule (42320 through
42321), CMS removed the requirement that RRCs must be paid as rural for
one cost reporting year before canceling rural reclassification, as
there no longer was an incentive to obtain and then cancel rural
reclassification status to obtain an MGCRB reclassification. However,
given our observations over the past two fiscal years of a new form of
wage index gaming, as described in the previous paragraph, we believe
it is necessary and appropriate to adopt a similar measure to prevent
rural reclassifications from being used purely as a mechanism for
statewide wage index manipulation.
Specifically, we are proposing that requests to cancel rural
reclassifications must be submitted to the CMS Regional Office not
earlier than one calendar year after the reclassification effective
date. For example, a hospital that was approved to receive a rural
reclassification effective October 1, 2021 would not be eligible to
request cancelation until October 1, 2022. We are also proposing an
additional modification to the effective date of these cancelation
requests. Currently, all rural reclassification requests must be
submitted not less than 120 days before the end of a fiscal year (that
is, assuming the fiscal year ends on September 30th, no cancellation
requests may be submitted after June 2nd and before October 1st). This
timeframe typically aligns closely with the rural reclassification
lock-in date under Sec. 412.103(b)(6) (the hospital's rural
reclassification application must be approved by the CMS Regional
Office no later than 60 days after the public display date of the IPPS/
LTCH PPS proposed rule at the Office of the Federal Register in order
for a hospital to be treated as rural in the wage index and budget
neutrality calculations for the next Federal fiscal year). The lock-in
date and the 120 day cancelation deadline provide timeframes within
which a hospital must be approved for rural reclassification (to have
its rural status included in the wage index and budget neutrality
calculations for the next fiscal year) or request cancelation of rural
status, respectively, and also give CMS adequate time to incorporate
these changes in the wage index and budget neutrality calculations
under Sec. 412.64(e)(1)(ii), (e)(2) and (4), and (h) for payment rates
for the next Federal fiscal year. Rural reclassifications are effective
as of the date the application is received (Sec. 412.103(b)(5), (d)),
and CMS Regional Offices are required to render a determination within
60 days of receipt of the application (Sec. 412.103(c)). We believe
that even with the proposed one-year minimum reclassification period
before cancelation can be requested, there still would be a possibility
that hospitals could time their applications around the lock-in date
and 120 day deadline to continue to manipulate the State's rural wage
index calculation. For example, assuming the lock-in date for a given
year was May 30th (that is, the date by which the Regional Office must
approve the application in order for the rural reclassification to be
included in the wage index and budget neutrality calculations for the
upcoming fiscal year), a hospital may choose to apply for rural
reclassification on May 25th, virtually assuring that it could not be
approved in time to be considered for wage index development purposes
for the upcoming fiscal year. Assuming our one-year minimum
reclassification period proposal is finalized, the hospital could
request cancelation on May 25th the following year. Since that date
would be prior to 120 day cancelation deadline, a hospital could once
again cancel its rural reclassification, then reapply for rural
reclassification status, and once again receive the rural wage index
for the upcoming fiscal year while excluding its own wage data from the
calculation. To address this rural wage index manipulation, we are
proposing to eliminate the current rule at Sec. 412.103(g)(3) (that
cancelation must be requested 120 days prior to the end of the fiscal
year and is effective beginning with the next fiscal year) and replace
it with a policy that ensures that a hospital approved for rural
reclassification (and that does not receive an additional
reclassification) would have its data included in the calculation of
the rural wage index for at least one Federal fiscal year before the
rural reclassification status could be canceled. Specifically, we are
proposing to make cancellation requests effective for the Federal
fiscal year that begins in the calendar year after the calendar year in
which the cancelation request is submitted. For example, we are
proposing that a cancelation request submitted on December 31, 2021
would be effective October 1, 2022. But a cancellation request
submitted one day later on January 1, 2022 would not become effective
until October 1, 2023.
Specifically, we are proposing to add 412.103(g)(4) to state that
for all written requests submitted by hospitals on or after October, 1,
2021 to cancel rural reclassifications, a hospital may cancel its rural
reclassification by submitting a written request to the CMS Regional
Office not less than 1 calendar year after the effective date of the
rural reclassification. The hospital's cancellation of its rural
reclassification would be effective beginning the Federal fiscal year
that begins in the calendar year following the calendar year in which
the cancelation request is submitted. We are also proposing to make
conforming revisions to Sec. 412.103(g)(3) to reflect that the rule in
Sec. 412.103(g)(3) applies to requests for cancelation of rural
reclassification submitted on or after October 1, 2019 and before
October 1, 2021.
We considered an alternative policy to increase the current 120 day
cancelation deadline to a sufficient number of days to ensure that
hospitals could not time applications and cancelations to straddle the
lock-in date. Given the floating nature of the lock-in date due to the
publication of the proposed rule varying year to year, it is difficult
to determine how long that period would need to be in order to ensure
our policy goals of preventing rural wage index manipulation are met.
We acknowledge that our proposals would increase the amount of time a
hospital must retain rural reclassification before it could cancel that
status. However, we do not believe these proposed changes would have an
undue impact on hospitals. In the FY 2021 final rule, 81 percent of
hospitals with rural reclassifications were assigned a wage index based
on an MGCRB or ``Lugar'' reclassification, and would not receive a wage
index based on their rural reclassification.\933\ Another 11 percent
received a rural wage index value that was greater than or equal to
their geographically urban area. Since these hospitals are typically
benefiting by maintaining rural reclassification status, we do not
believe they would be negatively affected by our proposals. More than
half of the remaining 9 percent of hospitals with rural
reclassifications do so to maintain MDH or SCH status. These special
statuses convey additional financial benefits to hospitals and are not
typically or routinely canceled by hospitals. We note that in the FY
2008 IPPS/LTCH final rule (72 FR 47372), we addressed a comment that
expressed concern that the proposed requirement that a hospital must
maintain rural status for at least a full 12 months could adversely
affect hospitals with SCH
[[Page 25413]]
status since the payment rate as a rural SCH may be only slightly
higher than the urban Federal rate. Since the form of wage index
manipulation addressed by the proposed policy in FY 2008 specifically
involved hospitals acquiring rural status to become RRCs, CMS opted to
limit the policy finalized in FY 2008 to RRCs only. By contrast, the
form of wage index manipulation we are addressing in this proposed rule
is not limited to any specific hospital type. Therefore, we believe it
is appropriate to apply it to all hospitals with rural reclassification
status. We believe the proposed policy of requiring that rural
reclassification be in effect for at least one year before cancelation
can be requested, and the proposed policy to make rural
reclassification cancelations effective beginning the Federal fiscal
year that begins in the calendar year after the calendar year in which
the cancelation request is submitted would reduce the instances of wage
index manipulation described previously, as well as reduce volatility
and promote accuracy in overall wage index values by ensuring that
hospitals that are being paid a State's rural wage index are eventually
included, when applicable, in that rural wage index calculation. We
note that this form of manipulation (hospitals canceling rural status
to remove their wage data from the rural wage index calculation)
resulted in the rural wage index for one state increasing by over 4
percent between the FY 2020 proposed rule and the FY 2020 final rule.
Based on our analysis, that figure could have been significantly
greater (as high as 10 percent) in certain States. We further believe
these proposed policies provide adequate time for hospitals to review
their reclassification status and make appropriate decisions for future
fiscal years. Hospitals that meet the proposed one-year minimum
requirement in proposed Sec. 412.103(g)(4) would have opportunity
between the publication date of the final rule (and potential
correction notices) and the end of the calendar year to evaluate
whether to cancel or maintain their rural status for the next fiscal
year.
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\933\ ``Lugar'' hospitals may reclassify as rural and retain the
urban wage index deemed under section 1886(d)(8)(B) of the Act, as
discussed in the FY 2017 IPPS/LTCH final rule (81 FR 56929).
---------------------------------------------------------------------------
3. Modification of Limitations on Redesignation by the Medicare
Geographic Classification Review Board Interim Final Rule (CMS-1762-
IFC) to implement Bates Co. v. Azar Adverse Court Decision
In the interim final rule with comment period (IFC) (CMS-1762-IFC)
simultaneously submitted for public inspection with this proposed rule
and publishing elsewhere in this issue of the Federal Register, CMS
made regulatory changes in order to align our policy with the decision
in Bates County Memorial Hospital v. Azar, 464 F. Supp. 3d 43 (D.D.C.
2020). Specifically, the IFC revised the regulations at Sec. 412.230
to allow hospitals with a rural redesignation under Section
1886(d)(8)(E) to reclassify under the MGCRB using the rural
reclassified area as the geographic area in which the hospital is
located effective with reclassifications beginning with fiscal year
(FY) 2023. We would also apply the policy in the IFC when deciding
timely appeals before the Administrator of applications for
reclassifications beginning with FY 2022 that were denied by the MGCRB
due to the policy in effect prior to the IFC, which did not permit
hospitals with rural redesignations to use the rural area's wage data
for purposes of reclassifying under the MGCRB.
L. Process for Requests for Wage Index Data Corrections
1. Process for Hospitals To Request Wage Index Data Corrections
The preliminary, unaudited Worksheet S-3 wage data files for the
proposed FY 2022 wage index were made available on May 18, 2020 and the
preliminary CY 2019 occupational mix data files for the proposed FY
2022 wage index were made available on September 8, 2020 through the
internet on the CMS website at: https://www.cms.gov/medicaremedicare-fee-service-paymentacuteinpatientppswage-index-files/fy-2022-wage-index-home-page.
On January 29, 2021, we posted a public use file (PUF) at: https://www.cms.gov/medicaremedicare-fee-service-paymentacuteinpatientppswage-index-files/fy-2022-wage-index-home-page containing FY 2022 wage index
data available as of January 28, 2021. This PUF contains a tab with the
Worksheet S-3 wage data (which includes Worksheet S-3, Parts II and III
wage data from cost reporting periods beginning on or after October 1,
2017 through September 30, 2018; that is, FY 2018 wage data), a tab
with the occupational mix data (which includes data from the CY 2019
occupational mix survey, Form CMS-10079), a tab containing the
Worksheet S-3 wage data of hospitals deleted from the January 29, 2021
wage data PUF, and a tab containing the CY 2019 occupational mix data
of the hospitals deleted from the January 29, 2021 occupational mix
PUF. In a memorandum dated January 22, 2021, we instructed all MACs to
inform the IPPS hospitals that they service of the availability of the
January 29, 2021 wage index data PUFs, and the process and timeframe
for requesting revisions in accordance with the FY 2022 Wage Index
Timetable.
In the interest of meeting the data needs of the public, beginning
with the proposed FY 2009 wage index, we post an additional PUF on the
CMS website that reflects the actual data that are used in computing
the proposed wage index. The release of this file does not alter the
current wage index process or schedule. We notify the hospital
community of the availability of these data as we do with the current
public use wage data files through our Hospital Open Door Forum. We
encourage hospitals to sign up for automatic notifications of
information about hospital issues and about the dates of the Hospital
Open Door Forums at the CMS website at: https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums.
In a memorandum dated April 14, 2020, we instructed all MACs to
inform the IPPS hospitals that they service of the availability of the
preliminary wage index data files posted on May 18, 2020, the
requirement to submit the new CY 2019 occupational mix surveys by
August 3, 2020 and the process and timeframe for requesting revisions.
Subsequently, in a memorandum dated July 31, 2020, we revised the date
hospitals were required to submit the new CY 2019 occupational mix
surveys from August 3, 2020 to September 3, 2020, the date the
preliminary CY 2019 occupational mix survey data files were scheduled
to be posted from August 6, 2020 to September 8, 2020 and the timeframe
for requesting revisions to the new CY 2019 occupational mix survey
data.
If a hospital wished to request a change to its data as shown in
the May 18, 2020 preliminary wage data files (or September 8, 2020
preliminary CY 2019 occupational mix survey data files), the hospital
had to submit corrections along with complete, detailed supporting
documentation to its MAC so that the MAC received them by September 3,
2020 (or by September 10, 2020 for preliminary CY 2019 occupational mix
survey data files). Hospitals were notified of these deadlines and of
all other deadlines and requirements, including the requirement to
review and verify their data as posted in the preliminary wage index
data files on the internet, through the letters sent to them by their
MACs. November 16, 2020 was the deadline for MACs to complete all desk
reviews for hospital wage and occupational mix data and transmit
revised Worksheet S-3 wage data and occupational mix data to CMS.
November 5, 2020 was the date by when MACs notified State hospital
[[Page 25414]]
associations regarding hospitals that failed to respond to issues
raised during the desk reviews. Additional revisions made by the MACs
were transmitted to CMS throughout January 2021. CMS published the wage
index PUFs that included hospitals' revised wage index data on January
29, 2021. Hospitals had until February 16, 2021, to submit requests to
the MACs to correct errors in the January 29, 2021 PUF due to CMS or
MAC mishandling of the wage index data, or to revise desk review
adjustments to their wage index data as included in the January 29,
2021 PUF. Hospitals also were required to submit sufficient
documentation to support their requests. Hospitals' requests and
supporting documentation must be received by the MAC by the February
deadline (that is, by February 16, 2021 for the FY 2021 wage index).
After reviewing requested changes submitted by hospitals, MACs were
required to transmit to CMS any additional revisions resulting from the
hospitals' reconsideration requests by March 19, 2021. Under our
current policy as adopted in the FY 2018 IPPS/LTCH PPS final rule (82
FR 38153), the deadline for a hospital to request CMS intervention in
cases where a hospital disagreed with a MAC's handling of wage data on
any basis (including a policy, factual, or other dispute) was April 2,
2021. Data that were incorrect in the preliminary or January 29, 2021
wage index data PUFs, but for which no correction request was received
by the February 16, 2021 deadline, are not considered for correction at
this stage. In addition, April 2, 2021 was the deadline for hospitals
to dispute data corrections made by CMS of which the hospital was
notified after the January 29, 2021 PUF and at least 14 calendar days
prior to April 2, 2021 (that is, March 19, 2021), that do not arise
from a hospital's request for revisions. The hospital's request and
supporting documentation must be received by CMS (and a copy received
by the MAC) by the April deadline (that is, by April 2, 2021 for the FY
2022 wage index). We refer readers to the wage index timeline for
complete details.
Hospitals are given the opportunity to examine Table 2 associated
with this proposed rule, which is listed in section VI. of the Addendum
to the proposed rule and available via the internet on the CMS website
at: https://www.cms.gov/medicare/acute-inpatient-pps/fy-2022-ipps-proposed-rule-home-page. Table 2 associated with the proposed rule
contains each hospital's proposed adjusted average hourly wage used to
construct the wage index values for the past 3 years, including the
proposed FY 2022 wage index which was constructed from FY 2018 data..
We note that the proposed hospital average hourly wages shown in Table
2 only reflected changes made to a hospital's data that were
transmitted to CMS by early February 2021.
We plan to post the final wage index data PUFs in late April 2021
on the CMS website at: https://www.cms.gov/medicaremedicare-fee-service-paymentacuteinpatientppswage-index-files/fy-2022-wage-index-home-page. The April 2021 PUFs are made available solely for the
limited purpose of identifying any potential errors made by CMS or the
MAC in the entry of the final wage index data that resulted from the
correction process previously described (the process for disputing
revisions submitted to CMS by the MACs by March 19, 2021, and the
process for disputing data corrections made by CMS that did not arise
from a hospital's request for wage data revisions as discussed
earlier).
After the release of the April 2021 wage index data PUFs, changes
to the wage and occupational mix data can only be made in those very
limited situations involving an error by the MAC or CMS that the
hospital could not have known about before its review of the final wage
index data files. Specifically, neither the MAC nor CMS will approve
the following types of requests:
Requests for wage index data corrections that were
submitted too late to be included in the data transmitted to CMS by the
MACs on or before March 19, 2021.
Requests for correction of errors that were not, but could
have been, identified during the hospital's review of the January 29,
2021 wage index PUFs.
Requests to revisit factual determinations or policy
interpretations made by the MAC or CMS during the wage index data
correction process.
If, after reviewing the April 2021 final wage index data PUFs, a
hospital believes that its wage or occupational mix data are incorrect
due to a MAC or CMS error in the entry or tabulation of the final data,
the hospital is given the opportunity to notify both its MAC and CMS
regarding why the hospital believes an error exists and provide all
supporting information, including relevant dates (for example, when it
first became aware of the error). The hospital is required to send its
request to CMS and to the MAC so that it is received no later than May
28, 2021. May 28, 2021 is also the deadline for hospitals to dispute
data corrections made by CMS of which the hospital is notified on or
after 13 calendar days prior to April 2, 2021 (that is, March 20,
2021), and at least 14 calendar days prior to May 28, 2021 (that is,
May 14, 2021), that do not arise from a hospital's request for
revisions. (Data corrections made by CMS of which a hospital was
notified on or after 13 calendar days prior to May 28, 2021 (that is,
May 15, 2021) may be appealed to the Provider Reimbursement Review
Board (PRRB)). In accordance with the FY 2022 wage index timeline
posted on the CMS website at: https://www.cms.gov/files/document/fy-2022-hospital-wage-index-development-time-table.pdf, the May appeals
are required to be sent via mail and email to CMS and the MACs. We
refer readers to the wage index timeline for complete details.
Verified corrections to the wage index data received timely (that
is, by May 28, 2021) by CMS and the MACs will be incorporated into the
final FY 2022 wage index, which will be effective October 1, 2021.
We created the processes previously described to resolve all
substantive wage index data correction disputes before we finalize the
wage and occupational mix data for the FY 2022 payment rates.
Accordingly, hospitals that do not meet the procedural deadlines set
forth earlier will not be afforded a later opportunity to submit wage
index data corrections or to dispute the MAC's decision with respect to
requested changes. Specifically, our policy is that hospitals that do
not meet the procedural deadlines as previously set forth (requiring
requests to MACs by the specified date in February and, where such
requests are unsuccessful, requests for intervention by CMS by the
specified date in April) will not be permitted to challenge later,
before the PRRB, the failure of CMS to make a requested data revision.
We refer readers also to the FY 2000 IPPS final rule (64 FR 41513) for
a discussion of the parameters for appeals to the PRRB for wage index
data corrections. As finalized in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38154 through 38156), this policy also applies to a hospital
disputing corrections made by CMS that do not arise from a hospital's
request for a wage index data revision. That is, a hospital disputing
an adjustment made by CMS that did not arise from a hospital's request
for a wage index data revision is required to request a correction by
the first applicable deadline. Hospitals that do not meet the
procedural deadlines set forth earlier will not be afforded a later
opportunity to submit wage index data corrections or to dispute CMS'
decision with respect to changes.
[[Page 25415]]
Again, we believe the wage index data correction process described
earlier provides hospitals with sufficient opportunity to bring errors
in their wage and occupational mix data to the MAC's attention.
Moreover, because hospitals had access to the final wage index data
PUFs by late April 2021, they have an opportunity to detect any data
entry or tabulation errors made by the MAC or CMS before the
development and publication of the final FY 2022 wage index by August
2021, and the implementation of the FY 2022 wage index on October 1,
2021. Given these processes, the wage index implemented on October 1
should be accurate. Nevertheless, in the event that errors are
identified by hospitals and brought to our attention after May 28,
2021, we retain the right to make midyear changes to the wage index
under very limited circumstances.
Specifically, in accordance with 42 CFR 412.64(k)(1) of our
regulations, we make midyear corrections to the wage index for an area
only if a hospital can show that: (1) The MAC or CMS made an error in
tabulating its data; and (2) the requesting hospital could not have
known about the error or did not have an opportunity to correct the
error, before the beginning of the fiscal year. For purposes of this
provision, ``before the beginning of the fiscal year'' means by the May
deadline for making corrections to the wage data for the following
fiscal year's wage index (for example, May 28, 2021 for the FY 2022
wage index). This provision is not available to a hospital seeking to
revise another hospital's data that may be affecting the requesting
hospital's wage index for the labor market area. As indicated earlier,
because CMS makes the wage index data available to hospitals on the CMS
website prior to publishing both the proposed and final IPPS rules, and
the MACs notify hospitals directly of any wage index data changes after
completing their desk reviews, we do not expect that midyear
corrections will be necessary. However, under our current policy, if
the correction of a data error changes the wage index value for an
area, the revised wage index value will be effective prospectively from
the date the correction is made.
In the FY 2006 IPPS final rule (70 FR 47385 through 47387 and
47485), we revised 42 CFR 412.64(k)(2) to specify that, effective on
October 1, 2005, that is, beginning with the FY 2006 wage index, a
change to the wage index can be made retroactive to the beginning of
the Federal fiscal year only when CMS determines all of the following:
(1) The MAC or CMS made an error in tabulating data used for the wage
index calculation; (2) the hospital knew about the error and requested
that the MAC and CMS correct the error using the established process
and within the established schedule for requesting corrections to the
wage index data, before the beginning of the fiscal year for the
applicable IPPS update (that is, by the May 28, 2021 deadline for the
FY 2022 wage index); and (3) CMS agreed before October 1 that the MAC
or CMS made an error in tabulating the hospital's wage index data and
the wage index should be corrected.
In those circumstances where a hospital requested a correction to
its wage index data before CMS calculated the final wage index (that
is, by the May 28, 2021 deadline for the FY 2022 wage index), and CMS
acknowledges that the error in the hospital's wage index data was
caused by CMS' or the MAC's mishandling of the data, we believe that
the hospital should not be penalized by our delay in publishing or
implementing the correction. As with our current policy, we indicated
that the provision is not available to a hospital seeking to revise
another hospital's data. In addition, the provision cannot be used to
correct prior years' wage index data; it can only be used for the
current Federal fiscal year. In situations where our policies would
allow midyear corrections other than those specified in 42 CFR
412.64(k)(2)(ii), we continue to believe that it is appropriate to make
prospective-only corrections to the wage index.
We note that, as with prospective changes to the wage index, the
final retroactive correction will be made irrespective of whether the
change increases or decreases a hospital's payment rate. In addition,
we note that the policy of retroactive adjustment will still apply in
those instances where a final judicial decision reverses a CMS denial
of a hospital's wage index data revision request.
2. Process for Data Corrections by CMS After the January 29 Public Use
File (PUF)
The process set forth with the wage index timeline discussed in
section III.L.1. of the preamble of this proposed rule allows hospitals
to request corrections to their wage index data within prescribed
timeframes. In addition to hospitals' opportunity to request
corrections of wage index data errors or MACs' mishandling of data, CMS
has the authority under section 1886(d)(3)(E) of the Act to make
corrections to hospital wage index and occupational mix data in order
to ensure the accuracy of the wage index. As we explained in the FY
2016 IPPS/LTCH PPS final rule (80 FR 49490 through 49491) and the FY
2017 IPPS/LTCH PPS final rule (81 FR 56914), section 1886(d)(3)(E) of
the Act requires the Secretary to adjust the proportion of hospitals'
costs attributable to wages and wage-related costs for area differences
reflecting the relative hospital wage level in the geographic areas of
the hospital compared to the national average hospital wage level. We
believe that, under section 1886(d)(3)(E) of the Act, we have
discretion to make corrections to hospitals' data to help ensure that
the costs attributable to wages and wage-related costs in fact
accurately reflect the relative hospital wage level in the hospitals'
geographic areas.
We have an established multistep, 15-month process for the review
and correction of the hospital wage data that is used to create the
IPPS wage index for the upcoming fiscal year. Since the origin of the
IPPS, the wage index has been subject to its own annual review process,
first by the MACs, and then by CMS. As a standard practice, after each
annual desk review, CMS reviews the results of the MACs' desk reviews
and focuses on items flagged during the desk review, requiring that, if
necessary, hospitals provide additional documentation, adjustments, or
corrections to the data. This ongoing communication with hospitals
about their wage data may result in the discovery by CMS of additional
items that were reported incorrectly or other data errors, even after
the posting of the January 29 PUF, and throughout the remainder of the
wage index development process. In addition, the fact that CMS analyzes
the data from a regional and even national level, unlike the review
performed by the MACs that review a limited subset of hospitals, can
facilitate additional editing of the data that may not be readily
apparent to the MACs. In these occasional instances, an error may be of
sufficient magnitude that the wage index of an entire CBSA is affected.
Accordingly, CMS uses its authority to ensure that the wage index
accurately reflects the relative hospital wage level in the geographic
area of the hospital compared to the national average hospital wage
level, by continuing to make corrections to hospital wage data upon
discovering incorrect wage data, distinct from instances in which
hospitals request data revisions.
We note that CMS corrects errors to hospital wage data as
appropriate, regardless of whether that correction will raise or lower
a hospital's average hourly wage. For example, as discussed
[[Page 25416]]
in section III.C. of the preamble of the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41364), in situations where a hospital did not have
documentable salaries, wages, and hours for housekeeping and dietary
services, we imputed estimates, in accordance with policies established
in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49965 through 49967).
Furthermore, if CMS discovers after conclusion of the desk review, for
example, that a MAC inadvertently failed to incorporate positive
adjustments resulting from a prior year's wage index appeal of a
hospital's wage-related costs such as pension, CMS would correct that
data error and the hospital's average hourly wage would likely increase
as a result.
While we maintain CMS' authority to conduct additional review and
make resulting corrections at any time during the wage index
development process, in accordance with the policy finalized in the FY
2018 IPPS/LTCH PPS final rule (82 FR 38154 through 38156) and as first
implemented with the FY 2019 wage index (83 FR 41389), hospitals are
able to request further review of a correction made by CMS that did not
arise from a hospital's request for a wage index data correction.
Instances where CMS makes a correction to a hospital's data after the
January 29 PUF based on a different understanding than the hospital
about certain reported costs, for example, could potentially be
resolved using this process before the final wage index is calculated.
We believe this process and the timeline for requesting review of such
corrections (as described earlier and in the FY 2018 IPPS/LTCH PPS
final rule) promote additional transparency to instances where CMS
makes data corrections after the January 29 PUF, and provide
opportunities for hospitals to request further review of CMS changes in
time for the most accurate data to be reflected in the final wage index
calculations. These additional appeals opportunities are described
earlier and in the FY 2022 Wage Index Development Time Table, as well
as in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38154 through 38156).
M. Proposed Labor-Related Share for the FY 2022 Wage Index
Section 1886(d)(3)(E) of the Act directs the Secretary to adjust
the proportion of the national prospective payment system base payment
rates that are attributable to wages and wage-related costs by a factor
that reflects the relative differences in labor costs among geographic
areas. It also directs the Secretary to estimate from time to time the
proportion of hospital costs that are labor-related and to adjust the
proportion (as estimated by the Secretary from time to time) of
hospitals' costs that are attributable to wages and wage-related costs
of the DRG prospective payment rates. We refer to the portion of
hospital costs attributable to wages and wage-related costs as the
labor-related share. The labor-related share of the prospective payment
rate is adjusted by an index of relative labor costs, which is referred
to as the wage index.
Section 403 of Public Law 108-173 amended section 1886(d)(3)(E) of
the Act to provide that the Secretary must employ 62 percent as the
labor-related share unless this would result in lower payments to a
hospital than would otherwise be made. However, this provision of
Public Law 108-173 did not change the legal requirement that the
Secretary estimate from time to time the proportion of hospitals' costs
that are attributable to wages and wage-related costs. Thus, hospitals
receive payment based on either a 62-percent labor-related share, or
the labor-related share estimated from time to time by the Secretary,
depending on which labor-related share resulted in a higher payment.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38158 through
38175), we rebased and revised the hospital market basket. We
established a 2014-based IPPS hospital market basket to replace the FY
2010-based IPPS hospital market basket, effective October 1, 2017.
Using the 2014-based IPPS market basket, we finalized a labor-related
share of 68.3 percent for discharges occurring on or after October 1,
2017. In addition, in FY 2018, we implemented this revised and rebased
labor-related share in a budget neutral manner (82 FR 38522). However,
consistent with section 1886(d)(3)(E) of the Act, we did not take into
account the additional payments that would be made as a result of
hospitals with a wage index less than or equal to 1.0000 being paid
using a labor-related share lower than the labor-related share of
hospitals with a wage index greater than 1.0000. In the FY 2021 IPPS/
LTCH PPS final rule (85 FR 58793), for FY 2021, we continued to use a
labor-related share of 68.3 percent for discharges occurring on or
after October 1, 2020.
As described in section IV. of the preamble of this proposed rule,
effective beginning FY 2022, we are proposing to rebase and revise the
IPPS market basket to reflect a 2018 base year. We also are proposing
to recalculate the labor-related share for discharges occurring on or
after October 1, 2021 using the proposed 2018-based IPPS market basket.
As discussed in Appendix A of this proposed rule, we are proposing this
rebased and revised labor -related share in a budget neutral manner.
However, consistent with section 1886(d)(3)(E) of the Act, we would not
take into account the additional payments that would be made as a
result of hospitals with a wage index less than or equal to 1.0000
being paid using a labor-related share lower than the labor-related
share of hospitals with a wage index greater than 1.0000.
The labor-related share is used to determine the proportion of the
national IPPS base payment rate to which the area wage index is
applied. We include a cost category in the labor-related share if the
costs are labor intensive and vary with the local labor market. As
described in section IV. of the preamble of this proposed rule,
beginning with FY 2022, we are proposing to include in the labor-
related share the national average proportion of operating costs that
are attributable to the following cost categories in the proposed 2018-
based IPPS market basket: Wages and Salaries; Employee Benefits;
Professional Fees: Labor-Related; Administrative and Facilities Support
Services; Installation, Maintenance, and Repair Services; and All Other
Labor-Related Services, as measured in the proposed 2018-based IPPS
market basket. Therefore, for FY 2022, we are proposing to use a labor-
related share of 67.6 percent for discharges occurring on or after
October 1, 2021.
As discussed in section V.B. of the preamble of this proposed rule,
prior to January 1, 2016, Puerto Rico hospitals were paid based on 75
percent of the national standardized amount and 25 percent of the
Puerto Rico-specific standardized amount. As a result, we applied the
Puerto Rico-specific labor-related share percentage and nonlabor-
related share percentage to the Puerto Rico-specific standardized
amount. Section 601 of the Consolidated Appropriations Act, 2016 (Pub.
L. 114-113) amended section 1886(d)(9)(E) of the Act to specify that
the payment calculation with respect to operating costs of inpatient
hospital services of a subsection (d) Puerto Rico hospital for
inpatient hospital discharges on or after January 1, 2016, shall use
100 percent of the national standardized amount. Because Puerto Rico
hospitals are no longer paid with a Puerto Rico-specific standardized
amount as of January 1, 2016, under section 1886(d)(9)(E) of the Act as
amended by section 601 of the Consolidated Appropriations Act, 2016,
there is no longer a need for us to calculate a Puerto Rico-specific
labor-related share percentage and nonlabor-related share percentage
for application
[[Page 25417]]
to the Puerto Rico-specific standardized amount. Hospitals in Puerto
Rico are now paid 100 percent of the national standardized amount and,
therefore, are subject to the national labor-related share and
nonlabor-related share percentages that are applied to the national
standardized amount. Accordingly, for FY 2022, we are not proposing a
Puerto Rico-specific labor-related share percentage or a nonlabor-
related share percentage.
Tables 1A and 1B, which are published in section VI. of the
Addendum to this FY 2022 IPPS/LTCH PPS proposed rule and available via
the internet on the CMS website, reflect the proposed national labor-
related share, which is also applicable to Puerto Rico hospitals. For
FY 2022, for all IPPS hospitals (including Puerto Rico hospitals) whose
wage indexes are less than or equal to 1.0000, we are proposing to
apply the wage index to a labor-related share of 62 percent of the
national standardized amount. For all IPPS hospitals (including Puerto
Rico hospitals) whose wage indexes are greater than 1.000, for FY 2022,
we are proposing to apply the wage index to the proposed labor-related
share of 67.6 percent of the national standardized amount.
IV. Proposed Rebasing and Revising of the Hospital Market Baskets for
Acute Care Hospitals
A. Background
Effective for cost reporting periods beginning on or after July 1,
1979, we developed and adopted a hospital input price index (that is,
the hospital market basket for operating costs). Although ``market
basket'' technically describes the mix of goods and services used in
providing hospital care, this term is also commonly used to denote the
input price index (that is, cost category weights and price proxies
combined) derived from that market basket. Accordingly, the term
``market basket'' as used in this document refers to the hospital input
price index.
The percentage change in the market basket reflects the average
change in the price of goods and services hospitals purchase in order
to provide inpatient care. We first used the market basket to adjust
hospital cost limits by an amount that reflected the average increase
in the prices of the goods and services used to provide hospital
inpatient care. This approach linked the increase in the cost limits to
the efficient utilization of resources.
Since the inception of the IPPS, the projected change in the
hospital market basket has been the integral component of the update
factor by which the prospective payment rates are updated every year.
An explanation of the hospital market basket used to develop the
prospective payment rates was published in the Federal Register on
September 1, 1983 (48 FR 39764). We also refer readers to the FY 2018
IPPS/LTCH PPS final rule (82 FR 38158 through 38175) in which we
discussed the most recent previous rebasing of the hospital input price
index.
The hospital market basket is a fixed-weight, Laspeyres-type price
index. A Laspeyres-type price index measures the change in price, over
time, of the same mix of goods and services purchased in the base
period. Any changes in the quantity or mix of goods and services (that
is, intensity) purchased over time are not measured.
The index itself is constructed in three steps. First, a base
period is selected (in this proposed rule, we are proposing to use 2018
as the base period) and total base period expenditures are estimated
for a set of mutually exclusive and exhaustive spending categories, and
the proportion of total costs that each category represents are
calculated. These proportions are called ``cost weights'' or
``expenditure weights.'' Second, each expenditure category is matched
to an appropriate price or wage variable, referred to as a ``price
proxy.'' In almost every instance, these price proxies are derived from
publicly available statistical series that are published on a
consistent schedule (preferably at least on a quarterly basis).
Finally, the expenditure weight for each cost category is multiplied by
the level of its respective price proxy. The sum of these products
(that is, the expenditure weights multiplied by their price index
levels) for all cost categories yields the composite index level of the
market basket in a given period. Repeating this step for other periods
produces a series of market basket levels over time. Dividing an index
level for a given period by an index level for an earlier period
produces a rate of growth in the input price index over that timeframe.
As previously noted, the market basket is described as a fixed-
weight index because it represents the change in price over time of a
constant mix (quantity and intensity) of goods and services needed to
provide hospital services. The effects on total expenditures resulting
from changes in the mix of goods and services purchased subsequent to
the base period are not measured. For example, a hospital hiring more
nurses to accommodate the needs of patients would increase the volume
of goods and services purchased by the hospital, but would not be
factored into the price change measured by a fixed-weight hospital
market basket. Only when the index is rebased would changes in the
quantity and intensity be captured, with those changes being reflected
in the cost weights. Therefore, we rebase the market basket
periodically so that the cost weights reflect recent changes in the mix
of goods and services that hospitals purchase (hospital inputs) to
furnish inpatient care between base periods.
We last rebased the hospital market basket cost weights effective
for FY 2018 (82 FR 38158 through 38175), with 2014 data used as the
base period for the construction of the market basket cost weights. For
this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing to rebase
the IPPS operating market basket to reflect the 2018 cost structure for
IPPS hospitals and to revise applicable cost categories and price
proxies used to determine the IPPS market basket, as discussed in this
rule. We are also proposing to rebase and revise the Capital Input
Price Index (CIPI) as described in section IV.D. of the preamble of
this proposed rule.
B. Rebasing and Revising the IPPS Market Basket
The terms ``rebasing'' and ``revising,'' while often used
interchangeably, actually denote different activities. ``Rebasing''
means moving the base year for the structure of costs of an input price
index (for example, in this proposed rule, we are proposing to shift
the base year cost structure for the IPPS hospital index from 2014 to
2018). ``Revising'' means changing data sources or price proxies used
in the input price index. As published in the FY 2006 IPPS final rule
(70 FR 47387), in accordance with section 404 of Public Law 108-173,
CMS determined a new frequency for rebasing the hospital market basket.
We established a rebasing frequency of every 4 years and, therefore,
for the FY 2022 IPPS update, we are proposing to rebase and revise the
IPPS market basket from 2014 to 2018. We are inviting public comments
on our proposed methodology.
1. Development of Cost Categories and Weights
a. Use of Medicare Cost Report Data
The major source of expenditure data for developing the proposed
rebased and revised hospital market basket cost weights is the 2018
Medicare cost reports. These 2018 Medicare cost reports are for cost
reporting periods beginning on and after October 1, 2017
[[Page 25418]]
and before October 1, 2018. We are proposing to use 2018 as the base
year because we believe that the 2018 Medicare cost reports represent
the most recent, complete set of Medicare cost report data available to
develop cost weights for IPPS hospitals at the time of rulemaking. We
believe it is important to regularly rebase and revise the IPPS market
basket to reflect more recent data. Historically, the cost weights
change minimally from year to year as they represent percent of total
operating costs rather than cost levels; however, given the COVID-19
public health emergency we will continue to monitor the upcoming
Medicare cost report data to see if a more frequent rebasing schedule
is necessary than our current schedule of every 4 years. As was done in
previous rebasings, these cost reports are from IPPS hospitals only
(hospitals excluded from the IPPS and CAHs are not included) and are
based on IPPS Medicare-allowable operating costs. IPPS Medicare-
allowable operating costs are costs that are eligible to be paid under
the IPPS. For example, the IPPS market basket excludes home health
agency (HHA) costs as these costs would be paid under the HHA PPS and,
therefore, these costs are not IPPS Medicare-allowable costs.
The current set of instructions for the Medicare cost reports for
hospitals (Form 2552-10, OMB Control Number 0938-0050) can be found in
Chapter 40 at the following website (https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935,
accessed February 17, 2021). As described in these instructions,
effective for cost reporting periods beginning on or after October 1,
2015, Worksheet S-3, Part II was revised to add lines 14.01, 14.02,
25.50, 25.51, 25.52, and 25.53, to enhance the wage index data
collection. This modification was made for Transmittal 10 and is
specifically highlighted in the instructions, which can be found at the
following website: (https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R10P240.pdf, accessed February 17,
2021). Therefore, as noted later in this section, for the 2018-based
IPPS market basket, we are proposing to use these more detailed lines
for the development of the market basket cost categories. These
detailed lines were not available at the time we finalized the 2014-
based IPPS market basket.
We are proposing to derive costs for eight major expenditures or
cost categories for the 2018-based IPPS market basket from the CMS
Medicare cost reports (Form 2552-10, OMB Control Number 0938-0050):
Wages and Salaries, Employee Benefits, Contract Labor, Pharmaceuticals,
Professional Liability Insurance (Malpractice), Blood and Blood
Products, Home Office/Related Organization Contract Labor, and a
residual ``All Other'' category. The residual ``All Other'' category
reflects all remaining costs that are not captured in the other seven
cost categories. These are the same major cost categories from the
Medicare cost reports that were derived for the 2014-based IPPS market
basket. In this rule, we describe the detailed methodology for
obtaining costs for each of the seven cost categories directly
determined from the Medicare cost reports.
In order to create a market basket that is representative of IPPS
hospitals serving Medicare patients and to help ensure accurate major
cost weights (which is the percent of total Medicare-allowable
operating costs, as defined in this rule), we propose to apply edits to
remove reporting errors and outliers. Specifically, the IPPS Medicare
cost reports used to calculate the market basket cost weights exclude
any providers that reported costs less than or equal to zero for the
following categories: Total Medicare inpatient costs (Worksheet D, Part
I, column 1, line 49); Medicare PPS payments (Worksheet E, Part A,
column 1, line 59); Total salary costs (Worksheet S-3, Part II, column
2, line 1). We also limited our sample to providers that had a Medicare
cost reporting period that was between 10 and 14 months. The final
sample used included roughly 3,200 Medicare cost reports (about 94
percent of the universe of IPPS Medicare cost reports for 2018). The
sample of providers is representative of the national universe of
providers by ownership-type (proprietary, nonprofit, and government)
and by urban/rural status.
First, we are proposing to calculate total Medicare-allowable
operating costs for each hospital. We are proposing that total
Medicare-allowable operating costs are equal to noncapital costs
(Worksheet B, Part I, column 26 less Worksheet B, Part II, column 26)
that are attributable to the Medicare-allowable cost centers of the
hospital. We are proposing that Medicare-allowable cost centers are
lines 30 through 35, 50 through 60, 62 through 76, 90, 91, 92.01, 93,
96 and 97. This is the same general methodology that was used for the
2014-based IPPS market basket. However, we note that for the
development of the 2018-based IPPS market basket, we conducted a
detailed review of the cost centers and are now proposing to include
lines 52, 96, and 97 when deriving total Medicare-allowable operating
costs as these reflect Medicare-allowable services that are reimbursed
under the IPPS.
(1) Wages and Salaries Costs
To derive wages and salaries costs for the Medicare-allowable cost
centers, we are proposing to first calculate total unadjusted wages and
salaries costs as reported on Worksheet S-3, Part II, column 4, line 1.
We are then proposing to remove the wages and salaries attributable to
non-Medicare-allowable cost centers (that is, excluded areas) as well
as a portion of overhead wages and salaries attributable to these
excluded areas. This is the same general methodology that was used to
derive wages and salaries costs for the 2014-based IPPS market basket.
However, we note that we are proposing minor changes to the Medicare
cost report lines that are used to derive excluded area wages and
salaries as well as overhead wages and salaries attributable to these
areas as described in this rule as we believe these represent a
technical improvement to the Medicare cost report lines used for the
2014-based IPPS market basket. The description of the detailed
methodology used for the 2014-based IPPS market basket was provided in
the FY 2018 IPPS/LTCH final rule (82 FR 38159).
Specifically, we are proposing to calculate excluded area wages and
salaries as equal to the sum of Worksheet S-3, Part II, column 4, lines
3, 4.01, 5, 6, 7, 7.01, 8, 9, and 10 less Worksheet A, column 1, lines
20 and 23. Overhead wages and salaries are attributable to the entire
IPPS facility. Therefore, we are proposing to only include the
proportion attributable to the Medicare-allowable cost centers.
Specifically, we are proposing to estimate the proportion of overhead
wages and salaries that are not attributable to Medicare-allowable
costs centers (that is, excluded areas) by first calculating the ratio
of total Medicare-allowable operating costs as previously defined to
total facility operating costs (Worksheet B, Part I, column 26, line
202 less Worksheet B, Part I, column 0, lines 1 and 2). We then are
proposing to multiply this ratio by total overhead wages and salaries
(Worksheet S-3, Part II, column 4, lines 26, 27, 29 through 32, 34, and
36 through 43).
Therefore, the proposed wages and salaries costs are equal to total
wages and salaries costs less: (a) Excluded area wages and salaries
costs and b) overhead wages and salaries costs attributable to the
excluded areas.
[[Page 25419]]
(2) Employee Benefits Costs
We are proposing to derive employee benefits costs using a similar
methodology as the wages and salaries costs; that is, reflecting
employee benefits costs attributable to the Medicare-allowable cost
centers. First, we calculate total unadjusted employee benefits costs
as the sum of Worksheet S-3, Part II, column 4, lines 17, 18, 20, 22,
and 25.52. The 2014-based IPPS market basket used Worksheet S-3, Part
II, column 4, lines 17, 18, 20 and 22 to derive the costs for this
category. As described previously, line 25.52 reflects a newly added
line to Worksheet S-3, Part II since the development of the 2014-based
IPPS market basket.
We then exclude those employee benefits attributable to the
overhead wages and salaries for the non-Medicare-allowable cost centers
(that is, the excluded areas). Employee benefits attributable to the
non-Medicare-allowable cost centers are derived by multiplying the
ratio of total employee benefits (equal to the sum of Worksheet S-3,
Part II, column 4, lines 17, 18, 19, 20, 21, 22, 22.01, 23, 24, 25,
25.50, 25.51, 25.52, and 25.53) to total wages and salaries (Worksheet
S-3, Part II, column 4, line 1) by excluded overhead wages and salaries
(as previously described in section IV.B.1.a.(1). of the preamble of
this proposed rule for wages and salaries costs). A similar methodology
was used in the 2014-based IPPS market basket.
(3) Contract Labor Costs
Contract labor costs are primarily associated with direct patient
care services. Contract labor costs for services such as accounting,
billing, and legal are estimated using other government data sources as
described in this rule. We are proposing to derive contract labor costs
for the 2018-based IPPS market basket as the sum of Worksheet S-3, Part
II, column 4, lines 11, 13, and 15. A similar methodology was used in
the 2014-based IPPS market basket.
(4) Professional Liability Insurance Costs
We are proposing that professional liability insurance (PLI) costs
(often referred to as malpractice costs) be equal to premiums, paid
losses, and self-insurance costs reported on Worksheet S-2, Part I,
columns 1 through 3, line 118.01. A similar methodology was used for
the 2014-based IPPS market basket.
(5) Pharmaceuticals Costs
We are proposing to calculate pharmaceuticals costs as total costs
reported for the Pharmacy cost center (Worksheet B, Part I, column 0,
line 15) and Drugs Charged to Patients cost center (Worksheet B, Part
I, column 0, line 73) less wages and salaries attributable to these two
cost centers (Worksheet S-3, Part II, column 4, line 40 and Worksheet
A, column 1, line 73) less estimated employee benefits attributable to
these two cost centers. We are proposing to estimate the employee
benefits costs by multiplying the ratio of total employee benefits
(equal to the sum of Worksheet S-3, Part II, column 4, lines 17, 18,
19, 20, 21, 22, 22.01, 23, 24, 25, 25.50, 25.51, 25.52, and 25.53) to
total wages and salaries (Worksheet S-3, Part II, column 4, line 1) by
total wages and salaries costs for the Pharmacy and Drugs Charged to
Patients cost centers (equal to the sum of Worksheet S-3, Part II,
column 4, line 40 and Worksheet A, column 1, line 73). The same general
methodology was used for the 2014-based IPPS market basket. However, we
note that for the 2014-based IPPS market basket, for calculating the
total nonsalary costs we used Worksheet A, column 2 for each cost
center instead of our proposed method of using Worksheet B, Part I,
column 0, less salary costs. We are proposing to use Worksheet B, Part
I, column 0 as this would reflect reclassifications and adjustments
(which are made on columns subsequent to Worksheet A columns 1 and 2).
(6) Blood and Blood Products Costs
We are proposing to calculate blood and blood products costs as
total costs reported for the Whole Blood & Packed Red Blood Cells cost
center (Worksheet B, Part I, column 0, line 62) and the Blood Storing,
Processing, & Transfusing cost center (Worksheet B, Part I, column 0,
Line 63) less wages and salaries attributable to these two cost centers
(Worksheet A, column 1, lines 62 and 63) less estimated employee
benefits attributable to these two cost centers. We estimate these
employee benefits costs by multiplying the ratio of total employee
benefits (equal to the sum of Worksheet S-3, Part II, column 4, lines
17, 18, 19, 20, 21, 22, 22.01, 23, 24, 25, 25.50, 25.51, 25.52, and
25.53) to total wages and salaries (Worksheet S-3, Part II, column 4,
line 1) by total wages and salaries for the Whole Blood & Packed Red
Blood Cells and Blood Storing, Processing, & Transfusing cost centers
(equal to the sum of Worksheet A, Column 1, lines 62 and 63). The same
general methodology was used for the 2014-based IPPS market basket.
However, we note that for the 2014-based IPPS market basket, for
calculating the total nonsalary costs we used Worksheet A, column 2 for
lines 62 and 63 instead of our proposed method of using Worksheet B,
Part I, column 0, lines 62 and 63, less salary costs. Similar to our
proposed method for Pharmaceuticals costs, we are proposing to use
Worksheet B, Part I, column 0 as this would reflect reclassifications
and adjustments (which are made on columns subsequent to Worksheet A
columns 1 and 2).
(7) Home Office Contract Labor/Related Organization Costs
We are proposing to determine home office/related organization
contract labor costs using data reported on Worksheet S-3, Part II,
column 4, lines 14.01, 14.02, 25.50, and 25.51. Home office/related
organization contract labor costs in the 2014-based IPPS market basket
were calculated using a similar method except we used data reported on
Worksheet S-3, Part II, column 4, line 14. As described previously,
effective for cost reporting periods beginning on or after October 1,
2015 (Transmittal 10), Worksheet S-3, Part II was revised to add lines
14.01, 14.02, 25.50, 25.51, 25.52, and 25.53, to enhance the wage index
data collection. Therefore, for the 2018-based IPPS market basket, we
are proposing to use these more detailed lines; however, the expenses
captured on these lines would be similar to the expenses originally
reported on line 14, prior to the break out of the expenses on these
new more detailed lines.
In addition, for the 2014-based IPPS market basket, we then
multiplied the home office/related organization contract labor costs by
the ratio of total Medicare-allowable operating costs to total
operating costs. However, for the 2018-based IPPS market basket, we are
no longer proposing to apply this adjustment since the Medicare cost
report instructions effective for Transmittal 10 now state that the
costs reported on these lines should reflect costs associated with
Medicare-allowable cost centers. Therefore, we no longer believe this
adjustment is necessary.
b. Final Major Cost Category Computation
After we derived costs for the seven major cost categories for each
provider using the Medicare cost report data as previously described,
we are proposing to address data outliers using the following steps.
First, we divide the costs for each of the seven categories (calculated
as previously described in this section) by total Medicare-allowable
operating costs for the provider
[[Page 25420]]
(calculated as previously described in this section) to obtain cost
weights for each PPS hospital.
For each of the major cost weights except the Home Office/Related
Organization Contract Labor cost weight, we are proposing to trim the
data to remove outliers (a standard statistical process) by: (1)
Requiring that major expenses (such as Wages and Salaries costs) and
total Medicare-allowable operating costs be greater than zero; and (2)
excluding the top and bottom five percent of the major cost weight (for
example, Wages and Salaries costs as a percent of total Medicare-
allowable operating costs). We note that missing values are assumed to
be zero consistent with the methodology for how missing values were
treated in the 2014-based IPPS market basket. After the outliers have
been removed, we sum the costs for each category across all remaining
providers. We then divide this by the sum of total Medicare-allowable
operating costs across all remaining providers to obtain a cost weight
for the proposed 2018-based IPPS market basket for the given category.
For the Home Office/Related Organization Contract Labor cost
weight, we are proposing to apply a trim that excludes those reporters
above the 99th percentile. This allows all providers' Medicare-
allowable costs to be included, even if their home office/related
organization contract labor costs were reported to be zero. The
Medicare cost report data (Worksheet S-2, Part I, line 140) indicate
that not all hospitals have a home office. IPPS hospitals without a
home office would report administrative costs that might typically be
associated with a home office in the Wages and Salaries and Employee
Benefits cost weights, or in the residual ``All Other'' cost weight if
they purchased these types of services from external contractors. We
believe the trimming methodology that excludes those who report a Home
Office/Related Organization Contract Labor cost weight above the 99th
percentile is appropriate as it removes extreme outliers while also
allowing providers with zero home office/related organization contract
labor costs to be included in the Home Office/Related Organization
Contract Labor cost weight calculation. Next, similar to the other cost
weights, after the outliers have been removed, we sum the costs across
all remaining providers. We then divide this by the sum of total
Medicare-allowable operating costs across all remaining providers to
obtain a cost weight for the proposed 2018-based IPPS market basket.
The trimming process is done individually for each cost category so
that providers excluded from one cost weight calculation are not
automatically excluded from another cost weight calculation. We note
that these proposed trimming methods are the same types of edits
performed for the 2014-based IPPS market basket, as well as other PPS
market baskets (including but not limited to SNF market basket and HHA
market basket). We believe this trimming process improves the accuracy
of the data used to compute the major cost weights by removing possible
misreported data. We note that for each of the cost weights we
evaluated the distribution of providers and costs by ownership-type,
and by urban/rural status. For all of the cost weights, the trimmed
sample was nationally representative.
Finally, we calculate the residual ``All Other'' cost weight that
reflects all remaining costs that are not captured in the seven cost
categories listed. Table IV-01 shows the major cost categories and
their respective cost weights as derived from the Medicare cost reports
for this proposed rule.
[GRAPHIC] [TIFF OMITTED] TP10MY21.231
From 2014 to 2018, the Wages and Salaries and Employee Benefits
cost weights as calculated directly from the Medicare cost reports
decreased by approximately 2.4 percentage points and 0.7 percentage
point, respectively, while the Contract Labor cost weight increased
slightly by 0.2 percentage point.
As we did for the 2014-based IPPS market basket (82 FR 38162), we
are proposing to allocate contract labor costs to the Wages and
Salaries and Employee Benefits cost weights based on their relative
proportions for employed labor under the assumption that contract labor
costs are comprised of both wages and salaries and employee benefits.
The contract labor allocation proportion for wages and salaries is
equal to the Wages and Salaries cost weight as a percent of the sum of
the Wages and Salaries cost weight and the Employee Benefits cost
weight. Using the 2018 Medicare cost report data, this percentage is 78
percent. Therefore, we are proposing to allocate approximately 78
percent of the Contract Labor cost weight to the Wages and Salaries
cost weight and 22 percent to the Employee Benefits cost weight. The
2014-based IPPS market basket also allocated 78 percent of the Contract
Labor cost weight to the Wages and Salaries cost weight.
Table IV-02 shows the Wages and Salaries and Employee Benefits cost
weights after contract labor allocation for the 2014-based IPPS market
basket and the proposed 2018-based IPPS market basket. In aggregate,
the
[[Page 25421]]
Compensation cost weight (calculated using more detailed decimal
places) decreased from 55.8 percent to 53.0 percent, or 2.8 percentage
points.
[GRAPHIC] [TIFF OMITTED] TP10MY21.232
c. Derivation of the Detailed Cost Weights
To further divide the ``All Other'' residual cost weight estimated
from the 2018 Medicare cost report data into more detailed cost
categories, we are proposing to use the 2012 Benchmark I-O ``Use
Tables/Before Redefinitions/Purchaser Value'' for NAICS 622000,
Hospitals, published by the BEA. These data are publicly available at
the following website: http://www.bea.gov/industry/io_annual.htm. The
BEA Benchmark I-O data are generally scheduled for publication every 5
years on a lagged basis, with the most recent data available for 2012.
The 2012 Benchmark I-O data are derived from the 2012 Economic Census
and are the building blocks for BEA's economic accounts. Therefore,
they represent the most comprehensive and complete set of data on the
economic processes or mechanisms by which output is produced and
distributed.\934\ BEA also produces Annual I-O estimates. However,
while based on a similar methodology, these estimates reflect less
comprehensive and less detailed data sources and are subject to
revision when benchmark data become available. Instead of using the
less detailed Annual I-O data, we are proposing to inflate the detailed
2012 Benchmark I-O data forward to 2018 by applying the annual price
changes from the respective price proxies to the appropriate market
basket cost categories that are obtained from the 2012 Benchmark I-O
data. In our calculations for this proposed rule, we repeated this
practice for each year. We then calculated the cost shares that each
cost category represents of the 2012 data inflated to 2018. These
resulting 2018 cost shares were applied to the ``All Other'' residual
cost weight to obtain the detailed cost weights for the proposed 2018-
based IPPS market basket. For example, the cost for Food: Direct
Purchases represents 4.8 percent of the sum of the ``All Other'' 2012
Benchmark I-O Hospital Expenditures inflated to 2018. Therefore, the
Food: Direct Purchases cost weight represents 4.8 percent of the
proposed 2018-based IPPS market basket's ``All Other'' cost category
(32.4 percent), yielding a Food: Direct Purchases proposed cost weight
of 1.6 percent in the proposed 2018-based IPPS market basket (0.048 x
32.4 percent = 1.6 percent). For the 2014-based IPPS market basket (82
FR 38162), we used the same methodology utilizing the 2007 Benchmark I-
O data (aged to 2014).
---------------------------------------------------------------------------
\934\ http://www.bea.gov/papers/pdf/IOmanual_092906.pdf.
---------------------------------------------------------------------------
Using this methodology, we are proposing to derive 17 detailed cost
categories from the proposed 2018-based IPPS market basket residual
cost weight (32.4 percent). These categories are: (1) Fuel: Oil and
Gas; (2) Electricity and Other Non-Fuel Utilities; (3) Food: Direct
Purchases; (4) Food: Contract Services; (5) Chemicals; (6) Medical
Instruments; (7) Rubber and Plastics; (8) Paper and Printing Products;
(9) Miscellaneous Products; (10) Professional Fees: Labor-Related; (11)
Administrative and Facilities Support Services; (12) Installation,
Maintenance, and Repair Services; (13) All Other: Labor-Related
Services; (14) Professional Fees: Nonlabor-Related; (15) Financial
Services; (16) Telephone Services; and (17) All Other: Nonlabor-Related
Services.
The 2014-based IPPS market basket had a separate cost category for
Water and Sewerage. Due to the size of the estimated cost weight
(approximately 0.1 percent), we are proposing that these costs be
included in the Electricity and Other Non-Fuel Utilities cost category.
2. Selection of Proposed Price Proxies
After computing the proposed 2018 cost weights for the IPPS market
basket, it was necessary to select appropriate wage and price proxies
to reflect the rate of price change for each expenditure category. With
the exception of the proxy for professional liability insurance (PLI),
all the proxies we are proposing are based on Bureau of Labor
Statistics (BLS) data and are grouped into one of the following BLS
categories:
Producer Price Indexes--Producer Price Indexes (PPIs)
measure the average change over time in the selling prices received by
domestic producers for their output. The prices included in the PPI are
from the first commercial transaction for many products and some
services (https://www.bls.gov/ppi/).
Consumer Price Indexes--Consumer Price Indexes (CPIs)
measure the average change over time in the prices paid by urban
consumers for a market basket of consumer goods and services (https://www.bls.gov/cpi/). CPIs are only used when the purchases are similar to
those of retail consumers rather than purchases at the producer level,
or if no appropriate PPIs are available.
Employment Cost Indexes--Employment Cost Indexes (ECIs)
measure the rate of change in employee wage rates and employer costs
for employee benefits per hour worked. These indexes are fixed-weight
indexes and strictly measure the change in wage rates and employee
benefits per hour. ECIs are superior to Average Hourly Earnings (AHE)
as price proxies for input price indexes because they are not affected
by shifts in occupation or industry mix, and because they measure pure
price change and are available by both occupational group and by
industry. The industry ECIs are based on the NAICS and the occupational
ECIs are based on the Standard Occupational Classification System
(SOC).
We evaluated the price proxies using the criteria of reliability,
timeliness, availability, and relevance:
Reliability. Reliability indicates that the index is based
on valid statistical
[[Page 25422]]
methods and has low sampling variability. Widely accepted statistical
methods ensure that the data were collected and aggregated in a way
that can be replicated. Low sampling variability is desirable because
it indicates that the sample reflects the typical members of the
population. (Sampling variability is variation that occurs by chance
because only a sample was surveyed rather than the entire population.)
Timeliness. Timeliness implies that the proxy is published
regularly, preferably at least once a quarter. The market basket levels
are updated quarterly, and therefore, it is important for the
underlying price proxies to be up-to-date, reflecting the most recent
data available. We believe that using proxies that are published
regularly (at least quarterly, whenever possible) helps to ensure that
we are using the most recent data available to update the market
basket. We strive to use publications that are disseminated frequently,
because we believe that this is an optimal way to stay abreast of the
most current data available.
Availability. Availability means that the proxy is
publicly available. We prefer that our proxies are publicly available
because this will help ensure that our market basket updates are as
transparent to the public as possible. In addition, this enables the
public to be able to obtain the price proxy data on a regular basis.
Relevance. Relevance means that the proxy is applicable
and representative of the cost category weight to which it is applied.
We believe the proposed PPIs, CPIs, and ECIs selected meet these
criteria. Therefore, we believe that they continue to be the best
measure of price changes for the cost categories to which they would be
applied.
In this rule, we present a detailed explanation of the price
proxies that we are proposing for each cost category weight. We note
that many of the proxies that we are proposing to use for the proposed
2018-based IPPS market basket are the same as those used for the 2014-
based IPPS market basket.
(1) Wages and Salaries
We are proposing to use the ECI for Wages and Salaries for All
Civilian Workers in Hospitals (BLS series code CIU1026220000000I) to
measure the price growth of this cost category. This is the same price
proxy used in the 2014-based IPPS market basket.
(2) Employee Benefits
We are proposing to use the ECI for Total Benefits for All Civilian
Workers in Hospitals to measure the price growth of this cost category.
This ECI is calculated using the ECI for Total Compensation for All
Civilian Workers in Hospitals (BLS series code CIU1016220000000I) and
the relative importance of wages and salaries within total
compensation. This is the same price proxy used in the 2014-based IPPS
market basket.
(3) Fuel: Oil and Gas
Similar to the 2014-based IPPS market basket, we are proposing to
use a blend of the PPI Industry for Petroleum Refineries and the PPI
Commodity for Natural Gas. Our analysis of the Bureau of Economic
Analysis' 2012 Benchmark I-O data (use table before redefinitions,
purchaser's value for NAICS 622000 [Hospitals]), shows that
approximately 96 percent of hospital Fuel: Oil, and Gas expenses are
for Petroleum Refineries (NAICS 324110) and Natural Gas (NAICS 221200)
expenses, with Petroleum Refineries expenses accounting for
approximately 90 percent and Natural Gas expenses accounting for
approximately 10 percent of this sum. We are proposing to create
blended index of these expenses based on each NAICS' expenses as share
of their sum. Therefore, we are proposing to use a blend of 90 percent
of the PPI Industry for Petroleum Refineries (BLS series code
PCU324110324110) and 10 percent of the PPI Commodity Index for Natural
Gas (BLS series code WPU0531) as the price proxy for this cost
category. The 2014-based IPPS market basket used a 70/30 blend of these
price proxies, reflecting the 2007 I-O data (82 FR 38163). We believe
that these two price proxies continue to be the most technically
appropriate indices available to measure the price growth of the Fuel:
Oil, and Gas cost category in the proposed 2018-based IPPS market
basket.
(4) Electricity and Other Non-Fuel Utilities
We are proposing to use the PPI Commodity for Commercial Electric
Power (BLS series code WPU0542) to measure the price growth of this
cost category, as Electricity costs account for 93 percent of these
expenses. This is the same price proxy used for the Electricity cost
category in the 2014-based IPPS market basket. As previously noted, we
are proposing to include Water and Sewerage costs within the
Electricity and Other Non-Fuel Utilities cost category, and to no
longer use the CPI for Water and Sewerage Maintenance as we did for the
2014-based IPPS market basket, due to the small size of this estimated
cost weight (approximately 0.1 percent).
(5) Professional Liability Insurance
We are proposing to proxy price changes in hospital professional
liability insurance premiums (PLI) using percentage changes as
estimated by the CMS Hospital Professional Liability Index. To generate
these estimates, we collect commercial insurance medical liability
premiums for a fixed level of coverage while holding nonprice factors
constant (such as a change in the level of coverage). This is the same
price proxy used in the 2014-based IPPS market basket.
(6) Pharmaceuticals
We are proposing to use the PPI Commodity for Pharmaceuticals for
Human Use, Prescription (BLS series code WPUSI07003) to measure the
price growth of this cost category. This is the same price proxy used
in the 2014-based IPPS market basket.
(7) Food: Direct Purchases
We are proposing to use the PPI Commodity for Processed Foods and
Feeds (BLS series code WPU02) to measure the price growth of this cost
category. This is the same price proxy used in the 2014-based IPPS
market basket.
(8) Food: Contract Services
We are proposing to use the CPI for Food Away From Home (All Urban
Consumers) (BLS series code CUUR0000SEFV) to measure the price growth
of this cost category. This is the same price proxy used in the 2014-
based IPPS market basket.
(9) Chemicals
Similar to the 2014-based IPPS market basket, we are proposing to
use a four-part blended PPI as the proxy for the chemicals cost
category in the proposed 2018-based IPPS market basket. The proposed
blend is composed of the PPI Industry for Industrial Gas Manufacturing,
Primary Products (BLS series code PCU325120325120P), the PPI Industry
for Other Basic Inorganic Chemical Manufacturing (BLS series code
PCU32518-32518-), the PPI Industry for Other Basic Organic Chemical
Manufacturing (BLS series code PCU32519-32519-), and the PPI Industry
for Other Miscellaneous Chemical Product Manufacturing (BLS series code
PCU325998325998). We note that the four part blended PPI used in the
2014-based IPPS market basket is composed of the PPI Industry for
Industrial Gas Manufacturing (BLS series code PCU325120325120P), the
[[Page 25423]]
PPI Industry for Other Basic Inorganic Chemical Manufacturing (BLS
series code PCU32518-32518-), the PPI Industry for Other Basic Organic
Chemical Manufacturing (BLS series code PCU32519-32519-), and the PPI
Industry for Soap and Cleaning Compound Manufacturing (BLS series code
PCU32561-32561-). For the 2018-based IPPS market basket, we are
proposing to derive the weights for the PPIs using the 2012 Benchmark
I-O data. The 2014-based IPPS market basket used the 2007 Benchmark I-O
data to derive the weights for the four PPIs (82 FR 38164). We note
that in the 2012 I-O data, the share of total chemicals expenses that
the Soap and Cleaning Compound Manufacturing (NAICS 325610) represents
decreased relative to the 2007 I-O data (from 5 percent to 2 percent),
while the share of the total chemicals expenses that the All Other
Chemical Product and Preparation manufacturing (NAICS 3259A0)
categories represents increased (from 5 percent to 7 percent). As a
result, we are proposing to remove the PPI Industry for Soap and
Cleaning Compound Manufacturing from the proposed blend for the
proposed 2018-based IPPS market basket and replace it with the PPI
Industry for Other Miscellaneous Chemical Product Manufacturing (BLS
series code PCU325998325998).
Table IV-03 shows the proposed weights for each of the four PPIs
used to create the blended index compared to those used for the 2014-
based IPPS market basket.
[GRAPHIC] [TIFF OMITTED] TP10MY21.233
(10) Blood and Blood Products
We are proposing to use the PPI Industry for Blood and Organ Banks
(BLS series code PCU621991621991) to measure the price growth of this
cost category. This is the same price proxy used in the 2014-based IPPS
market basket.
(11) Medical Instruments
We are proposing to use a blended price proxy for the Medical
Instruments category, as shown in Table IV-04. The 2012 Benchmark I-O
data shows the majority of medical instruments and supply costs are for
NAICS 339112--Surgical and medical instrument manufacturing costs
(approximately 56 percent) and NAICS 339113--Surgical appliance and
supplies manufacturing costs (approximately 43 percent). Therefore, we
are proposing to use a blend of these two price proxies. To proxy the
price changes associated with NAICS 339112, we propose using the PPI--
Commodity--Surgical and medical instruments (BLS series code WPU1562).
This is the same price proxy we used in the 2014-based IPPS market
basket. To proxy the price changes associated with NAICS 339113, we are
proposing to use a 50/50 blend of the PPI--Commodity--Medical and
surgical appliances and supplies (BLS series code WPU1563) and the
PPI--Commodity--Miscellaneous products--Personal safety equipment and
clothing (BLS series code WPU1571). We are proposing to include the
latter price proxy as it would reflect personal protective equipment
including but not limited to face shields and protective clothing. The
2012 Benchmark I-O data does not provide specific expenses for these
products; however, we recognize that this category reflects costs faced
by IPPS hospitals.
[GRAPHIC] [TIFF OMITTED] TP10MY21.234
(12) Rubber and Plastics
We are proposing to use the PPI Commodity for Rubber and Plastic
Products (BLS series code WPU07) to measure the price growth of this
cost category. This is the same price proxy used in the 2014-based IPPS
market basket.
(13) Paper and Printing Products
We are proposing to use the PPI Commodity for Converted Paper and
Paperboard Products (BLS series code WPU0915) to measure the price
growth of this cost category. This is the same price proxy used in the
2014-based IPPS market basket.
(14) Miscellaneous Products
We are proposing to use the PPI Commodity for Finished Goods Less
Food and Energy (BLS series code WPUFD4131) to measure the price growth
of this cost category. This is the same price proxy used in the 2014-
based IPPS market basket.
[[Page 25424]]
(15) Professional Fees: Labor-Related
We are proposing to use the ECI for Total Compensation for Private
Industry Workers in Professional and Related (BLS series code
CIU2010000120000I) to measure the price growth of this category. It
includes occupations such as legal, accounting, and engineering
services. This is the same price proxy used in the 2014-based IPPS
market basket.
(16) Administrative and Facilities Support Services
We are proposing to use the ECI for Total Compensation for Private
Industry Workers in Office and Administrative Support (BLS series code
CIU2010000220000I) to measure the price growth of this category. This
is the same price proxy used in the 2014-based IPPS market basket.
(17) Installation, Maintenance, and Repair Services
We are proposing to use the ECI for Total Compensation for All
Civilian Workers in Installation, Maintenance, and Repair (BLS series
code CIU1010000430000I) to measure the price growth of this cost
category. This is the same proxy used in the 2014-based IPPS market
basket.
(18) All Other: Labor-Related Services
We are proposing to use the ECI for Total Compensation for Private
Industry Workers in Service Occupations (BLS series code
CIU2010000300000I) to measure the price growth of this cost category.
This is the same price proxy used in the 2014-based IPPS market basket.
(19) Professional Fees: Nonlabor-Related
We are proposing to use the ECI for Total Compensation for Private
Industry Workers in Professional and Related (BLS series code
CIU2010000120000I) to measure the price growth of this category. This
is the same price proxy that we are proposing to use for the
Professional Fees: Labor-Related cost category and the same price proxy
used in the 2014-based IPPS market basket.
(20) Financial Services
We are proposing to use the ECI for Total Compensation for Private
Industry Workers in Financial Activities (BLS series code
CIU201520A000000I) to measure the price growth of this cost category.
This is the same price proxy used in the 2014-based IPPS market basket.
(21) Telephone Services
We are proposing to use the CPI for Telephone Services (BLS series
code CUUR0000SEED) to measure the price growth of this cost category.
This is the same price proxy used in the 2014-based IPPS market basket.
(22) All Other: Nonlabor-Related Services
We are proposing to use the CPI for All Items Less Food and Energy
(BLS series code CUUR0000SA0L1E) to measure the price growth of this
cost category. We believe that using the CPI for All Items Less Food
and Energy avoids double counting of changes in food and energy prices
as they are already captured elsewhere in the market basket. This is
the same price proxy used in the 2014-based IPPS market basket.
Table IV-05 sets forth the proposed 2018-based IPPS market basket,
including the cost categories and their respective weights and price
proxies. For comparison purposes, the corresponding 2014-based IPPS
market basket cost weights also are listed.
BILLING CODE 4120-01-P
[[Page 25425]]
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[[Page 25426]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.236
Table IV-06 compares both the historical and forecasted percent
changes in the 2014-based IPPS market basket and the proposed 2018-
based IPPS market basket. The forecasted growth rates in Table IV-06
are based on IHS Global Inc.'s (IGI's) fourth quarter 2020 forecast
with historical data through third quarter 2020.
[[Page 25427]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.237
BILLING CODE 4120-01-C
There is no difference between the average percent change in the
2014-based and the proposed 2018-based IPPS market basket over the FY
2017 through FY 2020 time period. For FY 2022, the increase is
projected to be 2.5 percent for both the 2014-based and proposed 2018-
based IPPS market baskets.
3. Labor-Related Share
Under section 1886(d)(3)(E) of the Act, the Secretary estimates
from time to time the proportion of payments that are labor-related.
Section 1886(d)(3)(E) of the Act states that the Secretary shall adjust
the proportion, (as estimated by the Secretary from time to time) of
hospitals' costs which are attributable to wages and wage-related
costs, of the DRG prospective payment rates. We refer to the proportion
of hospitals' costs that are attributable to wages and wage-related
costs as the ``labor-related share.''
The labor-related share is used to determine the proportion of the
national PPS base payment rate to which the area wage index is applied.
We include a cost category in the labor-related share if the costs are
labor intensive and vary with the local labor market. For this FY 2022
IPPS/LTCH PPS proposed rule, we are proposing to include in the labor-
related share the national average proportion of operating costs that
are attributable to the following cost categories in the proposed 2018-
based IPPS market basket: Wages and Salaries, Employee Benefits,
Professional Fees: Labor-Related, Administrative and Facilities Support
Services, Installation, Maintenance, and Repair Services, and All
Other: Labor-Related Services, as we did in the FY 2018 IPPS/LTCH PPS
final rule (82 FR 38167).
Similar to the 2014-based IPPS market basket, we are proposing that
the Professional Fees: Labor-Related cost category includes expenses
associated with advertising and a proportion of legal services,
accounting and auditing, engineering, and management consulting. As was
done in the 2014-based IPPS market basket rebasing, we are proposing to
determine the proportion of legal, accounting and auditing,
engineering, and management consulting services that meet our
definition of labor-related services based on a survey of hospitals
conducted by CMS in 2008. We notified the public of our intent to
conduct this survey on December 9, 2005 (70 FR 73250) and received no
comments (71 FR 8588).
A discussion of the composition of the survey and
poststratification can be found in the FY 2010 IPPS/LTCH PPS final rule
(74 FR 43850 through 43856). Based on the weighted results of the
survey, we determined that hospitals purchase, on average, the
following portions of contracted professional services outside of their
local labor market:
34 percent of accounting and auditing services.
30 percent of engineering services.
33 percent of legal services.
42 percent of management consulting services.
We are proposing to apply each of these percentages to its
respective Benchmark I-O cost category underlying the professional fees
cost category. This is the methodology that we used to separate the
2014-based IPPS market basket professional fees cost category into
Professional Fees: Labor-Related and Professional Fees: Nonlabor-
Related cost categories. We are proposing to use the same methodology
and survey results to separate the professional fees costs for the
proposed 2018-based IPPS market basket into Professional Fees: Labor-
Related and Professional Fees: Nonlabor-Related cost categories. We
believe these survey results are appropriate to use for the proposed
2018-based IPPS market basket as they empirically determine the
proportion of contracted professional services purchased by the
industry that is attributable to local firms and the proportion that is
purchased from national firms.
In the proposed 2018-based IPPS market basket, nonmedical
professional fees that were subject to allocation based on these survey
results represent approximately 6.4 percent of total operating costs
(and are limited to those fees related to Accounting & Auditing, Legal,
Engineering, and Management Consulting services). Based on our survey
results, we are proposing to apportion 4.1 percentage points of the 6.4
percentage point figure into the
[[Page 25428]]
Professional Fees: Labor-Related share cost category and designate the
remaining approximately 2.3 percentage points into the Professional
Fees: Nonlabor-Related cost category.
In addition to the professional services listed earlier, we also
classify a proportion of the Home Office/Related Organization cost
weight into the Professional Fees: Labor-Related cost category as was
done in the previous rebasing. We believe that many of these costs are
labor-intensive and vary with the local labor market. However, data
indicate that not all IPPS hospitals with home offices have home
offices located in their local labor market. Therefore, we are
proposing to include in the labor-related share only a proportion of
the Home Office/Related Organization cost weight based on the
methodology described in this rule.
For the proposed 2018-based IPPS market basket, based on Medicare
cost report data, we found that approximately 65 percent of IPPS
hospitals reported some type of home office information on their
Medicare cost report for 2018 (for example, city, State, and zip code).
Using the data reported on the Medicare cost report, we compared the
location of the hospital with the location of the hospital's home
office. We then determined the proportion of costs that should be
allocated to the labor-related share based on the percent of total
hospital home office/related organization contract labor costs for
those hospitals that had home offices located in their respective local
labor markets--defined as being in the same MSA. We determined a
hospital's and home office's MSAs using their zip code information from
the Medicare cost report.
Based on these data, we determined the proportion of costs that
should be allocated to the labor-related share based on the percent of
hospital home office/related organization contract labor costs (equal
to the sum of Worksheet S-3, Part II, column 4, lines 14.01, 14.02,
25.50, and 25.51). Using this methodology, we determined that 60
percent of hospitals' home office compensation costs were for home
offices located in their respective local labor markets. Therefore, we
are proposing to allocate 60 percent of Home Office/Related
Organization cost weight to the labor-related share. This is the same
proportion we used for the 2014-based IPPS market basket, which was
based on 2014 Medicare cost report data.
In the proposed 2018-based IPPS market basket, the Home Office/
Related Organization cost weight that is subject to allocation based on
the home office allocation methodology represent 5.9 percent of total
operating costs. Based on the results of the home office analysis, as
previously discussed, we are apportioning approximately 3.5 percentage
points of the 5.9 percentage points figure into the Professional Fees:
Labor-Related cost category and designating the remaining approximately
2.4 percentage points into the Professional Fees: Nonlabor-Related cost
category. In summary, based on the two previously mentioned
allocations, we apportioned 7.6 percentage points of the professional
fees and home office cost weights into the Professional Fees: Labor-
Related cost category. This amount is added to the portion of
professional fees that we already identified as labor-related using the
I-O data such as contracted advertising and marketing costs
(approximately 1.0 percentage point of total operating costs) resulting
in a Professional Fees: Labor-Related cost weight of 8.6 percent.
Table IV-07 presents a comparison of the proposed 2018-based labor-
related share and the 2014-based labor-related share. As discussed in
section IV.B.1.b. of the preamble of this proposed rule, the Wages and
Salaries and Employee Benefits cost weights reflect contract labor
costs.
[GRAPHIC] [TIFF OMITTED] TP10MY21.238
Using the cost category weights from the proposed 2018-based IPPS
market basket, we calculated a labor-related share of 67.6 percent,
approximately 0.7 percentage point lower than the current labor-related
share of 68.3 percent. This downward revision to the labor-related
share is the net effect of two impacts. First, we updated the base year
cost weights from 2014 to 2018 (-1.8 percentage points), which reflects
a -2.8 percentage point revision from the compensation cost weight and
a +1.0 percentage point revision from the labor-related portion of Home
Office/Related Organization Contract Labor cost weight (60 percent of
total cost weight). Second, there is an upward revision of 1.1
percentage points from the impact of updating the detailed cost weights
to reflect 2012 Input-Output data.
Therefore, we are proposing to use a labor-related share of 67.6
percent for discharges occurring on or after October 1, 2021. We
continue to believe, as we have stated in the past, that these
operating cost categories are related to, influenced by, or vary with
the local markets. Therefore, our definition of the
[[Page 25429]]
labor-related share continues to be consistent with section 1886(d)(3)
of the Act. We note that section 403 of Pub. L. 108-173 amended
sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act to provide that
the Secretary must employ 62 percent as the labor-related share unless
62 percent would result in lower payments to a hospital than would
otherwise be made.
C. Market Basket for Certain Hospitals Presently Excluded From the IPPS
In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43857), we
adopted the use of the FY 2006-based IPPS operating market basket
percentage increase to update the target amounts for children's
hospitals, PPS-excluded cancer hospitals and religious nonmedical
health care institutions (RNHCIs). Children's hospitals and PPS-
excluded cancer hospitals and RNHCIs are still reimbursed solely under
the reasonable cost-based system, subject to the rate-of-increase
limits. Under these limits, an annual target amount (expressed in terms
of the inpatient operating cost per discharge) is set for each hospital
based on the hospital's own historical cost experience trended forward
by the applicable rate-of-increase percentages.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50603), under the
broad authority in sections 1886(b)(3)(A) and (B), 1886(b)(3)(E), and
1871 of the Act and section 4454 of the BBA, consistent with our use of
the IPPS operating market basket percentage increase to update target
amounts, we adopted the use of the FY 2010-based IPPS operating market
basket percentage increase to update the target amounts for children's
hospitals, PPS-excluded cancer hospitals, and RNHCIs that are paid on
the basis of reasonable cost subject to the rate-of-increase limits
under Sec. 413.40. In addition, as discussed in the FY 2015 IPPS/LTCH
PPS final rule (79 FR 50156 through 50157), consistent with Sec. Sec.
412.23(g), 413.40(a)(2)(ii)(A), and 413.40(c)(3)(viii), we also used
the percentage increase in the FY 2010-based IPPS operating market
basket to update the target amounts for short-term acute care hospitals
located outside the 50 States, the District of Columbia, and Puerto
Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa). These hospitals also are
paid on the basis of reasonable cost, subject to the rate-of-increase
limits under Sec. 413.40. In the FY 2018 IPPS/LTCH PPS final rule, we
finalized the use of the 2014-based IPPS operating market basket for FY
2018 and subsequent fiscal years to update the target amounts for
children's hospitals, PPS-excluded cancer hospitals, RNHCIs, and short-
term acute care hospitals located outside the 50 states, the District
of Columbia, and Puerto Rico (that is, hospitals located in the U.S.
Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa)
that are paid on the basis of reasonable cost subject to the rate-of-
increase limits under Sec. 413.40. We refer the reader to the FY 2018
IPPS/LTCH PPS final rule (82 FR 38170) for discussion of why we believe
it is appropriate to use the percentage increase in the IPPS operating
market basket to update the target amounts for these excluded
facilities.
As discussed in this section IV. of the preamble of this FY 2022
IPPS/LTCH PPS proposed rule, we are proposing to rebase and revise the
IPPS operating market basket to a 2018 base year. We continue to
believe that it is appropriate to use the increase in the IPPS
operating market basket to update the target amounts for these excluded
facilities, as discussed in prior rulemaking. Therefore, we are
proposing to use the percentage increase in the proposed 2018-based
IPPS operating market basket to update the target amounts for
children's hospitals, the PPS-excluded cancer hospitals, RNHCIs, and
short-term acute care hospitals located outside the 50 states, the
District of Columbia, and Puerto Rico (that is, hospitals located in
the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and
American Samoa) for FY 2022 and subsequent fiscal years. Accordingly,
for FY 2022, the rate-of increase percentage to be applied to the
target amount for these hospitals would be the FY 2022 percentage
increase in the 2018-based IPPS operating market basket.
D. Rebasing and Revising the Capital Input Price Index (CIPI)
The CIPI was originally described in the FY 1993 IPPS final rule
(57 FR 40016). There have been subsequent discussions of the CIPI
presented in the IPPS proposed and final rules. The FY 2018 IPPS/LTCH
PPS final rule (82 FR 38170 through 38175) described the most recent
rebasing and revising of the CIPI to a 2014 base year, which reflected
the capital cost structure of IPPS hospitals available at that time.
For the FY 2022 IPPS update, we are proposing to rebase and revise
the CIPI to a 2018 base year to reflect a more current structure of
capital costs for IPPS hospitals. This proposed 2018-based CIPI was
derived using 2018 cost reports for IPPS hospitals, which includes
providers whose cost reporting period began on or after October 1,
2017, and prior to September 30, 2018. We are also proposing to start
with the same subset of Medicare cost reports from IPPS hospitals as
previously described in section IV.B.1.a. of the preamble of this
proposed rule. As with the 2014-based index, we are proposing to
develop two sets of weights to derive the proposed 2018-based CIPI. The
first set of weights identifies the proportion of hospital capital
expenditures attributable to each expenditure category, while the
second set of weights is a set of relative vintage weights for
depreciation and interest. The set of vintage weights is used to
identify the proportion of capital expenditures within a cost category
that is attributable to each year over the useful life of the capital
assets in that category. A more thorough discussion of vintage weights
is provided later in this section.
Using 2018 Medicare cost reports, we are able to obtain capital
costs for the following categories: Depreciation, Interest, Lease, and
Other. Specifically, we are proposing to determine what proportion of
total capital costs that each category represents using the data
reported by IPPS hospitals on Worksheet A-7, Part III. As shown in the
left column of Table IV-08, in 2018 depreciation expenses accounted for
67.5 percent of total capital costs, interest expenses accounted for
14.6 percent, leasing expenses accounted for 13.3 percent, and other
capital expenses accounted for 4.7 percent.
We also are proposing to allocate lease costs across each of the
remaining capital cost categories as was done in the 2014-based CIPI.
We are proposing to proportionally distribute leasing costs among the
cost categories of Depreciation, Interest, and Other, reflecting the
assumption that the underlying cost structure of leases is similar to
that of capital costs in general. As was done for the 2014-based CIPI,
we are proposing to assume that 10 percent of the lease costs as a
proportion of total capital costs represents overhead and to assign
those costs to the Other capital cost category accordingly. Therefore,
we are assuming that approximately 1.3 percent (13.3 percent x 0.1) of
total capital costs represent lease costs attributable to overhead, and
we are proposing to add this 1.3 percent to the 4.7 percent Other cost
category weight. We are then proposing to distribute the remaining
lease costs (12.0 percent, or 13.3 percent--1.3 percent) proportionally
across the three cost categories (Depreciation, Interest, and Other)
based on the proportion that these categories comprise of the sum of
[[Page 25430]]
the Depreciation, Interest, and Other cost categories (excluding lease
expenses). For example, the Other cost category represented 5.4 percent
of all three cost categories (Depreciation, Interest, and Other) prior
to any lease expenses being allocated. This 5.4 percent is applied to
the 12.0 percent of remaining lease expenses so that another 0.6
percent of lease expenses as a percent of total capital costs is
allocated to the Other cost category. Therefore, the resulting proposed
Other cost weight is 6.6 percent (4.7 percent + 1.3 percent + 0.6
percent). This is the same methodology used for the 2014-based CIPI.
The resulting cost weights of the proposed allocation of lease expenses
are shown in the right column of Table IV-08.
[GRAPHIC] [TIFF OMITTED] TP10MY21.239
Finally, we are proposing to further divide the Depreciation and
Interest cost categories. We are proposing to separate the Depreciation
cost category into the following two categories: (1) Building and Fixed
Equipment and (2) Movable Equipment. We also are proposing to separate
the Interest cost category into the following two categories: (1)
Government/Nonprofit; and (2) For-profit.
To disaggregate the depreciation cost weight, we needed to
determine the percent of total depreciation costs for IPPS hospitals
(after the allocation of lease costs) that are attributable to building
and fixed equipment, which we hereafter refer to as the ``fixed
percentage.'' Based on Worksheet A-7, Part III data from the 2018 IPPS
Medicare cost reports, we have determined that depreciation costs for
building and fixed equipment account for approximately 51 percent of
total depreciation costs, while depreciation costs for movable
equipment account for approximately 49 percent of total depreciation
costs. As was done for the 2014-based CIPI, we are proposing to apply
this fixed percentage to the depreciation cost weight (after leasing
costs are included) to derive a Depreciation cost weight attributable
to Building and Fixed Equipment and a Depreciation cost weight
attributable to Movable Equipment.
To disaggregate the interest cost weight, we needed to determine
the percent of total interest costs for IPPS hospitals that are
attributable to government and nonprofit facilities, which we hereafter
refer to as the ``nonprofit percentage,'' because interest price
pressures tend to differ between nonprofit and for-profit facilities.
We are proposing to use interest costs data from Worksheet A-7, Part
III of the 2018 Medicare cost reports for IPPS hospitals, which is the
same methodology used for the 2014-based CIPI. The nonprofit percentage
determined using this method is 90 percent. Table IV-09 provides a
comparison of the 2014-based CIPI cost weights and the proposed 2018-
based CIPI cost weights.
After the capital cost category weights were computed, it was
necessary to select appropriate price proxies to reflect the rate-of-
increase for each expenditure category. With the exception of the For-
profit interest cost category, we are proposing to apply the same price
proxies as were used in the 2014-based CIPI, which are listed in Table
IV-09. We also are proposing to continue to vintage weight the capital
price proxies for Depreciation and Interest to capture the long-term
consumption of capital. This vintage weighting method is the same
method that was used for the 2014-based CIPI and is described later in
this section of this rule.
We are proposing to continue to proxy the Depreciation--Building
and Fixed Equipment cost category by the BEA Chained Price Index for
Private Fixed Investment in Structures, Nonresidential, Hospitals and
Special Care (BEA Table 5.4.4. Price Indexes for Private Fixed
Investment in Structures by Type). As stated in the FY 2010 IPPS/LTCH
final rule (74 FR 43860), for the FY 2006-based CIPI we finalized the
use of this index to measure the price growth of this cost category.
This BEA index is intended to capture prices for construction of
facilities such as hospitals, nursing homes, hospices, and
rehabilitation centers. For the Depreciation--Movable Equipment cost
category, we are proposing to continue to measure the price growth
using the PPI Commodity for Machinery and Equipment (BLS series code
WPU11). This price index reflects price inflation associated with a
variety of machinery and equipment that would be utilized by hospitals
including but not limited to communication equipment, computers, and
medical equipment. For the Nonprofit Interest cost category, we are
proposing to continue to measure the price growth using the average
yield on domestic municipal bonds (Bond Buyer 20-bond index).
For the For-profit Interest cost category, we are proposing to use
the iBoxx AAA Corporate Bond Yield index instead of the Moody's AAA
Corporate Bond Yield index that was used for the 2014-based IPPS market
basket. Effective for December 2020, the Moody's AAA Corporate Bond
series is no longer available for use under license to IGI, the
nationally-recognized economic and financial forecasting firm with
which we contract to forecast the components of the market baskets and
MFP. Therefore, we are proposing to replace the price proxy for the
For-profit Interest cost category. We compared the iBoxx AAA Corporate
Bond Yield index with the Moody's AAA Corporate Bond Yield index and
found that the average growth rates in the two series were similar.
Over the historical time period of FY 2000 to FY 2020, the 4-quarter
percent change moving average growth
[[Page 25431]]
in the iBoxx series was approximately 0.1 percentage point higher, on
average, than the Moody's AAA corporate Bond Yield index.
For the Other capital cost category (including insurances, taxes,
and other capital-related costs), we are proposing to continue to
measure the price growth using the CPI for Rent of Primary Residence
(All Urban Consumers) (BLS series code CUUS0000SEHA), which would
reflect the price growth of these costs. We believe that these price
proxies continue to be the most appropriate proxies for IPPS capital
costs that meet our selection criteria of relevance, timeliness,
availability, and reliability.
[GRAPHIC] [TIFF OMITTED] TP10MY21.240
Because capital is acquired and paid for over time, capital
expenses in any given year are determined by both past and present
purchases of physical and financial capital. The proposed vintage-
weighted 2018-based CIPI is intended to capture the long-term
consumption of capital, using vintage weights for depreciation
(physical capital) and interest (financial capital). These vintage
weights reflect the proportion of capital purchases attributable to
each year of the expected life of building and fixed equipment, movable
equipment, and interest.
Vintage weights are an integral part of the CIPI. Capital costs are
inherently complicated and are determined by complex capital purchasing
decisions, over time, based on such factors as interest rates and debt
financing. In addition, capital is depreciated over time instead of
being consumed in the same period it is purchased. By accounting for
the vintage nature of capital, we are able to provide an accurate and
stable annual measure of price changes. Annual nonvintage price changes
for capital are unstable due to the volatility of interest rate changes
and, therefore, do not reflect the actual annual price changes for IPPS
capital costs. The CIPI reflects the underlying stability of the
capital acquisition process.
To calculate the vintage weights for depreciation and interest
expenses, we first needed a time series of capital purchases for
building and fixed equipment and movable equipment. We found no single
source that provides an appropriate time series of capital purchases by
hospitals for all of the previously noted components of capital
purchases. The early Medicare cost reports did not have sufficient
capital data to meet this need. Data we obtained from the American
Hospital Association (AHA) did not include annual capital purchases.
However, we were able to obtain data on total expenses back to 1963
from the AHA. Consequently, we are proposing to use data from the AHA
Panel Survey and the AHA Annual Survey to obtain a time series of total
expenses for hospitals. We then are proposing to use data from the AHA
Panel Survey supplemented with the ratio of depreciation to total
hospital expenses obtained from the Medicare cost reports to derive a
trend of annual depreciation expenses for 1963 through 2018. We are
proposing to separate these depreciation expenses into annual amounts
of building and fixed equipment depreciation and movable equipment
depreciation as determined earlier. From these annual depreciation
amounts, we derived annual end-of-year book values for building and
fixed equipment and movable equipment using the expected life for each
type of asset category. We used the AHA data and similar methodology to
derive the 2014-based IPPS capital market basket.
To continue to calculate the vintage weights for depreciation and
interest expenses, we also needed to account for the expected lives for
building and fixed equipment, movable equipment, and interest for the
proposed 2018-based CIPI. We are proposing to calculate the expected
lives using Medicare cost report data. The expected life of any asset
can be determined by dividing the value of the asset (excluding fully
depreciated assets) by its current year depreciation amount. This
calculation yields the estimated expected life of an asset if the rates
of depreciation were to continue at current year levels, assuming
straight-line depreciation. Using this proposed method, we determined
the average expected life of building and fixed equipment to be equal
to 27 years, and the average expected life of movable equipment to be
equal to 12 years. For the expected life of interest, we believe that
vintage weights for interest should represent the average expected life
of building and fixed equipment because, based on previous research
described in the FY 1997 IPPS final rule (61 FR 46198), the expected
life of hospital debt instruments and the expected life of buildings
and fixed equipment are similar. We note that the 2014-based CIPI was
also based on an expected average life of building and fixed
[[Page 25432]]
equipment of 27 years and an expected average life of movable equipment
of 12 years.
Multiplying these expected lives by the annual depreciation amounts
results in annual year-end asset costs for building and fixed equipment
and movable equipment. We then calculated a time series, beginning in
1964, of annual capital purchases by subtracting the previous year's
asset costs from the current year's asset costs.
For the building and fixed equipment and movable equipment vintage
weights, we are proposing to use the real annual capital-related
purchase amounts for each asset type to capture the actual amount of
the physical acquisition, net of the effect of price inflation. These
real annual capital-related purchase amounts are produced by deflating
the nominal annual purchase amount by the associated price proxy as
provided earlier in this proposed rule. For the interest vintage
weights, we are proposing to use the total nominal annual capital-
related purchase amounts to capture the value of the debt instrument
(including, but not limited to, mortgages and bonds). Using these
capital purchases time series specific to each asset type, we are
proposing to calculate the vintage weights for building and fixed
equipment, for movable equipment, and for interest.
The vintage weights for each asset type are deemed to represent the
average purchase pattern of the asset over its expected life (in the
case of building and fixed equipment and interest, 27 years, and in the
case of movable equipment, 12 years). For each asset type, we are
proposing to use the time series of annual capital purchases amounts
available from 2018 back to 1964. These data allow us to derive twenty-
nine 27-year periods of capital purchases for building and fixed
equipment and interest, and forty-four 12-year periods of capital
purchases for movable equipment. For each 27-year period for building
and fixed equipment and interest, or 12-year period for movable
equipment, we are proposing to calculate annual vintage weights by
dividing the capital-related purchase amount in any given year by the
total amount of purchases over the entire 27-year or 12-year period.
This calculation was done for each year in the 27-year or 12-year
period and for each of the periods for which we have data. We then
calculated the average vintage weight for a given year of the expected
life by taking the average of these vintage weights across the multiple
periods of data.
The vintage weights for the proposed 2018-based CIPI and the 2014-
based CIPI are presented in Table IV-10.
BILLING CODE 4120-01-P
[[Page 25433]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.241
BILLING CODE 4120-01-C
The process of creating vintage-weighted price proxies requires
applying the vintage weights to the price proxy index where the last
applied vintage weight in Table IV-10 is applied to the most recent
data point. We have provided on the CMS website an example of how the
vintage weighting price proxies are calculated, using example vintage
weights and example price indices. The example can be found under the
following CMS website link: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html in the zip file
titled ``Weight Calculations as described in the IPPS FY 2010 Proposed
Rule.''
Table IV-11 in this section of this rule compares both the
historical and forecasted percent changes in the 2014-based CIPI and
the proposed 2018-based CIPI.
[[Page 25434]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.242
IHS Global, Inc. forecasts a 1.0 percent increase in the proposed
2018-based CIPI for FY 2022, as shown in Table IV-11. The underlying
vintage-weighted price increases for depreciation (including building
and fixed equipment and movable equipment) and interest (including
government/nonprofit and for-profit) based on the proposed 2018-based
CIPI are included in Table IV-12.
[GRAPHIC] [TIFF OMITTED] TP10MY21.243
[[Page 25435]]
Rebasing the CIPI from 2014 to 2018 did not have an impact on the
percent change in the forecasted update for FY 2022 when rounded, as
shown in Table IV-11.
V. Other Decisions and Changes to the IPPS for Operating Costs
A. Proposed Changes in the Inpatient Hospital Update for FY 2022 (Sec.
412.64(d))
1. Proposed FY 2022 Inpatient Hospital Update
In accordance with section 1886(b)(3)(B)(i) of the Act, each year
we update the national standardized amount for inpatient hospital
operating costs by a factor called the ``applicable percentage
increase.'' For FY 2022, we are setting the applicable percentage
increase by applying the adjustments listed in this section in the same
sequence as we did for FY 2021. (We note that section
1886(b)(3)(B)(xii) of the Act required an additional reduction each
year only for FYs 2010 through 2019.) Specifically, consistent with
section 1886(b)(3)(B) of the Act, as amended by sections 3401(a) and
10319(a) of the Affordable Care Act, we are setting the applicable
percentage increase by applying the following adjustments in the
following sequence. The applicable percentage increase under the IPPS
for FY 2022 is equal to the rate-of-increase in the hospital market
basket for IPPS hospitals in all areas, subject to all of the
following:
A reduction of one-quarter of the applicable percentage
increase (prior to the application of other statutory adjustments; also
referred to as the market basket update or rate-of-increase (with no
adjustments)) for hospitals that fail to submit quality information
under rules established by the Secretary in accordance with section
1886(b)(3)(B)(viii) of the Act.
A reduction of three-quarters of the applicable percentage
increase (prior to the application of other statutory adjustments; also
referred to as the market basket update or rate-of-increase (with no
adjustments)) for hospitals not considered to be meaningful EHR users
in accordance with section 1886(b)(3)(B)(ix) of the Act.
An adjustment based on changes in economy-wide
productivity (the multifactor productivity (MFP) adjustment).
Section 1886(b)(3)(B)(xi) of the Act, as added by section 3401(a)
of the Affordable Care Act, states that application of the MFP
adjustment may result in the applicable percentage increase being less
than zero.
We note, in compliance with section 404 of the MMA, in this
proposed rule, we are proposing to replace the 2014-based IPPS
operating and capital market baskets with the rebased and revised 2018-
based IPPS operating and capital market baskets for FY 2022.
We are proposing to base the proposed FY 2022 market basket update
used to determine the applicable percentage increase for the IPPS on
IHS Global Inc.'s (IGI's) fourth quarter 2020 forecast of the proposed
2018-based IPPS market basket rate-of-increase with historical data
through third quarter 2020, which is estimated to be 2.5 percent. We
also are proposing that if more recent data subsequently become
available (for example, a more recent estimate of the market basket
update and the MFP adjustment), we would use such data, if appropriate,
to determine the FY 2022 market basket update and the MFP adjustment in
the final rule.
For FY 2022, we are proposing an MFP adjustment of 0.2 percentage
point. Similar to the market basket update, for this proposed rule, we
used IGI's fourth quarter 2020 forecast of MFP to compute the proposed
FY 2022 MFP adjustment. As noted previously, we are proposing that if
more recent data subsequently become available, we would use such data,
if appropriate, to determine the FY 2022 market basket update and the
MFP adjustment for the final rule.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51689 through
51692), we finalized our methodology for calculating and applying the
MFP adjustment. As we explained in that rule, section
1886(b)(3)(B)(xi)(II) of the Act, as added by section 3401(a) of the
Affordable Care Act, defines this productivity adjustment as equal to
the 10-year moving average of changes in annual economy-wide, private
nonfarm business MFP (as projected by the Secretary for the 10-year
period ending with the applicable fiscal year, calendar year, cost
reporting period, or other annual period). The Bureau of Labor
Statistics (BLS) publishes the official measure of private nonfarm
business MFP. We refer readers to the BLS website at http://www.bls.gov/mfp for the BLS historical published MFP data.
MFP is derived by subtracting the contribution of labor and capital
input growth from output growth. The projections of the components of
MFP are currently produced by IGI, a nationally recognized economic
forecasting firm with which CMS contracts to forecast the components of
the market baskets and MFP. As we discussed in the FY 2016 IPPS/LTCH
PPS final rule (80 FR 49509), beginning with the FY 2016 rulemaking
cycle, the MFP adjustment is calculated using the revised series
developed by IGI to proxy the aggregate capital inputs. Specifically,
in order to generate a forecast of MFP, IGI forecasts BLS aggregate
capital inputs using a regression model. A complete description of the
MFP projection methodology is available on the CMS website at: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html.
For FY 2022, we are proposing an MFP adjustment of 0.2 percentage
point. Similar to the market basket update, for this proposed rule, we
used IGI's fourth quarter 2020 forecast of the MFP adjustment to
compute the proposed FY 2022 MFP adjustment. As noted previously, we
are proposing that if more recent data subsequently become available,
we would use such data, if appropriate, to determine the FY 2022 market
basket update and the MFP for the final rule.
Based on these data, we have determined four proposed applicable
percentage increases to the standardized amount for FY 2022, as
specified in the following table:
[[Page 25436]]
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In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42344), we revised
our regulations at 42 CFR 412.64(d) to reflect the current law for the
update for FY 2020 and subsequent fiscal years. Specifically, in
accordance with section 1886(b)(3)(B) of the Act, we added paragraph
(d)(1)(viii) to Sec. 412.64 to set forth the applicable percentage
increase to the operating standardized amount for FY 2020 and
subsequent fiscal years as the percentage increase in the market basket
index, subject to the reductions specified under Sec. 412.64(d)(2) for
a hospital that does not submit quality data and Sec. 412.64(d)(3) for
a hospital that is not a meaningful EHR user, less an MFP adjustment.
(As previously noted, section 1886(b)(3)(B)(xii) of the Act required an
additional reduction each year only for FYs 2010 through 2019.)
Section 1886(b)(3)(B)(iv) of the Act provides that the applicable
percentage increase to the hospital-specific rates for SCHs and MDHs
equals the applicable percentage increase set forth in section
1886(b)(3)(B)(i) of the Act (that is, the same update factor as for all
other hospitals subject to the IPPS). Therefore, the update to the
hospital-specific rates for SCHs and MDHs also is subject to section
1886(b)(3)(B)(i) of the Act, as amended by sections 3401(a) and
10319(a) of the Affordable Care Act. (Under current law, the MDH
program is effective for discharges on or before September 30, 2022, as
discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41429 through
41430).)
For FY 2022, we are proposing the following updates to the
hospital-specific rates applicable to SCHs and MDHs: a proposed update
of 2.3 percent for a hospital that submits quality data and is a
meaningful EHR user; a proposed update of 0.425 percent for a hospital
that submits quality data and is not a meaningful EHR user; a proposed
update of 1.675 percent for a hospital that fails to submit quality
data and is a meaningful EHR user; and a proposed update of -0.2
percent for a hospital that fails to submit quality data and is not an
meaningful EHR user. As noted previously, for this proposed rule, we
are using IGI's fourth quarter 2020 forecast of the proposed 2018-based
IPPS market basket update with historical data through third quarter
2020. Similarly, we used IGI's fourth quarter 2020 forecast of the MFP
adjustment. We are proposing that if more recent data subsequently
became available (for example, a more recent estimate of the market
basket update and the MFP adjustment), we would use such data, if
appropriate, to determine the update in the final rule.
2. Proposed FY 2022 Puerto Rico Hospital Update
Section 602 of Public Law 114-113 amended section 1886(n)(6)(B) of
the Act to specify that subsection (d) Puerto Rico hospitals are
eligible for incentive payments for the meaningful use of certified EHR
technology, effective beginning FY 2016. In addition, section
1886(n)(6)(B) of the Act was amended to specify that the adjustments to
the applicable percentage increase under section 1886(b)(3)(B)(ix) of
the Act apply to subsection (d) Puerto Rico hospitals that are not
meaningful EHR users, effective beginning FY 2022. Accordingly, for FY
2022, section 1886(b)(3)(B)(ix) of the Act in conjunction with section
602(d) of Public Law 114-113 requires that any subsection (d) Puerto
Rico hospital that is not a meaningful EHR user as defined in section
1886(n)(3) of the Act and not subject to an exception under section
1886(b)(3)(B)(ix) of the Act will have ``three-quarters'' of the
applicable percentage increase (prior to the application of other
statutory adjustments), or three-quarters of the applicable market
basket rate-of-increase, reduced by 33\1/3\ percent. The reduction to
three-quarters of the applicable percentage increase for subsection (d)
Puerto Rico hospitals that are not meaningful EHR users increases to
66\2/3\ percent for FY 2023, and, for FY 2024 and subsequent fiscal
years, to 100 percent. (We note that section 1886(b)(3)(B)(viii) of the
Act, which specifies the adjustment to the applicable percentage
increase for ``subsection (d)'' hospitals that do not submit quality
data under the rules established by the Secretary, is not applicable to
hospitals located in Puerto Rico.) The regulations at 42 CFR
412.64(d)(3)(ii) reflect the current law for the update for subsection
(d) Puerto Rico hospitals for FY 2022 and subsequent fiscal years. In
the FY 2019 IPPS/LTCH PPS final rule, we finalized the payment
reductions (83 FR 41674).
For FY 2022, consistent with section 1886(b)(3)(B) of the Act, as
amended by section 602 of Public Law 114-113, we are setting the
applicable percentage increase for Puerto Rico hospitals by applying
the following adjustments in the following sequence. Specifically, the
applicable percentage increase under the IPPS for Puerto Rico hospitals
will be equal to the rate of-increase in the hospital market basket for
IPPS hospitals in all areas, subject to a 33\1/3\ percent reduction to
three-fourths of the
[[Page 25437]]
applicable percentage increase (prior to the application of other
statutory adjustments; also referred to as the market basket update or
rate-of-increase (with no adjustments)) for Puerto Rico hospitals not
considered to be meaningful EHR users in accordance with section
1886(b)(3)(B)(ix) of the Act, and then subject to the MFP adjustment at
section 1886(b)(3)(B)(xi) of the Act. As noted previously, section
1886(b)(3)(B)(xi) of the Act states that application of the MFP
adjustment may result in the applicable percentage increase being less
than zero.
Based on IGI's fourth quarter 2020 forecast of the proposed 2018
based IPPS market basket update with historical data through third
quarter 2020, for this FY 2022 proposed rule, in accordance with
section 1886(b)(3)(B) of the Act, as discussed previously, for Puerto
Rico hospitals we are proposing a market basket update of 2.5 percent
and an MFP adjustment of 0.2 percent. Therefore, for FY 2022, depending
on whether a Puerto Rico hospital is a meaningful EHR user, there are
two possible applicable percentage increases that can be applied to the
standardized amount. Based on these data, we have determined the
following proposed applicable percentage increases to the standardized
amount for FY 2022 for Puerto Rico hospitals:
For a Puerto Rico hospital that is a meaningful EHR user,
we are proposing an applicable percentage increase to the FY 2022
operating standardized amount of 2.3 percent (that is, the FY 2022
estimate of the proposed market basket rate-of-increase of 2.5 percent
less an adjustment of 0.2 percentage point for the proposed MFP
adjustment).
For a Puerto Rico hospital that is not a meaningful EHR
user, we are proposing an applicable percentage increase to the
operating standardized amount of 1.675 percent (that is, the FY 2022
estimate of the proposed market basket rate-of-increase of 2.5 percent,
less an adjustment of 0.625 percentage point (the proposed market
basket rate of-increase of 2.5 percent x 0.75)/3) for failure to be a
meaningful EHR user, less an adjustment of 0.2 percentage point for the
proposed MFP adjustment.
As noted previously, we are proposing that if more recent data
subsequently become available, we would use such data, if appropriate,
to determine the FY 2022 market basket update and the MFP adjustment
for the FY 2022 IPPS/LTCH PPS final rule.
B. Rural Referral Centers (RRCs) Proposed Annual Updates to Case-Mix
Index (CMI) and Discharge Criteria (Sec. 412.96)
Under the authority of section 1886(d)(5)(C)(i) of the Act, the
regulations at Sec. 412.96 set forth the criteria that a hospital must
meet in order to qualify under the IPPS as a rural referral center
(RRC). RRCs receive special treatment under both the DSH payment
adjustment and the criteria for geographic reclassification.
Section 402 of Public Law 108-173 raised the DSH payment adjustment
for RRCs such that they are not subject to the 12-percent cap on DSH
payments that is applicable to other rural hospitals. RRCs also are not
subject to the proximity criteria when applying for geographic
reclassification. In addition, they do not have to meet the requirement
that a hospital's average hourly wage must exceed, by a certain
percentage, the average hourly wage of the labor market area in which
the hospital is located.
Section 4202(b) of Public Law 105-33 states, in part, that any
hospital classified as an RRC by the Secretary for FY 1991 shall be
classified as such an RRC for FY 1998 and each subsequent fiscal year.
In the August 29, 1997 IPPS final rule with comment period (62 FR
45999), we reinstated RRC status for all hospitals that lost that
status due to triennial review or MGCRB reclassification. However, we
did not reinstate the status of hospitals that lost RRC status because
they were now urban for all purposes because of the OMB designation of
their geographic area as urban. Subsequently, in the August 1, 2000
IPPS final rule (65 FR 47089), we indicated that we were revisiting
that decision. Specifically, we stated that we would permit hospitals
that previously qualified as an RRC and lost their status due to OMB
redesignation of the county in which they are located from rural to
urban, to be reinstated as an RRC. Otherwise, a hospital seeking RRC
status must satisfy all of the other applicable criteria. We use the
definitions of ``urban'' and ``rural'' specified in subpart D of 42 CFR
part 412. One of the criteria under which a hospital may qualify as an
RRC is to have 275 or more beds available for use (Sec.
412.96(b)(1)(ii)). A rural hospital that does not meet the bed size
requirement can qualify as an RRC if the hospital meets two mandatory
prerequisites (a minimum case-mix index (CMI) and a minimum number of
discharges), and at least one of three optional criteria (relating to
specialty composition of medical staff, source of inpatients, or
referral volume). (We refer readers to Sec. 412.96(c)(1) through (5)
and the September 30, 1988 Federal Register (53 FR 38513) for
additional discussion.) With respect to the two mandatory
prerequisites, a hospital may be classified as an RRC if--
The hospital's CMI is at least equal to the lower of the
median CMI for urban hospitals in its census region, excluding
hospitals with approved teaching programs, or the median CMI for all
urban hospitals nationally; and
The hospital's number of discharges is at least 5,000 per
year, or, if fewer, the median number of discharges for urban hospitals
in the census region in which the hospital is located. The number of
discharges criterion for an osteopathic hospital is at least 3,000
discharges per year, as specified in section 1886(d)(5)(C)(i) of the
Act.
1. Proposed Amendment to Timeframe Used for Case-Mix Index (CMI) Under
Sec. 412.96(c)(1) and Sec. 412.96(h) and Discharges Under Sec.
412.96(i) for RRC Classification
a. Case-Mix Index (CMI)
As previously noted, in addition to meeting other criteria, to
qualify for initial RRC status for cost reporting periods beginning on
or after October 1 of a given fiscal year, under Sec. 412.96(c)(1), a
hospital must meet the minimum case-mix index (CMI) value during the
most recent Federal fiscal year that ended at least one year prior to
the beginning of the cost reporting period for which the hospital is
seeking RRC status. We typically use the data from the Federal fiscal
year that is two years prior to the Federal fiscal year for which a
hospital is seeking RRC status to compute the national and regional
median CMI values, as these are generally the best available data at
the time of the development of the proposed and final rules. For
example, in the FY 2021 IPPS/LTCH PPS final rule, we calculated the
national and regional median CMIs using discharges occurring during FY
2019 (October 1, 2018 through September 30, 2019).
However, as discussed in section I.F. of this proposed rule, the
best available data to use for certain purposes of this FY 2022
rulemaking may not be the FY 2020 data that we would ordinarily use,
due to the impact of the COVID-19 PHE. We believe that the differences
in utilization for certain types of services in FY 2020 as compared to
what would have been expected in the absence of the PHE also affects
the calculation of the CMI values used for purposes of determining RRC
status. We note that the CMI values calculated using the FY
[[Page 25438]]
2020 data are significantly different from the CMI values calculated
using the FY 2019 data. As such, while we would normally propose to use
data from FY 2020 to calculate CMI values for this FY 2022 proposed
rule, we are instead proposing to use values that are based on
discharges occurring during FY 2019 (October 1, 2018 through September
30, 2019), and include bills posted to CMS' records through March 2020.
We are making available for public comment the CMI values calculated
using the FY 2020 data that we would ordinarily propose to use. We
refer readers to the ``Alternatives Considered'' discussion in section
I.O. of Appendix A for where these and other supplemental files may be
found.
Accordingly, we are proposing to amend Sec. 412.96(c)(1) with
regard to the data to be used in identifying the CMI value for an
individual hospital that is used to determine whether the hospital
meets the CMI criteria for purposes for RRC classification.
Specifically, we are proposing to amend Sec. 412.96(c)(1) to indicate
that the individual hospital's CMI value for discharges during the same
Federal fiscal year used to compute the national and regional CMI
values is used for purposes of determining whether a hospital qualifies
for RRC classification. We are also proposing to amend Sec.
412.96(h)(1) to provide for the use of the best available data rather
than the latest available data in calculating the national and regional
CMI criteria.
b. Discharges
As previously noted, in addition to meeting other criteria, to
qualify for initial RRC status for cost reporting periods beginning on
or after October 1 of a given fiscal year, under Sec. 412.96(c)(2), a
hospital must meet the minimum number of discharges during its cost
reporting period that began during the same fiscal year as the cost
reporting periods used to compute the regional median discharges. We
typically use the cost reporting periods that are 3 years prior to the
fiscal year for which a hospital is seeking RRC status to compute the
regional median discharges, as these are generally the latest cost
report data available at the time of the development of the proposed
and final rules. For example, in FY 2021 IPPS/LTCH PPS final rule, we
calculated the regional standards based on discharges for urban
hospitals' cost reporting periods that began during FY 2018.
However, as discussed in section I.F. of this proposed rule and as
previously noted with respect to the CMI calculation, the best
available data to use for certain purposes of this FY 2022 rulemaking
may not be the FY 2019 cost report data that we would ordinarily use,
due to the impact of the COVID-19 PHE. We believe that the differences
in utilization for certain types of services in FY 2019 cost reporting
periods that spanned the PHE as compared to what would have been
expected in the absence of the PHE also affects the calculation of the
regional median discharges used for purposes of determining RRC status.
We note that the regional median discharges calculated using the FY
2019 cost report data are different from the regional median discharges
values calculated using the FY 2018 data. As such, while we ordinarily
would have proposed to calculate the regional median discharges based
on cost reports with cost reporting periods beginning in FY 2019
(October 1, 2018 through September 30, 2019), we are instead proposing
to calculate the regional median discharges based on cost reports with
cost reporting periods beginning in FY 2018 (October 1, 2017 through
September 30, 2018). We are making available for public comment the
regional median discharges calculated using FY 2019 cost report data
that we would ordinarily propose to use. We refer readers to the
``Alternatives Considered'' discussion in section I.O. of Appendix A
for where these and other supplemental files may be found.
Accordingly, we are proposing to amend the regulations at Sec.
412.96(i)(1) and (2), which describe the methodology for calculating
the number of discharges criteria, to provide for the use of the best
available data rather than the latest available or most recent data
when calculating the regional discharges for RRC classification.
2. Case-Mix Index (CMI)
Section 412.96(c)(1) provides that CMS establish updated national
and regional CMI values in each year's annual notice of prospective
payment rates for purposes of determining RRC status. The methodology
we used to determine the national and regional CMI values is set forth
in the regulations at Sec. 412.96(c)(1)(ii), in conjunction with the
proposed amendment to provide for the use of the best available data
rather than the use of the latest available data. The proposed national
median CMI value for FY 2022 is based on the CMI values of all urban
hospitals nationwide, and the proposed regional median CMI values for
FY 2022 are based on the CMI values of all urban hospitals within each
census region, excluding those hospitals with approved teaching
programs (that is, those hospitals that train residents in an approved
GME program as provided in Sec. 413.75). For the reasons discussed
previously, the proposed values are based on discharges occurring
during FY 2019 (October 1, 2018 through September 30, 2019), and
include bills posted to CMS' records through March 2020.
In this FY 2022 IPPS/LTCH PPS proposed rule, we are proposing that,
in addition to meeting other criteria, if rural hospitals with fewer
than 275 beds are to qualify for initial RRC status for cost reporting
periods beginning on or after October 1, 2021, they must have a CMI
value for FY 2019 that is at least--
1.7049 (national--all urban); or
The median CMI value (not transfer-adjusted) for urban
hospitals (excluding hospitals with approved teaching programs as
identified in Sec. 413.75) calculated by CMS for the census region in
which the hospital is located.
The proposed median CMI values by region are set forth in the table
in this section of this rule. We may update the proposed CMI values in
the FY 2022 final rule to reflect finalized policies for FY 2022,
including the best available data.
[[Page 25439]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.245
A hospital seeking to qualify as an RRC should obtain its hospital-
specific CMI value (not transfer-adjusted) from its MAC. Data are
available on the Provider Statistical and Reimbursement (PS&R) System.
In keeping with our policy on discharges, the CMI values are computed
based on all Medicare patient discharges subject to the IPPS MS-DRG-
based payment.
3. Discharges
Section 412.96(c)(2)(i) provides that CMS set forth the national
and regional numbers of discharges criteria in each year's annual
notice of prospective payment rates for purposes of determining RRC
status. As specified in section 1886(d)(5)(C)(ii) of the Act, the
national standard is set at 5,000 discharges. For FY 2022, consistent
with our proposed amendments to Sec. 412.96(i)(1) and (2) to provide
for the use of the best available data rather than the latest available
or most recent data, we are proposing to update the regional standards
based on discharges for urban hospitals' cost reporting periods that
began during FY 2018 (that is, October 1, 2017 through September 30,
2018). Therefore, we are proposing that, in addition to meeting other
criteria, a hospital, if it is to qualify for initial RRC status for
cost reporting periods beginning on or after October 1, 2021, must
have, as the number of discharges for its cost reporting period that
began during FY 2018, at least--
5,000 (3,000 for an osteopathic hospital); or
If less, the median number of discharges for urban
hospitals in the census region in which the hospital is located. We
refer readers to the proposed number of discharges in the table set
forth in this section of the rule.
[GRAPHIC] [TIFF OMITTED] TP10MY21.246
We note that because the median number of discharges for hospitals
in each census region is greater than the national standard of 5,000
discharges, under this proposed rule, 5,000 discharges is the minimum
criterion for all hospitals, except for osteopathic hospitals for which
the minimum criterion is 3,000 discharges.
C. Proposed Payment Adjustment for Low-Volume Hospitals (Sec. 412.101)
1. Background
Section 1886(d)(12) of the Act provides for an additional payment
to each qualifying low-volume hospital under the IPPS beginning in FY
2005. The additional payment adjustment to a low-volume hospital
provided for under section 1886(d)(12) of the Act is in addition to any
payment calculated under section 1886 of the Act. Therefore, the
additional payment adjustment is based on the per discharge amount paid
to the qualifying hospital under section 1886 of the Act. In other
words, the low-volume hospital payment adjustment is based on total per
discharge payments made under section 1886 of the Act, including
capital, DSH, IME, and outlier payments. For SCHs and MDHs, the low-
volume hospital payment adjustment is based in part on either the
Federal rate or the hospital-specific rate,
[[Page 25440]]
whichever results in a greater operating IPPS payment.
As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41398
through 41399), section 50204 of the Bipartisan Budget Act of 2018
(Pub. L. 115-123) modified the definition of a low-volume hospital and
the methodology for calculating the payment adjustment for low-volume
hospitals for FYs 2019 through 2022. (Section 50204 also extended prior
changes to the definition of a low-volume hospital and the methodology
for calculating the payment adjustment for low-volume hospitals through
FY 2018.) Currently, the low-volume hospital qualifying criteria
provide that a hospital must have fewer 3,800 total discharges during
the fiscal year, and the hospital must be located more than 15 road
miles from the nearest ``subsection (d)'' hospital. These criteria will
remain in effect through FY 2022. Beginning with FY 2023, the low-
volume hospital qualifying criteria and payment adjustment will revert
to the statutory requirements that were in effect prior to FY 2011.
Therefore, in order for a hospital to continue to qualify as a low-
volume hospital on or after October 1, 2022, it must have fewer than
200 total discharges during the fiscal year and be located more than 25
road miles from the nearest ``subsection (d)'' hospital (see Sec.
412.101(b)(2)(i)). (For additional information on the low-volume
hospital payment adjustment prior to FY 2018, we refer readers to the
FY 2017 IPPS/LTCH PPS final rule (81 FR 56941 through 56943). For
additional information on the low-volume hospital payment adjustment
for FY 2018, we refer readers to the FY 2018 IPPS notice (CMS-1677-N)
that appeared in the Federal Register on April 26, 2018 (83 FR 18301
through 18308).)
2. Temporary Changes to the Low-Volume Hospital Definition and Payment
Adjustment Methodology for FYs 2019 Through 2022
As discussed earlier, section 50204 of the Bipartisan Budget Act of
2018 further modified the definition of a low-volume hospital and the
methodology for calculating the payment adjustment for low-volume
hospitals for FYs 2019 through 2022. Specifically, the qualifying
criteria for low-volume hospitals under section 1886(d)(12)(C)(i) of
the Act were amended to specify that, for FYs 2019 through 2022, a
subsection (d) hospital qualifies as a low-volume hospital if it is
more than 15 road miles from another subsection (d) hospital and has
less than 3,800 total discharges during the fiscal year. Section
1886(d)(12)(D) of the Act was also amended to provide that, for
discharges occurring in FYs 2019 through 2022, the Secretary shall
determine the applicable percentage increase using a continuous, linear
sliding scale ranging from an additional 25 percent payment adjustment
for low-volume hospitals with 500 or fewer discharges to a zero percent
additional payment for low-volume hospitals with more than 3,800
discharges in the fiscal year. Consistent with the requirements of
section 1886(d)(12)(C)(ii) of the Act, the term ``discharge'' for
purposes of these provisions refers to total discharges, regardless of
payer (that is, Medicare and non-Medicare discharges).
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41399), to implement
this requirement, we specified a continuous, linear sliding scale
formula to determine the low-volume hospital payment adjustment for FYs
2019 through 2022 that is similar to the continuous, linear sliding
scale formula used to determine the low-volume hospital payment
adjustment originally established by the Affordable Care Act and
implemented in the regulations at Sec. 412.101(c)(2)(ii) in the FY
2011 IPPS/LTCH PPS final rule (75 FR 50240 through 50241). Consistent
with the statute, we provided that qualifying hospitals with 500 or
fewer total discharges will receive a low-volume hospital payment
adjustment of 25 percent. For qualifying hospitals with fewer than
3,800 discharges but more than 500 discharges, the low-volume payment
adjustment is calculated by subtracting from 25 percent the proportion
of payments associated with the discharges in excess of 500. As such,
for qualifying hospitals with fewer than 3,800 total discharges but
more than 500 total discharges, the low-volume hospital payment
adjustment for FYs 2019 through 2022 is calculated using the following
formula:
Low-Volume Hospital Payment Adjustment = 0.25 - [0.25/3300] x (number
of total discharges - 500) = (95/330) - (number of total discharges/
13,200).
For this purpose, we specified that the ``number of total
discharges'' is determined as total discharges, which includes Medicare
and non-Medicare discharges during the fiscal year, based on the
hospital's most recently submitted cost report. The low-volume hospital
payment adjustment for FYs 2019 through 2022 is set forth in the
regulations at 42 CFR 412.101(c)(3).
3. Process for Requesting and Obtaining the Low-Volume Hospital Payment
Adjustment
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50238 through 50275
and 50414) and subsequent rulemaking (for example, the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41399 through 41401), we discussed the
process for requesting and obtaining the low-volume hospital payment
adjustment. Under this previously established process, a hospital makes
a written request for the low-volume payment adjustment under Sec.
412.101 to its MAC. This request must contain sufficient documentation
to establish that the hospital meets the applicable mileage and
discharge criteria. The MAC will determine if the hospital qualifies as
a low-volume hospital by reviewing the data the hospital submits with
its request for low-volume hospital status in addition to other
available data. Under this approach, a hospital will know in advance
whether or not it will receive a payment adjustment under the low-
volume hospital policy. The MAC and CMS may review available data such
as the number of discharges, in addition to the data the hospital
submits with its request for low-volume hospital status, in order to
determine whether or not the hospital meets the qualifying criteria.
(For additional information on our existing process for requesting the
low-volume hospital payment adjustment, we refer readers to the FY 2019
IPPS/LTCH PPS final rule (83 FR 41399 through 41401).)
As explained earlier, for FY 2019 and subsequent fiscal years, the
discharge determination is made based on the hospital's number of total
discharges, that is, Medicare and non-Medicare discharges, as was the
case for FYs 2005 through 2010. Under Sec. 412.101(b)(2)(i) and (iii),
a hospital's most recently submitted cost report is used to determine
if the hospital meets the discharge criterion to receive the low-volume
payment adjustment in the current year. As discussed in the FY 2019
IPPS/LTCH PPS final rule (83 FR 41399 and 41400), we use cost report
data to determine if a hospital meets the discharge criterion because
this is the best available data source that includes information on
both Medicare and non-Medicare discharges. (For FYs 2011 through 2018,
the most recently available MedPAR data were used to determine the
hospital's Medicare discharges because non-Medicare discharges were not
used to determine if a hospital met the discharge criterion for those
years.) Therefore, a hospital should refer to its most recently
[[Page 25441]]
submitted cost report for total discharges (Medicare and non-Medicare)
in order to decide whether or not to apply for low-volume hospital
status for a particular fiscal year.
As also discussed in the FY 2019 IPPS/LTCH PPS final rule, in
addition to the discharge criterion, for FY 2019 and for subsequent
fiscal years, eligibility for the low-volume hospital payment
adjustment is also dependent upon the hospital meeting the applicable
mileage criterion specified in Sec. 412.101(b)(2)(i) or (iii) for the
fiscal year. Specifically, to meet the mileage criterion to qualify for
the low-volume hospital payment adjustment for FY 2022, as was the case
for FYs 2019, 2020 and 2021, a hospital must be located more than 15
road miles from the nearest subsection (d) hospital. (We define in
Sec. 412.101(a) the term ``road miles'' to mean ``miles'' as defined
in Sec. 412.92(c)(1) (75 FR 50238 through 50275 and 50414).) For
establishing that the hospital meets the mileage criterion, the use of
a web-based mapping tool as part of the documentation is acceptable.
The MAC will determine if the information submitted by the hospital,
such as the name and street address of the nearest hospitals, location
on a map, and distance from the hospital requesting low-volume hospital
status, is sufficient to document that it meets the mileage criterion.
If not, the MAC will follow up with the hospital to obtain additional
necessary information to determine whether or not the hospital meets
the applicable mileage criterion.
In accordance with our previously established process, a hospital
must make a written request for low-volume hospital status that is
received by its MAC by September 1 immediately preceding the start of
the Federal fiscal year for which the hospital is applying for low-
volume hospital status in order for the applicable low-volume hospital
payment adjustment to be applied to payments for its discharges for the
fiscal year beginning on or after October 1 immediately following the
request (that is, the start of the Federal fiscal year).\935\ For a
hospital whose request for low-volume hospital status is received after
September 1, if the MAC determines the hospital meets the criteria to
qualify as a low-volume hospital, the MAC will apply the applicable
low-volume hospital payment adjustment to determine payment for the
hospital's discharges for the fiscal year, effective prospectively
within 30 days of the date of the MAC's low-volume status
determination.
---------------------------------------------------------------------------
\935\ We note that for FY 2021, we established a deadline of
September 15, 2020 for receipt of a hospital's written request by
its MAC in order for the low-volume hospital payment adjustment to
be applied to payments for a hospital's discharges beginning on or
after October 1, 2020, as discussed in the FY 2021 IPPS/LTCH PPS
final rule (85 FR 58803).
---------------------------------------------------------------------------
Consistent with this previously established process, for FY 2022,
we are proposing that a hospital must submit a written request for low-
volume hospital status to its MAC that includes sufficient
documentation to establish that the hospital meets the applicable
mileage and discharge criteria (as described earlier). Consistent with
historical practice, for FY 2022, we are proposing that a hospital's
written request must be received by its MAC no later than September 1,
2021 in order for the low-volume hospital payment adjustment to be
applied to payments for its discharges beginning on or after October 1,
2021. If a hospital's written request for low-volume hospital status
for FY 2022 is received after September 1, 2021, and if the MAC
determines the hospital meets the criteria to qualify as a low-volume
hospital, the MAC would apply the low-volume hospital payment
adjustment to determine the payment for the hospital's FY 2022
discharges, effective prospectively within 30 days of the date of the
MAC's low-volume hospital status determination. We note that this
proposal is generally consistent with the process for requesting and
obtaining the low-volume hospital payment adjustment for FY 2021 (85 FR
58802 through 58803).\936\
---------------------------------------------------------------------------
\936\ As noted, CMS established a deadline of September 15, 2020
for receipt of the hospital's written request for FY 2021, as
discussed in the FY 2021 IPPS/LTCH PPS final rule.
---------------------------------------------------------------------------
Under this process, a hospital receiving the low-volume hospital
payment adjustment for FY 2021 may continue to receive a low-volume
hospital payment adjustment for FY 2022 without reapplying if it
continues to meet the applicable mileage and discharge criteria (which,
as discussed previously, are the same qualifying criteria that apply
for FY 2021). In this case, a hospital's request can include a
verification statement that it continues to meet the mileage criterion
applicable for FY 2022. (Determination of meeting the discharge
criterion is discussed earlier in this section.) We note that a
hospital must continue to meet the applicable qualifying criteria as a
low-volume hospital (that is, the hospital must meet the applicable
discharge criterion and mileage criterion for the fiscal year) in order
to receive the payment adjustment in that fiscal year; that is, low-
volume hospital status is not based on a ``one-time'' qualification (75
FR 50238 through 50275). Consistent with historical policy, a hospital
must submit its request, including this written verification, for each
fiscal year for which it seeks to receive the low-volume hospital
payment adjustment, and in accordance with the timeline described
earlier.
D. Proposed Indirect Medical Education (IME) Payment Adjustment Factor
(Sec. 412.105)
Under the IPPS, an additional payment amount is made to hospitals
with residents in an approved graduate medical education (GME) program
in order to reflect the higher indirect patient care costs of teaching
hospitals relative to nonteaching hospitals. The payment amount is
determined by use of a statutorily specified adjustment factor. The
regulations regarding the calculation of this additional payment, known
as the IME adjustment, are located at Sec. 412.105. We refer readers
to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51680) for a full
discussion of the IME adjustment and IME adjustment factor. Section
1886(d)(5)(B)(ii)(XII) of the Act provides that, for discharges
occurring during FY 2008 and fiscal years thereafter, the IME formula
multiplier is 1.35. Accordingly, for discharges occurring during FY
2022, the formula multiplier is 1.35. We estimate that application of
this formula multiplier for the FY 2022 IME adjustment will result in
an increase in IPPS payment of 5.5 percent for every approximately 10
percent increase in the hospital's resident-to-bed ratio.
E. Proposed Payment Adjustment for Medicare Disproportionate Share
Hospitals (DSHs) for FY 2022 (Sec. 412.106)
1. General Discussion
Section 1886(d)(5)(F) of the Act provides for additional Medicare
payments to subsection (d) hospitals that serve a significantly
disproportionate number of low-income patients. The Act specifies two
methods by which a hospital may qualify for the Medicare
disproportionate share hospital (DSH) adjustment. Under the first
method, hospitals that are located in an urban area and have 100 or
more beds may receive a Medicare DSH payment adjustment if the hospital
can demonstrate that, during its cost reporting period, more than 30
percent of its net inpatient care revenues are derived from State and
local government payments for care furnished to patients with low
incomes. This method is commonly referred to as the ``Pickle method.''
The second method for qualifying for the DSH payment
[[Page 25442]]
adjustment, which is the most common, is based on a complex statutory
formula under which the DSH payment adjustment is based on the
hospital's geographic designation, the number of beds in the hospital,
and the level of the hospital's disproportionate patient percentage
(DPP). A hospital's DPP is the sum of two fractions: The ``Medicare
fraction'' and the ``Medicaid fraction.'' The Medicare fraction (also
known as the ``SSI fraction'' or ``SSI ratio'') is computed by dividing
the number of the hospital's inpatient days that are furnished to
patients who were entitled to both Medicare Part A and Supplemental
Security Income (SSI) benefits by the hospital's total number of
patient days furnished to patients entitled to benefits under Medicare
Part A. The Medicaid fraction is computed by dividing the hospital's
number of inpatient days furnished to patients who, for such days, were
eligible for Medicaid, but were not entitled to benefits under Medicare
Part A, by the hospital's total number of inpatient days in the same
period.
Because the DSH payment adjustment is part of the IPPS, the
statutory references to ``days'' in section 1886(d)(5)(F) of the Act
have been interpreted to apply only to hospital acute care inpatient
days. Regulations located at 42 CFR 412.106 govern the Medicare DSH
payment adjustment and specify how the DPP is calculated as well as how
beds and patient days are counted in determining the Medicare DSH
payment adjustment. Under Sec. 412.106(a)(1)(i), the number of beds
for the Medicare DSH payment adjustment is determined in accordance
with bed counting rules for the IME adjustment under Sec. 412.105(b).
Section 3133 of the Patient Protection and Affordable Care Act, as
amended by section 10316 of the same Act and section 1104 of the Health
Care and Education Reconciliation Act (Pub. L. 111-152), added a
section 1886(r) to the Act that modifies the methodology for computing
the Medicare DSH payment adjustment. (For purposes of this proposed
rule, we refer to these provisions collectively as section 3133 of the
Affordable Care Act.) Beginning with discharges in FY 2014, hospitals
that qualify for Medicare DSH payments under section 1886(d)(5)(F) of
the Act receive 25 percent of the amount they previously would have
received under the statutory formula for Medicare DSH payments. This
provision applies equally to hospitals that qualify for DSH payments
under section 1886(d)(5)(F)(i)(I) of the Act and those hospitals that
qualify under the Pickle method under section 1886(d)(5)(F)(i)(II) of
the Act.
The remaining amount, equal to an estimate of 75 percent of what
otherwise would have been paid as Medicare DSH payments, reduced to
reflect changes in the percentage of individuals who are uninsured, is
available to make additional payments to each hospital that qualifies
for Medicare DSH payments and that has uncompensated care. The payments
to each hospital for a fiscal year are based on the hospital's amount
of uncompensated care for a given time period relative to the total
amount of uncompensated care for that same time period reported by all
hospitals that receive Medicare DSH payments for that fiscal year.
Section 1886(r) of the Act requires that, for FY 2014 and each
subsequent fiscal year, a subsection (d) hospital that would otherwise
receive DSH payments made under section 1886(d)(5)(F) of the Act
receives two separately calculated payments. Specifically, section
1886(r)(1) of the Act provides that the Secretary shall pay to such
subsection (d) hospital (including a Pickle hospital) 25 percent of the
amount the hospital would have received under section 1886(d)(5)(F) of
the Act for DSH payments, which represents the empirically justified
amount for such payment, as determined by the MedPAC in its March 2007
Report to Congress. We refer to this payment as the ``empirically
justified Medicare DSH payment.'' In addition to this empirically
justified Medicare DSH payment, section 1886(r)(2) of the Act provides
that, for FY 2014 and each subsequent fiscal year, the Secretary shall
pay to such subsection (d) hospital an additional amount equal to the
product of three factors. The first factor is the difference between
the aggregate amount of payments that would be made to subsection (d)
hospitals under section 1886(d)(5)(F) of the Act if subsection (r) did
not apply and the aggregate amount of payments that are made to
subsection (d) hospitals under section 1886(r)(1) of the Act for such
fiscal year. Therefore, this factor amounts to 75 percent of the
payments that would otherwise be made under section 1886(d)(5)(F) of
the Act.
The second factor is, for FY 2018 and subsequent fiscal years, 1
minus the percent change in the percent of individuals who are
uninsured, as determined by comparing the percent of individuals who
were uninsured in 2013 (as estimated by the Secretary, based on data
from the Census Bureau or other sources the Secretary determines
appropriate, and certified by the Chief Actuary of CMS), and the
percent of individuals who were uninsured in the most recent period for
which data are available (as so estimated and certified), minus a
statutory adjustment of 0.2 percentage point for FYs 2018 and 2019.
The third factor is a percent that, for each subsection (d)
hospital, represents the quotient of the amount of uncompensated care
for such hospital for a period selected by the Secretary (as estimated
by the Secretary, based on appropriate data), including the use of
alternative data where the Secretary determines that alternative data
are available which are a better proxy for the costs of subsection (d)
hospitals for treating the uninsured, and the aggregate amount of
uncompensated care for all subsection (d) hospitals that receive a
payment under section 1886(r) of the Act. Therefore, this third factor
represents a hospital's uncompensated care amount for a given time
period relative to the uncompensated care amount for that same time
period for all hospitals that receive Medicare DSH payments in the
applicable fiscal year, expressed as a percent.
For each hospital, the product of these three factors represents
its additional payment for uncompensated care for the applicable fiscal
year. We refer to the additional payment determined by these factors as
the ``uncompensated care payment.''
Section 1886(r) of the Act applies to FY 2014 and each subsequent
fiscal year. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50620
through 50647) and the FY 2014 IPPS interim final rule with comment
period (78 FR 61191 through 61197), we set forth our policies for
implementing the required changes to the Medicare DSH payment
methodology made by section 3133 of the Affordable Care Act for FY
2014. In those rules, we noted that, because section 1886(r) of the Act
modifies the payment required under section 1886(d)(5)(F) of the Act,
it affects only the DSH payment under the operating IPPS. It does not
revise or replace the capital IPPS DSH payment provided under the
regulations at 42 CFR part 412, subpart M, which were established
through the exercise of the Secretary's discretion in implementing the
capital IPPS under section 1886(g)(1)(A) of the Act.
Finally, section 1886(r)(3) of the Act provides that there shall be
no administrative or judicial review under section 1869, section 1878,
or otherwise of any estimate of the Secretary for purposes of
determining the factors described in section 1886(r)(2) of the Act or
of any period selected by the Secretary for the purpose of determining
[[Page 25443]]
those factors. Therefore, there is no administrative or judicial review
of the estimates developed for purposes of applying the three factors
used to determine uncompensated care payments, or the periods selected
in order to develop such estimates.
2. Eligibility for Empirically Justified Medicare DSH Payments and
Uncompensated Care Payments
As explained earlier, the payment methodology under section 3133 of
the Affordable Care Act applies to ``subsection (d) hospitals'' that
would otherwise receive a DSH payment made under section 1886(d)(5)(F)
of the Act. Therefore, hospitals must receive empirically justified
Medicare DSH payments in a fiscal year in order to receive an
additional Medicare uncompensated care payment for that year.
Specifically, section 1886(r)(2) of the Act states that, in addition to
the payment made to a subsection (d) hospital under section 1886(r)(1)
of the Act, the Secretary shall pay to such subsection (d) hospitals an
additional amount. Because section 1886(r)(1) of the Act refers to
empirically justified Medicare DSH payments, the additional payment
under section 1886(r)(2) of the Act is limited to hospitals that
receive empirically justified Medicare DSH payments in accordance with
section 1886(r)(1) of the Act for the applicable fiscal year.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50622) and the FY
2014 IPPS interim final rule with comment period (78 FR 61193), we
provided that hospitals that are not eligible to receive empirically
justified Medicare DSH payments in a fiscal year will not receive
uncompensated care payments for that year. We also specified that we
would make a determination concerning eligibility for interim
uncompensated care payments based on each hospital's estimated DSH
status for the applicable fiscal year (using the most recent data that
are available). We indicated that our final determination on the
hospital's eligibility for uncompensated care payments will be based on
the hospital's actual DSH status at cost report settlement for that
payment year.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50622) and in the
rulemaking for subsequent fiscal years, we have specified our policies
for several specific classes of hospitals within the scope of section
1886(r) of the Act. For this FY 2022 IPPS/LTCH PPS proposed rule, we
are proposing to determine eligibility for interim uncompensated care
payments based on each hospital's estimated DSH status for the
applicable fiscal year using the best available data, consistent with
our proposal discussed in section I.F of the preamble of this proposed
rule. For a discussion of the inpatient Provider Specific File, we
refer the reader to section II.A.4 of the Addendum of this proposed
rule. In this FY 2022 IPPS/LTCH PPS proposed rule, we discuss our
specific policies regarding eligibility to receive empirically
justified Medicare DSH payments and uncompensated care payments for FY
2022 with respect to the following hospitals:
Subsection (d) Puerto Rico hospitals that are eligible for
DSH payments also are eligible to receive empirically justified
Medicare DSH payments and uncompensated care payments under the new
payment methodology (78 FR 50623 and 79 FR 50006).
Maryland hospitals are not eligible to receive empirically
justified Medicare DSH payments and uncompensated care payments under
the payment methodology of section 1886(r) of the Act because they are
not paid under the IPPS. As discussed in the FY 2019 IPPS/LTCH PPS
final rule (83 FR 41402 through 41403), CMS and the State have entered
into an agreement to govern payments to Maryland hospitals under a new
payment model, the Maryland Total Cost of Care (TCOC) Model, which
began on January 1, 2019. Under the Maryland TCOC Model, Maryland
hospitals will not be paid under the IPPS in FY 2022, and will be
ineligible to receive empirically justified Medicare DSH payments and
uncompensated care payments under section 1886(r) of the Act.
Sole community hospitals (SCHs) that are paid under their
hospital-specific rate are not eligible for Medicare DSH payments. SCHs
that are paid under the IPPS Federal rate receive interim payments
based on what we estimate and project their DSH status to be prior to
the beginning of the Federal fiscal year (based on the best available
data at that time) subject to settlement through the cost report, and
if they receive interim empirically justified Medicare DSH payments in
a fiscal year, they also will receive interim uncompensated care
payments for that fiscal year on a per discharge basis, subject as well
to settlement through the cost report. Final eligibility determinations
will be made at the end of the cost reporting period at settlement, and
both interim empirically justified Medicare DSH payments and
uncompensated care payments will be adjusted accordingly (78 FR 50624
and 79 FR 50007).
Medicare-dependent, small rural hospitals (MDHs) are paid
based on the IPPS Federal rate or, if higher, the IPPS Federal rate
plus 75 percent of the amount by which the Federal rate is exceeded by
the updated hospital-specific rate from certain specified base years
(76 FR 51684). The IPPS Federal rate that is used in the MDH payment
methodology is the same IPPS Federal rate that is used in the SCH
payment methodology. Section 50205 of the Bipartisan Budget Act of 2018
(Pub. L. 115-123), enacted on February 9, 2018, extended the MDH
program for discharges on or after October 1, 2017, through September
30, 2022. Because MDHs are paid based on the IPPS Federal rate, they
continue to be eligible to receive empirically justified Medicare DSH
payments and uncompensated care payments if their DPP is at least 15
percent, and we apply the same process to determine MDHs' eligibility
for empirically justified Medicare DSH and uncompensated care payments
as we do for all other IPPS hospitals. Due to the extension of the MDH
program, MDHs will continue to be paid based on the IPPS Federal rate
or, if higher, the IPPS Federal rate plus 75 percent of the amount by
which the Federal rate is exceeded by the updated hospital-specific
rate from certain specified base years. Accordingly, we are proposing
to continue to make a determination concerning eligibility for interim
uncompensated care payments based on each hospital's estimated DSH
status for the applicable fiscal year (using the best available data).
Our final determination on the hospital's eligibility for uncompensated
care payments will be based on the hospital's actual DSH status at cost
report settlement for that payment year. In addition, as we do for all
IPPS hospitals, we will calculate a Factor 3 and an uncompensated care
payment amount for all MDHs, regardless of whether they are projected
to be eligible for Medicare DSH payments during the fiscal year, but
the denominator of Factor 3 of the uncompensated care payment
methodology will be based only on the uncompensated care data from the
hospitals that we have projected to be eligible for Medicare DSH
payments during the fiscal year.
IPPS hospitals that elect to participate in the Bundled
Payments for Care Improvement Advanced (BPCI Advanced) model starting
October 1, 2018, will continue to be paid under the IPPS and,
therefore, are eligible to receive empirically justified Medicare DSH
payments and uncompensated care payments. For further information
regarding the BPCI Advanced model, we refer readers to the CMS website
at:
[[Page 25444]]
https://innovation.cms.gov/initiatives/bpci-advanced/.
IPPS hospitals that participate in the Comprehensive Care
for Joint Replacement Model (80 FR 73300) continue to be paid under the
IPPS and, therefore, are eligible to receive empirically justified
Medicare DSH payments and uncompensated care payments. We refer the
reader to the interim final rule with request for comments that
appeared in the November 6, 2020 Federal Register for a discussion of
the Model (85 FR 71167 through 71173). The Model's Performance Year 5
was extended to September 30, 2021.
Hospitals participating in the Rural Community Hospital
Demonstration Program are not eligible to receive empirically justified
Medicare DSH payments and uncompensated care payments under section
1886(r) of the Act because they are not paid under the IPPS (78 FR
50625 and 79 FR 50008). The Rural Community Hospital Demonstration
Program was originally authorized for a 5-year period by section 410A
of the Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) (Pub. L. 108-173), and extended for another 5-year period
by sections 3123 and 10313 of the Affordable Care Act (Pub. L. 114-
255). The period of performance for this 5-year extension period ended
December 31, 2016. Section 15003 of the 21st Century Cures Act (Pub. L.
114-255), enacted December 13, 2016, again amended section 410A of
Public Law 108-173 to require a 10-year extension period (in place of
the 5-year extension required by the Affordable Care Act), therefore
requiring an additional 5-year participation period for the
demonstration program. Section 15003 of Public Law 114-255 also
required a solicitation for applications for additional hospitals to
participate in the demonstration program. The Consolidated
Appropriations Act of 2020 (Pub. L. 116-260) amended section 410A of
Public Law 108-173 to extend the Rural Community Hospital Demonstration
Program for an additional 5-year period. At the time of issuance of
this proposed rule, we believe 27 hospitals may participate in the
demonstration program at the start of FY 2022. Under the payment
methodology that applies during the third 5-year extension period for
the demonstration program, participating hospitals do not receive
empirically justified Medicare DSH payments, and they are also excluded
from receiving interim and final uncompensated care payments.
3. Empirically Justified Medicare DSH Payments
As we have discussed earlier, section 1886(r)(1) of the Act
requires the Secretary to pay 25 percent of the amount of the Medicare
DSH payment that would otherwise be made under section 1886(d)(5)(F) of
the Act to a subsection (d) hospital. Because section 1886(r)(1) of the
Act merely requires the program to pay a designated percentage of these
payments, without revising the criteria governing eligibility for DSH
payments or the underlying payment methodology, we stated in the FY
2014 IPPS/LTCH PPS final rule that we did not believe that it was
necessary to develop any new operational mechanisms for making such
payments.
Therefore, in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50626),
we implemented this provision by advising the Medicare Administrative
Contractors (MACs) to simply adjust the interim claim payments to the
requisite 25 percent of what would have otherwise been paid. We also
made corresponding changes to the hospital cost report so that these
empirically justified Medicare DSH payments can be settled at the
appropriate level at the time of cost report settlement. We provided
more detailed operational instructions and cost report instructions
following issuance of the FY 2014 IPPS/LTCH PPS final rule that are
available on the CMS website at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2014-Transmittals-Items/R5P240.html.
4. Uncompensated Care Payments
As we discussed earlier, section 1886(r)(2) of the Act provides
that, for each eligible hospital in FY 2014 and subsequent years, the
uncompensated care payment is the product of three factors. These three
factors represent our estimate of 75 percent of the amount of Medicare
DSH payments that would otherwise have been paid, an adjustment to this
amount for the percent change in the national rate of uninsurance
compared to the rate of uninsurance in 2013, and each eligible
hospital's estimated uncompensated care amount relative to the
estimated uncompensated care amount for all eligible hospitals. In this
section of this proposed rule, we discuss the data sources and
methodologies for computing each of these factors, our final policies
for FYs 2014 through 2021, and our proposed policies for FY 2022.
a. Proposed Calculation of Factor 1 for FY 2022
Section 1886(r)(2)(A) of the Act establishes Factor 1 in the
calculation of the uncompensated care payment. Section 1886(r)(2)(A) of
the Act states that this factor is equal to the difference between: (1)
The aggregate amount of payments that would be made to subsection (d)
hospitals under section 1886(d)(5)(F) of the Act if section 1886(r) of
the Act did not apply for such fiscal year (as estimated by the
Secretary); and (2) the aggregate amount of payments that are made to
subsection (d) hospitals under section 1886(r)(1) of the Act for such
fiscal year (as so estimated). Therefore, section 1886(r)(2)(A)(i) of
the Act represents the estimated Medicare DSH payments that would have
been made under section 1886(d)(5)(F) of the Act if section 1886(r) of
the Act did not apply for such fiscal year. Under a prospective payment
system, we would not know the precise aggregate Medicare DSH payment
amount that would be paid for a Federal fiscal year until cost report
settlement for all IPPS hospitals is completed, which occurs several
years after the end of the Federal fiscal year. Therefore, section
1886(r)(2)(A)(i) of the Act provides authority to estimate this amount,
by specifying that, for each fiscal year to which the provision
applies, such amount is to be estimated by the Secretary. Similarly,
section 1886(r)(2)(A)(ii) of the Act represents the estimated
empirically justified Medicare DSH payments to be made in a fiscal
year, as prescribed under section 1886(r)(1) of the Act. Again, section
1886(r)(2)(A)(ii) of the Act provides authority to estimate this
amount.
Therefore, Factor 1 is the difference between our estimates of: (1)
The amount that would have been paid in Medicare DSH payments for the
fiscal year, in the absence of the new payment provision; and (2) the
amount of empirically justified Medicare DSH payments that are made for
the fiscal year, which takes into account the requirement to pay 25
percent of what would have otherwise been paid under section
1886(d)(5)(F) of the Act. In other words, this factor represents our
estimate of 75 percent (100 percent minus 25 percent) of our estimate
of Medicare DSH payments that would otherwise be made, in the absence
of section 1886(r) of the Act, for the fiscal year.
As we did for FY 2021, in this FY 2022 IPPS/LTCH PPS proposed rule,
in order to determine Factor 1 in the uncompensated care payment
formula for FY 2022, we are proposing to
[[Page 25445]]
continue the policy established in the FY 2014 IPPS/LTCH PPS final rule
(78 FR 50628 through 50630) and in the FY 2014 IPPS interim final rule
with comment period (78 FR 61194) of determining Factor 1 by developing
estimates of both the aggregate amount of Medicare DSH payments that
would be made in the absence of section 1886(r)(1) of the Act and the
aggregate amount of empirically justified Medicare DSH payments to
hospitals under 1886(r)(1) of the Act. Consistent with the policy that
has applied in previous years, these estimates will not be revised or
updated subsequent to the publication of our final projections in the
FY 2022 IPPS/LTCH PPS final rule.
Therefore, in order to determine the two elements of proposed
Factor 1 for FY 2022 (Medicare DSH payments prior to the application of
section 1886(r)(1) of the Act, and empirically justified Medicare DSH
payments after application of section 1886(r)(1) of the Act), for this
proposed rule, we used the most recently available projections of
Medicare DSH payments for the fiscal year, as calculated by CMS' Office
of the Actuary (OACT) using the most recently filed Medicare hospital
cost reports with Medicare DSH payment information and the most recent
Medicare DSH patient percentages and Medicare DSH payment adjustments
provided in the IPPS Impact File. The determination of the amount of
DSH payments is partially based on OACT's Part A benefits projection
model. One of the results of this model is inpatient hospital spending.
Projections of DSH payments require projections for expected increases
in utilization and case-mix. The assumptions that were used in making
these projections and the resulting estimates of DSH payments for FY
2019 through FY 2022 are discussed in the table titled ``Factors
Applied for FY 2019 through FY 2022 to Estimate Medicare DSH
Expenditures Using FY 2018 Baseline.''
For purposes of calculating Factor 1 and modeling the impact of
this FY 2022 IPPS/LTCH PPS proposed rule, we used the Office of the
Actuary's January 2021 Medicare DSH estimates, which were based on data
from the September 2020 update of the Medicare Hospital Cost Report
Information System (HCRIS) and the FY 2021 IPPS/LTCH PPS final rule
IPPS Impact File, published in conjunction with the publication of the
FY 2021 IPPS/LTCH PPS final rule. Because SCHs that are projected to be
paid under their hospital-specific rate are excluded from the
application of section 1886(r) of the Act, these hospitals also were
excluded from the January 2021 Medicare DSH estimates. Furthermore,
because section 1886(r) of the Act specifies that the uncompensated
care payment is in addition to the empirically justified Medicare DSH
payment (25 percent of DSH payments that would be made without regard
to section 1886(r) of the Act), Maryland hospitals, which are not
eligible to receive DSH payments, were also excluded from the Office of
the Actuary's January 2021 Medicare DSH estimates. The 27 hospitals
that are anticipated to participate in the Rural Community Hospital
Demonstration Program in FY 2022 were also excluded from these
estimates, because under the payment methodology that applies during
the third 5-year extension period, these hospitals are not eligible to
receive empirically justified Medicare DSH payments or interim and
final uncompensated care payments.
For this proposed rule, using the data sources as previously
discussed, the Office of the Actuary's January 2021 estimate of
Medicare DSH payments for FY 2022 without regard to the application of
section 1886(r)(1) of the Act, is approximately $14.098 billion.
Therefore, also based on the January 2021 estimate, the estimate of
empirically justified Medicare DSH payments for FY 2022, with the
application of section 1886(r)(1) of the Act, is approximately $3.524
billion (or 25 percent of the total amount of estimated Medicare DSH
payments for FY 2022). Under Sec. 412.l06(g)(1)(i) of the regulations,
Factor 1 is the difference between these two OACT estimates .
Therefore, in this proposed rule, we are proposing that Factor 1 for FY
2022 would be $10,573,368,841.28, which is equal to 75 percent of the
total amount of estimated Medicare DSH payments for FY 2021
($14,097,825,121.71 minus $3,524,456,280.43). We note that consistent
with our approach in previous rulemakings, OACT intends to use more
recent data that may become available for purposes of projecting the
final Factor 1 estimates for the FY 2022 IPPS/LTCH PPS final rule.
The Factor 1 estimates for proposed rules are generally consistent
with the economic assumptions and actuarial analysis used to develop
the President's Budget estimates under current law, and the Factor 1
estimates for the final rule are generally consistent with those used
for the Midsession Review of the President's Budget. As we have in the
past, for additional information on the development of the President's
Budget, we refer readers to the Office of Management and Budget website
at: https://www.whitehouse.gov/omb/budget. Consistent with historical
practice, we expect that the Midsession Review will have updated
economic assumptions and actuarial analysis, which would be used for
the development of Factor 1 estimates in the final rule.
For a general overview of the principal steps involved in
projecting future inpatient costs and utilization, we refer readers to
the ``2020 Annual Report of the Boards of Trustees of the Federal
Hospital Insurance and Federal Supplementary Medical Insurance Trust
Funds'' available on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/index.html?redirect=/reportstrustfunds/ under
``Downloads.'' We note that the annual reports of the Medicare Boards
of Trustees to Congress represent the Federal Government's official
evaluation of the financial status of the Medicare Program. The
actuarial projections contained in these reports are based on numerous
assumptions regarding future trends in program enrollment, utilization
and costs of health care services covered by Medicare, as well as other
factors affecting program expenditures. In addition, although the
methods used to estimate future costs based on these assumptions are
complex, they are subject to periodic review by independent experts to
ensure their validity and reasonableness.
We also refer readers to the 2018 Actuarial Report on the Financial
Outlook for Medicaid for a discussion of general issues regarding
Medicaid projections. (available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/MedicaidReport).
In this proposed rule, we include information regarding the data
sources, methods, and assumptions employed by the actuaries in
determining OACT's estimate of Factor 1. In summary, we indicate the
historical HCRIS data update OACT used to identify Medicare DSH
payments, we explain that the most recent Medicare DSH payment
adjustments provided in the IPPS Impact File were used, and we provide
the components of all the update factors that were applied to the
historical data to estimate the Medicare DSH payments for the upcoming
fiscal year, along with the associated rationale and assumptions. This
discussion also includes a description of the ``Other'' and
``Discharges'' assumptions, and also provides additional information
regarding how we address the Medicaid and CHIP expansion.
The Office of the Actuary's estimates for FY 2022 for this proposed
rule began
[[Page 25446]]
with a baseline of $13.931 billion in Medicare DSH expenditures for FY
2018. The following table shows the factors applied to update this
baseline through the current estimate for FY 2022:
[GRAPHIC] [TIFF OMITTED] TP10MY21.247
In this table, the discharges column shows the changes in the
number of Medicare fee-for-service (FFS) inpatient hospital discharges.
The figures for FY 2019 and FY 2020 are based on Medicare claims data
that have been adjusted by a completion factor to account for
incomplete claims data. The discharge figure for FY 2021 is based on
preliminary data. The discharge figure for FY 2022 is an assumption
based on recent trends recovering back to the long-term trend and
assumptions related to how many beneficiaries will be enrolled in
Medicare Advantage (MA) plans. The discharge figures for FY 2020 to FY
2022 reflect the estimated impact of the COVID-19 pandemic. The case-
mix column shows the estimated change in case-mix for IPPS hospitals.
The case-mix figures for FY 2019 and FY 2020 are based on actual data
adjusted by a completion factor. The case-mix figure for FY 2021 is
based on preliminary data. The case-mix factor figures for FY 2020 and
FY 2021 have been adjusted for the estimated impact of the COVID-19
pandemic. The FY 2022 increase is an estimate based on the
recommendation of the 2010-2011 Medicare Technical Review Panel. The
``Other'' column shows the increase in other factors that contribute to
the Medicare DSH estimates. These factors include the difference
between the total inpatient hospital discharges and the IPPS
discharges, and various adjustments to the payment rates that have been
included over the years but are not reflected in the other columns
(such as the change in rates for the 2-midnight stay policy and the 20
percent add-on for COVID-19 discharges). In addition, the ``Other''
column includes a factor for the Medicaid expansion due to the
Affordable Care Act. The factor for Medicaid expansion was developed
using public information and statements for each State regarding its
intent to implement the expansion. Based on the information available
at the time of development of this proposed rule, it is assumed that
approximately 55 percent of all individuals who were potentially newly
eligible Medicaid enrollees in 2018, 2019, and 2020 resided in States
that had elected to expand Medicaid eligibility, and approximately 60
percent of all individuals who were potentially newly eligible Medicaid
enrollees in 2021 and thereafter, resided in States that had elected to
expand Medicaid eligibility. In the future, these assumptions may
change based on actual participation by States. The ``Other'' column
also includes the estimated impacts on Medicaid enrollment from the
COVID-19 pandemic. We note that, based on the most recent available
data, it is estimated that Medicaid enrollment increased by 2.9 percent
in FY 2020 and will increase by an additional 1.2 percent in FY 2021.
For a discussion of general issues regarding Medicaid projections,
we refer readers to the 2018 Actuarial Report on the Financial Outlook
for Medicaid, which is available on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/MedicaidReport2017.pdf. We note that, in
developing their estimates of the effect of Medicaid expansion on
Medicare DSH expenditures, our actuaries have assumed that the new
Medicaid enrollees are healthier than the average Medicaid recipient
and, therefore, use fewer hospital services. Specifically, based on the
most recent available data, OACT assumed per capita spending for
Medicaid beneficiaries who enrolled due to the expansion to be 78
percent of the average per capita expenditures for a pre-expansion
Medicaid beneficiary due to the better health of these beneficiaries.
We note that this is an updated assumption based on more recent data
compared to the data available at the time of the FY 2021 IPPS/LTCH PPS
final rule. This same assumption was used for the new Medicaid
beneficiaries who enrolled in 2020 and thereafter due to the COVID-19
pandemic. This assumption is consistent with recent internal estimates
of Medicaid per capita spending pre-expansion and post-expansion.
The following table shows the factors that are included in the
``Update'' column of the previous table:
[[Page 25447]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.248
b. Calculation of Proposed Factor 2 for FY 2022
(1) Background
Section 1886(r)(2)(B) of the Act establishes Factor 2 in the
calculation of the uncompensated care payment. Section
1886(r)(2)(B)(ii) of the Act provides that, for FY 2018 and subsequent
fiscal years, the second factor is 1 minus the percent change in the
percent of individuals who are uninsured, as determined by comparing
the percent of individuals who were uninsured in 2013 (as estimated by
the Secretary, based on data from the Census Bureau or other sources
the Secretary determines appropriate, and certified by the Chief
Actuary of CMS) and the percent of individuals who were uninsured in
the most recent period for which data are available (as so estimated
and certified), minus 0.2 percentage point for FYs 2018 and 2019. In FY
2020 and subsequent fiscal years, there is no longer a reduction. We
note that, unlike section 1886(r)(2)(B)(i) of the Act, which governed
the calculation of Factor 2 for FYs 2014, 2015, 2016, and 2017, section
1886(r)(2)(B)(ii) of the Act permits the use of a data source other
than the CBO estimates to determine the percent change in the rate of
uninsurance beginning in FY 2018. In addition, for FY 2018 and
subsequent years, the statute does not require that the estimate of the
percent of individuals who are uninsured be limited to individuals who
are under 65 years of age.
As we discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR
38197), in our analysis of a potential data source for the rate of
uninsurance for purposes of computing Factor 2 in FY 2018, we
considered the following: (1) The extent to which the source accounted
for the full U.S. population; (2) the extent to which the source
comprehensively accounted for both public and private health insurance
coverage in deriving its estimates of the number of uninsured; (3) the
extent to which the source utilized data from the Census Bureau; (4)
the timeliness of the estimates; (5) the continuity of the estimates
over time; (6) the accuracy of the estimates; and (7) the availability
of projections (including the availability of projections using an
established estimation methodology that would allow for calculation of
the rate of uninsurance for the applicable Federal fiscal year). As we
explained in the FY 2018 IPPS/LTCH PPS final rule, these considerations
are consistent with the statutory requirement that this estimate be
based on data from the Census Bureau or other sources the Secretary
determines appropriate and help to ensure the data source will provide
reasonable estimates for the rate of uninsurance that are available in
conjunction with the IPPS rulemaking cycle. We are proposing to use a
methodology similar to the one that was used in FY 2018 through FY 2021
to determine Factor 2 for FY 2022.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38197 and 38198), we
explained that we determined the source that, on balance, best meets
all of these considerations is the uninsured estimates produced by OACT
as part of the development of the National Health Expenditure Accounts
(NHEA). The NHEA represents the government's official estimates of
economic activity (spending) within the health sector. The information
contained in the NHEA has been used to study numerous topics related to
the health care sector, including, but not limited to, changes in the
amount and cost of health services purchased and the payers or programs
that provide or purchase these services; the economic causal factors at
work in the health sector; the impact of policy changes, including
major health reform; and comparisons to other countries' health
spending. Of relevance to the determination of Factor 2 is that the
comprehensive and integrated structure of the NHEA creates an ideal
tool for evaluating changes to the health care system, such as the mix
of the insured and uninsured, because this information is integral to
the well-established NHEA methodology. A full description of the
methodology used to develop the NHEA is available on the CMS website
at: https://www.cms.gov/files/document/definitions-sources-and-methods.pdf.
The NHEA estimates of U.S. population reflect the Census Bureau's
definition of the resident-based population, which includes all people
who usually reside in the 50 States or the District of Columbia, but
excludes residents living in Puerto Rico and areas under U.S.
sovereignty, members of the U.S. Armed Forces overseas, and U.S.
citizens whose usual place of residence is outside of the U.S., plus a
small (typically less than 0.2 percent of population) adjustment to
reflect Census undercounts. For fiscal years 2014 through 2017, the
estimates for Factor 2 were made using the CBO's uninsured population
estimates for the under 65 population. For FY 2018 and subsequent
years, the statute does not restrict the estimate to the measurement of
the percent of individuals under the age of 65 who are uninsured.
Accordingly, as we explained in the FY 2018 IPPS/LTCH PPS proposed and
final rules, we believe it is appropriate to use an estimate that
reflects the rate of uninsurance in the U.S. across all age groups. In
addition, we continue to believe that a resident-based population
estimate more fully reflects the levels of uninsurance in the United
States that influence uncompensated care for hospitals than an estimate
that reflects only legal residents. The NHEA estimates of uninsurance
are for the total U.S. population (all ages) and not by specific age
cohort, such as the population under the age of 65.
The NHEA includes comprehensive enrollment estimates for total
private
[[Page 25448]]
health insurance (PHI) (including direct and employer-sponsored plans),
Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and
other public programs, and estimates of the number of individuals who
are uninsured. Estimates of total PHI enrollment are available for 1960
through 2019, estimates of Medicaid, Medicare, and CHIP enrollment are
available for the length of the respective programs, and all other
estimates (including the more detailed estimates of direct-purchased
and employer-sponsored insurance) are available for 1987 through 2019.
The NHEA data are publicly available on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/index.html. In order to compute Factor
2, the first metric that is needed is the proportion of the total U.S.
population that was uninsured in 2013. In developing the estimates for
the NHEA, OACT's methodology included using the number of uninsured
individuals for 1987 through 2009 based on the enhanced Current
Population Survey (CPS) from the State Health Access Data Assistance
Center (SHADAC). The CPS, sponsored jointly by the U.S. Census Bureau
and the U.S. Bureau of Labor Statistics (BLS), is the primary source of
labor force statistics for the population of the United States. (We
refer readers to the website at: http://www.census.gov/programs-surveys/cps.html.) The enhanced CPS, available from SHADAC (available
at: http://datacenter.shadac.org) accounts for changes in the CPS
methodology over time. OACT further adjusts the enhanced CPS for an
estimated undercount of Medicaid enrollees (a population that is often
not fully captured in surveys that include Medicaid enrollees due to a
perceived stigma associated with being enrolled in the Medicaid program
or confusion about the source of their health insurance).
To estimate the number of uninsured individuals for 2010 through
2019, OACT extrapolates from the 2009 CPS data through 2018 using data
from the National Health Interview Survey (NHIS) and then, for 2019,
OACT extrapolates using the American Community Survey (ACS). In
deriving the number of uninsured for the most recent release of the
national health expenditure accounts, there were two concerns related
to the data sources typically used. The NHIS underwent a redesign in
2019 and cautioned its users against comparing the year-over-year trend
from 2018-2019 as a result. Also, the Census Bureau indicated that it
experienced data collection issues for the 2019 CPS, which may have
been affected by the COVID-19 pandemic, and similarly cautioned its
users to be aware of the potential impact on trend analysis between
2018 and 2019. Consequently, the ACS data were used for estimating
2019. The NHIS is one of the major data collection programs of the
National Center for Health Statistics (NCHS), which is part of the
Centers for Disease Control and Prevention (CDC). For both the NHIS and
ACS, the U.S. Census Bureau is the data collection agent. The results
from these data sources have been instrumental over the years in
providing data to track health status, health care access, and progress
toward achieving national health objectives. For further information
regarding the NHIS, we refer readers to the CDC website at: https://www.cdc.gov/nchs/nhis/index.htm. For further information regarding the
ACS, we refer readers to the Census Bureau's website at: https://www.census.gov/programs-surveys/acs/.
The next metrics needed to compute Factor 2 are projections of the
rate of uninsurance in both CY 2021 and CY 2022. On an annual basis,
OACT projects enrollment and spending trends for the coming 10-year
period. Those projections use the latest NHEA historical data,
available at the time of their construction. The NHEA projection
methodology accounts for expected changes in enrollment across all of
the categories of insurance coverage previously listed. The sources for
projected growth rates in enrollment for Medicare, Medicaid, and CHIP
include the latest Medicare Trustees Report, the Medicaid Actuarial
Report, or other updated estimates as produced by OACT. Projected rates
of growth in enrollment for private health insurance and the uninsured
are based largely on OACT's econometric models, which rely on the set
of macroeconomic assumptions underlying the latest Medicare Trustees
Report. Greater detail can be found in OACT's report titled
``Projections of National Health Expenditure: Methodology and Model
Specification,'' which is available on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ProjectionsMethodology.pdf.
The use of data from the NHEA to estimate the rate of uninsurance
is consistent with the statute and meets the criteria we have
identified for determining the appropriate data source. Section
1886(r)(2)(B)(ii) of the Act instructs the Secretary to estimate the
rate of uninsurance for purposes of Factor 2 based on data from the
Census Bureau or other sources the Secretary determines appropriate.
The NHEA utilizes data from the Census Bureau; the estimates are
available in time for the IPPS rulemaking cycle; the estimates are
produced by OACT on an annual basis and are expected to continue to be
produced for the foreseeable future; and projections are available for
calendar year time periods that span the upcoming fiscal year.
Timeliness and continuity are important considerations because of our
need to be able to update this estimate annually. Accuracy is also a
very important consideration and, all things being equal, we would
choose the most accurate data source that sufficiently meets our other
criteria.
We refer readers to OACT's Memorandum on Certification of Rates of
Uninsured prepared for this FY 2022 IPPS/LTCH proposed rule for further
details on the methodology and assumptions that were used in the
projection of the uninsurance rate.\937\
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\937\ OACT Memorandum on Certification of Rates of Uninsured.
March 12, 2021. Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/dsh.html.
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(2) Proposed Factor 2 for FY 2022
Using these data sources and the previously described
methodologies, OACT estimates that the uninsured rate for the
historical, baseline year of 2013 was 14 percent and for CYs 2021 and
2022 is 10.2 percent and 10.1 percent, respectively. The projected
rates of uninsurance for CY 2021 and 2022 reflect the estimated impact
of the COVID-19 pandemic. As required by section 1886(r)(2)(B)(ii) of
the Act, the Chief Actuary of CMS has certified these estimates.
As with the CBO estimates on which we based Factor 2 for fiscal
years before FY 2018, the NHEA estimates are for a calendar year. Under
the approach originally adopted in the FY 2014 IPPS/LTCH PPS final
rule, we have used a weighted average approach to project the rate of
uninsurance for each fiscal year. We continue to believe that, in order
to estimate the rate of uninsurance during a fiscal year accurately,
Factor 2 should reflect the estimated rate of uninsurance that
hospitals will experience during the fiscal year, rather than the rate
of uninsurance during only one of the calendar years that the fiscal
year spans. Accordingly, we are proposing to continue to apply the
weighted average approach used in past fiscal years in order to
estimate the rate of uninsurance for FY 2022.
[[Page 25449]]
OACT has certified the estimate of the rate of uninsurance for FY
2022 determined using this weighted average approach to be reasonable
and appropriate for purposes of section 1886(r)(2)(B)(ii) of the Act.
We may also consider the use of more recent data that may become
available for purposes of estimating the rates of uninsurance used in
the calculation of the final Factor 2 for FY 2022. We note that any
potential impacts from the American Rescue Plan Act are not reflected
in the following estimates, due to the timing for the development and
publication of the FY 2022 IPPS/LTCH proposed rule.
The calculation of the proposed Factor 2 for FY 2022 is as follows:
Percent of individuals without insurance for CY 2013: 14 percent.
Percent of individuals without insurance for CY 2021: 10.2 percent.
Percent of individuals without insurance for CY 2022: 10.1 percent.
Percent of individuals without insurance for FY 2022 (0.25 times
0.0102) + (0.75 times 0.0101): 10.1 percent.
1- [verbar]((0.101-0.14)/0.14)[verbar] = 1-0.2786 = 0.7214 (72.14
percent).
For FY 2020 and subsequent fiscal years, section 1886(r)(2)(B)(ii)
of the Act no longer includes any reduction to the previous calculation
in order to determine Factor 2. Therefore, we are proposing that Factor
2 for FY 2022 would be 72.14 percent.
The proposed FY 2022 uncompensated care amount is
$10,573,368,841.28* 0.7214 = $7,627,628,282.10.
[GRAPHIC] [TIFF OMITTED] TP10MY21.370
We are inviting public comments on the proposed Factor 2 for FY
2022.
c. Calculation of Proposed Factor 3 for FY 2022
(1) General Background
Section 1886(r)(2)(C) of the Act defines Factor 3 in the
calculation of the uncompensated care payment. As we have discussed
earlier, section 1886(r)(2)(C) of the Act states that Factor 3 is equal
to the percent, for each subsection (d) hospital, that represents the
quotient of: (1) The amount of uncompensated care for such hospital for
a period selected by the Secretary (as estimated by the Secretary,
based on appropriate data (including, in the case where the Secretary
determines alternative data are available that are a better proxy for
the costs of subsection (d) hospitals for treating the uninsured, the
use of such alternative data)); and (2) the aggregate amount of
uncompensated care for all subsection (d) hospitals that receive a
payment under section 1886(r) of the Act for such period (as so
estimated, based on such data).
Therefore, Factor 3 is a hospital-specific value that expresses the
proportion of the estimated uncompensated care amount for each
subsection (d) hospital and each subsection (d) Puerto Rico hospital
with the potential to receive Medicare DSH payments relative to the
estimated uncompensated care amount for all hospitals estimated to
receive Medicare DSH payments in the fiscal year for which the
uncompensated care payment is to be made. Factor 3 is applied to the
product of Factor 1 and Factor 2 to determine the amount of the
uncompensated care payment that each eligible hospital will receive for
FY 2014 and subsequent fiscal years. In order to implement the
statutory requirements for this factor of the uncompensated care
payment formula, it was necessary to determine: (1) The definition of
uncompensated care or, in other words, the specific items that are to
be included in the numerator (that is, the estimated uncompensated care
amount for an individual hospital) and the denominator (that is, the
estimated uncompensated care amount for all hospitals estimated to
receive Medicare DSH payments in the applicable fiscal year); (2) the
data source(s) for the estimated uncompensated care amount; and (3) the
timing and manner of computing the quotient for each hospital estimated
to receive Medicare DSH payments. The statute instructs the Secretary
to estimate the amounts of uncompensated care for a period based on
appropriate data. In addition, we note that the statute permits the
Secretary to use alternative data in the case where the Secretary
determines that such alternative data are available that are a better
proxy for the costs of subsection (d) hospitals for treating
individuals who are uninsured.
In the course of considering how to determine Factor 3 during the
rulemaking process for FY 2014, the first year for which section
1886(r) of the Act was in effect, we considered defining the amount of
uncompensated care for a hospital as the uncompensated care costs of
that hospital and determined that Worksheet S-10 of the Medicare cost
report would potentially provide the most complete data regarding
uncompensated care costs for Medicare hospitals. However, because of
concerns regarding variations in the data reported on Worksheet S-10
and the completeness of these data, we did not use Worksheet S-10 data
to determine Factor 3 for FY 2014, or for FYs 2015, 2016, or 2017.
Instead, we used alternative data on the utilization of insured low-
income patients, as measured by patient days, which we believed would
be a better proxy for the costs of hospitals in treating the uninsured
and therefore appropriate to use in calculating Factor 3 for these
years. Of particular importance in our decision to use proxy data was
the relative newness of Worksheet S-10, which went into effect on May
1, 2010. At the time of the rulemaking for FY 2014, the most recent
available cost reports would have been from FYs 2010 and 2011 and
submitted on or after May 1, 2010, when the new Worksheet S-10 went
into effect. However, we indicated our belief that Worksheet S-10 could
ultimately serve as an appropriate source of more direct data regarding
uncompensated care costs for purposes of determining Factor 3 once
hospitals were submitting more accurate and consistent data through
this reporting mechanism.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38202), we stated
that we could no longer conclude that alternative data to the Worksheet
S-10 are available for FY 2014 that are a better proxy for the costs of
subsection (d) hospitals for treating individuals who are uninsured.
Hospitals were on notice as of FY 2014 that Worksheet S-10 could
eventually become the data source for CMS to calculate uncompensated
care payments. Furthermore, hospitals' cost reports from FY 2014 had
been publicly available for some time, and CMS had analyses of
Worksheet S-10, conducted both internally and by stakeholders,
demonstrating that Worksheet S-10 accuracy had improved over time.
Analyses performed by MedPAC had already shown that the correlation
between audited uncompensated care data from 2009 and the data from the
FY 2011 Worksheet S-10 was over 0.80, as compared to a correlation of
approximately 0.50 between the audited uncompensated care data and 2011
[[Page 25450]]
Medicare SSI and Medicaid days. Based on this analysis, MedPAC
concluded that use of Worksheet S-10 data was already better than using
Medicare SSI and Medicaid days as a proxy for uncompensated care costs,
and that the data reported on Worksheet S-10 would improve over time as
the data are actually used to make payments (81 FR 25090). In addition,
a 2007 MedPAC analysis of data from the Government Accountability
Office (GAO) and the American Hospital Association (AHA) had suggested
that Medicaid days and low-income Medicare days are not an accurate
proxy for uncompensated care costs (80 FR 49525).
Subsequent analyses from Dobson/DaVanzo, originally commissioned by
CMS for the FY 2014 rulemaking and updated in later years, compared
Worksheet S-10 and IRS Form 990 data and assessed the correlation in
Factor 3s derived from each of the data sources. Our analyses on
balance led us to believe that we had reached a tipping point in FY
2018 with respect to the use of the Worksheet S-10 data. We refer
readers to the FY 2018 IPPS/LTCH PPS final rule (82 FR 38201 through
38203) for a complete discussion of these analyses. We found further
evidence for this tipping point when we examined changes to the FY 2014
Worksheet S-10 data submitted by hospitals following the publication of
the FY 2017 IPPS/LTCH PPS final rule.
We also recognized commenters' concerns that, in continuing to use
Medicaid days as part of the proxy for uncompensated care, it would be
possible for hospitals in States that choose to expand Medicaid to
receive higher uncompensated care payments because they may have more
Medicaid patient days than hospitals in a State that does not choose to
expand Medicaid. Because the earliest Medicaid expansions under the
Affordable Care Act began in 2014, the 2011, 2012, and 2013 Medicaid
days used to calculate uncompensated care payments in FYs 2015, 2016,
and 2017 are the latest available data on Medicaid utilization that do
not reflect the effects of these Medicaid expansions. Accordingly, if
we had used only low-income insured days to estimate uncompensated care
for FY 2018, we would have needed to hold the time period of these data
constant and use data on Medicaid days from 2011, 2012, and 2013 in
order to avoid the risk of any redistributive effects arising from the
decision to expand Medicaid in certain States. In the FY 2018 IPPS/LTCH
PPS final rule, we finalized a methodology under which we calculated
Factor 3 for all eligible hospitals, with the exception of Puerto Rico
hospitals and Indian Health Service (IHS) and Tribal hospitals, using
Worksheet S-10 data from FY 2014 cost reports in conjunction with low-
income insured days proxy data based on Medicaid days and SSI days. The
time period for the Medicaid days data was FY 2012 and FY 2013 cost
reports (82 FR 38208 through 38213).
As we stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41414),
with the additional steps we had taken to ensure the accuracy and
consistency of the data reported on Worksheet S-10 since the
publication of the FY 2018 IPPS/LTCH PPS final rule, we continued to
believe that we could no longer conclude that alternative data to the
Worksheet S-10 are currently available for FY 2014 that are a better
proxy for the costs of subsection (d) hospitals for treating
individuals who are uninsured. Similarly, the actions that we have
taken to improve the accuracy and consistency of the Worksheet S-10
data, including the opportunity for hospitals to resubmit Worksheet S-
10 data for FY 2015, led us to conclude that there were no alternative
data to the Worksheet S-10 data currently available for FY 2015 that
would be a better proxy for the costs of subsection (d) hospitals for
treating uninsured individuals. Accordingly, in the FY 2019 IPPS/LTCH
PPS final rule (83 FR 41428), we advanced the time period of the data
used in the calculation of Factor 3 forward by 1 year and used
Worksheet S-10 data from FY 2014 and FY 2015 cost reports in
combination with the low income insured days proxy for FY 2013 to
determine Factor 3 for FY 2019. We note that, as discussed in the FY
2020 IPPS/LTCH PPS final rule (84 FR 42366), the use of three years of
data to determine Factor 3 for FY 2018 and FY 2019 had the effect of
smoothing the transition from the use of low-income insured days to the
use of Worksheet S-10 data.
As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41424),
we received overwhelming feedback from commenters emphasizing the
importance of audits in ensuring the accuracy and consistency of data
reported on the Worksheet S-10. We began auditing the Worksheet S-10
data for selected hospitals in the Fall of 2018 so that the audited
uncompensated care data from these hospitals would be available in time
for use in the FY 2020 IPPS/LTCH PPS proposed rule. The audits began
with 1 year of data (that is, FY 2015 cost reports) in order to
maximize the available audit resources and not spread those audit
resources over multiple years, potentially diluting their
effectiveness. We chose to begin the audits with the FY 2015 cost
reports primarily because this was the most recent year of data that we
had broadly allowed to be resubmitted by hospitals, and many hospitals
had already made considerable efforts to amend their FY 2015 reports in
preparation for the FY 2019 rulemaking. We also considered that we had
used the FY 2015 data as part of the calculation of the FY 2019
uncompensated care payments; therefore, the data had been subject to
public comment and scrutiny.
In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42368), we finalized
our proposal to use a single year of Worksheet S-10 cost report data
from FY 2015 in the methodology for determining Factor 3 for FY 2020.
Although some commenters expressed support for the alternative policy
of using the FY 2017 Worksheet S-10 data to determine each hospital's
share of uncompensated care costs in FY 2020, given the feedback from
commenters in response to both the FY 2019 and FY 2020 IPPS/LTCH PPS
proposed rules, emphasizing the importance of audits in ensuring the
accuracy and consistency of data reported on the Worksheet S-10, we
concluded that the FY 2015 Worksheet S-10 data were the best available
audited data to be used in determining Factor 3 for FY 2020. We also
noted that we had begun auditing the FY 2017 data in July 2019, with
the goal of having the FY 2017 audited data available for future
rulemaking.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58823 through
58825), we finalized our proposal to use the most recent available
single year of audited Worksheet S-10 data to determine Factor 3 for FY
2021 and subsequent fiscal years. We explained our belief that using
the most recent audited data available before the applicable Federal
fiscal year, will more accurately reflect a hospital's uncompensated
care costs, as opposed to averaging multiple years of data. We noted
that if a hospital has relatively different data between cost report
years, we potentially would be diluting the effect of our considerable
auditing efforts and introducing unnecessary variability into the
calculation if we were to use multiple years of data to calculate
Factor 3. Therefore, we also believed using a single year of audited
cost report data is an appropriate methodology to determine Factor 3
for FY 2021 and subsequent years, except for IHS and Tribal hospitals
and hospitals located in Puerto Rico. For IHS and Tribal hospitals and
Puerto Rico hospitals, we finalized the use of a low-income insured
days proxy to determine Factor 3 for FY 2021. We did not finalize a
[[Page 25451]]
methodology to determine Factor 3 for IHS and Tribal hospitals and
Puerto Rico hospitals for FY 2022 and subsequent years because we
believed further consideration and review of these hospitals' Worksheet
S-10 data was necessary (85 FR 58825).
In the FY 2021 IPPS/LTCH PPS final rule, we finalized the
definition ``uncompensated care'' for FY 2021 and subsequent fiscal
years, for purposes of determining uncompensated care costs and
calculating Factor 3 (85 FR 58825 through 58828). We are continuing to
use the definition that we had initially adopted in the FY 2018 IPPS/
LTCH PPS final rule. Specifically, ``uncompensated care'' is defined as
the amount on Line 30 of Worksheet S-10, which is the cost of charity
care (Line 23) and the cost of non-Medicare bad debt and non-
reimbursable Medicare bad debt (Line 29). We refer readers to the FY
2021 IPPS/LTCH PPS rule (85 FR 58825 through 58828) for a discussion of
additional topics related to the definition of uncompensated care. We
noted in the FY 2021 IPPS/LTCH PPS final rule that the Paper Reduction
Act (PRA) package for Form CMS-2552-10 (OMB Control Number 0938-0050,
expiration date March 31, 2022) would offer an additional opportunity
to comment on the cost reporting instructions. A PRA package with
comment period appeared in the November 10, 2020 Federal Register (85
FR 71653). We thank stakeholders for their comments on the PRA package
and we will respond to those comments in a separate Federal Register
document.
(2) Background on the Methodology Used to Calculate Factor 3 for FY
2021 and Subsequent Fiscal Years
Section 1886(r)(2)(C) of the Act governs both the selection of the
data to be used in calculating Factor 3, and also allows the Secretary
the discretion to determine the time periods from which we will derive
the data to estimate the numerator and the denominator of the Factor 3
quotient. Specifically, section 1886(r)(2)(C)(i) of the Act defines the
numerator of the quotient as the amount of uncompensated care for a
subsection (d) hospital for a period selected by the Secretary. Section
1886(r)(2)(C)(ii) of the Act defines the denominator as the aggregate
amount of uncompensated care for all subsection (d) hospitals that
receive a payment under section 1886(r) of the Act for such period. In
the FY 2014 IPPS/LTCH PPS final rule (78 FR 50638), we adopted a
process of making interim payments with final cost report settlement
for both the empirically justified Medicare DSH payments and the
uncompensated care payments required by section 3133 of the Affordable
Care Act. Consistent with that process, we also determined the time
period from which to calculate the numerator and denominator of the
Factor 3 quotient in a way that would be consistent with making interim
and final payments. Specifically, we must have Factor 3 values
available for hospitals that we estimate will qualify for Medicare DSH
payments and for those hospitals that we do not estimate will qualify
for Medicare DSH payments but that may ultimately qualify for Medicare
DSH payments at the time of cost report settlement.
In the FY 2021 IPPS/LTCH PPS final rule, we applied the following
policies as part of the Factor 3 methodology: (1) The policy regarding
newly merged hospitals that was initially adopted in the FY 2015 IPPS/
LTCH PPS final rule; (2) the policies regarding annualization and long
cost reports that were adopted in the FY 2018 and FY 2019 IPPS/LTCH PPS
final rules, including a modified policy for the rare cases where a
provider has no cost report for the fiscal year that is used in the
Factor 3 methodology because the cost report for the previous fiscal
year spans both years; (4) the modified new hospital policy that was
finalized in the FY 2020 IPPS/LTCH PPS final rule; (5) the new merger
policy adopted in the FY 2021 IPPS/LTCH PPS final rule that accounts
for the merger effective date; and (6) the policies regarding the
application of statistical trim methodologies to potentially aberrant
CCRs and potentially aberrant uncompensated care costs reported on the
Worksheet S-10.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58829), we continued
to treat hospitals that merge after the development of the final rule
for the applicable fiscal year similar to new hospitals. As explained
in the FY 2015 IPPS/LTCH PPS final rule, for these newly merged
hospitals, we do not have data currently available to calculate a
Factor 3 amount that accounts for the merged hospital's uncompensated
care burden (79 FR 50021). In the FY 2015 IPPS/LTCH PPS final rule, we
finalized a policy under which Factor 3 for hospitals that we do not
identify as undergoing a merger until after the public comment period
and additional review period following the publication of the final
rule or that undergo a merger during the fiscal year would be
recalculated similar to new hospitals (79 FR 50021 and 50022).
Consistent with past policy, interim uncompensated care payments for
newly merged hospitals are based only on the data for the surviving
hospital's CCN available the time of the development of the final rule.
However, at cost report settlement, we will determine the newly merged
hospital's final uncompensated care payment based on the uncompensated
care costs reported on its FY 2021 cost report. That is, we will revise
the numerator of Factor 3 for the newly merged hospital to reflect the
uncompensated care costs reported on the newly merged hospital's FY
2021 cost report.
In FY 2021 IPPS/LTCH PPS final rule (85 FR 58829), we continued the
policy that was finalized in the FY 2018 IPPS/LTCH PPS final rule of
annualizing uncompensated care cost data reported on the Worksheet S-10
if a hospital's cost report does not equal 12 months of data, except in
the case of mergers, which would be subject to the modified merger
policy adopted for FY 2021. In addition, we continued the policies that
were finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41415)
regarding the use of the longest cost report available within the
Federal fiscal year. However, we adopted a modified policy for those
rare situations where a hospital has a cost report that starts in one
fiscal year but spans the entirety of the following fiscal year such
that the hospital has no cost report starting in that subsequent fiscal
year. Under this modified policy, we use the cost report that spans
both fiscal years for purposes of calculating Factor 3 when data from
the latter fiscal year are used in the Factor 3 methodology.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58829 and 58830), we
continued the modified new hospital policy for new hospitals that did
not have data for the cost reporting period(s) used in the Factor 3
calculation for FY 2021. Under the modified policy originally adopted
for FY 2020, new hospitals that have a preliminary projection of being
eligible for Medicare DSH based on their most recent available
disproportionate patient percentages may receive interim empirically
justified DSH payments. However, because these hospitals did not have a
FY 2017 cost report to use in the Factor 3 calculation and the
projection of eligibility for DSH payments was still preliminary, the
MAC will make a final determination concerning whether the hospital is
eligible to receive Medicare DSH payments at cost report settlement
based on its FY 2021 cost report. If the hospital is ultimately
determined to be eligible for Medicare DSH payments for FY 2021, the
hospital will receive an uncompensated care payment calculated using a
Factor 3, where the numerator is the uncompensated care
[[Page 25452]]
costs reported on Worksheet S-10 of the hospital's FY 2021 cost report,
and the denominator is the sum of the uncompensated care costs reported
on Worksheet S-10 of the FY 2017 cost reports for all DSH-eligible
hospitals.
In the FY 2021 IPPS/LTCH PPS final rule, we finalized a new merger
policy that accounts for the merger effective date (85 FR 58828 through
58829). To more accurately estimate UCC for the hospitals involved in a
merger when the merger effective date occurs partway through the
surviving hospital's cost reporting period, we finalized a policy of
not annualizing the acquired hospital's data. Under this policy, we use
only the portion of the acquired hospital's unannualized UCC data that
reflects the UCC incurred prior to the merger effective date, but after
the start of the surviving hospital's current cost reporting period. To
do this, we calculate a multiplier to be applied to the acquired
hospital's UCC. This multiplier represents the portion of the UCC data
from the acquired hospital that should be incorporated with the
surviving hospital's data to determine UCC for purposes of determining
Factor 3 for the surviving hospital. This multiplier is obtained by
calculating the number of days between the start of the applicable cost
reporting period for the surviving hospital and the merger effective
date, and then dividing this result by the total number of days in the
reporting period of the acquired hospital. Applying this multiplier to
the acquired hospital's unannualized UCC data will determine the final
portion of the acquired hospital's UCC that should be added to that of
the surviving hospital for purposes of determining Factor 3 for the
merged hospital.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58831 and 58832), we
continued to apply a CCR trim methodology similar to the CCR trim
methodology policy that has been used for purposes of determining
uncompensated care payments since FY 2018. This CCR trim methodology is
consistent with the approach used in the outlier payment methodology
under Sec. 412.84(h)(3)(ii), which states that the Medicare contractor
may use a statewide average CCR for hospitals whose operating or
capital CCR is in excess of 3 standard deviations above the
corresponding national geometric mean. We refer readers to the
discussion in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58831) for a
detailed description of the steps used to determine the applicable CCR.
In addition, we continued the UCC data trim methodology for rare
situations where a hospital has potentially aberrant data that are
unrelated to its CCR (85 FR 58832). However, because we had audited the
FY 2017 Worksheet S-10 data for a number of hospitals, we explained
that we no longer believe it is necessary to apply the trim methodology
for hospitals whose cost report has been audited. Accordingly, for FY
2021 we finalized a policy under which we exclude hospitals that were
part of the audits from the trim methodology for potentially aberrant
UCC. In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58831), we also
modified the potentially aberrant UCC trim methodology when it is
applied to all-inclusive rate providers (AIRPs). Under this modified
trim methodology, when an AIRP's total UCC are greater than 50 percent
of its total operating costs when calculated using the CCR included on
its FY 2017 cost report, we will recalculate the AIRP's UCC using the
CCR reported on Worksheet S-10, line 1 of the hospital's most recent
available prior year cost report that does not result in UCC of over 50
percent of total operating costs.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58824 and 58825), we
continued the policy we first adopted for FY 2018 of substituting data
regarding FY 2013 low-income insured days for the Worksheet S-10 data
when determining Factor 3 for IHS and Tribal hospitals and subsection
(d) Puerto Rico hospitals that have a FY 2013 cost report. We stated
our belief that this approach was appropriate as the FY 2013 data
reflect the most recent available information regarding these
hospitals' low-income insured days before any expansion of Medicaid. In
addition, because we continued to use 1 year of insured low income
patient days as a proxy for uncompensated care for Puerto Rico
hospitals and residents of Puerto Rico are not eligible for SSI
benefits, we continued to use a proxy for SSI days for Puerto Rico
hospitals consisting of 14 percent of the hospital's Medicaid days, as
finalized in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56953 through
56956).
We refer readers to the FY 2021 IPPS/LTCH PPS final rule (85 FR
58817) for a discussion of the approach that we continued in FY 2021 to
determine Factor 3 for new Puerto Rico hospitals. In brief, Puerto Rico
hospitals that do not have a FY 2013 cost report are considered new
hospitals and subject to the new hospital policy, as discussed
previously. Specifically, the numerator of the Factor 3 calculation
will be the uncompensated care costs reported on Worksheet S-10 of the
hospital's cost report for the applicable fiscal year and the
denominator is the same denominator that is determined prospectively
for purposes of determining Factor 3 for all DSH-eligible hospitals.
Therefore, for FY 2021, we finalized the following methodology to
compute Factor 3 for each hospital:
Step 1: Selecting the provider's longest cost report from its
Federal fiscal year (FFY) 2017 cost reports. (Alternatively, in the
rare case when the provider has no FFY 2017 cost report because the
cost report for the previous Federal fiscal year spanned the FFY 2017
time period, the previous Federal fiscal year cost report would be used
in this step.)
Step 2: Annualizing the uncompensated care costs (UCC) from
Worksheet S-10 Line 30, if the cost report is more than or less than 12
months. (If applicable, use the statewide average CCR (urban or rural)
to calculate uncompensated care costs.)
Step 3: Combining adjusted and/or annualized uncompensated care
costs for hospitals that merged.
Step 4: Calculating Factor 3 for IHS and Tribal hospitals and
Puerto Rico hospitals that have a FY 2013 cost report using the low-
income insured days proxy based on FY 2013 cost report data and the
most recent available SSI ratio (or, for Puerto Rico hospitals, 14
percent of the hospital's FY 2013 Medicaid days). (Alternatively, in
the rare case when a provider has no FFY applicable cost report because
the cost report for the previous Federal fiscal year spanned the time
period, the previous Federal fiscal year cost report would be used in
this step.) The denominator is calculated using the low-income insured
days proxy data from all DSH eligible hospitals. Consistent with the
policy adopted in the FY 2019 IPPS/LTCH PPS final rule, if a hospital
did not have both Medicaid days for FY 2013 and SSI days for FY 2018
available for use in the calculation of Factor 3 in Step 4, we
considered the hospital not to have data available for Step 4.
Step 5: Calculating Factor 3 for the remaining DSH eligible
hospitals using annualized uncompensated care costs (Worksheet S-10
Line 30) based on FY 2017 cost report data (from Step 1, 2, or 3). The
hospitals for which Factor 3 was calculated in Step 4 are excluded from
this calculation.
We also stated that the methodology adopted in the FY 2021 IPPS/
LTCH PPS final rule for purposes of determining Factor 3 for FY 2021
would apply for FY 2022 and subsequent years, using Worksheet S-10 data
from the most recent cost reporting year for which audits have been
conducted. However,
[[Page 25453]]
we did not finalize a methodology to determine Factor 3 for FY 2022 and
subsequent years for IHS and Tribal hospitals and Puerto Rico hospitals
that have a FY 2013 cost report because we believed further
consideration and review of these hospitals' Worksheet S-10 data is
necessary.
We amended the regulations at Sec. 412.106(g)(1)(iii)(C) by adding
a new paragraph (7) to reflect the methodology for computing Factor 3
for FY 2021. We also added a new paragraph (8) to reflect the policy
adopted for all subsequent fiscal years of using the most recent
available single year of audited Worksheet S-10 data to calculate
Factor 3 for all eligible hospitals, except IHS and Tribal hospitals
and Puerto Rico Hospitals.
(3) Proposed Methodology for Calculating Factor 3 for FY 2022
(a) Use of Audited FY 2018 Data To Calculate Factor 3 for FY 2022
Audits of FY 2018 cost reports began in 2020 and those audited
reports are now available, in time for the development of this proposed
rule. Feedback from the audits of the FY 2015 and FY 2017 reports and
lessons learned were incorporated into the audit process for the FY
2018 reports. We again chose to audit 1 year of data (that is, FY 2018)
in order to maximize the available audit resources and not spread those
audit resources over multiple years, potentially diluting their
effectiveness.
Given that the FY 2018 Worksheet S-10 data are the most recent
available audited data, we believe, on balance, that the FY 2018
Worksheet S-10 data are the best available data to use for calculating
Factor 3 for FY 2022. As discussed in the FY 2020 IPPS/LTCH PPS
proposed and final rules (84 FR 19419 and 84 FR 42364), we continue to
believe that mixing audited and unaudited data for individual hospitals
by averaging multiple years of data could potentially lead to a less
smooth result. To the extent that the audited FY 2018 data for a
hospital may be relatively different from its FY 2017 data (whether
audited or unaudited), we potentially would be diluting the effect of
the revisions to the cost reporting instructions and our considerable
auditing efforts, while introducing unnecessary variability into the
calculation if we were to use multiple years of data to calculate
Factor 3 for FY 2022. We recognize that the FY 2017 reports include
audited data for some hospitals. However, the FY 2018 cost reports are
the most recent year of audited data and, and reflect the revisions to
the Worksheet S-10 cost report instructions that were effective on
October 1, 2017.
Accordingly, consistent with the policy adopted in the FY 2021
IPPS/LTCH PPS final rule and codified in the regulations at Sec.
412.106(g)(8), we have used a single year of Worksheet S-10 data from
FY 2018 cost reports to calculate Factor 3 for FY 2022 for all eligible
hospitals with the exception of IHS and Tribal hospitals and Puerto
Rico hospitals that have a cost report for 2013. As discussed in a
later section, we are proposing to continue to use the low-income
insured days proxy to calculate Factor 3 for these hospitals for one
more year. We note that the proposed uncompensated care payments to
hospitals whose FY 2018 Worksheet S-10 data have been audited represent
approximately 99.6 percent of the proposed total uncompensated care
payments for FY 2022. For purposes of this FY 2022 proposed rule, we
have used a HCRIS extract updated through February 19, 2021. We note
that we intend to use the March 2021 update of HCRIS for the FY 2022
final rule and the respective March updates for all future final rules.
However, we may consider the use of more recent data that may become
available after March 2021, but prior to the development of the final
rule, if appropriate, for purposes of calculating the final Factor 3
for the FY 2022 IPPS/LTCH PPS final rule.
IHS and Tribal Hospitals
For the reasons discussed in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38209), we continue to recognize that the use of data from
Worksheet S-10 to calculate the uncompensated care amount for IHS and
Tribal hospitals may jeopardize these hospitals' payments due to their
unique funding structure. Prior to the proposed rulemaking for FY 2022,
CMS consulted with IHS and Tribal hospitals regarding uncompensated
care reporting. We are considering the input received through this
consultation with IHS and Tribal hospitals for future rulemaking.
Therefore, for IHS and Tribal hospitals, we propose to continue the
policy first adopted in the FY 2018 rulemaking regarding the low-income
patient proxy. Specifically, for FY 2022 we propose to determine Factor
3 for these hospitals based on Medicaid days for FY 2013 and the most
recent available year of data on SSI days. The aggregate amount of
uncompensated care that is used in the Factor 3 denominator for these
hospitals would continue to be based on the low-income patient proxy;
that is, the aggregate amount of uncompensated care determined for all
DSH eligible hospitals using the low-income insured days proxy. We
continue to believe this approach is appropriate because the FY 2013
data reflect the most recent available information regarding these
hospitals' Medicaid days before any expansion of Medicaid. We also note
that all IHS and Tribal hospitals have a FY 2013 cost report that can
be used for purposes of determining Factor 3. At the time of
development of the proposed rule, for modeling purposes, we computed
Factor 3 for these hospitals using FY 2013 Medicaid days from a HCRIS
extract updated through February 19, 2021, and the FY 2018 SSI days.
Puerto Rico Hospitals
In the FY 2021 IPPS/LTCH PPS proposed rule, we proposed to
determine Factor 3 for Puerto Rico hospitals using Worksheet S-10 data
starting in FY 2022. We did not finalize this proposal in the FY 2021
IPPS/LTCH PPS final rule (85 FR 58825) because we believed further
consideration was necessary. However, we noted that we continued to
believe Worksheet S-10 data is the appropriate long term source for
information on uncompensated care for hospitals located in Puerto Rico.
We are continuing to consider the reporting challenges in Puerto
Rico that may negatively impact the ability of Puerto Rico hospitals to
report uncompensated care. Accordingly, for FY 2022 we are proposing to
determine Factor 3 for Puerto Rico hospitals that have a FY 2013 cost
report based on the low-income patient proxy. We would determine Factor
3 for these hospitals based on Medicaid days for FY 2013 and the most
recent available year of data on SSI days. The aggregate amount of
uncompensated care that is used in the Factor 3 denominator for these
hospitals would continue to be based on the low-income patient proxy;
that is, the aggregate amount of uncompensated care determined for all
DSH eligible hospitals using the low-income insured days proxy. At the
time of development of the proposed rule, for modeling purposes, we
computed Factor 3 for these hospitals using FY 2013 Medicaid days from
a recent HCRIS extract and the most recent available data on SSI days,
which was the FY 2018 SSI days. In addition, because we are proposing
to continue to use 1 year of insured low-income patient days as a proxy
for uncompensated care for Puerto Rico hospitals and residents of
Puerto Rico are not eligible for SSI benefits, we are proposing to
continue to use a proxy for SSI days for Puerto Rico hospitals,
consisting of 14 percent of a hospital's Medicaid days, as finalized in
the FY
[[Page 25454]]
2017 IPPS/LTCH PPS final rule (81 FR 56953 through 56956).
(b) Methodology for Calculating Factor 3 for FY 2022
For purposes of determining Factor 3 for FY 2022, we will apply the
methodology adopted in the FY 2021 IPPS/LTCH PPS final rule.
Specifically, we are applying the following policies: (1) The merger
policies that were initially adopted in the FY 2015 IPPS/LTCH PPS final
rule (79 FR 50021), as modified in the FY 2021 IPPS/LTCH PPS final rule
to incorporate the use of a multiplier to account for merger effective
date; (2) the policy for providers with multiple cost reports,
beginning in the same fiscal year, of using the longest cost report and
annualizing Medicaid data and uncompensated care data if a hospital's
cost report does not equal 12 months of data; (3) the policy, as
modified in the FY 2021 IPPS/LTCH PPS final rule, for the rare case
where a hospital has a cost report that starts in one fiscal year and
spans the entirety of the following fiscal year, such that the hospital
has no cost report for that subsequent fiscal year, of using the cost
report that spans both fiscal years for the latter fiscal year; (4) the
new hospital policy, as modified in the FY 2020 IPPS/LTCH PPS final
rule; (5) the newly merged hospital policy; and (6) the policies
regarding the application of statistical trim methodologies to
potentially aberrant CCRs and potentially aberrant uncompensated care
costs reported on the Worksheet S-10.
New Hospital for Purposes of Factor 3
We will continue to apply the new hospital policy that was
initially adopted in the FY 2020 IPPS/LTCH PPS final rule to determine
Factor 3 for new hospitals that do not have an FY 2018 cost report to
use in the Factor 3 calculation (that is, hospitals with CCNs
established on or after October 1, 2018). In the FY 2020 IPPS/LTCH PPS
final rule, we modified the new hospital policy that was initially
adopted in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50643) and
continued to apply through FY 2019 (83 FR 41417). Under this modified
policy, if a new hospital has a preliminary projection of being
eligible for DSH payments based on its most recent available
disproportionate patient percentage, it may receive interim empirically
justified DSH payments. However, new hospitals will not receive interim
uncompensated care payments during FY 2022 because we will have no FY
2018 uncompensated care data on which to determine what those interim
payments should be. The MAC will make a final determination concerning
whether the hospital is eligible to receive Medicare DSH payments at
cost report settlement based on its FY 2022 cost report. If the
hospital is ultimately determined to be eligible for Medicare DSH
payments for FY 2022, the hospital will receive an uncompensated care
payment calculated using a Factor 3, where the numerator is the
uncompensated care costs reported on Worksheet S-10 of the hospital's
FY 2022 cost report, and the denominator is the sum of the
uncompensated care costs reported on Worksheet S-10 of the FY 2018 cost
reports for all DSH-eligible hospitals. This denominator will be the
same denominator that is determined prospectively for purposes of
determining Factor 3 for all DSH-eligible hospitals, with the exception
of Puerto Rico hospitals and IHS and Tribal hospitals.
Newly Merged Hospitals
We are continuing to treat hospitals that merge after the
development of the final rule for the applicable fiscal year similar to
new hospitals. As explained in the FY 2015 IPPS/LTCH PPS final rule,
for these newly merged hospitals, we do not have data currently
available to calculate a Factor 3 amount that accounts for the merged
hospital's uncompensated care burden (79 FR 50021). In the FY 2015
IPPS/LTCH PPS final rule, we finalized a policy under which Factor 3
for hospitals that we do not identify as undergoing a merger until
after the public comment period and additional review period following
the publication of the final rule or that undergo a merger during the
fiscal year will be recalculated similar to new hospitals (79 FR 50021
and 50022). Consistent with the policy adopted in the FY 2015 IPPS/LTCH
PPS final rule, we will continue to treat newly merged hospitals in a
similar manner to new hospitals, such that the newly merged hospital's
final uncompensated care payment will be determined at cost report
settlement where the numerator of the newly merged hospital's Factor 3
will be based on the cost report of only the surviving hospital (that
is, the newly merged hospital's cost report) for the current fiscal
year. However, if the hospital's cost reporting period includes less
than 12 months of data, the data from the newly merged hospital's cost
report will be annualized for purposes of the Factor 3 calculation.
Consistent with past policy, interim uncompensated care payments
for the newly merged hospital will be based only on the data for the
surviving hospital's CCN available at the time of the development of
the final rule. In other words, for FY 2022, the eligibility of a newly
merged hospital to receive interim uncompensated care payments and the
amount of any interim uncompensated care payments, will be based only
on the FY 2018 cost report available for the surviving CCN at the time
the final rule is developed. However, at cost report settlement, we
will determine the newly merged hospital's final uncompensated care
payment based on the uncompensated care costs reported on its FY 2022
cost report. That is, we will revise the numerator of Factor 3 for the
newly merged hospital to reflect the uncompensated care costs reported
on the newly merged hospital's FY 2022 cost report.
CCR Trim Methodology
The calculation of a hospital's total uncompensated care costs on
Worksheet S-10 requires the use of the hospital's cost to charge ratio
(CCR). Consistent with the process for trimming CCRs used in the FY
2021 IPPS/LTCH PPS final rule (85 FR 58831 and 58832), we will apply
the following steps to determine the applicable CCR:
Step 1: Remove Maryland hospitals. In addition, we will remove all-
inclusive rate providers because their CCRs are not comparable to the
CCRs calculated for other IPPS hospitals.
Step 2: For FY 2018 cost reports, calculate a CCR ``ceiling'' with
the following data: For each IPPS hospital that was not removed in Step
1 (including non-DSH eligible hospitals), we use cost report data to
calculate a CCR by dividing the total costs on Worksheet C, Part I,
Line 202, Column 3 by the charges reported on Worksheet C, Part I, Line
202, Column 8. (Combining data from multiple cost reports from the same
fiscal year is not necessary, as the longer cost report will be
selected.) The ceiling is calculated as 3 standard deviations above the
national geometric mean CCR for the applicable fiscal year. This
approach is consistent with the methodology for calculating the CCR
ceiling used for high-cost outliers. Remove all hospitals that exceed
the ceiling so that these aberrant CCRs do not skew the calculation of
the statewide average CCR.
Step 3: Using the CCRs for the remaining hospitals in Step 2,
determine the urban and rural statewide average CCRs for FY 2018 for
hospitals within each State (including non-DSH eligible hospitals),
weighted by the sum of total hospital discharges from Worksheet S-3,
Part I, Line 14, Column 15.
[[Page 25455]]
Step 4: Assign the appropriate statewide average CCR (urban or
rural) calculated in Step 3 to all hospitals, excluding all-inclusive
rate providers, with a CCR for FY 2018 greater than 3 standard
deviations above the national geometric mean for that fiscal year (that
is, the CCR ``ceiling''). For this proposed rule, the statewide average
CCR was applied to 10 hospitals, of which 3 hospitals had FY 2018
Worksheet S-10 data.
Step 5: For providers that did not report a CCR on Worksheet S-10,
Line 1, we assign them the statewide average CCR as determined in step
3.
After completing the previously described steps, we re-calculate
the hospital's uncompensated care costs (Line 30) using the trimmed CCR
(the statewide average CCR (urban or rural, as applicable)).
Uncompensated Care Data Trim Methodology
After applying the CCR trim methodology, we note that there are
rare situations where a hospital has potentially aberrant data that are
unrelated to its CCR. Therefore, under the trim methodology for
potentially aberrant UCC that was included as part of the methodology
for purposes of determining Factor 3 in the FY 2021 final rule (85 FR
58832), if the hospital's uncompensated care costs for FY 2018 are an
extremely high ratio (greater than 50 percent) of its total operating
costs, we will determine the ratio of uncompensated care costs to the
hospital's total operating costs from another available cost report,
and apply that ratio to the total operating expenses for the
potentially aberrant fiscal year to determine an adjusted amount of
uncompensated care costs. Specifically, if the hospital's FY 2018 cost
report is determined to include potentially aberrant data, data from
the FY 2019 cost report will be used for the ratio calculation. Thus,
the hospital's uncompensated care costs for FY 2018 will be trimmed by
multiplying its FY 2018 total operating costs by the ratio of
uncompensated care costs to total operating costs from the hospital's
FY 2019 cost report to calculate an estimate of the hospital's
uncompensated care costs for FY 2018 for purposes of determining Factor
3 for FY 2022.
We note that we have audited the FY 2018 Worksheet S-10 data for a
number of hospitals. Because the UCC data for these hospitals have been
subject to audit, we believe there is increased confidence that if high
uncompensated care costs are reported by these audited hospitals, the
information is accurate. Therefore, consistent with the policy that was
adopted in the FY 2021 IPPS/LTCH PPS final rule, it is unnecessary to
apply the trim methodology for these audited hospitals.
In addition to the existing UCC trim methodology, we are proposing
to apply a new trim specific to certain hospitals that do not have
audited FY 2018 Worksheet S-10 data. We note that in rare cases,
hospitals that are not currently projected to be DSH eligible and that
do not have audited Worksheet S-10 data may have a potentially aberrant
amount of insured patients' charity care costs (line 23 column 2). We
are proposing to use a threshold of three standard deviations from the
mean ratio of insured patients' charity care costs to total
uncompensated care costs (line 23 column 2 divided by line 30) and a
dollar threshold of $7 million, which is the median total uncompensated
care cost reported on FY 2018 cost reports for hospitals that are
projected to be DSH eligible, excluding IHS and Tribal hospitals and
Puerto Rico hospitals. Therefore, for FY 2022, we are proposing that in
the rare case that a hospital's insured patients' charity care costs
are greater than $7 million and the ratio of the hospital's cost of
insured patient charity care (line 23 column 2) to total uncompensated
care costs (line 30) is greater than 60 percent (rounded from 58
percent), we would exclude the hospital from the prospective Factor 3
calculation. This proposed trim would only impact hospitals that are
not currently projected to be DSH eligible; and therefore, are not part
of the calculation of the denominator of Factor 3, which includes only
uncompensated care costs for projected DSH eligible hospitals. If a
hospital would be trimmed under both the existing UCC trim methodology
and this proposed new trim, we are proposing to apply this new trim in
place of the existing UCC trim methodology. We believe the proposed new
trim more appropriately addresses potentially aberrant insured patient
charity care costs compared to the existing trim, because the existing
trim is based solely on the ratio of total uncompensated care costs to
total operating costs and does not consider the level of insured
patients' charity care costs.
In addition, we also propose that, for the hospitals that would be
subject to this proposed trim, if the hospital is ultimately determined
to be DSH eligible at cost report settlement, then the MAC would
calculate a Factor 3 after reviewing the uncompensated care information
reported on Worksheet S-10 of the hospital's FY 2022 cost report. We
believe if a hospital subject to this proposed trim is ultimately
determined to be DSH eligible at cost report settlement, its
uncompensated care payment should be calculated only after the
hospital's reporting of insured charity care costs on its FY 2022
Worksheet S-10 has been reviewed. We note that this approach is
comparable to the policy for new hospitals for which we cannot
calculate a prospective Factor 3 because they do not have Worksheet S-
10 data for the relevant fiscal year.
Summary of Methodology
In summary, for FY 2022, we will compute Factor 3 for each hospital
using the following steps:
Step 1: Select the provider's longest cost report from its Federal
fiscal year (FFY) 2018 cost reports. (Alternatively, in the rare case
when the provider has no FFY 2018 cost report because the cost report
for the previous Federal fiscal year spanned the FFY 2018 time period,
the previous Federal fiscal year cost report would be used in this
step.)
Step 2: Annualize the uncompensated care costs (UCC) from Worksheet
S-10 Line 30, if the cost report is more than or less than 12 months.
(If applicable, use the statewide average CCR (urban or rural) to
calculate uncompensated care costs.)
Step 3: Combine adjusted and/or annualized uncompensated care costs
for hospitals that merged using the merger policy.
Step 4: Calculate Factor 3 for IHS and Tribal hospitals and Puerto
Rico hospitals that have a cost report for 2013 using the low-income
insured days proxy based on FY 2013 cost report data and the most
recent available SSI ratio (or, for Puerto Rico hospitals, 14 percent
of the hospital's FY 2013 Medicaid days). The denominator is calculated
using the low-income insured days proxy data from all DSH eligible
hospitals.
Step 5: Calculate Factor 3 for the remaining DSH eligible hospitals
using annualized uncompensated care costs (Worksheet S-10 Line 30)
based on FY 2018 cost report data (from Step 1, 2 or 3). New hospitals
and the hospitals for which Factor 3 was calculated in Step 4 are
excluded from this calculation.
We are proposing to amend the regulation at Sec. 412.106 by adding
a new paragraph (g)(1)(iii)(C)(9) to reflect the methodology for
computing Factor 3 for FY 2022 for IHS and Tribal hospitals and for
Puerto Rico hospitals that have a 2013 cost report. We also are
proposing to make a conforming change to limit the reference to Puerto
Rico hospitals in paragraph (g)(1)(iii)(C)(8) to those Puerto Rico
hospitals that have a cost report for 2013.
[[Page 25456]]
(c) Proposal Related to the Per Discharge Amount of Interim
Uncompensated Care Payments
Since FY 2014, we have made interim uncompensated care payments
during the fiscal year on a per discharge basis. We have used a 3-year
average of the number of discharges for a hospital to produce an
estimate of the amount of the hospital's uncompensated care payment per
discharge. Specifically, the hospital's total uncompensated care
payment amount for the applicable fiscal year, is divided by the
hospital's historical 3-year average of discharges computed using the
most recent available data to determine the uncompensated care payment
per discharge for that fiscal year.
We are proposing to modify this calculation for FY 2022 to be based
on the average of FY 2018 and FY 2019 historical discharge data, rather
than a 3-year average that includes data from FY 2018, FY 2019, and FY
2020. We believe computing a 3-year average with the FY 2020 discharge
data would underestimate discharges, due to the decrease in discharges
during the pandemic. Under this proposal, the resulting 2-year average
of discharges would be used to calculate the per discharge payment
amount that will be used to make interim uncompensated care payments to
each projected DSH eligible hospital during FY 2022. The interim
uncompensated care payments made to a hospital during the fiscal year
are reconciled following the end of the year to ensure that the final
payment amount is consistent with the hospital's prospectively
determined uncompensated care payment for the Federal fiscal year.
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58833 and 58834), we
finalized a voluntary process through which a hospital may submit a
request to its MAC for a lower per discharge interim uncompensated care
payment amount, including a reduction to zero, once before the
beginning of the Federal fiscal year and/or once during the Federal
fiscal year. In conjunction with this request, the hospital must
provide supporting documentation demonstrating there would likely be a
significant recoupment (for example, 10 percent or more of the
hospital's total uncompensated care payment or at least $100,000) at
cost report settlement if the per discharge amount is not lowered. For
example, a hospital might submit documentation showing a large
projected increase in discharges during the fiscal year to support
reduction of its per discharge uncompensated care payment amount. As
another example, a hospital might request that its per discharge
uncompensated care payment amount be reduced to zero midyear if the
hospital's interim uncompensated care payments during the year have
already surpassed the total uncompensated care payment calculated for
the hospital.
Under the policy we finalized in the FY 2021 IPPS/LTCH PPS final
rule, the hospital's MAC would evaluate these requests and the
supporting documentation before the beginning of the Federal fiscal
year and/or with midyear requests when the historical average number of
discharges is lower than hospital's projected FY 2022 discharges. If
following review of the request and the supporting documentation, the
MAC agrees that there likely would be significant recoupment of the
hospital's interim Medicare uncompensated care payments at cost report
settlement, the only change that will be made is to lower the per
discharge amount either to the amount requested by the hospital or
another amount determined by the MAC to be appropriate to reduce the
likelihood of a substantial recoupment at cost report settlement. If
the MAC determines it would be appropriate to reduce the interim
Medicare uncompensated care payment per discharge amount, that updated
amount will be used for purposes of the outlier payment calculation for
the remainder of the Federal fiscal year. We refer readers to the
Addendum to this proposed rule for a more detailed discussion of the
steps for determining the operating and capital Federal payment rate
and the outlier payment calculation. No change would be made to the
total uncompensated care payment amount determined for the hospital on
the basis of its Factor 3. In other words, any change to the per
discharge uncompensated care payment amount will not change how the
total uncompensated care payment amount will be reconciled at cost
report settlement.
(d) Process for Notifying CMS of Merger Updates and To Report Upload
Issues
As we have done for every proposed and final rule beginning in FY
2014, in conjunction with this proposed rule, we will publish on the
CMS website a table listing Factor 3 for all hospitals that we estimate
will receive empirically justified Medicare DSH payments in FY 2022
(that is, those hospitals that will receive interim uncompensated care
payments during the fiscal year), and for the remaining subsection (d)
hospitals and subsection (d) Puerto Rico hospitals that have the
potential of receiving a Medicare DSH payment in the event that they
receive an empirically justified Medicare DSH payment for the fiscal
year as determined at cost report settlement. However, we note that a
Factor 3 will not be published for the hospitals that would be subject
to the proposed new trim, which is similar to the approach for new
hospitals, which also do not have a Factor 3 published. At the time of
development of this proposed rule, the FY 2019 SSI ratios were not
available. Accordingly, we computed Factor 3 for IHS and Tribal
hospitals and Puerto Rico hospitals using the most recent available
data regarding SSI days from the FY 2018 SSI ratios. If more recent
data become available, then we would use such data in the final rule.
We also will publish a supplemental data file containing a list of
the mergers that we are aware of and the computed uncompensated care
payment for each merged hospital. In the DSH uncompensated care
supplemental data file, we list new hospitals and the ten hospitals
that would be subject to the proposed new trim, with a N/A in the
Factor 3 column.
Hospitals have 60 days from the date of public display of the FY
2022 IPPS/LTCH PPS proposed rule in the Federal Register to review the
table and supplemental data file published on the CMS website in
conjunction with the proposed rule and to notify CMS in writing of
issues related to mergers and/or to report potential upload
discrepancies due to MAC mishandling of the Worksheet S-10 data during
the report submission process (for example, report not reflecting audit
results due to MAC mishandling or most recent report differs from
previously accepted amended report due to MAC mishandling). Comments
raising issues that are specific to the information included in the
table and supplemental data file can be submitted to the CMS inbox at
[email protected]. All other comments submitted in response to
our proposed policies for determining uncompensated care payments for
FY 2022 must be submitted in one of three ways found in the ADDRESSES
section of this proposed rule before the close of the comment period in
order to be assured consideration. In addition, this CMS DSH inbox is
not intended for Worksheet S-10 audit process related emails, which
should be directed to the MACs. We will address comments related to
mergers and/or reporting upload discrepancies submitted to the CMS DSH
inbox as appropriate in the table and the supplemental data file that
we publish on the CMS website in
[[Page 25457]]
conjunction with the publication of the FY 2022 IPPS/LTCH PPS final
rule.
For FY 2022, we are again proposing that hospitals will have 15
business days from the date of public display of the FY 2022 IPPS/LTCH
PPS final rule in the Federal Register to review and submit comments on
the accuracy of the table and supplemental data file published in
conjunction with the final rule. Any changes to Factor 3 would be
posted on the CMS website and would be effective beginning October 1,
2021. We continue to believe that hospitals have sufficient opportunity
during the comment period for the proposed rule to provide information
about recent and/or pending mergers and/or to report upload
discrepancies. Hospitals do not enter into mergers without advanced
planning. A hospital can inform CMS during the comment period for the
proposed rule regarding any merger activity not reflected in
supplemental file published in conjunction with the proposed rule. As
discussed in an earlier section, we currently expect to use data from
the March 2021 HCRIS extract for the FY 2022 final rule, which
contributes to our increased confidence that hospitals would be able to
comment on mergers and report any upload discrepancies during the
comment period for this proposed rule. However, we also noted that we
may consider using more recent data that may become available after
March 2021, but before the final rule for the purpose of calculating
the final Factor 3s for the FY 2022 IPPS/LTCH PPS final rule. In the
event that there are any remaining merger updates and/or upload
discrepancies after the final rule, the 15 business days from the date
of public display of the FY 2022 IPPS/LTCH PPS final rule deadline
should allow for the time necessary to prepare and make any corrections
to Factor 3 calculations before the beginning of the Federal fiscal
year.
We are inviting public comments on our proposed methodology for
calculating Factor 3 for FY 2022, including, but not limited to, our
proposed use of FY 2018 Worksheet S-10 data.
F. Counting Days Associated With Section 1115 Demonstration Projects in
the Medicaid Fraction
Some States extend medical coverage benefits under a section
1115(a) demonstration project (also referred to as a section 1115
waiver) to populations that could not have been made eligible for
medical assistance under the Medicaid State plan. These populations,
commonly referred to as expansion populations or expansion waiver
groups, are specific, finite populations defined in the waiver approval
letters and special terms and conditions for each demonstration
project.
On January 20, 2000, we issued an interim final rule with comment
period (65 FR 3136) (hereinafter, January 2000 interim final rule),
followed by a final rule issued on August 1, 2000 (65 FR 47086 through
47087), that changed the Secretary's policy on how to treat the patient
days of all populations that receive medical coverage benefits under a
section 1115 demonstration project in calculating the Medicare DSH
adjustment. Previously, hospitals could include only the days for those
populations receiving medical coverage benefits under a section 1115
demonstration project who were, or could have been made, eligible for
Medicaid under the State plan. Patient days of those expansion waiver
groups who were not and could not be made eligible for medical
assistance under the State plan were not to be included for purposes of
determining Medicaid patient days in calculating the Medicare DSH
patient percentage.
Under the new policy adopted in the January 2000 interim final rule
(65 FR 3137), hospitals could include in the numerator of the Medicaid
fraction all patient days of populations eligible for Title XIX for
which matching payment through a section 1115 expansion waiver
demonstration project is made, whether or not those individuals were or
could be made eligible for medical assistance under a State plan. This
policy was effective for discharges occurring on or after January 20,
2000. In the January 2000 interim final rule (65 FR 3137), we explained
that allowing hospitals to include patient days for section 1115
expansion populations in the Medicare DSH calculation is fully
consistent with the Congressional goals of the Medicare DSH adjustment
to recognize the higher costs to hospitals of treating low-income
individuals covered under Medicaid.
In the FY 2004 IPPS final rule (68 FR 45420 and 45421), we further
revised our regulations in order to limit the types of section 1115
waiver programs for which patient days could be counted in the
numerator of the Medicaid fraction. We explained that in allowing
hospitals to include patient days of section 1115 expansion waiver
populations, our intention was to include patient days of those
populations who, under a demonstration project, receive benefits,
including inpatient hospital coverage benefits, that are similar to the
benefits provided to traditional Medicaid beneficiaries. We had become
aware, however, that certain section 1115 demonstration projects serve
expansion populations with benefit packages so limited that the
benefits are unlike the relatively expansive health care insurance
coverage provided under a Medicaid State plan. We explained that these
limited section 1115 demonstration projects extend coverage only for
specific services and do not include insurance coverage for inpatient
hospital care. We noted that due to the limited nature of the coverage
provided under the section 1115 waiver, these expansion populations
could have significantly higher incomes than traditional Medicaid
beneficiaries. Because of the limited nature of the medical coverage
benefits provided to expansion populations under these waivers, as
compared to the benefits provided to the traditional Medicaid
population under a State plan, and the possible difference in income
levels between the expansion populations in limited benefit
demonstrations and traditional Medicaid beneficiaries, we determined it
was appropriate to exclude patient days of patients provided limited
benefits under a section 1115 waiver from the determination of Medicaid
days for purposes of the DSH calculation. Specifically, we revised the
language of Sec. 412.106(b)(4)(i) to provide that for purposes of
determining the Medicaid fraction, a patient is deemed eligible for
Medicaid on a given day only if the patient is eligible for inpatient
hospital services under an approved State Medicaid plan or under a
section 1115 waiver. Thus, under our current regulations, hospitals are
allowed to count patient days in the numerator of the Medicaid fraction
only if they are days of patients eligible for inpatient hospital
services under either a State Medicaid plan or section 1115 expansion
waiver, who are not also entitled to benefits under Medicare Part A.
In the FY 2004 IPPS final rule, we specifically discussed family
planning benefits offered under a section 1115 waiver as an example of
the kind of waiver program that should not be counted in the Medicaid
fraction because the benefits granted to the expansion population are
too limited and, therefore, might be offered to populations with
significantly higher incomes. Our intention was to provide a concrete
example of how the changes being made in the FY 2004 IPPS final rule
would refine the Secretary's policy to allow only the days of those
expansion waiver populations who are provided medical coverage
benefits, and
[[Page 25458]]
specifically coverage of inpatient hospital care, like the health care
coverage that traditional Medicaid beneficiaries receive under a State
plan, to be included in the numerator of the Medicaid fraction of the
Medicare DSH calculation. While we specifically discussed section 1115
waiver family planning benefits, it was our intention that they would
serve as an illustrative example of the kind of benefits offered
through a section 1115 waiver program that are so limited that the
patients receiving them should not be considered eligible for Medicaid
for purposes of the DSH calculation.
In 2005, the Ninth Circuit held that expansion populations receive
care ``under the State plan'' and that, accordingly, our pre-2000
practice of excluding them from the numerator of the Medicaid fraction
was contrary to the plain language of the Act.\938\ Subsequently, the
District Court for the District of Columbia reached the same
conclusion, reasoning that if our policy of counting the days of
expansion populations after 2000 was correct, then patients in
expansion populations were necessarily ``eligible for medical
assistance under a State plan'' (that is Medicaid) and the Act had
always required their inclusion.\939\
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\938\ Portland Adventist Med. Ctr. v. Thompson, 399 F.3d 1091,
1096 (9th Cir. 2005).
\939\ Cookeville Reg'l Med. Ctr. v. Thompson, No. 04-1053, 2005
WL 3276219, at *4-6 (D.D.C. Oct. 28, 2005).
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Shortly thereafter, in early 2006, Congress enacted the Deficit
Reduction Act of 2005 (``the DRA''). Section 5002 of the DRA amended
section 1886(d)(5)(F)(vi) of the Act to clarify our authority to
include or exclude expansion populations from the DSH calculation,
effectively overruling the earlier court decisions. Section 5002(a) of
the DRA clarified that expansion populations receiving Medicaid
benefits were not ``eligible for medical assistance under a State
plan'' by referring to them as ``not so eligible.'' The statute made
explicit that the Secretary nevertheless has the discretion to
``regard'' certain expansion populations as being ``eligible for
medical assistance under a State plan'' for the purpose of the DSH
calculation, and to include them in the numerator of the Medicaid
fraction ``to the extent and for the period the Secretary determines
appropriate.'' Section 5002(b) of the DRA expressly ratified our pre-
2000 policy of not including expansion populations unless they could
have been made eligible for Medicaid. As discussed, at the time the DRA
was enacted, CMS ``regarded'' only a small subset of expansion
populations as being eligible for Medicaid: Those who were eligible to
receive inpatient hospital insurance benefits under the terms of the
expansion waiver. In light of that history, we have not understood the
DRA to grant CMS the authority to include in the DSH calculation any
patient who in any way benefits from a section 1115 demonstration
project. Rather, our authority under section 1886(d)(5)(F)(vi) of the
Act remains limited to including expansion populations--that is,
patients who can be ``regarded'' as ``eligible for medical assistance
under a State plan approved under title XIX'' (that is, Medicaid)
because they receive benefits through a section 1115 demonstration
project that are comparable to traditional Medicaid benefits.
More recently, section 1115 demonstration projects have been used
to authorize the funding of uncompensated care pools that help to
offset the burden that treating the uninsured places on hospitals.
These pools do not extend Medicaid benefits to uninsured individuals.
Unlike demonstration projects that expand the population of people who
are entitled to Medicaid benefits, these pools do not provide inpatient
health coverage directly to patients or, like insurance, make payments
on behalf of specific, covered individuals, but rather directly benefit
hospitals and other providers by making Medicaid funds available to
compensate them for the otherwise uncompensated costs that they incur
in providing medical care to the uninsured and under-insured. Making
these funding pools available to hospitals and other providers to
reduce their uncompensated costs advances the objective of the Medicaid
program, as required by section 1115 of the Act, by making these
entities more financially viable and able to continue to serve the
Medicaid population. Indeed, these uncompensated care pools serve
essentially the same function as Medicaid DSH payments under sections
1902(a)(13)(A)(iv) and 1923 of the Act by indirectly subsidizing the
cost of treating the uninsured, while not extending Medicaid benefits
to additional populations.
Consistent with our current policy of excluding patient days of
individuals provided limited benefits (like family planning benefits)
under a section 1115 expansion waiver from the numerator of the
Medicaid fraction because the benefits they receive are too limited to
be considered similar to Medicaid coverage, we believe it is also
appropriate to exclude patient days for which hospitals receive payment
from an uncompensated care pool or other similar funding source
authorized by section 1115(a)(2). Uncompensated care pools and other
funding streams provided to hospitals do not offer any medical coverage
benefits directly to individuals, let alone benefits that are
comparable to the panoply of benefits provided to traditional Medicaid
beneficiaries under a State plan. As a result, we do not believe that
the uninsured patients whose costs are partially offset by
uncompensated care pools can be ``regarded'' as being eligible for
Medicaid as required under section 1886(d)(5)(F)(vi) of the Act.
Therefore, the patient days paid from such pools and other similar
sources should not be included in the calculation of the Medicare DSH
adjustment.
Similarly, we believe the days of patients who, under a section
1115 expansion waiver, receive premium assistance--that is, financial
assistance that can be used to help with the purchase of health
insurance from a private entity--should also be excluded from the DSH
calculation. Like patients receiving only a family planning or other
limited benefit from a demonstration project, premium assistance
patients do not receive guaranteed health insurance coverage for
inpatient hospital services. Rather, they receive money they can use to
buy private health insurance that may not necessarily provide the same
type of benefits traditional Medicaid beneficiaries receive. Moreover,
premium assistance is usually offered on a sliding scale with
relatively wealthy individuals receiving smaller subsidies and
individuals with lower incomes receiving higher subsidies. As a result,
individuals who receive premium assistance under an expansion waiver
program may be significantly wealthier than traditional Medicaid
beneficiaries. Because individuals receiving premium assistance as part
of an expansion waiver do not directly receive health insurance for
inpatient hospital services and may have higher incomes than
traditional Medicaid beneficiaries, we do not believe the days of such
patients are properly included in the numerator of the Medicaid
fraction.
Recently, however, courts have decided in a series of cases
(Bethesda Health, Inc. v. Azar, 980 F.3d 121 (DC Cir. 2020); Forrest
General Hospital v. Azar, 926 F.3d 221 (5th Cir. 2019); HealthAlliance
Hosps., Inc. v. Azar, 346 F. Supp. 3d 43 (D.D.C. 2018)) that, based on
the current language of the regulations, CMS is required to count in
the numerator of the Medicaid fraction patient days for which hospitals
have
[[Page 25459]]
received payment from an uncompensated care pool authorized by a
section 1115 demonstration and the days of patients who receive premium
assistance under a section 1115 demonstration program. These courts
have concluded that if a hospital received payment for otherwise
uncompensated inpatient hospital treatment of a patient, that patient
is ``eligible for inpatient hospital services'' within the meaning of
the current regulation. Likewise, the courts have concluded that
patients who receive premium assistance to pay for private insurance
that covers inpatient hospital services are ``eligible for inpatient
hospital services'' within the meaning of the current regulation. As
discussed previously, that was not our intent when we adopted the
current language of the regulation, and we continue to believe that it
is not appropriate to include patient days associated with these types
of expansion programs in the Medicare DSH calculation because the
benefits offered under these section 1115 demonstrations are not
similar to traditional Medicaid benefits and may be provided to
individuals with much higher incomes.
In light of these court decisions, we believe it is appropriate to
further revise our regulations to ensure that the only section 1115
days that may be counted in the numerator of the Medicaid fraction are
the days of patients for whom a section 1115 waiver provides inpatient
hospital insurance coverage benefits directly to that patient on that
day. Medicaid provides inpatient hospital insurance benefits directly
to specific individuals. Patient days associated with a section 1115
waiver program that does not similarly directly provide inpatient
hospital insurance coverage to specific individuals are not comparable
to the days of patients receiving traditional Medicaid benefits, and
therefore, should not be counted in the numerator of the Medicaid
fraction. Accordingly, we are proposing to revise the regulation at
Sec. 412.106(b)(4)(i) to state explicitly that a patient is deemed
eligible for Medicaid for the purposes of the DSH calculation on a
given day, and the corresponding patient day is included in the
numerator of the Medicaid fraction, only if the patient is eligible for
inpatient hospital services under an approved State Medicaid plan that
includes coverage for inpatient hospital care on that day or directly
receives inpatient hospital insurance coverage on that day under a
waiver authorized under section 1115(a)(2) of the Act. We also propose
to remove Sec. 412.106(b)(4)(ii) in its entirety as this provision
would no longer be needed.
We invite comments on this proposal.
G. Hospital Readmissions Reduction Program: Proposed Updates and
Changes (Sec. Sec. 412.150 through 412.154)
1. Statutory Basis for the Hospital Readmissions Reduction Program
Section 1886(q) of the Act, as amended by section 15002 of the 21st
Century Cures Act, establishes the Hospital Readmissions Reduction
Program. Under the Hospital Readmissions Reduction Program, Medicare
payments under the acute inpatient prospective payment system (IPPS)
for discharges from an applicable hospital, as defined under section
1886(d) of the Act, may be reduced to account for certain excess
readmissions. Section 15002 of the 21st Century Cures Act requires the
Secretary to compare hospitals with respect to the proportion of
beneficiaries who are dually eligible for Medicare and full-benefit
Medicaid (``dually eligible beneficiaries'') in determining the extent
of excess readmissions. We refer readers to the FY 2016 IPPS/LTCH PPS
final rule (80 FR 49530 through 49531) and the FY 2018 IPPS/LTCH PPS
final rule (82 FR 38221 through 38240) for a detailed discussion of and
additional information on the statutory history of the Hospital
Readmissions Reduction Program.
2. Regulatory Background
We refer readers to the following final rules for detailed
discussions of the regulatory background and descriptions of the
current policies for the Hospital Readmissions Reduction Program:
FY 2012 IPPS/LTCH PPS final rule (76 FR 51660 through
51676);
FY 2013 IPPS/LTCH PPS final rule (77 FR 53374 through
53401);
FY 2014 IPPS/LTCH PPS final rule (78 FR 50649 through
50676);
FY 2015 IPPS/LTCH PPS final rule (79 FR 50024 through
50048);
FY 2016 IPPS/LTCH PPS final rule (80 FR 49530 through
49543);
FY 2017 IPPS/LTCH PPS final rule (81 FR 56973 through
56979);
FY 2018 IPPS/LTCH PPS final rule (82 FR 38221 through
38240);
FY 2019 IPPS/LTCH PPS final rule (83 FR 41431 through
41439);
FY 2020 IPPS/LTCH PPS final rule (84 FR 42380 through
42390); and
FY 2021 IPPS/LTCH PPS final rule (85 FR 58844 through
58847).
We have also codified certain requirements of the Hospital
Readmissions Reduction Program at 42 CFR 412.152 through 412.154. In
section V.G.15 of the preamble of this proposed rule, we are proposing
to update the regulatory text at 42 CFR 412.154(f)(4) to add the phrase
``or successor website'' in order to reflect the change in the CMS
website name from Hospital Compare to Care Compare.
3. Summary of Proposed Policies for the Hospital Readmissions Reduction
Program
In section V.G.5 of the preamble of this proposed rule, we are
proposing to adopt a cross-program measure suppression policy due to
the impact of the COVID-19 public health emergency (PHE) on quality
measurement and pay-for-performance programs including the Hospital
Readmissions Reduction Program. In section V.G.6 of the preamble of
this proposed rule, we are proposing to suppress the Hospital 30-Day,
All-Cause, Risk-Standardized Readmission Rate (RSRR) following
Pneumonia Hospitalization measure (NQF #0506) and we provide
information on technical specification updates for the remaining five
condition/procedure-specific readmission measures to exclude COVID-19
diagnosed patients from the measure denominators beginning in fiscal
year (FY) 2023. In section V.G.8 of the preamble of this proposed rule,
we are proposing to use the MedPAR data to determine aggregate payments
that aligns with the applicable period for FY 2022. In section V.G.9 of
the preamble of this proposed rule, we are proposing the automatic
adoption of the use of MedPAR data corresponding to the applicable
period beginning with the FY 2023 program year and all subsequent
program years, unless otherwise specified by the Secretary. In section
V.G.13 of the preamble of this proposed rule, we are clarifying our
Extraordinary Circumstances (ECE) Policy. In section V.G.14 of the
preamble of this proposed rule, we request public comment on possible
future stratification of results by race and ethnicity for our
condition/procedure-specific readmission measures and by expansion of
standardized data collection to additional social factors, such as
language preference and disability status. We are also seeking comment
in that section on mechanisms of incorporating other demographic
characteristics into analysis that address and advance health equity,
such as the potential to include administrative and self-reported data
to measure co-occurring disability status.
We discuss these proposals in greater detail in this proposed rule.
[[Page 25460]]
4. Current Measures
The Hospital Readmissions Reduction Program currently includes six
applicable conditions/procedures: acute myocardial infarction (AMI);
heart failure (HF); pneumonia; elective primary total hip arthroplasty/
total knee arthroplasty (THA/TKA); chronic obstructive pulmonary
disease (COPD); and coronary artery bypass graft (CABG) surgery.
We continue to believe the measures we have adopted adequately meet
the goals of the Hospital Readmissions Reduction Program. However, due
to the potentially substantial relationship between pneumonia and
COVID-19, we are proposing to suppress temporarily the inclusion of the
Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR)
following Pneumonia Hospitalization measure (NQF #0506) in the Hospital
Readmissions Reduction Program measure set for the FY 2023 applicable
period in section V.G.6 of this preamble. We are also providing
information on technical specification updates for the remaining five
condition/procedure-specific readmission measures to exclude COVID-19
diagnosed patients from the measure denominators, including the
Hospital 30-Day All-Cause Risk-Standardized Readmission Rate (RSRR)
Following Acute Myocardial Infarction (AMI) Hospitalization (NQF
#0505), the Hospital 30-Day, All-Cause, Unplanned, Risk-Standardized
Readmission Rate (RSRR) Following Coronary Artery Bypass Graft (CABG)
Surgery (NQF #2515), the Hospital 30-Day, All-Cause, Risk-Standardized
Readmission Rate (RSRR) Following Chronic Obstructive Pulmonary Disease
(COPD) Hospitalization (NQF #1891), the Hospital 30-Day, All-Cause,
Risk-Standardized Readmission Rate (RSRR) Following Heart Failure
Hospitalization (NQF #0330), and the Hospital-Level 30-Day, All-Cause
Risk-Standardized Readmission Rate (RSRR) Following Elective Primary
Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF
#1551) beginning in FY 2023.
We refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR
41431 through 41439) for more information about how the Hospital
Readmissions Reduction Program supports CMS' goal of bringing quality
measurement, transparency, and improvement together with value-based
purchasing to the hospital inpatient care setting through the
Meaningful Measures Framework. We refer readers to section IX.A of this
proposed rule, where we request information on potential actions and
priority areas that would enable the continued transformation of our
quality measurement enterprise toward greater digital capture of data
and use of the FHIR standard (as described in that section). We also
refer readers to section IX.B of this proposed rule, where we request
information on potentially expanding the scope of our methodology to
adjust outcomes measurement to recognize disparities in care, to
include statistically estimated race and ethnicity information.
5. Proposed Flexibility for Changes That Affect Quality Measures During
a Performance Period in the Hospital Readmissions Reduction Program
In previous rules, we have identified the need for flexibility in
our quality programs to account for the impact of changing conditions
that are beyond participating facilities' or practitioners' control. We
identified this need because we would like to ensure that participants
in our programs are not affected negatively when their quality
performance suffers not due to the care provided, but due to external
factors.
A significant example of the type of external factor that may
affect quality measurement is the COVID-19 public health emergency
(PHE), which has had and continues to have significant and ongoing
effects on the provision of medical care in the country and around the
world. The COVID-19 PHE impedes effective quality measurement in
several ways. Changes to clinical practices to accommodate safety
protocols for medical personnel and patients, as well as unpredicted
changes in the number of stays and facility-level case mixes, have
affected the data used in quality measurement and the resulting quality
scores. Measures used in the Hospital Readmissions Reduction Program
need to be evaluated to determine whether their specifications need to
be updated to account for new clinical guidelines, diagnoses or
procedure codes, and medications that we have observed during the PHEs.
Additionally, COVID-19 prevalence is not identical across the country,
meaning that the medical provider community has been affected
differently at different times throughout the calendar year. Under
those circumstances, we remain significantly concerned that the
Hospital Readmissions Reduction Program's quality measurement scores
are distorted, which would result in skewed payment incentives and
inequitable payments, particularly for hospitals that have treated more
COVID-19 patients than others.
It is not our intention to penalize hospitals for performance on
measures that are affected significantly by global events like the
COVID-19 PHE. As previously discussed, the COVID-19 PHE has had, and
continues to have, significant and enduring effects on health care
systems around the world, and affects care decisions, including
readmissions to the hospital as measured by the Hospital Readmissions
Reduction Program. As a result of the PHE, hospitals could provide care
to their patients that meets the underlying clinical standard but
results in worse measured performance, and by extension, lower
incentive payments in the Hospital Readmissions Reduction Program. We
are concerned that regional and temporal differences in COVID-19
prevalence during the FY 2022 Hospital Readmissions Reduction Program
applicable period, which includes data collected during the PHE, have
directly affected hospitals' readmissions measure performance for the
FY 2022 program year. Although regional and temporal differences in
COVID-19 prevalence rates would not necessarily represent differences
in the quality of care furnished by hospitals, they would directly
affect the payment adjustments that these hospitals would receive and
could result in an unfair and inequitable distribution in the
assessment of penalties for excess readmissions. These inequities could
be especially pronounced for hospitals that have treated a large number
of COVID-19 patients.
Therefore, we are proposing to adopt a policy for the duration of
the PHE for COVID-19 that would enable us to suppress the use of
quality measures via adjustment to the Hospital Readmissions Reduction
Program's scoring methodology if we determine that circumstances caused
by the COVID-19 PHE have affected those measures and the associated
``excess readmissions'' calculations significantly. Under this proposed
policy, if we determine that the suppression of a Hospital Readmissions
Reduction Program measure is warranted for a Hospital Readmissions
Reduction Program applicable period, we would propose to calculate the
measure's rates for that program year but then suppress the use of
those rates to make changes to hospitals' Medicare payments. In the
Hospital Readmissions Reduction Program, this policy would have the
effect of temporarily weighting the affected measure at 0% in the
program's scoring methodology until adjustments are made, the affected
portion of the performance period for the measure is no longer
applicable to program scoring, or the measure is
[[Page 25461]]
removed entirely through rulemaking. We would still provide feedback
reports to hospitals as part of program activities, including to inform
their quality improvement activities, and to ensure that they are made
aware of the changes in performance rates that we have observed. We
would also publicly report suppressed measures' data with appropriate
caveats noting the limitations of the data due to the PHE for COVID-19.
In developing this proposed policy, we considered what
circumstances caused by the PHE for COVID-19 would affect a quality
measure significantly enough to warrant its suppression in a value-
based purchasing program. We believe that significant deviation in
measured performance that can be reasonably attributed to the PHE is a
significant indicator of changes in clinical conditions that affect
quality measurement. Similarly, we believe that a measure may be
focused on a clinical topic or subject that is proximal to the disease,
pathogen, or other health impacts of the PHE. As has been the case
during the COVID-19 PHE, we believe that rapid or unprecedented changes
in clinical guidelines and care delivery, potentially including
appropriate treatments, drugs, or other protocols may affect quality
measurement significantly and should not be attributed to the
participating facility positively or negatively. We also note that
scientific understanding of a particular disease or pathogen may evolve
quickly during an emergency, especially in cases of new diseases or
conditions. Finally, we believe that, as evidenced during the COVID-19
PHE, national or regional shortages or changes in health care
personnel, medical supplies, equipment, diagnostic tools, and patient
case volumes or facility-level case mix may result in significant
distortions to quality measurement.
Based on these considerations, we developed a number of Measure
Suppression Factors that we believe should guide our determination of
whether to propose to suppress a Hospital Readmissions Reduction
Program measure for one or more program years that overlap with the PHE
for COVID-19. We are proposing to adopt these Measure Suppression
Factors for use in the Hospital Readmissions Reduction Program, and for
consistency, the following value-based purchasing programs: Hospital
VBP Program, HAC Reduction Program, Skilled Nursing Facility Value-
Based Purchasing Program, and End-Stage Renal Disease Quality Incentive
Program. We believe that these Measure Suppression Factors will help us
evaluate the Hospital Readmissions Reduction Program's measures and
that their adoption in the other value-based purchasing programs, as
previously noted, will help ensure consistency in our measure
evaluations across programs. The proposed Measure Suppression Factors
are:
1. Significant deviation in national performance on the measure
during the PHE for COVID-19, which could be significantly better or
significantly worse compared to historical performance during the
immediately preceding program years.
2. Clinical proximity of the measure's focus to the relevant
disease, pathogen, or health impacts of the PHE for COVID-19.
3. Rapid or unprecedented changes in:
(i) Clinical guidelines, care delivery or practice, treatments,
drugs, or related protocols, or equipment or diagnostic tools or
materials; or
(ii) the generally accepted scientific understanding of the nature
or biological pathway of the disease or pathogen, particularly for a
novel disease or pathogen of unknown origin.
4. Significant national shortages or rapid or unprecedented changes
in: (i) Healthcare personnel; (ii) medical supplies, equipment, or
diagnostic tools or materials; or (iii) patient case volumes or
facility-level case mix.
We also considered alternatives to this proposed policy that could
also fulfill our objective to not hold hospitals accountable for
measure results under the Program that are distorted due to the PHE for
COVID-19. As previously noted, the country continues to grapple with
the effects of the COVID-19 PHE, and in March 2020, CMS issued a
nationwide, blanket ECE for all hospitals and other facilities
participating in our quality reporting and value-based purchasing
programs in response to the COVID-19 PHE. This blanket ECE waived all
data reporting requirements for Q1 and Q2 2020 data, including waiving
the use of claims data and data collected through the CDC's web-based
surveillance system for this data period, and quality data collection
resumed on July 1, 2020. We considered extending this blanket ECE for
Q3 and Q4 2020. This alternative would protect providers and suppliers
from having their quality data used for quality scoring purposes while
those data are likely to have been affected significantly by the COVID-
19 PHE. However, this option would make providers' quality data
collection and reporting to CMS no longer mandatory and would leave no
comprehensive data available for us to provide confidential performance
feedback to providers nor for monitoring and to inform decision-making
for potential future programmatic changes, particularly as the PHE is
extended.
As an alternative to the proposed quality measure suppression
policy, we also considered not making any further changes to the
Program and implementing it as previously specified. However, this
alternative would mean assessing hospitals using quality measure data
that has been significantly affected by the PHE for COVID-19.
Additionally, given the geographic disparities in the COVID-19 PHE's
effects, implementation of the Program as previously finalized would
place hospitals in regions that were more heavily affected by the PHE
in Q3 and Q4 of 2020 at a disadvantage compared to hospitals in regions
that were more heavily affected during the first two quarters of CY
2020.
We view the measure suppression proposal as a necessity to ensure
that the Hospital Readmissions Reduction Program does not reward or
penalize hospitals based on factors that the Program's measures were
not designed to accommodate. We intend for this proposed policy to
provide short-term relief to hospitals when we have determined that one
or more of the Measure Suppression Factors warrants the suppression of
one or more of the Program's measures.
We invite public comments on this proposal for the adoption of a
measure suppression policy for the Hospital Readmissions Reduction
Program for the duration of the PHE for COVID-19, and also on the
proposed Measure Suppression Factors that we developed for purposes of
this proposed policy.
We are also inviting comment on whether we should consider adopting
a measure suppression policy in the situation of a future national PHE,
and if so, whether under such a policy, we should have the flexibility
to suppress certain measures without specifically proposing to do so in
rulemaking.
We also request comment on whether we should in future years
consider adopting any form of regional adjustment for the proposed
measure suppression policy that could take into account any disparate
effects of circumstances affecting hospitals around the country that
would prompt us to suppress a measure. For example, COVID-19 affected
different regions of the country at different rates depending on
factors like time of year, geographic density, State and local
policies, and health care system capacity. In future years and for
future PHEs, should they arise, we also request commenters' feedback on
whether we should, rather
[[Page 25462]]
than suppress a measure completely by assigning it a 0 percent weight,
consider a suppression policy with more granular effects based on our
assessment of the geographic effects of the circumstances, and if so,
how region-based measure suppression could be accounted for within the
program's scoring methodology.
6. Proposals To Address the Impact of COVID-19 on Current Hospital
Readmissions Reduction Program Measures
a. Background
On March 11, 2020, the WHO publicly declared COVID-19 a pandemic.
On March 13, 2020, the President declared the COVID-19 pandemic a
national emergency. On April 21, 2020, July 23, 2020, October 2, 2020,
and January 7, 2021, the Secretary renewed the January 31, 2020
determination that a PHE for COVID-19 exists and has existed since
January 27, 2020. The Secretary may renew the PHE every 90 days until
such time as the Secretary determines that a public health emergency no
longer exists.
In response to the PHE for COVID-19, we have conducted analyses on
the six current Hospital Readmissions Reduction Program measures to
determine whether and how COVID-19 may have impacted the validity of
these condition/procedure-specific readmission measures. For the
reasons discussed below, we have concluded that COVID-19 has severely
impacted the validity of the Hospital 30-Day, All-Cause, Risk-
Standardized Readmission Rate (RSRR) following Pneumonia
Hospitalization measure (NQF #0506) (hereafter referred to as the CMS
30-Day Pneumonia Readmission Measure (NQF #0506)), such that we cannot
fairly assess this measure. The FY 2022 CMS 30-Day Pneumonia
Readmission Measure (NQF #506) applicable period is July 1, 2017
through June 30, 2020. However, in the September 2020 IFC, we noted
that we would except the use of any first or second quarter CY 2020
claims data from our calculation of performance for the applicable
fiscal years (85 FR 54833). With this exception, the FY 2022 applicable
period for this measure would only be affected by a shortened
performance period (July 1, 2017 through December 1, 2019) that does
not use data from the COVID-19 PHE. Therefore, we have determined that
it is not necessary to suppress this measure for the FY 2022 program
year. However, given the ongoing status of the PHE and the impact of
COVID-19 on this measure data, we are proposing to temporarily suppress
this measure for the FY 2023 program year.
Although COVID-19 has also impacted the five remaining condition/
procedure-specific measures, we have concluded that this impact is less
severe overall and can be further mitigated by updating the measure
specifications to exclude Medicare beneficiaries with a secondary
diagnosis of COVID-19. Therefore, we are not proposing to suppress the
five remaining condition/procedure-specific measures for the FY 2022
program year but are updating their specifications instead. The
measures are as follows:
Hospital 30-Day All-Cause Risk-Standardized Readmission
Rate (RSRR) Following Acute Myocardial Infarction (AMI) Hospitalization
(NQF #0505);
Hospital 30-Day, All-Cause, Unplanned, Risk-Standardized
Readmission Rate (RSRR) Following Coronary Artery Bypass Graft (CABG)
Surgery (NQF #2515);
Hospital 30-Day, All-Cause, Risk-Standardized Readmission
Rate (RSRR) Following Chronic Obstructive Pulmonary Disease (COPD)
Hospitalization (NQF #1891);
Hospital 30-Day, All-Cause, Risk-Standardized Readmission
Rate (RSRR) Following Heart Failure Hospitalization (NQF #0330); and
Hospital-Level 30-Day, All-Cause Risk-Standardized
Readmission Rate (RSRR) Following Elective Primary Total Hip
Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (NQF #1551).
As discussed more fully later in this section, we are modifying
these five condition/procedure-specific measures to exclude COVID-19
patients from the measure denominators as technical updates to the
measure specifications.
b. Proposal To Suppress the CMS 30-Day Pneumonia Readmission Measure
(NQF #0506) for the FY 2023 Program Year
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR
51664 through 51666), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50649
through 50676), the FY 2015 IPPS/LTCH PPS final rule (79 FR 50024
through 50048), and the FY 2016 IPPS/LTCH PPS final rule (80 FR 24490
through 24492) for information on our policies that relate to
refinement of the readmissions measures and related methodology for the
current applicable conditions/procedures.
In this proposed rule, we are proposing to suppress temporarily the
CMS 30-Day Pneumonia Readmission Measure (NQF #0506) for the FY 2023
program year under proposed Measure Suppression Factor 2, clinical
proximity of the measure's focus to the relevant disease or pathogen,
particularly for a novel disease or pathogen of unknown origin, due to
the COVID-19 PHE. COVID-19 is caused by the SAR-CoV-2 virus, which
begins when respiratory droplets containing the virus enter an
individual's upper respiratory tract.\940\ Pneumonia has been
identified as a typical characteristic of individuals infected with
COVID-19,\941\ and our analysis based on data from CY 2020 shows that a
substantial portion of the CMS 30-Day Pneumonia Readmission Measure
(NQF #0506) cohort includes admissions with a COVID-19 diagnosis. In
addition, almost all of the admissions with a COVID-19 diagnosis have a
principal diagnosis of sepsis; observed mortality rates for these
admissions are extremely high and are substantially higher than
admissions without a COVID-19 diagnosis. We are concerned that these
higher mortality rates may also potentially distort readmissions data
for the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) cohort.
Based on the currently available data for this measure, there is a high
percentage of Medicare beneficiaries with a secondary diagnosis of
COVID-19 in the measure cohort during CY 2020.
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\940\ CDC. ``How COVID-19 Spreads''. Available at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
\941\ CDC. ``Interim Clinical Guidance for Management of
Patients with Confirmed Coronavirus Disease (COVID-19)''. Updated
February 16, 2021. Available at: https://www.cdc.gov/coronavirus/2019-ncov/hcp/clinical-guidance-management-patients.html.
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In accordance with the previously discussed measure suppression
policy, we would weight the CMS 30-Day Pneumonia Readmission Measure
(NQF #0506) at zero percent in the Hospital Readmissions Reduction
Program payment methodology such that claims data for this measure
would not be used to assess that hospital's performance. Additionally,
we would continue to monitor the claims that form the basis for this
measure's calculations to evaluate the effect of the circumstances on
quality measurement and to determine the appropriate policies in the
future. We would also continue to provide feedback reports to hospitals
as part of program activities to ensure that they are made aware of the
changes in performance rates that are observed and to inform quality
improvement activities.
As previously discussed, the CMS 30-Day Pneumonia Readmission
Measure (NQF #0506) FY 2022 applicable period is July 1, 2017 through
June 30, 2020.
[[Page 25463]]
However, in the September 2020 IFC, we noted that we would not use any
first or second quarter CY 2020 claims data to assess performance for
the applicable fiscal years (85 FR 54833). With this exception, the FY
2022 applicable period for this measure would only be affected by a
shortened performance period (July 1, 2017 through December 1, 2019)
that does not use data impacted by the COVID-19 PHE. Therefore, we have
decided that it is not necessary to suppress this measure for the FY
2022 program year. However, given the ongoing status of the PHE and the
impact of COVID-19 on this measure's data, we are proposing to
temporarily suppress this measure for the FY 2023 program year.
Our analysis of the CMS 30-Day Pneumonia Readmission Measure (NQF
#0506) claims data showed that a higher proportion of patients had a
secondary diagnosis of COVID-19 than other readmission measures and
that these patients have a higher risk of mortality than the remainder
of the admissions in the pneumonia measure cohort.
[GRAPHIC] [TIFF OMITTED] TP10MY21.249
Data from September 2020 showed that although admission volumes for
this cohort were substantially lower compared to admission volumes in
September 2019, the observed readmission rates were statistically
significantly higher compared to the observed readmission rates for
this cohort during the same period in 2019.
Our analyses performed with available data demonstrated that COVID-
19 patients captured in the pneumonia readmission measure cohort likely
represent a distinct, severely ill group of patients for whom it may be
difficult to adequately ascertain appropriate risk adjustment. We want
to ensure that the measure reflects care provided by the hospital to
Medicare beneficiaries admitted with pneumonia and we are concerned
that excluding a significant proportion of all eligible patients may
not accurately reflect the care provided, particularly given the
unequal distribution of COVID-19 patients across hospitals over time.
Suppressing this measure for the FY 2023 program year would address
this concern.
As part of our analysis, we also evaluated the impact of
suppressing the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) on
hospital eligibility, program calculations, and payment for the FY 2023
program year. We note that we used data from the most recently
completed performance period, FY 2021, to simulate removal of the CMS
30-Day Pneumonia Readmission Measure (NQF #0506) as compared to the
baseline data.\942\ We found that the suppression of the CMS 30-Day
Pneumonia Readmission
[[Page 25464]]
Measure (NQF #0506) resulted in about a 1 percent decrease in
eligibility for hospitals with at least 25 eligible discharges for any
of the readmission measures under the Hospital Readmissions Reduction
Program; the number of hospitals receiving a payment reduction was
reduced by 5.17 percent; the penalty as a share of payments, or the
weighted average payment reduction decreased by .13 percentage points;
and the estimated Medicare savings decreased by 22.20%. Therefore, we
believe that suppressing the CMS 30-Day Pneumonia Readmission Measure
(NQF #0506) measure would have a minimal negative impact on eligibility
for the Hospital Readmissions Reduction Program, and the number of
hospitals receiving payment reductions. Although we note that
suppressing the CMS 30-Day Pneumonia Readmission Measure (NQF #0506)
measure would have larger impacts on the weighted average payment
reduction and the estimated Medicare savings under the Hospital
Readmissions Reduction Program, the reduction in penalty as a share of
payments and estimated Medicare savings are expected based on the
program methodology in which each measure contributes to the payment
reduction additively, increasing the size of the payment reduction.
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\942\ We note that, for purposes of this analysis, we removed
the pneumonia readmission measure from program results calculated
using a 29-month performance period.
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We are seeking comments on our proposal to suppress the current CMS
30-Day Pneumonia Readmission Measure (NQF #0506) for FY 2023.
c. Technical Measure Specification Update To Exclude COVID-19 Diagnosed
Patients From All Other Condition/Procedure-Specific Readmission
Measures Beginning With FY 2023
In the FY 2015 IPPS/LTCH final rule, we finalized a subregulatory
process to incorporate technical measure specification updates into the
measure specifications we have adopted for the Hospital Readmissions
Reduction Program (79 FR 50039). We reiterated this policy in the FY
2020 IPPS/LTCH final rule, stating our continued belief that the
subregulatory process is the most expeditious manner possible to ensure
that quality measures remain fully up to date while preserving the
public's ability to comment on updates that so fundamentally change a
measure that it is no longer the same measure that we originally
adopted (84 FR 42385). Due to the impact of the COVID-19 PHE on the
measures used in the Hospital Readmissions Reduction Program, as
described previously, we are updating these five condition/procedure-
specific readmission measures to exclude COVID-19 diagnosed patients
from the measure denominators. This technical update will modify these
five condition/procedure-specific readmission measures to exclude
certain ICD-10 Codes that represent patients with a secondary diagnosis
of COVID-19 from the measure denominators, but will retain the measures
in the program.
We believe that excluding COVID-19 patients from the measure
denominator will ensure that these five condition/procedure-specific
readmission measures continue to account for readmissions as intended
and meet the goals of the Hospital Readmissions Reduction Program.
Additional resources about the current measure technical specifications
and methodology for the Hospital Technical specification of the current
readmission measures are provided at our website in the Measure
Methodology Reports (available at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html). Readmissions Reduction Program are on the
Resources web page of the QualityNet website (available at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772412995).
7. Automatic Adoption of Applicable Periods for FY 2023 and Subsequent
Years
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR
51671) and the FY 2013 IPPS/LTCH PPS final rule (77 FR 53375) for
discussion of our previously finalized policy for defining ``applicable
period''. In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41434 through
41435) and the FY 2020 IPPS/LTCH PPS final rule (84 FR 42387), we
finalized the ``applicable period'' consistent with the definition
specified at 42 CFR 412.152, to calculate the readmission payment
adjustment factor for FY 2022 as the 3-year time period of July 1, 2017
through June 30, 2020.\943\
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\943\ Although the FY 2022 applicable period is July 1, 2017
through June 30, 2020, we note that first and second quarter data
from CY 2020 is excluded from consideration for program calculation
purposes due to the nationwide ECE that was granted in response to
the COVID-19 PHE.
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The ``applicable period'' is the 3-year period from which data are
being collected in order to calculate excess readmission ratios (ERRs)
and payment adjustment factors for the fiscal year; this includes
aggregate payments for excess readmissions and aggregate payments for
all discharges used in the calculation of the payment adjustment. The
``applicable period'' for dually eligible beneficiaries is the same as
the ``applicable period'' that we otherwise adopt for purposes of the
Hospital Readmissions Reduction Program.
In order to provide greater certainty around future applicable
periods for the Hospital Readmissions Reduction Program, in the FY 2021
IPPS/LTCH final rule (85 FR 58846), we finalized the automatic adoption
of applicable periods for FY 2023 and all subsequent program years for
the Hospital Readmissions Reduction Program. We remind readers that,
beginning in FY 2023, the applicable period for the Hospital
Readmissions Reduction Program will be the 3-year period beginning 1
year advanced from the previous program fiscal year's start of the
applicable period. Under this policy, for all subsequent years, we will
advance this 3-year period by 1 year unless otherwise specified by the
Secretary, which we would convey through notice and comment rulemaking.
Similarly, the applicable period for dual eligibility will continue to
correspond to the applicable period for the Hospital Readmissions
Reduction Program, unless otherwise specified by the Secretary. We
refer readers to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58845
through 58846) for a more detailed discussion of this topic. We are not
proposing any updates to this policy in this proposed rule.
8. Proposal To Identify Aggregate Payments for Each Condition/Procedure
and All Discharges for FY 2022
When calculating the numerator (aggregate payments for excess
readmissions), we determine the base operating DRG payment amount for
an individual hospital for the applicable period for each condition/
procedure using Medicare inpatient claims from the MedPAR file with
discharge dates that are within the applicable period. Under our
established methodology, we use the update of the MedPAR file for each
Federal fiscal year, which is updated 6 months after the end of each
Federal fiscal year within the applicable period, as our data source.
In identifying discharges for the applicable conditions/procedures
to calculate the aggregate payments for excess readmissions, we apply
the same exclusions to the claims in the MedPAR file as are applied in
the measure methodology for each of the applicable conditions/
procedures. For the FY 2022 applicable period, this includes the
discharge diagnoses for each applicable condition/procedure based on a
list of
[[Page 25465]]
specific ICD-10-CM and ICD-10-PCS code sets, as applicable, for that
condition/procedure, because diagnoses and procedure codes for
discharges occurring on or after October 1, 2015 (FY 2016) began
reporting under the ICD-10-CM and ICD-10-PCS code sets as opposed to
the previous ICD-9-CM code set.
We identify Medicare fee-for-service (FFS) claims that meet the
criteria as previously described for each applicable condition/
procedure to calculate the aggregate payments for excess readmissions.
This means that claims paid for under Medicare Part C (Medicare
Advantage) are not included in this calculation. This policy is
consistent with the methodology to calculate ERRs based solely on
admissions and readmissions for Medicare FFS patients. Therefore,
consistent with our established methodology, for FY 2022, we are
proposing to continue to exclude admissions for patients enrolled in
Medicare Advantage (MA), as identified in the Medicare Enrollment
Database.
In this proposed rule, for FY 2022, we are proposing to determine
aggregate payments for excess readmissions, and aggregate payments for
all discharges using data from MedPAR claims with discharge dates that
align with the FY 2022 applicable period.\944\ As we stated in the FY
2018 IPPS/LTCH PPS final rule (82 FR 38232), we will determine the
neutrality modifier using the most recently available full year of
MedPAR data. However, we note that, for the purpose of modeling the
proposed FY 2022 readmissions payment adjustment factors for this
proposed rule, we are using the proportion of dually eligible
beneficiaries, excess readmission ratios, and aggregate payments for
each condition/procedure and all discharges for applicable hospitals
from the FY 2021 Hospital Readmissions Reduction Program applicable
period (July 1, 2016 through June 30, 2019). For the FY 2022 program
year, applicable hospitals will have the opportunity to review and
correct calculations based on the FY 2022 applicable period of July 1,
2017 to December 1, 2019, before they are made public under our policy
regarding reporting of hospital-specific information. Again, we
reiterate that this period is intended to review the program
calculations, and not the underlying data. For more information on the
review and corrections process, we refer readers to the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53399 through 53401).
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\944\ Although the FY 2022 applicable period is July 1, 2017
through June 30, 2020, we note that first and second quarter data
from CY 2020 is excluded from consideration for scoring purposes due
to the nationwide ECE that was granted in response to the COVID-19
PHE. Taking into consideration the 30-day window to identify
readmissions, the period for calculating DRG payments would be
adjusted to July 1, 2017 through December 1, 2019. Further
information will be found in the FY 2022 Hospital Specific Report
(HSR) User Guide located on QualityNet website at: https://qualitynet.cms.gov/inpatient/hrrp/reports that is anticipated to
become available in August 2021.
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In this proposed rule, we are proposing to continue to use MedPAR
data corresponding to the applicable period for identifying discharges
for the applicable conditions/procedures to calculate the aggregate
payments for excess readmissions for the Hospital Readmissions
Reduction Program. We are proposing to use the update of the MedPAR
file for each Federal FY, which is updated 6 months after the end of
each Federal FY within the applicable period, as our data source.
We welcome public comment on this proposal to identify aggregate
payments for each condition/procedure and all discharges for the FY
2022 applicable period using corresponding MedPAR data.
9. Proposed Automatic Adoption of the Use of MedPAR Data Corresponding
to the Applicable Period Beginning in FY 2023
We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR
53387 through 53390) for discussion of our previously finalized policy
for the use of MedPAR claims data as our data source for determining
aggregate payments for each condition/procedure and aggregate payments
for all discharges during applicable periods. Most recently, in the FY
2021 IPPS/LTCH PPS final rule (85 FR 58846), we finalized our policy on
the continued use of the MedPAR data corresponding to the applicable
period for the Hospital Readmissions Reduction Program calculations for
the FY 2021 applicable period. We also finalized our policy to use the
update of the MedPAR file for each Federal FY, which is updated 6
months after the end of each Federal FY within the applicable period,
as our data source to identify discharges within the FY 2021 applicable
period during that fiscal year. Similarly, in section V.G.8 of this
proposed rule, we are proposing to use MedPAR data corresponding to the
applicable period for the Hospital Readmissions Reduction Program
calculations for the FY 2022 applicable period, and to use the update
of the MedPAR file for each Federal FY, which is updated 6 months after
the end of each Federal FY within the applicable period, as our data
source.
We continue to believe that the use of MedPAR claims data is the
appropriate source for identifying aggregate payments for each
condition/procedure and all discharges during the corresponding
applicable period for the Hospital Readmissions Reduction Program. In
order to provide greater certainty around future applicable periods for
the Hospital Readmissions Reduction Program, in the FY 2021 IPPS/LTCH
final rule (85 FR 58845 through 58846), we finalized the automatic
adoption of applicable periods for FY 2023 and all subsequent program
years for the Hospital Readmissions Reduction Program. Under this
policy, the 3-year applicable period will automatically advance by 1
year beginning in FY 2023. Because the MedPAR data used for the
Hospital Readmissions Reduction Program calculations corresponds to the
applicable period, we believe that the automatic adoption of the use of
MedPAR data corresponding to the applicable period for Hospital
Readmissions Reduction Program calculations each year will similarly
streamline the process and provide additional clarity and consistency
to the program.
Therefore, we are proposing to automatically adopt the use of
MedPAR data corresponding to the applicable period for Hospital
Readmissions Reduction Program calculations for FY 2023 and all
subsequent program years. We propose that, beginning in FY 2023, the
MedPAR data used to calculate aggregate payments for each condition/
procedure and for all discharges will be the 3-year period beginning 1
year advanced from the previous program fiscal year's MedPAR data
corresponding to the applicable period for Hospital Readmissions
Reduction Program calculations. Under this proposal, for all subsequent
years, we would advance this 3-year period by 1 year unless otherwise
specified by the Secretary, which we would convey through notice and
comment rulemaking. We also propose to automatically adopt the use of
the update of the MedPAR file for each Federal FY, which is updated 6
months after the end of each Federal FY within the applicable period,
as our data source, and to similarly advance this by 1 year from the
previous program fiscal year.
We welcome public comment on this proposal.
10. Calculation of Payment Adjustment Factors for FY 2022
As we discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR
38226),
[[Page 25466]]
section 1886(q)(3)(D) of the Act requires the Secretary to group
hospitals and apply a methodology that allows for separate comparisons
of hospitals within peer groups, based on the proportion of dually
eligible beneficiaries served by each hospital, in determining a
hospital's adjustment factor for payments applied to discharges
beginning in FY 2019. Section 1886(q)(3)(D) also states that this
methodology could be replaced through the application of subclause
(E)(i), which states that the Secretary may take into account the
studies conducted and the recommendations made by the reports required
by section 2(d)(1) of the IMPACT Act of 2014 (Pub. L. 113-185; 42
U.S.C. 1395 note) with respect to risk adjustment methodologies. On
June 29, 2020,\945\ the second Report to Congress by the Department's
Office of the Assistant Secretary for Planning and Evaluation (ASPE) on
social risk and Medicare's value-based purchasing programs came out. We
are continuing our review of these recommendations and will address
them as appropriate in future rulemaking.
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\945\ Department of Health and Human Services Office of the
Assistant Secretary for Planning and Evaluation (ASPE), ``Report to
Congress: Social Risk Factors and Performance in Medicare's Value-
Based Purchasing Program.'' March 2020. Available at: https://aspe.hhs.gov/system/files/pdf/263676/Second-IMPACT-SES-Report-to-Congress.pdf.
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We refer readers to the FY 2018 IPPS/LTCH PPS final rule (82 FR
38226 through 38237) for a detailed discussion of the payment
adjustment methodology. We are not proposing any changes to this
payment adjustment calculation methodology for FY 2022 in this proposed
rule.
11. Calculation of Payment Adjustment for FY 2022
Section 1886(q)(3)(A) of the Act defines the payment adjustment
factor for an applicable hospital for a fiscal year as ``equal to the
greater of: (i) The ratio described in subparagraph (B) for the
hospital for the applicable period (as defined in paragraph (5)(D)) for
such fiscal year; or (ii) the floor adjustment factor specified in
subparagraph (C).'' Section 1886(q)(3)(B) of the Act, in turn,
describes the ratio used to calculate the adjustment factor.
Specifically, it states that the ratio is equal to 1 minus the ratio of
aggregate payments for excess readmissions to aggregate payments for
all discharges, scaled by the neutrality modifier. The calculation of
this ratio is codified at 42 CFR 412.154(c)(1) and the floor adjustment
factor is codified at 42 CFR 412.154(c)(2). Section 1886(q)(3)(C) of
the Act specifies the floor adjustment factor at 0.97 for FY 2015 and
subsequent fiscal years.
Consistent with section 1886(q)(3) of the Act, codified in our
regulations at 42 CFR 412.154(c)(2), for FY 2022, the payment
adjustment factor will be either the greater of the ratio or the floor
adjustment factor of 0.97. Under our established policy, the ratio is
rounded to the fourth decimal place. In other words, for FY 2022, a
hospital subject to the Hospital Readmissions Reduction Program would
have an adjustment factor that is between 1.0 (no reduction) and 0.9700
(greatest possible reduction).
For additional information on the FY 2022 payment calculation, we
refer readers to the Hospital Readmissions Reduction Program
information and resources available on our QualityNet website. We are
not proposing any changes to our calculation of payment methodology in
this proposed rule.
12. Overall Hospital Quality Star Ratings
In the CY 2021 OPPS/ASC final rule with comment period and interim
final rule with comment period (85 FR 86193 through 86236), we
finalized a methodology to calculate the Overall Hospital Quality Star
Ratings (Overall Star Ratings). The Overall Star Ratings utilize data
collected on hospital inpatient and outpatient measures that are
publicly reported on a CMS website, including data from the Hospital
Readmissions Reduction Program. We refer readers to section XVI. of the
CY 2021 OPPS/ASC final rule for details (85 FR 86193 through 86236).
13. Extraordinary Circumstance Exception (ECE) Policy for the Hospital
Readmissions Reduction Program
a. Background
(1) Previously Established Extraordinary Circumstance Exception (ECE)
Policy Under the Hospital Readmissions Reduction Program
We refer readers to the FY 2016 IPPS/LTCH PPS final rule (80 FR
49542 through 49543) and the FY 2018 IPPS/LTCH PPS final rule (82 FR
38239 through 38240) for discussion of our Extraordinary Circumstances
Exception (ECE) policy. In the FY 2016 IPPS/LTCH PPS final rule (80 FR
49542 through 49543), we adopted an ECE policy for the Hospital
Readmissions Reduction Program, which recognized that there may be
periods of time during which a hospital is not able to submit data
(from which readmission measures data are derived) in an accurate or
timely fashion due to an extraordinary circumstance beyond its control.
When adopting this policy, we noted that we considered the feasibility
and implications of excluding data for certain measures for a limited
period of time from the calculations for a hospital's excess
readmission ratios for the applicable performance period. By minimizing
the data excluded from the program, the proposed policy enabled
affected hospitals to continue to participate in the Hospital
Readmissions Reduction Program for a given fiscal year if they
otherwise continued to meet applicable measure minimum threshold
requirements. We expressed the belief that this approach would help
alleviate the burden for a hospital that might be adversely impacted by
a natural disaster or other extraordinary circumstance beyond its
control, while enabling the hospital to continue to participate in the
Hospital Readmissions Reduction Program. We further observed that
section 1886(q)(5)(D) of the Act permits the Secretary to determine the
applicable period for readmissions data collection, and we interpreted
the statute to allow us to determine that the period not include times
when hospitals may encounter extraordinary circumstances. This policy
was similar to the ECE policy for the Hospital Inpatient Quality
Reporting (IQR) Program, as initially adopted in the FY 2012 IPPS/LTCH
PPS final rule (76 FR 51651) and modified in the FY 2014 IPPS/LTCH PPS
final rule (78 FR 50836) and the FY 2015 IPPS/LTCH PPS final rule (79
FR 50277). We also considered how best to align an extraordinary
circumstance exception policy for the Hospital Readmissions Reduction
Program with existing extraordinary circumstance exception policies for
other IPPS quality reporting and payment programs, such as the Hospital
Value-Based Purchasing (VBP) Program, to the extent feasible.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38239), we modified
the requirements for the Hospital Readmissions Reduction Program ECE
policy to further align with the processes used by other quality
reporting and VBP programs for requesting an exception from program
reporting due to an extraordinary circumstance not within a provider's
control.
(2) Extraordinary Circumstance Exception (ECE) Granted in Response to
the COVID-19 Public Health Emergency
On March 22, 2020, in response to COVID-19, we announced relief for
clinicians, providers, hospitals, and facilities participating in
Medicare quality reporting and value-based
[[Page 25467]]
purchasing programs.\946\ Specifically, we announced that we were
excluding data for the first and second quarters of CY 2020. On March
27, 2020, we published a supplemental guidance memorandum that
described the scope and duration of the ECEs we were granting under
each Medicare quality reporting and VBP program.\947\ For the Hospital
Readmissions Reduction Program, we stated that qualifying claims will
be excluded from the measure calculations for January 1, 2020-March 31,
2020 (Q1 2020) and April 1, 2020-June 30, 2020 (Q2 2020) from the
readmission measures.
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\946\ CMS, Press Release, CMS Announces Relief for Clinicians,
Providers, Hospitals and Facilities Participating in Quality
Reporting Programs in Response to COVID-19 (Mar. 22, 2020), https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
\947\ CMS, Exceptions and Extensions for Quality Reporting
Requirements for Acute Care Hospitals, PPS-Exempt Cancer Hospitals,
Inpatient Psychiatric Facilities, Skilled Nursing Facilities, Home
Health Agencies, Hospices, Inpatient Rehabilitation Facilities,
Long-Term Care Hospitals, Ambulatory Surgical Centers, Renal
Dialysis Facilities, and MIPS Eligible Clinicians Affected by COVID-
19 (Mar. 27, 2020), https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
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(3) Updated Application of the ECE Granted in Response to COVID-19
On September 2, 2020, we published the Interim Final Rule with
comment period (IFC), ``Medicare and Medicaid Programs, Clinical
Laboratory Improvement Amendments (CLIA), and Patient Protection and
Affordable Care Act; Additional Policy and Regulatory Revisions in
Response to the COVID-19 Public Health Emergency'' (85 FR 54820). The
IFC updated the ECE we granted in response to the PHE for COVID-19, for
the Hospital Readmissions Reduction Program and several other quality
reporting programs (85 FR 54827 through 54838).
In the IFC, we updated the previously announced application of our
ECE policy for the Hospital Readmissions Reduction Program (85 FR 54832
through 54833) to the COVID-19 PHE to exclude any data submitted
regarding care provided during the first and second quarters of CY 2020
from our calculation of performance for FY 2022, FY 2023, and FY 2024.
We expressed concern that excess readmission ratios calculated using
excepted claims data could affect the national comparability of these
data due to the geographic differences of COVID-19 incidence rates and
hospitalizations along with different impacts resulting from different
State and local law and policy changes implemented in response to
COVID-19, and therefore may not provide a nationally comparable
assessment of performance in keeping with the program goal of national
comparison.
In the IFC, we welcomed public comments on our policy to exclude
any data submitted regarding care provided during first and second
quarter of CY 2020 from our calculation of performance for FY 2022, FY
2023, and FY 2024. We will respond to those public comments in the FY
2022 IPPS/LTCH PPS final rule.
In the September 2, 2020 IFC, we also announced that if, due to
ECEs related to the COVID-19 PHE, we do not have enough data to
reliably measure national performance, we may propose to not assess
hospitals based on such limited data or make temporary payment
adjustments to facilities under the Hospital Readmissions Reduction
Program for the affected program year. We stated that, if circumstances
warranted, we could propose to suspend prospective application of
program penalties or payment adjustments through the annual IPPS/LTCH
PPS proposed rule. We also stated that, in the interest of time and
transparency, we would provide subregulatory advance notice of our
intentions to suspend such penalties and adjustments through routine
communication channels to facilities, vendors, and QIOs. The
communications could include memos, emails, and notices on the public
QualityNet website (https://www.qualitynet.cms.gov/).\948\
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\948\ We note that the QualityNet website (previously at
QualityNet.org) has transitioned to a QualityNet.cms.gov.
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b. General Clarifications to Hospital Readmissions Reduction Program
ECE Policy
After the nationwide ECE granted in response to the COVID-19 PHE
ended, we received several requests from hospitals for individual ECEs
under the Hospital Readmissions Reduction Program, due to extraordinary
circumstances resulting from the continuing impact of the PHE. In this
proposed rule, we would like to clarify our ECE policy to highlight
that an ECE granted under the Hospital Readmissions Reduction Program
would exclude claims data during the corresponding ECE period. Although
we have considered the feasibility and implications of excluding data
under the ECE policy for the Hospital Readmissions Reduction Program,
we have never specified the types of data that would be excluded under
an ECE granted to an individual hospital. Considering that the Hospital
Readmissions Reduction Program only uses claims data, we would like to
clarify our ECE policy to specify that claims data will be excluded
from calculations of measure performance under an approved ECE for the
Hospital Readmissions Reduction Program.
The FY 2016 IPPS/LTCH final rule specifies that we may waive
reporting requirements for the Hospital Readmissions Reduction Program
in response to ECE requests, in alignment with the Hospital Inpatient
Quality Reporting (IQR) policy (80 FR 49542). Although the Hospital
Readmissions Reduction Program and the Hospital IQR Program use
different sources of data and have different requirements depending on
the type of measure, the ECE policy applies to both programs.
Therefore, in this proposed rule we clarify that although an approved
ECE for the Hospital Readmissions Reduction Program would exclude
excepted data from Hospital Readmissions Reduction Program payment
reduction calculations, we are not proposing to waive the data
submission requirements of a hospital for claims data. For example, for
claims data, we require a hospital to submit claims to receive payments
for the services they provided to patients. Although an individual ECE
approval under the Hospital Readmissions Reduction Program would except
data submitted by a hospital from Hospital Readmissions Reduction
Program calculations, a hospital would still need to submit its claims
in order to receive reimbursement outside the scope of the Hospital
Readmissions Reduction Program for services provided.
We have also received a few requests from hospitals for ECEs under
the Hospital Readmissions Reduction Program, in which the hospitals
requested an exception from the Hospital Readmissions Reduction Program
payment reduction. The ECE policy for the Hospital Readmissions
Reduction Program is intended to provide relief for a hospital that has
been negatively impacted as a direct result of experiencing a
significant disaster or other extraordinary circumstance beyond the
hospital's control by excepting data from the period during which
performance was impacted. The hospital would still be evaluated for the
remainder of the applicable period during which performance was not
impacted. The ECE policy is not intended to extend to payment
reductions. Therefore, we would like to clarify that, although an
approved ECE for the Hospital
[[Page 25468]]
Readmissions Reduction Program would exclude excepted data from
Hospital Readmissions Reduction Program payment reduction calculations,
it does not exempt hospitals from payment reductions under the Hospital
Readmissions Reduction Program. Instead of relying upon our ECE policy,
we are relying upon our authority under subsection 1886(q)(5)(A)(i) of
the Act to determine the scope of ``applicable conditions'', including
the Secretary's authority to utilize his own criteria to select
measures to be used to calculate the excess readmission measure.
c. Clarification of the Impact of ECE Excluded Data for the Hospital
Readmissions Reduction Program
In this proposed rule, we clarify the impact of data which has been
excluded from the Hospital Readmissions Reduction Program due to the
nationwide ECE that was granted in response to COVID-19 on upcoming
Hospital Readmissions Reduction Program calculations. In order to
determine and evaluate what kind of impact the nationwide ECE might
have on the Hospital Readmissions Reduction Program, we conducted
analyses to simulate the impact of an altered performance period on
program eligibility and the resulting payment impacts to hospitals
using pre-COVID-19 data from the FY 2020 Hospital Readmissions
Reduction Program year. This analysis was intended to evaluate what
patterns we might observe in Hospital Readmissions Reduction Program
eligibility and payment as a result of excluding 6 months of data due
to the ECE granted in response to the PHE for COVID-19. Our analysis
found that there would be a minimal impact on hospitals when 6 months
of data are removed from Hospital Readmissions Reduction Program
calculations. We are performing additional analyses as CY 2020 data
becomes available, and we will provide updated analyses as necessary
when it becomes available.
Although the FY 2022 applicable period is July 1, 2017 through June
30, 2020, due to the first and second quarter CY 2020 claims exception
period and the 30-day window to identify readmissions, the period for
calculating ERRs would be adjusted to July 1, 2017 through December 1,
2019. The period for calculating DRG payments would similarly be
adjusted to July 1, 2017 through December 1, 2019 to align with the
period to calculate ERRs. We would also note that CY 2019 data would be
used to calculate the Neutrality Modifier, as that would be the most
recent full year of data (since Q1 and Q2 CY 2020 data are excluded
from FY 2020 data under the nationwide ECE). Finally, we note that each
of the readmission measures uses claims data for the 12 months prior to
the index hospitalization as well as index hospitalization claims for
risk adjustment (76 FR 51672). Due to the nationwide ECE that was
granted in response to the COVID-19 PHE, the condition/procedure-
specific measures will use less than 12 months of data for risk
adjustment for admissions between July 1, 2020 and June 30, 2021 during
the FY 2023 applicable period. For example, if not for the COVID-19 PHE
and subsequent nationwide ECE, an admission on July 1, 2020 would have
included 12 months of prior claims data--a lookback period of July 2,
2019 through June 30, 2020--for risk adjustment. Because claims data
from January 1, 2020 through June 30, 2020 are excluded under the
nationwide ECE, an admission on July 1, 2020 will have a shorter
lookback period of July 2, 2019 through December 31, 2019.
Comorbidities from the index admission will continue to be used for all
admissions.
In the FY 2020 IPPS/LTCH PPS final rule, we finalized our policy to
adopt a subregulatory process to make nonsubstantive updates to payment
adjustment factor components to facilitate the program's operation when
minor changes are required, but do not substantively impact the
program's previously finalized policies (84 FR 42385 through 42387).
Based on our analysis showing that there would be a minimal impact when
6 months of data are removed from Hospital Readmissions Reduction
Program calculations, we believe that these updates to payment
adjustment factor components are nonsubstantive and do not
substantially impact the Hospital Readmissions Reduction Program's
previously finalized policies. Therefore, we would like to clarify that
the impact of the two quarters of data that were excluded from the
Hospital Readmissions Reduction Program due to the nationwide ECE that
was granted in response to COVID-19 on payment adjustment factor
components will be addressed through the subregulatory process. For
more details on these subregulatory updates, we refer readers to the
Hospital Specific Report (HSR) User Guide located on QualityNet website
at: https://qualitynet.cms.gov/inpatient/hrrp/reports.
14. Request for Public Comment on Possible Future Stratification of
Results by Race and Ethnicity for Condition/Procedure-Specific
Readmission Measures
We are committed to achieving equity in health care outcomes for
our beneficiaries by supporting providers in quality improvement
activities to reduce health inequities, enabling them to make more
informed decisions, and promoting provider accountability for health
care disparities.\949\ As described in section IX.B of this proposed
rule, in response to statute and policy reports from the Assistant
Secretary for Planning and Evaluation (ASPE) of HHS and the National
Academies of Science, Engineering and Medicine to better account for
social risk factors in the Medicare program,\950\ we have created two
complementary methods to calculate disparities in condition/procedure-
specific readmission measures (the CMS Disparity Methods). The first
method (the Within-Hospital disparity method) promotes quality
improvement by calculating differences in outcome rates among patient
groups within a hospital while accounting for their clinical risk
factors. This method also allows for a comparison of those differences,
or disparities, across hospitals, so hospitals could assess how well
they are closing disparity gaps compared to other hospitals. The second
methodological approach (the Across-Hospital method) is complementary
and assesses hospitals' outcome rates for subgroups of patients across
hospitals, allowing for a comparison among hospitals on their
performance caring for their patients with social risk factors. We
refer readers to the technical report describing the CMS Disparity
Methods in detail as well as the FY 2018 IPPS/LTCH PPS final rule (82
FR 38405 through 38407) and the posted Disparity Methods Updates and
Specifications Report posted on the QualityNet website. The CMS
Disparity Methods have thus far focused on dual eligibility, a proxy
for social risk factors, as the main stratification variable for
reporting
[[Page 25469]]
disparity results. These stratified data are provided in confidential
Hospital Specific Reports (HSRs) for six condition/procedure-specific
readmission measures and not publicly reported at this time. The
disparity methods were designed to accommodate additional types of
stratification variables, such as race and ethnicity, language
preference, and disability status.
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\949\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
\950\ ASPE, Report to Congress: Social Risk Factors and
Performance Under Medicare's Value-Based Purchasing Programs (2016),
https://aspe.hhs.gov/system/files/pdf/253971/ASPESESRTCfull.pdf. For
more information, see National Academies of Sciences, Engineering,
and Medicine, Accounting for Social Risk Factors in Medicare
Payment: Identifying Social Risk Factors (2016), https://doi.org/10.17226/21858. See also, Improving Medicare Post-Acute Care
Transformation Act of 2014 (2014), https://www.govinfo.gov/content/pkg/BILLS-113hr4994enr/pdf/BILLS-113hr4994enr.pdf.
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As described in section IX.B.3 of this proposed rule, we are
seeking comment on potentially expanding our methods for stratified
reporting of the Disparity Methods to better illuminate social
disparities in populations served by Medicare-participating hospitals.
As described in section IX.B.3 of the proposed rule, studies have shown
that among Medicare beneficiaries, racial and ethnic minority persons
often experience worse health outcomes, including more frequent
hospital readmissions and procedural complications. We are, in
particular, exploring the significance of racial and ethnic inequities,
as well as other social factors such as language preference and
disability status, in outcomes in the Hospital Readmissions Reduction
Program.\951\ Expanding the disparity methods to include stratified
results by both dual eligibility and race and ethnicity, as well as
language preference and disability status, may enable a more
comprehensive assessment of health equity and support initiatives to
close the equity gap. We believe that hospitals will be able to use the
results from the disparity methods to identify and develop strategies
to promote health equity.
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\951\ For example, see the RIT Race Code, available at https://www.resdac.org/cms-data/variables/research-triangle-institute-rti-race-code. See also, Health Serv Res. 2019 Feb; 54(1):13-23. doi:
10.1111/1475-6773.13099. Epub 2018 Dec 3.
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More specifically, we are seeking comment on expanding our efforts
to provide hospital-level results of both the Within- and Across-
Hospital Disparity Methods, as described in section IX.B.3 of this
proposed rule, using indirectly estimated race and ethnicity, as well
as additional social factors, such as language preference and
disability status. Indirect estimation relies on a statistical
imputation method for inferring a missing variable or improving an
imperfect administrative variable using a related set of information
that is more readily available.\952\ Imputed data are most commonly
used at the population level, where aggregated results form a more
accurate description of the population than existing, imperfect data
sets. Section IX.B.3 of this proposed rule also summarizes the existing
challenges in accurately determining race and ethnicity in our
administrative data, the need for using advanced statistical methods
for indirectly estimating race and ethnicity, and the previous
algorithms developed to indirectly estimate race and ethnicity in our
data. The expanded methods would be reported at the hospital-level, and
provided to hospitals in confidential HSRs for six condition/procedure-
specific readmission measures, stratified by both dual eligibility and
race/ethnicity: (1) Hospital 30-Day, All-Cause, Risk-Standardized
Readmission Rate (RSRR) Following Acute Myocardial Infarction (AMI)
Hospitalization (NQF #0505); (2) Hospital 30-Day, All-Cause, Risk-
Standardized Readmission Rate (RSRR) Following Coronary Artery Bypass
Graft (CABG) Surgery (NQF #2515); (3) Hospital 30-Day, All-Cause, Risk-
Standardized Readmission Rate (RSRR) Following Chronic Obstructive
Pulmonary Disease (COPD) Hospitalization (NQF #1891); (4) Hospital 30-
Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) Following
Heart Failure (HF) Hospitalization (NQF #0330); (5) Hospital-Level 30-
Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) Following
Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee
Arthroplasty (TKA) (NQF #1551); and (6) Hospital 30-Day, All-Cause,
Risk-Standardized Readmission Rate (RSRR) Following Pneumonia
Hospitalization (NQF #0506), for groups where results are technically
feasible, adequately representative, and statistically reliable.\953\
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\952\ IOM. 2009. Race, Ethnicity, and Language Data:
Standardization for Health Care Quality Improvement. Washington, DC:
The National Academies Press.
\953\ Although we are proposing to suppress the CMS 30-Day
Pneumonia Readmission Measure (NQF #0506) in section V.G.6 of this
proposed rule, we note that the measure is not being proposed for
removal and is therefore still considered one of the six condition/
procedure-specific readmission measures included in the Hospital
Readmissions Reduction Program.
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To allow stakeholders an opportunity to become more familiar with,
and gain comfort in interpreting stratified results using indirect
estimation of race and ethnicity as described in section IX.B.3 of this
proposed rule, hospitals would receive confidential HSRs containing
results for the six condition/procedure-specific readmission measures,
stratified by both dual eligibility and race/ethnicity in Spring 2022,
prior to anticipated future publication of results in Spring 2023. Any
proposal to publicly display stratified quality measure data for these
six condition/procedure-specific readmission measures as previously
described on the Care Compare website, or expand stratified reporting
to additional social risk factors, would be made through future
rulemaking.
We invite public comment on the following: (1) The possibility of
confidentially reporting in HSRs stratified results using indirectly
estimated race and ethnicity in addition to the currently reported
results stratified using dual eligibility, for the six condition/
procedure-specific readmission measures, and by expansion of
standardized data collection to additional social factors, such as
language preference and disability status; (2) the possibility of
publicly reporting stratified results using both indirectly estimated
race and ethnicity, and dual eligibility, publicly on Care Compare,
after at least one year of confidential reporting and further
rulemaking, for the six condition/procedure-specific measures; and (3)
on possible mechanisms of incorporating other demographic
characteristics into analysis that address and advance health equity,
such as the potential to include administrative and self-reported data
to measure co-occurring disability status.
15. Proposed Regulatory Updates (42 CFR 412.154)
We are proposing to update the references to CMS resources in
regulation text. First, we note that we renamed our Hospital Compare
website. It is now referred to as Care Compare and is available at:
https://www.medicare.gov/care-compare. We are proposing to revise our
regulations for the Hospital Readmissions Reduction Program at 42 CFR
412.154(f)(4) to reflect the new website name. We propose to amend CFR
412.154(f)(4), by adding the phrase ``or successor website'' so that
the text reads ``Hospital Compare website or successor website.'' \954\
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\954\ While the statute refers to Hospital Compare, the name has
been changed to Care Compare. Now called Care Compare, the website
continues to serve the purpose of displaying quality data submitted
for the Hospital Readmissions Reduction Program.
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We invite public comment on our proposal.
H. Hospital Value-Based Purchasing (VBP) Program: Proposed Policy
Changes
Section 1886(o) of the Act requires the Secretary to establish a
hospital value-based purchasing program (the Hospital VBP Program)
under which value-based
[[Page 25470]]
incentive payments are made in a fiscal year (FY) to hospitals that
meet performance standards established for a performance period for
such fiscal year. Both the performance standards and the performance
period for a fiscal year are to be established by the Secretary.
For more of the statutory background and descriptions of our
current policies for the Hospital VBP Program, we refer readers to our
codified requirements for the Hospital VBP Program at 42 CFR 412.160
through 412.167.
1. Proposed Flexibilities for the Hospital VBP Program in Response to
the Public Health Emergency (PHE) Due to COVID-19
a. Proposed Measure Suppression Policy for the Duration of the PHE for
COVID-19
In previous rules, we have identified the need for flexibility in
our quality programs to account for the impact of changing conditions
that are beyond participating hospitals' control. We identified this
need because we would like to ensure that participants in our programs
are not affected negatively when their quality performance suffers not
due to the care provided, but due to external factors.
A significant example of the type of external factor that may
affect quality measurement is the COVID-19 public health emergency
(PHE), which has had, and continues to have, significant and ongoing
effects on the provision of medical care in the country and around the
world. The COVID-19 pandemic and associated PHE has impeded effective
quality measurement in many ways. Changes to clinical practices to
accommodate safety protocols for medical personnel and patients, as
well as unpredicted changes in the number of stays and facility-level
case mixes, have affected the data used in quality measurement and the
resulting quality scores. Measures used in the Hospital VBP Program
need to be evaluated to determine whether their specifications need to
be updated to account for new clinical guidelines, diagnosis or
procedure codes, and medication changes that we have observed during
the PHE. Additionally, because COVID-19 prevalence is not consistent
across the country, hospitals located in different areas have been
affected differently at different times throughout the pandemic. Under
those circumstances, we remain significantly concerned that Hospital
VBP Program quality measure scores that are calculated using data
submitted during the PHE for COVID-19 are distorted and will result in
skewed payment incentives and inequitable payments, particularly for
hospitals that have treated more COVID-19 patients than others.
It is not our intention to penalize hospitals based on measure
scores that we believe are distorted by the COVID-19 PHE and, thus, not
reflective of the quality of care that the measures in the Hospital VBP
Program were designed to assess. As previously discussed, the COVID-19
PHE has had, and continues to have, significant and enduring effects on
health care systems around the world, and affects care decisions,
including those made on clinical topics covered by the Hospital VBP
Program's measures. As a result of the COVID-19 PHE, hospitals could
provide care to their patients that meets the underlying clinical
standard but results in worse measured performance, and by extension,
lower incentive payments in the Hospital VBP Program. We are also
concerned that regional differences in COVID-19 prevalence during the
performance periods for the FY 2022 and FY 2023 Hospital VBP Programs,
which include CY 2020 data, have directly affected hospitals' measure
scores for the FY 2022 and FY 2023 Hospital VBP program years. Although
these regional differences in COVID-19 prevalence rates do not reflect
differences in the quality of care furnished by hospitals, they
directly affect the value-based incentive payments that these hospitals
are eligible to receive and could result in an unfair and inequitable
distribution of those incentives. These inequities could be especially
pronounced for hospitals that have treated a large number of COVID-19
patients.
Therefore, we are proposing to adopt a policy for the duration of
the PHE for COVID-19 that would enable us to suppress the use of data
for a number of measures if we determine that circumstances caused by
the COVID-19 PHE have affected those measures and the resulting Total
Performance Scores significantly. We are also proposing, as described
more fully in section V.H.1.b. of this rule, to suppress all of the
measures in the Person and Community Engagement, Safety, and Efficiency
and Cost Reduction Domains for the FY 2022 program year because we have
determined that circumstances caused by the COVID-19 PHE have affected
those measures significantly, and to adopt a special scoring and
payment rule for that program year. Under this special rule for FY
2022, which we would codify in our regulations at Sec. 412.168, we
would calculate measure rates for all measures, including the measures
we are proposing to suppress, but would only calculate achievement and
improvement scores for the measures in the Clinical Outcomes Domain,
which we are not proposing to suppress. We would also calculate domain
scores for the Clinical Outcomes Domain but because that domain is only
weighted at 25 percent of the TPS and we would have no other domain
scores, we would not calculate total performance scores (TPSs) for
hospitals. Finally, we would reduce each hospital's base-operating DRG
payment amount by 2 percent, as required under section 1886(o)(7)(B) of
the Act, but because no hospital would receive a TPS for FY 2022, we
would assign to each hospital a value-based incentive payment
percentage that results in a value-based incentive payment amount that
matches the 2 percent reduction to the base operating DRG payment
amount. The net result of these payment adjustments would be neutral
for hospitals. That is, a hospital's base operating DRG payment amount
would remain unchanged for FY 2022.
We would still provide confidential feedback reports to hospitals
on their FY 2022 measure rates on all measures to ensure that they are
made aware of the changes in performance rates that we have observed.
We would also publicly report Q3 and Q4 2020 data with appropriate
caveats noting the limitations of the data due to the PHE for COVID-19.
We note that, due to operational complications associated with extended
deadlines for Q3 2020 data submissions for the HCAHPS and HAI measures
granted in response to the system issues as well as the proposed
changes in the FY 2022 scoring methodology,\955\ and in order to allow
enough time for the appropriate notice and comment period process, we
may not be able to provide hospitals with the feedback reports for FY
2022 until after August 1, 2021. We intend to provide hospitals with
these feedback reports for FY 2022 as soon as possible and estimate
that we will be able to provide reports before the end of 2021.
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\955\ All Programs (IQR, OQR, PCH, Validation, VBP, eCQM, HACRP,
ESRD QIP) Subject: Q3 2020 Data Submission Deadline Extension for
Certain Medicare Quality Reporting and Value-Based Purchasing
Programs, available at: https://www.cms.gov/files/document/2020-12-inpatient-quarter-3-2020-extension-listserve-final.pdf.
---------------------------------------------------------------------------
For the FY 2023 program year, we are proposing to suppress only one
measure, MORT-30-PN because we have determined that circumstances
caused by the COVID-19 PHE have affected this measure significantly,
but we are not proposing to adopt a special scoring and payment rule
for that program year. Instead, the scoring and
[[Page 25471]]
payment rules we previously adopted at 42 CFR 412.160-412.165 would
apply. The FY 2024 and FY 2025 program years also use CY 2020 data, but
we are not proposing to suppress the MORT-30-PN measure in the FY 2024
and FY 2025 program years at this time. We will continue to analyze
this data and will address suppression of MORT-30-PN for additional
program years in future rulemaking.
In developing this measure suppression proposal, we considered what
circumstances caused by the PHE for COVID-19 would affect a quality
measure significantly enough to warrant its suppression in the Hospital
VBP Program. We believe that significant deviation in measured
performance that can be reasonably attributed to the PHE is a
significant indicator of changes in clinical conditions that affect
quality measurement. Similarly, we believe that a measure may be
focused on a clinical topic or subject that is proximal to the disease,
pathogen, or other health impacts of the PHE. As has been the case
during the COVID-19 pandemic, we believe that rapid or unprecedented
changes in clinical guidelines and care delivery, potentially including
appropriate treatments, drugs, or other protocols, may affect quality
measurement significantly and should not be attributed to the
participating facility positively or negatively. We also note that
scientific understanding of a particular disease or pathogen may evolve
quickly during an emergency, especially in cases of new disease or
conditions. Finally, we believe that, as evidenced during the COVID-19
pandemic, national or regional shortages or changes in health care
personnel, medical supplies, equipment, diagnostic tools, and patient
case volumes or facility-level case mix may result in significant
distortions to quality measurement.
Based on these considerations, we developed a number of Measure
Suppression Factors that we believe should guide our determination of
whether to propose to suppress a Hospital VBP Program measure for one
or more program years where the baseline or performance period of the
measure overlaps with the PHE for COVID-19. We are proposing to adopt
these Measure Suppression Factors for use in the Hospital VBP Program
and, for consistency, the following other value-based purchasing
programs: Hospital Readmissions Reduction Program, HAC Reduction
Program, and Skilled Nursing Facility Value-Based Purchasing Program.
We believe that these Measure Suppression Factors will help us evaluate
the Hospital VBP Program's measures and that their adoption in the
other value-based purchasing programs, as previously noted, will help
ensure consistency in our measure evaluations across programs. The
proposed Measure Suppression Factors are:
5. Significant deviation in national performance on the measure
during the PHE for COVID-19, which could be significantly better or
significantly worse compared to historical performance during the
immediately preceding program years.
6. Clinical proximity of the measure's focus to the relevant
disease, pathogen, or health impacts of the PHE for COVID-19.
7. Rapid or unprecedented changes in:
(iii) Clinical guidelines, care delivery or practice, treatments,
drugs, or related protocols, or equipment or diagnostic tools or
materials; or
(iv) the generally accepted scientific understanding of the nature
or biological pathway of the disease or pathogen, particularly for a
novel disease or pathogen of unknown origin.
8. Significant national shortages or rapid or unprecedented changes
in: (i) Healthcare personnel; (ii) medical supplies, equipment, or
diagnostic tools or materials; or (iii) patient case volumes or
facility-level case mix.
We also considered alternatives to this proposed policy that could
fulfill our objective to not penalize hospitals for measure results
that are distorted due to the PHE for COVID-19. As previously noted,
the country continues to grapple with the effects of the COVID-19 PHE,
and in March 2020, CMS issued a nationwide, blanket Extraordinary
Circumstances Exception (ECE) for all hospitals and other facilities
participating in our quality reporting and value-based purchasing
programs in response to the COVID-19 PHE. This blanket ECE excepted
data reporting requirements for Q1 and Q2 2020 data, including
excepting the use of claims data, HCAHPS survey data, and data
collected through the CDC's web-based surveillance system for this data
period. Quality data collection resumed on July 1, 2020. We considered
extending this blanket ECE for Q3 and Q4 2020. This alternative would
have protected hospitals from having their quality data used for
quality scoring purposes if those data were affected significantly by
the COVID-19 PHE. However, this option would have made hospital quality
data collection and reporting to CMS no longer mandatory and would have
left us with no comprehensive data available for use in providing
confidential performance feedback to hospitals or monitoring for
purposes of deciding whether programmatic changes are necessary to
adequately respond to the PHE.
As an alternative to the proposed quality measure suppression
policy, we also considered not suppressing any measures under the
Hospital VBP Program. However, this alternative would mean assessing
hospitals using quality measure data that has been significantly
affected by the COVID-19 PHE. Additionally, given the geographic
disparities in the COVID-19 PHE's effects, we believe that if we do not
adopt a policy to suppress measures that have been significantly
affected by the PHE for COVID-19, hospitals in regions that are more
heavily impacted by the COVID-19 PHE will be at a disadvantage when
compared to hospitals in regions that are either not as heavily
impacted, or are heavily impacted at a different point in the pandemic.
We view the measure suppression proposal as a necessity to ensure
that the Hospital VBP Program does not reward or penalize hospitals
based on circumstances caused by the PHE for COVID-19 that the
Program's measures were not designed to accommodate. We intend for this
proposed policy to provide short-term relief to hospitals when we have
determined that one or more of the Measure Suppression Factors warrants
the suppression of one or more of the Program's measures.
We invite public comment on this proposal for the adoption of a
measure suppression policy for the Hospital VBP Program for the
duration of the PHE for COVID-19, and also on the proposed Measure
Suppression Factors that we developed for purposes of this proposed
policy.
We are also inviting comment on whether we should consider adopting
a measure suppression policy in the situation of a future national PHE,
and if so, whether under such a policy, we should have the flexibility
to suppress certain measures without specifically proposing to do so in
rulemaking. We also request comment on whether we should in future
years consider adopting any form of regional adjustment for the
proposed measure suppression policy that could take into account any
disparate effects of circumstances affecting hospitals around the
country that would prompt us to suppress a measure. For example, COVID-
19 affected different regions of the country at different rates
depending on factors like time of year, geographic density, State and
local policies, and health care system capacity. In future years and
for future PHEs, should they arise, we also request commenters'
feedback on
[[Page 25472]]
whether we should, rather than suppress a measure completely for
scoring and payment purposes, consider a suppression policy with more
granular effects based on our assessment of the geographic effects of
the circumstances, and if so, how region-based measure suppression
could be accounted for within the program's scoring methodology.
b. Proposals To Suppress Specific Measures for the FY 2022 or FY 2023
Program Year
(1) Background
We have conducted analyses on all Hospital VBP Program measures
with the exception of the CMS PSI 90 measure to determine whether and
how COVID-19 has impacted the validity of these measures. Our findings
from these analyses are discussed in this proposed rule. We did not
conduct an analysis to determine the impact of COVID-19 on the CMS PSI
90 measure performance because the CMS PSI 90 measure would not be
included in TPS calculations until FY 2023, and we are proposing to
remove this measure from the Hospital VBP Program beginning with FY
2023. Based on those analyses, which are discussed in more detail in
this proposed rule, we are proposing to suppress the following measures
for the FY 2022 program year:
Hospital Consumer Assessment of Healthcare Provides and
Systems (HCAHPS) (NQF #0166)
Medicare Spending Per Beneficiary--Hospital (NQF #2158)
National Healthcare Safety Network (NHSN) Catheter-
Associated Urinary Tract Infection (CAUTI) Outcome Measure (NQF #0138)
National Healthcare Safety Network (NHSN) Central Line-
Associated Bloodstream Infection (CLABSI) Outcome Measure (NQF #0139)
American College of Surgeons--Centers for Disease Control
and Prevention Harmonized Procedure Specific Surgical Site Infection
(SSI) Outcome Measure (NQF #0753)
National Healthcare Safety Network (NHSN) Facility-wide
Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus
(MRSA) Bacteremia Outcomes Measure (NQF #1716)
National Healthcare Safety Network (NHSN) Facility-wide
Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome
Measure (NQF #1717)
We are additionally proposing to suppress the Hospital 30-Day, All
Cause, Risk Standardized Mortality Rate Following Pneumonia (PN)
Hospitalization measure (NQF #0468) (MORT-30-PN) for the FY 2023
program year. Our proposals are described in more detail in this
proposed rule.
(2) Proposal To Suppress the Hospital Consumer Assessment of Healthcare
Providers and Systems (HCAHPS) Survey Measure (NQF #0166) for the FY
2022 Hospital VBP Program Year
We are proposing to suppress the HCAHPS measure for the FY 2022
program year under proposed Measure Suppression Factor 1, significant
deviation in national performance on the measure during the PHE for
COVID-19, which could be significantly better or significantly worse as
compared to historical performance during the immediately preceding
program years. We would calculate hospitals' HCAHPS measure rates, but
we would not use these measure rates to generate achievement or
improvement points for this measure. Additionally, because the HCAHPS
measure is the only measure included in the Person and Family
Engagement domain, we would not calculate hospitals' FY 2022 domain
scores for the Person and Family Engagement domain. Participating
hospitals would continue to report the measure's data to CMS so that we
can monitor the effect of the circumstances on quality measurement and
determine the appropriate policies in the future. We would also
continue to provide confidential feedback reports to hospitals as part
of program activities to allow hospitals to track the changes in
performance rates that we observe. We also intend to publicly report
2020 Q3 and Q4 2020 measure rate data where feasible and appropriately
caveated.
Based on our analysis of HCAHPS data from Q1 2018 to Q3 2020, we
have observed a notable decline in hospital-level HCAHPS scores. This
decline is associated with the COVID-19 PHE in 2020. HCAHPS measure
results are publicly reported as ``top-box,'' ``bottom-box,'' and
``middle-box'' scores, with ``top-box'' being the most positive
response to HCAHPS Survey items.\956\
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\956\ https://www.hcahpsonline.org/en/summary-analyses/.
---------------------------------------------------------------------------
In order to detect the possible impact of the COVID-19 PHE on
patients' experience of hospital care, we conducted an ``apples-to-
apples'' analysis in which we compared hospitals' HCAHPS measure top-
box scores for each quarter between Q1 2019 and Q3 2020 to their top-
box scores for each of the same quarters one year earlier. For example,
scores from Q1 2019 were compared to scores from Q1 2018, and scores
from Q3 2020 (the most recent data available) were compared to scores
from Q3 2019. The pre-COVID-19 quarters reveal the trend in HCAHPS
scores prior to the onset of the pandemic. Each of these comparisons
shown in Table V.H-1 includes the following:
a. Official HCAHPS top-box scoring that adjusts for survey mode and
patient mix.
b. Restriction to hospitals with at least 25 completed surveys in
each of the two matched quarters, so that the same types of hospitals
that achieve 100 completes over four quarters for the Hospital VBP
Program were used.
c. Comparison was restricted to the same hospitals one year
earlier, so that differential participation of hospitals during the
excepted reporting period (Q1 and Q2 2020) did not distort results.
d. Comparisons of parallel quarters were used, for example Q1 to
Q1, to neutralize any seasonal effects.
Table V.H-1: Change in HCAHPS Top-Box scores in matched quarters,
from Q1 2019 vs. Q1 2018, to Q3 2020 vs. Q3 2019.
Each column compares data from the named quarter to data from the
same hospitals one year earlier, thus accounting for seasonal effects
and patient-mix adjustment.
[[Page 25473]]
[GRAPHIC] [TIFF OMITTED] TP10MY21.250
Results show that for Q1 2019 to Q4 2019, scores generally
increased compared to the same quarter one year earlier, with changes
of <1 top-box point. During the first COVID-19 impacted quarter, Q1
2020, score differences were mixed, with top-box scores with sometimes
>1 compared to a year earlier. That is, changes between Q1 2019 and Q1
2020 were both positive and negative, with some changes exceeding 1
top-box point.
During the COVID-19 impacted quarters of Q2 2020 and Q3 2020,
scores were always lower than a year earlier, generally by 1-3 top-box
points. These changes are statistically significant in all but one
instance, often with p<0.0001, meaning that changes were too large to
occur by chance more than one time in 10,000. These changes stand in
sharp contrast to the patterns of small improvement prior to Q2 2020
discharges.
We note that, in accordance with the ECE granted in response to the
COVID-19 PHE discussed more fully in section V.H.7 of the preamble of
this proposed rule, submission of CY 2020 Q1 and Q2 HCAHPS data was
optional. However, as previously mentioned, comparisons are based on
hospitals with at least 25 completed surveys in each of the two matched
quarters. We do not believe that such a significant change in hospital
performance from the immediately preceding years for this measure would
exist in the absence of the PHE for COVID-19.
Additionally, in the September 2020 IFC, we noted that we would not
use any Q1 or Q2 CY 2020 data to calculate TPSs for the applicable
fiscal years (85 FR 54835). Because the FY 2022 performance period for
the HCAHPS measure is January 1, 2020 through December 31, 2020, we
would only have six months of data (July 1, 2020 through December 31,
2020) to calculate hospital performance on this measure. We believe
that the third and fourth CY 2020 data would continue to demonstrate a
deviation in national performance such that scoring this measure would
not be representative of national or individual hospital quality of
care.
We also believe that suppressing this measure for the FY 2022
program year will address concerns about the potential unintended
consequences of penalizing hospitals that treated COVID-19 diagnosed
patients. Therefore, we believe it is appropriate to suppress the
HCAHPS measure for the FY 2022 Hospital VBP program year.
We welcome public comment on our proposal to suppress the HCAHPS
measure for the FY 2022 program year.
(3) Proposal To Suppress the Medicare Spending Per Beneficiary (MSPB)
Measure (NQF #2158) for the FY 2022 Hospital VBP Program Year
Pursuant to the measure suppression policy discussion in section
XX.H.1 of the preamble of this proposed rule, we are proposing to
suppress the MSPB measure for the FY 2022 program year under proposed
Measure Suppression Factor 4, significant national shortages or rapid
or unprecedented changes in: (i) Healthcare personnel; (ii) medical
supplies, equipment, or diagnostic tools or materials; or (iii) patient
case volumes or facility-level case mix. Based on our analysis, we have
found that hospitalizations involving COVID-19 overall tend to have
higher mortality rates, longer lengths of stay, and higher observed,
payment-standardized costs than hospitalizations without COVID-19.
Based on our analysis, we believe that these rapid changes in patient
case mix have significantly affected the MSPB measure. Under this
proposal, we would calculate hospitals' MSPB measure rates, but we
would not use these measure rates to generate achievement or
improvement points for this measure. Additionally, because the MSPB
measure is the only measure included in the Efficiency and Cost
Reduction domain, we would not
[[Page 25474]]
calculate hospitals' FY 2022 Efficiency and Cost Reduction domain
scores. Participating hospitals would continue to report the measure's
data to CMS so that we can monitor the effect of the circumstances on
quality measurement and determine the appropriate policies in the
future. We would also continue to provide confidential feedback reports
to hospitals as part of program activities to ensure that they are made
aware of the changes in performance rates that we observe. We also
intend to publicly report Q3 and Q4 2020 data where feasible and
appropriately caveated.
We note that in the September 2020 IFC, we stated that we would not
use any first or second quarter CY 2020 data to calculate TPSs for the
applicable fiscal years (85 FR 54835). We also note that the MSPB
Hospital measure requires a 90-day lookback period to risk adjust the
data appropriately. Third quarter CY 2020 data would require a lookback
period of April 1, 2020 through July 1, 2020 for risk adjustments, but
this period would fall within the excepted second quarter CY 2020 data.
Therefore, for the FY 2022 program year, if we were to not suppress
this measure, we would only be able to use hospital admissions data
from Q4 of CY 2020 to calculate hospital scores for this measure.
We conducted an analysis to assess the impact of COVID-19 on
hospitalizations and several specific components of the MSPB measure,
including length of stay, cost of inpatient stay, and proxy MSPB
hospital episode costs (all costs from 3 days prior to admission to 30
days post-discharge). This analysis used available data from January 1,
2020 through November 22, 2020. We focused on MS-DRGs as the unit of
analysis and comparison to examine the impact of COVID-19 generally on
hospitalizations. We applied several data processing steps to ensure
data completeness: we restricted the study population to beneficiaries
with continuous enrollment in Parts A and B and with Medicare as
primary payer, and who had data from three days prior to the inpatient
hospital admission through 30 days post-hospital discharge during the
study period. The analysis also required inpatient claims with a valid
discharge date and a positive standard allowed amount to ensure that
only claims that were paid under Medicare Parts A and B were captured.
These data processing steps ensured the appropriate beneficiary
population and data validity.
During the study period, we observed significant impacts to patient
case mix due to COVID-19. The majority of hospitals (67 percent) had at
least one COVID-19 hospitalization, defined as the presence of a
principal or secondary diagnosis for COVID-19 on the inpatient claim.
There were nearly 250,000 COVID-19 hospitalizations, representing
around 4 percent of all hospitalizations during the study period. As
the study period ended in November 2020, our analysis does not capture
increases in COVID-19 hospitalizations over the winter period. The MS-
DRG with the highest share of COVID-19 hospitalizations was MS-DRG 177
for Respiratory Infections and Inflammations with Major Complication or
Comorbidity (MCC), with over 70 percent of those admissions involving
COVID-19. The effect of COVID-19 was not limited to respiratory care;
in fact, we observed COVID-19 diagnoses across MS-DRGs in 25 Major
Diagnostic Categories (MDCs) out of a total of 26 MDCs. The only MDC
without any COVID-19 hospitalizations was MDC 15 for Newborns & Other
Neonates with Conditions Originating in Perinatal Period. These results
indicate that there were substantial changes to the patient case mix
across the full range of care provided by hospitals due to the influx
of patients with COVID-19.
Beyond the prevalence of COVID-19 amongst the hospital inpatient
population, we tested the extent to which hospitalizations with COVID-
19 appeared different from those without COVID-19. We found that the
mean and median lengths of stays where patients were diagnosed with
COVID-19 were longer compared to patients not diagnosed with COVID-19
(mean of 10 days compared to 7 days, respectively and median of 7 days
compared to 5 days, respectively). We also examined various cost
metrics, using payment-standardized amounts which remove the effect of
the increased DRG payment weighting for hospitalizations with a COVID-
19 diagnosis on the inpatient claim. The mean cost of hospitalizations
with a COVID-19 diagnosis on the inpatient claim was 44 percent greater
than the mean cost of hospitalizations without a COVID-19 diagnosis
($21,939 compared to $15,203). Our analysis was limited to examining
inpatient hospitalizations, rather than the MSPB measure, as we focused
on gaining a broader understanding of the changes to healthcare due to
COVID-19. However, we did conduct some analyses to understand the post-
discharge period as the MSPB measure includes a 30-day post discharge
period. We compared the cost of a proxy episode by looking at the costs
from 3 days prior to admission, the hospitalization, and 30 days after
discharge for patients with and without a COVID-19 diagnosis on the
inpatient claim. The mean cost for patients diagnosed with COVID-19 was
27 percent more than a hospital episode where the patient was not
diagnosed with COVID-19 ($37,217 compared to $29,309). These results
indicate that the differences in the cost of hospitalizations with and
without COVID-19 extend to the post-discharge period. We believe that
suppressing this measure for the FY 2022 program year would mitigate
concerns about the impact of the significant changes in facility-level
case mix and costs due to the PHE for COVID-19 on hospital performance
and national comparability for this measure. Therefore, we believe it
is appropriate to suppress the MSPB measure for the FY 2022 program
year.
We welcome public comment on our proposal to suppress the MSPB
measure for the FY 2022 program year.
(4) Proposal To Suppress the Five Healthcare-Associated Infection (HAI)
Safety Measures for the FY 2022 Hospital VBP Program Year
In this proposed rule, we are proposing to suppress the five HAI
Safety measures (CAUTI, CLABSI, Colon and Hysterectomy SSI, MRSA, and
CDI) for the FY 2022 program year under proposed Measure Suppression
Factor 1, significant deviation in national performance on the
measures, which could be significantly better or significantly worse
compared to historical performance during the immediately preceding
program years. We are concerned that the COVID-19 PHE affected measure
performance on the current HAI measures such that we will not be able
to score hospitals fairly or reliably on them. We would calculate
hospitals' five HAI measure rates, but we would not use these measure
rates to generate achievement or improvement points for these measures.
Additionally, because these five measures make up the entirety of the
Safety domain, we would not calculate hospitals' FY 2022 Safety domain
score. Participating hospitals would continue to report the measure's
data to the CDC and CMS so that we can monitor the effect of the
circumstances on quality measurement and determine the appropriate
policies in the future. We would continue to provide confidential
feedback reports to hospitals as part of program activities to ensure
that they are made aware of the changes in performance rates that we
observe. We also intend to publicly report CY 2020 Q3 and Q4 data where
feasible and appropriately caveated.
The previously established FY 2022 performance period for the HAI
[[Page 25475]]
measures was January 1, 2020 through December 31, 2020. We note that in
the September 2020 IFC, we stated that we would not use any first or
second quarter CY 2020 data to calculate TPSs for the applicable fiscal
years because we were concerned with the national comparability of
these data due to the geographic differences of COVID-19 incidence
rates and hospitalizations along with different impacts resulting from
different State and local law and policy changes implemented in
response to COVID-19 (85 FR 54835). However, we continue to be
concerned about measure performance and the national comparability of
such performance during the third and fourth quarter of CY 2020.
The CDC conducted an analysis which found that the CLASBI, CAUTI,
and MRSA measures had statistically significant measure rate increases
during the third and fourth quarter of CY 2020 as compared to the third
and fourth quarter of CY 2019. We believe that this distortion in
measure performance may be due to circumstances unique to the effects
of the pandemic such as staffing shortages and turnover, patients that
are more susceptible to infections due to increased hospitalization
stays, and longer indwelling catheters and central lines. In a March
comparison run between Q4 2019 and Q4 2020 data for hospitals that
submitted complete data for both quarters, there was a national percent
change in the standardized infection ratio (SIR), or the primary
summary measure used by the NHSN to track healthcare associated
infections, of 48.1 percent for CLABSI, 18.8 percent for CAUTI and 33.8
percent for MRSA. For the SSI and CDI measures, neither measure had a
statistically significant increase or decrease during the third and
fourth quarter of CY 2020 as compared to the third and fourth quarter
of CY 2019. For the SSI measure, the low reporting volume is due to the
decrease in surgeries during the pandemic, while the CDI measure has
historically been declining. Though the pandemic may not have the same
clinical impact on the SSI and CDI measures, we believe that due to the
low reporting volume of these two measures and for maintaining
consistency of the full CDC NHSN HAI measure set, all five CDC NHSN HAI
measures should be suppressed instead of just 3 of them. We are also
concerned that if we were to suppress three measures in the Safety
domain while continuing to score hospitals on the remaining two
measures in the Safety domain, the Safety domain scores may be
significantly better or significantly worse than in immediately
preceding years. Therefore, we believe it is appropriate to suppress
all five HAI measures in the Safety domain to ensure an accurate and
reliable national comparison of performance on hospital safety.
In determining how to address the impact of the COVID-19 PHE on the
five HAI measures, we also considered extending the FY 2022 performance
periods for the five HAI measures so that they would include one full
year of measure data. However, because the performance period for the
FY 2022 program year began on January 1, 2020, we believe that changing
the performance period after January 1, 2020 would be unfair and
confusing for hospitals. Using data from CY 2019 would require us to
score hospitals on data on which they have already been scored in the
FY 2021 program year. Additionally, using data from CY 2021 would
require us to change the performance periods for all future program
years in order to avoid using the same data twice. Scoring hospitals on
the same data for multiple program years may cause hospitals that have
improved on their performance to be penalized more than once or allow
hospitals that have not improved to be rewarded on their performance
more than once. Further, changing the performance periods for these
measures could incur administrative costs on hospitals that would be
required to change their reporting systems and workflows.
We also considered making no modifications to the program and
suppressing no measure data from CY 2020 for assessing FY 2022 HAI
measure scores as an additional alternative to using the measure
suppression policy. This alternative would be operationally easier to
implement but would mean assessing participating hospitals using
quality measure data that has been impacted by the COVID-19 PHE without
additional adjustments to the measures. Additionally, given the
geographic disparities in the COVID-19 PHE's effects, this policy could
place hospitals in regions that were hit harder by the pandemic at a
disadvantage. Ultimately, we believe that our proposal to suppress the
HAI measure data from CY 2020 more fairly addresses the impact of the
COVID-19 PHE on participating hospitals. Therefore, in order to
maintain program consistency and avoid scoring hospitals on the same
data for more than one program year, we are proposing to suppress all
five HAI measures in the Safety domain for the entire FY 2022 program
year.
We welcome public comment on our proposal to suppress the five HAI
measures for the FY 2022 program year.
(5) Proposal To Suppress the Hospital 30-Day, All-Cause, Risk-
Standardized Mortality Rate Following Pneumonia Hospitalization (MORT-
30-PN) Measure (NQF #0468) for the FY 2023 Program Year
In this proposed rule, we are proposing to suppress the MORT-30-PN
measure beginning with the FY 2023 program year under proposed Measure
Suppression Factor 2, clinical proximity of the measure's focus to the
relevant disease pathogen or health impacts of the national PHE. COVID-
19 is caused by SAR-CoV-2, which begins when respiratory droplets
containing the virus enter an individual's upper respiratory tract.
Pneumonia has been identified as a typical characteristic of
individuals infected with COVID-19,\957\ and our analysis based on data
from CY 2020 shows that a substantial portion of the MORT-30-PN measure
cohort includes admissions with either a principal or a secondary
diagnoses of COVID-19. In addition, almost all of the admissions with a
COVID-19 diagnosis have a principal diagnosis of sepsis; observed
mortality rates for these admissions are extremely high and are
substantially higher than admissions without a COVID-19 diagnosis.
Finally, observed mortality rates in admissions without a COVID-19
diagnosis (using data from April 2020 through June 2020) are higher
than observed mortality rates from the prior year. For the currently
available data for this measure, there is a high percentage of Medicare
beneficiaries with a secondary diagnosis of COVID-19 in the measure
cohort during CY 2020. We would calculate hospitals' MORT-30-PN measure
rates, but we would not use these measure rates to generate achievement
and improvement points for this measure. We will continue to monitor
the claims that form the basis for this measure's calculations to
evaluate the effect of the circumstances on quality measurement and to
determine the appropriate policies in the future. We would also
continue to provide confidential feedback reports to hospitals as part
of program activities to ensure that they are made aware of the changes
in performance rates that we observe.
As previously discussed, the FY 2022 MORT-30-PN performance period
is September 1, 2017 through June 30, 2020. However, in the September
2020 IFC, we noted that we would not use any first or second quarter CY
2020 data to calculate TPSs for the applicable fiscal years (85 FR
54835). With this
[[Page 25476]]
exception, the FY 2022 performance period for this measure would only
be affected by a shortened performance period (September 1, 2017
through December 31, 2019) that does not use data from the COVID-19
PHE. Therefore, we have decided that it is not necessary to suppress
this measure for the FY 2022 program year. However, given the ongoing
status of the PHE and the impact of COVID-19 on this measure data, we
are proposing to suppress this measure for the FY 2023 program year.
Our analysis of the MORT-30-PN measure data showed that the MORT-
30-PN cohort had a higher proportion of patients with a secondary
diagnosis of COVID-19 than the cohorts for the other condition-specific
mortality measures used in the Hospital VBP Program, and that these
patients have a higher risk of mortality than the remainder of the
patients included in the pneumonia measure cohort.
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Data from September 2020 also showed that although admission
volumes for the MORT-30-PN cohort were substantially lower compared to
admission volumes for this cohort in September 2019, the observed
mortality rates for this cohort were statistically significantly higher
in September 2020 when compared to the observed mortality rates for
this cohort during the same period in 2019.
Our analyses also demonstrated that almost all of the COVID-19
patients captured in the MORT-30-PN measure
[[Page 25477]]
cohort likely represent a distinct, severely ill group of patients
(with a mortality rate of 49.2 percent as compared 23.8 percent for
patients without a COVID-19 diagnosis) for whom it may be difficult to
adequately ascertain appropriate risk adjustment. In addition, our
analyses found that the odds ratio of mortality for COVID-19 as a risk
factor was very high (4.67, 95 percent confidence interval: 4.45-4.90)
as compared to other diagnoses such as metastatic cancers, acute
leukemia, and other severe cancers (2.16, 95 percent confidence
interval: 2.05-2.28), protein-calorie malnutrition (1.64, 95 percent
confidence interval: 1.57-1.71), dementia or specified brain disorders
(1.58, 95 percent confidence interval: 1.51-1.64), and chronic liver
disease (1.50, 95 percent confidence interval: 1.37-1.64). We also
calculated the Pearson correlation between the change in observed 30-
day pneumonia mortality rate and Medicare COVID-19 burden (defined as
COVID-19-related hospitalizations per Medicare beneficiary) for both a
3-months (March-May) and 12-months (June-May) period. That is, we
calculated the change in observed 30-day pneumonia mortality rates
between March-May 2019 (3-months) and March-May 2020, and also between
June 2018-May 2019 and June 2019-May 2020 (12-months). We then assessed
the correlation between these changes in observed pneumonia mortality
rates and Medicare COVID-19 burden. Changes in observed 30-day
pneumonia mortality rates were highly and statistically significantly
correlated with Medicare COVID-19 burden when analyzing the 3-month and
12-month periods (Pearson correlation of 0.77 and 0.69, respectively).
We considered whether we could exclude patients with a diagnosis of
COVID-19 from the MORT-30-PN cohort, but we determined suppression will
provide us with additional time and additional months of data
potentially impacted by COVID-19 to more thoroughly evaluate a broader
range of alternatives, given the month-to-month variation in the
percent of COVID-19 diagnoses as shown in Table V.H-3. We want to
ensure that the measure reflects care provided by the hospital to
Medicare beneficiaries admitted with pneumonia and we are concerned
that excluding a significant proportion of all eligible patients may
not accurately reflect the care provided, particularly given the
unequal distribution of COVID-19 patients across hospitals over time.
We believe that suppressing this measure beginning with the FY 2023
program year would address this concern.
As part of our analysis, we also evaluated the impact of
suppressing the MORT-30-PN measure on hospital eligibility, program
scoring, and payment for FY 2023. We used data from the most recently
completed program year, FY 2021, to simulate removal of the MORT-30-PN
measure as compared to the baseline data.\958\ For purposes of this
simulation, we assumed that all other measures in the Hospital VBP
Program would remain in the program and that hospital performance on
these measures would remain unchanged from their historical performance
on these measures. Based on this simulation, we found that the
suppression of the MORT-30-PN measure resulted in less than a one
percent decrease in overall eligibility for the Hospital VBP Program;
the average TPS for participating hospitals decreased by 0.4 points;
and the number of hospitals receiving a payment increase was reduced by
one percentage point. Therefore, we believe that suppressing the MORT-
30-PN measure minimizes negative impacts on the eligibility, scoring
and payment distributions under the Hospital VBP Program and at this
time we are not proposing to make any changes to the FY 2023 scoring
methodology as a result.
---------------------------------------------------------------------------
\958\ We note that this analysis did not include the MORT-30-
CABG measure because it is not included in the Hospital VBP Program
until FY 2022 (81 FR 56996 through 56998).
---------------------------------------------------------------------------
We invite public comment on our proposal to suppress the MORT-30-PN
measure for the FY 2023 program year.
2. FY 2022 Program Year Payment Details
Section 1886(o)(7)(B) of the Act instructs the Secretary to reduce
the base operating DRG payment amount for a hospital for each discharge
in a fiscal year by an applicable percent. Under section 1886(o)(7)(A)
of the Act, the sum of these reductions in a fiscal year must equal the
total amount available for value-based incentive payments for all
eligible hospitals for the fiscal year, as estimated by the Secretary.
We finalized details on how we would implement these provisions in the
FY 2013 IPPS/LTCH PPS final rule (77 FR 53571 through 53573), and we
refer readers to that rule for further details. We note that in section
V.H.1. of the preamble of this proposed rule, we are proposing to
suppress several measures in the Hospital VBP Program for the FY 2022
Program Year. If these policies are finalized each hospital would
receive the payment reduction for the Hospital VBP Program as required
by statute, but every hospital would receive a value-based incentive
payment amount that matches the payment reduction amount. However, if
the policies in section V.H.1. of the preamble of this proposed rule
are not finalized, the FY 2022 program year payment details would be as
described in this section. Under section 1886(o)(7)(C)(v) of the Act,
the applicable percent for the FY 2022 program year is two percent.
Using the methodology we adopted in the FY 2013 IPPS/LTCH PPS final
rule (77 FR 53571 through 53573), we estimate that the total amount
available for value-based incentive payments for FY 2022 is
approximately $1.9 billion, based on the December 2020 update of the FY
2020 MedPAR file. We intend to update this estimate for the FY 2022
IPPS/LTCH PPS final rule using the March 2021 update of the FY 2020
MedPAR file.
As finalized in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53573
through 53576), we would utilize a linear exchange function to
translate this estimated amount available into a value-based incentive
payment percentage for each hospital, based on its Total Performance
Score (TPS). We would then calculate a value-based incentive payment
adjustment factor to apply to the base operating DRG payment amount for
each discharge occurring in FY 2022, on a per-claim basis. Applying the
current scoring methodology without any modifications reflecting the
proposals in this proposed rule, we are publishing proxy value-based
incentive payment adjustment factors in Table 16 associated with this
proposed rule (which is available via the internet on the CMS website).
The TPSs from the FY 2021 program year are the basis for the proxy
factors. These FY 2021 performance scores are the most recently
available performance scores hospitals have been given the opportunity
to review and correct. We note that the FY 2021 TPSs were calculated
using measure data from before the PHE due to COVID-19 was declared.
Actual TPSs for the FY 2022 program year may be more variable than the
FY 2021 TPSs due to the impacts of the COVID-19 PHE on FY 2022 data. We
refer readers to sections V.H.1. and V.H.6. of the preamble of this
proposed rule for additional information on the impacts of the COVID-19
PHE on the Hospital VBP Program. The slope of the linear exchange
function used to calculate the proxy value-based incentive payment
adjustment factors in Table 16 is 2.6527024687. This slope, along with
the estimated amount
[[Page 25478]]
available for value-based incentive payments, is also published in
Table 16.
If our proposals to suppress measures and award each hospital a
value-based payment amount that matches the reduction to the base
operating DRG payment amount are finalized, we will not update Table 16
as Table 16A in the final rule. However, if those proposals are not
finalized, we would update this table as Table 16A in the final rule
(which will be available on the CMS website) to reflect changes based
on the March 2021 update to the FY 2020 MedPAR file. We would also
update the slope of the linear exchange function used to calculate
those updated proxy value-based incentive payment adjustment factors.
The updated proxy value-based incentive payment adjustment factors for
FY 2022 would continue to be based on historic FY 2021 program year
TPSs because hospitals will not have been given the opportunity to
review and correct their actual TPSs for the FY 2022 program year
before the FY 2022 IPPS/LTCH PPS final rule is published.
If our proposals to suppress measures and award each hospital a
value-based payment amount that matches the reduction to the base
operating DRG payment amount are finalized, we will also not post Table
16B (which we typically do to display the actual value-based incentive
payment adjustment factors, exchange function slope, and estimated
amount available for the applicable program year, after hospitals have
been given an opportunity to review and correct their actual TPSs).
3. Retention and Removal of Quality Measures
a. Retention of Previously Adopted Hospital VBP Program Measures and
Relationship Between the Hospital IQR and Hospital VBP Program Measure
Sets
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53592), we finalized
a policy to retain measures from prior program years for each
successive program year, unless otherwise proposed and finalized. In
the FY 2019 IPPS/LTCH PPS final rule (83 FR 41440 through 41441), we
finalized a revision to our regulations at 42 CFR 412.164(a) to clarify
that once we have complied with the statutory prerequisites for
adopting a measure for the Hospital VBP Program, the statute does not
require that the measure continue to remain in the Hospital IQR
Program.
We are not proposing any changes to these policies in this proposed
rule.
b. Measure Removal Factors for the Hospital VBP Program
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41441 through
41446), we finalized measure removal factors for the Hospital VBP
Program, and we refer readers to that final rule for details. We are
not proposing any changes to these policies in this proposed rule.
c. Proposed Removal of the CMS Patient Safety and Adverse Events
Composite (CMS PSI 90) (NQF #0531) Beginning With the FY 2023 Program
Year
We are proposing to remove the CMS Patient Safety and Adverse
Events Composite (CMS PSI 90) measure (NQF #0531) from the Hospital VBP
Program under removal Factor 8--the costs associated with the measure
outweigh the benefit of its use in the program. Factor 8 is a measure
removal factor finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR
41441 through 41446).
We adopted the CMS PSI 90 composite measure (NQF #0531) in the FY
2018 IPPS/LTCH PPS final rule (82 FR 38251 through 38256) beginning
with the FY 2023 program year to encourage improvement in patient
safety for all hospitals, and we also adopted a performance period for
that program year that runs from July 1, 2019 through June 30, 2021. We
continue to consider patient safety a high priority, but because the
CMS PSI 90 measure is also used in the HAC Reduction Program, we
believe removing this measure from the Hospital VBP Program will reduce
the provider and clinician costs associated with tracking duplicative
measures across programs. We noted in prior rulemaking that we would
continue to monitor the HAC Reduction Program and Hospital VBP Program
and analyze the impact of our measure selection, including any
unintended consequences with having a measure in more than one program,
and would revise the measure set in one or both programs if needed (82
FR 38255). Since then, we have considered the impact of having the CMS
PSI 90 measure in both the HAC Reduction Program and the Hospital VBP
Program. We note that the modified version of the CMS PSI 90 measure
was adopted for use in the FY 2018 HAC Reduction Program as finalized
in the FY 2017 IPPS/LTCH PPS final rule (81 FR 57020). While both
programs will require reporting on the same measure beginning in FY
2023, we have reconsidered whether the differences in the scoring
methodologies for measuring performance in these two programs presents
unneeded complexity in tracking duplicative measures while accounting
for differences in applicability.
For example, the scoring methodology for the CMS PSI 90 measure for
the Hospital VBP Program includes comparing an individual hospital's
performance during the performance period to all hospitals' performance
during an established baseline period and a hospital can be awarded
improvement points by comparing an individual hospital's performance
during the performance period to that same individual hospital's
performance from the baseline period; the HAC Reduction Program
assesses performance using an equally weighted average of scores across
measures included in the program and does not require a baseline period
for scoring purposes. Hospitals may also incur additional cost to
monitor measure performance and potential payment impact in two
programs, given that each program has a different scoring methodology
that applies to the same measure. We also believe removing the CMS PSI
90 measure from the Hospital VBP Program is appropriately responsive to
feedback from stakeholders who have noted that using the same measure
in different programs creates additional administrative costs to
hospitals rather than further incentivizing improved performance. We
have noted in previous years that we believe costs are multifaceted and
include not only the burden associated with reporting, but also the
costs CMS incurs to implement and maintain the measure in the program
(83 FR 41442). Maintaining this measure in both the HAC Reduction
Program and the Hospital VBP Program and applying two different scoring
methodologies requires CMS to expend resources for analyzing
performance and developing duplicative feedback reports for its use in
both programs. For example, due to the differences in scoring
methodologies between the HAC Reduction Program and the Hospital VBP
Program, CMS maybe required to utilize and maintain multiple versions
of the CMS PSI software used to calculate PSIs and the composite
measure across the two programs. Further, since 2017, we have worked to
reduce regulatory burden on hospitals, lower health care costs, and
enhance patient care by streamlining the quality reporting and value-
based purchasing programs through the Meaningful Measures Framework. We
refer readers to the FY 2019 IPPS/LTCH PPS final rule for a broader
discussion of the Meaningful Measures Framework (83 FR 41147). Two of
the primary
[[Page 25479]]
objectives of the Meaningful Measures Framework are to include quality
measures for which there is significant opportunity for improvement and
to minimize the level of burden for providers. We recognize that the
Hospital VBP Program currently uses five other patient safety-focused
measures (CAUTI, CLABSI, CDI, MRSA, and SSI) that are also used under
the HAC Reduction Program. As noted in prior rulemaking, we continue to
monitor and analyze measures that are in both the HAC Reduction Program
and Hospital VBP Program to assess the impact of having a measure in
more than one program and to revise the measure set in one or both
programs if needed (82 FR 38255). We focused our initial analysis on
the impact of the CMS PSI 90 measure in the Hospital VBP Program rather
than the other five patient safety-focused measures because we believe
it would be least burdensome to remove now, before hospitals are
required to begin reporting on the measure for the FY 2023 Hospital VBP
program year. Furthermore, as previously noted, the Hospital VBP
Program requires that the software used to calculate measure scores
between the baseline and performance period must match, whereas the HAC
Reduction Program does not include baseline periods and can therefore
more easily implement measure scoring. At this time, we believe there
is significant opportunity for the remaining five patient safety-
focused measures to continue encouraging improvement in patient safety
in both the Hospital VBP Program and the HAC Reduction Program and will
continue to monitor and analyze the impact of these measures and assess
the need for revisions in future rulemaking. We note that the Hospital
VBP Program uses the same processes adopted by the HAC Reduction
Program for hospitals to review and correct data for the CDC NHSN HAI
measures and relies on HAC Reduction Program validation to ensure the
accuracy of CDC NHSN HAI measure data used in the Hospital VBP Program.
Accordingly, for the previously discussed reasons, we are proposing
to remove the CMS PSI 90 measure from the Hospital VBP Program
beginning with the FY 2023 program year.
We welcome public comment on this proposal to remove the CMS PSI 90
measure beginning with FY 2023.
d. Updates to the Specifications of Four Condition-Specific Mortality
Measures and One Procedure-Specific Complication Measure Beginning With
the FY 2023 Program Year To Exclude Patients Diagnosed With COVID-19
We are updating the following four condition-specific mortality
measures and one procedure-specific complication measure to exclude
patients with either principal or secondary diagnoses of COVID-19 from
the measure denominators beginning with the FY 2023 program year.
Hospital 30-Day, All-Cause, Risk-Standardized Mortality
Rate Following Acute Myocardial Infarction (AMI) Hospitalization (NQF
#0230)
Hospital 30-Day, All-Cause, Risk-Standardized Mortality
Rate Following Coronary Artery Bypass Graft (CABG) Surgery (NQF #2558)
Hospital 30-Day, All-Cause, Risk-Standardized Mortality
Rate Following Chronic Obstructive Pulmonary Disease (COPD)
Hospitalization (NQF #1893)
Hospital 30-Day, All-Cause, Risk-Standardized Mortality
Rate Following Heart Failure Hospitalization (NQF #0229)
Hospital-Level Risk-Standardized Complication Rate
Following Elective Primary Total Hip Arthroplasty (THA) and/or Total
Knee Arthroplasty (TKA) (NQF #1550).
We note that we do not need to update these measures for the FY
2022 program year because the only data that would have been affected
by the PHE for COVID-19 is from the first and second quarters of CY
2020, which are excluded under the ECE we granted in response to the
PHE for COVID-19.
The measures we have adopted for the Hospital VBP Program are not
currently specified to account for how the presence of a COVID-19 might
impact the quality of care assessed by those measures. To determine
this impact, we analyzed the relationship between COVID-19 and the
measure cohorts for each of the applicable conditions/procedures for
the Hospital VBP Program measures, as previously listed. For these
measures, we calculated the Pearson correlation between changes in
observed 30-day mortality rates and Medicare COVID-19 burden (defined
as COVID-19-related hospitalizations per Medicare beneficiary) for both
a 3-month (March-May) and 12-month (June-May) period. That is, we
calculated the change in observed 30-day mortality rates between March-
May 2019 (3-months) and March-May 2020, and also between June 2018-May
2019 and June 2019-May 2020 (12-months). We then assessed the
correlation between these changes in observed mortality rates and
Medicare COVID-19 burden. Changes in observed 30-day mortality rates
showed no or modest but statistically significant correlation with
Medicare COVID-19 burden when analyzing a 3-month period for the non-
pneumonia measures in the Hospital VBP Program; however, there was no
significant correlation for the non-pneumonia measures when analyzing
the 12-month period. Because the performance periods for these measures
are each three years and there is no significant correlation between
the change in mortality with Medicare COVID-19 burden over a 12-month
period (using COVID-impacted data through May 2020), we believe these
measure scores will be valid and equitable for use in the Hospital VBP
Program.
In the FY 2015 IPPS/LTCH PPS final rule, we finalized a technical
updates policy which included a subregulatory process to incorporate
technical measure specification updates into the measure specifications
we have adopted for the Hospital VBP Program (79 FR 50077 through
50079). We stated that these non-substantive updates might include
exclusions to a measure (citing as an example the addition of a hospice
exclusion to the 30-day mortality measures) (79 FR 50078). Due to the
impact of the COVID-19 PHE on the mortality and complications measures
used in the Hospital VBP Program, as described previously, we are
updating the MORT-30-AMI, MORT-30-CABG, MORT-30 COPD, MORT-30-HF, and
COMP-HIP-KNEE measures to exclude admissions with either a principal or
secondary diagnosis of COVID-19 from the measure denominators. This
technical update will modify these four condition-specific mortality
measures and one procedure-specific complication measure to exclude
certain ICD-10 Codes that identify patients with a principal or
secondary diagnosis of COVID-19 from the measure denominators but will
retain the measures in the program.
We believe that excluding COVID-19 patients from the measure
denominator beginning with the FY 2023 program year and subsequent
years will ensure that these four condition-specific mortality measures
and one procedure-specific complication measure continue to account for
mortality and complication rates as intended and meet the goals of the
Hospital VBP Program. Technical specifications of the Hospital VBP
Program measures are provided on our website under the Measure
Methodology Reports section (available at: http://www.cms.gov/Medicare/
[[Page 25480]]
Quality-Initiatives-Patient-Assessment-Instruments/
HospitalQualityInits/Measure-Methodology.html). Additional resources
about the measure technical specifications and methodology for the
Hospital VBP Program are on the QualityNet website (available at:
https://qualitynet.cms.gov/inpatient/hvbp).
e. Summary of Previously Adopted Measures for FY 2022 Through FY 2025
Program Years
We refer readers to the FY 2021 IPPS/LTCH PPS final rule (85 FR
58849 through 58850) for summaries of previously adopted measures for
the FY 2023 and FY 2024 program years, and to the tables in this
section showing summaries of previously adopted measures for the FY
2023, FY 2024, and FY 2025 program years. We are proposing to remove
the CMS PSI 90 measure from the Hospital VBP Program beginning with the
FY 2023 program year. We are also proposing to suppress the HCAHPS,
MSPB, and HAI measures for the FY 2022 program year, and to suppress
the MORT-30-PN measure for FY 2023. We are not proposing to add new
measures at this time. If these measure proposals are finalized as
proposed, the Hospital VBP Program measure set for the FY 2022, FY
2023, FY 2024 and FY 2025 program years would, as of now, contain the
following measures:
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4. Previously Adopted Baseline and Performance Periods
a. Background
Section 1886(o)(4) of the Act requires the Secretary to establish a
performance period for the Hospital VBP Program that begins and ends
prior to the beginning of such fiscal year. We refer readers to the FY
2017 IPPS/LTCH PPS final rule (81 FR 56998 through 57003) for a
previously finalized schedule for all future baseline and performance
periods for previously adopted measures. We refer readers to the FY
2018 IPPS/LTCH PPS final rule (82 FR 38256 through 38261), the FY 2019
IPPS/LTCH PPS final rule (83 FR 41466 through 41469), the FY 2020 IPPS/
LTCH PPS final rule (84 FR 42393 through 42395), and the FY 2021 IPPS/
LTCH PPS final rule (85 FR 58850 through 58854) for additional
previously adopted baseline and performance periods for the FY 2023 and
subsequent program years. As discussed in sections V.H.3.c and
V.H.1.b.(5). of the preamble of this proposed rule, we are proposing to
remove the CMS PSI 90 measure and suppress the MORT-30-PN measure for
the FY 2023 program year.
b. Proposal To Update the Baseline Periods for Certain Measures due to
the Extraordinary Circumstances Exception Granted in Response to the
COVID-19 PHE
(1) Background
We previously finalized baseline and performance periods for the FY
2023, 2024, 2025, 2026, and 2027 program years for all the measures
included in the Hospital VBP Program, and we refer the reader to Table
V.H-5 for those previously adopted baseline and performance periods.
However, subsequent to finalizing those baseline periods, and as
described further in section V.H.7., we granted an ECE in response to
the COVID-19 PHE and stated that we will not use any first or second
quarter of CY 2020 measure data that was voluntarily submitted for
scoring purposes under the Hospital VBP Program.
If we simply removed the first and second quarter of CY 2020
measure data from the previously finalized baseline periods for the FY
2024 program year the baseline period for certain measures included in
the Hospital VBP Program would only be six months, which is too short
for purposes of calculating reliable baseline period scores.
Accordingly, to ensure that we have a sufficient quantity of data
for baselining purposes, we are proposing several updates to the
baseline periods in this proposed rule for the FY 2024 program year. We
believe that the previously established baseline periods for FY 2022,
FY 2025, and FY 2026 program years are not impacted. There are also
measures whose quantity of data for baselining purposes would be
impacted by the ECE for the FY 2027 program year. However, for these
measures, we believe 30 and 33-month baseline periods still provide
enough data to reliably calculate baseline scores.
(2) Proposal To Update the FY 2024 Baseline Period for the Person and
Community Engagement Domain Measure (HCAHPS Survey)
For the Person and Community Engagement Domain Measure (HCAHPS
Survey), we finalized that the baseline period for the FY 2024 program
year would be January 1, 2020 through December 31, 2020, but the
removal of the January-June data would only leave us with six months of
data. We believe that using at least a full year for data collection
provides high levels of data accuracy and reliability for scoring
hospitals on this measure (76 FR 2458). Therefore, we are proposing to
use a baseline period of January 1, 2019 through December 31, 2019 so
that we have a full year of data. This baseline period would be paired
with the previously finalized performance period of January 1, 2022
through December 31, 2022. We believe using data from this period will
provide sufficiently reliable data for evaluating hospital performance
that can be used for FY 2024 scoring. We selected this revised data
period because it would provide the most consistency for hospitals in
terms of the comparable length to previous program years and the
performance period, and it would capture a full year of data, including
any seasonal effects.
We note that this new proposed baseline period would not include
the third or fourth quarters of 2020, even though those quarters were
not included in the ECE. However, our internal analyses indicates that
the average number of completed surveys, and thus average reliability
of the measure as a whole, is higher when based on four consecutive
quarters as opposed to two quarters of HCAHPS data. In addition,
because hospitals must report at least 100 completed surveys for a
performance period to receive an HCAHPS measure score, reducing the
baseline period from 12 to six months would result in fewer hospitals,
especially smaller hospitals, being able to report 100 surveys for the
performance period. We estimate that 11 percent of the hospitals that
would be able to achieve 100 completed surveys over four quarters would
be unable to do so in two quarters. As a result, we believe using four
consecutive quarters of data for the baseline period will provide a
higher level of data accuracy and reliability for scoring hospitals on
the HCAHPS Survey.
(3) Proposal To Update the FY 2024 Baseline Period for the Safety
Domain Measures
In the FY 2017 IPPS/LTCH PPS final rule (81 FR 57000), we finalized
the performance period for all measures in the Safety domain to run on
the calendar year two years prior to the applicable program year and a
baseline period that runs on the calendar year four years prior to the
applicable program year for the FY 2019 program year and subsequent
program years. For FY 2024, the baseline period for the Safety Domain
Measures would be January 1, 2020 through December 31, 2020, but the
removal of data impacted by the ECE from January to June of 2020 would
only leave us with six months of data. We believe that using at least a
full year for data collection provides high levels of data accuracy and
reliability for scoring hospitals on measures (76 FR 2458). Therefore,
we are proposing to update the FY 2024 baseline period for the Safety
domain measures from January 1, 2020 through December 31, 2020 to
January 1, 2019 through December 31, 2019 so that we have a full year
of data. We believe using data from this period will provide
sufficiently reliable data for evaluating hospital performance that can
be used for FY 2024 scoring. We selected this data period because it
would provide the most consistency for hospitals in terms of the
comparable length to previous program years and the performance period,
and it would capture a full year of data, including any seasonal
affects.
(4) Proposal To Update the FY 2024 Baseline Period for the Efficiency
and Cost Reduction Domain Measure
In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56998), we finalized
a 12-month performance period for the MSPB measure that runs on the
calendar year two years prior to the applicable program year and a 12-
month baseline period that runs on the calendar year four years prior
to the applicable program year for the FY 2019 program year and
subsequent years. For FY 2024, the baseline period for the MSPB measure
would be January 1, 2020 through December 31, 2020, but the removal of
data impacted by the ECE from January to June of 2020 would only
[[Page 25484]]
leave us with six months of data. We believe that using at least a full
year for data collection provides high levels of data accuracy and
reliability for scoring hospitals on measures (76 FR 2458). Therefore,
we are proposing to update the FY 2024 baseline period for the MSPB
measure from January 1, 2020 through December 31, 2020 to January 1,
2019 through December 31, 2019 so that we have a full year of data. We
believe using data from this period will provide sufficiently reliable
data for evaluating hospital performance that can be used for FY 2024
scoring. We selected this data period because it would provide the most
consistency for hospitals in terms of the comparable length to previous
program years and the performance period, and it would capture a full
year of data, including any seasonal affects.
We welcome public comment on our proposals to update the FY 2024
baseline periods for the measures included in the Person and Community
Engagement, Safety, and Efficiency and Cost Reduction domains.
c. Summary of Previously Adopted and Newly Proposed Baseline and
Performance Periods for the FY 2023 Through FY 2027 Program Years
The following tables summarize the baseline and performance periods
that we have previously adopted and those that we are proposing to
adopt.
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5. Performance Standards for the Hospital VBP Program
a. Background
We refer readers to sections 1886(o)(3)(A) through 1886(o)(3)(D) of
the Act for the performance standard requirements under the Hospital
VBP Program. We refer readers to the Hospital Inpatient VBP Program
final rule (76 FR 26511 through 26513) for further discussion of
achievement and improvement standards under the Hospital VBP Program.
We refer readers to the FY 2013, FY 2014, and FY 2015 IPPS/LTCH PPS
final rules (77 FR 53599 through 53605; 78 FR 50694 through 50699; and
79 FR 50077 through 50081, respectively) for a more detailed discussion
of the general scoring methodology used in the Hospital VBP Program. We
refer readers to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58856
through 58857) for previously established performance standards for the
FY 2023 program year. We note that the measure suppression proposals
for the FY 2022 and FY 2023 program years, discussed more fully in
section V.H.1. of the preamble of this proposed rule, will not affect
the performance standards for the FY 2022 or FY 2023 program year.
However, as discussed in section X.H.6. of the preamble of this
proposed rule, we are proposing to not generate achievement or
improvement points for any suppressed measures for FY 2022.
We refer readers to the FY 2021 IPPS/LTCH PPS final rule for
further discussion on performance standards for which the measures are
calculated with lower values representing better performance (85 FR
58855).
b. Previously Established and Estimated Performance Standards for the
FY 2024 Program Year
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41472), we
established performance standards for the FY 2023 program year for the
Clinical Outcomes domain measures (MORT-30-AMI, MORT-30-HF, MORT-30-PN
(updated cohort), MORT-30-COPD, MORT-30-CABG, and COMP-HIP-KNEE) and
for the Efficiency and Cost Reduction domain measure (MSPB). In the FY
2019 IPPS/LTCH PPS final rule (83 FR 41471 through 41472), we
established, for the FY 2023 program year, the performance standards
for the Safety domain measure, CMS PSI 90. However, as discussed in
section V.H.3.c. of the
[[Page 25489]]
preamble of this proposed rule, we are proposing to remove the CMS PSI
90 measure from the Hospital VBP Program beginning with the FY 2023
program year. For this reason, we are not providing the estimated
performance standards for this measure in this proposed rule. We note
that the performance standards for the MSPB measure are based on
performance period data. Therefore, we are unable to provide numerical
equivalents for the standards at this time. As discussed in section
V.H.4.b. of the preamble of this proposed rule, we are proposing to
update the FY 2024 program year baseline periods for the measures
included in the Safety, Person and Community Engagement, and Efficiency
and Cost Reduction domains. If finalized, according to our established
methodology for calculating performance standards, we will use data
from January 1, 2019 through December 31, 2019 to calculate performance
standards for the FY 2024 program year for these measures.
In accordance with our methodology for calculating performance
standards discussed more fully in the Hospital Inpatient VBP Program
final rule (76 FR 26511 through 26513) and codified at 42 CFR 412.160,
we are estimating additional performance standards for the FY 2024
program year. We note that the numerical values for the performance
standards for the Safety and Person and Community Engagement domains
for the FY 2024 program year in the following tables are estimates
based on the most recently available data, and we intend to update the
numerical values in the FY 2022 IPPS/LTCH PPS final rule.
The previously established and estimated performance standards for
the measures in the FY 2024 program year are set out in the following
tables.
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The HCAHPS Base Score is calculated using the eight dimensions of
the HCAHPS measure. For each of the eight dimensions, Achievement
Points (0-10 points) and Improvement Points (0-9 points) are
calculated, the larger of which is then summed across the eight
dimensions to create the HCAHPS Base Score (0-80 points). Each of the
eight dimensions is of equal weight; therefore, the HCAHPS Base Score
ranges from 0 to 80 points. HCAHPS Consistency Points are then
calculated, which range from 0 to 20 points. The Consistency Points
take into consideration the scores of all eight Person and Community
Engagement dimensions. The final element of the scoring formula is the
summation of the HCAHPS Base Score and the HCAHPS Consistency Points,
which results in the Person and Community Engagement Domain score that
ranges from 0 to 100 points. As discussed in section V.H.4.b. of the
[[Page 25490]]
preamble of this proposed rule, we are proposing to update the FY 2024
program year baseline period for the measure included in the Person and
Community Engagement domain. If finalized, according to our established
methodology for calculating performance standards, we will use data
from January 1, 2019 through December 31, 2019 to calculate performance
standards for the FY 2024 program year for this measure.
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c. Previously Established Performance Standards for Certain Measures
for the FY 2025 Program Year
We have adopted certain measures for the Safety domain, Clinical
Outcomes domain, and Efficiency and Cost Reduction domain for future
program years in order to ensure that we can adopt baseline and
performance periods of sufficient length for performance scoring
purposes. In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42398 through
42399), we established performance standards for the FY 2025 program
year for the Clinical Outcomes domain measures (MORT-30-AMI, MORT-30-
HF, MORT-30-PN (updated cohort), MORT-30-COPD, MORT-30-CABG, and COMP-
HIP-KNEE) and the Efficiency and Cost Reduction domain measure (MSPB).
In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58858), we established,
for the FY 2025 program year, the performance standards for the Safety
domain measure, CMS PSI 90. However, as discussed in section V.H.3.c.
of the preamble of this proposed rule, we are proposing to remove the
CMS PSI 90 measure from the Hospital VBP Program starting with the FY
2023 program year. For this reason, we are not including performance
standards for this measure in this proposed rule. We note that the
performance standards for the MSPB measure are based on performance
period data. Therefore, we are unable to provide numerical equivalents
for the standards at this time. The previously established and newly
established performance standards for these measures are set out in the
following table.
[[Page 25491]]
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d. Previously Established Performance Standards for Certain Measures
for the FY 2026 Program Year
We have adopted certain measures for the Safety domain, Clinical
Outcomes domain, and the Efficiency and Cost Reduction domain for
future program years in order to ensure that we can adopt baseline and
performance periods of sufficient length for performance scoring
purposes. In the FY 2021 IPPS/LTCH PPS final rule (85 FR 58858 through
588589), we established performance standards for the FY 2026 program
year for the Clinical Outcomes domain measures (MORT-30-AMI, MORT-30-
HF, MORT-30-PN (updated cohort), MORT-30-COPD, MORT-30-CABG, and COMP-
HIP-KNEE) and the Efficiency and Cost Reduction domain measure (MSPB).
We note that the performance standards for the MSPB measure are based
on performance period data. Therefore, we are unable to provide
numerical equivalents for the standards at this time.
The previously established performance standards for these measures
are set out in the following table.
[[Page 25492]]
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e. Newly Established Performance Standards for Certain Measures for the
FY 2027 Program Year
As discussed previously, we have adopted certain measures for the
Clinical Outcomes domain (MORT-30-AMI, MORT-30-HF, MORT-30-PN (updated
cohort), MORT-30-COPD, MORT-30-CABG, and COMP-HIP-KNEE) and the
Efficiency and Cost Reduction domain (MSPB) for future program years in
order to ensure that we can adopt baseline and performance periods of
sufficient length for performance scoring purposes. In accordance with
our methodology for calculating performance standards discussed more
fully in the Hospital Inpatient VBP Program final rule (76 FR 26511
through 26513), which is codified at 42 CFR 412.160, we are
establishing the following performance standards for the FY 2027
program year for the Clinical Outcomes domain and the Efficiency and
Cost Reduction domain. We note that the performance standards for the
MSPB measure are based on performance period data. Therefore, we are
unable to provide numerical equivalents for the standards at this time.
The newly established performance standards for these measures are set
out in the following table.
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6. Proposed Scoring Methodology and Data Requirements
a. Proposed Scoring Methodology for the FY 2022 Program Year Due to the
PHE for COVID-19
As described in section V.H.1. of the preamble of this proposed
rule, we are proposing to suppress seven measures in the Hospital VBP
Program for FY 2022 and to use a special rule for FY 2022 scoring. As
previously discussed, we are proposing that we would calculate measure
rates for all measures in the FY 2022 program year. For measures that
we propose to suppress, we would not use the measure rates to generate
achievement and improvement points within the Hospitals VBP's current
scoring methodology. We further propose under this special rule that we
would only calculate achievement and improvement points, as well as a
domain score, for the Clinical Outcomes Domain and that, because no
other domains receive scores for the FY 2022 Program year, we would not
award TPSs to any hospital for FY 2022.
Because no hospital would receive a TPS for FY 2022, we further
propose that we would reduce each hospital's base-operating DRG payment
amount by 2 percent, as required under section 1886(o)(7)(B) of the
Act, and then assign to each hospital a value-based incentive payment
amount that matches the 2 percent reduction to the base operating DRG
payment amount. The net result of these payment adjustments would be
neutral for hospitals. We have stated that value-based payment systems
should rely on a mix of standards, processes, outcomes, and patient
experience measures (76 FR 26491). As such, the Hospital VBP Program
scoring methodology was developed to be used with several measures
across multiple domains and aims to score hospitals on their overall
achievement relative to national benchmarks. However, as discussed in
the measure suppression proposals in section V.H.1., the data from
several measures is significantly impacted by the COVID-19 PHE.
Awarding negative or positive incentive payment adjustment percentages
using TPSs calculated using the current scoring methodology would not
provide a representative score of a hospital's overall performance in
providing quality of care during a pandemic.
In order to ensure that hospitals are aware of changes in their
performance rates that we have observed, we are proposing to provide FY
2022 confidential feedback reports that contain the measure rates we
have calculated for the FY 2022 program year, along with achievement
and improvement scores for the measures in the Clinical Outcomes Domain
and a Clinical Outcomes Domain score. However, as previously discussed,
we are proposing that the measure rates and Clinical Outcome Domain
performance scores would not be used to calculate TPSs for the purpose
of adjusting hospital payments under the FY 2022 Hospital VBP Program.
We invite public comment on these proposals.
b. Domain Weighting for the FY 2023 Program Year and Subsequent Years
for Hospitals That Receive a Score on All Domains
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38266), we finalized
our proposal to retain the equal weight of 25 percent for each of the
four domains in the Hospital VBP Program for the FY 2020 program year
and subsequent years for hospitals that receive a score in all domains.
We are not proposing any changes to these domain weights in this
proposed rule.
c. Domain Weighting for the FY 2023 Program Year and Subsequent Years
for Hospitals Receiving Scores on Fewer Than Four Domains
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50084 through 50085)
we adopted a policy that hospitals must receive domain scores on at
least three of four quality domains in order to receive a TPS, for the
FY 2017 program year and subsequent years. Hospitals with sufficient
data on only three domains will have their TPSs proportionately
reweighted (79 FR 50084 through 50085). We are not
[[Page 25494]]
proposing any changes to these domain weights in this proposed rule.
d. Minimum Numbers of Measures for Hospital VBP Program Domains
We refer readers to the 2018 IPPS/LTCH PPS final rule (82 FR 38266)
for our previously finalized requirements for the minimum numbers of
measures for hospitals to receive domain scores. We are not proposing
any changes to these policies in this proposed rule.
e. Minimum Numbers of Cases for Hospital VBP Program Measures
(1) Background
Section 1886(o)(1)(C)(ii)(IV) of the Act requires the Secretary to
exclude for the fiscal year hospitals that do not report a minimum
number (as determined by the Secretary) of cases for the measures that
apply to the hospital for the performance period for the fiscal year.
For additional discussion of the previously finalized minimum numbers
of cases for measures under the Hospital VBP Program, we refer readers
to the Hospital Inpatient VBP Program final rule (76 FR 26527 through
26531); the CY 2012 OPPS/ASC final rule (76 FR 74532 through 74534);
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53608 through 53610); the
FY 2015 IPPS/LTCH PPS final rule (79 FR 50085 through 50086); the FY
2016 IPPS/LTCH PPS final rule (80 FR 49570); the FY 2017 IPPS/LTCH PPS
final rule (81 FR 57011); the FY 2018 IPPS/LTCH PPS final rule (82 FR
38266 through 38267); the FY 2019 IPPS/LTCH PPS final rule (83 FR 41465
through 41466); the FY 2020 IPPS/LTCH PPS final rule (84 FR 42399
through 42400; and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58859
through 58860). We are not proposing any changes to these policies in
this proposed rule.
(2) Summary of Previously Adopted Minimum Numbers of Cases
The previously adopted minimum numbers of cases for these measures
are set forth in the following table.
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f. Summary of Previously Adopted Administrative Policies for NHSN
Healthcare-Associated Infection (HAI) Measure Data
In the FY 2020 IPPS/LTCH PPS final rule (84 FR 42400 through
42402), we finalized our proposal to use the same data to calculate the
CDC NHSN HAI measures for the Hospital VBP Program that the HAC
Reduction Program uses for purposes of calculating the measures under
that program, beginning on January 1, 2020 for CY 2020 data collection,
which would apply to the Hospital VBP Program starting with data for
the FY 2022 program year performance period. In the FY 2020 IPPS/LTCH
PPS final rule (84 FR 42402), we also finalized our proposal for the
Hospital VBP Program to use the same processes adopted by the HAC
Reduction Program for hospitals to review and correct data for the CDC
NHSN HAI measures and to rely on HAC Reduction Program validation to
ensure the accuracy of CDC NHSN HAI measure data used in the Hospital
VBP Program. We are not proposing any changes to these policies in this
proposed rule.
7. Extraordinary Circumstance Exception (ECE) Policy for the Hospital
VBP Program
a. Background
(1) Previously Established Extraordinary Circumstance Exception (ECE)
Policy Under the Hospital VBP Program
We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR
50704 through 50707) for discussion of our Extraordinary Circumstance
Exception (ECE) policy. In the FY 2014 IPPS/LTCH PPS final rule (78 FR
50704 through 50707), we adopted an ECE policy for the Hospital VBP
Program, which recognized that there may be periods of time during
which a hospital is affected by an extraordinary circumstance beyond
its control. When adopting the policy, we stated that upon a hospital's
request, we will consider providing an exception from the Hospital VBP
Program requirements to hospitals affected by natural disasters or
other extraordinary circumstances (78 FR 50704 through 50706).
Specifically, we stated that we interpreted the minimum number of cases
and measures requirement in sections 1886(o)(1)(C)(ii)(III) and (IV) of
the Act to not include any measures or cases for which a hospital has
submitted data during a performance period for which the hospital has
been granted a Hospital VBP Program ECE. We expressed belief that this
approach would help alleviate the reporting burden for a hospital that
is adversely impacted by a natural disaster or other extraordinary
circumstance beyond its control, while enabling the hospital to
continue to participate in the Hospital VBP Program.
On May 8, 2020, we published an Interim Final Rule with public
comment
[[Page 25495]]
(IFC) titled ``Medicare and Medicaid Programs, Basic Health Program,
and Exchanges; Additional Policy and Regulatory Revisions in Response
to the COVID-19 Public Health Emergency and Delay of Certain Reporting
Requirements for the Skilled Nursing Facility Quality Reporting
Program,'' in response to the PHE for COVID-19 (hereafter referred to
as the ``May 2020 IFC'') (85 FR 27550), where we modified the Hospital
VBP Program's ECE policy to allow us to grant ECE exceptions to
hospitals which have not requested them when we determine that an
extraordinary circumstance that is out of their control, such as an act
of nature (for example, a hurricane) or PHE (for example, the COVID-19
pandemic), affects an entire region or locale, in addition to retaining
the individual ECE request policy (85 FR 27597 through 27598). We
stated that if we grant an ECE to hospitals located in an entire region
or locale under this revised policy and, as a result of granting that
ECE, one or more hospitals located in that region or locale does not
report the minimum number of cases and measures required to enable us
to calculate a TPS for that hospital for the applicable program year,
the hospital will be excluded from the Hospital VBP Program for the
applicable program year. We also stated that a hospital that does not
report the minimum number of cases or measures for a program year will
not receive a two percent reduction to its base operating diagnosis-
related group (DRG) payment amount for each discharge in the applicable
program year and will also not be eligible to receive any value-based
incentive payments for the applicable program year. We refer readers to
sections V.H.6.d. and V.H.6.e. of the preamble of this proposed rule
for the minimum number of measures and cases that we currently require
hospitals to report in order to receive a TPS for a program year under
the Hospital VBP Program.
(2) Extraordinary Circumstance Exception (ECE) Granted in Response to
the PHE for COVID-19
On March 22, 2020, in response to COVID-19, we announced relief for
clinicians, providers, hospitals, and facilities participating in
Medicare quality reporting and VBP programs.\959\ Specifically, we
announced that we were granting ECEs for certain data reporting
requirements and submission deadlines for the first and second quarters
of CY 2020. On March 27, 2020, we published a supplemental guidance
memorandum that described the scope and duration of the ECEs we were
granting under each Medicare quality reporting and VBP program.\960\
For the Hospital VBP Program, we stated that qualifying claims will be
excluded from the measure calculations for January 1, 2020-March 31,
2020 (Q1 2020) and April 1, 2020-June 30, 2020 (Q2 2020) from the
claims-based complication, mortality, and CMS PSI 90 measures. The ECEs
also relieved providers and facilities of their obligation to report
HCAHPS survey data and CDC NHSN HAI data for the fourth quarter
calendar year (CY) 2019, first quarter CY 2020, and second quarter CY
2020.
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\959\ CMS, Press Release, CMS Announces Relief for Clinicians,
Providers, Hospitals and Facilities Participating in Quality
Reporting Programs in Response to COVID-19 (Mar. 22, 2020), https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
\960\ CMS, Exceptions and Extensions for Quality Reporting
Requirements for Acute Care Hospitals, PPS-Exempt Cancer Hospitals,
Inpatient Psychiatric Facilities, Skilled Nursing Facilities, Home
Health Agencies, Hospices, Inpatient Rehabilitation Facilities,
Long-Term Care Hospitals, Ambulatory Surgical Centers, Renal
Dialysis Facilities, and MIPS Eligible Clinicians Affected by COVID-
19 (Mar. 27, 2020), https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
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(3) Updated Application of the ECE Granted in Response to the PHE for
COVID-19
On September 2, 2020, we published a separate IFC, titled
``Medicare and Medicaid Programs, Clinical Laboratory Improvement
Amendments (CLIA), and Patient Protection and Affordable Care Act;
Additional Policy and Regulatory Revisions in Response to the COVID-19
Public Health Emergency'' (hereafter referred to as the ``September
2020 IFC'') (85 FR 54820). The September 2020 IFC updated the ECE we
granted in response to the PHE for COVID-19, for the Hospital VBP
Program and several other quality reporting programs (85 FR 54827
through 54838).
In the September 2020 IFC, we updated the ECE that we granted for
the Hospital VBP Program (85 FR 54833 through 54835) and stated that we
will not use any first or second quarter CY 2020 measure data that was
voluntarily submitted for scoring purposes under the Hospital VBP
Program. We expressed concern with the national comparability of the
Hospital VBP Program data due to the geographic differences of COVID-19
incidence rates and hospitalizations along with different impacts
resulting from different State and local law and policy changes
implemented in response to COVID-19.
In the September 2020 IFC, we welcomed public comments on our
policy to not use any first or second quarter CY 2020 measure data that
was voluntarily submitted for scoring purposes under the Hospital VBP
Program. We will respond to those public comments in the FY 2022 IPPS/
LTCH PPS final rule.
8. Proposal To Revise Existing Code of Federal Regulations (CFR)
Language by Replacing the Term ``System Administrator'' With the Term
``Security Official''
We are proposing to replace the term ``QualityNet System
Administrator'' with ``QualityNet security official'' in Sec.
412.167(b)(5) of our regulations. This update will align the
terminology used for this program with the terminology we are proposing
in section IX.A.8.c.(2). of this proposed rule to use for the Hospital
IQR Program. This official is one of hospital's contact people for
purposes of the appeal process under Sec. 412.167(b).
We welcome public comment on this proposal to replace the term
``QualityNet System Administrator'' with ``QualityNet security
official'' in our regulation text.
9. Proposal To Update References to QualityNet and Hospital Compare for
the Hospital VBP Program
There are currently several codified requirements for the Hospital
VBP Program in our regulations. However, we are proposing to update
regulation text to reflect changes made to CMS resources. Specifically,
we are proposing to revise regulations in two places:
At 42 CFR 412.163 in paragraph (d) and at 42 CFR 412.164
at paragraph (b) to update the text to indicate that the Hospital
Compare website is now available on the Care Compare site at: https://www.medicare.gov/care-compare.
At 42 CFR 412.165 in paragraphs (c)(2) and (c)(4) to
update the URL for our QualityNet website from QualityNet.org to
QualityNet.cms.gov. We note that we launched the redesigned QualityNet
website in November 2020.
We welcome public comment on this proposal to update references to
CMS resources in our regulation text.
10. Overall Hospital Quality Star Ratings
In the CY 2021 OPPS/ASC final rule with comment period and interim
final rule with comment period (85 FR 86193 through 86236), we
finalized a methodology to calculate the Overall
[[Page 25496]]
Hospital Quality Star Ratings (Overall Star Ratings). The Overall Star
Ratings utilize data collected on hospital inpatient and outpatient
measures that are publicly reported on a CMS website, including data
from the Hospital VBP Program.202F; We refer readers to section XVI. of
the CY 2021 OPPS/ASC final rule for details (85 FR 86193 through
86236).
11. References to Additional Requests for Information
We refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR
41440 through 41472) for more information about how the Hospital VBP
Program supports CMS' goal of bringing quality measurement,
transparency, and improvement together with value-based purchasing to
the hospital inpatient care setting through the Meaningful Measures
Framework. We refer readers to section IX.A of this proposed rule,
where we request information on potential actions and priority areas
that would enable the continued transformation of our quality
measurement enterprise toward greater digital capture of data and use
of the FHIR standard. We also refer readers to section IX.B of this
proposed rule, where we request information on our Equity Plan for
Improving Quality in Medicare, which outlines our commitment to closing
the health equity gap through improved data collection to better
measure and analyze disparities across programs and policies.
I. Hospital-Acquired Conditions (HAC) Reduction Program: Proposed
Updates and Changes (42 CFR 412.170)
1. Regulatory Background
We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR
50707 through 50708) for a general overview of the HAC Reduction
Program and to the same final rule (78 FR 50708 through 50709) for a
detailed discussion of the statutory basis for the Program. For
additional descriptions of our previously finalized policies for the
HAC Reduction Program, we also refer readers to the following final
rules:
The FY 2014 IPPS/LTCH PPS final rule (78 FR 50707 through
50729);
The FY 2015 IPPS/LTCH PPS final rule (79 FR 50087 through
50104);
The FY 2016 IPPS/LTCH PPS final rule (80 FR 49570 through
49581);
The FY 2017 IPPS/LTCH PPS final rule (81 FR 57011 through
57026);
The FY 2018 IPPS/LTCH PPS final rule (82 FR 38269 through
38278);
The FY 2019 IPPS/LTCH PPS final rule (83 FR 41472 through
41492);
The FY 2020 IPPS/LTCH PPS final rule (84 FR 42402 through
42411); and