[Federal Register Volume 86, Number 147 (Wednesday, August 4, 2021)]
[Proposed Rules]
[Pages 42018-42360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15496]



[[Page 42017]]

Vol. 86

Wednesday,

No. 147

August 4, 2021

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 412, 416, 419, et al.

45 CFR Part 180





Medicare Program: Hospital Outpatient Prospective Payment and 
Ambulatory Surgical Center Payment Systems and Quality Reporting 
Programs; Price Transparency of Hospital Standard Charges; Radiation 
Oncology Model; Request for Information on Rural Emergency Hospitals; 
Proposed Rule

  Federal Register / Vol. 86, No. 147 / Wednesday, August 4, 2021 / 
Proposed Rules  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412, 416, 419, and 512

Office of the Secretary

45 CFR Part 180

[CMS-1753-P]
RIN 0938-AU43


Medicare Program: Hospital Outpatient Prospective Payment and 
Ambulatory Surgical Center Payment Systems and Quality Reporting 
Programs; Price Transparency of Hospital Standard Charges; Radiation 
Oncology Model; Request for Information on Rural Emergency Hospitals

AGENCY: Centers for Medicare & Medicaid Services (CMS), Depatment of 
Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the Medicare hospital 
outpatient prospective payment system (OPPS) and the Medicare 
ambulatory surgical center (ASC) payment system for Calendar Year (CY) 
2022 based on our continuing experience with these systems. In this 
proposed rule, we describe the proposed changes to the amounts and 
factors used to determine the payment rates for Medicare services paid 
under the OPPS and those paid under the ASC payment system. Also, this 
proposed rule would update and refine the requirements for the Hospital 
Outpatient Quality Reporting (OQR) Program and the ASC Quality 
Reporting (ASCQR) Program, update Hospital Price Transparency 
requirements, and update and refine the design of the Radiation 
Oncology Model. Finally, this proposed rule includes a Request for 
Information (RFI) focusing on the health and safety standards, quality 
measures and reporting requirements, and payment policies for Rural 
Emergency Hospitals (REHs), a new Medicare provider type. The RFI will 
be used to inform future rulemaking for REHs.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by September 17, 2021.

ADDRESSES: In commenting, please refer to file code CMS-1753-P when 
commenting on the issues in this proposed rule. Because of staff and 
resource limitations, we cannot accept comments by facsimile (FAX) 
transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may (and we encourage you to) submit 
electronic comments on this regulation to http://www.regulations.gov. 
Follow the instructions under the ``submit a comment'' tab.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1753-P, P.O. Box 8010, 
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-1753-P, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, we refer readers to the 
beginning of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Advisory Panel on Hospital Outpatient 
Payment (HOP Panel), contact the HOP Panel mailbox at 
[email protected].
    Ambulatory Surgical Center (ASC) Payment System, contact Scott 
Talaga via email at [email protected] or Mitali Dayal via email 
at [email protected].
    Ambulatory Surgical Center Quality Reporting (ASCQR) Program 
Administration, Validation, and Reconsideration Issues, contact Anita 
Bhatia via email at [email protected].
    Ambulatory Surgical Center Quality Reporting (ASCQR) Program 
Measures, contact Cyra Duncan via email [email protected].
    Blood and Blood Products, contact Josh McFeeters via email at 
[email protected].
    Cancer Hospital Payments, contact Scott Talaga via email at 
[email protected].
    CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck 
Braver via email at [email protected].
    Composite APCs (Low Dose Brachytherapy and Multiple Imaging), 
contact Au'Sha Washington via email at [email protected].
    Comprehensive APCs (C-APCs), contact Mitali Dayal via email at 
[email protected].
    Hospital Inpatient Quality Reporting Program--Administration 
Issues, contact Julia Venanzi, [email protected].
    Hospital Outpatient Quality Reporting (OQR) Program Administration, 
Validation, and Reconsideration Issues, contact Shaili Patel via email 
[email protected].
    Hospital Outpatient Quality Reporting (OQR) Program Measures, 
contact Janis Grady via email [email protected].
    Hospital Outpatient Visits (Emergency Department Visits and 
Critical Care Visits), contact Elise Barringer via email at 
[email protected].
    Hospital Price Transparency, contact the Hospital Price 
Transparency email box at [email protected].
    Inpatient Only (IPO) Procedures List, contact Au'Sha Washington via 
email at [email protected], or Allison Bramlett via email 
[email protected], Lela Strong-Holloway via email 
[email protected], or Abigail Cesnik at 
[email protected].
    Medical Review of Certain Inpatient Hospital Admissions under 
Medicare Part A for CY 2021 and Subsequent Years (2-Midnight Rule), 
contact Elise Barringer via email at [email protected].
    New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga 
via email at [email protected].
    No Cost/Full Credit and Partial Credit Devices, contact Scott 
Talaga via email at [email protected].
    OPPS Brachytherapy, contact Scott Talaga via email at 
[email protected].
    OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier 
Payments, and Wage Index), contact Erick Chuang via email at 
[email protected], or Scott Talaga via email at 
[email protected], or Josh McFeeters via email at 
[email protected].
    OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar 
Products, contact Josh McFeeters via email at 
[email protected], or Gil Ngan via email at 
[email protected], or Cory Duke via email at [email protected], 
or Au'Sha

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Washington via email at [email protected].
    OPPS New Technology Procedures/Services, contact the New Technology 
APC mailbox at [email protected].
    OPPS Packaged Items/Services, contact Mitali Dayal via email at 
[email protected] or Cory Duke via email at 
[email protected].
    OPPS Pass-Through Devices, contact the Device Pass-Through mailbox 
at [email protected].
    OPPS Status Indicators (SI) and Comment Indicators (CI), contact 
Marina Kushnirova via email at [email protected].
    Partial Hospitalization Program (PHP) and Community Mental Health 
Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at 
[email protected].
    Rural Hospital Payments, contact Josh McFeeters via email at 
[email protected].
    Skin Substitutes, contact Josh McFeeters via email at 
[email protected].
    Supervision of Outpatient Therapeutic Services in Hospitals and 
CAHs, contact Josh McFeeters via email at [email protected].
    All Other Issues Related to Hospital Outpatient and Ambulatory 
Surgical Center Payments Not Previously Identified, contact Elise 
Barringer via email at [email protected] or at 410-786-9222.
    RO Model, contact [email protected] or at 844-711-2664, 
Option 5.

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. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.

Addenda Available Only Through the Internet on the CMS Website

    In the past, a majority of the Addenda referred to in our OPPS/ASC 
proposed and final rules were published in the Federal Register as part 
of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC 
proposed rule, all of the Addenda no longer appear in the Federal 
Register as part of the annual OPPS/ASC proposed and final rules to 
decrease administrative burden and reduce costs associated with 
publishing lengthy tables. Instead, these Addenda are published and 
available only on the CMS website. The Addenda relating to the OPPS are 
available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
    The Addenda relating to the ASC payment system are available at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.

Current Procedural Terminology (CPT) Copyright Notice

    Throughout this proposed rule, we use CPT codes and descriptions to 
refer to a variety of services. We note that CPT codes and descriptions 
are copyright 2019 American Medical Association. All Rights Reserved. 
CPT is a registered trademark of the American Medical Association 
(AMA). Applicable Federal Acquisition Regulations (FAR and Defense 
Federal Acquisition Regulations (DFAR) apply.

Table of Contents

I. Summary and Background
    A. Executive Summary of This Document
    B. Legislative and Regulatory Authority for the Hospital OPPS
    C. Excluded OPPS Services and Hospitals
    D. Prior Rulemaking
    E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel 
or the Panel)
    F. Public Comments Received on the CY 2021 OPPS/ASC Final Rule 
with Comment Period
II. Proposed Updates Affecting OPPS Payments
    A. Proposed Recalibration of APC Relative Payment Weights
    B. Proposed Conversion Factor Update
    C. Proposed Wage Index Changes
    D. Proposed Statewide Average Default Cost-to-Charge Ratios 
(CCRs)
    E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs) 
and Essential Access Community Hospitals (EACHs) under Section 
1833(t)(13)(B) of the Act for CY 2021
    F. Proposed Payment Adjustment for Certain Cancer Hospitals for 
CY 2021
    G. Proposed Hospital Outpatient Outlier Payments
    H. Proposed Calculation of an Adjusted Medicare Payment From the 
National Unadjusted Medicare Payment
    I. Proposed Beneficiary Copayments
III. Proposed OPPS Ambulatory Payment Classification (APC) Group 
Policies
    A. Proposed OPPS Treatment of New and Revised HCPCS Codes
    B. Proposed OPPS Changes--Variations Within APCs
    C. Proposed New Technology APCs
    D. Proposed OPPS APC-Specific Policies
IV. Proposed OPPS Payment for Devices
    A. Proposed Pass-Through Payments for Devices
    B. Proposed Device-Intensive Procedures
V. Proposed OPPS Payment Changes for Drugs, Biologicals, and 
Radiopharmaceuticals
    A. Proposed OPPS Transitional Pass-Through Payment for 
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals
    B. Proposed OPPS Payment for Drugs, Biologicals, and 
Radiopharmaceuticals Without Pass-Through Payment Status
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, 
Biologicals, Radiopharmaceuticals, and Devices
    A. Background
    B. Proposed Estimate of Pass-Through Spending
VII. Proposed OPPS Payment for Hospital Outpatient Visits and 
Critical Care Services
VIII. Payment for Partial Hospitalization Services
    A. Background
    B. Proposed PHP APC Update for CY 2021
    C. Proposed Outlier Policy for CMHCs
IX. Proposed Services That Would Be Paid Only as Inpatient Services
    A. Background
    B. Proposed Changes to the Inpatient Only (IPO) List
    C. Comment Solicitation
X. Proposed Nonrecurring Policy Changes
    A. Proposed Changes in the Level of Supervision of Outpatient 
Therapeutic Services in Hospitals and Critical Access Hospitals 
(CAHs)
    B. Proposed Medical Review of Certain Inpatient Hospital 
Admissions Under Medicare Part A for CY 2021 and Subsequent Years
XI. Proposed CY 2021 OPPS Payment Status and Comment Indicators
    A. Proposed CY 2021 OPPS Payment Status Indicator Definitions
    B. Proposed CY 2021 Comment Indicator Definitions
XII. MedPAC Recommendations
    A. Proposed OPPS Payment Rates Update
    B. Proposed ASC Conversion Factor Update
    C. Proposed ASC Cost Data
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC) 
Payment System
    A. Background
    B. Proposed ASC Treatment of New and Revised Codes
    C. Proposed Update to the List of ASC Covered Surgical 
Procedures and Covered Ancillary Services
    D. Proposed Update and Payment for ASC Covered Surgical 
Procedures and Covered Ancillary Services

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    E. Proposed New Technology Intraocular Lenses (NTIOLs)
    F. Proposed ASC Payment and Comment Indicators
    G. Proposed Calculation of the ASC Payment Rates and the ASC 
Conversion Factor
XIV. Advancing to Digital Quality Measurement and the Use of Fast 
Healthcare Interoperability Resources (FHIR) in Outpatient Quality 
Programs--Request for Information
XV. Proposed Requirements for the Hospital Outpatient Quality 
Reporting (OQR) Program
    A. Background
    B. Proposed Hospital OQR Program Quality Measures
    C. Administrative Requirements
    D. Form, Manner, and Timing of Data Submitted for the Hospital 
OQR Program
    E. Proposed Payment Reduction for Hospitals That Fail To Meet 
the Hospital OQR Program Requirements for the CY 2021 Payment 
Determination
XVI. Requirements for the Ambulatory Surgical Center Quality 
Reporting (ASCQR) Program
    A. Background
    B. Proposed ASCQR Program Quality Measures
    C. Administrative Requirements
    D. Form, Manner, and Timing of Data Submitted for the ASCQR 
Program
    E. Proposed Payment Reduction for ASCs That Fail To Meet the 
ASCQR Program Requirements
XVII. Request for Information on Rural Emergency Hospitals
    A. Background
    B. Solicitation of Public Comments
    C. RO Model Proposed Regulations
XVIII. Radiation Oncology Model
    A. Introduction
    B. Background
XIX. Proposed Updates to Requirements for Hospitals To Make Public a 
List of Their Standard Charges
    A. Introduction and Overview
    B. Proposal To Increase the Civil Monetary Penalty Using a 
Scaling Factor
    C. Proposal To Deem Certain State Forensic Hospitals as Having 
Met Requirements
    D. Proposals Prohibiting Additional Barriers To Accessing the 
Machine-Readable File
    E. Clarifications and Requests for Comment
XX. Additional Hospital Inpatient Quality Reporting (IQR) Program 
Policies
XXI. Additional Medicare Promoting Interoperability Program Policies
XXII. Files Available to the Public via the Internet
XXIII. Collection of Information Requirements
    A. Statutory Requirement for Solicitation of Comments
    B. ICRs for the Hospital OQR Program
    C. ICRs for the ASCQR Program
    D. ICRs for [placeholder for any rider]
    E. Total Reduction in Burden Hours and in Costs
XXIV. Response to Comments
XXV. Economic Analyses
    A. Statement of Need
    B. Overall Impact for the Provisions of This Proposed Rule
    C. Detailed Economic Analyses
    D. Regulatory Review Costs
    E. Regulatory Flexibility Act (RFA) Analysis
    F. Unfunded Mandates Reform Act Analysis
    G. Federalism Analysis

I. Summary and Background

A. Executive Summary of This Document

1. Purpose
    In this proposed rule, we propose to update the payment policies 
and payment rates for services furnished to Medicare beneficiaries in 
hospital outpatient departments (HOPDs) and ambulatory surgical centers 
(ASCs), beginning January 1, 2022. Section 1833(t) of the Social 
Security Act (the Act) requires us to annually review and update the 
payment rates for services payable under the Hospital Outpatient 
Prospective Payment System (OPPS). Specifically, section 1833(t)(9)(A) 
of the Act requires the Secretary to review certain components of the 
OPPS not less often than annually, and to revise the groups, the 
relative payment weights, and the wage and other adjustments that take 
into account changes in medical practices, changes in technology, and 
the addition of new services, new cost data, and other relevant 
information and factors. In addition, under section 1833(i)(D)(v) of 
the Act, we annually review and update the ASC payment rates. This 
proposed rule also includes additional policy changes made in 
accordance with our experience with the OPPS and the ASC payment system 
and recent changes in our statutory authority. We describe these and 
various other statutory authorities in the relevant sections of this 
proposed rule. In addition, this proposed rule would update and refine 
the requirements for the Hospital Outpatient Quality Reporting (OQR) 
Program and the ASC Quality Reporting (ASCQR) Program.
2. Summary of the Major Provisions
     OPPS Update: For 2022, we propose to increase the payment 
rates under the OPPS by an Outpatient Department (OPD) fee schedule 
increase factor of 2.3 percent. This increase factor is based on the 
proposed hospital inpatient market basket percentage increase of 2.5 
percent for inpatient services paid under the hospital inpatient 
prospective payment system (IPPS) reduced by a proposed productivity 
adjustment of 0.2 percentage point. Based on this update, we estimate 
that total payments to OPPS providers (including beneficiary cost-
sharing and estimated changes in enrollment, utilization, and case-mix) 
for calendar year (CY) 2022 would be approximately $82.704 billion, an 
increase of approximately $10.757 billion compared to estimated CY 2021 
OPPS payments.
    We propose to continue to implement the statutory 2.0 percentage 
point reduction in payments for hospitals that fail to meet the 
hospital outpatient quality reporting requirements by applying a 
reporting factor of 0.9805 to the OPPS payments and copayments for all 
applicable services.
     Data used in CY 2022 OPPS/ASC Ratesetting: To set CY 2022 
OPPS and ASC payment rates, we would normally use the most updated 
claims and cost report data available. However, because the CY 2020 
claims data includes services furnished during the COVID-19 PHE, which 
significantly affected outpatient service utilization, we have 
determined that CY 2019 data would better approximate expected CY 2022 
outpatient service utilization than CY 2020 data. As a result, we are 
proposing to utilize CY 2019 data to set CY 2022 OPPS and ASC payment 
rates.
     Partial Hospitalization Update: For the CY 2022 OPPS/ASC 
proposed rule, CMS is proposing to use the CMHC and hospital-based PHP 
(HB PHP) geometric mean per diem costs, consistent with existing 
methodology, but with a cost floor that would maintain the per diem 
costs finalized in CY 2021. CMS is also proposing to use CY 2019 claims 
and cost report data for each provider type. This proposal is 
consistent with a broader CY 2022 OPPS ratesetting proposal to use 
claims and cost report data prior to the PHE.
     Changes to the Inpatient Only (IPO) List: For 2022, we 
propose to halt the elimination of the IPO list and, after clinical 
review of the services removed from the IPO list in CY 2021 against our 
longstanding criteria for removal, we propose to add the 298 services 
removed from the IPO list in CY 2021 back to the IPO list beginning in 
CY 2022. CMS is also proposing to codify in regulation the five 
longstanding criteria used to determine whether a procedure or service 
should be removed from the IPO list. In addition, we solicit comment on 
several policy modifications including whether CMS should maintain the 
longer-term objective of eliminating the IPO list or maintain the IPO 
list but continue to systematically scale the list back so that 
inpatient only designations are consistent with current standards of 
practice.
     Medical Review of Certain Inpatient Hospital Admissions 
under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight 
Rule): For CY 2022,

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we propose to exempt procedures that are removed from the inpatient 
only (IPO) list under the OPPS beginning on or January 1, 2021, from 
site-of-service claim denials, Beneficiary and Family-Centered Care 
Quality Improvement Organization (BFCC-QIO) referrals to Recovery Audit 
Contractor (RAC) for persistent noncompliance with the 2-midnight rule, 
and RAC reviews for ``patient status'' (that is, site-of-service) for a 
time period of 2 years.
     340B-Acquired Drugs: We propose to continue our current 
policy of paying an adjusted amount of ASP minus 22.5 percent for drugs 
and biologicals acquired under the 340B program. We are proposing to 
continue to exempt Rural SCHs, PPS-exempt cancer hospitals and 
children's hospitals from our 340B payment policy.
     Device Pass-Through Payment Applications: For CY 2022, we 
received eight applications for device pass-through payments. One of 
these applications (the Shockwave C\2\ Coronary Intravascular 
Lithotripsy (IVL) catheter) received preliminary approval for pass-
through payment status through our quarterly review process. We are 
soliciting public comment on all eight of these applications and final 
determinations on these applications will be made in the CY 2022 OPPS/
ASC final rule.
     Equitable Adjustment for Device Category, Drugs, and 
Biologicals with Expiring Pass-through Status: As a result of our 
proposal to use CY 2019 claims data, rather than CY 2020 claims data, 
to inform CY 2022 ratesetting, we are proposing to use our equitable 
adjustment authority under 1833(t)(2)(E) to provide up to four quarters 
of separate payment for 27 drugs and biologicals and one device 
category whose pass-through payment status will expire between December 
31, 2021 and September 30, 2022.
     Cancer Hospital Payment Adjustment: For 2022, we propose 
to continue to provide additional payments to cancer hospitals so that 
a cancer hospital's payment-to-cost ratio (PCR) after the additional 
payments is equal to the weighted average PCR for the other OPPS 
hospitals using the most recently submitted or settled cost report 
data. However, section 16002(b) of the 21st Century Cures Act requires 
that this weighted average PCR be reduced by 1.0 percentage point. 
Based on the data and the required 1.0 percentage point reduction, we 
propose that a target PCR of 0.89 would be used to determine the CY 
2022 cancer hospital payment adjustment to be paid at cost report 
settlement. That is, the payment adjustments will be the additional 
payments needed to result in a PCR equal to 0.89 for each cancer 
hospital.
     ASC Payment Update: For CYs 2019 through 2023, we adopted 
a policy to update the ASC payment system using the hospital market 
basket update. Using the hospital market basket methodology, for CY 
2022, we propose to increase payment rates under the ASC payment system 
by 2.3 percent for ASCs that meet the quality reporting requirements 
under the ASCQR Program. This proposed increase is based on a hospital 
market basket percentage increase of 2.5 percent reduced by a proposed 
productivity adjustment of 0.2 percentage point. Based on this proposed 
update, we estimate that total payments to ASCs (including beneficiary 
cost-sharing and estimated changes in enrollment, utilization, and 
case-mix) for CY 2022 would be approximately 5.16 billion, a decrease 
of approximately 20 million compared to estimated CY 2021 Medicare 
payments.
     ASC Payment Policy for Non-Opioid Pain Management Drugs 
and Biologicals under Section 6082 of the SUPPORT Act (Section 
1833(t)(22) of the Social Security Act): Under section 1833(t)(22)(A) 
of the Act, the Secretary was required to conduct a review (part of 
which may include a request for information) of payments for opioids 
and evidence-based non-opioid alternatives for pain management 
(including drugs and devices, nerve blocks, surgical injections, and 
neuromodulation) with a goal of ensuring that there are not financial 
incentives to use opioids instead of non-opioid alternatives. Section 
1833(t)(22)(A)(ii) provides that the Secretary may, as the Secretary 
determines appropriate, conduct subsequent reviews of such payment.
    In accordance with our review, for CY 2022, we are proposing to 
continue to pay separately for two drugs currently receiving separate 
payment in the ASC setting as non-opioid pain management drugs that 
function as surgical supplies. For CY 2022, we propose to modify the 
current non-opioid pain management payment policy and regulatory text 
to require that evidence-based non opioid alternatives for pain 
management must have Food and Drug Administration (FDA) approval, an 
FDA-approved indication for pain management or analgesia, and for the 
drugs and biologicals to have a per-day cost in excess of the OPPS drug 
packaging threshold, which is proposed at $130 for CY 2022 and 
described in section V.B.1.a., to qualify under this policy. Further, 
we are soliciting comment on potential additional requirements the 
Secretary should consider establishing for this policy as well as 
whether any additional products meet the proposed criteria for CY 2022.
     Changes to the List of ASC Covered Surgical Procedures: 
For CY 2022, we are proposing to re-adopt the ASC Covered Procedures 
List (CPL) criteria that were in effect in CY 2020 and to remove 258 of 
the 267 procedures that were added to the ASC CPL in CY 2021. We are 
requesting comments on whether any of the 258 procedures meet the CY 
2020 criteria that we are proposing to reinstate. We are also proposing 
to change the notification process adopted in CY 2021 to a nomination 
process, under which stakeholders could nominate procedures they 
believe meet the requirements to be added to the ASC CPL. The formal 
nomination process would begin in CY 2023.
    Hospital Outpatient Quality Reporting (OQR) Program: For the 
Hospital OQR Program, we are proposing changes for the CY 2023, CY 
2024, CY 2025, and CY 2026 payment determinations and subsequent years. 
For the Hospital OQR Program measure set, we are proposing to: (1) 
Remove the OP-02: Fibrinolytic Therapy Received Within 30 Minutes of ED 
Arrival measure beginning with the CY 2025 payment determination; (2) 
remove the OP-03: Median Time to Transfer to Another Facility for Acute 
Coronary Intervention measure beginning with the CY 2025 payment 
determination; (3) adopt the COVID-19 Vaccination Coverage Among Health 
Care Personnel (HCP) measure beginning with the CY 2024 payment 
determination; (4) adopt the Breast Screening Recall Rates measure 
beginning with the CY 2023 payment determination; (5) adopt the ST-
Segment Elevation Myocardial Infarction (STEMI) electronic clinical 
quality measure (eCQM) beginning with voluntary reporting for the CY 
2023 reporting period and mandatory reporting beginning with the CY 
2024 reporting period/CY 2026 payment determination; (6) make voluntary 
the reporting of the OP-37a-e: Outpatient and Ambulatory Surgery 
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) 
Survey-based measures beginning with the CY 2023 reporting period and 
mandatory beginning with the CY 2024 reporting period/CY 2026 payment 
determination; and (7) make mandatory the reporting of the OP-31: 
Cataracts: Improvement in Patient's Visual Function within 90 Days 
Following Cataract Surgery measure beginning with the CY 2025 payment 
determination. In addition, we are proposing data submission

[[Page 42022]]

requirements for the OAS CAHPS Survey-based measures and the COVID-19 
Vaccination Coverage Among HCP measure. Similarly, we are proposing 
data submission and certification requirements for eCQMs and expanding 
our Extraordinary Circumstances Exemption (ECE) policy to these 
measures.
    Beginning with the CY 2024 payment determination, we are proposing 
three updates to our validation requirements by proposing to: (1) Use 
electronic file submissions for chart-abstracted measure medical record 
requests; (2) change the chart validation requirements and methods; and 
(3) update the targeting criteria. We are also requesting comment from 
stakeholders on: (1) The potential future development and inclusion of 
a patient-reported outcomes measure following elective total hip and/or 
total knee arthroplasty (THA/TKA); (2) the possibility of expanding our 
current disparities methods to include reporting by race and ethnicity; 
and (3) the possibility of hospital collection of standardized 
demographic information for quality reporting and measure 
stratification. 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.
     Ambulatory Surgical Center Quality Reporting (ASCQR) 
Program: For the ASCQR Program, we are proposing changes for the CY 
2024, CY 2025, and CY 2026 payment determinations and subsequent years. 
For the ASCQR Program measure set, we are proposing to: (1) Adopt the 
COVID-19 Vaccination Coverage Among HCP measure beginning with the CY 
2024 payment determination; (2) resume data collection for four 
measures beginning with the CY 2025 payment determination: (a) ASC-1: 
Patient Burn; (b) ASC-2: Patient Fall; (c) ASC-3: Wrong Site, Wrong 
Side, Wrong Patient, Wrong Procedure, Wrong Implant; and (d) ASC-4: 
All-Cause Hospital Transfer/Admission; (3) require the ASC-11: 
Cataracts: Improvement in Patient's Visual Function within 90 Days 
Following Cataract Surgery measure beginning with the CY 2025 payment 
determination; and (4) require the ASC-15a-e: OAS CAHPS Survey-based 
measures with voluntary reporting beginning with the CY 2023 reporting 
period and mandatory reporting beginning with the CY 2024 reporting 
period/CY 2026 payment determination. In addition, we are proposing 
data submission requirements for the OAS CAHPS Survey-based measures 
and the COVID-19 Vaccination Coverage Among HCP measure.
    We are requesting stakeholder comment on: (1) The potential future 
development and inclusion of a patient-reported outcomes measure 
following elective THA/TKA; (2) potential measurement approaches or 
social risk factors that influence health disparities in the ASC 
setting; and (3) the future inclusion of a measure to assess pain 
management surgical procedures performed in ASCs. 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.
     Hospital Inpatient Quality Reporting (IQR) Program Update: 
In this proposed rule, we are requesting information from stakeholders 
on potential measure updates on reporting and submission requirements 
for the Safe Use of Opioids--Concurrent Prescribing eCQM.
     Updates to Requirements for Hospitals to Make Public a 
List of Their Standard Charges: We are proposing to amend several 
hospital price transparency policies codified at 45 CFR part 180 in 
order to encourage compliance. We are proposing to: (1) Increase the 
amount of the penalties for noncompliance through the use of a proposed 
scaling factor based on hospital bed count; (2) deem state forensic 
hospitals that meet certain requirements to be in compliance with the 
requirements of 45 CFR part 180; and (3) prohibit certain conduct that 
we have concluded are barriers to accessing the standard charge 
information. In addition, we clarify the expected output of hospital 
online price estimator tools when hospitals choose to use an online 
price estimator tool in lieu of posting its standard charges for the 
required shoppable services in a consumer-friendly format. Finally, we 
seek comment on a variety of issues that we may consider in future 
rulemaking, including improving standardization of the data disclosed 
by hospitals.
     Request for Information on Rural Emergency Hospitals 
(REHs):
    Congress enacted section 125 of the Consolidated Appropriations Act 
(CAA) of 2021, which establishes REHs as a new provider type. In 
accordance with the statutory requirements in the CAA, REHs will 
provide emergency department services, observation care, and, at the 
election of the REH, other medical and health services on an outpatient 
basis, as specified by the Secretary through rulemaking. Additionally, 
REHs must not provide acute care inpatient services, with the exception 
of skilled nursing facility services furnished in a distinct part unit. 
The REH must have a staffed emergency department 24 hours a day, 7 days 
a week, with staffing requirements similar to those for Critical Access 
Hospitals (CAHs). The CAA provides that the statutory provisions 
governing Medicare payment to REHs shall apply to items and services 
furnished on or after January 1, 2023. We are seeking public comment 
via a Request for Information on the health and safety standards, 
payment policies, the REH enrollment process, and quality measures and 
reporting requirements for REHs to inform our policy making as we 
establish this new provider type.
     Radiation Oncology Model (RO Model): Section 133 of the 
Consolidated Appropriations Act (CAA), 2021 (Pub. L. 116-260), enacted 
on December 27, 2020, included a provision that prohibits the RO Model 
from beginning before January 1, 2022. This law supersedes the RO Model 
delayed start date established in the CY 2021 OPPS/ASC final rule. In 
this proposed rule, we are proposing provisions related to the 
additional delayed implementation due to the CAA, 2021, as well as 
modifications to certain RO Model policies not related to the delay. 
These proposals if finalized would necessitate modifying 42 CFR 
512.205, 512.210, 512.217, 512.220, 512.230, 512.240, 512.245, 512.250, 
512.255, 512.275, 512.280, and 512.285 and add 42 CFR 512.292 and 
512.294.
     Comment Solicitation on Temporary Policies for the PHE for 
COVID-19: In response to the COVID-19 pandemic, CMS undertook emergency 
rulemaking to implement a number of flexibilities to address the 
pandemic, such as preventing spread of the infection and supporting 
diagnosis of COVID-19. While many of these flexibilities will expire at 
the conclusion of the PHE, we are seeking comment on whether there are 
certain policies that should be made permanent. Specifically, we are 
seeking comment on services furnished by hospital staff to 
beneficiaries in their homes through use of communication technology, 
direct supervision when the supervising practitioner is available 
through two-way, audio/video communication technology, and code and 
payment for COVID-19 specimen collection.
     Changes to Beneficiary Coinsurance for Colorectal Cancer 
Screening Test: Section 122 of the Consolidated Appropriations Act 
(CAA) of 2021 amends section 1833(a) of the Act to

[[Page 42023]]

offer a special coinsurance rule for screening flexible sigmoidoscopies 
and screening colonoscopies regardless of the code that is billed for 
the establishment of a diagnosis as a result of the test, or for the 
removal of tissue or other matter or other procedure, that is furnished 
in connection with, as a result of, and in the same clinical encounter 
as the colorectal cancer screening test. We propose that all surgical 
services furnished on the same date as a planned screening colonoscopy 
or planned flexible sigmoidoscopy could be viewed as being furnished in 
connection with, as a result of, and in the same clinical encounter as 
the screening test for purposes of determining the coinsurance required 
of Medicare beneficiaries for planned colorectal cancer screening tests 
that result in additional procedures furnished in the same clinical 
encounter.
3. Summary of Costs and Benefit
    In sections XXIV. and XXV. of this proposed rule, we set forth a 
detailed analysis of the regulatory and federalism impacts that the 
changes would have on affected entities and beneficiaries. Key 
estimated impacts are described below.
a. Impacts of All OPPS Changes
    Table U1 in section XXIV.B of this proposed rule displays the 
distributional impact of all the OPPS changes on various groups of 
hospitals and CMHCs for CY 2021 compared to all estimated OPPS payments 
in CY 2020. We estimate that the policies in this proposed rule would 
result in a 1.8 percent overall increase in OPPS payments to providers. 
We estimate that total OPPS payments for CY 2021, including beneficiary 
cost-sharing, to the approximately 3,662 facilities paid under the OPPS 
(including general acute care hospitals, children's hospitals, cancer 
hospitals, and CMHCs) would increase by approximately $1.3 billion 
compared to CY 2020 payments, excluding our estimated changes in 
enrollment, utilization, and case-mix.
    We estimated the isolated impact of our OPPS policies on CMHCs 
because CMHCs are only paid for partial hospitalization services under 
the OPPS. Continuing the provider-specific structure we adopted 
beginning in CY 2011, and basing payment fully on the type of provider 
furnishing the service, we estimate a 1.6 percent increase in CY 2021 
payments to CMHCs relative to their CY 2020 payments.
b. Impacts of the Proposed Updated Wage Indexes
    We estimate that our proposed update of the wage indexes based on 
the FY 2022 IPPS proposed rule wage indexes would result in no change 
for urban hospitals under the OPPS and no change for rural hospitals. 
These wage indexes include the continued implementation of the OMB 
labor market area delineations based on 2010 Decennial Census data, 
with updates, as discussed in section II.C. of this proposed rule.
c. Impacts of the Proposed Rural Adjustment and the Cancer Hospital 
Payment Adjustment
    There are no significant impacts of our CY 2022 payment policies 
for hospitals that are eligible for the rural adjustment or for the 
cancer hospital payment adjustment. We are not proposing to make any 
change in policies for determining the rural hospital payment 
adjustments. While we propose to implement the reduction to the cancer 
hospital payment adjustment for CY 2022 required by section 
1833(t)(18)(C) of the Act, as added by section 16002(b) of the 21st 
Century Cures Act, the target payment-to-cost ratio (PCR) for CY 2021 
is 0.89, equivalent to the 0.89 target PCR for CY 2021, and therefore 
has no budget neutrality adjustment.
d. Impacts of the Proposed OPD Fee Schedule Increase Factor
    For the CY 2021 OPPS/ASC, we propose to establish an OPD fee 
schedule increase factor of 2.3 percent and apply that increase factor 
to the conversion factor for CY 2021. As a result of the OPD fee 
schedule increase factor and other budget neutrality adjustments, we 
estimate that urban hospitals will experience an increase in payments 
of approximately 2.3 percent and that rural hospitals would experience 
an increase in payments of 2.3 percent. Classifying hospitals by 
teaching status, we estimate nonteaching hospitals would experience an 
increase in payments of 2.5 percent, minor teaching hospitals would 
experience an increase in payments of 2.3 percent, and major teaching 
hospitals would experience an increase in payments of 2.2 percent. We 
also classified hospitals by the type of ownership. We estimate that 
hospitals with voluntary ownership would experience an increase of 2.3 
percent in payments, while hospitals with government ownership would 
experience an increase of 2.4 percent in payments. We estimate that 
hospitals with proprietary ownership would experience an increase of 
2.5 percent in payments.
e. Impacts of the Proposed ASC Payment Update
    For impact purposes, the surgical procedures on the ASC covered 
surgical procedure list are aggregated into surgical specialty groups 
using CPT and HCPCS code range definitions. The percentage change in 
estimated total payments by specialty groups under the CY 2022 payment 
rates, compared to estimated CY 2021 payment rates, generally ranges 
between an increase of 2 and 4 percent, depending on the service, with 
some exceptions. We estimate the impact of applying the hospital market 
basket update to ASC payment rates would increase payments by $90 
million under the ASC payment system in CY 2022.

B. Legislative and Regulatory Authority for the Hospital OPPS

    When Title XVIII of the Act was enacted, Medicare payment for 
hospital outpatient services was based on hospital-specific costs. In 
an effort to ensure that Medicare and its beneficiaries pay 
appropriately for services and to encourage more efficient delivery of 
care, the Congress mandated replacement of the reasonable cost-based 
payment methodology with a prospective payment system (PPS). The 
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section 
1833(t) to the Act, authorizing implementation of a PPS for hospital 
outpatient services. The OPPS was first implemented for services 
furnished on or after August 1, 2000. Implementing regulations for the 
OPPS are located at 42 CFR parts 410 and 419.
    The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS. 
The following Acts made additional changes to the OPPS: The Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit 
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8, 
2006; the Medicare Improvements and Extension Act under Division B of 
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) 
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173), 
enacted on December 29, 2007; the Medicare Improvements

[[Page 42024]]

for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), 
enacted on July 15, 2008; the Patient Protection and Affordable Care 
Act (Pub. L. 111-148), enacted on March 23, 2010, as amended by the 
Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), 
enacted on March 30, 2010 (these two public laws are collectively known 
as the Affordable Care Act); the Medicare and Medicaid Extenders Act of 
2010 (MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut 
Continuation Act of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 
23, 2011; the Middle Class Tax Relief and Job Creation Act of 2012 
(MCTRJCA, Pub. L. 112-96), enacted on February 22, 2012; the American 
Taxpayer Relief Act of 2012 (Pub. L. 112-240), enacted January 2, 2013; 
the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) enacted on 
December 26, 2013; the Protecting Access to Medicare Act of 2014 (PAMA, 
Pub. L. 113-93), enacted on March 27, 2014; the Medicare Access and 
CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 114-10), enacted 
April 16, 2015; the Bipartisan Budget Act of 2015 (Pub. L. 114-74), 
enacted November 2, 2015; the Consolidated Appropriations Act, 2016 
(Pub. L. 114-113), enacted on December 18, 2015, the 21st Century Cures 
Act (Pub. L. 114-255), enacted on December 13, 2016; the Consolidated 
Appropriations Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; 
the Substance Use-Disorder Prevention that Promotes Opioid Recovery and 
Treatment for Patients and Communities Act (Pub. L. 115-271), enacted 
on October 24, 2018; the Further Consolidated Appropriations Act, 2020 
(Pub. L. 116-94), enacted on December 20, 2019; the Coronavirus Aid, 
Relief, and Economic Security Act (Pub. L. 116-136), enacted on March 
27, 2020; and the Consolidated Appropriations Act, 2021 (Pub. L. 116-
260), enacted on December 27, 2020.
    Under the OPPS, we generally pay for hospital Part B services on a 
rate-per-service basis that varies according to the APC group to which 
the service is assigned. We use the Healthcare Common Procedure Coding 
System (HCPCS) (which includes certain Current Procedural Terminology 
(CPT) codes) to identify and group the services within each APC. The 
OPPS includes payment for most hospital outpatient services, except 
those identified in section I.C. of this proposed rule. Section 
1833(t)(1)(B) of the Act provides for payment under the OPPS for 
hospital outpatient services designated by the Secretary (which 
includes partial hospitalization services furnished by CMHCs), and 
certain inpatient hospital services that are paid under Medicare Part 
B.
    The OPPS rate is an unadjusted national payment amount that 
includes the Medicare payment and the beneficiary copayment. This rate 
is divided into a labor-related amount and a nonlabor-related amount. 
The labor-related amount is adjusted for area wage differences using 
the hospital inpatient wage index value for the locality in which the 
hospital or CMHC is located.
    All services and items within an APC group are comparable 
clinically and with respect to resource use, as required by section 
1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of 
the Act, subject to certain exceptions, items and services within an 
APC group cannot be considered comparable with respect to the use of 
resources if the highest median cost (or mean cost, if elected by the 
Secretary) for an item or service in the APC group is more than 2 times 
greater than the lowest median cost (or mean cost, if elected by the 
Secretary) for an item or service within the same APC group (referred 
to as the ``2 times rule''). In implementing this provision, we 
generally use the cost of the item or service assigned to an APC group.
    For new technology items and services, special payments under the 
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act 
provides for temporary additional payments, which we refer to as 
``transitional pass-through payments,'' for at least 2 but not more 
than 3 years for certain drugs, biological agents, brachytherapy 
devices used for the treatment of cancer, and categories of other 
medical devices. For new technology services that are not eligible for 
transitional pass-through payments, and for which we lack sufficient 
clinical information and cost data to appropriately assign them to a 
clinical APC group, we have established special APC groups based on 
costs, which we refer to as New Technology APCs. These New Technology 
APCs are designated by cost bands which allow us to provide appropriate 
and consistent payment for designated new procedures that are not yet 
reflected in our claims data. Similar to pass-through payments, an 
assignment to a New Technology APC is temporary; that is, we retain a 
service within a New Technology APC until we acquire sufficient data to 
assign it to a clinically appropriate APC group.

C. Excluded OPPS Services and Hospitals

    Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to 
designate the hospital outpatient services that are paid under the 
OPPS. While most hospital outpatient services are payable under the 
OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for 
ambulance, physical and occupational therapy, and speech-language 
pathology services, for which payment is made under a fee schedule. It 
also excludes screening mammography, diagnostic mammography, and 
effective January 1, 2011, an annual wellness visit providing 
personalized prevention plan services. The Secretary exercises the 
authority granted under the statute to also exclude from the OPPS 
certain services that are paid under fee schedules or other payment 
systems. Such excluded services include, for example, the professional 
services of physicians and nonphysician practitioners paid under the 
Medicare Physician Fee Schedule (MPFS); certain laboratory services 
paid under the Clinical Laboratory Fee Schedule (CLFS); services for 
beneficiaries with end-stage renal disease (ESRD) that are paid under 
the ESRD prospective payment system; and services and procedures that 
require an inpatient stay that are paid under the hospital IPPS. In 
addition, section 1833(t)(1)(B)(v) of the Act does not include 
applicable items and services (as defined in subparagraph (A) of 
paragraph (21)) that are furnished on or after January 1, 2017 by an 
off-campus outpatient department of a provider (as defined in 
subparagraph (B) of paragraph (21)). We set forth the services that are 
excluded from payment under the OPPS in regulations at 42 CFR 419.22.
    Under Sec.  419.20(b) of the regulations, we specify the types of 
hospitals that are excluded from payment under the OPPS. These excluded 
hospitals are:
     Critical access hospitals (CAHs);
     Hospitals located in Maryland and paid under Maryland's 
All-Payer or Total Cost of Care Model;
     Hospitals located outside of the 50 States, the District 
of Columbia, and Puerto Rico; and
     Indian Health Service (IHS) hospitals.

D. Prior Rulemaking

    On April 7, 2000, we published in the Federal Register a final rule 
with comment period (65 FR 18434) to implement a prospective payment 
system for hospital outpatient services. The hospital OPPS was first 
implemented for services furnished on or after August 1, 2000. Section 
1833(t)(9)(A) of the Act requires the Secretary to review certain 
components of the OPPS, not less often than

[[Page 42025]]

annually, and to revise the groups, the relative payment weights, and 
the wage and other adjustments to take into account changes in medical 
practices, changes in technology, the addition of new services, new 
cost data, and other relevant information and factors.
    Since initially implementing the OPPS, we have published final 
rules in the Federal Register annually to implement statutory 
requirements and changes arising from our continuing experience with 
this system. These rules can be viewed on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.

E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the 
Panel)

1. Authority of the Panel
    Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of 
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law 
106-113, requires that we consult with an expert outside advisory panel 
composed of an appropriate selection of representatives of providers to 
annually review (and advise the Secretary concerning) the clinical 
integrity of the payment groups and their weights under the OPPS. In CY 
2000, based on section 1833(t)(9)(A) of the Act, the Secretary 
established the Advisory Panel on Ambulatory Payment Classification 
Groups (APC Panel) to fulfill this requirement. In CY 2011, based on 
section 222 of the Public Health Service Act, which gives discretionary 
authority to the Secretary to convene advisory councils and committees, 
the Secretary expanded the panel's scope to include the supervision of 
hospital outpatient therapeutic services in addition to the APC groups 
and weights. To reflect this new role of the panel, the Secretary 
changed the panel's name to the Advisory Panel on Hospital Outpatient 
Payment (the HOP Panel or the Panel). The HOP Panel is not restricted 
to using data compiled by CMS, and in conducting its review, it may use 
data collected or developed by organizations outside the Department.
2. Establishment of the Panel
    On November 21, 2000, the Secretary signed the initial charter 
establishing the Panel, and, at that time, named the APC Panel. This 
expert panel is composed of appropriate representatives of providers 
(currently employed full-time, not as consultants, in their respective 
areas of expertise) who review clinical data and advise CMS about the 
clinical integrity of the APC groups and their payment weights. Since 
CY 2012, the Panel also is charged with advising the Secretary on the 
appropriate level of supervision for individual hospital outpatient 
therapeutic services. The Panel is technical in nature, and it is 
governed by the provisions of the Federal Advisory Committee Act 
(FACA). The current charter specifies, among other requirements, that 
the Panel--
     May advise on the clinical integrity of Ambulatory Payment 
Classification (APC) groups and their associated weights;
     May advise on the appropriate supervision level for 
hospital outpatient services;
     May advise on OPPS APC rates for ASC covered surgical 
procedures;
     Continues to be technical in nature;
     Is governed by the provisions of the FACA;
     Has a Designated Federal Official (DFO); and
     Is chaired by a Federal Official designated by the 
Secretary.
    The Panel's charter was amended on November 15, 2011, renaming the 
Panel and expanding the Panel's authority to include supervision of 
hospital outpatient therapeutic services and to add critical access 
hospital (CAH) representation to its membership. The Panel's charter 
was also amended on November 6, 2014 (80 FR 23009), and the number of 
members was revised from up to 19 to up to 15 members. The Panel's 
current charter was approved on November 20, 2020, for a 2-year period.
    The current Panel membership and other information pertaining to 
the Panel, including its charter, Federal Register notices, membership, 
meeting dates, agenda topics, and meeting reports, can be viewed on the 
CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
    The Panel has held many meetings, with the last meeting taking 
place on August 31, 2020. Prior to each meeting, we publish a notice in 
the Federal Register to announce the meeting, new members, and any 
other changes of which the public should be aware. Beginning in CY 
2017, we have transitioned to one meeting per year (81 FR 31941). In CY 
2018, we published a Federal Register notice requesting nominations to 
fill vacancies on the Panel (83 FR 3715). As published in this notice, 
CMS is accepting nominations on a continuous basis.
    In addition, the Panel has established an administrative structure 
that, in part, currently includes the use of three subcommittee 
workgroups to provide preparatory meeting and subject support to the 
larger panel. The three current subcommittees include the following:
     APC Groups and Status Indicator Assignments Subcommittee, 
which advises and provides recommendations to the Panel on the 
appropriate status indicators to be assigned to HCPCS codes, including 
but not limited to whether a HCPCS code or a category of codes should 
be packaged or separately paid, as well as the appropriate APC 
assignment of HCPCS codes regarding services for which separate payment 
is made;
     Data Subcommittee, which is responsible for studying the 
data issues confronting the Panel and for recommending options for 
resolving them; and
     Visits and Observation Subcommittee, which reviews and 
makes recommendations to the Panel on all technical issues pertaining 
to observation services and hospital outpatient visits paid under the 
OPPS.
    Each of these workgroup subcommittees was established by a majority 
vote from the full Panel during a scheduled Panel meeting, and the 
Panel recommended at the August 31, 2020, meeting that the 
subcommittees continue. We accepted this recommendation.
    Discussions of the other recommendations made by the Panel at the 
August 31, 2020 Panel meeting, namely APC assignments for certain CPT 
codes, a comprehensive APC for skin substitute products, a 
comprehensive APC for autologous hematopoietic stem cell 
transplantation, and packaging policies, were discussed in relevant 
specific sections in the CY 2021 OPPS/ASC final rule with comment 
period (85 FR 85866). For discussions of earlier Panel meetings and 
recommendations, we refer readers to previously published OPPS/ASC 
proposed and final rules, the CMS website mentioned earlier in this 
section, and the FACA database at http://facadatabase.gov.

F. Public Comments Received on the CY 2020 OPPS/ASC Final Rule With 
Comment Period

    We received approximately 32 timely pieces of correspondence on the 
CY 2021 OPPS/ASC final rule with comment period that appeared in the 
Federal Register on December 2, 2020 (85 FR 85866), most of which were

[[Page 42026]]

outside of the scope of the final rule. In-scope comments related to 
the interim APC assignments and/or status indicators of new or 
replacement Level II HCPCS codes (identified with comment indicator 
``NI'' in OPPS Addendum B, ASC Addendum AA, and ASC Addendum BB to that 
final rule).

II. Proposed Updates Affecting OPPS Payments

A. Proposed Recalibration of APC Relative Payment Weights

1. Database Construction
a. Use of CY 2019 Data in the CY 2022 OPPS Ratesetting
    We primarily use two data sources in OPPS ratesetting: Claims data 
and cost report data. Our goal is always to use the best available data 
overall for ratesetting. Ordinarily, the best available full year of 
claims data would be 2 years prior to the calendar year that is the 
subject of the rulemaking. As discussed in further detail in Section 
X.E. of this CY 2022 OPPS/ASC proposed rule, given our concerns with CY 
2020 data as a result of the COVID-19 PHE, in general, we are proposing 
to use CY 2019 claims data and the data components related to it in 
establishing the CY 2022 OPPS.
b. Database Source and Methodology
    Section 1833(t)(9)(A) of the Act requires that the Secretary review 
not less often than annually and revise the relative payment weights 
for APCs. In the April 7, 2000 OPPS final rule with comment period (65 
FR 18482), we explained in detail how we calculated the relative 
payment weights that were implemented on August 1, 2000 for each APC 
group.
    For the CY 2022 OPPS, we propose to recalibrate the APC relative 
payment weights for services furnished on or after January 1, 2022, and 
before January 1, 2023 (CY 2022), using the same basic methodology that 
we described in the CY 2021 OPPS/ASC final rule with comment period (85 
FR 85873), using CY 2019 claims data. That is, we propose to 
recalibrate the relative payment weights for each APC based on claims 
and cost report data for hospital outpatient department (HOPD) services 
to construct a database for calculating APC group weights.
    For the purpose of recalibrating the proposed APC relative payment 
weights for CY 2022, we began with approximately 180 million final 
action claims (claims for which all disputes and adjustments have been 
resolved and payment has been made) for HOPD services furnished on or 
after January 1, 2019, and before January 1, 2020, before applying our 
exclusionary criteria and other methodological adjustments. After the 
application of those data processing changes, we used approximately 93 
million final action claims to develop the proposed CY 2022 OPPS 
payment weights. For exact numbers of claims used and additional 
details on the claims accounting process, we refer readers to the 
claims accounting narrative under supporting documentation for this 
proposed rule on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    Addendum N to this proposed rule (which is available via the 
internet on the CMS website) includes the proposed list of bypass codes 
for CY 2022. The proposed list of bypass codes contains codes that are 
reported on claims for services in CY 2019 and, therefore, includes 
codes that were in effect in CY 2019 and used for billing. We propose 
to retain deleted bypass codes on the proposed CY 2022 bypass list 
because these codes existed in CY 2019 and were covered OPD services in 
that period, and CY 2019 claims data were used to calculate proposed CY 
2022 payment rates. Keeping these deleted bypass codes on the bypass 
list potentially allows us to create more ``pseudo'' single procedure 
claims for ratesetting purposes. ``Overlap bypass codes'' that are 
members of the proposed multiple imaging composite APCs are identified 
by asterisks (*) in the third column of Addendum N to the proposed 
rule. HCPCS codes that we propose to add for CY 2022 are identified by 
asterisks (*) in the fourth column of Addendum N.
c. Proposed Calculation and Use of Cost-to-Charge Ratios (CCRs)
    For 2022, we propose to continue to use the hospital-specific 
overall ancillary and departmental cost-to-charge ratios (CCRs) to 
convert charges to estimated costs through application of a revenue 
code-to-cost center crosswalk. To calculate the APC costs on which the 
CY 2022 APC payment rates are based, we calculated hospital-specific 
overall ancillary CCRs and hospital-specific departmental CCRs for each 
hospital for which we had CY 2019 claims data by comparing these claims 
data to hospital cost reports available for the CY 2021 OPPS/ASC final 
rule with comment period ratesetting, which, in most cases, are from CY 
2019. For the proposed CY 2022 OPPS payment rates, we used the set of 
CY 2019 claims processed through June 30, 2020. We applied the 
hospital-specific CCR to the hospital's charges at the most detailed 
level possible, based on a revenue code-to-cost center crosswalk that 
contains a hierarchy of CCRs used to estimate costs from charges for 
each revenue code. To ensure the completeness of the revenue code-to-
cost center crosswalk, we reviewed changes to the list of revenue codes 
for CY 2019 (the year of claims data we used to calculate the proposed 
CY 2022 OPPS payment rates) and updates to the NUBC 2020 Data 
Specifications Manual. That crosswalk is available for review and 
continuous comment on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    In accordance with our longstanding policy, we calculate CCRs for 
the standard and nonstandard cost centers accepted by the electronic 
cost report database. In general, the most detailed level at which we 
calculate CCRs is the hospital-specific departmental level. For a 
discussion of the hospital-specific overall ancillary CCR calculation, 
we refer readers to the CY 2007 OPPS/ASC final rule with comment period 
(71 FR 67983 through 67985). The calculation of blood costs is a 
longstanding exception (since the CY 2005 OPPS) to this general 
methodology for calculation of CCRs used for converting charges to 
costs on each claim. This exception is discussed in detail in the CY 
2007 OPPS/ASC final rule with comment period and discussed further in 
section II.A.2.a.(1) of this proposed rule.
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74840 
through 74847), we finalized our policy of creating new cost centers 
and distinct CCRs for implantable devices, magnetic resonance imaging 
(MRIs), computed tomography (CT) scans, and cardiac catheterization. 
However, in response to comments we received from our CY 2014 OPPS/ASC 
proposed rule, we finalized a policy in the CY 2014 OPPS/ASC final rule 
with comment period (78 FR 74847) to remove claims from providers that 
use a cost allocation method of ``square feet'' to calculate CCRs used 
to estimate costs associated with the APCs for CT and MRI. As finalized 
in the CY 2020 OPPS/ASC final rule with comment period (84 FR 61152), 
beginning in CY 2021, we use all claims with valid CT and MRI cost 
center CCRs, including those that use a ``square feet'' cost allocation 
method, to estimate costs for the CT and MRI APCs.
2. Proposed Data Development and Calculation of Costs Used for 
Ratesetting
    In this section of this proposed rule, we discuss the use of claims 
to calculate the OPPS payment rates for CY 2022.

[[Page 42027]]

The Hospital OPPS page on the CMS website on which this proposed rule 
is posted (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html) provides an accounting of 
claims used in the development of the proposed payment rates. That 
accounting provides additional detail regarding the number of claims 
derived at each stage of the process. In addition, later in this 
section we discuss the file of claims that comprises the data set that 
is available upon payment of an administrative fee under a CMS data use 
agreement. The CMS website, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html, includes 
information about obtaining the ``OPPS Limited Data Set,'' which now 
includes the additional variables previously available only in the OPPS 
Identifiable Data Set, including ICD-10-CM diagnosis codes and revenue 
code payment amounts. This file is derived from the CY 2019 claims that 
were used to calculate the proposed payment rates for this CY 2022 
OPPS/ASC proposed rule.
    Previously, the OPPS established the scaled relative weights on 
which payments are based using APC median costs, a process described in 
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). 
However, as discussed in more detail in section II.A.2.f. of the CY 
2013 OPPS/ASC final rule with comment period (77 FR 68259 through 
68271), we finalized the use of geometric mean costs to calculate the 
relative weights on which the CY 2013 OPPS payment rates were based. 
While this policy changed the cost metric on which the relative 
payments are based, the data process in general remained the same under 
the methodologies that we used to obtain appropriate claims data and 
accurate cost information in determining estimated service cost. For 
2022, we propose to continue to use geometric mean costs to calculate 
the relative weights on which the proposed CY 2022 OPPS payment rates 
are based.
    We used the methodology described in sections II.A.2.a. through 
II.A.2.c. of this proposed rule to calculate the costs we used to 
establish the proposed relative payment weights used in calculating the 
OPPS payment rates for CY 2022 shown in Addenda A and B to this 
proposed rule (which are available via the internet on the CMS 
website). We refer readers to section II.A.4. of this proposed rule for 
a discussion of the conversion of APC costs to scaled payment weights.
    We note that under the OPPS, CY 2019 was the first year in which 
the claims data used for setting payment rates (CY 2017 data) contained 
lines with the modifier ``PN'', which indicates nonexcepted items and 
services furnished and billed by off-campus provider-based departments 
(PBDs) of hospitals. Because nonexcepted services are not paid under 
the OPPS, in the CY 2019 OPPS/ASC final rule with comment period (83 FR 
58832), we finalized a policy to remove those claim lines reported with 
modifier ``PN'' from the claims data used in ratesetting for the CY 
2019 OPPS and subsequent years. For the CY 2022 OPPS, we will continue 
to remove claim lines with modifier ``PN'' from the ratesetting 
process.
    For details of the claims accounting process used in this proposed 
rule, we refer readers to the claims accounting narrative under 
supporting documentation for this CY 2022 OPPS/ASC proposed rule on the 
CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
a. Proposed Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
    Since the implementation of the OPPS in August 2000, we have made 
separate payments for blood and blood products through APCs rather than 
packaging payment for them into payments for the procedures with which 
they are administered. Hospital payments for the costs of blood and 
blood products, as well as for the costs of collecting, processing, and 
storing blood and blood products, are made through the OPPS payments 
for specific blood product APCs.
    We propose to continue to establish payment rates for blood and 
blood products using our blood-specific CCR methodology, which utilizes 
actual or simulated CCRs from the most recently available hospital cost 
reports to convert hospital charges for blood and blood products to 
costs. This methodology has been our standard ratesetting methodology 
for blood and blood products since CY 2005. It was developed in 
response to data analysis indicating that there was a significant 
difference in CCRs for those hospitals with and without blood-specific 
cost centers, and past public comments indicating that the former OPPS 
policy of defaulting to the overall hospital CCR for hospitals not 
reporting a blood-specific cost center often resulted in an 
underestimation of the true hospital costs for blood and blood 
products. Specifically, to address the differences in CCRs and to 
better reflect hospitals' costs, we propose to continue to simulate 
blood CCRs for each hospital that does not report a blood cost center 
by calculating the ratio of the blood-specific CCRs to hospitals' 
overall CCRs for those hospitals that do report costs and charges for 
blood cost centers. We also propose to apply this mean ratio to the 
overall CCRs of hospitals not reporting costs and charges for blood 
cost centers on their cost reports to simulate blood-specific CCRs for 
those hospitals. We propose to calculate the costs upon which the 
proposed CY 2022 payment rates for blood and blood products are based 
using the actual blood-specific CCR for hospitals that reported costs 
and charges for a blood cost center and a hospital-specific, simulated 
blood-specific CCR for hospitals that did not report costs and charges 
for a blood cost center.
    We continue to believe that the hospital-specific, simulated blood-
specific, CCR methodology better responds to the absence of a blood-
specific CCR for a hospital than alternative methodologies, such as 
defaulting to the overall hospital CCR or applying an average blood-
specific CCR across hospitals. Because this methodology takes into 
account the unique charging and cost accounting structure of each 
hospital, we believe that it yields more accurate estimated costs for 
these products. We continue to believe that using this methodology in 
CY 2022 would result in costs for blood and blood products that 
appropriately reflect the relative estimated costs of these products 
for hospitals without blood cost centers and, therefore, for these 
blood products in general.
    We note that we defined a comprehensive APC (C-APC) as a 
classification for the provision of a primary service and all 
adjunctive services provided to support the delivery of the primary 
service. Under this policy, we include the costs of blood and blood 
products when calculating the overall costs of these C-APCs. We propose 
to continue to apply the blood-specific CCR methodology described in 
this section when calculating the costs of the blood and blood products 
that appear on claims with services assigned to the C-APCs. Because the 
costs of blood and blood products would be reflected in the overall 
costs of the C-APCs (and, as a result, in the proposed payment rates of 
the C-APCs), we propose not to make separate payments for blood and 
blood products when they appear on the same claims as services assigned 
to the C-APCs (we refer readers to the CY 2015 OPPS/ASC final rule with 
comment period (79 FR 66795 through 66796) for

[[Page 42028]]

more information about our policy not to make separate payments for 
blood and blood products when they appear on the same claims as 
services assigned to a C-APC).
    We refer readers to Addendum B of this proposed rule (which is 
available via the internet on the CMS website) for the proposed CY 2022 
payment rates for blood and blood products (which are generally 
identified with status indicator ``R''). For a more detailed discussion 
of the blood-specific CCR methodology, we refer readers to the CY 2005 
OPPS proposed rule (69 FR 50524 through 50525). For a full history of 
OPPS payment for blood and blood products, we refer readers to the CY 
2008 OPPS/ASC final rule with comment period (72 FR 66807 through 
66810).
    For CY 2022, we propose to continue to establish payment rates for 
blood and blood products using our blood-specific CCR methodology.
(2) Brachytherapy Sources
    Section 1833(t)(2)(H) of the Act mandates the creation of 
additional groups of covered OPD services that classify devices of 
brachytherapy consisting of a seed or seeds (or radioactive source) 
(``brachytherapy sources'') separately from other services or groups of 
services. The statute provides certain criteria for the additional 
groups. For the history of OPPS payment for brachytherapy sources, we 
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC 
final rule with comment period (77 FR 68240 through 68241). As we have 
stated in prior OPPS updates, we believe that adopting the general OPPS 
prospective payment methodology for brachytherapy sources is 
appropriate for a number of reasons (77 FR 68240). The general OPPS 
methodology uses costs based on claims data to set the relative payment 
weights for hospital outpatient services. This payment methodology 
results in more consistent, predictable, and equitable payment amounts 
per source across hospitals by averaging the extremely high and low 
values, in contrast to payment based on hospitals' charges adjusted to 
costs. We believe that the OPPS methodology, as opposed to payment 
based on hospitals' charges adjusted to cost, also would provide 
hospitals with incentives for efficiency in the provision of 
brachytherapy services to Medicare beneficiaries. Moreover, this 
approach is consistent with our payment methodology for the vast 
majority of items and services paid under the OPPS. We refer readers to 
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323 
through 70325) for further discussion of the history of OPPS payment 
for brachytherapy sources.
    For CY 2022, except where otherwise indicated, we propose to use 
the costs derived from CY 2019 claims data to set the proposed CY 2022 
payment rates for brachytherapy sources because CY 2019 is the year of 
data we propose to use to set the proposed payment rates for most other 
items and services that would be paid under the CY 2022 OPPS. With the 
exception of the proposed payment rate for brachytherapy source C2645 
(Brachytherapy planar source, palladium-103, per square millimeter) and 
brachytherapy source C2636 (Brachytherapy linear source, non-stranded, 
palladium-103, per 1 mm), we propose to base the payment rates for 
brachytherapy sources on the geometric mean unit costs for each source, 
consistent with the methodology that we propose for other items and 
services paid under the OPPS, as discussed in section II.A.2. of this 
proposed rule. We also propose to continue the other payment policies 
for brachytherapy sources that we finalized and first implemented in 
the CY 2010 OPPS/ASC final rule with comment period (74 FR 60537). We 
propose to pay for the stranded and nonstranded not otherwise specified 
(NOS) codes, HCPCS codes C2698 (Brachytherapy source, stranded, not 
otherwise specified, per source) and C2699 (Brachytherapy source, non-
stranded, not otherwise specified, per source), at a rate equal to the 
lowest stranded or nonstranded prospective payment rate for such 
sources, respectively, on a per-source basis (as opposed to, for 
example, a per mCi), which is based on the policy we established in the 
CY 2008 OPPS/ASC final rule with comment period (72 FR 66785). We also 
propose to continue the policy we first implemented in the CY 2010 
OPPS/ASC final rule with comment period (74 FR 60537) regarding payment 
for new brachytherapy sources for which we have no claims data, based 
on the same reasons we discussed in the CY 2008 OPPS/ASC final rule 
with comment period (72 FR 66786; which was delayed until January 1, 
2010 by section 142 of Pub. L. 110-275). Specifically, this policy is 
intended to enable us to assign new HCPCS codes for new brachytherapy 
sources to their own APCs, with prospective payment rates set based on 
our consideration of external data and other relevant information 
regarding the expected costs of the sources to hospitals. The proposed 
CY 2022 payment rates for brachytherapy sources are included in 
Addendum B to this proposed rule (which is available via the internet 
on the CMS website) and identified with status indicator ``U''.
    For CY 2018, we assigned status indicator ``U'' (Brachytherapy 
Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645 
(Brachytherapy planar source, palladium-103, per square millimeter) in 
the absence of claims data and established a payment rate using 
external data (invoice price) at $4.69 per mm\2\. For CY 2019, in the 
absence of sufficient claims data, we continued to establish a payment 
rate for C2645 at $4.69 per mm\2\. Our CY 2018 claims data available 
for the final CY 2020 OPPS/ASC final rule with comment period included 
two claims with a geometric mean cost for HCPCS code C2645 of $1.02 per 
mm\2\. In response to comments from stakeholders, we agreed with 
commenters that given the limited claims data available and a new 
outpatient indication for C2645, a payment rate for HCPCS code C2645 
based on the geometric mean cost of 1.02 per mm\2\ may not adequately 
reflect the cost of HCPCS code C2645. In the CY 2020 OPPS/ASC final 
rule with comment period, we finalized our policy to use our equitable 
adjustment authority under section 1833(t)(2)(E) of the Act, which 
states that the Secretary shall establish, in a budget neutral manner, 
other adjustments as determined to be necessary to ensure equitable 
payments, to maintain the CY 2019 payment rate of $4.69 per mm\2\ for 
HCPCS code C2645 for CY 2020. Similarly, in the absence of sufficient 
claims data to establish an APC payment rate, in the CY 2021 OPPS/ASC 
final rule with comment period, we finalized our policy to use our 
equitable adjustment authority under section 1833(t)(2)(E) of the Act 
to maintain the CY 2019 payment rate of $4.69 per mm\2\ for HCPCS code 
C2645 for CY 2021.
    As discussed in Section X.E. of this CY 2022 OPPS/ASC proposed 
rule, given our concerns with CY 2020 data as a result of the COVID-19 
PHE, in general we are proposing to use CY 2019 claims data and the 
data components related to it in establishing the CY 2022 OPPS. 
Therefore, we are proposing to use our equitable adjustment authority 
under section 1833(t)(2)(E) of the Act to maintain the CY 2019 payment 
rate of $4.69 per mm\2\ for HCPCS code C2645 for CY 2022.
    Additionally, for CY 2022 and subsequent calendar years, as 
discussed in Section X.C., we are proposing to establish a Low Volume 
APC policy for New Technology APCs, clinical APCs, and brachytherapy 
APCs. For these

[[Page 42029]]

APCs with fewer than 100 single claims that can be used for ratesetting 
purposes in the existing claims year, we are proposing to use up to 
four years of claims data to establish a payment rate for each item or 
service as we currently do for low volume services assigned to New 
Technology APCs. Further, we propose to calculate the cost for Low 
Volume APCs based on the greatest of the arithmetic mean cost, median 
cost, or geometric mean cost. We are proposing to designate 5 
brachytherapy APCs as Low Volume APCs for CY 2022. For more information 
on our Low Volume APC proposal, see Section X.C. of this CY 2022 OPPS/
ASC proposed rule.
    We continue to invite hospitals and other parties to submit 
recommendations to us for new codes to describe new brachytherapy 
sources. Such recommendations should be directed via email to 
[email protected] or by mail to the Division of Outpatient 
Care, Mail Stop C4-01-26, Centers for Medicare and Medicaid Services, 
7500 Security Boulevard, Baltimore, MD 21244. We will continue to add 
new brachytherapy source codes and descriptors to our systems for 
payment on a quarterly basis.
b. Comprehensive APCs (C-APCs) for CY 2022
(1) Background
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861 
through 74910), we finalized a comprehensive payment policy that 
packages payment for adjunctive and secondary items, services, and 
procedures into the most costly primary procedure under the OPPS at the 
claim level. The policy was finalized in CY 2014 but the effective date 
was delayed until January 1, 2015 to allow additional time for further 
analysis, opportunity for public comment, and systems preparation. The 
comprehensive APC (C-APC) policy was implemented effective January 1, 
2015, with modifications and clarifications in response to public 
comments received regarding specific provisions of the C-APC policy (79 
FR 66798 through 66810).
    A C-APC is defined as a classification for the provision of a 
primary service and all adjunctive services provided to support the 
delivery of the primary service. We established C-APCs as a category 
broadly for OPPS payment and implemented 25 C-APCs beginning in CY 2015 
(79 FR 66809 through 66810). In the CY 2016 OPPS/ASC final rule with 
comment period (80 FR 70332), we finalized 10 additional C-APCs to be 
paid under the existing C-APC payment policy and added 1 additional 
level to both the Orthopedic Surgery and Vascular Procedures clinical 
families, which increased the total number of C-APCs to 37 for CY 2016. 
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79584 
through 79585), we finalized another 25 C-APCs for a total of 62 C-
APCs. In the CY 2018 OPPS/ASC final rule with comment period, we did 
not change the total number of C-APCs from 62. In the CY 2019 OPPS/ASC 
final rule with comment period, we created 3 new C-APCs, increasing the 
total number to 65 (83 FR 58844 through 58846). In the CY 2020 OPPS/ASC 
final rule with comment period, we created two new C-APCs, increasing 
the total number to 67 C-APCs (84 FR 61158 through 61166). Most 
recently, in the CY 2021 OPPS/ASC final rule, we created two new C-
APCs, increasing the total number to 69 C-APCs (85 FR 85885).
    Under our C-APC policy, we designate a service described by a HCPCS 
code assigned to a C-APC as the primary service when the service is 
identified by OPPS status indicator ``J1''. When such a primary service 
is reported on a hospital outpatient claim, taking into consideration 
the few exceptions that are discussed below, we make payment for all 
other items and services reported on the hospital outpatient claim as 
being integral, ancillary, supportive, dependent, and adjunctive to the 
primary service (hereinafter collectively referred to as ``adjunctive 
services'') and representing components of a complete comprehensive 
service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services 
are packaged into the payments for the primary services. This results 
in a single prospective payment for each of the primary, comprehensive 
services based on the costs of all reported services at the claim 
level.
    Services excluded from the C-APC policy under the OPPS include 
services that are not covered OPD services, services that cannot by 
statute be paid for under the OPPS, and services that are required by 
statute to be separately paid. This includes certain mammography and 
ambulance services that are not covered OPD services in accordance with 
section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also 
are required by statute to receive separate payment under section 
1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which 
also require separate payment under section 1833(t)(6) of the Act; 
self-administered drugs (SADs) that are not otherwise packaged as 
supplies because they are not covered under Medicare Part B under 
section 1861(s)(2)(B) of the Act; and certain preventive services (78 
FR 74865 and 79 FR 66800 through 66801). A list of services excluded 
from the C-APC policy is included in Addendum J to this proposed rule 
(which is available via the internet on the CMS website).
    In the interim final rule with request for comments (IFC) entitled, 
``Additional Policy and Regulatory Revisions in Response to the COVID-
19 Public Health Emergency'', published on November 6, 2020, we stated 
that, effective for services furnished on or after the effective date 
of the IFC and until the end of the PHE for COVID-19, there is an 
exception to the OPPS C-APC policy to ensure separate payment for new 
COVID-19 treatments that meet certain criteria (85 FR 71158 through 
71160). Under this exception, any new COVID-19 treatment that meets the 
following two criteria will, for the remainder of the PHE for COVID-19, 
always be separately paid and will not be packaged into a C-APC when it 
is provided on the same claim as the primary C-APC service. First, the 
treatment must be a drug or biological product (which could include a 
blood product) authorized to treat COVID-19, as indicated in section 
``I. Criteria for Issuance of Authorization'' of the FDA letter of 
authorization for the emergency use of the drug or biological product, 
or the drug or biological product must be approved by the FDA for 
treating COVID-19. Second, the emergency use authorization (EUA) for 
the drug or biological product (which could include a blood product) 
must authorize the use of the product in the outpatient setting or not 
limit its use to the inpatient setting, or the product must be approved 
by the FDA to treat COVID-19 disease and not limit its use to the 
inpatient setting. For further information regarding the exception to 
the C-APC policy for COVID-19 treatments, please refer to the November 
6, 2020 IFC (85 FR 71158 through 71160).
    The C-APC policy payment methodology set forth in the CY 2014 OPPS/
ASC final rule with comment period for the C-APCs and modified and 
implemented beginning in CY 2015 is summarized as follows (78 FR 74887 
and 79 FR 66800):
    Basic Methodology. As stated in the CY 2015 OPPS/ASC final rule 
with comment period, we define the C-APC payment policy as including 
all covered OPD services on a hospital outpatient claim reporting a 
primary service that is assigned to status indicator ``J1'', excluding 
services that are not covered

[[Page 42030]]

OPD services or that cannot by statute be paid for under the OPPS. 
Services and procedures described by HCPCS codes assigned to status 
indicator ``J1'' are assigned to C-APCs based on our usual APC 
assignment methodology by evaluating the geometric mean costs of the 
primary service claims to establish resource similarity and the 
clinical characteristics of each procedure to establish clinical 
similarity within each APC.
    In the CY 2016 OPPS/ASC final rule with comment period, we expanded 
the C-APC payment methodology to qualifying extended assessment and 
management encounters through the ``Comprehensive Observation 
Services'' C-APC (C-APC 8011). Services within this APC are assigned 
status indicator ``J2''. Specifically, we make a payment through C-APC 
8011 for a claim that:
     Does not contain a procedure described by a HCPCS code to 
which we have assigned status indicator ``T;''
     Contains 8 or more units of services described by HCPCS 
code G0378 (Hospital observation services, per hour);
     Contains services provided on the same date of service or 
1 day before the date of service for HCPCS code G0378 that are 
described by one of the following codes: HCPCS code G0379 (Direct 
admission of patient for hospital observation care) on the same date of 
service as HCPCS code G0378; CPT code 99281 (Emergency department visit 
for the evaluation and management of a patient (Level 1)); CPT code 
99282 (Emergency department visit for the evaluation and management of 
a patient (Level 2)); CPT code 99283 (Emergency department visit for 
the evaluation and management of a patient (Level 3)); CPT code 99284 
(Emergency department visit for the evaluation and management of a 
patient (Level 4)); CPT code 99285 (Emergency department visit for the 
evaluation and management of a patient (Level 5)) or HCPCS code G0380 
(Type B emergency department visit (Level 1)); HCPCS code G0381 (Type B 
emergency department visit (Level 2)); HCPCS code G0382 (Type B 
emergency department visit (Level 3)); HCPCS code G0383 (Type B 
emergency department visit (Level 4)); HCPCS code G0384 (Type B 
emergency department visit (Level 5)); CPT code 99291 (Critical care, 
evaluation and management of the critically ill or critically injured 
patient; first 30-74 minutes); or HCPCS code G0463 (Hospital outpatient 
clinic visit for assessment and management of a patient); and
     Does not contain services described by a HCPCS code to 
which we have assigned status indicator ``J1''.
    The assignment of status indicator ``J2'' to a specific set of 
services performed in combination with each other allows for all other 
OPPS payable services and items reported on the claim (excluding 
services that are not covered OPD services or that cannot by statute be 
paid for under the OPPS) to be deemed adjunctive services representing 
components of a comprehensive service and resulting in a single 
prospective payment for the comprehensive service based on the costs of 
all reported services on the claim (80 FR 70333 through 70336).
    Services included under the C-APC payment packaging policy, that 
is, services that are typically adjunctive to the primary service and 
provided during the delivery of the comprehensive service, include 
diagnostic procedures, laboratory tests, and other diagnostic tests and 
treatments that assist in the delivery of the primary procedure; visits 
and evaluations performed in association with the procedure; uncoded 
services and supplies used during the service; durable medical 
equipment as well as prosthetic and orthotic items and supplies when 
provided as part of the outpatient service; and any other components 
reported by HCPCS codes that represent services that are provided 
during the complete comprehensive service (78 FR 74865 and 79 FR 
66800).
    In addition, payment for hospital outpatient department services 
that are similar to therapy services and delivered either by therapists 
or nontherapists is included as part of the payment for the packaged 
complete comprehensive service. These services that are provided during 
the perioperative period are adjunctive services and are deemed not to 
be therapy services as described in section 1834(k) of the Act, 
regardless of whether the services are delivered by therapists or other 
nontherapist health care workers. We have previously noted that therapy 
services are those provided by therapists under a plan of care in 
accordance with section 1835(a)(2)(C) and section 1835(a)(2)(D) of the 
Act and are paid for under section 1834(k) of the Act, subject to 
annual therapy caps as applicable (78 FR 74867 and 79 FR 66800). 
However, certain other services similar to therapy services are 
considered and paid for as hospital outpatient department services. 
Payment for these nontherapy outpatient department services that are 
reported with therapy codes and provided with a comprehensive service 
is included in the payment for the packaged complete comprehensive 
service. We note that these services, even though they are reported 
with therapy codes, are hospital outpatient department services and not 
therapy services. We refer readers to the July 2016 OPPS Change Request 
9658 (Transmittal 3523) for further instructions on reporting these 
services in the context of a C-APC service.
    Items included in the packaged payment provided in conjunction with 
the primary service also include all drugs, biologicals, and 
radiopharmaceuticals, regardless of cost, except those drugs with pass-
through payment status and SADs, unless they function as packaged 
supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We 
refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit 
Policy Manual for a description of our policy on SADs treated as 
hospital outpatient supplies, including lists of SADs that function as 
supplies and those that do not function as supplies.
    We define each hospital outpatient claim reporting a single unit of 
a single primary service assigned to status indicator ``J1'' as a 
single ``J1'' unit procedure claim (78 FR 74871 and 79 FR 66801). Line 
item charges for services included on the C-APC claim are converted to 
line item costs, which are then summed to develop the estimated APC 
costs. These claims are then assigned one unit of the service with 
status indicator ``J1'' and later used to develop the geometric mean 
costs for the C-APC relative payment weights. (We note that we use the 
term ``comprehensive'' to describe the geometric mean cost of a claim 
reporting ``J1'' service(s) or the geometric mean cost of a C-APC, 
inclusive of all of the items and services included in the C-APC 
service payment bundle.) Charges for services that would otherwise be 
separately payable are added to the charges for the primary service. 
This process differs from our traditional cost accounting methodology 
only in that all such services on the claim are packaged (except 
certain services as described above). We apply our standard data trims, 
which exclude claims with extremely high primary units or extreme 
costs.
    The comprehensive geometric mean costs are used to establish 
resource similarity and, along with clinical similarity, dictate the 
assignment of the primary services to the C-APCs. We establish a 
ranking of each primary service (single unit only) to be assigned to 
status indicator ``J1'' according to its comprehensive geometric mean 
costs. For the minority of claims reporting more than one primary 
service assigned to status indicator ``J1'' or units thereof,

[[Page 42031]]

we identify one ``J1'' service as the primary service for the claim 
based on our cost-based ranking of primary services. We then assign 
these multiple ``J1'' procedure claims to the C-APC to which the 
service designated as the primary service is assigned. If the reported 
``J1'' services on a claim map to different C-APCs, we designate the 
``J1'' service assigned to the C-APC with the highest comprehensive 
geometric mean cost as the primary service for that claim. If the 
reported multiple ``J1'' services on a claim map to the same C-APC, we 
designate the most costly service (at the HCPCS code level) as the 
primary service for that claim. This process results in initial 
assignments of claims for the primary services assigned to status 
indicator ``J1'' to the most appropriate C-APCs based on both single 
and multiple procedure claims reporting these services and clinical and 
resource homogeneity.
    Complexity Adjustments. We use complexity adjustments to provide 
increased payment for certain comprehensive services. We apply a 
complexity adjustment by promoting qualifying paired ``J1'' service 
code combinations or paired code combinations of ``J1'' services and 
certain add-on codes (as described further below) from the originating 
C-APC (the C-APC to which the designated primary service is first 
assigned) to the next higher paying C-APC in the same clinical family 
of C-APCs. We apply this type of complexity adjustment when the paired 
code combination represents a complex, costly form or version of the 
primary service according to the following criteria:
     Frequency of 25 or more claims reporting the code 
combination (frequency threshold); and
     Violation of the 2 times rule, as stated in section 
1833(t)(2) of the Act and section III.B.2. of this proposed rule, in 
the originating C-APC (cost threshold).
    These criteria identify paired code combinations that occur 
commonly and exhibit materially greater resource requirements than the 
primary service. The CY 2017 OPPS/ASC final rule with comment period 
(81 FR 79582) included a revision to the complexity adjustment 
eligibility criteria. Specifically, we finalized a policy to 
discontinue the requirement that a code combination (that qualifies for 
a complexity adjustment by satisfying the frequency and cost criteria 
thresholds described above) also not create a 2 times rule violation in 
the higher level or receiving APC.
    After designating a single primary service for a claim, we evaluate 
that service in combination with each of the other procedure codes 
reported on the claim assigned to status indicator ``J1'' (or certain 
add-on codes) to determine if there are paired code combinations that 
meet the complexity adjustment criteria. For a new HCPCS code, we 
determine initial C-APC assignment and qualification for a complexity 
adjustment using the best available information, crosswalking the new 
HCPCS code to a predecessor code(s) when appropriate.
    Once we have determined that a particular code combination of 
``J1'' services (or combinations of ``J1'' services reported in 
conjunction with certain add-on codes) represents a complex version of 
the primary service because it is sufficiently costly, frequent, and a 
subset of the primary comprehensive service overall according to the 
criteria described above, we promote the claim including the complex 
version of the primary service as described by the code combination to 
the next higher cost C-APC within the clinical family, unless the 
primary service is already assigned to the highest cost APC within the 
C-APC clinical family or assigned to the only C-APC in a clinical 
family. We do not create new APCs with a comprehensive geometric mean 
cost that is higher than the highest geometric mean cost (or only) C-
APC in a clinical family just to accommodate potential complexity 
adjustments. Therefore, the highest payment for any claim including a 
code combination for services assigned to a C-APC would be the highest 
paying C-APC in the clinical family (79 FR 66802).
    We package payment for all add-on codes into the payment for the C-
APC. However, certain primary service add-on combinations may qualify 
for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final 
rule with comment period (80 FR 70331), all add-on codes that can be 
appropriately reported in combination with a base code that describes a 
primary ``J1'' service are evaluated for a complexity adjustment.
    To determine which combinations of primary service codes reported 
in conjunction with an add-on code may qualify for a complexity 
adjustment for 2022, we propose to apply the frequency and cost 
criteria thresholds discussed above, testing claims reporting one unit 
of a single primary service assigned to status indicator ``J1'' and any 
number of units of a single add-on code for the primary ``J1'' service. 
If the frequency and cost criteria thresholds for a complexity 
adjustment are met and reassignment to the next higher cost APC in the 
clinical family is appropriate (based on meeting the criteria outlined 
above), we make a complexity adjustment for the code combination; that 
is, we reassign the primary service code reported in conjunction with 
the add-on code to the next higher cost C-APC within the same clinical 
family of C-APCs. As previously stated, we package payment for add-on 
codes into the C-APC payment rate. If any add-on code reported in 
conjunction with the ``J1'' primary service code does not qualify for a 
complexity adjustment, payment for the add-on service continues to be 
packaged into the payment for the primary service and is not reassigned 
to the next higher cost C-APC. We list the complexity adjustments for 
``J1'' and add-on code combinations for CY 2022, along with all of the 
other proposed complexity adjustments, in Addendum J to this CY 2022 
OPPS/ASC proposed rule (which is available via the internet on the CMS 
website).
    Addendum J to this proposed rule includes the cost statistics for 
each code combination that would qualify for a complexity adjustment 
(including primary code and add-on code combinations). Addendum J to 
this proposed rule also contains summary cost statistics for each of 
the paired code combinations that describe a complex code combination 
that would qualify for a complexity adjustment and are proposed to be 
reassigned to the next higher cost C-APC within the clinical family. 
The combined statistics for all proposed reassigned complex code 
combinations are represented by an alphanumeric code with the first 4 
digits of the designated primary service followed by a letter. For 
example, the proposed geometric mean cost listed in Addendum J for the 
code combination described by complexity adjustment assignment 3320R, 
which is assigned to C-APC 5224 (Level 4 Pacemaker and Similar 
Procedures), includes all paired code combinations that are proposed to 
be reassigned to C-APC 5224 when CPT code 33208 is the primary code. 
Providing the information contained in Addendum J to this proposed rule 
allows stakeholders the opportunity to better assess the impact 
associated with the proposed reassignment of claims with each of the 
paired code combinations eligible for a complexity adjustment.

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(2) Exclusion of Procedures Assigned to New Technology APCs From the C-
APC Policy
    Services that are assigned to New Technology APCs are typically new 
procedures that do not have sufficient claims history to establish an 
accurate payment for the procedures. Beginning in CY 2002, we retain 
services within New Technology APC groups until we gather sufficient 
claims data to enable us to assign the service to an appropriate 
clinical APC. This policy allows us to move a service from a New 
Technology APC in less than 2 years if sufficient data are available. 
It also allows us to retain a service in a New Technology APC for more 
than 2 years if sufficient data upon which to base a decision for 
reassignment have not been collected (82 FR 59277).
    The C-APC payment policy packages payment for adjunctive and 
secondary items, services, and procedures into the most costly primary 
procedure under the OPPS at the claim level. Prior to CY 2019, when a 
procedure assigned to a New Technology APC was included on the claim 
with a primary procedure, identified by OPPS status indicator ``J1'', 
payment for the new technology service was typically packaged into the 
payment for the primary procedure. Because the new technology service 
was not separately paid in this scenario, the overall number of single 
claims available to determine an appropriate clinical APC for the new 
service was reduced. This was contrary to the objective of the New 
Technology APC payment policy, which is to gather sufficient claims 
data to enable us to assign the service to an appropriate clinical APC.
    To address this issue and ensure that there is sufficient claims 
data for services assigned to New Technology APCs, in the CY 2019 OPPS/
ASC final rule with comment period (83 FR 58847), we finalized 
excluding payment for any procedure that is assigned to a New 
Technology APC (APCs 1491 through 1599 and APCs 1901 through 1908) from 
being packaged when included on a claim with a ``J1'' service assigned 
to a C-APC. In the CY 2020 OPPS/ASC final rule with comment period, we 
finalized that payment for services assigned to a New Technology APC 
would be excluded from being packaged into the payment for 
comprehensive observation services assigned status indicator ``J2'' 
when they are included on a claim with a ``J2'' service starting in CY 
2020 (84 FR 61167). We proposed to continue to exclude payment for any 
procedure that is assigned to a New Technology APC (APCs 1491 through 
1599 and APCs 1901 through 1908) from being packaged when included on a 
claim with a ``J1'' or ``J2'' service assigned to a C-APC.
(3) Additional C-APCs for CY 2022
    For CY 2022 and subsequent years, we propose to continue to apply 
the C-APC payment policy methodology. We refer readers to the CY 2017 
OPPS/ASC final rule with comment period (81 FR 79583) for a discussion 
of the C-APC payment policy methodology and revisions.
    Each year, in accordance with section 1833(t)(9)(A) of the Act, we 
review and revise the services within each APC group and the APC 
assignments under the OPPS. As a result of our annual review of the 
services and the APC assignments under the OPPS, we are not proposing 
to convert any standard APCs to C-APCs in CY 2022, thus we propose that 
the number of C-APCs for CY 2022 would be the same as the number for CY 
2021, which is 69 C-APCs.
    Table 1 lists the proposed C-APCs for CY 2022, all of which were 
established in past rules. All C-APCs are displayed in Addendum J to 
this proposed rule (which is available via the internet on the CMS 
website). Addendum J to this proposed rule also contains all of the 
data related to the C-APC payment policy methodology, including the 
list of complexity adjustments and other information.
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c. Proposed Calculation of Composite APC Criteria-Based Costs
    As discussed in the CY 2008 OPPS/ASC final rule with comment period 
(72 FR 66613), we believe it is important that the OPPS enhance 
incentives for hospitals to provide necessary, high quality care as 
efficiently as possible. For CY 2008, we developed composite APCs to 
provide a single payment for groups of services that are typically 
performed together during a single clinical encounter and that result 
in the provision of a complete service.

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Combining payment for multiple, independent services into a single OPPS 
payment in this way enables hospitals to manage their resources with 
maximum flexibility by monitoring and adjusting the volume and 
efficiency of services themselves. An additional advantage to the 
composite APC model is that we can use data from correctly coded 
multiple procedure claims to calculate payment rates for the specified 
combinations of services, rather than relying upon single procedure 
claims which may be low in volume and/or incorrectly coded. Under the 
OPPS, we currently have composite policies for mental health services 
and multiple imaging services. (We note that, in the CY 2018 OPPS/ASC 
final rule with comment period, we finalized a policy to delete the 
composite APC 8001 (LDR Prostate Brachytherapy Composite) for CY 2018 
and subsequent years.) We refer readers to the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66611 through 66614 and 66650 through 
66652) for a full discussion of the development of the composite APC 
methodology, and the CY 2012 OPPS/ASC final rule with comment period 
(76 FR 74163) and the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 59241 through 59242 and 59246 through 52950) for more recent 
background.
(1) Mental Health Services Composite APC
    We propose to continue our longstanding policy of limiting the 
aggregate payment for specified less resource-intensive mental health 
services furnished on the same date to the payment for a day of partial 
hospitalization services provided by a hospital, which we consider to 
be the most resource-intensive of all outpatient mental health 
services. We refer readers to the April 7, 2000 OPPS final rule with 
comment period (65 FR 18452 through 18455) for the initial discussion 
of this longstanding policy and the CY 2012 OPPS/ASC final rule with 
comment period (76 FR 74168) for more recent background.
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79588 
through 79589), we finalized a policy to combine the existing Level 1 
and Level 2 hospital-based PHP APCs into a single hospital-based PHP 
APC, and thereby discontinue APCs 5861 (Level 1--Partial 
Hospitalization (3 services) for Hospital-Based PHPs) and 5862 (Level--
2 Partial Hospitalization (4 or more services) for Hospital-Based PHPs) 
and replace them with APC 5863 (Partial Hospitalization (3 or more 
services per day)).
    In the CY 2018 OPPS/ASC proposed rule and final rule with comment 
period (82 FR 33580 through 33581 and 59246 through 59247, 
respectively), we proposed and finalized the policy for CY 2018 and 
subsequent years that, when the aggregate payment for specified mental 
health services provided by one hospital to a single beneficiary on a 
single date of service, based on the payment rates associated with the 
APCs for the individual services, exceeds the maximum per diem payment 
rate for partial hospitalization services provided by a hospital, those 
specified mental health services will be paid through composite APC 
8010 (Mental Health Services Composite). In addition, we set the 
payment rate for composite APC 8010 for CY 2018 at the same payment 
rate that will be paid for APC 5863, which is the maximum partial 
hospitalization per diem payment rate for a hospital, and finalized a 
policy that the hospital will continue to be paid the payment rate for 
composite APC 8010. Under this policy, the I/OCE will continue to 
determine whether to pay for these specified mental health services 
individually, or to make a single payment at the same payment rate 
established for APC 5863 for all of the specified mental health 
services furnished by the hospital on that single date of service. We 
continue to believe that the costs associated with administering a 
partial hospitalization program at a hospital represent the most 
resource intensive of all outpatient mental health services. Therefore, 
we do not believe that we should pay more for mental health services 
under the OPPS than the highest partial hospitalization per diem 
payment rate for hospitals.
    We propose that when the aggregate payment for specified mental 
health services provided by one hospital to a single beneficiary on a 
single date of service, based on the payment rates associated with the 
APCs for the individual services, exceeds the maximum per diem payment 
rate for partial hospitalization services provided by a hospital, those 
specified mental health services would be paid through composite APC 
8010 for CY 2022. In addition, we propose to set the proposed payment 
rate for composite APC 8010 at the same payment rate that we proposed 
for APC 5863, which is the maximum partial hospitalization per diem 
payment rate for a hospital, and that the hospital continue to be paid 
the proposed payment rate for composite APC 8010.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 
8008)
    Effective January 1, 2009, we provide a single payment each time a 
hospital submits a claim for more than one imaging procedure within an 
imaging family on the same date of service, to reflect and promote the 
efficiencies hospitals can achieve when performing multiple imaging 
procedures during a single session (73 FR 41448 through 41450). We 
utilize three imaging families based on imaging modality for purposes 
of this methodology: (1) Ultrasound; (2) computed tomography (CT) and 
computed tomographic angiography (CTA); and (3) magnetic resonance 
imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes 
subject to the multiple imaging composite policy and their respective 
families are listed in Table 2 below.
    While there are three imaging families, there are five multiple 
imaging composite APCs due to the statutory requirement under section 
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging 
services provided with and without contrast. While the ultrasound 
procedures included under the policy do not involve contrast, both CT/
CTA and MRI/MRA scans can be provided either with or without contrast. 
The five multiple imaging composite APCs established in CY 2009 are:
     APC 8004 (Ultrasound Composite);
     APC 8005 (CT and CTA without Contrast Composite);
     APC 8006 (CT and CTA with Contrast Composite);
     APC 8007 (MRI and MRA without Contrast Composite); and
     APC 8008 (MRI and MRA with Contrast Composite).
    We define the single imaging session for the ``with contrast'' 
composite APCs as having at least one or more imaging procedures from 
the same family performed with contrast on the same date of service. 
For example, if the hospital performs an MRI without contrast during 
the same session as at least one other MRI with contrast, the hospital 
will receive payment based on the payment rate for APC 8008, the ``with 
contrast'' composite APC.
    We make a single payment for those imaging procedures that qualify 
for payment based on the composite APC payment rate, which includes any 
packaged services furnished on the same date of service. The standard 
(noncomposite) APC assignments continue to apply for single imaging 
procedures and multiple imaging

[[Page 42036]]

procedures performed across families. For a full discussion of the 
development of the multiple imaging composite APC methodology, we refer 
readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 
68559 through 68569).
    For CY 2022, we propose to continue to pay for all multiple imaging 
procedures within an imaging family performed on the same date of 
service using the multiple imaging composite APC payment methodology. 
We continue to believe that this policy would reflect and promote the 
efficiencies hospitals can achieve when performing multiple imaging 
procedures during a single session.
    For CY 2022, except where otherwise indicated, we propose to use 
the costs derived from CY 2019 claims data to set the proposed CY 2022 
payment rates. Therefore, for CY 2022, the payment rates for the five 
multiple imaging composite APCs (APCs 8004, 8005, 8006, 8007, and 8008) 
are based on proposed geometric mean costs calculated from CY 2019 
claims available for this CY 2022 OPPS/ASC proposed rule that qualified 
for composite payment under the current policy (that is, those claims 
reporting more than one procedure within the same family on a single 
date of service). To calculate the proposed geometric mean costs, we 
used the same methodology that we have used to calculate the geometric 
mean costs for these composite APCs since CY 2014, as described in the 
CY 2014 OPPS/ASC final rule with comment period (78 FR 74918). The 
imaging HCPCS codes referred to as ``overlap bypass codes'' that we 
removed from the bypass list for purposes of calculating the proposed 
multiple imaging composite APC geometric mean costs, in accordance with 
our established methodology as stated in the CY 2014 OPPS/ASC final 
rule with comment period (78 FR 74918), are identified by asterisks in 
Addendum N to this CY 2022 OPPS/ASC proposed rule (which is available 
via the internet on the CMS website) and are discussed in more detail 
in section II.A.1.b. of this CY 2022 OPPS/ASC proposed rule.
    For this CY 2022 OPPS/ASC proposed rule, we were able to identify 
approximately 1.04 million ``single session'' claims out of an 
estimated 2.2 million potential claims for payment through composite 
APCs from our ratesetting claims data, which represents approximately 
47 percent of all eligible claims, to calculate the proposed CY 2022 
geometric mean costs for the multiple imaging composite APCs. Table 2 
of this CY 2022 OPPS/ASC proposed rule lists the proposed HCPCS codes 
that would be subject to the multiple imaging composite APC policy and 
their respective families and approximate composite APC proposed 
geometric mean costs for CY 2022.
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3. Proposed Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
    Like other prospective payment systems, the OPPS relies on the 
concept of averaging to establish a payment rate for services. The 
payment may be more or less than the estimated cost of providing a 
specific service or a bundle of specific services for a particular 
beneficiary. The OPPS packages payments for multiple interrelated items 
and services into a single payment to create incentives for hospitals 
to furnish services most efficiently and to manage their resources with 
maximum flexibility. Our packaging policies support our strategic goal 
of using larger payment bundles in the OPPS to maximize hospitals' 
incentives to provide care in the most efficient manner. For example, 
where there are a variety of devices, drugs, items, and supplies that 
could be used to furnish a service, some of which are more costly than 
others, packaging encourages hospitals to use the most cost efficient 
item that meets the patient's needs, rather than to routinely use a 
more expensive item, which may occur if separate payment is provided 
for the item.
    Packaging also encourages hospitals to effectively negotiate with 
manufacturers and suppliers to reduce the purchase price of items and 
services

[[Page 42041]]

or to explore alternative group purchasing arrangements, thereby 
encouraging the most economical health care delivery. Similarly, 
packaging encourages hospitals to establish protocols that ensure that 
necessary services are furnished, while scrutinizing the services 
ordered by practitioners to maximize the efficient use of hospital 
resources. Packaging payments into larger payment bundles promotes the 
predictability and accuracy of payment for services over time. Finally, 
packaging may reduce the importance of refining service-specific 
payment because packaged payments include costs associated with higher 
cost cases requiring many ancillary items and services and lower cost 
cases requiring fewer ancillary items and services. Because packaging 
encourages efficiency and is an essential component of a prospective 
payment system, packaging payments for items and services that are 
typically integral, ancillary, supportive, dependent, or adjunctive to 
a primary service has been a fundamental part of the OPPS since its 
implementation in August 2000. For an extensive discussion of the 
history and background of the OPPS packaging policy, we refer readers 
to the CY 2000 OPPS final rule (65 FR 18434), the CY 2008 OPPS/ASC 
final rule with comment period (72 FR 66580), the CY 2014 OPPS/ASC 
final rule with comment period (78 FR 74925), the CY 2015 OPPS/ASC 
final rule with comment period (79 FR 66817), the CY 2016 OPPS/ASC 
final rule with comment period (80 FR 70343), the CY 2017 OPPS/ASC 
final rule with comment period (81 FR 79592), the CY 2018 OPPS/ASC 
final rule with comment period (82 FR 59250), the CY 2019 OPPS/ASC 
final rule with comment period (83 FR 58854), the CY 2020 OPPS/ASC 
final rule with comment period (84 FR 61173), and the CY 2021 OPPS/ASC 
final rule with comment period (85 FR 85894). As we continue to develop 
larger payment groups that more broadly reflect services provided in an 
encounter or episode of care, we have expanded the OPPS packaging 
policies. Most, but not necessarily all, categories of items and 
services currently packaged in the OPPS are listed in 42 CFR 419.2(b). 
Our overarching goal is to make payments for all services under the 
OPPS more consistent with those of a prospective payment system and 
less like those of a per-service fee schedule, which pays separately 
for each coded item. As a part of this effort, we have continued to 
examine the payment for items and services provided under the OPPS to 
determine which OPPS services can be packaged to further achieve the 
objective of advancing the OPPS toward a more prospective payment 
system.
    For CY 2022, we examined the items and services currently provided 
under the OPPS, reviewing categories of integral, ancillary, 
supportive, dependent, or adjunctive items and services for which we 
believe payment would be appropriately packaged into payment for the 
primary service that they support. Specifically, we examined the HCPCS 
code definitions (including CPT code descriptors) and hospital 
outpatient department billing patterns to determine whether there were 
categories of codes for which packaging would be appropriate according 
to existing OPPS packaging policies or a logical expansion of those 
existing OPPS packaging policies.
    For CY 2022, we propose no changes to the overall packaging policy 
previously discussed. We propose to continue to conditionally package 
the costs of selected newly identified ancillary services into payment 
for a primary service where we believe that the packaged item or 
service is integral, ancillary, supportive, dependent, or adjunctive to 
the provision of care that was reported by the primary service HCPCS 
code. Below we discuss a proposed change to an ASC payment system 
packaging policy for CY 2022 and solicit comment on potential 
additional changes to that policy and application of that policy to the 
OPPS.
b. Proposed Payment Policy for Non-Opioid Pain Management Drugs and 
Biologicals That Function as Surgical Supplies Under the ASC Payment 
System
(1) Background on OPPS/ASC Non-Opioid Pain Management Packaging 
Policies
    In the CY 2018 OPPS/ASC proposed rule (82 FR 33588), within the 
framework of existing packaging categories, such as drugs that function 
as supplies in a surgical procedure or diagnostic test or procedure, we 
requested stakeholder feedback on common clinical scenarios involving 
currently packaged items and services described by HCPCS codes that 
stakeholders believe should not be packaged under the OPPS. We also 
expressed interest in stakeholder feedback on common clinical scenarios 
involving separately payable HCPCS codes for which payment would be 
most appropriately packaged under the OPPS. Commenters who responded to 
the CY 2018 OPPS/ASC proposed rule expressed a variety of views on 
packaging under the OPPS. While several commenters were in support of 
maintaining packaging policies, most of the public comments ranged from 
requests to unpackage most items and services that are unconditionally 
packaged under the OPPS, including drugs and devices, to specific 
requests for separate payment for a particular drug or device.
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
52485), we reiterated our position with regard to payment for 
Exparel[supreg], a non-opioid analgesic that functions as a surgical 
supply, stating that we believed that payment for this drug is 
appropriately packaged with the primary surgical procedure. We also 
stated in the CY 2018 OPPS/ASC final rule with comment period that we 
would continue to explore and evaluate packaging policies under the 
OPPS and consider these policies in future rulemaking.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 
58855), we explained that, in addition to stakeholder feedback 
regarding OPPS packaging policies, the President's Commission on 
Combating Drug Addiction and the Opioid Crisis (the Commission)\1\ had 
recently recommended that CMS examine payment policies for certain 
drugs that function as a supply, specifically non-opioid pain 
management treatments. The Commission was established in 2017 to study 
the scope and effectiveness of the Federal response to drug addiction 
and the opioid crisis and to make recommendations to the President for 
improving the Federal response to the crisis. The Commission's report 
included a recommendation for CMS to ``. . . review and modify 
ratesetting policies that discourage the use of non-opioid treatments 
for pain, such as certain bundled payments that make alternative 
treatment options cost prohibitive for hospitals and doctors, 
particularly those options for treating immediate postsurgical pain. . 
. .'' We explained that, as discussed in the CY 2019 OPPS/ASC proposed 
rule (83 FR 37068 through 37071), in response to stakeholder comments 
on the CY 2018 OPPS/ASC proposed rule and in light of the 
recommendations regarding payment policies for certain drugs, we had 
recently evaluated the impact of our packaging policy for drugs that 
function as a supply when used in a surgical

[[Page 42042]]

procedure on the utilization of these drugs in both the hospital 
outpatient department and the ASC setting. We stated that, although we 
found increases in utilization of Exparel when it was paid under the 
OPPS, we noticed decreased utilization of Exparel under the ASC payment 
system. Accordingly, in the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 58855 through 58860), we finalized a policy to unpackage 
and pay separately at ASP plus 6 percent for non-opioid pain management 
drugs that function as surgical supplies when they are furnished in the 
ASC setting for CY 2019, due to decreased utilization in the ASC 
setting. Historically, we stated that we consider all items related to 
the surgical outcome and provided during the hospital stay in which the 
surgery is performed, including postsurgical pain management drugs, to 
be part of the surgery for purposes of our drug and biological surgical 
supply packaging policy (79 FR 66875).
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    On October 24, 2018, the Substance Use-Disorder Prevention that 
Promotes Opioid Recovery and Treatment for Patients and Communities 
(SUPPORT) Act (Pub. L. 115-271) was enacted. Section 1833(t)(22)(A)(i) 
of the Act, as added by section 6082(a) of the SUPPORT Act, states that 
the Secretary must review payments under the OPPS for opioids and 
evidence-based non-opioid alternatives for pain management (including 
drugs and devices, nerve blocks, surgical injections, and 
neuromodulation) with a goal of ensuring that there are not financial 
incentives to use opioids instead of non-opioid alternatives. As part 
of this review, under section 1833(t)(22)(A)(iii) of the Act, the 
Secretary must consider the extent to which revisions to such payments 
(such as the creation of additional groups of covered OPD services to 
separately classify those procedures that utilize opioids and non-
opioid alternatives for pain management) would reduce the payment 
incentives for using opioids instead of non-opioid alternatives for 
pain management. In conducting this review and considering any 
revisions, the Secretary must focus on covered OPD services (or groups 
of services) assigned to C-APCs, APCs that include surgical services, 
or services determined by the Secretary that generally involve 
treatment for pain management. If the Secretary identifies revisions to 
payments pursuant to section 1833(t)(22)(A)(iii) of the Act, section 
1833(t)(22)(C) of the Act requires the Secretary to, as determined 
appropriate, begin making revisions for services furnished on or after 
January 1, 2020. Revisions under this paragraph are required to be 
treated as adjustments for purposes of paragraph (9)(B), which requires 
any adjustments to be made in a budget neutral manner. Section 
1833(i)(8), as added by section 6082(b) of the SUPPORT Act, requires 
the Secretary to conduct a similar type of review as required for the 
OPPS and to make revisions to the ASC payment system in an appropriate 
manner, as determined by the Secretary.
    For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427), 
as required by section 1833(t)(22)(A)(i) of the Act, we reviewed 
payments under the OPPS for opioids and evidence-based non-opioid 
alternatives for pain management (including drugs and devices, nerve 
blocks, surgical injections, and neuromodulation) with a goal of 
ensuring that there are not financial incentives to use opioids instead 
of non-opioid alternatives. We used currently available data to analyze 
the payment and utilization patterns associated with specific non-
opioid alternatives, including drugs that function as a supply, nerve 
blocks, and neuromodulation products, to determine whether our 
packaging policies may have reduced the use of non-opioid alternatives. 
For the CY 2020 OPPS/ASC proposed rule (84 FR 39423 through 39427), we 
proposed to continue our policy to pay separately at ASP plus 6 percent 
for non-opioid pain management drugs that function as surgical supplies 
in the performance of surgical procedures when they are furnished in 
the ASC setting and to continue to package payment for non-opioid pain 
management drugs that function as surgical supplies in the performance 
of surgical procedures in the hospital outpatient department setting 
for CY 2020. In the CY 2020 OPPS/ASC final rule with comment period (84 
FR 61173 through 61180), after reviewing data from stakeholders and 
Medicare claims data, we did not find compelling evidence to suggest 
that revisions to our OPPS payment policies for non-opioid pain 
management alternatives were necessary for CY 2020. We finalized our 
proposal to continue to unpackage and pay separately at ASP plus 6 
percent for non-opioid pain management drugs that function as surgical 
supplies when furnished in the ASC setting for CY 2020. Under this 
policy, for CY 2020, the only drug that qualified for separate payment 
in the ASC setting as a non-opioid pain management drug that functions 
as a surgical supply was Exparel.
    In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896 
to 85899), we continued the policy to pay separately at ASP plus 6 
percent for non-opioid pain management drugs that function as surgical 
supplies in the performance of surgical procedures when they are 
furnished in the ASC setting and to continue to package payment for 
non-opioid pain management drugs that function as surgical supplies in 
the performance of surgical procedures in the hospital outpatient 
department setting for CY 2021. For CY 2021, only two drug products met 
the criteria as non-opioid pain management drugs that function as 
surgical supplies in the ASC setting, and thus receive separate payment 
under the ASC payment system. These drugs are Exparel and Omidria.
(2) CY 2022 Evaluation of Payments for Opioids and Non-Opioid 
Alternatives for Pain Management and Comment Solicitation on Extending 
the Policy to the OPPS
    As noted in the background above, over the past several years we 
have reviewed non-opioid alternatives and evaluated the impact of our 
packaging policies on access to these products. In our previous 
evaluations, we used currently available data to analyze the payment 
and utilization patterns associated with specific non-opioid 
alternatives, including drugs that function as a supply, nerve blocks, 
and neuromodulation products, to determine whether our packaging 
policies may have reduced the use of non-opioid alternatives. In the CY 
2021 OPPS/ASC final rule with comment period (85 FR 85896 to 85899), we 
stated that we would continue to analyze the issue of access to non-
opioid pain management alternatives in the HOPD and the ASC settings as 
part of any reviews we conduct under section 1833(t)(22)(A)(ii), with a 
specific focus on whether there is evidence that our current payment 
policies are creating access barriers for other non-opioid pain 
management alternatives for which there is evidence-based support that 
these products help to deter or avoid prescription opioid use and 
opioid use disorder.
    For CY 2022, we conducted a subsequent review of payments for 
opioids and non-opioid alternatives as authorized by section 
1833(t)(22)(A)(ii). We analyzed utilization patterns in both the HOPD 
and ASC settings for multiple non-opioid pain management drugs, 
including the two drugs that are receiving separate payment when 
furnished in the ASC setting under our current policy for CY 2021: 
Exparel and Omidria. The results of our CY 2022 review were similar to 
the results of our

[[Page 42043]]

reviews in previous years. Generally, utilization of non-opioid pain 
management drugs continued to increase year after year in the HOPD 
setting, where payment for these non-opioid alternatives is packaged 
with the payment for the associated surgical procedure. In the ASC 
setting, where Exparel and Omidria are separately paid, we also saw 
utilization increases for these two drugs. However, in the ASC setting, 
the rate of increase in utilization is much more substantial than in 
the HOPD setting. In particular, in the HOPD setting where payment for 
Exparel is packaged, utilization of Exparel increased from 19.7 million 
units in 2019 to 21.8 million units in 2020, whereas utilization of 
Exparel increased from 1.5 million units in 2019 to 3.3 million units 
in 2020 in the ASC setting, where Exparel is separately paid. We note 
that a number of reasons could explain this discrepancy other than our 
policy to pay separately for Exparel under the ASC payment system, 
including evolving clinical practice in the ASC setting, which could 
increase the number of surgeries performed in ASCs for which Exparel is 
an appropriate pain management drug.
    We have consistently explained, including as recently as in the CY 
2021 OPPS/ASC final rule with comment period (85 FR 85894), that our 
packaging policies support our strategic goal of using larger payment 
bundles in the OPPS to maximize hospitals' incentives to provide care 
in the most efficient manner. For example, where there are a variety of 
devices, drugs, items, and supplies that could be used to furnish a 
service, some of which are more costly than others, packaging 
encourages hospitals to use the most cost-efficient item that meets the 
patient's needs, rather than to routinely use a more expensive item, 
which may occur if separate payment is provided for the item. We have 
not found conclusive evidence to support the notion that the OPPS 
packaging policy, under which non-opioid drugs and biologicals are 
packaged when they function as a supply in a surgical procedure, has 
created financial incentives to use opioids instead of evidence-based 
non-opioid alternatives for pain management. For example, we have not 
observed decreased utilization of non-opioid alternatives for pain 
management in the HOPD setting. Therefore, for CY 2022, we are 
proposing to continue to package payment for non-opioid pain management 
drugs that function as surgical supplies in the performance of surgical 
procedures in the hospital outpatient department setting.
    As explained earlier in this section, while packaging encourages 
efficiency and is a fundamental component of a prospective payment 
system, where there is an overriding policy objective to reduce 
disincentives for use of non-opioid products to the extent possible, we 
believe it may be appropriate to establish payment that reduces 
disincentives for use of non-opioid drugs and biologicals for pain 
management when there is evidence that use of those products reduces 
unnecessary opioid use. For these reasons, we are soliciting comment as 
to whether we should expand our current policy that only applies in the 
ASC setting--to pay separately at ASP plus 6 percent for non-opioid 
pain management drugs that function as surgical supplies in the 
performance of surgical procedures when they are furnished in the ASC 
setting--to the HOPD setting. We are interested in learning from 
stakeholders whether similar disincentives for the use of non-opioid 
pain management drugs and biologicals identified in the ASC setting 
exist in the HOPD setting. Previously, in the CY 2019 OPPS/ASC final 
rule with comment period (83 FR 59067), we identified several 
disincentives that were unique to the ASC setting compared to the HOPD 
setting, including the fact that ASCs tend to provide specialized care 
and a more limited range of services in comparison to hospital 
outpatient departments. Also, ASCs are paid, in aggregate, 
approximately 55 percent of the OPPS rate. Therefore, fluctuations in 
payment rates for specific services may affect these providers more 
acutely than hospital outpatient departments; and ASCs may be less 
likely to choose to furnish non-opioid postsurgical pain management 
treatments, which are typically more expensive than opioids, as a 
result. Additionally, we are seeking comment on what evidence supports 
the expansion of this policy to the HOPD setting, including the 
clinical benefit that Medicare beneficiaries may receive from the 
availability of separate or modified payment for these products in the 
HOPD setting.
    Finally, we are seeking comment on if we should treat products the 
same depending on the setting, ASC or HOPD. For example, we are seeking 
comment on whether products should have the same eligibility 
requirements to qualify for revised payment in the ASC and the HOPD 
settings. We are additionally seeking comment on how the additional 
comment solicitations described below, which refer to the ASC setting, 
could also be applied to the HOPD setting.
(3) Proposed Criteria for Eligibility for Separate Payment Under the 
ASC Payment System for Non-Opioid Pain Management Drugs and Biologicals 
That Function as Surgical Supplies
    As described in section 1833(t)(22)(A)(i) of the Act, the Secretary 
shall conduct a review of payments for opioids and evidence-based non-
opioid alternatives for pain management with a goal of ensuring that 
there are not financial incentives to use opioids instead of non-opioid 
alternatives. In any future reviews the Secretary may determine 
appropriate to conduct under section 1833(t)(22)(A)(ii) of the Act, we 
believe it is important to establish the evidence-base for non-opioid 
alternatives for pain management when evaluating whether current 
payment policies result in an incentive for providers to use opioids 
instead of such evidence-based non-opioid alternatives for pain 
management. Accordingly, for CY 2022 and subsequent years, we are 
proposing two criteria that non-opioid pain management drugs and 
biologicals would be required to meet to be eligible for a payment 
revision under the ASC payment system in accordance with section 
1833(t)(22)(C). The proposed criteria are intended to identify non-
opioid pain management drugs and biologicals that function as supplies 
in surgical procedures for which revised payment under the ASC payment 
system would be appropriate.
    Specifically, for CY 2022, we are proposing the following criteria 
that non-opioid pain management drugs and biologicals would be required 
to meet to be eligible for separate payment under the ASC payment 
system in accordance with section 1833(t)(22)(C):
Criterion 1: FDA Approval and Indication for Pain Management or 
Analgesia
    We propose that the drug or biological product must be safe and 
effective, as determined by the FDA. We propose that the drug must be 
approved under a new drug application under section 505(c) of the 
Federal Food, Drug, and Cosmetic Act (FDCA), generic drug application 
under an abbreviated new drug application under section 505(j), or, in 
the case of a biological product, be licensed under section 351 of the 
Public Health Service Act. We further propose that the drug or 
biological must also have an FDA-approved indication for pain 
management or analgesia. We believe FDA approval is an appropriate 
requirement for a drug or biological to

[[Page 42044]]

be eligible for this policy because the FDA reviews drugs and 
biologicals for safety and effectiveness, which would allow us to 
identify safe and effective non-opioid products to which this separate 
payment policy should apply. Given that the FDA has an existing and 
detailed review process already in place to review drugs and 
biologicals, we believe it would be appropriate and administratively 
efficient to utilize FDA approval as a requirement to ensure that the 
drugs and biologicals approved under this policy are generally safe and 
effective for beneficiaries. We believe the vast majority of drugs and 
biologicals on the market have undergone FDA review and approval, and 
we do not anticipate this criterion would prevent otherwise eligible 
drugs or biologicals from qualifying. In addition, section 
1833(t)(22)(C) of the Act, our current policy, and our proposed policy 
all focus on pain management products. Specifically, section 
1833(t)(22)(C) of the Act refers to reviews of opioid and evidence-
based non opioid products for pain management. Therefore, we propose to 
require an FDA-approved indication for pain management or analgesia for 
a drug or biological to qualify as a pain management product. The FDA 
approval process would allow us to confirm that a drug or biological 
is, in fact, a non-opioid. Drugs and biologicals that are approved as 
opioids or opioid agonists, or that receive an opioid-related approval 
from the FDA would not be eligible for separate payment under this 
policy.
Criterion 2: Cost of the Product
    Currently, under the OPPS, drugs that are not policy-packaged are 
subject to the drug packaging threshold. In accordance with section 
1833(t)(16)(B) of the Act, the threshold for establishing separate APCs 
for payment of drugs and biologicals was set at $50 per administration 
during CYs 2005 and 2006. We set the packaging threshold for 
establishing separate APCs for drugs and biologicals through annual 
notice and comment rulemaking. (Please see section V.B.1.a. of this 
proposed rule for additional details on the drug packaging threshold 
policy). The proposed per-day drug packaging threshold for CY 2022 is 
$130.
    As our second criterion, we are proposing that a drug or biological 
would only be eligible for a payment revision under the ASC payment 
system in accordance with section 1833(t)(22)(C) if its per-day cost 
exceeds the drug packaging threshold described in section V.B.1.a. of 
this rule. We believe this is an appropriate requirement because we 
believe that not all non-opioid alternative treatments are equally 
disincentivized by our packaging policies. In particular, the cost of 
non-opioid drugs and biologicals below the packaging threshold of $130 
per day does not generally have a significant impact on the overall 
procedure costs, and we believe use of these drugs and biologicals is 
unlikely to be disincentivized by CMS packaging policies. However, when 
the per-day cost of the drug is above the drug packaging threshold, the 
cost of these drugs or biologicals generally has a significant impact 
on the overall procedure costs. Section 1833(t)(22)(A)(i) of the Act 
discusses financial incentives to use opioids instead of non-opioid 
alternative treatments. As such, we do not believe non-opioid pain 
management drugs that are lower in cost are generally disincentivized 
by our packaging policies, as their cost is more easily absorbed into 
the payment for the primary procedure in which they are used when 
compared to drugs and biologicals above the threshold. We are proposing 
to use the existing OPPS drug packaging threshold as it is familiar to 
stakeholders and its application to drugs and biologicals under this 
policy creates uniformity across the OPPS and ASC payment systems. 
Therefore, CMS is proposing that drugs and biologicals would be 
required to have a per-day cost that exceeds the drug packaging 
threshold that CMS sets annually through notice and comment rulemaking.
    We also believe the use of this threshold as an eligibility 
criterion for drugs under consideration for a payment revision under 
this policy is appropriate, as it conforms with the broader goals of 
the OPPS and ASC payment systems. Like other prospective payment 
systems, the OPPS relies on the concept of averaging to establish a 
payment rate for services. The payment may be more or less than the 
estimated cost of providing a specific service or a bundle of specific 
services for a particular beneficiary. The OPPS packages payments for 
multiple interrelated items and services into a single payment to 
create incentives for hospitals to furnish services most efficiently 
and to manage their resources with maximum flexibility. Our packaging 
policies, including the drug packaging threshold, support our strategic 
goal of using larger payment bundles to maximize hospitals' incentives 
to provide care in the most efficient manner. Packaging payments into 
larger payment bundles promotes the predictability and accuracy of 
payment for services over time. For the reasons mentioned above, we 
believe it to be appropriate to package drugs under consideration for 
this policy which fall below the OPPS drug packaging threshold.
    We propose that non-opioid drugs and biologicals currently 
receiving transitional drug pass-through status in the OPPS would not 
be candidates for this policy as they are already paid separately under 
the OPPS and ASC payment system. Please see section V.A., Proposed OPPS 
Transitional Pass-Through Payment for Additional Costs of Drugs, 
Biologicals, and Radiopharmaceuticals, of this proposed rule for 
additional details on transitional pass-through payments for drugs and 
biologicals. We propose that once transitional drug pass-through status 
expires, the non-opioid drug or biological may qualify for separate 
payment under the ASC payment system if it meets the proposed 
eligibility requirements.
    We seek comment on whether there are any other non-opioid drug or 
biological products that would meet the proposed criteria if finalized.
(4) Proposed Regulation Text Changes
    We propose to codify our proposed criteria for separate payment for 
qualifying non-opioid pain management drugs and biologicals that 
function as surgical supplies in the regulation text for the ASC 
payment system in a new Sec.  416.174. In particular, we propose to 
provide in a new Sec.  416.174(a)(1) that non-opioid pain management 
drugs or biologicals that function as a supply in a surgical procedure 
are eligible for separate payment if they are approved under a new drug 
application under section 505(c) of the Federal Food, Drug, and 
Cosmetic Act (FDCA), generic drug application under an abbreviated new 
drug application under section 505(j), or, in the case of a biological 
product, are licensed under section 351 of the Public Health Service 
Act. Section 416.174(a)(1) would also provide that the drug or 
biological must have an FDA-approved indication for pain management or 
analgesia. New Sec.  416.174(a)(2) would require that the per-day cost 
of the drug or biological must exceed the OPPS drug packaging threshold 
set annually through notice and comment rulemaking.
    We also propose to amend Sec.  416.164(b)(6) to provide that non-
opioid pain management drugs and biologicals that function as a supply 
when used in a surgical procedure as determined by CMS under Sec.  
416.174 are ancillary items that are integral to a

[[Page 42045]]

covered surgical procedure and for which separate payment is allowed. 
We also propose to amend Sec.  416.171(b)(1) to provide that the 
payment rate for non-opioid pain management drugs and biologicals that 
function as a supply when used in a surgical procedure as determined by 
CMS under Sec.  416.174 are paid an amount derived from the payment 
rate for the equivalent item or service under the OPPS, and if such a 
payment amount is unavailable, are contractor priced.
(5) Eligibility for Separate Payment in CY 2022 for Exparel, Omidria, 
and Other Non-Opioid Products for Pain Management
    As discussed in the CY 2021 OPPS/ASC final rule with comment 
period, there are two products receiving separate payment in the ASC 
setting under our current policy to pay separately for non-opioid pain 
management treatments that function as surgical supplies when furnished 
in the ASC setting (85 FR 86171). These two products are Exparel (HCPCS 
Code C9290, Injection, bupivacaine liposome, 1 mg) and Omidria (HCPCS 
Code J1097, phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml 
ophthalmic irrigation solution, 1 ml). Based on the current information 
available to us, as we explain below, we are proposing that both 
products would be eligible for separate payment in CY 2022 under our 
proposed policy. We have included our initial evaluation of these two 
products below.
(a) Eligibility for Separate Payment in CY 2022 for Exparel Under the 
Proposed Eligibility Criteria
    We are proposing that Exparel would continue to receive separate 
payment in the ASC setting as a non-opioid pain management drug that 
functions as a surgical supply for CY 2022. Based on CMS's internal 
review, we believe Exparel meets criterion 1. Exparel was approved by 
the FDA with a New Drug Application (NDA #022496) on 10/28/2011.\2\ 
Exparel's FDA-approved indication is ``in patients 6 years of age and 
older for single-dose infiltration to produce postsurgical local 
analgesia (1). In adults as an interscalene brachial plexus nerve block 
to produce postsurgical regional analgesia''.\3\ No component of 
Exparel is opioid-based. Accordingly, we propose that Exparel meets 
criterion one.
---------------------------------------------------------------------------

    \2\ Exparel. FDA Letter. 28 October 2011. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf.
    \3\ Exparel. FDA Package Insert. 22 March 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf.
---------------------------------------------------------------------------

    As discussed in section (3) above, for criterion two we are 
proposing that a drug or biological would only be eligible for separate 
payment under this policy if its per-day cost exceeds the drug 
packaging threshold described in section V.B.1.a. of this rule. The 
proposed per day cost threshold for CY 2022 is $130. Using the 
methodology described at V.B.1.a., the per day cost of Exparel exceeds 
the $130 per day cost threshold. Therefore, we propose that Exparel 
meets criterion two.
    Therefore, we are proposing that Exparel meets criteria one and 
two, and should receive separate payment under the ASC payment system 
for CY 2022.
(b) Eligibility for Separate Payment for Omidria in CY 2022 Under the 
Proposed Eligibility Criteria
    We are proposing that Omidria would continue to receive separate 
payment in the ASC setting as a non-opioid pain management drug that 
functions as a surgical supply for CY 2022. Based on our internal 
review, we believe Omidria would meet criterion one. Omidria was 
approved by the FDA with a New Drug Application (NDA #205388) on 5/30/
2014.\4\ Additionally, Omidria's FDA-approved indication is as ``an 
alpha 1-adrenergic receptor agonist and nonselective cyclooxygenase 
inhibitor indicated for: Maintaining pupil size by preventing 
intraoperative miosis; Reducing postoperative pain''.\5\ No component 
of Omidria is opioid-based. Therefore, we propose that Omidria would 
meet proposed criterion one.
---------------------------------------------------------------------------

    \4\ Omidria. FDA Letter. 30 May 2014. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf.
    \5\ Omidria. FDA Package Insert. 08 December 2017. https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf.
---------------------------------------------------------------------------

    Using the methodology described at V.B.1.a., the per day cost of 
Omidria exceeds the $130 per day cost threshold. Therefore, we propose 
that Omidria meets criterion two. Therefore, we are proposing that 
Omidria meets criteria one and two, and should receive separate payment 
under the ASC payment system for CY 2022.
(6) Comment Solicitation on Policy Modifications and Potential 
Additional Criteria for Revised Payment for Non-Opioid Pain Management 
Treatments
    In addition to the proposed eligibility criteria above, we are also 
soliciting comment on potential policy modifications and additional 
criteria that may help further align this policy with the intent of 
section 1833(t)(22) of the Act. Below we discuss potential additional 
criteria. We note that, depending on the public comments we receive and 
our continued consideration of these potential criteria, we may adopt 
these criteria as part of our final policy and include them in the 
final regulation text; accordingly, we are providing substantial 
details, explanations, and considerations about these potential 
criteria. We welcome input from stakeholders on these and any 
additional policy modifications or criteria they believe would enhance 
our proposed policy. We are also soliciting comment on other barriers 
to access to non-opioid pain management products that may exist, and to 
what extent our policies under the OPPS or ASC payment system could be 
modified to address these barriers.
(a) Utilization of the Product
    We have historically used utilization as a metric to determine 
whether a change in our payment policy was necessary to determine 
whether our policies create a disincentive to use non-opioid 
alternatives. For example, as previously discussed, Exparel's 
decreasing utilization in the ASC setting caused us to propose to pay 
separately for non-opioid pain management drugs that function as 
surgical supplies in the ASC setting. We have used currently available 
claims data in prior years to analyze the payment and utilization 
patterns associated with specific non-opioid alternatives to determine 
whether our packaging policies may have reduced the use of non-opioid 
alternatives. We believe that higher utilization may be a potential 
indicator that the packaged payment is not causing an access to care 
issue and that the payment rate for the primary procedure adequately 
reflects the cost of the drug or biological. We also believe decreased 
utilization could potentially indicate that our packaging policy is 
discouraging use of drug or biological and that providers are choosing 
less expensive treatments. We note that it is difficult to attribute 
product-specific changes in utilization to our packaging policies 
alone. Nonetheless, while we acknowledge certain limitations of 
utilization data, we believe analyzing utilization either on a product-
specific basis or on a broader basis could be an important criterion in 
determining whether separate payment is warranted for a non-opioid pain 
management alternative.
    Therefore, we are soliciting comment on whether specific evidence 
of reduced utilization should be part of our evaluation and 
determination of whether a non-opioid pain management product should 
qualify for modified

[[Page 42046]]

payment. This data may help to demonstrate that our packaging policies 
are causing an access issue for these products. Additionally, we 
realize that new products to the market may not have utilization data 
available, or reliable utilization data may be difficult to obtain for 
some products; therefore, we are also requesting comment on whether 
utilization data requirements should vary based on the newness of a 
product or its FDA marketing approval date.
(b) FDA Indication for Pain Management or Analgesia for the Drug or 
Biological Product
    As previously discussed, section 1833(t)(22)(A) of the Act 
specifically refers to reviews of opioid and evidence-based non opioid 
products for pain management. We believe the majority of drugs and 
biologicals that would meet the requirements of our proposed policy 
would already have FDA approval as a pain management drug or as an 
analgesic. However, we acknowledge there may be other non-opioid 
products that would benefit from inclusion under this policy, but do 
not have a specific FDA-approved indication for pain management or 
analgesia, and would not satisfy criterion 1. Therefore, we are 
soliciting comment on whether we should allow certain FDA-approved 
drugs and biologicals to be eligible for separate payment under this 
policy without a specific FDA-approved indication for pain management 
or as an analgesic drug. In lieu of an FDA indication for pain 
management or analgesia, we are seeking comment on whether it would be 
appropriate to approve a product for inclusion under this policy if the 
pain-management or analgesia attributes of the drug or biological are 
recognized by a medical compendium. Similarly, we are seeking comment 
as to whether we should consider specialty society or national 
organization (such as a national surgery organization) recommendations 
of non-opioid pain management products that function as surgical 
supplies and reduce opioid use in the ASC setting, as evidence that a 
product meets criterion one, where a drug or biological does not have 
an FDA indication for pain management or analgesia.
(c) Peer-Reviewed Literature Requirement Comment Solicitation
    We note that section 1833(t)(22)(B) requires the Secretary to focus 
on covered OPD services (or groups of services) assigned to a 
comprehensive ambulatory payment classification, ambulatory payment 
classifications that primarily include surgical services, and other 
services determined by the Secretary that generally involve treatment 
for pain management. We are also soliciting comment as to whether we 
should only adopt a payment revision to drugs and biologicals that 
function as surgical supplies in the ASC setting when those products 
have evidence in peer reviewed literature supporting that the product 
actually decreases opioid. We believe this may be appropriate to ensure 
Medicare payment policies would not financially incentivize use of 
opioids rather than evidence-based non-opioid alternative treatments, 
as required by section 1833(t)(22)(A)(iii) of the Act. Specifically, we 
are seeking comment as to whether the drug or biological's use in a 
surgical procedure as a non-opioid pain management product should be 
supported by peer-reviewed literature demonstrating a clinically 
significant decrease in opioid usage compared to the standard of care, 
and we are seeking comment on whether such decreases in opioid usage 
should be sustained decreases that continue into the post-operative 
period.
    Additionally, we are seeking input from commenters as to what they 
believe the requirements for peer-reviewed literature requirements 
should be. For example, we are seeking stakeholder feedback as to 
whether peer-reviewed literature should demonstrate that use of the 
drug or biological results in at least one, or several, of the 
following: Decreased post-operative opioid use following surgery; 
decreased opioid misuse following surgery; or decreased opioid use 
disorder and dependency following surgery.
    Additionally, we ask stakeholders if specific thresholds are 
necessary to determine whether these decreases are statistically and 
clinically significant and whether the decreases should simply be 
measured against placebo or the standard of care. We also request 
information on how stakeholders would define the standard of care in 
these circumstances. When evaluating literature, we would expect to 
examine the study methods, sample size, limitations, possible conflicts 
of interest, patient populations studied, and how the evidence supports 
the conclusion that the product can serve as a non-opioid pain 
management product and provide a clinically significant reduction in 
opioid use that continues into the post-operative period. However, we 
welcome input from stakeholders about additional aspects of these 
studies that they believe CMS should focus on for this potential 
criterion. Additionally, we would expect to use our discretion to 
assess whether the submitted studies meet these criteria, as well as 
for clinical applicability, literature integrity, and potential biases 
in consultation with our clinical advisors.
    In order to provide stakeholders with some examples of what 
supporting evidence CMS may consider for this potential criterion, we 
believe it would be helpful for CMS to receive literature demonstrating 
that use of a non-opioid drug or biological results in a statistically 
and clinically significant decreased day supply of outpatient opioids 
prescribed after surgery discharge compared to the generally accepted 
standard of care, or a statistically and clinically significant 
decreased morphine milligram equivalents (MME) per opioid dose 
prescribed after surgery discharge compared to the generally accepted 
standard of care. We would consider the generally accepted standard of 
care to include pain management therapy a patient would receive in the 
absence of the non-opioid alternative, such as the use of localized 
analgesia and/or an opioid. As previously discussed, we would then 
expect the use of a non-opioid pain management drug or biological to 
result in a decline in opioids used compared to the pain management 
therapy a patient would receive in the absence of the non-opioid 
alternative. We would expect this decline in opioids to include a 
decreased number of opioids received by a patient intraoperatively, 
post-operatively, and most significantly at discharge. We are 
soliciting comment on additional examples or measures that would be 
beneficial for CMS to take into consideration. Additionally, we are 
seeking comment on whether we should require a specific objective 
measure for this criterion. We also seek input on how to assess whether 
changes are statistically and clinically significant. We request 
comment on whether stakeholders believe evidence of statistical 
significance should be sufficient, or whether stakeholders believe the 
literature should also demonstrate clinically significant differences 
between treatment groups as well.
(d) Alternative Payment Mechanisms for Non-Opioid Drugs and Biologicals
    As previously discussed, for CY 2022, we are proposing to pay 
separately at ASP plus 6 percent for non-opioid pain management drugs 
and biologicals that function as surgical supplies in the performance 
of surgical procedures when they are furnished in the ASC setting and 
meet our other proposed

[[Page 42047]]

criteria. Section 1833(t)(22)(A)(iii) requires the Secretary to 
consider the extent to which revisions payments (such as the creation 
of additional groups of covered OPD services to classify separately 
those procedures that utilize opioids and non-opioid alternatives for 
pain management) would reduce payment incentives to use opioids instead 
of non-opioid alternatives for pain management. Accordingly, separate 
payment is not the only possible revision that may be appropriate. We 
seek comment on additional payment mechanisms that may be appropriate 
aside from separate payment. For instance, we request feedback from 
stakeholders as to whether a single, flat add-on payment, or separate 
APC assignment, for products or procedures that use a product that 
meets eligibility criteria would be preferable to separate payment. We 
note that any revisions the Secretary determines appropriate under 
section 1833(t)(22)(C) must be applied in a budget neutral manner under 
section 1833(t)(9)(B). We also seek input from stakeholders on any 
other innovative payment mechanisms for eligible non-opioid drugs and 
biologicals for pain management.
(e) Non-Drug Products
    We are also interested in information on any non-opioid non-drug 
products that function as surgical supplies commenters believe should 
be eligible for separate payment under this policy. Although we have 
not currently identified any non-opioid pain management non-drug 
products that are disincentivized by CMS packaging policies based on 
utilization data, we believe it is reasonable to assume that if 
disincentives exist for the use of non-opioid pain management drugs and 
biological products under the ASC payment system, they may also exist 
for non-opioid, non-drug products under the ASC payment system. If this 
is the case, we would like to address these disincentives given the 
severity, and importance of combatting, the opioid epidemic, regardless 
of whether the non-opioid product is a drug, biological, or non-drug 
product. We remain interested as to whether there are any non-opioid, 
non-drug products that may meet the proposed eligibility criteria and 
should qualify for separate or modified payment as discussed in section 
(d) above, in the ASC setting. Similarly, we are also seeking comment 
on if there are unique qualities of non-drug products that would make 
revised payment in the HOPD setting appropriate instead of, or in 
addition to, the ASC setting.
    We are also soliciting comment on whether it is appropriate to 
require non-drug products to meet the same criteria being proposed for 
drugs and biologicals. Additionally, we are seeking comment from 
stakeholders on whether they believe it would be appropriate to create 
a broad category for non-drug products, or if a more limited category, 
such as for devices, would be appropriate. Specifically, we are seeking 
comment on whether there is information in the FDA approval for devices 
that would be an appropriate criterion to determine eligibility for 
separate payment, similar to how we are proposing to require FDA 
approval with an indication for pain management or analgesia for drugs 
and biologicals. We are also seeking comment on whether, if the non-
drug product is a ``device'' as defined in section 201(h) of the 
Federal Food, Drug, and Cosmetic Act, the device should have received 
FDA premarket approval, grant of a de novo request, 510(k) clearance or 
meet an exemption from premarket review. We are soliciting comment on 
all aspects of an extension of our current policy to include 
appropriate products that are not drugs or biologicals.
    We are also soliciting comment as to how peer-reviewed literature 
and utilization claims data could be used as potential criteria for a 
policy that would apply to non-drug products. Additionally, should a 
payment revision be determined necessary, we are seeking comment on 
appropriate payment mechanisms for non-opioid, non-drug products, 
including assigning the non-drug product to its own APC to ensure that 
the product is paid separately or establishing an add-on adjustment for 
the cost of the non-drug product in addition to the payment for the APC 
to which the non-drug product is assigned. Additionally, we seek 
comment on whether it would be appropriate to subject non-drug products 
to a cost threshold similar to the one we are proposing to apply to 
drugs and biologicals.
4. Calculation of OPPS Scaled Payment Weights
    We established a policy in the CY 2013 OPPS/ASC final rule with 
comment period (77 FR 68283) of using geometric mean-based APC costs to 
calculate relative payment weights under the OPPS. In the CY 2021 OPPS/
ASC final rule with comment period (85 FR 85902 through 85903), we 
applied this policy and calculated the relative payment weights for 
each APC for CY 2021 that were shown in Addenda A and B to that final 
rule with comment period (which were made available via the internet on 
the CMS website) using the APC costs discussed in sections II.A.1. and 
II.A.2. of that final rule with comment period. For CY 2022, as we did 
for CY 2021, we propose to continue to apply the policy established in 
CY 2013 and calculate relative payment weights for each APC for CY 2022 
using geometric mean-based APC costs.
    For CY 2012 and CY 2013, outpatient clinic visits were assigned to 
one of five levels of clinic visit APCs, with APC 0606 representing a 
mid-level clinic visit. In the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75036 through 75043), we finalized a policy that created 
alphanumeric HCPCS code G0463 (Hospital outpatient clinic visit for 
assessment and management of a patient), representing any and all 
clinic visits under the OPPS. HCPCS code G0463 was assigned to APC 0634 
(Hospital Clinic Visits). We also finalized a policy to use CY 2012 
claims data to develop the CY 2014 OPPS payment rates for HCPCS code 
G0463 based on the total geometric mean cost of the levels one through 
five CPT E/M codes for clinic visits previously recognized under the 
OPPS (CPT codes 99201 through 99205 and 99211 through 99215). In 
addition, we finalized a policy to no longer recognize a distinction 
between new and established patient clinic visits.
    For CY 2016, we deleted APC 0634 and reassigned the outpatient 
clinic visit HCPCS code G0463 to APC 5012 (Level 2 Examinations and 
Related Services) (80 FR 70372). For CY 2022, as we did for CY 2021, we 
propose to continue to standardize all of the relative payment weights 
to APC 5012. We believe that standardizing relative payment weights to 
the geometric mean of the APC to which HCPCS code G0463 is assigned 
maintains consistency in calculating unscaled weights that represent 
the cost of some of the most frequently provided OPPS services. For CY 
2022, as we did for CY 2021, we propose to assign APC 5012 a relative 
payment weight of 1.00 and to divide the geometric mean cost of each 
APC by the geometric mean cost for APC 5012 to derive the unscaled 
relative payment weight for each APC. The choice of the APC on which to 
standardize the relative payment weights does not affect payments made 
under the OPPS because we scale the weights for budget neutrality.
    We note that in the CY 2019 OPPS/ASC final rule with comment period 
(83 FR 59004 through 59015) and the CY 2020 OPPS/ASC final rule with 
comment period (84 FR 61365 through 61369), we discuss our policy, 
implemented on January 1, 2019, to

[[Page 42048]]

control for unnecessary increases in the volume of covered outpatient 
department services by paying for clinic visits furnished at excepted 
off-campus provider-based department (PBD) at a reduced rate. While the 
volume associated with these visits is included in the impact model, 
and thus used in calculating the weight scalar, the policy has a 
negligible effect on the scalar. Specifically, under this policy, there 
is no change to the relativity of the OPPS payment weights because the 
adjustment is made at the payment level rather than in the cost 
modeling. Further, under this policy, the savings that result from the 
change in payments for these clinic visits are not budget neutral. 
Therefore, the impact of this policy will generally not be reflected in 
the budget neutrality adjustments, whether the adjustment is to the 
OPPS relative weights or to the OPPS conversion factor. For a full 
discussion of this policy, we refer readers to the CY 2020 OPPS/ASC 
final rule with comment period (84 FR 61142).
    Section 1833(t)(9)(B) of the Act requires that APC reclassification 
and recalibration changes, wage index changes, and other adjustments be 
made in a budget neutral manner. Budget neutrality ensures that the 
estimated aggregate weight under the OPPS for CY 2022 is neither 
greater than nor less than the estimated aggregate weight that would 
have been calculated without the changes. To comply with this 
requirement concerning the APC changes, we propose to compare the 
estimated aggregate weight using the CY 2021 scaled relative payment 
weights to the estimated aggregate weight using the proposed CY 2022 
unscaled relative payment weights.
    For CY 2021, we multiplied the CY 2021 scaled APC relative payment 
weight applicable to a service paid under the OPPS by the volume of 
that service from CY 2019 claims to calculate the total relative 
payment weight for each service. We then added together the total 
relative payment weight for each of these services in order to 
calculate an estimated aggregate weight for the year. For CY 2022, we 
propose to apply the same process using the estimated CY 2022 unscaled 
relative payment weights rather than scaled relative payment weights. 
We propose to calculate the weight scalar by dividing the CY 2021 
estimated aggregate weight by the unscaled CY 2022 estimated aggregate 
weight.
    For a detailed discussion of the weight scalar calculation, we 
refer readers to the OPPS claims accounting document available on the 
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. Click on the CY 2022 OPPS 
proposed rule link and open the claims accounting document link at the 
bottom of the page.
    We propose to compare the estimated unscaled relative payment 
weights in CY 2022 to the estimated total relative payment weights in 
CY 2021 using CY 2019 claims data, holding all other components of the 
payment system constant to isolate changes in total weight. Based on 
this comparison, we propose to adjust the calculated CY 2022 unscaled 
relative payment weights for purposes of budget neutrality. We propose 
to adjust the estimated CY 2022 unscaled relative payment weights by 
multiplying them by a proposed weight scalar of 1.4436 to ensure that 
the proposed CY 2022 relative payment weights are scaled to be budget 
neutral. The proposed CY 2022 relative payment weights listed in 
Addenda A and B to this proposed rule (which are available via the 
internet on the CMS website) are scaled and incorporate the 
recalibration adjustments discussed in sections II.A.1. and II.A.2. of 
this proposed rule.
    Section 1833(t)(14) of the Act provides the payment rates for 
certain SCODs. Section 1833(t)(14)(H) of the Act provides that 
additional expenditures resulting from this paragraph shall not be 
taken into account in establishing the conversion factor, weighting, 
and other adjustment factors for 2004 and 2005 under paragraph (9), but 
shall be taken into account for subsequent years. Therefore, the cost 
of those SCODs (as discussed in section V.B.2. of proposed rule) is 
included in the budget neutrality calculations for the CY 2022 OPPS.

B. Proposed Conversion Factor Update

    Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to 
update the conversion factor used to determine the payment rates under 
the OPPS on an annual basis by applying the OPD fee schedule increase 
factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject 
to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee 
schedule increase factor is equal to the hospital inpatient market 
basket percentage increase applicable to hospital discharges under 
section 1886(b)(3)(B)(iii) of the Act. In the FY 2022 IPPS/LTCH PPS 
proposed rule (86 FR 25435), consistent with current law, based on IHS 
Global, Inc.'s fourth quarter 2020 forecast of the FY 2022 market 
basket increase, the proposed FY 2022 IPPS market basket update was 2.5 
percent.
    Specifically, section 1833(t)(3)(F)(i) of the Act requires that, 
for 2012 and subsequent years, the OPD fee schedule increase factor 
under subparagraph (C)(iv) be reduced by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment as 
equal to the 10-year moving average of changes in annual economy-wide, 
private nonfarm business multifactor productivity (MFP) (as projected 
by the Secretary for the 10-year period ending with the applicable 
fiscal year, year, cost reporting period, or other annual period) (the 
``MFP adjustment''). In the FY 2012 IPPS/LTCH PPS final rule (76 FR 
51689 through 51692), we finalized our methodology for calculating and 
applying the MFP adjustment, and then revised this methodology, as 
discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49509). In the 
FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25435), the proposed MFP 
adjustment for FY 2022 was 0.2 percentage point.
    Therefore, we propose that the MFP adjustment for the CY 2022 OPPS 
is 0.2 percentage point. We also propose that if more recent data 
become subsequently available after the publication of this proposed 
rule (for example, a more recent estimate of the market basket increase 
and/or the MFP adjustment), we will use such updated data, if 
appropriate, to determine the CY 2022 market basket update and the MFP 
adjustment, which are components in calculating the OPD fee schedule 
increase factor under sections 1833(t)(3)(C)(iv) and 1833(t)(3)(F) of 
the Act, in the CY 2022 OPPS/ASC final rule.
    We note that section 1833(t)(3)(F) of the Act provides that 
application of this subparagraph may result in the OPD fee schedule 
increase factor under section 1833(t)(3)(C)(iv) of the Act being less 
than 0.0 percent for a year, and may result in OPPS payment rates being 
less than rates for the preceding year. As described in further detail 
below, we propose for CY 2022 an OPD fee schedule increase factor of 
2.3 percent for the CY 2022 OPPS (which is the proposed estimate of the 
hospital inpatient market basket percentage increase of 2.5 percent, 
less the proposed 0.2 percentage point MFP adjustment).
    We propose that hospitals that fail to meet the Hospital OQR 
Program reporting requirements would be subject to an additional 
reduction of 2.0 percentage points from the OPD fee schedule increase 
factor adjustment to the conversion factor that would be used to 
calculate the OPPS payment

[[Page 42049]]

rates for their services, as required by section 1833(t)(17) of the 
Act. For further discussion of the Hospital OQR Program, we refer 
readers to section XIV. of the proposed rule.
    To set the OPPS conversion factor for 2022, we propose to increase 
the CY 2021 conversion factor of $82.797 by 2.3 percent. In accordance 
with section 1833(t)(9)(B) of the Act, we propose further to adjust the 
conversion factor for CY 2022 to ensure that any revisions made to the 
wage index and rural adjustment are made on a budget neutral basis. We 
propose to calculate an overall budget neutrality factor of 1.0012 for 
wage index changes by comparing proposed total estimated payments from 
our simulation model using the proposed FY 2022 IPPS wage indexes to 
those payments using the FY 2021 IPPS wage indexes, as adopted on a 
calendar year basis for the OPPS.
    For the CY 2022 OPPS, we propose to maintain the current rural 
adjustment policy, as discussed in section II.E. of this proposed rule. 
Therefore, the proposed budget neutrality factor for the rural 
adjustment is 1.0000.
    We propose to continue previously established policies for 
implementing the cancer hospital payment adjustment described in 
section 1833(t)(18) of the Act, as discussed in section II.F. of this 
proposed rule. We propose to calculate a CY 2022 budget neutrality 
adjustment factor for the cancer hospital payment adjustment by 
comparing estimated total CY 2022 payments under section 1833(t) of the 
Act, including the proposed CY 2022 cancer hospital payment adjustment, 
to estimated CY 2022 total payments using the CY 2021 final cancer 
hospital payment adjustment, as required under section 1833(t)(18)(B) 
of the Act. The proposed CY 2022 estimated payments applying the 
proposed CY 2022 cancer hospital payment adjustment were the same as 
estimated payments applying the CY 2021 final cancer hospital payment 
adjustment. Therefore, we propose to apply a budget neutrality 
adjustment factor of 1.0000 to the conversion factor for the cancer 
hospital payment adjustment. In accordance with section 1833(t)(18)(C), 
as added by section 16002(b) of the 21st Century Cures Act (Pub. L. 
114-255), we are applying a budget neutrality factor calculated as if 
the proposed cancer hospital adjustment target payment-to-cost ratio 
was 0.90, not the 0.89 target payment-to-cost ratio we applied as 
stated in section II.F. of the proposed rule.
    For this CY 2022 OPPS/ASC proposed rule, we estimated that proposed 
pass-through spending for drugs, biologicals, and devices for CY 2022 
would equal approximately $1.03 billion, which represented 1.24 percent 
of total projected CY 2022 OPPS spending. Therefore, the proposed 
conversion factor would be adjusted by the difference between the 0.92 
percent estimate of pass-through spending for CY 2021 and the 1.24 
percent estimate of proposed pass-through spending for CY 2022, 
resulting in a proposed decrease to the conversion factor for CY 2022 
of 0.32 percent.
    Proposed estimated payments for outliers would remain at 1.0 
percent of total OPPS payments for CY 2022. We estimate for the 
proposed rule that outlier payments would be 1.06 percent of total OPPS 
payments in CY 2021; the 1.00 percent for proposed outlier payments in 
CY 2022 would constitute a 0.06 percent decrease in payment in CY 2022 
relative to CY 2021.
    For this CY 2022 OPPS/ASC proposed rule, we also propose that 
hospitals that fail to meet the reporting requirements of the Hospital 
OQR Program would continue to be subject to a further reduction of 2.0 
percentage points to the OPD fee schedule increase factor. For 
hospitals that fail to meet the requirements of the Hospital OQR 
Program, we propose to make all other adjustments discussed above, but 
use a reduced OPD fee schedule update factor of 0.3 percent (that is, 
the proposed OPD fee schedule increase factor of 2.3 percent further 
reduced by 2.0 percentage points). This would result in a proposed 
reduced conversion factor for CY 2022 of $82.810 for hospitals that 
fail to meet the Hospital OQR Program requirements (a difference of -
1.647 in the conversion factor relative to hospitals that met the 
requirements).
    In summary, for 2022, we propose to use a reduced conversion factor 
of $82.810 in the calculation of payments for hospitals that fail to 
meet the Hospital OQR Program requirements (a difference of -1.647 in 
the conversion factor relative to hospitals that met the requirements).
    For 2022, we propose to use a conversion factor of $84.457 in the 
calculation of the national unadjusted payment rates for those items 
and services for which payment rates are calculated using geometric 
mean costs; that is, the proposed OPD fee schedule increase factor of 
2.3 percent for CY 2022, the required proposed wage index budget 
neutrality adjustment of approximately 1.0012, the proposed cancer 
hospital payment adjustment of 1.0000, and the proposed adjustment of 
0.32 percentage point of projected OPPS spending for the difference in 
pass-through spending that resulted in a proposed conversion factor for 
CY 2022 of $84.457.

C. Proposed Wage Index Changes

    Section 1833(t)(2)(D) of the Act requires the Secretary to 
determine a wage adjustment factor to adjust the portion of payment and 
coinsurance attributable to labor-related costs for relative 
differences in labor and labor-related costs across geographic regions 
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion 
of the OPPS payment rate is called the OPPS labor-related share. Budget 
neutrality is discussed in section II.B. of this proposed rule.
    The OPPS labor-related share is 60 percent of the national OPPS 
payment. This labor-related share is based on a regression analysis 
that determined that, for all hospitals, approximately 60 percent of 
the costs of services paid under the OPPS were attributable to wage 
costs. We confirmed that this labor-related share for outpatient 
services is appropriate during our regression analysis for the payment 
adjustment for rural hospitals in the CY 2006 OPPS final rule with 
comment period (70 FR 68553). We propose to continue this policy for 
the CY 2022 OPPS. We refer readers to section II.H. of this proposed 
rule for a description and an example of how the wage index for a 
particular hospital is used to determine payment for the hospital.
    As discussed in the claims accounting narrative included with the 
supporting documentation for this proposed rule (which is available via 
the internet on the CMS website), for estimating APC costs, we would 
standardize 60 percent of estimated claims costs for geographic area 
wage variation using the same FY 2022 pre-reclassified wage index that 
we would use under the IPPS to standardize costs. This standardization 
process removes the effects of differences in area wage levels from the 
determination of a national unadjusted OPPS payment rate and copayment 
amount.
    Under 42 CFR 419.41(c)(1) and 419.43(c) (published in the OPPS 
April 7, 2000 final rule with comment period (65 FR 18495 and 18545)), 
the OPPS adopted the final fiscal year IPPS post-reclassified wage 
index as the calendar year wage index for adjusting the OPPS standard 
payment amounts for labor market differences. Therefore, the wage index 
that applies to a particular acute care, short-stay hospital under the 
IPPS also applies to that hospital under the OPPS. As initially 
explained in the September 8, 1998 OPPS proposed rule (63 FR 47576), we 
believe that using the IPPS wage index as the source of an

[[Page 42050]]

adjustment factor for the OPPS is reasonable and logical, given the 
inseparable, subordinate status of the HOPD within the hospital 
overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS 
wage index is updated annually.
    The Affordable Care Act contained several provisions affecting the 
wage index. These provisions were discussed in the CY 2012 OPPS/ASC 
final rule with comment period (76 FR 74191). Section 10324 of the 
Affordable Care Act added section 1886(d)(3)(E)(iii)(II) to the Act, 
which defines a frontier State and amended section 1833(t) of the Act 
to add paragraph (19), which requires a frontier State wage index floor 
of 1.00 in certain cases, and states that the frontier State floor 
shall not be applied in a budget neutral manner. We codified these 
requirements at Sec.  419.43(c)(2) and (3) of our regulations. For 
2022, we propose to implement this provision in the same manner as we 
have since CY 2011. Under this policy, the frontier State hospitals 
would receive a wage index of 1.00 if the otherwise applicable wage 
index (including reclassification, the rural floor, and rural floor 
budget neutrality) is less than 1.00. Because the HOPD receives a wage 
index based on the geographic location of the specific inpatient 
hospital with which it is associated, the frontier State wage index 
adjustment applicable for the inpatient hospital also would apply for 
any associated HOPD. We refer readers to the FY 2011 through FY 2021 
IPPS/LTCH PPS final rules for discussions regarding this provision, 
including our methodology for identifying which areas meet the 
definition of ``frontier States'' as provided for in section 
1886(d)(3)(E)(iii)(II) of the Act: for FY 2011, 75 FR 50160 through 
50161; for FY 2012, 76 FR 51793, 51795, and 51825; for FY 2013, 77 FR 
53369 through 53370; for FY 2014, 78 FR 50590 through 50591; for FY 
2015, 79 FR 49971; for FY 2016, 80 FR 49498; for FY 2017, 81 FR 56922; 
for FY 2018, 82 FR 38142; for FY 2019, 83 FR 41380; for FY 2020, 84 FR 
42312; and for FY 2021, 85 FR 58765.
    In addition to the changes required by the Affordable Care Act, we 
note that the proposed FY 2022 IPPS wage indexes continue to reflect a 
number of adjustments implemented in past years, including, but not 
limited to, reclassification of hospitals to different geographic 
areas, the rural floor provisions, an adjustment for occupational mix, 
an adjustment to the wage index based on commuting patterns of 
employees (the out-migration adjustment), and an adjustment to the wage 
index for certain low wage index hospitals to help address wage index 
disparities between low and high wage index hospitals. In addition, in 
the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25405 through 25407), we 
proposed to implement section 9831 of the American Rescue Plan Act of 
2021 (Pub. L. 117-2) which reinstates the imputed floor wage index 
adjustment under the IPPS for hospitals in all-urban states effective 
for discharges on or after October 1, 2021 (FY 2022) using the 
methodology described in Sec.  412.64(h)(4)(vi) as in effect for FY 
2018. Specifically, section 1886(d)(3)(E)(iv)(I) and (II) of the Act, 
as added by section 9831 of the American Rescue Plan Act, provides that 
for discharges occurring on or after October 1, 2021, the area wage 
index applicable under the IPPS 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. We further noted in 
the FY 2022 IPPS/LTCH PPS proposed rule that, 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 (the reinstatement of the imputed floor 
wage index) into the calculation of the IPPS provider wage index for 
the FY 2022 IPPS/LTCH PPS proposed rule, and we stated that we would 
include the imputed floor wage index adjustment in the calculation of 
the IPPS provider wage index in the FY 2022 IPPS/LTCH PPS final rule. 
We note that CMS posted, concurrent with the issuance of the FY 2022 
IPPS/LTCH 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. In addition, we stated in the FY 2022 
IPPS/LTCH PPS proposed rule that, based on data available for the FY 
2022 IPPS/LTCH PPS 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 refer readers to the FY 2022 IPPS/LTCH PPS proposed 
rule (86 FR 25396 through 25417) for a detailed discussion of all 
proposed changes to the FY 2022 IPPS wage indexes.
    Furthermore, as discussed in the FY 2015 IPPS/LTCH PPS final rule 
(79 FR 49951 through 49963) and in each subsequent IPPS/LTCH PPS final 
rule, including the FY 2021 IPPS/LTCH PPS final rule (85 FR 58743 
through 58755), the Office of Management and Budget (OMB) issued 
revisions to the labor market area delineations on February 28, 2013 
(based on 2010 Decennial Census data) that included a number of 
significant changes, such as new Core Based Statistical Areas (CBSAs), 
urban counties that became rural, rural counties that became urban, and 
existing CBSAs that were split apart (OMB Bulletin 13-01). This 
bulletin can be found at: https://obamawhitehouse.archives.gov/sites/default/files/omb/bulletins/2013/b13-01.pdf. In the FY 2015 IPPS/LTCH 
PPS final rule (79 FR 49950 through 49985), for purposes of the IPPS, 
we adopted the use of the OMB statistical area delineations contained 
in OMB Bulletin No. 13-01, effective October 1, 2014. For purposes of 
the OPPS, in the CY 2015 OPPS/ASC final rule with comment period (79 FR 
66826 through 66828), we adopted the use of the OMB statistical area 
delineations contained in OMB Bulletin No. 13-01, effective January 1, 
2015, beginning with the CY 2015 OPPS wage indexes. In the FY 2017 
IPPS/LTCH PPS final rule (81 FR 56913), we adopted revisions to 
statistical areas contained in OMB Bulletin No. 15-01, issued on July 
15, 2015, which provided updates to and superseded OMB Bulletin No. 13-
01 that was issued on February 28, 2013. For purposes of the OPPS, in 
the CY 2017 OPPS/ASC final rule with comment period (81 FR 79598), we 
adopted the revisions to the OMB statistical area delineations 
contained in OMB Bulletin No. 15-01, effective January 1, 2017, 
beginning with the CY 2017 OPPS wage indexes.
    On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which 
provided updates to and superseded OMB Bulletin No. 15-01 that was 
issued on July 15, 2015. The attachments to OMB Bulletin No. 17-01 
provided detailed information on the update to the statistical areas 
since July 15, 2015, and were based on the application of the 2010 
Standards for Delineating Metropolitan and Micropolitan Statistical 
Areas to Census Bureau population estimates for July 1, 2014 and July 
1, 2015. For purposes of the OPPS, in the CY 2019 OPPS/ASC final rule 
with comment period (83 FR 58863 through 58865), we adopted the updates 
set forth in OMB Bulletin No. 17-01,

[[Page 42051]]

effective January 1, 2019, beginning with the CY 2019 wage index.
    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 new CBSAs, urban counties that became rural, rural counties that 
became urban, and some existing CBSAs that were split apart. In 
addition, some of these modifications had a number of downstream 
effects, such as reclassification changes. These bulletins established 
revised delineations for Metropolitan Statistical Areas, Micropolitan 
Statistical Areas, and Combined Statistical Areas, and provided 
guidance on the use of the delineations of these statistical areas. For 
purposes of the OPPS, in the CY 2021 OPPS/ASC final rule with comment 
period (85 FR 85907 through 85908), we adopted the updates set forth in 
OMB Bulletin No. 18-04 effective January 1, 2021, beginning with the CY 
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 CY 
2021 OPPS/ASC final rule with comment period.
    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 updates 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. As we stated in the FY 2022 IPPS/LTCH PPS 
proposed rule (86 FR 25397), after reviewing OMB Bulletin No. 20-01, we 
determined that the changes in Bulletin 20-01 encompassed delineation 
changes that would not affect the Medicare IPPS 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, consistent with our 
discussion in the FY 2022 IPPS/LTCH PPS proposed rule, while we propose 
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 OPPS wage index updates would not be necessary for 
CY 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 OPPS wage index calculation for CY 2022.
    For CY 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, as 
discussed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25397), 
given the unprecedented nature of the ongoing COVID-19 PHE, we sought 
comment in the FY 2022 IPPS/LTCH PPS proposed rule on whether it would 
be appropriate to continue to apply a transition for the FY 2022 IPPS 
wage index for hospitals negatively impacted by our adoption of the 
updates in OMB Bulletin 18-04. For example, we stated that such an 
extended transition could potentially take the form of holding the FY 
2022 IPPS wage index for those hospitals harmless from any reduction 
relative to their FY 2021 wage index. We further stated that if we were 
to apply a transition to the FY 2022 IPPS wage index for hospitals 
negatively impacted by our adoption of the updates in OMB Bulletin 18-
04, we also sought comment on making this transition budget neutral 
under the IPPS, as is our usual practice, in the same manner that the 
FY 2021 IPPS wage index transition was made budget neutral as discussed 
in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58755).
    CBSAs are made up of one or more constituent counties. Each CBSA 
and constituent county has its own unique identifying codes. The FY 
2018 IPPS/LTCH PPS final rule (82 FR 38130) discussed the two different 
lists of codes to identify counties: Social Security Administration 
(SSA) codes and Federal Information Processing Standard (FIPS) codes. 
Historically, CMS listed and used SSA and FIPS county codes to identify 
and crosswalk counties to CBSA codes for purposes of the IPPS and OPPS 
wage indexes. However, the SSA county codes are no longer being 
maintained and updated, although the FIPS codes continue to be 
maintained by the U.S. Census Bureau. The Census Bureau's most current 
statistical area information is derived from ongoing census data 
received since 2010; the most recent data are from 2015. The Census 
Bureau maintains a complete list of changes to counties or county 
equivalent entities on the website at: https://www.census.gov/geo/reference/county-changes.html (which, as of May 6, 2019, migrated to: 
https://www.census.gov/programs-surveys/geography.html). In the FY 2018 
IPPS/LTCH PPS final rule (82 FR 38130), for purposes of crosswalking 
counties to CBSAs for the IPPS wage index, we finalized our proposal to 
discontinue the use of the SSA county codes and begin using only the 
FIPS county codes. Similarly, for the purposes of crosswalking counties 
to CBSAs for the OPPS wage index, in the CY 2018 OPPS/ASC final rule 
with comment period (82 FR 59260), we finalized our proposal to 
discontinue the use of SSA county codes and begin using only the FIPS 
county codes. For CY 2022, under the OPPS, we are continuing to use 
only the FIPS county codes for purposes of crosswalking counties to 
CBSAs.
    We propose to use the FY 2022 IPPS post-reclassified wage index for 
urban and rural areas as the wage index for the OPPS to determine the 
wage adjustments for both the OPPS payment

[[Page 42052]]

rate and the copayment rate for CY 2022. Therefore, any adjustments for 
the FY 2022 IPPS post-reclassified wage index, including, but not 
limited to, the imputed floor adjustment and any transition that may be 
applied (as discussed previously), would be reflected in the final CY 
2022 OPPS wage index beginning on January 1, 2022. (We refer readers to 
the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25396 through 25417) and 
the proposed FY 2022 hospital wage index files posted on the CMS 
website.) With regard to budget neutrality for the CY 2022 OPPS wage 
index, we refer readers to section II.B. of this CY 2022 OPPS/ASC 
proposed rule. We continue to believe that using the IPPS post-
reclassified wage index as the source of an adjustment factor for the 
OPPS is reasonable and logical, given the inseparable, subordinate 
status of the HOPD within the hospital overall.
    Hospitals that are paid under the OPPS, but not under the IPPS, do 
not have an assigned hospital wage index under the IPPS. Therefore, for 
non-IPPS hospitals paid under the OPPS, it is our longstanding policy 
to assign the wage index that would be applicable if the hospital was 
paid under the IPPS, based on its geographic location and any 
applicable wage index adjustments. In this CY 2022 OPPS/ASC proposed 
rule, we propose to continue this policy for CY 2022, and are including 
below a brief summary of the major proposed FY 2022 IPPS wage index 
policies and adjustments that we propose to apply to these hospitals 
under the OPPS for CY 2022. We referred readers to the FY 2022 IPPS/
LTCH PPS proposed rule (86 FR 25396 through 25417) for a detailed 
discussion of the proposed changes to the FY 2022 IPPS wage indexes.
    It has been our longstanding policy to allow non-IPPS hospitals 
paid under the OPPS to qualify for the out-migration adjustment if they 
are located in a section 505 out-migration county (section 505 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(MMA)). Applying this adjustment is consistent with our policy of 
adopting IPPS wage index policies for hospitals paid under the OPPS. We 
note that, because non-IPPS hospitals cannot reclassify, they are 
eligible for the out-migration wage index adjustment if they are 
located in a section 505 out-migration county. This is the same out-
migration adjustment policy that would apply if the hospital were paid 
under the IPPS. For CY 2022, we propose to continue our policy of 
allowing non-IPPS hospitals paid under the OPPS to qualify for the 
outmigration adjustment if they are located in a section 505 out-
migration county (section 505 of the MMA). Furthermore, we propose that 
the wage index that would apply for CY 2022 to non-IPPS hospitals paid 
under the OPPS would continue to include the rural floor adjustment and 
any adjustments applied to the IPPS wage index to address wage index 
disparities. In addition, the wage index that would apply to non-IPPS 
hospitals paid under the OPPS would include any transition we may 
finalize for the FY 2022 IPPS wage index as discussed previously.
    For CMHCs, for CY 2022, we propose to continue to calculate the 
wage index by using the post-reclassification IPPS wage index based on 
the CBSA where the CMHC is located. Furthermore, we propose that the 
wage index that would apply to CMHCs for CY 2022 would continue to 
include the rural floor adjustment and any adjustments applied to the 
IPPS wage index to address wage index disparities. In addition, the 
wage index that would apply to CMHCs would include any transition we 
may finalize for the FY 2022 IPPS wage index as discussed above. Also, 
we propose that the wage index that would apply to CMHCs would not 
include the outmigration adjustment because that adjustment only 
applies to hospitals.
    Table 4A associated with the FY 2022 IPPS/LTCH PPS proposed rule 
(available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index) 
identifies counties that would be eligible for the out-migration 
adjustment. Table 2 associated with the FY 2022 IPPS/LTCH PPS proposed 
rule (available for download via the website above) identifies IPPS 
hospitals that would receive the out-migration adjustment for FY 2022. 
We are including the outmigration adjustment information from Table 2 
associated with the FY 2022 IPPS/LTCH PPS proposed rule as Addendum L 
to this CY 2022 OPPS/ASC proposed rule with the addition of non-IPPS 
hospitals that would receive the section 505 outmigration adjustment 
under this proposed rule. Addendum L is available via the internet on 
the CMS website. We refer readers to the CMS website for the OPPS at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index. At this link, readers will find a link to 
the proposed FY 2022 IPPS wage index tables and Addendum L.

D. Proposed Statewide Average Default Cost-to-Charge Ratios (CCRs)

    In addition to using CCRs to estimate costs from charges on claims 
for ratesetting, we use overall hospital-specific CCRs calculated from 
the hospital's most recent cost report to determine outlier payments, 
payments for pass-through devices, and monthly interim transitional 
corridor payments under the OPPS during the PPS year. For certain 
hospitals, under the regulations at 42 CFR 419.43(d)(5)(iii), we use 
the statewide average default CCRs to determine the payments mentioned 
earlier if it is not possible to determine an accurate CCR for a 
hospital in certain circumstances. This includes hospitals that are 
new, hospitals that have not accepted assignment of an existing 
hospital's provider agreement, and hospitals that have not yet 
submitted a cost report. We also use the statewide average default CCRs 
to determine payments for hospitals whose CCR falls outside the 
predetermined ceiling threshold for a valid CCR or for hospitals in 
which the most recent cost report reflects an all-inclusive rate status 
(Medicare Claims Processing Manual (Pub. 100-04), Chapter 4, Section 
10.11).
    We discussed our policy for using default CCRs, including setting 
the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final 
rule with comment period (73 FR 68594 through 68599) in the context of 
our adoption of an outlier reconciliation policy for cost reports 
beginning on or after January 1, 2009. For details on our process for 
calculating the statewide average CCRs, we refer readers to the CY 2022 
OPPS proposed rule Claims Accounting Narrative that is posted on our 
website. We propose to calculate the default ratios for CY 2022 using 
cost report data from the same set of cost reports we originally used 
in the CY 2021 OPPS ratesetting, consistent with the broader proposal 
regarding 2022 OPPS ratesetting discussed in section X.E. of this 
proposed rule.
    We no longer publish a table in the Federal Register containing the 
statewide average CCRs in the annual OPPS proposed rule and final rule 
with comment period. These CCRs with the upper limit will be available 
for download with each OPPS CY proposed rule and final rule on the CMS 
website. We refer readers to our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; click on the link on 
the left of the page titled ``Hospital Outpatient Regulations and 
Notices'' and then select the relevant regulation to download the 
statewide CCRs and upper limit in the Downloads section of the web 
page.

[[Page 42053]]

E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs) and 
Essential Access Community Hospitals (EACHs) Under Section 
1833(t)(13)(B) of the Act for CY 2022

    In the CY 2006 OPPS final rule with comment period (70 FR 68556), 
we finalized a payment increase for rural sole community hospitals 
(SCHs) of 7.1 percent for all services and procedures paid under the 
OPPS, excluding drugs, biologicals, brachytherapy sources, and devices 
paid under the pass-through payment policy, in accordance with section 
1833(t)(13)(B) of the Act, as added by section 411 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) 
(Pub. L. 108-173). Section 1833(t)(13) of the Act provided the 
Secretary the authority to make an adjustment to OPPS payments for 
rural hospitals, effective January 1, 2006, if justified by a study of 
the difference in costs by APC between hospitals in rural areas and 
hospitals in urban areas. Our analysis showed a difference in costs for 
rural SCHs. Therefore, for the CY 2006 OPPS, we finalized a payment 
adjustment for rural SCHs of 7.1 percent for all services and 
procedures paid under the OPPS, excluding separately payable drugs and 
biologicals, brachytherapy sources, items paid at charges reduced to 
costs, and devices paid under the pass-through payment policy, in 
accordance with section 1833(t)(13)(B) of the Act.
    In the CY 2007 OPPS/ASC final rule with comment period (71 FR 68010 
and 68227), for purposes of receiving this rural adjustment, we revised 
our regulations at Sec.  419.43(g) to clarify that essential access 
community hospitals (EACHs) are also eligible to receive the rural SCH 
adjustment, assuming these entities otherwise meet the rural adjustment 
criteria. Currently, two hospitals are classified as EACHs, and as of 
CY 1998, under section 4201(c) of Public Law 105-33, a hospital can no 
longer become newly classified as an EACH.
    This adjustment for rural SCHs is budget neutral and applied before 
calculating outlier payments and copayments. We stated in the CY 2006 
OPPS final rule with comment period (70 FR 68560) that we would not 
reestablish the adjustment amount on an annual basis, but we may review 
the adjustment in the future and, if appropriate, would revise the 
adjustment. We provided the same 7.1 percent adjustment to rural SCHs, 
including EACHs, again in CYs 2008 through 2021. Further, in the CY 
2009 OPPS/ASC final rule with comment period (73 FR 68590), we updated 
the regulations at Sec.  419.43(g)(4) to specify, in general terms, 
that items paid at charges adjusted to costs by application of a 
hospital-specific CCR are excluded from the 7.1 percent payment 
adjustment.
    For CY 2022, we propose to continue the current policy of a 7.1 
percent payment adjustment that is done in a budget neutral manner for 
rural SCHs, including EACHs, for all services and procedures paid under 
the OPPS, excluding separately payable drugs and biologicals, 
brachytherapy sources, items paid at charges reduced to costs, and 
devices paid under the pass-through payment policy.

F. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2021

1. Background
    Since the inception of the OPPS, which was authorized by the 
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), Medicare has paid 
the 11 hospitals that meet the criteria for cancer hospitals identified 
in section 1886(d)(1)(B)(v) of the Act under the OPPS for covered 
outpatient hospital services. These cancer hospitals are exempted from 
payment under the IPPS. With the Medicare, Medicaid and SCHIP Balanced 
Budget Refinement Act of 1999 (Pub. L. 106-113), the Congress added 
section 1833(t)(7), ``Transitional Adjustment to Limit Decline in 
Payment,'' to the Act, which requires the Secretary to determine OPPS 
payments to cancer and children's hospitals based on their pre-BBA 
payment amount (these hospitals are often referred to under this policy 
as ``held harmless'' and their payments are often referred to as ``hold 
harmless'' payments).
    As required under section 1833(t)(7)(D)(ii) of the Act, a cancer 
hospital receives the full amount of the difference between payments 
for covered outpatient services under the OPPS and a ``pre-BBA 
amount.'' That is, cancer hospitals are permanently held harmless to 
their ``pre-BBA amount,'' and they receive transitional outpatient 
payments (TOPs) or hold harmless payments to ensure that they do not 
receive a payment that is lower in amount under the OPPS than the 
payment amount they would have received before implementation of the 
OPPS, as set forth in section 1833(t)(7)(F) of the Act. The ``pre-BBA 
amount'' is the product of the hospital's reasonable costs for covered 
outpatient services occurring in the current year and the base payment-
to-cost ratio (PCR) for the hospital defined in section 
1833(t)(7)(F)(ii) of the Act. The ``pre-BBA amount'' and the 
determination of the base PCR are defined at Sec.  419.70(f). TOPs are 
calculated on Worksheet E, Part B, of the Hospital Cost Report or the 
Hospital Health Care Complex Cost Report (Form CMS-2552-96 or Form CMS-
2552-10, respectively), as applicable each year. Section 1833(t)(7)(I) 
of the Act exempts TOPs from budget neutrality calculations.
    Section 3138 of the Affordable Care Act amended section 1833(t) of 
the Act by adding a new paragraph (18), which instructs the Secretary 
to conduct a study to determine if, under the OPPS, outpatient costs 
incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of 
the Act with respect to APC groups exceed outpatient costs incurred by 
other hospitals furnishing services under section 1833(t) of the Act, 
as determined appropriate by the Secretary. Section 1833(t)(18)(A) of 
the Act requires the Secretary to take into consideration the cost of 
drugs and biologicals incurred by cancer hospitals and other hospitals. 
Section 1833(t)(18)(B) of the Act provides that, if the Secretary 
determines that cancer hospitals' costs are higher than those of other 
hospitals, the Secretary shall provide an appropriate adjustment under 
section 1833(t)(2)(E) of the Act to reflect these higher costs. In 
2011, after conducting the study required by section 1833(t)(18)(A) of 
the Act, we determined that outpatient costs incurred by the 11 
specified cancer hospitals were greater than the costs incurred by 
other OPPS hospitals. For a complete discussion regarding the cancer 
hospital cost study, we refer readers to the CY 2012 OPPS/ASC final 
rule with comment period (76 FR 74200 through 74201).
    Based on these findings, we finalized a policy to provide a payment 
adjustment to the 11 specified cancer hospitals that reflects their 
higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final 
rule with comment period (76 FR 74202 through 74206). Specifically, we 
adopted a policy to provide additional payments to the cancer hospitals 
so that each cancer hospital's final PCR for services provided in a 
given calendar year is equal to the weighted average PCR (which we 
refer to as the ``target PCR'') for other hospitals paid under the 
OPPS. The target PCR is set in advance of the calendar year and is 
calculated using the most recently submitted or settled cost report 
data that are available at the time of final rulemaking for the 
calendar year. The amount of the payment adjustment is made on an 
aggregate basis at cost report settlement. We note that the changes 
made by section

[[Page 42054]]

1833(t)(18) of the Act do not affect the existing statutory provisions 
that provide for TOPs for cancer hospitals. The TOPs are assessed, as 
usual, after all payments, including the cancer hospital payment 
adjustment, have been made for a cost reporting period. Table 3 
displays the target PCR for purposes of the cancer hospital adjustment 
for CY 2012 through CY 2021.
[GRAPHIC] [TIFF OMITTED] TP04AU21.006

2. Proposed Policy for CY 2022
    Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255) 
amended section 1833(t)(18) of the Act by adding subparagraph (C), 
which requires that in applying Sec.  419.43(i) (that is, the payment 
adjustment for certain cancer hospitals) for services furnished on or 
after January 1, 2018, the target PCR adjustment be reduced by 1.0 
percentage point less than what would otherwise apply. Section 16002(b) 
also provides that, in addition to the percentage reduction, the 
Secretary may consider making an additional percentage point reduction 
to the target PCR that takes into account payment rates for applicable 
items and services described under section 1833(t)(21)(C) of the Act 
for hospitals that are not cancer hospitals described under section 
1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality 
adjustment under section 1833(t) of the Act, the Secretary shall not 
take into account the reduced expenditures that result from application 
of section 1833(t)(18)(C) of the Act.
    We propose to provide additional payments to the 11 specified 
cancer hospitals so that each cancer hospital's final PCR is equal to 
the weighted average PCR (or ``target PCR'') for the other OPPS 
hospitals, using the most recent submitted or settled cost report data 
that were available at the time of the development of the proposed 
rule, reduced by 1.0 percentage point, to comply with section 16002(b) 
of the 21st Century Cures Act. We are not proposing an additional 
reduction beyond the 1.0 percentage point reduction required by section 
16002(b) for CY 2022.
    Under our established policy, to calculate the proposed CY 2022 
target PCR, we would use the same extract of cost report data from 
HCRIS used to estimate costs for the CY 2022 OPPS which would be the 
most recently available hospital cost reports which, in most cases, 
would be from CY 2020. However, as discussed in Section II.A.1.a of 
this proposed rule, given our concerns with CY 2020 claims data as a 
result of the PHE, we believe a target PCR based on CY 2020 claims and 
the most recently available cost reports may provide a less accurate 
estimation of cancer hospital PCRs and non-cancer hospital PCRs than 
the data used for the CY 2021 rulemaking cycle. Therefore, for CY 2022, 
we are proposing to continue to use the CY 2021 target PCR of 0.89. 
This proposed CY 2022 target PCR of 0.89 includes the 1.0 percentage 
point reduction required by section 16002(b) of the 21st Century Cures 
Act for CY 2022. For a description of the CY 2021 target PCR 
calculation, we refer readers to the CY 2021 OPPS/ASC final rule with 
comment period (84 FR 85912 through 85914).
    Table 4 shows the estimated percentage increase in OPPS payments to 
each cancer hospital for CY 2022, due to the cancer hospital payment 
adjustment policy. The actual amount of the CY 2022 cancer hospital 
payment adjustment for each cancer hospital will be determined at cost 
report settlement and will depend on each hospital's CY 2022 payments 
and costs. We note that the requirements contained in section 
1833(t)(18) of the Act do not affect the existing statutory provisions 
that provide for TOPs for cancer hospitals. The TOPs will be assessed, 
as usual, after all payments, including the cancer hospital payment 
adjustment, have been made for a cost reporting period.

[[Page 42055]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.007

G. Proposed Hospital Outpatient Outlier Payments

1. Background
    The OPPS provides outlier payments to hospitals to help mitigate 
the financial risk associated with high-cost and complex procedures, 
where a very costly service could present a hospital with significant 
financial loss. As explained in the CY 2015 OPPS/ASC final rule with 
comment period (79 FR 66832 through 66834), we set our projected target 
for aggregate outlier payments at 1.0 percent of the estimated 
aggregate total payments under the OPPS for the prospective year. 
Outlier payments are provided on a service-by-service basis when the 
cost of a service exceeds the APC payment amount multiplier threshold 
(the APC payment amount multiplied by a certain amount) as well as the 
APC payment amount plus a fixed-dollar amount threshold (the APC 
payment plus a certain amount of dollars). In CY 2021, the outlier 
threshold was met when the hospital's cost of furnishing a service 
exceeded 1.75 times (the multiplier threshold) the APC payment amount 
and exceeded the APC payment amount plus $5,300 (the fixed-dollar 
amount threshold) (85 FR 85914 through 85916). If the cost of a service 
exceeds both the multiplier threshold and the fixed-dollar threshold, 
the outlier payment is calculated as 50 percent of the amount by which 
the cost of furnishing the service exceeds 1.75 times the APC payment 
amount. Beginning with CY 2009 payments, outlier payments are subject 
to a reconciliation process similar to the IPPS outlier reconciliation 
process for cost reports, as discussed in the CY 2009 OPPS/ASC final 
rule with comment period (73 FR 68594 through 68599).
    It has been our policy to report the actual amount of outlier 
payments as a percent of total spending in the claims being used to 
model the OPPS. Our estimate of total outlier payments as a percent of 
total CY 2019 OPPS payments, using CY 2019 claims available for this CY 
2022 OPPS/ASC proposed rule, is approximately 1.0 percent of the total 
aggregated OPPS payments. Therefore, for CY 2019, we estimated that we 
paid the outlier target of 1.0 percent of total aggregated OPPS 
payments. Using an updated claims dataset for this CY 2022 OPPS/ASC 
proposed rule, we estimate that we paid approximately 0.92 percent of 
the total aggregated OPPS payments in outliers for CY 2019.
    For this CY 2022 OPPS/ASC proposed rule, using CY 2019 claims data 
and CY 2021 payment rates, we estimated that the aggregate outlier 
payments for CY 2021 would be approximately 1.06 percent of the total 
CY 2021 OPPS payments. We provided estimated CY 2021 outlier payments 
for hospitals and CMHCs with claims included in the claims data that we 
used to model impacts in the Hospital-Specific Impacts--Provider-
Specific Data file on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
2. Outlier Calculation for CY 2022
    For CY 2022, we propose to continue our policy of estimating 
outlier payments to be 1.0 percent of the estimated aggregate total 
payments under the OPPS. We propose that a portion of that 1.0 percent, 
an amount equal to less than 0.01 percent of outlier payments (or 
0.0001 percent of total OPPS payments), would be allocated to CMHCs for 
PHP outlier payments. This is the amount of estimated outlier payments 
that would result from the proposed CMHC outlier threshold as a 
proportion of total estimated OPPS outlier payments. We propose to 
continue our longstanding policy that if a CMHC's cost for partial 
hospitalization services, paid under APC 5853 (Partial

[[Page 42056]]

Hospitalization for CMHCs), exceeds 3.40 times the payment rate for 
proposed APC 5853, the outlier payment would be calculated as 50 
percent of the amount by which the cost exceeds 3.40 times the proposed 
APC 5853 payment rate.
    For further discussion of CMHC outlier payments, we refer readers 
to section VIII.C. of this CY 2022 OPPS/ASC proposed rule.
    To ensure that the estimated CY 2022 aggregate outlier payments 
would equal 1.0 percent of estimated aggregate total payments under the 
OPPS, we propose that the hospital outlier threshold be set so that 
outlier payments would be triggered when a hospital's cost of 
furnishing a service exceeds 1.75 times the APC payment amount and 
exceeds the APC payment amount plus $6,100.
    We calculated the proposed fixed-dollar threshold of $6,100 using 
the standard methodology most recently used for CY 2021 (85 FR 85914 
through 85916). For purposes of estimating outlier payments for the 
proposed rule, we used the hospital-specific overall ancillary CCRs 
available in the April 2020 update to the Outpatient Provider-Specific 
File (OPSF). The OPSF contains provider-specific data, such as the most 
current CCRs, which are maintained by the MACs and used by the OPPS 
Pricer to pay claims. The claims that we use to model each OPPS update 
lag by 2 years.
    In order to estimate the CY 2022 hospital outlier payments for the 
proposed rule, we inflated the charges on the CY 2019 claims using the 
same inflation factor of 1.20469 that we used to estimate the IPPS 
fixed-dollar outlier threshold for the FY 2022 IPPS/LTCH PPS proposed 
rule (86 FR 25718). We used an inflation factor of 1.13218 to estimate 
CY 2021 charges from the CY 2019 charges reported on CY 2019 claims. 
The methodology for determining this charge inflation factor is 
discussed in the FY 2021 IPPS/LTCH PPS final rule (85 FR 59039). As we 
stated in the CY 2005 OPPS final rule with comment period (69 FR 
65845), we believe that the use of these charge inflation factors is 
appropriate for the OPPS because, with the exception of the inpatient 
routine service cost centers, hospitals use the same ancillary and 
outpatient cost centers to capture costs and charges for inpatient and 
outpatient services.
    As noted in the CY 2007 OPPS/ASC final rule with comment period (71 
FR 68011), we are concerned that we could systematically overestimate 
the OPPS hospital outlier threshold if we did not apply a CCR inflation 
adjustment factor. Therefore, we propose to apply the same CCR 
inflation adjustment factor that we propose to apply for the FY 2022 
IPPS outlier calculation to the CCRs used to simulate the proposed CY 
2022 OPPS outlier payments to determine the fixed-dollar threshold. 
Specifically, for CY 2022, we propose to apply an adjustment factor of 
0.94964 to the CCRs that were in the April 2020 OPSF to trend them 
forward from CY 2020 to CY 2022. The methodology for calculating the 
proposed adjustment is discussed in the FY 2022 IPPS/LTCH PPS proposed 
rule (86 FR 25717 through 25719).
    To model hospital outlier payments for this proposed rule, we 
applied the overall CCRs from the April 2021 OPSF after adjustment 
(using the proposed CCR inflation adjustment factor of 0.94964 to 
approximate CY 2022 CCRs) to charges on CY 2019 claims that were 
adjusted (using the proposed charge inflation factor of 1.20469 to 
approximate CY 2022 charges). We simulated aggregated CY 2021 hospital 
outlier payments using these costs for several different fixed-dollar 
thresholds, holding the 1.75 multiplier threshold constant and assuming 
that outlier payments would continue to be made at 50 percent of the 
amount by which the cost of furnishing the service would exceed 1.75 
times the APC payment amount, until the total outlier payments equaled 
1.0 percent of aggregated estimated total CY 2021 OPPS payments. We 
estimated that a proposed fixed-dollar threshold of $6,100, combined 
with the proposed multiplier threshold of 1.75 times the APC payment 
rate, would allocate 1.0 percent of aggregated total OPPS payments to 
outlier payments. For CMHCs, we propose that, if a CMHC's cost for 
partial hospitalization services, paid under APC 5853, exceeds 3.40 
times the payment rate for APC 5853, the outlier payment would be 
calculated as 50 percent of the amount by which the cost exceeds 3.40 
times the APC 5853 payment rate.
    Section 1833(t)(17)(A) of the Act, which applies to hospitals, as 
defined under section 1886(d)(1)(B) of the Act, requires that hospitals 
that fail to report data required for the quality measures selected by 
the Secretary, in the form and manner required by the Secretary under 
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point 
reduction to their OPD fee schedule increase factor; that is, the 
annual payment update factor. The application of a reduced OPD fee 
schedule increase factor results in reduced national unadjusted payment 
rates that will apply to certain outpatient items and services 
furnished by hospitals that are required to report outpatient quality 
data and that fail to meet the Hospital OQR Program requirements. For 
hospitals that fail to meet the Hospital OQR Program requirements, we 
propose to continue the policy that we implemented in CY 2010 that the 
hospitals' costs will be compared to the reduced payments for purposes 
of outlier eligibility and payment calculation. For more information on 
the Hospital OQR Program, we refer readers to section XIV. of this 
proposed rule.

H. Proposed Calculation of an Adjusted Medicare Payment From the 
National Unadjusted Medicare Payment

    The basic methodology for determining prospective payment rates for 
HOPD services under the OPPS is set forth in existing regulations at 42 
CFR part 419, subparts C and D. For this CY 2022 OPPS/ASC proposed 
rule, the payment rate for most services and procedures for which 
payment is made under the OPPS is the product of the conversion factor 
calculated in accordance with section II.B. of this proposed rule and 
the relative payment weight determined under section II.A. of this 
proposed rule. Therefore, the proposed national unadjusted payment rate 
for most APCs contained in Addendum A to this proposed rule (which is 
available via the internet on the CMS website) and for most HCPCS codes 
to which separate payment under the OPPS has been assigned in Addendum 
B to this proposed rule (which is available via the internet on the CMS 
website) was calculated by multiplying the proposed CY 2022 scaled 
weight for the APC by the CY 2022 conversion factor.
    We note that section 1833(t)(17) of the Act, which applies to 
hospitals, as defined under section 1886(d)(1)(B) of the Act, requires 
that hospitals that fail to submit data required to be submitted on 
quality measures selected by the Secretary, in the form and manner and 
at a time specified by the Secretary, incur a reduction of 2.0 
percentage points to their OPD fee schedule increase factor, that is, 
the annual payment update factor. The application of a reduced OPD fee 
schedule increase factor results in reduced national unadjusted payment 
rates that apply to certain outpatient items and services provided by 
hospitals that are required to report outpatient quality data and that 
fail to meet the Hospital OQR Program (formerly referred to as the 
Hospital Outpatient Quality Data Reporting Program (HOP QDRP)) 
requirements. For further discussion of the payment reduction for 
hospitals that fail to meet the requirements of the

[[Page 42057]]

Hospital OQR Program, we refer readers to section XIV of this proposed 
rule.
    We demonstrate the steps used to determine the APC payments that 
will be made in a CY under the OPPS to a hospital that fulfills the 
Hospital OQR Program requirements and to a hospital that fails to meet 
the Hospital OQR Program requirements for a service that has any of the 
following status indicator assignments: ``J1'', ``J2'', ``P'', ``Q1'', 
``Q2'', ``Q3'', ``Q4'', ``R'', ``S'', ``T'', ``U'', or ``V'' (as 
defined in Addendum D1 to the proposed rule, which is available via the 
internet on the CMS website), in a circumstance in which the multiple 
procedure discount does not apply, the procedure is not bilateral, and 
conditionally packaged services (status indicator of ``Q1'' and ``Q2'') 
qualify for separate payment. We note that, although blood and blood 
products with status indicator ``R'' and brachytherapy sources with 
status indicator ``U'' are not subject to wage adjustment, they are 
subject to reduced payments when a hospital fails to meet the Hospital 
OQR Program requirements.
    Individual providers interested in calculating the payment amount 
that they will receive for a specific service from the national 
unadjusted payment rates presented in Addenda A and B to the proposed 
rule (which are available via the internet on the CMS website) should 
follow the formulas presented in the following steps. For purposes of 
the payment calculations below, we refer to the national unadjusted 
payment rate for hospitals that meet the requirements of the Hospital 
OQR Program as the ``full'' national unadjusted payment rate. We refer 
to the national unadjusted payment rate for hospitals that fail to meet 
the requirements of the Hospital OQR Program as the ``reduced'' 
national unadjusted payment rate. The reduced national unadjusted 
payment rate is calculated by multiplying the reporting ratio of 0.9805 
times the ``full'' national unadjusted payment rate. The national 
unadjusted payment rate used in the calculations below is either the 
full national unadjusted payment rate or the reduced national 
unadjusted payment rate, depending on whether the hospital met its 
Hospital OQR Program requirements to receive the full CY 2022 OPPS fee 
schedule increase factor.
    Step 1. Calculate 60 percent (the labor-related portion) of the 
national unadjusted payment rate. Since the initial implementation of 
the OPPS, we have used 60 percent to represent our estimate of that 
portion of costs attributable, on average, to labor. We refer readers 
to the April 7, 2000 OPPS final rule with comment period (65 FR 18496 
through 18497) for a detailed discussion of how we derived this 
percentage. During our regression analysis for the payment adjustment 
for rural hospitals in the CY 2006 OPPS final rule with comment period 
(70 FR 68553), we confirmed that this labor-related share for hospital 
outpatient services is appropriate.
    The formula below is a mathematical representation of Step 1 and 
identifies the labor-related portion of a specific payment rate for a 
specific service.
    X is the labor-related portion of the national unadjusted payment 
rate.
    X = .60 * (national unadjusted payment rate).
    Step 2. Determine the wage index area in which the hospital is 
located and identify the wage index level that applies to the specific 
hospital. We note that, for the CY 2021 OPPS wage index (85 FR 85907 
through 85908), we adopted the updated OMB delineations based on OMB 
Bulletin No. 18-04 and related IPPS wage index adjustments finalized in 
the FY 2021 IPPS/LTCH PPS final rule. The wage index values assigned to 
each area would reflect the geographic statistical areas (which are 
based upon OMB standards) to which hospitals are assigned for FY 2022 
under the IPPS, reclassifications through the Medicare Geographic 
Classification Review Board (MGCRB), section 1886(d)(8)(B) ``Lugar'' 
hospitals, and reclassifications under section 1886(d)(8)(E) of the 
Act, as implemented in Sec.  412.103 of the regulations. We propose to 
continue to apply for the CY 2022 OPPS wage index any adjustments for 
the FY 2022 IPPS post-reclassified wage index, including, but not 
limited to, the rural floor adjustment, a wage index floor of 1.00 in 
frontier states, in accordance with section 10324 of the Affordable 
Care Act of 2010, and an adjustment to the wage index for certain low 
wage index hospitals. For further discussion of the wage index we 
propose to apply for the CY 2022 OPPS, we refer readers to section 
II.C. of this proposed rule.
    Step 3. Adjust the wage index of hospitals located in certain 
qualifying counties that have a relatively high percentage of hospital 
employees who reside in the county, but who work in a different county 
with a higher wage index, in accordance with section 505 of Public Law 
108-173. Addendum L to this proposed rule (which is available via the 
internet on the CMS website) contains the qualifying counties and the 
associated wage index increase developed for the proposed FY 2022 IPPS 
wage index, which are listed in Table 2 associated with the FY 2022 
IPPS/LTCH PPS proposed rule and available via the internet on the CMS 
website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. (Click on the link on the left 
side of the screen titled ``FY 2022 IPPS Proposed Rule Home Page'' and 
select ``FY 2022 Proposed Rule Tables.'') This step is to be followed 
only if the hospital is not reclassified or redesignated under section 
1886(d)(8) or section 1886(d)(10) of the Act.
    Step 4. Multiply the applicable wage index determined under Steps 2 
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
    The formula below is a mathematical representation of Step 4 and 
adjusts the labor-related portion of the national unadjusted payment 
rate for the specific service by the wage index.
    Xa is the labor-related portion of the national unadjusted payment 
rate (wage adjusted).
    Xa = .60 * (national unadjusted payment rate) * applicable wage 
index.
    Step 5. Calculate 40 percent (the nonlabor-related portion) of the 
national unadjusted payment rate and add that amount to the resulting 
product of Step 4. The result is the wage index adjusted payment rate 
for the relevant wage index area.
    The formula below is a mathematical representation of Step 5 and 
calculates the remaining portion of the national payment rate, the 
amount not attributable to labor, and the adjusted payment for the 
specific service.
    Y is the nonlabor-related portion of the national unadjusted 
payment rate.
    Y = .40 * (national unadjusted payment rate).
    Adjusted Medicare Payment = Y + Xa.
    Step 6. If a provider is an SCH, as set forth in the regulations at 
Sec.  412.92, or an EACH, which is considered to be an SCH under 
section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural 
area, as defined in Sec.  412.64(b), or is treated as being located in 
a rural area under Sec.  412.103, multiply the wage index adjusted 
payment rate by 1.071 to calculate the total payment.
    The formula below is a mathematical representation of Step 6 and 
applies the rural adjustment for rural SCHs.
    Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment 
* 1.071.
    We are providing examples below of the calculation of both the full 
and reduced national unadjusted payment rates that will apply to 
certain outpatient items and services performed by hospitals that meet 
and that fail to meet the Hospital OQR Program requirements, using the 
steps outlined previously. For purposes of this

[[Page 42058]]

example, we are using a provider that is located in Brooklyn, New York 
that is assigned to CBSA 35614. This provider bills one service that is 
assigned to APC 5071 (Level 1 Excision/Biopsy/Incision and Drainage). 
The proposed CY 2022 full national unadjusted payment rate for APC 5071 
is $638.48. The proposed reduced national unadjusted payment rate for 
APC 5071 for a hospital that fails to meet the Hospital OQR Program 
requirements is $626.03. This proposed reduced rate is calculated by 
multiplying the reporting ratio of 0.9805 by the full unadjusted 
payment rate for APC 5071.
    The proposed FY 2022 wage index for a provider located in CBSA 
35614 in New York, which includes the proposed adoption of IPPS 2022 
wage index policies, is 1.3404. The labor-related portion of the 
proposed full national unadjusted payment is approximately $513.49 (.60 
* $638.48 * 1.3404). The labor-related portion of the proposed reduced 
national unadjusted payment is approximately $503.48 (.60 * $626.03 * 
1.3404). The nonlabor-related portion of the proposed full national 
unadjusted payment is approximately $255.39 (.40 * $638.48). The 
nonlabor-related portion of the proposed reduced national unadjusted 
payment is approximately $250.41 (.40 * $626.03). The sum of the labor-
related and nonlabor-related portions of the proposed full national 
adjusted payment is approximately $768.88 ($513.49 + $255.39). The sum 
of the portions of the proposed reduced national adjusted payment is 
approximately $753.89 ($503.48 + $250.41).

I. Proposed Beneficiary Copayments

1. Background
    Section 1833(t)(3)(B) of the Act requires the Secretary to set 
rules for determining the unadjusted copayment amounts to be paid by 
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of 
the Act specifies that the Secretary must reduce the national 
unadjusted copayment amount for a covered OPD service (or group of such 
services) furnished in a year in a manner so that the effective 
copayment rate (determined on a national unadjusted basis) for that 
service in the year does not exceed a specified percentage. As 
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective 
copayment rate for a covered OPD service paid under the OPPS in CY 
2006, and in CYs thereafter, shall not exceed 40 percent of the APC 
payment rate.
    Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered 
OPD service (or group of such services) furnished in a year, the 
national unadjusted copayment amount cannot be less than 20 percent of 
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the 
Act limits the amount of beneficiary copayment that may be collected 
for a procedure (including items such as drugs and biologicals) 
performed in a year to the amount of the inpatient hospital deductible 
for that year.
    Section 4104 of the Affordable Care Act eliminated the Medicare 
Part B coinsurance for preventive services furnished on and after 
January 1, 2011, that meet certain requirements, including flexible 
sigmoidoscopies and screening colonoscopies, and waived the Part B 
deductible for screening colonoscopies that become diagnostic during 
the procedure. Our discussion of the changes made by the Affordable 
Care Act with regard to copayments for preventive services furnished on 
and after January 1, 2011, may be found in section XII.B. of the CY 
2011 OPPS/ASC final rule with comment period (75 FR 72013).
2. Proposed OPPS Copayment Policy
    For CY 2022, we propose to determine copayment amounts for new and 
revised APCs using the same methodology that we implemented beginning 
in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule 
with comment period (68 FR 63458).) In addition, we propose to use the 
same standard rounding principles that we have historically used in 
instances where the application of our standard copayment methodology 
would result in a copayment amount that is less than 20 percent and 
cannot be rounded, under standard rounding principles, to 20 percent. 
(We refer readers to the CY 2008 OPPS/ASC final rule with comment 
period (72 FR 66687) in which we discuss our rationale for applying 
these rounding principles.) The proposed national unadjusted copayment 
amounts for services payable under the OPPS that would be effective 
January 1, 2022 are included in Addenda A and B to the proposed rule 
(which are available via the internet on the CMS website).
    As discussed in section XIV.E. of this proposed rule, for CY 2022, 
the Medicare beneficiary's minimum unadjusted copayment and national 
unadjusted copayment for a service to which a reduced national 
unadjusted payment rate applies will equal the product of the reporting 
ratio and the national unadjusted copayment, or the product of the 
reporting ratio and the minimum unadjusted copayment, respectively, for 
the service.
    We note that OPPS copayments may increase or decrease each year 
based on changes in the calculated APC payment rates, due to updated 
cost report and claims data, and any changes to the OPPS cost modeling 
process. However, as described in the CY 2004 OPPS final rule with 
comment period, the development of the copayment methodology generally 
moves beneficiary copayments closer to 20 percent of OPPS APC payments 
(68 FR 63458 through 63459).
    In the CY 2004 OPPS final rule with comment period (68 FR 63459), 
we adopted a new methodology to calculate unadjusted copayment amounts 
in situations including reorganizing APCs, and we finalized the 
following rules to determine copayment amounts in CY 2004 and 
subsequent years.
     When an APC group consists solely of HCPCS codes that were 
not paid under the OPPS the prior year because they were packaged or 
excluded or are new codes, the unadjusted copayment amount would be 20 
percent of the APC payment rate.
     If a new APC that did not exist during the prior year is 
created and consists of HCPCS codes previously assigned to other APCs, 
the copayment amount is calculated as the product of the APC payment 
rate and the lowest coinsurance percentage of the codes comprising the 
new APC.
     If no codes are added to or removed from an APC and, after 
recalibration of its relative payment weight, the new payment rate is 
equal to or greater than the prior year's rate, the copayment amount 
remains constant (unless the resulting coinsurance percentage is less 
than 20 percent).
     If no codes are added to or removed from an APC and, after 
recalibration of its relative payment weight, the new payment rate is 
less than the prior year's rate, the copayment amount is calculated as 
the product of the new payment rate and the prior year's coinsurance 
percentage.
     If HCPCS codes are added to or deleted from an APC and, 
after recalibrating its relative payment weight, holding its unadjusted 
copayment amount constant results in a decrease in the coinsurance 
percentage for the reconfigured APC, the copayment amount would not 
change (unless retaining the copayment amount would result in a 
coinsurance rate less than 20 percent).
     If HCPCS codes are added to an APC and, after 
recalibrating its relative payment weight, holding its unadjusted 
copayment amount constant results in

[[Page 42059]]

an increase in the coinsurance percentage for the reconfigured APC, the 
copayment amount would be calculated as the product of the payment rate 
of the reconfigured APC and the lowest coinsurance percentage of the 
codes being added to the reconfigured APC.
    We noted in the CY 2004 OPPS final rule with comment period that we 
would seek to lower the copayment percentage for a service in an APC 
from the prior year if the copayment percentage was greater than 20 
percent. We noted that this principle was consistent with section 
1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the 
national unadjusted coinsurance rate so that beneficiary liability will 
eventually equal 20 percent of the OPPS payment rate for all OPPS 
services to which a copayment applies, and with section 1833(t)(3)(B) 
of the Act, which achieves a 20-percent copayment percentage when fully 
phased in and gives the Secretary the authority to set rules for 
determining copayment amounts for new services. We further noted that 
the use of this methodology would, in general, reduce the beneficiary 
coinsurance rate and copayment amount for APCs for which the payment 
rate changes as the result of the reconfiguration of APCs and/or 
recalibration of relative payment weights (68 FR 63459).
    Section 122 of the Consolidated Appropriations Act (CAA) of 2021 
(Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal 
Cancer Screening Tests, amends section 1833(a) of the Act to offer a 
special coinsurance rule for screening flexible sigmoidoscopies and 
screening colonoscopies, regardless of the code that is billed for the 
establishment of a diagnosis as a result of the test, or for the 
removal of tissue or other matter or other procedure, that is furnished 
in connection with, as a result of, and in the same clinical encounter 
as the colorectal cancer screening test. We refer readers to section 
X.B., ``Changes to Beneficiary Coinsurance for Certain Colorectal 
Cancer Screening Tests'' of this rule for additional details.
3. Proposed Calculation of an Adjusted Copayment Amount for an APC 
Group
    Individuals interested in calculating the national copayment 
liability for a Medicare beneficiary for a given service provided by a 
hospital that met or failed to meet its Hospital OQR Program 
requirements should follow the formulas presented in the following 
steps.
    Step 1. Calculate the beneficiary payment percentage for the APC by 
dividing the APC's national unadjusted copayment by its payment rate. 
For example, using APC 5071, $127.70 is approximately 20 percent of the 
full national unadjusted payment rate of $638.48. For APCs with only a 
minimum unadjusted copayment in Addenda A and B to this proposed rule 
(which are available via the internet on the CMS website), the 
beneficiary payment percentage is 20 percent.
    The formula below is a mathematical representation of Step 1 and 
calculates the national copayment as a percentage of national payment 
for a given service.
    B is the beneficiary payment percentage.
    B = National unadjusted copayment for APC/national unadjusted 
payment rate for APC.
    Step 2. Calculate the appropriate wage-adjusted payment rate for 
the APC for the provider in question, as indicated in Steps 2 through 4 
under section II.H. of this proposed rule. Calculate the rural 
adjustment for eligible providers, as indicated in Step 6 under section 
II.H. of this proposed rule.
    Step 3. Multiply the percentage calculated in Step 1 by the payment 
rate calculated in Step 2. The result is the wage-adjusted copayment 
amount for the APC.
    The formula below is a mathematical representation of Step 3 and 
applies the beneficiary payment percentage to the adjusted payment rate 
for a service calculated under section II.H. of this proposed rule, 
with and without the rural adjustment, to calculate the adjusted 
beneficiary copayment for a given service.
    Wage-adjusted copayment amount for the APC = Adjusted Medicare 
Payment * B.
    Wage-adjusted copayment amount for the APC (SCH or EACH) = 
(Adjusted Medicare Payment * 1.071) * B.
    Step 4. For a hospital that failed to meet its Hospital OQR Program 
requirements, multiply the copayment calculated in Step 3 by the 
reporting ratio of 0.9805.
    The proposed unadjusted copayments for services payable under the 
OPPS that will be effective January 1, 2022, are shown in Addenda A and 
B to proposed rule (which are available via the internet on the CMS 
website). We note that the proposed national unadjusted payment rates 
and copayment rates shown in Addenda A and B to this proposed rule 
reflect the CY 2022 OPD fee schedule increase factor discussed in 
section II.B. of proposed rule.
    In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act 
limits the amount of beneficiary copayment that may be collected for a 
procedure performed in a year to the amount of the inpatient hospital 
deductible for that year.

III. Proposed OPPS Ambulatory Payment Classification (APC) Group 
Policies

A. Proposed OPPS Treatment of New and Revised HCPCS Codes

    Payments for OPPS procedures, services, and items are generally 
based on medical billing codes, specifically, HCPCS codes, that are 
reported on HOPD claims. The HCPCS is divided into two principal 
subsystems, referred to as Level I and Level II of the HCPCS. Level I 
is comprised of CPT (Current Procedural Terminology) codes, a numeric 
and alphanumeric coding system maintained by the American Medical 
Association (AMA), and consists of Category I, II, and III CPT codes. 
Level II, which is maintained by CMS, is a standardized coding system 
that is used primarily to identify products, supplies, and services not 
included in the CPT codes. HCPCS codes are used to report surgical 
procedures, medical services, items, and supplies under the hospital 
OPPS. Specifically, CMS recognizes the following codes on OPPS claims:
     Category I CPT codes, which describe surgical procedures, 
diagnostic and therapeutic services, and vaccine codes;
     Category III CPT codes, which describe new and emerging 
technologies, services, and procedures; and
     Level II HCPCS codes (also known as alphanumeric codes), 
which are used primarily to identify drugs, devices, ambulance 
services, durable medical equipment, orthotics, prosthetics, supplies, 
temporary surgical procedures, and medical services not described by 
CPT codes.
    CPT codes are established by the American Medical Association (AMA) 
and the Level II HCPCS codes are established by the CMS HCPCS 
Workgroup. These codes are updated and changed throughout the year. CPT 
and Level II HCPCS code changes that affect the OPPS are published 
through the annual rulemaking cycle and through the OPPS quarterly 
update Change Requests (CRs). Generally, these code changes are 
effective January 1, April 1, July 1, or October 1. CPT code changes 
are released by the AMA (via their website) while Level II HCPCS code 
changes are released to the public via the CMS HCPCS website. CMS 
recognizes the release of new CPT and Level II HCPCS codes and makes 
the

[[Page 42060]]

codes effective (that is, the codes can be reported on Medicare claims) 
outside of the formal rulemaking process via OPPS quarterly update CRs. 
Based on our review, we assign the new codes to interim status 
indicators (SIs) and APCs. These interim assignments are finalized in 
the OPPS/ASC final rules. This quarterly process offers hospitals 
access to codes that more accurately describe the items or services 
furnished and provides payment for these items or services in a 
timelier manner than if we waited for the annual rulemaking process. We 
solicit public comments on the new CPT and Level II HCPCS codes, status 
indicators, and APC assignments through our annual rulemaking process.
    We note that, under the OPPS, the APC assignment determines the 
payment rate for an item, procedure, or service. Those items, 
procedures, or services not exclusively paid separately under the 
hospital OPPS are assigned to appropriate status indicators. Certain 
payment status indicators provide separate payment while other payment 
status indicators do not. In section XI. of this proposed rule 
(Proposed CY 2022 OPPS Payment Status and Comment Indicators), we 
discuss the various proposed status indicators used under the OPPS. We 
also provide a complete list of proposed status indicators and their 
definitions in Addendum D1 to this CY 2022 OPPS/ASC proposed rule.
1. April 2021 HCPCS Codes for Which We Are Soliciting Public Comments 
in This Proposed Rule
    For the April 2021 update, 26 new HCPCS codes were established and 
made effective on April 1, 2021. These codes and their long descriptors 
are listed in Table 5 below. Through the April 2021 OPPS quarterly 
update CR (Transmittal 10666, Change Request 12175, dated March 8, 
2021), we recognized several new HCPCS codes for separate payment under 
the OPPS. In this CY 2022 OPPS/ASC proposed rule, we are soliciting 
public comments on the proposed APC and status indicator assignments 
for the codes listed Table 5. The proposed status indicator, APC 
assignment, and payment rate for each HCPCS code can be found in 
Addendum B to this proposed rule. The complete list of proposed status 
indicators and corresponding definitions used under the OPPS can be 
found in Addendum D1 to this proposed rule. These new codes that are 
effective April 1, 2021 are assigned to comment indicator ``NP'' in 
Addendum B to this proposed rule to indicate that the codes are 
assigned to an interim APC assignment and that comments will be 
accepted on their interim APC assignments. Also, the complete list of 
proposed comment indicators and definitions used under the OPPS can be 
found in Addendum D2 to this proposed rule. We note that OPPS Addendum 
B, Addendum D1, and Addendum D2 are available via the internet on the 
CMS website.
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2. July 2021 HCPCS Codes for Which We Are Soliciting Public Comments in 
This Proposed Rule
    For the July 2021 update, 55 new codes were established and made 
effective July 1, 2021. The codes and long descriptors are listed in 
Table 6 below. Through the July 2021 OPPS quarterly update CR 
(Transmittal 10825, Change Request 12316, dated June 11, 2021), we 
recognized several new codes for separate payment and assigned them to 
appropriate interim OPPS status indicators and APCs. In this CY 2022 
OPPS/ASC proposed rule, we are

[[Page 42063]]

soliciting public comments on the proposed APC and status indicator 
assignments for the codes implemented on July 1, 2021, all of which are 
listed in Table 6. The proposed status indicator, APC assignment, and 
payment rate for each HCPCS code can be found in Addendum B to this 
proposed rule. The complete list of proposed status indicators and 
corresponding definitions used under the OPPS can be found in Addendum 
D1 to this proposed rule. These new codes that are effective July 1, 
2021 are assigned to comment indicator ``NP'' in Addendum B to this 
proposed rule to indicate that the codes are assigned to an interim APC 
assignment and that comments will be accepted on their interim APC 
assignments. Also, the complete list of proposed comment indicators and 
definitions used under the OPPS can be found in Addendum D2 to this 
proposed rule. We note that OPPS Addendum B, Addendum D1, and Addendum 
D2 are available via the internet on the CMS website.

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3. October 2021 HCPCS Codes for Which We Will Be Soliciting Public 
Comments in the CY 2022 OPPS/ASC Final Rule With Comment Period
    As has been our practice in the past, we will solicit comments on 
the new CPT and Level II HCPCS codes that will be effective October 1, 
2021 in the CY 2022 OPPS/ASC final rule with comment period, thereby 
allowing us to finalize the status indicators and APC assignments for 
the codes in the CY 2023 OPPS/ASC final rule with comment period. The 
HCPCS codes will be released to the public through the October 2021 
OPPS Update CR and the CMS HCPCS website while the CPT codes will be 
released to the public through the AMA website.
    For CY 2022, we are proposing to continue our established policy of 
assigning comment indicator ``NI'' in Addendum B to the OPPS/ASC final 
rule with comment period to those new HCPCS codes that are effective 
October 1, 2021 to indicate that we are assigning them an interim 
status indicator, which is subject to public comment. We will be 
inviting public comments in the CY 2022 OPPS/ASC final rule with 
comment period on the status indicator and APC assignments, which would 
then be finalized in the CY 2023 OPPS/ASC final rule with comment 
period.
4. January 2022 HCPCS Codes
a. New Level II HCPCS Codes for Which We Will Be Soliciting Public 
Comments in the CY 2022 OPPS/ASC Final Rule With Comment Period
    Consistent with past practice, we will solicit comments on the new 
Level II HCPCS codes that will be effective January 1, 2022 in the CY 
2022 OPPS/ASC final rule with comment period, thereby allowing us to 
finalize the status indicators and APC assignments for the codes in the 
CY 2023 OPPS/ASC final rule with comment period. Unlike the CPT codes 
that are effective January 1 and are included in the OPPS/ASC proposed 
rules, and except for the G-codes listed in Addendum O of this proposed 
rule, most Level II HCPCS codes are not released until sometime around 
November to be effective January 1. Because these codes are not 
available until November, we are unable to include them in the OPPS/ASC 
proposed rules. Consequently, for CY 2022, we propose to include in 
Addendum B to the CY 2022 OPPS/ASC final rule with comment period the 
new Level II HCPCS codes effective January 1, 2022 that would be 
incorporated in the January 2022 OPPS quarterly update CR. These codes 
will be released to the public through the January OPPS quarterly 
update CRs and via the CMS HCPCS website (for Level II HCPCS codes).
    For CY 2022, we are proposing to continue our established policy of 
assigning comment indicator ``NI'' in Addendum B to the OPPS/ASC final 
rule with comment period to the new HCPCS codes that will be effective 
January 1, 2022 to indicate that we are assigning them an interim 
status indicator, which is subject to public comment. We will be 
inviting public comments in the CY 2022 OPPS/ASC final rule with 
comment period on the status indicator and APC assignments, which would 
then be finalized in the CY 2023 OPPS/ASC final rule with comment 
period.
b. CPT Codes for Which We Are Soliciting Public Comments in This 
Proposed Rule
    In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841 
through 66844), we finalized a revised process of assigning APC and 
status indicators for new and revised Category I and III CPT codes that 
would be effective January 1. Specifically, for the new/revised CPT 
codes that we receive in a timely manner from the AMA's CPT Editorial 
Panel, we finalized our proposal to include the codes that would be 
effective January 1 in the OPPS/ASC proposed rules, along with proposed 
APC and status indicator assignments for them, and to finalize the APC 
and status indicator assignments in the OPPS/ASC final rules beginning 
with the CY 2016 OPPS update. For those new/revised CPT codes that were 
received too late for inclusion in the OPPS/ASC proposed rule, we 
finalized our proposal to establish and use HCPCS G-codes that mirror 
the predecessor CPT codes and retain the

[[Page 42069]]

current APC and status indicator assignments for a year until we can 
propose APC and status indicator assignments in the following year's 
rulemaking cycle. We note that even if we find that we need to create 
HCPCS G-codes in place of certain CPT codes for the PFS proposed rule, 
we do not anticipate that these HCPCS G-codes will always be necessary 
for OPPS purposes. We will make every effort to include proposed APC 
and status indicator assignments for all new and revised CPT codes that 
the AMA makes publicly available in time for us to include them in the 
proposed rule, and to avoid resorting to use of HCPCS G-codes and the 
resulting delay in utilization of the most current CPT codes. Also, we 
finalized our proposal to make interim APC and status indicator 
assignments for CPT codes that are not available in time for the 
proposed rule and that describe wholly new services (such as new 
technologies or new surgical procedures), to solicit public comments in 
the final rule, and to finalize the specific APC and status indicator 
assignments for those codes in the following year's final rule.
    For the CY 2022 OPPS update, we received the CPT codes that will be 
effective January 1, 2022 from the AMA in time to be included in this 
proposed rule. The new, revised, and deleted CPT codes can be found in 
Addendum B to this proposed rule (which is available via the internet 
on the CMS website). We note that the new and revised CPT codes are 
assigned to comment indicator ``NP'' in Addendum B of this proposed 
rule to indicate that the code is new for the next calendar year or the 
code is an existing code with substantial revision to its code 
descriptor in the next calendar year as compared to the current 
calendar year with a proposed APC assignment, and that comments will be 
accepted on the proposed APC assignment and status indicator.
    Further, we note that the CPT code descriptors that appear in 
Addendum B are short descriptors and do not accurately describe the 
complete procedure, service, or item described by the CPT code. 
Therefore, we are including the 5-digit placeholder codes and the long 
descriptors for the new and revised CY 2022 CPT codes in Addendum O to 
this proposed rule (which is available via the internet on the CMS 
website) so that the public can adequately comment on our proposed APCs 
and status indicator assignments. The 5-digit placeholder codes can be 
found in Addendum O, specifically under the column labeled ``CY 2022 
OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code''. The final CPT 
code numbers will be included in the CY 2022 OPPS/ASC final rule with 
comment period.
    In summary, we are soliciting public comments on the proposed CY 
2022 status indicators and APC assignments for the new and revised CPT 
codes that will be effective January 1, 2022. Because the CPT codes 
listed in Addendum B appear with short descriptors only, we list them 
again in Addendum O to this proposed rule with long descriptors. In 
addition, we are proposing to finalize the status indicator and APC 
assignments for these codes (with their final CPT code numbers) in the 
CY 2022 OPPS/ASC final rule with comment period. The proposed status 
indicator and APC assignment for these codes can be found in Addendum B 
to this proposed rule (which is available via the internet on the CMS 
website).
    Finally, in Table 7 below, we summarize our current process for 
updating codes through our OPPS quarterly update CRs, seeking public 
comments, and finalizing the treatment of these codes under the OPPS.
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B. Proposed OPPS Changes--Variations Within APCs

1. Background
    Section 1833(t)(2)(A) of the Act requires the Secretary to develop 
a classification system for covered hospital outpatient department 
services. Section 1833(t)(2)(B) of the Act provides that the Secretary 
may establish groups of covered OPD services within this classification 
system, so that services classified within each group are comparable 
clinically and with respect to the use of resources. In accordance with 
these provisions, we developed a grouping classification system, 
referred to as Ambulatory Payment Classifications (APCs), as set forth 
in regulations at 42 CFR[thinsp]419.31. We use Level I (also known as 
CPT codes) and Level II HCPCS codes (also known as alphanumeric codes) 
to identify and group the services within each APC. The APCs are 
organized such that each group is homogeneous both clinically and in 
terms of resource use. Using this classification system, we have 
established distinct groups of similar services. We also have developed 
separate APC groups for certain medical devices, drugs, biologicals, 
therapeutic radiopharmaceuticals, and brachytherapy devices that are 
not packaged into the payment for the procedure.
    We have packaged into the payment for each procedure or service 
within an APC group the costs associated with those items and services 
that are typically ancillary and supportive to a primary diagnostic or 
therapeutic modality and, in those cases, are an integral part of the 
primary service they support. Therefore, we do not make separate 
payment for these packaged items or services. In general, packaged 
items and services include, but are not limited to, the items and 
services listed in regulations at 42 CFR 419.2(b). A further discussion 
of packaged services is included in section II.A.3. of this proposed 
rule.
    Under the OPPS, we generally pay for covered hospital outpatient 
services on a rate-per-service basis, where the service may be reported 
with one or more HCPCS codes. Payment varies according to the APC group 
to which the independent service or combination of services is 
assigned. For CY 2022, we propose that each APC relative payment weight 
represents the hospital cost of the services included in that APC, 
relative to the hospital cost of the services included in APC 5012 
(Clinic Visits and Related Services). The APC relative payment weights 
are scaled to APC 5012 because it is the hospital clinic visit APC and 
clinic visits are among the most frequently furnished services in the 
hospital outpatient setting.
2. Application of the 2 Times Rule
    Section 1833(t)(9)(A) of the Act requires the Secretary to review, 
not less often than annually, and revise the APC groups, the relative 
payment weights, and the wage and other adjustments described in 
paragraph (2) to take into account changes in medical practice, changes 
in technology, the addition of new services, new cost data, and other 
relevant information and factors. Section 1833(t)(9)(A) of the Act also 
requires the Secretary to consult with an expert outside advisory panel 
composed of an appropriate selection of representatives of providers to 
review (and advise the Secretary concerning)

[[Page 42071]]

the clinical integrity of the APC groups and the relative payment 
weights. We note that the HOP Panel recommendations for specific 
services for the CY 2022 OPPS update will be discussed in the relevant 
specific sections throughout the CY 2022 OPPS/ASC final rule with 
comment period.
    In addition, section 1833(t)(2) of the Act provides that, subject 
to certain exceptions, the items and services within an APC group 
cannot be considered comparable with respect to the use of resources if 
the highest cost for an item or service in the group is more than 2 
times greater than the lowest cost for an item or service within the 
same group (referred to as the ``2 times rule''). The statute 
authorizes the Secretary to make exceptions to the 2 times rule in 
unusual cases, such as for low-volume items and services (but the 
Secretary may not make such an exception in the case of a drug or 
biological that has been designated as an orphan drug under section 526 
of the Federal Food, Drug, and Cosmetic Act). In determining the APCs 
with a 2 times rule violation, we consider only those HCPCS codes that 
are significant based on the number of claims. We note that, for 
purposes of identifying significant procedure codes for examination 
under the 2 times rule, we consider procedure codes that have more than 
1,000 single major claims or procedure codes that both have more than 
99 single major claims and contribute at least 2 percent of the single 
major claims used to establish the APC cost to be significant (75 FR 
71832). This longstanding definition of when a procedure code is 
significant for purposes of the 2 times rule was selected because we 
believe that a subset of 1,000 or fewer claims is negligible within the 
set of approximately 100 million single procedure or single session 
claims we use for establishing costs. Similarly, a procedure code for 
which there are fewer than 99 single claims and that comprises less 
than 2 percent of the single major claims within an APC will have a 
negligible impact on the APC cost (75 FR 71832). In this section of 
this proposed rule, for CY 2022, we propose to make exceptions to this 
limit on the variation of costs within each APC group in unusual cases, 
such as for certain low-volume items and services.
    For the CY 2022 OPPS update, we have identified the APCs with 
violations of the 2 times rule. Therefore, we propose changes to the 
procedure codes assigned to these APCs in Addendum B to this proposed 
rule. We note that Addendum B does not appear in the printed version of 
the Federal Register as part of this CY 2022 OPPS/ASC proposed rule. 
Rather, it is published and made available via the internet on the CMS 
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. To eliminate a violation of 
the 2 times rule and improve clinical and resource homogeneity, we 
propose to reassign these procedure codes to new APCs that contain 
services that are similar with regard to both their clinical and 
resource characteristics. In many cases, the proposed procedure code 
reassignments and associated APC reconfigurations for CY 2022 included 
in this proposed rule are related to changes in costs of services that 
were observed in the CY 2019 claims data available for CY 2022 
ratesetting. Addendum B to this CY 2021 OPPS/ASC proposed rule 
identifies with a comment indicator ``CH'' those procedure codes for 
which we propose a change to the APC assignment or status indicator, or 
both, that were initially assigned in the July 1, 2021 OPPS Addendum B 
Update (available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html).
3. Proposed APC Exceptions to the 2 Times Rule
    Taking into account the APC changes that we propose to make for CY 
2022, we reviewed all of the APCs to determine which APCs would not 
meet the requirements of the 2 times rule. We used the following 
criteria to evaluate whether to propose exceptions to the 2 times rule 
for affected APCs:
     Resource homogeneity;
     Clinical homogeneity;
     Hospital outpatient setting utilization;
     Frequency of service (volume); and
     Opportunity for upcoding and code fragments.
    Based on the CY 2019 claims data available for this CY 2022 
proposed rule, we found 23 APCs with violations of the 2 times rule. We 
applied the criteria as described above to identify the APCs for which 
we propose to make exceptions under the 2 times rule for CY 2022, and 
found that all of the 23 APCs we identified meet the criteria for an 
exception to the 2 times rule based on the CY 2019 claims data 
available for this proposed rule. We did not include in that 
determination those APCs where a 2 times rule violation was not a 
relevant concept, such as APC 5401 (Dialysis), which only has two HCPCS 
codes assigned to it that have similar geometric mean costs and do not 
create a 2 times rule violation. Therefore, we have only identified 
those APCs, including those with criteria-based costs, such as device-
dependent CPT/HCPCS codes, with violations of the 2 times rule.
    We note that, for cases in which a recommendation by the HOP Panel 
appears to result in or allow a violation of the 2 times rule, we may 
accept the HOP Panel's recommendation because those recommendations are 
based on explicit consideration (that is, a review of the latest OPPS 
claims data and group discussion of the issue) of resource use, 
clinical homogeneity, site of service, and the quality of the claims 
data used to determine the APC payment rates.
    Table 8 of this proposed rule lists the 23 APCs for which we 
propose to make an exception under the 2 times rule for CY 2021 based 
on the criteria cited above and claims data submitted between January 
1, 2019, and December 31, 2019, and processed on or before June 30, 
2020, and updated CCRs, if available. The proposed geometric mean costs 
for covered hospital outpatient services for these and all other APCs 
that were used in the development of this proposed rule can be found on 
the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
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C. Proposed New Technology APCs

1. Background
    In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes 
to the time period in which a service can be eligible for payment under 
a New Technology APC. Beginning in CY 2002, we retain services within 
New Technology APC groups until we gather sufficient claims data to 
enable us to assign the service to an appropriate clinical APC. This 
policy allows us to move a service from a New Technology APC in less 
than 2 years if sufficient data are available. It also allows us to 
retain a service in a New Technology APC for more than 2 years if 
sufficient data upon which to base a decision for reassignment have not 
been collected.
    In the CY 2004 OPPS final rule with comment period (68 FR 63416), 
we restructured the New Technology APCs to make the cost intervals more 
consistent across payment levels and refined the cost bands for these 
APCs to retain two parallel sets of New Technology APCs, one set with a 
status indicator of ``S'' (Significant Procedures, Not Discounted when 
Multiple. Paid under OPPS; separate APC payment) and the other set with 
a status indicator of ``T'' (Significant Procedure, Multiple Reduction 
Applies. Paid under OPPS; separate APC payment). These current New 
Technology APC configurations allow us to price new technology services 
more appropriately and consistently.
    For CY 2021, there were 52 New Technology APC levels, ranging from 
the lowest cost band assigned to APC 1491 (New Technology--Level 1A 
($0-$10)) through the highest cost band assigned to APC 1908 (New 
Technology--Level 52 ($145,001-$160,000)). We note that the cost bands 
for the New Technology APCs, specifically, APCs 1491 through 1599 and 
1901 through 1908, vary with increments ranging from $10 to $14,999. 
These cost bands identify the APCs to which new technology procedures 
and services with estimated service costs that fall within those cost 
bands are assigned under the OPPS. Payment for each APC is made at the 
mid-point of the APC's assigned cost band. For example, payment for New 
Technology APC 1507 (New Technology--Level 7 ($501--$600)) is made at 
$550.50.
    Under the OPPS, one of our goals is to make payments that are 
appropriate for the services that are necessary for the treatment of 
Medicare beneficiaries. The OPPS, like other Medicare payment systems, 
is budget neutral and increases are limited to the annual hospital 
market basket increase reduced by the productivity adjustment. We 
believe that our payment rates reflect the costs that are associated 
with providing care to Medicare beneficiaries and are adequate to 
ensure access to services (80 FR 70374).
    For many emerging technologies, there is a transitional period 
during

[[Page 42073]]

which utilization may be low, often because providers are first 
learning about the technologies and their clinical utility. Quite 
often, parties request that Medicare make higher payments under the New 
Technology APCs for new procedures in that transitional phase. These 
requests, and their accompanying estimates for expected total patient 
utilization, often reflect very low rates of patient use of expensive 
equipment, resulting in high per-use costs for which requesters believe 
Medicare should make full payment. Medicare does not, and we believe 
should not, assume responsibility for more than its share of the costs 
of procedures based on projected utilization for Medicare beneficiaries 
and does not set its payment rates based on initial projections of low 
utilization for services that require expensive capital equipment. For 
the OPPS, we rely on hospitals to make informed business decisions 
regarding the acquisition of high-cost capital equipment, taking into 
consideration their knowledge about their entire patient base (Medicare 
beneficiaries included) and an understanding of Medicare's and other 
payers' payment policies. We refer readers to the CY 2013 OPPS/ASC 
final rule with comment period (77 FR 68314) for further discussion 
regarding this payment policy.
    We note that, in a budget-neutral system, payments may not fully 
cover hospitals' costs in a particular circumstance, including those 
for the purchase and maintenance of capital equipment. We rely on 
hospitals to make their decisions regarding the acquisition of high-
cost equipment with the understanding that the Medicare program must be 
careful to establish its initial payment rates, including those made 
through New Technology APCs, for new services that lack hospital claims 
data based on realistic utilization projections for all such services 
delivered in cost-efficient hospital outpatient settings. As the OPPS 
acquires claims data regarding hospital costs associated with new 
procedures, we regularly examine the claims data and any available new 
information regarding the clinical aspects of new procedures to confirm 
that our OPPS payments remain appropriate for procedures as they 
transition into mainstream medical practice (77 FR 68314). For CY 2022, 
we included the proposed payment rates for New Technology APCs 1491 to 
1599 and 1901 through 1908 in Addendum A to this CY 2022 OPPS/ASC 
proposed rule (which is available via the internet on the CMS website).
2. Establishing Payment Rates for Low-Volume New Technology Services
    Services that are assigned to New Technology APCs are typically new 
services that do not have sufficient claims history to establish an 
accurate payment for the services. One of the objectives of 
establishing New Technology APCs is to generate sufficient claims data 
for a new service so that it can be assigned to an appropriate clinical 
APC. Some services that are assigned to New Technology APCs have very 
low annual volume, which we consider to be fewer than 100 claims. We 
consider services with fewer than 100 claims annually to be low-volume 
services because there is a higher probability that the payment data 
for a service may not have a normal statistical distribution, which 
could affect the quality of our standard cost methodology that is used 
to assign services to an APC. In addition, services with fewer than 100 
claims per year are not generally considered to be a significant 
contributor to the APC ratesetting calculations and, therefore, are not 
included in the assessment of the 2 times rule. As we explained in the 
CY 2019 OPPS/ASC final rule with comment period (83 FR 58890), we were 
concerned that the methodology we use to estimate the cost of a service 
under the OPPS by calculating the geometric mean for all separately 
paid claims for a HCPCS service code from the most recent available 
year of claims data may not generate an accurate estimate of the actual 
cost of the service for these low-volume services.
    In accordance with section 1833(t)(2)(B) of the Act, services 
classified within each APC must be comparable clinically and with 
respect to the use of resources. As described earlier, assigning a 
service to a New Technology APC allows us to gather claims data to 
price the service and assign it to the APC with services that use 
similar resources and are clinically comparable. However, where 
utilization of services assigned to a New Technology APC is low, it can 
lead to wide variation in payment rates from year to year, resulting in 
even lower utilization and potential barriers to access to new 
technologies, which ultimately limits our ability to assign the service 
to the appropriate clinical APC. To mitigate these issues, we 
determined in the CY 2019 OPPS/ASC final rule with comment period that 
it was appropriate to utilize our equitable adjustment authority at 
section 1833(t)(2)(E) of the Act to adjust how we determined the costs 
for low-volume services assigned to New Technology APCs (83 FR 58892 
through 58893). We have utilized our equitable adjustment authority at 
section 1833(t)(2)(E) of the Act, which states that the Secretary shall 
establish, in a budget neutral manner, other adjustments as determined 
to be necessary to ensure equitable payments, to estimate an 
appropriate payment amount for low-volume new technology services in 
the past (82 FR 59281). Although we have used this adjustment authority 
on a case-by-case basis in the past, we stated in the CY 2019 OPPS/ASC 
final rule with comment period that we believed it was appropriate to 
adopt an adjustment for low-volume services assigned to New Technology 
APCs in order to mitigate the wide payment fluctuations that have 
occurred for new technology services with fewer than 100 claims and to 
provide more predictable payment for these services.
    For purposes of this adjustment, we stated that we believed that it 
was appropriate to use up to 4 years of claims data in calculating the 
applicable payment rate for the prospective year, rather than using 
solely the most recent available year of claims data, when a service 
assigned to a New Technology APC has a low annual volume of claims, 
which, for purposes of this adjustment, we defined as fewer than 100 
claims annually. We adopted a policy to consider services with fewer 
than 100 claims annually as low-volume services because there is a 
higher probability that the payment data for a service may not have a 
normal statistical distribution, which could affect the quality of our 
standard cost methodology that is used to assign services to an APC. We 
explained that we were concerned that the methodology we use to 
estimate the cost of a service under the OPPS by calculating the 
geometric mean for all separately paid claims for a HCPCS procedure 
code from the most recent available year of claims data may not 
generate an accurate estimate of the actual cost of the low-volume 
service. Using multiple years of claims data will potentially allow for 
more than 100 claims to be used to set the payment rate, which would, 
in turn, create a more statistically reliable payment rate.
    In addition, to better approximate the cost of a low-volume service 
within a New Technology APC, we stated that we believed using the 
median or arithmetic mean rather than the geometric mean (which 
``trims'' the costs of certain claims out) could be more appropriate in 
some circumstances, given the extremely low volume of claims. Low claim 
volumes increase the impact of ``outlier'' claims; that is, claims with 
either a very low or very high payment

[[Page 42074]]

rate as compared to the average claim, which would have a substantial 
impact on any statistical methodology used to estimate the most 
appropriate payment rate for a service. We also explained that we 
believed having the flexibility to utilize an alternative statistical 
methodology to calculate the payment rate in the case of low-volume new 
technology services would help to create a more stable payment rate. 
Therefore, in the CY 2019 OPPS/ASC final rule with comment period (83 
FR 58893), we established that, in each of our annual rulemakings, we 
would seek public comments on which statistical methodology should be 
used for each low-volume service assigned to a New Technology APC. In 
the preamble of each annual rulemaking, we stated that we would present 
the result of each statistical methodology and solicit public comment 
on which methodology should be used to establish the payment rate for a 
low-volume new technology service. In addition, we explained that we 
would use our assessment of the resources used to perform a service and 
guidance from the developer or manufacturer of the service, as well as 
other stakeholders, to determine the most appropriate payment rate. 
Once we identified the most appropriate payment rate for a service, we 
would assign the service to the New Technology APC with the cost band 
that includes its payment rate.
    For CY 2022, we propose to continue to utilize our equitable 
adjustment authority under section 1833(t)(2)(E) of the Act to 
calculate the geometric mean, arithmetic mean, and median using up to 
four years of claims data to select the appropriate payment rate for 
purposes of assigning services with fewer than 100 claims per year to a 
New Technology APC. However, we propose to utilize our equitable 
adjustment authority through our proposed universal low volume APC 
policy described in section X.C. of this proposed rule. Our proposed 
universal low volume APC policy is similar to our current New 
Technology APC low volume policy with the difference between the two 
policies being that the universal low volume APC policy would apply to 
clinical APCs and brachytherapy APCs, in addition to New Technology 
APCs, and would use the highest of the geometric mean, arithmetic mean, 
or median based on up to four years of claims data to set the payment 
rate for the APC. For New Technology APCs with fewer than 100 single 
claims at the procedure level that can be used for ratesetting, we 
would apply our proposed methodology for determining a low volume APC's 
cost, choosing the ``greatest of'' the median, arithmetic mean, or 
geometric mean at the procedure level, to apply to the individual 
services assigned to New Technology APCs and provide the final New 
Technology APC assignment for each procedure. We propose to end our 
separate New Technology APC low volume policy if we adopt the proposed 
universal low volume APC policy, as it also applies to New Technology 
APCs.
3. Procedures Assigned to New Technology APC Groups for CY 2022
    As we described in the CY 2002 OPPS final rule with comment period 
(66 FR 59902), we generally retain a procedure in the New Technology 
APC to which it is initially assigned until we have obtained sufficient 
claims data to justify reassignment of the procedure to a clinically 
appropriate APC. In addition, in cases where we find that our initial 
New Technology APC assignment was based on inaccurate or inadequate 
information (although it was the best information available at the 
time), where we obtain new information that was not available at the 
time of our initial New Technology APC assignment, or where the New 
Technology APCs are restructured, we may, based on more recent resource 
utilization information (including claims data) or the availability of 
refined New Technology APC cost bands, reassign the procedure or 
service to a different New Technology APC that more appropriately 
reflects its cost (66 FR 59903).
    Consistent with our current policy, for CY 2022, we propose to 
retain services within New Technology APC groups until we obtain 
sufficient claims data to justify reassignment of the service to an 
appropriate clinical APC. The flexibility associated with this policy 
allows us to reassign a service from a New Technology APC in less than 
2 years if we have not obtained sufficient claims data. It also allows 
us to retain a service in a New Technology APC for more than 2 years if 
we have not obtained sufficient claims data upon which to base a 
reassignment decision (66 FR 59902).
a. Retinal Prosthesis Implant Procedure
    CPT code 0100T (Placement of a subconjunctival retinal prosthesis 
receiver and pulse generator, and implantation of intra-ocular retinal 
electrode array, with vitrectomy) describes the implantation of a 
retinal prosthesis, specifically, a procedure involving the use of the 
Argus[supreg] II Retinal Prosthesis System. This first retinal 
prosthesis was approved by FDA in 2013 for adult patients diagnosed 
with severe to profound retinitis pigmentosa. For information on the 
utilization and payment history of the Argus[supreg] II procedure and 
the Argus[supreg] II device prior to CY 2020, please refer to the CY 
2021 OPPS final rule (85 FR 85937 through 85938).
    For CY 2020, we identified 35 claims reporting the procedure 
described by CPT code 0100T for the 4-year period of CY 2015 through CY 
2018. We found the geometric mean cost for the procedure described by 
CPT code 0100T to be approximately $146,059, the arithmetic mean cost 
to be approximately $152,123, and the median cost to be approximately 
$151,267. All of the resulting estimates from using the three 
statistical methodologies fell within the same New Technology APC cost 
band ($145,001- $160,000), where the Argus[supreg] II procedure was 
assigned for CY 2019. Consistent with our policy stated in section 
III.C.2, we presented the result of each statistical methodology in the 
proposed rule, and we sought public comments on which method should be 
used to assign procedures described by CPT code 0100T to a New 
Technology APC. All three potential statistical methodologies used to 
estimate the cost of the Argus[supreg] II procedure fell within the 
cost band for New Technology APC 1908, with the estimated cost being 
between $145,001 and $160,000. Accordingly, we assigned CPT code 0100T 
in APC 1908 (New Technology--Level 52 ($145,001-$160,000)), with a 
payment rate of $152,500.50 for CY 2020.
    For CY 2021, the number of reported claims for the Argus[supreg] II 
procedure continued to be very low with a substantial fluctuation in 
cost from year to year. The high annual variability of the cost of the 
Argus[supreg] II procedure continued to make it difficult to establish 
a consistent and stable payment rate for the procedure. As previously 
mentioned, in accordance with section 1833(t)(2)(B) of the Act, we are 
required to establish that services classified within each APC are 
comparable clinically and with respect to the use of resources. We 
identified 35 claims reporting the procedure described by CPT code 
0100T for the 4-year period of CY 2016 through CY 2019. We found the 
geometric mean cost for the procedure described by CPT code 0100T to be 
approximately $148,148, the arithmetic mean cost to be approximately 
$153,682, and the median cost to be approximately $151,974. All three 
potential statistical methodologies used to estimate the cost of the 
Argus[supreg] II procedure fell within

[[Page 42075]]

the cost band for New Technology APC 1908, with the estimated cost 
being between $145,001 and $160,000, and accordingly, we assigned the 
Argus II procedure to New Technology APC 1908 for CY 2021.
    For 2022, we propose to utilize our equitable adjustment authority 
under section 1833(t)(2)(E) of the Act to establish the universal low 
volume APC policy described in section X.C. of this proposed rule. 
Consistent with this proposed policy, we calculated the geometric mean, 
arithmetic mean, and median costs using multiple years of claims data 
to select the appropriate payment rate for purposes of assigning the 
Argus[supreg] II procedure (CPT code 0100T) to a New Technology APC. We 
propose to use claims data from CY 2016 through CY 2019, which are the 
last four years of available OPPS claims data that we believe are 
appropriate for ratesetting, to determine the proposed payment rate for 
the Argus[supreg] II procedure for CY 2022. The claims data are the 
same 35 claims that were used to determine the payment rate for CPT 
code 0100T in CY 2021, and the estimates of the geometric mean 
($148,148), the arithmetic mean ($153,682), and the median ($151,974) 
are the same as the estimates for CY 2021. All three potential 
statistical methodologies used to estimate the cost of the 
Argus[supreg] II procedure are within the cost band for New Technology 
APC 1908, with the proposed payment rate being between $145,001 and 
$160,000. Accordingly, we propose to continue to assign the 
Argus[supreg] II procedure to New Technology APC 1908 for CY 2022. 
Please see Table 9 below for the proposed OPPS APC and status indicator 
for the Argus[supreg] II procedure (CPT code 0100T) for CY 2022.
[GRAPHIC] [TIFF OMITTED] TP04AU21.017

b. Administration of Subretinal Therapies Requiring Vitrectomy (APC 
1561)
    Effective January 1, 2021, CMS established HCPCS code C9770 
(Vitrectomy, mechanical, pars plana approach, with subretinal injection 
of pharmacologic/biologic agent) and assigned it to a New Technology 
APC based on the geometric mean cost of HCPCS code 67036. For CY 2021, 
HCPCS code C9770 was assigned to APC 1561 (New Technology--Level 24 
($3001-$3500)). This procedure may be used to describe the 
administration of CPT code J3398 (Injection, voretigene neparvovec-
rzyl, 1 billion vector genomes). This procedure was previously 
discussed in the CY 2021 OPPS/ASC Final Rule with comment period (85 FR 
85939-85940).
    CPT code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion 
vector genomes) is a gene therapy for a rare mutation-associated 
retinal dystrophy. Voretigene neparvovec-rzyl (Luxturna[supreg]), was 
approved by FDA in December of 2017, and is indicated as an adeno-
associated virus vector-based gene therapy indicated for the treatment 
of patients with confirmed biallelic RPE65 mutation-associated retinal 
dystrophy.\6\ This therapy is administered through a subretinal 
injection, which stakeholders describe as an extremely delicate and 
sensitive surgical procedure. The FDA package insert describes one of 
the steps for administering Luxturna as, ``after completing a 
vitrectomy, identify the intended site of administration. The 
subretinal injection can be introduced via pars plana.''
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    \6\ Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download.
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    Stakeholders, including the manufacturer of Luxturna[supreg], 
recommended HCPCS code 67036 (Vitrectomy, mechanical, pars plana 
approach) for the administration of the gene therapy.\7\ However, the 
manufacturer previously contended the administration was not accurately 
described by any existing codes as HCPCS code 67036 (Vitrectomy, 
mechanical, pars plana approach) does not account for the 
administration itself.
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    \7\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/pdf/Reimbursement_Guide_for_Treatment_Centers_Interactive_010418_FINAL.pdf.
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    CMS recognized the need to accurately describe the unique 
administration procedure that is required to administer the therapy 
described by HCPCS code J3398. Therefore, in the CY 2021 OPPS/ASC 
proposed rule (85 FR 48832), we proposed to establish a new HCPCS code, 
C97X1 (Vitrectomy, mechanical, pars plana approach, with subretinal 
injection of pharmacologic/biologic agent) to describe this process. We 
stated that we believed that this new HCPCS code accurately described 
the unique service associated with intraocular administration of HCPCS 
code J3398. We recognized that HCPCS code 67036 represents a clinically 
similar procedure and process that approximates similar resource 
utilization that is associated with C97X1. However, we also recognized 
that it is not prudent for the code that describes the administration 
of this unique gene therapy, C97X1, to be assigned to the same C-APC to 
which HCPCS code 67036 is assigned, as this would package the primary 
therapy, HCPCS code J3398, into the code that represents the process to 
administer the gene therapy.
    Therefore, for CY 2021, we proposed to assign the services 
described by C97X1 to a New Technology APC with

[[Page 42076]]

a cost band that contains the geometric mean cost for HCPCS code 67036. 
The placeholder code C97X1 was replaced by C9770 in the final rule. For 
CY 2021, we finalized our proposal to create C9770 (Vitrectomy, 
mechanical, pars plana approach, with subretinal injection of 
pharmacologic/biologic agent), and we assigned this code to APC 1561 
(New Technology--Level 24 ($3001-$3500)) using the geometric mean cost 
of HCPCS code 67036. See Table 10 for the finalized descriptor and APC 
assignment of HCPCS code C9770 for CY 2021.
    For CY 2022, we are proposing to continue our policy from CY 2021 
to assign the services described by HCPCS code C9770 to a New 
Technology APC with a cost band that contains the geometric mean cost 
for HCPCS code 67036. We propose to continue to assign the services 
described by C9770 to a New Technology APC with a payment band based on 
the geometric mean cost for HCPCS code 67036 based on its geometric 
mean cost using CY 2019 claims data for CY 2022. Based on this data, 
the geometric mean cost of HCPCS code 67036 is $3,434.91. Therefore, we 
propose to assign C9770 to the corresponding New Technology APC payment 
band, APC 1561 New Technology--Level 24 ($3001-$3500) with a payment 
rate of $3250.50. Please see Table 10 below for the proposed OPPS APC 
and status indicator for HCPCS code C9770 for CY 2022.
[GRAPHIC] [TIFF OMITTED] TP04AU21.018

c. Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave 
Energy
    Effective January 1, 2019, CMS established HCPCS code C9751 
(Bronchoscopy, rigid or flexible, transbronchial ablation of lesion(s) 
by microwave energy, including fluoroscopic guidance, when performed, 
with computed tomography acquisition(s) and 3-D rendering, computer-
assisted, image-guided navigation, and endobronchial ultrasound (EBUS) 
guided transtracheal and/or transbronchial sampling (for example, 
aspiration[s]/biopsy[ies]) and all mediastinal and/or hilar lymph node 
stations or structures and therapeutic intervention(s)). This microwave 
ablation procedure utilizes a flexible catheter to access the lung 
tumor via a working channel and may be used as an alternative procedure 
to a percutaneous microwave approach. Based on our review of the New 
Technology APC application for this service and the service's clinical 
similarity to existing services paid under the OPPS, we estimated the 
likely cost of the procedure would be between $8,001 and $8,500.
    In claims data available for CY 2019 for the CY 2021 OPPS/ASC final 
rule with comment period, there were 4 claims reported for bronchoscopy 
with transbronchial ablation of lesions by microwave energy. Given the 
low volume of claims for the service, we proposed for CY 2021 to apply 
the policy we adopted in CY 2019, under which we utilize our equitable 
adjustment authority under section 1833(t)(2)(E) of the Act to 
calculate the geometric mean, arithmetic mean, and median costs to 
calculate an appropriate payment rate for purposes of assigning 
bronchoscopy with transbronchial ablation of lesions by microwave 
energy to a New Technology APC. We found the geometric mean cost for 
the service to be approximately $2,693, the arithmetic mean cost to be 
approximately $3,086, and the median cost to be approximately $3,708. 
The median was the statistical methodology that estimated the highest 
cost for the service and provided a reasonable estimate of the midpoint 
cost of the three claims that have been paid for this service. The 
payment rate calculated using this methodology fell within the cost 
band for New Technology APC 1562 (New Technology--Level 25 ($3,501-
$4,000)). Therefore, we assigned HCPCS code C9751 to APC 1562 for CY 
2021.
    For CY 2022, the only available claims for HCPCS code C9751 are 
from CY 2019. Therefore, we are proposing given the low number of 
claims for this procedure to utilize our equitable adjustment authority 
under section 1833(t)(2)(E) of the Act to calculate the geometric mean, 
arithmetic mean, and median costs to calculate an appropriate payment 
rate for purposes of assigning bronchoscopy with transbronchial 
ablation of lesions by microwave energy to a New Technology APC, 
consistent with our proposed universal low volume APC policy. Because 
we are using the same claims as we did for CY 2021, we found the same 
values for the geometric mean cost, arithmetic mean cost, and the 
median cost for CY 2022. Once again, the median was the statistical 
methodology that estimated the highest cost for the service and 
provides a reasonable estimate of the midpoint cost of the three claims 
that have been paid for this service. The payment rate calculated using 
this methodology falls again within the cost band for New Technology 
APC 1562 (New Technology--Level 25 ($3,501-$4,000)). Therefore, we 
propose to continue to assign HCPCS code C9751 to APC 1562 (New 
Technology--Level 25 ($3,501-$4,000)), with a proposed payment rate of 
$3,750.50 for CY 2022. Details regarding HCPCS code C9751 are included 
in Table 11.

[[Page 42077]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.019

d. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)
    Fractional Flow Reserve Derived from Computed Tomography (FFRCT), 
also known by the trade name HeartFlow, is a noninvasive diagnostic 
service that allows physicians to measure coronary artery disease in a 
patient through the use of coronary CT scans. The HeartFlow procedure 
is intended for clinically stable symptomatic patients with coronary 
artery disease, and, in many cases, may avoid the need for an invasive 
coronary angiogram procedure. HeartFlow uses a proprietary data 
analysis process performed at a central facility to develop a three-
dimensional image of a patient's coronary arteries, which allows 
physicians to identify the fractional flow reserve to assess whether or 
not patients should undergo further invasive testing (that is, a 
coronary angiogram).
    For many services paid under the OPPS, payment for analytics that 
are performed after the main diagnostic/image procedure are packaged 
into the payment for the primary service. However, in CY 2018, we 
determined that HeartFlow should receive a separate payment because the 
service is performed by a separate entity (that is, a HeartFlow 
technician who conducts computer analysis offsite) rather than the 
provider performing the CT scan. We assigned CPT code 0503T, which 
describes the analytics performed, to New Technology APC 1516 (New 
Technology--Level 16 ($1,401-$1,500)), with a payment rate of $1,450.50 
based on pricing information provided by the developer of the procedure 
that indicated the price of the procedure was approximately $1,500. We 
did not have Medicare claims data in CY 2019 for CPT code 0503T, and we 
continued to assign the service to New Technology APC 1516 (New 
Technology--Level 16 ($1,401-$1,500)), with a payment rate of 
$1,450.50.
    CY 2020 was the first year for which we had Medicare claims data to 
calculate the cost of HCPCS code 0503T. For the CY 2020 OPPS/ASC final 
rule, there were 957 claims with CPT code 0503T of which 101 of the 
claims were single frequency claims that were used to calculate the 
geometric mean of the procedure. We planned to use the geometric mean 
to report the cost of HeartFlow. However, the number of single claims 
for CPT code 0503T was below the low-volume payment policy threshold 
for the proposed rule, and this number of single claims was only two 
claims above the threshold for the New Technology APC low-volume policy 
for the final rule. Therefore, we decided to use our equitable 
adjustment authority under section 1833(t)(2)(E) of the Act to 
calculate the geometric mean, arithmetic mean, and median using the CY 
2018 claims data to determine an appropriate payment rate for HeartFlow 
using our New Technology APC low-volume payment policy. While the 
number of single frequency claims was just above our threshold to use 
the low-volume payment policy, we still had concerns about the normal 
cost distribution of the claims used to calculate the payment rate for 
HeartFlow, and we decided the low-volume payment policy would be the 
best approach to address those concerns.
    Our analysis found that the geometric mean cost for CPT code 0503T 
was $768.26, the arithmetic mean cost for CPT code 0503T was $960.12, 
and the median cost for CPT code 0503T was $900.28. Of the three cost 
methods, the highest amount was for the arithmetic mean. The arithmetic 
mean fell within the cost band for New Technology APC 1511 (New 
Technology--Level 11 ($901-$1,000)) with a payment rate of $950.50. The 
arithmetic mean helped to account for some of the higher costs of CPT 
code 0503T identified by the developer and other stakeholders that may 
not have been reflected by either the median or the geometric mean.
    For CY 2021, we observed a significant increase in the number of 
claims billed with CPT code 0503T. Specifically, using CY 2019 data, we 
identified 3,188 claims billed with CPT code 0503T including 465 single 
frequency claims. These totals are well above the threshold of 100 
claims for a procedure to be evaluated using the New Technology APC 
low-volume policy. Therefore, we used our standard methodology rather 
than the low-volume methodology we previously used to determine the 
cost of CPT code 0503T. Our analysis found that the geometric mean for 
CPT code 0503T was $804.35, and the geometric mean cost for the service 
fell within the cost band for New Technology APC 1510 (New Technology--
Level 10 ($801-$900)). However, providers and other stakeholders have 
noted that the FFRCT service costs $1,100 and that there are additional 
staff costs related to the submission of coronary CT image data for 
processing by HeartFlow.
    We noted that HeartFlow is one of the first procedures utilizing 
artificial intelligence to be separately payable in the OPPS, and 
providers are still

[[Page 42078]]

learning how to accurately report their charges to Medicare when 
billing for artificial intelligence services (85 FR 85943). This is 
especially the case for allocating the cost of staff resources between 
the HeartFlow procedure and the coronary CT imaging services. 
Therefore, we decided it would be appropriate to use our equitable 
adjustment authority under section 1833(t)(2)(E) of the Act to assign 
CPT code 0503T to the same New Technology APC in CY 2021 as in CY 2020 
in order to provide payment stability and equitable payment for 
providers as they continue to become more familiar with the proper cost 
reporting for HeartFlow and other artificial intelligence services. 
Accordingly, we assigned CPT code 0503T to New Technology APC 1511 (New 
Technology--Level 11 ($901-$1,000)) with a payment rate of $950.50 for 
CY 2020, and we continued to assign CPT code 0503T to New Technology 
APC 1511 for CY 2021.
    For CY 2022, we propose to use claims data from CY 2019 to estimate 
the cost of the HeartFlow service. Because we are using the same claims 
data as in CY 2021, these data continue to reflect that providers were 
learning how to accurately report their charges to Medicare when 
billing for artificial intelligence services. Therefore, we propose to 
continue to use our equitable adjustment authority under section 
1833(t)(2)(E) of the Act to assign CPT code 0503T to the same New 
Technology APC in CY 2022 as in CY 2020 and CY 2021: New Technology APC 
1511 (New Technology--Level 11 ($901-$1,000)), with a payment rate of 
$950.50 for CY 2022, which is the same payment rate for the service as 
in CY 2020 and CY 2021. Please see Table 12 below for the proposed OPPS 
APC and status indicator for CPT code 0503T for CY 2022.
[GRAPHIC] [TIFF OMITTED] TP04AU21.020

e. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT) 
Studies
    Effective January 1, 2020, we assigned three CPT codes (78431, 
78432, and 78433) that describe the services associated with cardiac 
PET/CT studies to New Technology APCs. Table 13 lists the code 
descriptors, status indicators, and APC assignments for these CPT 
codes. CPT code 78431 was assigned to APC 1522 (New Technology--Level 
22 ($2,001-$2,500)) with a payment rate of $2,250.50. CPT codes 78432 
and 78433 were assigned to APC 1523 (New Technology--Level 23 ($2,501-
$3,000)) with a payment rate of $2,750.50. We did not receive any 
claims data for these services for CY 2021. Therefore, we continued to 
assign CPT code 78431 to APC 1522 (New Technology--Level 22 ($2,001-
$2,500)) with a payment rate of $2,250.50. Likewise, CPT codes 78432 
and 78433 continued to be assigned to APC 1523 (New Technology--Level 
23 ($2,501-$3,000)) with a payment rate of $2,750.50.
    For CY 2022, we propose to use CY 2019 claims data to determine the 
payment rates for CPT codes 78431, 78432, and 78433. Because these 
codes did not become active until CY 2020, there are no claims for 
these three services. Accordingly, we propose to continue to assign CPT 
code 78431 to APC 1522 (New Technology--Level 22 ($2,001-$2,500)) with 
a payment rate of $2,250.50. Likewise, we propose that CPT codes 78432 
and 78433 would continue to be assigned to APC 1523 (New Technology--
Level 23 ($2,501-$3,000)) with a payment rate of $2,750.50. Table 13 
lists code descriptors, status indicators, and APC assignments for 
these CPT codes. The proposed CY 2022 payment rates for CPT codes 
78431, 78432, and 78433 can be found in Addendum B to the CY 2022 OPPS/
ASC proposed rule.
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[[Page 42079]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.021

f. V-Wave Medical Interatrial Shunt Procedure
    A randomized, double-blinded, controlled IDE study is currently in 
progress for the V-Wave interatrial shunt. The V-Wave interatrial shunt 
is for patients with severe symptomatic heart failure and is designed 
to regulate left atrial pressure in the heart. All participants who 
passed initial screening for the study receive a right heart 
catheterization procedure described by CPT code 93451 (Right heart 
catheterization including measurement(s) of oxygen saturation and 
cardiac output, when performed). Participants assigned to the 
experimental group also receive the V-Wave interatrial shunt procedure 
while participants assigned to the control group only receive right 
heart catheterization. The developer of V-Wave was concerned that the 
current coding of these services by Medicare would reveal to the study 
participants whether they have received the interatrial shunt because 
an additional procedure code, CPT code 93799 (Unlisted cardiovascular 
service or procedure), would be included on the claims for participants 
receiving the interatrial shunt. Therefore, for CY 2020, we created a 
temporary HCPCS code to describe the V-wave interatrial shunt procedure 
for both the experimental group and the control group in the study. 
Specifically, we established HCPCS code C9758 (Blinded procedure for 
NYHA class III/IV heart failure; transcatheter implantation of 
interatrial shunt or placebo control, including right heart 
catheterization, trans-esophageal echocardiography (TEE)/intracardiac 
echocardiography (ICE), and all imaging with or without guidance (for 
example, ultrasound, fluoroscopy), performed in an approved 
investigational device exemption (IDE) study) to describe the service, 
and we assigned the service to New Technology APC 1589 (New 
Technology--Level 38 ($10,001-$15,000)).
    We stated in the CY 2021 OPPS final rule that we believe that 
similar resources and device costs are involved with the V-Wave 
interatrial shunt procedure and the Corvia Medical interatrial shunt 
procedure (85 FR 85946). Therefore, the difference in the payment for 
HCPCS codes C9758 and C9760 is based on how often the interatrial shunt 
is implanted when each code is billed. An interatrial shunt is 
implanted one-half of the time HCPCS code C9758 is billed. Accordingly, 
for CY 2021, we reassigned HCPCS code C9758 to New Technology APC 1590, 
which reflects the cost of having surgery

[[Page 42080]]

every time and receiving the interatrial shunt one-half of the time 
when the procedure is performed.
    For CY 2022, we are using the same claims data that we did for CY 
2021. Because there are no claims reporting HCPCS code C9758, we are 
proposing to continue to assign HCPCS code C9758 to New Technology APC 
1590 with a payment rate of $17,500.50 for CY 2022.
    Details about the HCPCS code and its APC assignment are shown in 
Table 14. The proposed CY 2022 payment rate for C9758 can be found in 
Addendum B to the CY 2022 OPPS/ASC proposed rule.
[GRAPHIC] [TIFF OMITTED] TP04AU21.022

g. Corvia Medical Interatrial Shunt Procedure
    Corvia Medical is currently conducting its pivotal trial for their 
interatrial shunt procedure. The trial started in Quarter 1 of CY 2017 
and is scheduled to continue through CY 2021.\8\ On July 1, 2020, we 
established HCPCS code C9760 (Non-randomized, non-blinded procedure for 
nyha class ii, iii, iv heart failure; transcatheter implantation of 
interatrial shunt or placebo control, including right and left heart 
catheterization, transeptal puncture, trans-esophageal echocardiography 
(tee)/intracardiac echocardiography (ice), and all imaging with or 
without guidance (for example, ultrasound, fluoroscopy), performed in 
an approved investigational device exemption (ide) study) to facilitate 
the implantation of the Corvia Medical interatrial shunt.
---------------------------------------------------------------------------

    \8\ https://clinicaltrials.gov/ct2/show/NCT03088033?term=NCT03088033&rank=1.
---------------------------------------------------------------------------

    As we stated in the CY 2021 OPPS final rule, we believe that 
similar resources and device costs are involved with the Corvia Medical 
interatrial shunt procedure and the V-Wave interatrial shunt procedure 
(85 FR 85947). Therefore, the difference in the payment for HCPCS codes 
C9760 and C9758 is based on how often the interatrial shunt is 
implanted when each code is billed. The Corvia Medical interatrial 
shunt is implanted every time HCPCS code C9760 is billed. Therefore, 
for CY 2021, we assigned HCPCS code C9760 to New Technology APC 1592 
(New Technology--Level 41 ($25,001-$30,000)) with a payment rate of 
$27,500.50. We also modified the code descriptor for HCPCS code C9760 
to remove the phrase ``or placebo control,'' from the descriptor. For 
CY 2022, we propose to use the same claims data as in CY 2021 to 
establish payment rates for services. Therefore, there are no claims 
for HCPCS code C9760, and we propose to continue to assign HCPCS code 
C9760 to New Technology APC 1592.
    Details about the HCPCS code and its APC assignment are shown in 
Table 15. The proposed CY 2022 payment rate for C9760 can be found in 
Addendum B to the proposed rule.

[[Page 42081]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.023

h. Supervised Visits for Esketamine Self-Administration (HCPCS Codes 
G2082 and G2083 APCs 1508 and 1511)
    On March 5, 2019, FDA approved Spravato\TM\ (esketamine) nasal 
spray, used in conjunction with an oral antidepressant, for treatment 
of depression in adults who have tried other antidepressant medicines 
but have not benefited from them (treatment-resistant depression 
(TRD)). Because of the risk of serious adverse outcomes resulting from 
sedation and dissociation caused by Spravato administration, and the 
potential for abuse and misuse of the product, it is only available 
through a restricted distribution system under a Risk Evaluation and 
Mitigation Strategy (REMS). A REMS is a drug safety program that FDA 
can require for certain medications with serious safety concerns to 
help ensure the benefits of the medication outweigh its risks.
    A treatment session of esketamine consists of instructed nasal 
self-administration by the patient, followed by a period of post-
administration observation of the patient under direct supervision of a 
health care professional. Esketamine is a noncompetitive N-methyl D-
aspartate (NMDA) receptor antagonist. It is a nasal spray supplied as 
an aqueous solution of esketamine hydrochloride in a vial with a nasal 
spray device. This is the first FDA approval of esketamine for any use. 
Each device delivers two sprays containing a total of 28 mg of 
esketamine. Patients would require either two (2) devices (for a 56 mg 
dose) or three (3) devices (for an 84 mg dose) per treatment.
    Because of the risk of serious adverse outcomes resulting from 
sedation and dissociation caused by Spravato administration, and the 
potential for abuse and misuse of the product, Spravato is only 
available through a restricted distribution system under a REMS; 
patients must be monitored by a health care provider for at least 2 
hours after receiving their Spravato dose; the prescriber and patient 
must both sign a Patient Enrollment Form; and the product will only be 
administered in a certified medical office where the health care 
provider can monitor the patient. Please refer to the CY 2020 PFS final 
rule and interim final rule for more information about supervised 
visits for esketamine self-administration (84 FR 63102 through 63105).
    To facilitate prompt beneficiary access to the new, potentially 
life-saving treatment for TRD using esketamine, we created two new 
HCPCS G codes, G2082 and G2083, effective January 1, 2020. HCPCS code 
G2082 is for an outpatient visit for the evaluation and management of 
an established patient that requires the supervision of a physician or 
other qualified health care professional and provision of up to 56 mg 
of esketamine nasal self-administration and includes 2 hours post-
administration observation. HCPCS code G2082 was assigned to New 
Technology APC 1508 (New Technology--Level 8 ($601-$700)) with a 
payment rate of $650.50. HCPCS code G2083 describes a similar service 
to HCPCS code G2082, but involves the administration of more than 56 mg 
of esketamine. HCPCS code G2083 was assigned to New Technology APC 1511 
(New Technology--Level 11 ($901-$1,000)) with a payment rate of 
$950.50.
    For CY 2022, we are using CY 2019 claims data to determine the 
payment rates for HCPCS codes G2082 and G2083. Since these codes did 
not become active until CY 2020, there are no claims for these two 
services. Therefore, for CY 2022, we propose to continue to assign 
HCPCS code G2082 to New Technology APC 1508 (New Technology--Level 8 
($601-$700)) and to assign HCPCS code G2083 to New Technology APC 1511 
(New Technology--Level 11 ($901-$1,000)).
    Details about the HCPCS codes and their APC assignments are shown 
in Table 16. The proposed CY 2022 payment rate for esketamine self-
administration can be found in Addendum B to the proposed rule.

[[Page 42082]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.024

BILLING CODE 4120-01-C

D. Proposed OPPS APC-Specific Policy: Stromal Vascular Fraction (SVF) 
Therapy

    SVF therapy is intended to treat knee osteoarthritis. To process 
SVF, the patient's own body fat (usually from the abdomen), is 
recovered, and then processed to isolate a cellular product, referred 
to in CPT codes as an autologous cellular implant, and then injected 
into the knee for pain relief. SVF therapy is currently described by 
CPT codes 0565T and 0566T, which were effective January 1, 2020. The 
long descriptors for both codes are as follows:
     0565T: Autologous cellular implant derived from adipose 
tissue for the treatment of osteoarthritis of the knees; tissue 
harvesting and cellular implant creation.
     0566T: Autologous cellular implant derived from adipose 
tissue for the treatment of osteoarthritis of the knees; injection of 
cellular implant into knee joint including ultrasound guidance, 
unilateral.
    For CY 2021, CPT code 0565T is assigned to APC 5733 (Level 3 Minor 
Procedures) with a payment rate of $55.66, and CPT code 0566T is 
assigned to APC 5441 (Level 1 Nerve Injections) with a payment rate of 
$261.17. Based on recent information from the FDA, we found there is no 
current FDA-approved autologous cellular product derived from 
autologous body fat (referred to in CPT code 0565T and 0566T as 
``autologous cellular implant'') associated with SVF therapy. In 
addition, review of the clinical trials.gov website indicate that SVF 
therapy is currently under clinical trial (ClinicalTrials.gov 
Identifiers: NCT04440189 and NCT02726945), and has not received CMS 
approval as investigational device exemption (IDE) studies. We note 
that IDE studies that have been approved and met CMS' standards for 
coverage are listed on the CMS Approved IDE Studies website, 
specifically, at https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.
    Consequently, for CY 2022, we are proposing not to pay under the 
OPPS for either code. Specifically, we are revising the status 
indicator for CPT code 0565T from ``Q1'' (conditionally packaged; 
separately payable) to ``E1'' to indicate that the code is not payable 
by Medicare. Similarly, we are revising the status indicator for CPT 
code 0566T from ``T'' (separately payable) to ``E1'' to indicate that 
the code is not payable by Medicare and deleting the APC assignment for 
this code.
    We note that the CY 2022 proposed status indicators for CPT codes 
0565T and 0566T can also be found in Addendum B to this proposed rule 
with comment period. In addition, we refer readers to Addendum D1 of 
this proposed rule with comment period for the status indicator (SI) 
definitions for all codes reported under the OPPS. Both Addendum B and 
D1 are available via the internet on the CMS website.

[[Page 42083]]

IV. OPPS Payment for Devices

A. Proposed Pass-Through Payment for Devices

1. Beginning Eligibility Date for Device Pass-Through Status and 
Quarterly Expiration of Device Pass-Through Payments
a. Background
    The intent of transitional device pass-through payment, as 
implemented at Sec.  419.66, is to facilitate access for beneficiaries 
to the advantages of new and truly innovative devices by allowing for 
adequate payment for these new devices while the necessary cost data is 
collected to incorporate the costs for these devices into the procedure 
APC rate (66 FR 55861). Under section 1833(t)(6)(B)(iii) of the Act, 
the period for which a device category eligible for transitional pass-
through payments under the OPPS can be in effect is at least 2 years 
but not more than 3 years. Prior to CY 2017, our regulation at Sec.  
419.66(g) provided that this pass-through payment eligibility period 
began on the date CMS established a particular transitional pass-
through category of devices, and we based the pass-through status 
expiration date for a device category on the date on which pass-through 
payment was effective for the category. In the CY 2017 OPPS/ASC final 
rule with comment period (81 FR 79654), in accordance with section 
1833(t)(6)(B)(iii)(II) of the Act, we amended Sec.  419.66(g) to 
provide that the pass-through eligibility period for a device category 
begins on the first date on which pass-through payment is made under 
the OPPS for any medical device described by such category.
    In addition, prior to CY 2017, our policy was to propose and 
finalize the dates for expiration of pass-through status for device 
categories as part of the OPPS annual update. This means that device 
pass-through status would expire at the end of a calendar year when at 
least 2 years of pass-through payments had been made, regardless of the 
quarter in which the device was approved. In the CY 2017 OPPS/ASC final 
rule with comment period (81 FR 79655), we changed our policy to allow 
for quarterly expiration of pass-through payment status for devices, 
beginning with pass-through devices approved in CY 2017 and subsequent 
calendar years, to afford a pass-through payment period that is as 
close to a full 3 years as possible for all pass-through payment 
devices. We also have an established policy to package the costs of the 
devices that are no longer eligible for pass-through payments into the 
costs of the procedures with which the devices are reported in the 
claims data used to set the payment rates (67 FR 66763).
    We refer readers to the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79648 through 79661) for a full discussion of the current 
device pass-through payment policy.
b. Expiration of Transitional Pass-Through Payments for Certain Devices
    As stated earlier, section 1833(t)(6)(B)(iii) of the Act requires 
that, under the OPPS, a category of devices be eligible for 
transitional pass-through payments for at least 2 years, but not more 
than 3 years. There currently are 11 device categories eligible for 
pass-through payment: C1823-Generator, neurostimulator (implantable), 
nonrechargeable, with transvenous sensing and stimulation leads); 
C1824-Generator, cardiac contractility modulation (implantable); C1982-
Catheter, pressure-generating, one-way valve, intermittently occlusive; 
C1839-Iris prosthesis; C1734-Orthopedic/device/drug matrix for opposing 
bone-to-bone or soft tissue-to bone (implantable); C2596-Probe, image-
guided, robotic, waterjet ablation; C1748-Endoscope, single-use (that 
is disposable), Upper GI, imaging/illumination device (insertable); 
C1052-Hemostatic agent, gastrointestinal, topical, C1062-Intravertebral 
body fracture augmentation with implant (for example, metal, polymer); 
C1825-Generator, neurostimulator (implantable), nonrechargeable with 
carotid sinus baroreceptor stimulation lead(s); and C1761-Catheter, 
transluminal intravascular lithotripsy, coronary.
    Below, we detail the expiration dates of pass-through payment 
status for each of the 11 devices currently receiving device pass-
through payment.
    The pass-through payment status of the device category for HCPCS 
code C1823 is scheduled to expire on December 31, 2021. Typically, we 
would propose to package the costs of the device described by C1823 
into the costs related to the procedure with which the device is 
reported in the hospital claims data for CY 2022. The data for the CY 
2022 OPPS proposed rule ratesetting for the procedure reported with 
C1823 would have been set using CY 2020 outpatient claims data 
processed through December 31, 2020, however, as described in section 
IV.A.3 of this proposed rule, due to the effects of the COVID-19 PHE, 
we are proposing to use CY 2019 claims data instead of CY 2020 claims 
data in establishing the CY 2022 OPPS rates and to use cost report data 
from the same set of cost reports originally used in final rule 2021 
OPPS ratesetting. Therefore, we are proposing to use our equitable 
adjustment authority under section 1833(t)(2)(E) of the Act to provide 
separate payment for C1823 for four quarters of CY 2022 to end on 
December 31, 2022. This would allow for CY 2021 claims data to inform 
CY 2023 rate setting for the procedure reported with C1823. This is the 
only device whose costs would typically be packaged into the related 
procedure in CY 2022 using CY 2020 claims data for ratesetting and is 
the only device to which this proposed policy would apply. A full 
discussion of this proposed policy is included in section IV.A.3 of 
this proposed rule.
    The pass-through payment status of the device category for HCPCS 
code C1823 will end on December 31, 2021. The pass-through payment 
status of the device categories for HCPCS codes C1824, C1982, C1839, 
C1734, and C2596 is set to expire on December 31, 2022. The pass-
through payment status of the device category for HCPCS code C1748 is 
set to expire on June 30, 2023. The pass-through payment status of the 
device category for HCPCS codes C1052, C1062, and C1825 is set to 
expire on December 31, 2023 and the pass-through payment status of the 
device category for HCPCS code C1761 is set to expire on June 30, 2024. 
Table 17 shows the expiration of transitional pass-through payments for 
these devices.
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[[Page 42084]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.025

BILLING CODE 4120-01-C
2. New Device Pass-Through Applications
a. Background
    Section 1833(t)(6) of the Act provides for pass-through payments 
for devices, and section 1833(t)(6)(B) of the Act requires CMS to use 
categories in determining the eligibility of devices for pass-through 
payments. As part of implementing the statute through regulations, we 
have continued to believe that it is important for hospitals to receive 
pass-through payments for devices that offer substantial clinical 
improvement in the treatment of Medicare beneficiaries to facilitate 
access by beneficiaries to the advantages of the new technology. 
Conversely, we have noted that the need for additional payments for 
devices that offer little or no clinical improvement over previously 
existing devices is less apparent. In such cases, these devices can 
still be used by hospitals, and hospitals will be paid for them through 
appropriate APC payment. Moreover, a goal is to target pass-through 
payments for those devices where cost considerations might be most 
likely to interfere with patient access (66 FR 55852; 67 FR 66782; and 
70 FR 68629). We note that, as discussed in section IV.A.4. of this CY 
2022 OPPS/ASC proposed rule, we created an alternative pathway in the 
CY 2020 OPPS/ASC final rule that granted fast-track device pass-through 
payment under the OPPS for devices approved under the FDA Breakthrough 
Device Program for OPPS device pass-through payment applications 
received on or after January 1, 2020. We refer readers to section 
IV.A.4. of this CY 2022 OPPS/ASC proposed rule for a complete 
discussion of this pathway.
    As specified in regulations at Sec.  419.66(b)(1) through (3), to 
be eligible for transitional pass-through payment under the OPPS, a 
device must meet the following criteria:
     If required by FDA, the device must have received FDA 
marketing authorization (except for a device that has received an FDA 
investigational device exemption (IDE) and has been classified as a 
Category B device by the FDA), or meet another appropriate FDA 
exemption; and the pass-through

[[Page 42085]]

payment application must be submitted within 3 years from the date of 
the initial FDA marketing authorization, if required, unless there is a 
documented, verifiable delay in U.S. market availability after FDA 
marketing authorization is granted, in which case CMS will consider the 
pass-through payment application if it is submitted within 3 years from 
the date of market availability;
     The device is determined to be reasonable and necessary 
for the diagnosis or treatment of an illness or injury or to improve 
the functioning of a malformed body part, as required by section 
1862(a)(1)(A) of the Act; and
     The device is an integral part of the service furnished, 
is used for one patient only, comes in contact with human tissue, and 
is surgically implanted or inserted (either permanently or 
temporarily), or applied in or on a wound or other skin lesion.
    In addition, according to Sec.  419.66(b)(4), a device is not 
eligible to be considered for device pass-through payment if it is any 
of the following: (1) Equipment, an instrument, apparatus, implement, 
or item of this type for which depreciation and financing expenses are 
recovered as depreciation assets as defined in Chapter 1 of the 
Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a 
material or supply furnished incident to a service (for example, a 
suture, customized surgical kit, or clip, other than a radiological 
site marker).
    Separately, we use the following criteria, as set forth under Sec.  
419.66(c), to determine whether a new category of pass-through payment 
devices should be established. The device to be included in the new 
category must--
     Not be appropriately described by an existing category or 
by any category previously in effect established for transitional pass-
through payments, and was not being paid for as an outpatient service 
as of December 31, 1996;
     Have an average cost that is not ``insignificant'' 
relative to the payment amount for the procedure or service with which 
the device is associated as determined under Sec.  419.66(d) by 
demonstrating: (1) The estimated average reasonable cost of devices in 
the category exceeds 25 percent of the applicable APC payment amount 
for the service related to the category of devices; (2) the estimated 
average reasonable cost of the devices in the category exceeds the cost 
of the device-related portion of the APC payment amount for the related 
service by at least 25 percent; and (3) the difference between the 
estimated average reasonable cost of the devices in the category and 
the portion of the APC payment amount for the device exceeds 10 percent 
of the APC payment amount for the related service (with the exception 
of brachytherapy and temperature-monitored cryoablation, which are 
exempt from the cost requirements as specified at Sec.  419.66(c)(3) 
and (e)); and
     Demonstrate a substantial clinical improvement, that is, 
substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment.
    Beginning in CY 2016, we changed our device pass-through evaluation 
and determination process. Device pass-through applications are still 
submitted to CMS through the quarterly subregulatory process, but the 
applications will be subject to notice-and-comment rulemaking in the 
next applicable OPPS annual rulemaking cycle. Under this process, all 
applications that are preliminarily approved upon quarterly review will 
automatically be included in the next applicable OPPS annual rulemaking 
cycle, while submitters of applications that are not approved upon 
quarterly review will have the option of being included in the next 
applicable OPPS annual rulemaking cycle or withdrawing their 
application from consideration. Under this notice-and-comment process, 
applicants may submit new evidence, such as clinical trial results 
published in a peer-reviewed journal or other materials for 
consideration during the public comment process for the proposed rule. 
This process allows those applications that we are able to determine 
meet all of the criteria for device pass-through payment under the 
quarterly review process to receive timely pass-through payment status, 
while still allowing for a transparent, public review process for all 
applications (80 FR 70417 through 70418).
    In the CY 2020 annual rulemaking process, we finalized an 
alternative pathway for devices that are granted a Breakthrough Device 
designation (84 FR 61295) and receive Food and Drug Administration 
(FDA) marketing authorization. Under this alternative pathway, devices 
that are granted an FDA Breakthrough Device designation are not 
evaluated in terms of the current substantial clinical improvement 
criterion at Sec.  419.66(c)(2) for the purposes of determining device 
pass-through payment status, but do need to meet the other requirements 
for pass-through payment status in our regulation at Sec.  419.66. 
Devices that are part of the Breakthrough Devices Program, have 
received FDA marketing authorization, and meet the other criteria in 
the regulation can be approved through the quarterly process and 
announced through that process (81 FR 79655). Proposals regarding these 
devices and whether pass-through payment status should continue to 
apply are included in the next applicable OPPS rulemaking cycle. This 
process promotes timely pass-through payment status for innovative 
devices, while also recognizing that such devices may not have a 
sufficient evidence base to demonstrate substantial clinical 
improvement at the time of FDA marketing authorization.
    More details on the requirements for device pass-through payment 
applications are included on the CMS website in the application form 
itself at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the 
``Downloads'' section. In addition, CMS is amenable to meeting with 
applicants or potential applicants to discuss research trial design in 
advance of any device pass-through application or to discuss 
application criteria, including the substantial clinical improvement 
criterion.
b. Applications Received for Device Pass-Through Payment for CY 2022
    We received eight complete applications by the March 1, 2021 
quarterly deadline, which was the last quarterly deadline for 
applications to be received in time to be included in the CY 2022 OPPS/
ASC proposed rule. We received three of the applications in the third 
quarter of 2020, two of the applications in the fourth quarter of 2020, 
and three of the applications in the first quarter of 2021. One of the 
applications was approved for device pass-through payment during the 
quarterly review process: The Shockwave C\2\ Coronary Intravascular 
Lithotripsy (IVL) catheter, which received fast-track approval under 
the alternative pathway effective July 1, 2021. As previously stated, 
all applications that are preliminarily approved upon quarterly review 
will automatically be included in the next applicable OPPS annual 
rulemaking cycle. Therefore, the Shockwave C\2\ Coronary Intravascular 
Lithotripsy (IVL) catheter is discussed below in section IV.2.b.1.
    Applications received for the later deadlines for the remaining 
2021 quarters (June 1, September 1, and December 1), if any, will be 
discussed

[[Page 42086]]

in the CY 2023 OPPS/ASC proposed rule. We note that the quarterly 
application process and requirements have not changed in light of the 
addition of rulemaking review. Detailed instructions on submission of a 
quarterly device pass-through payment application are included on the 
CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf.
    A discussion of the applications received by the March 1, 2021 
deadline is included below.
1. Alternative Pathway Device Pass-Through Applications
    We received two device pass-through applications by the March 2021 
quarterly application deadline for devices that have received 
Breakthrough Device designation from FDA and FDA marketing 
authorization, and therefore are eligible to apply under the 
alternative pathway. As stated above in section IV.2.a of this proposed 
rule, under this alternative pathway, devices that are granted an FDA 
Breakthrough Device designation are not evaluated in terms of the 
substantial clinical improvement criterion at Sec.  419.66(c)(2)(i) for 
purposes of determining device pass-through payment status, but need to 
meet the other requirements for pass-through payment status in our 
regulation at Sec.  419.66.
(1) RECELL System
    AVITA Medical submitted an application for a new device category 
for transitional pass-through payment status for the RECELL System 
(RECELL) for CY 2022. According to the applicant, RECELL is used to 
process autologous donor tissue into a cell suspension autograft that 
is then immediately applied to the surgically prepared acute thermal 
burn wound.
    The applicant stated RECELL is a stand-alone, single-use, battery-
powered device used to process and apply an autologous skin cell 
suspension. According to the applicant, RECELL is a Category III 
medical device indicated for the treatment of acute partial-thickness 
and full-thickness/mixed depth thermal burn wounds and is not 
categorized as a skin substitute.
    According to the applicant, the autograft procedure utilizing the 
RECELL system involves harvesting a small graft from the patient's 
healthy skin and placing it into the RECELL System for immediate 
processing into an autologous skin cell suspension. The applicant 
asserts that a significantly smaller autograft harvest is needed for 
procedures involving RECELL when compared to procedures involving a 
split-thickness skin graft (STSG) without RECELL; where typical STSG 
expansion ranges from 2:1 to 6:1, RECELL may expand skin by up to 80:1. 
The applicant adds the entire procedure takes place in the operating 
room, including surgically preparing the acute burn wound, harvesting 
the autograft, processing the skin cell suspension through a 
disaggregation process, and applying the cell suspension autograft to 
the wound with no culturing in a laboratory.
    The applicant described the RECELL procedure in 27 steps: (1) The 
autograft site is identified; (2) the patient is anesthetized and 
prepared; (3) the nurse opens and transfers the sterile RECELL System 
to the operative field; (4) a self-test is performed; (5) the nurse 
prepares and dispenses the enzyme into the incubation well; (6) the 
buffer solution is drawn and dispensed into the buffering and rinsing 
well; (7) the RECELL processing unit is activated to heat the enzyme; 
(8) a thin epidermal autograft is harvested; (9) the harvested skin 
graft is placed in the enzyme; (10) the donor graft incubates for 15-20 
minutes; (11) the sample is placed dermal side down in the mechanical 
scraping tray; (12) a scalpel is used to scrape the edges of the skin 
sample; (13) once ready, the donor skin is rinsed in the buffer 
solution; (14) the skin is returned to the mechanical scraping tray; 
(15) buffer is applied to the skin sample; (16) the skin sample is held 
in place with forceps; (17) the surgeon scrapes the epidermal cells; 
(18) the buffer syringe is used to rinse the disaggregated skin cells; 
(19) the surgeon draws up the autologous skin cell suspension from the 
tray into a syringe; (20) the suspension is then dispensed through the 
cell strainer to filter the suspension; (21) the filtered autologous 
skin cell suspension is drawn into a new 10 ml syringe; (22) the cell 
suspension autograft is prepared; (23) the burn wound is debrided; (24) 
the primary dressing (non-adherent, non-absorbent, small pore) is fixed 
or held only at the lower aspect of the burn wound; (25) the cell 
suspension autograft is applied by either spraying or dripping over the 
prepared wound bed; (26) after application, the primary dressing is 
immediately secured over the wound bed; and (27) absorbent and 
protective dressings are then applied as needed.
    The applicant states the autologous skin cell suspension prepared 
using the RECELL System contains keratinocytes, fibroblasts and 
melanocytes. According to the applicant, keratinocytes are the primary 
cells of the epidermis that are responsible for healing; fibroblasts 
enable the creation of new extracellular matrix proteins; and 
melanocytes produce melanin to allow restoration of normal 
pigmentation. The applicant asserts the unique delivery system allows 
for broad and even distribution of the cell suspension autograft 
directly onto a prepared wound surface or in combination with a meshed 
skin graft.
    According to the applicant, there is one commercially available 
product (Epicel) that is also used to create an autograft from the 
patient's skin that is then applied to treat acute thermal burns. The 
applicant's claims regarding the differences between the two products 
are summarized in the following Table 18:
BILLING CODE 4120-01-P

[[Page 42087]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.026

    With respect to the newness criterion at Sec.  419.66(b)(1), RECELL 
received FDA Breakthrough Designation effective January 1, 2020. The 
applicant states that RECELL received premarket approval (PMA) on 
September 20, 2018. The applicant adds that RECELL is a Class III 
medical device indicated for the treatment of acute thermal burn wounds 
in patients 18 years of age and older. We received the application for 
a new device category for transitional pass-through payment status for 
RECELL on August 7, 2020, which is within 3 years of the date of the 
initial FDA marketing authorization. We are inviting public comment on 
whether the RECELL meets the newness criterion.
---------------------------------------------------------------------------

    \9\ Instructions for use--RECELL[supreg] Autologous Cell 
Harvesting Device. Food and Drug Administration. https://www.fda.gov/media/116382/download.
    \10\ Ibid.
    \11\ Humanitarian Device Exemption (HDE) Program--Guidance for 
Industry and FDA Staff. U.S. Department of Health and Human 
Services. Food and Drug Administration. Issued September 6, 2019. 
Accessed on March 30, 2021 and available at: https://www.fda.gov/media/74307/download.
    \12\ Manufacturer Important Drug Warning: Serious Risk with Use 
of Epicel (cultured epidermal autografts): Squamous Cell Carcinoma 
(SCC). June 2014. Food and Drug Administration. Accessed on March 
30, 2021 and available at: https://www.fda.gov/media/102746/download.
    \13\ Directions for Use--Epicel (cultured epidermal autografts). 
Food and Drug Administration. https://www.fda.gov/vaccines-blood-biologics/approved-blood-products/epicel-cultured-epidermal-autografts.
    \14\ Epicel Surgical Guidelines. Epicel website. Accessed on 
March 30, 2021 and available at: https://www.epicel.com/pdfs/Epicel%20SurgicalGuide%202018%20DIGITAL.pdf.
---------------------------------------------------------------------------

    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, RECELL is integral to the service provided, 
is used for one patient only, comes in contact with human tissue, and 
is surgically implanted or inserted (either permanently or temporarily) 
or applied in or on a wound or other skin lesion. The applicant also 
claimed that RECELL meets the device eligibility requirements of Sec.  
419.66(b)(4) because it is not an instrument, apparatus, implement, or 
item for which depreciation and financing expenses are recovered, and 
it is not a supply or material furnished incident to a service. 
However, given the applicant's description of RECELL as a device that 
processes tissue into an autograft, it appears that the RECELL system 
may

[[Page 42088]]

not be surgically implanted or inserted (either permanently or 
temporarily) or applied in or on a wound or other skin lesion. We 
believe the product of the RECELL system, the suspension, may be 
applied on a wound, but we are not certain that this suspension 
qualifies as a device. We are inviting public comments on whether 
RECELL meets the eligibility criteria at Sec.  419.66(b).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. We have not 
yet identified an existing pass-through payment category that describes 
RECELL. We are inviting public comment on whether RECELL meets the 
device category criterion.
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
That a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization. As previously discussed in 
section IV.2.a above, we finalized the alternative pathway for devices 
that are granted a Breakthrough Device designation and receive FDA 
marketing authorization in the CY 2020 OPPS/ASC final rule (84 FR 
61295). The RECELL System has a Breakthrough Device designation and 
marketing authorization from the FDA and therefore is not evaluated for 
substantial clinical improvement. We note that the applicant has 
applied for the New Technology Add-on Payment under the Alternative 
Pathway for Breakthrough devices in the FY 2022 IPPS/LTCH proposed rule 
(86 FR 25385 through 25388).
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that RECELL would be 
reported with the HCPCS codes listed in the following Table 19:
[GRAPHIC] [TIFF OMITTED] TP04AU21.027

BILLING CODE 4120-01-C
    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. For our calculations, we used APC 5054--Level 4 Skin 
Procedures, which had a CY 2020 payment rate of $1,622.74 at the time 
the application was received. Beginning in CY 2017, we calculate the 
device offset amount at the HCPCS/CPT code level instead of the APC 
level (81 FR 79657). HCPCS code 15110 had a device offset amount of 
$13.47 at the time the application was received. According to the 
applicant, the cost of the RECELL is $7,500.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost of $7,500 for RECELL is 462 percent of the 
applicable APC payment amount for the service related to the category 
of devices of $1,622.74 ((7,500/1,622.74) x 100 = 462.2 percent). 
Therefore, we believe RECELL meets the first cost significance 
requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides

[[Page 42089]]

that the estimated average reasonable cost of the devices in the 
category must exceed the cost of the device-related portion of the APC 
payment amount for the related service by at least 25 percent, which 
means that the device cost needs to be at least 125 percent of the 
offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $7,500 for 
RECELL is 55,679 percent of the cost of the device-related portion of 
the APC payment amount for the related service of $13.47 (($7,500/
$13.47) x 100 = 55,679.3 percent). Therefore, we believe that RECELL 
meets the second cost significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $7,500 for RECELL and the portion of the APC payment 
amount for the device of $13.47 is 461 percent of the APC payment 
amount for the related service of $1,622.74 ((($7,500-$13.47)/
$1,622.74) x 100 = 461.4 percent). Therefore, we believe that RECELL 
meets the third cost significance requirement.
    We are inviting public comment on whether the RECELL meets the 
device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
(2) Shockwave C\2\ Coronary Intravascular Lithotripsy (IVL) Catheter
    Shockwave Medical submitted an application for a new device 
category for transitional pass-through payment status for the Shockwave 
C\2\ Coronary Intravascular Lithotripsy (IVL) catheter (Coronary IVL) 
for CY 2022. The applicant asserts the Coronary IVL catheter is a 
proprietary lithotripsy device delivered through the coronary arterial 
system of the heart to the site of an otherwise difficult to treat 
calcified stenosis, including calcified stenosis that is anticipated to 
exhibit resistance to full balloon dilation or subsequent uniform 
coronary stent expansion. According to the applicant, energizing the 
lithotripsy device generates intermittent sound waves within the target 
treatment site, disrupting calcium within the lesion and allowing 
subsequent dilation of a coronary artery stenosis using low balloon 
pressure. According to the applicant, the Coronary IVL System is 
comprised of the following components:
    (1) IVL Generator--a portable, rechargeable power source that is 
capital equipment and reusable.
    (2) IVL Connect Cable--a reusable cable used to connect the IVL 
Generator to the IVL Catheter.
    (3) Coronary IVL Catheter--a sterile, single-use catheter that 
delivers intravascular lithotripsy within the target coronary lesion.
    According to the applicant, during a percutaneous coronary 
intervention (PCI) procedure, the physician determines that a lesion 
has severe calcification. The applicant states the Coronary IVL 
catheter is introduced into the lesion where lithotripsy is delivered 
to crack the calcification to facilitate the optimal dilatation of the 
vessel and placement of a coronary stent. The applicant adds that the 
catheter is removed, and the physician then implants a coronary stent 
to treat the lesion.
    The applicant asserts that Coronary IVL is different from other 
devices used during PCI procedures as it delivers localized lithotripsy 
to crack the calcified lesion prior to the placement of a coronary 
stent. According to the applicant there are other devices that may be 
utilized to remove calcium within the vessel (that is, atherectomy), 
however, these devices utilize some form of cutting or laser to remove 
or ablate the calcium and can only address the calcium nearest to the 
vessel lumen. According to the applicant, Coronary IVL addresses the 
calcium within the lumen as well as within the vessel walls.
    According to the applicant, Coronary IVL is used to treat a subset 
of patients identified for a PCI procedure to treat their coronary 
artery disease where approximately 15 percent of lesions in patients 
being eligible for a PCI procedure have severe calcification. The 
applicant adds the Shockwave C2 Coronary IVL catheter is 
utilized during PCI procedures and does not replace any devices 
currently utilized to complete the procedure (for example, guidewires, 
angioplasty balloons, stent(s), vascular closure, etc.) that are 
packaged into the APC payment rate. According to the applicant, based 
on the FDA labeling for the Coronary IVL catheter, it will be utilized 
prior to the placement of a coronary stent.
    With respect to the newness criterion at Sec.  419.66(b)(1), the 
Coronary IVL received FDA premarket approval (PMA) for the Shockwave 
Intravascular Lithotripsy (IVL) System with Shockwave C2 
Coronary Intravascular Lithotripsy (IVL) Catheter on February 12, 2021 
and is indicated for lithotripsy-enabled, low-pressure balloon 
dilatation of severely calcified, stenotic de novo coronary arteries 
prior to stenting. The Coronary IVL received FDA Breakthrough Device 
designation on August 19, 2019, and is indicated for lithotripsy-
enabled, low-pressure dilatation of calcified, stenotic de novo 
coronary arteries prior to stenting. We received the application for a 
new device category for transitional pass-through payment status for 
the Coronary IVL on February 26, 2021, which is within 3 years of the 
date of the initial FDA marketing authorization. We are inviting public 
comment on whether the Coronary IVL meets the newness criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, Coronary IVL is integral to the service 
provided, is used for one patient only, comes in contact with human 
tissue and is surgically inserted in a patient until the procedure is 
completed. The applicant also claimed that Coronary IVL meets the 
device eligibility requirements of Sec.  419.66(b)(4) because it is not 
an instrument, apparatus, implement, or item for which depreciation and 
financing expenses are recovered, and it is not a supply or material 
furnished incident to a service. We are inviting public comments on 
whether Coronary IVL meets the eligibility criteria at Sec.  419.66(b).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. The 
applicant identified five established categories which they believe are 
not appropriate representatives of the Coronary IVL: (1) C1714 and C 
1724 include devices that use mechanical cutting tools, (2) C1725 
includes balloon angioplasty, (3) C1885 which uses laser, beams of 
light to break up vessel obstructions, and (4) C2623 which includes a 
drug coated balloon. We have not identified an existing pass-through 
payment category that describes Coronary IVL and we are inviting public 
comment on this issue.
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
That a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the

[[Page 42090]]

functioning of a malformed body part compared to the benefits of a 
device or devices in a previously established category or other 
available treatment; or (ii) for devices for which pass-through status 
will begin on or after January 1, 2020, as an alternative to the 
substantial clinical improvement criterion, the device is part of the 
FDA's Breakthrough Devices Program and has received FDA marketing 
authorization. As previously discussed in section IV.2.a above, we 
finalized the alternative pathway for devices that are granted a 
Breakthrough Device designation and receive FDA marketing authorization 
in the CY 2020 OPPS/ASC final rule (84 FR 61295). Coronary IVL has a 
Breakthrough Device designation and marketing authorization from the 
FDA and therefore is not evaluated for substantial clinical 
improvement. We note that the applicant has applied for the New 
Technology Add-on Payment under the Alternative Pathway for 
Breakthrough devices in the FY 2022 IPPS/LTCH proposed rule (86 FR 
25388 through 25389).
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that Coronary IVL would 
be reported with the HCPCS codes listed in the following Table 20:
[GRAPHIC] [TIFF OMITTED] TP04AU21.028

    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. For our calculations, we used APC 5193--Level 3 Endovascular 
Procedures, which had a CY 2021 payment rate of $10,042.94 at the time 
the application was received. Beginning in CY 2017, we calculate the 
device offset amount at the HCPCS/CPT code level instead of the APC 
level (81 FR 79657). HCPCS code 92928 had a device offset amount of 
$3,607.42 at the time the application was received.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost for Coronary IVL of $5,640 is 56 percent of the 
applicable APC payment amount for the service related to the category 
of devices of $10,042.94 (($5,640/10,042.94) x 100 = 56 percent). 
Therefore, we believe Coronary IVL meets the first cost significance 
requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost for Coronary IVL of 
$5,640 is 156 percent of the cost of the device-related portion of the 
APC payment amount for the related service of $3,607.42 (($5,640/
$3,607.42) x 100 = 156 percent). Therefore, we believe that Coronary 
IVL meets the second cost significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $5,640 for Coronary IVL and the portion of the APC 
payment amount for the device of $3,607.42 is 20 percent of the APC 
payment amount for the related service of $10,042.94 (($5,640 - 
$3,607.42)/$10,042.94) x 100= 20 percent. Therefore, we believe that 
Coronary IVL meets the third cost significance requirement.
    We are inviting public comment on whether the Coronary IVL meets 
the device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.

[[Page 42091]]

    As specified above, the Coronary IVL application was preliminarily 
approved for transitional pass-through payment under the alternative 
pathway effective July 1, 2021. We are inviting public comment on 
whether the Coronary IVL should continue to receive transitional pass-
through payment under the alternative pathway for devices that are FDA 
market authorized and that have an FDA Breakthrough Device designation.
2. Traditional Device Pass-Through Applications
(1) AngelMed Guardian[supreg] System
    Angel Medical Systems submitted an application for a new device 
category for transitional pass-through payment status for the AngelMed 
Guardian[supreg] System (Guardian[supreg]) for CY 2022. The applicant 
asserted that the Guardian[supreg] is a proactive diagnostic technology 
that monitors a patient's heart's electrical activity for changes that 
may indicate an Acute Coronary Syndrome (ACS) event (that is, STEMI, 
NSTEMI, or unstable angina) related to blockage of a coronary artery 
which prevents the heart muscle from receiving sufficient oxygen. The 
Guardian[supreg] is a device implanted in the upper left chest and 
connects to an active fixation intracardiac lead attached to the apex 
of the right ventricle. The applicant asserts the Guardian[supreg] 
consists of an implantable medical device (IMD) which is composed of 
the header with an antenna for communication and the can with 
circuitry, radio, vibratory motor, and battery. According to the 
applicant, the Guardian[supreg] system also includes an external device 
that communicates with the IMD and provides redundant patient 
notification using auditory and visual alarms. Lastly, the applicant 
states the Guardian[supreg] system includes a physician programmer, a 
capital device, used to program the IMD and download cardiac data 
captured by the IMD.
    According to the applicant, the Guardian[supreg] system relies upon 
the gold standard of changes to the ST-segment of a patient's heartbeat 
to diagnose a heart attack. According to the applicant, the 
Guardian[supreg] system uses an intracardiac lead to sense cardiac data 
and proprietary machine learning algorithms to assess acute changes to 
the ST-segment on a continuous, real-time basis. The applicant asserts 
these changes are compared to a patient's normal baseline reference 
that is computed over the prior twenty-four hours of monitored heart 
activity. According to the applicant, if the Guardian[supreg] detects a 
statistically abnormal acute change relative to this baseline, it 
notifies the patient to the potential ACS event by providing an alarm: 
The implanted device will vibrate, and the external device will flash 
and beep. According to the applicant, patients are instructed to seek 
urgent medical assistance when the system activates, even in the 
absence of ACS symptoms.
    According to the applicant, the Guardian[supreg] system 
implantation will typically be an outpatient procedure and, following 
10-14 days, is programmed in the physician office. The applicant 
asserts the patient undergoes training on the Guardian[supreg] and has 
follow-up visits every six months to review the device data. The 
applicant states that the emergency alarm is intended to be used as an 
adjunct to symptoms; in the absence of an emergency alarm patients are 
instructed not to ignore symptoms of an ACS event. The applicant 
asserts that while current technologies detect and provide therapy for 
cardiac medical conditions related to abnormal heart rate and rhythm, 
the AngelMed Guardian[supreg] system is the only FDA approved 
technology for providing detection and patient notification of ACS 
events so that patients more reliably and urgently seek medical care.
    With respect to the newness criterion at Sec.  419.66(b)(1), the 
AngelMed Guardian[supreg] system first received FDA 510(k) clearance on 
April 9, 2018 under premarket approval (PMA) number P150009. The 
manufacturers received a Category B Investigational Device Exemption 
(IDE) as of January 27, 2020 for the use of the device in their 
continued access study, AngelMed for Early Recognition and Treatment of 
STEMI (ALERTS). According to the applicant, the device is anticipated 
for U.S. market availability in quarter three of 2021. We received the 
application for a new device category for transitional pass-through 
payment status for the Guardian[supreg] system on February 28, 2021, 
which is within 3 years of the date of the initial FDA marketing 
authorization. We solicited public comment on whether the 
Guardian[supreg] system meets the newness criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, the Guardian[supreg] is integral to the 
service provided, is used for one patient only, comes in contact with 
human tissue, and is surgically inserted temporarily. The applicant 
also claimed that Guardian[supreg] meets the device eligibility 
requirements of Sec.  419.66(b)(4) because it is not an instrument, 
apparatus, implement, or item for which depreciation and financing 
expenses are recovered, and it is not a supply or material furnished 
incident to a service. We are inviting public comments on whether 
Guardian[supreg] meets the eligibility criteria at Sec.  419.66(b).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. We have not 
yet identified an existing pass-through payment category that describes 
Guardian[supreg]. We are inviting public comment on whether 
Guardian[supreg] meets the device category criterion.
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
That a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization.
    The applicant stated that Guardian[supreg] represents a substantial 
clinical improvement over existing technologies. With respect to this 
criterion, the applicant asserted that Guardian[supreg] 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 is 
currently possible and this earlier diagnosis results in better 
outcomes.\15\ In support of this claim the applicant submitted two 
published articles, the first by Gibson et al. and the second by Holmes 
et al.16 17
---------------------------------------------------------------------------

    \15\ 66 FR 55852, November 2, 2001.
    \16\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns, 
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B., 
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early 
Recognition of ST-Segment Elevation Myocardial Infarction. Journal 
of the American College of Cardiology, 73(15), 1919-1927.
    \17\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G., 
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, 
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., & 
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment 
Delay in Patients with Acute Coronary Syndrome Events. JACC, 74(16), 
2047-2055.

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

[[Page 42092]]

    The first study is a randomized control trial with 907 subjects who 
were implanted with the Guardian[supreg] system and randomized 1:1 to 
either active or deactivated alarms.\18\ According to the authors, all 
subjects received education regarding the importance of minimizing 
symptom-to-door time in the presence of chest pain or ischemic 
equivalents, regardless of alarm status. The authors state that 
patients were not blinded to their randomization status. After 
randomization patients returned for follow-up visits at 1, 3, 6, and 
every six months thereafter. In all patients, the Guardian[supreg] 
system captured electrogram data up to 24 hours before and 8 hours 
after a triggered alarm for later review. According to the authors, the 
primary safety endpoint was the absence of system-related complications 
that required a system revision or invasive intervention to resolve in 
at least 90 percent of subjects through six months. The primary 
efficacy endpoint was a composite of: (1) Cardiac or unexplained death; 
(2) new Q-wave MI; and (3) detection-to-presentation time >2 h for a 
documented coronary occlusion event. Electrocardiogram (ECG) tracings 
were obtained prior to implantation, at randomization, at 1, 3, and 6 
months, and at every emergency presentation to evaluate for a Q-wave MI 
not present at baseline. An exploratory dual baseline ECG analysis was 
performed, according to the authors, because Q-waves may be transient 
between implantation and randomization. The dual baseline ECG analysis 
evaluates for the presence of new Q waves across subsequent ECGs. At 
the start of the trial, 456 patients were identified as controls and 
451 as treated; at six months, 446 controls remained and 437 treated 
remained. The authors stated that subject enrollment ceased after 900 
subjects were randomized and therefore an alpha penalty of 0.25 was 
taken for the interim look at event rates after 600 subjects.
---------------------------------------------------------------------------

    \18\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns, 
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B., 
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early 
Recognition of ST-Segment Elevation Myocardial Infarction. Journal 
of the American College of Cardiology, 73(15), 1919-1927.
---------------------------------------------------------------------------

    According to the authors, the control and treatment groups were 
well matched at baseline.\19\ The primary safety endpoint was met with 
96.7 percent freedom (posterior probability >0.999) with a total of 31 
system-related complications in 30 (3.3 percent) subjects with 
infections being the predominant cause of complications. The authors 
stated that ACS events occurrence was low. At 7, 30, 50, 70, and 90 
days there were no statistical differences between the control and 
treated groups on the primary composite efficacy endpoint. At each time 
interval, the treated group had lower rates of the primary endpoint 
than the control group. Statistical differences were observed between 
treated and control groups in the dual baseline ECG exploratory 
analysis particularly at 50, 70, and 90 days after a confirmed 
occlusive event favoring the treated group. At the pre-specified 7-day 
look back window, the median time from Guardian[supreg] notification to 
arrival at a medical facility was 51 minutes for the treated subjects 
as compared to 30.6 hours for control subjects (Pr [pt < pc] >0.999). 
Subject arrival within 2 hours of a detected and confirmed coronary 
occlusion occurred in 85 percent (29 of 34) of the treatment group 
compared with only 5 percent of the control group, with the majority of 
patients in the control arm presenting after 7 days. However, the 
authors asserted that despite a numerical reduction in new Q-wave MI 
using single and dual baseline ECGs at any of the pre-specified look-
back windows, the posterior probability of superiority did not reach 
statistical significance. The applicant added that 22 percent (42/193) 
of the confirmed ACS events were detected due to Emergency Department 
(ED) visits prompted by alarms in the absence of symptoms; that silent 
MIs typically account for approximately 30 percent of all MIs and are 
historically associated with increased rates of morbidity and 
mortality.\20\
---------------------------------------------------------------------------

    \19\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns, 
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B., 
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early 
Recognition of ST-Segment Elevation Myocardial Infarction. Journal 
of the American College of Cardiology, 73(15), 1919-1927.
    \20\ Gibson, C. M., Holmes, D., Mikdadi, G., Presser, D., Wohns, 
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B., 
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early 
Recognition of ST-Segment Elevation Myocardial Infarction. Journal 
of the American College of Cardiology, 73(15), 1919-1927.
---------------------------------------------------------------------------

    The second article expanded on the previously discussed study with 
a post hoc analysis of two coprimary efficacy endpoints: Superiority of 
positive predictive value (PPV) and noninferiority of false positive 
rate for ED visits prompted by alarms compared to symptoms-only.\21\ 
According to the authors, these primary endpoints were assessed by 
comparing ED visits for an Alarms OFF group (control subjects during 
the randomized 6-month period) to those of an Alarms ON group 
(including both the treatment subjects during the first 6 months and 
all implanted patients beyond 6 months with alarms activated). The 
authors stated the expanded analysis adjudicated ED visits into either 
true or false-positive ACS events based on independent review of 
cardiac test data. The authors stated that the annual rate for Clinical 
Events Committee (CEC)--adjudicated ACS events was 0.151 (33 of 218.15) 
in the Alarms OFF group and 0.124 (193 of 1,557.64) in the Alarms ON 
group. In the Alarms OFF group, of the 181 ED visits, the CEC 
adjudicated 33 (18 percent) as ACS events (MI = 22 [67 percent]; 
unstable angina (UA) \1/4\ 11 [33 percent]), with the remaining visits 
adjudicated as due to either stable CAD or indeterminate etiology. The 
median symptom-to-door time for Alarms OFF ACS events was 8.0 h (95 
percent confidence interval [CI]: 3.2 to 47.5 h). In Alarms ON 
subjects, of the 970 ED visits, the CEC adjudicated 193 (20 percent) as 
ACS events, with the remainder classified as stable CAD, indeterminate 
events, and/or a false-positive alarm. Of the 193 ACS events, 89 events 
(46 percent) were prompted by alarms (with or without symptoms; MI \1/
4\ 40 [45 percent]; UA \1/4\ 49 [55 percent]). The remaining 104 visits 
(54 percent) were prompted by symptoms only (MI \1/4\ 60 [58 percent]; 
UA \1/4\ 44 [42 percent]). An overall median arrival time of 1.7 h was 
found for the Alarms ON group composite including all 3 prompt types 
for ED arrival (alarms only, alarms [thorn] symptoms, or symptoms 
only), which was significantly shorter than the 8.0 h delay of the 
Alarms OFF group (p < 0.0001). The applicant asserts that the 
Guardian[supreg] system allows patients with asymptomatic ACS events to 
respond to the ED faster with a median pre-hospital delay of 1.4 hours.
---------------------------------------------------------------------------

    \21\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G., 
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, 
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., & 
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment 
Delay in Patients with Acute Coronary Syndrome Events. JACC, 74(16), 
2047-2055.
---------------------------------------------------------------------------

    The applicant further asserts that the Guardian[supreg] system 
offers more rapid beneficial resolution of the disease process treated 
because of the use of the device. According to the applicant, the 
Guardian[supreg] system increases the likelihood that a patient will 
correctly seek medical care for an ACS event in a timely manner that 
reduces pre-hospital delay and associated risk of heart damage (for 
example, larger infarct size, ejection fraction decrement) 
22 23 24

[[Page 42093]]

and associated downstream sequelae. More specifically, the applicant 
asserts that based on the results of the second discussed study, the 
Guardian[supreg] system Alarms ON group showed reduced pre-hospital 
delays, with 55 percent (95 percent confidence interval [CI]: 46 
percent to 63 percent) of Emergency department visits for ACS events <2 
hours compared with 10 percent (95 percent CI: 2 percent to 27 percent) 
in the Alarms OFF group (p < 0.0001).\25\ The applicant adds that 
results were similar when restricted to myocardial infarction (MI) 
events.\26\ The applicant states the median pre-hospital delay for MI 
was 12.7 hours for Alarms OFF compared to 1.6 hours in Alarms ON 
subjects (p < 0.0089) as reported in Holmes et al. (2019).\27\ The 
applicant asserts that it is clinically recognized, due to numerous 
lines of evidence, that shorter total ischemia time is associated with 
better outcomes for ACS events.28 29 30 31 The applicant 
asserts that prompt responsiveness to symptoms and decreased pre-
hospital delay is a universally understood benefit which improves the 
health outcomes of ACS events. According to the applicant, the American 
Heart Association (Mission Lifeline), American College of Cardiology 
(Door to Balloon (D2B) Alliance), Society for Angiographic Intervention 
(Seconds CountTM program) and the National Heart, Lung, and 
Blood Institute have organized task forces and launched national 
programs with the goal of improving patient awareness and response to 
symptoms which are indicative of potential ACS events and reducing 
total ischemia time (that is, prehospital delay and in-hospital delay) 
to improve outcomes.
---------------------------------------------------------------------------

    \22\ Weaver WD, Cerqueira M, Hallstrom AP, et al. Prehospital-
Initiated vs Hospital-Initiated Thrombolytic Therapy: The Myocardial 
Infarction Triage and Intervention Trial. JAMA. 1993;270(10):1211-
1216.
    \23\ Hasche ET, Fernandes C, Freedman SB, Jeremy RW. Relation 
between ischemia time, infarct size, and left ventricular function 
in humans. Circulation. 1995;92:710-719.
    \24\ Liem AL, van `t Hof AW, Hoorntje JC, de Boer MJ, 
Suryapranata H, Zijlstra F. Influence of treatment delay on infarct 
size and clinical outcome in patients with acute myocardial 
infarction treated with primary angioplasty. J Am Coll Cardiol. 
1998;32:629-633.
    \25\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G., 
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, 
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., & 
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment 
Delay in Patients With Acute Coronary Syndrome Events. Journal of 
the American College of Cardiology, 74(16), 2047-2055.
    \26\ Holmes, D.R., Jr, Krucoff, M. W., Mullin, C., Mikdadi, G., 
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, 
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., & 
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment 
Delay in Patients With Acute Coronary Syndrome Events. Journal of 
the American College of Cardiology, 74(16), 2047-2055.
    \27\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G., 
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, 
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M. S., & 
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment 
Delay in Patients With Acute Coronary Syndrome Events. Journal of 
the American College of Cardiology, 74(16), 2047-2055.
    \28\ Guerchicoff A, Brener SJ, Maehara A, et al. Impact of delay 
to reperfusion on reperfusion success, infarct size, and clinical 
outcomes in patients with ST-segment elevation myocardial 
infarction: the INFUSE-AMI Trial (INFUSE-Anterior Myocardial 
Infarction). JACC Cardiovasc Interv. 2014;7(7):733-740.
    \29\ Flynn A, Moscucci M, Share D, et al. Trends in door-to-
balloon time and mortality in patients with ST elevation myocardial 
infarction undergoing primary percutaneous coronary intervention. 
Arch Intern Med. 2010;170(20):1842-1849.
    \30\ De Luca G, Suryapranata H, Zijlstra F, et al. Symptom-
onset-to-balloon time and mortality in patients with acute 
myocardial infarction treated by primary angioplasty. J Am Coll 
Cardiol. 2003;42(6):991-997.
    \31\ Gersh BJ, Stone GW. Pharmacological facilitation of 
coronary intervention in ST-segment elevation myocardial infarction: 
Time is of the essence. JACC Cardiovasc Interv. 2010;3(12):1292-
1294.
---------------------------------------------------------------------------

    The applicant next asserts the device offers more rapid beneficial 
resolution of the disease process because the use of the 
Guardian[supreg] system, as compared to the standard of care relying on 
symptoms alone, being in the Alarm ON group was associated with a 
reduction in the rate of new onset of left ventricular dysfunction.\32\
---------------------------------------------------------------------------

    \32\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G., 
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, 
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., & 
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment 
Delay in Patients With Acute Coronary Syndrome Events. Journal of 
the American College of Cardiology, 74(16), 2047-2055.
---------------------------------------------------------------------------

    Lastly the applicant asserts the use of the Guardian[supreg] system 
will decrease the number of future hospitalizations or physician 
visits. According to the applicant, the Guardian[supreg] system reduces 
the annual false positive rate (FPR) of Emergency Department visits 
(that is, spurious ED visits where no ACS is found) by 26 percent.\33\ 
The applicant states that the FPR for all alarms on emergency visits 
was 0.499 per patient-year compared to 0.678 for alarms off (p 
<0.001).\34\
---------------------------------------------------------------------------

    \33\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns, 
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B., 
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early 
Recognition of ST-Segment Elevation Myocardial Infarction. Journal 
of the American College of Cardiology, 73(15), 1919-1927.
    \34\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns, 
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B., 
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early 
Recognition of ST-Segment Elevation Myocardial Infarction. Journal 
of the American College of Cardiology, 73(15), 1919-1927.
---------------------------------------------------------------------------

    Based on the evidence submitted with the application, we have the 
following observations. Much of the claims for substantial clinical 
improvement are derived from two primary studies identified by the 
applicant and discussed above.35 36 We note that the first 
study (Gibson et al. 2019) did not demonstrate statistically 
significant superiority of the intervention during the pre-determined 
study window. The authors noted a lower than expected frequency of 
events and the study was terminated early, two factors which may have 
affected these results. The results from the second study are based 
entirely on a post hoc analysis of data from the first article. We note 
that the findings presented are valuable but we seek comment on whether 
a post hoc analysis provides sufficient evidence to support the claim 
of substantial clinical improvement. Furthermore, we note that the 
primary efficacy endpoint was a composite of three outcomes. We are not 
certain that this endpoint is an appropriate measure with which to 
evaluate substantial clinical improvement among patients experiencing 
ACS events. We invite public comments on whether the Guardian[supreg] 
system meets the substantial clinical improvement criterion.
---------------------------------------------------------------------------

    \35\ Gibson, C.M., Holmes, D., Mikdadi, G., Presser, D., Wohns, 
D., Yee, M.K., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, Iteld, B., 
& Krucoff, M.W. (2019). Implantable Cardiac Alert System for Early 
Recognition of ST-Segment Elevation Myocardial Infarction. Journal 
of the American College of Cardiology, 73(15), 1919-1927.
    \36\ Holmes, D.R., Jr, Krucoff, M.W., Mullin, C., Mikdadi, G., 
Presser, D., Wohns, D., Kaplan, A., Ciuffo, A., Eberly, A.L., 3rd, 
Iteld, B., Fischell, D.R., Fischell, T., Keenan, D., John, M.S., & 
Gibson, C.M. (2019). Implanted Monitor Alerting to Reduce Treatment 
Delay in Patients With Acute Coronary Syndrome Events. Journal of 
the American College of Cardiology, 74(16), 2047-2055.
---------------------------------------------------------------------------

    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that Guardian[supreg] 
would be reported with the HCPCS codes listed in the following Table 
21:

[[Page 42094]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.029

    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. For our calculations, we used APC 5222--Level 2 Pacemaker and 
Similar Procedures, which had a CY 2021 payment rate of $8,152.58 at 
the time the application was received. Beginning in CY 2017, we 
calculate the device offset amount at the HCPCS/CPT code level instead 
of the APC level (81 FR 79657). HCPCS code 0527T was assigned to APC 
5222 and had a device offset amount of $1,598.72 at the time the 
application was received.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost for Guardian is 126 percent of the applicable 
APC payment amount for the service related to the category of devices 
of $8,152.58. Therefore, we believe Guardian[supreg] meets the first 
cost significance requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost for 
Guardian[supreg] is 641 percent of the cost of the device-related 
portion of the APC payment amount for the related service of $1,598.72. 
Therefore, we believe that Guardian[supreg] meets the second cost 
significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost for Guardian[supreg] and the portion of the APC payment 
amount for the device of $1,598.72 is 106 percent of the APC payment 
amount for the related service of $8,152.58. Therefore, we believe that 
Guardian[supreg] meets the third cost significance requirement. We are 
inviting public comment on whether the Guardian[supreg] meets the 
device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
(2) BONEBRIDGE Bone Conduction Implant System
    MED-EL Corporation submitted an application for a new device 
category for transitional pass-through payment status for the 
BONEBRIDGE Bone Conduction Implant System (hereinafter referred to as 
the BONEBRIDGE) by the March 2021 quarterly deadline for CY 2022. The 
BONEBRIDGE is a transcutaneous, active auditory osseointegrated device 
that replaces the function of the damaged outer or middle ear and can 
help people for whom hearing aids are ineffective or not recommended. 
According to the applicant, the device consists of a bone conduction 
implant and electronics components, and an externally worn audio 
processor. The bone conduction implant is called the BONEBRIDGE Bone 
Conduction Implant (BCI 602) and the externally worn audio processor is 
called the SAMBA 2 Audio Processor. The BCI 602 consists of two main 
sections, the coil section and the transducer section. The BCI 602 
consists of a magnet surrounded by the receiver coil, the transition, 
the Bone Conduction Floating Mass Transducer (BC-FMT), and the 
electronics package in a hermetic housing. The SAMBA 2 Audio Processor 
is 30.4 mm x 36.4 mm x 10.2 mm and weighs 9.3 g, including the battery 
and magnet (strength 1). It

[[Page 42095]]

has an 18-band digital equalizer, 18 independent compression channels, 
and an audio frequency range of 250 Hz to 8 kHz. The audio processor is 
powered by a non-rechargeable 675 zinc-air button cell with a nominal 
1.4-volt supply and 600 mA-Hrs of capacity offering the user up to 133 
hours (8 to 10 days) on a single battery.
    The applicant stated that the bone conduction implant is surgically 
attached to the skull, subcutaneous, and is connected to the external 
audio processor by transcutaneous magnetic attraction. The external 
audio processor picks up sound from the environment and converts those 
sounds to a radiofrequency (RF) signal that that can be transmitted 
across the skin to the implant. The implant converts the signal to 
controlled vibrations which are conducted via the skull and perceived 
as sound. More specifically, the applicant stated that the BCI 602 is 
activated by placing the external audio processor over the magnet of 
the BCI 602. The signal and the energy to drive the BC-FMT are 
transferred via an inductive link to the internal coil, and then 
relayed to the BC-FMT. The BC-FMT transduces the signal into mechanical 
vibrations, which are conducted to the skull via the cortical titanium 
screws. These vibrations stimulate the auditory system through the bone 
conduction pathway to allow the patient to hear.
    With respect to the newness criterion at Sec.  419.66(b)(1), the 
FDA granted a de novo request classifying the BONEBRIDGE as a Class II 
device under section 513(f)(2) of the Federal Food, Drug, and Cosmetic 
Act on July 20, 2018. The BONEBRIDGE is indicated for use in the 
following patients: (1) Patients 12 years of age or older; and (2) 
patients who have a conductive or mixed hearing loss and still can 
benefit from sound amplification. The pure tone average (PTA) bone 
conduction (BC) threshold (measured at 0.5, 1, 2, and 3 kHz) should be 
better than or equal to 45 dB HL; (3) Bilateral fitting of the 
BONEBRIDGE is intended for patients having a symmetrically conductive 
or mixed hearing loss. The difference between the left and right sides' 
BC thresholds should be less than 10 dB on average measured at 0.5, 1, 
2, and 3 kHz, or less than 15 dB at individual frequencies; (4) 
Patients who have profound sensorineural hearing loss in one ear and 
normal hearing in the opposite ear (that is, single-sided deafness or 
``SSD''). The pure tone average air conduction hearing thresholds of 
the hearing ear should be better than or equal to 20 dB HL (measured at 
0.5, 1, 2, and 3 kHz); (5) The BONEBRIDGE for SSD is also indicated for 
any patient who is indicated for an air conduction contralateral 
routing of signals (AC CROS) hearing aid, but who for some reason 
cannot or will not use an AC CROS. Prior to receiving the device, it is 
recommended that an individual have experience with appropriately fit 
air conduction or bone conduction hearing aids. We received the 
application for a new device category for transitional pass-through 
payment status for the BONEBRIDGE on December 10, 2020, which is within 
3 years of the date of the initial FDA marketing authorization. We are 
inviting public comments on whether the BONEBRIDGE meets the newness 
criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, the BONEBRIDGE is integral to the service 
provided, is used for one patient only, comes in contact with human 
skin and is surgically implanted or inserted. The applicant also 
claimed that the BONEBRIDGE meets the device eligibility requirements 
of Sec.  419.66(b)(4) because it is not an instrument, apparatus, 
implement, or item for which depreciation and financing expenses are 
recovered, and it is not a supply or material furnished incident to a 
service. Additionally, the BONEBRIDGE is not subject to the hearing aid 
exclusion at Sec.  411.15(d)(1). The BONEBRIDGE Bone Conduction Implant 
(BCI 602) component is an osseointegrated implant, surgically attached 
to the skull that converts a radiofrequency signal from an external 
audio processor to controlled vibrations which are conducted via the 
skull to the cochlea. Therefore, we believe the BONEBRIDGE meets the 
criterion at Sec.  411.15(d)(2)(i) and is not subject to the hearing 
aid exclusion. In accordance with the Medicare Benefit Policy Manual, 
Chapter 16 ``General Exclusions from Coverage,'' section 100, certain 
devices that produce perception of sound by replacing the function of 
the middle ear, cochlea or auditory nerve are payable by Medicare as 
prosthetic devices. These include osseointegrated implants, that is, 
devices implanted in the skull that replace the function of the middle 
ear and provide mechanical energy to the cochlea via a mechanical 
transducer. We believe the BONEBRIDGE device meets the criteria of this 
benefit category. We are inviting public comments on whether the 
BONEBRIDGE meets the eligibility criteria at Sec.  419.66(b) as well as 
the criterion at Sec.  411.15(d)(2)(i).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996.
    The applicant stated that the previous category, L8690--Auditory 
osseointegrated device, includes all internal and external components, 
which was effective from January 1, 2007-December 31, 2008 did not 
include the BONEBRIDGE. The applicant stated that at the time the 
category was established, BONEBRIDGE did not exist and the devices 
described by the category included auditory osseointegrated implant 
(AOI) devices or bone-anchored hearing aids (BAHA). The applicant 
claimed that AOI devices and BAHAs are distinct from the BONEBRIDGE 
because they are implant systems composed of an external sound 
processor connected via a percutaneous abutment to a titanium implant 
that is implanted in the skull. In these devices, the titanium implant 
protrudes through the skin creating a titanium post, which directly 
attaches to an external sound processor. The system replaces the 
function of the middle ear by transmitting mechanical energy from the 
external transducer/sound processor directly to the titanium implant to 
the cochlea thereby resulting in better hearing. The applicant stated 
that the titanium abutment used by percutaneous systems permanently 
pierce the skin to allow the sound processor to transmit sound and 
create vibrations within the skull that stimulate the nerve fibers of 
the inner ear. The applicant also stated that in the percutaneous 
systems, the external component (sound processor) receives and 
processes the sound and generates the vibrations.
    The applicant claimed that the BONEBRIDGE is a new technology 
compared to the AOI devices and BAHAs and unlike these devices, it does 
not use a percutaneous abutment. The applicant described BONEBRIDGE as 
an active, transcutaneous device that consists of a completely 
implanted transducer and electronics components, and an externally worn 
audio processor. The active implant is surgically attached to the 
skull, is subcutaneous, and is connected to the external audio 
processor by transcutaneous magnetic attraction. The external audio 
processor picks up sound from the environment and converts those sounds 
to a radiofrequency (RF) signal that can be transmitted across the skin 
to the implant. The implant converts the

[[Page 42096]]

signal to controlled vibrations, which are conducted via the skull and 
perceived as sound. The applicant proposed the device pass-through 
category descriptor ``Auditory osseointegrated device, transcutaneous, 
with implanted transducer and radiofrequency link to external sound 
processor'' and suggested that L8690 be revised to read, ``Auditory 
osseointegrated device, percutaneous, includes all internal and 
external components''. The applicant stated that the Cochlear 
OsiaTM 2 System, which also submitted a device pass-through 
application for CY 2022, would also be described by the proposed 
additional category.
    We believe that the BONEBRIDGE is described by L8690--Auditory 
osseointegrated device, includes all internal and external components. 
The applicant has noted differences between the BONEBRIDGE and the 
devices that were described by L8690, specifically percutaneous, 
auditory osseointegrated devices, regarding the connection between the 
implanted transducer and the external audio processor (percutaneous 
abutment vs. transcutaneous magnetic attraction). However, we believe 
that there is a similar mechanism of action for all these devices 
specifically, vibratory stimulation of the skull to stimulate the 
receptors in the cochlea (inner ear). Further, we believe that the 
broad descriptor for L8690 of ``Auditory osseointegrated device, 
includes all internal and external components'' includes the 
applicant's device.
    We are inviting public comment on whether the BONEBRIDGE meets the 
device category criterion.
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
That a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization. With respect to the substantial 
clinical improvement criterion, the applicant stated that the 
BONEBRIDGE represents a substantial clinical improvement because it 
provides a reduced rate of device-related complications and a more 
rapid beneficial resolution of the disease process treated because of 
the use of the device compared to currently available treatments. The 
applicant submitted six studies to support these claims. The applicant 
also submitted references for four retrospective case studies of 
complications with percutaneous devices, specifically bone-anchored 
hearing aids, including infections, pain, soft tissue hypertrophy, loss 
of osseointegration, and need for further surgery. These studies did 
not involve the applicant's device.
    In support of the claim that the BONEBRIDGE reduced the rate of 
device-related complications compared to currently available 
treatments, the applicant submitted a white paper that reviewed the 
literature reporting on safety outcomes in bone conduction implants 
authored by the manufacturer of the BONEBRIDGE, MED-EL.\37\ The review 
included five products used to treat conductive hearing loss, mixed 
hearing loss or single side deafness, which were either percutaneous 
systems that had an abutment that permanently pierced through the skin 
or transcutaneous systems without permanent skin penetration. The 
authors further defined the products as either active or passive, 
depending on the placement of the vibrating (or active) device 
component. According to the authors, active bone conduction systems, 
the active device component, is located within the implantable part of 
the system. According to the authors, passive bone conduction systems, 
the vibrating device component, is located outside of the skull.\38\
---------------------------------------------------------------------------

    \37\ MED-EL Medical Electronics. (2019). Safety outcomes of bone 
conduction implants: A systematic review [White paper].
    \38\ Ibid.
---------------------------------------------------------------------------

    The literature review compared the safety outcomes of the BAHA 
Connect and the Ponto, (passive, percutaneous systems,) the BONEBRIDGE, 
(an active, transcutaneous systems), and the Sophono Alpha and the BAHA 
Attract, (passive, transcutaneous systems). In total, 156 studies were 
included in the literature review. There were seven studies with 234 
patients reported on the Ponto, thirteen studies with 175 patients 
reported on the BONEBRIDGE, twelve publications with 143 patients 
reported on the Sophono Alpha, seven studies reported on the BAHA 
Attract system with 114 patients, and 117 studies reported on the BAHA 
Connect system with a total of 6,965 patients. Of all reported adverse 
events, 38 percent were major and 62 percent were minor. Major adverse 
events reported in the review included revision surgery, explantation, 
removal at patient request, implant loss, implant device failure, skin 
revision surgery or skin infection. Minor adverse events included skin 
infections, soft tissue reactions, and healing difficulties. The 
results showed that 9.8 percent of patients using the BONEBRIDGE system 
experienced an adverse event (major or minor), compared to 68.4 percent 
of BAHA Attract patients, 46.9 percent of Sophono Alpha patients, 44.0 
percent of Ponto system patients and 51.7 percent of BAHA Connect 
patients. When comparing the percentage of patients who experienced a 
major adverse event, 2.9 percent of BONEBRIDGE patients had a major 
adverse event compared to 1.8 percent of BAHA Attract patients, 4.2 
percent of Sophono Alpha patients, 5.1 percent of Ponto system 
patients, and 21.1 percent of BAHA Connect patients.
    To support the claim that the BONEBRIDGE reduced the rate of 
device-related complications compared to currently available 
treatments, the applicant also submitted a systematic review of the 
current literature on safety, efficacy and subjective benefit after 
implantation with the BONEBRIDGE device.\39\ The systematic review 
assessed 39 publications and included randomized controlled trials, 
clinical controlled trials and cohort studies, case series and case 
reports investigating subjective and objective outcomes. In the 39 
publications included in the review, 487 participants were evaluated; 
303 participants had conductive hearing loss, 67 participants had mixed 
hearing loss, and 53 participants had single-sided deafness. The mean 
age of the patients in the included studies was 35.6  16.9 
years. Using the guidelines available from the Cochrane Collaboration, 
a search strategy and review protocol was developed using PubMed 
(MEDLINE) and Cochrane databases to identify all publications on the 
BONEBRIDGE from 2012 to October 31, 2018. The researchers excluded 
studies that assessed a device or treatment other than the BONEBRIDGE, 
did not include human participants, focused on a type of hearing loss 
other than the losses that BONEBRIDGE is indicated for (that is, 
conductive hearing loss, mixed hearing loss or single-sided deafness), 
did not report on safety or performance/quality of life data, were not 
related to hearing loss or treatment thereof, lacked

[[Page 42097]]

sufficient information for evaluation, and included overlapping 
samples.
---------------------------------------------------------------------------

    \39\ Magele, A., Schoerg, P., Stanek, B. et al. (2019). Active 
transcutaneous bone conduction hearing implants: Systematic review 
and meta-analysis. PLoS ONE 14(9); e0221484 https://doi.org/10.1371/journal.pone.0221484.
---------------------------------------------------------------------------

    The outcomes extracted from the studies were assessed via meta-
analysis. The safety of the device was assessed by collecting 
information on complications during surgery and adverse events in the 
postoperative period. Of the 39 identified studies, there were 25 
studies that reported on safety during a mean period of 11.7 months 
(range 3-36 months). The reported complications were categorized into 
minor and major complications, with a major complication described as 
requiring surgical attention leading to revision surgery or 
explantation. Minor complications included skin edema or erythema, skin 
infections, and hematomas. Out of 286 ears implanted with the device, 
there were no complications in 259 ears (90.6 percent). Minor 
complications occurred in 22 ears (7.7 percent) over a cumulative 
period of reported mean follow-up of 12.7 years (mean: 11.7 months 
 4.5). Major complications occurred in three studies 
comprising five ears (1.7 percent).\40\
---------------------------------------------------------------------------

    \40\ Ibid.
---------------------------------------------------------------------------

    The applicant submitted an additional study by Schmerber, et al. to 
support the claim that the BONEBRIDGE reduced the rate of device-
related complications compared to currently available treatments.\41\ 
The study of 28 participants was a multicenter, prospective study with 
intra-subject measurements with the purpose of the study to validate 
the safety and efficacy of the BONEBRIDGE 12 months after 
implementation. The study included nine university hospitals, seven in 
France and two in Belgium. Sixteen participants with conductive or 
mixed hearing loss with bone-conduction hearing thresholds under the 
upper limit of 45 dB HL for each frequency from 500 to 4,000 Hz, and 12 
participants with SSD (contralateral hearing within normal range) were 
enrolled in the study. Three of the 28 participants (with mixed or 
conductive hearing loss) did not complete the study; one requested that 
the device be removed (due to ``severe psychological problems'') and 
two were lost to follow up. The skin safety of the participants was 
evaluated by the surgeon who implanted the device up to 12 months post-
operatively using an ordinal scale (``very good'', ``good'', 
``acceptable'', ``bad skin condition'') and a visual analogue scale 
(between 1 and 10 from ``very bad'' to ``excellent'') to rate cutaneous 
tolerance. In the study, no complications or device failures occurred, 
no revision surgery was necessary and no skin injury was reported. The 
scoring was judged as `excellent' or `good' for all subjects (n = 25), 
corresponding to scores 8 to 10 on the scale. No complication (0 
percent) was observed [95 percent confidence interval = (0 percent-14.9 
percent)]. The authors stated that there was a lower rate of 
complications for the BONEBRIDGE device compared to percutaneous 
systems, like the BAHA, whose complication rate was up to 24 percent in 
a large series of 602 ears and a revision surgery rate of 12 
percent.42 43
---------------------------------------------------------------------------

    \41\ Schmerber, S., Deguine, O., Marx, M. et al. (2017). Safety 
and effectiveness of the Bonebridge transcutaneous direct-drive 
bone-conduction hearing implant at 1-year device use. Eur Arch 
Otorhinolaryngol 274: 1835-1851 doi 10.1007/s00405-016-4228-6.
    \42\ Schmerber, S., Deguine, O., Marx, M. et al. (2017). Safety 
and effectiveness of the Bonebridge transcutaneous direct-drive 
bone-conduction hearing implant at 1-year device use. Eur Arch 
Otorhinolaryngol 274: 1835-1851 doi 10.1007/s00405-016-4228-6.
    \43\ Hobson, J.C., Roper, A.J., Andrew, R., Rothera, M.P., Hill, 
P., Green, K.M. (2010) Complications of bone-anchored hearing aid 
implantation. J Laryngol Otol 124(2):132-136. doi:10.1017/
S0022215109991708.
---------------------------------------------------------------------------

    The applicant also submitted a study by Siegel et al. as evidence 
to support the claim that the BONEBRIDGE reduced the rate of device-
related complications compared to currently available treatments.\44\ 
The study was a retrospective review that included 37 adult patients 
with conductive/mixed hearing loss who met the indications for use and 
were implanted with BONEBRIDGE over a five-year period from April 2013 
to May 2018. Patient charts were reviewed for surgical outcomes and 
complications over the 6-year period. The mean time of follow-up was 32 
months (range: 9-71 months). There were no events of surgical 
complications in the patients included in the study, specifically no 
instances of dural injury, cerebrospinal fluid (CSF) leak, or 
intracranial bleeding. There were also no skin complications and no 
postoperative symptoms of tinnitus/vertigo or dizziness.\45\
---------------------------------------------------------------------------

    \44\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active 
transcutaneous bone conduction implant: Adiometric outcomes 
following a novel middle fossa approach with self-drilling screws. 
Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
    \45\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active 
transcutaneous bone conduction implant: Audiometric outcomes 
following a novel middle fossa approach with self-drilling screws. 
Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
---------------------------------------------------------------------------

    In support of the assertion that the use of BONEBRIDGE resulted in 
a more rapid beneficial resolution of the disease process compared to 
currently available treatments, the applicant also referenced the 
Magele et al., and Siegel et al. studies as well as a study conducted 
by Yang et al.46 47 48
---------------------------------------------------------------------------

    \46\ Ibid.
    \47\ Ibid.
    \48\ Ibid.
---------------------------------------------------------------------------

    As previously noted, the Magele et al. study assessed 39 
publications that included 487 participants; 303 participants had 
conductive hearing loss, 67 participants had mixed hearing loss, and 53 
participants had single-sided deafness.\49\ Functional gain was 
available for analysis from 14 articles and was measured as the 
difference between unaided and aided (with the BONEBRIDGE) warble tone 
thresholds. On average, functional gain of 32.7 dB  16 dB 
was observed. Overall, the results showed a 30.89 dB (95 percent CI 
27.53 dB-34.24 dB) improvement at speech presentation level; for the 30 
conductive hearing loss patients, the improvement was 39.48 dB (95 
percent CI 35.25 dB-43.71 dB); for the mixed hearing loss group, the 
improvement was 29.08 dB (95 percent CI 26.32 dB-31.83 dB) and the 
improvement was 28.94 dB (95 percent CI 16.92 dB-40.96 dB) for the 10 
subjects with single-sided deafness.
---------------------------------------------------------------------------

    \49\ Ibid.
---------------------------------------------------------------------------

    The applicant also noted the study by Siegel et al. to support the 
claim that the use of BONEBRIDGE resulted in a more rapid beneficial 
resolution of the disease process compared to currently available 
treatments.\50\ As previously stated, in this study, 37 adult patients 
with conductive/mixed hearing loss who met the indications for use were 
implanted with BONEBRIDGE over a six-year period. The patients' charts 
were reviewed for surgical outcomes and complications over the six-year 
period. Preoperative air conduction (AC), preoperative bone conduction 
(BC), and 3-month postoperative aided thresholds were recorded. Speech 
perception was assessed using two different tests, consonant-nucleus-
consonant (CNC) words and AzBio sentences. Pure-tone averages (PTAs; 
measured at 0.5, 1.0, 2.0 and 3.0 kHz), air-bone gap (ABG), and 
functional gain (FG) were calculated. The preoperative air-bone gap was 
calculated as the difference between AC thresholds and BC thresholds of 
the implanted ear. The postoperative ABG was calculated as the 
difference between the preoperative BC and postoperative BONEBRIDGE 
aided thresholds measured at 3 months postoperatively. Functional gain 
was

[[Page 42098]]

calculated as the difference between preoperative AC thresholds and 
BONEBRIDGE aided thresholds measured 3 months postoperatively.
---------------------------------------------------------------------------

    \50\ Siegel, L.H., You, P., Zimmerman, K. et al. (2020). Active 
transcutaneous bone conduction implant: Audiometric outcomes 
following a novel middle fossa approach with self-drilling screws. 
Otol Neurotol 41(5): 605-613. doi: 10.1097/MAO.0000000000002597.
---------------------------------------------------------------------------

    The results of this study showed audiological improvement in the 37 
patients with a functional gain (averaged over 4 frequencies, 500 kHz 
to 3,000 kHz) of 40.3 dB ( 19.0 dB) for air conduction 3 
months postoperatively. The difference between the average air to bone 
conduction gap fell from 44.9 dB preoperative to 4.6 dB three months 
after surgery. The postoperative air conduction thresholds for the 21 
patients with mixed hearing loss ranged between 30-40 dB and the air 
conduction thresholds for the 16 patients with conductive hearing loss 
ranged between 20-30 dB. For patients with mixed hearing loss, nearly a 
full ABG closure was achieved at all frequencies by 3 months 
postoperatively.
    In the same study, speech perception testing was available for 21 
patients (57 percent). At activation, mean speech perception results 
for CNC words (13 patients) and AzBio sentences (14 patients) were 79 
and 93 percent, respectively. At six months postoperatively, CNC words 
(17 patients) and AzBio sentences (21 patients) were 81 and 93 percent, 
respectively. The authors stated that the results of the study were 
comparable with what has been accomplished using traditional 
percutaneous conduction devices and passive transcutaneous bone 
conduction devices.
    Lastly, to support the claim that the use of the BONEBRIDGE 
resulted in a more rapid beneficial resolution of the disease process, 
the applicant submitted a study that compared the use of the BONEBRIDGE 
with a non-implantable bone conduction hearing aid (BCHA).\51\ This 
single center, prospective study involved 100 patients in Beijing, 
China with bilateral congenital microtia-atresia (CMA). The patients 
had a mean age of 11.9  6.0 years old at the time the 
BONEBRIDGE was implanted. All patients had worn the passive bone 
anchored hearing aid for at least a year prior to the implantation of 
the BONEBRIDGE and patients were tested an average of 25 weeks after 
surgery. Measured outcomes in the study included sound field thresholds 
(SFT), functional gain (FG) [aided threshold minus the unaided 
threshold], word recognition, speech reception thresholds (SRT), 
preoperative and postoperative bone and air conduction and patient 
subjective satisfaction. Bone conduction of pure tones at any frequency 
did not change significantly from preoperative to postoperative 
testing. The mean bone-conduction pure-tone threshold (PTA) before 
implantation was 8.7  6.1 dB HL and after surgery was 8.9 
 5.6 dB HL (p > .745, paired t-test). Furthermore, bone 
conduction did not significantly change at any frequency after surgery 
(p > .05, t-test). The mean SFT of the BONEBRIDGE (61.6  
7.1 dB HL) was significantly higher than the BCHA (31.3  
6.1 dB HL) (paired t-test, p < .001) and the SFT was significantly 
better with BONEBRIDGE at 500, 1,000, 2,000, and 4,000 Hz sound 
frequencies (paired t-test, p < .002). Further, the FG of the 
BONEBRIDGE (31.2  9.5 dB HL) was significantly better than 
the FG of the BCHA (26.5  10.3 dB HL) (paired t-test, p < 
.001). The FG measured at 250 Hz in the two aided conditions had less 
improvement compared to other frequencies (p < .001). A comparison of 
BCHA and BONEBRIDGE resulted in a significant difference in word 
recognition (68.0 percent for monosyllabic words and 79.0 percent for 
disyllabic words with the BCHA vs. 78.0 percent for monosyllabic and 
84.0 percent for disyllabic words with the BONEBRIDGE) in favor of the 
BONEBRIDGE (p < .001).
---------------------------------------------------------------------------

    \51\ Yang, J., Chen, P., Zhao, C. et al. 2020. Audiological and 
subjective outcomes of 100 implanted transcutaneous bone conduction 
devices and preoperative bone conduction hearing aids in patients 
with bilateral microtia-atresia. Acta Oto-Laryngologica 140(6): 667-
673 https://doi.org/10.1080/00016489.2020.1762929.
---------------------------------------------------------------------------

    Regarding the applicant's evidence of substantial clinical 
improvement, we note that the studies submitted did not involve a 
direct comparison to other currently available treatments, namely 
percutaneous or passive, transcutaneous auditory osseointegrated 
devices. Therefore, it was difficult to determine whether the 
BONEBRIDGE provided a substantial clinical improvement over existing 
devices. Also, the studies submitted included a small number of 
participants which may affect the generalizability of the data provided 
in support of the device.
    In the white paper by MED-EL, the authors compared the complication 
rates associated with various studies that differed by design, 
population characteristics and follow-up time. We are not confident 
that differences seen or elucidated by the applicant are due to the 
differences in treatments or instead due to differences in study 
characteristics. Additionally, although the overall, both major and 
minor, adverse event ratio was significantly lower for the BONEBRIDGE 
device (9.8 percent) versus other bone conduction hearing devices in 
the study, when comparing the percent of patients who experienced a 
major adverse event, BONEBRIDGE patients had a major adverse event (2.9 
percent) that was more comparable to other devices included in the 
paper. With regard to the Yang et al. study, given the young age of the 
patients and the congenital nature of the hearing loss being treated, 
we are concerned that these results may not be generalizable to the 
Medicare population, which tends to be significantly older in age and 
potentially less likely to have hearing loss related to congenital 
causes. We invite public comments on whether BONEBRIDGE meets the 
substantial clinical improvement criterion.
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that there were no 
specific CPT codes that currently describe the implantation of 
BONEBRIDGE. To demonstrate that the requested category met the cost 
criterion, the applicant submitted the HCPCS codes used to describe 
implantation of a percutaneous device, included in the following Table 
22.

[[Page 42099]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.030

    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. For our calculations, we used APC 5115--Level 5 
Musculoskeletal Procedures, which had a CY 2020 payment rate of 
$11,900.71 at the time the application was received. Beginning in CY 
2017, we calculate the device offset amount at the HCPCS/CPT code level 
instead of the APC level (81 FR 79657). HCPCS code 69714 had a device 
offset amount of $7,742.60 at the time the application was received. 
According to the applicant, the cost of the BONEBRIDGE is $11,500.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost of $11,500 for BONEBRIDGE is 97 percent of the 
applicable APC payment amount for the service related to the category 
of devices of $11,900.71 (($11,500/$11,900.71) x 100 = 96.6 percent). 
Therefore, we believe BONEBRIDGE meets the first cost significance 
requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $11,500 for 
BONEBRIDGE is 149 percent of the cost of the device-related portion of 
the APC payment amount for the related service of $7,742.60 (($11,500/
$7,742.60) x 100 = 148.5 percent). Therefore, we believe that 
BONEBRIDGE meets the second cost significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $11,500 for BONEBRIDGE and the portion of the APC 
payment amount for the device of $7,742.60 is 31.6 percent of the APC 
payment amount for the related service of $11,900.71 ((($11,500-
$7,742.60)/$11,900.71) x 100 = 31.6 percent). Therefore, we believe 
that BONEBRIDGE meets the third cost significance requirement.
    We invite public comment on whether BONEBRIDGE meets the device 
pass-through payment criteria discussed in this section, including the 
cost criterion for device pass-through payment status.
(3) Eluvia\TM\ Drug-Eluting Vascular Stent System
    Boston Scientific Corporation submitted an application for device 
pass-through status for the Eluvia\TM\ Drug-Eluting Vascular Stent 
System (Eluvia\TM\ system) for CY 2022. According to the applicant, the 
Eluvia\TM\ system is a combination product composed of an implantable 
endoprosthesis, a non-bonded freely dispersed drug layer (a formulation 
of paclitaxel contained in a polymer matrix), and a stent delivery 
system indicated for the treatment of symptomatic de novo or restenotic 
lesions in the native superficial femoral artery (SFA) and/or proximal 
popliteal artery (PPA).
    According to the applicant, the Eluvia\TM\ system stent is a laser-
cut self-expanding stent composed of nickel titanium alloy with 
radiopaque markers made of tantalum on the proximal and distal ends. 
The applicant states that the 6-French delivery system is a triaxial 
design with an outer shaft to stabilize the stent delivery system, a 
middle shaft to protect and constrain the stent, and an inner shaft to 
provide a guidewire lumen. The delivery system is compatible with 0.035 
in (0.89mm) guidewires and is offered in two working lengths (75 and 
130 cm).
    According to the applicant, peripheral artery disease (PAD) occurs 
when fatty or calcified material (plaque) builds up in the walls of the 
arteries and makes them narrower, thus restricting blood flow. The 
applicant asserts that when this occurs, the muscles in the legs cannot 
get enough blood and oxygen, especially during exertion such as 
exercise or walking. According to the applicant, the main symptoms of 
PAD are pain, burning sensation, or general discomfort in the muscles 
of the feet, calves, or thighs. As the disease progresses, plaque 
accumulation may significantly reduce blood flow through the arteries, 
resulting in claudication and increasing disability, with severe cases 
often leading to amputation of the affected limb. The applicant states 
that according to the Centers for Disease Control and Prevention 
approximately 8.5 million people age 40 and older in the United States 
have PAD, including 6-26 percent of individuals older than age 60.\52\ 
According to the applicant,

[[Page 42100]]

PAD disproportionately affects African American and American Indian 
populations \53\ and nonrevascularized lower extremity PAD is among the 
most common causes of lower extremity amputation.
---------------------------------------------------------------------------

    \52\ Centers for Disease Control and Prevention. https://www.cdc.gov/heartdisease/pad.htm.
    \53\ Virani SS, et al. AHA Statistical Update: Heart Disease and 
Stroke Statistics--2020 Update, A Report from the American Heart 
Association. Circulation. 2020;141:e139-e596.
---------------------------------------------------------------------------

    According to the applicant, the Eluvia\TM\ system is designed to 
restore blood flow in the peripheral arteries above the knee, 
specifically the superficial femoral artery and proximal popliteal 
artery. The applicant states that the stent features a unique drug-
polymer combination intended to facilitate sustained elution of the 
drug paclitaxel that can prevent narrowing (restenosis) of the vessel. 
The applicant adds that restenosis is often the cause of pain and 
disability for patients diagnosed with PAD.
    The applicant asserts that no other endovascular technologies that 
are approved for the treatment of PAD provide sustained elution of a 
drug over at least 12 months to prevent restenosis. According to the 
applicant, two of the most common endovascular treatments for PAD are 
angioplasty and stenting. The applicant states that following an 
intervention within the SFA or PPA, these arteries elicit a healing 
response that leads to restenosis starting with inflammation, followed 
by smooth muscle cell proliferation and matrix formation.\54\ According 
to the applicant, because of the unique mechanical forces in the SFA 
and PPA, the restenotic process can continue well beyond 12 months from 
the initial intervention. The applicant asserts the Eluvia\TM\ system 
is designed to elute anti-restenotic drug paclitaxel beyond 12 months, 
which is longer than the two-month duration of drug applied from drug-
coated balloons and the drug-coated stent Zilver PTX.
---------------------------------------------------------------------------

    \54\ Forrester JS, et al. A paradigm for restenosis based on 
cell biology: Clues for the development of new preventive therapies. 
J Am Coll Cardiol. 1991 Mar 1;17(3):758-69.
---------------------------------------------------------------------------

    With respect to the newness criterion at Sec.  419.66(b)(1), the 
Eluvia\TM\ system received FDA premarket approval (PMA) on September 
18, 2018. The application for a new device category for transitional 
pass-through payment status for the Eluvia\TM\ system was received on 
February 26, 2021, which is within 3 years of the date of the initial 
FDA approval or clearance. We invite public comments on whether the 
Eluvia\TM\ system meets the newness criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, the Eluvia\TM\ system is integral to the 
service provided, is used for one patient only, comes in contact with 
human tissue, and is surgically impacted or inserted. The applicant 
also claimed that the Eluvia\TM\ system meets the device eligibility 
requirements of Sec.  419.66(b)(4) because it is not an instrument, 
apparatus, implement, or items for which depreciation and financing 
expenses are recovered, and it is not a supply or material furnished 
incident to a service. Previously, we invited public comment and 
subsequently determined that Eluvia\TM\ system device meets the 
eligibility criterion (84 FR 61286). We invite public comments on 
whether the Eluvia\TM\ system continues to meet the eligibility 
criterion at Sec.  419.66(b).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. We have not 
identified an existing pass-through payment category that describes the 
Eluvia\TM\ system. The applicant proposed a category descriptor for the 
Eluvia\TM\ system of ``Stent, non-coronary, polymer matrix, minimum 12-
month sustained drug release, with delivery system.'' Previously, we 
invited public comment and subsequently determined that Eluvia\TM\ 
system device meets the device category eligibility criterion. For a 
complete discussion of comments received, please see the CY 2020 OPPS/
ASC final rule with comment period (84 FR 61286-61287). We invite 
public comments on whether the Eluvia\TM\ system continues to meet this 
criterion.
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines that a device to be included 
in the category has demonstrated that it will substantially improve the 
diagnosis or treatment of an illness or injury or improve the 
functioning of a malformed body part compared to the benefits of a 
device or devices in a previously established category or other 
available treatment. With respect to this criterion, the applicant 
claims the Eluvia\TM\ system provides a substantial clinical 
improvement over existing technologies for the following reasons: (1) 
The Eluvia\TM\ system achieves superior primary patency; (2) the 
Eluvia\TM\ system achieves reduced lesion revascularization, leading to 
a reduced rate of subsequent therapeutic interventions at one year and 
a statistically significant reduction of target lesion 
revascularization (TLR) at two years; (3) the Eluvia\TM\ system 
decreases the number of future hospitalizations or physician visits; 
(4) the Eluvia\TM\ system reduces hospital readmission rates; (5) 
Eluvia reduces the rate of device related complications; and (6) the 
Eluvia\TM\ system achieves similar functional outcomes and quality of 
life index values while associated with half the rate of TLRs.
    Many of the assertions made by the applicant are derived from the 
IMPERIAL trial which is reported in three citations supplied by the 
applicant.55 56 57 We discuss results from the MAJESTIC 
study and then these publications from the IMPERIAL study to provide 
context for the assertions made by the applicant.
---------------------------------------------------------------------------

    \55\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
    \56\ M[uuml]ller-H[uuml]lsbeck S et al. Two-Year Efficacy and 
Safety Results from the IMPERIAL Randomized Study of the Eluvia 
Polymer-Coated Drug-Eluting Stent and the Zilver PTX Polymer-free 
Drug-Coated Stent. Cardiovasc Intervent Radiol. 2021;44:368-375.
    \57\ Golzar J et al. Effectiveness and Safety of a Paclitaxel-
Eluting Stent for Superficial Femoral Artery Lesions up to 190 mm: 
One-Year Outcomes of the Single-Arm IMPERIAL Long Lesion Substudy of 
the Eluvia Drug-Eluting Stent. Journal of Endovascular Therapy. 
2020;27(2):296-303.
---------------------------------------------------------------------------

    The first article, by M[uuml]ller-H[uuml]lsbeck et al., discusses 
the three-year results of the MAJESTIC study, the first-in-human 
prospective, single-arm, multicenter, clinical trial involving 57 
patients with symptomatic lower limb ischemia and lesions in the 
superficial femoral artery or proximal popliteal artery.\58\ Patients 
who were treated with the Eluvia\TM\ system were followed for a three-
year time period during which they took acetylsalicylic acid as an 
antiplatelet therapy. At 24 months, patients received a duplex 
ultrasound, ankle-brachial index, and Rutherford classification at a 
clinical visit. At 36 months patients completed a telephone or clinical 
visit which included adverse event and antiplatelet medication 
assessments. The authors report that long-term results from the 
MAJESTIC study of the Eluvia\TM\ system continue to demonstrate good 
technical and clinical outcomes (assessed through 2 years) and

[[Page 42101]]

a low reintervention rate (through 3 years).
---------------------------------------------------------------------------

    \58\ M[uuml]ller-H[uuml]lsbeck S, Keirse K, Zeller T, Schroe H, 
Diaz-Cartelle J. Long-Term Results from the MAJESTIC Trial of the 
Eluvia Paclitaxel-Eluting Stent for Femoropopliteal Treatment: 3-
Year Followup. Cardiovasc Interv Ther. 2017;40(12):1832-1838.
---------------------------------------------------------------------------

    The second article, by Gray et al., discusses the IMPERIAL trial, a 
prospective randomized (2:1) (Eluvia\TM\ system vs. Zilver PTX), 
single-blind, non-inferiority study in 465 patients with symptomatic 
lower-limb ischemia manifesting as claudication with atherosclerotic 
lesions in the native superficial femoral artery or proximal popliteal 
artery across 65 centers and multiple countries.\59\ Of the 465 
patients enrolled, 309 were assigned to the Eluvia\TM\ system and 156 
were assigned to Zilver PTX. The authors state the overall sample size 
in the randomised trial was selected to preserve adequate statistical 
power for non-inferiority testing of the primary efficacy and safety 
endpoints at a prespecified, one-sided significance level of 5 percent 
for each, without adjustment for multiplicity.
---------------------------------------------------------------------------

    \59\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): a 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------

    The authors state baseline demographic, clinical, and angiographic 
characteristics were similar between the two study groups, indicative 
of successful randomization. The primary efficacy endpoint of the trial 
was primary vessel patency at 12 months which was a binary endpoint 
based on a duplex ultrasound peak systolic velocity ratio of 2.4 or 
lower in the absence of clinically driven target lesion 
revascularization or bypass of the target lesion. Secondary endpoints 
at 12 months were technical success, procedural success, adverse 
events, stent integrity, major adverse events, and clinical outcomes. 
The authors note that the funder of the study was involved in study 
design, data collection, data analysis, data interpretation, and 
writing of the report. To identify statistically meaningful results for 
the non-inferiority test, the authors used a test such as the 
Farrington-Manning method, to estimate the lower bound for the 95 
percent CI of the difference between treatment groups.\60\ According to 
the authors, if this lower bound was greater than the non-inferiority 
margin of -10 percent, the Eluvia\TM\ system would be considered non-
inferior to Zilver PTX in terms of device efficacy. For all other 
statistical comparisons, the authors used a p value of less than 0.05 
as indicative of a significant difference.
---------------------------------------------------------------------------

    \60\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------

    According to the authors, the primary non-inferiority analyses were 
done when 409 patients (276 in the Eluvia group and 133 in the Zilver 
PTX group) had completed 12 months of follow-up or had a primary 
efficacy or safety endpoint event.\61\ Primary patency was observed for 
231 (87 percent) of 266 patients in the Eluvia\TM\ system group and for 
106 (82 percent) of 130 patients in the Zilver PTX stent group 
(difference 5.3 percent [one-sided lower bound of 95 percent CI -0.66]; 
p<0[middot]0001). 259 (95 percent) of 273 patients in the Eluvia group 
and 121 (91 percent) of 133 patients in the Zilver PTX group had not 
had a major adverse event at 12 months (difference 3.9 percent [one-
sided lower bound of 95 percent CI -0[middot]46]; p<0[middot]0001). 
According to the authors, superiority of the Eluvia\TM\ system over 
Zilver PTX (primary patency in 86.8 percent vs. 77.5 percent 
respectively, p = 0.0144) was met in the post-hoc analysis of 12 month 
primary patency data in the full-analysis cohort. The authors summarize 
by stating the proportions of patients with stent thrombosis or 
clinically driven target lesion revascularisation in the Eluvia stent 
group were about half those in the Zilver PTX group while both groups 
showed improvements in clinical symptoms and walking function and the 
occurrence of stent fracture was low.\62\
---------------------------------------------------------------------------

    \61\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
    \62\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------

    The third article, by Golzar et al, discusses the one-year follow 
up of the single-arm long lesion substudy portion of the IMPERIAL 
trial.\63\ Fifty patients were enrolled in the study where 20 patients 
had diabetes, 16 were current smokers, 35 had moderately or severely 
calcified lesions, and 16 lesions were total occlusions. To be 
eligible, patients needed a lesion ranging from 140 mm to 190 mm which 
required two overlapping Eluvia stents. At 12 months, no deaths, stent 
thrombosis, or target limb amputation had occurred. The primary patency 
rate was 87.0 percent at 12 months which exceeded the 60 percent 
performance goal. Forty-three patients (91 percent) had Rutherford 
category improvement without the need for TLR. The authors concluded 
that one year patency with the Eluvia\TM\ system was independent of 
lesion length.
---------------------------------------------------------------------------

    \63\ Golzar J et al. Effectiveness and Safety of a Paclitaxel-
Eluting Stent for Superficial Femoral Artery Lesions up to 190 mm: 
One-Year Outcomes of the Single-Arm IMPERIAL Long Lesion Substudy of 
the Eluvia Drug-Eluting Stent. Journal of Endovascular Therapy. 
2020;27(2):296-303.
---------------------------------------------------------------------------

    The fourth article, by M[uuml]ller-H[uuml]lsbeck et al., discusses 
the two-year follow up to the IMPERIAL trial.\64\ The authors found 
that through 24 months, the patency rates and Rutherford category 
improvements were largely sustained, with a significantly lower 
clinically driven TLR rate for Eluvia versus Zilver PTX at 2 years. At 
two years the TLR rate for patients treated with Eluvia was 12.7 
percent as compared to patients treated with Zilver PTX at 20.1 percent 
(P = 0.0495). As with the previous citation, both study arms show 
sustained clinical improvement (that is improvement in Rutherford 
classification by one or more categories as compared with baseline and 
without TLR) of 84.4 percent for patients treated with Eluvia and 78.2 
percent for patients treated with Zilver PTX (p = 0.140). For all-cause 
mortality, Eluvia (7.1 percent) and Zilver PTX (8.3 percent) did not 
statistically differ (p = 0.6649). The authors conclude that the 
IMPERIAL trial provides support for the benefit of drug-eluting 
treatment in this population.
---------------------------------------------------------------------------

    \64\ M[uuml]ller-H[uuml]lsbeck S et al. Two-Year Efficacy and 
Safety Results from the IMPERIAL Randomized Study of the Eluvia 
Polymer-Coated Drug-Eluting Stent and the Zilver PTX Polymer-free 
Drug-Coated Stent. Cardiovasc Intervent Radiol. 2021;44:368-375.
    \65\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------

    According to the applicant, the Eluvia\TM\ system achieves superior 
primary patency compared to Zilver PTX. The applicant states that, 
based on the IMPERIAL trial, the Eluvia\TM\ system demonstrated 
superior primary patency over Zilver PTX, 86.8 percent vs. 77.5 percent 
respectively (p=0.0144) based on pre-specific post-hoc analysis. The 
applicant further states that at 12 months, the Eluvia\TM\ system had 
greater primary patency than Zilver PTX at 88.5 percent vs. 79.5 
percent respectively (p=0.0119). According to the applicant, these 
results are consistent with the 96.4 percent primary patency rate at 12 
months in the MAJESTIC study, the single-arm first-in-human study of 
the Eluvia\TM\ system.\65\ Furthermore, in regard to this point, the 
applicant asserts among patients 65 and older, the primary patency rate 
in the Eluvia\TM\ system was 92.6 percent

[[Page 42102]]

compared to 75.0 percent in Zilver PTX (p=0.0386). Lastly, the 
application states that among 50 patients with an average lesion length 
of 162.8 mm (long lesions), each treated with two Eluvia stents, there 
was a 12 month primary patency of 87 percent and a TLR of 6.5 
percent.\66\
---------------------------------------------------------------------------

    \66\ Golzar J et al. Effectiveness and Safety of a Paclitaxel-
Eluting Stent for Superficial Femoral Artery Lesions up to 190 mm: 
One-Year Outcomes of the Single-Arm IMPERIAL Long Lesion Substudy of 
the Eluvia Drug-Eluting Stent. Journal of Endovascular Therapy. 
2020;27(2):296-303.
---------------------------------------------------------------------------

    According to the applicant, the Eluvia\TM\ system reduced 
subsequent therapeutic interventions at one year and a reduction of 
target lesion revascularization at two years. Based on the IMPERIAL 
trial, the applicant asserts the Eluvia\TM\ system achieved a 
substantial reduction in re-intervention with a target lesion 
revascularization (TLR) of 4.5 percent compared to 9.0 percent 
(p=0.0672) in the Zilver PTX group.\67\ The applicant states that at 
two years the Eluvia\TM\ system had a statistically significantly lower 
rate of TLRs than Zilver PTX of 12.7 percent vs. 20.1 percent 
respectively (p=0.0495).\68\ The applicant notes that the published 
analysis presented in this application has a slightly different 
clinically-driven TLR rate at two years than internal analysis provided 
in the Eluvia CY 2020 device pass-through application (12.7 percent and 
20.1 percent (p=0.0495) vs. 12.9 percent and 20.5 percent (p=0.0472), 
respectively). We note that the applicant provides a table which 
compares TLR rates between the Eluvia\TM\ system and Zilver PTX by all 
patients 65 and older, US patients 65 and older, and patients with 
diabetes.
---------------------------------------------------------------------------

    \67\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
    \68\ M[uuml]ller-H[uuml]lsbeck S et al. Two-Year Efficacy and 
Safety Results from the IMPERIAL Randomized Study of the Eluvia 
Polymer-Coated Drug-Eluting Stent and the Zilver PTX Polymer-free 
Drug-Coated Stent. Cardiovasc Intervent Radiol. 2021;44:368-375. 
Published online 22 November 2020.
---------------------------------------------------------------------------

    The applicant asserts that patients treated with the Eluvia\TM\ 
system required fewer days of hospital care than in the Zilver PTX 
group. According to the applicant, patients treated with the Eluvia\TM\ 
system had fewer days in the hospital as compared to Zilver PTX for all 
adverse events (13.9 vs. 17.7 respectively), TLR (2.8 vs. 7.1 
respectively), and procedure and device related adverse events (2.7 vs. 
4.5 respectively). We note that statistical significance was not 
assessed.
    The applicant asserts that patients treated with the Eluvia\TM\ 
system had reduced hospital readmission rates compared to those treated 
with Zilver PTX at 12 months at 3.9 percent and 7.1 percent 
respectively (p=0.1369).\69\
---------------------------------------------------------------------------

    \69\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------

    The applicant asserts that while rates of adverse events were 
similar in total between treatment arms in the IMPERIAL trial, device-
related adverse-events were reported in 8 percent of patients treated 
with the Eluvia\TM\ system as compared to 14 percent of patients 
treated with Zilver PTX.\70\
---------------------------------------------------------------------------

    \70\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------

    Lastly, the applicant asserts that the Eluvia\TM\ system is able to 
achieve similar functional outcomes to Zilver PTX while associated with 
half the rate of TLRs. The applicant states while functional outcomes 
appear similar between the Eluvia Stent System and Zilver PTX groups at 
12 months, these improvements for the Zilver PTX group are associated 
with twice as many TLRs to achieve similar EQ-5D index values.\71\ The 
applicant provides multiple tables which show similar improvements in 
walking, distance, speed, stair climbing, and health related quality of 
life (EQ-5D) between the Eluvia\TM\ system and Zilver PTX.
---------------------------------------------------------------------------

    \71\ Gray WA et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet. 2018;392:1541-51.
---------------------------------------------------------------------------

    For a complete discussion of the applicant's previous submission 
regarding substantial clinical improvement please see the CY 2020 OPPS/
ASC final rule with comment period (84 FR 61287-61292). We note that we 
did not approve the Eluvia\TM\ system for CY 2020 device transitional 
payment due to the potential increased long-term mortality signal that 
the FDA was at the time evaluating. We further note that in the FY 2021 
IPPS/LTCH final rule (85 FR 58657), we stated that the FDA August 7, 
2019 update, which concluded that the benefits of paclitaxel-coated 
devices (for example, reduced reinterventions) should be considered in 
individual patients along with potential risks (for example, late 
mortality) as well as for individual patients judged to be at 
particularly high risk for restenosis and repeat femoropopliteal 
interventions, clinicians may determine that the benefits of using a 
paclitaxel-coated device outweigh the risk of late mortality. The 
applicant asserts that the Eluvia\TM\ system has demonstrated 
substantial clinical improvement over Zilver PTX in the IMPERIAL trial 
to include no increase in all-cause mortality. In response to this new 
information, we no longer have concerns regarding the increased long-
term mortality signal we described in the CY 2020 OPPS/ASC final rule 
with comment period.
    In the CY 2020 OPPS/ASC final rule with comment period (84 FR 
61289) we noted that the IMPERIAL study, which showed significant 
differences in primary patency at 12 months, was designed for 
noninferiority and not superiority. Therefore, we were concerned that 
results showing primary patency at 12 months may not be valid given the 
study design. In response, the applicant stated that a non-inferiority 
study is consistent with accepted research methodology and is typical 
of many head-to-head trials of medical devices. For the complete 
response please see the CY 2020 OPPS/ASC final rule with comment period 
(84 FR 61290). We invite public comments on whether the 
EluviaTM Drug-Eluting Vascular Stent System meets the 
substantial clinical improvement criterion with respect to a finding of 
substantial clinical improvement for the EluviaTM system.
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that Eluvia\TM\ system 
would be reported with the HCPCS codes in the following Table 23:

[[Page 42103]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.031

    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. For our calculations, we used APC 5193--Level 3 Endovascular 
Procedures, which had a CY 2021 payment rate of $10,042.94 at the time 
the application was received. Beginning in CY 2017, we calculate the 
device offset amount at the HCPCS/CPT code level instead of the APC 
level (81 FR 79657). HCPCS code 37226 had a device offset amount of 
$4,843.71 at the time the application was received.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost of Eluvia\TM\ system is 56 percent of the 
applicable APC payment amount for the service related to the category 
of devices of $10,042.94. Therefore, we believe the Eluvia\TM\ system 
meets the first cost significance requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost for the Eluvia\TM\ 
system is 117 percent of the cost of the device-related portion of the 
APC payment amount for the related service of $4,843.71. Therefore, we 
do not believe that the Eluvia\TM\ system meets the second cost 
significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost for the Eluvia\TM\ system and the portion of the APC 
payment amount for the device of $4,843.71 is 8 percent of the APC 
payment amount for the related service of $10,042.94. Therefore, we do 
not believe that Eluvia\TM\ system meets the third cost significance 
requirement.
    We invite public comment on whether the Eluvia\TM\ system meets the 
device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
(4) CochlearTM Osia[supreg] 2 System
    Cochlear Americas submitted an application for a new device 
category for transitional pass-through payment status for the 
CochlearTM Osia[supreg] 2 System (hereinafter referred to as 
the Osia[supreg] 2 System) by the December 2020 quarterly deadline for 
CY 2022. The Osia[supreg] 2 System is a transcutaneous, active auditory 
osseointegrated device that replaces the function of the middle ear by 
providing mechanical energy to the cochlea. According to the applicant, 
the device consists of four components including: (1) An external sound 
processor, the Osia 2 Sound Processor; (2) the Osia OSI200 Implant 
Piezo PowerTM transducer; (3) the BI300 osseointegrated 
implant for anchoring and single point transmission; and (4) a fixation 
screw for attaching the OSI200 implant to the BI300 implant which is 
implanted in the skull.
    The external sound processor captures environmental sounds and 
converts the sound signal into a digital signal transmitted as a 
radiofrequency. The external sound processor also contains a magnet and 
a battery (rechargeable 675 zinc air button 1.4Volt; 600 mA-hrs 
capacity). The magnets couple the external and internal components 
across the skin. The transducer (Piezo PowerTM) detects the 
radiofrequency signals after they pass through the intact skin and 
transforms the signal to vibrations, which are then transmitted to the 
bone-implanted fixation screw. The screw vibrates the skull bone 
(temporal portion) which stimulates the cochlea (inner ear) to transmit 
the information to the brain so that the vibrations are perceived as 
sounds. The implanted portion is 7.2 cm x 3 cm x 0.49 cm. The system 
has a fitting range of 55 dB sensory neural hearing loss. The applicant 
stated that unlike hearing aids, which make sounds louder, an auditory 
osseointegrated device, such as the Osia[supreg] 2 System can improve 
clarity of hearing and improve hearing at higher frequencies.
    With respect to the newness criterion at Sec.  419.66(b)(1), the 
Osia[supreg] 2 System received FDA 510(k) clearance on November 15, 
2019, based on a determination of substantial equivalence to a legally 
marketed predicate device. The Osia[supreg] 2 System is intended for 
the following patients and indications: (1) Patients 12 years of age or 
older; (2) patients who have a conductive or mixed hearing loss and 
still can benefit from sound amplification. The pure tone average (PTA) 
bone conduction (BC) threshold (measured at 0.5, 1, 2, and 3 kHz) 
should be better than or equal to 55 dBHL; (3) Bilateral fitting of the 
Osia[supreg] 2 System is intended for patients having a symmetrically 
conductive or mixed hearing loss. The difference between the left and 
right sides' BC thresholds should be less than 10 dB on average 
measured at 0.5, 1, 2, and 3 kHz, or less than 15 dB at individual 
frequencies; (4) patients who have profound sensorineural hearing loss 
in one ear and normal hearing in the opposite ear (that is, single-
sided deafness or ``SSD''). The pure tone average air conduction 
hearing thresholds of the hearing ear should be better than or equal to 
20 dB HL (measured at 0.5, 1, 2, and 3 kHz). The Osia[supreg] 2 System 
for SSD is also indicated for any patient who is indicated for an air-
conduction contralateral routing of signals (AC CROS) hearing aid, but 
who for some reason cannot or will not use an AC CROS. Prior to 
receiving the device, it is recommended that an individual have 
experience with appropriately fitted air conduction or bone conduction 
hearing aids.
    We received the application for a new device category for 
transitional pass-through payment status for the Osia[supreg] 2 System 
on December 1, 2020, which is

[[Page 42104]]

within 3 years of the date of the initial FDA marketing authorization. 
We are inviting public comments on whether the Osia[supreg] 2 System 
meets the newness criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, the Osia[supreg] 2 System is integral to 
the service provided, is used for one patient only, comes in contact 
with human skin and is surgically implanted or inserted. The applicant 
also claimed that the Osia[supreg] 2 System meets the device 
eligibility requirements of Sec.  419.66(b)(4) because it is not an 
instrument, apparatus, implement, or item for which depreciation and 
financing expenses are recovered, and it is not a supply or material 
furnished incident to a service. Additionally, the Osia[supreg] 2 
System is not subject to the hearing aid exclusion at Sec.  
411.15(d)(1). As described in the application, the implanted components 
of the Osia[supreg] 2 System consist of a piezoelectric transducer 
(OSI200) that is attached directly to an osseointegrated implant 
(BI300) with a fixation screw. Sound received by an external processor 
(the Osia[supreg] 2 System) is converted to a digital radiofrequency 
signal which is received and transformed into mechanical vibrations by 
the OSI200 implant, which are transferred directly to the BI300 
osseointegrated implant. These vibrations are conducted via the skull 
to the cochlea. Therefore, we believe the Osia[supreg] 2 System meets 
the criterion at Sec.  411.15(d)(2)(i) and is not subject to the 
hearing aid exclusion.
    In accordance with the Medicare Benefit Policy Manual, Chapter 16 
``General Exclusions from Coverage,'' Sec.  100, certain devices that 
produce perception of sound by replacing the function of the middle 
ear, cochlea or auditory nerve are payable by Medicare as prosthetic 
devices. These include osseointegrated implants, that is, devices 
implanted in the skull that replace the function of the middle ear and 
provide mechanical energy to the cochlea via a mechanical transducer. 
We believe the Osia[supreg] 2 System as described by the application 
meets the criteria for this benefit category. We are inviting public 
comments on whether the Osia[supreg] 2 System meets the eligibility 
criteria at Sec.  419.66(b) as well as the criterion at Sec.  
411.15(d)(2)(i).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996.
    The applicant stated that the Osia[supreg] 2 System differs 
significantly from the devices that were included in the previous 
category for auditory osseointegrated devices (L8690--Auditory 
osseointegrated device, includes all internal and external components) 
which was effective from effective from January 1, 2007 through 
December 31, 2008. The applicant claimed that the devices that were 
described by this category include a transducer/actuator and sound 
processor that is worn externally with the transducer/actuator 
connected to the skull by a percutaneous post or abutment that 
penetrates the skin. In these devices, the sound processor converts 
sound into a digital signal which the transducer/actuator converts to 
vibrations that are transmitted to the skull through the abutment. The 
vibrations are transmitted directly to the inner ear and are reproduced 
as sound.
    The applicant stated that the Osia[supreg] 2 System is distinct 
from devices with a percutaneous connection between the transducer and 
the sound processor because the transducer/actuator for the 
Osia[supreg] 2 system is surgically implanted and has a magnetic 
transcutaneous attachment to the external sound processor. The 
applicant also claimed that the percutaneously coupled osseointegrated 
devices included in the previous device pass-through category convert 
sound to mechanical vibrations in the external sound processor/
actuator, then transmit the vibrations to the internal components. The 
applicant claimed that the Osia[supreg] 2 system instead converts the 
sound to mechanical vibrations after it has reached the internal 
components. The applicant claimed that the technology to fully implant 
the transducer/actuator did not exist when the previous device pass-
through category was established. The applicant proposed the device 
pass-through category descriptor ``Auditory osseointegrated device, 
including implanted transducer/actuator with radiofrequency link to 
external sound processor''. The applicant stated that the BONEBRIDGE 
Bone Conduction Implant System, which also submitted a device pass-
through application for CY 2022 and is described in this section under 
number (2) above, would also be described by the proposed additional 
category.
    We believe that the Osia[supreg] 2 system is described by L8690--
Auditory osseointegrated device, includes all internal and external 
components. The applicant has noted differences between the 
Osia[supreg] 2 system and the devices that were described by L8690, 
specifically percutaneous, auditory osseointegrated devices, regarding 
the connection between the implanted transducer and the external audio 
processor (percutaneous abutment vs. transcutaneous magnetic 
attraction) however, we believe that there is a similar mechanism of 
action for all these devices specifically, vibratory stimulation of the 
skull to stimulate the receptors in the cochlea (inner ear). Further, 
we believe that the broad descriptor for L8690 of ``Auditory 
osseointegrated device, includes all internal and external components'' 
includes the applicant's device. We are inviting public comment on 
whether the Osia[supreg] 2 system meets the device category criterion.
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
That a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization. With respect to the substantial 
clinical improvement criterion, the applicant stated that the 
Osia[supreg] 2 system represents a substantial clinical improvement 
because it provides a reduced rate of device-related complications 
compared to currently available treatments. The applicant submitted 
five references to retrospective case series that studied the long-term 
complications associated with percutaneous osseointegrated bone 
conduction hearing devices, specifically bone-anchored hearing 
aids.72 73 74 75 76

[[Page 42105]]

The applicant stated that complications associated with bone-anchored 
hearing aids include irritation and/or infection of the skin 
surrounding the abutment, skin flap necrosis, wound dehiscence, 
bleeding or hematoma formation, soft tissue overgrowth and persistent 
pain.77 78 79 80 81 Additionally, the applicant also 
submitted five references to clinical studies and case series involving 
the use of transcutaneous osseointegrated bone conduction hearing 
devices. Of these five references, three of these studies involved the 
use of the BONEBRIDGE device and have been previously discussed in this 
section, one study that involved the use of the BAHA Attract device, 
and one study that involved the use of the Osia[supreg] system, an 
earlier version of the Osia[supreg] 2 system.
---------------------------------------------------------------------------

    \72\ Kraai T, Brown C, Neeff M, Fisher K. Complications of bone-
anchored hearing aids in pediatric patients. Int J Pediatr 
Otorhinolaryngol. 2011 Jun;75(6):749-53.
    \73\ Badran K, Arya AK, Bunstone D, Mackinnon N. Long-term 
complications of bone-anchored hearing aids: A 14-year experience. J 
Laryngol Otol. 2009 Feb;123(2):170-6.
    \74\ House JW, Kutz JW Jr. Bone-anchored hearing aids: Incidence 
and management of postoperative complications. Otol Neurotol. 2007 
Feb;28(2):213-7.
    \75\ Asma A, Ubaidah MA, Hasan SS, Wan Fazlina WH, Lim BY, Saim 
L, Goh BS. Surgical outcome of bone anchored hearing aid (baha) 
implant surgery: A 10 years experience. Indian J Otolaryngol Head 
Neck Surg. 2013 Jul;65(3):251-4.
    \76\ Shirazi MA, Marzo SJ, Leonetti JP. Perioperative 
complications with the bone-anchored hearing aid. Otolaryngol Head 
Neck Surg. 2006 Feb;134(2):236-9.
    \77\ Ibid.
    \78\ Ibid.
    \79\ Ibid.
    \80\ Ibid.
    \81\ Ibid.
---------------------------------------------------------------------------

    In support of their claim that the Osia[supreg] 2 system reduced 
the rate of device-related complications compared to currently 
available treatments, the applicant submitted a multicenter prospective 
within-subject study conducted at five centers in Europe, Australia, 
and USA. This study investigated clinical performance, safety, and 
benefit of the Osia[supreg] system and included 51 adult subjects with 
mixed and conductive hearing loss (MHL/CHL, n = 37) and single-sided 
sensorineural deafness (SSD, n = 14). In regard to safety outcomes, 
patients experienced the following minor adverse events including pain 
(n = 7), numbness (n = 1), vertigo (n = 3), swelling (n = 3), tension 
implant site (n = 1), warmth at the SP site (n = 3), headache (n = 3), 
hematoma/bleeding (n = 2).\82\ One participant developed an implant-
site infection three days after implantation, which subsequently 
developed into skin necrosis and dehiscence. The implant had to be 
removed 55 days after implantation.
---------------------------------------------------------------------------

    \82\ Mylanos, E.A.M., Hua, H., Arndt, S. 2020. Multicenter 
clinical investigation of a new active osseointegrated steady-state 
implant system. Otol Neurotol 41: 1249-1257.
---------------------------------------------------------------------------

    We are concerned that the applicant did not submit studies that 
involved the use of the Osia[supreg] 2 system to demonstrate 
substantial clinical improvement of the device. The applicant submitted 
one study that investigated the Osia[supreg] system that utilizes an 
earlier model of the device. We are also concerned that the evidence of 
substantial clinical improvement submitted by the applicant did not 
directly compare the Osia[supreg] 2 system to other currently available 
treatments, namely percutaneous or passive, transcutaneous auditory 
osseointegrated devices. Therefore, we are concerned that we are unable 
to determine a substantial clinical improvement of the Osia 2 system as 
compared to existing devices. We would be interested in any additional 
studies that involve the use of the Osia[supreg] 2 system and compare 
the device to other currently available auditory osseointegrated 
devices. We invite public comments on whether the Osia[supreg] 2 system 
meets the substantial clinical improvement criterion.
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that Osia[supreg] 2 
system would be reported with the HCPCS codes listed in the following 
Table 24:
[GRAPHIC] [TIFF OMITTED] TP04AU21.032

    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. For our calculations, we used APC 5115--Level 5 
Musculoskeletal Procedures, which had a CY 2020 payment rate of 
$11,900.71 at the time the application was received. Beginning in CY 
2017, we calculate the device offset amount at the HCPCS/CPT code level 
instead of the APC level (81 FR 79657). HCPCS code 69714 had a device 
offset amount of $7,742.60 at the time the application was received.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost of the Osia[supreg] 2 system is 88 percent of 
the applicable APC payment amount for the service related to the 
category of devices of $11,900.71. Therefore, we believe the 
Osia[supreg] 2 system meets the first cost significance requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost for the 
Osia[supreg] 2 system is 136 percent of the cost of the device-related 
portion of the APC payment amount for the related

[[Page 42106]]

service of $7,742.60. Therefore, we believe that the Osia[supreg] 2 
system meets the second cost significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of the Osia[supreg] 2 system and the portion of the APC 
payment amount for the device of $7,742.60 is 23 percent of the APC 
payment amount for the related service of $11,900.71. Therefore, we 
believe that the Osia[supreg] 2 system meets the third cost 
significance requirement.
    We invite public comment on whether the Osia[supreg] 2 system meets 
the device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
(5) Pure-Vu[supreg] System
    Motus GI submitted an application for a new device category for 
transitional pass-through payment status for the Pure-Vu[supreg] System 
(Pure-Vu[supreg]) for CY 2022. The applicant asserted that the Pure-
Vu[supreg] System 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 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.
    With respect to the newness criterion at Sec.  419.66(b)(1), 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

[[Page 42107]]

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 did purchase the device outside of any true 
clinical study, mostly based on the fact that physicians wanted to try 
the product prior to committing to a clinical trial. The applicant 
further noted that minor modifications were made to the Pure-Vu[supreg] 
System in additional 510(k) clearances dated December 12, 2017 and June 
21, 2018. The current marketed Pure-Vu[supreg] 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. We have not identified 
an existing pass-through payment category that describes the Pure-
Vu[supreg] System. We are inviting public comment on whether the Pure-
Vu[supreg] System meets the device category criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, Pure-Vu[supreg] is integral to the service 
provided, is used for one patient only, comes in contact with human 
tissue, and is surgically inserted temporarily. The applicant also 
claimed that Pure-Vu[supreg] meets the device eligibility requirements 
of Sec.  419.66(b)(4) because it is not an instrument, apparatus, 
implement, or item for which depreciation and financing expenses are 
recovered, and it is not a supply or material furnished incident to a 
service. We are inviting public comments on whether Pure-Vu[supreg] 
meets the eligibility criteria at Sec.  419.66(b).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. We have not 
identified an existing pass-through payment category that describes 
Pure-Vu[supreg]. We are inviting public comment on whether Pure-
Vu[supreg] meets the device category criterion.
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
That a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization. The applicant stated that Pure-
Vu[supreg] represents a substantial clinical improvement over existing 
technologies. With respect to this criterion, the applicant submitted 
studies that examined the impact of Pure-Vu[supreg] on endoscopic 
hemostasis outcomes, rebleeding occurrence, and mortality. We note that 
the applicant has applied for the New Technology Add-on Payment in the 
FY 2022 IPPS/LTCH proposed rule (86 FR 25299 through 25304).
    According to the applicant, 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 Pure-Vu[supreg] is 
indicated for use in emergent issues such as acute lower 
gastrointestinal (GI) bleeding, unknown abdominal pain, foreign body 
removal, chronic disease management, and preventive medicine such as 
screening and surveillance. The applicant states these procedures are 
typically performed using a colonoscope to visualize the colon and 
provide a conduit to deliver therapeutic treatments. According to the 
applicant, the current standard of care requires the colon to be 
cleansed to ensure the success of any procedure. The applicant asserts 
that in the case where pre-procedural preparations are not adequate to 
achieve proper visualization, current technology provides limited 
ability to remove debris from the colon during the procedure to 
facilitate the process. The applicant states that regardless of 
indication, the bowel preparation remains the constant across patients 
who may have a wide range of comorbidities which may limit patient 
tolerability. According to the applicant the consumption of a purgative 
and the dietary restriction to be on clear liquids for approximately 24 
hours can be problematic for the diabetic and elderly populations.\83\
---------------------------------------------------------------------------

    \83\ 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.
---------------------------------------------------------------------------

    In support of its application, the applicant submitted 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 Boston Bowel Preparation Scale (BBPS). In the first study, 
Perez J., et al. conducted an outpatient prospective pilot study using 
the Pure-Vu[supreg] System.\84\ 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.
---------------------------------------------------------------------------

    \84\ 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.\85\ 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]).
---------------------------------------------------------------------------

    \85\ 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,

[[Page 42108]]

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.\86\ 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 7.5oz Magnesium Citrate (MgC) 
each taken with 19.5oz of clear liquid (``Mag Citrate 15oz arm''), and 
18 patients ingested 2 doses of 5oz MgC taken with 16oz of clear liquid 
(``Mag Citrate 10oz arm''). Of the 46 subjects, 59 percent were males 
and there was a mean age of 61  9.48 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[supreg]. 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 15oz arm, the mean BBPS score 
improved from 3.62 to 8.95. For the Mag Citrate 10oz arm, the mean BBPS 
Score improved from 4.76 to 9.0.
---------------------------------------------------------------------------

    \86\ Bertiger, Gerald MD Optimizing the Preparation Regimen 
Prior to Colonoscopy Procedure With the Pure-Vu[supreg] System, 
American Journal of Gastroenterology: October 2018--Volume 113--
Issue--p S119-S120.
---------------------------------------------------------------------------

    The applicant also provided 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.\87\ 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 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.
---------------------------------------------------------------------------

    \87\ 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).
---------------------------------------------------------------------------

    In addition to the previously discussed studies, the applicant also 
submitted two case studies to highlight the various clinical 
presentations of lower gastrointestinal bleed (LGIB) with the use of 
the Pure-Vu[supreg] System. In the first case, the applicant described 
a patient with a history of scleroderma and chronic constipation who 
was referred for a surveillance colonoscopy after a prior endoscopic 
mucosal resection due to a large polyp. The applicant states this was 
the patient's third colonoscopy in twelve months due to a history of 
poor preparation in the prior exams. Despite an aggressive prep regime, 
the applicant states the patient still had solid stool and debris 
throughout the colon. The applicant states the Pure-Vu[supreg] system 
was used extensively and the physician was able to fully cleanse the 
colon during which the physician was able to uncover a poorly defined 
over 1 cm sessile serrated polyp that could not be appreciated before 
cleansing with Pure-Vu[supreg]. The applicant states a successful 
polypectomy was performed.
    In the second case, the applicant described a patient presenting 
with hemorrhagic shock and acute kidney injury six days after a 
colonoscopy where nine polyps were removed, including two polyps 
greater than 2cm. The applicant states angiographic control of the 
bleeding was not considered because of the patient's acute kidney 
injury with a rising creatinine. According to the applicant, the 
physician elected to use Pure-Vu[supreg] to immediately exam the 
patient without any preparation doing a bedside colonoscopy in the ICU. 
The applicant states, the physician was able to cleanse the colon, 
locate the source of the bleed and create hemostasis by placing two 
clips on the bleed. According to the applicant, the entire colon was 
visualized to confirm there were no other sources of bleeding, the 
physician was able to downgrade the patient out of the ICU that same 
day, and the patient was discharged from the hospital the following 
day.
    The applicant concludes that based on the provided evidence, Pure-
Vu[supreg] has the ability to improve adenoma detection rates which can 
reduce the rate of colorectal cancer (CRC) and diagnose and treat 
emergent patients in a more expeditious fashion by removing the need to 
have successful pre-procedural preparation that can take time and be 
very burdensome to the most needy and fragile patients. According to 
the applicant, Pure-Vu[supreg] can minimize the number of aborted and 
early repeat colonoscopies that carry inherent risks and add 
unnecessary costs to the healthcare system.
    Based on the evidence submitted with the application, we have the 
following observations. 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 it is unclear whether this device would 
have less utility in the outpatient setting as compared to the 
inpatient setting, given that patients will typically have time to 
adequately prepare for scheduled outpatient procedures. We further note 
that this device may not be broadly applicable in the outpatient 
setting and are seeking comment for situations in which this device 
will have a substantial clinical benefit for patients

[[Page 42109]]

or subpopulations of patients. For instance, in the outpatient setting, 
we are not certain that it would be appropriate to use this device in 
the case of a patient with a poorly prepared bowel as opposed to simply 
rescheduling the appointment.
    Lastly, we 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.\88\ 
Based upon the evidence presented, we are inviting public comments on 
whether the Pure-Vu[supreg] meets the substantial clinical improvement 
criterion.
---------------------------------------------------------------------------

    \88\ 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 third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that Pure-Vu[supreg] 
would be reported with the HCPCS codes listed in the following Table 
25:
[GRAPHIC] [TIFF OMITTED] TP04AU21.033

    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. For our calculations, we used APC 5311--Level 1 Lower GI 
Procedures, which had a CY 2020 payment rate of $763.88 at the time the 
application was received. Beginning in CY 2017, we calculate the device 
offset amount at the HCPCS/CPT code level instead of the APC level (81 
FR 79657). HCPCS code 45378 had a device offset amount of $1.07 at the 
time the application was received. According to the applicant, the cost 
of the Pure-Vu[supreg] is $975.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost of $975 for Pure-Vu[supreg] is 128 percent of 
the applicable APC payment amount for the service related to the 
category of devices of $763.80 (($975/$763.88) x 100 = 127.7 percent). 
Therefore, we believe Pure-Vu[supreg] meets the first cost significance 
requirement.
    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $975 for Pure-
Vu[supreg] is 91,122 percent of the cost of the device-related portion 
of the APC payment amount for the related service of $1.07 (($975/
$1.07) x 100 = 91,121.5 percent). Therefore, we believe that Pure-
Vu[supreg] meets the second cost significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $975 for Pure-Vu[supreg] and the portion of the APC 
payment amount for the device of $1.07 is 128 percent of the APC 
payment amount for the related service of $763.88 ((($975-$1.07)/
$763.80) x 100 = 127.5 percent). Therefore, we believe that Pure-
Vu[supreg] meets the third cost significance requirement.
    We are inviting public comment on whether the Pure-Vu[supreg] meets 
the device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
(6) Xenocor XenoscopeTM
    Xenocor Inc. submitted an application for a new device category for 
transitional pass-through payment status for the Articulating Xenoscope 
Laparoscope (hereinafter referred to as the XenoscopeTM) by 
the March 2021 quarterly deadline for CY 2022. The applicant described 
the XenoscopeTM as a disposable laparoscope which consists 
of a high-definition camera chip on the tip of a composite shaft, 
paired with led lights with a handle comprised of a clamshell design 
and made with molded plastic. The applicant stated that the 
XenoscopeTM provides visualization in the abdominal and 
thoracic cavities through small, minimally invasive incisions for 
diagnostic and therapeutic laparoscopic procedures in a similar fashion 
to established, reusable versions of laparoscopes. It is paired with an 
image processing unit, the Xenobox, that can plug into any HD monitor 
to

[[Page 42110]]

display anatomy in the abdomen, pelvis or chest. The Xenobox uses pre-
installed firmware that is upgradable.
    The applicant claimed that the XenoscopeTM is the first 
disposable laparoscope. The applicant also claimed that the use of the 
XenoscopeTM reduces the number of cords in the operating 
room, eliminates intraoperative fogging and associated image compromise 
and eliminates up-front capital enditures associated with reusable 
laparoscopes.
    With respect to the newness criterion, the XenoscopeTM 
received FDA 510(k) clearance on January 27, 2020, based on a 
determination of substantial equivalence to a legally marketed 
predicate device. The XenoscopeTM is indicated for use in 
diagnostic and therapeutic procedures for endoscopy and endoscopic 
surgery within the thoracic and peritoneal cavities including the 
female reproductive organs. We received the application for a new 
device category for transitional pass-through payment status for the 
XenoscopeTM on August 6, 2020, which is within 3 years of 
the date of the initial FDA marketing authorization. We are inviting 
public comments on whether the XenoscopeTM meets the newness 
criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, the use of the XenoscopeTM is 
integral to the service, is used for one patient only, comes in contact 
with human skin, and is surgically implanted or inserted into the 
patient. Specifically, the applicant explained that the 
XenoscopeTM is plugged into the Xenobox image processing 
unit (which is connected to an HD monitor and an A/C power source). A 
surgeon then makes a small incision and a trocar (tube-like device with 
a seal to maintain abdominal pressure) is inserted to gain access to 
the body cavity. The XenoscopeTM is then inserted through 
the trocar in order to provide a full view of the anatomy for 
diagnostic and therapeutic procedures.
    The applicant also claimed the XenoscopeTM meets the 
device eligibility requirements of Sec.  419.66(b)(4) because it is not 
an instrument, apparatus, implement, or item for which depreciation and 
financing expenses are recovered, and it is not a supply or material 
furnished incident to a service. We are inviting public comments on 
whether the XenoscopeTM meets the eligibility criteria at 
Sec.  419.66(b).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. The 
applicant described the XenoscopeTM as disposable 
laparoscope. The applicant reported that it does not believe that the 
XenoscopeTM is described by an existing category and 
requested category descriptor ``Single-use laparoscopes.'' The 
applicant also stated that the currently existing category, C1748--
Endoscope, single-use (that is, disposable), upper gi, imaging/
illumination device (insertable), did not describe this device because 
it is limited to single-use duodenoscopes inserted orally, to reach the 
small intestine versus minimally invasive abdominal surgery 
(laparoscopy). We have not identified an existing pass-through payment 
category that is applicable to the XenoscopeTM. We are 
inviting public comments on this issue.
    The second criterion for establishing a device category, at Sec.  
419.66(c)(2), provides that CMS determines either of the following: (i) 
That a device to be included in the category has demonstrated that it 
will substantially improve the diagnosis or treatment of an illness or 
injury or improve the functioning of a malformed body part compared to 
the benefits of a device or devices in a previously established 
category or other available treatment; or (ii) for devices for which 
pass-through status will begin on or after January 1, 2020, as an 
alternative to the substantial clinical improvement criterion, the 
device is part of the FDA's Breakthrough Devices Program and has 
received FDA marketing authorization.
    With respect to the substantial clinical improvement criterion, the 
applicant stated that the XenoscopeTM provides a substantial 
clinical improvement over reusable laparoscopes because of its single-
use nature. Specifically, the applicant claimed, that because the 
XenoscopeTM is a disposable, single-use device, the 
XenoscopeTM provides for less risk of scope-related cross-
contamination and infection from improperly handled or reprocessed 
scopes compared to traditional laparoscopy.
    The applicant also claimed that the XenoscopeTM includes 
a fog-free scope and provides a substantial clinical improvement over 
currently available laparoscopes which, according to the applicant, fog 
often, and can put patients at risk for surgical errors and more time 
under anesthesia. Additionally, the applicant claimed that the 
XenoscopeTM reaches 104 degrees Fahrenheit at the tip, 
eliminating risk of patient burns and drape fires associated with 
hotter Xenon bulbs used in currently available laparoscopes.
    Lastly, that applicant stated that there can be significant 
economic benefits through the use of the XenoscopeTM due to 
the processing costs and up-front capital expenditures required for 
reusable laparoscopes.
    In support of the assertion that the XenoscopeTM reduces 
the risk of cross-contamination from improperly cleaned reusable 
laparoscopic instruments, the applicant referenced two articles. The 
first article was published in 2002 and describes the problem of 
surgical site infection (SSI), the Centers for Disease Control (CDC) 
guidelines for SSI, and some cases of SSI related to improper cleaning 
of reusable laparoscopic instruments. The article also discusses 
practices to avoid these infections.\89\ The applicant also submitted a 
draft of a manuscript titled ``Novel Laparoscopic System for Quality 
Improvement and Increased Efficiency'' that summarizes some of the 
evidence that laparoscopy, in general, is superior to open surgical 
approaches in terms of pain management and infection risk.\90\
---------------------------------------------------------------------------

    \89\ Hewitt, A. (2002, November 1). Laparoscopic Instruments: 
Handle with Care. Infection Control Today. https://www.infectioncontroltoday.com/view/laparoscopic-instruments-handle-care.
    \90\ Elliott, K.W. & Heilbraun, E. (2020). Novel Laparoscopic 
System for Quality Improvement and Increased Efficiency. Manuscript 
submitted for publication.
---------------------------------------------------------------------------

    In support of the claim that the XenoscopeTM eliminates 
the risk of patient burns and drape fires associated with Xenon bulbs 
used by currently available laparoscopes, the applicant submitted two 
articles. The first was an article published in 2011 that discusses the 
problem of laparoscopic related burn injuries and a potential solution 
using Active Electrode Monitoring (AEM).\91\ AEM instruments reportedly 
use a ``shielded and monitored'' design to prevent the risk of stray 
energy burn injury from insulation failure and capacitive coupling. 
According to the article, the AEM technology is currently licensed by 
Intuitive Surgical's da Vinci[supreg] Surgical Systems. The applicant 
does not compare the XenoscopeTM to AEM technology in terms 
of burn injury reduction. The second article examined the variation and 
extent of thermal injuries that could be induced by laparoscopic light 
sources to porcine tissue. In the study, the maximum temperature at the 
tip of the optical cable varied between 119.5 degrees C and 268.6 
degrees C. When surgical

[[Page 42111]]

drapes were exposed to the tip of the light source, the time to char 
was 3-6 seconds. The degree and volume of injury increased with longer 
exposure times, and significant injury was recorded with the optical 
cable 3 mm from the skin.\92\
---------------------------------------------------------------------------

    \91\ Encision Inc. (2011, April 1). Method of Reducing Stray 
Energy Burns in Laparoscopic Surgery. Medical Design Briefs. https://www.medicaldesignbriefs.com/component/content/article/mdb/tech-briefs/9500.
    \92\ Hindle, A. K., Brody, F., Hopkins, V., Rosales, G., 
Gonzalez, F., & Schwartz, A. (2009). Thermal injury secondary to 
laparoscopic fiber-optic cables. Surgical endoscopy, 23(8), 1720-
1723. https://doi.org/10.1007/s00464-008-0219-z.
---------------------------------------------------------------------------

    In support of the claim that there could be significant economic 
benefits realized through the use the XenoscopeTM compared 
to reusable laparoscopes, the applicant also referenced the manuscript 
entitled ``Novel Laparoscopic System for Quality Improvement and 
Increased Efficiency''.\93\ In this study, a three-page survey was 
created to collect data regarding laparoscope-related practices and 
costs. The survey was completed by three different institutions, 
including an ambulatory surgery center (ASC), a rural hospital and a 
suburban hospital. The sites provided the capital equipment cost 
required at the time of purchase at their facility which ranged from 
$837,184 to $2,786,348. The average cost per use for one surgical 
procedure involving a reusable laparoscope was $1,019.24 across the 
three institutions.
---------------------------------------------------------------------------

    \93\ Ibid.
---------------------------------------------------------------------------

    We are concerned that the application and the articles submitted as 
evidence of substantial clinical improvement discuss potential adverse 
effects from laparoscopic procedures, but do not appear to directly 
show any clinical improvement that result from the use of the 
XenoscopeTM. The applicant has provided evidence which seems 
to rely on indirect inferences from other sources of data. The articles 
provided did not involve the clinical use of the XenoscopeTM 
and did not compare the device to an appropriate comparator, such as a 
reusable laparoscope. Therefore, it is difficult to determine whether 
the XenoscopeTM offers substantial clinical improvement over 
standard, reusable laparoscopes based on the information provided. In 
order to demonstrate substantial clinical improvement over currently 
available treatments, we consider supporting evidence, preferably 
published peer-reviewed clinical trials, that shows improved clinical 
outcomes, such as reduction in mortality, complications, subsequent 
interventions, future hospitalizations, recovery time, pain, or a more 
rapid beneficial resolution of the disease process compared to the 
standard of care.
    We are invite public comment on whether the XenoscopeTM 
meets the substantial clinical improvement criterion.
    The third criterion for establishing a device category, at Sec.  
419.66(c)(3), requires us to determine that the cost of the device is 
not insignificant, as described in Sec.  419.66(d). Section 419.66(d) 
includes three cost significance criteria that must each be met. The 
applicant provided the following information in support of the cost 
significance requirements. The applicant stated that the 
XenoscopeTM would be reported with HCPCS codes listed in the 
following Table 26:
[GRAPHIC] [TIFF OMITTED] TP04AU21.034

    To meet the cost criterion for device pass-through payment status, 
a device must pass all three tests of the cost criterion for at least 
one APC. For our calculations, we used APC 5361 Level 1 Laparoscopy and 
Related Services, which had a CY 2020 payment rate of $4,833.71. 
Beginning in CY 2017, we calculated the device offset amount at the 
HCPCS/CPT code level instead of the APC level (81 FR 79657). CPT code 
49320 had a device offset amount of $107.79 at the time the application 
was received. According to the applicant, the cost of the 
XenoscopeTM is $1,500.
    Section 419.66(d)(1), the first cost significance requirement, 
provides that the estimated average reasonable cost of devices in the 
category must exceed 25 percent of the applicable APC payment amount 
for the service related to the category of devices. The estimated 
average reasonable cost of $1,500 for the XenoscopeTM is 31 
percent of the applicable APC payment amount for the service related to 
the category of devices of XenoscopeTM (($1,500/$4,833.71) x 
100 = 31.0 percent). Therefore, we believe XenoscopeTM meets 
the first cost significance requirement.

[[Page 42112]]

    The second cost significance requirement, at Sec.  419.66(d)(2), 
provides that the estimated average reasonable cost of the devices in 
the category must exceed the cost of the device-related portion of the 
APC payment amount for the related service by at least 25 percent, 
which means that the device cost needs to be at least 125 percent of 
the offset amount (the device-related portion of the APC found on the 
offset list). The estimated average reasonable cost of $1,500 for the 
XenoscopeTM is 1,392 percent of the cost of the device-
related portion of the APC payment amount for the related service of 
$107.79 (($1,500/$107.79) x 100 = 1,391.6 percent). Therefore, we 
believe that the XenoscopeTM meets the second cost 
significance requirement.
    The third cost significance requirement, at Sec.  419.66(d)(3), 
provides that the difference between the estimated average reasonable 
cost of the devices in the category and the portion of the APC payment 
amount for the device must exceed 10 percent of the APC payment amount 
for the related service. The difference between the estimated average 
reasonable cost of $1,500 for the XenoscopeTM and the 
portion of the APC payment amount for the device of $107.79 is 29 
percent of the APC payment amount for the related service of $4,833.71 
(($1,500-$107.79)/$4,833.71) = 28.8 percent). Therefore, we believe 
that the XenoscopeTM meets the third cost significance 
requirement.
    We invite public comment on whether the XenoscopeTM 
meets the device pass-through payment criteria discussed in this 
section, including the cost criterion.

B. Proposed Device-Intensive Procedures

1. Background
    Under the OPPS, prior to CY 2017, device-intensive status for 
procedures was determined at the APC level for APCs with a device 
offset percentage greater than 40 percent (79 FR 66795). Beginning in 
CY 2017, CMS began determining device-intensive status at the HCPCS 
code level. In assigning device-intensive status to an APC prior to CY 
2017, the device costs of all the procedures within the APC were 
calculated and the geometric mean device offset of all of the 
procedures had to exceed 40 percent. Almost all of the procedures 
assigned to device-intensive APCs utilized devices, and the device 
costs for the associated HCPCS codes exceeded the 40-percent threshold. 
The no cost/full credit and partial credit device policy (79 FR 66872 
through 66873) applies to device-intensive APCs and is discussed in 
detail in section IV.B.4. of this CY 2022 OPPS/ASC proposed rule. A 
related device policy was the requirement that certain procedures 
assigned to device-intensive APCs require the reporting of a device 
code on the claim (80 FR 70422) and is discussed in detail in Section 
IV.B.3 of this CY 2022 OPPS/ASC proposed rule. For further background 
information on the device-intensive APC policy, we refer readers to the 
CY 2016 OPPS/ASC final rule with comment period (80 FR 70421 through 
70426).
a. HCPCS Code-Level Device-Intensive Determination
    As stated earlier, prior to CY 2017, under the device-intensive 
methodology we assigned device-intensive status to all procedures 
requiring the implantation of a device that were assigned to an APC 
with a device offset greater than 40 percent and, beginning in CY 2015, 
that met the three criteria listed below. Historically, the device-
intensive designation was at the APC level and applied to the 
applicable procedures within that APC. In the CY 2017 OPPS/ASC final 
rule with comment period (81 FR 79658), we changed our methodology to 
assign device-intensive status at the individual HCPCS code level 
rather than at the APC level. Under this policy, a procedure could be 
assigned device-intensive status regardless of its APC assignment, and 
device-intensive APC designations were no longer applied under the OPPS 
or the ASC payment system.
    We believe that a HCPCS code-level device offset is, in most cases, 
a better representation of a procedure's device cost than an APC-wide 
average device offset based on the average device offset of all of the 
procedures assigned to an APC. Unlike a device offset calculated at the 
APC level, which is a weighted average offset for all devices used in 
all of the procedures assigned to an APC, a HCPCS code-level device 
offset is calculated using only claims for a single HCPCS code. We 
believe that this methodological change results in a more accurate 
representation of the cost attributable to implantation of a high-cost 
device, which ensures consistent device-intensive designation of 
procedures with a significant device cost. Further, we believe a HCPCS 
code-level device offset removes inappropriate device-intensive status 
for procedures without a significant device cost that are granted such 
status because of their APC assignment.
    Under our existing policy, procedures that meet the criteria listed 
in section IV.B.1.b. of this CY 2022 OPPS/ASC proposed rule are 
identified as device-intensive procedures and are subject to all the 
policies applicable to procedures assigned device-intensive status 
under our established methodology, including our policies on device 
edits and no cost/full credit and partial credit devices discussed in 
sections IV.B.3. and IV.B.4. of this CY 2022 OPPS/ASC proposed rule, 
respectively.
b. Use of the Three Criteria To Designate Device-Intensive Procedures
    We clarified our established policy in the CY 2018 OPPS/ASC final 
rule with comment period (82 FR 52474), where we explained that device-
intensive procedures require the implantation of a device and 
additionally are subject to the following criteria:
     All procedures must involve implantable devices that would 
be reported if device insertion procedures were performed;
     The required devices must be surgically inserted or 
implanted devices that remain in the patient's body after the 
conclusion of the procedure (at least temporarily); and
     The device offset amount must be significant, which is 
defined as exceeding 40 percent of the procedure's mean cost.
    We changed our policy to apply these three criteria to determine 
whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC 
final rule with comment period (79 FR 66926), where we stated that we 
would apply the no cost/full credit and partial credit device policy--
which includes the three criteria listed previously--to all device-
intensive procedures beginning in CY 2015. We reiterated this position 
in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424), 
where we explained that we were finalizing our proposal to continue 
using the three criteria established in the CY 2007 OPPS/ASC final rule 
with comment period for determining the APCs to which the CY 2016 
device intensive policy will apply. Under the policies we adopted in 
CYs 2015, 2016, and 2017, all procedures that require the implantation 
of a device and meet the previously described criteria are assigned 
device-intensive status, regardless of their APC placement.
2. Device-Intensive Procedure Policy for CY 2019 and Subsequent Years
    As part of our effort to better capture costs for procedures with 
significant device costs, in the CY 2019 OPPS/ASC final rule with 
comment period (83 FR 58944 through 58948), for CY 2019, we modified 
our criteria for device-intensive procedures. We had heard

[[Page 42113]]

from stakeholders that the criteria excluded some procedures that 
stakeholders believed should qualify as device-intensive procedures. 
Specifically, we were persuaded by stakeholder arguments that 
procedures requiring expensive surgically inserted or implanted devices 
that are not capital equipment should qualify as device-intensive 
procedures, regardless of whether the device remains in the patient's 
body after the conclusion of the procedure. We agreed that a broader 
definition of device-intensive procedures was warranted, and made two 
modifications to the criteria for CY 2019 (83 FR 58948). First, we 
allowed procedures that involve surgically inserted or implanted 
single-use devices that meet the device offset percentage threshold to 
qualify as device-intensive procedures, regardless of whether the 
device remains in the patient's body after the conclusion of the 
procedure. We established this policy because we no longer believe that 
whether a device remains in the patient's body should affect a 
procedure's designation as a device-intensive procedure, as such 
devices could, nonetheless, comprise a large portion of the cost of the 
applicable procedure. Second, we modified our criteria to lower the 
device offset percentage threshold from 40 percent to 30 percent, to 
allow a greater number of procedures to qualify as device-intensive. We 
stated that we believe allowing these additional procedures to qualify 
for device-intensive status will help ensure these procedures receive 
more appropriate payment in the ASC setting, which will help encourage 
the provision of these services in the ASC setting. In addition, we 
stated that this change would help to ensure that more procedures 
containing relatively high-cost devices are subject to the device 
edits, which leads to more correctly coded claims and greater accuracy 
in our claims data. Specifically, for CY 2019 and subsequent years, we 
finalized that device-intensive procedures will be subject to the 
following criteria:
     All procedures must involve implantable devices assigned a 
CPT or HCPCS code;
     The required devices (including single-use devices) must 
be surgically inserted or implanted; and
     The device offset amount must be significant, which is 
defined as exceeding 30 percent of the procedure's mean cost (83 FR 
58945).
    In addition, to further align the device-intensive policy with the 
criteria used for device pass-through payment status, we finalized, for 
CY 2019 and subsequent years, that for purposes of satisfying the 
device-intensive criteria, a device-intensive procedure must involve a 
device that:
     Has received FDA marketing authorization, has received an 
FDA investigational device exemption (IDE), and has been classified as 
a Category B device by FDA in accordance with Sec. Sec.  405.203 
through 405.207 and 405.211 through 405.215, or meets another 
appropriate FDA exemption from premarket review;
     Is an integral part of the service furnished;
     Is used for one patient only;
     Comes in contact with human tissue;
     Is surgically implanted or inserted (either permanently or 
temporarily); and
     Is not either of the following:
    (a) Equipment, an instrument, apparatus, implement, or item of the 
type for which depreciation and financing expenses are recovered as 
depreciable assets as defined in Chapter 1 of the Medicare Provider 
Reimbursement Manual (CMS Pub. 15-1); or
    (b) A material or supply furnished incident to a service (for 
example, a suture, customized surgical kit, scalpel, or clip, other 
than a radiological site marker) (83 FR 58945).
    In addition, for new HCPCS codes describing procedures requiring 
the implantation of devices that do not yet have associated claims 
data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR 
79658), we finalized a policy for CY 2017 to apply device-intensive 
status with a default device offset set at 41 percent for new HCPCS 
codes describing procedures requiring the implantation or insertion of 
a device that did not yet have associated claims data until claims data 
are available to establish the HCPCS code-level device offset for the 
procedures. This default device offset amount of 41 percent was not 
calculated from claims data; instead, it was applied as a default until 
claims data were available upon which to calculate an actual device 
offset for the new code. The purpose of applying the 41-percent default 
device offset to new codes that describe procedures that implant or 
insert devices was to ensure ASC access for new procedures until claims 
data become available.
    As discussed in the CY 2019 OPPS/ASC proposed rule and final rule 
with comment period (83 FR 37108 through 37109 and 58945 through 58946, 
respectively), in accordance with our policy stated previously to lower 
the device offset percentage threshold for procedures to qualify as 
device-intensive from greater than 40 percent to greater than 30 
percent, for CY 2019 and subsequent years, we modified this policy to 
apply a 31-percent default device offset to new HCPCS codes describing 
procedures requiring the implantation of a device that do not yet have 
associated claims data until claims data are available to establish the 
HCPCS code-level device offset for the procedures. In conjunction with 
the policy to lower the default device offset from 41 percent to 31 
percent, we continued our current policy of, in certain rare instances 
(for example, in the case of a very ensive implantable device), 
temporarily assigning a higher offset percentage if warranted by 
additional information such as pricing data from a device manufacturer 
(81 FR 79658). Once claims data are available for a new procedure 
requiring the implantation or insertion of a device, device-intensive 
status is applied to the code if the HCPCS code-level device offset is 
greater than 30 percent, according to our policy of determining device-
intensive status by calculating the HCPCS code-level device offset.
    In addition, in the CY 2019 OPPS/ASC final rule with comment 
period, we clarified that since the adoption of our policy in effect as 
of CY 2018, the associated claims data used for purposes of determining 
whether or not to apply the default device offset are the associated 
claims data for either the new HCPCS code or any predecessor code, as 
described by CPT coding guidance, for the new HCPCS code. Additionally, 
for CY 2019 and subsequent years, in limited instances where a new 
HCPCS code does not have a predecessor code as defined by CPT, but 
describes a procedure that was previously described by an existing 
code, we use clinical discretion to identify HCPCS codes that are 
clinically related or similar to the new HCPCS code but are not 
officially recognized as a predecessor code by CPT, and to use the 
claims data of the clinically related or similar code(s) for purposes 
of determining whether or not to apply the default device offset to the 
new HCPCS code (83 FR 58946). Clinically related and similar procedures 
for purposes of this policy are procedures that have little or no 
clinical differences and use the same devices as the new HCPCS code. In 
addition, clinically related and similar codes for purposes of this 
policy are codes that either currently or previously describe the 
procedure described by the new HCPCS code. Under this policy, claims 
data from clinically related and similar codes are included as 
associated claims data for a new code, and where an existing HCPCS code 
is found to be

[[Page 42114]]

clinically related or similar to a new HCPCS code, we apply the device 
offset percentage derived from the existing clinically related or 
similar HCPCS code's claims data to the new HCPCS code for determining 
the device offset percentage. We stated that we believe that claims 
data for HCPCS codes describing procedures that have minor differences 
from the procedures described by new HCPCS codes will provide an 
accurate depiction of the cost relationship between the procedure and 
the device(s) that are used, and will be appropriate to use to set a 
new code's device offset percentage, in the same way that predecessor 
codes are used. If a new HCPCS code has multiple predecessor codes, the 
claims data for the predecessor code that has the highest individual 
HCPCS-level device offset percentage is used to determine whether the 
new HCPCS code qualifies for device-intensive status. Similarly, in the 
event that a new HCPCS code does not have a predecessor code but has 
multiple clinically related or similar codes, the claims data for the 
clinically related or similar code that has the highest individual 
HCPCS level device offset percentage is used to determine whether the 
new HCPCS code qualifies for device-intensive status.
    As we indicated in the CY 2019 OPPS/ASC proposed rule and final 
rule with comment period, additional information for our consideration 
of an offset percentage higher than the default of 31 percent for new 
HCPCS codes describing procedures requiring the implantation (or, in 
some cases, the insertion) of a device that do not yet have associated 
claims data, such as pricing data or invoices from a device 
manufacturer, should be directed to the Division of Outpatient Care, 
Mail Stop C4-01-26, Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, MD 21244-1850, or electronically at 
[email protected]. Additional information can be submitted 
prior to issuance of an OPPS/ASC proposed rule or as a public comment 
in response to an issued OPPS/ASC proposed rule. Device offset 
percentages will be set in each year's final rule.
    As discussed in Section X.E of this proposed rule, given our 
concerns regarding CY 2020 data as a result of the COVID-PHE, we are 
proposing to use CY 2019 claims data to establish CY 2022 prospective 
rates. While we continue to believe CY 2019 represents the best full 
year of claims data for ratesetting, we believe our policy of 
temporarily assigning a higher offset percentage if warranted by 
additional information would provide a more accurate device offset 
percentage for certain procedures. Specifically, for procedures that 
were assigned device-intensive status, but were assigned a default 
device offset percentage of 31 percent or a device offset percentage 
based on claims from a clinically-similar code in the absence of CY 
2019 claims data, we are proposing to assign a device offset percentage 
for such procedures based on CY 2020 data if CY 2020 claims information 
is available. While we believe that CY 2019 claims data is a better 
basis for CY 2022 OPPS rates overall, because we have specifically 
noted that we would consider using more recent data than the data 
available for ratesetting in a given year to determine device offset 
percentages for services that do not have any claims data in the year 
used for ratesetting, we believe it would be consistent with this 
policy for us to use CY 2020 claims data to determine the device offset 
percentage for services that meet the above criteria.
    For CY 2022, our proposal would assign device offset percentages 
using CY 2020 claims data to the following 11 procedures:
     0266T (Implantation or replacement of carotid sinus 
baroreflex activation device; total system (includes generator 
placement, unilateral or bilateral lead placement, intra-operative 
interrogation, programming, and repositioning, when performed));
     0414T (Removal and replacement of permanent cardiac 
contractility modulation system pulse generator only);
     0511T (Removal and reinsertion of sinus tarsi implant);
     0587T (Percutaneous implantation or replacement of 
integrated single device neurostimulation system including electrode 
array and receiver or pulse generator, including analysis, programming, 
and imaging guidance when performed, posterior tibial nerve);
     0600T (Ablation, irreversible electroporation; 1 or more 
tumors per organ, including imaging guidance, when performed, 
percutaneous);
     0614T (Removal and replacement of substernal implantable 
defibrillator pulse generator);
     66987 (Extracapsular cataract removal with insertion of 
intraocular lens prosthesis (1-stage procedure), manual or mechanical 
technique (for example, irrigation and aspiration or 
phacoemulsification), complex, requiring devices or techniques not 
generally used in routine cataract surgery (for example, iris ansion 
device, suture support for intraocular lens, or primary posterior 
capsulorrhexis) or performed on patients in the amblyogenic 
developmental stage; with endoscopic cyclophotocoagulation);
     66988 (Extracapsular cataract removal with insertion of 
intraocular lens prosthesis (1 stage procedure), manual or mechanical 
technique (for example, irrigation and aspiration or 
phacoemulsification); with endoscopic cyclophotocoagulation);
     C9757 (Laminotomy (hemilaminectomy), with decompression of 
nerve root(s), including partial facetectomy, foraminotomy and excision 
of herniated intervertebral disc, and repair of annular defect with 
implantation of bone anchored annular closure device, including annular 
defect measurement, alignment and sizing assessment, and image 
guidance; 1 interspace, lumbar);
     C9765 (Revascularization, endovascular, open or 
percutaneous, lower extremity artery(ies), except tibial/peroneal; with 
intravascular lithotripsy, and transluminal stent placement(s), 
includes angioplasty within the same vessel(s), when performed); and
     C9767 (Revascularization, endovascular, open or 
percutaneous, lower extremity artery(ies), except tibial/peroneal; with 
intravascular lithotripsy and transluminal stent placement(s), and 
atherectomy, includes angioplasty within the same vessel(s), when 
performed).
    We are soliciting comments on our proposal to establish the CY 2022 
device offset percentage using CY 2020 claims data for device-intensive 
procedures with no claims in the CY 2019 claims data. The full listing 
of the proposed CY 2022 device-intensive procedures can be found in 
Addendum P to this CY 2022 OPPS/ASC proposed rule (which is available 
via the internet on the CMS website). Further, our claims accounting 
narrative contains a description of our device offset percentage 
calculation. Our claims accounting narrative for this proposed rule can 
be found under supporting documentation for the CY 2022 OPPS/ASC 
proposed rule on our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
3. Device Edit Policy
    In the CY 2015 OPPS/ASC final rule with comment period (79 FR 
66795), we finalized a policy and implemented claims processing edits 
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code 
assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC 
final rule with comment period (the CY 2015

[[Page 42115]]

device-dependent APCs) is reported on the claim. In addition, in the CY 
2016 OPPS/ASC final rule with comment period (80 FR 70422), we modified 
our previously existing policy and applied the device coding 
requirements exclusively to procedures that require the implantation of 
a device that are assigned to a device-intensive APC. In the CY 2016 
OPPS/ASC final rule with comment period, we also finalized our policy 
that the claims processing edits are such that any device code, when 
reported on a claim with a procedure assigned to a device-intensive APC 
(listed in Table 42 of the CY 2016 OPPS/ASC final rule with comment 
period (80 FR 70422)) will satisfy the edit.
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658 
through 79659), we changed our policy for CY 2017 and subsequent years 
to apply the CY 2016 device coding requirements to the newly defined 
device-intensive procedures. For CY 2017 and subsequent years, we also 
specified that any device code, when reported on a claim with a device-
intensive procedure, will satisfy the edit. In addition, we created 
HCPCS code C1889 to recognize devices furnished during a device-
intensive procedure that are not described by a specific Level II HCPCS 
Category C-code. Reporting HCPCS code C1889 with a device-intensive 
procedure will satisfy the edit requiring a device code to be reported 
on a claim with a device-intensive procedure. In the CY 2019 OPPS/ASC 
final rule with comment period, we revised the description of HCPCS 
code C1889 to remove the specific applicability to device-intensive 
procedures (83 FR 58950). For CY 2019 and subsequent years, the 
description of HCPCS code C1889 is ``Implantable/insertable device, not 
otherwise classified''.
    We are not proposing any changes to this policy for CY 2022.
4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial 
Credit Devices
a. Background
    To ensure equitable OPPS payment when a hospital receives a device 
without cost or with full credit, in CY 2007, we implemented a policy 
to reduce the payment for specified device-dependent APCs by the 
estimated portion of the APC payment attributable to device costs (that 
is, the device offset) when the hospital receives a specified device at 
no cost or with full credit (71 FR 68071 through 68077). Hospitals were 
instructed to report no cost/full credit device cases on the claim 
using the ``FB'' modifier on the line with the procedure code in which 
the no cost/full credit device is used. In cases in which the device is 
furnished without cost or with full credit, hospitals were instructed 
to report a token device charge of less than $1.01. In cases in which 
the device being inserted is an upgrade (either of the same type of 
device or to a different type of device) with a full credit for the 
device being replaced, hospitals were instructed to report as the 
device charge the difference between the hospital's usual charge for 
the device being implanted and the hospital's usual charge for the 
device for which it received full credit. In CY 2008, we expanded this 
payment adjustment policy to include cases in which hospitals receive 
partial credit of 50 percent or more of the cost of a specified device. 
Hospitals were instructed to append the ``FC'' modifier to the 
procedure code that reports the service provided to furnish the device 
when they receive a partial credit of 50 percent or more of the cost of 
the new device. We refer readers to the CY 2008 OPPS/ASC final rule 
with comment period for more background information on the ``FB'' and 
``FC'' modifiers payment adjustment policies (72 FR 66743 through 
66749).
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 
through 75007), beginning in CY 2014, we modified our policy of 
reducing OPPS payment for specified APCs when a hospital furnishes a 
specified device without cost or with a full or partial credit. For CY 
2013 and prior years, our policy had been to reduce OPPS payment by 100 
percent of the device offset amount when a hospital furnishes a 
specified device without cost or with a full credit and by 50 percent 
of the device offset amount when the hospital receives partial credit 
in the amount of 50 percent or more of the cost for the specified 
device. For CY 2014, we reduced OPPS payment, for the applicable APCs, 
by the full or partial credit a hospital receives for a replaced 
device. Specifically, under this modified policy, hospitals are 
required to report on the claim the amount of the credit in the amount 
portion for value code ``FD'' (Credit Received from the Manufacturer 
for a Replaced Device) when the hospital receives a credit for a 
replaced device that is 50 percent or greater than the cost of the 
device. For CY 2014, we also limited the OPPS payment deduction for the 
applicable APCs to the total amount of the device offset when the 
``FD'' value code appears on a claim. For CY 2015, we continued our 
policy of reducing OPPS payment for specified APCs when a hospital 
furnishes a specified device without cost or with a full or partial 
credit and to use the three criteria established in the CY 2007 OPPS/
ASC final rule with comment period (71 FR 68072 through 68077) for 
determining the APCs to which our CY 2015 policy will apply (79 FR 
66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment 
period (80 FR 70424), we finalized our policy to no longer specify a 
list of devices to which the OPPS payment adjustment for no cost/full 
credit and partial credit devices would apply and instead apply this 
APC payment adjustment to all replaced devices furnished in conjunction 
with a procedure assigned to a device-intensive APC when the hospital 
receives a credit for a replaced specified device that is 50 percent or 
greater than the cost of the device.
b. Policy for No Cost/Full Credit and Partial Credit Devices
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659 
through 79660), for CY 2017 and subsequent years, we finalized a policy 
to reduce OPPS payment for device-intensive procedures, by the full or 
partial credit a provider receives for a replaced device, when a 
hospital furnishes a specified device without cost or with a full or 
partial credit. Under our current policy, hospitals continue to be 
required to report on the claim the amount of the credit in the amount 
portion for value code ``FD'' when the hospital receives a credit for a 
replaced device that is 50 percent or greater than the cost of the 
device.
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005 
through 75007), we adopted a policy of reducing OPPS payment for 
specified APCs when a hospital furnishes a specified device without 
cost or with a full or partial credit by the lesser of the device 
offset amount for the APC or the amount of the credit. We adopted this 
change in policy in the preamble of the CY 2014 OPPS/ASC final rule 
with comment period and discussed it in subregulatory guidance, 
including Chapter 4, Section 61.3.6 of the Medicare Claims Processing 
Manual. Further, in the CY 2021 OPPS/ASC final rule with comment period 
(85 FR 86017 through 86018, 86302), we made conforming changes to our 
regulations at Sec.  419.45(b)(1) and (2) that codified this policy.
    We are not proposing any changes to our policies regarding payment 
for no cost/full credit and partial credit devices in CY 2022.

[[Page 42116]]

5. Payment Policy for Low-Volume Device-Intensive Procedures
    In CY 2016, we used our equitable adjustment authority under 
section 1833(t)(2)(E) of the Act and used the median cost (instead of 
the geometric mean cost per our standard methodology) to calculate the 
payment rate for the implantable miniature telescope procedure 
described by CPT code 0308T (Insertion of ocular telescope prosthesis 
including removal of crystalline lens or intraocular lens prosthesis), 
which is the only code assigned to APC 5494 (Level 4 Intraocular 
Procedures) (80 FR 70388). We noted that, as stated in the CY 2017 
OPPS/ASC proposed rule (81 FR 45656), we proposed to reassign the 
procedure described by CPT code 0308T to APC 5495 (Level 5 Intraocular 
Procedures) for CY 2017, but it would be the only procedure code 
assigned to APC 5495. The payment rates for a procedure described by 
CPT code 0308T (including the predecessor HCPCS code C9732) were 
$15,551 in CY 2014, $23,084 in CY 2015, and $17,551 in CY 2016. The 
procedure described by CPT code 0308T is a high-cost device-intensive 
surgical procedure that has a very low volume of claims (in part 
because most of the procedures described by CPT code 0308T are 
performed in ASCs). We believe that the median cost is a more 
appropriate measure of the central tendency for purposes of calculating 
the cost and the payment rate for this procedure because the median 
cost is impacted to a lesser degree than the geometric mean cost by 
more extreme observations. We stated that, in future rulemaking, we 
would consider proposing a general policy for the payment rate 
calculation for very low-volume device-intensive APCs (80 FR 70389).
    For CY 2017, we proposed and finalized a payment policy for low-
volume device-intensive procedures that is similar to the policy 
applied to the procedure described by CPT code 0308T in CY 2016. In the 
CY 2017 OPPS/ASC final rule with comment period (81 FR 79660 through 
79661), we established our current policy that the payment rate for any 
device-intensive procedure that is assigned to a clinical APC with 
fewer than 100 total claims for all procedures in the APC be calculated 
using the median cost instead of the geometric mean cost, for the 
reasons described previously for the policy applied to the procedure 
described by CPT code 0308T in CY 2016. For CYs 2019 through 2021, we 
continued our policy of establishing the payment rate for any device-
intensive procedure that is assigned to a clinical APC with fewer than 
100 total claims for all procedures in the APC by using the median cost 
instead of the geometric mean (85 FR 86019).
    As discussed in further detail in Section X.C of this proposed 
rule, we are proposing to establish a universal low volume APC policy 
for clinical APCs, brachytherapy APCs, and New Technology APCs with 
fewer than 100 single claims in the claims data used for ratesetting 
(for CY 2022 rates, this is proposed to be the CY 2019 claim data). For 
APCs designated as low volume APCs (those with fewer than 100 single 
claims in the claims year) under our proposed policy, we propose to 
establish a payment rate using the highest of the median cost, 
arithmetic mean cost, or the geometric mean cost. In conjunction with 
our new, broader low volume APC proposal for clinical APCs, 
brachytherapy APCs, and New Technology APCs, we are proposing to 
eliminate our payment policy for low-volume device-intensive procedures 
for CY 2022 and subsequent calendar years. Currently, CPT code 0308T is 
the only code subject to our low-volume device-intensive policy. Given 
that our proposed universal low volume APC policy would utilize a 
greater number of claims and provide additional cost metric 
alternatives for ratesetting than our existing low-volume device-
intensive policy, we believe that the cost and ratesetting issues 
previously discussed with respect to CPT code 0308T would be 
appropriately addressed under our broader universal low volume APC 
proposal.
    We are soliciting comments on our proposal to eliminate our payment 
policy for low-volume device-intensive procedures and address low-
volume, device-intensive procedures through our broader proposal to 
designate low volume APCs among eligible clinical APCs, brachytherapy 
APCs, and New Technology APCs.

V. Proposed OPPS Payment Changes for Drugs, Biologicals, and 
Radiopharmaceuticals

A. Proposed OPPS Transitional Pass-Through Payment for Additional Costs 
of Drugs, Biologicals, and Radiopharmaceuticals

1. Background
    Section 1833(t)(6) of the Act provides for temporary additional 
payments or ``transitional pass-through payments'' for certain drugs 
and biologicals. Throughout the proposed rule, the term ``biological'' 
is used because this is the term that appears in section 1861(t) of the 
Act. A ``biological'' as used in the proposed rule includes (but is not 
necessarily limited to) a ``biological product'' or a ``biologic'' as 
defined under section 351 of the Public Health Service Act. As enacted 
by the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
1999 (BBRA) (Pub. L. 106-113), this pass-through payment provision 
requires the Secretary to make additional payments to hospitals for: 
Current orphan drugs for rare diseases and conditions, as designated 
under section 526 of the Federal Food, Drug, and Cosmetic Act; current 
drugs and biologicals and brachytherapy sources used in cancer therapy; 
and current radiopharmaceutical drugs and biologicals. ``Current'' 
refers to those types of drugs or biologicals mentioned above that are 
hospital outpatient services under Medicare Part B for which 
transitional pass-through payment was made on the first date the 
hospital OPPS was implemented.
    Transitional pass-through payments also are provided for certain 
``new'' drugs and biologicals that were not being paid for as an HOPD 
service as of December 31, 1996, and whose cost is ``not 
insignificant'' in relation to the OPPS payments for the procedures or 
services associated with the new drug or biological. For pass-through 
payment purposes, radiopharmaceuticals are included as ``drugs.'' As 
required by statute, transitional pass-through payments for a drug or 
biological described in section 1833(t)(6)(C)(i)(II) of the Act can be 
made for a period of at least 2 years, but not more than 3 years, after 
the payment was first made for the drug as a hospital outpatient 
service under Medicare Part B. Proposed CY 2022 pass-through drugs and 
biologicals and their designated APCs are assigned status indicator 
``G'' in Addenda A and B to the proposed rule (which are available via 
the internet on the CMS website).
    Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through 
payment amount, in the case of a drug or biological, is the amount by 
which the amount determined under section 1842(o) of the Act for the 
drug or biological exceeds the portion of the otherwise applicable 
Medicare OPD fee schedule that the Secretary determines is associated 
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64. 
These regulations specify that the pass-through payment equals the 
amount determined under section 1842(o) of the Act minus the portion of 
the APC payment that CMS determines is associated with the drug or 
biological.

[[Page 42117]]

    Section 1847A of the Act establishes the average sales price (ASP) 
methodology, which is used for payment for drugs and biologicals 
described in section 1842(o)(1)(C) of the Act furnished on or after 
January 1, 2005. The ASP methodology, as applied under the OPPS, uses 
several sources of data as a basis for payment, including the ASP, the 
wholesale acquisition cost (WAC), and the average wholesale price 
(AWP). In the proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described 
therein. Additional information on the ASP methodology can be found on 
our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
    The pass-through application and review process for drugs and 
biologicals is described on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html.
2. Transitional Pass-Through Payment Period for Pass-Through Drugs, 
Biologicals, and Radiopharmaceuticals and Quarterly Expiration of Pass-
Through Status
    As required by statute, transitional pass-through payments for a 
drug or biological described in section 1833(t)(6)(C)(i)(II) of the Act 
can be made for a period of at least 2 years, but not more than 3 
years, after the payment was first made for the drug or biological as a 
hospital outpatient service under Medicare Part B. Our current policy 
is to accept pass-through applications on a quarterly basis and to 
begin pass-through payments for newly approved pass-through drugs and 
biologicals on a quarterly basis through the next available OPPS 
quarterly update after the approval of a drug's or biological's pass-
through status. However, prior to CY 2017, we expired pass-through 
status for drugs and biologicals on an annual basis through notice-and-
comment rulemaking (74 FR 60480). In the CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79662), we finalized a policy change, 
beginning with pass-through drugs and biologicals newly approved in CY 
2017 and subsequent calendar years, to allow for a quarterly expiration 
of pass-through payment status for drugs, biologicals, and 
radiopharmaceuticals to afford a pass-through payment period that is as 
close to a full 3 years as possible for all pass-through drugs, 
biologicals, and radiopharmaceuticals.
    This change eliminated the variability of the pass-through payment 
eligibility period, which previously varied based on when a particular 
application was initially received. We adopted this change for pass-
through approvals beginning on or after CY 2017, to allow, on a 
prospective basis, for the maximum pass-through payment period for each 
pass-through drug without exceeding the statutory limit of 3 years. 
Notice of drugs whose pass-through payment status is ending during the 
calendar year will continue to be included in the quarterly OPPS Change 
Request transmittals.
3. Drugs and Biologicals With Expiring Pass-Through Payment Status in 
CY 2021
    There are 25 drugs and biologicals whose pass-through payment 
status will expire during CY 2021, as listed in Table 27. Most of these 
drugs and biologicals will have received OPPS pass-through payment for 
3 years during the period of April 1, 2018, through December 31, 2020. 
In accordance with the policy finalized in CY 2017 and described 
earlier, pass-through payment status for drugs and biologicals newly 
approved in CY 2017 and subsequent years will expire on a quarterly 
basis, with a pass-through payment period as close to 3 years as 
possible. With the exception of those groups of drugs and biologicals 
that are always packaged when they do not have pass-through payment 
status (specifically, anesthesia drugs; drugs, biologicals, and 
radiopharmaceuticals that function as supplies when used in a 
diagnostic test or procedure (including diagnostic 
radiopharmaceuticals, contrast agents, and stress agents); and drugs 
and biologicals that function as supplies when used in a surgical 
procedure), our standard methodology for providing payment for drugs 
and biologicals with expiring pass-through payment status in an 
upcoming calendar year is to determine the product's estimated per day 
cost and compare it with the OPPS drug packaging threshold for that 
calendar year (which is proposed to be $130 for CY 2022), as discussed 
further in section V.B.1. of this proposed rule. We proposed that if 
the estimated per day cost for the drug or biological is less than or 
equal to the applicable OPPS drug packaging threshold, we would package 
payment for the drug or biological into the payment for the associated 
procedure in the upcoming calendar year. If the estimated per day cost 
of the drug or biological is greater than the OPPS drug packaging 
threshold, we proposed to provide separate payment at the applicable 
ASP-based payment amount (which is proposed at ASP+6 percent for non-
340B drugs for CY 2022, as discussed further in section V.B.2. of this 
proposed rule).
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4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through 
Payment Status Expiring in CY 2022
    We propose to end pass-through payment status in CY 2022 for 26 
drugs and biologicals. These drugs and biologicals, which were approved 
for pass-through payment status between April 1, 2019, and January 1, 
2020, are listed in Table 28. The APCs and HCPCS codes for these drugs 
and biologicals, which have pass-through payment status that will end 
by December 31, 2022, are assigned status indicator ``G'' in Addenda A 
and B to this proposed rule (which are available via the internet on 
the CMS website).
    Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through 
payment for pass-through drugs and biologicals (the pass-through 
payment amount) as the difference between the amount authorized under 
section 1842(o) of the Act and the portion of the otherwise applicable 
OPD fee schedule that the Secretary determines is associated with the 
drug or biological. For 2022, we propose to continue to pay for pass-
through drugs and biologicals at ASP+6 percent, equivalent to the 
payment rate these drugs and biologicals would receive in the 
physician's office setting in CY 2022. We propose that a $0 pass-
through payment amount would be paid for pass-through drugs and 
biologicals that are not policy-packaged as described in Section 
V.B.1.c. under the CY 2022 OPPS because the difference between the 
amount authorized under section 1842(o) of the Act, which is proposed 
at ASP+6 percent, and the portion of the otherwise applicable OPD fee 
schedule that the Secretary determines is appropriate, which is 
proposed at ASP+6 percent, is $0.
    In the case of policy-packaged drugs (which include the following: 
Anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that 
function as supplies when used in a diagnostic test or procedure 
(including contrast agents, diagnostic radiopharmaceuticals, and stress 
agents); and drugs and biologicals that function as supplies when used 
in a surgical procedure), we propose that their pass-through payment 
amount would be equal to ASP+6 percent for CY 2022 minus a payment 
offset for the portion of the otherwise applicable OPD fee schedule 
that the Secretary determines is associated with the drug or biological 
as described in section V.A.6. of this proposed rule. We propose this 
policy because, if not for the pass-through payment status of these 
policy-packaged products, payment for these products would be packaged 
into the associated procedure.
    We propose to continue to update pass-through payment rates on a 
quarterly basis on the CMS website during CY 2022 if later quarter ASP 
submissions (or more recent WAC or AWP information, as applicable) 
indicate that adjustments to the payment rates for these pass-through 
payment drugs or biologicals are necessary. For a full description of 
this policy, we refer readers to the CY 2006 OPPS/ASC final rule with 
comment period (70 FR 68632 through 68635).
    For CY 2022, consistent with our CY 2021 policy for diagnostic and 
therapeutic radiopharmaceuticals, we propose to provide payment for 
both diagnostic and therapeutic radiopharmaceuticals that are granted 
pass-through payment status based on the ASP methodology. As stated 
earlier, for purposes of pass-through payment, we consider 
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a 
diagnostic or therapeutic radiopharmaceutical receives pass-through 
payment status during CY 2022, we propose to follow the standard ASP 
methodology to determine the pass-through payment rate that drugs 
receive under section 1842(o) of the Act, which is proposed at ASP+6 
percent. If ASP data are not available for a radiopharmaceutical, we 
propose to provide pass-through payment at WAC+3 percent (consistent 
with our proposed policy in section V.B.2.b. of this proposed rule), 
the equivalent payment provided to pass-through drugs and biologicals 
without ASP information. Additional detail on the WAC+3 percent payment 
policy can be found in section V.B.2.b. of this proposed rule. If WAC 
information also is not available, we propose to provide payment for 
the pass-through radiopharmaceutical at 95 percent of its most recent 
AWP.
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5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through 
Payment Status Continuing in CY 2022
    We propose to continue pass-through payment status in CY 2022 for 
46 drugs and biologicals. These drugs and biologicals, which were 
approved for pass-through payment status with effective dates beginning 
between April 1, 2020, and April 1, 2021, are listed in Table 29. The 
APCs and HCPCS codes for these drugs and biologicals, which have pass-
through payment status that will continue after December 31, 2022, are 
assigned status indicator ``G'' in Addenda A and B to this proposed 
rule (which are available via the internet on the CMS website).
    Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through 
payment for pass-through drugs and biologicals (the pass-through 
payment amount) as the difference between the amount authorized under 
section 1842(o) of the Act and the portion of the otherwise applicable 
OPD fee schedule that the Secretary determines is associated with the 
drug or biological. For 2023, we propose to continue to pay for pass-
through drugs and biologicals at ASP+6 percent, equivalent to the 
payment rate these drugs and+ biologicals would receive in the 
physician's office setting in CY 2022. We propose that a $0 pass-
through payment amount would be paid for pass-through drugs and 
biologicals that are not policy-packaged as described in Section 
V.B.1.c. under the CY 2022 OPPS because the difference between the 
amount authorized under section 1842(o) of the Act, which is proposed 
at ASP+6 percent, and the portion of the otherwise applicable OPD fee 
schedule that the Secretary determines is appropriate, which is 
proposed at ASP+6 percent, is $0.
    In the case of policy-packaged drugs (which include the following: 
Anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that 
function as supplies when used in a diagnostic test or procedure 
(including contrast

[[Page 42123]]

agents, diagnostic radiopharmaceuticals, and stress agents); and drugs 
and biologicals that function as supplies when used in a surgical 
procedure), we propose that their pass-through payment amount would be 
equal to ASP+6 percent for CY 2022 minus a payment offset for any 
predecessor drug products contributing to the pass-through payment as 
described in section V.A.6. of this proposed rule. We propose this 
policy because, if not for the pass-through payment status of these 
policy-packaged products, payment for these products would be packaged 
into the associated procedure.
    We propose to continue to update pass-through payment rates on a 
quarterly basis on our website during CY 2022 if later quarter ASP 
submissions (or more recent WAC or AWP information, as applicable) 
indicate that adjustments to the payment rates for these pass-through 
payment drugs or biologicals are necessary. For a full description of 
this policy, we refer readers to the CY 2006 OPPS/ASC final rule with 
comment period (70 FR 68632 through 68635).
    For CY 2022, consistent with our CY 2021 policy for diagnostic and 
therapeutic radiopharmaceuticals, we propose to provide payment for 
both diagnostic and therapeutic radiopharmaceuticals that are granted 
pass-through payment status based on the ASP methodology. As stated 
earlier, for purposes of pass-through payment, we consider 
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a 
diagnostic or therapeutic radiopharmaceutical receives pass-through 
payment status during CY 2023, we propose to follow the standard ASP 
methodology to determine the pass-through payment rate that drugs 
receive under section 1842(o) of the Act, which is proposed at ASP+6 
percent. If ASP data are not available for a radiopharmaceutical, we 
propose to provide pass-through payment at WAC+3 percent (consistent 
with our proposed policy in section V.B.2.b. of this proposed rule), 
the equivalent payment provided to pass-through drugs and biologicals 
without ASP information. Additional detail on the WAC+3 percent payment 
policy can be found in section V.B.2.b. of this proposed rule. If WAC 
information also is not available, we propose to provide payment for 
the pass-through radiopharmaceutical at 95 percent of its most recent 
AWP.
    The drugs and biologicals that we propose to have pass-through 
payment status expire after December 31, 2022, are shown in Table 29.
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6. Provisions for Reducing Transitional Pass-Through Payments for 
Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals To Offset 
Costs Packaged Into APC Groups
    Under the regulation at 42 CFR 419.2(b), nonpass-through drugs, 
biologicals, and radiopharmaceuticals that function as supplies when 
used in a diagnostic test or procedure are packaged in the OPPS. This 
category includes diagnostic radiopharmaceuticals, contrast agents, 
stress agents, and other diagnostic drugs. Also under the regulation at 
42 CFR 419.2(b), nonpass-through drugs and biologicals that function as 
supplies in a surgical procedure are packaged in the OPPS. This 
category includes skin substitutes and other surgical-supply drugs and 
biologicals. As described earlier, section 1833(t)(6)(D)(i) of the Act 
specifies that the transitional pass-through payment amount for pass-
through drugs and biologicals is the difference between the amount paid 
under section 1842(o) of the Act and the otherwise applicable OPD fee 
schedule amount. Because a payment offset is necessary in order to 
provide an appropriate transitional pass-through payment, we deduct 
from the pass-through payment for policy-packaged drugs, biologicals, 
and radiopharmaceuticals an amount reflecting the portion of the APC 
payment associated with predecessor products in order to ensure no 
duplicate payment is made. This amount reflecting the portion of the 
APC payment associated with predecessor products is called the payment 
offset.
    The payment offset policy applies to all policy-packaged drugs, 
biologicals, and radiopharmaceuticals. For a full description of the 
payment offset policy as applied to policy-packaged drugs, which 
include diagnostic radiopharmaceuticals, contrast agents, stress 
agents, and skin substitutes, we refer readers to the discussion in the 
CY 2016 OPPS/ASC final rule with comment period (80 FR 70430 through 
70432). For CY 2022, as we did in CY 2021, we propose to continue to 
apply the same policy-packaged offset policy to payment for pass-
through diagnostic radiopharmaceuticals, pass-through contrast agents, 
pass-through stress

[[Page 42127]]

agents, and pass-through skin substitutes. The proposed APCs to which a 
payment offset may be applicable for pass-through diagnostic 
radiopharmaceuticals, pass-through contrast agents, pass-through stress 
agents, and pass-through skin substitutes are identified in Table 30.
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    We propose to continue to post annually on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html a file that contains the 
APC offset amounts that will be used for that year for purposes of both 
evaluating cost significance for candidate pass-through payment device 
categories and drugs and biologicals and establishing any appropriate 
APC offset amounts. Specifically, the file will continue to provide the 
amounts and percentages of APC payment associated with packaged 
implantable devices, policy-packaged drugs, and threshold packaged 
drugs and biologicals for every OPPS clinical APC.

B. Proposed OPPS Payment for Drugs, Biologicals, and 
Radiopharmaceuticals Without Pass-Through Payment Status

1. Proposed Criteria for Packaging Payment for Drugs, Biologicals, and 
Radiopharmaceuticals
a. Proposed Packaging Threshold
    In accordance with section 1833(t)(16)(B) of the Act, the threshold 
for establishing separate APCs for

[[Page 42128]]

payment of drugs and biologicals was set to $50 per administration 
during CYs 2005 and 2006. In CY 2007, we used the four quarter moving 
average Producer Price Index (PPI) levels for Pharmaceutical 
Preparations (Prescription) to trend the $50 threshold forward from the 
third quarter of CY 2005 (when the Pub. L. 108-173 mandated threshold 
became effective) to the third quarter of CY 2007. We then rounded the 
resulting dollar amount to the nearest $5 increment in order to 
determine the CY 2007 threshold amount of $55. Using the same 
methodology as that used in CY 2007 (which is discussed in more detail 
in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68085 
through 68086)), we set the packaging threshold for establishing 
separate APCs for drugs and biologicals at $130 for CY 2021 (84 FR 
61312 through 61313).
    Following the CY 2007 methodology, for this CY 2022 OPPS/ASC 
proposed rule, we used the most recently available four quarter moving 
average PPI levels to trend the $50 threshold forward from the third 
quarter of CY 2005 to the third quarter of CY 2022 and rounded the 
resulting dollar amount ($132.44) to the nearest $5 increment, which 
yielded a figure of $130. In performing this calculation, we used the 
most recent forecast of the quarterly index levels for the PPI for 
Pharmaceuticals for Human Use (Prescription) (Bureau of Labor 
Statistics series code WPUSI07003) from CMS' Office of the Actuary. For 
this CY 2022 OPPS/ASC proposed rule, based on these calculations using 
the CY 2007 OPPS methodology, we propose a packaging threshold for CY 
2022 of $130.
b. Proposed Packaging of Payment for HCPCS Codes That Describe Certain 
Drugs, Certain Biologicals, and Therapeutic Radiopharmaceuticals Under 
the Cost Threshold (``Threshold-Packaged Drugs'')
    To determine the proposed CY 2022 packaging status for all nonpass-
through drugs and biologicals that are not policy packaged, we 
calculated, on a HCPCS code-specific basis, the per day cost of all 
drugs, biologicals, and therapeutic radiopharmaceuticals (collectively 
called ``threshold-packaged'' drugs) that had a HCPCS code in CY 2019 
and were paid (via packaged or separate payment) under the OPPS. We 
used data from CY 2019 claims processed through June 30, 2020 for this 
calculation. However, we did not perform this calculation for those 
drugs and biologicals with multiple HCPCS codes that include different 
dosages, as described in section V.B.1.d. of the proposed rule, or for 
the following policy-packaged items that we propose to continue to 
package in CY 2022: Anesthesia drugs; drugs, biologicals, and 
radiopharmaceuticals that function as supplies when used in a 
diagnostic test or procedure; and drugs and biologicals that function 
as supplies when used in a surgical procedure.
    In order to calculate the per day costs for drugs, biologicals, and 
therapeutic radiopharmaceuticals to determine their proposed packaging 
status in CY 2022, we use the methodology that was described in detail 
in the CY 2006 OPPS proposed rule (70 FR 42723 through 42724) and 
finalized in the CY 2006 OPPS final rule with comment period (70 FR 
68636 through 68638). For each drug and biological HCPCS code, we used 
an estimated payment rate of ASP+6 percent (which is the payment rate 
we propose for separately payable drugs and biologicals (other than 
340B drugs) for CY 2022, as discussed in more detail in section 
V.B.2.b. of the proposed rule) to calculate the CY 2022 proposed rule 
per day costs. We used the manufacturer-submitted ASP data from the 
fourth quarter of CY 2020 (data that were used for payment purposes in 
the physician's office setting, effective April 1, 2021) to determine 
the proposed rule per day cost. While the CY 2020 ASP data was 
collected during the PHE, ASP data are not affected by changes in 
utilization the way non-drug services are for setting payment rates, 
and so we believe ASP data continues to be representative of the price 
of drugs in the market. We have continued to use ASP data from CY 2020 
to report quarterly drug rates for CY 2020 and CY 2021.
    As is our standard methodology, for 2022, we propose to use payment 
rates based on the ASP data from the fourth quarter of CY 2020 for 
budget neutrality estimates, packaging determinations, impact analyses, 
and completion of Addenda A and B to the proposed rule (which are 
available via the internet on the CMS website) because these are the 
most recent data available for use at the time of development of the 
proposed rule. These data also were the basis for drug payments in the 
physician's office setting, effective April 1, 2021. For items that did 
not have an ASP-based payment rate, such as some therapeutic 
radiopharmaceuticals, we used their mean unit cost derived from the CY 
2019 hospital claims data to determine their per day cost.
    We propose to package items with a per day cost less than or equal 
to $130, and identify items with a per day cost greater than $130 as 
separately payable unless they are policy-packaged. Consistent with our 
past practice, we cross-walked historical OPPS claims data from the CY 
2019 HCPCS codes that were reported to the CY 2021 HCPCS codes that we 
display in Addendum B to this proposed rule (which is available via the 
internet on the CMS website) for proposed payment in CY 2022.
    Our policy during previous cycles of the OPPS has been to use 
updated ASP and claims data to make final determinations of the 
packaging status of HCPCS codes for drugs, biologicals, and therapeutic 
radiopharmaceuticals for the OPPS/ASC final rule with comment period. 
We note that it is also our policy to make an annual packaging 
determination for a HCPCS code only when we develop the OPPS/ASC final 
rule with comment period for the update year. Only HCPCS codes that are 
identified as separately payable in the final rule with comment period 
are subject to quarterly updates. For our calculation of per day costs 
of HCPCS codes for drugs and biologicals in this CY 2022 OPPS/ASC 
proposed rule, we proposed to use ASP data from the fourth quarter of 
CY 2020, which is the basis for calculating payment rates for drugs and 
biologicals in the physician's office setting using the ASP 
methodology, effective April 1, 2021, along with updated hospital 
claims data from CY 2019. We note that we also propose to use these 
data for budget neutrality estimates and impact analyses for this CY 
2022 OPPS/ASC proposed rule.
    Payment rates for HCPCS codes for separately payable drugs and 
biologicals included in Addenda A and B of the final rule with comment 
period will be based on ASP data from the second quarter of CY 2021. 
These data will be the basis for calculating payment rates for drugs 
and biologicals in the physician's office setting using the ASP 
methodology, effective October 1, 2021. These payment rates would then 
be updated in the January 2022 OPPS update, based on the most recent 
ASP data to be used for physicians' office and OPPS payment as of 
January 1, 2022. For items that do not currently have an ASP-based 
payment rate, we proposed to recalculate their mean unit cost from all 
of the CY 2019 claims data and update cost report information available 
for the CY 2022 final rule with comment period to determine their final 
per day cost.
    Consequently, the packaging status of some HCPCS codes for drugs, 
biologicals, and therapeutic radiopharmaceuticals in the proposed rule 
may be different from the same drugs' HCPCS codes' packaging status

[[Page 42129]]

determined based on the data used for the final rule with comment 
period. Under such circumstances, we proposed to continue to follow the 
established policies initially adopted for the CY 2005 OPPS (69 FR 
65780) in order to more equitably pay for those drugs whose costs 
fluctuate relative to the proposed CY 2022 OPPS drug packaging 
threshold and the drug's payment status (packaged or separately 
payable) in CY 2021. These established policies have not changed for 
many years and are the same as described in the CY 2016 OPPS/ASC final 
rule with comment period (80 FR 70434). Specifically, for CY 2022, 
consistent with our historical practice, we proposed to apply the 
following policies to these HCPCS codes for drugs, biologicals, and 
therapeutic radiopharmaceuticals whose relationship to the drug 
packaging threshold changes based on the updated drug packaging 
threshold and on the final updated data:
     HCPCS codes for drugs and biologicals that were paid 
separately in CY 2021 and that are proposed for separate payment in CY 
2022, and that then have per day costs equal to or less than the CY 
2022 final rule drug packaging threshold, based on the updated ASPs and 
hospital claims data used for the CY 2022 final rule, would continue to 
receive separate payment in CY 2022.
     HCPCS codes for drugs and biologicals that were packaged 
in CY 2021 and that are proposed for separate payment in CY 2022, and 
that then have per day costs equal to or less than the CY 2022 final 
rule drug packaging threshold, based on the updated ASPs and hospital 
claims data used for the CY 2022 final rule, would remain packaged in 
CY 2022.
     HCPCS codes for drugs and biologicals for which we 
proposed packaged payment in CY 2022 but that then have per-day costs 
greater than the CY 2022 final rule drug packaging threshold, based on 
the updated ASPs and hospital claims data used for the CY 2022 final 
rule, would receive separate payment in CY 2022.
c. Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals
    As mentioned earlier in this section, under the OPPS, we package 
several categories of nonpass-through drugs, biologicals, and 
radiopharmaceuticals, regardless of the cost of the products. Because 
the products are packaged according to the policies in 42 CFR 419.2(b), 
we refer to these packaged drugs, biologicals, and radiopharmaceuticals 
as ``policy-packaged'' drugs, biologicals, and radiopharmaceuticals. 
These policies are either longstanding or based on longstanding 
principles and inherent to the OPPS and are as follows:
     Anesthesia, certain drugs, biologicals, and other 
pharmaceuticals; medical and surgical supplies and equipment; surgical 
dressings; and devices used for external reduction of fractures and 
dislocations (Sec.  419.2(b)(4));
     Intraoperative items and services (Sec.  419.2(b)(14));
     Drugs, biologicals, and radiopharmaceuticals that function 
as supplies when used in a diagnostic test or procedure (including, but 
not limited to, diagnostic radiopharmaceuticals, contrast agents, and 
pharmacologic stress agents) (Sec.  419.2(b)(15)); and
     Drugs and biologicals that function as supplies when used 
in a surgical procedure (including, but not limited to, skin 
substitutes and similar products that aid wound healing and implantable 
biologicals) (Sec.  419.2(b)(16)).
    The policy at Sec.  419.2(b)(16) is broader than that at Sec.  
419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with 
comment period: ``We consider all items related to the surgical outcome 
and provided during the hospital stay in which the surgery is 
performed, including postsurgical pain management drugs, to be part of 
the surgery for purposes of our drug and biological surgical supply 
packaging policy'' (79 FR 66875). The category described by Sec.  
419.2(b)(15) is large and includes diagnostic radiopharmaceuticals, 
contrast agents, stress agents, and some other products. The category 
described by Sec.  419.2(b)(16) includes skin substitutes and some 
other products. We believe it is important to reiterate that cost 
consideration is not a factor when determining whether an item is a 
surgical supply (79 FR 66875).
d. Packaging Determination for HCPCS Codes That Describe the Same Drug 
or Biological But Different Dosages
    In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490 
through 60491), we finalized a policy to make a single packaging 
determination for a drug, rather than an individual HCPCS code, when a 
drug has multiple HCPCS codes describing different dosages because we 
believe that adopting the standard HCPCS code-specific packaging 
determinations for these codes could lead to inappropriate payment 
incentives for hospitals to report certain HCPCS codes instead of 
others. We continue to believe that making packaging determinations on 
a drug-specific basis eliminates payment incentives for hospitals to 
report certain HCPCS codes for drugs and allows hospitals flexibility 
in choosing to report all HCPCS codes for different dosages of the same 
drug or only the lowest dosage HCPCS code. Therefore, we propose to 
continue our policy to make packaging determinations on a drug-specific 
basis, rather than a HCPCS code-specific basis, for those HCPCS codes 
that describe the same drug or biological but different dosages in CY 
2022.
    For CY 2022, in order to propose a packaging determination that is 
consistent across all HCPCS codes that describe different dosages of 
the same drug or biological, we aggregated both our CY 2019 claims data 
and our pricing information at ASP+6 percent across all of the HCPCS 
codes that describe each distinct drug or biological in order to 
determine the mean units per day of the drug or biological in terms of 
the HCPCS code with the lowest dosage descriptor. The following drugs 
did not have pricing information available for the ASP methodology for 
this CY 2022 OPPS/ASC proposed rule, and as is our current policy for 
determining the packaging status of other drugs, we used the mean unit 
cost available from the CY 2019 claims data to make the proposed 
packaging determinations for these drugs: HCPCS code C9257 (Injection, 
bevacizumab, 0.25 mg); HCPCS code J1840 (Injection, kanamycin sulfate, 
up to 500 mg); HCPCS code J1850 (Injection, kanamycin sulfate, up to 75 
mg); HCPCS code J3472 (Injection, hyaluronidase, ovine, preservative 
free, per 1000 usp units); HCPCS code J7100 (Infusion, dextran 40, 500 
ml); and HCPCS code J7110 (Infusion, dextran 75, 500 ml).
    For all other drugs and biologicals that have HCPCS codes 
describing different doses, we then multiplied the proposed weighted 
average ASP+6 percent per unit payment amount across all dosage levels 
of a specific drug or biological by the estimated units per day for all 
HCPCS codes that describe each drug or biological from our claims data 
to determine the estimated per day cost of each drug or biological at 
less than or equal to the proposed CY 2022 drug packaging threshold of 
$130 (so that all HCPCS codes for the same drug or biological would be 
packaged) or greater than the proposed CY 2022 drug packaging threshold 
of $130 (so that all HCPCS codes for the same drug or biological would 
be separately payable). The proposed packaging status of each drug and 
biological HCPCS code to which this methodology would apply in CY 2022 
is displayed in Table 31.
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2. Payment for Drugs and Biologicals Without Pass-Through Status That 
Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other 
Separately Payable Drugs and Biologicals
    Section 1833(t)(14) of the Act defines certain separately payable 
radiopharmaceuticals, drugs, and biologicals and mandates specific 
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a 
``specified covered outpatient drug'' (known as a SCOD) is defined as a 
covered outpatient drug, as defined in section 1927(k)(2) of the Act, 
for which a separate APC has been established and that either is a 
radiopharmaceutical agent or is a drug or biological for which payment 
was made on a pass-through basis on or before December 31, 2002.
    Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and 
biologicals are designated as exceptions and are not included in the 
definition of SCODs. These exceptions are--
     A drug or biological for which payment is first made on or 
after January 1, 2003, under the transitional pass-through payment 
provision in section 1833(t)(6) of the Act.
     A drug or biological for which a temporary HCPCS code has 
not been assigned.
     During CYs 2004 and 2005, an orphan drug (as designated by 
the Secretary).
    Section 1833(t)(14)(A)(iii) of the Act requires that payment for 
SCODs in CY 2006 and subsequent years be equal to the average 
acquisition cost for the drug for that year as determined by the 
Secretary, subject to any adjustment for overhead costs and taking into 
account the hospital acquisition cost survey data collected by the 
Government Accountability Office (GAO) in CYs 2004 and 2005, and later 
periodic surveys conducted by the Secretary as set forth in the 
statute. If hospital acquisition cost data are not available, the law 
requires that payment be equal to payment rates established under the 
methodology described in section 1842(o), section 1847A, or section 
1847B of the Act, as calculated and adjusted by the Secretary as 
necessary for purposes of paragraph (14). We refer to this alternative 
methodology as the ``statutory default.'' Most physician Part B drugs 
are paid at ASP+6 percent in accordance with section 1842(o) and 
section 1847A of the Act.
    Section 1833(t)(14)(E)(ii) of the Act provides for an adjustment in 
OPPS payment rates for SCODs to take into account overhead and related 
expenses, such as pharmacy services and handling costs. Section 
1833(t)(14)(E)(i) of the Act required MedPAC to study pharmacy overhead 
and related expenses and to make recommendations to the Secretary 
regarding whether, and if so how, a payment adjustment should be made 
to compensate hospitals for overhead and related expenses. Section 
1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the 
weights for ambulatory procedure classifications for SCODs to take into 
account the findings of the MedPAC study.\94\
---------------------------------------------------------------------------

    \94\ Medicare Payment Advisory Committee. June 2005 Report to 
the Congress. Chapter 6: Payment for pharmacy handling costs in 
hospital outpatient departments. Available at: http://www.medpac.gov/docs/default-source/reports/June05_ch6.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    It has been our policy since CY 2006 to apply the same treatment to 
all separately payable drugs and biologicals, which include SCODs, and 
drugs and biologicals that are not SCODs. Therefore, we apply the 
payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs, 
as required by statute, but we also apply it to separately payable 
drugs and biologicals that are not SCODs, which is a policy 
determination rather than a statutory requirement. In this CY 2022 
OPPS/ASC proposed rule, we proposed to apply section 
1833(t)(14)(A)(iii)(II) of the Act to all separately payable drugs and 
biologicals, including SCODs. Although we do not distinguish SCODs in 
this discussion, we note that we are required to apply section 
1833(t)(14)(A)(iii)(II) of the Act to

[[Page 42132]]

SCODs, but we also are applying this provision to other separately 
payable drugs and biologicals, consistent with our history of using the 
same payment methodology for all separately payable drugs and 
biologicals.
    For a detailed discussion of our OPPS drug payment policies from CY 
2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule 
with comment period (77 FR 68383 through 68385). In the CY 2013 OPPS/
ASC final rule with comment period (77 FR 68386 through 68389), we 
first adopted the statutory default policy to pay for separately 
payable drugs and biologicals at ASP+6 percent based on section 
1833(t)(14)(A)(iii)(II) of the Act. We have continued this policy of 
paying for separately payable drugs and biologicals at the statutory 
default for CYs 2014 through 2021.
b. Proposed CY 2022 Payment Policy
    For 2022, we propose to continue our payment policy that has been 
in effect since CY 2013 to pay for separately payable drugs and 
biologicals, with the exception of 340B-acquired drugs, at ASP+6 
percent in accordance with section 1833(t)(14)(A)(iii)(II) of the Act 
(the statutory default). We propose to pay for separately payable 
nonpass-through drugs acquired with a 340B discount at a rate of ASP 
minus 22.5 percent (as described in section V.B.6). We refer readers to 
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 
through 59371), and the CY 2021 OPPS/ASC final rule with comment period 
(85 FR 86042 through 86055) for more information about our current 
payment policy for drugs and biologicals acquired with a 340B discount.
    In the case of a drug or biological during an initial sales period 
in which data on the prices for sales of the drug or biological are not 
sufficiently available from the manufacturer, section 1847A(c)(4) of 
the Act permits the Secretary to make payments that are based on WAC. 
Under section 1833(t)(14)(A)(iii)(II) of the Act, the amount of payment 
for a separately payable drug equals the average price for the drug for 
the year established under, among other authorities, section 1847A of 
the Act. As explained in greater detail in the CY 2019 PFS final rule, 
under section 1847A(c)(4) of the Act, although payments may be based on 
WAC, unlike section 1847A(b) of the Act (which specifies that payments 
using ASP or WAC must be made with a 6 percent add-on), section 
1847A(c)(4) of the Act does not require that a particular add-on amount 
be applied to WAC-based pricing for this initial period when ASP data 
is not available. Consistent with section 1847A(c)(4) of the Act, in 
the CY 2019 PFS final rule (83 FR 59661 to 59666), we finalized a 
policy that, effective January 1, 2019, WAC-based payments for Part B 
drugs made under section 1847A(c)(4) of the Act will utilize a 3-
percent add-on in place of the 6-percent add-on that was being used 
according to our policy in effect as of CY 2018. For the CY 2019 OPPS, 
we followed the same policy finalized in the CY 2019 PFS final rule (83 
FR 59661 to 59666). For CYs 2020 and 2021, we adopted a policy to 
utilize a 3-percent add-on instead of a 6-percent add-on for drugs that 
are paid based on WAC under section 1847A(c)(4) of the Act pursuant to 
our authority under section 1833(t)(14)(A)(iii)(II) (84 FR 61318 and 85 
FR 86039). For 2022, we propose to continue to utilize a 3-percent add-
on instead of a 6-percent add-on for drugs that are paid based on WAC 
pursuant to our authority under section 1833(t)(14)(A)(iii)(II) of the 
Act, which provides, in part, that the amount of payment for a SCOD is 
the average price of the drug in the year established under section 
1847A of the Act. We also propose to apply this provision to non-SCOD 
separately payable drugs. Because we propose to establish the average 
price for a drug paid based on WAC under section 1847A of the Act as 
WAC+3 percent instead of WAC+6 percent, we believe it is appropriate to 
price separately payable drugs paid based on WAC at the same amount 
under the OPPS. We propose that, if finalized, our proposal to pay for 
drugs or biologicals at WAC+3 percent, rather than WAC+6 percent, would 
apply whenever WAC-based pricing is used for a drug or biological under 
1847A(c)(4). For drugs and biologicals that would otherwise be subject 
to a payment reduction because they were acquired under the 340B 
Program, the payment amount for these drugs (proposed as a rate of WAC 
minus 22.5 percent) would continue to apply. We refer readers to the CY 
2019 PFS final rule (83 FR 59661 to 59666) for additional background on 
this policy.
    We propose that payments for separately payable drugs and 
biologicals would be included in the budget neutrality adjustments, 
under the requirements in section 1833(t)(9)(B) of the Act. We also 
propose that the budget neutral weight scalar would not be applied in 
determining payments for these separately payable drugs and 
biologicals.
    We note that separately payable drug and biological payment rates 
listed in Addenda A and B to this proposed rule (available via the 
internet on the CMS website), which illustrate the proposed CY 2022 
payment of ASP+6 percent for separately payable nonpass-through drugs 
and biologicals and ASP+6 percent for pass-through drugs and 
biologicals, reflect either ASP information that is the basis for 
calculating payment rates for drugs and biologicals in the physician's 
office setting effective April 1, 2021, or WAC, AWP, or mean unit cost 
from CY 2019 claims data and updated cost report information available 
for this proposed rule. In general, these published payment rates are 
not the same as the actual January 2022 payment rates. This is because 
payment rates for drugs and biologicals with ASP information for 
January 2022 will be determined through the standard quarterly process 
where ASP data submitted by manufacturers for the third quarter of CY 
2021 (July 1, 2021 through September 30, 2021) will be used to set the 
payment rates that are released for the quarter beginning in January 
2022 near the end of December 2021. In addition, payment rates for 
drugs and biologicals in Addenda A and B to the proposed rule for which 
there was no ASP information available for April 2021 are based on mean 
unit cost in the available CY 2019 claims data. If ASP information 
becomes available for payment for the quarter beginning in January 
2022, we will price payment for these drugs and biologicals based on 
their newly available ASP information. Finally, there may be drugs and 
biologicals that have ASP information available for the proposed rule 
(reflecting April 2021 ASP data) that do not have ASP information 
available for the quarter beginning in January 2022. These drugs and 
biologicals would then be paid based on mean unit cost data derived 
from CY 2019 hospital claims. Therefore, the proposed payment rates 
listed in Addenda A and B to the proposed rule are not for January 2022 
payment purposes and are only illustrative of the CY 2022 OPPS payment 
methodology using the most recently available information at the time 
of issuance of the proposed rule.
c. Biosimilar Biological Products
    For CY 2016 and CY 2017, we finalized a policy to pay for 
biosimilar biological products based on the payment allowance of the 
product as determined under section 1847A of the Act and to subject 
nonpass-through biosimilar biological products to our annual threshold-
packaged policy (for CY 2016, 80 FR 70445 through 70446; and for CY 
2017, 81 FR 79674). In the CY 2018 OPPS/ASC proposed rule (82

[[Page 42133]]

FR 33630), for CY 2018, we proposed to continue this same payment 
policy for biosimilar biological products.
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
59351), we noted that, with respect to comments we received regarding 
OPPS payment for biosimilar biological products, in the CY 2018 PFS 
final rule, CMS finalized a policy to implement separate HCPCS codes 
for biosimilar biological products. Therefore, consistent with our 
established OPPS drug, biological, and radiopharmaceutical payment 
policy, HCPCS coding for biosimilar biological products is based on the 
policy established under the CY 2018 PFS final rule.
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
59351), after consideration of the public comments we received, we 
finalized our proposed payment policy for biosimilar biological 
products, with the following technical correction: All biosimilar 
biological products are eligible for pass-through payment and not just 
the first biosimilar biological product for a reference product. In the 
CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed 
to continue the policy in place from CY 2018 to make all biosimilar 
biological products eligible for pass-through payment and not just the 
first biosimilar biological product for a reference product.
    In addition, in CY 2018, we adopted a policy that biosimilars 
without pass-through payment status that were acquired under the 340B 
Program would be paid the ASP of the biosimilar minus 22.5 percent of 
the reference product's ASP (82 FR 59367). We adopted this policy in 
the CY 2018 OPPS/ASC final rule with comment period because we believe 
that biosimilars without pass-through payment status acquired under the 
340B Program should be treated in the same manner as other drugs and 
biologicals acquired through the 340B Program. As noted earlier, 
biosimilars with pass-through payment status are paid their own ASP+6 
percent of the reference product's ASP. Separately payable biosimilars 
that do not have pass-through payment status and are not acquired under 
the 340B Program are also paid their own ASP plus 6 percent of the 
reference product's ASP. If a biosimilar does not have ASP pricing, but 
instead has WAC pricing, the WAC pricing add-on of either 3 percent or 
6 percent is calculated from the biosimilar's WAC and is not calculated 
from the WAC price of the reference product.
    As noted in the CY 2019 OPPS/ASC proposed rule (83 FR 37123), 
several stakeholders raised concerns to us that the payment policy for 
biosimilars acquired under the 340B Program could unfairly lower the 
OPPS payment for biosimilars not on pass-through payment status because 
the payment reduction would be based on the reference product's ASP, 
which would generally be expected to be priced higher than the 
biosimilar, thus resulting in a more significant reduction in payment 
than if the 22.5 percent was calculated based on the biosimilar's ASP. 
We agreed with stakeholders that the current payment policy could 
unfairly lower the price of biosimilars without pass-through payment 
status that are acquired under the 340B Program. In addition, we noted 
that we believed that these changes would better reflect the resources 
and production costs that biosimilar manufacturers incur. We also 
stated that we believe this approach is more consistent with the 
payment methodology for 340B-acquired drugs and biologicals, for which 
the 22.5 percent reduction is calculated based on the drug or 
biological's ASP, rather than the ASP of another product. In addition, 
we explained that we believed that paying for biosimilars acquired 
under the 340B Program at ASP minus 22.5 percent of the biosimilar's 
ASP, rather than 22.5 percent of the reference product's ASP, will more 
closely approximate hospitals' acquisition costs for these products.
    Accordingly, in the CY 2019 OPPS/ASC proposed rule (83 FR 37123), 
we proposed changes to our Medicare Part B drug payment methodology for 
biosimilars acquired under the 340B Program. Specifically, for CY 2019 
and subsequent years, in accordance with section 
1833(t)(14)(A)(iii)(II) of the Act, we proposed to pay nonpass-through 
biosimilars acquired under the 340B Program at ASP minus 22.5 percent 
of the biosimilar's ASP instead of the biosimilar's ASP minus 22.5 
percent of the reference product's ASP. This proposal was finalized 
without modification in the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 58977).
    For 2022, we propose to continue our policy to make all biosimilar 
biological products eligible for pass-through payment and not just the 
first biosimilar biological product for a reference product. We also 
propose to continue our current policy of paying for nonpass-through 
biosimilars acquired under the 340B program at the biosimilar's ASP 
minus 22.5 percent of the biosimilar's ASP instead of the biosimilar's 
ASP minus 22.5 percent of the reference product's ASP, in accordance 
with section 1833(t)(14)(A)(iii)(II) of the Act.
3. Payment Policy for Therapeutic Radiopharmaceuticals
    For CY 2022, we propose to continue the payment policy for 
therapeutic radiopharmaceuticals that began in CY 2010. We pay for 
separately payable therapeutic radiopharmaceuticals under the ASP 
methodology adopted for separately payable drugs and biologicals. If 
ASP information is unavailable for a therapeutic radiopharmaceutical, 
we base therapeutic radiopharmaceutical payment on mean unit cost data 
derived from hospital claims. We believe that the rationale outlined in 
the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524 
through 60525) for applying the principles of separately payable drug 
pricing to therapeutic radiopharmaceuticals continues to be appropriate 
for nonpass-through, separately payable therapeutic 
radiopharmaceuticals in CY 2022. Therefore, we propose for CY 2022 to 
pay all nonpass-through, separately payable therapeutic 
radiopharmaceuticals at ASP+6 percent, based on the statutory default 
described in section 1833(t)(14)(A)(iii)(II) of the Act. For a full 
discussion of ASP-based payment for therapeutic radiopharmaceuticals, 
we refer readers to the CY 2010 OPPS/ASC final rule with comment period 
(74 FR 60520 through 60521). We also propose to rely on CY 2019 mean 
unit cost data derived from hospital claims data for payment rates for 
therapeutic radiopharmaceuticals for which ASP data are unavailable and 
to update the payment rates for separately payable therapeutic 
radiopharmaceuticals according to our usual process for updating the 
payment rates for separately payable drugs and biologicals on a 
quarterly basis if updated ASP information is unavailable. For a 
complete history of the OPPS payment policy for therapeutic 
radiopharmaceuticals, we refer readers to the CY 2005 OPPS final rule 
with comment period (69 FR 65811), the CY 2006 OPPS final rule with 
comment period (70 FR 68655), and the CY 2010 OPPS/ASC final rule with 
comment period (74 FR 60524). The proposed CY 2022 payment rates for 
nonpass-through, separately payable therapeutic radiopharmaceuticals 
are included in Addenda A and B to this proposed rule (which are 
available via the internet on the CMS website).

[[Page 42134]]

4. Payment for Blood Clotting Factors
    For CY 2021, we provided payment for blood clotting factors under 
the same methodology as other nonpass-through separately payable drugs 
and biologicals under the OPPS and continued paying an updated 
furnishing fee (85 FR 86041). That is, for CY 2021, we provided payment 
for blood clotting factors under the OPPS at ASP+6 percent, plus an 
additional payment for the furnishing fee. We note that when blood 
clotting factors are provided in physicians' offices under Medicare 
Part B and in other Medicare settings, a furnishing fee is also applied 
to the payment. The CY 2021 updated furnishing fee was $0.238 per unit.
    For 2022, we propose to pay for blood clotting factors at ASP+6 
percent, consistent with our proposed payment policy for other nonpass-
through, separately payable drugs and biologicals, and to continue our 
policy for payment of the furnishing fee using an updated amount. Our 
policy to pay a furnishing fee for blood clotting factors under the 
OPPS is consistent with the methodology applied in the physician's 
office and in the inpatient hospital setting. These methodologies were 
first articulated in the CY 2006 OPPS final rule with comment period 
(70 FR 68661) and later discussed in the CY 2008 OPPS/ASC final rule 
with comment period (72 FR 66765). The proposed furnishing fee update 
is based on the percentage increase in the Consumer Price Index (CPI) 
for medical care for the 12-month period ending with June of the 
previous year. Because the Bureau of Labor Statistics releases the 
applicable CPI data after the PFS and OPPS/ASC proposed rules are 
published, we are not able to include the actual updated furnishing fee 
in the proposed rules. Therefore, in accordance with our policy, as 
finalized in the CY 2008 OPPS/ASC final rule with comment period (72 FR 
66765), we propose to announce the actual figure for the percent change 
in the applicable CPI and the updated furnishing fee calculated based 
on that figure through applicable program instructions and posting on 
our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
    We propose to provide payment for blood clotting factors under the 
same methodology as other separately payable drugs and biologicals 
under the OPPS and to continue payment of an updated furnishing fee. We 
will announce the actual figure of the percent change in the applicable 
CPI and the updated furnishing fee calculation based on that figure 
through the applicable program instructions and posting on the CMS 
website.
5. Payment for Nonpass-Through Drugs, Biologicals, and 
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims 
Data
    For CY 2022, we propose to continue to use the same payment policy 
as in CY 2021 for nonpass-through drugs, biologicals, and 
radiopharmaceuticals with HCPCS codes but without OPPS hospital claims 
data, which describes how we determine the payment rate for drugs, 
biologicals, or radiopharmaceuticals without an ASP. For a detailed 
discussion of the payment policy and methodology, we refer readers to 
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70442 
through 70443). The proposed CY 2022 payment status of each of the 
nonpass-through drugs, biologicals, and radiopharmaceuticals with HCPCS 
codes but without OPPS hospital claims data is listed in Addendum B to 
this proposed rule, which is available via the internet on the CMS 
website.
6. CY 2022 OPPS Payment Methodology for 340B Purchased Drugs
a. Overview and Background
    Under the OPPS, payment rates for drugs are typically based on 
their average acquisition cost. This payment is governed by section 
1847A of the Act, which generally sets a default rate of average sales 
price (ASP) plus 6 percent for certain drugs; however, the Secretary 
has statutory authority to adjust that rate under the OPPS. As 
described below, beginning in CY 2018, the Secretary adjusted the 340B 
drug payment rate to ASP minus 22.5 percent to approximate a minimum 
average discount for 340B drugs, which was based on findings of the GAO 
and MedPAC that hospitals were acquiring drugs at a significant 
discount under HRSA's 340B Drug Pricing Program. As described in the 
following sections, in December 2018, the United States District Court 
for the District of Columbia (the district court) concluded that the 
Secretary lacks the authority to bring the default rate in line with 
average acquisition cost unless the Secretary obtains survey data from 
hospitals on their acquisition costs. On July 10, 2019, the district 
court entered final judgment. The agency appealed to the United States 
Court of Appeals for the District of Columbia Circuit (hereinafter 
referred to as ``the D.C. Circuit''), and on July 31, 2020 the court 
entered an opinion reversing the district court's judgment in this 
matter. Following the D.C. Circuit's reversal of the lower's court 
decision, appellees' petition for panel rehearing and petition for 
rehearing en banc were denied on October 16, 2020. For CY 2021, CMS 
continued its policy of paying for drugs and biologicals acquired 
through the 340B Program at ASP minus 22.5 percent.
    On January 10, 2021, the appellees filed a petition for a writ of 
certiorari in the United States Supreme Court. On July 2, 2021, the 
Supreme Court granted their petition for a writ of certiorari, and 
directed the parties to argue whether the petitioners' suit challenging 
HHS's 340B drugs payment adjustment is precluded by section 1833(t) 
(12).\95\
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    \95\ https://www.supremecourt.gov/orders/courtorders/070221zor_4gc5.pdf. Accessed July 8, 2021.
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Background
    In the CY 2018 OPPS/ASC proposed rule (82 FR 33558 through 33724), 
we proposed changes to the OPPS payment methodology for drugs and 
biologicals (hereinafter referred to collectively as ``drugs'') 
acquired under the 340B Program. We proposed these changes to better, 
and more accurately, reflect the resources and acquisition costs that 
these hospitals incur. We stated our belief that such changes would 
allow Medicare beneficiaries (and the Medicare program) to pay a more 
appropriate amount when hospitals participating in the 340B Program 
furnish drugs to Medicare beneficiaries that are purchased under the 
340B Program. Subsequently, in the CY 2018 OPPS/ASC final rule with 
comment period (82 FR 59369 through 59370), we finalized our proposal 
and adjusted the payment rate for separately payable drugs and 
biologicals (other than drugs with pass-through payment status and 
vaccines) acquired under the 340B Program from average sales price 
(ASP) plus 6 percent to ASP minus 22.5 percent. We stated that our goal 
was to make Medicare payment for separately payable drugs more aligned 
with the resources expended by hospitals to acquire such drugs, while 
recognizing the intent of the 340B Program to allow covered entities, 
including eligible hospitals, to stretch scarce resources in ways that 
enable hospitals to continue providing access to care for Medicare 
beneficiaries and other patients. Congress created the 340B Drug 
Pricing Program so that the eligible entities, safety net providers, 
identified in statute, could stretch scarce Federal resources as far as 
possible, reaching more eligible patients and providing more 
comprehensive services. By

[[Page 42135]]

design, the 340B Program increases the resources available to these 
safety net providers by providing discounts on covered outpatient drugs 
that generate savings that can be used to support patient care or other 
services. When the program was created, there was an understanding that 
many of the patients seen by these safety net providers were Medicare 
and Medicaid beneficiaries. This rule aims to fulfill the goals of 
different Federal programs, each of which helps ensure access to care 
for vulnerable populations. Critical access hospitals are not paid 
under the OPPS, and therefore are not subject to the OPPS payment 
policy for 340B-acquired drugs. We also excepted rural sole community 
hospitals, children's hospitals, and PPS-exempt cancer hospitals from 
the 340B payment adjustment in CY 2018. In addition, as stated in the 
CY 2018 OPPS/ASC final rule with comment period, this policy change 
does not apply to drugs with pass-through payment status, which are 
required to be paid based on the ASP methodology, or vaccines, which 
are excluded from the 340B Program.
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 
through 79706), we implemented section 603 of the Bipartisan Budget Act 
of 2015. As a general matter, applicable items and services furnished 
in certain off-campus outpatient departments of a provider on or after 
January 1, 2017 are not considered covered outpatient services for 
purposes of payment under the OPPS and are paid ``under the applicable 
payment system,'' which is generally the Physician Fee Schedule (PFS). 
However, consistent with our policy to pay separately payable, covered 
outpatient drugs and biologicals acquired under the 340B Program at ASP 
minus 22.5 percent, rather than ASP+6 percent, when billed by a 
hospital paid under the OPPS that is not excepted from the payment 
adjustment, in the CY 2019 OPPS/ASC final rule with comment period (83 
FR 59015 through 59022), we finalized a policy to pay ASP minus 22.5 
percent for 340B-acquired drugs and biologicals furnished in non-
excepted off-campus PBDs paid under the PFS. We adopted this payment 
policy effective for CY 2019 and subsequent years.
    We clarified in the CY 2019 OPPS/ASC proposed rule (83 FR 37125) 
that the 340B payment adjustment applies to drugs that are priced using 
either WAC or AWP, and that it has been our policy to subject 340B-
acquired drugs that use these pricing methodologies to the 340B payment 
adjustment since the policy was first adopted. The 340B payment 
adjustment for WAC-priced drugs is WAC minus 22.5 percent. 340B-
acquired drugs that are priced using AWP are paid an adjusted amount of 
69.46 percent of AWP. The 69.46 percent of AWP is calculated by first 
reducing the original 95 percent of AWP price by 6 percent to generate 
a value that is similar to ASP or WAC with no percentage markup. Then 
we apply the 22.5 percent reduction to ASP/WAC-similar AWP value to 
obtain the 69.46 percent of AWP, which is similar to either ASP minus 
22.5 percent or WAC minus 22.5 percent.
    As discussed in the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 59369 through 59370), to effectuate the payment adjustment for 
340B-acquired drugs, we implemented modifier ``JG'', effective January 
1, 2018. Hospitals paid under the OPPS, other than a type of hospital 
excluded from the OPPS (such as critical access hospitals), or excepted 
from the 340B drug payment policy for CY 2018, were required to report 
modifier ``JG'' on the same claim line as the drug HCPCS code to 
identify a 340B-acquired drug. For CY 2018, rural sole community 
hospitals, children's hospitals and PPS-exempt cancer hospitals were 
excepted from the 340B payment adjustment. These hospitals were 
required to report informational modifier ``TB'' for 340B-acquired 
drugs, and continue to be paid ASP+6 percent. We refer readers to the 
CY 2018 OPPS/ASC final rule with comment period (82 FR 59353 through 
59370) for a full discussion and rationale for the CY 2018 policies and 
use of modifiers ``JG'' and ``TB''.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 
58981), we continued the Medicare 340B payment policies that were 
implemented in CY 2018 and adopted a policy to pay for nonpass-through 
340B-acquired biosimilars at ASP minus 22.5 percent of the biosimilar's 
ASP, rather than of the reference product's ASP. In the CY 2020 OPPS/
ASC final rule with comment period (84 FR 61321), we continued the 340B 
policies that were implemented in CY 2018 and CY 2019.
    Our CY 2018 and 2019 OPPS payment policies for 340B-acquired drugs 
have been the subject of ongoing litigation. On December 27, 2018, in 
the case of American Hospital Association, et al. v. Azar, et al., the 
district court concluded in the context of reimbursement requests for 
CY 2018 that the Secretary exceeded his statutory authority by 
adjusting the Medicare payment rates for drugs acquired under the 340B 
Program to ASP minus 22.5 percent for that year.\96\ In that same 
decision, the district court recognized the `` `havoc that piecemeal 
review of OPPS payment could bring about' in light of the budget 
neutrality requirement,'' and ordered supplemental briefing on the 
appropriate remedy.\97\ On May 6, 2019, after briefing on remedy, the 
district court issued an opinion that reiterated that the 2018 rate 
reduction exceeded the Secretary's authority, and declared that the 
rate reduction for 2019 (which had been finalized since the Court's 
initial order was entered) also exceeded his authority.\98\ Rather than 
ordering HHS to pay plaintiffs their alleged underpayments, however, 
the district court recognized that crafting a remedy is ``no easy task, 
given Medicare's complexity,'' \99\ and initially remanded the issue to 
HHS to devise an appropriate remedy while also retaining jurisdiction. 
The district court acknowledged that ``if the Secretary were to 
retroactively raise the 2018 and 2019 340B rates, budget neutrality 
would require him to retroactively lower the 2018 and 2019 rates for 
other Medicare Part B products and services.'' \100\ Id. at 19. ``And 
because HHS has already processed claims under the previous rates, the 
Secretary would potentially be required to recoup certain payments made 
to providers; an expensive and time-consuming prospect.'' \101\
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    \96\ American Hosp. Ass'n, et al. v. Azar, et al., No. 1:18-cv-
2084 (D.D.C. Dec. 27, 2018).
    \97\ Id. at 35 (quoting Amgen, Inc. v. Smith, 357 F.3d 103, 112 
(D.C. Cir. 2004) (citations omitted)).
    \98\ See May 6, 2019 Memorandum Opinion, Granting in Part 
Plaintiffs' Motion for a Permanent Injunction; Remanding the 2018 
and 2019 OPPS Rules to HHS at 10-12.
    \99\ Id. at 13.
    \100\ Id. at 19.
    \101\ Id. (citing Declaration of Elizabeth Richter).
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    We respectfully disagreed with the district court's understanding 
of the scope of the Secretary's adjustment authority. On July 10, 2019, 
the district court entered final judgment. The agency appealed to the 
United States Court of Appeals for the District of Columbia Circuit, 
(hereinafter referred to as ``the D.C. Circuit''), and on July 31, 2020 
the court entered an opinion reversing the district court's judgment in 
this matter. Following the D.C. Circuit's decision, appellees' petition 
for panel rehearing and petition for rehearing en banc were denied on 
October 16, 2020. On January of 2021, appellees petitioned the United 
States Supreme Court for a writ of certiorari. On July 2, 2021, the 
Court granted the petition.
    Before the D.C. Circuit upheld our authority to pay ASP minus 22.5

[[Page 42136]]

percent, we stated in the CY 2020 OPPS/ASC final rule with comment 
period that we were taking the steps necessary to craft an appropriate 
remedy in the event of an unfavorable decision on appeal. Notably, 
after the CY 2020 OPPS/ASC proposed rule was issued, we announced in 
the Federal Register (84 FR 51590) our intent to conduct a 340B 
hospital survey to collect drug acquisition cost data for certain 
quarters in CY 2018 and 2019. We stated that such survey data may be 
used in setting the Medicare payment amount for drugs acquired by 340B 
hospitals for cost years going forward, and also may be used to devise 
a remedy for prior years if the district court's ruling was upheld on 
appeal. The district court itself acknowledged that CMS may base the 
Medicare payment amount on average acquisition cost when survey data 
are available.\102\ No 340B hospital disputed in the rulemakings for CY 
2018 and 2019 that the ASP minus 22.5 percent formula was a 
conservative adjustment that represented the minimum discount that 
hospitals receive for drugs acquired through the 340B program, which is 
significant because 340B hospitals have internal data regarding their 
own drug acquisition costs. We stated in the CY 2020 OPPS/ASC final 
rule with comment period that we thus anticipated that survey data 
collected for CY 2018 and 2019 would confirm that the ASP minus 22.5 
percent rate is a conservative amount that overcompensates covered 
entity hospitals for drugs acquired under the 340B program. We also 
explained that a remedy that relies on such survey data could avoid the 
complexities referenced in the district court's opinion. For a complete 
discussion of the Hospital Acquisition Cost Survey for 340B-Acquired 
Specified Covered Outpatient Drugs, we refer readers to the CY 2021 
OPPS/ASC Proposed Rule (85 FR 48882 through 48891) and the CY 2021 
OPPS/ASC Final Rule with comment period (85 FR 86042 through 86055).
---------------------------------------------------------------------------

    \102\  See American Hosp. Assoc. v. Azar, 348 F. Supp. 3d 62, 82 
(D.D.C. 2018).
---------------------------------------------------------------------------

    We proposed a payment rate for 340B drugs of ASP minus 28.7 percent 
based on survey data, and also proposed in the alternative that the 
agency could continue its current policy of paying ASP minus 22.5 
percent for CY 2021. We explained that we adopted the OPPS 340B payment 
policy based on the average minimum discount for 340B-acquired drugs 
being approximately ASP minus 22.5 percent. The estimated discount was 
based on a MedPAC analysis identifying 22.5 percent as a conservative 
minimum discount that 340B entities receive when they purchase drugs 
under the 340B program, which we discussed in the CY 2018 OPPS/ASC 
final rule with comment period (82 FR 52496). We emphasized that we 
continue to believe that ASP minus 22.5 percent is an appropriate 
payment rate for 340B-acquired drugs under the authority of section 
1833(t)(14)(A)(iii)(II) for the reasons we stated when we adopted this 
policy in CY 2018 (82 FR 59216). We pointed out that on July 31, 2020, 
the D.C. Circuit reversed the decision of the district court, holding 
that this interpretation of the statute was reasonable. Therefore, we 
also proposed in the alternative that the agency could continue the 
current Medicare payment policy for CY 2021. If adopted, we stated that 
this proposed policy would continue the current Medicare payment policy 
for CY 2021.
    Based on feedback from stakeholders, we stated that we believed 
maintaining the current payment policy of paying ASP minus 22.5 percent 
for 340B drugs was appropriate in order to maintain consistent and 
reliable payment for these drugs both for the remainder of the PHE and 
after its conclusion to give hospitals some certainty as to payments 
for these drugs. We explained that continuing our current policy also 
gives us more time to conduct further analysis of hospital survey data 
for potential future use for 340B drug payment. We also noted that any 
changes to the current 340B payment policy would be adopted through 
public notice and comment rulemaking.
    Finally, we stated that while we believe our methods to conduct the 
340B Drug Acquisition Cost Survey, as well as the methodology we used 
to calculate the proposed average or typical discount received by 340B 
entities on 340B drugs, are valid, we nonetheless recognize the 
comments that we received from stakeholders. Utilization of the survey 
data is complex, and we emphasized that we wish to continue to evaluate 
how to balance and weigh the use of the survey data, the necessary 
adjustments to the data, and the weighting and incorporation of ceiling 
prices--all to determine how best to take the relevant factors into 
account for potentially using the survey to set Medicare OPPS drug 
payment policy. We stated that we would continue to assess commenters' 
feedback as we explore whether survey data should be considered 
hospital acquisition cost data for purposes of paying for drugs 
acquired under section 1833(t)(14)(A)(iii)(I).
CY 2022 Proposed 340B Drug Payment Policy
    For CY 2022, we are proposing to continue our current policy 
without modification of paying ASP minus 22.5 percent for 340B-acquired 
drugs and biologicals, including when furnished in nonexcepted off-
campus PBDs paid under the PFS. We are proposing, in accordance with 
section 1833(t)(14)(A)(iii)(II) of the Act, to pay for separately 
payable Medicare Part B drugs and biologicals (assigned status 
indicator ``K''), other than vaccines and drugs on pass-through status, 
that are acquired through the 340B Program at ASP minus 22.5 percent 
when billed by a hospital paid under the OPPS that is not excepted from 
the payment adjustment. We propose to continue our current policy for 
calculating payment for 340B-acquired biosimilars, which is discussed 
in section V.B.2.c. of the CY 2019 OPPS/ASC final rule with comment 
period, and would continue the policy we finalized in CY 2019 to pay 
ASP minus 22.5 percent for 340B-acquired drugs and biologicals 
furnished in nonexcepted off-campus PBDs paid under the PFS.
    We are also proposing to continue the 340B payment adjustment for 
WAC-priced drugs, which is WAC minus 22.5 percent. 340B-acquired drugs 
that are priced using AWP would continue to be paid an adjusted amount 
of 69.46 percent of AWP. Additionally, we are proposing to continue to 
exempt rural sole community hospitals (as described under the 
regulations at Sec.  412.92 and designated as rural for Medicare 
purposes), children's hospitals, and PPS-exempt cancer hospitals from 
the 340B payment adjustment. These hospitals will continue to report 
informational modifier ``TB'' for 340B-acquired drugs, and will 
continue to be paid ASP plus 6 percent. We may revisit our policy to 
exempt rural SCHs, as well as other hospital types, from the 340B drug 
payment reduction in future rulemaking.
    We are also continuing to require hospitals to use modifiers to 
identify 340B-acquired drugs. We refer readers to the CY 2018 OPPS/ASC 
final rule with comment period (82 FR 59353 through 59370) for a full 
discussion and rationale for the CY 2018 policies and the requirements 
for use of modifiers ``JG'' and ``TB''. We believe maintaining the 
current policy of paying ASP minus 22.5 percent for 340B drugs is 
appropriate given the July 31, 2020 D.C. Circuit decision, which 
reversed the district court's decision and found that the 
interpretation of the statute was reasonable when the 340B drug

[[Page 42137]]

payment policy was implemented in CY 2018. We note that any changes to 
the current 340B payment policy would be adopted through public notice 
and comment rulemaking.
    While we believe the Secretary has discretion to propose a payment 
rate for 340B drugs based on the 2020 survey results, we also continue 
to believe that the current payment rate of ASP minus 22.5 percent 
represents the minimum discount that 340B covered entities receive, 
which more closely aligns the payment rate with the resources expended 
by 340B hospitals to acquire such drugs compared to a payment rate of 
ASP plus 6 percent, while also recognizing the intent of the 340B 
program to allow covered entities, including eligible hospitals, to 
stretch scarce resources in ways that enable hospitals to continue 
providing access to care for Medicare beneficiaries and other patients. 
Additionally, we continue to believe it is important to provide 
consistency and reliable payment for these drugs both for the remainder 
of the Public Health Emergency (PHE) and after its conclusion to give 
hospitals some certainty as to payments for these drugs.
7. High Cost/Low Cost Threshold for Packaged Skin Substitutes
a. Background
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 
74938), we unconditionally packaged skin substitute products into their 
associated surgical procedures as part of a broader policy to package 
all drugs and biologicals that function as supplies when used in a 
surgical procedure. As part of the policy to package skin substitutes, 
we also finalized a methodology that divides the skin substitutes into 
a high cost group and a low cost group, in order to ensure adequate 
resource homogeneity among APC assignments for the skin substitute 
application procedures (78 FR 74933).
    Skin substitutes assigned to the high cost group are described by 
HCPCS codes 15271 through 15278. Skin substitutes assigned to the low 
cost group are described by HCPCS codes C5271 through C5278. Geometric 
mean costs for the various procedures are calculated using only claims 
for the skin substitutes that are assigned to each group. Specifically, 
claims billed with HCPCS code 15271, 15273, 15275, or 15277 are used to 
calculate the geometric mean costs for procedures assigned to the high 
cost group, and claims billed with HCPCS code C5271, C5273, C5275, or 
C5277 are used to calculate the geometric mean costs for procedures 
assigned to the low cost group (78 FR 74935).
    Each of the HCPCS codes described earlier are assigned to one of 
the following three skin procedure APCs according to the geometric mean 
cost for the code: APC 5053 (Level 3 Skin Procedures): HCPCS codes 
C5271, C5275, and C5277); APC 5054 (Level 4 Skin Procedures): HCPCS 
codes C5273, 15271, 15275, and 15277); or APC 5055 (Level 5 Skin 
Procedures): HCPCS code 15273). In CY 2021, the payment rate for APC 
5053 (Level 3 Skin Procedures) was $524.17, the payment rate for APC 
5054 (Level 4 Skin Procedures) was $1,715.36, and the payment rate for 
APC 5055 (Level 5 Skin Procedures) was $3,522.15. This information also 
is available in Addenda A and B of the CY 2021 OPPS/ASC final rule with 
comment period, as issued with the final rule correction notice (86 FR 
11428) (the correction notice and corrected Addenda A and B are 
available via the internet on the CMS website).
    We have continued the high cost/low cost categories policy since CY 
2014, and we propose to continue it for CY 2022. Under the current 
policy, skin substitutes in the high cost category are reported with 
the skin substitute application CPT codes, and skin substitutes in the 
low cost category are reported with the analogous skin substitute HCPCS 
C-codes. For a discussion of the CY 2014 and CY 2015 methodologies for 
assigning skin substitutes to either the high cost group or the low 
cost group, we refer readers to the CY 2014 OPPS/ASC final rule with 
comment period (78 FR 74932 through 74935) and the CY 2015 OPPS/ASC 
final rule with comment period (79 FR 66882 through 66885).
    For a discussion of the high cost/low cost methodology that was 
adopted in CY 2016 and has been in effect since then, we refer readers 
to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70434 
through 70435). Beginning in CY 2016 and in subsequent years, we 
adopted a policy where we determined the high cost/low cost status for 
each skin substitute product based on either a product's geometric mean 
unit cost (MUC) exceeding the geometric MUC threshold or the product's 
per day cost (PDC) (the total units of a skin substitute multiplied by 
the mean unit cost and divided by the total number of days) exceeding 
the PDC threshold. We assigned each skin substitute that exceeded 
either the MUC threshold or the PDC threshold to the high cost group. 
In addition, we assigned any skin substitute with a MUC or a PDC that 
does not exceed either the MUC threshold or the PDC threshold to the 
low cost group (85 FR 86059).
    However, some skin substitute manufacturers have raised concerns 
about significant fluctuation in both the MUC threshold and the PDC 
threshold from year to year using the methodology developed in CY 2016. 
The fluctuation in the thresholds may result in the reassignment of 
several skin substitutes from the high cost group to the low cost group 
which, under current payment rates, can be a difference of over $1,000 
in the payment amount for the same procedure. In addition, these 
stakeholders were concerned that the inclusion of cost data from skin 
substitutes with pass-through payment status in the MUC and PDC 
calculations would artificially inflate the thresholds. Skin substitute 
stakeholders requested that CMS consider alternatives to the current 
methodology used to calculate the MUC and PDC thresholds and also 
requested that CMS consider whether it might be appropriate to 
establish a new cost group in between the low cost group and the high 
cost group to allow for assignment of moderately priced skin 
substitutes to a newly created middle group.
    We share the goal of promoting payment stability for skin 
substitute products and their related procedures as price stability 
allows hospitals using such products to more easily anticipate future 
payments associated with these products. We have attempted to limit 
year-to-year shifts for skin substitute products between the high cost 
and low cost groups through multiple initiatives implemented since CY 
2014, including: establishing separate skin substitute application 
procedure codes for low-cost skin substitutes (78 FR 74935); using a 
skin substitute's MUC calculated from outpatient hospital claims data 
instead of an average of ASP+6 percent as the primary methodology to 
assign products to the high cost or low cost group (79 FR 66883); and 
establishing the PDC threshold as an alternate methodology to assign a 
skin substitute to the high cost group (80 FR 70434 through 70435).
    To allow additional time to evaluate concerns and suggestions from 
stakeholders about the volatility of the MUC and PDC thresholds, in the 
CY 2018 OPPS/ASC proposed rule (82 FR 33627), we proposed that a skin 
substitute that was assigned to the high cost group for CY 2017 would 
be assigned to the high cost group for CY 2018, even if it did not 
exceed the CY 2018 MUC or PDC thresholds. We finalized this policy in 
the CY 2018 OPPS/ASC final rule with comment

[[Page 42138]]

period (82 FR 59347). We stated in the CY 2018 OPPS/ASC proposed rule 
that the goal of our proposal to retain the same skin substitute cost 
group assignments in CY 2018 as in CY 2017 was to maintain similar 
levels of payment for skin substitute products for CY 2018 while we 
study our skin substitute payment methodology to determine whether 
refinements to the existing policies are consistent with our policy 
goal of providing payment stability for skin substitutes.
    We stated in the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 59347) that we would continue to study issues related to the 
payment of skin substitutes and take these comments into consideration 
for future rulemaking. We received many responses to our request for 
comments in the CY 2018 OPPS/ASC proposed rule about possible 
refinements to the existing payment methodology for skin substitutes 
that would be consistent with our policy goal of providing payment 
stability for these products. In addition, several stakeholders have 
made us aware of additional concerns and recommendations since the 
release of the CY 2018 OPPS/ASC final rule with comment period. As 
discussed in the CY 2019 OPPS/ASC final rule with comment period (83 FR 
58967 through 58968), we identified four potential methodologies that 
have been raised to us that we encouraged the public to review and 
provide comments on. We stated in the CY 2019 OPPS/ASC final rule with 
comment period that we were especially interested in any specific 
feedback on policy concerns with any of the options presented as they 
relate to skin substitutes with differing per day or per episode costs 
and sizes and other factors that may differ among the dozens of skin 
substitutes currently on the market.
    For CY 2020, we sought more extensive comments on the two policy 
ideas that generated the most comment from the CY 2019 comment 
solicitation. One of the ideas was to establish a payment episode 
between 4 to 12 weeks where a lump-sum payment would be made to cover 
all of the care services needed to treat the wound. There would be 
options for either a complexity adjustment or outlier payments for 
wounds that require a large amount of resources to treat. The other 
policy idea would be to eliminate the high cost and low cost categories 
for skin substitutes and have only one payment category and set of 
procedure codes for the application of all graft skin substitute 
products. Please refer to the CY 2019 OPPS final rule (83 FR 58967 to 
58968) and the CY 2020 OPPS final rule (84 FR 61328 to 61331) for a 
detailed summary and discussion of the comments we received in response 
to these comment solicitations. We are continuing to consider the 
comments we received in response to these comment solicitations.
b. Proposals for Packaged Skin Substitutes for CY 2022
    For CY 2022, consistent with our policy since CY 2016, we propose 
to continue to determine the high cost/low cost status for each skin 
substitute product based on either a product's geometric mean unit cost 
(MUC) exceeding the geometric MUC threshold or the product's per day 
cost (PDC) (the total units of a skin substitute multiplied by the mean 
unit cost and divided by the total number of days) exceeding the PDC 
threshold. Consistent with the methodology as established in the CY 
2014 through CY 2018 final rules with comment period, we analyzed CY 
2019 claims data to calculate the MUC threshold (a weighted average of 
all skin substitutes' MUCs) and the PDC threshold (a weighted average 
of all skin substitutes' PDCs). The proposed CY 2022 MUC threshold is 
$48 per cm\2\ (rounded to the nearest $1) and the proposed CY 2022 PDC 
threshold is $949 (rounded to the nearest $1). We also propose that our 
definition of skin substitutes includes synthetic skin substitute 
products in addition to biological skin substitute products as 
described in section V.B.7.d. of this proposed rule. We also want to 
clarify that the availability of an HCPCS code for a particular human 
cell, tissue, or cellular or tissue-based product (HCT/P) does not mean 
that that product is appropriately regulated solely under section 361 
of the PHS Act and the FDA regulations in 21 CFR part 1271. 
Manufacturers of HCT/Ps should consult with the FDA Tissue Reference 
Group (TRG) or obtain a determination through a Request for Designation 
(RFD) on whether their HCT/Ps are appropriately regulated solely under 
section 361 of the PHS Act and the regulations in 21 CFR part 1271.
    For CY 2022, as we did for CY 2021, we propose to assign each skin 
substitute that exceeds either the MUC threshold or the PDC threshold 
to the high cost group. In addition, we propose to assign any skin 
substitute with a MUC or a PDC that does not exceed either the MUC 
threshold or the PDC threshold to the low cost group. For CY 2022, we 
propose that any skin substitute product that was assigned to the high 
cost group in CY 2021 would be assigned to the high cost group for CY 
2022, regardless of whether it exceeds or falls below the CY 2022 MUC 
or PDC threshold. This policy was established in the CY 2018 OPPS/ASC 
final rule with comment period (82 FR 59346 through 59348).
    For 2022, we propose to continue to assign skin substitutes with 
pass-through payment status to the high cost category. We propose to 
assign skin substitutes with pricing information but without claims 
data to calculate a geometric MUC or PDC to either the high cost or low 
cost category based on the product's ASP+6 percent payment rate as 
compared to the MUC threshold. If ASP is not available, we propose to 
use WAC+3 percent to assign a product to either the high cost or low 
cost category. Finally, if neither ASP nor WAC is available, we propose 
to use 95 percent of AWP to assign a skin substitute to either the high 
cost or low cost category. We propose to continue to use WAC+3 percent 
instead of WAC+6 percent to conform to our proposed policy described in 
section V.B.2.b. of this proposed rule to establish a payment rate of 
WAC+3 percent for separately payable drugs and biologicals that do not 
have ASP data available. New skin substitutes without pricing 
information would be assigned to the low cost category until pricing 
information is available to compare to the CY 2022 MUC and PDC 
thresholds. We also propose to continue to include synthetic products 
in addition to biological products in our description of skin 
substitutes. For a discussion of our existing policy under which we 
assign skin substitutes without pricing information to the low cost 
category until pricing information is available, we refer readers to 
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70436). For 
a discussion of how we determined that synthetic skin graft sheet 
products can be reported with graft skin substitute procedure codes, we 
refer readers to the CY 2021 OPPS/ASC final rule (85 FR 86064 to 
86067). Table 32 displays the final CY 2022 cost category assignment 
for each skin substitute product.
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BILLING CODE 4120-01-C

VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, 
Biologicals, Radiopharmaceuticals, and Devices

A. Background

    Section 1833(t)(6)(E) of the Act limits the total projected amount 
of transitional pass-through payments for drugs, biologicals, 
radiopharmaceuticals, and categories of devices for a given year to an 
``applicable percentage,'' currently not to exceed 2.0 percent of total 
program payments estimated to be made for all covered services under 
the OPPS furnished for that year. If we estimate before the beginning 
of the calendar year that the total amount of pass-through payments in 
that year would exceed the applicable percentage, section 
1833(t)(6)(E)(iii) of the Act requires a uniform prospective reduction 
in the amount of each of the transitional pass-through payments made in 
that year to ensure that the limit is not exceeded. We estimate the 
pass-through spending to determine whether payments exceed the

[[Page 42144]]

applicable percentage and the appropriate pro rata reduction to the 
conversion factor for the projected level of pass-through spending in 
the following year to ensure that total estimated pass-through spending 
for the prospective payment year is budget neutral, as required by 
section 1833(t)(6)(E) of the Act.
    For devices, developing a proposed estimate of pass-through 
spending in CY 2022 entails estimating spending for two groups of 
items. The first group of items consists of device categories that are 
currently eligible for pass-through payment and that will continue to 
be eligible for pass-through payment in CY 2022. The CY 2008 OPPS/ASC 
final rule with comment period (72 FR 66778) describes the methodology 
we have used in previous years to develop the pass-through spending 
estimate for known device categories continuing into the applicable 
update year. The second group of items consists of items that we know 
are newly eligible, or project may be newly eligible, for device pass-
through payment in the remaining quarters of CY 2021 or beginning in CY 
2022. The sum of the proposed CY 2022 pass-through spending estimates 
for these two groups of device categories equaled the proposed total CY 
2022 pass-through spending estimate for device categories with pass-
through payment status. We based the device pass-through estimated 
payments for each device category on the amount of payment as 
established in section 1833(t)(6)(D)(ii) of the Act, and as outlined in 
previous rules, including the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75034 through 75036). We note that, beginning in CY 2010, 
the pass-through evaluation process and pass-through payment 
methodology for implantable biologicals newly approved for pass-through 
payment beginning on or after January 1, 2010, that are surgically 
inserted or implanted (through a surgical incision or a natural 
orifice) use the device pass-through process and payment methodology 
(74 FR 60476). As has been our past practice (76 FR 74335), in the 
proposed rule, we propose to include an estimate of any implantable 
biologicals eligible for pass-through payment in our estimate of pass-
through spending for devices. Similarly, we finalized a policy in CY 
2015 that applications for pass-through payment for skin substitutes 
and similar products be evaluated using the medical device pass-through 
process and payment methodology (76 FR 66885 through 66888). Therefore, 
as we did beginning in CY 2015, for CY 2022, we also propose to include 
an estimate of any skin substitutes and similar products in our 
estimate of pass-through spending for devices.
    For drugs and biologicals eligible for pass-through payment, 
section 1833(t)(6)(D)(i) of the Act establishes the pass-through 
payment amount as the amount by which the amount authorized under 
section 1842(o) of the Act (or, if the drug or biological is covered 
under a competitive acquisition contract under section 1847B of the 
Act, an amount determined by the Secretary equal to the average price 
for the drug or biological for all competitive acquisition areas and 
year established under such section as calculated and adjusted by the 
Secretary) exceeds the portion of the otherwise applicable fee schedule 
amount that the Secretary determines is associated with the drug or 
biological. Our estimate of drug and biological pass-through payment 
for CY 2022 for this group of items is $462.4 million, as discussed 
below, because we propose that most non pass-through separately payable 
drugs and biologicals would be paid under the CY 2022 OPPS at ASP+6 
percent with the exception of 340B-acquired separately payable drugs, 
which we propose would be paid at ASP minus 22.5 percent, and because 
we propose to pay for CY 2022 pass-through payment drugs and 
biologicals at ASP+6 percent, as we discuss in section V.A. of this CY 
2022 OPPS/ASC proposed rule.
    Furthermore, payment for certain drugs, specifically diagnostic 
radiopharmaceuticals and contrast agents without pass-through payment 
status, is packaged into payment for the associated procedures, and 
these products will not be separately paid. In addition, we policy-
package all non pass-through drugs, biologicals, and 
radiopharmaceuticals that function as supplies when used in a 
diagnostic test or procedure, drugs and biologicals that function as 
supplies when used in a surgical procedure, drugs and biologicals used 
for anesthesia, and drugs and biologicals, as discussed in section 
V.B.1.c. of this CY 2022 OPPS/ASC proposed rule. We propose that all of 
these policy-packaged drugs and biologicals with pass-through payment 
status will be paid at ASP+6 percent, like other pass-through drugs and 
biologicals, for CY 2022. Therefore, our estimate of pass-through 
payment for policy-packaged drugs and biologicals with pass-through 
payment status approved prior to CY 2022 is not $0, as discussed below. 
In section V.A.6. of this proposed rule, we discuss our policy to 
determine if the costs of certain policy-packaged drugs or biologicals 
are already packaged into the existing APC structure. If we determine 
that a policy-packaged drug or biological approved for pass-through 
payment resembles predecessor drugs or biologicals already included in 
the costs of the APCs that are associated with the drug receiving pass-
through payment, we propose to offset the amount of pass-through 
payment for the policy-packaged drug or biological. For these drugs or 
biologicals, the APC offset amount is the portion of the APC payment 
for the specific procedure performed with the pass-through drug or 
biological, which we refer to as the policy-packaged drug APC offset 
amount. If we determine that an offset is appropriate for a specific 
policy-packaged drug or biological receiving pass-through payment, we 
propose to reduce our estimate of pass-through payments for these drugs 
or biologicals by this amount.
    Similar to pass-through spending estimates for devices, the first 
group of drugs and biologicals requiring a pass-through payment 
estimate consists of those products that were recently made eligible 
for pass-through payment and that will continue to be eligible for 
pass-through payment in CY 2022. The second group contains drugs and 
biologicals that we know are newly eligible, or project will be newly 
eligible, in the remaining quarters of CY 2021 or beginning in CY 2022. 
The sum of the CY 2022 pass-through spending estimates for these two 
groups of drugs and biologicals equals the total CY 2022 pass-through 
spending estimate for drugs and biologicals with pass-through payment 
status.

B. Proposed Estimate of Pass-Through Spending

    For 2022, we propose to set the applicable pass-through payment 
percentage limit at 2.0 percent of the total projected OPPS payments 
for CY 2022, consistent with section 1833(t)(6)(E)(ii)(II) of the Act 
and our OPPS policy from CY 2004 through CY 2021 (85 FR 86068).
    For the first group, consisting of device categories that are 
currently eligible for pass-through payment and will continue to be 
eligible for pass-through payment in CY 2022, there are 9 active 
categories for CY 2022. The active categories are described by HCPCS 
codes C2596, C1734, C1982, C1824, C1839, C1748, C1825, C1052, and 
C1062. Based on the information from the device manufacturers, we 
estimate that HCPCS code C2596 will cost $11.3 million in pass-through 
expenditures in CY 2022, HCPCS C1734 will cost $36.9 million in pass-
through

[[Page 42145]]

expenditures in CY 2022, HCPCS code C1982 will cost $116.3 million in 
pass-through expenditures in CY 2022, HCPCS code C1824 will cost $46 
million in pass-through expenditures in CY 2022, HCPCS code C1839 will 
cost $500,000 in pass-through expenditures in CY 2022, HCPCS code C1748 
will cost $39.1 million in pass-through expenditures in CY 2022, HCPCS 
code C1825 will cost $3.5 million in pass-through expenditures in CY 
2022, HCPCS code C1052 will cost $40 million in pass-through 
expenditures in CY 2022, and HCPCS code C1062 will cost $14.3 million 
in pass-through expenditures in CY 2022. Therefore, we propose an 
estimate for the first group of devices of $307.9 million.
    In estimating our proposed CY 2022 pass-through spending for device 
categories in the second group, we included: Device categories that we 
assumed at the time of the development of this proposed rule will be 
newly eligible for pass-through payment in CY 2022; additional device 
categories that we estimated could be approved for pass-through status 
after the development of the proposed rule and before January 1, 2022; 
and contingent projections for new device categories established in the 
second through fourth quarters of CY 2022. For CY 2022, we propose to 
use the general methodology described in the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66778), while also taking into account 
recent OPPS experience in approving new pass-through device categories. 
The proposed estimate of CY 2022 pass-through spending for this second 
group of device categories is $244.4 million.
    To estimate proposed CY 2022 pass-through spending for drugs and 
biologicals in the first group, specifically those drugs and 
biologicals recently made eligible for pass-through payment and 
continuing on pass-through payment status for at least one quarter in 
CY 2022, we propose to use the CY 2019 Medicare hospital outpatient 
claims data regarding their utilization, information provided in the 
respective pass-through applications, other historical hospital claims 
data, pharmaceutical industry information, and clinical information 
regarding those drugs or biologicals to project the CY 2022 OPPS 
utilization of the products.
    For the known drugs and biologicals (excluding policy-packaged 
diagnostic radiopharmaceuticals, contrast agents, drugs, biologicals, 
and radiopharmaceuticals that function as supplies when used in a 
diagnostic test or procedure, and drugs and biologicals that function 
as supplies when used in a surgical procedure) that will be continuing 
on pass-through payment status in CY 2022, we estimate the pass-through 
payment amount as the difference between ASP+6 percent and the payment 
rate for non pass-through drugs and biologicals that will be separately 
paid. Separately payable drugs are paid at a rate of ASP+6 percent with 
the exception of 340B-acquired drugs, for which we propose to pay ASP 
minus 22.5 percent. Therefore, the payment rate difference between the 
pass-through payment amount and the non pass-through payment amount is 
$462.4 million for this group of drugs. Because payment for policy-
packaged drugs and biologicals is packaged if the product was not paid 
separately due to its pass-through payment status, we proposed to 
include in the CY 2022 pass-through estimate the difference between 
payment for the policy-packaged drug or biological at ASP+6 percent (or 
WAC+6 percent, or 95 percent of AWP, if ASP or WAC information is not 
available) and the policy-packaged drug APC offset amount, if we 
determine that the policy-packaged drug or biological approved for 
pass-through payment resembles a predecessor drug or biological already 
included in the costs of the APCs that are associated with the drug 
receiving pass-through payment, which we estimate for CY 2022 for the 
first group of policy-packaged drugs to be $0 since there are currently 
no policy-packaged drugs for which we have cost data that will be on 
pass-through in CY 2022.
    To estimate proposed CY 2022 pass-through spending for drugs and 
biologicals in the second group (that is, drugs and biologicals that we 
knew at the time of development of the proposed rule were newly 
eligible or recently became eligible for pass-through payment in CY 
2022, additional drugs and biologicals that we estimated could be 
approved for pass-through status subsequent to the development of the 
proposed rule and before January 1, 2022 and projections for new drugs 
and biologicals that could be initially eligible for pass-through 
payment in the second through fourth quarters of CY 2022), we propose 
to use utilization estimates from pass-through applicants, 
pharmaceutical industry data, clinical information, recent trends in 
the per unit ASPs of hospital outpatient drugs, and projected annual 
changes in service volume and intensity as our basis for making the CY 
2022 pass-through payment estimate. We also propose to consider the 
most recent OPPS experience in approving new pass-through drugs and 
biologicals. Using our proposed methodology for estimating CY 2022 
pass-through payments for this second group of drugs, we calculate a 
proposed spending estimate for this second group of drugs and 
biologicals of approximately $10 million.
    We estimate that total pass-through spending for the device 
categories and the drugs and biologicals that are continuing to receive 
pass-through payment in CY 2022 and those device categories, drugs, and 
biologicals that first become eligible for pass-through payment during 
CY 2022 would be approximately $1,024.7 million (approximately $552.3 
million for device categories and approximately $472.4 million for 
drugs and biologicals) which represents 1.24 percent of total projected 
OPPS payments for CY 2022 (approximately $83 billion). Therefore, we 
estimate that pass-through spending in CY 2022 will not amount to 2.0 
percent of total projected OPPS CY 2022 program spending.
    As discussed in section X.E. of this proposed rule, due to the 
effects of the COVID-19 PHE, we are proposing to generally use CY 2019 
claims data instead of CY 2020 claims data in establishing the CY 2022 
OPPS rates and to use cost report data from the same set of cost 
reports originally used in CY 2021 final rule OPPS ratesetting. If our 
proposal to use CY 2019 data, rather than CY 2020 data, to inform CY 
2022 ratesetting, is finalized, we would effectively remove 
approximately one year of pass-through data collection time for 
ratesetting purposes. Therefore, for CY 2022, in section X.E. of this 
proposed rule, we are proposing to use our equitable adjustment 
authority under 1833(t)(2)(E) to provide up to four quarters of 
separate payment for 21 drugs and biologicals whose pass-through 
payment status will expire on March 31, 2022, June 30, 2022, or 
September 30, 2022 and six drugs and biologicals and one device 
category whose pass-through payment status will expire on December 31, 
2021. This would ensure that we have a full year of claims data from CY 
2021 to use for CY 2023 ratesetting and would allow us to avoid using 
CY 2020 data to set rates for these pass-through drugs, biologicals, 
and the device category for CY 2022.
    We estimated the spending for the drugs, biologicals, and device 
category for which we are proposing to provide separate payment for the 
remainder of CY 2022 using our equitable adjustment authority. To 
estimate proposed CY 2022 spending for the one device pass-through 
category with pass-through status expiring on December 31, 2021, we 
also used the general methodology

[[Page 42146]]

described in the CY 2008 OPPS/ASC final rule with comment period (72 FR 
66778). For this device category, we calculate a proposed spending 
estimate of $3.5 million. To estimate proposed CY 2022 spending for the 
six drugs with pass-through status expiring on December 21, 2021 and 
the 18 drugs and three biologicals with pass-through status expiring on 
March 30, 2022, June 30, 2022, and September 30, 2022 we performed an 
analysis similar to the analysis for the first group of drugs and 
biologicals described earlier in this section where we estimated the 
pass-through payment amount as the difference between ASP+6 percent and 
the payment rate for non pass-through drugs and biologicals that will 
be separately paid. For this group, we calculate a proposed spending 
estimate for CY 2022 of $61.5 million. We estimate that total spending 
for these 27 drugs and biologicals and one device category would be 
approximately $65 million for CY 2022. The drugs, biologicals, and 
device category for which we propose to provide separate payment for 
one to four quarters in CY 2022 are listed in table 33 below.
BILLING CODE 4120-01-P

[[Page 42147]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.050


[[Page 42148]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.051

BILLING CODE 4120-01-C

VII. OPPS Payment for Hospital Outpatient Visits and Critical Care 
Services

    For CY 2022, we propose to continue with our current clinic and 
emergency department (ED) hospital outpatient visits payment policies. 
For a description of the current clinic and ED hospital outpatient 
visits policies, we refer readers to the CY 2016 OPPS/ASC final rule 
with comment period (80 FR 70448). We also propose to continue our 
payment policy for critical care services for CY 2022. For a 
description of the current payment policy for critical care services, 
we refer readers to the CY 2016 OPPS/ASC final rule with comment period 
(80 FR 70449), and for the history of the payment policy for critical 
care services, we refer readers to the CY 2014 OPPS/ASC final rule with 
comment period (78 FR 75043). In this proposed rule, we are seeking 
public comments on any changes to these codes that we should consider 
for future rulemaking cycles. We continue to encourage commenters to 
provide the data and analysis necessary to justify any suggested 
changes.
    We are continuing the clinic visit payment policy for CY 2022 and 
beyond. We will continue to utilize a PFS-equivalent payment rate for 
the hospital outpatient clinic visit service described by HCPCS code 
G0463 when it is furnished by excepted off-campus provider-based 
departments. The PFS-equivalent rate for CY 2022 is 40 percent of the 
proposed OPPS payment (that is, 60 percent less than the proposed OPPS 
rate). Under this policy, these departments will be paid approximately 
40 percent of the OPPS rate (100 percent of the OPPS rate minus the 60-
percent payment reduction that is applied in CY 2022) for the clinic 
visit service in CY 2022. We will continue to monitor the effect of 
this change in Medicare payment policy, including the volume of these 
types of OPD services.

VIII. Payment for Partial Hospitalization Services

A. Background

    A partial hospitalization program (PHP) is an intensive outpatient 
program of psychiatric services provided as an alternative to inpatient 
psychiatric care for individuals who have an acute mental illness, 
which includes, but is not limited to, conditions such as depression, 
schizophrenia, and substance use disorders. Section 1861(ff)(1) of the 
Act defines partial hospitalization services as the items and services 
described in paragraph (2) prescribed by a physician and provided under 
a program described in paragraph (3) under the supervision of a 
physician pursuant to an individualized, written plan of treatment 
established and periodically reviewed by a physician (in consultation 
with appropriate staff participating in such program), which sets forth 
the physician's diagnosis, the type, amount, frequency, and duration of 
the items and services provided

[[Page 42149]]

under the plan, and the goals for treatment under the plan. Section 
1861(ff)(2) of the Act describes the items and services included in 
partial hospitalization services. Section 1861(ff)(3)(A) of the Act 
specifies that a PHP is a program furnished by a hospital to its 
outpatients or by a community mental health center (CMHC), as a 
distinct and organized intensive ambulatory treatment service, offering 
less than 24-hour-daily care, in a location other than an individual's 
home or inpatient or residential setting. Section 1861(ff)(3)(B) of the 
Act defines a CMHC for purposes of this benefit. We refer readers to 
sections 1833(t)(1)(B)(i), 1833(t)(2)(B), 1833(t)(2)(C), and 
1833(t)(9)(A) of the Act and 42 CFR 419.21, for additional guidance 
regarding PHP.
    In CY 2008, we began efforts to strengthen the PHP benefit through 
extensive data analysis, along with policy and payment changes by 
implementing two refinements to the methodology for computing the PHP 
median. For a detailed discussion on these policies, we refer readers 
to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66670 
through 66676). In CY 2009, we implemented several regulatory, policy, 
and payment changes. For a detailed discussion on these policies, we 
refer readers to the CY 2009 OPPS/ASC final rule (73 FR 68688 through 
68697). In CY 2010, we retained the two-tier payment approach for 
partial hospitalization services and used only hospital-based PHP data 
in computing the PHP APC per diem costs, upon which PHP APC per diem 
payment rates are based (74 FR 60556 through 60559). In CY 2011 (75 FR 
71994), we established four separate PHP APC per diem payment rates: 
Two for CMHCs (APC 0172 and APC 0173) and two for hospital-based PHPs 
(APC 0175 and APC 0176) and instituted a 2-year transition period for 
CMHCs to the CMHC APC per diem payment rates. For a detailed 
discussion, we refer readers to section X.B. of the CY 2011 OPPS/ASC 
final rule with comment period (75 FR 71991 through 71994). In CY 2012, 
we determined the relative payment weights for partial hospitalization 
services provided by CMHCs based on data derived solely from CMHCs and 
the relative payment weights for partial hospitalization services 
provided by hospital-based PHPs based exclusively on hospital data (76 
FR 74348 through 74352). In the CY 2013 OPPS/ASC final rule with 
comment period, we finalized our proposal to base the relative payment 
weights that underpin the OPPS APCs, including the four PHP APCs (APCs 
0172, 0173, 0175, and 0176), on geometric mean costs rather than on the 
median costs. For a detailed discussion on this policy, we refer 
readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 
68406 through 68412).
    In the CY 2014 OPPS/ASC proposed rule (78 FR 43621 through 43622) 
and CY 2015 OPPS/ASC final rule with comment period (79 FR 66902 
through 66908), we continued to apply our established policies to 
calculate the four PHP APC per diem payment rates based on geometric 
mean per diem costs using the most recent claims data for each provider 
type. For a detailed discussion on this policy, we refer readers to the 
CY 2014 OPPS/ASC final rule with comment period (78 FR 75047 through 
75050). In the CY 2016, we described our extensive analysis of the 
claims and cost data and ratesetting methodology, corrected a cost 
inversion that occurred in the final rule data with respect to 
hospital-based PHP providers and renumbered the PHP APCs. In CY 2017 
OPPS/ASC final rule with comment period (81 FR 79687 through 79691), we 
continued to apply our established policies to calculate the PHP APC 
per diem payment rates based on geometric mean per diem costs and 
finalized a policy to combine the Level 1 and Level 2 PHP APCs for 
CMHCs and for hospital-based PHPs. We also implemented an eight-percent 
outlier cap for CMHCs to mitigate potential outlier billing 
vulnerabilities. For a comprehensive description of PHP payment policy, 
including a detailed methodology for determining PHP per diem amounts, 
we refer readers to the CY 2016 and CY 2017 OPPS/ASC final rules with 
comment period (80 FR 70453 through 70455 and 81 FR 79678 through 
79680).
    In the CYs 2018 and 2019 OPPS/ASC final rules with comment period 
(82 FR 59373 through 59381, and 83 FR 58983 through 58998, 
respectively), we continued to apply our established policies to 
calculate the PHP APC per diem payment rates based on geometric mean 
per diem costs, designated a portion of the estimated 1.0 percent 
hospital outpatient outlier threshold specifically for CMHCs, and 
proposed updates to the PHP allowable HCPCS codes. We finalized these 
proposals in the CY 2020 OPPS/ASC final rule with comment period (84 FR 
61352). We refer readers to section VIII.D. of this proposed rule for a 
discussion of the proposed updates and the applicability for CY 2021.
    In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61339 
through 61350), we finalized our proposal to use the calculated CY 2020 
CMHC geometric mean per diem cost and the calculated CY 2020 hospital-
based PHP geometric mean per diem cost, but with a cost floor equal to 
the CY 2019 final geometric mean per diem costs as the basis for 
developing the CY 2020 PHP APC per diem rates. Also, we continued to 
designate a portion of the estimated 1.0 percent hospital outpatient 
outlier threshold specifically for CMHCs, consistent with the 
percentage of projected payments to CMHCs under the OPPS, excluding 
outlier payments.
    In the April 30, 2020 interim final rule with comment (85 FR 27562 
through 27566), effective as of March 1, 2020 and for the duration of 
the COVID-19 Public Health Emergency (PHE), hospital and CMHC staff are 
permitted to furnish certain outpatient therapy, counseling, and 
educational services (including certain PHP services), incident to a 
physician's services, to beneficiaries in temporary expansion 
locations, including the beneficiary's home, so long as the location 
meets all conditions of participation to the extent not waived. A 
hospital or CMHC can furnish such services using telecommunications 
technology to a beneficiary in a temporary expansion location if that 
beneficiary is registered as an outpatient. These provisions apply only 
for the duration of the COVID-19 PHE.
    In the CY 2021 final rule (85 FR 86073 through 86080), we finalized 
a CMHC geometric mean per diem cost of $136.14 and a final hospital-
based PHP geometric mean per diem cost of $253.76 using the most recent 
updated claims and cost data. In the CY 2021 proposed rule (85 FR 48901 
through 48905), we had proposed, for CY 2021 and subsequent years, to 
use the CY 2021 CMHC geometric mean per diem cost calculated in 
accordance with our existing methodology, but with a cost floor equal 
to the per diem cost for CMHCs of $121.62 that was calculated for CY 
2020 ratesetting (84 FR 61339 through 61344), as the basis for 
developing the CY 2021 CMHC APC per diem rate. We had also proposed, 
for CY 2021 and subsequent years, to use the CY 2021 hospital-based 
geometric mean per diem cost calculated in accordance with our existing 
methodology, but with a cost floor equal to the per diem cost for 
hospital-based providers of $222.76 that was calculated for CY 2020 
ratesetting (84 FR 61344 through 61345). We explained in the final rule 
that the final calculated geometric mean per diem costs for both CMHCs 
and hospital-based PHPs were significantly higher than each proposed 
cost floor,

[[Page 42150]]

therefore a floor was not necessary at the time, and we did not 
finalize the proposed cost floors in the CY 2021 OPPS/ASC final rule 
with comment period.

B. Proposed PHP APC Update for CY 2022

1. Proposed PHP APC Geometric Mean Per Diem Costs
    In summary, for CY 2022 only, we propose to use the CY 2022 CMHC 
geometric mean per diem cost calculated in accordance with our existing 
methodology, but with a cost floor equal to the per diem cost for CMHCs 
of $136.14, which is the final CMHC geometric mean per diem cost 
calculated last year for CY 2021 ratesetting (85 FR 86080), as the 
basis for developing the CY 2022 CMHC APC per diem rate. We also 
propose, for CY 2022 only, to use the CY 2022 hospital-based geometric 
mean per diem cost calculated in accordance with our existing 
methodology, but with a cost floor equal to the per diem cost for 
hospital-based providers of $253.76 calculated last year for CY 2021 
ratesetting (85 FR 86080). Following this methodology, we propose to 
use the cost floor value of $136.14 for CMHCs as the basis for 
developing the CY 2022 CMHC APC per diem rate, and to use the cost 
floor value of $253.76 as the basis for developing the CY 2021 
hospital-based APC per diem rate. As discussed in section VIII.B.2 of 
this proposed rule, we propose to use the latest available CY 2019 
claims and cost data from the CY 2021 rulemaking to determine CY 2022 
geometric mean per diem costs in this proposed rule, and we propose 
that if the final CY 2022 cost for CMHCs or hospital-based PHPs is 
calculated to be above the proposed floor for that provider type, we 
would use the final calculated cost instead of the floor. The rationale 
behind this proposal is discussed in greater detail in sections 
VIII.B.2.a and VIII.B.2.b of this proposed rule.
    Lastly, in accordance with our longstanding policy, we propose to 
continue to use CMHC APC 5853 (Partial Hospitalization (three or More 
Services Per Day)) and hospital-based PHP APC 5863 (Partial 
Hospitalization (three or More Services Per Day)). These proposals are 
discussed in more detail below.
2. Development of the Proposed PHP APC Geometric Mean Per Diem Costs
    In preparation for CY 2022, we followed the PHP ratesetting 
methodology described in section VIII.B.2. of the CY 2016 OPPS/ASC 
final rule with comment period (80 FR 70462 through 70466) to calculate 
the PHP APCs' geometric mean per diem costs and payment rates for APCs 
5853 and 5863, incorporating the modifications made in the CY 2017 
OPPS/ASC final rule with comment period. As discussed in section 
VIII.B.1. of the CY 2017 OPPS/ASC final rule with comment period (81 FR 
79680 through 79687), the geometric mean per diem cost for hospital-
based PHP APC 5863 is based upon actual hospital-based PHP claims and 
costs for PHP service days providing three or more services. Similarly, 
the geometric mean per diem cost for CMHC APC 5853 is based upon actual 
CMHC claims and costs for CMHC service days providing three or more 
services. In addition, for this CY 2022 proposed rulemaking, we used 
cost and charge data from the Hospital Cost Report Information System 
(HCRIS) as the source for the CMHC cost-to-charge ratios (CCRs), 
instead of using the Outpatient Provider Specific File (OPSF). We 
discuss this proposed change in greater detail in section VIII.B.2.a of 
this OPPS/ASC proposed rule.
    As discussed in section X.E of this OPPS/ASC proposed rule, we 
analyzed OPPS cost and claims information from CY 2019 and CY 2020 to 
better understand the effects of the COVID-19 PHE on outpatient 
services, including PHP, and to identify which data would be the best 
available for ratesetting. As discussed in that section, we observed a 
number of changes, likely as a result of the COVID-19 PHE, in the CY 
2020 OPPS claims that we would ordinarily use for ratesetting, and this 
includes changes in the claims for partial hospitalization. For PHP 
services in particular, we identified that for hospital-based PHPs, the 
number of PHP days in our trimmed CY 2020 claims dataset was 
approximately 53 percent less than the number of PHP days in our 
trimmed CY 2019 claims dataset; and for CMHCs, the number of PHP days 
in our trimmed CY 2020 claims dataset was approximately 45 percent less 
than the number of PHP days in our trimmed CY 2019 claims dataset.
    For this CY 2022 ratesetting, we are proposing to use CY 2019 
claims and the cost information from prior to the COVID-19 PHE, that 
is, the cost information that was available for the CY 2021 OPPS/ASC 
rulemaking. We believe this is appropriate and necessary for PHP 
services, because of the substantial decrease in the number of PHP days 
in the CY 2020 claims dataset, which we would normally use for 
ratesetting. Furthermore, there was a substantial decrease in the 
number of PHP providers in the CY 2020 data. Our trimmed CY 2020 claims 
dataset contains cost and claim information from 35 fewer hospital-
based PHP providers than are in the CY 2019 data. These significant 
decreases in utilization and in the number of hospital-based PHP 
providers who submitted CY 2020 claims lead us to believe that CY 2020 
data are not the best overall approximation of expected PHP services in 
CY 2022. We believe that CY 2019 data, as the most recent complete 
calendar year of data prior to the COVID-19 PHE, are a better 
approximation of expected CY 2022 PHP services. Therefore, as discussed 
in section X.E of this OPPS/ASC proposed rule, and consistent with what 
CMS is proposing to do for other APCs under the OPPS, we are proposing 
to use CY 2019 claims and the cost information from prior to the COVID-
19 PHE, that is, the cost information that was available for the CY 
2021 OPPS/ASC rulemaking, for calculating the CY 2022 CMHC and 
hospital-based PHP APC per diem costs.
    The CMHC or hospital-based PHP APC per diem costs are the provider-
type specific costs derived from the latest updated CY 2019 claims and 
cost data from the CY 2021 rulemaking. The CMHC or hospital-based PHP 
APC per diem payment rates are the national unadjusted payment rates 
calculated from the CMHC or hospital-based PHP APC geometric mean per 
diem costs, after applying the OPPS budget neutrality adjustments 
described in section XX of this proposed rule.
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
    For this CY 2022 OPPS/ASC proposed rule, we prepared data 
consistent with our policies as described in the CY 2016 OPPS/ASC final 
rule with comment period (80 FR 70463 through 70465). However, as 
discussed above, we propose to use CY 2019 claims data and the cost 
information from prior to the COVID-19 PHE, that is, the cost 
information that was available for the CY 2021 OPPS/ASC rulemaking, for 
calculating the CY 2022 CMHC PHP APC per diem cost.
    For this CY 2022 proposed rule, we also used cost and charge 
information from HCRIS as the basis for determining the CMHC CCRs used 
to calculate the geometric mean per diem cost for CMHC APC 5853. 
Following the methodology described in the CY 2016 OPPS/ASC final rule 
with comment period (80 FR 70462), we calculated the CCR based on 
Medicare costs and charges. However, we note that CMHCs are now 
reporting their costs using the newer cost

[[Page 42151]]

reporting form, Form CMS 2088-17, which has different lines and columns 
than the ones described in the CY 2016 OPPS/ASC final rule for Form CMS 
2088-92. Therefore, to calculate each CMHC's CCR for this proposed 
rulemaking, we divided costs from Worksheet C, Line 50, Column 5 by 
charges from Worksheet C, Line 50, Column 4.
    As noted above, prior to this year's proposed rulemaking, our 
longstanding methodology for calculating CCRs for CMHCs has been to use 
the CCRs from the OPSF. As discussed in the CY 2004 OPPS/ASC final rule 
(68 FR 63468), a Program Memorandum was issued on January 17, 2003, 
which directed the fiscal intermediaries to recalculate hospital and 
CMHC cost-to-charge ratios and to update the cost-to-charge ratios on 
an ongoing basis in the OPSF, which was used as the basis for the CCRs 
used in calculating the geometric mean per diem costs for CMHCs. 
Subsequently, in the CY 2009 OPPS/ASC final rule (73 FR 68690), 
commenters addressed the fact that cost report information for CMHCs 
was not at that time included in HCRIS, and recommended that CMS base 
its calculations only in the cost report information that the agency 
can verify directly and not on data provided by the fiscal 
intermediary. CMS responded in the same OPPS/ASC final rule that it was 
working to include CMHC cost reports in the system, but that the CCRs 
from the OPSF continued to be the best available data for ratesetting. 
In the CY 2011 OPPS/ASC final rule (75 FR 71993 through 71994), 
commenters requested that CMHC cost report information be included in 
HCRIS, and CMS explained that CMHC cost reports would begin to be 
available in HCRIS starting in early 2011. Since that time, CMHC cost 
reports have become available in HCRIS. Because the data is now 
available and consistently populated based on the cost reports that 
CMHCs submit, we believe that using cost information from HCRIS would 
be more consistent with the methodology for calculating most other OPPS 
services, including hospital-based PHP services. Therefore, we are 
proposing for CY 2022 and future years to use HCRIS as the source for 
CMHC cost information used for calculating the geometric mean per diem 
cost for CMHC APC 5853.
    Prior to calculating the proposed geometric mean per diem cost for 
CMHC APC 5853, we prepare the data by first applying trims and data 
exclusions, and assessing CCRs as described in the CY 2016 OPPS/ASC 
final rule with comment period (80 FR 70463 through 70465), so that 
ratesetting is not skewed by providers with extreme data. Before any 
trims or exclusions were applied, there were 40 CMHCs in the PHP claims 
data file. Under the 2 standard deviation trim policy, we 
exclude any data from a CMHC for ratesetting purposes when the CMHC's 
geometric mean cost per day was more than 2 standard 
deviations from the geometric mean cost per day for all CMHCs. In 
applying this trim for CY 2022 ratesetting, one CMHC had geometric mean 
costs per day below the trim's lower limit of $32.84, and one had 
geometric mean costs per day above the trim's upper limit of $491.85. 
Therefore, we are excluding data for ratesetting from these 2 CMHCs 
because of the 2 standard deviation trim.
    In accordance with our PHP ratesetting methodology (80 FR 70465), 
we also remove service days with no wage index values, because we use 
the wage index data to remove the effects of geographic variation in 
costs prior to APC geometric mean per diem cost calculation (80 FR 
70465). For this CY 2022 proposed rule ratesetting, no CMHC was missing 
wage index data for all of its service days and, therefore, no CMHC was 
excluded. We also exclude providers without any days containing 3 or 
more units of PHP-allowable services. One provider is excluded from 
ratesetting because it had no days containing 3 or more units of PHP-
allowable services. In addition to our trims and data exclusions, 
before calculating the PHP APC geometric mean per diem costs, we also 
assess CCRs (80 FR 70463). Our longstanding PHP OPPS ratesetting 
methodology defaults any CMHC CCR that is not available or any CMHC CCR 
greater than one to the statewide hospital CCR associated with the 
provider's urban/rural designation and their state location (80 FR 
70463). For this CY 2022 OPPS/ASC proposed rule ratesetting, there are 
3 CMHCs with CCRs greater than one, and 12 CMHCs with missing CCR 
information. Therefore, we are defaulting the CCRs for these 15 CMHCs 
for ratesetting to the applicable statewide hospital CCR for each CMHC 
based on its urban/rural designation and its state location.
    In summary, these data preparation steps adjusted the CCR during 
our ratesetting process for 15 CMHCs having either a CCR greater than 
one or having no CCR. We are also excluding one CMHC because it had no 
days containing 3 or more services and 2 CMHCs for failing the 2 standard deviation trim, resulting in the inclusion of 37 
CMHCs. There were 564 CMHC claims removed during data preparation steps 
due to the 2 standard deviation trim or because they either 
had no PHP allowable- codes or had zero payment days, leaving 10,370 
CMHC claims in our CY 2022 proposed rule ratesetting modeling. After 
applying all of the previously listed trims, exclusions, and 
adjustments, we followed the methodology described in the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70464 through 70465) and 
modified in the CY 2017 OPPS/ASC final rule with comment period (81 FR 
79687 through 79688, and 79691), using the CMHC CCRs calculated based 
on the cost information from HCRIS as discussed in this OPPS/ASC 
proposed rule, to calculate the CMHC APC geometric mean per diem 
cost.\103\ The calculated CY 2022 geometric mean per diem cost for all 
CMHCs for providing three or more services per day (CMHC APC 5853) is 
$130.41, a decrease from $136.14 calculated last year for CY 2021 
ratesetting (85 FR 86080).
---------------------------------------------------------------------------

    \103\ Each revenue code on the CMHC claim must have a HCPCS code 
and charge associated with it. We multiply each claim service line's 
charges by the CMHC's overall CCR (or statewide CCR, where the 
overall CCR was greater than 1 or was missing) to estimate CMHC 
costs. Only the claims service lines containing PHP allowable HCPCS 
codes and PHP allowable revenue codes from the CMHC claims remaining 
after trimming are retained for CMHC cost determination. The costs, 
payments, and service units for all service lines occurring on the 
same service date, by the same provider, and for the same 
beneficiary are summed. CMHC service days must have three or more 
services provided to be assigned to CMHC APC 5853. The final 
geometric mean per diem cost for CMHC APC 5853 is calculated by 
taking the nth root of the product of n numbers, for days where 
three or more services were provided. CMHC service days with costs 
3 standard deviations from the geometric mean costs 
within APC 5853 are deleted and removed from modeling. The remaining 
PHP service days are used to calculate the final geometric mean per 
diem cost for each PHP APC by taking the nth root of the product of 
n numbers for days where three or more services were provided.
---------------------------------------------------------------------------

    We considered whether a geometric mean per diem cost for CMHCs of 
$130.41 would be appropriate for calculating the CMHC APC 5853 per diem 
payment rate for CY 2022. As discussed above, we used the latest 
available CY 2019 claims and the cost information from prior to the 
COVID-19 PHE, that is, the cost information that was available for the 
CY 2021 OPPS/ASC rulemaking, for calculating the CY 2022 CMHC PHP APC 
per diem cost, because decreases that we observed in utilization and in 
the number of hospital-based PHP providers who submitted CY 2020 claims 
have led us to believe that the CY 2019 data, rather than the CY 2020 
data, are the best overall approximation of expected PHP services in CY 
2022. We considered what effect a decrease from the $136.14 calculated 
last year for the CY 2021 CMHC PHP APC might have on CMHCs

[[Page 42152]]

and Medicare beneficiaries. Recognizing the disruption that the ongoing 
COVID-19 PHE appears to be having on CMHCs' operations, we believe it 
is important for CMS to continue to support Medicare beneficiaries' 
access to critical PHP services during the COVID-19 PHE by helping 
maintain the stability of payments to PHP providers. We are concerned 
that a decrease in the geometric mean per diem cost for CMHC APC 5853 
would result in a disruption to CMHC payments at a time when, despite 
the large decrease in the number of PHP days that we observed in our CY 
2020 PHP claims data, the need for mental health services has 
increased.\104\ Therefore, rather than proposing to calculate the CMHC 
APC 5853 payment rate based on the calculated geometric mean per diem 
cost of $130.41, we are instead proposing a cost floor to stabilize the 
geometric mean per diem costs finalized in the prior year, CY 2021. The 
final CY 2021 geometric mean per diem cost for CMHC APC 5853, which was 
calculated for the CY 2021 OPPS/ASC final rule based on CY 2019 claims, 
is $136.14, which we are proposing as the cost floor for CY 2022. 
Therefore, because the calculated geometric mean per diem cost for CMHC 
APC 5853 is below the cost floor, we are proposing to calculate the CY 
2022 CMHC APC 5853 payment rate based on the cost floor of $136.14. We 
also propose that if the final CY 2022 geometric mean per diem cost is 
calculated to be higher than $136.14, then we would use the calculated 
geometric mean per diem cost.
---------------------------------------------------------------------------

    \104\ https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e2.htm.
---------------------------------------------------------------------------

    As discussed earlier in this section, 3 CMHCs in our dataset had 
CCRs greater than 1, and 12 CMHCs had missing CCRs. We want to remind 
readers that our PHP ratesetting methodology depends heavily on 
provider-reported costs. We strongly encourage CMHCs to review cost 
reporting instructions to be sure they are reporting their costs 
correctly. These instructions are available in chapter 45 of the 
Provider Reimbursement Manual (PRM), Part 2, available on the CMS 
website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals. We want to reiterate that it is a 
requirement for CMHCs, unless they are approved as a low-utilization or 
no-utilization provider in accordance with PRM-1, chapter 1, section 
110 (42 CFR 413.24(g) and (h)), to file full cost reports, to help us 
capture accurate CMHC costs in rate setting. We furthermore encourage 
those CMHCs that do not file full cost reports to consider doing so.
    We continue to recognize that because the CMHC ratesetting dataset 
is small (n=37), changes in costs from a small number of providers can 
influence the overall geometric mean per diem cost calculation. We are 
considering approaches to address cost fluctuations in future years, 
however, we are not proposing a methodology at this time.
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
    For this CY 2022 proposed rule, we prepared data consistent with 
our policies as described in the CY 2016 OPPS/ASC final rule with 
comment period (80 FR 70463 through 70465) for hospital-based PHP 
providers, which is similar to that used for CMHCs. However, as 
discussed above, we propose to use CY 2019 claims data and the cost 
information from prior to the COVID-19 PHE, that is, the cost 
information that was available for the CY 2021 OPPS/ASC rulemaking, for 
calculating the CY 2022 hospital-based PHP APC per diem cost. The CY 
2019 PHP claims included data for 449 hospital-based PHP providers for 
our calculations in this CY 2022 OPPS/ASC proposed rule.
    Consistent with our policies, as stated in the CY 2016 OPPS/ASC 
final rule with comment period (80 FR 70463 through 70465), we prepared 
the data by applying trims and data exclusions. We applied a trim on 
hospital service days for hospital-based PHP providers with a CCR 
greater than 5 at the cost center level. To be clear, the CCR greater 
than 5 trim is a service day-level trim in contrast to the CMHC 2 standard deviation trim, which is a provider-level trim. 
Applying the CCR greater than 5 trim removed affected service days from 
one hospital-based PHP provider from our proposed ratesetting. However, 
100 percent of the service days for this hospital-based PHP provider 
had at least one service associated with a CCR greater than 5, so the 
trim removed this provider entirely from our proposed ratesetting. In 
addition, 68 hospital-based PHPs were removed for having no days with 
PHP payment. Two hospital-based PHPs were removed because none of their 
days included PHP-allowable HCPCS codes. No hospital-based PHPs were 
removed for missing wage index data, and a single hospital-based PHP 
was removed by the OPPS 3 standard deviation trim on costs 
per day. (We refer readers to the OPPS Claims Accounting Document, 
available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/CMS-1717-P-2020-OPPS-Claims-Accounting.pdf.
    Overall, we removed 72 hospital-based PHP providers (1 with all 
service days having a CCR greater than 5) + (68 with no PHP payment) + 
(2 with no PHP-allowable HCPCS codes) + (1 provider with geometric mean 
costs per day outside the  3 SD limits)], resulting in 377 
(449 total-72 excluded) hospital-based PHP providers in the data used 
for calculating ratesetting.
    After completing these data preparation steps, we calculated the CY 
2022 geometric mean per diem cost for hospital-based PHP APC 5863 by 
following the methodology described in the CY 2016 OPPS/ASC final rule 
with comment period (80 FR 70464 through 70465) and modified in the CY 
2017 OPPS/ASC final rule with comment period (81 FR 79687 and 
79691).\105\ The calculated CY 2022 hospital-based PHP APC geometric 
mean per diem cost for hospital-based PHP providers that provide three 
or more services per service day (hospital-based PHP APC 5863) is 
$253.08, which is a very slight decrease from $253.76 calculated last 
year for CY 2021 ratesetting (85 FR 86080).
---------------------------------------------------------------------------

    \105\ Each revenue code on the hospital-based PHP claim must 
have a HCPCS code and charge associated with it. We multiply each 
claim service line's charges by the hospital's department-level CCR; 
in CY 2020 and subsequent years, that CCR is determined by using the 
PHP-only revenue-code-to-cost-center crosswalk. Only the claims 
service lines containing PHP-allowable HCPCS codes and PHP-allowable 
revenue codes from the hospital-based PHP claims remaining after 
trimming are retained for hospital-based PHP cost determination. The 
costs, payments, and service units for all service lines occurring 
on the same service date, by the same provider, and for the same 
beneficiary are summed. Hospital-based PHP service days must have 
three or more services provided to be assigned to hospital-based PHP 
APC 5863. The final geometric mean per diem cost for hospital-based 
PHP APC 5863 is calculated by taking the nth root of the product of 
n numbers, for days where three or more services were provided. 
Hospital-based PHP service days with costs 3 standard 
deviations from the geometric mean costs within APC 5863 are deleted 
and removed from modeling. The remaining hospital-based PHP service 
days are used to calculate the final geometric mean per diem cost 
for hospital-based PHP APC 5863.
---------------------------------------------------------------------------

    As we discussed above, we observed a number of changes, likely as a 
result of the COVID-19 PHE, in the CY 2020 OPPS claims that we would 
ordinarily use for ratesetting, and this includes changes in the claims 
for partial hospitalization. We considered what effect this very slight 
decrease from the $253.76 calculated last year for the CY 2021 CMHC PHP 
APC might have on CMHCs and Medicare beneficiaries. In general, a 
decrease of this magnitude would not be unexpected due to normal 
variation in cost and claims data. However, recognizing the disruption

[[Page 42153]]

that the ongoing COVID-19 PHE appears to be having on the operations of 
hospital-based PHPs, we believe it is important for CMS to continue to 
support Medicare beneficiaries' access to critical PHP services during 
the COVID-19 PHE by helping to maintain the stability of payments to 
PHP providers. While the decrease in the geometric mean per diem cost 
for hospital-based PHP APC 5863 would be very slight based on the CY 
2019 claims and cost data used for this CY 2022 OPPS/ASC proposed rule, 
we continue to believe, as we have stated before in recent years, that 
access is better supported when geometric mean per diem costs do not 
fluctuate greatly. The proposed cost floor would protect access to PHP 
services at hospital-based PHPs if the final CY 2022 calculated 
hospital-based PHP APC geometric mean per diem cost is significantly 
less. We are concerned that such a decrease may result in a disruption 
to hospital-based PHP payments at a time when, as discussed earlier in 
section VII.B.2.a of this OPPS/ASC proposed rule, the need for mental 
health services has increased. Therefore, we are proposing to calculate 
the hospital-based PHP APC 5863 payment rate based on a cost floor to 
maintain the geometric mean per diem costs finalized in the prior year, 
CY 2021. The final CY 2021 geometric mean per diem cost for hospital-
based PHP APC 5863, which was calculated for the CY 2021 OPPS/ASC final 
rule based on CY 2019 claims, is $253.76, which we are proposing as the 
cost floor for CY 2022. Therefore, because the calculated geometric 
mean per diem cost for hospital-based PHP APC 5863 is below the cost 
floor, we are proposing to calculate the CY 2022 hospital-based PHP APC 
5863 payment rate based on the cost floor of $253.76. We also propose 
that if the final CY 2022 geometric mean per diem cost is calculated to 
be higher than $253.76, then we would use the calculated geometric mean 
per diem cost.
    We continue to recognize, as we have noted in past years, that 
changes in costs from a small number of providers can influence the 
overall geometric mean per diem cost calculation. We are considering 
approaches to address cost fluctuations in future years, however we are 
not proposing a methodology at this time.
    These proposed CY 2022 PHP geometric mean per diem costs are shown 
in Table 34 and are used to derive the proposed CY 2022 PHP APC per 
diem rates for CMHCs and hospital-based PHPs. The proposed CY 2022 PHP 
APC per diem rates are included in Addendum A to this proposed rule 
(which is available on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html).\106\
---------------------------------------------------------------------------

    \106\ As discussed in section XX. of this CY 2022 OPPS/ASC 
proposed rule, OPPS APC geometric mean per diem costs (including PHP 
APC geometric mean per diem costs) are divided by the geometric mean 
per diem costs for APC 5012 (Clinic Visits and Related Services) to 
calculate each PHP APC's unscaled relative payment weight. An 
unscaled relative payment weight is one that is not yet adjusted for 
budget neutrality. Budget neutrality is required under section 
1833(t)(9)(B) of the Act, and ensures that the estimated aggregate 
weight under the OPPS for a calendar year is neither greater than 
nor less than the estimated aggregate weight that would have been 
made without the changes. To adjust for budget neutrality (that is, 
to scale the weights), we compare the estimated aggregated weight 
using the scaled relative payment weights from the previous calendar 
year at issue. We refer readers to the ratesetting procedures 
described in Part 2 of the OPPS Claims Accounting narrative and in 
section II. of this proposed rule for more information on scaling 
the weights, and for details on the final steps of the process that 
leads to final PHP APC per diem payment rates. The OPPS Claims 
Accounting narrative is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
[GRAPHIC] [TIFF OMITTED] TP04AU21.052

C. Proposed Outlier Policy for CMHCs

    For 2022, we propose to continue to calculate the CMHC outlier 
percentage, cutoff point and percentage payment amount, outlier 
reconciliation, outlier payment cap, and fixed dollar- threshold 
according to previously established policies. These topics are 
discussed in more detail. We refer readers to section II.G.1 of this CY 
2022 OPPS/ASC proposed rule for our general policies for hospital 
outpatient outlier payments.
1. Background
    As discussed in the CY 2004 OPPS final rule with comment period (68 
FR 63469 through 63470), we noted a significant difference in the 
amount of outlier payments made to hospitals and CMHCs for PHP 
services. Given the difference in PHP charges between hospitals and 
CMHCs, we did not believe it was appropriate to make outlier payments 
to CMHCs using the outlier percentage target amount and threshold 
established for hospitals. Therefore, beginning in CY 2004, we created 
a separate outlier policy specific to the estimated costs and OPPS 
payments provided to CMHCs. We designated a portion of the estimated 
OPPS outlier threshold specifically for CMHCs, consistent with the 
percentage of projected payments to CMHCs under the OPPS each year, 
excluding outlier payments, and established a separate outlier 
threshold for CMHCs. This separate outlier threshold for CMHCs resulted 
in $1.8 million in outlier payments to CMHCs in CY 2004 and $0.5 
million in outlier payments to CMHCs in CY 2005 (82 FR 59381). In 
contrast, in CY 2003, more than $30 million was paid to CMHCs in 
outlier payments (82 FR 59381).
2. CMHC Outlier Percentage
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 
through 59268), we described the current outlier policy for hospital 
outpatient payments and CMHCs. We note that we also discussed our 
outlier policy for CMHCs in more detail in section VIII.C. of that same 
final rule (82 FR 59381). We set our projected target for all OPPS 
aggregate outlier payments at 1.0 percent of the estimated aggregate 
total payments under the OPPS (82 FR

[[Page 42154]]

59267). This same policy was also reiterated in the CY 2019 OPPS/ASC 
final rule with comment period (83 FR 58996), the CY 2020 OPPS/ASC 
final rule with comment period (84 FR 61350), and the CY 2021 OPPS/ASC 
final rule with comment period (85 FR 86082).
    We estimate CMHC per diem payments and outlier payments by using 
the most recent available utilization and charges from CMHC claims, 
updated CCRs, and the updated payment rate for APC 5853. For increased 
transparency, we are providing a more detailed explanation of the 
existing calculation process for determining the CMHC outlier 
percentages. To calculate the CMHC outlier percentage, we follow three 
steps:
     Step 1: We multiply the OPPS outlier threshold, which is 
1.0 percent, by the total estimated OPPS Medicare payments (before 
outliers) for the prospective year to calculate the estimated total 
OPPS outlier payments:
    (0.01 x Estimated Total OPPS Payments) = Estimated Total OPPS 
Outlier Payments.
     Step 2: We estimate CMHC outlier payments by taking each 
provider's estimated costs (based on their allowable charges multiplied 
by the provider's CCR) minus each provider's estimated CMHC outlier 
multiplier threshold (we refer readers to section VIII.C.3. of this 
proposed rule). That threshold is determined by multiplying the 
provider's estimated paid days by 3.4 times the CMHC PHP APC payment 
rate. If the provider's costs exceed the threshold, we multiply that 
excess by 50 percent, as described in section VIII.C.3. of this 
proposed rule, to determine the estimated outlier payments for that 
provider. CMHC outlier payments are capped at 8 percent of the 
provider's estimated total per diem payments (including the 
beneficiary's copayment), as described in section VIII.C.5. of this 
proposed rule, so any provider's costs that exceed the CMHC outlier cap 
will have its payments adjusted downward. After accounting for the CMHC 
outlier cap, we sum all of the estimated outlier payments to determine 
the estimated total CMHC outlier payments.
    (Each Provider's Estimated Costs--Each Provider's Estimated 
Multiplier Threshold) = A. If A is greater than 0, then (A x 0.50) = 
Estimated CMHC Outlier Payment (before cap) = B. If B is greater than 
(0.08 x Provider's Total Estimated Per Diem Payments), then cap 
adjusted- B = (0.08 x Provider's Total Estimated Per Diem Payments); 
otherwise, B = B. Sum (B or cap-adjusted B) for Each Provider = Total 
CMHC Outlier Payments.
     Step 3: We determine the percentage of all OPPS outlier 
payments that CMHCs represent by dividing the estimated CMHC outlier 
payments from Step 2 by the total OPPS outlier payments from Step 1: 
(Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).
    We propose to continue to calculate the CMHC outlier percentage 
according to previously established policies, and we do not propose any 
changes to our current methodology for calculating the CMHC outlier 
percentage for CY 2022. Therefore, based on our CY 2022 payment 
estimates, CMHCs are projected to receive 0.02 percent of total 
hospital outpatient payments in CY 2022, excluding outlier payments. We 
propose to designate approximately less than 0.01 percent of the 
estimated 1.0 percent hospital outpatient outlier threshold for CMHCs. 
This percentage is based upon the formula given in Step 3.
3. Cutoff Point and Percentage Payment Amount
    As described in the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 59381), our policy has been to pay CMHCs for outliers if the 
estimated cost of the day exceeds a cutoff point. In CY 2006, we set 
the cutoff point for outlier payments at 3.4 times the highest CMHC PHP 
APC payment rate implemented for that calendar year (70 FR 68551). For 
CY 2018, the highest CMHC PHP APC payment rate is the payment rate for 
CMHC PHP APC 5853. In addition, in CY 2002, the final OPPS outlier 
payment percentage for costs above the multiplier threshold was set at 
50 percent (66 FR 59889). In CY 2018, we continued to apply the same 50 
percent outlier payment percentage that applies to hospitals to CMHCs 
and continued to use the existing cutoff point (82 FR 59381). 
Therefore, for CY 2018, we continued to pay for partial hospitalization 
services that exceeded 3.4 times the CMHC PHP APC payment rate at 50 
percent of the amount of CMHC PHP APC geometric mean per diem costs 
over the cutoff point. For example, for CY 2018, if a CMHC's cost for 
partial hospitalization services paid under CMHC PHP APC 5853 exceeds 
3.4 times the CY 2018 payment rate for CMHC PHP APC 5853, the outlier 
payment would be calculated as 50 percent of the amount by which the 
cost exceeds 3.4 times the CY 2018 payment rate for CMHC PHP APC 5853 
[0.50 x (CMHC Cost-(3.4 x APC 5853 rate))]. This same policy was also 
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83 
FR 58996 through 58997), CY 2020 OPPS/ASC final rule with comment 
period (84 FR 61351) and the CY 2021 OPPS/ASC final rule with comment 
period (85 FR 86082 through 86083). For CY 2022, we propose to continue 
to pay for partial hospitalization services that exceed 3.4 times the 
proposed CMHC PHP APC payment rate at 50 percent of the CMHC PHP APC 
geometric mean per diem costs over the cutoff point. That is, for CY 
2022, if a CMHC's cost for partial hospitalization services paid under 
CMHC PHP APC 5853 exceeds 3.4 times the payment rate for CMHC APC 5853, 
the outlier payment will be calculated as [0.50 x (CMHC Cost - (3.4 x 
APC 5853 rate))].
4. Outlier Reconciliation
    In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 
through 68599), we established an outlier reconciliation policy to 
address charging aberrations related to OPPS outlier payments. We 
addressed vulnerabilities in the OPPS outlier payment system that lead 
to differences between billed charges and charges included in the 
overall CCR, which are used to estimate cost and would apply to all 
hospitals and CMHCs paid under the OPPS. We initiated steps to ensure 
that outlier payments appropriately account for the financial risk when 
providing an extraordinarily costly and complex service, but are only 
being made for services that legitimately qualify for the additional 
payment.
    For a comprehensive description of outlier reconciliation, we refer 
readers to the CY 2019 OPPS/ASC final rules with comment period (83 FR 
58874 through 58875 and 81 FR 79678 through 79680).
    We propose to continue these policies for partial hospitalization 
services provided through PHPs for CY 2022. The current outlier 
reconciliation policy requires that providers whose outlier payments 
meet a specified threshold (currently $500,000 for hospitals and any 
outlier payments for CMHCs) and whose overall ancillary CCRs change by 
plus or minus 10 percentage points or more, are subject to outlier 
reconciliation, pending approval of the CMS Central Office and Regional 
Office (73 FR 68596 through 68599). The policy also includes provisions 
related to CCRs and to calculating the time value of money for 
reconciled outlier payments due to or due from Medicare, as detailed in 
the CY 2009 OPPS/ASC final rule with comment period and in the Medicare 
Claims Processing Manual (73 FR 68595 through 68599 and Medicare Claims 
Processing internet Only Manual, Chapter 4, Section 10.7.2 and its 
subsections, available online at: https://www.cms.gov/Regulations-and-

[[Page 42155]]

Guidance/Guidance/Manuals/Downloads/clm104c04.pdf).
5. Outlier Payment Cap
    In the CY 2017 OPPS/ASC final rule with comment period, we 
implemented a CMHC outlier payment cap to be applied at the provider 
level, such that in any given year, an individual CMHC will receive no 
more than a set percentage of its CMHC total per diem payments in 
outlier payments (81 FR 79692 through 79695). We finalized the CMHC 
outlier payment cap to be set at 8 percent of the CMHC's total per diem 
payments (81 FR 79694 through 79695). This outlier payment cap only 
affects CMHCs, it does not affect other provider types (that is, 
hospital-based PHPs), and is in addition to and separate from the 
current outlier policy and reconciliation policy in effect. In the CY 
2020 OPPS/ASC final rule with comment period (84 FR 61351), we 
finalized a proposal to continue this policy in CY 2020 and subsequent 
years. In this proposed rule, we are not proposing any changes to this 
policy.
6. Fixed-Dollar Threshold
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 
through 59268), for the hospital outpatient outlier payment policy, we 
set a fixed--dollar threshold in addition to an APC multiplier 
threshold. Fixed-dollar thresholds are typically used to drive outlier 
payments for very costly items or services, such as cardiac pacemaker 
insertions. CMHC PHP APC 5853 is the only APC for which CMHCs may 
receive payment under the OPPS, and is for providing a defined set of 
services that are relatively low cost when compared to other OPPS 
services. Because of the relatively low cost of CMHC services that are 
used to comprise the structure of CMHC PHP APC 5853, it is not 
necessary to also impose a fixed-dollar threshold on CMHCs. Therefore, 
in the CY 2018 OPPS/ASC final rule with comment period, we did not set 
a fixed--dollar threshold for CMHC outlier payments (82 FR 59381). This 
same policy was also reiterated in the CY 2020 OPPS/ASC final rule with 
comment period (84 FR 61351) and the CY 2021 OPPS/ASC final rule with 
comment period (85 FR 86083). We propose to continue this policy for CY 
2022.

IX. Proposed Services That Will Be Paid Only as Inpatient Services

A. Background

    Established in rulemaking as part of the initial implementation of 
the OPPS, the inpatient only (IPO) list identifies services for which 
Medicare will only make payment when the services are furnished in the 
inpatient hospital setting because of the nature of the procedure, the 
underlying physical condition of the patient, or the need for at least 
24 hours of postoperative recovery time or monitoring before the 
patient can be safely discharged (70 FR 68695). The IPO list was 
created based on the premise (rooted in the practice of medicine at 
that time), that Medicare should not pay for procedures furnished as 
outpatient services that are performed on an inpatient basis virtually 
all of the time for the Medicare population, either because of the 
invasive nature of the procedures, the need for postoperative care, or 
the underlying physical condition of the patient who would require such 
surgery, because performing these procedures on an outpatient basis 
would not be safe or appropriate, and therefore not reasonable and 
necessary under Medicare rules (63 FR 47571). Services included on the 
IPO list were those determined to require inpatient care, such as those 
that are highly invasive, result in major blood loss or temporary 
deficits of organ systems (such as neurological impairment or 
respiratory insufficiency), or otherwise require intensive or extensive 
postoperative care (65 FR 67826). There are some services designated as 
inpatient only that, given their clinical intensity, would not be 
expected to be performed in the outpatient setting. For example, we 
have traditionally considered certain surgically invasive procedures on 
the brain, heart, and abdomen, such as craniotomies, coronary-artery 
bypass grafting, and laparotomies, to require inpatient care (65 FR 
18456). Designation of a service as inpatient-only does not preclude 
the service from being furnished in a hospital outpatient setting, but 
means that Medicare will not make payment for the service if it is 
furnished to a Medicare beneficiary in the outpatient setting (65 FR 
18443). Conversely, the absence of a procedure from the list should not 
be interpreted as identifying those procedures as appropriately 
performed only in the outpatient setting (70 FR 68696).
    As part of the annual update process, we have historically worked 
with interested stakeholders, including professional societies, 
hospitals, surgeons, hospital associations, and beneficiary advocacy 
groups, to evaluate the IPO list and to determine whether services 
should be added to or removed from the list. Stakeholders were 
encouraged to request reviews for a particular code or group of codes; 
and we have asked that their requests include evidence that 
demonstrates that the procedure was performed on an outpatient basis in 
a safe and appropriate manner in a variety of different types of 
hospitals--including but not limited to--operative reports of actual 
cases, peer-reviewed medical literature, community medical standards 
and practice, physician comments, outcome data, and post-procedure care 
data (67 FR 66740).
    Prior to CY 2021, we traditionally used five criteria to determine 
whether a procedure should be removed from the IPO list (65 FR 18455). 
As noted in the CY 2012 OPPS/ASC final rule with comment period (76 FR 
74353), we assessed whether a procedure or service met these criteria 
to determine whether or not it should be removed from the IPO list and 
assigned to an APC group for payment under the OPPS when provided in 
the hospital outpatient setting. We have explained that a procedure is 
not required to meet all of the established criteria to be removed from 
the IPO list. The criteria for assessing procedures for removal from 
the IPO list prior to CY 2021 are the following:
     Most outpatient departments are equipped to provide the 
services to the Medicare population.
     The simplest procedure described by the code may be 
furnished in most outpatient departments.
     The procedure is related to codes that we have already 
removed from the IPO list.
     A determination is made that the procedure is being 
furnished in numerous hospitals on an outpatient basis.
     A determination is made that the procedure can be 
appropriately and safely furnished in an ASC and is on the list of 
approved ASC services or has been proposed by us for addition to the 
ASC list.
    In the past, we have requested that stakeholders submit 
corresponding evidence in support of their claims that a code or group 
of codes met the longstanding criteria for removal from the IPO list 
and was safe to perform on the Medicare population in the outpatient 
setting--including, but not limited to case reports, operative reports 
of actual cases, peer-reviewed medical literature, medical professional 
analysis, clinical criteria sets, and patient selection protocols. Our 
medical advisors thoroughly reviewed all information submitted within 
the context of the established criteria and if, following this review, 
we determined that there was sufficient evidence to confirm that the 
code could be safely

[[Page 42156]]

and appropriately performed on an outpatient basis, we assigned the 
services to an APC and included it as a payable procedure under OPPS 
(67 FR 66740).
    We stated in prior rulemaking that, over time, given advances in 
technology and surgical technique, we would continue to evaluate 
services to determine whether they should be removed from the IPO list. 
Our goal is to ensure that inpatient only designations are consistent 
with current standards of practice. We have asserted in prior 
rulemaking that, insofar as advances in medical practice mitigate 
concerns about these procedures being performed on an outpatient basis, 
we would be prepared to remove procedures from the IPO list and provide 
for payment for them under the OPPS (65 FR 18443). Prior to CY 2021, 
changes to the IPO list have been gradual. Further, CMS has at times 
had to reclassify codes as inpatient only services with the emergence 
of new information.
    We refer readers to the CY 2012 OPPS/ASC final rule with comment 
period (76 FR 74352 through 74353) for a full discussion of our 
historic policies for identifying services that are typically provided 
only in an inpatient setting and, therefore, that will not be paid by 
Medicare under the OPPS, as well as the criteria we have used to review 
the IPO list to determine whether or not any services should be removed 
from the list.
    In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86084 
through 86088), we significantly adjusted our approach to the IPO list. 
As we stated in that final rule, we no longer saw the need for CMS to 
restrict payment for certain procedures by maintaining the IPO list to 
identify services that require inpatient care. In that final rule, we 
acknowledged the seriousness of the concerns regarding patient safety 
and quality of care that various stakeholders expressed regarding 
removing procedures from the IPO list or eliminating the IPO list 
altogether. But we stated that we believed that the developments in 
surgical technique and technological advances in the practice of 
medicine, as well as various safeguards, including, but not limited to, 
physician clinical judgment, state and local regulations, accreditation 
requirements, medical malpractice laws, hospital conditions of 
participation, CMS quality and monitoring initiatives and programs and 
other CMS initiatives would continue to ensure that procedures removed 
from the IPO list and provided in the outpatient setting could be 
performed safely on appropriately selected beneficiaries. We also 
stated that given our increasing ability to measure the safety of 
procedures performed in the outpatient setting and to monitor the 
quality of care, in addition to the other safeguards detailed above, we 
believed that quality of care was unlikely to be affected by the 
elimination of the IPO list. We noted that we do not require services 
that are not included on the IPO list to be performed solely in the 
outpatient setting and that services that were previously identified as 
inpatient only can continue to be performed in the inpatient setting. 
We emphasized that physicians should use their clinical knowledge and 
judgment, together with consideration of the beneficiary's specific 
needs, to determine whether a procedure can be performed appropriately 
in a hospital outpatient setting or whether inpatient care is required 
for the beneficiary, subject to the general coverage rules requiring 
that any procedure be reasonable and necessary. We also stated that the 
elimination of the IPO list would ensure maximum availability of 
services to beneficiaries in the outpatient setting. Finally, we 
stressed that as medical practice continues to develop, we believed 
that the difference between the need for inpatient care and the 
appropriateness of outpatient care has become less distinct for many 
services.
    Accordingly, in the CY 2021 OPPS/ASC final rule with comment period 
(85 FR 86084 through 86088), we finalized, with modification, our 
proposal to eliminate the IPO list over the course of three years (85 
FR 86093). We revised our regulation at Sec.  419.22(n) to state that, 
effective on January 1, 2021, the Secretary shall eliminate the list of 
services and procedures designated as requiring inpatient care through 
a three-year transition. As part of the first phase of this elimination 
of the IPO list, we removed 298 codes from the list beginning in CY 
2021 and, because we proposed to eliminate the IPO list entirely, the 
removed procedures were not assessed against our longstanding criteria 
for removal (85 FR 86094).

B. Proposed Changes to the Inpatient Only (IPO) List

    In this proposed rule, for CY 2022, we propose to halt the 
elimination of the IPO list and, after clinical review of the services 
removed from the IPO list in CY 2021 as part of the first phase of 
eliminating the IPO list, we propose to add the 298 services removed 
from the IPO list in CY 2021 back to the IPO list beginning in CY 2022. 
In accordance with this proposal, we propose to amend the regulation at 
Sec.  419.22(n) to remove the reference to the elimination of the list 
of services and procedures designated as requiring inpatient care 
through a three-year transition. We also propose to codify the five 
longstanding criteria for determining whether a service or procedure 
should be removed from the IPO list in the regulation in a newSec.  
419.23.
1. Stakeholder Feedback on Eliminating the IPO List
    We received a significant number of stakeholder comments throughout 
the CY 2021 rulemaking cycle and following issuance of the final rule 
about eliminating the IPO list. Many commenters, including hospital 
associations and hospital systems, professional associations, and 
medical specialty societies, vociferously opposed eliminating the IPO 
list. These commenters primarily cited patient safety concerns, stating 
that the IPO list serves as an important programmatic safeguard and 
maintains a common standard of medical judgment in the Medicare 
program. Stakeholders stated that they support maintaining the IPO list 
and consider it an important tool to indicate which services may be 
appropriate to furnish in the outpatient setting (by virtue of the 
procedures not being on the IPO list) and to ensure that Medicare 
beneficiaries receive quality care. Commenters argued that many of the 
procedures that we designated as ``inpatient only'' are currently 
performed appropriately and safely only in the inpatient setting, and 
therefore, should remain on the IPO list. Additionally, commenters 
opposed eliminating the IPO list and stated that high-risk, invasive 
procedures that require post-operative monitoring would not be safe to 
perform on Medicare beneficiaries in an outpatient setting. While some 
commenters acknowledged that eliminating the IPO list would provide 
increased beneficiary access to care, these commenters were concerned 
that the increased access would be to lower quality care.
    Many commenters who were opposed to eliminating the IPO list stated 
that CMS should retain the current methodology for evaluating and 
removing procedures from the IPO list through rulemaking. 
Alternatively, several commenters requested that instead of eliminating 
the IPO list, CMS should instead maintain the list specifically for a 
smaller number of procedures that are complex, surgically invasive, and 
that commenters believe should never be performed in the outpatient 
setting. The commenters suggested that these procedures be considered 
appropriate for inpatient

[[Page 42157]]

hospital admission and payment under Medicare Part A regardless of the 
expected length of stay.
    While some commenters believed that eliminating the IPO list would 
remove regulatory barriers and provide patients with more choices for 
where to receive affordable care, other commenters expressed concerns 
that eliminating the IPO list would cause administrative and financial 
burdens for beneficiaries, hospitals, and payers given the number of 
transitioning codes and the speed with which they would be removed from 
the list.
    A minority of commenters (including providers and trade 
associations) supported CMS eliminating the IPO list and stated that 
deference should be given to physicians' judgment on site-of-service 
decisions. These commenters stated that there is no clinical difference 
between a surgery performed on an inpatient versus an outpatient, and 
that eliminating the IPO list would create more flexibility for 
physicians and beneficiaries. The commenters also believed that 
eliminating the IPO list could potentially decrease overall healthcare 
costs and improve clinical outcomes for patients.
    Commenters who supported delaying the elimination of the IPO list 
suggested various timeframes that ranged from three years to seven 
years. Several hospital associations recommended we delay eliminating 
the IPO list until we address patient safety concerns and provide 
national guidelines to identify patients who are appropriate candidates 
for care in the inpatient hospital versus outpatient hospital settings. 
During the 2021 rulemaking cycle, a few stakeholders suggested that we 
remove the proposed musculoskeletal services from the IPO list and then 
monitor the transition of those services to the outpatient hospital 
setting and the effect on beneficiary outcomes for a period of time 
before removing any additional services.
    Following the CY 2021 OPPS/ASC final rule with comment period, 
stakeholders continued to express concerns regarding the pace at which 
the IPO list would be eliminated, the perceived lack of transparency in 
determining the order of removal of procedures over the course of the 
elimination process, and what stakeholders believed were insufficient 
details concerning rate setting for procedures for which payment would 
be made when furnished in the HOPD setting, as well as the accuracy of 
those rates for the HOPD setting. We have received stakeholder requests 
to reconsider the elimination of the IPO list, to reevaluate procedures 
removed from the IPO list due to safety and quality concerns, and to, 
at a minimum, extend the timeframe for eliminating the list.
2. Proposal To Halt the Elimination of the IPO List in CY 2022
    After further consideration of the policy we adopted in last year's 
final rule with comment period and the concerns stakeholders have 
raised since the final rule was issued, we believe that we should halt 
the elimination of the IPO list to ensure that any service removed from 
the IPO list is evaluated against the previous longstanding criteria 
for removal from the IPO list before it is removed. We believe 
assessing whether a procedure or service meets the criteria for removal 
would allow for a more gradual removal of services from the IPO list--
which would also allow stakeholders more time to evaluate the safety of 
the service in the HOPD and to prepare to safely furnish the services 
migrating off of the IPO list, if they so choose.
    After further consideration, we continue to believe that the 
inpatient only list is a valuable tool for ensuring that the OPPS only 
pays for services that can safely be performed in the hospital 
outpatient setting, and we have reconsidered eliminating the inpatient 
only list at this time. We believe that there are many surgical 
procedures that cannot be safely performed on a typical Medicare 
beneficiary in the hospital outpatient setting, and therefore, it would 
be inappropriate for us to assign them separately payable status 
indicators and establish payment rates in the OPPS (78 FR 75055). We 
recognize that while physicians are able to make safety determinations 
for a specific beneficiary, CMS is in the position to make safety 
determinations for the broader population of Medicare beneficiaries, 
that is, the typical Medicare beneficiary. While we want to afford 
physicians and hospitals the maximum flexibility in choosing the most 
clinically appropriate site of service for the procedure, as long as 
the characteristics of the procedure are consistent with the criteria 
listed above, we believe that the IPO list is a necessary safeguard 
that considers the broader Medicare population.
    In the CY 2021 OPPS/ASC final rule with comment period, we 
recognized that stakeholders may need time to adjust to the removal of 
procedures from the list, especially given the significant number of 
services removed beginning in CY 2021 (85 FR 86085 and 86092). We 
recognized that providers may need time to prepare, update their 
billing systems, and gain experience with newly removed procedures 
eligible to be paid under either the IPPS or the OPPS (85 FR 86086). We 
also acknowledged that it will take time for clinical staff and 
providers to gain experience furnishing these services to the 
appropriate Medicare beneficiaries in the HOPD, and to develop 
comprehensive patient selection criteria and other protocols to 
identify whether a beneficiary can safely have these procedures 
performed in the outpatient setting (85 FR 86088).
    Separately, we also acknowledged the numerous challenges that 
providers are facing due to the COVID-19 PHE (85 FR 86089). After 
further experience with the PHE and its impact on provider and 
beneficiary behavior, we recognize that the COVID-19 PHE has likely 
reduced providers' ability to prepare to furnish these services in the 
outpatient setting in the manner they would absent the PHE. We 
recognize that the COVID-19 PHE may have negatively impacted the time 
and resources that providers have to adapt to the removal of these 
procedures from the IPO list--making it more difficult for providers to 
prepare, update their billing systems, and gain experience with newly 
removed procedures eligible to be paid under either the IPPS or the 
OPPS. We also recognize that the COVID-19 PHE has negatively impacted 
clinical staff and providers' opportunity to develop the comprehensive 
patient selection criteria and other protocols necessary to identify 
whether a Medicare beneficiary could safely have these procedures 
performed in the outpatient setting while guaranteeing them appropriate 
quality of care.
    After further consideration and review of the additional feedback 
from stakeholders, we recognize that the timeframe we finalized in the 
CY 2021 final rule with comment period for eliminating the IPO list did 
not, and would not, give us a sufficient opportunity to carefully 
assess whether a procedure should be payable in the HOPD setting, with 
considerations to beneficiary safety and medical advancements. We also 
recognize that the unprecedented removal of the 298 codes from the IPO 
list transpired quickly. Given the significant policy shift and work 
required to operationalize the elimination of the IPO list, we 
recognize that more time is required to separately evaluate and 
consider the inpatient only classification of each service and its 
potential APC assignment. In addition, we believe that we should 
continue to use the longstanding criteria for removing services from 
the IPO list to evaluate each service before proposing

[[Page 42158]]

to remove it from the list, and, as noted above, we propose to codify 
these criteria in the regulation in a new Sec.  419.23.
    CMS still believes that as medical practice continues to develop, 
the difference between the need for inpatient care and the 
appropriateness of outpatient care has become less distinct for many 
services. While we recognize that there are services currently 
classified as inpatient only that may be appropriate in the outpatient 
setting for some Medicare beneficiaries, CMS continues to strive to 
balance the goals of increasing physician and patient choice of setting 
of care with considerations to patient safety for all Medicare 
beneficiaries. We must also consider the timing with which we remove 
services from the IPO list and the availability of evidence that may 
support the removal of those services. We believe that with additional 
time stakeholders can provide supportive evidence to aid in the 
evaluations of each individual procedure's assignment to the IPO list, 
and where appropriate the APC assignment and corresponding payment for 
any codes as well, including but not limited to case reports, operative 
reports of actual cases, peer-reviewed medical literature, medical 
professional analysis, clinical criteria sets, and patient selection 
protocols.
    An initial review of 2021 billing data through May 21, 2021, 
supports our proposal to halt the elimination of the list, revealing 
that 131 of the 298 codes removed from the IPO list in last year's 
final rule appeared on either zero or one OPPS claims and 269 of the 
298 codes appeared on fewer than 100 claims. These data indicate that 
fewer than 3 percent of the services removed from the IPO list in 2021 
have seen notable volume in the outpatient setting following their 
removal from the IPO list. For perspective, we also note that even 
before we removed these codes from the IPO list, it was not uncommon to 
see at least some volume for these codes in the claims data. In CY 
2020, when these codes were still not payable under the OPPS, 188 of 
the codes had at least one outpatient claim and 18 codes had greater 
than 100 claims, for reasons undetermined. As a result, it is likely 
that not all of the reported claims represent services provided in the 
outpatient setting due to these services being removed from the IPO 
list in CY 2021.
    We propose to halt the elimination of the IPO list in order to 
allow for greater consideration of the impact removing services from 
the list has on beneficiary safety and to allow providers impacted by 
the COVID-19 PHE additional time to prepare to furnish appropriate 
services safely and efficiently before continuing to remove large 
numbers of services from the list. Below we solicit comments on the 
potential future elimination of the IPO list and what commenters 
believe the effects of that elimination would be. We also solicit 
comment on if CMS should maintain the IPO list but continue to 
systematically scale back the list by looking at groups of services 
that can safely and effectively be performed in the outpatient setting. 
Specifically, CMS is requesting comments on whether CMS should maintain 
the longer-term objective of eliminating the IPO list and if so, 
suggestions for a reasonable timeline for the elimination and what 
method should be employed to evaluate procedure removal. We request 
that commenters submit evidence on what effect, if any, they believe 
eliminating or scaling back the IPO list will have on beneficiary 
quality of care and what effect, if any, would the elimination or 
scaling back of the IPO list have on provider behavior, incentives, or 
innovation. We are also interested in stakeholders' viewpoints on the 
clinical, financial, and administrative impact of removing services 
from the IPO list. Additionally, we are interested in stakeholders' 
suggestions for refining the approach to inpatient only code evaluation 
to keep pace with advances in technology and surgical techniques that 
allow for more services to appropriately take place in the outpatient 
setting if we were to retain the IPO list.
    We reiterate that the removal of a particular procedure from the 
IPO list does not require that all beneficiaries be treated in the 
hospital outpatient setting, but we are cognizant that it does require 
the physician and clinical care team to exercise complex medical 
judgment to determine the appropriate setting of care, in accordance 
with the two-midnight rule guidance. The services that we are proposing 
to maintain or add back to the IPO list reflect those services that we 
believe may pose increased safety risk to the typical Medicare 
beneficiary. However, we recognize that there may be a subset of 
Medicare beneficiaries who, on a case by case basis, may nonetheless be 
appropriate to treat in the outpatient setting; and we seek comment 
below on whether any services that were removed in CY 2021, but are 
being proposed to be added back to the IPO for CY 2022, should in fact, 
remain off the IPO list.
3. Proposal To Return Procedures Removed in CY 2021 to the IPO List for 
CY 2022
    CMS continues to believe that physicians must use their clinical 
knowledge and judgment, together with consideration of the 
beneficiary's needs, to determine the appropriate site of service, but 
we recognize that the broad removal of services from the IPO list in CY 
2021 did not assess whether procedures proposed for removal met the 
longstanding removal criteria that we have historically used in 
consideration of the typical Medicare beneficiary. We also recognize 
that given the clinical intensity of some of the services removed from 
the IPO list (which include, for example, amputations), the 298 codes 
that were removed from the list included services that clinically would 
not be expected to be performed in the outpatient setting and would be 
unlikely to meet the criteria. As discussed previously, to ensure 
beneficiary safety, we have historically used longstanding criteria to 
determine if a procedure should be removed from the IPO list, but the 
removed procedures were not assessed against these criteria as part of 
the broad removal of services from the IPO list in CY 2021 because we 
proposed to eliminate the IPO list entirely. After further 
consideration, we believe it is important to continue to assess whether 
services individually meet any of the criteria for removal from the IPO 
list before being removed. Further, CMS recognizes that the impact of 
the COVID-19 PHE on providers' ability to safely and comprehensively 
prepare to furnish these services in the outpatient setting may be 
greater than previously anticipated. After a clinical review and an 
evaluation using the five longstanding criteria for removing services 
from the IPO list discussed earlier in Section IX(A) we now believe 
that the services removed from the IPO list in CY 2021 do not currently 
meet our longstanding removal criteria and we propose to add them back 
to the IPO list for CY 2022.
    As discussed earlier in Section IX(A), we typically evaluate 
whether a service should be removed from the IPO list using five 
criteria and, while a service does not need to meet all of the criteria 
to be removed from the IPO list, it should meet at least one criterion 
and the case for removing the service from the IPO list is strengthened 
with the more criteria the service meets. For CY 2021, in light of our 
proposal to eliminate the IPO list over a three-year transition, we 
proposed that musculoskeletal services would be the

[[Page 42159]]

first group of services removed from the IPO list. We stated that we 
proposed to remove this group of services first for several reasons. In 
recent years, due to new technologies and advances in surgical care 
protocols, expedited rehabilitation protocols, and significant 
enhancements in postoperative processes, we have removed TKA and THA, 
which are both musculoskeletal services, from the IPO list. During the 
process of proposing and finalizing removing TKA and THA from the IPO 
list, stakeholders have continuously requested that CMS remove other 
musculoskeletal services from the IPO list as well, citing shortened 
length of stay times, advancements in technologies and surgical 
techniques, and improved postoperative processes. Additionally, we 
noted that, more often than not, stakeholders historically requested 
that we remove musculoskeletal services from the IPO list more than 
other types of services. We also recognized that there is already a set 
of comprehensive APCs for musculoskeletal services for payment under 
the OPPS, which facilitates payment for these services and further 
supported their removal for CY 2021. Specifically, because we have 
previously removed codes from the IPO list that are similar clinically 
and in terms of resource cost and assigned them to these comprehensive 
APCs, we explained that these APCs generally describe appropriate 
ranges for the musculoskeletal codes removed in CY 2021, which we 
believed allowed for appropriate payment. We also proposed to remove 
additional related services that were recommended for removal by 
stakeholders during the annual HOP panel meeting.
    As stated above, because these services were being removed from the 
IPO list as the first phase of the elimination of the list, we did not 
evaluate each of these services against the longstanding criteria for 
removing a service from the IPO list. While a number of commenters 
supported the removal of the 298 services, the vast majority of 
commenters were opposed to removing the services and shared concerns 
regarding their inability to properly review the clinical nature of 
this large number of procedures and to provide comprehensive feedback 
on their removal from the list. Some commenters were able to review the 
individual services and requested that specific CPT codes remain 
payable in the inpatient setting only, including CPT codes 27280 
(Arthrodesis, open, sacroiliac joint, including obtaining bone graft, 
including instrumentation, when performed) and 22857 (Total disc 
arthroplasty (artificial disc), anterior approach, including discectomy 
to prepare interspace (other than for decompression), single 
interspace, lumbar) due to concerns about the safety of these 
procedures if they are performed in the outpatient setting.
    As previously stated in the CY 2021 final rule (85 FR 86087), an 
overwhelming number of stakeholders supported the previously 
established methodology for identifying appropriate changes to the IPO 
list. CMS received numerous requests to continue to use the established 
criteria to review and analyze services proposed for removal as opposed 
to removing large numbers of services in groups or categories. 
Commenters noted that they preferred the historical process for 
assessing services for removal from the IPO list using the five 
criteria, as they believed this process was more manageable for 
patients, providers, and other like stakeholders, allowing them to 
provide meaningful input on a procedure-by-procedure basis. Because we 
are proposing to halt elimination of the IPO list, we also believe it 
is appropriate to continue to evaluate services that we propose for 
removal against the longstanding criteria, and include with our 
proposals an in depth analysis of whether most outpatient departments 
are equipped to provide the services to the Medicare population; 
whether the simplest procedure described by the code may be performed 
in most outpatient departments; whether the procedure is related to 
codes that we have already removed from the IPO list; our determination 
of whether the procedure is being performed in numerous hospitals on an 
outpatient basis; and our determination of whether the procedure can be 
appropriately and safely performed in an ASC, is on the list of 
approved ASC procedures, or has been proposed by us for addition to the 
ASC list. Historically, we have included discussions of the individual 
codes proposed for removal in the proposed rule and stakeholders have 
had the opportunity to comment in kind with evidence in support of or 
opposition to the service's assignment to the IPO list, and we believe 
it is appropriate to continue to do so.
    In light of ongoing stakeholder feedback, we have now, for CY 2022, 
reviewed each of the procedures removed from the IPO list in CY 2021 to 
determine whether they individually meet the longstanding criteria for 
removal from the list. Our review considered the clinical intensity and 
characteristics of the service, the underlying condition of the 
beneficiary who would require the service, peer-reviewed medical 
literature, case reports, clinical criteria sets, and utilization data. 
This review determined that none of the services removed in CY 2021 
have sufficient supporting evidence that the service can be safely 
performed on the Medicare population in the outpatient setting, that 
most outpatient departments are equipped to provide the services to the 
Medicare population, or that the services are being performed safely on 
an outpatient basis. For a large number of the removed services, we did 
not find vignettes, claims or utilization data, or literature to 
support their removal under our longstanding criteria. For the few 
services that did have some data supporting their removal from the 
list, we found the data to be either incomplete or to be countered by 
conflicting data. For example, a few services, including CPT code 21627 
(sternal debridement), showed increasing migration to the outpatient 
setting, but we could not locate supportive medical literature case 
studies, or outcomes data to support that the services are safe for the 
Medicare population in the outpatient setting. Some services, such as 
CPT code 22558 (Lumbar spine fusion) and CPT code 23472 (reconstruct 
shoulder joint), show increasing outpatient claims data, but have high 
length of stay times and extensive post-operative care needs that 
indicate these services may not be appropriate for the Medicare 
population in the outpatient setting. Other services, such as CPT code 
22846 (Anterior instrumentation; 4 to 7 vertebral segments), lack 
medical literature or case studies, lack supportive claims data, and 
have conflicting stakeholder feedback for the safety of the service in 
the outpatient setting. We were unable to find literature and data for 
services that included outcomes specific to the Medicare population, 
particularly in the outpatient setting.
    Given that our review of each of the services removed from the list 
in CY 2021 using the five criteria mentioned in Section IX(A) did not 
find sufficient evidence that any of these services would be safe to 
perform on the Medicare population in the outpatient setting, we do not 
believe it would be appropriate for Medicare to pay for these services 
when performed in an outpatient setting. In particular, we found that 
the simplest procedures described by the codes for these services 
cannot be furnished safely in most outpatient departments, most 
outpatient departments are not equipped to

[[Page 42160]]

provide these services to the Medicare population, and the procedures 
are not being performed in numerous hospitals on an outpatient basis. 
We also do not believe the services can be appropriately and safely 
furnished in an ASC.
    As a result of this review, we are proposing to return all of the 
procedures removed in last year's final rule to the IPO list for CY 
2022 because we do not believe they meet the previously established 
criteria for removal from the IPO list. Therefore, after further 
clinical review and additional consideration of safety and quality of 
care concerns for the group of services removed from the IPO list in 
the CY 2021 final rule, for CY 2022 we are proposing to return these 
298 services to the IPO list, as shown in Table 35 below. The complete 
list of codes describing services that we propose to designate as 
inpatient-only services beginning in CY 2022 is included as Addendum E 
to this CY 2022 OPPS/ASC proposed rule, which is available via the 
internet on the CMS website.
    We solicit public comment on whether there are services that were 
removed from the IPO list in CY 2021 that stakeholders believe do meet 
the longstanding criteria for removing services from the IPO list and 
should continue to be payable in the outpatient setting in CY 2022. If 
so, we request that commenters submit corresponding evidence--
including, but not limited to, case reports, operative reports of 
actual cases, peer-reviewed medical literature, medical professional 
analysis, clinical criteria sets, and patient selection protocols--that 
the service meets the longstanding criteria for removal from the IPO 
list and is safe to perform on the average Medicare population in the 
outpatient setting.
    As mentioned above, the services that we are proposing to add back 
to the IPO list reflect those services that we believe may pose 
increased safety risk to the typical Medicare beneficiary. However, we 
recognize that there may be a subset of Medicare beneficiaries who, on 
a case by case basis, may nonetheless be appropriate to treat in the 
outpatient setting and we seek comment below on whether any services 
that were removed in CY 2021, but are being proposed to be added back 
to the IPO for CY 2022, should in fact, remain off the IPO list.
    Table 35 below contains the proposed additions to the IPO list for 
CY 2022.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP04AU21.053


[[Page 42161]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.054


[[Page 42162]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.055


[[Page 42163]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.056


[[Page 42164]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.057


[[Page 42165]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.058


[[Page 42166]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.059


[[Page 42167]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.060


[[Page 42168]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.061


[[Page 42169]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.062


[[Page 42170]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.063


[[Page 42171]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.064


[[Page 42172]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.065


[[Page 42173]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.066


[[Page 42174]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.067


[[Page 42175]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.068

BILLING CODE 4120-01-C

[[Page 42176]]

4. Topics and Questions Posed for Public Comments
    In addition to our proposal to halt the elimination of the IPO list 
and return services summarily removed from the IPO list last year that 
our clinicians have determined do not meet the criteria for removal 
from the IPO list, as provided in Table 35, we are also interested in 
feedback from stakeholders on whether CMS should maintain the longer-
term objective of eliminating the IPO list or if CMS should maintain 
the IPO list but continue to systematically scale the list back to so 
that inpatient only designations are consistent with current standards 
of practice. Specifically, CMS is requesting comments on the following:
     Should CMS maintain the longer-term objective of 
eliminating the IPO list? If so, what is a reasonable timeline for 
eliminating the list? What method do stakeholders suggest CMS use to 
approach removing codes from the list?
     Should CMS maintain the IPO list but continue to 
streamline the list of services included on the list and, if so, 
suggestions for ways to systematically scale the list back to allow for 
the removal of codes, or groups of codes, that can safely and 
effectively be performed on a typical Medicare beneficiary in the 
hospital outpatient setting so that inpatient only designations are 
consistent with current standards of practice?
     What effect do commenters believe the elimination or 
scaling back of the IPO list would have on safety and quality of care 
for Medicare beneficiaries?
     What effect do commenters believe elimination or the 
scaling back of the IPO list would have on provider behavior, 
incentives, or innovation?
     What information or support would be helpful for providers 
and physicians in their considerations of site-of-service selections?
     Should CMS's clinical evaluation of the safety of a 
service in the outpatient setting consider the safety and quality of 
care for the typical Medicare beneficiary or a smaller subset of 
Medicare beneficiaries for whom the outpatient provision of a service 
may have fewer risk factors?
     Are there services that were removed from the IPO list in 
CY 2021 that stakeholders believe meet the longstanding criteria for 
removal from the IPO list and should continue to be payable in the 
outpatient setting in CY 2022? If so, what evidence supports the 
conclusion that the service meets the longstanding criteria for removal 
from the IPO list and is safe to perform on the Medicare population in 
the outpatient setting?

X. Proposed Nonrecurring Policy Changes

A. Proposed Medical Review of Certain Inpatient Hospital Admissions 
Under Medicare Part A for CY 2022 and Subsequent Years

1. Background on the 2-Midnight Rule
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50913 through 
50954), we clarified our policy regarding when an inpatient admission 
is considered reasonable and necessary for purposes of Medicare Part A 
payment. Under this policy, we established a benchmark providing that 
surgical procedures, diagnostic tests, and other treatments would be 
generally considered appropriate for inpatient hospital admission and 
payment under Medicare Part A when the physician expects the patient to 
require a stay that crosses at least 2 midnights and admits the patient 
to the hospital based upon that expectation. Conversely, when a 
beneficiary enters a hospital for a surgical procedure not designated 
as an inpatient-only (IPO) procedure as described in 42 CFR 419.22(n), 
a diagnostic test, or any other treatment, and the physician expects to 
keep the beneficiary in the hospital for only a limited period of time 
that does not cross 2 midnights, the services would be generally 
inappropriate for payment under Medicare Part A, regardless of the hour 
that the beneficiary came to the hospital or whether the beneficiary 
used a bed. With respect to services designated under the OPPS as IPO 
list procedures, we explained that because of the intrinsic risks, 
recovery impacts, or complexities associated with such services, these 
procedures would continue to be appropriate for inpatient hospital 
admission and payment under Medicare Part A regardless of the expected 
length of stay. We also indicated that there might be further ``rare 
and unusual'' exceptions to the application of the benchmark, which 
would be detailed in subregulatory guidance.
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50913 through 
50954), we also finalized the 2-Midnight presumption, which is related 
to the 2-Midnight benchmark but is a separate medical review policy. 
The 2-Midnight benchmark represents guidance to reviewers to identify 
when an inpatient admission is generally reasonable and necessary for 
purposes of Medicare Part A payment, while the 2-Midnight presumption 
relates to instructions to medical reviewers regarding the selection of 
claims for medical review. Specifically, under the 2-Midnight 
presumption, inpatient hospital claims with lengths of stay greater 
than 2 midnights after the formal admission following the order are 
presumed to be appropriate for Medicare Part A payment and are not the 
focus of medical review efforts, absent evidence of systematic gaming, 
abuse, or delays in the provision of care in an attempt to qualify for 
the 2-Midnight presumption.
    In the CY 2016 OPPS/ASC final rule with comment period (80 FR 70538 
through 70549), we revisited the previous rare and unusual exceptions 
policy and finalized a proposal to allow for case-by-case exceptions to 
the 2-Midnight benchmark, whereby Medicare Part A payment may be made 
for inpatient admissions where the admitting physician does not expect 
the patient to require hospital care spanning 2 midnights, if the 
documentation in the medical record supports the physician's 
determination that the patient nonetheless requires inpatient hospital 
care.
    In the CY 2016 OPPS/ASC final rule with comment period, we 
reiterated our position that the 2-Midnight benchmark provides clear 
guidance on when a hospital inpatient admission is appropriate for 
Medicare Part A payment, while respecting the role of physician 
judgment. We stated that the following criteria will be relevant to 
determining whether an inpatient admission with an expected length of 
stay of less than 2 midnights is nonetheless appropriate for Medicare 
Part A payment:
     Complex medical factors such as history and comorbidities;
     The severity of signs and symptoms;
     Current medical needs; and
     The risk of an adverse event.
    The exceptions for procedures on the IPO list and for ``rare and 
unusual'' circumstances designated by CMS as national exceptions were 
unchanged by the CY 2016 OPPS/ASC final rule with comment period.
    As we stated in the CY 2016 OPPS/ASC final rule with comment 
period, the decision to formally admit a patient to the hospital is 
subject to medical review. For instance, for cases where the medical 
record does not support a reasonable expectation of the need for 
hospital care crossing at least 2 midnights, and for inpatient 
admissions not related to a surgical procedure specified by Medicare as 
an IPO procedure under 42 CFR 419.22(n) or for which there is not a 
national exception, payment of the claim under Medicare Part A is 
subject to the clinical judgment

[[Page 42177]]

of the medical reviewer. The medical reviewer's clinical judgment 
involves the synthesis of all submitted medical record information (for 
example, progress notes, diagnostic findings, medications, nursing 
notes, and other supporting documentation) to make a medical review 
determination on whether the clinical requirements in the relevant 
policy have been met. In addition, Medicare review contractors must 
abide by CMS' policies in conducting payment determinations, but are 
permitted to take into account evidence-based guidelines or commercial 
utilization tools that may aid such a decision. While Medicare review 
contractors may continue to use commercial screening tools to help 
evaluate the inpatient admission decision for purposes of payment under 
Medicare Part A, such tools are not binding on the hospital, CMS, or 
its review contractors. This type of information also may be 
appropriately considered by the physician as part of the complex 
medical judgment that guides their decision to keep a beneficiary in 
the hospital and formulation of the expected length of stay.
2. Current Policy for Medical Review of Inpatient Hospital Admissions 
for Procedures Removed From the Inpatient Only List
    In the CY 2020 OPPS/ASC final rule with comment period we finalized 
a policy to exempt procedures that have been removed from the IPO list 
from certain medical review activities to assess compliance with the 2-
Midnight rule within the 2 calendar years following their removal from 
the IPO list. We stated that these procedures will not be considered by 
the Beneficiary and Family-Centered Care Quality Improvement 
Organizations (BFCC-QIOs) in determining whether a provider exhibits 
persistent noncompliance with the 2-Midnight rule for purposes of 
referral to the RAC nor will these procedures be reviewed by RACs for 
``patient status.'' We explained that during this 2-year period, BFCC-
QIOs will have the opportunity to review such claims in order to 
provide education for practitioners and providers regarding compliance 
with the 2-Midnight rule, but claims identified as noncompliant will 
not be denied with respect to the site-of-service under Medicare Part 
A.
    In CY 2021 we proposed to continue the 2-year exemption from site-
of-service claim denials, BFCC-QIO referrals to RACs, and RAC reviews 
for ``patient status'' (that is, site-of-service) for procedures that 
are removed from the IPO list under the OPPS beginning on January 1, 
2021. However, we finalized our proposal with modifications in the CY 
2021 OPPS/ASC final rule with comment period. Instead of the 2-year 
exemption, procedures removed from the IPO list after January 1, 2021 
were indefinitely exempted from site-of-service claim denials under 
Medicare Part A, eligibility for BFCC-QIO referrals to RACs for 
noncompliance with the 2-Midnight rule, and RAC reviews for ``patient 
status'' (that is, site-of-service). We stated that this exemption 
would last until we have Medicare claims data indicating that the 
procedure is more commonly performed in the outpatient setting than the 
inpatient setting. Thus, for the exemption to end for a specific 
procedure, in a single calendar year we would need to have Medicare 
claims data indicating that the procedure was performed more than 50 
percent of the time in the outpatient setting. We stated that we would 
revisit in rulemaking whether an exemption for a procedure should be 
ended or whether we may consider additional metrics in the future that 
could assist us in determining when the exemption period should end for 
a procedure. Even during this exemption period, the BFCC-QIOs retain 
the authority to review such claims in order to provide education for 
practitioners and providers regarding compliance with the 2-Midnight 
rule, but claims identified as noncompliant will not be denied with 
respect to the site-of-service under Medicare Part A. Additionally, we 
stated that we may still conduct medical review in cases in which we 
believe there is potential fraud or abuse occurring. We explained that 
the elimination of the IPO list was a large scale change that created 
brand new considerations in determining site-of-service for providers 
and beneficiaries. At the time we believed a change of this 
significance required us to reevaluate our stance on the exemption 
period for procedures removed from the IPO list.
    Finally, in the CY 2021 OPPS/ASC final rule with comment period we 
amended 42 CFR 412.3 to clarify when a procedure removed from the IPO 
is exempt from certain medical review activities. We stated that for 
those services and procedures removed between January 1 and December 
31, 2020, this exemption will last for 2 years from the date of such 
removal. For those services and procedures removed on or after January 
1, 2021, this exemption will last until the Secretary determines that 
the service or procedure is more commonly performed in the outpatient 
setting.
3. Medical Review of Inpatient Hospital Admissions for Procedures 
Removed From the Inpatient Only List for CY 2022 and Subsequent Years
    As stated earlier in this section, services on the IPO list are not 
subject to the 2-Midnight rule for purposes of determining whether 
payment is appropriate under Medicare Part A. However, the 2-Midnight 
rule is applicable once services have been removed from the IPO list. 
Outside of the exemption periods discussed above, services that have 
been removed from the IPO list are subject to initial medical reviews 
of claims for short-stay inpatient admissions conducted by BFCC-QIOs.
    BFCC-QIOs may also refer providers to the RACs for further medical 
review due to exhibiting persistent noncompliance with Medicare payment 
policies, including, but not limited to:
     Having high denial rates;
     Consistently failing to adhere to the 2-Midnight rule; or
     Failing to improve their performance after QIO educational 
intervention.
    However, as finalized in the CY 2021 OPPS/ASC final rule with 
comment period, procedures that have been removed from the IPO list 
January 1, 2021 or later were indefinitely exempted from site-of-
service claim denials under Medicare Part A, eligibility for BFCC-QIO 
referrals to RACs for noncompliance with the 2-Midnight rule, and RAC 
reviews for ``patient status'' (that is, site-of-service). We stated 
that this exemption would last until we have Medicare claims data 
indicating that the procedure is more commonly performed in the 
outpatient setting than the inpatient setting.
    As stated in section IX, CMS is proposing to halt the elimination 
of the IPO list. In accordance with this proposal, we are proposing to 
amend 42 CFR 419.22(n) to remove the reference to the elimination of 
the list of services and procedures designated as requiring inpatient 
care through a three-year transition. We are also proposing to return 
298 procedures removed from the IPO list in CY 2021 to the IPO list for 
CY 2022.
    Regardless of the status of the IPO list, we believe that the 2-
Midnight benchmark remains an important metric to help guide when Part 
A payment for inpatient hospital admissions is appropriate. As 
technology advances and more services may be safely performed in the 
hospital outpatient setting and paid under the OPPS, it is

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increasingly important for physicians to exercise their clinical 
judgment in determining the generally appropriate clinical setting for 
their patient to receive a procedure, whether that be as an inpatient 
or on an outpatient basis. Importantly, removal of a service from the 
IPO list has never meant that a beneficiary cannot receive the service 
as a hospital inpatient--as always, the physician should use his or her 
complex medical judgment to determine the appropriate setting on a case 
by case basis.
    As stated previously, our current policy regarding IPO list 
procedures is that they are appropriate for inpatient hospital 
admission and payment under Medicare Part A regardless of the expected 
length of stay. Halting the elimination of the IPO list would mean that 
this will remain true for all services that are still on the list. As 
in previous years, any services that are removed from the list in the 
future will be subject to the 2-Midnight benchmark and 2-Midnight 
presumption. This means that for services removed from the IPO list, 
under the 2-Midnight presumption, inpatient hospital claims with 
lengths of stay greater than 2 midnights after admission will be 
presumed to be appropriate for Medicare Part A payment and would not be 
the focus of medical review efforts, absent evidence of systematic 
gaming, abuse, or delays in the provision of care in an attempt to 
qualify for the 2-Midnight presumption. Additionally, under the 2-
Midnight benchmark, services formerly on the IPO list will be generally 
considered appropriate for inpatient hospital admission and payment 
under Medicare Part A when the physician expects the patient to require 
a stay that crosses at least 2 midnights and admits the patient to the 
hospital based upon that expectation.
    As finalized in the CY 2021 OPPS/ASC final rule with comment 
period, procedures removed from the IPO list after January 1, 2021 were 
indefinitely exempted from site-of-service claim denials under Medicare 
Part A, eligibility for BFCC-QIO referrals to RACs for noncompliance 
with the 2-Midnight rule, and RAC reviews for ``patient status'' (that 
is, site-of-service). These procedures are not considered by the BFCC-
QIOs in determining whether a provider exhibits persistent 
noncompliance with the 2-Midnight rule for purposes of referral to the 
RAC nor will claims for these procedures be reviewed by RACs for 
``patient status.'' During the exemption period, BFCC-QIOs have the 
opportunity to review such claims in order to provide education for 
practitioners and providers regarding compliance with the 2-Midnight 
rule, but claims identified as noncompliant are not denied with respect 
to the site-of-service under Medicare Part A. Again, information 
gathered by the BFCC-QIO when reviewing procedures as they are newly 
removed from the IPO list can be used for educational purposes and does 
not result in a claim denial during the exemption period.
    Because we are proposing to halt the elimination of the IPO list 
and add 298 services that were removed back to the IPO list, we believe 
this proposed change requires us to reexamine the applicable exemption 
period. We noted in the CY 2021 OPPS/ASC final rule with comment period 
that we may shorten the exemption period for a procedure if necessary. 
We heard from many commenters last year that the 2-year exemption was 
appropriate when CMS was removing a smaller volume of procedures from 
the IPO list. However, commenters believed that the unprecedented 
volume of procedures becoming subject to the 2-Midnight rule with the 
phased elimination of the IPO list would necessitate a longer exemption 
period. While these commenters expressed their support for continuing 
the 2-year exemption, they further stated that a longer exemption 
period may be more appropriate. Some commenters suggested that anywhere 
between 3 to 6 years or indefinitely would be appropriate. Commenters 
expressed their belief that increasing the length of the exemption 
would be necessary to allow hospitals and practitioners sufficient time 
to adjust their billing and clinical systems, as well as processes used 
to determine the appropriate setting of care. For a full description of 
the comments received please refer to the CY 2021 OPPS/ASC final rule 
with comment period (85 FR 86115).
    We believe that the indefinite exemption was appropriate when the 
agency was removing an unprecedented volume of procedures from the IPO 
list in a short period of time. That would have resulted in a large 
number of procedures becoming subject to the 2-Midnight rule in a 
three-year span. However, should we finalize our proposal to halt the 
elimination of the IPO list, there will no longer be an unprecedented 
volume of procedures removed from the IPO list at once, and thus the 
indefinite exemption may no longer be appropriate. As we explained in 
the CY 2021 OPPS/ASC final rule with comment period, the indefinite 
exemption was necessary given the magnitude of the change for 
providers. Now, however, we are proposing to move toward a much smaller 
volume of procedures becoming subject to the 2-Midnight rule at one 
time. We believe that, in the event that we finalize the proposed halt 
in the elimination of the IPO list, an indefinite exemption from 
medical review activities related to the 2-Midnight rule will no longer 
be warranted.
    We continue to believe that, in order to facilitate compliance with 
our payment policy for inpatient admissions, some exemption from 
certain medical review activities for services removed from the IPO 
list under the OPPS is appropriate. Accordingly, we propose to rescind 
the indefinite exemption and instead apply a 2-year exemption from two 
midnight medical review activities for services removed from the IPO 
list on or after January 1, 2021. As finalized in the CY 2020 OPPS/ASC 
final rule with comment period, and unchanged by the CY 2021 
rulemaking, services removed from the IPO list between January 1 and 
December 30, 2020, are currently subject to a 2-year exemption. 
Accordingly, under this proposal, the same 2-year exemption would apply 
to all service removed from the IPO list on or after January 1, 2020. 
As we explained in the CY 2020 OPPS/ASC final rule with comment period, 
we believe that a 2-year exemption from certain medical review 
activities for procedures removed from the IPO list would allow 
sufficient time for providers to become more familiar with how to 
comply with the 2-Midnight rule and for hospitals and clinicians to 
become used to the availability of payment under both the hospital 
inpatient and outpatient setting for procedures removed from the IPO 
list. Should we finalize our proposal to halt the elimination of the 
IPO list, we believe that this rationale applies equally to the smaller 
number of services that may be removed from the list at any one time in 
the future, and thus that the same 2-year exemption period is 
appropriate.
    As with the previous 2-year exemption period for services removed 
from the IPO list between January 1 and December 30, 2020, applying a 
2-year exemption period to services removed from the IPO list on or 
after January 1, 2021, would allow providers time to gather information 
on procedures newly removed from the IPO list to help inform education 
and guidance for the broader provider community, develop patient 
selection criteria to identify which patients are, and are not, 
appropriate candidates for outpatient procedures, and to develop 
related policy protocols. We believe that this exemption period would 
aid in

[[Page 42179]]

compliance with our payment policy for inpatient admissions.
    It is important to note that whether there is a limited timeframe 
or an indefinite exemption from the specified medical review 
activities, providers are still expected to comply with the 2-Midnight 
rule. It is also important to note that the 2-Midnight rule does not 
prohibit procedures from being performed or billed on an inpatient 
basis. Whether a procedure has an exemption or not does not change what 
site of service is medically necessary or appropriate for an individual 
beneficiary. Providers are still expected to use their complex medical 
judgment to determine the appropriate site of service for each patient 
and to bill in compliance with the 2-Midnight rule. The exemption is 
not from the 2-Midnight rule but from certain medical review procedures 
and site-of-service claim denials.
    Absent the removal of an unprecedented number of services at once 
from the IPO list, we continue to believe that a 2-year exemption from 
BFCC-QIO referral to RACs and RAC ``patient status'' review of the 
setting for procedures removed from the IPO list under the OPPS and 
performed in the inpatient setting would be an adequate amount of time 
to allow providers to gain experience with application of the 2-
Midnight rule to these procedures and the documentation necessary for 
Part A payment for those patients for which the admitting physician 
determines that the procedures should be furnished in an inpatient 
setting. Furthermore, it is our belief that the 2-year exemption from 
referrals to RACs, RAC patient status review, and claims denials would 
be sufficient to allow providers time to update their billing systems 
and gain experience with respect to newly removed procedures eligible 
to be paid under either the IPPS or the OPPS, while avoiding potential 
adverse site-of-service determinations. We solicit public comments 
regarding the appropriate period of time for this exemption. Commenters 
may indicate whether and why they believe the 2-year period is 
appropriate, or whether they believe a longer or shorter exemption 
period would be more appropriate.
    In summary, for CY 2021 and subsequent years, we propose to return 
to the 2-year exemption from site-of-service claim denials, BFCC-QIO 
referrals to RACs, and RAC reviews for ``patient status'' (that is, 
site-of-service) for procedures that are removed from the IPO list 
under the OPPS on January 1, 2021 or later. Under this proposal, 
services removed beginning on January 1, 2021 would receive the same 2-
year exemption from 2-Midnight medical review activities as currently 
applies to services removed between January 1 and December 30, 2020, 
and not the indefinite exemption finalized in the CY 2021 OPPS/ASC 
final rule with comment period. We encourage BFCC-QIOs to review these 
cases for medical necessity in order to educate themselves and the 
provider community on appropriate documentation for Part A payment when 
the admitting physician determines that it is medically reasonable and 
necessary to conduct these procedures on an inpatient basis. We note 
that we will monitor changes in site-of-service to determine whether 
changes may be necessary to certain CMS Innovation Center models. While 
we are proposing to halt the elimination of the IPO list, we are 
seeking comment on whether a 2-year time period is appropriate, or if a 
longer or shorter period may be more warranted. If we do not finalize 
our proposal to halt the elimination of the IPO list we may continue 
with the indefinite exemptions. Finally, we are proposing to amend 
Sec.  412.3 of the Code of Federal Regulations to clarify when a 
procedure removed from the IPO list is exempt from certain medical 
review activities. For all services and procedures removed after 
January 1, 2020, this exemption will last for 2 years from the date of 
such removal. This would include those services and procedures removed 
on or after January 1, 2021, for which this exemption would also be for 
2 years from the date of such removal.

B. Changes to Beneficiary Coinsurance for Certain Colorectal Cancer 
Screening Tests

    Section 122 of the Consolidated Appropriations Act (CAA) of 2021 
(Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal 
Cancer Screening Tests, amends section 1833(a) of the Act to offer a 
special coinsurance rule for screening flexible sigmoidoscopies and 
screening colonoscopies, regardless of the code that is billed for the 
establishment of a diagnosis as a result of the test, or for the 
removal of tissue or other matter or other procedure, that is furnished 
in connection with, as a result of, and in the same clinical encounter 
as the colorectal cancer screening test. The reduced coinsurance will 
be phased in beginning January 1, 2022. Currently, the addition of any 
procedure beyond a planned colorectal cancer screening test (for which 
there is no coinsurance), results in the beneficiary having to pay 
coinsurance.
    Section 1861(pp) of the Act defines ``colorectal cancer screening 
tests'' and, under sections 1861(pp)(1)(B) and (C) of the Act, 
identifies ``screening flexible sigmoidoscopy'' and ``screening 
colonoscopy'' as two of the recognized procedures. During the course of 
either one of these two procedures, removal of tissue or other matter 
may become necessary for diagnostic purposes. Among other things, 
section 1861(pp)(1)(D) of the Act authorizes the Secretary to include 
in the definition, other tests or procedures and modifications to the 
tests and procedures described under this subsection, with such 
frequency and payment limits as the Secretary determines appropriate, 
in consultation with appropriate organizations. Section 1861(s)(2)(R) 
of the Act includes colorectal cancer screening tests in the definition 
of the medical and other health services that fall within the scope of 
Medicare Part B benefits described in section 1832(a)(1) of the Act. 
Section 1861(ddd)(3) of the Act includes colorectal cancer screening 
tests within the definition of ``preventive services.'' In addition, 
section 1833(a)(1)(Y) of the Act provides for payment for a preventive 
service under the PFS at 100 percent of the lesser of the actual charge 
or the fee schedule amount for these colorectal cancer screening tests, 
and under the OPPS at 100 percent of the OPPS payment amount, when the 
preventive service is recommended by the United States Preventive 
Services Task Force (USPSTF) with a grade of A or B. As such, there is 
no beneficiary coinsurance for recommended colorectal cancer screening 
tests as defined in section 1861(pp)(1) of the Act.
    Under these statutory provisions, we have issued regulations 
governing payment for colorectal cancer screening tests at Sec.  
410.152(l)(5). We pay 100 percent of the Medicare payment amount 
established under the applicable payment methodology for the setting 
for providers and suppliers, and beneficiaries are not required to pay 
Part B coinsurance for colorectal cancer screening tests (except for 
barium enemas, which are not recommended by the USPSTF with a grade of 
A or B).
    In addition to colorectal cancer screening tests, which typically 
are furnished to patients in the absence of signs or symptoms of 
illness or injury, Medicare also covers various diagnostic tests (see 
Sec.  410.32). In general, diagnostic tests must be ordered by the 
physician or practitioner who is treating the beneficiary and who uses 
the results of the diagnostic test in the management of the patient's 
specific medical

[[Page 42180]]

condition. Under Part B, Medicare may cover flexible sigmoidoscopies 
and colonoscopies as diagnostic tests when those tests are reasonable 
and necessary as specified in section 1862(a)(1)(A) of the Act. When 
these services are furnished as diagnostic tests rather than as 
screening tests, patients are responsible for the 20 percent of the 
Part B coinsurance associated with these services.
    We define colorectal cancer screening tests in our regulation at 
Sec.  410.37(a)(1) to include ``flexible screening sigmoidoscopies'' 
and ``screening colonoscopies, including anesthesia furnished in 
conjunction with the service.'' Under our current regulations, we 
exclude from the definition of colorectal screening services, 
colonoscopies and sigmoidoscopies that begin as screening services, but 
where a polyp or other growth is found and removed as part of the 
procedure. The exclusion of these services from the definition of 
colorectal cancer screening services is based upon longstanding 
provisions of the statute under section 1834(d)(2)(D) dealing with the 
detection of lesions or growths during procedures (See CY 1998 PFS 
final rule at 62 FR 59048, 59082).
    Prior to the enactment of section 122 of the CAA, section 
1834(d)(2)(D) of the Act provided that if, during the course of a 
screening flexible sigmoidoscopy, a lesion or growth is detected which 
results in a biopsy or removal of the lesion or growth, payment under 
Medicare Part B shall not be made for the screening flexible 
sigmoidoscopy, but shall be made for the procedure classified as a 
flexible sigmoidoscopy with such biopsy or removal. Similarly, prior to 
the recent legislative change, section 1834(d)(3)(D) of the Act 
provided that if, during the course of a screening colonoscopy, a 
lesion or growth is detected that results in a biopsy or removal of the 
lesion or growth, payment under Medicare Part B shall not be made for 
the screening colonoscopy but shall be made for the procedure 
classified as a colonoscopy with such biopsy or removal. In these 
situations, Medicare pays for the flexible sigmoidoscopy and 
colonoscopy tests as diagnostic tests rather than as screening tests 
and the 100 percent payment rate for recommended preventive services 
under section 1833(a)(1)(Y) of the Act, as codified in our regulation 
at Sec.  410.152(l)(5), has not applied. As such, beneficiaries 
currently are responsible for the usual 20 percent coinsurance that 
applies to the services.
    Under section 1833(b) of the Act, before making payment under 
Medicare Part B for expenses incurred by a beneficiary for covered Part 
B services, beneficiaries must first meet the applicable deductible for 
the year. Section 4104 of the Affordable Care Act (that is, the Patient 
Protection and Affordable Care Act (Pub. L. 111-148, March 23, 2010), 
and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 
111-152, March 30, 2010), collectively referred to as the ``Affordable 
Care Act'') amended section 1833(b)(1) of the Act to make the 
deductible inapplicable to expenses incurred for certain preventive 
services that are recommended with a grade of A or B by the USPSTF, 
including colorectal cancer screening tests as defined in section 
1861(pp) of the Act. Section 4104 of the Affordable Care Act also added 
a sentence at the end of section 1833(b)(1) of the Act specifying that 
the exception to the deductible shall apply with respect to a 
colorectal cancer screening test regardless of the code that is billed 
for the establishment of a diagnosis as a result of the test, or for 
the removal of tissue or other matter or other procedure that is 
furnished in connection with, as a result of, and in the same clinical 
encounter as the screening test. Although amendments made by the 
Affordable Care Act addressed the applicability of the deductible in 
the case of a colorectal cancer screening test that involves biopsy or 
tissue removal, they did not alter the coinsurance provision in section 
1833(a) of the Act for such procedures. Although public commenters 
encouraged the agency to eliminate the coinsurance in these 
circumstances, the agency found that statute did not provide for 
elimination of the coinsurance (75 FR 73170 at 73431).
    Beneficiaries have continued to contact us noting their concern 
that a coinsurance percentage applies (20 or 25 percent depending upon 
the setting) under circumstances where they expected to receive only a 
colorectal screening test to which coinsurance does not apply. Instead, 
these beneficiaries received what Medicare considers to be a diagnostic 
procedure because, for example, polyps were discovered and removed 
during the procedure. Similarly, physicians have expressed concern 
about the reactions of beneficiaries when they are informed that they 
will be responsible for coinsurance if polyps are discovered and 
removed during a procedure that they had expected to be a screening 
procedure to which coinsurance does not apply.
    Section 122 of the CAA addresses this coinsurance issue by 
successively reducing, over a period of years, the percentage amount of 
coinsurance for which the beneficiary is responsible. Ultimately, for 
services furnished on or after January 1, 2030, the coinsurance will be 
zero.
    To implement the amendments made by section 122 of the CAA, we are 
proposing in the CY 2022 PFS proposed rule to modify our regulations to 
reflect the changes to statute. As amended, the statute effectively 
provides that, for services furnished on or after January 1, 2022, a 
flexible sigmoidoscopy or a colonoscopy can be considered a screening 
flexible sigmoidoscopy or a screening colonoscopy test even if an 
additional procedure is furnished to remove tissue or other matter 
during the screening test. Specifically, section 122(a)(3) of the CAA 
added a sentence to the end of section 1833(a) of the Act to include as 
colorectal screening tests described in section 1833(a)(1)(Y) of the 
Act, a colorectal cancer screening test, regardless of the code that is 
billed for the establishment of a diagnosis as a result of the test, or 
for the removal of tissue or other matter or other procedure that is 
furnished in connection with, as a result of, and in the same clinical 
encounter as the screening test. We note that only flexible screening 
sigmoidoscopies and screening colonoscopies are recognized currently as 
colorectal cancer screening tests that might involve removal of tissue 
or other matter. This new sentence added under section 1833(a) uses the 
same language that was used to amend the statute at section 1833(b)(1) 
of the Act to broaden the scope of colorectal cancer screening tests to 
which a deductible does not apply. Section 122(b)(1) of the CAA then 
limits application of the 100 percent Medicare payment rate (that is, 
no beneficiary coinsurance) under section 1833(a)(1)(Y) of the Act for 
the additional colorectal cancer screening tests (those that are not 
screening tests ``but for'' the new sentence at the end of section 
1833(a) of the Act) by making payment for them subject to a new section 
1833(dd) of the Act. Section 1833(dd) of the Act provides for a series 
of increases in the Medicare payment rate percentage for those services 
over successive periods of years through CY 2029. Thereafter, section 
1833(dd) of the Act has no effect, so payment for all colorectal cancer 
screening tests would be made at 100 percent under section 
1833(a)(1)(Y) of the Act.
    To codify the amendments made by section 122 of the CAA in our 
regulations, we are proposing in the CY 2022 PFS proposed rule to make 
two modifications to current regulations.
    At Sec.  410.37, we propose in the CY 2022 PFS proposed rule to 
modify our

[[Page 42181]]

regulation where we define conditions for and limitations on coverage 
for colorectal cancer screening tests by adding a new paragraph (j). 
That paragraph would provide that, effective January 1, 2022, when a 
planned colorectal cancer screening test, that is, screening flexible 
sigmoidoscopy or colonoscopy screening test, requires a related 
procedure, including removal of tissue or other matter, furnished in 
connection with, as a result of, and in the same clinical encounter as 
the screening test, it is considered to be a colorectal cancer 
screening test.
    At Sec.  410.152(l)(5), we propose in the CY 2022 PFS proposed rule 
to modify our regulation. Here we describe payment for colorectal 
cancer screening tests. Effective January 1, 2022, we propose to 
provide for an increase in the Medicare payment percentage that is 
phased in over time. As the Medicare payment percentage increases, the 
beneficiary coinsurance percentage decreases. We propose to revise 
section 410.152(l)(5) to provide that Medicare payment in a specified 
year is equal to a specified percent of the lesser of the actual charge 
for the service or the amount determined under the fee schedule that 
applies to the test. The phased in Medicare payment percentages for 
colorectal cancer screening services described in the amendments we 
propose in the CY 2022 PFS proposed rule to our regulation at section 
410.37(j) (and the corresponding reduction in coinsurance) are as 
follows:
     80 percent payment for services furnished in CY 2022 (with 
coinsurance equal to 20 percent);
     85 percent payment for services furnished in CY 2023 (with 
coinsurance equal to 15 percent);
     90 percent payment for services furnished in 2027 through 
2029 (with coinsurance equal to 10 percent); and
     100 percent payment for services furnished from CY 2030 
onward (with coinsurance equal to zero percent).
    Thus, between CYs 2022 and 2030, the coinsurance required of 
Medicare beneficiaries for planned colorectal cancer screening tests 
that result in additional procedures furnished in the same clinical 
encounter will be reduced from 20 or 25 percent to 0 percent. We refer 
readers to the CY 2022 Medicare Physician Fee Schedule (PFS) proposed 
rule for the full discussion of these proposed changes. Comments on 
this proposed policy, including the proposed changes to the regulations 
at Sec. Sec.  410.37 and 410.152(l)(5), should be submitted in response 
to the CY 2022 PFS proposed rule.
    In the CY 2011 OPPS/ASC final rule with comment period (75 FR 72019 
through 72020), we adopted a policy that all surgical services 
furnished on the same date as a planned screening colonoscopy, planned 
flexible sigmoidoscopy, or barium enema be viewed as being furnished in 
connection with, as a result of, and in the same clinical encounter as 
the screening test for purposes of implementing section 4104(c)(2) of 
the Affordable Care Act. We created the HCPCS modifier PT for providers 
to append to the diagnostic procedure code that is reported instead of 
the screening colonoscopy, screening flexible sigmoidoscopy HCPCS code, 
or as a result of the barium enema when the screening test becomes a 
diagnostic service. Where the modifier appears on a claim, the claims 
processing system does not apply the Part B deductible for all surgical 
services on the same date as the diagnostic test. We stated that we 
believed this interpretation was appropriate because we believe that it 
would be very rare for an unrelated surgery to occur on the same date 
as one of these scheduled screening tests (75 FR 72019). We also stated 
that we would reassess the appropriateness of the proposed definition 
of services that are furnished in connection with, as a result of, and 
in the same clinical encounter as the colorectal cancer screening test 
that becomes diagnostic in the event of a legislative change to this 
policy (for example, a statutory change that would remove the 
coinsurance for these related services in addition to the deductible).
    As we did for purposes of implementing section 4104(c)(2) of the 
Affordable Care Act, to implement the amendments made by section 122 of 
the CAA we propose that all surgical services furnished on the same 
date as a planned screening colonoscopy or planned flexible 
sigmoidoscopy would be viewed as being furnished in connection with, as 
a result of, and in the same clinical encounter as the screening test 
for purposes of determining the coinsurance required of Medicare 
beneficiaries for planned colorectal cancer screening tests that result 
in additional procedures furnished in the same clinical encounter. We 
believe this interpretation is appropriate because we continue to 
believe that it is very rare for an unrelated surgery to occur on the 
same date as a scheduled colorectal cancer screening. Providers must 
continue to report HCPCS modifier ``PT'' to indicate that a planned 
colorectal cancer screening service converted to a diagnostic service. 
We note that if this proposal is finalized, we will examine the claims 
data, monitor for any increases in surgical services unrelated to the 
colorectal cancer screening test performed on the same date as the 
screening test, and consider revising our policy through rulemaking if 
there is a notable increase.

C. Low Volume Policy for Clinical, Brachytherapy, and New Technology 
APCs

    Historically, we have used our equitable adjustment authority at 
section 1833(t)(2)(E) of the Act on a case-by-case basis to adjust how 
we determine the costs for certain low volume services. In the CY 2016 
OPPS/ASC final rule with comment period, we acknowledged that for low 
volume procedures with significant device costs, the median cost would 
be a more appropriate measure of the central tendency for purposes of 
calculating the cost and the payment rate for low volume procedures (80 
FR 70388 through 70389). We explained that the median cost is impacted 
to a lesser degree than the geometric mean cost by more extreme 
observations. Therefore, in the CY 2016 OPPS/ASC final rule with 
comment period, we used our equitable adjustment authority under 
section 1833(t)(2)(E) of the Act to use the median cost, rather than 
the geometric mean, to calculate the payment rate for the procedure 
described by CPT code 0308T (Insertion of ocular telescope prosthesis 
including removal of crystalline lens or intraocular lens prosthesis) 
for CY 2016.
    In the CY 2017 OPPS/ASC final rule with comment period, we adopted 
a payment policy for low-volume device-intensive procedures similar to 
the policy we applied to the procedure described by CPT code 0308T. 
Under this policy, we calculate the payment rate for any device-
intensive procedure that is assigned to an APC with fewer than 100 
single claims for all procedures in the APC using the median cost 
instead of the geometric mean cost (81 FR 79660 through 79661). We 
explained that we believed this policy would help mitigate to some 
extent the significant year-to-year payment rate fluctuations while 
preserving accurate claims data-based payment rates for these 
procedures.
    In the CY 2019 OPPS/ASC final rule with comment period, we 
developed a policy for establishing payment rates for low-volume 
procedures assigned to New Technology APCs (83 FR 58892 through 58893). 
In that rule, we explained that procedures assigned to New Technology 
APCs are typically new procedures that do not have sufficient claims 
history to establish an accurate payment for them (83 FR 58892). One of 
the objectives of

[[Page 42182]]

establishing New Technology APCs is to generate sufficient claims data 
for a new procedure so that it can be assigned to an appropriate 
clinical APC. We stated that some procedures that are assigned to New 
Technology APCs have very low annual volume, which we consider to be 
fewer than 100 claims. There is a higher probability that payment data 
for a procedure with fewer than 100 claims per year may not have a 
normal statistical distribution, which we were concerned could affect 
the quality of our standard cost methodology for assigning services to 
clinical APCs. We also noted that services with fewer than 100 claims 
per year are not generally considered to be significant contributors to 
the APC ratesetting calculations, and therefore, are not included in 
the assessment of the 2 times rule. For these low-volume procedures, we 
were concerned that the methodology we use to estimate the cost of a 
procedure under the OPPS--calculating the geometric mean for all 
separately paid claims for a HCPCS procedure code from the most recent 
available year of claims data--may not generate an accurate estimate of 
the actual cost of these procedures.
    We noted that low utilization of services can lead to wide 
variation in payment rates from year to year. This volatility in 
payment rates from year to year can result in even lower utilization 
and potential barriers to access for these new technologies, which in 
turn limits our ability to assign the service to an appropriate 
clinical APC. To mitigate these issues, we believed that it was 
appropriate to utilize our equitable adjustment authority at section 
1833(t)(2)(E) of the Act to adjust how we determine the costs for low-
volume services assigned to New Technology APCs. We finalized a policy 
to calculate payment rates for low-volume procedures with fewer than 
100 claims per year that are assigned to a New Technology APC by using 
up to 4 years of claims data to calculate the geometric mean, the 
median, and the arithmetic mean, to include the result of each 
statistical methodology in annual rulemaking, and to solicit comment on 
which methodology should be used to establish the payment rate. We 
explained that once we identify a payment rate for a low-volume 
service, we would assign the service to the New Technology APC with the 
cost band that includes its payment rate (83 FR 58893).
    While we believe that the policies we have adopted to calculate 
payment rates for low-volume procedures have mitigated concerns 
regarding payment rates for new technologies and device-intensive 
procedures, we also believe that additional items and services may 
benefit from a policy that applies to clinical APCs with significantly 
low claims volume available for ratesetting purposes. In particular, we 
believe that where there are fewer than 100 single claims from the most 
recent year available for ratesetting for an APC, there is often 
significant volatility in the payment rate for those APCs that could be 
addressed with a low-volume adjustment policy similar to our low-volume 
policies for device-intensive procedures and New Technology APCs. For 
example, for CY 2022 ratesetting purposes, there are only 43 single 
claims from CY 2019 available for determining the geometric mean cost 
for APC 5244 (Level 4 Blood Product Exchange and Related Services) and 
the payment rate for this APC has fluctuated significantly from year to 
year. The geometric mean cost of APC 5244 was $30,424.15 in CY 2018 
(based on CY 2016 claims), increased by 25.6 percent to $38,220.27 in 
CY 2019 (based on CY 2017 claims), and decreased by 18.9 percent to 
$31,015.17 in CY 2021 (based on CY 2019 claims).
    Additionally, for CY 2022 ratesetting purposes, there are only 22 
single claims from CY 2019 available for determining the geometric mean 
cost of APC 2632 (Iodine i-125 sodium iodide). The payment rates for 
this APC have also fluctuated significantly, with a geometric mean cost 
of $26.63 in CY 2018 (based on CY 2016 claims), which increased by 43.4 
percent to $38.20 in CY 2019 (based on CY 2017 claims), and decreased 
by 31.8 percent to $26.04 in CY 2021 (based on CY 2019 claims).
    We believe that APCs with low claims volume available for 
ratesetting could also benefit from a low-volume adjustment policy 
similar to the one we currently utilize to set payment rates for 
device-intensive procedures and procedures assigned to New Technology 
APCs. Specifically, we propose to designate clinical APCs, 
brachytherapy APCs, and New Technology APCs with fewer than 100 single 
claims that can be used for ratesetting purposes in the claims year 
used for ratesetting for the prospective year (the CY 2019 claims year 
for this CY 2022 proposed rule) as low volume APCs. While our proposed 
criterion for a clinical or brachytherapy APC to qualify as a low 
volume APC policy is that the APC have fewer than 100 single claims 
that can be used for ratesetting, we acknowledge that New Technology 
APCs are different from clinical APCs in that they contain procedures 
that may not be clinically similar to other procedures assigned to the 
same New Technology APC based on cost and are only assigned to a New 
Technology APC because there is not sufficient data to assign these 
procedures to a clinical APC. Therefore, we propose that for New 
Technology APCs with fewer than 100 single claims at the procedure 
level that can be used for ratesetting, we would apply our proposed 
methodology for determining a low volume APC's cost, choosing the 
``greatest of'' the median, arithmetic mean, or geometric mean at the 
procedure level, to apply to the individual services assigned to New 
Technology APCs and provide the final New Technology APC assignment for 
each procedure.
    We are proposing that the threshold for the low volume APC 
designation would be fewer than 100 single claims per year for the APC 
that can be used for ratesetting purposes, as this is how we have 
traditionally defined low volume under our existing policies. As 
previously mentioned, the threshold would be 100 single claims at the 
procedure level for New Tech APCs. We have defined low volume as fewer 
than 100 single claims under our existing policies as there is a higher 
probability that payment data for a procedure with fewer than 100 
claims per year may not have a normal statistical distribution, which 
we were concerned could affect how we set payment rates for low volume 
APCs. For items and services assigned to APCs we propose to designate 
as low volume APCs, we are proposing to use up to 4 years of claims 
data to establish a payment rate for each item or service as we 
currently do for low volume services assigned to New Technology APCs. 
The availability of multiple years of claims data will allow for more 
claims to be used for ratesetting purposes and create a more 
statistically reliable payment rate for these APCs than setting rates 
for APCs with low claims volume based on one year of data alone. 
Further, using multiple years of claims data, we are proposing to use 
the greatest of the median, arithmetic mean, or geometric mean cost to 
approximate the cost of items and services assigned to a low volume 
APC. In previous years, we have received few to no public comments on 
which statistical methodology to use and have usually chosen the 
methodology that yields the highest rate to set the payment rate for 
procedures assigned to New Technology APCs. Going forward, we are 
proposing to formalize this approach for low volume New Technology, 
clinical, and brachytherapy APCs, as we believe using the greatest of 
these three methodologies provides a simple and consistent approach to 
determining the cost metric to be used for ratesetting for

[[Page 42183]]

these APCs and avoids uncertainty where multiple cost metrics could be 
used to set the APC's cost. Additionally, due to the payment volatility 
and low volume nature of these products, we believe that choosing the 
methodology that yields the highest rate will ensure that these 
products receive sufficient payment and that payment is not a barrier 
to access for these procedures.
    Given the different nature of policies that affect the partial 
hospitalization program (PHP), we are not proposing to apply this low 
volume APC policy to APC 5853 Partial Hospitalization for CMHCs or APC 
5863 Partial Hospitalization for Hospital-based PHPs. We are also not 
proposing to apply this low volume APC policy to APC 2698 (Brachytx, 
stranded, nos) or APC 2699 (Brachytx, non-stranded, nos), as we believe 
our current methodology for determining payment rates for non-specified 
brachytherapy sources, as discussed in Section II.A.2.a.(2) of this 
proposed rule, is appropriate. Further, as discussed in additional 
detail in Section IV.B.5 of this proposed rule, we are proposing to 
eliminate our low volume Device-Intensive Procedure policy, for which 
HCPCS code 0308T has been the only procedure subject to this policy, 
and subsume the ratesetting for HCPCS code 0308T within our broader low 
volume APC proposal.
    For this CY 2022 OPPS/ASC proposed rule, we evaluated certain New 
Technology APCs to determine if such APCs meet our low volume APC 
criteria. As previously mentioned, we are proposing to use the 
``greatest of'' the geometric mean, the median, or the arithmetic mean 
at the procedure level for determining the low volume APC cost of the 
individual services assigned to New Technology APCs, rather than 
soliciting comment on which methodology to use. In claims data 
available for this CY 2022 OPPS/ASC proposed rule, there were 5 claims 
for APC 1562 (which reflects the assignment of new technology procedure 
HCPCS code C9751 (bronchoscopy with transbronchial ablation of lesions 
by microwave energy)) and 35 claims for APC 1908 (New Technology--Level 
52 ($145,001-$160,000)) which reflects the assignment of new technology 
procedure CPT code 0100T (Placement of a subconjunctival retinal 
prosthesis receiver and pulse generator, and implantation of intra-
ocular retinal electrode array, with vitrectomy).
    Given the low volume of claims for HCPCS code C9751, we propose for 
CY 2022 to calculate the geometric mean, arithmetic mean, and median 
costs to calculate an appropriate payment rate for purposes of 
assigning HCPCS code C9751 to a New Technology APC. We found the 
greatest cost metric for HCPCS code C9751 to be $3,707.76. Therefore, 
for this proposed rule, we are proposing to assign HCPCS code C9751 to 
APC 1562 (New Technology--Level 25 ($3,501-$4,000)) and we are 
proposing to designate APC 1562 (New Technology--Level 25 ($3,501-
$4,000)) as a low volume APC with a proposed APC cost and payment rate 
of $3,750.50. Details regarding APC 1562 are shown in Table 36.
    Additionally, given the low volume of claims for APC 1908 (New 
Technology--Level 52 ($145,001-$160,000)) which reflects the assignment 
of new technology procedure CPT code 0100T (Placement of a 
subconjunctival retinal prosthesis receiver and pulse generator, and 
implantation of intra-ocular retinal electrode array, with vitrectomy), 
we propose for CY 2022 to calculate the geometric mean, arithmetic 
mean, and median costs to calculate an appropriate payment rate for 
purposes of assigning CPT code 0100T to a New Technology APC. We found 
the greatest cost metric for CPT code 0100T to be $155,412.90. 
Therefore, for this proposed rule, we are proposing to assign CPT code 
0100T to APC 1908 (New Technology--Level 52 ($145,001-$160,000)) and we 
are proposing to designate APC 1908 (New Technology--Level 52 
($145,001-$160,000)) as a low volume APC with a proposed APC cost and 
payment rate of $152,500.50. Details regarding APC 1908 are shown in 
Table 36.
    Further, for CY 2022, in addition to the 2 New Technology APCs we 
are proposing to designate as low volume APCs, we are also proposing to 
designate 4 clinical APCs and 5 brachytherapy APCs as low volume APCs 
under the OPPS. The 4 clinical APCs and 5 brachytherapy APCs meet our 
criteria of having fewer than 100 single claims in the claims year (CY 
2019 for this CY 2022 OPPS/ASC proposed rule) and therefore, we propose 
that they would be subject to our new low volume APC policy, if 
finalized. Table 36 illustrates the APC geometric mean cost without the 
low volume APC designation, the median, arithmetic mean, and geometric 
mean cost using up to 4 years of claims data, as well as the 
statistical methodology we are proposing to use as the APC's cost for 
ratesetting purposes for CY 2022. As discussed in Section II.A.1.a of 
this proposed rule, given our concerns with CY 2020 claims data as a 
result of the PHE, the 4 years of claims data are based on CY 2016 
claims through CY 2019 claims.
BILLING CODE 4120-01-P

[[Page 42184]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.069

BILLING CODE 4120-01-C

[[Page 42185]]

    Based on the number of available claims from the standard 
ratesetting methodology used for ASC ratesetting purposes, for CY 2022, 
under the ASC payment system, we propose to designate 2 New Technology 
APCs, 3 clinical APCs, and 5 brachytherapy APCs as Low Volume APCs that 
meet our criteria of having fewer than 100 single claims in the claims 
year (CY 2019 for this CY 2022 OPPS/ASC proposed rule) and would be 
subject to our new Low Volume APC. Under our proposed Low Volume APC 
policy, the payment rates for these APCs would be set at the highest 
amount among the geometric mean, median, or arithmetic mean, calculated 
using up to four years of data, which in the case of these APCs, would 
be claims data from 2016 through 2019.
    As discussed in Section II.A.1.a of this proposed rule, given our 
concerns with CY 2020 claims data as a result of the PHE, the 4 years 
of claims data are based on claims from CY 2016 through CY 2019. We are 
soliciting comments from the public on our proposal to establish a Low 
Volume APC policy for clinical APCs, brachytherapy APCs, and New 
Technology APCs. This includes our criterion for designating an APC as 
a Low Volume APC, the use of the highest of the geometric mean, median, 
and arithmetic mean to determine the payment rate for clinical and 
brachytherapy APCs, as well as individual services assigned to New 
Technology APCs, and our use of claims data from CY 2016 through 2019 
to calculate the geometric mean, median, and arithmetic mean for 
purposes of determining the CY 2022 payment rates for these APCs.

D. Comment Solicitation on Temporary Policies To Address the COVID-19 
PHE

    In response to the COVID-19 pandemic, CMS issued waivers and 
undertook emergency rulemaking to implement a number of temporary 
policies to address the pandemic, including policies to prevent spread 
of the infection and support diagnosis of COVID-19. Many of these 
flexibilities were available because certain statutory or regulatory 
provisions were waived. These waivers will expire at the conclusion of 
the PHE. We are seeking comment on the extent to which stakeholders 
utilized the flexibilities available under these waivers, as well as 
whether stakeholders believe certain of these temporary policies should 
be made permanent to the extent possible within our existing authority. 
Specifically, we are seeking comment on stakeholders' experience with 
hospital staff furnishing services remotely to beneficiaries in their 
homes through use of communications technology; providers furnishing 
services in which the direct supervision for cardiac rehabilitation, 
intensive cardiac rehabilitation, and pulmonary rehabilitation services 
requirement was met by the supervising practitioner being available 
through audio/video real-time communications technology; and the need 
for specific coding and payment to remain available under the OPPS for 
specimen collection for COVID-19.
1. Mental Health Services Furnished Remotely by Hospital Staff to 
Beneficiaries in Their Homes
    Under the Physician Fee Schedule (PFS), Medicare makes payment to 
professionals and other suppliers for physicians' services, including 
certain diagnostic tests and preventive services. Section 1834(m) of 
the Act specifies the payment amounts and circumstances under which 
Medicare makes payment for a discrete set of Medicare telehealth 
services, all of which must ordinarily be furnished in-person, when 
they are instead furnished using interactive, real-time 
telecommunications technology. When furnished as Medicare telehealth 
services under section 1834(m), many of these services are still 
reported using codes that describe ``face-to-face'' services even 
though they are furnished using audio/video, real-time communications 
technology instead of in-person (82 FR 53006). Section 1834(m) of the 
Act specifies the types of health care professionals that can furnish 
and be paid by Medicare for telehealth services (referred to as distant 
site practitioners) and the types and locations of settings where a 
beneficiary can be located when receiving telehealth services (referred 
to as originating sites). In the CY 2003 PFS final rule with comment 
period (67 FR 79988), we established a regulatory process for adding 
services to or deleting services from the Medicare telehealth services 
list in accordance with section 1834(m)(4)(F)(ii) of the Act (42 CFR 
410.78(f)). This process provides the public with an ongoing 
opportunity to submit requests for adding services, which we consider 
and review through the annual PFS rulemaking process. The regulation at 
Sec.  410.78(a)(3) also defines the requirements for the interactive 
telecommunications systems that may be used to furnish Medicare 
telehealth services.
    Due to the circumstances of the COVID-19 pandemic, particularly the 
need to maintain physical distance to avoid exposure to the virus, we 
anticipated that health care practitioners would develop new approaches 
to providing care using various forms of technology when they are not 
physically present with the patient. We have established several 
flexibilities to accommodate these changes in the delivery of care. For 
Medicare telehealth services, using waiver authority under section 
1135(b)(8) of the Act in response to the PHE for the COVID-19 pandemic, 
we have removed the geographic and site of service originating site 
restrictions in section 1834(m)(4)(C) of the Act, as well as the 
restrictions in section 1834(m)(4)(E) of the Act on the types of 
practitioners who may furnish telehealth services, for the duration of 
the PHE for the COVID-19 pandemic. We also used waiver authority to 
allow certain telehealth services to be furnished via audio-only 
communication technology during the PHE.
    According to MedPAC's report, Telehealth in Medicare after the 
Coronavirus Public Health Emergency,\107\ there were 8.4 million 
telehealth services paid under the PFS in April 2020, compared with 
102,000 in February 2020. MedPAC also reported that during focus groups 
held in the summer of 2020, clinicians and beneficiaries supported 
continued access to telehealth visits with some combination of in-
person visits. They cited benefits of telehealth, including improved 
access to care for those with physical impairments, increased 
convenience from not traveling to an office, and increased access to 
specialists outside of a local area. In their annual beneficiary 
survey, over 90 percent of respondents who had a telehealth visit 
reported being ``somewhat'' or ``very satisfied'' with their video or 
audio visit, and nearly two-thirds reported being ``very satisfied.''
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    \107\ http://medpac.gov/docs/default-source/reports/mar21_medpac_report_ch14_sec.pdf?sfvrsn=0.
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    Recently enacted legislation modified the circumstances under which 
Medicare makes payment for mental health services furnished via 
telehealth technology under the PFS following the PHE. Division CC, 
section 123 of the CAAremoved the geographic originating site 
restrictions and added the home of the individual as a permissible 
originating site for Medicare telehealth services when furnished for 
the purposes of diagnosis, evaluation, or treatment of a mental health 
disorder.\108\

[[Page 42186]]

This change correlates with a growing acceptance of the use of 
technology in the provision of mental health care. According to the 
Commonwealth Fund,\109\ the provision of mental and behavioral health 
services via communications technology, in particular, has a robust 
evidence base and numerous studies have demonstrated its effectiveness 
across a range of modalities and mental health diagnoses (e.g., 
depression, substance use disorders). Clinicians furnishing tele-
psychiatry services at Massachusetts General Hospital Department of 
Psychiatry during the PHE observed several advantages of the virtual 
format for furnishing psychiatric services, noting that patients with 
psychiatric pathologies that interfere with their ability to leave home 
(e.g., immobilizing depression, anxiety, agoraphobia, and/or time-
consuming obsessive-compulsive rituals) were able to access care more 
consistently since eliminating the need to travel to a psychiatry 
clinic can increase privacy and therefore decrease stigma-related 
barriers to treatment, potentially bringing care to many more patients 
in need, as well as enhanced ease of scheduling, decreased rate of no-
shows, increased understanding of family and home dynamics, and 
protection for patients and practitioners with underlying health 
conditions.\110\
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    \108\ There is a longstanding statutory payment exclusion that 
prohibits Medicare payment for services that are not furnished 
within the United States (see section 1862(a)(4) of the Act). This 
payment exclusion was not changed by the CAA.
    \109\ https://www.commonwealthfund.org/blog/2020/using-telehealth-meet-mental-health-needs-during-covid-19-crisis.
    \110\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7347331/.
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    These findings are consistent with our analysis of Medicare claims 
data that indicate that interactive communications technology for 
mental health care is likely to continue to be in broad use beyond the 
circumstances of the pandemic. According to our analysis of Medicare 
Part B claims data for services furnished via Medicare telehealth 
during the PHE, use of telehealth for many professional services spiked 
in utilization around April 2020 and diminished over time. In contrast, 
Medicare claims data suggest that for mental health services added to 
the Medicare Telehealth list both permanently and temporarily, 
subsequent to April 2020, the trend is toward maintaining a steady 
state of usage over time. Given this information, broad acceptance in 
the public and medical community, and the relatively stable Medicare 
utilization of mental health services during the COVID-19 pandemic, we 
believe use of interactive communication technology in furnishing 
mental health care is becoming an established part of medical practice, 
very likely to persist after the COVID-19 pandemic, and available 
across the country under the Medicare statute for the range of 
professionals furnishing mental health care and paid under the PFS.
    In many cases, hospitals provide hospital outpatient mental health 
services (including behavioral health), education, and training 
services that are furnished by hospital-employed counselors or other 
licensed professionals. Examples of these services include 
psychoanalysis, psychotherapy, diabetes self-management training, and 
medical nutrition therapy. With few exceptions, the Medicare statute 
does not have a benefit category that would allow these types of 
professionals (for example, mental health counselors and registered 
nurses) to bill Medicare directly for their services. These services 
can, in many cases, be billed by providers such as hospitals under the 
OPPS or by physicians and other practitioners as services incident to 
their professional services under the PFS. We also note that while 
partial hospitalization services are paid under the OPPS, section 
1861(ff)(3)(A) of the Act explicitly prohibits partial hospitalization 
services from being furnished in an individual's home or residential 
setting.
    As we explained in the interim final rule with comment period 
published on May 8, 2020 titled ``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'' (the May 8th COVID-19 IFC) (85 FR 27550, 
27563), outpatient mental health services, education, and training 
services require communication and interaction. We stated that facility 
staff can effectively furnish these services using telecommunication 
technology and, unlike many hospital services, the clinical staff and 
patient are not required to be in the same location to furnish them. We 
further explained that blanket waivers in effect during the COVID-19 
PHE allow the hospital to consider the beneficiary's home, and any 
other temporary expansion location operated by the hospital during the 
COVID-19 PHE, to be a provider-based department (PBD) of the hospital, 
so long as the hospital can ensure the locations meet all of the 
conditions of participation, to the extent not waived. In light of the 
need for infection control and a desire for continuity of behavioral 
health care and treatment services, we recognized the ability of the 
hospital's clinical staff to continue to deliver these services even 
when they are not physically located in the hospital. Therefore, in the 
May 8th COVID-19 IFC (85 FR 27564), we made clear that when a 
hospital's clinical staff are furnishing hospital outpatient mental 
health services, education, and training services to a patient in the 
hospital (which can include the patient's home so long as it is 
provider-based to the hospital), and the patient is registered as an 
outpatient of the hospital, we will consider the requirements of the 
regulations at Sec.  [thinsp]410.27(a)(1) to be met. We reminded 
readers that the physician supervision level for the vast majority of 
hospital outpatient therapeutic services is currently general 
supervision under Sec.  [thinsp]410.27. This means a service must be 
furnished under the physician's overall direction and control, but the 
physician's presence is not required during the performance of the 
service.
    In the May 8th COVID-19 IFC we emphasized that all services 
furnished by the hospital still require an order by a physician or 
qualified NPP and must be supervised by a physician or other NPP 
appropriate for supervising the service given their hospital admitting 
privileges, state licensing, and scope of practice, consistent with the 
requirements in Sec.  [thinsp]410.27 (85 FR 27563). We noted that 
hospitals may bill for these services as if they were furnished in the 
hospital and consistent with any specific requirements for billing 
Medicare in general, including any relevant modifications in effect 
during the COVID-19 PHE. We also noted that when these services are 
provided by clinical staff of the physician or other practitioner and 
furnished incident to their professional services, and are not provided 
by staff of the hospital, the hospital would not bill for the services. 
We stated that in those circumstances, the physician or other 
practitioner should bill for such services incident to their own 
services and would be paid under the PFS.
    Given that the widespread use of communications technology to 
furnish services during the PHE has illustrated acceptance within the 
medical community and among Medicare beneficiaries of the possibility 
of furnishing and receiving care through the use of that technology, we 
are interested in information on the role of hospital staff in 
providing care to beneficiaries remotely in their homes. During the 
PHE, hospital staff have had the flexibility to provide these kinds of 
services to beneficiaries in their homes through communications 
technology; however, this flexibility is tied to

[[Page 42187]]

waivers and other temporary policies that expire at the end of the PHE. 
In instances where a beneficiary may be receiving mental health 
services from a hospital clinical staff member who cannot bill Medicare 
independently for their professional service, the beneficiary would 
then need to physically travel to the hospital to continue receiving 
the services post-PHE. We are concerned that this could have a negative 
impact on access to care in areas where beneficiaries may only be able 
to access mental health services provided by hospital staff and, during 
the PHE, have become accustomed to receiving these services in their 
homes. We also note that the ability to receive mental health services 
in their homes may help expand access to care for beneficiaries who 
prefer additional privacy for the treatment of their condition.
    We are concerned that, during the PHE, practice patterns may have 
shifted to support expanded virtual services. During the PHE, we have 
not required any claims-based modifier identifying specifically when a 
service is furnished by clinical staff of the hospital to a beneficiary 
in their home through communications technology, and therefore we are 
not able to gauge the magnitude of these practice pattern shifts. 
Therefore, we are seeking comment on the extent to which hospitals have 
been billing for mental health services provided to beneficiaries in 
their homes through communications technology during the PHE, and 
whether they would anticipate continuing demand for this model of care 
following the conclusion of the PHE. As described in preceding 
paragraphs, billing for Medicare telehealth services has increased 
dramatically during the PHE, particularly for mental health services. 
We are seeking comment on whether hospitals have experienced a similar 
increase during the PHE in utilization of mental health services 
provided by hospital staff to beneficiaries in their homes through 
communications technology. We are also seeking comment on whether there 
are changes commenters believe CMS should make to account for shifting 
patterns of practice that rely on communication technology to provide 
mental health services to beneficiaries in their homes.
2. Direct Supervision by Interactive Communications Technology
    In the interim final rule with comment period titled ``Policy and 
Regulatory Provisions in Response to the COVID-19 Public Health 
Emergency'' published on April 6, 2020 (the April 6th COVID-19 IFC) (85 
FR 19230, 19246, 19286), we changed the regulation at 42 CFR 
410.27(a)(1)(iv)(D) to provide that, during a Public Health Emergency 
as defined in Sec.  400.200, the presence of the physician for purposes 
of the direct supervision requirement for pulmonary rehabilitation, 
cardiac rehabilitation, and intensive cardiac rehabilitation services 
includes virtual presence through audio/video real-time communications 
technology when use of such technology is indicated to reduce exposure 
risks for the beneficiary or practitioner. Specifically, the required 
direct physician supervision can be provided through virtual presence 
using audio/video real-time communications technology (excluding audio-
only) subject to the clinical judgment of the supervising practitioner. 
We further amended Sec.  410.27(a)(1)(iv)(D) in the CY 2021 OPPS/ASC 
final rule with comment period to provide that this flexibility 
continues until the end of the PHE as defined in Sec.  400.200 or 
December 31, 2021, whichever is later (85 FR 86113). We noted that the 
public comments we received, along with feedback we have received since 
the implementation of the policy in the April 6th COVID-19 IFC allowing 
for direct supervision through virtual presence (85 FR 19246) have 
convinced us that we need more information on the issues involved with 
direct supervision through virtual presence before implementing this 
policy permanently. We acknowledge that the additional time between the 
issuance of the CY 2021 OPPS/ASC final rule with comment period and the 
issuance of this proposed rule may have allowed providers to collection 
more information that could inform CMS' decision making and are 
therefore seeking additional comment on whether this policy should be 
adopted on a permanent basis. While we are not proposing to maintain 
this flexibility after the later of the end of the PHE or December 31, 
2021, we are seeking comment on whether and to what extent hospitals 
have relied upon this flexibility during the PHE and whether providers 
expect this flexibility would be beneficial outside of the PHE. We are 
seeking comment on whether we should continue to allow direct 
supervision for these services to include presence of the supervising 
practitioner via two-way, audio/video communication technology 
permanently, or for some period of time after the conclusion of the PHE 
or beyond December 31, 2021, to facilitate a gradual sunset of the 
policy. We are also seeking comment on whether there are safety and/or 
quality of care concerns regarding adopting this policy beyond the PHE 
and what policies CMS could adopt to address those concerns if the 
policy were extended post-PHE. Finally, if this policy is made 
permanent, we are seeking comment on whether a service-level modifier 
should be required to identify when the requirements for direct 
supervision for pulmonary rehabilitation, cardiac rehabilitation, and 
intensive cardiac rehabilitation services were met using audio/video 
real-time communications technology.
3. Payment for COVID-19 Specimen Collection in Hospital Outpatient 
Departments
    Also in the May 8th COVID-19 IFC, we created a new E/M code to 
support COVID-19 testing during the PHE: HCPCS code C9803 (Hospital 
outpatient clinic visit specimen collection for severe acute 
respiratory syndrome coronavirus 2 (sars-cov-2) (coronavirus disease 
[covid-19]), any specimen source) (85 FR 27604). In our review of 
available HCPCS and CPT codes for the May 8th COVID-19 IFC, we did not 
identify a code that explicitly described the exact services of symptom 
assessment and specimen collection that HOPDs were undertaking to 
facilitate widespread testing for COVID-19. As stated in the May 8th 
COVID-19 IFC, we believed that HCPCS code C9803 was necessary to meet 
the resource requirements for HOPDs to provide extensive testing for 
the duration of the COVID-19 PHE. This code was created only to meet 
the need of the COVID-19 PHE and we stated that we expected to retire 
this code at the conclusion of the COVID-19 PHE (85 FR 27605).
    We assigned HCPCS code C9803 to APC 5731--Level 1 Minor Procedures 
effective March 1, 2020 for the duration of the COVID-19 PHE. In 
accordance with Section 1833(t)(2)(B) of the Act, APC 5731--Level 1 
Minor Procedures contains services similar to HCPCS code C9803. APC 
5731--Level 1 Minor Procedures has a payment rate of $24.67 for CY 
2021. HCPCS code C9803 was also assigned a status indicator of ``Q1.'' 
The Q1 status indicator indicates that the OPPS will package services 
billed under HCPCS code C9803 when billed with a separately payable 
primary service in the same encounter. When HCPCS code C9803 is billed 
without another separately payable primary service, we will make 
separate payment for the service under the OPPS. The OPPS also makes 
separate payment for HCPCS code C9803 when it is billed with a clinical 
diagnostic laboratory test with a status indicator of ``A'' on Addendum 
B of the OPPS.

[[Page 42188]]

    We are soliciting public comments on whether we should keep HCPCS 
code C9803 active beyond the conclusion of the COVID-19 PHE and whether 
we should extend or make permanent the OPPS payment associated with 
specimen collection for COVID-19 tests after the COVID-19 PHE ends, 
including why commenters believe it would be necessary to continue to 
provide OPPS payment for this service, as well as how long commenters 
believe payment should be extended for this code.

E. Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment System 
Ratesetting Due to the PHE

    As described in section I.A. of this proposed rule with comment 
period, section 1833(t) of the Social Security Act requires the 
Secretary to annually review and update the payment rates for services 
payable under the Hospital Outpatient Prospective Payment System 
(OPPS). Specifically, Section 1833(t)(9)(A) of the Act requires the 
Secretary to review not less often than annually and to revise the 
groups, the relative payment weights, and the wage and other 
adjustments described in paragraph (2) to take into account changes in 
medical practice, changes in technology, the addition of new services, 
new cost data, and other relevant information and factors.
    In updating the OPPS payment rates and system for each rulemaking 
cycle we primarily use two sources of information: The outpatient 
Medicare claims data and HCRIS cost report data. The claims data source 
is the Outpatient Standard Analytic File, which includes final action 
Medicare outpatient claims for services furnished in a given calendar 
year. For the OPPS ratesetting process, our goal is to use the best 
available data for ratesetting so that we can accurately estimate the 
costs associated with furnishing outpatient services, and thus set 
appropriate payment rates. Ordinarily, the best available claims data 
is the set of data from 2 years prior to the calendar year that is the 
subject of rulemaking. For CY 2022 OPPS/ASC proposed rule ratesetting, 
this typically would have been the set of CY 2020 calendar year 
outpatient claims data processed through December 31, 2020. The cost 
report data source is typically the Medicare hospital cost report data 
files from the most recently available quarterly HCRIS file as we begin 
the ratesetting process. For example, ordinarily, the best available 
cost report data used in developing the OPPS relative weights would be 
from cost reports beginning 3 fiscal years prior to the year that is 
the subject of the rulemaking. For CY 2022 OPPS ratesetting, under 
ordinary circumstances, that would be cost report data from HCRIS 
extracted in December 2020, which would contain many cost reports 
ending in FY 2020 based on each hospital's cost reporting period.
    As discussed in section I.F. of the FY 2022 IPPS/LTCH proposed 
rule, there are a number of issues related to the use of the standard 
hospital data we would otherwise use for purposes of CY 2022 
ratesetting because data from the applicable time period would include 
the effects of the COVID-19 PHE (86 FR 25086 through 25090). Even 
though the specific data elements might be slightly different between 
the inpatient and outpatient hospital settings, the same questions and 
challenges exist for hospital data from CY/FY 2020. Some of the issues 
are focused on the source data and the degree to which the utilization 
of services and cost patterns found in them are affected by the PHE. 
Other issues are more prospective in nature and concern whether 
hospital claims data from this time period might be consistent with our 
expectations for the prospective year, particularly in a changing 
environment with regards to COVID-19 vaccinations and treatment.
    In the FY 2022 IPPS proposed rule, we proposed to use FY 2019 data 
for FY 2022 IPPS ratesetting based on our determination that the FY 
2019 data would be more representative of FY 2022 inpatient hospital 
experience than the FY 2020 data (86 FR 25089). We note that there are 
a number of policies that apply and interact across the IPPS and OPPS, 
in part because they both concern services furnished in the hospital 
setting. We have noted in annual rulemaking in regards to adopting the 
fiscal year IPPS wage index into the OPPS, the ``inseparable, 
subordinate status of the HOPD within the hospital overall'' (85 FR 
85908). It is in this context where inpatient and outpatient hospital 
departments are inherently connected to each other, as parts of the 
broader hospital setting overall, that we have identified many of the 
same reasons to use 2019 data for 2022 ratesetting as discussed in the 
FY 2022 IPPS proposed rule.
    We note that we observe a number of changes, likely as a result of 
the PHE, in the CY 2020 OPPS claims data that we would ordinarily use 
for ratesetting. The most significant difference compared to prior 
years is the decrease in the overall volume of outpatient hospital 
claims--with approximately 20 percent fewer claims usable for 
ratesetting purposes when compared to the prior year. In addition, this 
decrease in outpatient claims volume applied to a majority of the 
clinical APCs in the OPPS.
    In some cases, we saw broad changes as a result of the PHE, 
including in the APCs for hospital emergency department and clinic 
visits. Among those APCs, the decrease in volume was approximately 30 
percent--some of which may be related to changing practice patterns 
during the PHE. For example, we see a significant increase in the use 
of the HCPCS code Q3014 (Telehealth originating site facility fee) in 
the hospital outpatient claims, with the approximately 35,000 services 
billed in the CY 2019 OPPS claims increasing to 1.8 million services in 
the CY 2020 OPPS claims. This example highlights two types of 
differences we see in the CY 2020 set of claims when comparing to more 
typical claims data. One difference is likely due to the degree to 
which elective procedures/services were not performed as often during 
the PHE. The other difference is the result of site of service changes 
due to flexibilities available during the PHE.
    In other cases, we saw changes in the claims data that were 
associated with specific services that were furnished more frequently 
during the PHE. For example, two notable exceptions to this decrease in 
claims volume between CY 2019 and CY 2020 are for APC 5731 (Level 1 
Minor Procedures) and APC 5801 (Ventilation Initiation and Management). 
In the case of APC 5731, HCPCS code C9803 was made effective for 
services furnished on or after March 1, 2020 through the interim final 
rule with comment period titled ``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'' (85 FR 27602 through 27605) to describe a 
COVID-19 Specimen collection. In the CY 2020 claims, HCPCS C9803 has 
1,023,957 single claims available for cost modeling, representing 
approximately 93% of claims used to model the APC cost. While in some 
cases this would be appropriate in establishing the APC cost, we 
generally would not expect the same volume of the procedure in the CY 
2022 OPPS because we anticipate that specimen collection for COVID-19 
testing will be significantly lower than it was in CY 2020. Similarly, 
the estimated increase in the geometric mean cost of APC 5801 based on 
the CY 2020 claims data may not be predictive of CY 2022 costs for APC 
5801 if there is less use of this service in CY 2022 than in CY 2020.
    As a result of a number of COVID-19 PHE-related factors, including 
the

[[Page 42189]]

changes in services potentially related to the COVID-19 PHE, the 
significant decrease in volume suggesting that patients may have been 
deferring elective care during CY 2020, the changes in APC relative 
weights for services, and the increasing number of Medicare 
beneficiaries vaccinated against COVID-19, we believe that CY 2020 data 
are not the best overall approximation of expected outpatient hospital 
services in CY 2022. Instead we believe that CY 2019 data, as the most 
recent complete calendar year of data prior to the COVID-19 PHE, are a 
better approximation of expected CY 2022 hospital outpatient services.
    We analyzed the extent the decision to use CY 2019 or CY 2020 
claims data as the basis for ratesetting differentially impacts the CY 
2022 OPPS rates. To do this, we estimated the difference in case-mix 
under the CY 2019-based weights and the CY 2020-based weights if the CY 
2022 outpatient 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 CY 2019-based weights, we calculated the case-mix using claims 
from the CY 2019-based claims extract as an approximation of the actual 
CY 2022 experience (Scenario A), and using claims from the CY 2020 
based claims extract as an approximation of the actual CY 2022 
experience (Scenario B). For the CY 2020-based weights, we calculated 
the case-mix using claims from the CY 2020 claims based extract as an 
approximation of the actual CY 2022 outpatient experience (Scenario C), 
and using claims from the CY 2019 claims based extract as an 
approximation of the actual CY 2022 experience (Scenario D). The 
results are shown in the following table 37.
[GRAPHIC] [TIFF OMITTED] TP04AU21.070

    In Scenario A and Scenario C, there is no differential impact as a 
result of a less accurate assumption made when the OPPS relative 
weights were calculated: The CY 2022 outpatient experience matches the 
assumption made when the OPPS relative weights were calculated. In 
Scenario B and Scenario D, the actual experience is the reverse of the 
assumption used when the OPPS relative weights were calculated.
    In Scenario B, when the CY 2019-based weights were used, but the CY 
2022 outpatient experience turns out to be more similar to CY 2020 
claims data, the less accurate assumption slightly affects the 
calculated case-mix, by 0.1 percent. This can be seen by comparing the 
modeled case mix under Scenario B (5.056) with the modeled case-mix 
under Scenario C (5.051). In other words, if we use the CY 2019-based 
weights and CY 2022 outpatient experience turns out to be more similar 
to the CY 2020 data, then the modeled case-mix is slightly lower than 
if we had accurately used the CY 2020-based weights. This suggests 
that, while there is some impact from using the CY 2019 data if CY 2022 
outpatient service utilization ends up being more similar to CY 2020 
utilization, that impact would be limited.
    In Scenario D, where the CY 2020-based weights were used, but the 
CY 2022 outpatient experience turns out to be more similar to CY 2019 
claims data, this inaccurate assumption has a somewhat more significant 
effect. In this case, the modeled case-mix is-0.44 percent lower than 
it would be if we had correctly assumed that CY 2022 outpatient 
services utilization would be more like CY 2019 than CY 2020. This can 
be seen by comparing the modeled case-mix under Scenario D (4.600) to 
the modeled case-mix under Scenario A (4.620). In other words, if we 
use the CY 2020-based weights and the CY 2022 outpatient experience 
turns out to be more similar to CY 2019 data, the modeled case-mix is-
0.44 percent lower than if we had used the CY 2019-based weights.
    In addition to our expectation that CY 2019 is a more likely 
approximation of the CY 2022 outpatient experience for the reasons 
discussed earlier, the previous analysis indicates that the 
differential effect of making an incorrect assumption about which 
year's data to use to set the CY 2022 OPPS relative weights is more 
limited if the CY 2019-based weights are used than it is if the CY 
2020-based weights are used. While CY 2022 outpatient hospital services 
data is unlikely to look exactly like either CY 2019 data or CY 2020 
data, we believe that it will be more similar to a standard year (not 
having the effects of the PHE) as pandemic-related issues decline and 
more of the U.S. population is vaccinated against COVID-19. Since the 
update provided in the FY 2022 IPPS final rule, continued progress has 
been made in vaccinating the U.S. population, with approximately 320 
million doses administered as of July 1, 2021, as reported to the 
Centers for Disease Control (CDC) https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html.
    Consistent with the proposal to use CY 2019 claims data in 
establishing the CY 2022 OPPS rates, we are also proposing to use cost 
report data from

[[Page 42190]]

the same set of cost reports we originally used in final rule 2021 OPPS 
ratesetting, where we ordinarily would have used the most updated 
available cost reports available in HCRIS in determining the proposed 
CY 2022 OPPS APC relative weights (as discussed in greater detail in 
section II.E. of this proposed rule). As discussed previously, if we 
were to proceed with the standard ratesetting process of using updated 
cost reports, we would have used approximately 1,000 cost reports with 
the fiscal year ending in CY 2020 based on each hospital's cost 
reporting period. We note that Medicare outpatient claims data and cost 
report data from the HCRIS file are examples of data sources for which 
we discuss the proposed use of CY 2019 data for CY 2022 OPPS 
ratesetting. While we are generally using CY 2019 claims data and the 
data components related to it in establishing the CY 2022 OPPS, we note 
in this rule the specific cases where we are using updated information, 
such as the ASP data used in determining drug packaging status 
discussed in section V. of this proposed rule with comment period.
    We also considered the alternative of continuing with our standard 
process of using the most updated claims and cost report data 
available. To facilitate comment on this alternative proposal for CY 
2022, we are making available the cost statistics and addenda utilizing 
the CY 2020 data we would ordinarily have provided in conjunction with 
this proposed rule. We are providing a file comparing the budget 
neutrality and certain 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 CY 2020 data that we 
ordinarily would have provided, including: The OPPS Impact File, cost 
statistics files, addenda, and budget neutrality factors. We refer the 
reader to the CMS website for this proposed rule for more information 
on where these supplemental files may be found.

F. Proposal To Provide Separate Payment in CY 2022 for the Device 
Category, Drugs, and Biologicals With Transitional Pass-Through Payment 
Status Expiring Between December 31, 2021 and September 30, 2022

    In the CY 2021 OPPS/ASC final rule (85 FR 86012 through 86013), we 
discussed the public comments we received in response to the comment 
solicitation we included in the CY 2021 OPPS/ASC proposed rule 
regarding whether we should utilize our equitable adjustment authority 
under section 1833(t)(2)(E) of the Act to provide separate payment for 
some period of time after pass-through status ends for devices with 
expiring pass-through status in order to account for the period of time 
that utilization for the devices was reduced due to the PHE.\111\ 
Although we only solicited comments on use of our equitable adjustment 
authority to pay separately for devices with pass-through status during 
the PHE, we received public comments both suggesting that drugs, 
biologicals, and biosimilar biological products with pass-through 
status during the same time period should also be subject to an 
adjustment to extend the pass-through period for those products, but 
also pointing out that most of these products continue to be separately 
paid after their pass-through status expires, and therefore, it would 
be unnecessary to utilize the equitable adjustment authority to 
``extend'' pass-through status for these products.
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    \111\ On January 31, 2020, HHS Secretary Azar determined that a 
PHE exists retroactive to January 27, 2020, under section 319 of the 
Public Health Service Act (42 U.S.C. 247d) in response to COVID-19, 
and on April 21, 2020 Secretary Azar renewed, effective April 26, 
2020, and again effective July 25, 2020, the determination that a 
PHE exists. On March 13, 2020, the President of the United States 
declared that the COVID-19 outbreak in the U.S. constitutes a 
national emergency, retroactive to March 1, 2020.
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    As discussed elsewhere in section X.E. of this proposed rule and 
section I.F of the FY 2022 IPPS/LTCH proposed rule (86 FR 25211-25212), 
our goal is to use the best available data for ratesetting. Ordinarily, 
the best available claims data is the set of data from 2 years prior to 
the calendar year that is the subject of rulemaking, and accordingly, 
we would have used claims data from CY 2020 for calculating proposed 
rates for this CY 2022 OPPS/ASC proposed rule. As noted in section 
X.E., however, we are proposing to use CY 2019 claims data in 
establishing the CY 2022 OPPS rates and to use cost report data from 
the same set of cost reports originally used in the final rule for 2021 
OPPS ratesetting. We recognize that due to the effects of the PHE, the 
CY 2020 claims data may not be the best available data for ratesetting, 
including for purposes of ratesetting for devices, drugs, and 
biologicals for which pass-through status expires between December 31, 
2021 and September 30, 2022.
    For this reason, and after consideration of the public comments we 
received in response to the comment solicitation included in the CY 
2021 OPPS/ASC proposed rule (85 FR 48862), we propose a one-time 
equitable adjustment under section 1833(t)(2)(E) to continue separate 
payment for the remainder of CY 2022 for devices, drugs, and 
biologicals with pass-through status that expires between December 31, 
2021 and September 30, 2022. We have consistently explained that 
transitional pass-through payment for drugs, biologicals, and devices 
is intended as an interim measure to allow for adequate payment of 
certain new technology while we collect the necessary data to 
incorporate the costs for these items into the procedure APC rate (66 
FR 55861). We believe an equitable adjustment to continue separate 
payment for devices, drugs, and biologicals with pass-through status 
that expires between December 31, 2021 and September 30, 2022 is 
necessary to ensure that we have full claims data from CY 2021 with 
which to set payment rates beginning in CY 2023. We also believe it is 
necessary to pay separately for these products in CY 2022 in a manner 
that mimics continued pass-through status, rather than having to set 
rates and make APC assignments and packaging decisions for these 
products for CY 2022 based on data from CY 2020, which we do not 
believe is the best available data for this purpose.
    For those drugs, biologicals and the device for which payment would 
be packaged following expiration of their pass-through status, we 
believe providing separate payment for up to a full year in CY 2022 is 
warranted to ensure there is a full year of data for ratesetting, 
including to ensure appropriate APC assignments for the services with 
which these products are billed. For drugs and biologicals that would 
generally remain separately payable after their pass-through status 
expires, we believe providing separate payment for up to a full year in 
CY 2022 is necessary to ensure that these drugs and biologicals would, 
in fact, be separately payable when their pass-through status expires, 
including to ensure that their payment would be packaged if the drug's 
cost is below the per-day packaging threshold. Specifically, for 
threshold packaged drugs and biologicals, CMS requires current, 
appropriate data to determine whether the drug should be packaged and 
then to determine the impact of that packaging on the associated 
service rates. We also believe separate payment in CY 2022 is necessary 
to ensure we have sufficient data in the event payment for the drug is 
packaged with payment for a primary C-APC service. Finally, consistent 
with our goal of ensuring that the equitable adjustment

[[Page 42191]]

to provide separate payment for drugs and biologicals with pass-through 
status that expires between December 31, 2021 and September 30, 2022 
mimics pass-through payment to the extent possible, we propose that 
separately payable drugs and biologicals that are eligible for this 
adjustment would not be paid the proposed reduced amount of ASP minus 
22.5 percent when they are acquired under the 340B program, and would 
generally continue to be paid ASP plus 6 percent for the duration of 
the time period during which the adjustment applies.
    Under our proposal, the device category, drugs, and biologicals 
that would be affected are as follows. One device category, HCPCS code 
C1823 (Generator, neurostimulator (implantable), nonrechargeable, with 
transvenous sensing and stimulation leads), would receive adjusted 
payment equivalent to an additional four quarters of device pass-
through status. There are 27 drugs and biologicals whose pass-through 
payment status expires between December 31, 2021 and September 30, 
2022. Based on the CY 2020 data, payment for three of the 27 drugs and 
biologicals would otherwise be packaged after the expiration of their 
pass-through status. The remaining 24 drugs and biologicals would be 
paid separately and would otherwise receive reduced payment at the 
proposed rate of ASP minus 22.5 percent when they are acquired under 
the 340B program.
    There are currently six drugs and one device category whose pass-
through payment status will expire on December 31, 2021, nine drugs and 
three biologicals whose pass-through status will expire on March 31, 
2022, seven drugs whose pass-through status will expire on June 30, 
2022, and two drugs whose pass-through payment status will expire on 
September 30, 2022. Because pass-through status can expire at the end 
of a quarter, the proposed adjusted payment would be made for between 
one and four quarters, depending on when the pass-through period 
expires for the device category, drug, or biological. In particular, 
separate payment would be made a full year for the device category and 
6 drugs for which pass-through status will expire on December 31, 2021, 
three quarters for the 12 drugs and biologicals for which pass-through 
status will expire on March 31, 2022, two quarters for the 7 drugs for 
which pass-through status will expire on June 30, 2022, and one quarter 
for the 2 drugs for which pass-through status will expire on September 
30, 2022.
    Table 38 lists pass-through drugs, biologicals and the device 
category that we propose would receive adjusted separate payment, their 
pass-through payment period effective dates and end dates, as well as 
the number of quarters of separate payment equivalent to an extension 
of pass-through status that we propose each drug or device category 
would receive.
BILLING CODE 4120-01-P

[[Page 42192]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.071


[[Page 42193]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.072

BILLING CODE 4120-01-C
    We are soliciting comments on our proposal to utilize our equitable 
adjustment authority to pay separately for the remainder of CY 2022 for 
the device category, drugs and biologicals with pass-through status 
that expires between December 31, 2021 and September 30, 2022.

XI. Proposed CY 2022 OPPS Payment Status and Comment Indicators

A. Proposed CY 2022 OPPS Payment Status Indicator Definitions

    Payment status indicators (SIs) that we assign to HCPCS codes and 
APCs serve an important role in determining payment for services under 
the OPPS. They indicate whether a service represented by a HCPCS code 
is payable under the OPPS or another payment system, and also whether 
particular OPPS policies apply to the code.
    For CY 2022, we are not proposing to make any changes to the 
existing definitions of status indicators that were listed in Addendum 
D1 to the CY 2021 OPPS/ASC final rule with comment period available on 
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
    We are requesting public comments on the proposed definitions of 
the OPPS status indicators for CY 2022.
    The complete list of the proposed payment status indicators and 
their definitions that would apply for CY 2022 is displayed in Addendum 
D1 to this proposed rule, which is available on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    The proposed CY 2022 payment status indicator assignments for APCs 
and HCPCS codes are shown in Addendum A and Addendum B, respectively, 
to this proposed rule, which are available on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.

B. Proposed CY 2022 Comment Indicator Definitions

    In this proposed rule, we propose to use four comment indicators 
for the CY 2022 OPPS. These comment indicators, ``CH'', ``NC'', ``NI'', 
and ``NP'', are in effect for CY 2021 and we propose to continue their 
use in CY 2022. The proposed CY 2022 OPPS comment indicators are as 
follows:
     ``CH''--Active HCPCS code in current and next calendar 
year, status indicator and/or APC assignment has changed; or active 
HCPCS code that will be discontinued at the end of the current calendar 
year.

[[Page 42194]]

     ``NC''--New code for the next calendar year or existing 
code with substantial revision to its code descriptor in the next 
calendar year, as compared to current calendar year for which we 
requested comments in the proposed rule, final APC assignment; comments 
will not be accepted on the final APC assignment for the new code.
     ``NI''--New code for the next calendar year or existing 
code with substantial revision to its code descriptor in the next 
calendar year, as compared to current calendar year, interim APC 
assignment; comments will be accepted on the interim APC assignment for 
the new code.
     ``NP''--New code for the next calendar year or existing 
code with substantial revision to its code descriptor in the next 
calendar year, as compared to current calendar year, proposed APC 
assignment; comments will be accepted on the proposed APC assignment 
for the new code.
    The definitions of the proposed OPPS comment indicators for CY 2022 
are listed in Addendum D2 to this proposed rule, which is available on 
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    We believe that the existing CY 2021 definitions of the OPPS 
comment indicators continue to be appropriate for CY 2022. Therefore, 
we propose to use those definitions without modification for CY 2022.

XII. MedPAC Recommendations

    The Medicare Payment Advisory Commission (MedPAC) was established 
under section 1805 of the Act in large part to advise the U.S. Congress 
on issues affecting the Medicare program. As required under the 
statute, MedPAC submits reports to the Congress no later than March and 
June of each year that present its Medicare payment policy 
recommendations. The March report typically provides discussion of 
Medicare payment policy across different payment systems and the June 
report typically discusses selected Medicare issues. We are including 
this section to make stakeholders aware of certain MedPAC 
recommendations for the OPPS and ASC payment systems as discussed in 
its March 2021 report.

A. Proposed OPPS Payment Rates Update

    The March 2021 MedPAC ``Report to the Congress: Medicare Payment 
Policy,'' recommended that Congress update Medicare OPPS payment rates 
by 2 percent, with the difference between this and the update amount 
specified in current law to be used to increase payments in a new 
suggested Medicare quality program, the ``Hospital Value Incentive 
Program (HVIP).'' We refer readers to the March 2021 report for a 
complete discussion of these recommendations.\112\ We appreciate 
MedPAC's recommendations, but as MedPAC acknowledged in its March 2021 
report, the Congress would need to change current law to enable us to 
implement its recommendations.
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    \112\ Medicare Payment Advisory Committee. March 2021 Report to 
the Congress. Chapter 3: Hospital Inpatient and outpatient services, 
pp.81-82. Available at: http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf?sfvrsn=0.
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B. Proposed ASC Conversion Factor Update

    In the March 2021 MedPAC ``Report to the Congress: Medicare Payment 
Policy,'' MedPAC found that, based on its analysis of indicators of 
payment adequacy, the number of ASCs had increased, beneficiaries' use 
of ASCs had increased, and ASC access to capital has been 
adequate.\113\ As a result, for CY 2022, MedPAC stated that payments to 
ASCs are adequate and recommended that in the absence of cost report 
data no payment update should be given for CY 2022 (that is, the update 
factor would be zero percent).
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    \113\ Medicare Payment Advisory Committee. March 2020 Report to 
the Congress. Chapter 5: Ambulatory surgical center services, p.147. 
Available at: http://www.medpac.gov/docs/default-source/reports/mar20_entirereport_sec.pdf?sfvrsn=0.
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    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 
59079), we adopted a policy, which we codified at 42 CFR 416.171(a)(2), 
to apply the productivity-adjusted hospital market basket update to ASC 
payment system rates for an interim period of 5 years. We refer readers 
to the CY 2019 OPPS/ASC final rule with comment period for complete 
details regarding our policy to use the productivity-adjusted hospital 
market basket update for the ASC payment system for CY 2019 through CY 
2023. Therefore, consistent with our policy for the ASC payment system, 
as discussed in section XIII.G. of this proposed rule, we propose to 
apply a 2.3 percent productivity-adjusted hospital market basket update 
factor to the CY 2021 ASC conversion factor for ASCs meeting the 
quality reporting requirements to determine the CY 2022 ASC payment 
amounts.

C. ASC Cost Data

    In the March 2021 MedPAC ``Report to the Congress: Medicare Payment 
Policy,'' MedPAC recommended that Congress require ASCs to report cost 
data to enable the Commission to examine the growth of ASCs' costs over 
time and analyze Medicare payments relative to the costs of efficient 
providers, and that CMS could use ASC cost data to examine whether an 
existing Medicare price index is an appropriate proxy for ASC costs or 
an ASC specific market basket should be developed. Further, MedPAC 
suggested that CMS could limit the scope of the cost reporting system 
to minimize administrative burden on ASCs and the program but should 
make cost reporting a condition of ASC participation in the Medicare 
program.\114\
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    \114\ Medicare Payment Advisory Committee. March 2021 Report to 
the Congress. Chapter 5: Ambulatory surgical center services, p.157. 
Available at: http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf?sfvrsn=0.
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    While we recognize that the submission of cost data could place 
additional administrative burden on most ASCs, and we are not proposing 
any cost reporting requirements for ASCs in this CY 2022 OPPS/ASC 
proposed rule, we are interested in public comment on methods that 
would mitigate the burden of reporting costs on ASCs while also 
collecting enough data to reliably use such data in the determination 
of ASC costs. Such cost data would be beneficial in establishing an 
ASC-specific market basket index for updating payment rates under the 
ASC payment system.
    The full March 2021 MedPAC Report to Congress can be downloaded 
from MedPAC's website at: http://www.medpac.gov.

XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System

A. Background

1. Legislative History, Statutory Authority, and Prior Rulemaking for 
the ASC Payment System
    For a detailed discussion of the legislative history and statutory 
authority related to payments to ASCs under Medicare, we refer readers 
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377 
through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through 
32292). For a discussion of prior rulemaking on the ASC payment system, 
we refer readers to the CYs 2012, 2013, 2014, 2015, 2016, 2017, 2018, 
2019, 2020, and 2021 OPPS/ASC final rules with comment period (76 FR 
74378 through 74379; 77 FR 68434 through 68467; 78 FR 75064 through 
75090; 79 FR 66915 through 66940; 80 FR 70474 through 70502; 81 FR 
79732 through 79753; 82 FR 59401 through 59424; 83 FR 59028 through

[[Page 42195]]

59080; 84 FR 61370 through 61410, and 85 FR 86121 through 86179, 
respectively).
2. Policies Governing Changes to the Lists of Codes and Payment Rates 
for ASC Covered Surgical Procedures and Covered Ancillary Services
    Under Sec. Sec.  416.2 and 416.166 of the Medicare regulations, 
subject to certain exclusions, covered surgical procedures in an ASC 
are surgical procedures that are separately paid under the OPPS, are 
not designated as requiring inpatient care under Sec.  419.22(n) as of 
December 31, 2020, are not only able to be reported using a CPT 
unlisted surgical procedure code, and are not otherwise excluded under 
Sec.  411.15.
    In previous years, we identified surgical procedures as those 
described by Category I CPT codes in the surgical range from 10000 
through 69999 as well as those Category III CPT codes and Level II 
HCPCS codes that directly crosswalk or are clinically similar to 
procedures in the CPT surgical range that we have determined do not 
pose a significant safety risk, that we would not expect to require an 
overnight stay when performed in ASCs, and that are separately paid 
under the OPPS (72 FR 42478).
    Covered ancillary services are specified in Sec.  416.164(b) and, 
as stated previously, are eligible for separate ASC payment. As 
provided at 42 CFR 416.164(b), we make separate ASC payments for the 
following ancillary items and services when they are provided integral 
to ASC covered surgical procedures: (1) Brachytherapy sources; (2) 
certain implantable items that have pass-through payment status under 
the OPPS; (3) certain items and services that we designate as 
contractor-priced, including, but not limited to, procurement of 
corneal tissue; (4) certain drugs and biologicals for which separate 
payment is allowed under the OPPS; (5) certain radiology services for 
which separate payment is allowed under the OPPS; and (6) non-opioid 
pain management drugs that function as a supply when used in a surgical 
procedure. Payment for ancillary items and services that are not paid 
separately under the ASC payment system is packaged into the ASC 
payment for the covered surgical procedure.
    We update the lists of, and payment rates for, covered surgical 
procedures and covered ancillary services in ASCs in conjunction with 
the annual proposed and final rulemaking process to update the OPPS and 
the ASC payment system (Sec.  416.173; 72 FR 42535). We base ASC 
payment and policies for most covered surgical procedures, drugs, 
biologicals, and certain other covered ancillary services on the OPPS 
payment policies, and we use quarterly change requests (CRs) to update 
services paid for under the OPPS. We also provide quarterly update CRs 
for ASC covered surgical procedures and covered ancillary services 
throughout the year (January, April, July, and October). We release new 
and revised Level II HCPCS codes and recognize the release of new and 
revised CPT codes by the American Medical Association (AMA) and make 
these codes effective (that is, the codes are recognized on Medicare 
claims) via these ASC quarterly update CRs. We recognize the release of 
new and revised Category III CPT codes in the July and January CRs. 
These updates implement newly created and revised Level II HCPCS and 
Category III CPT codes for ASC payments and update the payment rates 
for separately paid drugs and biologicals based on the most recently 
submitted ASP data. New and revised Category I CPT codes, except 
vaccine codes, are released only once a year, and are implemented only 
through the January quarterly CR update. New and revised Category I CPT 
vaccine codes are released twice a year and are implemented through the 
January and July quarterly CR updates. We refer readers to Table 41 in 
the CY 2012 OPPS/ASC proposed rule for an example of how this process 
is used to update HCPCS and CPT codes, which we finalized in the CY 
2012 OPPS/ASC final rule with comment period (76 FR 42291; 76 FR 74380 
through 74384).
    In our annual updates to the ASC list of, and payment rates for, 
covered surgical procedures and covered ancillary services, we 
undertake a review of excluded surgical procedures, new codes, and 
codes with revised descriptors, to identify any that we believe meet 
the criteria for designation as ASC covered surgical procedures or 
covered ancillary services. Updating the lists of ASC covered surgical 
procedures and covered ancillary services, as well as their payment 
rates, in association with the annual OPPS rulemaking cycle is 
particularly important because the OPPS relative payment weights and, 
in some cases, payment rates, are used as the basis for the payment of 
many covered surgical procedures and covered ancillary services under 
the revised ASC payment system. This joint update process ensures that 
the ASC updates occur in a regular, predictable, and timely manner.
3. Definition of ASC Covered Surgical Procedures
    Since the implementation of the ASC prospective payment system, we 
have historically defined a ``surgical'' procedure under the payment 
system as any procedure described within the range of Category I CPT 
codes that the CPT Editorial Panel of the AMA defines as ``surgery'' 
(CPT codes 10000 through 69999) (72 FR 42478). We also have included as 
``surgical,'' procedures that are described by Level II HCPCS codes or 
by Category III CPT codes that directly crosswalk or are clinically 
similar to procedures in the CPT surgical range.
    As we noted in the August 7, 2007 final rule that implemented the 
revised ASC payment system, using this definition of surgery would 
exclude from ASC payment certain invasive, ``surgery-like'' procedures, 
such as cardiac catheterization or certain radiation treatment services 
that are assigned codes outside the CPT surgical range (72 FR 42477). 
We stated in that final rule that we believed continuing to rely on the 
CPT definition of surgery is administratively straightforward, is 
logically related to the categorization of services by physician 
experts who both establish the codes and perform the procedures, and is 
consistent with a policy to allow ASC payment for all outpatient 
surgical procedures.
    However, in the CY 2019 OPPS/ASC final rule with comment period (83 
FR 59029 through 59030), after consideration of public comments 
received in response to the CY 2019 OPPS/ASC proposed rule and earlier 
OPPS/ASC rulemaking cycles, we revised our definition of a surgical 
procedure under the ASC payment system. In that final rule, we defined 
a surgical procedure under the ASC payment system as any procedure 
described within the range of Category I CPT codes that the CPT 
Editorial Panel of the AMA defines as ``surgery'' (CPT codes 10000 
through 69999) (72 FR 42476), as well as procedures that are described 
by Level II HCPCS codes or by Category I CPT codes or by Category III 
CPT codes that directly crosswalk or are clinically similar to 
procedures in the CPT surgical range that we determined met the general 
standards established in previous years for addition to the CPL. These 
criteria included that a procedure is not expected to pose a 
significant risk to beneficiary safety when performed in an ASC, that 
standard medical practice dictates that the beneficiary would not 
typically be expected to require an overnight stay following the 
procedure, and that the procedure is separately

[[Page 42196]]

paid under the OPPS. In CY 2021, we revised the definition of covered 
surgical procedures to surgical procedures specified by the Secretary 
that are separately paid under the OPPS, are not designated as 
requiring inpatient care under Sec.  [thinsp]419.22(n) as of December 
31, 2020, are not only able to be reported using a CPT unlisted 
surgical procedure code, and are not otherwise excluded under Sec.  
[thinsp]411.15 (85 FR 86153).

B. Proposed ASC Treatment of New and Revised Codes

1. Background on Current Process for Recognizing New and Revised HCPCS 
Codes
    Payment for ASC procedures, services, and items are generally based 
on medical billing codes, specifically, HCPCS codes, that are reported 
on ASC claims. HCPCS codes are used to report procedures, services, 
items, and supplies under the ASC payment system. Specifically, we 
recognize the following codes on ASC claims:
     Category I CPT codes, which describe surgical procedures, 
diagnostic and therapeutic services, and vaccine codes;
     Category III CPT codes, which describe new and emerging 
technologies, services, and procedures; and
     Level II HCPCS codes (also known as alpha-numeric codes), 
which are used primarily to identify and track drugs, devices, 
supplies, temporary procedures, and services not described by CPT 
codes.
    We finalized a policy in the August 2, 2007 final rule (72 FR 42533 
through 42535) to evaluate each year all new and revised Category I and 
Category III CPT codes and Level II HCPCS codes that describe surgical 
procedures, and to make preliminary determinations during the annual 
OPPS/ASC rulemaking process regarding whether or not they meet the 
criteria for payment in the ASC setting as covered surgical procedures 
and, if so, whether or not they are office-based procedures. In 
addition, we identify new and revised codes as ASC covered ancillary 
services based upon the final payment policies of the revised ASC 
payment system. In prior rulemakings, we refer to this process as 
recognizing new codes. However, this process has always involved the 
recognition of new and revised codes. We consider revised codes to be 
new when they have substantial revision to their code descriptors that 
necessitate a change in the current ASC payment indicator. We refer to 
these codes as new and revised in this CY 2022 OPPS/ASC proposed rule.
    We have separated our discussion below based on when the codes are 
released and whether we are proposing to solicit public comments in 
this proposed rule (and respond to those comments in the CY 2022 OPPS/
ASC final rule with comment period) or whether we will be soliciting 
public comments in the CY 2022 OPPS/ASC final rule with comment period 
(and responding to those comments in the CY 2023 OPPS/ASC final rule 
with comment period).
2. April 2021 HCPCS Codes for Which We Are Soliciting Public Comments 
in This Proposed Rule
    For the April 2021 update, there was one new CPT code and there 
were 11 new Level II HCPCS codes. In the April 2021 ASC quarterly 
update (Transmittal 10702, CR 12183, dated April 1, 2021), we added 11 
new Level II HCPCS codes to the list of ASC covered surgical procedures 
and the list of covered ancillary services. Table 39 below lists the 
new Level II HCPCS codes that were implemented April 1, 2021, along 
with their proposed payment indicators for CY 2022. The proposed 
comment indicators, payment indicators and payment rates, where 
applicable, for these April codes can be found in Addendum BB to this 
proposed rule. The list of proposed ASC payment indicators and 
corresponding definitions can be found in Addendum DD1 to this proposed 
rule. These new codes that are effective April 1, 2021 are assigned to 
comment indicator ``NP'' in Addendum BB to this proposed rule to 
indicate that the codes are assigned to an interim APC assignment and 
that comments will be accepted on their interim APC assignments. Also, 
the list of proposed comment indicators and definitions used under the 
ASC payment system can be found in Addendum DD2 to this proposed rule. 
We note that ASC Addenda AA, BB, DD1, and DD2 are available via the 
internet on the CMS website.
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[[Page 42197]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.073

    We are inviting public comments on these proposed payment 
indicators for the new HCPCS codes that were recognized as ASC covered 
surgical procedures and ancillary services in April 2021 through the 
quarterly update CRs, as listed in Table 39 above. We are proposing to 
finalize their payment indicators in the CY 2022 OPPS/ASC final rule 
with comment period.
3. July 2021 HCPCS Codes for Which We Are Soliciting Public Comments in 
This Proposed Rule
    In the July 2021 ASC quarterly update (Transmittal 10858, Change 
Request 12341, dated June 25, 2021), we added several separately 
payable CPT and Level II HCPCS codes to the list of covered surgical 
procedures and ancillary services. Table 40 below lists the new HCPCS 
codes that are effective July 1, 2021. The proposed payment indicators 
and payment rates for these codes can be found in Addendum AA and 
Addendum BB to this proposed rule. The list of proposed ASC payment 
indicators and corresponding definitions can be found in Addendum DD1 
to this proposed rule. These new codes that are effective July 1, 2021 
are assigned comment indicator ``NP'' in Addendum BB to this proposed 
rule to indicate that the codes are assigned to an interim APC 
assignment and that comments will be accepted on those assignments. The 
list of proposed comment indicators and definitions used under the ASC 
payment system can be found in Addendum DD2 to this proposed rule. We 
note that ASC Addenda AA, BB, DD1, and DD2 are available via the 
internet on the CMS website.

[[Page 42198]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.074

    In addition, through the July 2021 quarterly update CR, we added 11 
new Category III CPT codes to the list of ASC covered ancillary 
services, effective July 1, 2021. This code is listed in Table 41 
below, along with the proposed comment indicator and payment indicator. 
The CY 2022 proposed payment rate for these new Category III CPT codes 
can be found in Addendum BB. As noted above, the lists of proposed 
payment indicators and comment indicators used under the ASC payment 
system are included in Addenda DD1 and DD2, respectively, of this 
proposed rule. We note that ASC Addenda AA, BB, DD1, and DD2 are 
available via the internet on the CMS website.

[[Page 42199]]

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[[Page 42200]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.076

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    We are inviting public comments on the proposed comment indicators 
and payment indicators for the new Level II HCPCS codes newly 
recognized as ASC covered surgical procedures and covered ancillary 
services and the new Category III CPT codes for covered ancillary 
services beginning in July 2021 through the quarterly update CRs, as 
listed in Tables 39, 40, and 41 above. We are proposing to finalize the 
proposed payment indicators in the CY 2022 OPPS/ASC final rule with 
comment period.
4. October 2021 HCPCS Codes for Which We Will Be Soliciting Public 
Comments in the CY 2022 OPPS/ASC Final Rule With Comment Period
    For CY 2022, consistent with our established policy, we are 
proposing that the Level II HCPCS codes that will be effective October 
1, 2021 would be flagged with comment indicator ``NI'' in Addendum B to 
the CY 2022 OPPS/ASC final rule with comment period to indicate that we 
have assigned the codes an interim OPPS payment status for CY 2022. We 
will invite public comments in the CY 2022 OPPS/ASC final rule with 
comment period on the interim payment indicators, which would then be 
finalized in the CY 2023 OPPS/ASC final rule with comment period.
5. January 2022 HCPCS Codes
a. Level II HCPCS Codes for Which We Will Be Soliciting Public Comments 
in the CY 2022 OPPS/ASC Final Rule With Comment Period
    As has been our practice in the past, we incorporate those new 
Level II HCPCS codes that are effective January 1 in the final rule 
with comment period, thereby updating the ASC payment system for the 
calendar year. We note that unlike the CPT codes that are effective 
January 1 and are included in the OPPS/ASC proposed rules, and except 
for the G-codes listed in Addendum O to this proposed rule, most Level 
II HCPCS codes are not released until sometime around November to be 
effective January 1. Because these codes are not available until 
November, we are unable to include them in the OPPS/ASC proposed rules. 
Therefore, these Level II HCPCS codes will be released to the public 
through the January 2022 ASC Update CR, and included on the CMS HCPCS 
website and in the CY 2022 OPPS/ASC final rule with comment period.
    In addition, for CY 2022, we propose to continue our established 
policy of assigning comment indicator ``NI'' in Addendum AA and 
Addendum BB to the OPPS/ASC final rule with comment period to the new 
Level II HCPCS codes that will be effective January 1, 2022 to indicate 
that we are assigning them an interim payment indicator, which is 
subject to public comment. We will be inviting public comments in the 
CY 2022 OPPS/ASC final rule with comment period on the payment 
indicator assignments, which would then be finalized in the CY 2023 
OPPS/ASC final rule with comment period.
b. CPT Codes for Which We Are Soliciting Public Comments in This 
Proposed Rule
    For new and revised CPT codes effective January 1, 2022 that were 
received in time to be included in this proposed rule, we are proposing 
the appropriate payment indicator assignments, and soliciting public 
comments on the payment assignments. We will accept comments and 
finalize the payment indicators in the CY 2022 OPPS/ASC final rule with 
comment period. For those new/revised CPT codes that are received too 
late for inclusion in this OPPS/ASC proposed rule, we may either make 
interim final assignments in the CY 2022 OPPS/ASC final rule with 
comment period or use HCPCS G codes that mirror the predecessor CPT 
codes and retain the current APC and status indicator assignments for a 
year until we can propose APC and status indicator assignments in the 
following year's rulemaking cycle.
    For the CY 2022 ASC update, the new and revised Category I and III 
CPT codes that will be effective on January 1, 2022 can be found in ASC 
Addendum AA and Addendum BB to this proposed rule (which are available 
via the internet on the CMS website). The CPT codes are assigned to 
comment indicator ``NP'' to indicate that the code is new for the next 
calendar year or the code is an existing code with substantial revision 
to its code descriptor in the next calendar year as compared to the 
current calendar year and that comments will be accepted on the 
proposed payment indicator. Further, we remind readers that the CPT 
code descriptors that appear in Addendum AA and Addendum BB are short 
descriptors and do not describe the complete procedure, service, or 
item described by the CPT code. Therefore, we include the 5-digit 
placeholder codes and their long descriptors for the new and revised CY 
2022 CPT codes in Addendum O to this proposed rule (which is available 
via the internet on

[[Page 42201]]

the CMS website) so that the public can comment on our proposed payment 
indicator assignments. The 5-digit placeholder codes can be found in 
Addendum O to this proposed rule, specifically under the column labeled 
``CY 2021 OPPS/ASC Proposed Rule 5-Digit Placeholder Code.'' The final 
CPT code numbers will be included in the CY 2022 OPPS/ASC final rule 
with comment period.
    In summary, we are soliciting public comments on the proposed CY 
2022 payment indicators for the new and revised Category I and III CPT 
codes that will be effective January 1, 2022. Because these codes are 
listed in Addenda AA and Addendum BB with short descriptors only, we 
are listing them again in Addendum O with the long descriptors. We are 
also proposing to finalize the payment indicator for these codes (with 
their final CPT code numbers) in the CY 2022 OPPS/ASC final rule with 
comment period. The proposed payment indicator and comment indicator 
for these codes can be found in Addendum AA and BB to this proposed 
rule. The list of ASC payment indicators and corresponding definitions 
can be found in Addendum DD1 to this proposed rule. These new CPT codes 
that will be effective January 1, 2022 are assigned to comment 
indicator ``NP'' in Addendum AA and BB to this proposed rule to 
indicate that the codes are assigned to an interim payment indicator 
and that comments will be accepted on their interim ASC payment 
assignments. Also, the list of comment indicators and definitions used 
under the ASC can be found in Addendum DD2 to this proposed rule. We 
note that ASC Addenda AA, BB, DD1, and DD2 are available via the 
internet on the CMS website.
    Finally, in Table 42 below, we summarize our process for updating 
codes through our ASC quarterly update CRs, seeking public comments, 
and finalizing the treatment of these new codes under the ASC payment 
system.
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C. Proposed Update to the List of ASC Covered Surgical Procedures and 
Covered Ancillary Services

1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated as Office-Based
(1) Background
    In the August 2, 2007 ASC final rule, we finalized our policy to 
designate as ``office-based'' those procedures that are added to the 
ASC Covered Procedures List (CPL) in CY 2008 or later years that we 
determine are furnished predominantly (more than 50 percent of the 
time) in physicians' offices based on consideration of the most recent 
available volume and utilization data for each individual procedure 
code and/or, if appropriate, the clinical characteristics, utilization, 
and volume of related codes. In that rule, we also finalized our policy 
to exempt all procedures on the CY 2007 ASC list from application of 
the office-based classification (72 FR 42512). The procedures that were 
added to the ASC CPL beginning in CY 2008 that we determined were 
office-based were identified in Addendum AA to that rule

[[Page 42202]]

with payment indicator ``P2'' (Office-based surgical procedure added to 
ASC list in CY 2008 or later with MPFS nonfacility PE RVUs; payment 
based on OPPS relative payment weight); ``P3'' (Office-based surgical 
procedures added to ASC list in CY 2008 or later with MPFS nonfacility 
PE RVUs; payment based on MPFS nonfacility PE RVUs); or ``R2'' (Office-
based surgical procedure added to ASC list in CY 2008 or later without 
MPFS nonfacility PE RVUs; payment based on OPPS relative payment 
weight), depending on whether we estimated the procedure would be paid 
according to the standard ASC payment methodology based on its OPPS 
relative payment weight or at the MPFS nonfacility PE RVU-based amount.
    Consistent with our final policy to annually review and update the 
ASC CPL to include all covered surgical procedures eligible for payment 
in ASCs, each year we identify covered surgical procedures as either 
temporarily office-based (these are new procedure codes with little or 
no utilization data that we have determined are clinically similar to 
other procedures that are permanently office-based), permanently 
office-based, or non office-based, after taking into account updated 
volume and utilization data.
(2) Proposed Changes for CY 2022 to Covered Surgical Procedures 
Designated as Office-Based
    In developing this CY 2022 OPPS/ASC proposed rule, we followed our 
policy to annually review and update the covered surgical procedures 
for which ASC payment is made and to identify new procedures that may 
be appropriate for ASC payment (described in detail in section 
XIII.C.1.d), including their potential designation as office-based. 
Historically, we would also review the most recent claims volume and 
utilization data (CY 2020 claims) and the clinical characteristics for 
all covered surgical procedures that are currently assigned a payment 
indicator in CY 2020 of ``G2'' (Non office-based surgical procedure 
added in CY 2008 or later; payment based on OPPS relative payment 
weight), as well as for those procedures assigned one of the temporary 
office-based payment indicators, specifically ``P2'', ``P3'', or ``R2'' 
in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86131 
through 86139). However, as discussed in Section II.A.1.a of this 
proposed rule, given our concerns with CY 2020 claims data as a result 
of the PHE, we are not proposing to review the most recent claims 
volume and utilization data from CY 2020 claims and instead we are 
proposing not to assign permanent office-based designations for CY 2022 
to any covered surgical procedure currently assigned a payment 
indicator of ``G2'' (Non office-based surgical procedure added in CY 
2008 or later; payment based on OPPS relative payment weight).
    Similarly, we are also proposing not to use the most recent claims 
volume and utilization data and other information for procedures 
designated as temporarily office-based and temporarily assigned one of 
the office-based payment indicators, specifically ``P2,'' ``P3'' or 
``R2,'' as shown in Table 56 and Table 57 in the CY 2021 OPPS/ASC final 
rule with comment period (85 FR 86136 through 86137). Instead, we 
propose to continue to designate these procedures, shown in Table 43, 
as temporarily office-based for CY 2022. The procedures we propose to 
designate as temporarily office-based for CY 2022 are identified with 
an asterisk in Addendum AA to this proposed rule with comment period 
(which is available via the internet on the CMS website).
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BILLING CODE 4120-01-C
    As discussed in the August 2, 2007 revised ASC payment system final 
rule (72 FR 42533 through 42535), we finalized our policy to designate 
certain new surgical procedures as temporarily office-based until 
adequate claims data are available to assess their predominant sites of 
service, whereupon if we confirm their office-based nature, the 
procedures would be permanently assigned to the list of office-based

[[Page 42204]]

procedures. In the absence of claims data, we stated we would use other 
available information, including our clinical advisors' judgment, 
predecessor CPT and Level II HCPCS codes, information submitted by 
representatives of specialty societies and professional associations, 
and information submitted by commenters during the public comment 
period.
    For CY 2022, we propose to designate two new CY 2022 CPT codes for 
ASC covered surgical procedures as temporarily office-based. After 
reviewing the clinical characteristics, utilization, and volume of 
related procedure codes, we determined that the procedures listed in 
Table 44 would be predominantly performed in physicians' offices. We 
believe the procedure described by CPT code 42XXX (Drug-induced sleep 
endoscopy, with dynamic evaluation of velum, pharynx, tongue base, and 
larynx for evaluation of sleep-disordered breathing, flexible, 
diagnostic) is similar to CPT code 31505 (Laryngoscopy, indirect; 
diagnostic (separate procedure)) which is currently on the list of ASC 
covered surgical procedures and was assigned a final payment indicator 
of ``P3''--Office-based surgical procedure added to ASC list in CY 2008 
or later with MPFS nonfacility PE RVUs; payment based on MPFS 
nonfacility PE RVUs.--in CY 2021. Additionally, we believe the 
procedure described by CPT code 53XX4 (Periurethral transperineal 
adjustable balloon continence device; percutaneous adjustment of 
balloon(s) fluid volume) is similar to CPT code 0551T (Transperineal 
periurethral balloon continence device; adjustment of balloon(s) fluid 
volume), which is currently on the list of ASC covered surgical 
procedures and was assigned a final payment indicator of ``R2''--
Office-based surgical procedure added to ASC list in CY 2008 or later 
without MPFS nonfacility PE RVUs; payment based on OPPS relative 
payment weight--for CY 2021. As such, we propose to add CPT codes 42XXX 
and 53XX4 in Table 44 to the list of ASC covered surgical procedures 
designated as temporarily office-based for CY 2022.
[GRAPHIC] [TIFF OMITTED] TP04AU21.079

b. Proposed Device-Intensive ASC Covered Surgical Procedures
(1) Background
    We refer readers to the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 59040 through 59041), for a summary of our existing 
policies regarding ASC covered surgical procedures that are designated 
as device-intensive.
(2) Changes to List of ASC Covered Surgical Procedures Designated as 
Device-Intensive for CY 2022
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 
590401 through 59043), for CY 2019, we modified our criteria for 
device-intensive procedures to better capture costs for procedures with 
significant device costs. We adopted a policy to allow procedures that 
involve surgically inserted or implanted, high-cost, single-use devices 
to qualify as device-intensive procedures. In addition, we modified our 
criteria to lower the device offset percentage threshold from 40 
percent to 30 percent. Specifically, for CY 2019 and subsequent years, 
we adopted a policy that device-intensive procedures would be subject 
to the following criteria:
     All procedures must involve implantable devices assigned a 
CPT or HCPCS code;
     The required devices (including single-use devices) must 
be surgically inserted or implanted; and
     The device offset amount must be significant, which is 
defined as exceeding 30 percent of the procedure's mean cost. For 
consistency with this change in the cost criterion, we adopted a policy 
that the default device offset for new codes that describe procedures 
that involve the implantation of medical devices will be 31 percent 
beginning in CY 2019. For new codes describing procedures that are 
payable when furnished in an ASC involving the implantation of a 
medical device, we adopted a policy that the default device offset 
would be applied in the same

[[Page 42205]]

manner as the policy we adopted in section IV.B.2. of the CY 2019 OPPS/
ASC final rule with comment period (83 FR 58944 through 58948). We 
amended Sec.  416.171(b)(2) of the regulations to reflect these new 
device criteria.
    In addition, as also adopted in section IV.B.2. of CY 2019 OPPS/ASC 
final rule with comment period, to further align the device-intensive 
policy with the criteria used for device pass-through status, we 
specified, for CY 2019 and subsequent years, that for purposes of 
satisfying the device-intensive criteria, a device-intensive procedure 
must involve a device that:
     Has received Food and Drug Administration (FDA) marketing 
authorization, has received an FDA investigational device exemption 
(IDE) and has been classified as a Category B device by the FDA in 
accordance with Sec. Sec.  405.203 through 405.207 and 405.211 through 
405.215, or meets another appropriate FDA exemption from premarket 
review;
     Is an integral part of the service furnished;
     Is used for one patient only;
     Comes in contact with human tissue;
     Is surgically implanted or inserted (either permanently or 
temporarily); and
     Is not any of the following:
    ++ Equipment, an instrument, apparatus, implement, or item of this 
type for which depreciation and financing expenses are recovered as 
depreciable assets as defined in Chapter 1 of the Medicare Provider 
Reimbursement Manual (CMS Pub. 15-1); or
    ++ A material or supply furnished incident to a service (for 
example, a suture, customized surgical kit, scalpel, or clip, other 
than a radiological site marker).
    Based on these criteria, for 2022, we propose to update the ASC CPL 
to indicate procedures that are eligible for payment according to our 
device-intensive procedure payment methodology, based on the proposed 
individual HCPCS code device-offset percentages using the CY 2019 OPPS 
claims and cost report data available for the CY 2022 OPPS/ASC proposed 
rule.
    The ASC covered surgical procedures that we propose to designate as 
device-intensive, and therefore subject to the device-intensive 
procedure payment methodology for CY 2022, are assigned payment 
indicator ``J8'' and are included in ASC Addendum AA to this proposed 
rule (which is available via the internet on the CMS website). The CPT 
code, the CPT code short descriptor, and the proposed CY 2022 ASC 
payment indicator, and an indication of whether the full credit/partial 
credit (FB/FC) device adjustment policy would apply because the 
procedure is designated as device-intensive are also included in 
Addendum AA to the proposed rule (which is available via the internet 
on the CMS website).
    Under current policy, the payment rate under the ASC payment system 
for device-intensive procedures furnished with an implantable or 
inserted medical device are calculated by applying the device offset 
percentage based on the standard OPPS APC ratesetting methodology to 
the OPPS national unadjusted payment based on the standard ratesetting 
methodology to determine the device cost included in the OPPS payment 
rate for a device-intensive ASC covered surgical procedure, which we 
then set as equal to the device portion of the national unadjusted ASC 
payment rate for the procedure. We calculate the service portion of the 
ASC payment for device intensive procedures by applying the uniform ASC 
conversion factor to the service (non-device) portion of the OPPS 
relative payment weight for the device-intensive procedure. Finally, we 
sum the ASC device portion and ASC service portion to establish the 
full payment for the device-intensive procedure under the ASC payment 
system (82 FR 59409).
    In past rulemaking (79 FR 66924), we have stated that the device-
intensive methodology for ASCs should align with the device-intensive 
policies under the OPPS. Further, we have stated that we do not believe 
that procedures are device-intensive in one setting and not in another 
setting. We have heard concerns from stakeholders that our methodology 
does not provide device-intensive status to certain procedures even 
though the procedures' device offset percentages are greater than our 
30 percent threshold when calculated under the standard ASC ratesetting 
methodology. We have also heard concerns from stakeholders that 
procedures designated as device-intensive under the OPPS are not 
assigned device-intensive status under the ASC payment system even 
though the procedure has significant device costs.
    The different ratesetting methodologies used under the OPPS and ASC 
payment system can create conflicts when determining device-intensive 
status. For example, procedures with device offset percentages greater 
than 30 percent under the OPPS may not have device offset percentages 
greater than 30 percent when calculated under the standard ASC 
ratesetting methodology. Under current policy, procedures must be 
device-intensive in the OPPS setting to be eligible for device-
intensive status under the ASC payment system. However, this 
methodology has caused confusion among stakeholders and has denied 
device-intensive status to procedures with significant device costs. 
While we believe that device-intensive policies under the ASC payment 
system should align with device-intensive policies under the OPPS, we 
believe device-intensive status under the ASC payment system should, at 
a minimum, reflect a procedure's estimated device costs under the ASC 
standard ratesetting methodology. Therefore, for CY 2022 and subsequent 
years, we are proposing to assign device-intensive status to procedures 
that involve surgically inserted or implanted, high-cost, single-use 
devices to qualify as device-intensive procedures if their device 
offset percentage exceeds 30 percent under the ASC standard ratesetting 
methodology, even if the procedure is not designated as device-
intensive under the OPPS.
    Further, in situations where a procedure is designated as device-
intensive under the OPPS but the procedure's device offset percentage 
is below the device-intensive threshold under the standard ASC 
ratesetting methodology, we believe that deference should be given to 
the OPPS designation to address this conflict in status. Since the 
comprehensive ratesetting methodology under the OPPS packages a greater 
amount of non-device costs into the primary procedure and is typically 
able to use a greater number of claims in its ratesetting methodology, 
we believe that if a device receives OPPS device-intensive status, the 
device should also be device-intensive in the ASC setting, give that 
fewer non-device costs are generally packaged into a procedure's cost 
under the ASC methodology compared to the OPPS methodology. Therefore, 
for CY 2022 and subsequent years, we are proposing that if a procedure 
is assigned device-intensive status under the OPPS, but has a device 
offset percentage below the device-intensive threshold under the 
standard ASC ratesetting methodology, the procedure will be assigned 
device-intensive status under the ASC payment system with a default 
device offset percentage of 31 percent.
    We are soliciting comments on our proposed changes related to 
designating surgical procedures as device-intensive under the ASC 
payment system.

[[Page 42206]]

c. Adjustment to ASC Payments for No Cost/Full Credit and Partial 
Credit Devices
    Our ASC payment policy for costly devices implanted or inserted in 
ASCs at no cost/full credit or partial credit is set forth in Sec.  
416.179 of our regulations, and is consistent with the OPPS policy that 
was in effect until CY 2014. We refer readers to the CY 2008 OPPS/ASC 
final rule with comment period (72 FR 66845 through 66848) for a full 
discussion of the ASC payment adjustment policy for no cost/full credit 
and partial credit devices.) ASC payment is reduced by 100 percent of 
the device offset amount when a hospital furnishes a specified device 
without cost or with a full credit and by 50 percent of the device 
offset amount when the hospital receives partial credit in the amount 
of 50 percent or more of the cost for the specified device.
    Effective CY 2014, under the OPPS, we finalized our proposal to 
reduce OPPS payment for applicable APCs by the full or partial credit a 
provider receives for a device, capped at the device offset amount. 
Although we finalized our proposal to modify the policy of reducing 
payments when a hospital furnishes a specified device without cost or 
with full or partial credit under the OPPS, in the CY 2014 OPPS/ASC 
final rule with comment period (78 FR 75076 through 75080), we 
finalized our proposal to maintain our ASC policy for reducing payments 
to ASCs for specified device-intensive procedures when the ASC 
furnishes a device without cost or with full or partial credit. Unlike 
the OPPS, there is currently no mechanism within the ASC claims 
processing system for ASCs to submit to CMS the actual credit received 
when furnishing a specified device at full or partial credit. 
Therefore, under the ASC payment system, we finalized our proposal for 
CY 2014 to continue to reduce ASC payments by 100 percent or 50 percent 
of the device offset amount when an ASC furnishes a device without cost 
or with full or partial credit, respectively.
    Under current ASC policy, all ASC device-intensive covered surgical 
procedures are subject to the no cost/full credit and partial credit 
device adjustment policy. Specifically, when a device-intensive 
procedure is performed to implant or insert a device that is furnished 
at no cost or with full credit from the manufacturer, the ASC would 
append the HCPCS ``FB'' modifier on the line in the claim with the 
procedure to implant or insert the device. The contractor would reduce 
payment to the ASC by the device offset amount that we estimate 
represents the cost of the device when the necessary device is 
furnished without cost or with full credit to the ASC. We continue to 
believe that the reduction of ASC payment in these circumstances is 
necessary to pay appropriately for the covered surgical procedure 
furnished by the ASC.
    Effective in CY 2019 (83 FR 59043 through 59044), for partial 
credit, we adopted a policy to reduce the payment for a device-
intensive procedure for which the ASC receives partial credit by one-
half of the device offset amount that would be applied if a device was 
provided at no cost or with full credit, if the credit to the ASC is 50 
percent or more (but less than 100 percent) of the cost of the new 
device. The ASC will append the HCPCS ``FC'' modifier to the HCPCS code 
for the device-intensive surgical procedure when the facility receives 
a partial credit of 50 percent or more (but less than 100 percent) of 
the cost of a device. To report that the ASC received a partial credit 
of 50 percent or more (but less than 100 percent) of the cost of a new 
device, ASCs have the option of either: (1) Submitting the claim for 
the device-intensive procedure to their Medicare contractor after the 
procedure's performance, but prior to manufacturer acknowledgment of 
credit for the device, and subsequently contacting the contractor 
regarding a claim adjustment, once the credit determination is made; or 
(2) holding the claim for the device implantation or insertion 
procedure until a determination is made by the manufacturer on the 
partial credit and submitting the claim with the ``FC'' modifier 
appended to the implantation procedure HCPCS code if the partial credit 
is 50 percent or more (but less than 100 percent) of the cost of the 
device. Beneficiary coinsurance would be based on the reduced payment 
amount. As finalized in the CY 2015 OPPS/ASC final rule with comment 
period (79 FR 66926), to ensure our policy covers any situation 
involving a device-intensive procedure where an ASC may receive a 
device at no cost or receive full credit or partial credit for the 
device, we apply our ``FB''/``FC'' modifier policy to all device-
intensive procedures.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043 
through 59044) we stated we would reduce the payment for a device-
intensive procedure for which the ASC receives partial credit by one-
half of the device offset amount that would be applied if a device was 
provided at no cost or with full credit, if the credit to the ASC is 50 
percent or more (but less than 100 percent) of the cost of the device. 
In the CY 2020 OPPS/ASC final rule with comment period, we finalized 
continuing our existing policies for CY 2020. We note that we 
inadvertently omitted language that this policy would apply not just in 
CY 2019 but also in subsequent calendar years. We intended to apply 
this policy in CY 2019 and subsequent calendar years. Therefore, we 
propose to apply our policy for partial credits specified in the CY 
2019 OPPS/ASC final rule with comment period (83 FR 59043 through 
59044) in CY 2022 and subsequent calendar years. Specifically, for CY 
2022 and subsequent calendar years, we would reduce the payment for a 
device-intensive procedure for which the ASC receives partial credit by 
one-half of the device offset amount that would be applied if a device 
was provided at no cost or with full credit, if the credit to the ASC 
is 50 percent or more (but less than 100 percent) of the cost of the 
device. To report that the ASC received a partial credit of 50 percent 
or more (but less than 100 percent) of the cost of a device, ASCs have 
the option of either: (1) Submitting the claim for the device intensive 
procedure to their Medicare contractor after the procedure's 
performance, but prior to manufacturer acknowledgment of credit for the 
device, and subsequently contacting the contractor regarding a claim 
adjustment, once the credit determination is made; or (2) holding the 
claim for the device implantation or insertion procedure until a 
determination is made by the manufacturer on the partial credit and 
submitting the claim with the ``FC'' modifier appended to the 
implantation procedure HCPCS code if the partial credit is 50 percent 
or more (but less than 100 percent) of the cost of the device. 
Beneficiary coinsurance would be based on the reduced payment amount. 
We are not proposing any other changes to our policies related to no/
cost full credit or partial credit devices.
d. Additions to the List of ASC Covered Surgical Procedures
    Section 1833(i)(1) of the Act requires us, in part, to specify, in 
consultation with appropriate medical organizations, surgical 
procedures that are appropriately performed on an inpatient basis in a 
hospital but that can also be safely performed in an ASC, a CAH, or an 
HOPD, and to review and update the list of ASC procedures at least 
every 2 years. We evaluate the ASC covered procedures list (ASC CPL) 
each year to determine whether procedures should be added to or removed 
from the list, and changes to the list are often made

[[Page 42207]]

in response to specific concerns raised by stakeholders.
    From CY 2008 through CY 2020, under our regulations at Sec. Sec.  
416.2 and 416.166, covered surgical procedures furnished on or after 
January 1, 2008 were surgical procedures that met the general standards 
specified in Sec.  416.166(b) and were not excluded under the general 
exclusion criteria specified in Sec.  416.166(c). Specifically, under 
Sec.  416.166(b), the general standards provided that covered surgical 
procedures were surgical procedures specified by the Secretary and 
published in the Federal Register and/or via the internet on the CMS 
website that were separately paid under the OPPS, that would not be 
expected to pose a significant safety risk to a Medicare beneficiary 
when performed in an ASC, and for which standard medical practice 
dictated that the beneficiary would not typically be expected to 
require active medical monitoring and care at midnight following the 
procedure. Section 416.166(c) set out the general exclusion criteria 
used under the ASC payment system to evaluate the safety of procedures 
for performance in an ASC. The general exclusion criteria provided that 
covered surgical procedures do not include those surgical procedures 
that: (1) Generally result in extensive blood loss; (2) require major 
or prolonged invasion of body cavities; (3) directly involve major 
blood vessels; (4) are generally emergent or life threatening in 
nature; (5) commonly require systemic thrombolytic therapy; (6) are 
designated as requiring inpatient care under Sec.  419.22(n); (7) can 
only be reported using a CPT unlisted surgical procedure code; or (8) 
are otherwise excluded under Sec.  411.15. For a discussion of the 
history of our policies for adding surgical procedures to the ASC CPL, 
we refer readers to the CY 2021 OPPS/ASC final rule with comment period 
(85 FR 86143 through 86145).
    In the CY 2021 OPPS/ASC Final Rule, we significantly revised our 
policy for adding surgical procedures to the ASC CPL. We revised the 
definition of covered surgical procedures at 42 CFR 416.166(a) and (b) 
to add new subparagraphs to provide that, for services furnished on or 
after January 1, 2021, covered surgical procedures for purposes of the 
ASC CPL are surgical procedures specified by the Secretary and 
published in the Federal Register and/or via the internet on the CMS 
website that: Are separately paid under the OPPS; and are not: 
Designated as requiring inpatient care as of December 31, 2020; only 
able to be reported using a CPT unlisted surgical procedure code; or 
otherwise excluded under Sec.  411.15.
    We added a new paragraph (d) to 42 CFR 416.166 to provide that the 
general exclusion and general standard criteria that we used to 
identify covered surgical procedures furnished between January 1, 2008, 
and December 31, 2020, would, beginning January 1, 2021, be safety 
factors that physicians consider as to a specific beneficiary when 
determining whether to perform a covered surgical procedure. We also 
added a new paragraph (e) to 42 CFR 416.166 to provide that, on or 
after January 1, 2021, we add surgical procedures to the list of ASC 
covered surgical procedures either when we identify a surgical 
procedure that meets the requirements of paragraph (b)(2) or we are 
notified of a surgical procedure that could meet the requirements of 
paragraph (b)(2) and we confirm that such procedure meets those 
requirements. We added 267 surgical procedures to the ASC CPL that met 
the revised criteria for covered surgical procedures beginning in CY 
2021.
    As we explained in the CY 2021 OPPS/ASC final rule with comment 
period, there were a number of reasons that we made changes to our ASC 
CPL policy, including that ASCs are increasingly able to safely provide 
services that meet some of the general exclusion criteria. We explained 
that we believed it was important that we adapt the ASC CPL in light of 
significant advances in medical practice, surgical techniques, and ASC 
capabilities (85 FR 86150). We stated that, while many of the 
procedures we were adding to the ASC CPL were performed on non-Medicare 
patients who tend to be younger and have fewer comorbidities than the 
Medicare population, we believed careful patient selection can identify 
Medicare beneficiaries who are suitable candidates to receive these 
services in the ASC setting. We also emphasized the importance of 
ensuring that the healthcare system has as many access points and 
patient choices for Medicare beneficiaries as possible, which includes 
enabling physicians and patients to choose the ASC as the site of care 
when appropriate. Finally, we reiterated the critical role that 
physicians play in determining the appropriate site of care for their 
patients, including whether a surgical procedure can be safely 
performed in the ASC setting for an individual patient.
1. Proposed Changes to the List of ASC Covered Surgical Procedures for 
CY 2022
    Since the CY 2021 OPPS/ASC final rule was published, we have 
reexamined our ASC CPL policy and the public comments we received in 
response to the CY 2021 OPPS/ASC proposed rule, considered the concerns 
we received from stakeholders since the final rule was published, and 
conducted an internal clinical review of the 267 procedures we added to 
the ASC CPL under our revised policy beginning in CY 2021. After 
examining our revised policy and the feedback we have received, and 
reviewing the procedures we added to the ASC CPL under our revised 
policy, we have reconsidered our policy and believe that the policy may 
not appropriately assess the safety of performing surgical procedures 
on a typical Medicare beneficiary in an ASC, and that the 258 surgical 
procedures we added to the ASC CPL beginning in CY 2021 under our 
revised policy may not be appropriate to be performed on a typical 
beneficiary in the ASC setting. We believe that our current policy--to 
shift consideration of the general standards and exclusion criteria we 
have historically used to determine whether a surgical procedure should 
be added to the ASC CPL from CMS to physicians--needs to be modified to 
better ensure that surgical procedures added to the ASC CPL under the 
revised criteria can be performed safely in the ASC setting on the 
typical Medicare beneficiary. We recognize that appropriate patient 
selection and physicians' complex medical judgment could help mitigate 
risks for patient safety. But while we are always striving to balance 
the goals of increasing physician and patient choice, and expanding 
site neutral options with patient safety considerations, we nonetheless 
believe the current policy could be improved with additional patient 
safety considerations in determining whether a surgical procedure 
should be added to the ASC CPL.
    One issue we identified with our revised policy is that many of the 
procedures added in CY 2021 would only be appropriate for Medicare 
beneficiaries who are healthier and have less complex medical 
conditions than the typical beneficiary. Upon further review, we 
believe the subset of Medicare beneficiaries who may be suitable 
candidates to receive these procedures in an ASC setting do not 
necessarily represent the average Medicare beneficiary. After 
evaluating the 267 surgery or surgery-like codes

[[Page 42208]]

that were added last year, CMS clinicians determined that 258 of these 
surgical procedures may pose a significant safety risk to a typical 
Medicare beneficiary when performed in an ASC, and that nearly all 
would likely require active medical monitoring and care at midnight 
following the procedure. In the CY 2021 OPPS/ASC Final Rule, we 
established that physicians would consider certain safety factors as to 
a specific beneficiary when determining whether to perform a covered 
surgical procedure in an ASC. However, while a physician can make 
safety determinations for a specific beneficiary, CMS is in the 
position to make safety determinations for the broader population of 
Medicare beneficiaries.
    While there could be some appropriately selected patient 
populations for which some of these procedures could be safely 
performed in the ASC setting, that may not be the case for the typical 
Medicare beneficiary, due to comorbidities and other health risks that 
may require more intensive care and monitoring than provided in an ASC 
setting among this population. We believe it is appropriate to assess 
the safety of these procedures in the context of the typical Medicare 
beneficiary, whose health status is representative of the broader 
Medicare population. Thus, we believe evaluating procedures for their 
potential to require additional care and monitoring for the typical 
beneficiary is an appropriate consideration for CMS to make in 
determining which procedures can safely be performed in an ASC.
    We are concerned that, under our current policy, we do not make an 
active enough determination about whether a procedure is suitable to 
perform on a typical Medicare beneficiary in an ASC setting. The policy 
finalized last year allows individual physicians discretion to perform 
a number of procedures in the ASC setting that would not necessarily be 
appropriate for the typical Medicare beneficiary in that setting. 
Clinicians apply appropriate screening criteria to determine either 
that the procedure should not be performed in the ASC setting because 
of the risks to the specific beneficiary, or that the specific 
beneficiary presents a low enough risk profile that the procedure could 
be safely performed in the ASC setting.
    However, we want to reiterate that, in accordance with section 
1833(i)(1)(A) of the Act, the Secretary shall specify those surgical 
procedures that are appropriately (when considered in terms of the 
proper utilization of hospital inpatient facilities) performed on an 
inpatient basis in a hospital but that also can be performed safely on 
an ambulatory basis in an ambulatory surgical center. That is, if 
Medicare allows payment for these services in the ASC setting, it means 
that Medicare has determined that the procedure is safe to perform on 
the typical Medicare beneficiary.
    Accordingly, the addition of a procedure to the ASC CPL can signal 
to physicians that the procedure is safe to perform on the typical 
Medicare beneficiary in the ASC setting, even though the current 
criteria, adopted in CY 2021, for adding procedures to the ASC CPL do 
not include safety criteria other than ensuring that the procedure was 
not on the IPO list as of CY 2020. We recognize that, while there are 
similarities between the ASC and HOPD settings, there are also 
significant differences between the two care settings. The HOPD setting 
has additional capabilities, resources, and certifications that are not 
required for the ASC setting. For example, hospitals operate 24/7 and 
are subject to EMTALA requirements, while ASCs are not. Therefore, a 
procedure that can be furnished in the HOPD setting is not necessarily 
safe and appropriate to perform in an ASC setting simply because we 
make payment for the procedure when it is furnished in the HOPD 
setting.
    In light of these concerns, in this CY 2022 OPPS/ASC proposed rule, 
we propose to revise the criteria and process for adding procedures to 
the ASC CPL by reinstating the ASC CPL policy and regulation text that 
were in place in CY 2020. While this approach is a departure from the 
revised policy we adopted for CY 2021, it is consistent with our policy 
from CY 2008 through CY 2020 where we gradually expanded the ASC CPL 
while giving careful consideration to safety concerns and risks to the 
typical beneficiary. This approach would also continue to support our 
efforts to maximize patient access to care by, when appropriate, adding 
procedures to the ASC CPL to further increase the availability of ASCs 
as an alternative, lower cost site of care. While expanding the ASC CPL 
offers benefits like preserving the capacity of hospitals to treat more 
acute patients and promoting site neutrality, it is also essential that 
any expansion of the ASC CPL be done in a carefully calibrated fashion 
to ensure that Medicare is appropriately signaling that a procedure is 
safe to be performed in the ASC setting for a typical Medicare 
beneficiary.
    Accordingly, for CY 2022, we propose to revise the requirements for 
covered surgical procedures in the regulation at Sec.  416.166 to 
reinstate the specifications we had established prior to CY 2021. 
Specifically, we propose that, effective for services furnished on or 
after January 1, 2022, covered surgical procedures are those procedures 
that meet the general standards and do not meet the general exclusions. 
We propose to again provide in paragraph (b) of Sec.  416.166 that, 
subject to the exclusions we propose to again include in paragraph (c), 
covered surgical procedures are surgical procedures specified by the 
Secretary and published in the Federal Register and/or via the internet 
on the CMS website that are separately paid under the OPPS, that would 
not be expected to pose a significant safety risk to a Medicare 
beneficiary when performed in an ASC, and for which standard medical 
practice dictates that the beneficiary would not typically be expected 
to require active medical monitoring and care at midnight following the 
procedure. We propose to revise paragraph (c) to again include the five 
criteria currently included in paragraph (d) of the regulation as 
safety factors physicians consider. We propose that revised paragraph 
(c) would provide that, notwithstanding paragraph (b), covered surgical 
procedures do not include those surgical procedures that: (1) Generally 
result in extensive blood loss; (2) require major or prolonged invasion 
of body cavities; (3) directly involve major blood vessels; (4) are 
generally emergent or life-threatening in nature; (5) commonly require 
systemic thrombolytic therapy; (6) are designated as requiring 
inpatient care under Sec.  419.22(n); (7) can only be reported using a 
CPT unlisted surgical procedure code; or (8) are otherwise excluded 
under Sec.  411.15. We propose to remove the physician considerations 
at Sec.  416.166(d) and change the notification process at Sec.  
416.166(e) to a nomination process, which is discussed further in 
section (d)(2) below.
    We expect that we would continue to expand the ASC CPL in future 
years under our proposed revised criteria as the practice of medicine 
and medical technology continue to evolve. We believe that adding 
appropriate procedures to the ASC CPL, that meet the safety criteria 
that we are proposing to reinstate, has beneficial effects for Medicare 
beneficiaries and healthcare professionals, including increased access, 
better utilization of existing healthcare resources, and expansion of 
the capacity of the healthcare system.

[[Page 42209]]

(1) Comment Solicitation on Procedures That Were Added to the ASC CPL 
in CY 2021 and Would Not Meet the Proposed Revised CY 2022 Criteria
    As stated above, we are proposing to remove 258 procedures from the 
ASC CPL for CY 2022 that were added to the ASC CPL in CY 2021 that we 
believe do not meet the proposed revised CY 2022 ASC CPL criteria, 
listed in Table 45. Based on our internal review of preliminary claims 
submitted to Medicare, we do not believe that ASCs have been furnishing 
the majority of the 267 procedures finalized in 2021. Because of this, 
we believe it is unlikely that ASCs have made practice changes in 
reliance on the policy we adopted in CY 2021. Therefore, we do not 
anticipate that ASCs would be significantly affected by the removal of 
these 258 procedures from the ASC CPL. For the final rule, we seek 
input from commenters who believe any of the 258 procedures added to 
the ASC CPL in CY 2021 meet the proposed revised CY 2022 criteria and, 
if those revised criteria are finalized, should remain on the ASC CPL 
for CY 2022. We request any clinical evidence or literature to support 
commenters' views that any of these procedures meet the proposed 
revised CY 2022 criteria and should remain on the ASC CPL for CY 2022.
Nomination Process Proposal
    For CY 2022, we propose to change the current notification process 
for adding surgical procedures to the ASC CPL to a nomination process. 
We propose that external parties, for example, medical specialty 
societies or other members of the public, could nominate procedures to 
be added to the ASC CPL. CMS anticipates that stakeholders, such as 
specialty societies that specialize in and have a deep understanding of 
the complexities involved in providing certain procedures, would be 
able to provide valuable suggestions as to which additional procedures 
may reasonably and safely be performed in an ASC. While members of the 
public may already suggest procedures to be added to the ASC CPL 
through meetings with CMS or through public comments on the proposed 
rule, we believe it may be beneficial to enable the public, 
particularly specialty societies who are very familiar with procedures 
in their specialty, to formally nominate procedures based on the latest 
evidence available as well as input from their memberships.
    We propose to include the nomination process in a new subparagraph 
(d)(1) of Sec.  416.166. We propose that the regulation at Sec.  
416.166(d)(2) would provide that, if we identify a surgical procedure 
that meets the requirements at paragraph (a) of this section, including 
a surgical procedure nominated by an external party under paragraph 
(d)(1), we will propose to add the surgical procedure to the list of 
ASC covered surgical procedures in the next available annual 
rulemaking. Under this proposal, we would propose to add a nominated 
procedure to the ASC CPL if it meets the proposed general standards for 
covered surgical procedures at proposed Sec.  416.166(b), and does not 
meet the general exclusions in proposed Sec.  416.166(c).
    Specifically, for the OPPS/ASC rulemaking for a calendar year, we 
would request stakeholder nominations by March 1 of the year prior to 
the calendar year for the next applicable rulemaking cycle in order to 
be included in that rulemaking cycle. For example, stakeholders would 
need to send in nominations by March 1, 2022, to be considered for the 
CY 2023 rulemaking cycle and potentially have their nomination 
effective by January 1, 2023. We would evaluate procedures nominated by 
stakeholders based on the applicable statutory and regulatory 
requirements for ASC covered surgical procedures. We propose to address 
nominated procedures beginning in the CY 2023 rulemaking cycle. We 
would address in rulemaking nominated procedures for which stakeholders 
have provided sufficient information for us to evaluate the procedure. 
We propose to include in the applicable proposed rule, a summary of the 
justification for proposing to add or not add each nominated procedure, 
which would allow members of the public to assess and comment on 
nominated procedures during the public comment period. After reviewing 
comments provided during the public comment period, we would indicate 
whether or not we are adding the procedures to ASC CPL in the final 
rule. In the event that CMS determines that a nominated procedure does 
not meet the criteria to be added to the ASC CPL, we would provide our 
rationale in the rulemaking. In certain cases, we may need to defer a 
proposal regarding a nominated procedure to the next regulatory cycle 
or future rulemaking in order to have sufficient time to evaluate and 
make an appropriate proposal about the nominated procedure.
    We are also seeking comment on how we might prioritize our review 
of nominated procedures, in the event we receive an unexpectedly or 
extraordinarily large volume of nominations for which CMS has 
insufficient resources to address in the annual rulemaking. For 
example, if we could not address every nomination in a rulemaking cycle 
due to a large volume, we may need to prioritize our review such that 
we would only address in rulemaking those nominations that merit 
priority. Therefore, we are seeking comments as to how CMS should 
prioritize nominations. For example, whether we would prioritize the 
nominations that have codes nominated by multiple organizations or 
individuals, codes recently removed from the IPO list, codes 
accompanied by evidence that other payers are paying for the service on 
an outpatient basis or in an ASC setting, or a variety of other 
factors. If we were to finalize a prioritization hierarchy for CMS's 
review of nominated procedures to the ASC CPL, we would indicate in 
regulation text, likely in proposed Sec.  416.166(d)(2) Inclusion in 
Rulemaking: (1) That CMS would apply a prioritization hierarchy for 
reviewing nominated procedures if necessary because of an unexpectedly 
or extraordinarily large volume of nominations; and (2) specify CMS's 
prioritization hierarchy.
    We believe that this nominations proposal allows for the expansion 
of the ASC CPL in a more gradual fashion, which would better balance 
the goals of increasing patient choice and expanding site neutral 
options with patient safety considerations. We believe a nomination 
process will take time to develop because we want to incorporate 
stakeholder input on the most effective way to structure this process. 
We also acknowledge that stakeholders will need time to consider and 
evaluate potential surgical procedures to nominate. We propose to 
accept nominations for surgical procedures to be added to the ASC CPL 
beginning in CY 2023.
BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C
2. Covered Ancillary Services
    We are proposing to continue our existing policies relating to 
covered ancillary services with a proposed revision to the regulation 
at 42 CFR 416.164(b)(6) regarding our policy related to payment for 
non-opioid pain management drugs and biologicals.
    In the CY 2019 OPPS/ASC final rule (83 FR 59062 through 59063), 
consistent with the established ASC payment system policy (72 FR 
42497), we finalized the policy to update the ASC list of covered 
ancillary services to reflect the payment status for the services under 
the CY 2019 OPPS final rule. As discussed in prior rulemaking, 
maintaining consistency with the OPPS may result in changes to ASC 
payment indicators for some covered ancillary services because of 
changes that are being finalized under the OPPS for CY 2022. For 
example, if a covered ancillary service was separately paid under the 
ASC payment system in CY 2021, but will be packaged under the CY 2022 
OPPS, to maintain consistency with the OPPS, we would also package the 
ancillary service under the ASC payment system for CY 2022. In the CY 
2019 OPPS/ASC final rule, we finalized the policy to continue this 
reconciliation of packaged status for subsequent calendar years. 
Comment indicator ``CH'', which is discussed in section XIII.F. of the 
CY 2021 OPPS/ASC proposed rule, is used in Addendum BB to this CY 2022 
OPPS/ASC final rule (which is available via the internet on the CMS 
website) to indicate covered ancillary services for which we are 
finalizing a change in the ASC payment indicator to reflect a finalized 
change in the OPPS treatment of the service for CY 2021.
    For CY 2022, as discussed in section II.A.3.b, we propose to revise 
42 CFR 416.164(b)(6) to include, as ancillary items that are integral 
to a covered surgical procedure and for which separate payment is 
allowed, non-opioid pain management drugs and biologicals that function 
as a supply when used in a surgical procedure as determined by CMS in 
proposed new Sec.  416.174.
    New CPT and HCPCS codes for covered ancillary services and their 
proposed payment indicators for CY 2022 can be found in section XIII.B 
of this CY 2022 OPPS/ASC proposed rule. All ASC covered ancillary 
services and their proposed payment indicators for CY 2022 are also 
included in Addendum BB to this CY 2022 OPPS/ASC proposed rule (which 
is available via the internet on the CMS website).

D. Proposed Update and Payment for ASC Covered Surgical Procedures and 
Covered Ancillary Services

1. Proposed ASC Payment for Covered Surgical Procedures
a. Background
    Our ASC payment policies for covered surgical procedures under the 
revised ASC payment system are described in the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66828 through 66831). Under our 
established policy, we use the ASC standard ratesetting methodology of 
multiplying the ASC relative payment weight for the procedure by the 
ASC conversion factor for that same year to calculate the national 
unadjusted payment rates for procedures with payment indicators ``G2'' 
and ``A2''. Payment indicator ``A2'' was developed to identify 
procedures that were included on the list of ASC covered

[[Page 42225]]

surgical procedures in CY 2007 and, therefore, were subject to 
transitional payment prior to CY 2011. Although the 4-year transitional 
period has ended and payment indicator ``A2'' is no longer required to 
identify surgical procedures subject to transitional payment, we 
retained payment indicator ``A2'' because it is used to identify 
procedures that are exempted from the application of the office-based 
designation.
    The rate calculation established for device-intensive procedures 
(payment indicator ``J8'') is structured so only the service portion of 
the rate is subject to the ASC conversion factor. In the CY 2021 OPPS/
ASC final rule with comment period (85 FR 86122 through 86179), we 
updated the CY 2020 ASC payment rates for ASC covered surgical 
procedures with payment indicators of ``A2'', ``G2'', and ``J8'' using 
CY 2019 data, consistent with the CY 2021 OPPS update. We also updated 
payment rates for device-intensive procedures to incorporate the CY 
2021 OPPS device offset percentages calculated under the standard APC 
ratesetting methodology, as discussed earlier in this section.
    Payment rates for office-based procedures (payment indicators 
``P2'', ``P3'', and ``R2'') are the lower of the PFS nonfacility PE 
RVU-based amount or the amount calculated using the ASC standard rate 
setting methodology for the procedure. In the CY 2021 OPPS/ASC final 
rule with comment period, we updated the payment amounts for office-
based procedures (payment indicators ``P2'', ``P3'', and ``R2'') using 
the most recent available MPFS and OPPS data. We compared the estimated 
CY 2021 rate for each of the office-based procedures, calculated 
according to the ASC standard rate setting methodology, to the PFS 
nonfacility PE RVU-based amount to determine which was lower and, 
therefore, would be the CY 2021 payment rate for the procedure under 
our final policy for the revised ASC payment system (Sec.  416.171(d)).
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 
75081), we finalized our proposal to calculate the CY 2014 payment 
rates for ASC covered surgical procedures according to our established 
methodologies, with the exception of device removal procedures. For CY 
2014, we finalized a policy to conditionally package payment for device 
removal procedures under the OPPS. Under the OPPS, a conditionally 
packaged procedure (status indicators ``Q1'' and ``Q2'') describes a 
HCPCS code where the payment is packaged when it is provided with a 
significant procedure but is separately paid when the service appears 
on the claim without a significant procedure. Because ASC services 
always include a covered surgical procedure, HCPCS codes that are 
conditionally packaged under the OPPS are always packaged (payment 
indicator ``N1'') under the ASC payment system. Under the OPPS, device 
removal procedures are conditionally packaged and, therefore, would be 
packaged under the ASC payment system. There would be no Medicare 
payment made when a device removal procedure is performed in an ASC 
without another surgical procedure included on the claim; therefore, no 
Medicare payment would be made if a device was removed but not 
replaced. To ensure that the ASC payment system provides separate 
payment for surgical procedures that only involve device removal--
conditionally packaged in the OPPS (status indicator ``Q2'')--we 
continued to provide separate payment since CY 2014 and assigned the 
current ASC payment indicators associated with these procedures.
b. Changes to Beneficiary Coinsurance for Certain Colorectal Cancer 
Screening Tests
    Section 122 of the Consolidated Appropriations Act (CAA) of 2021 
(Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal 
Cancer Screening Tests, amends section 1833(a) of the Act to offer a 
special coinsurance rule for screening flexible sigmoidoscopies and 
screening colonoscopies, regardless of the code that is billed for the 
establishment of a diagnosis as a result of the test, or for the 
removal of tissue or other matter or other procedure, that is furnished 
in connection with, as a result of, and in the same clinical encounter 
as the colorectal cancer screening test. The reduced coinsurance will 
be phased-in beginning January 1, 2022. Our proposals to implement this 
legislation are included in the CY 2022 PFS proposed rule and section 
X.B., ``Changes to Beneficiary Coinsurance for Certain Colorectal 
Cancer Screening Tests'' of this proposed rule.
c. Proposed Update to ASC Covered Surgical Procedure Payment Rates for 
CY 2022
    We propose to update ASC payment rates for CY 2022 and subsequent 
years using the established rate calculation methodologies under Sec.  
416.171 and using our definition of device-intensive procedures, as 
discussed in section XII.C.1.b. of this CY 2022 OPPS/ASC proposed rule. 
Because the proposed OPPS relative payment weights are generally based 
on geometric mean costs, the ASC system would generally use the 
geometric mean cost to determine proposed relative payment weights 
under the ASC standard methodology. We propose to continue to use the 
amount calculated under the ASC standard ratesetting methodology for 
procedures assigned payment indicators ``A2'' and ``G2''.
    We propose to calculate payment rates for office-based procedures 
(payment indicators ``P2'', ``P3'', and ``R2'') and device-intensive 
procedures (payment indicator ``J8'') according to our established 
policies and, for device-intensive procedures, using our modified 
definition of device-intensive procedures, as discussed in section 
XII.C.1.b. of this CY 2022 OPPS/ASC proposed rule. Therefore, we 
propose to update the payment amount for the service portion of the 
device-intensive procedures using the standard ASC ratesetting 
methodology and the payment amount for the device portion based on the 
proposed CY 2022 device offset percentages that have been calculated 
using the standard OPPS APC ratesetting methodology. Payment for 
office-based procedures would be at the lesser of the proposed CY 2022 
MPFS nonfacility PE RVU-based amount or the proposed CY 2022 ASC 
payment amount calculated according to the ASC standard ratesetting 
methodology.
    As we did for CYs 2014 through 2021, for CY 2022 we propose to 
continue our policy for device removal procedures, such that device 
removal procedures that are conditionally packaged in the OPPS (status 
indicators ``Q1'' and ``Q2'') would be assigned the current ASC payment 
indicators associated with those procedures and would continue to be 
paid separately under the ASC payment system.
d. Proposed Limit on ASC Payment Rates for Procedures Assigned to Low 
Volume APCs
    As stated in section XIII.D.1.b. of this CY 2022 OPPS/ASC proposed 
rule, the ASC payment system generally uses OPPS geometric mean costs 
under the standard methodology to determine proposed relative payment 
weights under the standard ASC ratesetting methodology. However, for 
low-volume device-intensive procedures, the proposed relative payment 
weights are based on median costs, rather than geometric mean costs, as 
discussed in section IV.B.5. of this CY 2022 OPPS/ASC proposed rule.
    In the CY 2020 OPPS/ASC final rule with comment period (84 FR 
61400), we finalized our policy to limit the ASC payment rate for low-
volume device-intensive procedures to a payment rate equal to the OPPS 
payment rate for that

[[Page 42226]]

procedure. Under this policy, where the ASC payment rate based on the 
standard ASC ratesetting methodology for low volume device-intensive 
procedures would exceed the rate paid under the OPPS for the same 
procedure, we establish an ASC payment rate for such procedures equal 
to the OPPS payment rate for the same procedure.
    As discussed in Section X of this CY 2022 OPPS/ASC proposed rule, 
we are proposing a low volume APC policy for CY 2022 and subsequent 
calendar years. Under our proposal, a clinical APC, brachytherapy APC, 
or new technology APC with fewer than 100 claims per year would be 
designated as a low volume APC. For items and services assigned to APCs 
we propose to designate as low volume APCs, we are proposing to use up 
to 4 years of claims data to establish a payment rate for each item or 
service as we currently do for low volume services assigned to New 
Technology APCs. The payment rate for a low volume APC would be based 
on the highest of the median cost, arithmetic mean cost, or geometric 
mean cost calculated using multiple years of claims data. Because we 
are proposing to adopt a low volume APC policy, we are also proposing 
to eliminate our low volume device-intensive procedure policy and 
subsume the ratesetting issues associated with HCPCS code 0308T within 
our broader low volume APC proposal. Consequently, we are proposing to 
modify our existing regulations at Sec.  416.171(b)(4) to apply our ASC 
payment rate limitation to services assigned to low volume APCs rather 
than low volume device-intensive procedures.
    We seek comments on our proposal to modify our existing regulations 
at Sec.  416.171(b)(4) and limit the ASC payment rate for services 
assigned to low volume APCs to the payment rate for the OPPS.
2. Proposed Payment for Covered Ancillary Services
a. Background
    Our payment policies under the ASC payment system for covered 
ancillary services generally vary according to the particular type of 
service and its payment policy under the OPPS. Our overall policy 
provides separate ASC payment for certain ancillary items and services 
integrally related to the provision of ASC covered surgical procedures 
that are paid separately under the OPPS and provides packaged ASC 
payment for other ancillary items and services that are packaged or 
conditionally packaged (status indicators ``N'', ``Q1'', and ``Q2'') 
under the OPPS. In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77 
FR 68457 through 68458), we further clarified our policy regarding the 
payment indicator assignment for procedures that are conditionally 
packaged in the OPPS (status indicators ``Q1'' and ``Q2''). Under the 
OPPS, a conditionally packaged procedure describes a HCPCS code where 
the payment is packaged when it is provided with a significant 
procedure but is separately paid when the service appears on the claim 
without a significant procedure. Because ASC services always include a 
surgical procedure, HCPCS codes that are conditionally packaged under 
the OPPS are generally packaged (payment indictor ``N1'') under the ASC 
payment system (except for device removal procedures, as discussed in 
section IV. of this CY 2022 OPPS/ASC proposed rule). Thus, our policy 
generally aligns ASC payment bundles with those under the OPPS (72 FR 
42495). In all cases, in order for those ancillary services also to be 
paid, ancillary items and services must be provided integral to the 
performance of ASC covered surgical procedures for which the ASC bills 
Medicare.
    Our ASC payment policies generally provide separate payment for 
drugs and biologicals that are separately paid under the OPPS at the 
OPPS rates and package payment for drugs and biologicals for which 
payment is packaged under the OPPS. However, as discussed in section 
XIII.D.3. of this CY 2022 OPPS/ASC proposed rule, for CY 2022, we are 
proposing a policy to unpackage and pay separately at ASP plus 6 
percent for the cost of non-opioid pain management drugs and 
biologicals that function as a supply when used in a surgical procedure 
as determined by CMS under proposed new Sec.  416.174. We generally pay 
for separately payable radiology services at the lower of the PFS 
nonfacility PE RVU-based (or technical component) amount or the rate 
calculated according to the ASC standard ratesetting methodology (72 FR 
42497). However, as finalized in the CY 2011 OPPS/ASC final rule with 
comment period (75 FR 72050), payment indicators for all nuclear 
medicine procedures (defined as CPT codes in the range of 78000 through 
78999) that are designated as radiology services that are paid 
separately when provided integral to a surgical procedure on the ASC 
list are set to ``Z2'' so that payment is made based on the ASC 
standard ratesetting methodology rather than the MPFS nonfacility PE 
RVU amount (``Z3''), regardless of which is lower (Sec.  
416.171(d)(1)).
    Similarly, we also finalized our policy to set the payment 
indicator to ``Z2'' for radiology services that use contrast agents so 
that payment for these procedures will be based on the OPPS relative 
payment weight using the ASC standard ratesetting methodology and, 
therefore, will include the cost for the contrast agent (Sec.  
416.171(d)(2)).
    ASC payment policy for brachytherapy sources mirrors the payment 
policy under the OPPS. ASCs are paid for brachytherapy sources provided 
integral to ASC covered surgical procedures at prospective rates 
adopted under the OPPS or, if OPPS rates are unavailable, at 
contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs 
have been paid for brachytherapy sources provided integral to ASC 
covered surgical procedures at prospective rates adopted under the 
OPPS.
    Our ASC policies also provide separate payment for: (1) Certain 
items and services that CMS designates as contractor-priced, including, 
but not limited to, the procurement of corneal tissue; and (2) certain 
implantable items that have pass-through payment status under the OPPS. 
These categories do not have prospectively established ASC payment 
rates according to ASC payment system policies (72 FR 42502 and 42508 
through 42509; Sec.  416.164(b)). Under the ASC payment system, we have 
designated corneal tissue acquisition and hepatitis B vaccines as 
contractor-priced. Corneal tissue acquisition is contractor-priced 
based on the invoiced costs for acquiring the corneal tissue for 
transplantation. Hepatitis B vaccines are contractor-priced based on 
invoiced costs for the vaccine.
    Devices that are eligible for pass-through payment under the OPPS 
are separately paid under the ASC payment system and are contractor-
priced. Under the revised ASC payment system (72 FR 42502), payment for 
the surgical procedure associated with the pass-through device is made 
according to our standard methodology for the ASC payment system, based 
on only the service (non-device) portion of the procedure's OPPS 
relative payment weight if the APC weight for the procedure includes 
other packaged device costs. We also refer to this methodology as 
applying a ``device offset'' to the ASC payment for the associated 
surgical procedure. This ensures that duplicate payment is not provided 
for any portion of an implanted device with OPPS pass-through payment 
status.

[[Page 42227]]

    In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933 
through 66934), we finalized that, beginning in CY 2015, certain 
diagnostic tests within the medicine range of CPT codes for which 
separate payment is allowed under the OPPS are covered ancillary 
services when they are integral to an ASC covered surgical procedure. 
We finalized that diagnostic tests within the medicine range of CPT 
codes include all Category I CPT codes in the medicine range 
established by CPT, from 90000 to 99999, and Category III CPT codes and 
Level II HCPCS codes that describe diagnostic tests that crosswalk or 
are clinically similar to procedures in the medicine range established 
by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also 
finalized our policy to pay for these tests at the lower of the PFS 
nonfacility PE RVU-based (or technical component) amount or the rate 
calculated according to the ASC standard ratesetting methodology (79 FR 
66933 through 66934). We finalized that the diagnostic tests for which 
the payment is based on the ASC standard ratesetting methodology be 
assigned to payment indicator ``Z2'' and revised the definition of 
payment indicator ``Z2'' to include a reference to diagnostic services 
and those for which the payment is based on the PFS nonfacility PE RVU-
based amount be assigned payment indicator ``Z3,'' and revised the 
definition of payment indicator ``Z3'' to include a reference to 
diagnostic services.
b. Proposed Payment for Covered Ancillary Services for CY 2022
    We propose to update the ASC payment rates and to make changes to 
ASC payment indicators, as necessary, to maintain consistency between 
the OPPS and ASC payment system regarding the packaged or separately 
payable status of services and the proposed CY 2022 OPPS and ASC 
payment rates and subsequent year payment rates. We also propose to 
continue to set the CY 2022 ASC payment rates and subsequent year 
payment rates for brachytherapy sources and separately payable drugs 
and biologicals equal to the OPPS payment rates for CY 2022 and 
subsequent year payment rates.
    Covered ancillary services and their proposed payment indicators 
for CY 2022 are listed in Addendum BB of this CY 2022 OPPS/ASC proposed 
rule (which is available via the internet on the CMS website). For 
those covered ancillary services where the payment rate is the lower of 
the proposed rates under the ASC standard rate setting methodology and 
the PFS final rates, the proposed payment indicators and rates set 
forth in the proposed rule are based on a comparison using the proposed 
PFS rates effective January 1, 2022. For a discussion of the PFS rates, 
we refer readers to the CY 2022 PFS proposed rule, which is available 
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
3. CY 2022 ASC Packaging Policy for Non-Opioid Pain Management Drugs 
and Biologicals
    Please refer to Section II.A.3.b for a discussion of the proposed 
CY 2022 OPPS/ASC for payment for non-opioid pain management drugs and 
biologicals.

E. Proposed New Technology Intraocular Lenses (NTIOLs)

    New Technology Intraocular Lenses (NTIOLs) are intraocular lenses 
that replace a patient's natural lens that has been removed in cataract 
surgery and that also meet the requirements listed in Sec.  416.195.
1. NTIOL Application Cycle
    Our process for reviewing applications to establish new classes of 
NTIOLs is as follows:
     Applicants submit their NTIOL requests for review to CMS 
by the annual deadline. For a request to be considered complete, we 
require submission of the information requested in the guidance 
document entitled ``Application Process and Information Requirements 
for Requests for a New Class of New Technology Intraocular Lenses 
(NTIOLs) or Inclusion of an IOL in an Existing NTIOL Class'' posted on 
the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.html.
     We announce annually, in the proposed rule updating the 
ASC and OPPS payment rates for the following calendar year, a list of 
all requests to establish new NTIOL classes accepted for review during 
the calendar year in which the proposal is published. In accordance 
with section 141(b)(3) of Public Law 103-432 and our regulations at 
Sec.  416.185(b), the deadline for receipt of public comments is 30 
days following publication of the list of requests in the proposed 
rule.
     In the final rule updating the ASC and OPPS payment rates 
for the following calendar year, we--
    ++ Provide a list of determinations made as a result of our review 
of all new NTIOL class requests and public comments.
    ++ When a new NTIOL class is created, identify the predominant 
characteristic of NTIOLs in that class that sets them apart from other 
IOLs (including those previously approved as members of other expired 
or active NTIOL classes) and that is associated with an improved 
clinical outcome.
    ++ Set the date of implementation of a payment adjustment in the 
case of approval of an IOL as a member of a new NTIOL class 
prospectively as of 30 days after publication of the ASC payment update 
final rule, consistent with the statutory requirement.
    ++ Announce the deadline for submitting requests for review of an 
application for a new NTIOL class for the following calendar year.
2. Requests To Establish New NTIOL Classes for CY 2022
    We did not receive any requests for review to establish a new NTIOL 
class for CY 2022 by March 1, 2021, the due date published in the CY 
2021 OPPS/ASC final rule with comment period (85 FR 86173).
3. Payment Adjustment
    The current payment adjustment for a 5-year period from the 
implementation date of a new NTIOL class is $50 per lens. Since 
implementation of the process for adjustment of payment amounts for 
NTIOLs in 1999, we have not revised the payment adjustment amount, and 
we are not proposing to revise the payment adjustment amount for CY 
2022.

F. Proposed ASC Payment and Comment Indicators

1. Background
    In addition to the payment indicators that we introduced in the 
August 2, 2007 final rule, we created final comment indicators for the 
ASC payment system in the CY 2008 OPPS/ASC final rule with comment 
period (72 FR 66855). We created Addendum DD1 to define ASC payment 
indicators that we use in Addenda AA and BB to provide payment 
information regarding covered surgical procedures and covered ancillary 
services, respectively, under the revised ASC payment system. The ASC 
payment indicators in Addendum DD1 are intended to capture policy-
relevant characteristics of HCPCS codes that may receive packaged or 
separate payment in ASCs, such as whether they were on the ASC CPL 
prior to CY 2008; payment designation, such as device-intensive or 
office-based, and the corresponding ASC payment methodology; and their 
classification as separately payable ancillary services,

[[Page 42228]]

including radiology services, brachytherapy sources, OPPS pass-through 
devices, corneal tissue acquisition services, drugs or biologicals, or 
NTIOLs.
    We also created Addendum DD2 that lists the ASC comment indicators. 
The ASC comment indicators included in Addenda AA and BB to the 
proposed rules and final rules with comment period serve to identify, 
for the revised ASC payment system, the status of a specific HCPCS code 
and its payment indicator with respect to the timeframe when comments 
will be accepted. The comment indicator ``NI'' is used in the OPPS/ASC 
final rule to indicate new codes for the next calendar year for which 
the interim payment indicator assigned is subject to comment. The 
comment indicator ``NI'' also is assigned to existing codes with 
substantial revisions to their descriptors such that we consider them 
to be describing new services, and the interim payment indicator 
assigned is subject to comment, as discussed in the CY 2010 OPPS/ASC 
final rule with comment period (74 FR 60622).
    The comment indicator ``NP'' is used in the OPPS/ASC proposed rule 
to indicate new codes for the next calendar year for which the proposed 
payment indicator assigned is subject to comment. The comment indicator 
``NP'' also is assigned to existing codes with substantial revisions to 
their descriptors, such that we consider them to be describing new 
services, and the proposed payment indicator assigned is subject to 
comment, as discussed in the CY 2016 OPPS/ASC final rule with comment 
period (80 FR 70497).
    The ``CH'' comment indicator is used in Addenda AA and BB to the 
proposed rule (which are available via the internet on the CMS website) 
to indicate that the payment indicator assignment has changed for an 
active HCPCS code in the current year and the next calendar year, for 
example if an active HCPCS code is newly recognized as payable in ASCs; 
or an active HCPCS code is discontinued at the end of the current 
calendar year. The ``CH'' comment indicators that are published in the 
final rule with comment period are provided to alert readers that a 
change has been made from one calendar year to the next, but do not 
indicate that the change is subject to comment.
    In the CY 2021 OPPS/ASC final rule, we finalized the addition of 
ASC payment indicator ``K5''--Items, Codes, and Services for which 
pricing information and claims data are not available. No payment 
made.--to ASC Addendum DD1 (which is available via the internet on the 
CMS website) to indicate those services and procedures that CMS 
anticipates will become payable when claims data or payment information 
becomes available.
2. ASC Payment and Comment Indicators for CY 2022
    For 2022, we propose new and revised Category I and III CPT codes 
as well as new and revised Level II HCPCS codes. Therefore, proposed 
Category I and III CPT codes that are new and revised for CY 2022 and 
any new and existing Level II HCPCS codes with substantial revisions to 
the code descriptors for CY 2022, compared to the CY 2021 descriptors, 
are included in ASC Addenda AA and BB to this proposed rule and labeled 
with proposed comment indicator ``NP'' to indicate that these CPT and 
Level II HCPCS codes are open for comment as part of this proposed 
rule. Proposed comment indicator ``NP'' meant a new code for the next 
calendar year or an existing code with substantial revision to its code 
descriptor in the next calendar year, as compared to the current 
calendar year; and denoted that comments would be accepted on the 
proposed ASC payment indicator for the new code.
    We will respond to public comments on ASC payment and comment 
indicators and finalize their ASC assignment in the CY 2022 OPPS/ASC 
final rule with comment period. We refer readers to Addenda DD1 and DD2 
of this proposed rule (which are available via the internet on the CMS 
website) for the complete list of ASC payment and comment indicators 
proposed for the CY 2022 update. Addenda DD1 and DD2 to this proposed 
rule (which are available via the internet on the CMS website) contain 
the complete list of ASC payment and comment indicators for CY 2022.

G. Proposed Calculation of the ASC Payment Rates and the ASC Conversion 
Factor

1. Background
    In the August 2, 2007 final rule (72 FR 42493), we established our 
policy to base ASC relative payment weights and payment rates under the 
revised ASC payment system on APC groups and the OPPS relative payment 
weights. Consistent with that policy and the requirement at section 
1833(i)(2)(D)(ii) of the Act that the revised payment system be 
implemented so that it would be budget neutral, the initial ASC 
conversion factor (CY 2008) was calculated so that estimated total 
Medicare payments under the revised ASC payment system in the first 
year would be budget neutral to estimated total Medicare payments under 
the prior (CY 2007) ASC payment system (the ASC conversion factor is 
multiplied by the relative payment weights calculated for many ASC 
services in order to establish payment rates). That is, application of 
the ASC conversion factor was designed to result in aggregate Medicare 
expenditures under the revised ASC payment system in CY 2008 being 
equal to aggregate Medicare expenditures that would have occurred in CY 
2008 in the absence of the revised system, taking into consideration 
the cap on ASC payments in CY 2007, as required under section 
1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the 
system budget neutral in subsequent calendar years (72 FR 42532 through 
42533; Sec.  416.171(e)).
    We note that we consider the term ``expenditures'' in the context 
of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of 
the Act to mean expenditures from the Medicare Part B Trust Fund. We do 
not consider expenditures to include beneficiary coinsurance and 
copayments. This distinction was important for the CY 2008 ASC budget 
neutrality model that considered payments across the OPPS, ASC, and 
MPFS payment systems. However, because coinsurance is almost always 20 
percent for ASC services, this interpretation of expenditures has 
minimal impact for subsequent budget neutrality adjustments calculated 
within the revised ASC payment system.
    In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857 
through 66858), we set out a step-by-step illustration of the final 
budget neutrality adjustment calculation based on the methodology 
finalized in the August 2, 2007 final rule (72 FR 42521 through 42531) 
and as applied to updated data available for the CY 2008 OPPS/ASC final 
rule with comment period. The application of that methodology to the 
data available for the CY 2008 OPPS/ASC final rule with comment period 
resulted in a budget neutrality adjustment of 0.65.
    For CY 2008, we adopted the OPPS relative payment weights as the 
ASC relative payment weights for most services and, consistent with the 
final policy, we calculated the CY 2008 ASC payment rates by 
multiplying the ASC relative payment weights by the final CY 2008 ASC 
conversion factor of $41.401. For covered office-based surgical 
procedures, covered ancillary radiology services (excluding covered 
ancillary radiology services involving certain nuclear medicine 
procedures or involving the use of contrast agents, as discussed in 
section XII.D.2. of this CY

[[Page 42229]]

2022 OPPS/ASC proposed rule), and certain diagnostic tests within the 
medicine range that are covered ancillary services, the established 
policy is to set the payment rate at the lower of the MPFS unadjusted 
nonfacility PE RVU-based amount or the amount calculated using the ASC 
standard ratesetting methodology. Further, as discussed in the CY 2008 
OPPS/ASC final rule with comment period (72 FR 66841 through 66843), we 
also adopted alternative ratesetting methodologies for specific types 
of services (for example, device-intensive procedures).
    As discussed in the August 2, 2007 final rule (72 FR 42517 through 
42518) and as codified at Sec.  416.172(c) of the regulations, the 
revised ASC payment system accounts for geographic wage variation when 
calculating individual ASC payments by applying the pre-floor and pre-
reclassified IPPS hospital wage indexes to the labor-related share, 
which is 50 percent of the ASC payment amount based on a GAO report of 
ASC costs using 2004 survey data. Beginning in CY 2008, CMS accounted 
for geographic wage variation in labor costs when calculating 
individual ASC payments by applying the pre-floor and pre-reclassified 
hospital wage index values that CMS calculates for payment under the 
IPPS, using updated Core Based Statistical Areas (CBSAs) issued by OMB 
in June 2003.
    The reclassification provision in section 1886(d)(10) of the Act is 
specific to hospitals. We believe that using the most recently 
available pre-floor and pre-reclassified IPPS hospital wage indexes 
results in the most appropriate adjustment to the labor portion of ASC 
costs. We continue to believe that the unadjusted hospital wage 
indexes, which are updated yearly and are used by many other Medicare 
payment systems, appropriately account for geographic variation in 
labor costs for ASCs. Therefore, the wage index for an ASC is the pre-
floor and pre-reclassified hospital wage index under the IPPS of the 
CBSA that maps to the CBSA where the ASC is located.
    Generally, OMB issues major revisions to statistical areas every 10 
years, based on the results of the decennial census. On February 28, 
2013, OMB issued OMB Bulletin No. 13-01, which provides the 
delineations of all Metropolitan Statistical Areas, Metropolitan 
Divisions, Micropolitan Statistical Areas, Combined Statistical Areas, 
and New England City and Town Areas in the United States and Puerto 
Rico based on the standards published on June 28, 2010 in the Federal 
Register (75 FR 37246 through 37252) and 2010 Census Bureau data. (A 
copy of this bulletin may be obtained at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2013/b13-01.pdf). In the FY 
2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963), we 
implemented the use of the CBSA delineations issued by OMB in OMB 
Bulletin 13-01 for the IPPS hospital wage index beginning in FY 2015.
    OMB occasionally issues minor updates and revisions to statistical 
areas in the years between the decennial censuses. On July 15, 2015, 
OMB issued OMB Bulletin No. 15-01, which provides updates to and 
supersedes OMB Bulletin No. 13-01 that was issued on February 28, 2013. 
OMB Bulletin No. 15-01 made changes that are relevant to the IPPS and 
ASC wage index. We refer readers to the CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79750) for a discussion of these changes and 
our implementation of these revisions. (A copy of this bulletin may be 
obtained at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2015/15-01.pdf).
    On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which 
provided updates to and superseded OMB Bulletin No. 15-01 that was 
issued on July 15, 2015. We refer readers to the CY 2019 OPPS/ASC final 
rule with comment period (83 FR 58864 through 58865) for a discussion 
of these changes and our implementation of these revisions. (A copy of 
this bulletin may be obtained at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf).
    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 18-04 which superseded the April 10, 2018 
OMB Bulletin No. 18-03. A copy of OMB Bulletin No. 18-04 may be 
obtained at https://www.whitehouse.gov/wpcontent/uploads/2018/90/Bulletin-18-04.pdf. We are utilizing the revised delineations as set 
forth in the April 10, 2018 OMB Bulletin No. 18-03 and the September 
14, 2018 OMB Bulletin No. 18-04 to calculate the CY 2021 ASC wage index 
effective beginning January 1, 2021.
    For CY 2022, we noted that the proposed CY 2022 ASC wage indexes 
fully reflects the OMB labor market area delineations (including the 
revisions to the OMB labor market delineations discussed above, as set 
forth in OMB Bulletin Nos. 15-01, 17-01, 18-03, and 18-04). We note 
that, in certain instances, there might be urban or rural areas for 
which there is no IPPS hospital that has wage index data that could be 
used to set the wage index for that area. For these areas, our policy 
has been to use the average of the wage indexes for CBSAs (or 
metropolitan divisions as applicable) that are contiguous to the area 
that has no wage index (where ``contiguous'' is defined as sharing a 
border). For example, for CY 2022, we applied a proxy wage index based 
on this methodology to ASCs located in CBSA 25980 (Hinesville-Fort 
Stewart, GA).
    When all of the areas contiguous to the urban CBSA of interest are 
rural and there is no IPPS hospital that has wage index data that could 
be used to set the wage index for that area, we determine the ASC wage 
index by calculating the average of all wage indexes for urban areas in 
the state (75 FR 72058 through 72059). In other situations, where there 
are no IPPS hospitals located in a relevant labor market area, we have 
continued our current policy of calculating an urban or rural area's 
wage index by calculating the average of the wage indexes for CBSAs (or 
metropolitan divisions where applicable) that are contiguous to the 
area with no wage index.
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2022 and Future 
Years
    We update the ASC relative payment weights each year using the 
national OPPS relative payment weights (and PFS nonfacility PE RVU-
based amounts, as applicable) for that same calendar year and uniformly 
scale the ASC relative payment weights for each update year to make 
them budget neutral (72 FR 42533). The OPPS relative payment weights 
are scaled to maintain budget neutrality for the OPPS. We then scale 
the OPPS relative payment weights again to establish the ASC relative 
payment weights. To accomplish this, we hold estimated total ASC 
payment levels constant between calendar years for purposes of 
maintaining budget neutrality in the ASC payment system. That is, we 
apply the weight scalar to ensure that projected expenditures from the 
updated ASC payment weights in the ASC payment system equal to what 
would be the current expenditures based on the scaled ASC payment 
weights. In this way we ensure budget neutrality and that the only 
changes to total payments to ASCs result from increases or decreases in 
the ASC payment update factor.
    Where the estimated ASC expenditures for an upcoming year are 
higher than the estimated ASC

[[Page 42230]]

expenditures for the current year, the ASC weight scalar is reduced, in 
order to bring the estimated ASC expenditures in line with the 
expenditures for the baseline year. This frequently results in ASC 
relative payment weights for surgical procedures that are lower than 
the OPPS relative payment weights for the same procedures for the 
upcoming year. Therefore, over time, even if procedures performed in 
the HOPD and ASC receive the same update factor under the OPPS and ASC 
payment system, payment rates under the ASC payment system would 
increase at a lower rate than payment for the same procedures performed 
in the HOPD as a result of applying the ASC weight scalar to ensure 
budget neutrality.
    As discussed in Section II.A.1.a of this proposed rule, given our 
concerns with CY 2020 claims data as a result of the PHE, we are using 
the CY 2019 claims data to be consistent with the OPPS claims data for 
this CY 2022 OPPS/ASC proposed rule. Consistent with our established 
policy, we propose to scale the CY 2022 relative payment weights for 
ASCs according to the following method. Holding ASC utilization, the 
ASC conversion factor, and the mix of services constant from CY 2019, 
we propose to compare the total payment using the CY 2021 ASC relative 
payment weights with the total payment using the CY 2022 ASC relative 
payment weights to take into account the changes in the OPPS relative 
payment weights between CY 2021 and CY 2022. We propose to use the 
ratio of CY 2021 to CY 2022 total payments (the weight scalar) to scale 
the ASC relative payment weights for CY 2022. The proposed CY 2022 ASC 
weight scalar is 0.8591. Consistent with historical practice, we would 
scale the ASC relative payment weights of covered surgical procedures, 
covered ancillary radiology services, and certain diagnostic tests 
within the medicine range of CPT codes, which are covered ancillary 
services for which the ASC payment rates are based on OPPS relative 
payment weights.
    Scaling would not apply in the case of ASC payment for separately 
payable covered ancillary services that have a predetermined national 
payment amount (that is, their national ASC payment amounts are not 
based on OPPS relative payment weights), such as drugs and biologicals 
that are separately paid or services that are contractor-priced or paid 
at reasonable cost in ASCs. Any service with a predetermined national 
payment amount would be included in the ASC budget neutrality 
comparison, but scaling of the ASC relative payment weights would not 
apply to those services. The ASC payment weights for those services 
without predetermined national payment amounts (that is, those services 
with national payment amounts that would be based on OPPS relative 
payment weights) would be scaled to eliminate any difference in the 
total payment between the current year and the update year.
    For any given year's ratesetting, we typically use the most recent 
full calendar year of claims data to model budget neutrality 
adjustments. At the time of this proposed rule, we have available 100 
percent of CY 2019 ASC claims data.
b. Updating the ASC Conversion Factor
    Under the OPPS, we typically apply a budget neutrality adjustment 
for provider-level changes, most notably a change in the wage index 
values for the upcoming year, to the conversion factor. Consistent with 
our final ASC payment policy, for the CY 2017 ASC payment system and 
subsequent years, in the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79751 through 79753), we finalized our policy to 
calculate and apply a budget neutrality adjustment to the ASC 
conversion factor for supplier-level changes in wage index values for 
the upcoming year, just as the OPPS wage index budget neutrality 
adjustment is calculated and applied to the OPPS conversion factor. For 
CY 2022, we calculated the proposed adjustment for the ASC payment 
system by using the most recent CY 2019 claims data available and 
estimating the difference in total payment that would be created by 
introducing the proposed CY 2022 ASC wage indexes. Specifically, 
holding CY 2019 ASC utilization, service-mix, and the proposed CY 2022 
national payment rates after application of the weight scalar constant, 
we calculated the total adjusted payment using the CY 2021 ASC wage 
indexes and the total adjusted payment using the proposed CY 2022 ASC 
wage indexes. We used the 50-percent labor-related share for both total 
adjusted payment calculations. We then compared the total adjusted 
payment calculated with the CY 2021 ASC wage indexes to the total 
adjusted payment calculated with the proposed CY 2022 ASC wage indexes 
and applied the resulting ratio of 0.9999 (the proposed CY 2022 ASC 
wage index budget neutrality adjustment) to the CY 2021 ASC conversion 
factor to calculate the proposed CY 2022 ASC conversion factor.
    Section 1833(i)(2)(C)(i) of the Act requires that, if the Secretary 
has not updated amounts established under the revised ASC payment 
system in a calendar year, the payment amounts shall be increased by 
the percentage increase in the Consumer Price Index for all urban 
consumers (CPI-U), U.S. city average, as estimated by the Secretary for 
the 12-month period ending with the midpoint of the year involved. The 
statute does not mandate the adoption of any particular update 
mechanism, but it requires the payment amounts to be increased by the 
CPI-U in the absence of any update. Because the Secretary updates the 
ASC payment amounts annually, we adopted a policy, which we codified at 
Sec.  416.171(a)(2)(ii)), to update the ASC conversion factor using the 
CPI-U for CY 2010 and subsequent calendar years.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075 
through 59080), we finalized our proposal to apply the productivity-
adjusted hospital market basket update to ASC payment system rates for 
an interim period of 5 years (CY 2019 through CY 2023), during which we 
will assess whether there is a migration of the performance of 
procedures from the hospital setting to the ASC setting as a result of 
the use of a productivity-adjusted hospital market basket update, as 
well as whether there are any unintended consequences, such as less 
than expected migration of the performance of procedures from the 
hospital setting to the ASC setting. In addition, we finalized our 
proposal to revise our regulations under Sec.  416.171(a)(2), which 
address the annual update to the ASC conversion factor. During this 5-
year period, we intend to assess the feasibility of collaborating with 
stakeholders to collect ASC cost data in a minimally burdensome manner 
and could propose a plan to collect such information. We refer readers 
to that final rule for a detailed discussion of the rationale for these 
policies.
    The proposed hospital market basket update for CY 2022 is projected 
to be 2.5 percent, as published in the FY 2022 IPPS/LTCH PPS proposed 
rule (86 FR 25435), based on IHS Global Inc.'s (IGI's) 2020 fourth 
quarter forecast with historical data through the third quarter of 
2020.
    Section 1886(b)(3)(B)(xi)(II) of the Act, defines the productivity 
adjustment to be equal to the 10-year moving average of changes in 
annual economy-wide private nonfarm business multifactor productivity 
(MFP). We finalized the methodology for calculating the productivity 
adjustment in the CY 2011 PFS final rule with comment period (75 FR 
73394 through 73396) and revised it

[[Page 42231]]

in the CY 2012 PFS final rule with comment period (76 FR 73300 through 
73301) and the CY 2016 OPPS/ASC final rule with comment period (80 FR 
70500 through 70501). The proposed productivity adjustment for CY 2022 
is projected to be 0.2 percentage point, as published in the FY 2022 
IPPS/LTCH PPS proposed rule (86 FR 25435) based on IGI's 2020 fourth 
quarter forecast.
    For 2022, we propose to utilize the hospital market basket update 
of 2.5 percent reduced by the productivity adjustment of 0.2 percentage 
point, resulting in a productivity-adjusted hospital market basket 
update factor of 2.3 percent for ASCs meeting the quality reporting 
requirements. Therefore, we propose to apply a 2.3 percent 
productivity-adjusted hospital market basket update factor to the CY 
2021 ASC conversion factor for ASCs meeting the quality reporting 
requirements to determine the CY 2022 ASC payment amounts. The ASCQR 
Program affected payment rates beginning in CY 2014 and, under this 
program, there is a 2.0 percentage point reduction to the update factor 
for ASCs that fail to meet the ASCQR Program requirements. We refer 
readers to section XIV.E. of the CY 2019 OPPS/ASC final rule with 
comment period (83 FR 59138 through 59139) and section XIV.E. of this 
CY 2022 OPPS/ASC proposed rule for a detailed discussion of our 
policies regarding payment reduction for ASCs that fail to meet ASCQR 
Program requirements. We propose to utilize the hospital market basket 
update of 2.5 percent reduced by 2.0 percentage points for ASCs that do 
not meet the quality reporting requirements and then reduced by the 0.2 
percentage point productivity adjustment. Therefore, we propose to 
apply a 0.3 percent productivity-adjusted hospital market basket update 
factor to the CY 2021 ASC conversion factor for ASCs not meeting the 
quality reporting requirements. We also propose that if more recent 
data are subsequently available (for example, a more recent estimate of 
the hospital market basket update or productivity adjustment), we would 
use such data, if appropriate, to determine the CY 2022 ASC update for 
the CY 2022 OPPS/ASC final rule with comment period.
    For 2022, we propose to adjust the CY 2021 ASC conversion factor 
($48.952) by the proposed wage index budget neutrality factor of 0.9993 
in addition to the productivity-adjusted hospital market basket update 
of 2.3 percent discussed above, which results in a proposed CY 2022 ASC 
conversion factor of $50.043 for ASCs meeting the quality reporting 
requirements. For ASCs not meeting the quality reporting requirements, 
we propose to adjust the CY 2021 ASC conversion factor ($48.952) by the 
proposed wage index budget neutrality factor of 0.9993 in addition to 
the quality reporting/productivity-adjusted hospital market basket 
update of 0.3 percent discussed above, which results in a proposed CY 
2022 ASC conversion factor of $49.064.
3. Display of Proposed CY 2022 ASC Payment Rates
    Addenda AA and BB to this proposed rule (which are available on the 
CMS website) display the proposed ASC payment rates for CY 2022 for 
covered surgical procedures and covered ancillary services, 
respectively. Historically, for those covered surgical procedures and 
covered ancillary services where the payment rate is the lower of the 
proposed rates under the ASC standard ratesetting methodology and the 
MPFS proposed rates, the proposed payment indicators and rates set 
forth in this proposed rule are based on a comparison using the PFS 
rates that would be effective January 1, 2022. For a discussion of the 
PFS rates, we refer readers to the CY 2022 PFS proposed rule that is 
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    The proposed payment rates included in addenda AA and BB to this 
proposed rule reflect the full ASC payment update and not the reduced 
payment update used to calculate payment rates for ASCs not meeting the 
quality reporting requirements under the ASCQR Program. These addenda 
contain several types of information related to the proposed CY 2022 
payment rates. Specifically, in Addendum AA, a ``Y'' in the column 
titled ``To be Subject to Multiple Procedure Discounting'' indicates 
that the surgical procedure would be subject to the multiple procedure 
payment reduction policy. As discussed in the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66829 through 66830), most covered 
surgical procedures are subject to a 50-percent reduction in the ASC 
payment for the lower-paying procedure when more than one procedure is 
performed in a single operative session.
    Display of the comment indicator ``CH'' in the column titled 
``Comment Indicator'' indicates a change in payment policy for the item 
or service, including identifying discontinued HCPCS codes, designating 
items or services newly payable under the ASC payment system, and 
identifying items or services with changes in the ASC payment indicator 
for CY 2021. Display of the comment indicator ``NI'' in the column 
titled ``Comment Indicator'' indicates that the code is new (or 
substantially revised) and that comments will be accepted on the 
interim payment indicator for the new code. Display of the comment 
indicator ``NP'' in the column titled ``Comment Indicator'' indicates 
that the code is new (or substantially revised) and that comments will 
be accepted on the ASC payment indicator for the new code.
    For 2021, we finalized adding a new column to ASC Addendum BB 
titled ``Drug Pass-Through Expiration during Calendar Year'' where we 
flag through the use of an asterisk each drug for which pass-through 
payment is expiring during the calendar year (that is, on a date other 
than December 31st).
    The values displayed in the column titled ``Proposed CY 2021 
Payment Weight'' are the proposed relative payment weights for each of 
the listed services for CY 2021. The proposed relative payment weights 
for all covered surgical procedures and covered ancillary services 
where the ASC payment rates are based on OPPS relative payment weights 
were scaled for budget neutrality. Therefore, scaling was not applied 
to the device portion of the device-intensive procedures, services that 
are paid at the MPFS nonfacility PE RVU-based amount, separately 
payable covered ancillary services that have a predetermined national 
payment amount, such as drugs and biologicals and brachytherapy sources 
that are separately paid under the OPPS, or services that are 
contractor-priced or paid at reasonable cost in ASCs. This includes 
separate payment for non-opioid pain management drugs.
    To derive the proposed CY 2022 payment rate displayed in the 
``Proposed CY 2022 Payment Rate'' column, each ASC payment weight in 
the ``Proposed CY 2022 Payment Weight'' column was multiplied by the 
proposed CY 2022 conversion factor of $50.043. The conversion factor 
includes a budget neutrality adjustment for changes in the wage index 
values and the annual update factor as reduced by the productivity 
adjustment. The proposed CY 2022 ASC conversion factor uses the CY 2022 
productivity-adjusted hospital market basket update factor of 2.3 
percent (which is equal to the projected hospital market basket update 
of 2.5 percent reduced by a projected productivity adjustment of 0.2 
percentage point).
    In Addendum BB, there are no relative payment weights displayed in 
the ``Proposed CY 2022 Payment Weight'' column for items and services

[[Page 42232]]

with predetermined national payment amounts, such as separately payable 
drugs and biologicals. The ``Proposed CY 2021 Payment'' column displays 
the proposed CY 2022 national unadjusted ASC payment rates for all 
items and services. The proposed CY 2022 ASC payment rates listed in 
Addendum BB for separately payable drugs and biologicals are based on 
ASP data used for payment in physicians' offices in 2020.
    Addendum EE provides the HCPCS codes and short descriptors for 
surgical procedures that are proposed to be excluded from payment in 
ASCs for CY 2022.

XIV. Advancing to Digital Quality Measurement and the Use of Fast 
Healthcare Interoperability Resources (FHIR) in Outpatient Quality 
Programs--Request for Information

    We aim to move fully to digital quality measurement in the Centers 
for Medicare & Medicaid Services (CMS) quality reporting and value-
based purchasing (VBP) programs by 2025. As part of this modernization 
of our quality measurement enterprise, we are issuing this request for 
information (RFI). The purpose of this RFI is to gather broad public 
input solely for planning purposes for our transition to digital 
quality measurement. Any updates to specific program requirements 
related to providing data for quality measurement and reporting 
provisions would be addressed through future rulemaking, as necessary. 
This RFI contains five parts:
     Background. This part provides information on our quality 
measurement programs and our goal to move fully to digital quality 
measurement by 2025. This part also provides a summary of recent HHS 
policy developments that are advancing interoperability and could 
support our move towards full digital quality measurement.
     Definition of Digital Quality Measures (dQMs). This part 
provides a potential definition for dQMs. Specific requests for input 
are included in the section.
     Use of Fast Healthcare Interoperability Resources 
(FHIR[supreg]) for Current Electronic Clinical Quality Measures 
(eCQMs). This part provides information on current activities underway 
to align CMS eCQMs with the FHIR standard and support quality 
measurement via application programming interfaces (APIs), and 
contrasts this approach to current eCQM standards and practice.
     Changes Under Consideration to Advance Digital Quality 
Measurement: Potential Actions in Four Areas to Transition to dQMs by 
2025. This part introduces four possible steps that would enable 
transformation of CMS' quality measurement enterprise to be fully 
digital by 2025. Specific requests for input are included in the 
section.
     Solicitation of Comments. This part lists all requests for 
input included in the sections of this RFI.

A. Background

    As required by law, we implement quality measurement and VBP 
programs across a broad range of inpatient acute care, outpatient, and 
post-acute care (PAC) settings consistent with our mission to improve 
the quality of health care for Americans through measurement, 
transparency, and increasingly, value-based purchasing. These quality 
programs are foundational for incentivizing value-based care, 
contributing to improvements in health care, enhancing patient 
outcomes, and informing consumer choice. In October 2017, we launched 
the Meaningful Measures Framework. This framework for quality 
measurement captures our vision to better address health care quality 
priorities and gaps, including emphasizing digital quality measurement, 
reducing measurement burden, and promoting patient perspectives, while 
also focusing on modernization and innovation. The scope of the 
Meaningful Measures Framework evolves as the health care environment 
continues to change.\115\ Consistent with the Meaningful Measures 
Framework, we aim to move fully to digital quality measurement by 2025. 
We acknowledge facilities within the various care and practice settings 
covered by our quality programs may be at different stages of readiness 
and, therefore, the timeline for achieving full digital quality 
measurement across our quality reporting programs may vary.
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    \115\ Meaningful Measures 2.0: Moving from Measure Reduction to 
Modernization. Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
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    We also continue to evolve the Medicare Promoting Interoperability 
Program's focus on the use of certified electronic health record (EHR) 
technology, from an initial focus on electronic data capture to 
enhancing information exchange and expanding quality measurement (83 FR 
41634). However, reporting data for quality measurement via EHRs 
remains burdensome, and our current approach to quality measurement 
does not readily incorporate emerging data sources such as patient-
reported outcomes (PRO) and patient-generated health data (PGHD).\116\ 
There is a need to streamline our approach to data collection, 
calculation, and reporting to fully leverage clinical and patient-
centered information for measurement, improvement, and learning.
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    \116\ What are patient generated health data: https://www.healthit.gov/topic/otherhot-topics/what-are-patient-generated-health-data.
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    Additionally, advancements in technical standards and associated 
regulatory initiatives to improve interoperability of healthcare data 
are creating an opportunity to significantly improve our quality 
measurement systems. In May 2020, we finalized interoperability 
requirements in the CMS Interoperability and Patient Access final rule 
(85 FR 25510) to support beneficiary access to data held by certain 
payers. At the same time, the Office of the National Coordinator for 
Health Information Technology (ONC) finalized policies in the ONC 21st 
Century Cures Act final rule (85 FR 25642) to advance the 
interoperability of health information technology (IT) as defined in 
section 4003 of the 21st Century Cures Act, including the ``complete 
access, exchange, and use of all electronically accessible health 
information.'' Closely working with ONC, we collaboratively identified 
Health Level 7 (HL7[supreg]) FHIR Release 4.0.1 as the standard to 
support API policies in both rules. ONC, on behalf of HHS, adopted the 
HL7 FHIR Release 4.0.1 for APIs and related implementation 
specifications at 45 CFR 170.215. We believe the FHIR standard has the 
potential to be a more efficient and modular standard to enable APIs. 
We also believe this standard enables collaboration and information 
sharing, which is essential for delivering high-quality care and better 
outcomes at a lower cost. By aligning technology requirements for 
payers, health care facilities, and health IT developers HHS can 
advance an interoperable health IT infrastructure that ensures 
healthcare facilities and patients have access to health data when and 
where it is needed.
    In the ONC 21st Century Cures Act final rule, ONC adopted a 
``Standardized API for Patient and Population Services'' certification 
criterion for health IT that requires the use of FHIR Release 4 and 
several implementation specifications. Health IT certified to this 
criterion will offer single patient and multiple patient services that 
can be accessed by third party applications (85 FR 25742).\117\ The

[[Page 42233]]

ONC 21st Century Cures Act final rule also requires health IT 
developers to update their certified health IT to support the United 
States Core Data for Interoperability (USCDI) standard.\118\ The scope 
of patient data identified in the USCDI and the data standards that 
support this data set are expected to evolve over time, starting with 
data specified in Version 1 of the USCDI. In November 2020, ONC issued 
an interim final rule with comment period extending the date when 
health IT developers must make technology meeting updated certification 
criteria available under the ONC Health IT Certification Program until 
December 31, 2022 (85 FR 70064).\119\
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    \117\ Application Programming Interfaces (API) Resource Guide, 
Version 1.0. Available at: https://www.healthit.gov/sites/default/files/page/2020-11/API-Resource-Guide_v1_0.pdf.
    \118\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
    \119\ Information Blocking and the ONC Health IT Certification 
Program: Extension of Compliance Dates and Timeframes in Response to 
the Covid-19 Public Health Emergency. Available at: https://www.govinfo.gov/content/pkg/FR-2020-11-04/pdf/2020-24376.pdf.
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    The CMS Interoperability and Patient Access final rule (85 FR 
25510) and program policies build on the ONC 21st Century Cures Act 
final rule (85 FR 25642). The CMS Interoperability and Patient Access 
final rule and policies require certain payers (for example, Medicare 
Advantage organizations, Medicaid and Child Health Insurance Program 
(CHIP) Fee-for-Service (FFS) programs, Medicaid managed care plans, 
CHIP managed care entities, and issuers of certain Qualified Health 
Plan (QHP) on the Federally-facilitated Exchanges (FFEs)) to implement 
and maintain a standards-based Patient Access API using HL7 FHIR 
Release 4.0.1 to make available claims and encounter data to their 
enrollees and beneficiaries (called ``patients'' in the CMS 
interoperability rule) with the intent of ensuring enrollees and 
beneficiaries have access to their own health care information through 
third-party software applications.
    The CMS Interoperability and Patient Access final rule also 
established new conditions of participation for Medicare and Medicaid 
participating hospitals and critical access hospitals (CAHs), requiring 
them to send electronic notifications to another healthcare facility or 
community provider or practitioner when a patient is admitted, 
discharged, or transferred (85 FR 25603).
    In the calendar year (CY) 2021 Physician Fee Schedule (PFS) final 
rule (85 FR 84472), we finalized a policy to align the certified EHR 
technology required for use in the Promoting Interoperability Programs 
and the Merit-based Incentive Payment System (MIPS) Promoting 
Interoperability performance category with the updates to health IT 
certification criteria finalized in the ONC 21st Century Cures Act 
final rule. Under this policy, MIPS eligible clinicians, and eligible 
hospitals and CAHs participating in the Promoting Interoperability 
Programs, must use technology meeting the updated certification 
criteria for performance and reporting periods beginning in 2023 (85 FR 
84825).
    The use of APIs can also reduce long-standing barriers to quality 
measurement. Currently, health IT developers are required to implement 
individual measure specifications within their health IT products. The 
health IT developer must also accommodate how that product connects 
with the unique variety of systems within a specific care setting.\120\ 
This may be further complicated by systems that integrate a wide range 
of data schemas. This process is burdensome and costly, and it is 
difficult to reliably obtain high quality data across systems. As 
health IT developers map their health IT data to the FHIR standard and 
related implementation specifications, APIs can enable these structured 
data to be easily accessible for quality measurement or other use 
cases, such as care coordination, clinical decision support, and 
supporting patient access.
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    \120\ The Office of the National Coordinator for Health 
Information Technology, Strategy on Reducing Regulatory and 
Administrative Burden Relating to the Use of Health IT and EHRs, 
Final Report (Feb. 2020). Available at: https://www.healthit.gov/sites/default/files/page/2020-02/BurdenReport_0.pdf.
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    We believe the emerging data standardization and interoperability 
enabled by APIs will support the transition to full digital quality 
measurement by 2025, and are committed to exploring and seeking input 
on potential solutions for the transition to digital quality 
measurement as described in this RFI.

B. Definition of Digital Quality Measures

    In this section we seek to refine the definition of digital quality 
measures (dQMs) to further operationalize our objective of fully 
transitioning to dQMs by 2025. We previously noted dQMs use ``sources 
of health information that are captured and can be transmitted 
electronically and via interoperable systems'' (85 FR 84845). In this 
RFI, we seek input on future elaboration that would define a dQM as a 
software that processes digital data to produce a measure score or 
measure scores. Data sources for dQMs may include administrative 
systems, electronically submitted clinical assessment data, case 
management systems, EHRs, instruments (for example, medical devices and 
wearable devices), patient portals or applications (for example, for 
collection of patient-generated health data), health information 
exchanges (HIEs) or registries, and other sources. We also note that 
dQMs are intended to improve the patient experience including quality 
of care, improve the health of populations, and/or reduce costs. We 
discuss one potential approach to developing dQM software in section 
XIV.D.2. of the preamble of this proposed rule. In this section, we are 
seeking comment on the potential definition of dQMs in this RFI.
    We also seek feedback on how leveraging advances in technology (for 
example, FHIR-based APIs) to access and electronically transmit 
interoperable data for dQMs could reinforce other activities to support 
quality measurement and improvement (for example, the aggregation of 
data across multiple data sources, rapid-cycle feedback, and alignment 
of programmatic requirements).
    The transition to dQMs relies on advances in data standardization 
and interoperability. As providers and payers work to implement the 
required advances in interoperability over the next several years, we 
will continue to support reporting of eCQMs through CMS quality 
reporting programs and through the Promoting Interoperability 
Programs.\121\ These fully digital measures continue to be important 
drivers of interoperability advancement and learning. As discussed in 
the next section, we are currently re-specifying and testing these 
measures to use FHIR rather than the currently adopted Quality Data 
Model (QDM) in anticipation of the wider use of FHIR standards. CMS 
intends to apply significant components of the output of this work, 
such as the re-specified measure logic and the learning done through 
measure testing with FHIR-based APIs, to define and build future dQMs 
that take advantage of the expansion of standardized, interoperable 
data.
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    \121\ eCQI Resource Center. Available at: https://ecqi.healthit.gov/.
---------------------------------------------------------------------------

C. Use of FHIR for Current eCQMs

    Since we adopted eCQMs in our hospital and clinician quality 
programs, we have heard from stakeholders about the technological 
challenges, burden, and related costs of reporting eCQM data. The CMS 
eCQM Strategy Project engaged with stakeholders through site visits and 
listening sessions with health

[[Page 42234]]

systems and provider organizations to learn about their experiences. 
This stakeholder feedback identified recommendations to improve 
processes related to alignment; development; implementation and 
reporting; certification; and communication, education, and outreach. 
Over the past 2 years, we have focused on opportunities to streamline 
and modernize quality data collection and reporting processes, such as 
exploring FHIR (http://hl7.org/fhir) as a framework for measure 
structure and data submission for quality reporting programs, 
specifically for eCQMs. FHIR is a free and open source standards 
framework (in both commercial and government settings) created by HL7 
International that establishes a common language and process for all 
health information technology. FHIR allows systems to communicate and 
information to be shared seamlessly, with a lower burden for hospitals, 
providers, clinicians, vendors, and quality measurement stakeholders. 
Specifically, for quality reporting, FHIR enables representing the data 
in eCQMs as well as provides a structure for eCQMs and reporting, using 
FHIR as the standard for all. Whereas today, multiple standards being 
used to report eCQMs is challenging and burdensome.
    We are working to convert current eCQMs to the FHIR standard. We 
are currently testing the exchange of data elements represented in FHIR 
to CMS through ongoing HL7 Connectathons and integrated system testing 
by using and refining implementation guides (IGs). Submitting data 
through FHIR-based APIs has the potential to improve data exchange by 
providing consistent security, performance, scalability, and structure 
to all users. In addition, development of FHIR-based APIs could 
decrease provider burden by automating more of the measure data 
collection process. We continue to explore and expand potential 
applications of the FHIR standard and testing with eCQM use cases, and 
we are strongly considering a transition to FHIR-based quality 
reporting with the use of the FHIR standard for eCQMs in quality and 
value-based reporting programs. As we move to an all-dQM format for 
quality programs, we are depending on testing results and community 
readiness to improve interoperability, reduce burden, and facilitate 
better patient care. We will continue to consider how to leverage the 
interoperability advantages offered by the FHIR standards and API-based 
data submission, including digital quality measurement.

D. Changes Under Consideration To Advance Digital Quality Measurement: 
Potential Actions in Four Areas To Transition to Digital Quality 
Measures by 2025

    Building on the advances in interoperability and learning from 
testing of FHIR-converted eCQMs, we aim to move fully to dQMs, 
originating from sources of health information that are captured and 
can be transmitted electronically via interoperable systems, by 2025.
    To enable this transformation, we are considering further 
modernization of the quality measurement enterprise in four major ways: 
(1) Leverage and advance standards for digital data and obtain all EHR 
data required for quality measures via provider FHIR-based APIs; (2) 
redesign our quality measures to be self-contained tools; (3) better 
support data aggregation; and (4) work to align measure requirements 
across our reporting programs, other Federal programs and agencies, and 
the private sector where appropriate.
    These changes would enable us to collect and utilize more timely, 
actionable, and standardized data from diverse sources and care 
settings to improve the scope and quality of data used in quality 
reporting and payment programs, reduce quality reporting burden, and 
make results available to stakeholders in a rapid-cycle fashion. Data 
collection and reporting efforts would become more efficient, supported 
by advances in interoperability and data standardization. Aggregation 
of data from multiple sources would allow assessments of costs and 
outcomes to be measured across multiple care settings for an individual 
patient or clinical conditions. We believe that aggregating data for 
measurement can incorporate a more holistic assessment of an 
individual's health and health care and produce the rich set of data 
needed to enable patients and caregivers to make informed decisions by 
combining data from multiple sources (for example, patient reported 
data, EHR data, and claims data) for measurement.
    Perhaps most importantly, these steps would help us deliver on the 
full promise of quality measurement and drive us toward a learning 
health system that transforms healthcare quality, safety, and 
coordination and effectively measures and achieves value-based care. 
The shift from a static to a learning health system hinges on the 
interoperability of healthcare data, and the use of standardized data. 
dQMs would leverage this interoperability to deliver on the promise of 
a learning health system wherein standards-based data sharing and 
analysis, rapid-cycle feedback, and quality measurement and incentives 
are aligned for continuous improvement in patient-centered care. 
Similarly, standardized, interoperable data used for measurement can 
also be used for other use cases, such as clinical decision support, 
care coordination and care decision support, which impacts health care 
and care quality.
    We are requesting comments on four potential future actions that 
would enable transformation to a fully digital quality measurement 
enterprise by 2025.
1. Leveraging and Advancing Standards for Digital Data and Obtaining 
All EHR Data Required for Quality Measures via Provider FHIR-Based APIs
    We are considering targeting the data required for our quality 
measures that utilize EHR data to be data retrieved via FHIR-based APIs 
based on standardized, interoperable data. Utilizing standardized data 
for EHR-based measurement (based on FHIR and associated IGs) and 
aligning where possible with interoperability requirements can 
eliminate the data collection burden providers currently experience 
with required chart-abstracted quality measures and reduce the burden 
of reporting digital quality measure results. We can fully leverage 
this advance to adapt eCQMs and expand to other dQMs through the 
adoption of interoperable standards across other digital data sources. 
We are considering methods and approaches to leverage the 
interoperability data requirements for APIs in certified health IT set 
by the ONC 21st Century Cures Act final rule to support modernization 
of CMS quality measure reporting. As discussed previously, these 
requirements will be included in certified technology in future years 
(85 FR 84825) including availability of data included in the USCDI via 
standards-based APIs, and CMS will require clinicians and hospitals 
participating in MIPS and the Promoting Interoperability Programs, 
respectively, to transition to use of certified technology updated 
consistent with the 2015 Cures Edition Update (85 FR 84825).
    Digital data used for measurement could also expand beyond data 
captured in traditional clinical settings, administrative claims data, 
and EHRs. Many important data sources are not currently captured 
digitally, such as survey and PGHD. We intend to work to innovate and 
broaden the digital data used across the quality measurement enterprise 
beyond the clinical EHR and administrative claims. Agreed upon

[[Page 42235]]

standards for these data, and associated implementation guides will be 
important for interoperability and quality measurement. We will 
consider developing clear guidelines and requirements for these digital 
data that align with interoperability requirements, for example, 
requirements for expressing data in standards, exposing data via 
standards-based APIs, and incentivizing technologies that innovate data 
capture and interoperability.
    High quality data are also essential for reliable and valid 
measurement. Hence, in implementing the shift to collect all clinical 
EHR data via FHIR-based APIs, we would support efforts to strengthen 
and test the quality of the data obtained through FHIR-based APIs for 
quality measurement. We currently conduct audits of eCQM data submitted 
under our quality programs, including the Hospital Inpatient Quality 
Reporting (IQR) Program, with functions including checks for data 
completeness and data accuracy, confirmation of proper data formatting, 
alignment with standards, and appropriate data cleaning (82 FR 38398 
through 38402). These functions would continue and be applied to dQMs 
and further expanded to automate the manual validation of the data 
compared to the original data source (for example, the medical record) 
where possible. Analytic advancements such as natural language 
processing, big data analytics, and artificial intelligence, can 
support this evolution. These techniques can be applied to validating 
observed patterns in data and inferences or conclusions drawn from 
associations, as data are received, to ensure high quality data are 
used for measurement.
    We are seeking feedback on the goal of aligning data needed for 
quality measurement with interoperability requirements and the 
strengths and limitations of this approach. We are also seeking 
feedback on the importance of and approaches to supporting inclusion of 
PGHD and other currently non-standardized data. We also welcome comment 
on approaches for testing data quality and validity.
2. Redesigning Quality Measures To Be Self-Contained Tools
    We are considering approaches for including quality measures that 
take advantage of standardized data and interoperability requirements 
that have expanded flexibility and functionality compared to CMS' 
current eCQMs. We are considering defining and developing dQM software 
as end-to-end measure calculation solutions that retrieve data from 
primarily FHIR-based resources maintained by providers, payers, CMS, 
and others; calculate measure score(s); and produce reports. In 
general, we believe to optimize the use of standardized and 
interoperable data, the software solution for dQMs should do the 
following:
     Have the flexibility to support calculation of single or 
multiple quality measure(s).
     Perform three functions --
    ++ Obtain data via automated queries from a broad set of digital 
data sources (initially from EHRs, and in the future from claims, PRO, 
and PGHD);
    ++ Calculate the measure score according to measure logic; and
    ++ Generate measure score report(s).
     Be compatible with any data source systems that implement 
standard interoperability requirements.
     Exist separately from digital data source(s) and respect 
the limitations of the functionality of those data sources.
     Be tested and updated independently of the data source 
systems.
     Operate in accordance with health information protection 
requirements under applicable laws and comply with governance functions 
for health information exchange.
     Have the flexibility to be deployed by individual health 
systems, health IT vendors, data aggregators, and health plans; and/or 
run by CMS depending on the program and measure needs and 
specifications.
     Be designed to enable easy installation for supplemental 
uses by medical professionals and other non-technical end-users, such 
as local calculation of quality measure scores or quality improvement.
     Have the flexibility to employ current and evolving 
advanced analytic approaches such as natural language processing.
     Be designed to support pro-competitive practices for 
development, maintenance, and implementation as well as diffusion of 
quality measurement and related quality improvement and clinical tools 
through, for example, the use of open-source core architecture.
    We seek comment on these suggested functionalities and other 
additional functionalities that quality measure tools should ideally 
have particularly in the context of the possible expanding availability 
of standardized and interoperable data (for example, standardized EHR 
data available via FHIR-based APIs).
    We are also interested whether and how this more open, agile 
strategy may facilitate broader engagement in quality measure 
development, the use of tools developed for measurement for local 
quality improvement, and/or the application of quality tools for 
related purposes such as public health or research.
3. Building a Pathway to Data Aggregation in Support of Quality 
Measurement
    Using multiple sources of collected data to inform measurement 
would reduce data fragmentation (or, different pieces of data regarding 
a single patient stored in many different places). Additionally, we are 
considering expanding and establishing policies and processes for data 
aggregation and measure calculation by third-party aggregators that 
include, but are not limited to, HIEs and clinical registries. 
Qualified Clinical Data Registries and Qualified Registries that report 
quality measures for eligible clinicians in the MIPS program are 
potential examples \122\ at 42 CFR 414.1440(b)(2)(iv) and (v) and 
(c)(2)(iii) and (iv) and can also support measure reporting. We are 
considering establishing similar policies for third-party aggregators 
to maintain the integrity of our measure reporting process and to 
encourage market innovation.
---------------------------------------------------------------------------

    \122\ CY 2021 Physician Fee Schedule Final Rule: Finalized (New 
and Updated) Qualified Clinical Data Registry (QCDR) and Qualified 
Registry Policies, https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1362/QCDR%20and%20QR%20Updates%202021%20Final%20Rule%20Fact%20Sheet.pdf.
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    We seek feedback on aggregation of data from multiple sources to 
inform measurement and potential policy considerations. We also seek 
feedback on the role data aggregators can and should play in CMS 
quality measure reporting in collaboration with providers, and how we 
can best facilitate and enable aggregation.
4. Potential Future Alignment of Measures Across Reporting Programs, 
Federal and State Agencies, and the Private Sector
    We are committed to using policy levers and working with 
stakeholders to solve the issue of interoperable data exchange and to 
transition to full digital quality measurement. We are considering the 
future potential development and multi-staged implementation of a 
common portfolio of dQMs across our regulated programs, agencies, and 
private payers. This common portfolio would require alignment of: (1) 
Measure concepts and specifications including narrative statements, 
measure logic, and value sets; and (2) the individual data elements 
used to build these measure

[[Page 42236]]

specifications and calculate the measure logic. Further, the required 
data elements would be limited to standardized, interoperable data 
elements to the fullest extent possible; hence, part of the alignment 
strategy will be the consideration and advancement of data standards 
and IGs for key data elements. We would coordinate closely with quality 
measure developers, Federal and state agencies, and private payers to 
develop and to maintain a cohesive dQM portfolio that meets our 
programmatic requirements and that fully aligns across Federal and 
state agencies and payers to the extent possible.
    We intend for this coordination to be ongoing and allow for 
continuous refinement to ensure quality measures remain aligned with 
evolving healthcare practices and priorities (for example, PROs, 
disparities, and care coordination), and track with the transformation 
of data collection, alignment with health IT module updates including 
capabilities and standards adopted by ONC (for example, standards to 
enable APIs). This coordination would build on the principles outlined 
in HHS' National Health Quality Roadmap.\123\ It would focus on the 
quality domains of safety, timeliness, efficiency, effectiveness, 
equitability, and patient-centeredness. It would leverage several 
existing Federal and public-private efforts including our Meaningful 
Measures 2.0 Framework; the Federal Electronic Health Record 
Modernization (Department of Defense and Veterans Affairs (DoD/VA)); 
the Agency for Healthcare Research and Quality's (AHRQ) Clinical 
Decision Support Initiative; the Centers for Disease Control and 
Prevention's (CDC) Adapting Clinical Guidelines for the Digital Age 
initiative; Core Quality Measure Collaborative, which convenes 
stakeholders from America's Health Insurance Plans (AHIP), CMS, 
National Quality Forum (NQF), provider organizations, private payers, 
and consumers and develops consensus on quality measures for provider 
specialties; and the NQF-convened Measure Applications Partnership 
(MAP), which recommends measures for use in public payment and 
reporting programs. We would coordinate with HL7's ongoing work to 
advance FHIR resources in critical areas to support patient care and 
measurement such as social determinants of health. Through this 
coordination, we would identify which existing measures could be used 
or evolved to be used as dQMs, in recognition of current healthcare 
practice and priorities.
---------------------------------------------------------------------------

    \123\ Department of Health and Human Services, National Health 
Quality Roadmap (May 2020). Available at: https://www.hhs.gov/sites/default/files/national-health-quality-roadmap.pdf.
---------------------------------------------------------------------------

    This multi-stakeholder, joint Federal, state, and industry effort, 
made possible and enabled by the pending advances towards true 
interoperability, would yield a significantly improved quality 
measurement enterprise. The success of the dQM portfolio would be 
enhanced by the degree to which the measures achieve our programmatic 
requirements for measures as well as the requirements of other agencies 
and payers.
    We seek feedback on initial priority areas for the dQM portfolio 
given evolving interoperability requirements (for example, measurement 
areas, measure requirements, tools, and data standards). We also seek 
to identify opportunities to collaborate with other Federal agencies, 
states, and the private sector to adopt standards and technology-driven 
solutions to address our quality measurement priorities across sectors.

E. Solicitation of Comments

    As noted previously, we seek input on the future development of the 
following:
     Definition of Digital Quality Measures. We are seeking 
feedback on the following as described in section XIV.2. of the 
preamble of this proposed rule:
    ++ Do you have feedback on the potential future dQM definition?
    ++ Does this approach to defining and deploying dQMs to interface 
with FHIR-based APIs seem promising? We also welcome more specific 
comments on the attributes or functions to support such an approach of 
deploying dQMs.
     Use of FHIR for Current eCQMs. We are seeking feedback on 
the following as described in section XIV.3. of the preamble of this 
proposed rule:

    ++ Would a transition to FHIR-based quality reporting reduce burden 
on health IT vendors and providers? Please explain.
    ++ Would access to near real-time quality measure scores benefit 
your practice? How so?
    ++ What parts of the current CMS Quality Reporting Data 
Architecture (QRDA) IGs cause the most burden (please explain the 
primary drivers of burden)?
    ++ In what ways could CMS FHIR Reporting IG be modified to reduce 
burden on providers and vendors?
     Changes Under Consideration to Advance Digital Quality 
Measurement: Actions in Four Areas to Transition to Digital Quality 
Measures by 2025.
    ++ We are seeking feedback on the following as described in section 
XIV.4.a. of the preamble of this proposed rule:

--Do you agree with the goal of aligning data needed for quality 
measurement with interoperability requirements? What are the strengths 
and limitations of this approach? Are there specific FHIR IGs suggested 
for consideration?
--How important is a data standardization approach that also supports 
inclusion of PGHD and other currently non-standardized data?
--What are possible approaches for testing data quality and validity?

    ++ We are seeking feedback on the following as described in section 
XIV.4.b. of the preamble of this proposed rule:

--What functionalities, described in section (4)(b) or others, should 
quality measure tools ideally have in the context of the pending 
availability of standardized and interoperable data (for example, 
standardized EHR data available via FHIR-based APIs)?
--How would this more open, agile strategy for end-to-end measure 
calculation facilitate broader engagement in quality measure 
development, the use of tools developed for measurement for local 
quality improvement, and/or the application of quality tools for 
related purposes such as public health or research?

    ++ We seek feedback on the following as described in section 
XIV.4.c. of the preamble of this proposed rule:

--What are key policy considerations for aggregation of data from 
multiple sources being used to inform measurement?
--What role can or should data aggregators play in CMS quality measure 
reporting in collaboration with providers? How can CMS best facilitate 
and enable aggregation?

    ++ We seek feedback on the following as described in section 
XIV.4.d. of the preamble of this proposed rule:

--What are initial priority areas for the dQM portfolio given evolving 
interoperability requirements (for example, measurement areas, measure 
requirements, tools)?
--We also seek to identify opportunities to collaborate with other 
Federal agencies, states, and the private sector to adopt standards and 
technology-driven solutions to address our quality measurement 
priorities and across sectors.

    Commenters should consider provisions in the CMS Interoperability 
and Patient Access final rule (85 FR

[[Page 42237]]

25510), CMS CY 2021 PFS final rule (85 FR 84472), and the ONC 21st 
Century Cures Act final rule (85 FR 25642).
    We plan to continue working with other agencies and stakeholders to 
coordinate and to inform any potential transition to dQMs by 2025. 
While we will not be responding to specific comments submitted in 
response to this Request for Information in the CY 2022 OPPS/ASC final 
rule, we will actively consider all input as we develop future 
regulatory proposals or future subregulatory policy guidance. Any 
updates to specific program requirements related to quality measurement 
and reporting provisions would be addressed through separate and future 
notice-and-comment rulemaking, as necessary.

XV. Requirements for the Hospital Outpatient Quality Reporting (OQR) 
Program

A. Background

1. Overview
    CMS seeks to promote higher quality and more efficient healthcare 
for Medicare beneficiaries. Consistent with these goals, CMS has 
implemented quality reporting programs for multiple care settings 
including the quality reporting program for hospital outpatient care, 
known as the Hospital Outpatient Quality Reporting (OQR) Program.
2. Statutory History of the Hospital OQR Program
    We refer readers to the CY 2011 OPPS/ASC final rule with comment 
period (75 FR 72064 through 72065) for a detailed discussion of the 
statutory history of the Hospital OQR Program. The Hospital OQR Program 
regulations are codified at 42 CFR[thinsp]419.46. In the CY 2021 OPPS/
ASC final rule (85 FR 86179), we finalized to update the regulations to 
include a reference to the statutory authority for the Hospital OQR 
Program. Section 1833(t)(17)(A) of the Social Security Act (the Act) 
states that subsection (d) hospitals (as defined under section 
1886(d)(1)(B) of the Act) that do not submit data required for measures 
selected with respect to such a year, in the form and manner required 
by the Secretary, will incur a 2.0 percentage point reduction to their 
annual Outpatient Department (OPD) fee schedule increase factor. In the 
CY 2021 OPPS/ASC final rule (85 FR 86179) we codified the Hospital OQR 
Program's statutory authority at Sec.  419.46(a).
3. Regulatory History of the Hospital OQR Program
    We refer readers to the CY 2008 through 2021 OPPS/ASC final rules 
with comment period for detailed discussions of the regulatory history 
of the Hospital OQR Program:
     The CY 2008 OPPS/ASC final rule (72 FR 66860 through 
66875);
     The CY 2009 OPPS/ASC final rule (73 FR 68758 through 
68779);
     The CY 2010 OPPS/ASC final rule (74 FR 60629 through 
60656);
     The CY 2011 OPPS/ASC final rule (75 FR 72064 through 
72110);
     The CY 2012 OPPS/ASC final rule (76 FR 74451 through 
74492);
     The CY 2013 OPPS/ASC final rule (77 FR 68467 through 
68492);
     The CY 2014 OPPS/ASC final rule (78 FR 75090 through 
75120);
     The CY 2015 OPPS/ASC final rule (79 FR 66940 through 
66966);
     The CY 2016 OPPS/ASC final rule (80 FR 70502 through 
70526);
     The CY 2017 OPPS/ASC final rule (81 FR 79753 through 
79797);
     The CY 2018 OPPS/ASC final rule (82 FR 59424 through 
59445);
     The CY 2019 OPPS/ASC final rule (83 FR 59080 through 
59110);
     The CY 2020 OPPS/ASC final rule (84 FR 61410 through 
61420); and
     The CY 2021 OPPS/ASC final rule (85 FR 86179 through 
86187).
    We have codified certain requirements under the Hospital OQR 
Program at 42 CFR[thinsp]419.46. We refer readers to section XV.E. of 
this proposed rule for a detailed discussion of the payment reduction 
for hospitals that fail to meet Hospital OQR Program requirements for 
the CY 2024 payment determination.

B. Hospital OQR Program Quality Measures

1. Considerations in Selecting Hospital OQR Program Quality Measures
    We refer readers to the CY 2012 OPPS/ASC final rule with comment 
period (76 FR 74458 through 74460) for a detailed discussion of the 
priorities we consider for the Hospital OQR Program quality measure 
selection. We are not proposing any changes to these policies in this 
proposed rule.
2. Retention of Hospital OQR Program Measures Adopted in Previous 
Payment Determinations
    We previously finalized and codified at Sec.  419.46(h)(1) a policy 
to retain measures from a previous year's Hospital OQR Program measure 
set for subsequent years' measure sets, unless removed (77 FR 68471 and 
83 FR 59082). We are not proposing any changes to these policies in 
this proposed rule.
3. Removal of Quality Measures From the Hospital OQR Program Measure 
Set
a. Immediate Removal
    We previously finalized and codified at Sec.  419.46(i)(2) and (3) 
a process for removal and suspension of Hospital OQR Program measures, 
based on evidence that the continued use of the measure as specified 
raises patient safety concerns (74 FR 60634 through 60635, 77 FR 68472, 
and 83 FR 59082).\124\ We are not proposing any changes to these 
policies in this proposed rule.
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    \124\ We refer readers to the CY 2013 OPPS/ASC final rule with 
comment period (77 FR 68472 through 68473) for a discussion of our 
reasons for changing the term ``retirement'' to ``removal'' in the 
Hospital OQR Program.
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b. Consideration Factors for Removing Measures
    We previously finalized and codified at Sec.  419.46(i)(3) policies 
to use the regular rulemaking process to remove a measure for 
circumstances for which we do not believe that continued use of a 
measure raises specific patient safety concerns (74 FR 60635 and 83 FR 
59082).\125\ We are not proposing any changes to these policies in this 
proposed rule.
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    \125\ We initially referred to this process as ``retirement'' of 
a measure in the 2010 OPPS/ASC proposed rule, but later changed it 
to ``removal'' during final rulemaking.
---------------------------------------------------------------------------

c. Proposed Removals Beginning With the CY 2023 Reporting Period/CY 
2025 Payment Determination: OP-02 (Fibrinolytic Therapy Received Within 
30 Minutes of ED Arrival) and OP-03 (Median Time To Transfer to Another 
Facility for Acute Coronary Intervention)
    In this proposed rule, we are proposing to remove two chart-
abstracted measures under removal Factor 4--the availability of a more 
broadly applicable (across settings, populations, or conditions) 
measure for the particular topic:
     Fibrinolytic Therapy Received Within 30 Minutes of 
Emergency Department (ED) Arrival (OP-2); and
     Median Time to Transfer to Another Facility for Acute 
Coronary Intervention (OP-3).
    The OP-2 measure assesses the number of acute myocardial infarction 
(AMI) patients with: (a) ST-segment elevation on the electrocardiogram 
closest to arrival time receiving fibrinolytic therapy during the ED 
visit; and (b) a time from hospital arrival to fibrinolysis of 30 
minutes or less. For

[[Page 42238]]

more details on this measure, we refer readers to the CY 2008 OPPS/ASC 
final rule with comment period (72 FR 66865), where this measure was 
designated as ED-AMI-3, and the CY 2009 OPPS/ASC final rule with 
comment period (73 FR 68761), where this measure was relabeled OP-2 
(for the CY 2010 payment determination and subsequent years). The OP-3 
measure assesses the median number of minutes before outpatients with 
chest pain or possible heart attack who needed specialized care were 
transferred to another hospital capable of offering such specialized 
care. For more details on this measure, we refer readers to the CY 2008 
OPPS/ASC final rule with comment period (72 FR 66865), where this 
measure was designated as ED-AMI-5, and the CY 2009 OPPS/ASC final rule 
with comment period (73 FR 68761), where this measure was relabeled OP-
3 (for the CY 2010 payment determination and subsequent years).
    In this proposed rule, we are proposing to remove these two 
measures (Fibrinolytic Therapy Received Within 30 Minutes of Emergency 
Department (ED) Arrival (OP-2) and Median Time to Transfer to Another 
Facility for Acute Coronary Intervention (OP-3)) beginning with the CY 
2023 reporting period/CY 2025 payment determination due to the 
availability of a more broadly applicable measure. Specifically, in 
this proposed rule, we are proposing to adopt the ST-Segment Elevation 
Myocardial Infarction (STEMI) electronic clinical quality measure 
(eCQM) into the Hospital OQR Program measure set, which would serve as 
a replacement for these two measures. We refer readers to section 
XV.B.4.c. of this proposed rule for further discussion of the STEMI 
eCQM, including the measure overview, data sources, and measure 
calculation.
    OP-2 and OP-3 measure the proportion of eligible STEMI patients who 
receive timely fibrinolytic therapy and timely transfer from an ED to 
another facility to receive appropriate care, respectively. The STEMI 
eCQM is a proposed electronic process measure that includes both the 
populations of OP-2 and OP-3. It measures the percentage of ED patients 
diagnosed with STEMI that received timely fibrinolytic therapy (within 
30 minutes) or timely transfer to a percutaneous coronary intervention 
(PCI)-capable facility (within 45 minutes). Additionally, the STEMI 
eCQM captures transfer and non-transfer patients at a PCI-capable 
facility who receive PCI (within 90 minutes). Pursuant to removal 
Factor 4, we believe that the adoption of the STEMI eCQM would capture 
the OP-2 and OP-3 measure populations and expand beyond these 
populations to comprehensively measure the timeliness and 
appropriateness of STEMI care.
    Furthermore, the OP-2 and OP-3 measures are chart-abstracted 
measures, which result in greater provider burden due to manual 
abstraction. The STEMI eCQM allows for the retrieval of data directly 
from the electronic health record (EHR) using patient-level data. As a 
result, we believe the STEMI eCQM is a more broadly applicable measure 
and transitions the Hospital OQR Program toward the use of EHR data for 
quality measurement. We note that removal of these measures is 
contingent on the finalization of the STEMI eCQM. We invite public 
comment on our proposals to remove these measures.
4. Proposals To Adopt New Measures for the Hospital OQR Program Measure 
Set
    In this proposed rule, we are proposing to adopt three new 
measures: (1) COVID-19 Vaccination Coverage Among Health Care Personnel 
(HCP) measure, beginning with the CY 2022 reporting period; (2) Breast 
Screening Recall Rates measure, beginning with the CY 2022 reporting 
period; and (3) STEMI eCQM, beginning as a voluntary measure with the 
CY 2023 reporting period, and then as a mandatory measure beginning 
with the CY 2024 reporting period. We refer readers to the following 
sections for more information.
a. Proposal To Adopt the COVID-19 Vaccination Coverage Among Health 
Care Personnel (HCP) Measure Beginning With the CY 2022 Reporting 
Period/CY 2024 Payment Determination
(1) Background
    On January 31, 2020, the Secretary declared a public health 
emergency (PHE) for the United States (U.S.) in response to the global 
outbreak of SARS-CoV-2, a novel (new) coronavirus that causes a disease 
named ``coronavirus disease 2019'' (COVID-19).\126\ COVID-19 is a 
contagious respiratory infection\127\ that can cause serious illness 
and death. Older individuals, some racial and ethnic minorities, and 
those with underlying medical conditions are considered to be at higher 
risk for more serious complications from COVID-19.128 129 As 
of July 2, 2021, the U.S. has reported over 33 million cases of COVID-
19 and over 600,000 COVID-19 deaths.\130\ Hospitals and health systems 
saw significant surges of COVID-19 patients as community infection 
levels increased.\131\ Between December 2, 2020 and January 30, 2021, 
more than 100,000 Americans with COVID-19 were hospitalized at the same 
time.\132\
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    \126\ U.S. Dept of Health and Human Services, Office of the 
Assistant Secretary for Preparedness and Response. (2020). 
Determination that a Public Health Emergency Exists. Available at: 
https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
    \127\ Centers for Disease Control and Prevention. (2020). Your 
Health: Symptoms of Coronavirus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
    \128\ Centers for Disease Control and Prevention. (2020). Your 
Health: Symptoms of Coronavirus. Available at https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
    \129\ Centers for Disease Control and Prevention. (2020). Health 
Equity Considerations and Racial and Ethnic Minority Groups. 
Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
    \130\ This information has been updated from the proposed rule 
to reflect current data from the Centers for Disease Control and 
Prevention. (2021). CDC COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
    \131\ Associated Press. Tired to the Bone. Hospitals Overwhelmed 
with Virus Cases. November 18, 2020. Accessed on December 16, 2020, 
at https://apnews.com/article/hospitals-overwhelmed-coronavirus-cases-74a1f0dc3634917a5dc13408455cd895. Also see: New York Times. 
Just how full are U.S. intensive care units? New data paints an 
alarming picture. November 18, 2020. Accessed on December 16, 2020, 
at: https://www.nytimes.com/2020/12/09/world/just-how-full-are-us-intensive-care-units-new-data-paints-an-alarming-picture.html.
    \132\ US Currently Hospitalized [bond] The COVID Tracking 
Project. Accessed January 31, 2021 at: https://covidtracking.com/data/charts/us-currently-hospitalized.
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    Evidence indicates that COVID-19 primarily spreads when individuals 
are in close contact with one another.\133\ Ongoing research indicates 
that fully vaccinated people without immunocompromising conditions are 
able to engage in most activities with very low risk of acquiring or 
transmitting SARS-CoV-2, and the Centers for Disease Control and 
Prevention (CDC) issued new guidance for fully vaccinated individuals 
on May 28, 2021.\134\ The virus is typically transmitted through 
respiratory droplets or small particles created when someone who is 
infected with the virus coughs, sneezes, sings, talks or breathes.\135\ 
Thus, the CDC advises that infections mainly occur through exposure to 
respiratory droplets when a person is in close contact with someone

[[Page 42239]]

who has COVID-19.\136\ Experts believe that COVID-19 spreads less 
commonly through contact with a contaminated surface \137\ and that in 
certain circumstances, infection can occur through airborne 
transmission.\138\ According to the CDC, those at greatest risk of 
infection are persons who have had prolonged, unprotected close contact 
(that is, within 6 feet for 15 minutes or longer) with an individual 
with confirmed COVID-19 infection, regardless of whether the individual 
has symptoms.\139\ Although personal protective equipment (PPE) and 
other infection-control precautions can reduce the likelihood of 
transmission in health care settings, COVID-19 can spread between HCP 
and patients or from patient to patient given the close contact that 
may occur during the provision of care.\140\ The CDC has emphasized 
that health care settings, including long-term care (LTC) settings, can 
be high-risk places for COVID-19 exposure and transmission.\141\
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    \133\ Centers for Disease Control and Prevention. (2021). How 
COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \134\ Centers for Disease Control and Prevention. (2021). 
Interim Public Health Recommendations for Fully Vaccinated People. 
Accessed on June 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/vaccines/fully-vaccinated-guidance.html.
    \135\ Ibid.
    \136\ Ibid.
    \137\ Ibid.
    \138\ Centers for Disease Control and Prevention. (2020). How 
COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \139\ Centers for Disease Control and Prevention. (2021). When 
to Quarantine. Accessed on April 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/if-you-are-sick/quarantine.html.
    \140\ Centers for Disease Control and Prevention. 2021). Interim 
U.S. Guidance for Risk Assessment and Work Restrictions for 
Healthcare Personnel with Potential Exposure to COVID-19.
    \141\ Dooling, K, McClung, M, et al. ``The Advisory Committee on 
Immunization Practices' Interim Recommendations for Allocating 
Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb 
Mortal Wkly Rep. 2020; 69(49): 1857-1859.
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    Vaccination is a critical part of the nation's strategy to 
effectively counter the spread of COVID-19 and ultimately help restore 
societal functioning.\142\ On December 11, 2020, the Food and Drug 
Administration (FDA) issued the first Emergency Use Authorization (EUA) 
for a COVID-19 vaccine in the U.S.\143\ Subsequently, the FDA issued 
EUAs for additional COVID-19 vaccines.144 145
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    \142\ Centers for Disease Control and Prevention. (2020). COVID-
19 Vaccination Program Interim Playbook for Jurisdiction Operations. 
Accessed on December 18 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
    \143\ U.S. Food and Drug Administration. (2020). Pfizer-BioNTech 
COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144412/download.
    \144\ U.S. Food and Drug Administration. (2021). Moderna COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download.
    \145\ U.S. Food and Drug Administration. (2021). Janssen COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/146303/download.
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    As part of its national strategy to address COVID-19, the White 
House stated on March 25, 2021 that it would work with states and the 
private sector to execute an aggressive vaccination strategy and has 
outlined a goal of administering 200 million shots in 100 days.\146\ On 
April 21, 2021, it was announced that this goal had been achieved.\147\ 
Although the goal of the U.S. Government is to ensure that every 
American who wants to receive a COVID-19 vaccine can receive one, the 
Department of Health and Human Services (HHS), the Department of 
Defense (DoD), and the CDC, recommended that early vaccination efforts 
focus on those critical to the PHE response, including HCP, and 
individuals at highest risk for developing severe illness from COVID-
19.\148\ For example, the CDC's Advisory Committee on Immunization 
Practices (ACIP) recommended that HCP should be among those individuals 
prioritized to receive the initial, limited supply of the COVID-19 
vaccination, given the potential for transmission in health care 
settings and the need to preserve health care system capacity.\149\ 
Research suggests most states followed this recommendation,\150\ and 
HCP began receiving the vaccine in mid-December of 2020.\151\
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    \146\ The White House. Remarks by President Biden on the COVID-
19 Response and the State of Vaccinations. Accessed on April 3, 2021 
at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/03/29/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations/.
    \147\ The White House. Remarks by President Biden on the COVID-
19 Response and the State of Vaccinations. Accessed on June 2, 2021 
at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/21/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations-2/.
    \148\ Health and Human Services, Department of Defense. (2020) 
From the Factory to the Frontlines: The Operation Warp Speed 
Strategy for Distributing a COVID-19 Vaccine. Accessed December 18 
at: https://www.hhs.gov/sites/default/files/strategy-for-distributing-covid-19-vaccine.pdf; Centers for Disease Control 
(2020). COVID-19 Vaccination Program Interim Playbook for 
Jurisdiction Operations. Accessed December 18 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
    \149\ Dooling, K, McClung, M, et al. ``The Advisory Committee on 
Immunization Practices' Interim Recommendations for Allocating 
Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb. 
Mortal Wkly Rep. 2020; 69(49): 1857-1859. ACIP also recommended that 
long-term care residents be prioritized to receive the vaccine, 
given their age, high levels of underlying medical conditions, and 
congregate living situations make them high risk for severe illness 
from COVID-19.
    \150\ Kates, J, Michaud, J, Tolbert, J. ``How Are States 
Prioritizing Who Will Get the COVID-19 Vaccine First?'' Kaiser 
Family Foundation. December 14, 2020. Accessed on December 16 at 
https://www.kff.org/policy-watch/how-are-states-prioritizing-who-will-get-the-covid-19-vaccine-first/.
    \151\ Associated Press. `Healing is Coming:' US Health Workers 
Start Getting Vaccine. December 15, 2020. Accessed on December 16 
at: https://apnews.com/article/us-health-workers-coronavirus-vaccine-56df745388a9fc12ae93c6f9a0d0e81f.
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    Frontline healthcare workers, such as those employed in hospitals, 
have been prioritized for vaccination in most locations. There are 
approximately 18 million healthcare workers in the U.S.\152\ A survey 
of HCP found that 66 percent of hospital HCP and 64 percent of 
outpatient clinic HCP reported receiving at least one dose of the 
vaccine.\153\ As of July 2, 2021, the CDC reported that over 328 
million doses of COVID-19 vaccine had been administered and 
approximately 155.9 million people were fully vaccinated.\154\ The 
White House indicated on April 6, 2021, that the U.S. retains 
sufficient vaccine supply, and every adult became eligible to receive 
the vaccine beginning April 19, 2021.\155\
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    \152\ Centers for Disease Control and Prevention. Healthcare 
Workers. (2017) Accessed February 18, 2021 at: https://www.cdc.gov/niosh/topics/healthcare/default.html.
    \153\ KFF/The Washington Post Frontline Health Care Workers 
Survey. (2021). Accessed June 2, 2021 at: https://www.kff.org/coronavirus-covid-19/poll-finding/kff-washington-post-health-care-workers/.
    \154\ This information has been updated from the proposed rule 
to reflect current data from the Centers for Disease Control and 
Prevention. COVID Data Tracker. COVID-19 Vaccinations in the United 
States. (2021). Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
    \155\ The White House. Remarks by President Biden Marking the 
150 Millionth COVID-19 Vaccine Shot. Accessed April 8, 2021 at: 
https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/06/remarks-by-president-biden-marking-the-150-millionth-covid-19-vaccine-shot/.
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    We believe it is important to require that hospital outpatient 
departments (HOPDs) report HCP vaccination information for health care 
facilities to assess whether these facilities are taking steps to limit 
the spread of COVID-19 among their health care workers and to help 
sustain the ability of HOPDs to continue serving their communities 
throughout the PHE and beyond. Therefore, we are proposing to adopt a 
new measure, COVID-19 Vaccination Coverage Among HCP, beginning with 
the CY 2024 payment determination. For that payment year, hospitals 
would be required to report data quarterly on the measure for the 
January 2022 through December 2022 reporting period. The measure would 
assess the proportion of a hospital's health care workforce that has 
been vaccinated against COVID-19.
    HCP are at risk of transmitting COVID-19 infection to patients, 
experiencing illness or death as a result of COVID-19 themselves, and

[[Page 42240]]

transmitting it to their families, friends, and the general public. We 
believe HOPDs should report the level of vaccination among their HCP as 
part of their efforts to assess and reduce the risk of transmission of 
COVID-19 within their facilities. HCP vaccination can reduce illness 
that leads to work absence and limit disruptions to providing care 
\156\ with major reductions in SARS-CoV-2 infections among those 
receiving two dose COVID-19 vaccine despite a high community infection 
rate.\157\ Data from influenza vaccination demonstrates that provider 
vaccination is associated with that provider recommending vaccination 
to patients,\158\ and we believe HCP COVID-19 vaccination in HOPDs 
could similarly increase uptake among that patient population. We also 
believe that publicly reporting the HCP vaccination rates would be 
helpful to many patients, including those who are at high-risk for 
developing serious complications from COVID-19, as they choose HOPDs 
for treatment. Under CMS' Meaningful Measures Framework, the COVID-19 
measure addresses the quality priority of ``Promote Effective 
Prevention and Treatment of Chronic Disease'' through the Meaningful 
Measures Area of ``Preventive Care.''
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    \156\ Centers for Disease Control and Prevention. Overview of 
Influenza Vaccination among Health Care Personnel. October 2020. 
(2020) Accessed March 16, 2021 at: https://www.cdc.gov/flu/toolkit/long-term-care/why.htm.
    \157\ Benenson S, Oster Y, Cohen MJ, Nir-Paz R. BNT162b2 mRNA 
Covid-19 Vaccine Effectiveness among Health Care Workers. N Engl J 
Med. 2021. See also: Keehner J, Horton LE, Pfeffer MA, Longhurst CA, 
Schooley RT, Currier JS, et al. SARS-CoV-2 Infection after 
Vaccination in Health Care Workers in California. N Engl J Med. 
2021.
    \158\ Measure Application Committee Coordinating Committee 
Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021 
at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
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(2) Overview of Measure
    The COVID-19 Vaccination Coverage Among HCP measure (``COVID-19 HCP 
vaccination measure'') is a process measure developed by the CDC to 
track COVID-19 vaccination coverage among HCP in non-LTC facilities 
including outpatient hospitals.
(a) Measure Specifications
    The denominator for the HCP measure is the number of HCP eligible 
to work in the hospital for at least 1 day during the self-selected 
week, excluding persons with contraindications to COVID-19 vaccination 
that are described by the CDC.\159\
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    \159\ Centers for Disease Control and Prevention. 
Contraindications and precautions. (2021) Accessed March 15, 2021 
at: https://www.cdc.gov/vaccines/covid-19/info-by-product/clinical-considerations.html#Contraindications.
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    The numerator for the HCP measure is the cumulative number of HCP 
eligible to work in at the hospital for at least 1 day during the self-
selected week and who received a complete vaccination course against 
COVID-19 using an FDA-authorized or FDA-approved vaccine for COVID-19 
(whether the FDA issued an approval or EUA).\160\ A complete 
vaccination course is defined under the specific FDA authorization and 
may require multiple doses or regular revaccination.\161\ Vaccination 
coverage for purposes of this measure is defined as the estimated 
percentage (given the potential for week-to-week variation) of HCP 
eligible to work at the hospital for at least 1 day who received a 
COVID-19 vaccine. Acute care facilities would count HCP working in all 
inpatient or outpatient units that are physically attached to the 
inpatient acute care facility site and share the same CMS certification 
number (CCN), regardless of the size or type of unit. Facilities would 
also count HCP working in inpatient and outpatient departments that are 
affiliated with the specific acute care facility (such as sharing 
medical privileges or patients), regardless of distance from the acute 
care facility and also share the same CCN. The decision to include or 
exclude HCP from the acute care facility's HCP vaccination counts would 
be based on whether individuals meet the specified National Healthcare 
Safety Network (NHSN) criteria and are physically working in a location 
that is considered any part of the on-site acute care facility that is 
being monitored.\162\ The proposed specifications for the COVID-19 
vaccination coverage among HCP measure is available on the NQF website 
at: https://www.cdc.gov/nhsn/nqf/index.html.\163\
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    \160\ Measure Application Partnership Coordinating Committee 
Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021 
at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
    \161\ Measure Application Partnership Coordinating Committee 
Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021 
at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
    \162\ Centers for Disease Control and Prevention. CMS Reporting 
Requirements FAQs. Accessed June 2, 2021 at: https://www.cdc.gov/nhsn/PDFs/CMS/faq/FAQs-CMS-Reporting-Requirements.pdf.
    \163\ https://www.cdc.gov/nhsn/nqf/index.html.
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(b) Review by the Measure Applications Partnership
    The COVID-19 HCP vaccination measure was included on the publicly 
available ``List of Measures Under Consideration for December 21, 
2020,'' \164\ a list of measures under consideration for use in various 
Medicare programs. The Measure Applications Partnership (MAP) hospital 
workgroup convened on January 11, 2021, and it reviewed the list of 
Measures Under Consideration (MUC) including the COVID-19 HCP 
vaccination measure. The MAP hospital workgroup agreed that the 
proposed measure represents a promising effort to advance measurement 
for an evolving national pandemic and that it could bring value to the 
Hospital OQR Program measure set by providing transparency about an 
important COVID-19 intervention to help prevent infections in HCP and 
patients.\165\ The MAP hospital workgroup also stated in its 
preliminary recommendations that collecting information on COVID-19 
vaccination coverage among HCP and providing feedback to hospitals 
would allow hospitals to benchmark coverage rates and improve coverage 
in their facility, and that reducing COVID-19 infection rates in HCP 
may reduce transmission among patients and reduce instances of staff 
shortages due to illness.\166\
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    \164\ The National Quality Forum. (2021) Accessed March 14, 2021 
at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
    \165\ Measure Applications Partnership. MAP Preliminary 
Recommendations 2020-2021. Accessed on January 24, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \166\ Ibid.
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    In its preliminary recommendations, the MAP hospital workgroup did 
not support this measure for rulemaking, subject to the potential for 
mitigation.\167\ To mitigate its concerns, the MAP hospital workgroup 
believed that the measure needed well-documented evidence, finalized 
specifications, testing, and National Quality Forum (NQF) endorsement 
prior to implementation.\168\ Subsequently, the MAP Coordinating 
Committee met on January 25, 2021, and reviewed the COVID-19 HCP 
vaccination measure. In the 2020-2021 MAP Final Recommendations, the 
MAP offered conditional support for rulemaking contingent on CMS 
bringing the measure back to MAP once the specifications were further 
refined. The MAP specifically stated, ``the incomplete specifications 
require immediate mitigation and further development should continue.'' 
\169\ In its

[[Page 42241]]

final report, the MAP noted that the measure would add value by 
providing visibility into an important intervention to limit COVID-19 
infections in HCP and the patients for whom they provide care.\170\ The 
spreadsheet of final recommendations no longer cited concerns regarding 
evidence, testing, or NQF endorsement.\171\ In response to the MAP 
final recommendation request that CMS bring the measure back to the MAP 
once the specifications are further refined, CMS and the CDC met with 
the MAP Coordinating Committee on March 15, 2021. Additional 
information was provided to address vaccine availability, alignment of 
the COVID-19 HCP vaccination measure as closely as possible with the 
data collection for the Influenza HCP vaccination measure (NQF #0431), 
and clarification related to how HCP are defined. CMS and the CDC also 
presented preliminary findings from the testing of the numerator of the 
COVID-19 HCP vaccination measure, which is currently in process. These 
preliminary findings show numerator data should be feasible to collect 
and reliable. Testing of the measure numerator (the number of HCP 
vaccinated) involves a comparison of the data collected through the 
NHSN and independently reported through the Federal pharmacy 
partnership program for delivering vaccination to LTC facilities. These 
are two completely independent data collection systems. In initial 
analyses of the first month of vaccination, the number of healthcare 
workers vaccinated in approximately 1,200 facilities for which data 
from both systems was available, the number of healthcare personnel 
vaccinated was highly correlated between the two systems with a 
correlation coefficient of nearly 90 percent in the second two weeks of 
reporting.\172\ Because of the high correlation across a large number 
of facilities and high number of HCP within those facilities receiving 
at least one dose of the COVID-19 vaccine, we believe the measure is 
feasible and reliable for use in HOPDs. After reviewing this additional 
information, the MAP retained its final recommendation of conditional 
support, and expressed support for CMS' efforts to use the measure as 
part of the solution for the COVID-19 public health crisis.\173\
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    \167\ Ibid.
    \168\ Ibid.
    \169\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on February 23, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \170\ Ibid.
    \171\ Ibid.
    \172\ For more information on testing results and other measure 
updates, please see the Meeting Materials (including Agenda, 
Recording, Presentation Slides, Summary, and Transcript) of the 
March 15, 2021 meeting available at https://www.qualityforum.org/ProjectMaterials.aspx?projectID=75367.
    \173\ Ibid.
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    Section 1890A(a)(4) of the Act, as added by section 3014(b) of the 
Affordable Care Act, requires the Secretary to take into consideration 
input from multi-stakeholder groups in selecting certain quality and 
efficiency measures. While we value input from the MAP, we believe it 
is important to propose the measure as quickly as possible to address 
the urgency of the COVID-19 PHE and its impact on high risk 
populations, including hospitals. CMS continues to engage with the MAP 
to mitigate concerns and appreciates the MAP's conditional support for 
the measure.
(c) Measure Endorsement
    Under section 1833(t)(17)(C)(i) of the Act, unless the exception of 
subclause (ii) applies, measures selected for the quality reporting 
program must have been set forth by the entity with a contract under 
section 1890(a) of the Act. The NQF currently holds this contract. 
Under section 1833(t)(17)(C)(ii) of the Act, in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary.
    In general, we prefer to adopt measures that have been endorsed by 
the NQF because it is a national multi-stakeholder organization with a 
well-documented and rigorous approach to consensus development. 
However, as we have noted in previous rulemaking (for example, 75 FR 
72065 and 76 FR 74494 for the Hospital OQR and ASCQR Programs, 
respectively), the requirement that measures reflect consensus among 
affected parties can be achieved in other ways, including through the 
measure development process, through broad acceptance, use of the 
measure(s), and through public comment.
    The proposed COVID-19 HCP vaccination measure is not NQF endorsed 
and has not been submitted to NQF for endorsement consideration. We 
will consider the potential for future NQF endorsement as part of its 
ongoing work with the MAP.
    Because this measure is not NQF-endorsed, we considered whether 
there are other available measures that assess COVID-19 vaccination 
rates among HCP. We found no other feasible and practical measures on 
the topic of COVID-19 vaccination among HCP.
(d) Data Collection, Submission, and Reporting
    Given the time sensitive nature of this measure considering the 
current PHE, we are proposing that hospitals would be required to begin 
reporting data on the proposed COVID-19 HCP vaccination measure 
beginning January 1, 2022, for the CY 2024 payment determination for 
the Hospital OQR Program. Thereafter, we propose quarterly reporting 
periods. While we considered annual reporting periods for the Hospital 
OQR Program, we are proposing quarterly reporting periods given the 
immediacy of the PHE and the importance of alignment across quality 
payment programs proposing this measure.
    If our proposal to adopt this measure is finalized, hospitals would 
report the measure through the CDC's NHSN web-based surveillance 
system.\174\ While the Hospital OQR Program does not currently require 
use of the NHSN web-based surveillance system, we have previously 
required use of this system for submitting data. We refer readers to 
the CY 2014 OPPS/ASC final rule with comment period in which we adopted 
the Influenza Vaccination Coverage Among Health Care Personnel (NQF 
#0431) measure (78 FR 75096 through 75099) and section XV.D.5.b.(1). of 
this proposed rule for additional information on reporting through the 
NHSN web-based surveillance system under the Hospital OQR Program. 
Hospitals also have experience reporting acute care hospital measures 
to the CDC's NHSN under the Hospital IQR Program.
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    \174\ Centers for Disease Control and Prevention. Surveillance 
for Weekly HCP COVID-19 Vaccination. Accessed at: https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html on February 10, 
2021.
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    To report this measure, we are proposing that hospitals would 
collect the numerator and denominator for the COVID-19 HCP vaccination 
measure for at least one, self-selected week during each month of the 
reporting quarter and submit the data to the NHSN Healthcare Personal 
Safety (HPS) Component before the quarterly deadline to meet Hospital 
OQR Program requirements. While we believe that it would be ideal to 
have HCP vaccination data for every week of each month, we are mindful 
of the time and resources that hospitals would need to report the data. 
Thus, in collaboration with the CDC, we determined that data from at 
least one week of each month would be sufficient to obtain a reliable 
snapshot of vaccination levels among a hospital's

[[Page 42242]]

HCP while balancing the costs of reporting. If a hospital submits more 
than one week of data in a month, the most recent week's data would be 
used to calculate the measure. For example, if first and third week 
data are submitted, third week data would be used. If first, second, 
and fourth week data are submitted, fourth week data would be used. 
Each quarter, we are proposing that the CDC would calculate a single 
quarterly COVID-19 HCP vaccination coverage rate for each hospital, 
which would be calculated by taking the average of the data from the 
three submission periods submitted by the hospital for that quarter. If 
finalized, CMS would publicly report each quarterly COVID-19 HCP 
vaccination coverage rate as calculated by the CDC.
    Hospitals would submit the number of HCP eligible to have worked at 
the facility during the self-selected week that the hospital reports 
data in NHSN (denominator) and the number of those HCP who have 
received a complete course of a COVID-19 vaccination (numerator) during 
the same self-selected week. As previously stated, acute care 
facilities would count HCP working in all inpatient or outpatient units 
that share the same CCN, regardless of the size or type of unit.\175\
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    \175\ Ibid.
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    We invite public comment on our proposal.
b. Proposal To Adopt the Breast Screening Recall Rates Measure 
Beginning With the CY 2023 Payment Determination
(1) Background
    Performing breast imaging in the outpatient setting facilitates 
early detection of malignancies.\176\ However, performing diagnostic 
mammography or digital breast tomosynthesis (DBT) as a result of a 
false-positive screening study or other errant data has the potential 
to expose women to unnecessary follow-up.\177\ This could result in 
increased prevalence of radiation-induced cancers in younger women, 
including those carrying related gene mutations, such as BRCA-1 and 
BRCA-2 178 179 or additional imaging and biopsies, which 
could lead to unnecessary procedures for women who do not have breast 
cancer.180 181 In contrast, recalling too few women for 
follow-up imaging may lead to delayed diagnoses, higher stages at 
diagnosis, and/or undetected cases of breast cancer.\182\ Given the 
potential negative consequences associated with too many or too few 
diagnostic mammography and DBT studies performed within the population, 
evidence from the clinical literature suggests appropriate recall rates 
should fall between 5 to 12 percent.183 184
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    \176\ Coleman, C. (2017). Early detection and screening for 
breast cancer. Seminars in Oncology Nursing, 33(2), 141-155. http://dx.doi.org/10.1016/j.soncn.2017.02.009.
    \177\ Bernardi D., Li T., Pellegrini M., Macaskill, P., 
Valentini, M., Fanto, C., Ostillo, L., & Houssami, N. (2018). Effect 
of integrating digital breast tomosynthesis (3D-mammography) with 
acquired or synthetic 2D-mammography on radiologists' true positive 
and false-positive detection in a population screening trial: A 
descriptive study. European Journal of Radiology, 106, 26-31.
    \178\ Berrington de Gonzalez, A., Berg, C.D., Visvanathan, K., & 
Robson, M. (2009). Estimated risk of radiation-induced breast cancer 
from mammographic screening for young BRCA mutation carriers. 
Journal of the National Cancer Institute, 101(3), 205-209. https://doi.org/10.1093/jnci/djn440.
    \179\ Miglioretti, D.L., Lange, J., van den Broek, J. J., Lee, 
C.I., van Ravesteyn, N.T., Ritley, D., Kerlikowske, K., Fenton, 
J.J., Melnikow, J., de Koning, H.J., & Hubbard, R.A. (2016). 
Radiation-induced breast cancer incidence and mortality from digital 
mammography screening: a modeling study. Annals of internal 
medicine, 164(4), 205-214. https://doi.org/10.7326/M15-1241.
    \180\ Long, H., Brooks, J.M., Harvie, M., Maxwell, A., & French, 
D.P. (2019). How do women experience a false-positive test result 
from breast screening? A systematic review and thematic synthesis of 
qualitative studies. British journal of cancer, 121(4), 351-358. 
https://doi.org/10.1038/s41416-019-0524-4.
    \181\ Nelson, H.D., Pappas, M., Cantor, A., Griffin, J., Daeges, 
M., & Humphrey, L. (2016). Harms of breast cancer screening: 
systematic review to update the 2009 U.S. preventive services task 
force recommendation. Annals of internal medicine, 164(4), 256-267. 
https://doi.org/10.7326/M15-0970.
    \182\ Nelson, H.D., Tyne, K., Naik, A., Bougatsos, C., Chan, 
B.K., & Humphrey, L. (2009). Screening for breast cancer: Systematic 
evidence review update for the U.S. Preventive Services Task Force. 
Ann Intern Med, 151(10):727-W242.
    \183\ Carney, P.A., Sickles, E. A., Monsees, B.S., Bassett, 
L.W., Brenner, R.J., Feig, S.A., Smith, R.A., Rosenberg, R.D., 
Bogart, T.A., Browning, S., Barry, J.W., Kelly, M.M., Tran, K.A., & 
Miglioretti, D.L. (2010). Identifying minimally acceptable 
interpretive performance criteria for screening mammography. 
Radiology, 255(2), 354-361. https://pubmed.ncbi.nlm.nih.gov/20413750/.
    \184\ D'Orsi, C.J., Sickles, E.A., Mendelson, E.B., Morris E.A., 
et al. (2013). ACR BI-RADS[supreg] atlas, breast imaging reporting 
and data system. Reston, VA: American College of Radiology.
---------------------------------------------------------------------------

    To address the health and clinical risks associated with too many 
or too few breast screening recalls, we are proposing to adopt the 
Breast Screening Recall Rates measure beginning with the CY 2023 
payment determination using a data collection period of July 1, 2020, 
to June 30, 2021, and then data collection periods from July 1 through 
June 30 of the following year starting 3 years before the applicable 
payment calendar year for subsequent years. We intend for this measure 
to move facilities toward the 5 to 12 percent range of recall rates. 
Facilities that are above or below the range should consider 
implementation of internal quality-improvement procedures to ensure 
they are not missing cases or recalling individuals unnecessarily. This 
measure would fill the gap in women's health and oncology care that was 
left in the Hospital OQR Program portfolio following the removal of the 
Mammography Follow Up Rates measure (OP-9).\185\ More specifically, 
this measure would directly address the reason OP-9 was removed from 
the Hospital OQR Program by bringing the measure into alignment with 
current clinical practice and emerging scientific evidence through the 
addition of screening and diagnostic DBT (83 FR 
59096).186 187 188 189 190 191 192 193 The Breast Screening 
Recall Rates measure would be added to a measure set focused on imaging 
efficiency. While this measure, as currently specified, would not 
provide data on outcomes (that is, the number of patients who were 
recalled and subsequently diagnosed with cancer), it would give

[[Page 42243]]

facilities information to use in examining their own imaging practices. 
Results from the measure could be used to identify opportunities for 
improving the efficiency and quality of care provided and would be 
added to a measure set focused on imaging efficiency.
---------------------------------------------------------------------------

    \185\ CMS finalized OP-9 for removal from the Hospital OQR 
Program in the CY 2019 Outpatient Payment Prospective System and 
Ambulatory Surgical Center Payment System final rule (CMS-1695-FC) 
(83 FR 58818).
    \186\ Aase, H.S., Holen, A.S., Pedersen, K., Houssami, N., 
Haldorsen, I.S., Sebuodegard, S., & Hofvind, S. (2019). A randomized 
controlled trial of digital breast tomosynthesis versus digital 
mammography in population-based screening in Bergen: Interim 
analysis of performance indicators from the To-Be trial. 29(3), 
1175-1186. doi: 10.1007/s00330-018-5690-x.
    \187\ Aujero, M.P., Gavenonis, S.C., Benjamin, R., Zhang, Z., & 
Holt, J.S. (2017). Clinical performance of synthesized two-
dimensional mammography combined with tomosynthesis in a large 
screening population. Radiology, 283(1), 70-76. doi: 10.1148/
radiol.2017162674.
    \188\ Bian, T., Lin, Q., Cui, C., Li, L., Qi, C., Fei, J., & Su, 
X. (2016). Digital breast tomosynthesis: A new diagnostic method for 
mass-like lesions in dense breasts. Breast J, 22(5), 535-540. doi: 
10.1111/tbj.12622.
    \189\ Caumo, F., Zorzi, M., Brunelli, S., Romanucci, G., Rella, 
R., Cugola, L., Bricolo, P., Fedato, C., Montemezzi, S., & Houssami, 
N. (2018). Digital breast tomosynthesis with synthesized two-
dimensional images versus full-field digital mammography for 
population screening: Outcomes from the Verona screening program. 
Radiology, 287(1), 37-46. https://doi.org/10.1148/radiol.2017170745.
    \190\ Conant, E.F., Beaber, E.F., Sprague, B.L., Herschorn, 
S.D., Weaver, D.L., Onega, T., . . . Barlow, W.E. (2016). Breast 
cancer screening using tomosynthesis in combination with digital 
mammography compared to digital mammography alone: A cohort study 
within the PROSPR consortium. Breast Cancer Res Treat, 156(1), 109-
116. doi: 10.1007/s10549-016-3695-1.
    \191\ Pattacini, P., Nitrosi, A., & Giorgi Rossi, P. (2018). 
Digital mammography versus digital mammography plus tomosynthesis 
for breast cancer screening: The Reggio Emilia tomosynthesis 
randomized trial. 288(2), 375-385. doi: 10.1148/radiol.2018172119.
    \192\ Pozz, A., Corte, A.D., Lakis, M.A., & Jeong, H. (2016). 
Digital breast tomosynthesis in addition to conventional 2D 
mammography reduces recall rates and is cost effective. Asian Pac J 
Cancer Prev, 17(7), 3521-3526.
    \193\ Skaane, P. (2017). Breast cancer screening with digital 
breast tomosynthesis. Breast Cancer, 24(1), 32-41. doi: 10.1007/
s12282-016-0699-y.
---------------------------------------------------------------------------

(2) Overview of Measure
    This claims-based process measure documents breast screening recall 
rates at the facility level. The Breast Screening Recall Rates measure 
would calculate the percentage of Medicare fee-for-service (FFS) 
beneficiaries for whom a traditional mammography or DBT screening study 
was performed that was then followed by a diagnostic mammography, DBT, 
ultrasound of the breast, or magnetic resonance imaging (MRI) of the 
breast in an outpatient or office setting on the same day or within 45 
calendar days of the index image. In assessing this measure based on 
clinical quality and efficiency, there are potential negative 
consequences of high and low mammography and DBT recall rates. A 
middle-range number is the ideal value for this measure. A high 
cumulative dose of low-energy radiation can be a consequence of too 
many false-positive mammography and DBT recall studies. Alternatively, 
inappropriately low recall rates may lead to delayed diagnoses or 
undetected cases of breast cancer. The inclusion of DBT in evaluating 
recall care may improve recall rates and positive predictive values 
compared to metrics that focus solely on mammography.
    Although this measure is not based on a specific clinical 
guidelines, expert clinical consensus and support from publications in 
the peer-reviewed literature emphasize the importance of appropriate 
recall rates.194 195 The adoption of this measure could 
potentially fill a gap in breast screening measures for the Hospital 
OQR Program. This measure would address the Meaningful Measure priority 
area of ``Making Care Safer.'' The measure addresses this Meaningful 
Measure area by: (1) Promoting appropriate use of breast cancer 
screening and diagnostic imaging by encouraging facilities to aim for a 
performance score within the target recall range; (2) reducing the 
harms associated with too many recalls, which can lead to unnecessary 
radiation exposure, anxiety and distress, and increased costs or 
resource utilization; 196 197 and (3) addressing the issue 
of inappropriately low recall rates, which may lead to delayed 
diagnoses, diagnoses at a later stage, or undetected cases of breast 
cancer.\198\
---------------------------------------------------------------------------

    \194\ Nelson, H.D., Tyne, K., Naik, A., Bougatsos, C., Chan, 
B.K., & Humphrey, L. (2009). Screening for breast cancer: Systematic 
evidence review update for the U.S. Preventive Services Task Force. 
Ann Intern Med, 151(10):727-W242.
    \195\ D'Orsi, C.J., Sickles, E.A., Mendelson, E.B., Morris EA, 
et al. (2013). ACR BI-RADS[supreg] atlas, breast imaging reporting 
and data system. Reston, VA: American College of Radiology.
    \196\ Long, H., Brooks, J.M., Harvie, M., Maxwell, A., & French, 
D.P. (2019). How do women experience a false-positive test result 
from breast screening? A systematic review and thematic synthesis of 
qualitative studies. British journal of cancer, 121(4), 351-358. 
https://doi.org/10.1038/s41416-019-0524-4.
    \197\ Nelson, H.D., Pappas, M., Cantor, A., Griffin, J., Daeges, 
M., & Humphrey, L. (2016). Harms of breast cancer screening: 
Systematic review to update the 2009 U.S. preventive services task 
force recommendation. Annals of internal medicine, 164(4), 256-267. 
https://doi.org/10.7326/M15-0970.
    \198\ Nelson, H.D., Tyne, K., Naik, A., Bougatsos, C., Chan, 
B.K., & Humphrey, L. (2009). Screening for breast cancer: Systematic 
evidence review update for the U.S. Preventive Services Task Force. 
Ann Intern Med, 151(10):727-W242.
---------------------------------------------------------------------------

    The measure was included on the publicly available ``List of 
Measures Under Consideration for December 21, 2020,'' a list of 
measures under consideration for use in various Medicare programs.\199\ 
In January 2021, the Breast Screening Recall Rates measure was reviewed 
by both the MAP's rural health workgroup and hospital workgroup, 
overseen by the Coordinating Committee (MUC20-0005).\200\ Both groups 
and the Coordinating Committee voted to conditionally support the 
measure, pending NQF endorsement.\201\ Concerns cited during the 
January 2021 MAP review included: (1) The proposed recall range is not 
based on clinical practice guidelines, but rather expert consensus and 
synthesis of findings from the scientific literature; (2) use of a 
range (as opposed to a targeted high or low value) may be difficult for 
clinicians, patients, and other stakeholders to interpret; (3) the 
measure does not address social determinants of health, which may 
impact the rate of recall at some facilities; and (4) the measure does 
not provide complementary information about patient outcomes (for 
example, breast cancer detection rate), which could aid in the 
interpretation and usefulness of the measure's data.\202\ Despite these 
concerns, some members of the rural health workgroup, hospital 
workgroup, and Coordinating Committee expressed support of the Breast 
Screening Recall Rates measure and noted that feedback provided by the 
MAP did not preclude measure implementation, given its importance to 
the clinical community and the public.\203\ As a part of measure 
implementation, we would develop a suite of education and outreach 
materials to aid stakeholders in the interpretation of measure 
performance data. These materials would explain the measure structure 
(including use of a range representing ideal performance) to ensure 
stakeholders understand values within and outside of the target range. 
Once implemented, the measure would be re-evaluated annually, which 
would include a consideration of changes to the evidence base and 
potential integration of social determinants of health (that is, 
stratification or risk adjustment); updates to the measure 
specifications would be made iteratively, as appropriate, on an annual 
basis.
---------------------------------------------------------------------------

    \199\ The National Quality Forum. ``List of Measures Under 
Consideration for December 21, 2020''. (2020) Accessed May 14, 2021. 
Available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
    \200\ The National Quality Forum. ``List of Measures Under 
Consideration for December 21, 2020''. (2020) Accessed May 14, 2021 
at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
    \201\ Measure Applications Partnership. 2020-2021 Measure 
Applications Partnership. 2020-2021 Considerations for Implementing 
Measures Final Report--Clinicians, Hospitals, and PAC-LTC. Accessed 
on May 14, 2021 at: https://www.qualityforum.org/Publications/2021/03/MAP_2020-2021_Considerations_for_Implementing_Measures_Final_Report_-_Clinicians,_Hospitals,_and_PAC-LTC.aspx.
    \202\ Measure Application Partnership Coordinating Committee 
Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021 
at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
    \203\ Measure Applications Partnership. 2020-2021 Measure 
Applications Partnership. 2020-2021 Considerations for Implementing 
Measures Final Report--Clinicians, Hospitals, and PAC-LTC. Accessed 
on May 14, 2021 at: https://www.qualityforum.org/Publications/2021/03/MAP_2020-2021_Considerations_for_Implementing_Measures_Final_Report_-_Clinicians,_Hospitals,_and_PAC-LTC.aspx.
---------------------------------------------------------------------------

    Section 1833(t)(17)(C)(i) of the Act authorizes the Secretary to 
specify a measure for addition to a program that is not endorsed by the 
NQF, as long as due consideration is given to other measures that have 
been endorsed or adopted by a consensus organization (for example, 
NQF). We have reviewed those NQF-endorsed measures that are related to 
breast imaging and have not identified any that focus on recall rates 
specifically. As such, we are proposing to adopt this measure for use 
in the Hospital OQR Program because of its importance to women's health 
and its ability to fill a gap in CMS' Meaningful Measure portfolio even 
though it has not yet been reviewed by NQF. Submission for NQF 
endorsement would be considered for this measure in the future.

[[Page 42244]]

(3) Measure Calculation
    This claims-based process measure documents breast screening recall 
rates at the facility level. The Breast Screening Recall Rates measure 
would calculate the percentage of Medicare FFS beneficiaries for whom a 
traditional mammography or DBT screening study was performed that was 
then followed by a diagnostic mammography, DBT, ultrasound of the 
breast, or MRI of the breast in an outpatient or office setting on the 
same day or within 45 days of the index image. Specifically, the 
measure denominator includes Medicare FFS beneficiaries who received a 
screening mammography or DBT study at a facility paid under the OPPS. 
The numerator consists of individuals from the denominator who had a 
diagnostic mammography study, DBT, ultrasound of the breast, or MRI of 
the breast following a screening mammography or DBT study on the same 
day or within 45 days of the screening study. The Breast Screening 
Recall Rates measure does not have any exclusions. This measure is not 
risk adjusted. As a process-of-care measure, the decision to image a 
beneficiary should not be influenced by sociodemographic status 
factors; rather, risk adjustment for such sociodemographic factors 
could potentially mask important inequities in care delivery for 
beneficiaries seen at facilities providing data for this measure. If 
performance scores for this measure vary across populations, this may 
be reflective of differences in the quality of care provided to the 
diverse populations included in the measure's denominator.
    Although this measure is not based on a specific clinical 
guideline, expert clinical consensus and support from the peer-reviewed 
literature emphasize the importance of appropriate recall rates.\204\ 
We refer readers to the QualityNet website at http://www.QualityNet.cms.gov for the full measure specifications.
---------------------------------------------------------------------------

    \204\ Nelson, H.D., Tyne, K., Naik, A., Bougatsos, C., Chan, 
B.K., & Humphrey, L. (2009). Screening for breast cancer: Systematic 
evidence review update for the U.S. Preventive Services Task Force. 
Ann Intern Med, 151(10):727-W242.
---------------------------------------------------------------------------

(4) Data Sources
    The Breast Screening Recall Rates measure would be calculated using 
data from final claims that facilities submit for Medicare 
beneficiaries enrolled in Medicare FFS. As such, facilities would not 
have to submit any additional data for this measure. The measurement 
period for the Breast Screening Recall Rates measure is 12 months. As 
noted previously, we would use final claims data from July 1, 2020 to 
June 30, 2021 to calculate the measure for the CY 2023 payment 
determination and then data collection periods from July 1 through June 
30 of the following year starting 3 years before the applicable payment 
calendar year for subsequent years. Please note that claims for the 
initial patient population would be identified from July 1 through May 
17 of each year, with numerator cases occurring from July 1 through 
June 30 annually. The data would be calculated only for facilities paid 
under the OPPS for mammography and DBT screening in the hospital 
outpatient setting. Data from the hospital outpatient and carrier files 
would be used to determine beneficiary inclusion (for example, a 
mammography follow-up study can occur in any location and be eligible 
for inclusion in the measure's numerator).
    We invite public comment on our proposal.
c. Proposal To Adopt the ST-Segment Elevation Myocardial Infarction 
(STEMI) eCQM Beginning With Voluntary Reporting for the CY 2023 
Reporting Period and Mandatory for the CY 2024 Reporting Period/CY 2026 
Payment Determination and Subsequent Years
(1) Background
    An ST-segment elevation myocardial infarction (STEMI) is a form of 
heart attack in which there is a complete occlusion of one of the heart 
arteries.\205\ Each year over 250,000 Americans experience a STEMI, 
approximately 50 percent of whom are Medicare 
beneficiaries.206 207 This is represented on the 
electrocardiogram as an elevation of the ST segment--the interval 
between ventricular depolarization and repolarization (which represents 
the duration of an average ventricular contraction).\208\ Time is of 
the essence in STEMI treatment, and the prompt identification of STEMI 
and restoration of blood flow to the heart (reperfusion therapy) is a 
key determinant of health outcomes.209 210 211 Primary 
percutaneous coronary intervention (PCI), which is the use of balloons 
and stents to restore blood flow, is the preferred reperfusion 
modality.\212\ The 2013 American College of Cardiology Foundation 
(ACCF)/American Heart Association (AHA) guidelines recommend the 
initiation of PCI within 120 minutes from first medical contact 
(FMC).\213\ Specifically, if a patient presents to a PCI-capable 
facility, primary PCI is recommended within 90 minutes of FMC.\214\ If 
a patient presents to a non-PCI-capable facility, the patient should be 
expeditiously transported to a PCI-capable facility and receive PCI 
within a total of 120 minutes.\215\ However, in care settings where it 
is not possible for a patient to receive PCI or be transferred and 
receive primary PCI within the 120-minute timeframe, fibrinolytic 
therapy (medications to dissolve blood clots and restore flow) should 
be administered rapidly for reperfusion in the absence of 
contraindications.\216\ The guidelines recommend that eligible patients 
should receive fibrinolytic therapy within 30 minutes of hospital 
arrival.
---------------------------------------------------------------------------

    \205\ Anderson JL, Morrow DA. Acute Myocardial Infarction. New 
England Journal of Medicine. 2017;376(21):2053-2064.
    \206\ Ward et al. Incidence of Emergency Department Visits for 
ST-Elevation Myocardial Infarction in a Recent 6-Year Period in the 
United States. Am J Cardiol. 2015 Jan 15; 115(2): 167-170.
    \207\ Vallabhajosyula S, Kumar V, Sundaragiri PR, et al. 
Influence of primary payer status on the management and outcomes of 
ST-segment elevation myocardial infarction in the United States. 
PLoS One. 2020;15(12):e0243810.
    \208\ Vogel B, Claessen BE, Arnold SV, Chan D, Cohen DJ, 
Giannitsis E, Gibson CM, Goto S, Katus HA, Kerneis M, Kimura T, 
Kunadian V, Pinto DS, Shiomi H, Spertus JA, Steg PG, Mehran R. ST-
segment elevation myocardial infarction. (2019). Nature Reviews 
Disease Primers, 5(39). Available at https://doi.org/10.1038/s41572-019-0090-3.
    \209\ Boersma E, Maas AC, Deckers JW, Simoons ML. Early 
thrombolytic treatment in acute myocardial infarction: reappraisal 
of the golden hour. Lancet. 1996;348(9030):771-775.
    \210\ Cannon CP, Gibson CM, Lambrew CT, et al. Relationship of 
symptom-onset-to-balloon time and door-to-balloon time with 
mortality in patients undergoing angioplasty for acute myocardial 
infarction. Jama. 2000;283(22):2941-2947.
    \211\ McNamara RL, Wang Y, Herrin J, et al. Effect of door-to-
balloon time on mortality in patients with ST-segment elevation 
myocardial infarction. J Am Coll Cardiol. 2006;47(11):2180-2186.
    \212\ Anderson JL, Morrow DA. Acute Myocardial Infarction. New 
England Journal of Medicine. 2017;376(21):2053-2064.
    \213\ O'Gara P, Kushner F, Ascheim D, Casey D, Chung M, de Lemos 
J, Ettinger S, Fang J, Fesmire F, Franklin B, Granger C, Krumholz H, 
Linderbaum J, Morrow D, Newby L, Ornato J, Ou N, Radford M, Tamis-
Holland J, Tommaso C, Tracy C, Woo Y, Zhao D, Anderson J, Jacobs A, 
Halperin J, Albert N, Brindis R, Creager M, DeMets D, Guyton R, 
Hochman J, Kovacs R, Kushner F, Ohman E, Stevenson W, Yancy C. 
(2013). 2013 ACCF/AHA guideline for the management of ST-elevation 
myocardial infarction: a report of the American College of 
Cardiology Foundation/American Heart Association Task Force on 
Practice Guidelines. Circulation, 127(4): e362-425. Available at 
https://www.ncbi.nlm.nih.gov/pubmed/23247304.
    \214\ Ibid.
    \215\ Ibid.
    \216\ Ibid.
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(2) Overview of Measure
    The STEMI eCQM measures the percentage of ED patients with a 
diagnosis of STEMI who received timely delivery of guideline-based 
reperfusion therapies appropriate for the care setting and delivered in 
the absence of contraindications. The Meaningful Measures Framework 
aims to address

[[Page 42245]]

issues that are most vital to delivering quality, value-based care to 
improve patient outcomes.\217\ In alignment with the Meaningful 
Measures quality priority of promoting effective prevention and 
treatment of chronic disease, we believe this STEMI eCQM encourages 
timely, effective and appropriate treatment using clinical data 
available in certified electronic health record technology (CEHRT) and 
that this measure has the potential to reduce adverse health outcomes.
---------------------------------------------------------------------------

    \217\ Meaningful Measures 2.0: Moving from Measure Reduction to 
Modernization. Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
---------------------------------------------------------------------------

    The measure was included on the publicly available ``List of 
Measures Under Consideration for December 21, 2020,'' a list of 
measures under consideration for use in various Medicare programs.\218\ 
In January 2021, the STEMI eCQM was reviewed by the MAP's rural health 
workgroup, hospital workgroup, and Coordinating Committee (MUC20-
0004).\219\ The MAP rural health workgroup conducted discussion 
regarding the appropriate treatment time for STEMI and how this may be 
impacted in rural settings due to proximity and transportation issues, 
especially with getting someone to a PCI-capable facility, and 
supported the STEMI eCQM for rural providers in the Hospital OQR 
Program.\220\ The MAP voted to conditionally support the measure, 
pending NQF endorsement.\221\ We note that on-site facilities can 
perform a PCI (if they have the capability to do so), use fibrinolysis, 
or they can transfer a patient to a facility that provides PCI. These 
three treatment scenarios are all captured by the measure, including 
relative treatment times (non-transfer patients receiving PCI at a PCI-
capable facility within 90 minutes of arrival and patients transferred 
from a non-PCI-capable to a PCI-capable facility within 45 minutes).
---------------------------------------------------------------------------

    \218\ The National Quality Forum. (2021). List of Measures under 
Consideration for December 21, 2020. Accessed March 14, 2021 at: 
https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
    \219\ The National Quality Forum. (2021). Meeting Summary 
Measure Applications Partnership Rural Health Workgroup Virtual 
Review Meeting. Accessed on May 17, 2021 at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94656.
    \220\ The National Quality Forum. (2021). Measure Applications 
Partnership 2020-2021. Considerations for Implementing Measures in 
Federal Programs: Clinician, Hospital & PAC/LTC. Accessed on May 17, 
2021 at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94893.
    \221\ Ibid.
---------------------------------------------------------------------------

    Section 1833(t)(17)(C)(i) of the Act requires the Secretary to 
develop measures appropriate for the measurement of the quality of care 
(including medication errors) furnished by hospitals in outpatient 
settings, that these measures reflect consensus among affected parties 
and, to the extent feasible and practicable, that these measures 
include measures set forth by one or more national consensus building 
entities (for example, NQF). We also note that section 1833(t)(17) of 
the Act does not require that each measure we adopt for the Hospital 
OQR Program be endorsed by a national consensus building entity. We 
have reviewed and identified two related NQF-endorsed chart-abstracted 
measures--OP-2 (Fibrinolytic Therapy Received within 30 Minutes of ED 
Arrival) and OP-3 (Median Time to Transfer to Another Facility for 
Acute Coronary Intervention).
    In section XV.B.3.c. of this proposed rule, we are proposing to 
remove these two related chart-abstracted measures--OP-2 (Fibrinolytic 
Therapy Received within 30 Minutes of ED Arrival) and OP-3 (Median Time 
to Transfer to Another Facility for Acute Coronary Intervention)--and 
replace them with this eCQM. The use of the STEMI eCQM measure, in lieu 
of the OP-2 and OP-3 measures, would eliminate the need for manual 
chart-abstraction. It would also broaden the group of measured STEMI 
patients including patients who present to and receive primary PCI at a 
PCI-capable facility, which is the vast majority of STEMI patients, 
instead of only including patients presenting to non-PCI-capable 
facilities and receiving either fibrinolytics or being transferred to a 
PCI-capable facility. The STEMI eCQM better supports compliance with 
the full group of STEMI patients covered in the 2013 ACCF and AHA 
guidelines for the management of STEMI by measuring timeliness and 
appropriateness of care for STEMI patients in the ED.\222\ We believe 
that the STEMI eCQM would efficiently and comprehensively measure 
timeliness of STEMI care by reducing the burden on facilities currently 
reporting these two chart-abstracted measures, broadening the STEMI 
population for which performance scores could be publicly reported, and 
incorporating contraindications to enhance the clinical applicability 
of the measure. We refer readers to section XV.B.3.c. of this proposed 
rule for further discussion on our proposal to remove the OP-2 and OP-3 
measures from the Hospital OQR Program.
---------------------------------------------------------------------------

    \222\ O'Gara P, Kushner F, Ascheim D, Casey D, Chung M, de Lemos 
J, Ettinger S, Fang J, Fesmire F, Franklin B, Granger C, Krumholz H, 
Linderbaum J, Morrow D, Newby L, Ornato J, Ou N, Radford M, Tamis-
Holland J, Tommaso C, Tracy C, Woo Y, Zhao D, Anderson J, Jacobs A, 
Halperin J, Albert N, Brindis R, Creager M, DeMets D, Guyton R, 
Hochman J, Kovacs R, Kushner F, Ohman E, Stevenson W, Yancy C. 
(2013). 2013 ACCF/AHA guideline for the management of ST-elevation 
myocardial infarction: a report of the American College of 
Cardiology Foundation/American Heart Association Task Force on 
Practice Guidelines. Circulation, 127(4): e362-425. Available at 
https://www.ncbi.nlm.nih.gov/pubmed/23247304.
---------------------------------------------------------------------------

    As such, we are proposing to adopt the STEMI eCQM for use in the 
Hospital OQR Program because of its importance in measuring timely 
delivery of guideline-based reperfusion therapies appropriate for the 
care of ED patients with a diagnosis of STEMI and its ability to fill a 
gap in CMS' Meaningful Measure portfolio. The measure was submitted to 
NQF in January 2021 and is under review.
(3) Measure Calculation
    The STEMI eCQM is a process measure that assesses the percentage of 
ED patients aged 18 years or older with a diagnosis of STEMI who 
received appropriate treatment. The denominator includes all ED 
patients 18 years or older diagnosed with STEMI who do not have 
contraindications to fibrinolytic, antithrombotic, and anticoagulation 
therapies.
    The numerator includes:
     ED-based STEMI patients whose time from ED arrival to 
fibrinolytic therapy is 30 minutes or fewer; or
     Non-transfer ED-based STEMI patients who received PCI at a 
PCI-capable hospital within 90 minutes of arrival; or
     ED-based STEMI patients who were transferred to a PCI-
capable hospital within 45 minutes of ED arrival at a non-PCI-capable 
hospital.
    For more information on the STEMI eCQM, we refer readers to the 
full measure specifications available on the Electronic Clinical 
Quality Improvement (eCQI) Resource Center website, available at: 
https://ecqi.healthit.gov/pre-rulemaking-eh-oqr-ecqms.
(4) Data Sources
    The proposed measure is an eCQM that uses data routinely collected 
through the EHR and is designed to be calculated by the hospitals' 
CEHRT using patient-level data and submitted to CMS. In 2020, using 
data from 2018, the STEMI eCQM was tested at two hospital systems (20 
EDs in total) with two different EHR platforms for feasibility, 
validity, and reliability testing, based on the endorsement criteria 
outlined by NQF.\223\ The

[[Page 42246]]

feasibility testing showed that the measure is feasible and the key 
features of the eCQM, such as the code sets and measure logic, were 
readily interpreted by both sites as assessed by the feasibility 
scorecard and exit interviews conducted at the two sites. The validity 
testing results showed a wide range of agreement among data elements 
between the electronic and manual data extracts. Some data elements 
were collected but not fully interoperable within providers' EHRs. 
However, as hospitals and EHR vendors meet ONC requirements for 
interoperability under the ONC 21st Century Cures Act final rule (85 FR 
25642 through 25961) and map data elements for interoperability via the 
FHIR-based API required by December 31, 2022 (85 FR 70075), these data 
elements would be accessible without special effort.
---------------------------------------------------------------------------

    \223\ National Quality Forum. What NQF Endorsement Means. 
Available at: http://https://www.qualityforum.org/Measuring_Performance/ABCs/What_NQF_Endorsement_Means.aspx.
---------------------------------------------------------------------------

(5) Implementation
    We propose to start with voluntary reporting beginning with the CY 
2023 reporting period and then with mandatory reporting beginning with 
the CY 2024 reporting period/CY 2026 payment determination and for 
subsequent years. We believe that taking an incremental approach to 
implementing this measure would allow hospitals time to implement 
workflow changes as necessary to better prepare for submitting data and 
to increase familiarity with data submission with the introduction of 
an eCQM into the Hospital OQR Program. We refer readers to section 
XV.D.6. of this proposed rule for additional proposals related to eCQM 
data submission and reporting requirements under the Hospital OQR 
Program.
    We invite public comment on our proposal.
5. Modifications to Previously Adopted Measures
a. Proposal To Require OP-37a-e: Outpatient and Ambulatory Surgery 
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) 
Survey-Based Measures Beginning With Voluntary Reporting for the CY 
2023 Reporting Period and Mandatory Reporting Beginning With the CY 
2024 Reporting Period/CY 2026 Payment Determination and for Subsequent 
Years
    We previously adopted the OP-37a-e: Outpatient and Ambulatory 
Surgery Consumer Assessment of Healthcare Providers and Systems (OAS 
CAHPS) measures to assess patient experience with care following a 
procedure or surgery in a HOPD. These survey-based measures rate 
patient experience as a means for empowering patients and improving the 
quality of their care (82 FR 59432). For further details on these 
measures, we refer readers to the CY 2017 OPPS/ASC final rule with 
comment period (81 FR 79771 through 79784), in which we adopted these 
measures beginning with the CY 2020 payment determination.
    Subsequently, in the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 59432 through 59433), we delayed implementation of OP-
37a-e for the Hospital OQR Program beginning with the CY 2020 payment 
determination due to lack of sufficient operational and implementation 
data. At that time, we believed that our ongoing National OAS CAHPS 
voluntary reporting program for the survey measures, which began in 
January 2016 \224\ and is unrelated to either the Hospital OQR Program 
or ASCQR Program, would provide valuable information moving forward. 
Specifically, we wanted to use the information from the National OAS 
CAHPS voluntary reporting program to: (1) Ensure that the survey 
measures appropriately account for patient response rates, both 
aggregate and by survey administration method; (2) reaffirm the 
reliability of national implementation of OAS CAHPS Survey data; and 
(3) appropriately account for the burden associated with administering 
the survey in the outpatient setting of care.
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    \224\ Participation in the program is open to any interested 
Medicare-certified Hospital Outpatient Departments (HOPDs) and free-
standing ambulatory surgery centers (ASCs). More information on the 
National OAS CAHPS voluntary reporting program is available at: 
https://oascahps.org/General-Information/National-Implementation and 
https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/CAHPS/OAS-CAHPS.
---------------------------------------------------------------------------

    In this proposed rule, we are proposing to restart the OP-37a-e 
measure by requiring the measure in the Hospital OQR Program beginning 
with the CY 2024 reporting period/CY 2026 payment determination. 
Specifically, for the Hospital OQR Program, we are proposing voluntary 
data collection and reporting beginning with the CY 2023 reporting 
period, followed by mandatory data collection and reporting beginning 
with the CY 2024 reporting period/CY 2026 payment determination. As 
noted previously, the National OAS CAHPS voluntary reporting program is 
independent of the Hospital OQR Program and the ASCQR Program. This 
proposal is intended to make the distinction that HOPDs that 
voluntarily report the OAS CAHPS survey-based measures during the CY 
2023 reporting period would do so as part of the Hospital OQR Program 
until mandatory reporting begins, if these proposals are finalized. The 
reporting process for HOPDs to submit OAS CAHPS data would remain 
unchanged for HOPDs (that is, they would not duplicate submissions to 
the program and National OAS CAHPS voluntary reporting program). We 
refer readers to section XV.D.4.b. of the preamble of this proposed 
rule for our related proposals regarding the form, manner, and timing 
for reporting the OP-37a-e survey-based measures.
    Having had the opportunity during the delayed implementation to 
investigate the concerns about patient response rates and data 
reliability, we believe that patients are able to respond to OAS CAHPS 
survey questions, and that those responses are reliable based on our 
prior experiences collecting voluntary data for public reporting since 
CY 2016 (available at https://data.cms.gov/provider-data/). We reaffirm 
that the OAS CAHPS survey-based measures assess important aspects of 
care where the patient is the best or only source of information (81 FR 
79771). Furthermore, in section XV.D.4.b.(1)., we are proposing 
additional collection modes using a web-based module (web with mail 
follow-up of non-respondents and web with telephone follow-up of non-
respondents) for administering the survey, which would be available 
beginning in CY 2023 under the Hospital OQR Program and for subsequent 
years.\225\ We believe this would address some burden concerns raised 
during the CY 2017 OPPS/ASC final rule with comment period (81 FR 
79777) because the web-based modules would produce similar results but 
at lower costs of collection.\226\ We also continue to believe that the 
benefits of this measure, such as giving patients the opportunity to 
compare and assess quality of care in the outpatient setting in a 
standardized and comparable manner, outweigh the burdens (81 FR 79778). 
As we stated in the CY 2018 OPPS/ASC final rule with comment period, we 
continue to believe that implementation of these measures will enable 
objective and meaningful comparisons between hospital outpatient 
departments (82 FR 59432)

[[Page 42247]]

and rating patient experience still provides important information to 
hospital outpatient departments and patients and enables objective and 
meaningful comparisons between hospital outpatient departments (82 FR 
59432).
---------------------------------------------------------------------------

    \225\ We note that the mixed modes will be available as part of 
the National OAS CAHPS voluntary reporting program beginning in CY 
2022.
    \226\ Bergeson SC, Gray J, Ehrmantraut LA, Laibson T, Hays RD. 
Comparing Web-based with Mail Survey Administration of the Consumer 
Assessment of Healthcare Providers and Systems (CAHPS[supreg]) 
Clinician and Group Survey. Prim Health Care. 2013;3:1000132. 
doi:10.4172/2167-1079.1000132.
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    We refer readers to section XV.D.4.b. for our related proposals 
regarding form, manner, and timing for reporting the OP-37a-e survey-
based measures. We invite public comment on our proposal.
    We also refer readers to section XVI.B.4.c. of this proposed rule 
where we are also proposing modifications to this measure in the ASCQR 
Program.
b. Proposal To Require OP-31: Cataracts: Improvement in Patient's 
Visual Function Within 90 Days Following Cataract Surgery (NQF #1536) 
Beginning With the CY 2023 Reporting Period/CY 2025 Payment 
Determination
(1) Background
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75102 
through 75104) we finalized the adoption of the OP-31: Cataracts: 
Improvement in Patient's Visual Function with 90 Days Following 
Cataract Surgery \227\ measure beginning with the CY 2016 payment 
determination. This measure assesses the percentage of patients aged 18 
years and older who had cataract surgery and had improvement in visual 
function achieved within 90 days following the cataract surgery (78 FR 
75102). The measure data consists of pre-operative and post-operative 
visual function surveys. The implementation of this measure has been 
the subject of a number of changes as discussed in this section for the 
proposed rule.
---------------------------------------------------------------------------

    \227\ We note that this measure was endorsed by the NQF under 
NQF #1536 at the time of adoption but has subsequently had its 
endorsement removed.
---------------------------------------------------------------------------

    During the CY 2014 OPPS/ASC proposed rule, some commenters 
expressed concern about the burden of collecting pre-operative and 
post-operative visual function surveys (78 FR 75103). In response to 
those comments, we modified and finalized our implementation strategy 
in a manner that we believed would significantly minimize collection 
and reporting burden (78 FR 75103). Specifically, we applied a sampling 
scheme and a low case threshold exemption to address commenters' 
concerns regarding burden (78 FR 75114). With those changes, we 
intended to decrease burden and facilitate data reporting by allowing 
random sampling of cases when volume is high, instead of collecting 
information for all eligible patients (78 FR 75114). For further 
details, we refer readers to the CY 2014 OPPS/ASC final rule with 
comment period (78 FR 75102 through 75104).
    Shortly thereafter, we became concerned about the use of 
inconsistent surveys to assess visual function. The measure 
specifications allowed for the use of any validated survey and we were 
not positive about the impact the use of varying surveys might have. 
Therefore, we issued guidance stating that we would delay the 
implementation of OP-31.\228\
---------------------------------------------------------------------------

    \228\ The implementation was first delayed by 3 months--from 
January 1, 2014 to April 1, 2014, for the CY 2016 payment 
determination, via guidance issued December 31, 2013. Available at: 
https://qualitynet.cms.gov/outpatient/notifications8772854917. 
Because of continuing concerns, on April 2, 2014, we issued 
additional guidance stating that we would further delay the 
implementation of the measure from April 1, 2014 to January 1, 2015 
for the CY 2016 payment determination. Available at: https://qualitynet.cms.gov/outpatient/notifications.
---------------------------------------------------------------------------

    Subsequently, in the CY 2015 OPPS/ASC final rule with comment 
period (79 FR 66947 through 66948), we finalized our proposal to 
exclude OP-31 from the CY 2016 payment determination measure set, and 
for subsequent years. We proposed to exclude OP-31 for a few reasons. 
First, we understood it was operationally difficult for hospitals to 
collect and report on the measure (79 FR 66947). Notably, the results 
of the survey used to assess the pre-operative and post-operative 
visual function of the patient were not consistently shared across 
clinicians, making it difficult for hospitals to have knowledge of the 
visual function of the patient before and after surgery (79 FR 66947). 
Second, the concern about use of various versions of the survey 
persisted. Specifically, we were concerned that if physicians used 
different surveys to assess visual function, then the measure could 
produce inconsistent results (79 FR 66947). By excluding OP-31 from the 
measure set used for the CY 2016 payment determination and subsequent 
years, hospitals were excused from reporting on it. Hospitals that did 
not report on OP-31 for the CY 2016 payment determination were not 
subject to a payment reduction (79 FR 66947). In conjunction with 
excusing hospitals from reporting on OP-31 for the CY 2016 payment 
determination and subsequent years, we finalized allowing hospitals to 
voluntarily report OP-31 data for the CY 2015 reporting period/CY 2017 
payment determination and subsequent years (79 FR 66948).
(2) Proposal To Require Hospitals Report on OP-31 Beginning With the CY 
2023 Reporting Period/CY 2025 Payment Determination and for Subsequent 
Years
    We now believe it is appropriate to require hospitals to report on 
OP-31. Our earlier concerns have been ameliorated. At this point, 
hospitals have had several years to familiarize themselves with OP-31, 
prepare to operationalize it, and opportunity to practice reporting the 
measure since the CY 2015 reporting period/CY 2017 payment 
determination. We note that a small number of facilities have 
consistently reported data for this measure and these data have been 
made publicly available. As to our second concern, research indicates 
that using different surveys will not result in inconsistencies, as the 
allowable surveys are scientifically validated.\229\ Research has 
demonstrated that of 16 different cataract surgery outcome 
questionnaires, all were able to detect clinically important 
change.\230\
---------------------------------------------------------------------------

    \229\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux 
EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery 
outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81. 
doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
    \230\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux 
EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery 
outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81. 
doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
---------------------------------------------------------------------------

    Therefore, in this proposed rule, we are proposing to require 
reporting of the OP-31 measure beginning with the CY 2023 reporting 
period/CY 2025 payment determination and for subsequent years. As we 
stated in the CY 2014 OPPS/ASC final rule with comment period, as well 
as the CY 2015 OPPS/ASC final rule with comment period, and consistent 
with the MAP recommendation, we continue to maintain that this measure 
``addresses a high-impact condition'' that is not otherwise adequately 
addressed in our current measure set (78 FR 75103 and 79 FR 66947, 
respectively). Moreover, OP-31 serves to improve patient-centered care 
by representing an important patient reported outcome (78 FR 75103). 
This measure provides opportunities for care coordination as well as 
direct patient feedback.
    We refer readers to section XV.D.5.a. of this proposed rule for 
information about submitting data via a CMS web-based tool.
    We invite public comment on our proposal.

[[Page 42248]]

6. Summary of Previously Finalized and Proposed Hospital OQR Program 
Measure Sets
a. Summary of Previously Finalized and Proposed Hospital OQR Program 
Measure Set for the CY 2023 Payment Determination
    We refer readers to the CY 2021 OPPS/ASC final rule with comment 
period (85 FR 86180 through 86181) for a summary of the previously 
adopted Hospital OQR Program measure set for the CY 2023 payment 
determination and subsequent years. If finalized as proposed in this 
proposed rule, the CY 2023 payment determination and subsequent years 
would also include the Breast Screening Recall Rates measure. Table 46 
summarizes the previously finalized and newly proposed Hospital OQR 
Program measure set for the CY 2023 payment determination:
[GRAPHIC] [TIFF OMITTED] TP04AU21.095

b. Summary of Previously Finalized and Proposed Hospital OQR Program 
Measure Set for the CY 2024 Payment Determination
    Table 47 summarizes the previously finalized and newly proposed 
Hospital OQR Program measure set for the CY 2024 payment determination, 
which includes the proposed COVID-19 Vaccination Coverage Among HCP 
measure:

[[Page 42249]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.096

c. Summary of Previously Finalized and Proposed Hospital OQR Program 
Measure Set for the CY 2025 Payment Determination
    Table 48 summarizes the previously finalized and newly proposed 
Hospital OQR Program measure set for the CY 2025 payment determination, 
which includes the proposed OP-39: ST-Segment Elevation Myocardial 
Infarction (STEMI) eCQM and proposed removals of the OP-2 and OP-3 
measures:

[[Page 42250]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.097

d. Summary of Previously Finalized and Proposed Hospital OQR Program 
Measure Set for the CY 2026 Payment Determination and Subsequent Years
    Table 49 summarizes the previously finalized and newly proposed 
Hospital OQR Program measure set for the CY 2026 payment determination 
and subsequent years, which includes the proposed mandatory reporting 
of the ST-Segment Elevation Myocardial Infarction (STEMI) eCQM and the 
proposed requirement of the OAS CAHPS measures (OP-37a-e):

[[Page 42251]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.098

7. Hospital OQR Program Measures and Topics for Future Considerations
a. Request for Comment on Potential Adoption of Future Measures for the 
Hospital OQR Program
    We seek to adopt a comprehensive set of quality measures for 
widespread use to inform decision-making regarding care and for quality 
improvement efforts in the hospital outpatient setting. In the CY 2021 
OPPS/ASC final rule with comment period (85 FR 86083 through 86110), 
under the OPPS we finalized the elimination of the Inpatient Only (IPO) 
list over a 3-year transitional period, beginning with the removal of 
approximately 300 primarily musculoskeletal-related services, with the 
list to be completely phased out by CY 2024.\231\ As discussed in 
section IX. of this rule, we have continued to receive stakeholder 
requests to reconsider the elimination of the IPO list, to reevaluate 
services removed from the IPO list due to safety and quality concerns, 
and to, at a minimum, extend the timeframe for eliminating the list. 
After further consideration and review of the additional feedback from 
stakeholders, we believe that the timeframe we adopted for removing 
services from the IPO list does not give us a sufficient opportunity to 
carefully assess whether a procedure can be removed from the IPO list 
while still ensuring beneficiary safety. For CY 2022, we are proposing 
to halt the elimination of the IPO list and, after clinical review of 
the services removed from the IPO list in CY 2021, we propose to add 
the 298 services removed from the IPO list in CY 2021 back to the IPO 
list beginning in CY 2022.
---------------------------------------------------------------------------

    \231\ Centers for Medicare & Medicaid Services. (2020, December 
2). CY 2021 Medicare Hospital Outpatient Prospective Payment System 
and Ambulatory Surgical Center Payment System Final Rule (CMS-1736-
FC). Retrieved from www.cms.gov/newsroom: https://www.cms.gov/newsroom/fact-sheets/cy-2021-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-0.
---------------------------------------------------------------------------

    However, as technology and surgical techniques advance, services 
will continue to transition off of the IPO list, becoming payable in 
the outpatient setting. We recognize that there may be a need for more 
measures that inform decision-making regarding care and for quality 
improvement efforts, particularly focused on the behaviors of services 
that become newly eligible for payment in the outpatient setting. In 
light of this, we seek comment on potential future adoption of measures 
that would allow better tracking of the quality of care for services 
that transition from the IPO list and become eligible for payment in 
the outpatient setting.
    Therefore, we invite public comment on the potential future 
adoption of measures for our consideration that address care quality in 
the hospital outpatient setting given the transition of procedures from 
inpatient settings to outpatient settings of care.
b. Request for Comment on Potential Future Adoption and Inclusion of a 
Hospital-Level, Risk-Standardized Patient Reported Outcomes Measure 
Following Elective Primary Total Hip and/or Total Knee Arthroplasty 
(THA/TKA)
    As described in section XV.B.7.a., we are seeking comment on 
priorities for quality measurement in outpatient settings due to 
changes to the IPO procedure list (82 FR 59385 and 84 FR 61355) and the 
ASC covered procedures list (CPL) (84 FR 61388 and 85 FR 86146) 
announced in the CY 2021 OPPS/ASC final rule with comment period.
    We are also requesting comment on the potential future adoption of 
a respecified version of a patient-reported outcome-based performance 
measure

[[Page 42252]]

(PRO-PM) for two such procedures--elective primary total hip 
arthroplasty (THA) and total knee arthroplasty (TKA), which were 
removed from the IPO list effective with CY 2020 and CY 2018, 
respectively. We recently solicited public comment on the potential 
future inclusion of a hospital-level Risk-Standardized Patient-Reported 
Outcomes Measure Following Elective Primary Total Hip and/or Total Knee 
Arthroplasty (Hospital-level THA/TKA PRO-PM (NQF #3559)) in the FY 2022 
IPPS/LTCH PPS proposed rule for the inpatient hospital setting (86 FR 
25589). This measure reports the hospital-level risk-standardized 
improvement rate (RSIR) in patient-reported outcomes (PROs) following 
elective primary THA/TKA for Medicare FFS beneficiaries aged 65 years 
and older. Substantial clinical improvement is measured by achieving a 
pre-defined improvement in score on one of the two validated joint-
specific PRO instruments measuring hip or knee pain and functioning: 
(1) The Hip dysfunction and Osteoarthritis Outcome Score for Joint 
Replacement (HOOS, JR) for completion by THA recipients; and (2) the 
Knee injury and Osteoarthritis Outcome Score for Joint Replacement 
(KOOS, JR) for completion by TKA recipients. Improvement is measured 
from the preoperative assessment (data collected 90 to 0 days before 
surgery) to the postoperative assessment (data collected 300 to 425 
days following surgery). Improvement scores are risk adjusted to 
account for differences in patient case mix. Potential non-response 
bias in measure scores due to the voluntary nature of PROs is 
incorporated in the measure calculation with stabilized inverse 
probability weighting based on likelihood of response.
    Currently, the volume of THA and TKA procedures performed is lower 
among HOPDs than in the inpatient setting. Given the relatively recent 
removal of TKA and THA from the IPO list, we expect that the volume of 
THA and TKA procedures will continue to increase in HOPDs, and that 
significant numbers of Medicare beneficiaries 65 and older will 
potentially undergo these procedures in the outpatient setting in 
future years.
    We recognize that potential future adoption and implementation of a 
respecified version of the THA/TKA PRO-PM in the Hospital OQR Program 
would require sufficient numbers of procedures for each measured HOPD 
to ensure a reliable measure score. Additionally, implementing a THA/
TKA PRO-PM would require providers to successfully collect pre- and 
post-operative PRO data for each procedure. Specifically, the inpatient 
THA/TKA PRO-PM discussed in the FY 2022 IPPS/LTCH PPS proposed rule 
proposes to require a minimum of 25 cases with completed pre- and post-
operative PRO data per hospital to ensure a reliable measure score. For 
more details on the inpatient THA/TKA PRO-PM, we refer readers to the 
FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25589) and the PROs 
Following Elective Primary Total Hip and/or Total Knee Arthroplasty: 
Hospital-Level Performance Measure -- Measure Methodology Report, 
available on the CMS website at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.
    We will continue to monitor the number of THA and TKA procedures in 
the outpatient setting and when we believe there is a sufficient number 
of such procedures performed in these settings to reliably measure a 
meaningful number of facilities, we may consider expanding the PRO-PM 
to these settings. We also note that, as finalized in the CY 2017 OPPS/
ASC final rule with comment period (81 FR 79764 through 79771), the 
Hospital OQR Program currently includes a Hospital Visits after 
Hospital Outpatient Surgery (OP-36) measure using claims data, which 
provides facilities with important information on patient outcomes for 
Medicare FFS beneficiaries following surgery at HOPDs and is publicly 
reported on CMS' Care Compare website (https://www.medicare.gov/care-compare/). The measure calculates a facility-specific risk-standardized 
hospital visit ratio within 7 days of hospital outpatient surgery, and 
has as outcomes of interest unplanned hospital admissions, ED visits, 
and observation stays thereby providing valuable quality information as 
these procedures are increasingly conducted as outpatient surgeries.
    As described in our Meaningful Measures 2.0 Framework, we aim to 
promote better collection and integration of patients' voices by 
developing PRO measures as an additional tool for measuring and 
improving quality. Given the unique challenges and opportunities for 
PRO-PMs for THA and TKA procedures in the outpatient setting, we invite 
public comment on the potential future adoption of a respecified 
version of PRO measures for elective THA/TKA PRO-PM for the Hospital 
OQR Program. Specifically, we invite public comment on the following:
     Input on the mechanism of PRO data collection and 
submission, including anticipated barriers and solutions to data 
collection and submission.
     Usefulness of having an aligned set of PRO-PMs across 
settings where elective THA/TKA are performed, that is, hospital 
inpatient setting, hospital outpatient departments, and ASCs for 
patients, providers, and other stakeholders. Specifically, usefulness 
and considerations for a hospital that performs both inpatient and 
outpatient elective THA/TKAs.
     Considerations unique to THA/TKAs performed in the 
hospital outpatient setting such as the volume of procedures performed 
or the measure cohort, outcome, or risk adjustment approach.
c. Request for Comment on Potential Future Efforts To Address Health 
Equity in the Hospital OQR Program
(1) Introduction and Expansion of the CMS Disparity Methods to Hospital 
OQR Program Setting
    Significant and persistent inequities in health care outcomes exist 
in the U.S.\232\ Belonging to a racial or ethnic minority group; living 
with a disability; being a member of the lesbian, gay, bisexual, 
transgender, and queer (LGBTQ+) community; living in a rural area; and 
being near or below the poverty level, are often associated with worse 
health outcomes.233 234 235 236 237 238 239 240 Such 
disparities in health outcomes are the

[[Page 42253]]

result of number of factors, including social, economic, and 
environmental factors, but importantly for CMS programs, although not 
the sole determinant, negative experiences, poor access, and provision 
of lower quality health care can contribute to health inequities. For 
instance, numerous studies have shown that among Medicare 
beneficiaries, racial and ethnic minority individuals often receive 
lower quality of care, report lower experiences of care, and experience 
more frequent hospital readmissions and procedural 
complications.241 242 243 244 245 246 Readmission rates for 
common conditions in the Hospital Readmissions Reduction Program (HRRP) 
are higher for Black Medicare beneficiaries and higher for Hispanic 
Medicare beneficiaries with congestive heart failure and acute 
myocardial infarction.247 248 249 250 251 Studies have also 
shown that African Americans are significantly more likely than White 
Americans to die prematurely from heart disease and stroke.\252\ The 
COVID-19 pandemic has further highlighted many of these longstanding 
health inequities with higher rates of infection, hospitalization, and 
mortality among Black, Latino, and Indigenous and Native American 
persons relative to White persons.253 254 As noted by the 
CDC, ``long-standing systemic health and social inequities have put 
many people from racial and ethnic minority groups at increased risk of 
getting sick and dying from COVID-19.'' \255\ One important strategy 
for addressing these important inequities is by improving data 
collection to allow for better measurement and reporting on equity 
across our programs and policies.
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    \232\ United States Department of Health and Human Services. 
``Healthy People 2020: Disparities. 2014.'' Available at: https://www.healthypeople.gov/2020/about/foundation-health-measures/Disparities.
    \233\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \234\ Lindenauer PK, Lagu T, Rothberg MB, et al. Income 
Inequality and 30 Day Outcomes After Acute Myocardial Infarction, 
Heart Failure, and Pneumonia: Retrospective Cohort Study. British 
Medical Journal. 2013;346.
    \235\ Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity 
of Care in U.S. Hospitals. New England Journal of Medicine. 
2014;371(24):2298-2308.
    \236\ Polyakova, M., et al. Racial Disparities In Excess All-
Cause Mortality During The Early COVID-19 Pandemic Varied 
Substantially Across States. Health Affairs. 2021; 40(2): 307-316.
    \237\ Rural Health Research Gateway. Rural Communities: Age, 
Income, and Health Status. Rural Health Research Recap. November 
2018. Available at: https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
    \238\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
    \239\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
    \240\ Poteat TC, Reisner SL, Miller M, Wirtz AL. COVID-19 
Vulnerability of Transgender Women With and Without HIV Infection in 
the Eastern and Southern U.S. Preprint. medRxiv. 
2020;2020.07.21.20159327. Published 2020 Jul 24. doi:10.1101/
2020.07.21.20159327.
    \241\ Martino, SC, Elliott, MN, Dembosky, JW, Hambarsoomian, K, 
Burkhart, Q, Klein, DJ, Gildner, J, and Haviland, AM. Racial, 
Ethnic, and Gender Disparities in Health Care in Medicare Advantage. 
Baltimore, MD: CMS Office of Minority Health. 2020.
    \242\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \243\ Singh JA, Lu X, Rosenthal GE, Ibrahim S, Cram P. Racial 
disparities in knee and hip total joint arthroplasty: An 18-year 
analysis of national Medicare data. Ann Rheum Dis. 2014 
Dec;73(12):2107-15.
    \244\ Rivera-Hernandez M, Rahman M, Mor V, Trivedi AN. Racial 
Disparities in Readmission Rates among Patients Discharged to 
Skilled Nursing Facilities. J Am Geriatr Soc. 2019 Aug;67(8):1672-
1679.
    \245\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \246\ Tsai TC, Orav EJ, Joynt KE. Disparities in surgical 30-day 
readmission rates for Medicare beneficiaries by race and site of 
care. Ann Surg. Jun 2014;259(6):1086-1090.
    \247\ Rodriguez F, Joynt KE, Lopez L, Saldana F, Jha AK. 
Readmission rates for Hispanic Medicare beneficiaries with heart 
failure and acute myocardial infarction. Am Heart J. Aug 
2011;162(2):254-261 e253.
    \248\ Centers for Medicare and Medicaid Services. Medicare 
Hospital Quality Chartbook: Performance Report on Outcome Measures; 
2014.
    \249\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \250\ Prieto-Centurion V, Gussin HA, Rolle AJ, Krishnan JA. 
Chronic obstructive pulmonary disease readmissions at minority-
serving institutions. Ann Am Thorac Soc. Dec 2013;10(6):680-684.
    \251\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \252\ HHS. Heart disease and African Americans. (March 29, 
2021). https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19.
    \253\ https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
    \254\ Ochieng N, Cubanski J, Neuman T, Artiga S, and Damico A. 
Racial and Ethnic Health Inequities and Medicare. Kaiser Family 
Foundation. February 2021. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
    \255\ https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
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    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 inequities.\256\ For the purposes of this proposed rule, we are 
using a definition of equity established in Executive Order 13985, 
issued on January 25, 2021, as ``the consistent and systematic fair, 
just, and impartial treatment of all individuals, including individuals 
who belong to underserved communities that have been denied such 
treatment, such as Black, Latino, and Indigenous and Native American 
persons, Asian Americans and Pacific Islanders and other persons of 
color; members of religious minorities; LGBTQ+ persons; persons with 
disabilities; persons who live in rural areas; and persons otherwise 
adversely affected by persistent poverty or inequality.'' \257\ We note 
that this definition was recently established and provides a useful, 
common definition for equity across different areas of government, 
although numerous other definitions of equity exist.
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    \256\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \257\ https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
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    Our ongoing commitment to closing the equity gap in CMS quality 
programs is demonstrated by a portfolio of programs aimed at making 
information on the quality of health care providers and services, 
including disparities, more transparent to consumers and providers. The 
CMS Equity Plan for Improving Quality in Medicare outlines a path to 
equity which aims to support Quality Improvement Network Quality 
Improvement Organizations (QIN-QIOs); Federal, state, local, and tribal 
organizations; providers; researchers; policymakers; beneficiaries and 
their families; and other stakeholders in activities to achieve health 
equity.\258\
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    \258\ Centers for Medicare & Medicaid Services Office of 
Minority Health. The CMS Equity Plan for Improving Quality in 
Medicare. 2015-2021. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMS_EquityPlanforMedicare_090615.pdf.
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    We refer readers to the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 
25070) which summarizes our existing initiatives aimed at closing the 
equity gap in outcomes for Medicare beneficiaries, including the CMS 
Disparity Methods. The methods were finalized in the FY 2018 IPPS/LTCH 
PPS final rule (82 FR 38405 through 38407) and the FY 2020 IPPS/LTCH 
PPS final rule (84 FR 42496 through 42500), and results are currently 
reported confidentially across six quality measures in the HRRP 
stratified by dual eligibility status. As described in the FY 2022 
IPPS/LTCH PPS proposed rule (86 FR 25070), we are considering further 
expanding the confidential reporting to include measurement of racial 
and ethnic disparities for one measure in the Hospital IQR Program, the 
Hospital-Wide All-Cause Unplanned Readmission Measure (NQF #1789).
    We have developed two complementary disparity methods to report 
stratified measure results for outcome measures. 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 the magnitude of disparity across 
hospitals at a given point in time, so hospitals could assess how well 
they are closing disparity gaps compared to other hospitals. The second 
methodological approach (the Across-Hospital Disparity Method) is 
complementary to the first method and assesses hospitals' outcome rates 
for patients with a given risk factor, across facilities, allowing for 
a comparison among hospitals on their performance caring for their 
patients with social risk

[[Page 42254]]

factors. These methods were first confidentially reported for the 
inpatient setting in 2019 for the Pneumonia Readmission (NQF #0506) and 
Pneumonia Mortality (NQF #0468) measures, stratified dual eligibility 
for Medicare and Medicaid, and confidential reporting for hospitals has 
since expanded to include additional measures. For additional 
information on the two disparity methods, we refer readers to the FY 
2018 IPPS/LTCH PPS final rule (82 FR 38405 through 38407) and the 2020 
Disparity Methods Updates and Specifications Report.\259\ As discussed 
in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41599) and the FY 2022 
IPPS/LTCH PPS proposed rule (86 FR 25070), the two disparity methods do 
not place any additional collection or reporting burden on hospitals 
because social risk factor data are readily available in claims data.
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    \259\ https://qualitynet.cms.gov/inpatient/measures/disparity-methods/methodology.
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    In this proposed rule, we are seeking comment on expanding our 
efforts to provide results of the disparity methods to promote health 
equity and improve healthcare quality. Specifically, we are seeking 
comment on the idea of stratifying the performance results in the 
hospital outpatient setting. We have identified six priority measures 
included in the Hospital OQR Program as candidate measures for 
disparities reporting stratified by dual eligibility:
     MRI Lumbar Spine for Low Back Pain (OP-8);
     Abdomen CT--Use of Contract Material (OP-10);
     Cardiac Imaging for Preoperative Risk Assessment for Non-
Cardiac Low Risk Surgery (OP-13);
     Facility 7-Day Risk-Standardized Hospital Visit Rate after 
Outpatient Colonoscopy (OP-32);
     Admissions and ED Visits for Patients Receiving Outpatient 
Chemotherapy (OP-35); and
     Hospital Visits after Hospital Outpatient Surgery (OP-36).
    To identify these measures, we considered evidence of existing 
disparities, procedure volume, and statistical reliability. For more 
information about these measures, we refer readers to the Hospital 
Outpatient Quality Reporting Specifications Manual available on the 
QualityNet website.\260\ We are seeking public comment on potential 
future confidential reporting of the six aforementioned measures, as 
well as other potential measures described in section XV.B.4., 
stratified by dual eligibility status, if technically feasible, 
adequately representative, and statistically reliable.
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    \260\ https://qualitynet.cms.gov/outpatient/specifications-manuals.
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(2) Additional Social Risk Factors
    We are committed to advancing health equity by improving data 
collection to better measure and analyze disparities across programs 
and policies.\261\ As we described earlier, we have been considering, 
among other things, expanding our efforts to stratify data by 
additional social risk factors and demographic variables, optimizing 
the ease-of-use of the results, enhancing public transparency of equity 
results, and building towards provider accountability for health 
equity. Following potential confidential reporting using dual 
eligibility as an indicator of social risk, we are exploring the 
possibility of further expanding stratified reporting to include race 
and ethnicity.
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    \261\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
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    We refer readers to the ``Closing the Health Equity Gap in CMS 
Hospital Quality Programs'' section of the FY 2022 IPPS/LTCH PPS 
proposed rule which summarizes the existing challenges in accurately 
determining race and ethnicity in our administrative data, and the need 
for using advanced statistical methods for enhancing the accuracy of 
race and ethnicity disparity estimates (86 FR 25554).
    As we stated in the ``Closing the Health Equity Gap in CMS Hospital 
Quality Programs'' section of the FY 2022 IPPS/LTCH PPS proposed rule 
(86 FR 25554), because development of sustainable and consistent 
programs to collect demographic information related to health 
disparities, such as race and ethnicity, can be considerable 
undertakings, we recognize that another method to identify more 
accurate race and ethnicity disparities is needed in the short term. In 
working with our contractors, two algorithms have been developed to 
indirectly estimate the race and ethnicity of Medicare beneficiaries 
(as described further in the next section). We believe that using 
indirect estimation can help to overcome some of the current 
limitations of demographic information and enable timelier reporting of 
equity results until longer term collaborations to improve demographic 
data quality across the health care sector materialize. The use of 
indirectly estimated race and ethnicity for conducting stratified 
reporting does not place any additional collection or reporting burdens 
on facilities as these data are derived using existing administrative 
and census-linked data.
    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. Indirectly estimated data are most commonly used at the 
population level (such as the hospital or health plan-level) where 
aggregated results form a more accurate description of the population 
than existing, imperfect data sets. For missing race and ethnicity 
information, these methods use a combination of other data sources 
which estimate self-identified race and ethnicity, such as language 
preference, information about race and ethnicity in our administrative 
records, first and last names matched to validated lists of names 
correlated to specific national origin groups, and the racial and 
ethnic composition of the surrounding neighborhood. Indirect estimation 
has been used in other settings to support population-based equity 
measurement when self-identified data are not available.\262\
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    \262\ Institute of Medicine. 2009. Race, Ethnicity, and Language 
Data: Standardization for Health Care Quality Improvement. 
Washington, DC: The National Academies Press. Available at: https://www.ahrq.gov/sites/default/files/publications/files/iomracereport.pdf.
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    As described previously, we have previously supported the 
development of two such methods of indirect estimation of race and 
ethnicity of Medicare beneficiaries. One indirect estimation approach 
developed by our contractor uses Medicare administrative data, first 
name and surname matching, derived from the U.S. Census and other 
sources, with beneficiary language preference, state of residence, and 
the source of the race and ethnicity code in Medicare administrative 
data to reclassify some beneficiaries as Hispanic or Asian/Pacific 
Islander (API).\263\ In recent years, we have also worked with another 
contractor to develop a new approach, the Medicare Bayesian Improved 
Surname Geocoding (MBISG), which combines Medicare administrative data, 
first and surname matching, geocoded residential address linked to the 
2010 U.S. Census data,

[[Page 42255]]

applying both Bayesian updating and multinomial logistic regression to 
estimate the probability of belonging to each of the six racial/ethnic 
groups.\264\
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    \263\ Bonito AJ, Bann C, Eicheldinger C, Carpenter L. Creation 
of New Race-Ethnicity Codes and Socioeconomic Status (SES) 
Indicators for Medicare Beneficiaries. Final Report, Sub-Task 2. 
(Prepared by RTI International for the Centers for Medicare and 
Medicaid Services through an interagency agreement with the Agency 
for Healthcare Research and Policy, under Contract No. 500-00-0024, 
Task No. 21) AHRQ Publication No. 08-0029-EF. Rockville, MD, Agency 
for Healthcare Research and Quality. January 2008.
    \264\ Haas, A, Elliott, MN, Dembosky, JW, et al. Imputation of 
race/ethnicity to enable measurement of HEDIS performance by race/
ethnicity. Health Serv Res. 2019; 54: 13-23. https://doi.org/10.1111/1475-6773.13099.
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    The MBISG model is currently used to conduct the national, 
contract-level, stratified reporting of Medicare Part C & D performance 
data for Medicare Advantage Plans by race and ethnicity.\265\ 
Validation testing reveals concordances between 0.88-0.95 between 
indirectly estimated and self-reported race and ethnicity among those 
who identify as White, Black, Hispanic, and API for the MBISG version 
2.0 and concordances with self-reported race and ethnicity of 0.96-0.99 
for these same groups for MBISG version 2.1.266 267 The 
algorithms under consideration are considerably less accurate for 
individuals who self-identify as American Indian/Alaskan Native or 
multiracial.\268\ Indirect estimation is a statistically reliable 
approach for calculating aggregate results for groups of individuals 
(such as the facility-level) and is not intended, nor being considered, 
as an approach for predicting the race and ethnicity of individuals.
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    \265\ https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
    \266\ The Office of Minority Health (2020). Racial, Ethnic, and 
Gender Disparities in Health Care in Medicare Advantage, The Centers 
for Medicare and Medicaid Services, (pg vii). https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
    \267\ https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
    \268\ Haas, A, Elliott, MN, Dembosky, JW, et al. Imputation of 
race/ethnicity to enable measurement of HEDIS performance by race/
ethnicity. Health Serv Res. 2019; 54: 13- 23. https://doi.org/10.1111/1475-6773.13099.
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    Despite the high degree of accuracy of the indirect estimation 
algorithms under consideration there remains the small risk of 
introducing measurement bias. For example, if the indirect estimation 
is not as accurate in correctly estimating race and ethnicity in 
certain geographies or populations it could lead to some bias in the 
method results. Such bias might result in slight overestimation or 
underestimation of the quality of care received by a given group. We 
believe this risk of bias is considerably less than would be expected 
if stratified reporting were conducted using the race and ethnicity 
currently contained in our administrative data. Indirect estimation of 
race and ethnicity is envisioned as an intermediate step, filling the 
pressing need for more accurate demographic information for the 
purposes of exploring inequities in service delivery, while allowing 
newer approaches, as described in the next section, for improving 
demographic data collection to progress. We are interested in learning 
more about, and soliciting comments about, the potential benefits and 
challenges associated with measuring facility equity using indirect 
estimation to enhance existing administrative data quality for race and 
ethnicity until self-reported information is sufficiently available.
(a) Improving Demographic Data Collection
    Stratified facility-level reporting using indirectly estimated race 
and ethnicity would represent an important advance in our ability to 
provide accurate equity reports to facilities. However, self-reported 
race and ethnicity data remain the gold standard for classifying an 
individual according to race or ethnicity. The CMS Quality Strategy 
outlines our commitment to strengthening infrastructure and data 
systems by ensuring that standardized demographic information is 
collected to identify disparities in health care delivery 
outcomes.\269\ Collection and sharing of a standardized set of social, 
psychological, and behavioral data by hospitals, including race and 
ethnicity, using electronic data definitions which permit nationwide, 
interoperable health information exchange, can significantly enhance 
the accuracy and robustness of our equity reporting.\270\ This could 
potentially include expansion of stratified reporting to additional 
social risk factors, such as language preference and disability status, 
where accuracy of administrative data is currently limited. We are 
mindful that additional resources, including data collection and staff 
training may be necessary to ensure that conditions are created whereby 
all patients are comfortable answering demographic questions, and that 
individual preferences for non-response are maintained.
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    \269\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \270\ The Office of the National Coordinator for Health 
Information Technology. United State Core Data for Interoperability 
Draft Version 2. 2021. Available at: https://www.healthit.gov/isa/sites/isa/files/2021-01/Draft-USCDI-Version-2-January-2021-Final.pdf.
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    We note that facilities participating in the Medicare Promoting 
Interoperability Program must use CEHRT that has been certified to the 
2015 Edition of health IT certification criteria as defined at 45 CFR 
170.102. As noted earlier, the certification criterion for Demographics 
under the 2015 Edition (45 CFR 170.315(a)(5)) supports collection of 
data using both the OMB standards for collecting data on race and 
ethnicity as well as the more granular ``Race & Ethnicity--CDC'' 
standard. In the 2020 ONC 21st Century Cures Act final rule, ONC also 
adopted a new framework for the core data set which certified health IT 
products must exchange, called the USCDI (85 FR 25669). The USCDI 
incorporates the demographic data and associated code sets finalized 
for the 2015 Edition certification criteria.
    As noted previously, ONC also finalized a certification criterion 
in the 2015 Edition which supports a certified health IT product's 
ability to collect social, psychological, and behavioral data (45 FR 
170.315(a)(15)). However, this functionality is not included as part of 
the CEHRT required by the Medicare Promoting Interoperability Program. 
While the technical functionality exists to achieve the gold standard 
of data collection, we understand challenges and barriers exist in 
using the technologies with these capabilities.
    We are interested in learning about and soliciting comments on 
current data collection practices by facilities to capture demographic 
data elements (such as race, ethnicity, sex, sexual orientation and 
gender identity (SOGI), primary language, and disability status). 
Further, we are interested in potential challenges facing facility 
collection, on the day of service, of a minimum set of demographic data 
elements in alignment with national data collection standards (such as 
the standards finalized by the Affordable Care Act \271\) and standards 
for interoperable exchange (such as the USCDI incorporated into 
certified health IT products as part of the 2015 Edition of health IT 
certification criteria \272\). Advancing data interoperability through 
collection of a minimum set of demographic data collection, and 
incorporation into quality measure specifications, has the potential 
for improving the robustness of the disparity method results, 
potentially permitting reporting using more accurate, self-reported 
information, such as race and ethnicity, and expanding reporting to 
additional dimensions of equity, including stratified reporting by 
disability status.
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    \271\ https://minorityhealth.hhs.gov/assets/pdf/checked/1/Fact_Sheet_Section_4302.pdf.
    \272\ https://www.healthit.gov/sites/default/files/2020-08/2015EdCures_Update_CCG_USCDI.pdf.

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[[Page 42256]]

(b) Solicitation of Public Comments
    We are currently seeking comment on the possibility of expanding 
our current disparities methods to include reporting by race and 
ethnicity using indirect estimation. We are also seeking comment on the 
possibility of facility collection of standardized demographic 
information for the purposes of potential future quality reporting and 
measure stratification to permit more robust equity measurement. 
Additionally, we are seeking comment on the design of a Facility Equity 
Score for presenting combined results across multiple social risk 
factors and measures, including race/ethnicity and disability. Any data 
pertaining to these areas that are recommended for collection for 
measure reporting for a CMS program and potential public disclosure on 
Care Compare or successor website would be addressed through a separate 
and future notice-and-comment rulemaking. We plan to continue working 
with the Office of the Assistant Secretary for Planning and Evaluation, 
facilities, the public, and other key stakeholders on this important 
issue to identify policy solutions that achieve the goals of attaining 
health equity for all beneficiaries and minimizing unintended 
consequences.
    Specifically, we are inviting public comment on the following:
     The potential future application to the Hospital OQR 
Program measures of the two disparity methods currently used to 
confidentially report stratified measures in HRRP.
     The possibility of reporting stratified results 
confidentially in Facility-Specific Reports (FSRs) using dual 
eligibility as a proxy for social risk.
     The possibility of reporting stratified results using dual 
eligibility as the proxy for social risk publicly on Care Compare in 
future years.
     The potential future application of an algorithm to 
indirectly estimate race and ethnicity to permit stratification of 
measures (in addition to dual-eligibility) for facility-level disparity 
reporting until more accurate forms of self-identified demographic 
information are available.
     The possibility of facility collection, on the day of 
service, of a minimum set of demographic data using standardized and 
interoperable electronic health record standards.
8. Maintenance of Technical Specifications for Quality Measures
    CMS maintains technical specifications for previously adopted 
Hospital OQR Program measures. These specifications are updated as we 
modify the Hospital OQR Program measure set. The manuals that contain 
specifications for the previously adopted measures can be found on the 
QualityNet website at: https://qualitynet.cms.gov/outpatient/specifications-manuals. We refer readers to the CY 2019 OPPS/ASC final 
rule with comment period (83 FR 59104 through 59105), where we changed 
the frequency of the Hospital OQR Program Specifications Manual release 
beginning with CY 2019 and subsequent years, such that we will release 
a manual once every 12 months and release addenda as necessary. We are 
not proposing any changes to these policies in this proposed rule.
    In section XV.B.4. of this proposed rule, we are proposing the 
adoption of eCQMs into the Hospital OQR Program measure set beginning 
with the CY 2023 reporting period. Therefore, we are also proposing the 
manner to update the technical specifications for eCQMs. We propose 
that the technical specifications for eCQMs used in the Hospital OQR 
Program would be contained in the CMS Annual Update for the Hospital 
Quality Reporting Programs (Annual Update). The Annual Update and 
implementation guidance documents are available on the eCQI Resource 
Center website at: https://ecqi.healthit.gov/. For eCQMs, we would 
generally update the measure specifications on an annual basis through 
the Annual Update which includes code updates, logic corrections, 
alignment with current clinical guidelines, and additional guidance for 
hospitals and EHR vendors to use in order to collect and submit data on 
eCQMs from hospital EHRs.
    Hospitals would be required to register and submit quality data 
through the Hospital Quality Reporting (HQR) System (formerly referred 
to as the QualityNet Secure Portal). The HQR System is safeguarded in 
accordance with the HIPAA Privacy and Security Rules to protect 
submitted patient information. See 45 CFR parts 160 and 164, subparts 
A, C, and E, for more information. We invite public comment on our 
proposal.
    We also refer readers to section XIV. 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).
9. Public Display of Quality Measures
a. Background
    We refer readers to the CY 2009, CY 2014, and CY 2017 OPPS/ASC 
final rules with comment period (73 FR 68777 through 68779, 78 FR 
75092, and 81 FR 79791, respectively) for our previously finalized 
policies regarding public display of quality measures. We are not 
proposing any changes to these policies in this proposed rule.
b. Overall Hospital Quality Star Rating
    In the CY 2021 OPPS/ASC final rule (85 FR 86182), we finalized a 
methodology to calculate the Overall Hospital Quality Star Rating 
(Overall Star Rating). We refer readers to section XVI. (``Overall 
Hospital Quality Star Rating Methodology for Public Release in CY 2021 
and Subsequent Years'') of the CY 2021 OPPS/ASC final rule with comment 
period for details. We are not proposing any changes to this policy in 
this proposed rule.

C. Administrative Requirements

1. QualityNet Account and Security Administrator/Security Official
a. Background
    The previously finalized QualityNet security administrator 
requirements, including setting up a QualityNet account and the 
associated timelines, are described in the CY 2014 OPPS/ASC final rule 
with comment period (78 FR 75108 through 75109). We codified these 
procedural requirements at Sec.  419.46(b) in that final rule with 
comment period. In the CY 2021 OPPS/ASC final rule with comment period 
(85 FR 86182), we finalized to use the term ``security official'' 
instead of ``security administrator'' to denote the exercise of 
authority invested in the role. The term ``security official'' would 
refer to ``the individual(s)'' who have responsibilities for security 
and account management requirements for a hospital's QualityNet 
account. This update in terminology did not change the individual's 
responsibilities or add burden. We are not proposing any changes to 
this policy.
b. Active Security Official Account and Maintenance Requirements for 
Data Submission
    The previously finalized QualityNet security administrator (now 
referred to as a security official) requirements, including those for 
setting up a QualityNet account and the associated timelines, are 
described in the CY 2014 OPPS/ASC final rule with comment period (78 FR 
75108 through 75109).

[[Page 42257]]

    In the CY 2011 OPPS/ASC final rule with comment period (75 FR 
72099) and the CY 2012 OPPS/ASC final rule with comment period (76 FR 
74479), we indicated that hospitals would be required to maintain a 
current QualityNet security administrator (now referred to as a 
security official) for as long as the hospital participates in the 
Program. In this proposed rule, we are clarifying that failing to 
maintain an active QualityNet security official once a hospital has 
successfully registered to participate in the Hospital OQR Program will 
not result in a finding that the hospital did not successfully 
participate in the Hospital OQR Program. Again, we refer readers to 
requirements at Sec.  419.46(b).
2. Requirements Regarding Participation Status
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75108 through 75109), the CY 2016 OPPS/ASC final rule 
with comment period (80 FR 70519), and the CY 2019 OPPS/ASC final rule 
with comment period (83 FR 59103 through 59104) for requirements for 
participation and withdrawal from the Hospital OQR Program. We codified 
these requirements at Sec.  419.46(b) and (c). We are not proposing any 
changes to these policies in this proposed rule.

D. Form, Manner, and Timing of Data Submitted for the Hospital OQR 
Program

1. Hospital OQR Program Annual Submission Deadlines
    We refer readers to the CYs 2014, 2016, and 2018 OPPS/ASC final 
rules with comment period (78 FR 75110 through 75111; 80 FR 70519 
through 70520; and 82 FR 59439, respectively) where we finalized our 
policies for clinical data submission deadlines. We codified these 
submission requirements at Sec.  419.46(d). The clinical data 
submission deadlines for the CY 2024 payment determination are 
illustrated in Table 50.
[GRAPHIC] [TIFF OMITTED] TP04AU21.099

    We are not proposing any changes to these policies in this proposed 
rule.
2. Requirements for Chart-Abstracted Measures Where Patient-Level Data 
Are Submitted Directly to CMS for the CY 2024 Payment Determination and 
Subsequent Years
    We refer readers to the CY 2013 OPPS/ASC final rule with comment 
period (77 FR 68481 through 68484) for a discussion of the form, 
manner, and timing for data submission requirements of chart-abstracted 
measures for the CY 2014 payment determination and subsequent years. We 
are not proposing any changes to these policies in this proposed rule.
    The following previously finalized Hospital OQR Program chart-
abstracted measures will require patient-level data to be submitted for 
the CY 2023 payment determination and subsequent years:
     OP-2: Median Time from ED Arrival to ED Departure for 
Discharged ED Patients (NQF #0496); \273\
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    \273\ In this year's proposed rule we are proposing to remove 
OP-2 beginning with the CY 2023 reporting period/CY 2025 payment 
determination.
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     OP-3: Median Time from ED Arrival to ED Departure for 
Discharged ED Patients (NQF #0496); \274\
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    \274\ In this year's proposed rule we are proposing to remove 
OP-3 beginning with the CY 2023 reporting period/CY 2025 payment 
determination.
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     OP-18: Median Time from ED Arrival to ED Departure for 
Discharged ED Patients (NQF #0496); and
     OP-23: Head CT Scan Results for Acute Ischemic Stroke or 
Hemorrhagic Stroke Patients who Received Head CT Scan Interpretation 
Within 45 Minutes of ED Arrival (NQF #0661).
3. Claims-Based Measure Data Requirements for the CY 2024 Payment 
Determination and Subsequent Years
    Currently, in addition to the proposed Breast Screening Recall 
Rates measure, the following previously finalized Hospital OQR Program 
claims-based measures are required for the CY 2023 payment 
determination and subsequent years:
     OP-8: MRI Lumbar Spine for Low Back Pain (NQF #0514);
     OP-10: Abdomen CT--Use of Contrast Material;
     OP-13: Cardiac Imaging for Preoperative Risk Assessment 
for Non-Cardiac, Low Risk Surgery (NQF #0669);
     OP-32: Facility 7-Day Risk-Standardized Hospital Visit 
Rate after Outpatient Colonoscopy (NQF #2539);
     OP-35: Admissions and Emergency Department Visits for 
Patients Receiving Outpatient Chemotherapy;
     OP-36: Hospital Visits after Hospital Outpatient Surgery 
(NQF #2687); and
     Breast Screening Recall Rates.\275\
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    \275\ We note that, if finalized, an OP/measure number will be 
assigned for this measure in the final rule.
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    We refer readers to the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 59106 through 59107), where we established a 3-year 
reporting period for OP-32: Facility 7-Day Risk-Standardized Hospital 
Visit Rate after Outpatient Colonoscopy beginning with the CY 2020 
payment determination and for subsequent years. In that final rule with 
comment period (83 FR 59136 through 59138), we established a similar 
policy under the ASCQR Program. We are not proposing any changes to 
these policies in this proposed rule. We refer readers to section 
XV.B.4.b. of this proposed rule where we are also proposing a 3-year 
reporting period for the Breast Screening Recall Rates measure.

[[Page 42258]]

4. Data Submission Requirements for the OP-37a-e: Outpatient and 
Ambulatory Surgery Consumer Assessment of Healthcare Providers and 
Systems (OAS CAHPS) Survey-Based Measures for the CY 2024 Reporting 
Period/CY 2026 Payment Determination and Subsequent Years
a. Background
    We refer readers to the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79792 through 79794) for a discussion of the previously 
finalized requirements related to survey administration and vendors for 
the OAS CAHPS Survey-based measures. In addition, we refer readers to 
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59432 
through 59433), where we finalized a policy to delay implementation of 
the OP-37a-e OAS CAHPS Survey-based measures beginning with the CY 2020 
payment determination (2018 reporting period) until further action in 
future rulemaking.
b. Proposed Form, Manner, and Timing for OP-37a-e: Outpatient and 
Ambulatory Surgery Consumer Assessment of Healthcare Providers and 
Systems (OAS CAHPS) Survey-Based Measures Beginning With the CY 2024 
Reporting Period/CY 2026 Payment Determination
    As discussed in section XV.B.5.a. of this proposed rule, we are 
proposing to begin data collection of five survey-based measures 
derived from the OAS CAHPS Survey beginning with voluntary data 
collection and reporting for the CY 2023 reporting period/CY 2025 
payment determination,\276\ followed by mandatory reporting beginning 
with the CY 2024 reporting period/CY 2026 payment determination and for 
subsequent years. The OAS CAHPS survey contains three OAS CAHPS 
composite survey-based measures and two global survey-based measures. 
In this section, we are proposing requirements related to survey 
administration, vendors, and oversight activities.
---------------------------------------------------------------------------

    \276\ As stated in section XV.B.5.a., we note that National OAS 
CAHPS voluntary reporting program is independent of the Hospital OQR 
Program, but the submission process will otherwise remain unchanged. 
This proposal is intended to clarify that voluntary reporting of OAS 
CAHPS would begin as part of the Hospital OQR Program in the CY 2023 
reporting period until mandatory reporting would begin in the CY 
2024 reporting period/CY 2026 payment determination and for 
subsequent years, if both proposals are finalized.
---------------------------------------------------------------------------

    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79792 
through 79794), we previously discussed the form, manner, and timing of 
this survey. In this proposed rule, we are reaffirming our approach to 
the form, manner, and timing which OAS CAHPS information will be 
submitted and we are now proposing to add two additional data 
collection modes (web with mail follow-up of non-respondents and web 
with telephone follow-up of non-respondents),\277\ beginning with 
voluntary data collection for the CY 2023 reporting period/CY 2025 
payment determination and continuing for mandatory reporting for 
subsequent years. For more information about the modes of 
administration, we refer readers to the OAS CAHPS website: https://oascahps.org. We reiterate our clarification from when we adopted these 
measures in the CY 2017 OPPS/ASC final rule with comment period that, 
when implemented, hospital outpatient departments that anticipate 
receiving more than 300 surveys would be required to either: (1) 
Randomly sample their eligible patient population; or (2) survey their 
entire OAS CAHPS eligible patient population (81 FR 79773). We also 
refer readers to section XVI.D.1.d. of the preamble of this proposed 
rule where we are proposing similar policies for the ASCQR Program.
---------------------------------------------------------------------------

    \277\ The two additional modes will be available as part of 
National OAS CAHPS voluntary reporting program in 2022.
---------------------------------------------------------------------------

(1) Survey Requirements
    The data collection modes as currently specified for the survey 
include three administration modes: (1) Mail-only; (2) telephone-only; 
and (3) mixed mode (mail with telephone follow-up of non-respondents). 
We refer readers to the Protocols and Guidelines Manual for the OAS 
CAHPS Survey (https://oascahps.org/Survey-Materials) for materials for 
each mode of survey administration. In the 2018 OPPS/ASC final rule 
with comment period, we expressed interest in investigating the 
feasibility of offering the OAS CAHPS Survey using a web-based format 
(82 FR 59433). As a result, we designed a mode experiment to assess the 
impact of adding web-based survey administration. This mode experiment 
tested five administration modes with patients who receive outpatient 
surgical care: (1) Mail-only; (2) telephone-only; (3) web-only; (4) web 
with mail follow-up; and (5) web with a telephone follow-up. Data 
collection was completed in the fall of 2019. Response rates by mode in 
the experiment were: 35 percent (mail-only); 19 percent (telephone-
only); 29 percent (web-only); 39 percent (web with mail follow-up); and 
35 percent (web with telephone follow-up).
    Based on these results, in addition to the three previously 
established modes, in this proposed rule we are proposing to 
incorporate two more administration methods: (1) Mixed mode web with 
mail follow-up of non-respondents, and (2) mixed mode web with 
telephone follow-up of non-respondents. This would allow a total of 
five methods of survey administration for reporting beginning with 
voluntary data collection and reporting as part of the Hospital OQR 
Program for the CY 2023 reporting period/CY 2025 payment determination 
\278\ and mandatory reporting for the CY 2024 reporting period/CY 2026 
payment determination--the first year the survey would be required if 
our proposal in section XV.B.5.a. is finalized as proposed. We are not 
proposing a purely web-based format at this time because the use of a 
web-based mode is included in the two mixed modes options being 
proposed and the purely web-based format would create response bias 
since not all patients have the ability to respond by web.
---------------------------------------------------------------------------

    \278\ As stated in section XV.B.5.a., we note that the two modes 
(web with mail follow-up of non-respondents; and web with telephone 
follow-up of non-respondents) will be available beginning in CY 2022 
for National OAS CAHPS voluntary reporting, and then if finalized, 
available as part of OQR Program's reporting beginning in the CY 
2023 reporting period and subsequent years.
---------------------------------------------------------------------------

    For all five proposed modes of administration as part of the 
Hospital OQR Program, we are proposing that data collection must be 
initiated no later than 21 calendar days after the month in which a 
patient has a surgery or procedure at a hospital and completed within 6 
weeks (42 days) after initial contact of eligible patient begins, 
beginning with voluntary reporting in the CY 2023 reporting period/CY 
2025 payment determination and subsequent years. Under this proposal, 
hospitals, via their CMS-approved vendors (discussed in section 
XV.D.4.b.(2) of this proposed rule.), must make multiple attempts to 
contact eligible patients unless the patient refuses or the vendor 
learns that the patient is ineligible to participate in the survey. In 
addition, we are proposing that hospitals, via their CMS-approved 
survey vendor, collect survey data for eligible patients using the 
established quarterly deadlines to report data to CMS for each data 
collection period unless the hospital has been exempted from the OAS 
CAHPS Survey requirements under the low volume exemption. We refer 
readers to the CY 2017 OPPS/ASC final rule with comment period (81 FR 
79774) where we previously established the low volume exemption, which

[[Page 42259]]

exempts hospital outpatient departments with fewer than 60 survey-
eligible patients during the ``eligibility period,'' (which is the 
calendar year before the data collection period), that submit the 
participation exemption request form, which would be made available on 
the OAS CAHPS Survey website (https://oascahps.org) on or before May 15 
of the data collection year. As finalized previously, all exemption 
requests would be reviewed and evaluated by CMS (81 FR 79774). For 
hospitals that do not have an exemption, the submission deadlines would 
be posted on the OAS CAHPS Survey website (https://oascahps.org). Late 
submissions would not be accepted.
    As discussed in more detail in this section of the proposed rule, 
compliance with the OAS CAHPS Survey protocols and guidelines, 
including this monthly data collection requirement as part of each 
quarterly data submission, would be overseen by CMS or its contractor 
who would receive approved vendors' monthly submissions, review the 
data, and analyze the results. We previously finalized (81 FR 79774) 
all data collection and submission for the OAS CAHPS Survey measures 
would be reported at the Medicare participating hospital level, as 
identified by its CCN. If data collection and reporting becomes 
mandatory beginning with the CY 2024 reporting period as proposed, 
under this proposal, all locations that offer outpatient services, of 
each eligible Medicare participating hospital, would be required to 
participate in the OAS CAHPS Survey (81 FR 79793), except for those 
that meet and receive an exception for having fewer than 60 survey-
eligible patients during the year preceding the data collection period 
(81 FR 79773). Therefore, the survey data reported using a Medicare 
participating hospital's CCN must include all eligible patients from 
all outpatient locations (whether the hospital outpatient department is 
on campus or off campus) of an eligible Medicare participating 
hospital; or if more than 300 completed surveys are anticipated, a 
hospital can choose to randomly sample their eligible patient 
population (81 FR 79784).
    In this proposed rule, we also propose that survey vendors acting 
on behalf of hospitals must submit data by the specified data 
submission deadlines, which generally would be posted on the OAS CAHPS 
Survey website located at https://oascahps.org/Data-Submission/Data-Submission-Deadlines. If a hospital's data are submitted after the data 
submission deadline, it would not fulfill the OAS CAHPS quality 
reporting requirements. Therefore, in regard to any OAS CAHPS 
reporting, we would strongly encourage hospitals to be fully apprised 
of the methods and actions of their survey vendors--especially the 
vendors' full compliance with OAS CAHPS Survey administration 
protocols--and to carefully inspect all data warehouse reports in a 
timely manner.
    We reiterate that the use of predictive or auto dialers in 
telephonic survey administration is governed by the Telephone Consumer 
Protection Act (TCPA) (47 U.S.C. 227) and subsequent regulations 
promulgated by the Federal Communications Commission (FCC) (47 CFR 
64.1200) and Federal Trade Commission. We refer readers to the FCC's 
declaratory ruling released on July 10, 2015 further clarifying the 
definition of an auto dialer, available at: https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-72A1.pdf. In the telephone-only and 
mixed mode survey administration methods involving telephone, hospitals 
and vendors must comply with the regulations and any other applicable 
regulations. To the extent that any existing CMS technical guidance 
conflicts with the TCPA or its implementing regulations regarding the 
use of predictive or auto dialers, or any other applicable law, CMS 
would expect vendors to comply with applicable law.
    We invite comments on our proposals as discussed previously.
(2) Vendor Requirements
    We are not proposing new vendor requirements, but reiterate the 
vendor requirements finalized in the CY 2017 OPPS/ASC final rule with 
comment period (81 FR 79793 through 79794) to ensure that patients 
respond to the survey in a way that reflects their actual experiences 
with outpatient care, and is not influenced by the hospital. We 
finalized that hospitals must contract with a CMS-approved OAS CAHPS 
Survey vendor to conduct or administer the survey. We believe that a 
neutral third-party should administer the survey for hospitals, and it 
is our belief that an experienced survey vendor would be best able to 
ensure reliable results. CAHPS Survey-approved vendors are also already 
used or required in the following CMS quality programs: The Hospital 
IQR Program (71 FR 68203 through 68204); the Hospital VBP Program (76 
FR 26497, 26502 through 26503, and 26510); the End Stage Renal Disease 
Quality Improvement Program (76 FR 70269 through 70270); the Home 
Health QRP (80 FR 68709 through 68710); and the Hospice QRP (80 FR 
47141 through 47207).
    Information about the list of approved survey vendors and how to 
authorize a vendor to collect data on a hospital's behalf is available 
through the OAS CAHPS Survey website at: https://oascahps.org. The web 
portal has both public and secure (restricted access) sections to 
ensure the security and privacy of selected interactions. As mentioned 
previously, requirements for survey vendors were previously finalized 
in the CY 2017 OPPS/ASC final rule with comment period (81 FR 79793 
through 79794) and codified at Sec.  419.46(h)(2). Hospitals will need 
to register on the OAS CAHPS Survey website (https://oascahps.org) in 
order to authorize the CMS-approved vendor to administer the survey and 
submit data on their behalf. Each hospital must then administer (via 
its vendor) the survey to all eligible patients (or for those 
anticipating more than 300 completed surveys, randomly sample their 
eligible patient population) treated during the data collection period 
on a monthly basis according to the guidelines in the Protocols and 
Guidelines Manual (https://oascahps.org) and report the survey data to 
CMS on a quarterly basis by the deadlines posted on the OAS CAHPS 
Survey website.
5. Data Submission Requirements for Measures Submitted via a Web-Based 
Tool for the CY 2023 Payment Determination and Subsequent Years
a. Data Submission Requirements for Measures Submitted via a CMS Web-
Based Tool
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75112 through 75115), the CY 2016 OPPS/ASC final rule 
with comment period (80 FR 70521), and the QualityNet website available 
at: https://qualitynet.cms.gov for a discussion of the requirements for 
measure data submitted via the HQR System (formerly referred to as the 
QualityNet Secure Portal) for the CY 2017 payment determination and 
subsequent years. We are not proposing any changes to these policies.
    The following previously adopted quality measures require data to 
be submitted via a CMS web-based tool for the CY 2022 reporting period/
CY 2024 payment determination and subsequent years:
     OP-22: Left Without Being Seen (NQF #0499); and
     OP-29: Endoscopy/Polyp Surveillance: Appropriate Follow-up

[[Page 42260]]

Interval for Normal Colonoscopy in Average Risk Patients (NQF #0658).
(1) Proposed Form, Manner, and Timing for Reporting OP-31: Cataracts: 
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery (NQF #1536)
    The following measure that is being proposed for modification in 
this proposed rule would require data to be submitted via a CMS web-
based tool for the CY 2023 reporting period/CY 2025 payment 
determination and subsequent years:
     OP-31: Cataracts: Improvement in Patient's Visual Function 
within 90 Days Following Cataract Surgery (NQF #1536).
    We propose that this measure would be submitted according to our 
existing policies for data submitted via the HQR System (formerly 
referred to as the QualityNet Secure Portal). As noted earlier, we are 
not proposing changes to those policies. We invite public comment on 
our proposal.
b. Data Submission Requirements for Measures Submitted via the CDC NHSN 
Website
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75097 through 75100) for a discussion of the previously 
finalized requirements for measure data submitted via the CDC NHSN 
website. While we are not proposing any changes to those policies in 
this proposed rule, we are proposing policies specific to the proposed 
COVID-19 Vaccination Coverage Among HCP measure, which would be 
submitted via the CDC NHSN website.
(1) Proposed Form, Manner, and Timing for the COVID-19 Vaccination 
Coverage Among HCP Measure Beginning With the CY 2022 Reporting Period/
CY 2024 Payment Determination and Subsequent Years
    For the COVID-19 Vaccination Coverage Among HCP measure, we are 
proposing to require reporting data on the number of HCP who have 
received the completed vaccination course of a COVID-19 vaccine by each 
individual facility's CCN.
    For the COVID-19 Vaccination Coverage Among HCP measure, we are 
proposing that facilities would report COVID-19 vaccination data to the 
NHSN for at least one week each month, beginning with the January 1, 
2022 through December 31, 2022 reporting period affecting the CY 2024 
payment determination and continuing with quarterly reporting deadlines 
for subsequent years. If facilities report more than one week of data 
in a month, the most recent week's data would be used for measure 
calculation purposes. We propose that hospitals would report the 
measure through the NHSN web-based surveillance system.\279\ 
Specifically, hospitals would use the COVID-19 vaccination data 
reporting modules in the NHSN Healthcare Personnel Safety (HPS) 
Component to report the number of HCP eligible to have worked at the 
facility that week (denominator) and the number of those HCP who have 
received COVID-19 vaccination (numerator). Specific details on data 
submission for this measure can be found in the CDC's Overview of the 
Healthcare Safety Component, available at https://www.cdc.gov/nhsn/PDFs/slides/NHSN-Overview-HPS_Aug2012.pdf. We refer readers to the CY 
2014 OPPS/ASC final rule (78 FR 75097 through 75100) for details about 
requirements for measure data submitted via the NHSN. Each quarter, the 
CDC would calculate a summary measure of COVID-19 vaccination coverage 
from the reporting periods for the quarter in four-quarter increments, 
when four quarters of data are available.
---------------------------------------------------------------------------

    \279\ Centers for Disease Control and Prevention. Surveillance 
for Weekly HCP COVID-19 Vaccination. Accessed at: https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html on February 10, 
2021.
---------------------------------------------------------------------------

    With respect to public reporting of this measure, for each CCN, a 
percentage of the HCP who received a complete course of the COVID-19 
vaccine would be calculated and publicly reported on the Care Compare 
website, so that the public would know what percentage of the HCP have 
been vaccinated in each hospital. Once four quarters are available, 
data would be refreshed on a quarterly basis with the most recent four 
quarters. This quarterly average COVID-19 vaccination coverage would be 
publicly reported. We invite public comment on our proposals.
6. Proposed eCQM Reporting and Submission Requirements
a. Background
    We believe that collection and reporting of data through health 
information technology would greatly simplify and streamline reporting 
for many CMS quality reporting programs. Through electronic reporting, 
hospitals will be able to leverage EHRs to capture, calculate, and 
electronically submit quality data to CMS for the Hospital OQR Program.
    We believe that automated electronic extraction and reporting of 
clinical quality data would significantly reduce the administrative 
burden on hospitals for the Hospital OQR Program. We believe that the 
use of CEHRT can effectively and efficiently help providers improve 
internal care delivery practices, support management of patient care 
across the continuum, and support the reporting of eCQMs. In previous 
rules, we stated our intent and assessment of the inclusion of eCQMs 
into the Hospital OQR Program, and we have sought public comment on the 
addition of such measures into the measure set. We refer readers to the 
CY 2014 OPPS/ASC final rule with comment period (78 FR 75106 through 
75107), the CY 2015 OPPS/ASC final rule with comment period (79 FR 
66956 through 66961), the CY 2016 OPPS/ASC final rule with comment 
period (80 FR 70516 through 70518), the CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79785 through 79790), and the CY 2018 OPPS/
ASC final rule with comment period (82 FR 59435 through 59438) for more 
details on previous discussion regarding future measure concepts 
related to eCQMs and electronic reporting of data for the Hospital OQR 
Program, including stakeholder support for the introduction of eCQMs 
into the Program. Measure stewards and developers have worked to 
advance eCQMs that would be reported in the outpatient setting and we 
believe the introduction of eCQMs in the Hospital OQR Program is 
timely. We also believe this is important in aligning the Hospital OQR 
Program with the Medicare Promoting Interoperability Program and the 
Hospital IQR Program.
b. Proposed eCQM Reporting and Data Submission Requirements Beginning 
With the CY 2023 Reporting Period/CY 2025 Payment Determination
    In section XV.B.4.c. of the preamble of this proposed rule, we 
discuss the proposed adoption of the STEMI eCQM. In this proposed rule, 
we are proposing a progressive increase in the number of quarters for 
which hospitals report eCQM data. Increasing the number of reported 
quarters to be reported has several benefits. Primarily, a single 
quarter of data is not enough to capture trends in performance over 
time. Evaluating multiple quarters of data would provide a more 
reliable and accurate picture of overall performance. Further, 
reporting multiple quarters of data would provide hospitals with a more 
continuous information stream to monitor their levels of performance. 
Ongoing, timely data analysis can better identify a change in 
performance that may necessitate investigation and potentially 
corrective action.
    However, we believe that starting with limited voluntary reporting 
would

[[Page 42261]]

give hospitals more time to gain experience with reporting data 
(including time to implement the eCQM and provide training to support 
eCQM reporting, if necessary). Similar to what was established for the 
Hospital IQR Program (82 FR 38355), we believe that increasing the 
number of quarters for which hospitals report eCQM data would produce 
more comprehensive and reliable quality measure data for patients and 
providers. In section XV.B.4.c. of this proposed rule, we are proposing 
to adopt the STEMI eCQM with voluntary reporting beginning with the CY 
2023 reporting period. For the CY 2023 reporting period, we propose 
that hospitals that submit STEMI eCQM data during this reporting period 
voluntarily submit any quarter(s) of data. Hospitals that chose to 
submit voluntarily must submit in compliance with the eCQM 
certification requirements proposed in sections XV.D.6.c., XV.D.6.d, 
and XV.D.6.e. of this proposed rule.
    For the CY 2024 reporting period/CY 2026 payment determination, we 
propose that hospitals report one self-selected calendar quarter of 
data for the STEMI eCQM. We note that in section XV.B.4.c. of this 
proposed rule, we are proposing that the STEMI eCQM is required 
beginning with the CY 2024 reporting period/CY 2026 payment 
determination.
    For the CY 2025 reporting period/CY 2027 payment determination, we 
propose to increase the amount of data required. We are proposing that 
hospitals report two self-selected calendar quarters of data for the 
required STEMI eCQM.
    For the CY 2026 reporting period/CY 2028 payment determination, we 
propose to further increase the amount of data required for the STEMI 
eCQM. Specifically, in this proposed rule, we are proposing to require 
that hospitals report three self-selected calendar quarters of data for 
the CY 2026 reporting period/CY 2028 payment determination for the 
required STEMI eCQM. Beginning with the CY 2027 reporting period/CY 
2029 payment determination, we propose to require that hospitals report 
all four calendar quarters (one calendar year) of data for the required 
STEMI eCQM.
    We also refer readers to Table 51 for a summary of the proposed 
quarterly data increase in eCQM reporting beginning with the CY 2023 
reporting period.
[GRAPHIC] [TIFF OMITTED] TP04AU21.100

    We invite public comment on our proposals.
c. Proposed Electronic Quality Measure Certification Requirements for 
eCQM Reporting
(1) Proposal To Require Use of 2015 Edition Cures Update Certified 
Technology Beginning With the CY 2023 Reporting Period/CY 2025 Payment 
Determination
    In May 2020, the ONC 21st Century Cures Act final rule (85 FR 25642 
through 25961) finalized updates to the 2015 Edition of health IT 
certification criteria (hereto referred to as the ``2015 Edition Cures 
Update''). These updates included revisions to the clinical quality 
measurement certification criterion at 45 CFR 170.315(c)(3) to refer to 
CMS Quality Reporting Data Architecture (QRDA) IGs and remove the 
Health Level 7 (HL7[supreg]) QRDA standard from the relevant health IT 
certification criteria (85 FR 25645). The ONC 21st Century Cures Act 
final rule provided health IT developers up to 24 months from May 1, 
2020 to make technology certified to the updated and/or new criteria 
available to their customers (85 FR 25670). In November 2020, ONC 
issued an interim final rule with comment (85 FR 70064) which extended 
the compliance deadline for the update to the Clinical Quality 
Measures-Report criterion until December 31, 2022 (85 FR 70075). These 
updates were finalized to reduce burden on health IT developers under 
the ONC Health IT certification program (85 FR 25686) and have no 
impact on providers' existing reporting practices for CMS programs.
    For the Hospital OQR Program, we propose to require hospitals to 
utilize certified technology updated consistent with the 2015 Edition 
Cures Update for the CY 2023 reporting period/CY 2025 payment 
determination and subsequent years, which includes both the voluntary 
period and required submissions. We note that this proposal is in 
alignment with the Hospital IQR Program proposal in the FY 2022 IPPS/
LTCH PPS proposed rule that requires use of technology updated 
consistent with 2015 Edition Cures Update beginning with the CY 2023 
reporting period/FY 2025 payment determination (86 FR 25595). We invite 
public comment on our proposal.
d. File Format for EHR Data, Zero Denominator Declarations, and Case 
Threshold Exemptions
(1) File Format for EHR Data
    Data can be collected in EHRs and health information technology 
systems using standardized formats to promote consistent representation 
and interpretation, as well as to allow for systems to compute data 
without needing human interpretation. As described in the FY 2016 IPPS/
LTCH PPS final rule (80 FR 49701), these standards are referred to as 
content exchange standards because the standard details how data should 
be represented and the relationships between data elements. This allows 
the data to be exchanged across EHRs and health IT systems while 
retaining their meaning. Commonly used content exchange standards 
include the QRDA. The QRDA standard provides a document format and 
standard structure to electronically report quality measure data. We 
believe electronically reporting data elements formatted according to 
the QRDA standard would promote consistent representation and more 
efficient calculation of eCQM measure results.

[[Page 42262]]

    Therefore, in alignment with the Hospital IQR Program file format 
requirements (85 FR 58940), we are proposing the requirements beginning 
with the CY 2023 reporting period/CY 2025 payment determination. 
Specifically, we are proposing that hospitals: (1) Must submit eCQM 
data via the QRDA Category I (QRDA I) file format; \280\ (2) may use 
third parties to submit QRDA I files on their behalf; and (3) may 
either use abstraction or pull the data from non-certified sources in 
order to then input these data into CEHRT for capture and reporting 
QRDA I. Hospitals could meet the reporting requirements by submitting 
data via QRDA I files, zero denominator declaration, or case threshold 
exemptions. We discuss the zero denominator declaration and case 
threshold exemptions in the subsequent sections. We also refer readers 
to section XV.B.8. where we outline the maintenance of technical 
specifications including those for eCQMs.
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    \280\ QRDA I is an individual patient-level quality report that 
contains quality data for one patient for one or more eCQMs. QRDA 
creates a standard method to report quality measure results in a 
structured, consistent format and can be used to exchange eCQM data 
between systems. For further detail on QRDA I, the most recently 
available QRDA I specifications and Implementation Guides (IGs) can 
be found at: https://ecqi.healthit.gov/qrda.
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    Under this proposal, we expect QRDA I files to reflect data for one 
patient per file per quarter with five key elements necessary to 
identify the file:
     CMS Certification Number (CCN);
     CMS Program Name;
     EHR Patient ID;
     Reporting period specified in the Reporting Parameters 
Section; and
     EHR Submitter ID.
    We invite public comment on our proposal.
(2) Zero Denominator Declarations
    We understand there may be situations in which a hospital does not 
have data to report on a particular eCQM. Therefore, we propose if the 
hospital's EHR is certified to an eCQM, but the hospital does not have 
patients that meet the denominator criteria of that eCQM, the hospital 
can submit a zero in the denominator for that eCQM. Submission of a 
zero in the denominator for an eCQM counts as a successful submission 
for that eCQM for the Hospital OQR Program. For example, if the 
hospital within the previously mentioned health system does not provide 
fibrinolytic therapy, but one of the eCQMs the health system's EHR is 
certified to is a fibrinolytic therapy measure, that hospital's EHR may 
render a zero in the denominator for that eCQM. The hospital would 
therefore report a zero denominator for that fibrinolytic therapy eCQM, 
and this would count toward the required eCQMs for the Hospital OQR 
Program. Hospitals within that health system for which that 
fibrinolytic therapy eCQM does apply would provide data on that 
measure. We invite public comment on our proposal.
(3) Case Threshold Exemptions
    We understand that in some cases, a hospital may not meet the case 
threshold of discharges for a particular eCQM. We propose to align with 
the case threshold exemption from the Medicare Promoting 
Interoperability Program (77 FR 54080) and the Hospital IQR Program (79 
FR 50324). As stated for the Hospital IQR Program, the case threshold 
exemption means that for each quality measure for which hospitals do 
not have a minimum number of patients that meet the patient population 
denominator criteria for the relevant reporting period, hospitals would 
have the ability to declare a ``case threshold exemption'' if they have 
five or fewer applicable discharges. Specifically, for the Hospital OQR 
Program we propose that beginning with the CY 2023 reporting period/CY 
2025 payment determination, if a hospital's EHR system is certified to 
report an eCQM and the hospital experiences 5 or fewer outpatient 
discharges per quarter or 20 or fewer outpatient discharges per year 
(Medicare and non-Medicare combined), as defined by an electronic 
clinical quality measure's denominator population, that hospital could 
be exempt from reporting on that electronic clinical quality measure. 
Case threshold exemptions are entered on the Denominator Declaration 
screen within the HQR System (formerly referred to as the QualityNet 
Secure Portal) available during the submission period.\281\ The 
exemption would not have to be used; hospitals could report those 
individual cases if they would like to. We invite public comment on our 
proposal.
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    \281\ CMS Adds New Features to Denominator Declaration Screen 
for eCQM Reporting, available at: https://qualitynet.cms.gov/news/5fa161829314190021d3c262.
---------------------------------------------------------------------------

e. Submission Deadlines for eCQM Data
    In the FY 2017 IPPS/LTCH PPS final rule (81 FR 57172), the Hospital 
IQR Program aligned their eCQM submission deadline with that of the 
Medicare Promoting Interoperability Program. The eCQM submission 
deadline for those two programs is the end of two months following the 
close of the CY (beginning with the CY 2017 reporting period/FY 2019 
payment determination and for subsequent years).
    In this proposed rule, for the Hospital OQR Program, we are also 
proposing to require eCQM data submission by the end of 2 months 
following the close of the calendar year for the CY 2023 reporting 
period/CY 2025 payment determination and for subsequent years. We 
believe that by aligning with the Hospital IQR and Promoting 
Interoperability Programs' deadlines, we would not add unnecessary 
burden. For example, for the CY 2023 reporting period/CY 2025 payment 
determination, hospitals that choose to voluntarily report that 
calendar year would be required to submit eCQM data by February 29, 
2024, which is the end of 2 months following the close of the calendar 
year (December 31, 2023).
    In crafting this proposal, we also considered proposing a 
submission deadline of May 15 to align with the submission deadline for 
Hospital OQR web-based measures. Under the Hospital OQR Program, the 
data submission period for web-based measures (for example, OP-29 and 
OP-31) extends through May 15 (we note the submission deadline may be 
moved to the next business day if it falls on a weekend or Federal 
holiday). However, we ultimately proposed instead to align eCQM data 
submission deadlines across quality reporting programs, because we 
believe that it would be less burdensome for hospitals.
    We invite public comment on our proposal.
7. Population and Sampling Data Requirements for the CY 2022 Payment 
Determination and Subsequent Years
    We refer readers to the CY 2011 OPPS/ASC final rule with comment 
period (75 FR 72100 through 72103) and the CY 2012 OPPS/ASC final rule 
with comment period (76 FR 74482 through 74483) for discussions of our 
population and sampling requirements. We are not proposing any changes 
to these policies in this proposed rule. We note that we are not 
proposing any population and sampling data policies related to eCQM 
reporting, because we would expect data for all patients who meet the 
patient population denominator criteria to be reported, if our eCQM-
related proposals are finalized as proposed.
8. Review and Corrections Period for Measure Data Submitted to the 
Hospital OQR Program
a. Chart-Abstracted Measures
    We refer readers to the CY 2015 OPPS/ASC final rule with comment 
period (79 FR 66964 and 67014) where

[[Page 42263]]

we formalized a review and corrections period for chart-abstracted 
measures in the Hospital OQR Program. We are not proposing any changes 
to these policies in this proposed rule.
b. Web-Based Measures
    In the CY 2021 OPPS/ASC final rule (85 FR 86184), we finalized and 
codified to expand our review and corrections policy to apply to 
measure data submitted via the CMS web-based tool beginning with data 
submitted for the CY 2023 payment determination and subsequent years. 
We are not proposing any changes to these policies in this proposed 
rule.
c. Electronic Clinical Quality Measures (eCQMs)
    In this proposed rule, we are proposing that hospitals would have a 
review and corrections period for eCQM data submitted to the Hospital 
OQR Program. We propose a review and corrections period for eCQM data 
which would run concurrently with the data submission period. The 
review and corrections period is from the time the submission period 
opens to the submission deadline. In the HQR System (formerly referred 
to as the QualityNet Secure Portal), providers can submit QRDA Category 
I test and production data files and can correct QRDA Category I test 
and production data files before production data is submitted for final 
reporting. We encourage early testing and the use of pre-submission 
testing tools to reduce errors and inaccurate data submissions in eCQM 
reporting. The HQR System does not allow data to be submitted or 
corrected after the annual deadline. We refer readers to the HQR System 
website (available at: https://hqr.cms.gov/hqrng/login) and the eCQI 
Resource Center (available at: https://ecqi.healthit.gov/) for more 
resources on eCQM reporting.
    We invite public comment on our proposal.
d. OAS CAHPS Measures
    Each hospital administers (via its vendor) the survey for all 
eligible patients treated during the data collection period on a 
monthly basis according to the guidelines in the Protocols and 
Guidelines Manual (https://oascahps.org) and report the survey data to 
CMS on a quarterly basis by the deadlines posted on the OAS CAHPS 
Survey website as stated in section XV.D.4.b.(2). of this proposed 
rule. As finalized in the CY 2017 OPPS/ASC final rule with comment 
period, data cannot be altered after the data submission deadline but 
can be reviewed prior to the submission deadline (81 FR 79793).
9. Hospital OQR Program Validation Requirements
a. Background
    We refer readers to the CY 2011 OPPS/ASC final rule with comment 
period (75 FR 72105 through 72106), the CY 2013 OPPS/ASC final rule 
with comment period (77 FR 68484 through 68487), the CY 2015 OPPS/ASC 
final rule with comment period (79 FR 66964 through 66965), the CY 2016 
OPPS/ASC final rule with comment period (80 FR 70524), the CY 2018 
OPPS/ASC final rule with comment period (82 FR 59441 through 59443), 
and 42 CFR[thinsp]419.46(f) for our policies regarding validation.
b. Proposal To Use Electronic File Submissions for Chart-Abstracted 
Measure Medical Records Requests Beginning With the CY 2022 Reporting 
Period/CY 2024 Payment Determination and Subsequent Years
    Currently, hospitals may choose to submit paper copies of medical 
records for chart-abstracted measure validation, or they may submit 
copies of medical records for validation by securely transmitting 
electronic versions of medical information (79 FR 66965 through 66966). 
Submission of electronic versions can either entail downloading or 
copying the digital image of the medical record onto Compact Disc (CD), 
Digital Video Disc (DVD), or flash drive, or submission of Portable 
Document Format (PDF) using a secure file transmission process after 
logging into the HQR System (formerly referred to as the QualityNet 
Secure Portal) (79 FR 66966). We reimburse hospitals at $3.00 per chart 
(FY 2016 IPPS/LTCH PPS final rule (80 FR 49763)).
    We strive to provide the public with accurate quality data while 
maintaining alignment with hospital recordkeeping practices. We 
appreciate that hospitals have rapidly adopted EHR systems as their 
primary source of information about patient care, which can facilitate 
the process of producing electronic copies of medical records. 
Additionally, we monitor the medical records submissions to the CMS 
Clinical Data Abstraction Center (CDAC) contractor and have found that 
almost two-thirds of hospitals already use the option to submit PDF 
copies of medical records as electronic files. In our assessment based 
on this monitoring, we believe requiring electronic file submissions 
can be a more effective and efficient process for hospitals selected 
for validation.
    Therefore, in this proposed rule, we are proposing to discontinue 
the option for hospitals to send paper copies of, or CDs, DVDs, or 
flash drives containing medical records for validation affecting the CY 
2024 payment determination (that is, beginning with data submission for 
Q1 of CY 2022). We are proposing to require hospitals to instead submit 
only electronic files when submitting copies of medical records for 
validation of chart-abstracted measures, beginning with validation 
affecting the CY 2024 payment determination (that is, Q1 of CY 2022) 
and for subsequent years. Under this proposal, hospitals would be 
required to submit PDF copies of medical records using direct 
electronic file submission via a CMS-approved secure file transmission 
process as directed by CDAC. We would continue to reimburse hospitals 
at $3.00 per chart, consistent with the current reimbursement amount 
for electronic submissions of charts. We note that this process would 
align with that for the Hospital IQR Program (FY 2016 IPPS/LTCH PPS 
final rule (85 FR 58949)).
    Requiring electronic file submissions reduces the burden of not 
only coordinating numerous paper-based pages of medical records, but 
also of having to then ship the papers or physical digital media 
storage to the CDAC. Therefore, we believe it is appropriate to require 
that hospitals use electronic file submissions via a CMS-approved 
secure file transmission process. We invite public comment on our 
proposal.
c. Proposal To Change the Time Period for Chart-Abstracted Measure Data 
Validation for Validations Affecting the CY 2024 Payment Determination 
and Subsequent Years
    We refer readers to the chart-abstracted validation requirements 
and methods we adopted in the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75117 through 75118) and codified at 42 CFR 419.46(f)(1) 
for the CY 2024 payment determination and subsequent years. In previous 
years, charts were requested by the CMS CDAC contractor and hospitals 
were given 45 calendar days from the date of the request to submit the 
requested records. If any record(s) were not received by the 45-day 
requirement, the CMS CDAC contractor assigned a ``zero'' validation 
score to each measure in a missing record. Using data from the CDAC, we 
have found that a large majority of hospitals that have participated in 
Hospital OQR Program data validation efforts have submitted their 
records prior to 30 calendar days in the current process. Furthermore,

[[Page 42264]]

outpatient records typically contain significantly fewer pages than the 
inpatient records that hospitals have been submitting to the Hospital 
IQR Program for several years, which suggests that outpatient records 
could be gathered in less time and use less resources.
    Therefore, in this proposed rule, we are proposing to revise Sec.  
419.46(f)(1) to change the time period given to hospitals to submit 
medical records to the CDAC contractor from 45 calendar days to 30 
calendar days, beginning with medical record submissions for encounters 
in Q1 of CY 2022/validations affecting the CY 2024 payment 
determination and for subsequent years. We are proposing this deadline 
modification to reduce the time needed to complete validation, provide 
hospitals with feedback on their abstraction accuracy in a timelier 
manner, and to further align with the Hospital IQR Program's validation 
policy (76 FR 51645). We invite public comment on our proposal.
d. Targeting Criteria
(1) Background
    In the CY 2012 OPPS/ASC final rule with comment period (76 FR 
74485), we finalized a validation selection process in which we select 
a random sample of 450 hospitals for validation purposes and select an 
additional 50 hospitals based on specific criteria. We finalized a 
policy in the CY 2013 OPPS/ASC final rule with comment period (77 FR 
68485 through 68486), that for the CY 2014 payment determination and 
subsequent years, a hospital will be preliminarily selected for 
validation based on targeting criteria if it fails the validation 
requirement that applies to the previous year's payment determination. 
We also refer readers to the CY 2013 OPPS/ASC final rule with comment 
period (77 FR 68486 through 68487) for a discussion of finalized 
policies regarding our medical record validation procedure 
requirements. We codified at Sec.  419.46(f)(3) that we select a random 
sample of 450 hospitals for validation purposes, and select an 
additional 50 hospitals for validation purposes based on the following 
criteria:
     The hospital fails the validation requirement that applies 
to the previous year's payment determination; or
     The hospital has an outlier value for a measure based on 
the data it submits. An ``outlier value'' is a measure value that is 
greater than 5 standard deviations from the mean of the measure values 
for other hospitals and indicates a poor score.
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
59441), we clarified that an ``outlier value'' for purposes of this 
targeting is defined as a measure value that appears to deviate 
markedly from the measure values for other hospitals.
(2) Proposal To Add Targeting Criteria
    Beginning with validations affecting the CY 2022 reporting period/
CY 2024 payment determination and subsequent years, we are proposing to 
add to the two established targeting criteria used to select the 50 
additional hospitals. Specifically, we are proposing to revise Sec.  
419.46(f)(3) to add the following criteria for targeting the additional 
50 hospitals:
     Any hospital that has not been randomly selected for 
validation in any of the previous 3 years.
     Any hospital that passed validation in the previous year, 
but had a two-tailed confidence interval that included 75 percent.
    We believe these proposals would allow more hospitals the 
opportunity for validation. First, by adding targeting criteria for any 
hospital that has not been randomly selected for validation in any of 
the previous 3 years, we can ensure that hospitals are eligible to be 
validated on a regular basis even if they are not selected under the 
randomly selected sample. Second, the option to selectively review 
hospitals that have a confidence interval that includes 75 percent is 
important because hospitals whose confidence interval includes 75 
percent indicates a higher level of uncertainty as to the reliability 
of data for that particular hospital. By adding the targeting criteria 
for hospitals with two-tailed confidence interval that includes 75 
percent, we can target those hospitals that are in the statistical 
margin of error for their accuracy (which includes hospitals that both 
pass and fail on this level). These proposals also align Hospital OQR 
Program validation with additional aspects of Hospital IQR Program 
validation (77 FR 53553). We believe that these proposed additional 
criteria would improve data quality by increased targeting of hospitals 
with possible or confirmed past data quality issues. Additionally, this 
proposal would respond to concerns that CMS does not have a methodology 
to address hospitals for which both passing and falling levels of 
accuracy were included for the statistical margin of error.\282\ We 
invite public comment on our proposals.
---------------------------------------------------------------------------

    \282\ Government Accountability Office. ``Hospital Quality Data. 
CMS needs more rigorous methods to ensure reliability of publicly 
released data''. GAO-06-54, January 2006.
---------------------------------------------------------------------------

e. Educational Review Process and Score Review and Correction Period 
for Chart-Abstracted Measures
    We refer readers to the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 59441 through 59443) and the CY 2021 OPPS/ASC final rule 
with comment period (85 FR 86185), where we finalized and codified a 
policy to formalize the Educational Review Process for Chart-Abstracted 
Measures, including Validation Score Review and Correction.
    We are not proposing any changes to these policies in this proposed 
rule.
10. Extraordinary Circumstances Exception (ECE) Process for the CY 2022 
Payment Determination and Subsequent Years
a. Background
    We refer readers to the CY 2013 OPPS/ASC final rule with comment 
period (77 FR 68489), the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75119 through 75120), the CY 2015 OPPS/ASC final rule 
with comment period (79 FR 66966), the CY 2016 OPPS/ASC final rule with 
comment period (80 FR 70524), the CY 2017 OPPS/ASC final rule with 
comment period (81 FR 79795), the CY 2018 OPPS/ASC final rule with 
comment period (82 FR 59444), and 42 CFR 419.46(e) for a complete 
discussion of our extraordinary circumstances exception (ECE) process 
under the Hospital OQR Program.
b. Proposal To Expand the Extraordinary Circumstances Exemption to 
eCQMs
    As part of our proposed policies in support of the introduction of 
eCQMs into the Hospital OQR Program, beginning with the CY 2024 
reporting period/CY 2026 payment determination and for subsequent 
years, we are proposing to expand our established Extraordinary 
Circumstances Exceptions policy to allow hospitals to request an 
exception from the Hospital OQR Program's eCQM reporting requirements 
based on hardships preventing hospitals from electronically reporting. 
We note that our proposal aligns with the Hospital IQR Program's 
Extraordinary Circumstances Exceptions policy for eCQMs (80 FR 49695, 
42 CFR 412.140(c)(2)).
    Under this proposal, applicable hardships could include, but are 
not limited to, infrastructure challenges (hospitals must demonstrate 
that they are in an area without sufficient internet access or face 
insurmountable barriers to obtaining infrastructure) or unforeseen 
circumstances, such as

[[Page 42265]]

vendor issues outside of the hospital's control (including a vendor 
product losing certification). In addition, under the Hospital OQR 
Program, we may consider being a newly participating hospital as 
undergoing hardship such that newly participating hospitals can apply 
for an exemption for the applicable program year. Newly participating 
hospitals are required to begin data submission under the Hospital OQR 
Program procedural requirements at Sec.  419.46(d)(1), which describes 
submission and validation of Hospital OQR Program data.
    We also propose that a hospital participating in the Hospital OQR 
Program that wishes to request an exception must submit its request to 
CMS by April 1 following the end of the reporting calendar year in 
which the extraordinary circumstances occurred. For example, if an 
extraordinary circumstance occurred on or by December 31, 2024, the ECE 
request must be submitted by April 1, 2025. Specific requirements for 
submission of a request for an exception would be available on the 
QualityNet website available at: https://qualitynet.cms.gov/.
    We invite public comment on our proposals.
11. Hospital OQR Program Reconsideration and Appeals Procedures for the 
CY 2022 Payment Determination and Subsequent Years
    We refer readers to the CY 2013 OPPS/ASC final rule with comment 
period (77 FR 68487 through 68489), the CY 2014 OPPS/ASC final rule 
with comment period (78 FR 75118 through 75119), the CY 2016 OPPS/ASC 
final rule with comment period (80 FR 70524), the CY 2017 OPPS/ASC 
final rule with comment period (81 FR 79795), the CY 2021 OPPS/ASC 
final rule with comment period (85 FR 68185), and 42 CFR 419.46(g) for 
our reconsideration and appeals procedures. We are not proposing any 
changes to these policies in this proposed rule.
E. Proposed Payment Reduction for Hospitals That Fail To Meet the 
Hospital OQR Program Requirements for the CY 2022 Payment Determination
1. Background
    Section 1833(t)(17) of the Act, which applies to subsection (d) 
hospitals (as defined under section 1886(d)(1)(B) of the Act), states 
that hospitals that fail to report data required to be submitted on 
measures selected by the Secretary, in the form and manner, and at a 
time, specified by the Secretary will incur a 2.0 percentage point 
reduction to their Outpatient Department (OPD) fee schedule increase 
factor; that is, the annual payment update factor. Section 
1833(t)(17)(A)(ii) of the Act specifies that any reduction applies only 
to the payment year involved and will not be taken into account in 
computing the applicable OPD fee schedule increase factor for a 
subsequent year.
    The application of a reduced OPD fee schedule increase factor 
results in reduced national unadjusted payment rates that apply to 
certain outpatient items and services provided by hospitals that are 
required to report outpatient quality data in order to receive the full 
payment update factor and that fail to meet the Hospital OQR Program 
requirements. Hospitals that meet the reporting requirements receive 
the full OPPS payment update without the reduction. For a more detailed 
discussion of how this payment reduction was initially implemented, we 
refer readers to the CY 2009 OPPS/ASC final rule with comment period 
(73 FR 68769 through 68772).
    The national unadjusted payment rates for many services paid under 
the OPPS equal the product of the OPPS conversion factor and the scaled 
relative payment weight for the APC to which the service is assigned. 
The OPPS conversion factor, which is updated annually by the OPD fee 
schedule increase factor, is used to calculate the OPPS payment rate 
for services with the following status indicators (listed in Addendum B 
to the proposed rule, which is available via the internet on the CMS 
website): ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'', ``Q3'', ``R'', ``S'', 
``T'', ``V'', or ``U''. In the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79796), we clarified that the reporting ratio does not 
apply to codes with status indicator ``Q4'' because services and 
procedures coded with status indicator ``Q4'' are either packaged or 
paid through the Clinical Laboratory Fee Schedule and are never paid 
separately through the OPPS. Payment for all services assigned to these 
status indicators will be subject to the reduction of the national 
unadjusted payment rates for hospitals that fail to meet Hospital OQR 
Program requirements, with the exception of services assigned to New 
Technology APCs with assigned status indicator ``S'' or ``T''. We refer 
readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR 
68770 through 68771) for a discussion of this policy.
    The OPD fee schedule increase factor is an input into the OPPS 
conversion factor, which is used to calculate OPPS payment rates. To 
reduce the OPD fee schedule increase factor for hospitals that fail to 
meet reporting requirements, we calculate two conversion factors--a 
full market basket conversion factor (that is, the full conversion 
factor), and a reduced market basket conversion factor (that is, the 
reduced conversion factor). We then calculate a reduction ratio by 
dividing the reduced conversion factor by the full conversion factor. 
We refer to this reduction ratio as the ``reporting ratio'' to indicate 
that it applies to payment for hospitals that fail to meet their 
reporting requirements. Applying this reporting ratio to the OPPS 
payment amounts results in reduced national unadjusted payment rates 
that are mathematically equivalent to the reduced national unadjusted 
payment rates that would result if we multiplied the scaled OPPS 
relative payment weights by the reduced conversion factor. For example, 
to determine the reduced national unadjusted payment rates that applied 
to hospitals that failed to meet their quality reporting requirements 
for the CY 2010 OPPS, we multiplied the final full national unadjusted 
payment rate found in Addendum B of the CY 2010 OPPS/ASC final rule 
with comment period by the CY 2010 OPPS final reporting ratio of 0.980 
(74 FR 60642).
    We note that the only difference in the calculation for the full 
conversion factor and the calculation for the reduced conversion factor 
is that the full conversion factor uses the full OPD update and the 
reduced conversion factor uses the reduced OPD update. The baseline 
OPPS conversion factor calculation is the same since all other 
adjustments would be applied to both conversion factor calculations. 
Therefore, our standard approach of calculating the reporting ratio as 
described earlier in this section is equivalent to dividing the reduced 
OPD update factor by that of the full OPD update factor. In other 
words:

Full Conversion Factor = Baseline OPPS conversion factor * (1 + OPD 
update factor)
Reduced Conversion Factor = Baseline OPPS conversion factor * (1 + OPD 
update factor - 0.02)
Reporting Ratio = Reduced Conversion Factor/Full Conversion Factor

    Which is equivalent to:

Reporting Ratio = (1 + OPD Update factor - 0.02)/(1 + OPD update 
factor)

    In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68771 
through 68772), we established a policy that the Medicare beneficiary's 
minimum unadjusted copayment and national unadjusted copayment for a 
service to which a reduced national unadjusted payment rate applies 
would each equal the product of the reporting

[[Page 42266]]

ratio and the national unadjusted copayment or the minimum unadjusted 
copayment, as applicable, for the service. Under this policy, we apply 
the reporting ratio to both the minimum unadjusted copayment and 
national unadjusted copayment for services provided by hospitals that 
receive the payment reduction for failure to meet the Hospital OQR 
Program reporting requirements. This application of the reporting ratio 
to the national unadjusted and minimum unadjusted copayments is 
calculated according to Sec.  419.41 of our regulations, prior to any 
adjustment for a hospital's failure to meet the quality reporting 
standards according to Sec.  419.43(h). Beneficiaries and secondary 
payers thereby share in the reduction of payments to these hospitals.
    In the CY 2009 OPPS/ASC final rule with comment period (73 FR 
68772), we established the policy that all other applicable adjustments 
to the OPPS national unadjusted payment rates apply when the OPD fee 
schedule increase factor is reduced for hospitals that fail to meet the 
requirements of the Hospital OQR Program. For example, the following 
standard adjustments apply to the reduced national unadjusted payment 
rates: The wage index adjustment, the multiple procedure adjustment, 
the interrupted procedure adjustment, the rural sole community hospital 
adjustment, and the adjustment for devices furnished with full or 
partial credit or without cost. Similarly, OPPS outlier payments made 
for high cost and complex procedures will continue to be made when 
outlier criteria are met. For hospitals that fail to meet the quality 
data reporting requirements, the hospitals' costs are compared to the 
reduced payments for purposes of outlier eligibility and payment 
calculation. We established this policy in the OPPS beginning in the CY 
2010 OPPS/ASC final rule with comment period (74 FR 60642). For a 
complete discussion of the OPPS outlier calculation and eligibility 
criteria, we refer readers to section II.G. of this proposed rule.
2. Reporting Ratio Application and Associated Adjustment Policy for CY 
2022
    We propose to continue our established policy of applying the 
reduction of the OPD fee schedule increase factor through the use of a 
reporting ratio for those hospitals that fail to meet the Hospital OQR 
Program requirements for the full CY 2022 annual payment update factor. 
For this CY 2022 OPPS/ASC proposed rule, the proposed reporting ratio 
is 0.9805, which when multiplied by the proposed full conversion factor 
of $84.457 equals a proposed conversion factor for hospitals that fail 
to meet the requirements of the Hospital OQR Program (that is, the 
reduced conversion factor) of $82.810. We propose to continue to apply 
the reporting ratio to all services calculated using the OPPS 
conversion factor. We propose to continue to apply the reporting ratio, 
when applicable, to all HCPCS codes to which we have proposed status 
indicator assignments of ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'', ``Q3'', 
``R'', ``S'', ``T'', ``V'', and ``U'' (other than new technology APCs 
to which we have proposed status indicator assignment of ``S'' and 
``T''). We propose to continue to exclude services paid under New 
Technology APCs. We propose to continue to apply the reporting ratio to 
the national unadjusted payment rates and the minimum unadjusted and 
national unadjusted copayment rates of all applicable services for 
those hospitals that fail to meet the Hospital OQR Program reporting 
requirements. We also propose to continue to apply all other applicable 
standard adjustments to the OPPS national unadjusted payment rates for 
hospitals that fail to meet the requirements of the Hospital OQR 
Program. Similarly, we propose to continue to calculate OPPS outlier 
eligibility and outlier payment based on the reduced payment rates for 
those hospitals that fail to meet the reporting requirements. In 
addition to our proposal to implement the policy through the use of a 
reporting ratio, we also propose to calculate the reporting ratio to 
four decimals (rather than the previously used three decimals) to more 
precisely calculate the reduced adjusted payment and copayment rates.
    For CY 2022, the proposed reporting ratio is 0.9805, which when 
multiplied by the final full conversion factor of 84.457 equals a 
proposed conversion factor for hospitals that fail to meet the 
requirements of the Hospital OQR Program (that is, the reduced 
conversion factor) of 82.810.

XVI. Requirements for the Ambulatory Surgical Center Quality Reporting 
(ASCQR) Program

A. Background

1. Overview
    We refer readers to section XIV.A.1. of the CY 2020 OPPS/ASC final 
rule with comment period (84 FR 61410) for a general overview of our 
quality reporting programs and to the CY 2019 OPPS/ASC final rule with 
comment period (83 FR 58820 through 58822) where we previously 
discussed our Meaningful Measures Framework.
2. Statutory History of the ASCQR Program
    We refer readers to the CY 2012 OPPS/ASC final rule with comment 
period (76 FR 74492 through 74494) for a detailed discussion of the 
statutory history of the ASCQR Program.
3. Regulatory History of the ASCQR Program
    We refer readers to the CY 2014 through 2021 OPPS/ASC final rules 
with comment period for an overview of the regulatory history of the 
ASCQR Program:
     CY 2014 OPPS/ASC final rule (78 FR 75122);
     CY 2015 OPPS/ASC final rule (79 FR 66966 through 66987);
     CY 2016 OPPS/ASC final rule (80 FR 70526 through 70538);
     CY 2017 OPPS/ASC final rule (81 FR 79797 through 79826);
     CY 2018 OPPS/ASC final rule (82 FR 59445 through 59476);
     CY 2019 OPPS/ASC final rule (83 FR 59110 through 59139);
     CY 2020 OPPS/ASC final rule (84 FR 61420 through 61434); 
and
     CY 2021 OPPS/ASC final rule (85 FR 86187 through 86193).
    We have codified requirements under the ASCQR Program at 42 CFR, 
part 16, subpart H (42 CFR 416.300 through 416.330).

B. ASCQR Program Quality Measures

1. Considerations in the Selection of ASCQR Program Quality Measures
    We refer readers to the CY 2013 OPPS/ASC final rule with comment 
period (77 FR 68493 through 68494) for a detailed discussion of the 
priorities we consider for the ASCQR Program quality measure selection. 
We are not proposing any changes to these policies in this proposed 
rule.
2. Retention and Removal of Quality Measures From the ASCQR Program
a. Retention of Previously Adopted ASCQR Program Measures
    We previously finalized a policy that quality measures adopted for 
an ASCQR Program measure set for a previous payment determination year 
be retained in the ASCQR Program for measure sets for subsequent 
payment determination years, except when such measures are removed, 
suspended, or replaced as indicated (76 FR 74494 and 74504; 77 FR 68494 
through 68495; 78 FR 75122; and 79 FR 66967 through 66969). We are not 
proposing any changes to this policy in this proposed rule.

[[Page 42267]]

b. Removal Factors for ASCQR Program Measures
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59111 
through 59115), we clarified, finalized, and codified at Sec.  416.320 
an updated set of factors \283\ and the process for removing measures 
from the ASCQR Program. We are not proposing any changes to the measure 
removal factors in this proposed rule.
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    \283\ We note that we previously referred to these factors as 
``criteria'' (for example, 79 FR 66967 through 66969); we now use 
the term ``factors'' to align the ASCQR Program terminology with the 
terminology we use in other CMS quality reporting and pay-for-
performance (value-based purchasing) programs.
---------------------------------------------------------------------------

3. Proposal To Adopt a New Measure for the ASCQR Program Measure Set
    In this proposed rule, we are proposing to adopt one new measure: 
COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure 
beginning with the CY 2022 reporting period/2024 payment determination.
a. Proposal To Adopt the COVID-19 Vaccination Coverage Among Health 
Care Personnel (HCP) Measure Beginning With the CY 2022 Reporting 
Period/CY 2024 Payment Determination
(1) Background
    On January 31, 2020, the Secretary declared a public health 
emergency (PHE) for the United States (U.S.) in response to the global 
outbreak of SARS-CoV-2, a novel coronavirus that causes a disease named 
``coronavirus disease 2019'' (COVID-19).\284\ COVID-19 is a contagious 
respiratory infection \285\ that can cause serious illness and death. 
Older individuals, some racial and ethnic minorities, and those with 
underlying medical conditions are considered to be at higher risk for 
more serious complications from COVID-19.286 287 As of July 
2, 2021, the U.S. has reported over 33 million cases of COVID-19 and 
over 600,000 COVID-19 deaths.\288\ Hospitals and health systems 
significant surges of COVID-19 patients as community infection levels 
increased.\289\ From December 2, 2020 through January 30, 2021, more 
than 100,000 Americans with COVID-19 were hospitalized at the same 
time.\290\
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    \284\ U.S. Dept of Health and Human Services, Office of the 
Assistant Secretary for Preparedness and Response. (2020). 
Determination that a Public Health Emergency Exists. Available at: 
https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
    \285\ Centers for Disease Control and Prevention. (2020). Your 
Health: Symptoms of Coronavirus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
    \286\ Centers for Disease Control and Prevention. (2020). Your 
Health: Symptoms of Coronavirus. Available at https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
    \287\ Centers for Disease Control and Prevention. (2020). Health 
Equity Considerations and Racial and Ethnic Minority Groups. 
Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
    \288\ This information has been updated from the proposed rule 
to reflect current data from the Centers for Disease Control and 
Prevention. (2020). CDC COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
    \289\ Associated Press. Tired to the Bone. Hospitals Overwhelmed 
with Virus Cases. November 18, 2020. Accessed on December 16, 2020, 
at https://apnews.com/article/hospitals-overwhelmed-coronavirus-cases-74a1f0dc3634917a5dc13408455cd895. Also see: New York Times. 
Just how full are U.S. intensive care units? New data paints an 
alarming picture. November 18, 2020. Accessed on December 16, 2020, 
at: https://www.nytimes.com/2020/12/09/world/just-how-full-are-us-intensive-care-units-new-data-paints-an-alarming-picture.html.
    \290\ US Currently Hospitalized [verbar] The COVID Tracking 
Project. Accessed January 31, 2021 at: https://covidtracking.com/data/charts/us-currently-hospitalized.
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    Evidence indicates that COVID-19 primarily spreads when individuals 
are in close contact with one another.\291\ Ongoing research indicates 
that fully vaccinated people without immunocompromising conditions are 
able to engage in most activities with very low risk of acquiring or 
transmitting SARS-CoV-2, and the Centers for Disease Control and 
Prevention (CDC) issued new guidance for fully vaccinated individuals 
on May 28, 2021.\292\ The virus is typically transmitted through 
respiratory droplets or small particles created when someone who is 
infected with the virus coughs, sneezes, sings, talks or breathes.\293\ 
Thus, the CDC advises that infections mainly occur through exposure to 
respiratory droplets when a person is in close contact with someone who 
has COVID-19.\294\ Experts believe that COVID-19 spreads less commonly 
through contact with a contaminated surface \295\ and that in certain 
circumstances, infection can occur through airborne transmission.\296\ 
According to the CDC, those at greatest risk of infection are persons 
who have had prolonged, unprotected close contact (that is, within 6 
feet for 15 minutes or longer) with an individual with confirmed COVID-
19 infection, regardless of whether the individual has symptoms.\297\ 
Although personal protective equipment (PPE) and other infection-
control precautions can reduce the likelihood of transmission in health 
care settings, COVID-19 can spread between HCP and patients or from 
patient to patient given the close contact that may occur during the 
provision of care.\298\ The CDC has emphasized that health care 
settings can be high-risk places for COVID-19 exposure and 
transmission.\299\
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    \291\ Centers for Disease Control and Prevention. (2021). How 
COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \292\ Centers for Disease Control and Prevention. (2021). 
Interim Public Health Recommendations for Fully Vaccinated People. 
Accessed on June 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/vaccines/fully-vaccinated-guidance.html.
    \293\ Centers for Disease Control and Prevention (2021). How 
COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \294\ Centers for Disease Control and Prevention (2021). How 
COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \295\ Centers for Disease Control and Prevention (2021). How 
COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \296\ Centers for Disease Control and Prevention. (2021). How 
COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \297\ Centers for Disease Control and Prevention. (2021). When 
to Quarantine. Accessed on April 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/if-you-are-sick/quarantine.html.
    \298\ Centers for Disease Control and Prevention. (2021). 
Interim U.S. Guidance for Risk Assessment and Work Restrictions for 
Healthcare Personnel with Potential Exposure to COVID-19. Accessed 
on April 2 at: https://www.cdc.gov/coronavirus/2019-ncov/hcp/faq.html#Transmission.
    \299\ Dooling, K, McClung, M, et al. ``The Advisory Committee on 
Immunization Practices' Interim Recommendations for Allocating 
Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb 
Mortal Wkly Rep. 2020; 69(49): 1857-1859.
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    Vaccination is a critical part of the nation's strategy to 
effectively counter the spread of COVID-19 and ultimately help restore 
societal functioning.\300\ On December 11, 2020, the Food and Drug 
Administration (FDA) issued the first Emergency Use Authorization (EUA) 
for a COVID-19 vaccine in the U.S.\301\ Subsequently, the FDA issued 
EUAs for additional COVID-19 vaccines.302 303
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    \300\ Centers for Disease Control and Prevention. (2020). COVID-
19 Vaccination Program Interim Playbook for Jurisdiction Operations. 
Accessed on December 18 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
    \301\ U.S. Food and Drug Administration. (2020). Pfizer-BioNTech 
COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144412/download.
    \302\ U.S. Food and Drug Administration. (2021). Moderna COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download.
    \303\ U.S. Food and Drug Administration. (2021). Janssen COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/146303/download.
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    As part of its national strategy to address COVID-19, the White 
House stated on March 25, 2021 that it would work with states and the 
private sector to execute an aggressive vaccination strategy and 
outlined a goal of

[[Page 42268]]

administering 200 million shots in 100 days \304\ On April 21, 2021, it 
was announced that this goal had been achieved.\305\ Although the goal 
of the U.S. Government is to ensure that every American who wants to 
receive a COVID-19 vaccine can receive one, the Department of Health 
and Human Services, the Department of Defense, and the CDC, recommended 
that early vaccination efforts focus on those critical to the PHE 
response, including HCP, and individuals at highest risk for developing 
severe illness from COVID-19.\306\ The CDC's Advisory Committee on 
Immunization Practices (ACIP) recommended that HCP should be among 
those individuals prioritized to receive the initial, limited supply of 
the COVID-19 vaccination, given the potential for transmission in 
health care settings and the need to preserve health care system 
capacity.\307\ Reportedly most states followed this 
recommendation,\308\ and HCP began receiving the vaccine in mid-
December of 2020.\309\
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    \304\ The White House. Remarks by President Biden on the COVID-
19 Response and the State of Vaccinations. Accessed on April 3, 2021 
at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/03/29/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations/.
    \305\ The White House. Remarks by President Biden on the COVID-
19 Response and the State of Vaccinations. Accessed on June 2, 2021 
at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/21/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations-2/.
    \306\ Health and Human Services, Department of Defense. (2020) 
From the Factory to the Frontlines: The Operation Warp Speed 
Strategy for Distributing a COVID-19 Vaccine. Accessed December 18 
at: https://www.hhs.gov/sites/default/files/strategy-for-distributing-covid-19-vaccine.pdf; Centers for Disease Control 
(2020). COVID-19 Vaccination Program Interim Playbook for 
Jurisdiction Operations. Accessed December 18 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
    \307\ Dooling, K, McClung, M, et al. ``The Advisory Committee on 
Immunization Practices' Interim Recommendations for Allocating 
Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb. 
Mortal Wkly Rep. 2020; 69(49): 1857-1859. ACIP also recommended that 
long-term care residents be prioritized to receive the vaccine, 
given their age, high levels of underlying medical conditions, and 
congregate living situations make them high risk for severe illness 
from COVID-19.
    \308\ Kates, J, Michaud, J, Tolbert, J. ``How Are States 
Prioritizing Who Will Get the COVID-19 Vaccine First?'' Kaiser 
Family Foundation. December 14, 2020. Accessed on December 16 at 
https://www.kff.org/policy-watch/how-are-states-prioritizing-who-will-get-the-covid-19-vaccine-first/.
    \309\ Associated Press. `Healing is Coming:' US Health Workers 
Start Getting Vaccine. December 15, 2020. Accessed on December 16 
at: https://apnews.com/article/us-health-workers-coronavirus-vaccine-56df745388a9fc12ae93c6f9a0d0e81f.
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    Frontline healthcare workers, such as those employed in ASCs, have 
been prioritized for vaccination in most locations. There are 
approximately 18 million healthcare workers in the U.S.\310\ A survey 
of HCP found that 66 percent of hospital HCP and 64 percent of 
outpatient clinic HCP reported receiving at least one dose of the 
vaccine.\311\ As of July 2, 2021, the CDC reported that over 328 
million doses of COVID-19 vaccine had been administered and 
approximately 155.9 million people had received full doses.\312\ The 
White House indicated on April 6, 2021 that the U.S. retains sufficient 
vaccine supply, and every adult became eligible to receive the vaccine 
beginning April 19, 2021.\313\
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    \310\ Centers for Disease Control and Prevention. Healthcare 
Workers. (2017) Accessed February 18, 2021 at: https://www.cdc.gov/niosh/topics/healthcare/default.html.
    \311\ KFF/The Washington Post Frontline Health Care Workers 
Survey. (2021). Accessed June 2, 2021 at: https://www.kff.org/coronavirus-covid-19/poll-finding/kff-washington-post-health-care-workers/.
    \312\ This information has been updated from the proposed rule 
to reflect current data from the Centers for Disease Control and 
Prevention. COVID Data Tracker. COVID-19 Vaccinations in the United 
States. Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
    \313\ The White House. Remarks by President Biden Marking the 
150 Millionth COVID-19 Vaccine Shot. Accessed April 8, 2021 at: 
https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/06/remarks-by-president-biden-marking-the-150-millionth-covid-19-vaccine-shot/.
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    We believe it is important to require that ASCs report HCP 
vaccination information for health care facilities to assess whether 
these facilities are taking steps to limit the spread of COVID-19 among 
their health care workers and to help sustain the ability of ASCs to 
continue serving their communities throughout the PHE and beyond. 
Therefore, we are proposing to adopt a new measure, COVID-19 
Vaccination Coverage Among HCP, beginning with the CY 2024 payment 
determination. For that payment year, ASCs would be required to report 
data quarterly on the measure for the January 2022 through December 
2022 reporting period. The measure would assess the proportion of an 
ASC's health care workforce that has been vaccinated against COVID-19.
    HCP are at risk of transmitting COVID-19 infection to patients, 
experiencing illness or death as a result of COVID-19 infection 
themselves, and transmitting it to their families, friends, and the 
general public. We believe ASCs should report the level of vaccination 
among their HCP as part of their efforts to assess and reduce the risk 
of transmission of COVID-19 within their facilities. HCP vaccination 
can reduce illness that leads to work absence and limit disruptions to 
providing care \314\ with major reductions in SARS-CoV-2 infections 
among those receiving a two dose COVID-19 vaccine despite a high 
community infection rate.\315\ Data from influenza vaccination 
demonstrate that provider vaccination is associated with that provider 
recommending vaccination to patients \316\ and we believe HCP COVID-19 
vaccination in ASCs could similarly increase vaccination among that 
patient population. We also believe that publishing the HCP vaccination 
rates will be helpful to many patients, particularly those who are at 
high-risk for developing serious complications from COVID-19, as they 
choose among ASCs for treatment. Under CMS' Meaningful Measures 
Framework, the COVID-19 measure addresses the quality priority of 
``Promote Effective Prevention and Treatment of Chronic Disease'' 
through the Meaningful Measures Area of ``Preventive Care.''
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    \314\ Centers for Disease Control and Prevention. Overview of 
Influenza Vaccination among Health Care Personnel. October 2020. 
(2020) Accessed March 16, 2021 at: https://www.cdc.gov/flu/toolkit/long-term-care/why.htm.
    \315\ Benenson S, Oster Y, Cohen MJ, Nir-Paz R. BNT162b2 mRNA 
Covid-19 Vaccine Effectiveness among Health Care Workers. N Engl J 
Med. 2021. See also: Keehner J, Horton LE, Pfeffer MA, Longhurst CA, 
Schooley RT, Currier JS, et al. SARS-CoV-2 Infection after 
Vaccination in Health Care Workers in California. N Engl J Med. 
2021.
    \316\ Measure Application Committee Coordinating Committee 
Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021 
at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
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(2) Overview of Measure
    The COVID-19 Vaccination Coverage Among HCP measure (``COVID-19 HCP 
vaccination measure'') is a process measure developed by the CDC to 
track COVID-19 vaccination coverage among HCP in non-LTC facilities 
including ASCs.
(a) Measure Specifications
    The denominator for the HCP measure is the number of HCP eligible 
to work in the ASC for at least 1 day during the reporting period, 
excluding persons with contraindications to COVID-19 vaccination that 
are described by the CDC.\317\
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    \317\ Centers for Disease Control and Prevention. 
Contraindications and precautions. (2021) Accessed March 15, 2021 
at: https://www.cdc.gov/vaccines/covid-19/info-by-product/clinical-considerations.html#Contraindications.
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    The numerator for the HCP measure is the cumulative number of HCP 
eligible to work in at the ASC for at least 1 day during the reporting 
period and who received a complete vaccination course against COVID-19 
using an FDA-authorized or FDA-approved vaccine for COVID-19 (whether 
the FDA issued an

[[Page 42269]]

approval or EUA).\318\ A complete vaccination course is defined under 
the specific FDA authorization and may require multiple doses or 
regular revaccination.\319\ Vaccination coverage for purposes of this 
measure is defined as the estimated percentage (given the potential for 
week-to-week variation) of HCP eligible to work at the ASC for at least 
1 day who received a COVID-19 vaccine. For reporting, facilities would 
count HCP working in all facilities that share the same CMS 
certification number (CCN).\320\ The proposed specifications for the 
COVID-19 HCP vaccination measure are available on the NQF website at: 
https://www.cdc.gov/nhsn/nqf/index.html.\321\
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    \318\ Measure Application Partnership Coordinating Committee 
Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021 
at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
    \319\ Measure Application Partnership Coordinating Committee 
Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021 
at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
    \320\ Centers for Disease Control and Prevention. CMS Reporting 
Requirements FAQs. Accessed June 2, 2021 at: https://www.cdc.gov/nhsn/PDFs/CMS/faq/FAQs-CMS-Reporting-Requirements.pdf.
    \321\ https://www.cdc.gov/nhsn/nqf/index.html.
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(b) Review by the Measure Applications Partnership
    The COVID-19 HCP vaccination measure was included on the publicly 
available ``List of Measures Under Consideration for December 21, 
2020,'' \322\ a list of measures under consideration for use in various 
Medicare programs. The Measure Applications Partnership (MAP) hospital 
workgroup convened on January 11, 2021 and reviewed the Measures Under 
Consideration (MUC) List including the COVID-19 HCP vaccination 
measure. The MAP hospital workgroup agreed that the proposed measure 
represents a promising effort to advance measurement for an evolving 
national pandemic and that it could bring value to the ASCQR Program 
measure set by providing transparency about an important COVID-19 
intervention to help prevent infections in HCP and patients.\323\ The 
MAP hospital workgroup also stated in its recommendations that 
collecting information on COVID-19 vaccination coverage among HCP and 
providing feedback to facilities will allow facilities to benchmark 
coverage rates and improve coverage in their facility, and that 
reducing COVID-19 infection rates in HCP may reduce transmission among 
patients and reduce instances of staff shortages due to illness.\324\
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    \322\ https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
    \323\ Measure Applications Partnership. MAP Preliminary 
Recommendations 2020-2021. Accessed on January 24, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \324\ Ibid.
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    In its preliminary recommendations, the MAP hospital workgroup did 
not support this measure for rulemaking, subject to potential for 
mitigation.\325\ To mitigate its concerns, the MAP hospital workgroup 
believed that the measure needed well-documented evidence, finalized 
specifications, testing, and National Quality Forum (NQF) endorsement 
prior to implementation.\326\ Subsequently, the MAP Coordinating 
Committee met on January 25, 2021 and reviewed the COVID-19 HCP 
vaccination measure. In the 2020 and 2021 MAP Final Recommendations, 
the MAP offered conditional support for rulemaking contingent on CMS 
bringing the measures back to MAP once the specifications are further 
refined.\327\ The MAP stated, ``the incomplete specifications require 
immediate mitigation and further development should continue.'' \328\ 
In its final report, the MAP noted that the measure would add value by 
providing visibility into an important intervention to limit COVID-19 
infections in HCP and the patients for whom they provide care.\329\ The 
spreadsheet of final recommendations no longer cited concerns regarding 
evidence, testing, or NQF endorsement.\330\ In response to the MAP 
final recommendation request that CMS bring the measure back to the MAP 
once the specifications are further refined, CMS and the CDC met with 
the MAP Coordinating Committee on March 15, 2021. CMS and CDC provided 
additional information to address vaccine availability, alignment of 
the COVID-19 HCP vaccination measure as being as closely as possible 
with the data collection for the Influenza HCP vaccination measure (NQF 
#0431), and provided clarification on how HCP are defined. CMS and the 
CDC also presented preliminary findings from the testing of the 
numerator of the COVID-19 HCP vaccination measure, which is currently 
in process. These preliminary findings show numerator data should be 
feasible to collect and reliable. Testing of the measure numerator (the 
number of HCP vaccinated) involves a comparison of the data collected 
through the National Healthcare Safety Network (NHSN) and independently 
reported through the Federal pharmacy partnership program for 
delivering vaccination to LTC facilities. These are two independent 
data collection systems. In initial analyses of the first month of 
vaccination, the number of healthcare workers vaccinated in 
approximately 1,200 facilities for which data from both systems were 
available, the number of healthcare personnel vaccinated was highly 
correlated between the two systems with a correlation coefficient of 
nearly 90 percent in the second two weeks of reporting.\331\ Because of 
the high correlation across a large number of facilities and high 
number of HCP within those facilities receiving at least one dose of 
the COVID-19 vaccine, we believe the measure is feasible and reliable 
for use in ASCs. After reviewing this additional information, the MAP 
retained its final recommendation of conditional support, and expressed 
support for CMS' efforts to use the measure as part of the solution for 
the COVID-19 public health crisis.\332\
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    \325\ Ibid.
    \326\ Ibid.
    \327\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on February 3, 2021 at: http://www.qualityforum.org/Setting_Priorities/Partnership/Measure_Applications_Partnership.aspx.
    \328\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on February 23, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \329\ Ibid.
    \330\ Ibid.
    \331\ For more information on testing results and other measure 
updates, please see the Meeting Materials (including Agenda, 
Recording, Presentation Slides, Summary, and Transcript) of the 
March 15, 2021 meeting available at https://www.qualityforum.org/ProjectMaterials.aspx?projectID=75367.
    \332\ Ibid.
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    Section 1890A(a)(4) of the Act, as added by section 3014(b) of the 
Affordable Care Act, requires the Secretary to take into consideration 
input from multi-stakeholder groups in selecting certain quality and 
efficiency measures. While we value input from the MAP, we believe it 
is important to propose the measure as quickly as possible to address 
the urgency of the COVID-19 PHE and its impact on vulnerable 
populations. CMS continues to engage with the MAP to mitigate concerns 
and appreciates the MAP's conditional support for the measure.
(c) Measure Endorsement
    Section 1833(i)(7)(B) of the Act states that section 1833(t)(17) of 
the Act shall apply with respect to ASC services in a similar manner in 
which it applies to hospitals for the Hospital OQR Program, except as 
the Secretary may otherwise provide. The requirements at section 
1833(t)(17)(C)(i) of the Act state that measures developed shall ``be 
appropriate for the measurement of the quality of care (including 
medication

[[Page 42270]]

errors) furnished by hospitals in outpatient settings and that reflect 
consensus among affected parties and, to the extent feasible and 
practicable, shall include measures set forth by one or more national 
consensus building entities.''
    In general, we prefer to adopt measures that have been endorsed by 
the NQF because it is a national multi-stakeholder organization with a 
well-documented and rigorous approach to consensus development. 
However, as we have noted in previous rulemaking (for example, 75 FR 
72065 and 76 FR 74494 for the Hospital OQR and ASCQR Programs, 
respectively), the requirement that measures reflect consensus among 
affected parties can be achieved in other ways, including through the 
measure development process, through broad acceptance, use of the 
measure(s), and through public comment.
    The proposed COVID-19 HCP vaccination measure is not NQF endorsed 
and has not been submitted to NQF for endorsement consideration. 
However, at this time, we find no other feasible and practicable 
measures on the topic of COVID-19 vaccination among HCP. CMS will 
consider the potential for future NQF endorsement as part of its 
ongoing work with the MAP. Section 1886(b)(3)(B)(viii)(IX)(bb) of the 
Act states that in the case of a specified area or medical topic 
determined appropriate by the Secretary for which a feasible and 
practicable measure has not been endorsed by the entity with a contract 
under section 1890(a) (currently the NQF), the Secretary may specify a 
measure that is not so endorsed as long as due consideration is given 
to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary. Therefore, with the above 
considerations, we believe there is sufficient basis to propose 
adoption of this measure at this time.
(d) Data Collection, Submission, and Reporting
    Given the time sensitive nature of this measure considering the 
current PHE, we are proposing that ASCs would be required to begin 
reporting data on the proposed COVID-19 HCP vaccination measure 
beginning January 1, 2022, for the CY 2024 payment determination for 
the ASCQR Program. Thereafter, we propose quarterly reporting periods. 
While we considered annual reporting periods for the ASCQR Program, we 
are proposing quarterly reporting periods given the immediacy of the 
PHE and the importance of alignment across quality payment programs 
proposing this measure.
    If our proposal to adopt this measure is finalized, ASCs would 
report the measure through the CDC NHSN web-based surveillance 
system.\333\ While the ASCQR Program does not currently require use of 
the NHSN web-based surveillance system, we have previously required use 
of this system for submitting program data. We refer readers to the CY 
2014 OPPS/ASC final rule with comment period in which we adopted the 
Influenza Vaccination Coverage Among HCP (NQF #0431) measure (78 FR 
75110 through 75117) and section XVI.D.1.c.(2). of this proposed rule 
for additional information on reporting through the NHSN web-based 
surveillance system under the ASCQR Program. The Influenza Vaccination 
Coverage Among HCP (NQF #0431) measure was removed from the ASCQR 
Program in the CY 2019 OPPS/ASC final rule as CMS observed that 
reporting measure data through the NHSN could be more burdensome for 
ASCs compared to the relative burden for hospitals participating in the 
Hospital IQR Program and the HAC Reduction Program and especially for 
freestanding ASCs (83 FR 59115 through 59117). However, the COVID-19 
pandemic and associated PHE have had a more significant effect on most 
aspects of society than influenza, including availability of the 
healthcare system. With respect to reporting for the COVID-19 HCP 
vaccination measure, CDC guidance for entering data requires submission 
of HCP count at the facility level \334\ and the measure requires 
reporting consistent with that guidance. We believe that the public 
health benefits to having these data available outweigh the burden of 
reporting for systems with multiple facilities or locations. While we 
recognize that there may be some elements of the measure specifications 
that increase burden for some ASCs, given the impact that the COVID-19 
PHE has had on society and the healthcare system, we believe that the 
benefits outweigh this reporting burden. For more information on the 
associated burden of this measure, we refer readers to XXV.C.5.b. of 
the proposed rule.
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    \333\ Centers for Disease Control and Prevention. Surveillance 
for Weekly HCP COVID-19 Vaccination. Accessed at: https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html. on February 10, 
2021.
    \334\ COVID-19 Vaccination Non-LTC Healthcare Personnel TOI 
(cdc.gov).
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    To report this measure, we are proposing that ASCs would collect 
the numerator and denominator for the COVID-19 HCP vaccination measure 
for at least one, self-selected week during each month of the reporting 
quarter and submit the data to the NHSN Healthcare Personal Safety 
(HPS) Component before the quarterly deadline to meet ASCQR Program 
requirements. While we believe that it would be ideal to have HCP 
vaccination data for every week of each month, we are mindful of the 
time and resources that ASCs would need to report the data. Thus, in 
collaboration with the CDC, we determined that data from at least one 
week of each month would be sufficient to obtain a reliable estimate of 
vaccination levels among an ASC's HCP while balancing the costs of 
reporting. If an ASC submits more than one week of data in a month, the 
most recent week's data would be used to calculate the measure. For 
example, if first and third week data are submitted, third week data 
would be used. If first, second, and fourth week data are submitted, 
fourth week data would be used. Each quarter, we are proposing that the 
CDC would calculate a single quarterly COVID-19 HCP vaccination 
coverage rate for each ASC, which would be calculated by taking the 
average of the data from the three submission periods submitted by the 
ASC for that quarter. If finalized, CMS would publicly report each 
quarterly COVID-19 HCP vaccination coverage rate as calculated by the 
CDC.
    ASCs would submit the number of HCP eligible to have worked at the 
facility during the self-selected week that the ASC reports data in 
NHSN (denominator) and the number of those HCP who have received a 
complete course of a COVID-19 vaccination (numerator) during the same 
self-selected week. As previously stated, facilities would count HCP 
working in all facilities that share the same CCN.\335\
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    \335\ Ibid.
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    We invite public comment on our proposal.
4. Proposed Changes to Previously Adopted Measures in the ASCQR Program 
Measure Set
    We previously adopted the following measures into the ASCQR measure 
set: ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong 
Side, Wrong Patient, Wrong Procedure, Wrong Implant; ASC-4: All-Cause 
Hospital Transfer/Admission; ASC-11: Cataracts--Improvement in 
Patient's Visual Function with 90 Days Following Cataract Surgery; and 
ASC-15a-e: Outpatient and Ambulatory Surgery Consumer Assessment of 
Healthcare Providers and Systems. For various reasons discussed in 
sections XVI.B.4.a., XVI.B.4.b., and XVI.B.4.c., these measures were 
either paused or suspended from the ASCQR Program.

[[Page 42271]]

We now believe that previous concerns related to the data submission 
method previously utilized for these measures can be addressed and we 
are now proposing to return to requiring data submission for these 
measures.
a. Proposal To Require Previously Suspended ASC-1, ASC-2, ASC-3, and 
ASC-4 Measures Beginning With the CY 2023 Reporting Period/CY 2025 
Payment Determination and Subsequent Years
(1) Background
    We refer readers to the CY 2012 OPPS/ASC final rule with comment 
period (76 FR 74497 through 74498) where we adopted ASC-1: Patient Burn 
beginning with the CY 2014 payment determination. This outcome measure 
assesses the percentage of ASC admissions experiencing a burn prior to 
discharge. We refer readers to the CY 2012 OPPS/ASC final rule with 
comment period (76 FR 74498) where we adopted ASC-2: Patient Fall 
beginning with the CY 2014 payment determination (NQF #0266). This 
measure assesses the percentage of ASC admissions experiencing a fall 
at the ASC. We refer readers to the CY 2012 OPPS/ASC final rule with 
comment period (76 FR 74498 through 74499) where we adopted ASC-3: 
Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant 
beginning with the CY 2014 payment determination (NQF #0267). This 
outcome measure assesses the percentage of ASC admissions experiencing 
a wrong site, wrong side, wrong patient, wrong procedure, or wrong 
implant. We refer readers to the CY 2012 OPPS/ASC final rule with 
comment period (76 FR 74499) where we adopted ASC-4: All-Cause Hospital 
Transfer/Admission beginning with the CY 2014 payment determination 
(NQF #0265). This outcome measure assesses the rate of ASC admissions 
requiring a hospital transfer or hospital admission upon discharge from 
the ASC.
    In the CY 2019 OPPS/ASC proposed rule, we proposed to remove ASC-1, 
ASC-2, ASC-3, and ASC-4 under measure removal Factor 1--measure 
performance among ASCs is so high and unvarying that meaningful 
distinctions and improvements in performance can no longer be made--for 
the CY 2021 payment determination and subsequent years (83 FR 37198 
through 37199). We noted that the ASCQR Program had previously 
finalized two criteria for determining when a measure is ``topped-
out,'' including: (1) When there is statistically indistinguishable 
performance at the 75th and 90th percentiles of national facility 
performance; and (2) when the measure's truncated coefficient of 
variation (TCOV) is less than or equal to 0.10.\336\ We presented data 
demonstrating that each of these four measures met the criteria for 
topped-out status and stated that we believed their removal from the 
ASCQR Program measure set was appropriate as there was little room for 
improvement. In addition, we stated that removal would alleviate the 
maintenance costs and administrative burden to ASCs associated with 
retaining the measures. As such, we believed the burden associated with 
reporting these measures outweighed the benefits of keeping them in the 
program (83 FR 37198 through 37199).
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    \336\ In the CY 2019 OPPS/ASC proposed rule, we also clarified 
how we calculated the TCOV for ASC-1, ASC-2, ASC-3, and ASC-4, which 
assess the rate of rare, undesired events for which a lower rate is 
preferred. Typically, for measures for which a higher rate is 
preferred, we determine the TCOV by calculating the truncated 
standard deviation (SD) in performance divided by the truncated mean 
of performance (the mean of positive events). For these four 
measures, we employed an alternate methodology utilizing the mean of 
non-adverse events in our calculation of the TCOV. This substitution 
resulted in a TCOV that was comparable to that calculated for other 
measures and allowed us to assess rare event measures by still 
generally using our previously finalized topped-out criteria. For 
more information, see 83 FR 37196 through 37197.
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    However, in the CY 2019 OPPS/ASC final rule with comment period, we 
stated that we had re-evaluated the data due to public comments and 
reviewed many studies demonstrating the importance of measuring and 
reporting the data for these measures (83 FR 59118). It became clear to 
us that these measures are more valuable to stakeholders than we had 
initially perceived. We agreed that it was important to continue to 
monitor these types of events, considering the potential negative 
impacts to patients' morbidity and mortality, in order to continue to 
prevent their occurrence and ensure that they remain rare. We 
acknowledged that these measures provided critical data to 
beneficiaries and were valuable to the ASC community. We also 
acknowledged that having measures that apply to all ASCs provides 
beneficiaries with the most comprehensive patient safety data to use 
when making decisions about a site of care. Therefore, in the CY 2019 
OPPS/ASC final rule with comment period, we did not finalize our 
proposals to remove ASC-1, ASC-2, ASC-3, and ASC-4 (83 FR 59118). We 
believed it was more prudent to keep them in the measure set in order 
to continue to detect and prevent these events.
    However, we also stated in the CY 2019 OPPS/ASC final rule with 
comment period that we were concerned about some of the data submitted 
for these measures (83 FR 59119). We explained that the data submission 
method for these measures, which involved adding specific QDCs onto 
eligible claims, may impact the completeness and accuracy of the data. 
Specifically, we were concerned that ASCs lacked the ability to correct 
the QDC codes that are used to calculate these measures from Medicare 
FFS claims (83 FR 59119) if the claim had been submitted and processed 
for payment. We stated that we believed that revising the data 
submission method for the measures, such as via QualityNet, would 
address this issue and allow facilities to correct any data submissions 
errors, resulting in more complete and accurate data (83 FR 59119).
    Therefore, we suspended the data collection of ASC-1, ASC-2, ASC-3, 
and ASC-4 beginning with the CY 2019 reporting period/CY 2021 payment 
determination (83 FR 59119). Starting with the CY 2021 payment 
determination, facilities were not required to submit data for these 
four measures as part of ASCQR Program requirements, even though the 
measures remained in the ASCQR Program measure set. We stated that as 
we developed future revisions for the data collected for these 
measures, we would take into consideration other data submission 
methods that may allow for the reporting of adverse events across 
payers and would consider commenters' feedback toward the future 
updates to the measures (83 FR 59119).
(2) Proposal To Require ASC-1, ASC-2, ASC-3, and ASC-4 Measures 
Beginning With the CY 2023 Reporting Period/CY 2025 Payment 
Determination and Subsequent Years
    In this proposed rule, we are proposing to again require and resume 
data collection for ASC-1, ASC-2, ASC-3, and ASC-4 beginning with the 
CY 2023 reporting period/CY 2025 payment determination and subsequent 
years. Under our proposal, providers would submit data via the HQR 
System (formerly referred to as the QualityNet Secure Portal). We 
believe that web-based submission will make reporting easier and more 
efficient for facilities and will allow facilities to review and 
correct submitted data until the data submission deadline; our review 
and corrections policy is discussed in more detail at section 
XVI.D.1.f.
    We stated that we believed that revising the data submission method 
for

[[Page 42272]]

the measures, such as via QualityNet (now known as the HQR System) 
would address this issue and allow facilities to correct any data 
submissions errors, resulting in more complete and accurate data (83 FR 
59119). Facilities would be able to review and correct their data 
submissions up to the data submission deadline. As we stated above, we 
also believe that while these measures have been ``topped-out'', the 
public continues to believe that it is important to monitor these types 
of events, considering the potential negative impacts to patients' 
morbidity and mortality, to continue to prevent their occurrence and 
ensure that they remain rare.
    We refer readers to section XVI.D.1.c.(1). of this proposed rule, 
where we discuss the data submission process for web-based measures, 
for more detail on how ASCs would be expected to submit data.
    We invite public comment on our proposals.
b. Proposal To Require ASC-11: Cataracts--Improvement in Patient's 
Visual Function Within 90 Days Following Cataract Surgery (NQF #1536) 
Beginning With the CY 2023 Reporting Period/CY 2025 Payment 
Determination
(1) Background
    In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75124 
through 75129) we finalized the adoption of the ASC-11: Cataracts--
Improvement in Patient's Visual Function within 90 Days Following 
Cataract Surgery measure.\337\ This measure assesses the percentage of 
patients aged 18 years and older who had cataract surgery and had 
improvement in visual function achieved within 90 days following the 
cataract surgery (78 FR 75129). The measure data consists of pre-
operative and post-operative visual function surveys. The 
implementation of this measure underwent a number of changes aimed to 
address concerns regarding burden and survey instrument usage that we 
believe are resolved so that this measure can now be proposed as 
mandatory.
---------------------------------------------------------------------------

    \337\ We note that this measure was endorsed by the NQF under 
NQF #1536 at the time of adoption but has subsequently had its 
endorsement removed.
---------------------------------------------------------------------------

    During the CY 2014 OPPS/ASC rule cycle, some commenters expressed 
concern about the burden of collecting pre-operative and post-operative 
visual function surveys (78 FR 75129 and 75138). In response to those 
comments, we modified our implementation strategy in a manner that we 
believed would significantly minimize collection and reporting burden 
(78 FR 75129). Specifically, we applied a sampling scheme and a low 
case threshold exemption to address commenters' concerns regarding 
burden (78 FR 75138 through 75139). With those changes, we intended to 
decrease burden and facilitate data reporting by allowing random 
sampling of cases when volume is high, instead of collecting 
information for all eligible patients (78 FR 75138 through 75139). For 
further details, we refer readers to the CY 2014 OPPS/ASC final rule 
with comment period (78 FR 75129; 75138 through 75139).
    Shortly thereafter, we became concerned about the use of what we 
believed at the time were inconsistent surveys to assess visual 
function. The measure specifications allowed for the use of any 
validated survey and we were unclear about the impact the use of 
varying surveys might have. Therefore, we issued guidance stating that 
we would delay the implementation of ASC-11.\338\
---------------------------------------------------------------------------

    \338\ The implementation was first delayed by 3 months--from 
January 1, 2014 to April 1, 2014, for the CY 2016 payment 
determination, via guidance issued December 31, 2013. Available at: 
https://qualitynet.cms.gov/asc/notifications. Because of continuing 
concerns, on April 2, 2014, we issued additional guidance stating 
that we would further delay the implementation of the measure from 
April 1, 2014 to January 1, 2015 for the CY 2016 payment 
determination. Available at: https://qualitynet.cms.gov/asc/notifications.
---------------------------------------------------------------------------

    Subsequently, in the CY 2015 OPPS/ASC final rule with comment 
period (79 FR 66984 through 66985), we finalized our proposal to 
exclude ASC-11 from the CY 2016 payment determination measure set, and 
for subsequent years. We proposed to exclude ASC-11 for a few reasons. 
First, we understood it was operationally difficult for ASCs to collect 
and report on the measure (79 FR 66984). Notably, the results of the 
survey used to assess the pre-operative and post-operative visual 
function of the patient were not consistently shared across clinicians, 
making it difficult for ASCs to have knowledge of the visual function 
of the patient before and after surgery (79 FR 66984). Second, the 
concern about use of various versions of the survey persisted. 
Specifically, we were concerned that if physicians used different 
surveys to assess visual function, then the measure could produce 
inconsistent results (79 FR 66984).
    By excluding ASC-11 from the measure set used for the CY 2016 
payment determination and subsequent years, ASCs were excused from 
reporting on it (79 FR 66984). ASCs that did not report on ASC-11 for 
the CY 2016 payment determination were not subject to a payment 
reduction (79 FR 66984). In conjunction with excusing ASCs from 
reporting on ASC-11 for the CY 2016 payment determination and 
subsequent years, we finalized allowing ASCs to voluntarily report ASC-
11 data for the CY 2015 reporting period/CY 2017 payment determination 
and subsequent years (79 FR 66984).
(2) Proposal To Require the ASC-11 Measure Beginning With the CY 2023 
Reporting Period/CY 2025 Payment Determination and for Subsequent Years
    We now believe it is appropriate to require that ASCs report on 
ASC-11 as our earlier concerns have been allayed. At this point, ASCs 
have had several years to familiarize themselves with ASC-11, prepare 
to operationalize it, and opportunity to practice reporting the measure 
since the CY 2015 reporting period/CY 2017 payment determination. We 
note that a small number of facilities have consistently reported data 
for this measure and these data have been made publicly available. 
Furthermore, research indicates that using different surveys will not 
result in inconsistencies, as the allowable surveys are scientifically 
validated.\339\ Research has demonstrated that of 16 different cataract 
surgery outcome questionnaires, all were able to detect clinically 
important change.\340\
---------------------------------------------------------------------------

    \339\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux 
EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery 
outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81. 
doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
    \340\ McAlinden C, Gothwal VK, Khadka J, Wright TA, Lamoureux 
EL, Pesudovs K. A head-to-head comparison of 16 cataract surgery 
outcome questionnaires. Ophthalmology. 2011 Dec;118(12):2374-81. 
doi: 10.1016/j.ophtha.2011.06.008. Epub 2011 Sep 25. PMID: 21945088.
---------------------------------------------------------------------------

    Therefore, we are proposing to require reporting for the NQF-
endorsed ASC-11 measure beginning with the CY 2023 reporting period/CY 
2025 payment determination and subsequent years. As we stated in the CY 
2014 OPPS/ASC final rule with comment period, as well as the CY 2015 
OPPS/ASC final rule with comment period, and consistent with the MAP 
recommendation, we continue to believe that this measure ``addresses a 
high-impact condition'' that is not otherwise adequately addressed in 
our current measure set (78 FR 75129 and 79 FR 66984, respectively). 
Moreover, ASC-11 serves to drive coordination of care (78 FR 75129 and 
79 FR 66984) in multiple ways, including the operational requisites for 
conducting--and sharing the results of--the surveys. This measure 
provides opportunities for care

[[Page 42273]]

coordination as well as direct patient feedback.
    We refer readers to section XVI.D.1.c.(1). for information about 
submitting data via a CMS web-based tool. We invite public comment on 
our proposal.
c. Proposal To Require ASC-15a-e: Outpatient and Ambulatory Surgery 
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) 
Survey-Based Measures Beginning With Voluntary Reporting in CY 2023 
Reporting Period and Mandatory Reporting Beginning With the CY 2024 
Reporting Period/CY 2026 Payment Determination and for Subsequent Years
(1) Background
    We previously adopted the ASC-15a-e: Outpatient and Ambulatory 
Surgery Consumer Assessment of Healthcare Providers and Systems (OAS 
CAHPS) survey-based measures to assess patient experience with care 
following a procedure or surgery in an ASC. These survey-based measures 
rate patient experience as a means for empowering patients and 
improving the quality of their care (82 FR 59450). For further details 
on this measure, we refer readers to the CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79803 through 79817), in which we adopted 
these measures beginning with the CY 2020 payment determination.
    Subsequently, in the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 49450 through 49451), we delayed implementation of ASC-
15a-e for the ASCQR Program beginning with the CY 2020 payment 
determination due to lack of sufficient operational and implementation 
data. At that time, we believed that our ongoing National OAS CAHPS 
voluntary reporting program for the survey, which began in January 2016 
\341\ and is unrelated to either the Hospital OQR Program or ASCQR 
Program, would provide valuable information moving forward. 
Specifically, we wanted to use the information from the National OAS 
CAHPS voluntary reporting program to: (1) Ensure that the survey 
measures appropriately account for patient response rates, both 
aggregate and by survey administration method; (2) reaffirm the 
reliability of national implementation of OAS CAHPS Survey data; and 
(3) appropriately account for the burden associated with administering 
the survey in the outpatient care setting.
---------------------------------------------------------------------------

    \341\ Participation in the program is open to any interested 
Medicare-certified Hospital Outpatient Departments (HOPDs) and free-
standing ambulatory surgery centers (ASCs). More information on the 
National OAS CAHPS voluntary reporting program is available at: 
https://oascahps.org/General-Information/National-Implementation and 
https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/CAHPS/OAS-CAHPS.
---------------------------------------------------------------------------

    Having had the opportunity during the delayed implementation to 
investigate the concerns about patient response rates and data 
reliability, we believe that patients are able to respond to OAS CAHPS 
questions, and that those responses are reliable based on prior 
experience collecting voluntary data for public reporting since CY 2016 
(available at https://www.medicare.gov/care-compare/). We reaffirm that 
the OAS CAHPS survey-based measures assess important aspects of care 
where the patient is the best or only source of information (81 FR 
79803). Regarding the burden associated with the survey, we believe 
that rating patient experience still provides important information to 
ASCs and patients, especially for assessing the quality of care 
provided at an ASC (82 FR 59450). Furthermore, in section 
XVI.D.1.d.(2)., we are proposing additional collection modes using a 
web-based module (web with mail follow-up of non-respondents and web 
with telephone follow-up of non-respondents) for administering the 
survey, which would be available beginning in CY 2023 under the ASCQR 
Program and for subsequent years.\342\ We believe this would further 
address some burden concerns raised during the CY 2017 OPPS/ASC final 
rule with comment period (81 FR 59450) because the web-based modules 
may produce similar results but at lower costs of collection.\343\ As 
we stated in the CY 2018 OPPS/ASC final rule with comment period, we 
continue to believe that implementation of these measures will enable 
objective and meaningful comparisons between ASCs (82 FR 59450) and 
that patient experience of care data is valuable in assessing the 
quality of care provided at an ASC and assisting patients in selecting 
a provider for their care (82 FR 59450).
---------------------------------------------------------------------------

    \342\ We note that the mixed modes will be available as part of 
the National OAS CAHPS voluntary reporting program beginning in CY 
2022.
    \343\ Bergeson SC, Gray J, Ehrmantraut LA, Hays RD. Comparing 
Web-based with Mail Survey Administration of the Consumer Assessment 
of Healthcare Providers and Systems (CAHPS[supreg]) Clinician and 
Group Survey. Prim Health Care. 2013 Sept; doi: 10.4172/2167-
1079.1000132. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3783026/.
---------------------------------------------------------------------------

    In this proposed rule, we are proposing to restart the ASC-15a-e 
measures by proposing to link reporting of measure data with payment 
determinations as part of the ASCQR Program beginning with the CY 2024 
reporting period/CY 2026 payment determination. Specifically, for the 
ASCQR Program, we are proposing voluntary data collection and reporting 
beginning with the CY 2023 reporting period, followed by mandatory data 
collection and reporting beginning with the CY 2024 reporting period/CY 
2026 payment determination. As noted above, the National OAS CAHPS 
voluntary reporting program is independent of the ASCQR Program and the 
Hospital OQR Program. This proposal is intended to make the distinction 
that ASCs that voluntarily report the OAS CAHPS survey-based measures 
during the CY 2023 reporting period would do so as part of the ASCQR 
Program until mandatory reporting begins, if these proposals are 
finalized. The reporting process for ASCs to submit OAS CAHPS data 
would remain unchanged for ASCs (that is, they would not duplicate 
submissions to the program and National OAS CAHPS voluntary reporting 
program) and we refer readers to section XVI.D.1.d. for our related 
proposals regarding the form, manner, and timing for reporting the ASC-
15a-e survey-based measures.
    We initially considered a 2-year voluntary period, that is, the CY 
2023 and CY 2024 reporting periods, because we believed that ASCs may 
require additional preparation time for OAS CAHPS implementation 
including contracting with OAS CAHPS vendors. We also considered the 
challenges that many ASCs may have experienced during the COVID-19 
pandemic and the additional operational constraints that they may still 
be experiencing. However, since voluntary reporting, including the two 
new modes of data collection we are proposing in section 
XVI.D.1.d.(2)., will be available in 2022 as part of the National OAS 
CAHPS voluntary reporting program, and we are proposing one year of 
voluntary reporting as part of the ASCQR Program for the CY 2023 
reporting period, we believe that ASCs will have sufficient time to 
familiarize themselves with OAS CAHPS measures and OAS CAHPS vendors 
prior to mandatory reporting in the CY 2024 reporting period/CY 2026 
payment determination and for subsequent years.
    We refer readers to section XVI.D.1.d. for our related proposals 
regarding the form, manner, and timing for reporting the ASC-15a-e 
survey-based measures.
    We invite public comment on our proposal. We also refer readers to 
section XV.B.5.a. of this proposed rule where we are also proposing to 
restart this measure in the Hospital OQR Program.

[[Page 42274]]

5. Summary of Previously Finalized and Proposed ASCQR Program Quality 
Measure Set
a. Summary of Previously Finalized and Proposed ASCQR Program Quality 
Measure Set for the CY 2022 Reporting Period/CY 2024 Payment 
Determination
    Table 52 summarizes the previously finalized and proposed ASCQR 
Program measure set for the CY 2022 reporting period/CY 2024 payment 
determination.
[GRAPHIC] [TIFF OMITTED] TP04AU21.101

b. Summary of Previously Finalized and Proposed ASCQR Program Quality 
Measure Set for the CY 2023 Reporting Period/CY 2025 Payment 
Determination
    Table 53 summarizes the previously finalized and proposed ASCQR 
Program measure set for the CY 2023 reporting period/CY 2025 payment 
determination.

[[Page 42275]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.102

c. Summary of Previously Finalized and Proposed ASCQR Program Quality 
Measure Set for the CY 2024 Reporting Period/CY 2026 Payment 
Determination and Subsequent Years
    Table 54 summarizes the previously finalized and proposed ASCQR 
Program measure set for the CY 2024 reporting period/CY 2026 payment 
determination and subsequent years.

[[Page 42276]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.103

6. ASCQR Program Measures and Topics for Future Consideration
a. Request for Comment on Potential Adoption of Future Measures for the 
ASCQR Program
    We seek to adopt a comprehensive set of quality measures for 
widespread use to inform decision-making regarding care and for quality 
improvement efforts in the ASC setting. In the CY 2021 OPPS/ASC final 
rule with comment period (85 FR 86083 through 86110), under the OPPS we 
finalized the elimination of the Inpatient Only (IPO) list over a 3-
year transitional period, beginning with the removal of approximately 
300 primarily musculoskeletal-related services, with the list to be 
completely phased out by CY 2024.\344\ As discussed in section IX. of 
this rule, we have continued to receive stakeholder requests to 
reconsider the elimination of the IPO list, to reevaluate services 
removed from the IPO list due to safety and quality concerns, and to, 
at a minimum, extend the timeframe for eliminating the list. After 
further consideration and review of the additional feedback from 
stakeholders, we believe that the timeframe we adopted for removing 
services from the IPO list does not give us a sufficient opportunity to 
carefully assess whether a procedure can be removed from the IPO list 
while still ensuring beneficiary safety. For CY 2022, we are proposing 
to halt the elimination of the IPO list and, after clinical review of 
the services removed from the IPO list in CY 2021, we propose to add 
the 298 services removed from the IPO list in CY 2021 back to the IPO 
list beginning in CY 2022.
---------------------------------------------------------------------------

    \344\ Centers for Medicare & Medicaid Services. (2020, December 
2). CY 2021 Medicare Hospital Outpatient Prospective Payment System 
and Ambulatory Surgical Center Payment System final rule (CMS-1736-
FC). Retrieved from www.cms.gov/newsroom: https://www.cms.gov/newsroom/fact-sheets/cy-2021-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-0.
---------------------------------------------------------------------------

    We are also proposing to reinstate the CY 2020 criteria used to add 
procedures to the ASC Covered Procedures List (CPL) and remove 258 of 
the additional 267 surgical procedures that were added to the ASC CPL 
beginning in CY 2021, under the CY 2021 revised criteria \345\ with 
additional procedures being proposed for addition for CY 2022.
    However, as technology and surgical techniques advance, services 
will continue to transition off of the IPO list, becoming payable in 
the outpatient hospital setting and being eligible for addition to the 
ASC covered procedures list in subsequent years. We recognize that 
there may be a need for more measures that inform decision-making 
regarding care and for quality improvement efforts, particularly 
focused on the behaviors of services that become newly eligible for 
payment in the ASC setting. In light of this, we seek comment on 
potential future adoption of measures that would allow better tracking 
of the quality of care for services that transition from the IPO list 
and may subsequently become eligible for addition to the ASC CPL.
    Therefore, we invite public comment on the potential future 
adoption of measures for our consideration that address care quality in 
the ASC setting given the transition of procedures from inpatient 
settings to outpatient settings of care.
b. Request for Comment on Potential Future Adoption and Inclusion of an 
ASC-Level, Risk-Standardized Patient Reported Outcomes Measure 
Following Elective Primary Total Hip and/or Total Knee Arthroplasty 
(THA/TKA)
    As described in section XVI.B.6.a. above, we are seeking comment on 
priorities for quality measurement in outpatient settings due to 
changes to the IPO procedure list (82 FR 59385 and 84

[[Page 42277]]

FR 61355) and the ASC CPL (84 FR 61388 and 85 FR 86146).
    We are also requesting comment on the potential future adoption of 
a re-specified version of a patient-reported outcome-based performance 
measure (PRO-PM) for two such procedures, elective primary total hip 
arthroplasty (THA) and total knee arthroplasty (TKA), which were 
removed from the IPO list effective for CY 2020 and CY 2018, 
respectively, and added to the ASC CPL effective for CY 2021 and CY 
2020, respectively. We recently solicited public comment on the 
potential future inclusion of a Hospital-level THA/TKA PRO-PM (NQF 
#3559) in the FY 2022 IPPS/LTCH PPS proposed rule for the inpatient 
hospital setting (86 FR 25589). This measure reports the hospital-level 
risk-standardized improvement rate (RSIR) in patient-reported outcomes 
(PROs) following elective primary THA/TKA for Medicare fee-for-service 
(FFS) beneficiaries aged 65 years and older. Substantial clinical 
improvement is measured by achieving a pre-defined improvement in score 
on one of the two validated joint-specific PRO instruments measuring 
hip or knee pain and functioning: (1) The Hip dysfunction and 
Osteoarthritis Outcome Score for Joint Replacement (HOOS, JR) for 
completion by THA recipients; and (2) the Knee injury and 
Osteoarthritis Outcome Score for Joint Replacement (KOOS, JR) for 
completion by TKA recipients. Improvement is measured from the 
preoperative assessment (data collected 90 to 0 days before surgery) to 
the postoperative assessment (data collected 300 to 425 days following 
surgery). Improvement scores are risk adjusted to account for 
differences in patient case mix. Potential non-response bias in measure 
scores due to the voluntary nature of PROs is incorporated in the 
measure calculation with stabilized inverse probability weighting based 
on likelihood of response.
    Given the recent changes in the ASC CPL, we expect that THA and TKA 
procedures will increasingly be performed in ASCs and that the volume 
of these procedures on Medicare beneficiaries 65 and older will also 
increase in ASCs in future years.
    We recognize that potential future adoption and implementation of a 
re-specified version of the THA/TKA PRO-PM in the ASCQR Program would 
require sufficient numbers of procedures for each measured ASC to 
ensure a reliable measure score. Only a subset of ASCs perform 
orthopedic procedures, so the measure would likely apply to a minority 
of ASCs. Additionally, implementing a THA/TKA PRO-PM would require 
providers to successfully collect pre- and post-operative PRO data for 
each procedure. Specifically, the inpatient THA/TKA PRO-PM discussed in 
the FY 2022 IPPS/LTCH PPS proposed rule requires a minimum of 25 cases 
with completed pre- and post-operative PRO data per hospital to ensure 
a reliable facility-level score. For more details on the inpatient THA/
TKA PRO-PM, we refer readers to the FY 2022 IPPS/LTCH PPS proposed rule 
(86 FR 25589) and the PROs Following Elective Primary Total Hip and/or 
Total Knee Arthroplasty: Hospital-Level Performance Measure--Measure 
Methodology Report, available on the CMS website at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.
    We will continue to monitor the number of THA and TKA procedures in 
ASCs and when we believe there is a sufficient number of such 
procedures performed in ASCs to reliably measure a meaningful number of 
facilities, we may consider expanding the PRO-PM to this setting. We 
also note that, as finalized in the CY 2018 OPPS/ASC final rule with 
comment period (82 FR 59455 through 59463), the ASCQR Program currently 
includes a Hospital Visits After Orthopedic Ambulatory Surgical Center 
Procedures (ASC-17) measure using claims data which provides facilities 
with important information on patient outcomes for Medicare FFS 
beneficiaries following orthopedic surgery at ASCs and this measure 
includes THA and TKA procedures. The ASC-17 measure calculates a 
facility-specific risk-standardized hospital visit ratio within 7 days 
of an orthopedic procedure performed at an ASC and has as outcomes of 
interest unplanned hospital admissions, emergency department (ED) 
visits, and observation stays, thereby, providing valuable quality 
information for these procedures as they expand into the ASC setting.
    As described in our Meaningful Measures 2.0 Framework, we aim to 
promote better collection and integration of patients' voices by 
developing PRO measures as an additional tool for measuring and 
improving quality. Given the unique challenges and opportunities for 
PRO-PMs for THA and TKA procedures in the ASC setting, we invite public 
comment on the potential future adoption of a re-specified version of 
PRO measures for elective THA/TKA PRO-PM for the ASCQR Program. 
Specifically, we invite public comment on the following:
     Input on the mechanism of PRO data collection and 
submission, including anticipated barriers and solutions to data 
collection and submission.
     Usefulness of having an aligned set of PRO-PMs across 
settings where elective THA/TKA are performed, that is, hospital 
inpatient setting, hospital outpatient departments, and ASCs for 
patients, providers, and other stakeholders. Specifically, usefulness 
and considerations for a healthcare system that performs inpatient and/
or outpatient and ASC elective THA/TKAs.
     Considerations unique to THA/TKAs performed in the ASC 
setting such as the volume of procedures performed or the measure 
cohort, outcome, or risk adjustment approach.
    We invite public comment on the adoption of a re-specified version 
of a PRO-PM measure for elective primary THA and TKA and future 
inclusion of such in the ASCQR Program measure set.
c. Request for Comment on Potential Future Efforts To Address Health 
Equity in the ASCQR Program
(1) Background
    Significant and persistent inequities in health care outcomes exist 
in the U.S. Belonging to racial or ethnic minority group; living with a 
disability; being a member of the lesbian, gay, bisexual, transgender, 
and queer (LGBTQ+) community; living in a rural area; and being near or 
below the poverty level, are often associated with worse health 
outcomes.346 347 348 349 350 351 352 353 Such

[[Page 42278]]

disparities in health outcomes are the result of number of factors, but 
importantly for CMS programs, although not the sole determinant, 
negative experiences, poor access, and provision of lower quality 
health care contribute to health disparities. For instance, numerous 
studies have shown that among Medicare beneficiaries, racial and ethnic 
minority individuals often receive lower quality of care, report lower 
experiences of care, and experience more frequent hospital readmissions 
and procedural complications.354 355 356 357 358 359 
Readmission rates for common conditions in the Hospital Readmissions 
Reduction Program (HRRP) are higher for Black Medicare beneficiaries 
and higher for Hispanic Medicare beneficiaries with Congestive Heart 
Failure and Acute Myocardial Infarction.360 361 362 363 364 
Studies have also shown that African Americans are significantly more 
likely than White Americans to die prematurely from heart disease and 
stroke.\365\ The COVID-19 pandemic has further highlighted many of 
these longstanding health inequities with higher rates of infection, 
hospitalization, and mortality among Black, Latino, and Indigenous and 
Native American persons relative to White persons.366 367 As 
noted by the CDC, ``long-standing systemic health and social inequities 
have put many people from racial and ethnic minority groups at 
increased risk of getting sick and dying from COVID-19.'' \368\ One 
important strategy for addressing these important inequities is by 
improving data collection to allow for better measurement and reporting 
on equity across our programs and policies.
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    \346\ Joynt K.E., Orav E., Jha A.K. Thirty-Day Readmission Rates 
for Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \347\ Lindenauer P.K., Lagu T., Rothberg M.B., et al. Income 
Inequality and 30 Day Outcomes After Acute Myocardial Infarction, 
Heart Failure, and Pneumonia: Retrospective Cohort Study. British 
Medical Journal. 2013;346.
    \348\ Trivedi A.N., Nsa W., Hausmann LRM, et al. Quality and 
Equity of Care in U.S. Hospitals. New England Journal of Medicine. 
2014;371(24):2298-2308.
    \349\ Polyakova, M., et al. Racial Disparities In Excess All-
Cause Mortality During The Early COVID-19 Pandemic Varied 
Substantially Across States. Health Affairs. 2021; 40(2): 307-316.
    \350\ Rural Health Research Gateway. Rural Communities: Age, 
Income, and Health Status. Rural Health Research Recap. November 
2018. Available at: https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
    \351\ U.S. Department of Health and Human Services Office of 
Minority Health. 2020 Update on the Action Plan to Reduce Racial and 
Ethnic Health Disparities, FY 2020. Available at: https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
    \352\ Heslin K.C., Hall J.E. Sexual Orientation Disparities in 
Risk Factors for Adverse COVID-19-Related Outcomes, by Race/
Ethnicity--Behavioral Risk Factor Surveillance System, United 
States, 2017-2019. MMWR Morb Mortal Wkly Rep 2021;70:149-154. DOI: 
http://dx.doi.org/10.15585/mmwr.mm7005a1. Available at: www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
    \353\ Poteat T.C., Reisner S.L., Miller M., Wirtz A.L. COVID-19 
Vulnerability of Transgender Women With and Without HIV Infection in 
the Eastern and Southern U.S. Preprint. medRxiv. 
2020;2020.07.21.20159327. Published 2020 Jul 24. doi:10.1101/
2020.07.21.20159327.
    \354\ Martino, S.C., Elliott, M.N., Dembosky, J.W., 
Hambarsoomian, K., Burkhart, Q., Klein, D.J., Gildner, J., and 
Haviland, A.M. Racial, Ethnic, and Gender Disparities in Health Care 
in Medicare Advantage. Baltimore, MD: CMS Office of Minority Health. 
2020.
    \355\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \356\ Singh J.A., Lu X., Rosenthal G.E., Ibrahim S., Cram P. 
Racial disparities in knee and hip total joint arthroplasty: An 18-
year analysis of national Medicare data. Ann Rheum Dis. 2014 
Dec;73(12):2107-15.
    \357\ Rivera-Hernandez M., Rahman M., Mor V., Trivedi A.N. 
Racial Disparities in Readmission Rates among Patients Discharged to 
Skilled Nursing Facilities. J Am Geriatr Soc. 2019 Aug;67(8):1672-
1679.
    \358\ Joynt K.E., Orav E., Jha A.K. Thirty-Day Readmission Rates 
for Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \359\ Tsai T.C., Orav E.J., Joynt K.E. Disparities in surgical 
30-day readmission rates for Medicare beneficiaries by race and site 
of care. Ann Surg. Jun 2014;259(6):1086-1090.
    \360\ Rodriguez F., Joynt K.E., Lopez L., Saldana F., Jha A.K. 
Readmission rates for Hispanic Medicare beneficiaries with heart 
failure and acute myocardial infarction. Am Heart J. Aug 
2011;162(2):254-261 e253.
    \361\ Centers for Medicare and Medicaid Services. Medicare 
Hospital Quality Chartbook: Performance Report on Outcome Measures; 
2014.
    \362\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \363\ Prieto-Centurion V., Gussin H.A., Rolle A.J., Krishnan 
J.A. Chronic obstructive pulmonary disease readmissions at minority-
serving institutions. Ann Am Thorac Soc. Dec 2013;10(6):680-684.
    \364\ Joynt K.E., Orav E., Jha A.K. Thirty-Day Readmission Rates 
for Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \365\ HHS. Heart disease and African Americans.. (March 29, 
2021). https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19.
    \366\ CMS. Preliminary Medicare COVID-19 Data Snapshot. (April 
16, 2021). Available at: https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
    \367\ Ochieng N., Cubanski J., Neuman T., Artiga S., and Damico 
A. Racial and Ethnic Health Inequities and Medicare. Kaiser Family 
Foundation. February 2021. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
    \368\ CDC. Health Equity Considerations & Racial & Ethnic 
Minority Groups. (April 19, 2021). Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
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    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.\369\ For the purposes of this proposed rule, we are 
using a definition of equity established in Executive Order 13985, 
issued on January 25, 2021, as ``the consistent and systematic fair, 
just, and impartial treatment of all individuals, including individuals 
who belong to underserved communities that have been denied such 
treatment, such as Black, Latino, and Indigenous and Native American 
persons, Asian Americans and Pacific Islanders and other persons of 
color; members of religious minorities; LGBTQ+ persons; persons with 
disabilities; persons who live in rural areas; and persons otherwise 
adversely affected by persistent poverty or inequality.'' \370\ We note 
that this definition was recently established and provides a useful, 
common definition for equity across different areas of government, 
though numerous other definitions of equity exist.
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    \369\ CMS. CMS Quality Strategy. (2016). Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \370\ Executive Order 13985. Advancing Racial Equity and Support 
for Underserved Communities Through the Federal Government. 86 FR 
7009 (Jan. 20, 2021). Available at: https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
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    Our ongoing commitment to closing the equity gap in CMS quality 
programs is demonstrated by a portfolio of programs aimed at making 
information on the quality of health care providers and services, 
including disparities, more transparent to consumers and providers. The 
CMS Equity Plan for Improving Quality in Medicare outlines a path to 
equity which aims to support Quality Improvement Network Quality 
Improvement Organizations (QIN-QIOs); Federal, state, local, and tribal 
organizations; providers; researchers; policymakers; beneficiaries and 
their families; and other stakeholders in activities to achieve health 
equity.\371\
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    \371\ Centers for Medicare & Medicaid Services Office of 
Minority Health. The CMS Equity Plan for Improving Quality in 
Medicare. 2015-2021. https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMS_EquityPlanforMedicare_090615.pdf.
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    We refer readers to the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 
25070) which summarizes our existing initiatives aimed at closing the 
equity gap in outcomes for Medicare beneficiaries. We also refer 
readers to the section XV.B.7.c.(1). of this proposed rule which 
describes the policy and statute which have informed the creation of 
the CMS Disparity Methods to provide confidential stratified results 
for measures in the hospital inpatient setting using dual eligibility 
as a proxy for social risk. Our efforts to stratify outcome measures by 
dual eligibility are supported by national recommendations from the 
Assistant Secretary for Planning and Evaluation (ASPE) and the National 
Academies of Sciences, Engineering, and Medicine, which identified dual 
eligibility, as an indicator of social risk, as a powerful predictor of 
poor health outcomes among the social risk factors that were 
tested.372 373
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    \372\ https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicaresvalue-based-purchasing-
programs.
    \373\ National Academies of Sciences, Engineering, and Medicine. 
2017. Accounting for social risk factors in Medicare payment. 
Washington, DC: The National Academies Press.

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[[Page 42279]]

    To date, we have not expanded disparities reporting to the ASC 
setting. Internally testing the two disparities methods (Within- and 
Across-Hospital Disparity Methods) on ASCQR Program quality measures 
calculated using Medicare FFS claims revealed several unique challenges 
to measuring disparities for dually eligible individuals in the ASC 
setting, principally, relatively low volumes of dual eligible patients 
in many facilities, and large diversity in the types and patient mix 
between ASCs as these facilities tend to specialize. In our initial 
analysis, few facilities met the minimum sample size required to yield 
technically feasible, adequately representative, and statistically 
reliable disparity results. We are considering social risk factors, 
including neighborhood-level social determinants of health, such as the 
poverty, education, and housing quality, which can adversely influence 
health outcomes, contributing to health inequities, in order to report 
more information regarding equity gaps in the care provided in the ASC 
setting. There are several different approaches for quantifying the 
health impacts of adverse neighborhood level socioeconomic factors. One 
approach is the Agency for Healthcare Research and Quality (AHRQ) 
neighborhood Socioeconomic Status (SES) Index, which uses information 
from the U.S. Census at the census block-group level to estimate the 
range of socioeconomic status in the beneficiary's neighborhood.\374\ 
In this proposed rule, we are seeking comment on and are interested in 
learning more about the potential for measuring disparities in care 
provided in this setting.
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    \374\ Bonito A.J., Bann C., Eicheldinger C., Carpenter L. 
Creation of New Race-Ethnicity Codes and Socioeconomic Status (SES) 
Indicators for Medicare Beneficiaries. Final Report, Sub-Task 2. 
(Prepared by RTI International for the Centers for Medicare and 
Medicaid Services through an interagency agreement with the Agency 
for Healthcare Research and Policy, under Contract No. 500-00-0024, 
Task No. 21) AHRQ Publication No. 08-0029-EF. Rockville, MD, Agency 
for Healthcare Research and Quality. January 2008.
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(2) Solicitation of Public Comments
    We are seeking comment on the possibility of providing equity 
reporting in the ASCQR Program in a way that maximally supports 
facilities in improving the quality of care for all Medicare 
beneficiaries, regardless of their socioeconomic status or other risk 
factors. We are particularly interested in learning about measurement 
approaches or social risk factors which may permit illuminating social-
based disparities in facilities which have relatively few individuals 
who possess social risk factors. Specifically, we are inviting public 
comment on the following:
     Ways to address the unique challenges of measuring 
disparities in the ASC setting, such as small sample sizes, ASC 
specialization, and the relatively smaller proportion of patients with 
social risk factors.
     The utility of neighborhood-level socioeconomic factors 
toward measuring disparities in quality-of-care outcomes for ASCs.
     Ways social risk factors influence the access to care, 
quality of care and outcomes for ASC patients in general or for 
specific ASC services.
d. Request for Comment on the Future Development and Inclusion of a 
Pain Management Measure
    Chronic pain is linked to a number of adverse physical and mental 
conditions 375 376 377 378 and contributes to increased 
health care costs.\379\ An estimated 20.4 percent (50 million) of U.S. 
adults have chronic pain.\380\ As patients with acute and chronic pain 
continue to face challenges in obtaining adequate care,\381\ Congress 
has advanced policies to improve the treatment of pain and substance 
use disorders. The Comprehensive Addiction and Recovery Act of 2016 
(CARA) (Pub. L. 114-198), the 21st Century Cures Act (Pub. L. 114-225), 
and the Substance Use-Disorder Prevention that Promotes Opioid Recovery 
and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 
115-271) outline evidence-based national strategies and prevention 
toward reducing opioid dependence. In conjunction with the opioid 
epidemic efforts, the SUPPORT Act also provides guidelines for 
providers to be prepared to discuss pain management risks and options 
with patients, including providing referrals to a pain management 
specialist.\382\ As a result of the opioid epidemic and as pain 
management procedures become more advanced, pain management practices 
and surgery centers have become increasingly viewed as feasible for the 
initial treatment of pain as well as for the expansion of non-opioid 
treatments for pain management.\383\ Based on a growing body of 
evidence on the risks of opioid misuse, we have developed a strategy to 
impact the national opioid misuse epidemic by combating nonmedical use 
of prescription opioids, opioid use disorder, and overdose through the 
promotion of safe and appropriate opioid utilization, improved access 
to treatment for opioid use disorders, and evidence-based practices for 
acute and chronic pain management.\384\
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    \375\ Institute of Medicine (US) Committee on Pain, Disability, 
and Chronic Illness Behavior; Osterweis M, Kleinman A, Mechanic D, 
editors. Washington (DC): National Academies Press (US); 1987. 
Available at: https://www.ncbi.nlm.nih.gov/books/NBK219250/.
    \376\ Hooten W.M. Chrnoic Pain and mental Health Disorders: 
Shared Neural Mechanisms, Epidemiology, and Treatment. (2016). May 
Clinic Proceedings. Available at: https://www.mayoclinicproceedings.org/article/S0025-6196(16)30182-3/
fulltext.
    \377\ De Heer E.W., Gerrits MMJG., Beekman ATF., Dekker J., van 
Marwijk HWJ., de Waal MWM., Spinhoven P., Penninx BWJH., van der 
Feltz-Cornelis C.M. (2014). The Association of Depression and 
Anxiety with Pain: A Study for NESDA. PLOS ONE 9(12): e115077. 
https://doi.org/10.1371/journal.pone.0115077.
    \378\ Rayner L., Hotopf M., Petkova H., Matcham F., Simpson A., 
and McCracken L.M. (2016). Depression in patients with chronic pain 
attending a specialised pain treatment centre: Prevalence and impact 
on health care costs. Pain; 157(7): 1472-1479. doi: 10.1097/
j.pain.0000000000000542.
    \379\ Gaskin D.J. and Richard P. (2012). The Economic Costs of 
Pain in the United States. The Journal of Pain; 13(8): 715-724. 
Available at: https://www.jpain.org/article/S1526-5900(12)00559-7/
pdf#:~:text=The%20additional%20health%20care%20costs,from%20%24299%20
to%20%24335%20billion.
    \380\ Dahlhamer J., Lucas J., Zelaya, C., et al. Prevalence of 
Chronic Pain and High-Impact Chronic Pain Among Adults--United 
States, 2016. MMWR Morb Mortal Wkly Rep 2018;67:1001-1006. DOI: 
http://dx.doi.org/10.15585/mmwr.mm6736a2.
    \381\ https://www.hhs.gov/sites/default/files/pmtf-final-report-2019-05-23.pdf.
    \382\ H.R.6--SUPPORT for Patients and Communities Act. Available 
at: https://www.congress.gov/bill/115th-congress/house-bill/6/text.
    \383\ MedPac. Report to the Congress: Medicare Payment Policy, 
Chapter 16: Opioids and alternatives in hospital settings--Payments, 
incentives, and Medicare data. Available at: http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch16_sec.pdf?sfvrsn=0.
    \384\ CMS Opioid Misuse Strategy 2016. Available at: https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/Prescription-DrugInformation-for-Partners-Items/CMS-OpioidMisuse-Strategy-2016.html.
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    With advances in techniques and growing recognition by providers 
that pain is a treatable condition, pain management services have seen 
rapid growth as a form of early intervention \385\ and more such 
procedures are being performed in ASCs.\386\ ASCs specializing in pain 
management services are also growing

[[Page 42280]]

as a share of overall ASCs.\387\ The most common multispecialty ASCs 
that focused on two specialties in 2017 were those specializing in pain 
management and either neurology or orthopedic services.\388\
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    \385\ Manchikanti, L., Parr A., Singh V., Fellows B. Ambulatory 
Surgery Centers and Interventional Techniques: A Look at Long-Term 
Survival. Pain Physician 2011; 14: E177-215. Available at: https://www.painphysicianjournal.com/current/pdf?article=MTQ1MQ%3D%3D&journal=60.
    \386\ Manchikanti, L., Parr A., Singh V., Fellows B. Ambulatory 
Surgery Centers and Interventional Techniques: A Look at Long-Term 
Survival. Pain Physician 2011; 14: E177-215. Available at: https://www.painphysicianjournal.com/current/pdf?article=MTQ1MQ%3D%3D&journal=60.
    \387\ MedPac. Report to the Congress: Medicare Payment Policy, 
Chapter 5: Ambulatory Surgical Center Services. Available at: http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch5_sec.pdf?sfvrsn=0.
    \388\ Report to the Congress: Medicare Payment Policy, 
Ambulatory Surgical Center Services. March 2019. Available at: 
http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch5_sec.pdf?sfvrsn=0.
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    We internally analyzed CY 2019 and CY 2020 Medicare FFS claims data 
using the methodology previously adopted for the ASC-7: ASC Facility 
Volume Data on Selected ASC Surgical Procedures measure (76 FR 74507 
through 74509), which identifies procedure categories for the top 100 
current procedural terminology (CPT[supreg]) codes reimbursed (we refer 
readers to Table 55). In our analyses of the Medicare FFS claims data 
from CY 2019 and CY 2020, we found that overall, the number of 
procedures declined 22 percent, likely reflecting conditions imposed by 
the COVID-19 PHE. The rank ordering of the types of procedures 
performed remained constant for the most part with pain management 
procedures (contained in the Nervous System category) being the third 
most commonly performed procedure category with 22.3 percent and 22.6 
percent in CY 2019 and CY 2020, respectively.
[GRAPHIC] [TIFF OMITTED] TP04AU21.104

    Thus, we see pain management surgical procedures as a significant 
portion of procedures performed in the ASC setting and that an 
applicable measure would provide important quality of care information 
for a specialty not included in the current ASCQR Program measure set.
    We invite public comment on the development and future inclusion of 
a measure to assess pain management surgical procedures performed in 
ASCs.
7. Maintenance of Technical Specifications for Quality Measures
    We refer readers to the CYs 2012, 2013, 2014, 2015, and 2016 OPPS/
ASC final rules with comment period (76 FR 74513 through 74514; 77 FR 
68496 through 68497; 78 FR 75131; 79 FR 66981; and 80 FR 70531, 
respectively) for detailed discussion of our policies regarding the 
maintenance of technical specifications for the ASCQR Program which are 
codified at 42 CFR 416.325. We are not proposing any changes to these 
policies in this proposed rule.
    We also refer readers to section XIV. 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 Fast 
Healthcare Interoperability Resources (FHIR) standard (as described in 
that section).
8. Public Reporting of ASCQR Program Data
    We refer readers to the CYs 2012, 2016, 2017, and 2018 OPPS/ASC 
final rules with comment period (76 FR 74514 through 74515; 80 FR 70531 
through 70533; 81 FR 79819 through 79820; and 82 FR 59455 through 
59470, respectively) for detailed discussion of our policies regarding 
the public reporting of ASCQR Program data, which are codified at 42 
CFR 416.315 (80 FR 70533). We are not proposing any changes to these 
policies in this proposed rule.

C. Administrative Requirements

1. Requirements Regarding QualityNet Account and Security Administrator
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75132 through 75133) for a detailed discussion of the 
QualityNet security administrator requirements, including setting up a 
QualityNet account and the associated timelines for the CY 2014 payment 
determination and subsequent years. In the CY 2016 OPPS/ASC final rule 
with comment period (80 FR 70533), we codified the administrative 
requirements regarding the maintenance of a QualityNet account and 
security administrator for the ASCQR Program at Sec.  416.310(c)(1)(i). 
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86189), 
we finalized the use of the term ``security official'' instead of 
``security administrator'' to denote the

[[Page 42281]]

exercise of authority invested in the role. The term ``security 
official'' refers to ``the individual(s)'' who have responsibilities 
for security and account management requirements for a facility's 
QualityNet account. We are not proposing any changes to this policy in 
this proposed rule.
2. Requirements Regarding Participation Status
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75133 through 75135) for a complete discussion of the 
participation status requirements for the CY 2014 payment determination 
and subsequent years. In the CY 2016 OPPS/ASC final rule with comment 
period (80 FR 70533 through 70534), we codified these requirements 
regarding participation status for the ASCQR Program at Sec.  416.305. 
We are not proposing any changes to these policies in this proposed 
rule.

D. Form, Manner, and Timing of Data Submitted for the ASCQR Program

1. Data Collection and Submission
a. Background
    We previously codified our existing policies regarding data 
collection and submission under the ASCQR Program at Sec.  416.310.
b. Requirements for Claims-Based Measures
(1) Requirements Regarding Data Processing and Collection Periods for 
Claims-Based Measures Using Quality Data Codes (QDCs)
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75135) for a complete summary of the data processing and 
collection periods for the claims-based measures using QDCs for the CY 
2014 payment determination and subsequent years. In the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70534), we codified the 
requirements regarding data processing and collection periods for 
claims-based measures using QDCs for the ASCQR Program at Sec.  
416.310(a)(1) and (2). We note that the previously finalized data 
processing and collection period requirements will apply to any future 
claims-based-measures using QDCs adopted in the ASCQR Program. We are 
not proposing any changes to these requirements in this proposed rule.
(2) Minimum Threshold, Minimum Case Volume, and Data Completeness for 
Claims-Based Measures Using QDCs
    We refer readers to the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 59472) (and the previous rulemakings cited therein), as 
well as 42 CFR 416.310(a)(3) and 42 CFR 416.305(c) for our policies 
about minimum threshold, minimum case volume, and data completeness for 
claims-based measures using QDCs. As noted in section XVI.D.1.b., our 
policies for minimum threshold, minimum case volume, and data 
completeness requirements will apply to any future claims-based-
measures using QDCs adopted in the ASCQR Program. We are not proposing 
any changes to these policies in this proposed rule.
(3) Requirements Regarding Data Processing and Collection Periods for 
Non-QDC Based, Claims-Based Measure Data
    We refer readers to the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 59136 through 59138) for a complete summary of the data 
processing and collection requirements for the non-QDC based, claims-
based measures. We codified the requirements regarding data processing 
and collection periods for non-QDC, claims-based measures for the ASCQR 
Program at Sec.  416.310(b). We note that these requirements for non-
QDC based, claims-based measures apply to the following previously 
adopted measures:
     ASC-12: Facility 7-Day Risk-Standardized Hospital Visit 
Rate after Outpatient Colonoscopy; and
     ASC-19: Facility-Level 7-Day Hospital Visits after General 
Surgery Procedures Performed at Ambulatory Surgical Centers (NQF 
#3357).
    We are not proposing any changes to these requirements in this 
proposed rule.
c. Requirements for Data Submitted via an Online Data Submission Tool
(1) Requirements for Data Submitted via a CMS Online Data Submission 
Tool
    We refer readers to the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 59473) (and the previous rulemakings cited therein) and 
42 CFR 416.310(c)(1) for our requirements regarding data submitted via 
a CMS online data submission tool. We are currently using the HQR 
System (formerly referred to as the QualityNet Secure Portal) to host 
our CMS online data submission tool, available at: https://qualitynet.cms.gov/. We note that in the CY 2018 OPPS/ASC final rule 
with comment period (82 FR 59473), we finalized expanded submission via 
the CMS online tool to also allow for batch data submission and made 
corresponding changes at Sec.  416.310(c)(1)(i). We are not proposing 
any changes to these policies for data submitted via a CMS online data 
submission tool in this proposed rule.
    The following previously finalized measures require data to be 
submitted via a CMS online data submission tool for the CY 2021 payment 
determination and subsequent years:
     ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up 
Interval for Normal Colonoscopy in Average Risk Patients;
     ASC-11: Cataracts: Improvement in Patients' Visual 
Function within 90 Days Following Cataract Surgery;
     ASC-13: Normothermia Outcome; and
     ASC-14: Unplanned Anterior Vitrectomy.
    As discussed in section XVI.B.4.a.(2). of this proposed rule, we 
are proposing to require and resume data collection beginning with the 
CY 2023 reporting period/CY 2025 payment determination and subsequent 
years for the following four measures:
     ASC-1: Patient Burn;
     ASC-2: Patient Fall;
     ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong 
Procedure, Wrong Implant; and
     ASC-4: All-Cause Hospital Transfer/Admission.
    Measure data for these measures would be submitted via the HQR 
System (formerly referred to as the QualityNet Secure Portal).
(2) Requirements for Data Submitted via a Non-CMS Online Data 
Submission Tool
    We refer readers to the CY 2014 OPPS/ASC final rule with comment 
period (78 FR 75139 through 75140) and the CY 2015 OPPS/ASC final rule 
with comment period (79 FR 66985 through 66986) for our requirements 
regarding data submitted via a non-CMS online data submission tool 
(specifically, the CDC NHSN website). We codified our existing policies 
regarding the data collection periods for measures involving online 
data submission and the deadline for data submission via a non-CMS 
online data submission tool at Sec.  416.310(c)(2). While we are not 
proposing any changes to those policies in this proposed rule, we are 
proposing policies specific to the proposed COVID-19 Vaccination 
Coverage Among HCP measure, for which data would be submitted via the 
CDC NHSN website.

[[Page 42282]]

(a) Proposed Form, Manner, and Timing for the COVID-19 Vaccination 
Coverage Among HCP Measure Beginning With the CY 2022 Reporting Period/
CY 2024 Payment Determination and Subsequent Years
    For the COVID-19 Vaccination Coverage Among HCP measure, we are 
proposing to require reporting data on the number of HCP who have 
received the completed vaccination course of a COVID-19 vaccine by each 
individual facility's CMS CCN.
    We propose that ASCs would report the measure through the NHSN web-
based surveillance system.\389\ Specifically, ASCs would use the COVID-
19 vaccination data reporting modules in the NHSN HPS Component to 
report the number of HCP eligible to have worked at the ASC that week 
(denominator) and the number of those HCP who have received COVID-19 
vaccination (numerator). Specific details on data submission for this 
measure can be found in the CDC's Overview of the Healthcare Safety 
Component, available at: https://www.cdc.gov/nhsn/PDFs/slides/NHSN-Overview-HPS_Aug2012.pdf.
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    \389\ Centers for Disease Control and Prevention. Surveillance 
for Weekly HCP COVID-19 Vaccination. Accessed at: https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html on February 10, 
2021.
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    For the COVID-19 Vaccination Among HCP measure, we are proposing 
that ASCs would report the measure to the NHSN for at least one week 
each month, beginning with the January 1, 2022, through December 31, 
2022, reporting period affecting CY 2024 payment determination and 
continuing with quarterly reporting deadlines for subsequent years. If 
ASCs report more than one week of data in a month, the most recent 
week's data would be used for measure calculation purposes. Each 
quarter, the CDC would calculate a summary measure of COVID-19 
vaccination coverage from the reporting periods for the quarter.
    With respect to public reporting, this quarterly average COVID-19 
vaccination coverage would be publicly reported on the Care Compare 
website in four-quarter increments, when four quarters of data are 
available. Once four quarters are available, data will be refreshed on 
a quarterly basis with the most recent four quarters publicly 
displayed. For each CMS CCN, a percentage of the HCP who received a 
complete course of the COVID-19 vaccine would be calculated and 
publicly reported. We invite public comment on our proposal.
d. Proposed Form, Manner, and Timing for Reporting the ASC-15a-e: 
Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare 
Providers and Systems (OAS CAHPS) Survey-Based Measures
(1) Background
    We refer readers to the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79822 through 79824) for a discussion of the previously 
finalized requirements related to survey administration and vendors for 
the OAS CAHPS Survey-based measures. In addition, we refer readers to 
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59450 
through 59451), where we finalized a policy to delay implementation of 
the ASC-15a-e OAS CAHPS Survey-based measures beginning with the CY 
2020 payment determination (2018 reporting period) until further action 
in future rulemaking.
(2) Proposal To Add Data Collection Survey Modes of OAS CAHPS Measures 
Collection to Existing Three Modes
    As discussed in section XVI.B.4.c. of this proposed rule, we are 
proposing to begin data collection of five survey-based measures 
derived from the OAS CAHPS Survey for the ASCQR Program beginning with 
voluntary reporting for the CY 2023 reporting periods/CY 2025 payment 
determination,\390\ followed by mandatory data collection and reporting 
beginning with the CY 2024 reporting period/CY 2026 payment 
determination and for subsequent years. The OAS CAHPS survey contains 
three OAS CAHPS composite survey-based measures and two global survey-
based measures. In this section, we are proposing requirements related 
to survey administration, vendors, and oversight activities.
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    \390\ As stated in section XVI.B.4.c., we note that National OAS 
CAHPS voluntary reporting is independent of the ASCQR Program, but 
the submission process will otherwise remain unchanged. This 
proposal is intended to clarify that voluntary reporting of OAS 
CAHPS would begin as part of the ASCQR program in the CY 2023 
reporting period until mandatory reporting would begin in the CY 
2024 reporting period, if both proposals are finalized.
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    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79822 
through 79825), we previously discussed the time, form, and manner 
which OAS CAHPS information will be submitted. We are now proposing two 
additional data collection modes (web with mail follow-up of non-
respondents and web with telephone follow-up of non-respondents) \391\ 
beginning with voluntary data collection and reporting for the CY 2023 
reporting/CY 2025 payment determination and continuing for mandatory 
reporting beginning with the CY 2024 reporting period/CY 2026 payment 
determination and for subsequent years, if finalized in section 
XVI.B.4.c. For more information about the modes of administration, we 
refer readers to the OAS CAHPS website: https://oascahps.org. We 
reiterate our clarification from when we adopted these measures in the 
CY 2017 OPPS/ASC final rule that, when implemented, ASCs that 
anticipate receiving more than 300 surveys would be required to either: 
(1) Randomly sample their eligible patient population; or (2) survey 
their entire OAS CAHPS eligible patient population (81 FR 79809). We 
also refer readers to section XV.D.4.b of this proposed rule where we 
describe our similar policy for the Hospital OQR Program.
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    \391\ The two additional modes will be available as part of 
National OAS CAHPS voluntary reporting in 2022.
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(a) Survey Requirements
    The data collection for the survey currently has three 
administration methods: (1) Mail-only; (2) telephone-only; and (3) 
mixed mode (mail with telephone follow-up of non-respondents). We refer 
readers to the Protocols and Guidelines Manual for the OAS CAHPS Survey 
(https://oascahps.org/Survey-Materials) for materials for each mode of 
survey administration. In the 2018 OPPS/ASC final rule with comment 
period, we expressed interest in investigating the feasibility of 
offering the OAS CAHPS Survey using a web-based format (82 FR 59451). 
As a result, we designed a mode experiment to assess the impact of 
adding web-based survey administration. This mode experiment tested 
five administration modes with patients who receive outpatient surgical 
care: (1) Mail-only; (2) telephone-only; (3) web-only; (4) web with 
mail follow-up; and (5) web with a telephone follow-up. Data collection 
was completed in the fall of 2019. Response rates by mode in the 
experiment were: 35 percent (mail-only); 19 percent (telephone-only); 
29 percent (web-only); 39 percent (web with mail follow-up); and 35 
percent (web with telephone follow-up).
    Based on these results, in addition to the three previously 
established modes, in this proposed rule we are proposing to 
incorporate two additional administration methods: (1) Web with mail 
follow-up of non-respondents; and

[[Page 42283]]

(2) web with telephone follow-up of non-respondents. This would allow a 
total of five modes of survey administration for reporting beginning 
with voluntary data collection and reporting as part of the ASCQR 
Program for the CY 2023 reporting period \392\ and continuing for 
mandatory data collection and reporting for the CY 2024 reporting 
period/CY 2026 payment determination--the first year the survey would 
be required if our proposal in section XVI.B.4.c. is finalized as 
proposed--and thereafter. We are not proposing a purely web-based 
format at this time because the use of a web-based mode is included in 
the two mixed modes options being proposed and the purely web-based 
format would create response bias since not all patients have the 
ability to respond by web.
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    \392\ As stated in section XVI.B.4.c., we note that the two 
modes (web with mail follow-up of non-respondents; and web with 
telephone follow-up of non-respondents) will be available beginning 
in CY 2022 for National OAS CAHPS voluntary reporting, and then if 
finalized, available as part of ASCQR Program beginning in the CY 
2023 reporting period and subsequent years.
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    For all five proposed modes of administration as part of the ASCQR 
Program, we are proposing that data collection must be initiated no 
later than 21 calendar days after the month in which a patient has a 
surgery or procedure at an ASC and completed within 6 weeks (42 days) 
after initial contact of eligible patients begins, beginning with 
voluntary data collection and reporting in the CY 2023 reporting 
period/CY 2025 payment determination and subsequent years. Under this 
proposal, ASCs, via their CMS-approved survey vendors, must make 
multiple attempts to contact eligible patients unless the patient 
refuses or the ASC/vendor learns that the patient is ineligible to 
participate in the survey. In addition, we are proposing that ASCs, via 
their CMS-approved survey vendor, collect survey data for eligible 
patients using the established quarterly deadlines to report data to 
CMS for each data collection period, unless the ASC has been exempted 
from the OAS CAHPS Survey requirements under our minimum case volume 
for program participation \393\ or our OAS CAHPS low-volume exemption 
policy, which exempts ACS that treat fewer than 60 survey-eligible 
patients during the ``eligibility period,'' (which is the calendar year 
before the data collection period (81 FR 79806)), that submit the 
participation exemption request form, which will be made available on 
the OAS CAHPS Survey website (https://oascahps.org) on or before May 15 
of the data collection year. As finalized previously, all exemption 
requests would be reviewed and evaluated by CMS (81 FR 79806). For ASCs 
with minimum case volumes, but without a low-volume exemption, these 
submission deadlines would be posted on the OAS CAHPS Survey website 
(https://oascahps.org). Late submissions would not be accepted.
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    \393\ ASCs with fewer than 240 Medicare claims (Medicare primary 
and secondary payer) per year during an annual reporting period for 
a payment determination year are not required to participate in the 
ASCQR Program for the subsequent annual reporting period for that 
subsequent payment determination year. See 42 CFR 416.305.
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    As discussed in more detail below, compliance with the OAS CAHPS 
Survey protocols and guidelines, including this monthly data collection 
requirement as part of each quarterly data submission, would be 
overseen by CMS or its contractor who would receive approved vendors' 
monthly submissions, review the data, and analyze the results. As 
stated previously (81 FR 79805), all data collection and submission for 
the OAS CAHPS Survey measures would be reported at the CCN level, and 
if data collection and reporting becomes mandatory in CY 2024 reporting 
period/CY 2026 payment determination as proposed, under this proposal, 
all eligible ASCs in a CCN would be required to participate in the OAS 
CAHPS Survey, except for those that meet and receive an exception for 
having fewer than 60 survey-eligible patients during the year preceding 
the data collection period (81 FR 79806). Therefore, the survey data 
reported for a CCN must include eligible patients from all eligible 
ASCs covered by the CCN; or if more than 300 completed surveys are 
anticipated, an ASC can choose to randomly sample their eligible 
patient population (81 FR 79817).
    In this proposed rule, we also propose that survey vendors acting 
on behalf of ASCs must submit data by the specified data submission 
deadlines, which generally would be posted on the Outpatient and 
Ambulatory Surgery CAHPS Survey website located at https://oascahps.org/Data-Submission/Data-Submission-Deadlines. If an ASC's 
data are submitted after the data submission deadline, it would not 
fulfill the OAS CAHPS quality reporting requirements. Therefore, in 
regard to any OAS CAHPS reporting, we would strongly encourage ASCs to 
be fully appraised of the methods and actions of their survey vendors, 
especially the vendors' full compliance with OAS CAHPS Survey 
administration protocols, and to carefully inspect all data warehouse 
reports in a timely manner.
    We reiterate that the use of predictive or auto dialers in 
telephonic survey administration is governed by the Telephone Consumer 
Protection Act (TCPA) (47 U.S.C. 227) and subsequent regulations 
promulgated by the Federal Communications Commission (FCC) (47 CFR 
64.1200) and Federal Trade Commission. We refer readers to the FCC's 
declaratory ruling released on July 10, 2015 further clarifying the 
definition of an auto dialer, available at: https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-72A1.pdf. In the telephone-only and 
mixed mode survey administration methods involving telephone, ASCs and 
vendors must comply with the regulations discussed above, and any other 
applicable regulations. To the extent that any existing CMS technical 
guidance conflicts with the TCPA or its implementing regulations 
regarding the use of predictive or auto dialers, or any other 
applicable law, CMS would expect vendors to comply with applicable law.
    We invite comments on our proposals discussed previously.
(b) Vendor Requirements
    We are not proposing new vendor requirements, but reiterate the 
vendor requirements finalized in the CY 2017 OPPS/ASC final rule with 
comment period (81 FR 79823 through 79824) to ensure that patients 
respond to the survey in a way that reflects their actual experiences 
with outpatient care, and is not influenced by the ASC. We finalized 
that ASCs must contract with a CMS-approved OAS CAHPS Survey vendor to 
conduct or administer the survey. We believe that a neutral third-party 
should administer the survey for ASCs, and it is our belief that an 
experienced survey vendor will be best able to ensure reliable results. 
CAHPS Survey-approved vendors are also already used or required in the 
following CMS quality programs: The Hospital Inpatient Quality 
Reporting Program (71 FR 68203 through 68204); the Hospital Value-Based 
Purchasing (VBP) Program (76 FR 26497, 26502 through 26503, and 26510); 
the End Stage Renal Disease Quality Improvement Program (76 FR 70269 
through 70270); the Home Health QRP (80 FR 68709 through 68710); and 
the Hospice QRP (80 FR 47141 through 47207).
    Information about the list of approved survey vendors and how to 
authorize a vendor to collect data on an ASC's behalf is available 
through the OAS CAHPS Survey website, available at: https://oascahps.org. The web portal has both public and secure (restricted 
access) sections to ensure the security and privacy of selected 
interactions. As

[[Page 42284]]

mentioned earlier, requirements for survey vendors were previously 
finalized in the CY 2017 OPPS/ASC final rule with comment period (81 FR 
79793 through 79794) and codified at Sec.  416.310(e)(2). ASCs will 
need to register on the OAS CAHPS Survey website (https://oascahps.org) 
in order to authorize the CMS-approved vendor to administer the survey 
and submit data on their behalf. Each ASC must then administer (via its 
vendor) the survey to eligible patients treated during the data 
collection period on a monthly basis according to the guidelines in the 
Protocols and Guidelines Manual (https://oascahps.org) and report the 
survey data to CMS on a quarterly basis by the deadlines posted on the 
OAS CAHPS Survey website.
e. ASCQR Program Data Submission Deadlines
    In the CY 2021 OPPS/ASC final rule with comment period (85 FR 
86191) we finalized that all program deadlines falling on a nonwork day 
be moved forward consistent with section 216(j) of the Act, 42 U.S.C. 
416(j), ``Periods of Limitation Ending on Nonwork Days.'' Specifically, 
the Act indicates that all deadlines occurring on a Saturday, Sunday, 
or legal holiday, or on any other day, all or part of which is declared 
to be a nonwork day for Federal employees by statute or Executive 
order, shall be extended to the first day thereafter which is not a 
Saturday, Sunday or legal holiday or any other day all or part of which 
is declared to be a nonwork day for Federal employees by statute or 
Executive order (42 U.S.C. 416(j)). We codified this policy at Sec.  
416.310(f). We are not proposing any changes to this policy in this 
proposed rule.
f. Review and Corrections Period for Measure Data Submitted to the 
ASCQR Program
(1) Review and Corrections Period for Data Submitted via a CMS Online 
Data Submission Tool
    Under the ASCQR Program, for measures submitted via a CMS online 
data submission tool, ASCs submit measure data to CMS from January 1 
through May 15 during the calendar year subsequent to the current data 
collection period (84 FR 61432).\394\ For example, ASCs collect measure 
data from January 1, 2020 through December 31, 2020 and submit these 
data to CMS from January 1, 2021 through May 15, 2021. ASCs may begin 
submitting data to CMS as early as January 1. ASCs are encouraged, but 
not required, to submit data early in the submission period so that 
they can identify errors and resubmit data before the established 
submission deadline.
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    \394\ ASCQR Program Data Submission Deadlines. Available at: 
https://qualitynet.cms.gov/asc/data-submission#tab2.
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    In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86191 
through 86192), we finalized the formalization of that process and 
established a review and corrections period similar to what was 
finalized for the Hospital OQR Program in the CY 2021 OPPS/ASC final 
rule with comment period (85 FR 86184) for data submitted via the CMS 
web-based tool. For the ASCQR Program, we finalized the implementation 
of a review and corrections period which runs concurrently with the 
data submission period beginning with the effective date of this rule. 
During this review and corrections period, ASCs may enter, review, and 
correct data submitted directly to CMS. However, after the submission 
deadline, ASCs are not allowed to change these data. We codified this 
review and corrections period at Sec.  416.310(c)(1)(iii). We are not 
proposing any changes to this policy in this proposed rule.
(2) Review and Corrections Period for the OAS CAHPS Measures
    Each ASC administers (via its vendor) the survey to all eligible 
patients treated during the data collection period on a monthly basis 
according to the guidelines in the Protocols and Guidelines Manual 
(available at: https://oascahps.org) and report the survey data to CMS 
on a quarterly basis by the deadlines posted on the OAS CAHPS Survey 
website as stated above in section XVI.D.1.d.(2).(b). Data cannot be 
altered after the data submission deadline but can be reviewed prior to 
the submission deadline (81 FR 79822 through 79823).
g. ASCQR Program Reconsideration Procedures
    We refer readers to the CY 2016 OPPS/ASC final rule with comment 
period (82 FR 59475) (and the previous rulemakings cited therein) and 
42 CFR 416.330 for the ASCQR Program's reconsideration policy. We are 
not proposing any changes to this policy in this proposed rule.
h. Extraordinary Circumstances Exception (ECE) Process for the CY 2021 
Payment Determination and Subsequent Years
    We refer readers to the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 59474 through 59475) (and the previous rulemakings cited 
therein) and 42 CFR 416.310(d) for the ASCQR Program's policies for 
extraordinary circumstance exceptions (ECE) requests. In the CY 2018 
OPPS/ASC final rule with comment period (82 FR 59474 through 59475), 
we: (1) Changed the name of this policy from ``extraordinary 
circumstances extensions or exemption'' to ``extraordinary 
circumstances exceptions'' for the ASCQR Program, beginning January 1, 
2018; and (2) revised Sec.  416.310(d) of our regulations to reflect 
this change. We will strive to complete our review of each request 
within 90 days of receipt. We are not proposing any changes to this 
policy in this proposed rule.

E. Proposed Payment Reduction for ASCs That Fail To Meet the ASCQR 
Program Requirements

1. Statutory Background
    We refer readers to the CY 2013 OPPS/ASC final rule with comment 
period (77 FR 68499) for a detailed discussion of the statutory 
background regarding payment reductions for ASCs that fail to meet the 
ASCQR Program requirements.
2. Policy Regarding Reduction to the ASC Payment Rates for ASCs That 
Fail To Meet the ASCQR Program Requirements for a Payment Determination 
Year
    The national unadjusted payment rates for many services paid under 
the ASC payment system are equal to the product of the ASC conversion 
factor and the scaled relative payment weight for the APC to which the 
service is assigned. For CY 2022, the ASC conversion factor is equal to 
the conversion factor calculated for the previous year updated by the 
productivity-adjusted hospital market basket update factor. The 
productivity adjustment is set forth in section 1833(i)(2)(D)(v) of the 
Act. The productivity-adjusted hospital market basket update is the 
annual update for the ASC payment system for a 5-year period (CY 2019 
through CY 2023). Under the ASCQR Program in accordance with section 
1833(i)(7)(A) of the Act and as discussed in the CY 2013 OPPS/ASC final 
rule with comment period (77 FR 68499), any annual increase shall be 
reduced by 2.0 percentage points for ASCs that fail to meet the 
reporting requirements of the ASCQR Program. This reduction applied 
beginning with the CY 2014 payment rates (77 FR 68500). For a complete 
discussion of the calculation of the ASC conversion factor and our 
finalized proposal to update the ASC

[[Page 42285]]

payment rates using the inpatient hospital market basket update for CYs 
2019 through 2023, we refer readers to the CY 2019 OPPS/ASC final rule 
with comment period (83 FR 59073 through 59080).
    In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499 
through 68500), in order to implement the requirement to reduce the 
annual update for ASCs that fail to meet the ASCQR Program 
requirements, we finalized our proposal that we would calculate two 
conversion factors: A full update conversion factor and an ASCQR 
Program reduced update conversion factor. We finalized our proposal to 
calculate the reduced national unadjusted payment rates using the ASCQR 
Program reduced update conversion factor that would apply to ASCs that 
fail to meet their quality reporting requirements for that calendar 
year payment determination. We finalized our proposal that application 
of the 2.0 percentage point reduction to the annual update may result 
in the update to the ASC payment system being less than zero prior to 
the application of the productivity adjustment.
    The ASC conversion factor is used to calculate the ASC payment rate 
for services with the following payment indicators (listed in Addenda 
AA and BB to the proposed rule, which are available via the internet on 
the CMS website): ``A2'', ``G2'', ``P2'', ``R2'' and ``Z2'', as well as 
the service portion of device-intensive procedures identified by ``J8'' 
(77 FR 68500). We finalized our proposal that payment for all services 
assigned the payment indicators listed above would be subject to the 
reduction of the national unadjusted payment rates for applicable ASCs 
using the ASCQR Program reduced update conversion factor (77 FR 68500).
    The conversion factor is not used to calculate the ASC payment 
rates for separately payable services that are assigned status 
indicators other than payment indicators ``A2'', ``G2'', ``J8'', 
``P2'', ``R2'' and ``Z2.'' These services include separately payable 
drugs and biologicals, pass-through devices that are contractor-priced, 
brachytherapy sources that are paid based on the OPPS payment rates, 
and certain office-based procedures, radiology services and diagnostic 
tests where payment is based on the PFS nonfacility PE RVU-based 
amount, and a few other specific services that receive cost-based 
payment (77 FR 68500). As a result, we also finalized our proposal that 
the ASC payment rates for these services would not be reduced for 
failure to meet the ASCQR Program requirements because the payment 
rates for these services are not calculated using the ASC conversion 
factor and, therefore, not affected by reductions to the annual update 
(77 FR 68500).
    Office-based surgical procedures (generally those performed more 
than 50 percent of the time in physicians' offices) and separately paid 
radiology services (excluding covered ancillary radiology services 
involving certain nuclear medicine procedures or involving the use of 
contrast agents) are paid at the lesser of the PFS nonfacility PE RVU-
based amounts or the amount calculated under the standard ASC 
ratesetting methodology. Similarly, in the CY 2015 OPPS/ASC final rule 
with comment period (79 FR 66933 through 66934), we finalized our 
proposal that payment for certain diagnostic test codes within the 
medical range of CPT codes for which separate payment is allowed under 
the OPPS will be at the lower of the PFS nonfacility PE RVU-based (or 
technical component) amount or the rate calculated according to the 
standard ASC ratesetting methodology when provided integral to covered 
ASC surgical procedures. In the CY 2013 OPPS/ASC final rule with 
comment period (77 FR 68500), we finalized our proposal that the 
standard ASC ratesetting methodology for this type of comparison would 
use the ASC conversion factor that has been calculated using the full 
ASC update adjusted for productivity. This is necessary so that the 
resulting ASC payment indicator, based on the comparison, assigned to 
these procedures or services is consistent for each HCPCS code, 
regardless of whether payment is based on the full update conversion 
factor or the reduced update conversion factor.
    For ASCs that receive the reduced ASC payment for failure to meet 
the ASCQR Program requirements, we believe that it is both equitable 
and appropriate that a reduction in the payment for a service should 
result in proportionately reduced coinsurance liability for 
beneficiaries (77 FR 68500). Therefore, in the CY 2013 OPPS/ASC final 
rule with comment period (77 FR 68500), we finalized our proposal that 
the Medicare beneficiary's national unadjusted coinsurance for a 
service to which a reduced national unadjusted payment rate applies 
will be based on the reduced national unadjusted payment rate.
    In that final rule with comment period, we finalized our proposal 
that all other applicable adjustments to the ASC national unadjusted 
payment rates would apply in those cases when the annual update is 
reduced for ASCs that fail to meet the requirements of the ASCQR 
Program (77 FR 68500). For example, the following standard adjustments 
would apply to the reduced national unadjusted payment rates: The wage 
index adjustment; the multiple procedure adjustment; the interrupted 
procedure adjustment; and the adjustment for devices furnished with 
full or partial credit or without cost (77 FR 68500). We believe that 
these adjustments continue to be equally applicable to payment for ASCs 
that do not meet the ASCQR Program requirements (77 FR 68500).
    In the CY 2015 through CY 2021 OPPS/ASC final rules with comment 
period we did not make any other changes to these policies. We propose 
the continuation of these policies for CY 2022.

XVII. Request for Information on Rural Emergency Hospitals

A. Background

    Americans who live in rural areas of the nation make up about 20 
percent of the United States population, and they often experience 
shorter life expectancy, higher all-cause mortality, higher rates of 
poverty, fewer local doctors, and greater distances to travel to see 
healthcare providers, than do their urban and suburban 
counterparts.\395\
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    \395\ Rural Health Research Gateway. (2018). Rural Communities: 
Age, Income, and Health Status. https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
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    The healthcare inequities that many rural Americans face raise 
serious concerns that the trend for poor healthcare access and worse 
outcomes overall in rural areas will continue unless the potential 
causes of such healthcare inequities are addressed.
    In addition, one in five rural residents identifies as Black, 
Hispanic, American Indian/Alaska Native (AI/AN), Asian American/Pacific 
Islander (AA/PI), or a combination of ethnic backgrounds. Compared to 
the non-Hispanic White rural population, these minority groups often 
and regularly experience several disadvantageous social determinants of 
health.\396\
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    \396\ Rural Health Research Gateway. (2020). Rural Ethnic/Racial 
Disparities: Adverse Health Outcomes. https://www.ruralhealthresearch.org/assets/3973-16600/rural-ethnic-racial-disparities-health-recap.pdf.
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    Rural hospitals are essential to providing health care to their 
communities and the closure of these hospitals limits access to care 
for the communities they once served and reduces employment 
opportunities, further impacting local economies. Barriers to accessing 
health services can

[[Page 42286]]

lead to unmet health needs, delays in receiving appropriate care, 
inability to get preventive services, financial burdens, and 
preventable hospitalizations.\397\ Healthcare workforce shortages can 
also significantly impact healthcare access in rural communities.\398\ 
As of March 2021, 61.47 percent of Primary Medical Health Professional 
Shortage Areas (HPSAs) were located in rural areas.\399\
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    \397\ Healthy People 2020 (n.d.) Access to Health Services. 
https://www.healthypeople.gov/2020/topics-objectives/topic/Access-to-Health-Services.
    \398\ Hempel S., Gibbons M.M., Ulloa J.G., et al. Rural 
Healthcare Workforce: A Systematic Review [Internet]. Washington 
(DC): Department of Veterans Affairs (U.S.); 2015 Dec. INTRODUCTION. 
Available from: https://www.ncbi.nlm.nih.gov/books/NBK409502/.
    \399\ Health Resources and Services Administration. (2021). HRSA 
Data Warehouse: Designated Health Professional Shortage Areas 
Statistics. https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport.
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    The Consolidated Appropriations Act (CAA), 2021, was signed into 
law in December 2020. In this legislation, Congress established a new 
Medicare provider type: Rural Emergency Hospitals (REHs). Section 125 
of the CAA, 2021, Division CC, defines an REH as a facility that: Is 
enrolled in the Medicare program on or after January 1, 2023; does not 
provide any acute care inpatient services (other than post-hospital 
extended care services furnished in a distinct part unit licensed as a 
skilled nursing facility (SNF)); has a transfer agreement in effect 
with a level I or level II trauma center; meets certain licensure 
requirements; meets requirements to be a staffed emergency department; 
meets staff training and certification requirements established by the 
Secretary; and meets certain conditions of participation (CoPs) 
applicable to hospital emergency departments and critical access 
hospitals (CAHs) with respect to emergency services. CAHs and small 
rural hospitals that convert to REHs may furnish rural emergency 
hospital services for Medicare payment beginning in 2023.
    The Secretary is required to establish quality measurement 
reporting requirements for REHs, which may include claims-based 
measures and/or patient experience surveys. An REH is required to 
submit quality measure data to the Secretary, and the Secretary shall 
establish procedures to make the data available to the public on the 
CMS website.
    The Quality Improvement Organization requirements established at 
section 1156(a) of the Social Security Act (the Act) shall apply to 
REHs in the same manner that they apply to hospitals and CAHs, in 
accordance with section 125(b)(1) of the CAA. In addition, the 
requirements established at section 1864 of the Act for hospitals and 
CAHs to be surveyed for compliance with the CoPs shall apply to REHs in 
the same manner as other hospitals and CAHs, in accordance with section 
125(d)(2) of the CAA.
    Additionally, section 125 of the CAA, 2021, requires that REHs 
provide emergency department services and observation services, and, at 
the election of the REH, other medical and health services furnished on 
an outpatient basis, as specified by the Secretary. The REH must also 
have a staffed emergency department 24 hours a day, 7 days a week, with 
staffing requirements similar to those for CAHs.\400\
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    \400\ Congress.gov. (2020). H.R.133--Consolidated Appropriations 
Act, 2021. https://www.congress.gov/116/bills/hr133/BILLS-116hr133enr.pdf.
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    In order to become an REH, a provider must, on the date of 
enactment of the CAA, 2021 (December 27, 2020), either already be a CAH 
or a rural subsection (d) hospital with not more than 50 beds. In 
addition, the REH must meet certain other requirements, including, but 
not limited to the following:
     An annual per patient average of 24 hours or less in the 
REH;
     staff training and certification requirements established 
by the Secretary;
     emergency services CoPs applicable to CAHs;
     hospital emergency department CoPs determined applicable 
by the Secretary;
     the applicable SNF requirements (if the REH includes a 
distinct part SNF);
     a transfer agreement with a level I or level II trauma 
center; and
     any other requirements the Secretary finds necessary in 
the interest of the health and safety of individuals who are furnished 
REH services.
    Starting on January 1, 2023, an REH that provides rural emergency 
hospital services (as defined in section 1861(kkk)(1) of the Act) will 
receive a Medicare payment for those services pursuant to section 
1843(x)(1) of the Act that reflects a 5 percent increase over the 
payment rate the provider would otherwise receive through the OPPS. Any 
co-payments for these services will be calculated based on the standard 
OPPS rate for the service excluding the 5 percent payment increase.
    REHs also will receive an additional facility payment pursuant to 
section 1834(x)(2) of the Act. The annual payment amount will be 
determined based on the excess (if any) of the total amount that was 
paid to all CAHs in 2019 over the estimated total amount that would 
have been paid to CAHs in 2019 if payment were made for inpatient 
hospital, outpatient hospital, and skilled nursing facility services 
under the applicable prospective payment systems for such services 
during such year. This excess amount is divided by the total number of 
CAHs in 2019. After the initial Medicare subsidy amount is calculated 
for CY 2023, the additional facility payments in subsequent years will 
increase by the hospital market basket percentage increase. REHs will 
receive these additional facility payments in twelve monthly 
installments. REHs also will be required to maintain detailed 
information as to how they have used these payments.

B. Solicitation of Public Comments

    Under the statute, in addition to the applicable mandatory CAH 
requirements (42 CFR part 485, subpart F), hospital emergency services 
requirements (42 CFR 482.55) and SNF requirements (42 CFR part 483, 
subpart B), the Secretary has discretion to determine what, if any, 
additional health and safety requirements should apply to REHs. We are 
soliciting stakeholder input as we consider the health and safety 
standards that, in accordance with the statute, should apply to REHs in 
order for them to be certified to participate in the Medicare program. 
We are also seeking broad input on the concerns of rural providers that 
should be taken into consideration by CMS in establishing additional 
CoPs for REHs. Specifically, we are asking for stakeholder input on the 
following questions:
Type and Scope of Services Offered
    1. What are the barriers and challenges to delivering emergency 
department services customarily provided by hospitals and CAHs in rural 
and underserved communities that may require different or additional 
CoPs for REHs (for example, staffing shortages, transportation, and 
sufficient resources)?
    2. An REH must provide emergency and observation services and may 
elect to provide additional services as determined appropriate by the 
Secretary. What other outpatient medical and health services, including 
behavioral health services, should the Secretary consider as additional 
eligible services? In particular, what other services may otherwise 
have a lack of access for Medicare beneficiaries if an REH does not 
provide them?

[[Page 42287]]

    3. What, if any, virtual or telehealth services would be 
appropriate for REHs to provide, and what role could virtual care play 
in REHs??
    4. Should REHs include Opioid Treatment Programs, clinics for 
buprenorphine induction, or clinics for treating stimulant addiction in 
their scope of services? Please discuss the barriers that could prevent 
inclusion of each of these types of services.
    5. What, if any, maternal health services would be appropriate for 
REHs to provide and how can REHs address the maternal health needs in 
rural communities? What unique challenges or concerns will the 
providing of care to the maternal health population present for an REH?
Health and Safety Standards, Including Licensure and Conditions of 
Participation
    6. The statute requires that REHs meet the requirements for 
emergency services (set forth at Sec.  485.618) that apply to CAHs. 
Which hospital emergency department requirements (set forth at Sec.  
482.55) should or should not be mandated for REHs and why or why not? 
Are there additional health and safety standards that should be 
considered? What are they, why are they important, and are there data 
that speak to the need for a particular standard?
    7. The REH must meet staff training and certification requirements 
established by the Secretary. Should these be the same as, or similar 
to, CAH requirements (Personnel qualifications, Sec.  485.604 and 
Staffing and staff responsibilities, Sec.  485.631)? Are there 
additional or different staff training and certification requirements 
that should be considered for REHs and why? Are there any staffing 
concerns that the existing CAH requirements would not address?
    8. What additional considerations should CMS be aware of as it 
evaluates the establishment of CoPs for REHs? Are there data and/or 
research of which we should particularly be aware?
    9. What, if any, lessons have been learned as they relate to rural 
emergency services during the COVID-19 pandemic that might be pertinent 
to consider for policy implementation after the Public Health 
Emergency?
    10. Are there state licensure concerns for hospitals and CAHs that 
wish to become REHs? What issues with respect to existing or potential 
state licensure requirements should CMS consider when developing the 
CoPs for this new provider type? What supports and timelines should be 
in place for States to establish licensing rules?
Health Equity
    On January 20 and 21, 2021, President Biden issued three executive 
orders related to issues of health equity: Executive Order 13985 
``Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government''; \401\ Executive Order 13988, 
``Preventing and Combating Discrimination on the Basis of Gender 
Identity or Sexual Orientation'';\402\ and Executive Order 13995 
``Ensuring an Equitable Pandemic Response and Recovery''.\403\
---------------------------------------------------------------------------

    \401\ The White House. (2021). Briefing Room: Executive Order ON 
Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
    \402\ The White House. (2021). Briefing Room: Executive Order on 
Preventing and Combating Discrimination on the Basis of Gender 
Identity or Sexual Orientation. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-preventing-and-combating-discrimination-on-basis-of-gender-identity-or-sexual-orientation/.
    \403\ The White House. (2021). Briefing Room: Executive Order on 
Ensuring an Equitable Pandemic Response and Recovery. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/21/executive-order-ensuring-an-equitable-pandemic-response-and-recovery/.
---------------------------------------------------------------------------

    Executive Order 13985, ``Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government'' requires the 
Federal Government to pursue a comprehensive approach to advancing 
equity for all, including people of color and others who have been 
historically underserved, marginalized, and adversely affected by 
persistent poverty and inequality by recognizing and working to redress 
inequities in its policies and programs that serve as barriers to equal 
opportunity. In accordance with this Executive order, persons who live 
in rural areas are identified as belonging to underserved communities 
that have been adversely affected by inequality.
    Executive Order 13988, ``Preventing and Combating Discrimination on 
the Basis of Gender Identity or Sexual Orientation'' requires the 
Federal Government to prevent and combat discrimination, including when 
accessing healthcare, on the basis of gender identity or sexual 
orientation, and to fully enforce Title VII of the Civil Rights Act. 
This Executive order also requires the Federal Government to fully 
enforce other laws that prohibit discrimination on the basis of gender 
identity or sexual orientation, all of which impact all persons, 
including those in rural communities.
    In accordance with Executive Order 13995, ``Ensuring an Equitable 
Pandemic Response and Recovery,'' the Federal Government must identify 
and eliminate health and social inequities resulting in 
disproportionately higher rates of exposure, illness, and death related 
to COVID-19 and take swift action to prevent and remedy differences in 
COVID-19 care and outcomes within communities of color and other 
underserved populations. The Executive order highlights the observed 
inequities in rural and Tribal communities, territories, and other 
geographically isolated communities which would have an impact on REHs 
given the rural communities they will serve.
    Consistent with these Executive orders, we are committed to 
advancing equity for all, including racial and ethnic minorities, 
members of the lesbian, gay, bisexual, transgendered, and queer/
questioning (LGBTQ) community, people with limited English proficiency, 
people with disabilities, rural populations, and people otherwise 
adversely affected by persistent poverty or inequality. We are, 
therefore, asking for public comments on the following health equity 
focused issues:
    11. How can REHs address the social needs arising in rural areas 
from challenging social determinants of health, which are the 
conditions in which people are born, live, learn, work, play, worship, 
and age, and which can have a profound impact on patients' health, 
ensuring that REHs are held accountable for health equity?
    12. With respect to questions 1 through 11 above, are there 
additional factors we should consider for specific populations 
including, but not limited to, elderly and pediatric patients; homeless 
persons; racial, ethnic, sexual, or gender minorities; veterans; and 
persons with physical, behavioral (for example, mental health 
conditions and substance use disorders), and/or intellectual and 
developmental disabilities?
    13. How can the CoPs ensure that an REH's executive leadership 
(that is, its governance, or persons legally responsible for the REH) 
is fully invested in and held accountable for implementing policies 
that will reduce health disparities within the facility and the 
community that it serves? In addition, with regards to governance and 
leadership, how can the CoPs:
     Encourage a REH's executive leadership to utilize 
diversity and inclusion strategies to establish a diverse workforce 
that is reflective of the community that it serves;

[[Page 42288]]

     Ensure that health equity is embedded into a facility's 
strategic planning and quality improvement efforts; and
     Ensure that executive leadership is held accountable for 
reducing health disparities?
    14. An important first step in addressing health disparities and 
improving health outcomes is to begin considering a patient's post-
discharge needs and social determinants of health prior to discharge 
from a facility. How can health equity be advanced through the care 
planning and discharge planning process? How can the CoPs address the 
need for REHs to partner with community-based organizations in order to 
improve a patient's care and outcomes after discharge?
    15. In order to ensure that health care workers understand and 
incorporate health equity concepts as they provide culturally competent 
care to patients, and in order to mitigate potential implicit and 
explicit bias that may exist in healthcare, what types of staff 
training or other efforts would be helpful?
    16. Finally, how can the CoPs ensure that providers offer fully 
accessible services for their patients in terms of physical, 
communication, and language access with the resources they have 
available to them?
Collaboration and Care Coordination
    17. How can CMS and other Federal agencies best encourage and 
incentivize collaboration and coordination between an REH and the 
healthcare providers, entities, or organizations with which an REH 
routinely works (for example, requirements related to the Emergency 
Medical Treatment and Active Labor Act, transfer agreements, and 
participation in EMS protocols), to help the REH successfully fulfill 
its role in its community? Healthcare providers, entities, and 
organizations with which an REH might typically work and interact might 
include, for example, federally qualified health centers, rural health 
clinics, state and local public health departments, Veterans 
Administration and Indian Health Service facilities, primary care and 
oral health providers, transportation, education, employment and 
housing providers, faith-based entities, and others.
Quality Measurement
    The CAA also contains provisions regarding the establishment of 
quality measurement requirements for REHs, including quality reporting 
requirements, specification of quality measures, and public 
availability of quality reporting data. As a result, we are also 
seeking broad input on the concerns of rural providers that should be 
taken into consideration by CMS in establishing quality measures and 
quality reporting requirements for REHs. Specifically, we are asking 
for stakeholder input on the following questions:
    18. What existing quality measures that reflect the care provided 
in rural emergency department settings can be recommended? What 
existing quality measures from other quality reporting programs, such 
as the Hospital Inpatient Quality Reporting and Hospital Outpatient 
Quality Reporting Programs, are relevant to the services that are 
likely to be furnished in REHs and should be considered for adoption in 
the REH context? What measures, specific to REHs, should be developed?
    19. Based on experiences in quality reporting by small rural 
hospitals and CAHs, what barriers and challenges to quality reporting 
are REHs likely to encounter? What quality reporting strategies should 
CMS consider to mitigate those barriers?
    20. For CAHs, what are the barriers and challenges to electronic 
submission of quality measures, and will those barriers likely apply to 
REHs? What similar barriers and challenges could CAHs and REHs 
experience for chart abstracted measures?
    21. What factors should be considered for the baseline measure set 
and how should CMS assess expanding quality measures for REHs? How 
could quality measures support survey and certification for REHs?
    22. What additional incentives and disincentives for quality 
reporting unrelated to payment would be appropriate for REHs? Are there 
limitations or lower limits based on case volume/mix or geographic 
distance that would be appropriate for CMS to consider when assessing 
the quality performance of REHs?
    23. The inclusion of CAHs within the Overall Hospital Quality Star 
Ratings provides patients with greater transparency on the performance 
of CAHs that provide acute inpatient and outpatient care in their area. 
What factors should CMS consider in determining how to publicly report 
REH quality measure data?
Payment Provisions
    We are also soliciting stakeholder input regarding the payment 
provisions established for rural emergency hospitals and that will go 
into effect for items and services furnished on or after January 1, 
2023. Specifically, we are asking for stakeholder input on the 
following items:
    24. Under the law, only existing critical access hospital or 
subsection (d) hospitals with not more than 50 beds that are located in 
a rural area are eligible to convert to an REH. While REHs will receive 
the applicable OPPS rate that would otherwise apply under section 
1833(t)(1) of the Act and with an increase of 5 percent under section 
1834(x)(1) of the Act as well as an additional facility payment to be 
made on a monthly basis under section 1834(x)(2) of the Act, we note 
that rural sole community hospitals (SCHs) currently receive an 
additional 7.1 percent payment for all services paid through the OPPS. 
We are seeking comment on the likelihood of rural SCHs deciding to seek 
to become REHs.
    25. In order to calculate the additional annual facility payment 
for rural emergency hospitals required by section 1834(x)(2) of the 
Act, CMS will need to compare all CY 2019 payments to CAHs with an 
estimate of the total amount of payment that would have been made to 
CAHs in CY 2019 if CAHs were paid through the inpatient, outpatient, 
and skilled nursing facility prospective payment systems, rather than 
receiving Medicare payment at 101 percent of the reasonable costs of 
these services. Are there any claims or other payment reporting issues 
that CMS should consider when calculating the hypothetical estimated 
payment under the prospective payment systems for services furnished by 
CAHs in CY 2019?
    26. We also are seeking comment on whether the claims forms used by 
CAHs to report inpatient hospital services, outpatient hospital 
services, and skilled nursing services contain all of the necessary 
information in order that the claims could be processed by the 
applicable CMS prospective payment systems. We are seeking this 
information because section 1834(x)(2)(C) of the Act requires as a part 
of the calculation to determine the additional facility payment for CY 
2023 for CMS to estimate what CAHs would have received for payment of 
inpatient hospital services, outpatient hospital services, and skilled 
nursing facility services if those services were paid through their 
respective prospective payment systems. We want to know what barriers, 
if any, we may face when attempting to use CAH claims to perform this 
calculation. If the CAH claims are missing information that would be 
required to process the claims through a prospective payment system, 
what challenges could CAHs face in collecting the missing information 
and submitting it to CMS for processing?

[[Page 42289]]

    27. The statute requires that a facility seeking to enroll as an 
REH must provide information regarding how the facility intends to use 
the additional facility payment provided under section 1834(x)(2) of 
the Act, including a detailed description of the services that the 
additional facility payment would be supporting, such as furnishing of 
telehealth and ambulance services, including operating the facility and 
maintaining the emergency department to provide covered services. What 
challenges will providers face to maintain and submit what will likely 
be similar detailed information about how their facility has spent the 
additional facility payment for rural emergency hospitals as required 
by section 1834(x)(2)(D) of the Act? What assistance or guidance should 
HHS consider providing to facilities to meet this reporting 
requirement?
Enrollment Process
    28. The statute requires that an eligible facility must submit an 
application to enroll as an REH in a form determined by the Secretary. 
In accordance with the requirements of the CAA, the application for 
enrollment must include an action plan for initiating REH services, 
including a detailed transition plan that lists the specific services 
that the facility will retain, modify, add and discontinue. What 
suggestions do facilities who are considering enrolling as REHs want us 
to take into account in developing the enrollment requirements?
    29. What considerations should be taken into account regarding the 
steps and timing for conversion to an REH?
    CMS appreciates comments and feedback as we work towards developing 
new health and safety standards for REHs and establishing payment rules 
to implement the statutory payment methodology. In accordance with the 
statute, CMS intends to engage in rulemaking to implement these 
provisions. We intend to consider the comments received in response to 
this request for information to inform the development of a proposed 
rule that will solicit comments on the implementation of this new 
provider type. In accordance with the statute, we will propose and 
finalize provisions establishing and governing REHs in time for the 
statutorily required effective date of January 1, 2023.

XVIII. Radiation Oncology Model

A. Introduction

    On September 29, 2020, the Centers for Medicare & Medicaid Services 
(CMS) published in the Federal Register the final rule entitled 
``Specialty Care Models to Improve Quality of Care and Reduce 
Expenditures,'' hereafter referred to as the Specialty Care Models Rule 
(85 FR 61114) and codified policies at 42 CFR part 512. The Radiation 
Oncology (RO) Model is designed to test whether prospective episode-
based payments for radiotherapy (RT) services (also referred to as 
radiation therapy services) will reduce Medicare program expenditures 
and preserve or enhance quality of care for beneficiaries. As radiation 
oncology is highly technical and furnished in well-defined episodes, 
and because patient comorbidities generally do not influence treatment 
delivery decisions, we believe that radiation oncology is well-suited 
for testing a prospective episode payment model. Under the RO Model, 
Medicare would pay participating providers and suppliers a site-
neutral, episode-based payment for specified professional and technical 
RT services furnished during a 90-day episode to Medicare fee-for 
service (FFS) beneficiaries diagnosed with certain cancer types. The RO 
Model will include 30 percent of all eligible RO episodes (these occur 
in 204 eligible Core-Based Statistical Areas (CBSAs) in 48 states and 
the District of Columbia). We finalized that the base payment amounts 
for RT services included in the RO Model would be the same for hospital 
outpatient departments (HOPDs) and freestanding radiation therapy 
centers. We finalized that the model performance period \404\ for the 
RO Model would be five performance years (PYs), beginning January 1, 
2021, and ending December 31, 2025, with final data submission of 
clinical data elements and quality measures in 2026 to account for 
episodes ending in 2025.
---------------------------------------------------------------------------

    \404\ CMS has made a stylistic change to this term. CMS changed 
``Model performance period'' to ``model performance period'' to be 
consistent with other CMMI Models.
---------------------------------------------------------------------------

    To ensure that participation in the RO Model during the public 
health emergency (PHE) for the Coronavirus disease 2019 (COVID-19) 
pandemic did not further strain RO participants' capacity, CMS revised 
the RO Model's model performance period to begin on July 1, 2021, and 
end December 31, 2025, in the Hospital Outpatient Prospective Payment 
(OPPS) and Ambulatory Surgical Center (ASC) Payment Systems and Quality 
Reporting Programs final rule with comment period (CMS-1736-IFC) (85 FR 
85866) (hereinafter referred to as ``CY 2021 OPPS/ASC final rule''). In 
the CY 2021 OPPS/ASC final rule, we changed the duration of the model 
performance period from 5 years to 4.5 years, changed the timelines for 
the submission of clinical data elements, quality measures and 
Certified Electronic Health Record Technology (CEHRT) requirements, and 
modified the eligibility dates of the RO Model as an Advanced 
Alternative Payment Model (APM) and Merit-based Incentive Payment 
System (MIPS) APM (85 FR 85866).
    Section 133 of the Consolidated Appropriations Act (CAA), 2021 
(Pub. L. 116-260), enacted on December 27, 2020, included a provision 
that prohibits implementation of the RO Model before January 1, 2022. 
This Congressional action supersedes the RO Model delayed start date 
established in the CY 2021 OPPS/ASC final rule. In this proposed rule, 
we are proposing provisions related to the additional delayed 
implementation due to the CAA, 2021, as well as modifications to 
certain RO Model policies not related to the delay. We are proposing to 
modify Sec. Sec.  512.205, 512.210, 512.217, 512.220, 512.230, 512.240, 
512.245, 512.250, 512.255, 512.275, 512.280, and 512.285 and add 
Sec. Sec.  512.292 and 512.294.

B. Background

    We are committed to promoting higher quality of care and improving 
outcomes for Medicare beneficiaries while reducing costs. Accordingly, 
as part of that effort, we have in recent years undertaken a number of 
initiatives to improve cancer treatment, most notably with our Oncology 
Care Model (OCM). We believe that a model in radiation oncology will 
further these efforts to improve cancer care for Medicare beneficiaries 
and reduce Medicare expenditures.
    Radiotherapy is a common treatment, received by nearly two thirds 
of all patients undergoing cancer treatment, and it is typically 
furnished by a radiation oncologist.405 406 As described in 
the 2017 REPORT TO CONGRESS: Episodic Alternative Payment Model for 
Radiation Therapy Services and the Specialty Care Models (Proposed 
Rule), CMS-5527-P (84 FR 34490), because there are differences in the 
underlying methodologies used for rate setting in the OPPS and 
Physician Fee Schedule (PFS), there often are differences in the 
payment rate for the same RT service depending on whether the service 
is furnished in a freestanding radiation

[[Page 42290]]

therapy center paid under the PFS, or an HOPD paid under the OPPS. This 
is called the site-of-service payment differential, and stakeholders 
from freestanding radiation therapy centers have asserted that such 
differentials between HOPDs and freestanding radiation therapy centers 
are unwarranted because the actual treatment and care received by 
patients for a given modality is the same in each setting.
---------------------------------------------------------------------------

    \405\ [thinsp]Physician Characteristics and Distribution in the 
U.5., 2010 Edition, 2004 IMV Medical Information Division, 2003 SROA 
Benchmarking Survey.
    \406\ 2012/13 Radiation Therapy Benchmark Report, IMV Medical 
Information Division, Inc. (2013).
---------------------------------------------------------------------------

    For these reasons, the RO Model is designed to test whether making 
site-neutral, prospective episode-based payments to HOPDs, physician 
group practices (PGPs), and freestanding radiation therapy centers for 
RT episodes of care preserves or enhances the quality of care furnished 
to Medicare beneficiaries while reducing or maintaining Medicare 
program spending.

C. RO Model Proposed Regulations

1. Proposed Model Performance Period
    In the Specialty Care Models Rule, we specified at Sec.  512.205 
that the model performance period would last five performance years, 
beginning January 1, 2021, and ending December 31, 2025 (85 FR 61367). 
We finalized that each PY is the 12-month period beginning on January 1 
and ending on December 31 of each CY during the model performance 
period, and no new RO episodes may begin after October 3, 2025, in 
order for all RO episodes to end by December 31, 2025.
    In the CY 2021 OPPS/ASC final rule, we amended the definition of 
model performance period, specifying that it would begin July 1, 2021 
and end on December 31, 2025, and we amended the definition of PY to 
mean the 6-month period beginning on July 1, 2021, and ending on 
December 31, 2021, and the 12-month period beginning on January 1 and 
ending on December 31 of each subsequent year (2022 through 2025) 
during the model performance period.
    Section 133 of the CAA 2021 prohibits implementation of the RO 
Model prior to January 1, 2022. We are proposing to begin the RO Model 
as soon as we are permitted to do so by law, on January 1, 2022, as we 
continue to believe that a prospective episode payment model is needed 
and well suited to be tested in the radiation oncology space. We are 
proposing to modify the model performance period to begin on January 1, 
2022, and end December 31, 2026 as described in detail in the proposed 
definitions in section XVIII.C.2. No new RO episodes may begin after 
October 3, 2026, in order for all RO episodes to end by December 31, 
2026. We are also proposing that each PY will be a 12-month period 
beginning on January 1 and ending on December 31 of each year during 
the model performance period, unless the initial model performance 
period starts mid-year, in which case PY1 will begin on that date and 
end on December 31 of that year.
    We invite public comments on these proposals related to the dates 
associated with the model performance period.
2. Proposed Definitions
    We codified at Sec.  512.205 definitions for the RO Model. We are 
proposing to modify some of these definitions in this proposed rule and 
add a definition for baseline period, as described in more detail later 
in this section of the preamble. We are also proposing to add a 
definition for ``EUC'' (extreme and uncontrollable circumstances) to 
correspond with the proposed EUC policy described in more detail in 
section XVIII.C.10 of this proposed rule. To describe how changes in 
CMS Certification Numbers (CCNs) and Tax Identification Numbers (TINs) 
are treated under the RO Model, which is described in more detail in 
section XVIII.C.5.g of this proposed rule, we are also proposing to add 
definitions for ``legacy CCN'' and ``legacy TIN''. And, to clarify how 
RO Model requirements align with the Quality Payment Program (QPP), we 
are proposing to add definitions for ``Track One'' and ``Track Two'' as 
described in section XVIII.C.7 of this proposed rule.
    We are proposing to add a definition for ``baseline period'', 
specifying which episodes (dependent on the model performance period) 
are used in the pricing methodology. We propose to define ``baseline 
period'' to mean the three calendar year (CY) period that begins on 
January 1 no fewer than 5 years but no more than 6 years prior to the 
start of the model performance period during which episodes must 
initiate in order to be used in the calculation of the national base 
rates, participant-specific professional and technical historical 
experience adjustments for the model performance period, and the 
participant-specific professional and technical case mix adjustments 
for PY1. The baseline period would be January 1, 2017 through December 
31, 2019, unless the RO Model is prohibited by law from starting in CY 
2022, in which case the baseline period would be adjusted according to 
the new model performance period (that is, if the model performance 
period starts any time in CY 2023, then the baseline period would be CY 
2018 through CY 2020).
    We propose to modify the definition of the ``model performance 
period'' to mean the five PYs during which RO episodes must initiate 
and terminate. The model performance period would begin on January 1, 
2022 and end on December 31, 2026, unless the RO Model is prohibited by 
law from starting on January 1, 2022, in which case the model 
performance period would begin on the earliest date permitted by law 
that is January 1, April 1, or July 1.
    We propose to modify the definition of ``PY'' (performance year) to 
mean each 12-month period beginning on January 1 and ending on December 
31 during the model performance period, unless the model performance 
period begins on a date other than January 1, in which case, the first 
performance year (PY1) would begin on that date and end on December 31 
of the same year.
    We propose to modify the definition of ``stop-loss reconciliation 
amount'' to mean the amount set forth in Sec.  512.285(f) owed by CMS 
for the loss incurred under the Model to RO participants that have 
fewer than 60 episodes during the baseline period and were furnishing 
included RT services any time before the start of the model performance 
period in the CBSAs selected for participation.
    We invite public comments on these proposed definitions.
3. Proposed RO Model Participant Exclusions
    At Sec.  512.210(b), we exclude from the RO Model any PGP, 
freestanding radiation therapy center, or HOPD that furnishes RT only 
in Maryland; furnishes RT only in Vermont; furnishes RT only in United 
States (U.S.) Territories; is classified as an ambulatory surgical 
center (ASC), critical access hospital (CAH), or Prospective Payment 
System (PPS)-exempt cancer hospital; or participates in or is 
identified by CMS as eligible to participate in the Pennsylvania Rural 
Health Model (PARHM).
a. Pennsylvania Rural Health Model (PARHM)
    We are proposing to modify Sec.  512.210(b)(5) to exclude from the 
RO Model only the HOPDs that are participating in PARHM, rather than 
excluding both HOPDs that are participating in PARHM and those that 
have been identified by CMS as eligible to participate in PARHM. We 
continue to believe that HOPDs that are participating in PARHM should 
be excluded from the RO Model because these hospitals receive global 
budgets,

[[Page 42291]]

and these global budgets would include payments for RT services and as 
such would overlap with the RO Model payment. In the Specialty Care 
Models final rule, we also excluded HOPDs that are eligible to 
participate in the PARHM from the RO Model on the grounds that 
additional hospitals and CAHs may join PARHM in the future or may be 
included in the evaluation comparison group for that model (see 85 FR 
61144).
    However, after further consideration, we believe that including in 
the RO Model those HOPDs that have been identified as eligible to 
participate in PARHM, but that are not actually participating in PARHM 
because they are not currently a party to a PARHM participation 
agreement with CMS, would not affect the PARHM evaluation. First, such 
HOPDs do not receive global budgets under PARHM, so including these 
hospitals in the RO Model would not result in an overlap between PARHM 
payments and RO Model payments. Second, while we initially explored the 
potential for HOPDs that are eligible to participate in PARHM being 
included in that model's evaluation comparison group, we now expect 
that the PARHM comparison group will consist only of hospitals located 
outside of Pennsylvania because of selection constraints. Thus, it is 
now our expectation that HOPDs that have been identified as eligible to 
participate in PARHM--all of which are located within the Commonwealth 
of Pennsylvania--would not be selected for the comparison group for the 
PARHM evaluation. Accordingly, we do not expect that including in the 
RO Model those HOPDs that have been identified as eligible to 
participate, but not actually participating in, PARHM would affect the 
ability to detect the impact of PARHM on the cost and quality of care.
    In addition, while it remains the case that hospitals and CAHs may 
join PARHM on an ongoing basis, hospitals and CAHs generally join PARHM 
at the start of a given CY. Because the RO Model's PYs would align with 
CYs, we have concluded it would be possible to update the RO Model 
exclusions for a given PY if an HOPD leaves or joins PARHM. For 
instance, if a rural hospital identified as eligible to participate in 
PARHM later initiates its participation in PARHM by signing a PARHM 
participation agreement with CMS, then the HOPDs participating in PARHM 
as part of that participating rural hospital would be excluded from 
participation in the RO Model as of the start of the next CY quarter 
that follows the date that the HOPD begins participating in PARHM. 
Similarly, if an HOPD no longer participates in PARHM as part of a 
participating rural hospital, and the HOPD otherwise meets the 
definition of an RO participant, then the HOPD would be required to 
participate in the RO Model as of the start of the next CY quarter.
    We would continue to use the list on the PARHM website at https://innovation.cms.gov/initiatives/pa-rural-health-model/, which is updated 
quarterly, to identify the hospitals that are participating in PARHM, 
and therefore identify the specific HOPDs excluded from participation 
in the RO Model. We therefore are proposing that HOPDs that are 
identified as eligible to participate in PARHM, but that are not 
current PARHM participants, should be included in the RO Model if they 
are located in a CBSA selected for participation in the RO Model and 
that this exclusion of HOPDs associated with hospitals that participate 
in PARHM from the RO Model would apply only during the period of such 
participation.
    We invite public comments on the inclusion of HOPDs eligible to 
participate in PARHM, but that are not current PARHM participants in 
the RO Model.
b. Community Health Access and Rural Transformation Model
    We are also proposing to modify the exclusions from the RO Model at 
Sec.  512.210(b)(6) so that the HOPD of any participating hospital in 
the Community Transformation Track of the Community Health Access and 
Rural Transformation (CHART) Model is excluded from the RO Model. 
Specifically, for any CHART Community Transformation Track performance 
period during which a hospital is participating in the CHART Model, the 
HOPD would be excluded from the RO Model. We are proposing to exclude 
these ``CHART HOPDs'' because these hospitals will receive prospective 
capitated payments, including HOPD-based RT services, that are not 
retrospectively reconciled based on experience during the CHART 
performance year, rather future payments are adjusted based on changes 
in population and proportion of services that participating HOPDs 
provide. We are proposing to exclude CHART HOPDs to avoid double 
payment for the same services. The participating hospitals will be 
listed and updated on the CHART Model website at https://innovation.cms.gov/innovation-models/chart-model. For the CHART ACO 
Transformation Track, we will follow the same policy for overlap 
between the RO Model and the Medicare Shared Savings Program ACOs, 
which was finalized at 85 FR 61260.
    We invite public comments on the exclusion of HOPDs the HOPD of any 
participating hospital in the Community Transformation Track of the 
Community Health Access and Rural Transformation (CHART) Model from the 
RO Model.
c. Low Volume Opt-Out
    We codified at Sec.  512.210(c) that a PGP, freestanding radiation 
therapy center, or HOPD, which would otherwise be required to 
participate in the RO Model may choose to opt out of the RO Model for a 
given PY if it has fewer than 20 episodes of RT services across all 
CBSAs selected for participation in the most recent year with claims 
data available prior to the applicable PY. In the CY 2021 OPPS/ASC 
final rule (85 FR 86261), we amended this policy at Sec.  512.210(c) to 
clarify the type of episodes used to determine eligibility for the low 
volume opt-out in each performance year, where episodes, as defined at 
Sec.  512.205, are used to determine eligibility in PY1 and PY2 and RO 
episodes, as defined at Sec.  512.205 and described at Sec.  
512.245(a), are used to determine eligibility in PY4 and PY5, and both 
episodes and RO episodes are used to determine eligibility in PY3. 
Specifically, for PY3, eligibility for the low volume opt-out is 
determined by counting episodes from January 1, 2021 through June 30, 
2021 and RO episodes from July 1, 2021 through December 31, 2021.
    Because section 133 of the CAA 2021 prohibits implementation of the 
RO Model prior to January 1, 2022, in this proposed rule, we are again 
clarifying the dates of the data used to determine eligibility for the 
low volume opt-out. A PGP, freestanding radiation therapy center, or 
HOPD, which would otherwise be required to participate in the RO Model 
may choose to opt-out of the RO Model for a given PY if it has fewer 
than 20 episodes or RO episodes, as applicable, depending on the PY, 
across all CBSAs selected for participation in the most recent year 
with claims data available, which is 2 years prior to the applicable 
PY. At least 30 days prior to the start of each PY, CMS will notify RO 
participants eligible for the low volume opt-out for the upcoming PY. 
If the RO participant wishes to opt out, it must attest that it intends 
to do so prior to the start of the upcoming PY. We are further 
clarifying that episodes furnished prior to the start of the model 
performance period in CBSAs selected for participation will be used to 
determine the eligibility of the low volume opt-out for PY1 and PY2. If 
PY1 begins on January 1, RO episodes will be used to determine the 
eligibility of the low volume opt-out for PY3. If

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PY1 begins on any date other than January 1, both RO episodes of PY1 
and episodes occurring in the CY of PY1 (but occurring prior to the 
start of PY1 in that year) in CBSAs selected for participation will be 
used to determine the eligibility of the low volume opt-out for PY3. RO 
episodes of PY2 and PY3 will be used to determine the eligibility of 
the low volume opt-out for PY4 through PY5, respectively.
    We are proposing to codify at Sec.  512.210(c)(7) that during the 
model performance period, an entity would not be eligible for the low 
volume opt-out if its legacy TIN or legacy CCN was used to bill 
Medicare for 20 or more episodes or RO episodes, as applicable, of RT 
services in the 2 years prior to the applicable PY across all CBSAs 
selected for participation across all CBSAs selected for participation.
    If finalized as proposed, CMS would include episodes and RO 
episodes, as applicable, associated with the RO participant's current 
CCN or TIN and episodes and RO episodes, as applicable, attributed to 
the RO participant's legacy CCN(s) or legacy TIN(s). We propose that a 
legacy CCN means a CCN that an RO participant that is a hospital 
outpatient department, or its predecessor(s), previously used to bill 
Medicare for included RT services but no longer uses to bill Medicare 
for included RT services. We propose that a legacy TIN means a TIN that 
an RO participant that is a PGP, or a freestanding radiation therapy 
center, or its predecessor(s), previously used to bill Medicare for 
included RT services but no longer uses to bill Medicare for included 
RT services.
    We are proposing this change to remove any incentive for RO 
participants to change their TIN or CCN in an effort to become eligible 
for the low volume opt-out.
    We invite public comments on the proposed definitions of legacy TIN 
and legacy CCN, as well as the proposal for how to address low volume 
opt-out eligibility in the case of an entity that has a change in TIN 
or CCN.
4. Certain Changes to RO Model Episodes
a. Criteria for Determining Included Cancer Types
    The criteria for cancer types to be included in the RO Model are 
set forth at Sec.  512.230(a). To be included in the RO Model, a cancer 
type must be commonly treated with radiation and associated with 
current International Classification of Diseases (ICD)-10 codes that 
have demonstrated pricing stability. We also established the criteria 
for removal of cancer types from the RO Model are set forth at Sec.  
512.230(b). CMS will remove a cancer type from the RO Model if it 
determines that RT is no longer appropriate to treat that cancer type 
per nationally recognized, evidence-based clinical treatment 
guidelines; CMS discovers a >10 percent error in established national 
base rates; or the Secretary determines that the cancer type is not 
suitable for inclusion in the RO Model.
    Upon further review, we believe that reorganization of Sec.  
512.230(a) and (b) would improve the clarity and internal consistency 
of the regulatory text. We are therefore proposing to amend Sec.  
512.230(a) and (b) such that to be included in the RO Model, a cancer 
type must be commonly treated with radiation per nationally recognized, 
evidence-based clinical treatment guidelines; associated with current 
ICD-10 codes that have demonstrated pricing stability, which is 
determined by analyzing the interquartile ranges of the episode prices 
across cancer types as described in the Specialty Care Models final 
rule at 85 FR 61155; and the Secretary must not have determined that 
the cancer type is not suitable for inclusion in the RO Model. We 
propose that CMS will remove from the RO Model a cancer type that does 
not meet all three of these criteria or for which CMS discovers a >10 
percent error in established national base rates.
    We invite public comments on the reorganization of Sec.  512.230(a) 
and (b).
b. Removal of Liver Cancer From Included Cancer Types
    We finalized 16 cancer types (Anal Cancer, Bladder Cancer, Bone 
Metastases, Brain Metastases, Breast Cancer, Cervical Cancer, Central 
Nervous System (CNS) Tumors, Colorectal Cancer, Head and Neck Cancer, 
Liver Cancer, Lung Cancer, Lymphoma, Pancreatic Cancer, Prostate 
Cancer, Upper Gastrointestinal (GI) Cancer, and Uterine Cancer) for 
inclusion in the RO Model because they meet the criteria set forth in 
Sec.  512.230(a) (85 FR 61157). These cancers are commonly treated with 
RT and are associated with current ICD-10 codes that have demonstrated 
pricing stability. They can be accurately priced for prospective 
episode payments in that episode prices across these included diagnosis 
codes the RO Model have been stable.
    The treatment of liver cancer with RT services continues to 
develop, with limited guidance for first-line use of radiotherapy.\407\ 
While RT may represent a promising treatment for certain types of liver 
cancers, there are few prospective, randomized controlled trials.\408\ 
Some guidelines do not include radiotherapy as a first-line therapy for 
the treatment of the most common type of liver cancer, hepatocellular 
carcinoma.\409\ After continued conversations with radiation 
oncologists consulting on the RO Model and additional reviews of the 
latest literature, we now believe that the inclusion of liver cancer 
does not meet the inclusion criteria at Sec.  512.230(a)(1) because 
liver cancer is not commonly treated with radiation per nationally 
recognized, evidence-based clinical treatment guidelines.
---------------------------------------------------------------------------

    \407\ Marrero, J.A., Kulik, L.M., Sirlin, C.B., Zhu, A.X., Finn, 
R.S., Abecassis, M.M., Roberts, L.R., & Heimbach, J.K. (2018). 
Diagnosis, Staging, and Management of Hepatocellular Carcinoma: 2018 
Practice Guidance by the American Association for the Study of Liver 
Diseases. Hepatology (Baltimore, Md.), 68(2), 723-750. https://doi.org/10.1002/hep.29913.
    \408\ Chen C.P. (2019). Role of Radiotherapy in the Treatment of 
Hepatocellular Carcinoma. Journal of clinical and translational 
hepatology, 7(2), 183-190. https://doi.org/10.14218/JCTH.2018.00060.
    \409\ Marrero, J.A., Kulik, L.M., Sirlin, C.B., Zhu, A.X., Finn, 
R.S., Abecassis, M.M., Roberts, L.R., & Heimbach, J.K. (2018). 
Diagnosis, Staging, and Management of Hepatocellular Carcinoma: 2018 
Practice Guidance by the American Association for the Study of Liver 
Diseases. Hepatology (Baltimore, Md.), 68(2), 723-750. https://doi.org/10.1002/hep.29913.
---------------------------------------------------------------------------

    We believe that liver cancer meets the current criteria for 
exclusion and that it would meet the criteria for exclusion under our 
proposal to reorganize the regulatory language in Sec.  512.230(a) and 
(b) as described earlier in more detail. Therefore, if the 
reorganization is finalized as proposed, or if the current regulatory 
text is not changed, we will remove liver cancer from the RO Model as 
an included cancer type. We will remove the liver cancer ICD-10 
diagnosis code(s) from the list on the RO Model website no later than 
30 days prior to the start of the model performance period in 
accordance with Sec.  512.230(c).
c. Proposal To Remove Brachytherapy From Included RT Services
    We codified at Sec.  512.240 the modalities that are included under 
the RO Model: 3-dimensional conformal radiotherapy (3DCRT), intensity-
modulated radiotherapy (IMRT), stereotactic radiosurgery (SRS), 
stereotactic body radiotherapy (SBRT), proton beam therapy (PBT), 
image-guided radiation therapy (IGRT), and brachytherapy. We finalized 
the inclusion of all of these modalities because they are commonly used 
to treat

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the cancer types included in the RO Model and because including these 
modalities would allow us to test a modality-agnostic approach.
    In response to the publication of the Specialty Care Models 
proposed rule and final rule, we received stakeholder feedback 
encouraging CMS to reconsider how multimodality episodes--which are 
episodes involving two or more types of RT treatment--are handled in 
the RO Model, especially in the cases of cervical cancer and prostate 
cancer, where standard clinical practice is concordant treatment with 
external beam radiation therapy (EBRT) and brachytherapy. Stakeholders 
expressed concern that the RO episode-based payment does not account 
for multimodality care. Stakeholders were particularly concerned about 
cases where the RO participant furnishing the external beam radiation 
therapy is different from the RO participant providing brachytherapy. 
Stakeholders suggested creating a separate bundled payment for 
brachytherapy or removing it from the RO Model. We have also heard 
continued concern from some stakeholders about the inclusion of the 
brachytherapy sources, particularly fast-acting radioisotopes, in the 
bundled payments, because they are more like medical devices used in 
conjunction with medical procedures than other modalities. 
Brachytherapy sources are also typically paid for separately.
    Some stakeholders suggested that inclusion of brachytherapy in the 
bundled payments could lead to reduced utilization of brachytherapy in 
situations where a combination of brachytherapy and EBRT is clinically 
indicated (particularly for cervical and prostate cancers). 
Stakeholders expressed concern that in the case of multimodality 
treatment including brachytherapy, there may be a disincentive to refer 
patients to other radiation oncologists for treatment when the RO 
participant cannot deliver brachytherapy services themselves.
    CMS seeks to neither incentivize nor discourage the use of one 
modality over another, but rather to encourage providers to choose RT 
services that are the most clinically appropriate for beneficiaries 
under their care. The exclusion of a modality from the RO Model is not 
meant to imply anything about the value of such modality. Published 
clinical evidence suggests brachytherapy is a high-value RT service, 
which could warrant its inclusion in the RO Model. However, we 
acknowledge the concerns stakeholders have about possible unintended 
consequences for beneficiaries' access to care.
    We are proposing to amend Sec.  512.240 to remove brachytherapy as 
an included modality in the RO Model. If finalized as proposed, we 
would continue to monitor utilization of brachytherapy, both as a 
single modality and multimodality among RO participants compared to 
non-participants, and consider whether there is opportunity to adjust 
pricing for multimodality episodes, without disrupting the RO Model 
design, and potentially add brachytherapy to the RO Model in the 
future. We would also make conforming edits to the list of included RT 
services previously set forth in the Specialty Care Models Rule at 85 
FR 61166 to account for the proposed removal of brachytherapy. The 
proposed list of included RT services as identified by HCPCS codes are 
in Table 56 of this proposed rule.
    We invite public comments on the removal of brachytherapy.
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    Our proposal to remove brachytherapy from the RO Model, if 
finalized, would render our waiver of section 1833(t)(2)(H) of the Act 
(as discussed in the Specialty Care Models Rule at 85 CFR 61242 and 
codified at Sec.  512.280(f)(4) moot, and therefore we are proposing to 
withdraw this waiver if our proposal to remove brachytherapy is 
finalized as proposed. We finalized this waiver under the authority of 
section 1115A(d)(1) of the Act, because it was necessary for the 
purposes of testing the RO Model when we were including brachytherapy 
as part of the RO Model. Because we are proposing to remove 
brachytherapy from the RO Model, we believe that the waiver under 
section 1833(t)(2)(H) of the Act would no longer be necessary solely 
for the purposes of testing the RO Model and therefore are proposing to 
withdraw this waiver.
    We invite public comments on the removal of the 1833(t)(2)(H) 
waiver.
    If we remove brachytherapy from the RO Model, we are requesting 
information on how payments for multi-modality care might be handled in 
the future. For example, we request information on how RO participants 
should be paid under the RO Model in cases where brachytherapy is 
furnished in conjunction with one or more other modalities during an RO 
episode. CMS does not intend to respond to these comments in the CY 
2022 OPPS/ASC final rule; instead, we intend to use these comments to 
inform potential changes to the RO Model that could be proposed in 
future notice and comment rulemaking.

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d. Exclusion of Intraoperative Radiotherapy (IORT)
    We finalized that Intraoperative Radiotherapy (IORT)--a technique 
that involves precise delivery of a large dose of ionizing radiation to 
the tumor or tumor bed during surgery--would not be included in the RO 
Model in the Specialty Care Models Rule (85 FR 61175). We have received 
comments from stakeholders requesting that we re-evaluate this decision 
and include IORT in the RO Model for certain cancer types, particularly 
early stage breast cancer.
    At this time, episode payment rates are modality-agnostic. They 
include all Medicare FFS claims paid during the baseline period as well 
as claims that are included under an episode where the initial 
treatment planning service occurred during the baseline period so long 
as the RT service furnished is not of a modality excluded from the RO 
Model. We do not have separate national base rates per included cancer 
type based on a specific modality. Given that the evidence base for 
IORT is limited to certain cancer types, it does not meet the 
qualifications for inclusion in this Model. As we have reconsidered 
IORT's inclusion, we also note that it is a modality that is not site 
neutral, meaning that the TC of IORT is primarily delivered in HOPDs 
(during surgery) instead of freestanding radiation therapy centers. One 
of the primary goals of the RO Model is to test site neutral payments, 
where care delivered in HOPDs or freestanding radiation therapy centers 
are paid the same bundled payment. Given that this modality is only 
provided in one of those locations, it is not site neutral, and 
therefore does not meet the goals of the RO Model. Modalities that are 
not included in the RO Model, including IORT, would continue to be paid 
under Medicare FFS.
    We are soliciting comments on whether and how we might include IORT 
in our pricing methodology in future years of the RO Model, for example 
whether CMS should include cancer-specific modalities in the RO Model. 
CMS does not intend to respond to these comments in this CY 2022 OPPS/
ASC final rule. We intend to use these comments to inform potential 
changes to the RO Model that could be proposed in future notice and 
comment rulemaking.
5. Pricing Methodology
a. Assignment of Cancer Types to an Episode
    We finalized at 85 FR 61179 our process for assigning a cancer type 
to an episode as follows: First, we identify ICD-10 diagnosis codes 
during an episode from: (1) Medicare PFS claims for evaluation and 
management (E&M) services with an included cancer diagnosis code with a 
date of service during the 30 days before the episode start date, on 
the episode start date, or during the 29 days after the episode start 
date; and (2) Medicare PFS claims for treatment planning and delivery 
services with an included cancer diagnosis code (See Table 57), or 
Medicare OPPS claims for treatment delivery services with an included 
cancer diagnosis code on the claim header, with a date of service on 
the episode start date or during the 29 days after the episode start 
date. The cancer diagnosis code from OPPS claims must be the principal 
diagnosis to count toward cancer type assignment, and treatment 
delivery services that concern image guidance do not count toward 
cancer type assignment as we determined that image guidance was not an 
important indicator of cancer type. Then, we analyze and count these 
ICD-10 diagnosis codes across the claim lines to determine the 
episode's cancer type assignment according to the algorithm described 
in (1) through (3):
    (1) If two or more claim lines fall within brain metastases or bone 
metastases or secondary malignancies (per the mapping of ICD-10 
diagnosis code to cancer type described in Table 57 of Identified 
Cancer Types and Corresponding ICD-10 Codes), we set the episode cancer 
type to the type (either brain metastases or bone metastases) with the 
highest count. If the count is tied, we assign the episode in the 
following order of precedence: Brain metastases; bone metastases; other 
secondary malignancies.
    (2) If there are fewer than two claim lines for brain metastases, 
bone metastases or other secondary malignancies, we assign the episode 
the cancer type with the highest claim line count among all other 
cancer types. We exclude the episode if the cancer type with the 
highest claims line count among other cancer types is not an included 
cancer type.
    (3) If there are no claim lines with a cancer diagnosis meeting the 
previously discussed criteria, then no cancer type is assigned to that 
episode and therefore, that episode is excluded from the national base 
rate calculations.
    Since the publication of the Specialty Care Models Rule, a 
stakeholder has asked for clarification on how to identify when there 
are fewer than two claim lines for brain metastases, bone metastases or 
other secondary malignancies. In response to the stakeholder's request, 
in this proposed rule, we would like to clarify paragraph (2). 
Specifically, if there are not at least two claim lines for brain 
metastases or at least two claim lines for bone metastases or at least 
two claim lines for any other secondary malignancy, then we assign the 
episode the cancer type with the highest line count among all other 
cancer types. For example, one bone metastases claim line and one 
secondary metastases claim line would not qualify as two or more claim 
lines that fall within brain metastases or bone metastases or secondary 
malignancies. Instead, the episode would be assigned whatever cancer 
type had the highest line count among all other cancers.
    We would also like to clarify that we use a broad list of cancer 
diagnoses (those included in the RO Model and those not included) to 
assign cancer type to episodes in the baseline period. This broad list 
of cancer diagnoses will be posted on the RO Model website at https://innovation.cms.gov/innovation-models/radiation-oncology-model. We 
identify ICD-10 diagnosis codes for cancer during an episode from E&M 
services, and treatment planning and delivery services that have a 
cancer diagnosis code from that broad cancer diagnosis list. We assign 
a cancer type to the episode as described in the Specialty Care Models 
Rule at 85 FR 61179. We then exclude those episodes that are not 
assigned an included cancer type. We do not exclude claims of excluded 
cancer types prior to episode construction, as this could lead to an 
episode being included in the RO Model where most of the RT services 
were related to treating an excluded cancer type.
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b. Proposal To Construct Episodes Using Medicare FFS Claims and 
Calculation of Episode Payment
    We finalized at 85 FR 61181 that we construct episodes based on 
dates of service for Medicare FFS claims paid during the baseline 
period (CYs 2016 through 2018) as well as claims that are included 
under an episode where the initial treatment planning service occurred 
during the baseline period. In the construction of episodes, we also 
weigh the most recent observations more heavily than those that 
occurred in earlier years, weighting episodes that initiated in 2016 at 
20 percent, episodes that initiated in 2017 at 30 percent, and episodes 
that initiated in 2018 at 50 percent.
    We are proposing to update how we describe this approach. Although 
we are removing references to specific CYs from the definition of 
baseline period, we still construct episodes based on dates of service 
for Medicare FFS claims paid during the baseline period as well as 
claims that are included under an episode where the initial treatment 
planning service occurred during the baseline period. Furthermore, 
although we are removing references to specific CYs, we will continue 
to weigh the most recent observations more heavily than those that 
occurred in earlier years, as previously finalized. We would continue 
to weigh episodes that initiated in the first year of the baseline 
period at 20 percent, episodes that initiated in second year of the 
baseline period at 30 percent, and episodes that initiated in the third 
year of the baseline period at 50 percent.
    We invite public comment on this proposal to weigh the most recent 
episodes more heavily than those that occurred in earlier years in the 
baseline period.
    We codified at Sec.  512.255(c)(13) that for sequestration, we 
deduct 2 percent from each episode payment after applying the trend 
factor, geographic adjustment, case mix and historical experience 
adjustments, discount, withholds, and coinsurance to the national base 
rate. At times, the requirements for sequestrations are modified by 
legislation or regulation. For example, section 3709(a) of division A 
of the Coronavirus Aid, Relief and Economic Security (CARES) Act (Pub. 
L.

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116-136) included a temporary moratorium on sequestration for all 
Medicare programs beginning on May 1, 2020 and ending on December 31, 
2020, while section 102(a) of division N of the Consolidated 
Appropriations Act, 2021 (Pub. L. 116-260), extended the suspension 
period to March 31, 2021. An Act to Prevent Across-the-Board Direct 
Spending Cuts, and for Other Purposes (Pub. L. 117-7), signed into law 
on April 14, 2021, extends the suspension period to December 31, 2021. 
Thus, we are proposing to amend Sec.  512.255(c)(13) by removing the 
percentage amount and indicating that sequestration will be applied in 
accordance with applicable law.
    We invite public comments on the application of sequestration.
c. Proposed National Base Rates
    We codified at Sec.  512.250(b) the criteria for excluding 
episodes, as more fully described in 85 FR 61183 through 61184. We 
finalized that we would exclude episodes in the baseline (currently 
proposed to be formally defined as ``baseline period'') that are not 
attributed to an RT provider or RT supplier. These episodes are 
exceedingly rare. There were fewer than 15 episodes out of more than 
518,000 episodes in the 2016 to 2018 baseline period where the only RT 
delivery services in the episode were classified as professional 
services. There are a few brachytherapy surgery services that are 
categorized as professional services. We also finalized that episodes 
would be excluded if either the PC or TC is attributed to an RT 
provider or RT supplier with a U.S. Territory service location or to a 
PPS-exempt entity, but that services within an episode provided in a 
U.S. Territory or provided by a PPS-exempt entity would be included in 
the episode pricing. We finalized that episodes would be excluded if 
they include any RT service furnished by a CAH. Finally, we finalized 
that we would exclude all Maryland and Vermont claims before episodes 
are constructed and attributed to an RT provider or RT supplier, and we 
would similarly exclude inpatient and ASC claims from episode 
construction and attribution.
    We finalized a policy that excluded claims before episodes were 
constructed in certain cases, while in other cases, we excluded entire 
episodes after construction if they included claims that were to be 
excluded. To simplify episode construction, attribution, and pricing, 
we propose to exclude all Maryland, Vermont, and U.S. Territory claims 
and all CAH, inpatient, ASC, and PPS-exempt claims in the same manner: 
Before episodes are constructed and attributed to an RT provider or RT 
supplier. Furthermore, to mirror the participant exclusion policy 
proposed in section XVIII.C.3 of this proposed rule, we are proposing 
to exclude all claims of an HOPD participating in PARHM (during the 
time period of their participation in PARHM) before episodes are 
constructed and attributed to an RT provider or RT supplier. We are 
also clarifying that we will exclude episodes from the RO Model's 
pricing methodology that are attributed to an RT provider or RT 
supplier that is located in a ZIP Code not assigned to a CBSA, not 
assigned an included cancer type, or that do not have more than $0 in 
total allowed amount for professional or technical services from Model 
pricing. We propose to amend Sec.  512.250(b) accordingly.
    We invite public comments on the proposal to exclude all Maryland, 
Vermont, and U.S. Territory claims and all CAH, inpatient, ASC, and 
PPS-exempt claims before episodes are constructed and attributed to an 
RT provider or RT supplier. We also invite public comments on the 
proposal to exclude all claims of an HOPD participating in PARHM 
(during the time period of their participation in PARHM) before 
episodes are constructed and attributed to an RT provider or RT 
supplier.
    We finalized our policy in the Specialty Care Models Rule at 85 FR 
61185 to change the baseline from 2015 to 2017 to 2016 to 2018 and 
finalized our national base rates for the model performance period 
based on the criteria set forth for cancer type inclusion are 
summarized in Table 3 of that final rule. As proposed in section 
XVIII.C.2. of this proposed rule, the baseline period would be updated 
to be the 3-year period within which episodes must initiate in order to 
be used in the calculation of the national base rates, participant-
specific professional and technical historical experience adjustments, 
and participant-specific professional and technical case mix 
adjustments for PY1. The baseline period is January 1, 2017 through 
December 31, 2019, unless the RO Model is prohibited by law from 
starting in CY 2022, in which case the baseline period will be adjusted 
according to the new model performance period (that is, if the model 
performance period starts any time in CY 2023, then the baseline period 
would be CY 2018 through CY 2020).
    In conjunction with the publication of this proposed rule, we will 
provide a summary level, de-identified file titled the ``RO Episode 
File (2017 to 2019),'' on the RO Model website at https://innovation.cms.gov/innovation-models/radiation-oncology-model to 
further facilitate understanding of the RO Model's pricing methodology. 
We would like to clarify that the number of national base rates will 
vary based on how many cancer types are included in the RO Model.
    Further, we are clarifying that Part B expenditures during the 
baseline period would be used to establish separate PC and TC national 
base rates for each of the included cancer types, the participant-
specific historical experience adjustments for the model performance 
period, and the participant-specific case mix adjustments for PY1. The 
case mix adjustments for subsequent PYs (PY2 to PY5) would be 
calculated using the case mix model from the baseline period with the 
inputs coming from the beneficiary characteristics in episodes 
attributed to the participant in the most recent 3-year period that 
ends 3 years prior to the start of the CY to which the participant-
specific case mix adjustment would apply. Our proposed national base 
rates for the model performance period are based on the criteria set 
forth for cancer type inclusion and are summarized in Table 58 of this 
proposed rule.

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BILLING CODE 4120-01-C
d. Proposed Trend Factors
    We codified our policy at Sec.  512.255(c)(1) to apply a trend 
factor (an adjustment applied to the national base rates that updates 
those rates to reflect current trends in the OPPS and PFS rates for RT 
services) to each of the national base rates. For each PY, we will 
calculate separate trend factors for the PC and TC of each cancer type 
using data from HOPDs and freestanding radiation therapy centers not 
participating in the RO Model. Each of the separate trend factors will 
be updated and applied to the national base rates prior to the start of 
each PY (for which they would apply) so as to account for trends in 
payment rates and volume for RT services outside of the RO Model under 
OPPS and PFS. As finalized in the Specialty Care Models Rule, for the 
PC of each included cancer type and the TC of each included cancer 
type, we would calculate a trend factor as the ratio of: (a) Volume-
weighted FFS payment rates for RT services included in that component 
for that cancer type in the upcoming PY (that is, the numerator) to (b) 
volume-weighted FFS payment rates for RT services included in that 
component for that cancer type in the most recent baseline year (that 
is, the denominator), which will be FFS rates from 2018. To calculate 
the

[[Page 42300]]

numerator, we finalized that we would multiply: (a) The average number 
of times each HCPCS code (relevant to the component and the cancer type 
for which the trend factor will be applied) was furnished for the most 
recent CY with complete data by (b) the corresponding FFS payment rate 
(as paid under OPPS or PFS) for the upcoming performance year.
    To calculate the denominator, we finalized that we would multiply: 
(a) The average number of times each HCPCS code (relevant to the 
component and the cancer type for which the trend factor will be 
applied) was furnished in 2018 (the most recent year used to calculate 
the national base rates) by (b) the corresponding FFS payment rate in 
2018. The volume of HCPCS codes determining the numerator and 
denominator would be derived from non-participant episodes that would 
be otherwise eligible for Model pricing.
    We would like to clarify that the number of separate trend factors 
will vary depending on the number of cancer types included in the RO 
Model. Further, given the delay in the model performance period and 
proposal to update the baseline period, we are proposing that the 
numerator of the trend factor be the product of (a) the component's FFS 
payment rate (as paid under OPPS or PFS) for the CY of the upcoming PY 
and (b) the average number of times each HCPCS code (relevant to the 
component and the cancer type for which the trend factor will be 
applied) was furnished 3 years prior to the CY used to determine the 
FFS payment rates.
    We are proposing the denominator of the trend factor be the product 
of (a) the average number of times each HCPCS code (relevant to the 
component and the cancer type for which the trend factor will be 
applied) was furnished in the most recent year of the baseline period 
and (b) the corresponding FFS payment rate for the most recent year of 
the baseline period. For example, for PY1, we would calculate the trend 
factor as: 2022 Trend factor = (2019 volume * 2022 corresponding FFS 
rates as paid under OPPS or PFS)/(2019 volume * 2019 corresponding FFS 
rates as paid under OPPS or PFS). As another example, for PY3, we would 
calculate the trend factor as: 2024 Trend factor = (2021 volume * 2024 
corresponding FFS rates as paid under OPPS or PFS)/(2019 volume * 2019 
corresponding FFS rates as paid under OPPS or PFS).
    We would like to clarify that the trended national base rates will 
be made available on the RO Model website prior to the start of the 
applicable PY, after CMS issues the annual OPPS and PFS final rules 
that establish payment rates for the upcoming CY.
    We finalized in the Specialty Care Models Rule at 85 FR 61188 the 
years used in the trend factor's numerator and denominator calculation. 
For example, the trend factor's numerator calculation for a model 
performance period that begins in 2021 is the most recent CY with 
complete data used to determine the average number of times each HCPCS 
code was furnished. The most recent CY with complete data in that case 
would have been 2018 for PY1, 2019 for PY2, and so forth. We noted that 
the corresponding FFS payment rate (as paid under the OPPS and PFS) 
included in the numerator calculation was still that of the upcoming PY 
(2021 payment rates for PY1, 2022 payment rates for PY2, and so forth). 
For a model performance period starting in 2021, the trend factor's 
denominator calculation would have used data from 2018 to determine: 
(a) The average number of times each HCPCS code (relevant to the 
component and the cancer type for which the trend factor will be 
applying) was furnished; and (b) the corresponding FFS payment rate.
    Given the delay in the model performance period and proposal to 
update the baseline period, we are proposing that the denominator of 
the trend factor be based on the third year of the proposed baseline 
period, and the numerator of the trend factor would be based on FFS 
payment rates for the same CY as the upcoming PY combined with 
utilization from the third year of the baseline period for PY1, the 
first CY after the baseline period for PY2, the second CY after the 
baseline period for PY3, and so on. For example, for a model 
performance period starting in 2022, the trend factor's denominator for 
PY1 would be based on 2019 FFS payment rates and 2019 utilization, 
while the numerator would be based on 2022 FFS payment rates and 2019 
utilization. The trend factor's denominator would not change and 
remains based on 2019 FFS payment rates and 2019 utilization over the 
course of the model performance period. The numerator, however, would 
change, just as we described in the Specialty Care Models Rule (85 FR 
61114). Its volume and utilization would be based on years that roll 
forward. For instance, for a model performance period starting in 2022, 
the numerator of the PY3 trend factor would be based on 2024 FFS 
payment rates and 2021 utilization.
    We finalized at 85 FR 61187 through 61188 how RT services that are 
contractor-priced under Medicare PFS are incorporated into RO Model 
pricing. Due to the potential differences across jurisdictions, we 
would calculate the average paid amounts for each year in the baseline 
period for each of these RT services to determine their average paid 
amount that would be used in the calculation of the national base 
rates. We would use the most recent CY with claims data available to 
determine the average paid amounts for these contractor-priced RT 
services that would be used in the calculation of the trend factors for 
the PC and TC of each cancer type.
    We would also like to clarify that we will use the allowed charges 
in the claims data to calculate these average paid amounts for 
contractor-priced RT services under Medicare PFS.
    We invite public comments on the years used in the trend factor's 
numerator and denominator calculation.
e. Applying the Adjustments
    We finalized our policy at 85 FR 61194 that the combined 
adjustment, that is the adjustment that results when the corresponding 
participant-specific historical experience and case mix adjustments, 
and blend are combined, be multiplied by the corresponding trended 
national base rate from Step 2 for each cancer type. We will repeat 
this calculation for the corresponding case mix adjustment, historical 
experience adjustment, and blend for the TC, yielding a total of 32 RO 
participant-specific episode payments for Dual participants and a total 
of 16 RO participant-specific episode payments for Professional 
participants and Technical participants. We are clarifying that the 
total number of RO participant-specific episode payments for Dual 
participants and the total number of RO participant-specific episode 
payments for Professional participants and Technical participants will 
vary depending on the number of included cancer types. For example, 15 
included cancer types would yield a total of 30 RO participant-specific 
episode payment amounts for Dual participants and a total of 15 RO 
participant-specific episode payment amounts for Professional 
participants and Technical participants.
f. Proposal for HOPD or Freestanding Radiation Therapy Center With 
Fewer Than Sixty Episodes During the Baseline Period
    We codified at Sec.  512.255(c)(7)(iv) a stop-loss limit of 20 
percent for the RO participants that have fewer than 60 episodes from 
2016 through 2018 and were furnishing included RT services in the CBSAs 
selected for participation at the time of the effective date of 
Specialty Care Models Rule (85 FR

[[Page 42301]]

61114). Under this stop-loss limit, CMS would use no-pay claims to 
determine what these RO participants would have been paid under FFS as 
compared to the payments they received under the RO Model and CMS would 
pay these RO participants retrospectively for losses in excess of 20 
percent of what they would have been paid under FFS. Payments under the 
stop-loss policy would be determined at the time of reconciliation.
    We propose to modify this stop-loss limit policy such that it 
applies to RO participants that have fewer than 60 episodes during the 
proposed baseline period and that were furnishing included RT services 
any time before the start of the model performance period in the CBSAs 
selected for participation and amend Sec.  512.255(c)(7)(iv) 
accordingly.
    We invite public comments on this proposal that the stop-loss limit 
policy would apply to RO participants that have fewer than 60 episodes 
during the proposed baseline period and that were furnishing included 
RT services any time before the start of the model performance period 
in the CBSAs selected for participation.
g. Proposal To Apply Adjustments for HOPD or Freestanding Radiation 
Therapy Center With a Merger, Acquisition, or Other New Business 
Relationship, With a CCN or TIN Change
    We codified at Sec.  512.210(a) those entities that must 
participate in the RO Model, and as more fully described at 85 FR 
61195, an entity must participate in the RO Model if it has a new TIN 
or CCN that results from a merger, acquisition, or other new clinical 
or business relationship that occurs prior to October 3, 2025, begins 
to furnish RT services within a CBSA selected for participation, and 
meets the RO Model's eligibility requirements. We finalized a 
requirement for advance notification regarding a new merger, 
acquisition, or other new clinical or business relationships so that 
the appropriate adjustments would be made to the new or existing RO 
participant's participant-specific professional episode payment and 
participant-specific technical episode payment amounts. We finalized 
that RO participants must also provide a notification regarding a new 
clinical relationship that may or may not constitute a change in 
control, and if there were sufficient historical data from the entities 
merged, absorbed, or otherwise changed as a result of this new clinical 
or business relationship, then this data would be used to determine 
adjustments for the new or existing TIN or CCN. We also note that RO 
participants are required to report a change in control under Sec.  
512.180(c).
    We propose to add Sec.  512.255(c)(14) that we would calculate in 
accordance with Sec.  512.255(c)(3) the RO participant's case mix 
adjustments based on all episodes and RO episodes, as applicable, 
attributed to the RO participant's legacy TIN(s) or legacy CCN(s) 
during the 3-year period that determines the case mix adjustment for 
each PY and all episodes and RO episodes, as applicable, attributed to 
the RO participant's current TIN or CCN during the 3-year period that 
determines the case mix adjustment for each PY. We also propose to 
calculate the RO participant's historical experience adjustments in 
accordance with Sec.  512.255(c)(4) based on all episodes attributed to 
the RO participant's legacy TIN(s) or legacy CCN(s) during the baseline 
period and all episodes attributed to the RO participant's current TIN 
or CCN during the baseline period. We propose to eliminate the 
requirement that RO participants provide a notification regarding all 
new clinical or business relationship that may or may not constitute a 
change in control. We continue to believe that some new or altered 
clinical or business relationships may still pose risks of gaming in 
the RO Model, regardless of whether a change in control results. 
However, we believe that requiring RO participants to report changes to 
TINs or CCNs will capture the types of changes that pose these risks. 
This would also avoid any ambiguity as to what types of changes RO 
participants would need to report. We are proposing to add Sec.  
[thinsp]512.210(e) requiring an RO participant to furnish to CMS 
written notice of a change in TIN or CCN in a form and manner specified 
by CMS at least 90 days before the effective date of any change in TIN 
or CCN that is used to bill Medicare.
    We invite public comments on the proposal of how the case mix 
adjustments and historical experience adjustments are calculated for an 
entity that has a change in TIN or CCN. We also invite public comment 
on the proposal requiring an RO participant to furnish CMS written 
notice of a change in TIN or CCN.
h. Proposed Discount Factor
    We codified at both Sec. Sec.  512.205 and 512.255(c)(8) that the 
discount factor for the PC would be 3.75 percent and the discount 
factor for the TC would be 4.75 percent. We propose to lower the 
discount factor for the PC to 3.5 percent and the discount factor for 
the TC to 4.5 percent.
    We believe that our proposals to remove brachytherapy from the list 
of included modalities and liver cancer from the included cancer types, 
if finalized, will enable us to lower these discounts without 
increasing the size of the RO Model due to a reduction in pricing 
variability. Given these proposed modifications to the RO Model, the 
proposed baseline period, and the current size of the RO Model 
(approximately 30 percent of eligible episodes), we now expect to be 
able to detect a savings of 3.2 percent or greater at a significance 
level of 0.05 and with a power of 0.8. If the proposals to remove 
brachytherapy and liver cancer are not both finalized, we would not 
finalize the lowered discounts as proposed.
    The definition of discount factor codified at Sec.  512.205 also 
included the finalized percentages. To simplify the regulation text, we 
propose to include the discount percentages at Sec.  512.205 and remove 
the percentages from Sec.  512.255(c)(8).
    We invite public comments on these proposals related to the 
discount factor.
i. Proposed Withholds
    We codified at Sec.  512.255(c)(10) that we would apply a 2 percent 
quality withhold from each professional episode payment after applying 
the trend factor, geographic adjustment, case mix and historical 
experience adjustments, and discount factor to the national base rate. 
In the CY 2021 OPPS/ASC final rule (85 FR 85866), we delayed RO Model 
quality measures requirements to what would have been PY2 (January 1, 
2022 through December 31, 2022) under the model performance period 
described in that final rule with comment and thus delayed the 
application of the quality withhold to that PY2. In this proposed rule, 
we are proposing that RO participants submit quality measure data 
starting in PY1 (when the model performance period begins) as described 
in section XVIII.C.6 of this proposed rule, and that beginning in PY1, 
a 2 percent quality withhold for the PC would be applied to the 
applicable trended national base rates after the case mix and 
historical experience adjustments.
    We invite public comment on the proposed timing of applying the 
quality withhold.
j. Proposed Adjustment for Geography
    We described in the Specialty Care Models Rule (85 FR 61198) that 
the geographic adjustment whereby the RO Model-specific relative value 
unit (RVU) values would be derived from the national base rates which 
are based on

[[Page 42302]]

2016 to 2018 episodes that had the majority of radiation treatment 
services furnished at an HOPD and that were attributed to an HOPD. We 
finalized that we would use only 2018 episodes to calculate the implied 
RVU shares. (See RVUs shares in Table 59).
    We propose to modify this provision to align with the proposed 
model performance period so that the final year of the baseline period 
would be used to calculate the implied RVU shares. For example, for a 
baseline period of 2017-2019, 2019 would be used to calculate the 
implied RVU shares.
    We invite public comments on the proposal concerning the 
calculation of the RVU shares.
[GRAPHIC] [TIFF OMITTED] TP04AU21.109

k. Example of Participant-Specific Professional Episode Payment and 
Participant-Specific Technical Episode Payment for an Episode Involving 
Lung Cancer in PY1
    Table 60 and Table 61 are updated versions of Table 8 and Table 9 
included in the Specialty Care Model Rule (85 FR 61201 and 85 FR 61202, 
respectively), that reflect the proposed updated national base rate for 
lung cancer and proposed discount rate for the respective component 
represented in each table.
BILLING CODE 4120-01-P

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[GRAPHIC] [TIFF OMITTED] TP04AU21.110

    Please note that Table 60, which displays the participant-specific 
professional episode payment example, does not include any withhold 
amount that the RO participant would be eligible to receive back or 
repayment if more money was needed beyond the withhold amount from the 
RO participant. It also does not include any MIPS adjustment that 
applies to the RO participant.

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[GRAPHIC] [TIFF OMITTED] TP04AU21.111

    Table 61 details the participant-specific technical episode payment 
paid by CMS to a single TIN or single CCN for the furnishing of RT 
technical services to an RO beneficiary for an RO episode of lung 
cancer. The participant-specific technical episode payment in this 
example does not include any rural sole community hospital adjustment 
that the RO participant would be eligible to receive. Also, please note 
that for the participant-specific technical payment amount, the 
beneficiary coinsurance cannot exceed the inpatient deductible limit 
under OPPS.
    We are currently analyzing whether the COVID-19 pandemic resulted 
in a decrease in Medicare FFS claims submissions for RT services during 
2020 relative to historical levels. For this reason, under the extreme 
and uncontrollable policy proposed in section XVIII.C.10 of this 
proposed rule, pending 12-months of claims run-out for RT services 
furnished in 2020, we will consider the removal of 2020 data from the 
calculation of any applicable baseline period or trend factor. We are 
not considering the exclusion of 2020 from the case mix adjustment at 
this time, because the case mix episodes are weighted equally (unlike 
the baseline period, where more recent episodes are given more weight 
than earlier episodes), and the case mix adjustment does not rely on 
the volume of RT services furnished.
    We solicit comments on this approach to addressing utilization 
during the 2020 EUC.
    We are also providing Table 62, which is an example that summarizes 
the data sources and time periods used to determine the values of key 
pricing components for a baseline period of 2017 through 2019 as a 
result of the proposed modifications to the pricing methodology.

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[[Page 42306]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.113

BILLING CODE 4120-01-C
6. Quality--Proposed Form, Manner, and Timing for Quality Reporting
    We finalized that the RO Model quality measure reporting to be 
based on a CY of data (85 FR 61220 through 61223). In the CY 2021 OPPS/
ASC final rule, we delayed RO Model quality measures requirements to 
PY2 (January 1, 2022 through December 31, 2022). In this proposed rule, 
we are proposing that Professional participants and Dual participants 
submit quality measure data starting in PY1 during the proposed model 
performance period. Under this proposal, if the proposed model 
performance period starts mid-year, the CY collection period would 
remain. For example, if the model performance period starts in July, RO 
participants would collect quality measure data for that CY starting in 
January. This would allow RO participants to use their MIPS data 
submission to meet the RO Model requirements. We are proposing this 
policy because we believe that any segmentation to reflect data from 
only the portion of the CY in PY1 would be inconsistent with the 
measure, and add

[[Page 42307]]

substantial reporting burden to RO participants.
    For PY1, Professional participants and Dual participants would be 
required to submit data for three pay-for-performance measures: (1) 
Plan of Care for Pain; (2) Screening for Depression and Follow-Up Plan; 
and (3) Advance Care Plan. Professional participants and Dual 
participants would be required to submit data on a fourth measure, 
Treatment Summary Communication--Radiation Oncology, as a pay-for-
reporting measure. All quality measure data is reported using the RO 
Model secure data portal in the manner consistent with that submission 
portal and the measure specification.
    Data submitted by Professional participants and Dual participants 
for the Treatment Summary Communication--Radiation Oncology measure 
will be used to propose a benchmark to re-specify it as a pay-for-
performance measure, for PY3.
    We are proposing that we may update the specifications for the 
Treatment Summary Communication--Radiation Oncology measure, should new 
specifications from the measure's steward meet the RO Model's needs. 
Any non-substantive updates to the specifications for this measure 
would be communicated in a form and manner specified by CMS. Any 
substantive changes to measure specifications would be addressed 
through notice and comment rulemaking.
    We also finalized that we would have a CMS-approved contractor 
administer the Consumer Assessment of Healthcare Providers and Systems 
(CAHPS[supreg]) Cancer Care Survey for Radiation Therapy, beginning in 
April 2021 (85 FR 61220). In the CY 2021 OPPS/ASC final rule, we 
revised this policy so that a CMS-approved contractor would administer 
the CAHPS[supreg] Cancer Care Survey for Radiation Therapy beginning in 
October 2021. Given the change in model performance period due to the 
delay under section 133 of the CAA 2021, we are proposing that we amend 
existing policy such that the CMS-approved contractor will begin 
administering the CAHPS[supreg] Cancer Care Survey for Radiation 
Therapy on behalf of the RO participants and CMS as soon as there are 
completed RO episodes, no earlier than the fourth month of the model 
performance period.
    We finalized under the RO Model's clinical data collection policy 
that Professional participants and Dual participants must collect 
certain clinical information not available in claims or quality 
measures, with data collecting starting in PY1 (85 FR 61223 through 
61226). In the CY 2021 OPPS/ASC final rule, we revised this policy so 
that the collection period for clinical data elements (CDEs) would 
begin on January 1, 2022. In this proposed rule, we are proposing that 
Professional participants and Dual participants submit CDEs starting in 
PY1.
    We invite public comments on these proposals, including whether 
there are associated changes to the burden or costs with submitting 
CDEs.
7. The RO Model as an Advanced Alternative Payment Model (Advanced APM) 
and a Merit-Based Incentive Payment System APM (MIPS APM)
    We finalized in the Specialty Care Models Rule at 85 FR 61238 that 
we expected the RO Model to meet the criteria to be an Advanced APM and 
a MIPS APM under the Quality Payment Program beginning in PY1 of the RO 
Model, on January 1, 2021. In CY 2021 OPPS/ASC final rule (85 FR 
86262), we amended this policy to reflect that we anticipated that the 
RO Model will meet the criteria to be both an Advanced APM and a MIPS 
APM under the Quality Payment Program starting in PY2 which would begin 
on January 1, 2022. Despite the delay required by section 133 of the 
CAA 2021, we expect the RO Model to meet the criteria to be an Advanced 
APM and a MIPS APM beginning in PY1, beginning January 1, 2022. Final 
CMS determinations of Advanced APMs and MIPS APMs for the 2022 
performance period will be announced via the Quality Payment Program 
website at https://qpp.cms.gov/. We anticipate that the RO Model will 
meet the Advanced APM criteria, reflected in our regulation at Sec.  
414.1415 in PY1 and all subsequent PYs.
    The first criterion to be an Advanced APM is set forth at Sec.  
414.1415(a), CEHRT use. For the RO Model, this criterion is satisfied 
by the requirements of Sec.  512.220(b), that participants must use 
CEHRT; that the RO participant must annually certify its use of CEHRT 
during the model performance period; and that the RO participant will 
be required to certify its use of CEHRT within 30 days of the start of 
each PY.
    The second criterion to be an Advanced APM is at Sec.  414.1415(b), 
Payment based on quality measures. This criterion is satisfied because 
payment under the RO Model is based on MIPS-comparable quality 
measures, as specified in regulation at Sec.  414.1415(b). 
Specifically, the RO participant will have their payment amount 
adjusted by the 2 percent quality withhold with the chance of earning 
back some or all of that amount based on their AQS, as codified at 
Sec.  512.255(c)(10). For further discussion of these requirements, 
please see 85 FR 61211 through 61231.
    The third criterion to be an Advanced APM is set forth at Sec.  
414.1415(c), Financial Risk. This criterion is satisfied by the 
application of the discount factor to RO Model payments, codified at 
Sec.  512.255(c)(8); the application of the quality withhold to the RO 
Model payments, codified at Sec.  512.255(c)(10); and the fact that RO 
participants are responsible for 100 percent of all expenditures in 
excess of the expected amount of expenditures beyond those covered by 
the participant-specific professional episode payment or the 
participant-specific technical episode payment as codified at Sec.  
512.265, with the exception of those RO participants that qualify for 
the stop-loss policy as codified at Sec.  512.285(f). The proposed 
changes to the stop-loss policy described in section XVIII.C.5.f and 
the discount amounts described in section XVIII.C.5.h of this proposed 
rule do not affect the satisfaction of the Financial Risk criterion.
    As finalized in the CY 2021 OPPS/ASC final rule at 85 FR 61237, for 
the subset of RO participants that are limited to the total amount of 
losses they may incur because they are eligible for the stop-loss 
policy, that limit is set to 20 percent of expected expenditures for 
which the RO participants are responsible for under the RO Model. 
Therefore, even when the RO Model stop-loss policy is applicable, the 
RO Model still meets the Financial Risk criterion to be an Advanced 
APM, which is 3 percent of the expected expenditures for which an APM 
Entity is responsible under the APM, at Sec.  414.1415(c)(3)(i)(B).
    The RO Model would also meet the criteria to be a MIPS APM under 
the definition at Sec.  414.1305 starting January 1, 2022. Any MIPS 
eligible clinician who is included on the individual practitioner list 
as described at Sec.  512.217 may report and be scored for MIPS as part 
of an APM Entity, and through the APM Performance Pathway described at 
Sec.  414.1367.
    The MIPS APM criteria at Sec.  414.1367(b) specify that APM 
entities in a MIPS APM must participate in the APM under an agreement 
with CMS or through a law or regulation, and the APM must base payment 
on quality measures and cost/utilization. Professional participants and 
Dual participants are required to report quality measures, as codified 
at Sec.  512.275(c), and the RO Model meets the quality measure and 
cost/utilization requirement through the application of the quality 
withhold, codified at Sec.  512.255(c)(10), and the use of the

[[Page 42308]]

Aggregate Quality Score (AQS) and its application to the quality 
withhold, as finalized at 85 FR 61226 through 61231. Pursuant to 
Sec. Sec.  414.1317 and 414.1367, MIPS eligible clinicians who are 
identified on a participation list of an APM Entity participating in a 
MIPS APM during the performance period have unique reporting options 
under MIPS.
    We are clarifying that Professional participants and Dual 
participants who meet the RO Model requirements codified at Sec.  
512.220, including use of CEHRT, and who are eligible clinicians on a 
Participation List as those terms are defined at Sec.  414.1305, will 
fall into a category called ``Track One'' of the RO Model. We propose 
to define ``Track One'' to mean an Advanced APM and MIPS APM track for 
Dual participants and Professional participants that use CEHRT. RO 
Model participants in Track One will be considered to be participating 
in the Advanced APM track of the RO Model, and we will make Qualifying 
APM Participant (QP) determinations for the eligible clinicians on the 
RO Model Participation List for Track One as provided in Sec.  
414.1425. If eligible clinicians who are Track One RO Participants do 
not meet the thresholds to become QPs, they will be considered to be 
participating in a MIPS APM and can report to MIPS using reporting 
options applicable to MIPS APM participants as specified at Sec.  
414.1367. At the start of a PY, if Professional participants or Dual 
participants fail to meet any of the RO Model requirements codified at 
Sec.  512.220, which includes use of CEHRT, they will be moved into a 
separate category called ``Track Two'' of the RO Model for that PY. We 
propose to define ``Track Two'' to mean an APM for Dual participants 
and Professional participants who do not meet the RO Model requirements 
set forth at Sec.  512.220; and for all Technical participants. RO 
participants that fall into Track Two will not be participating in an 
Advanced APM or MIPS APM for the RO Model. As such, we will not make QP 
determinations for the eligible clinicians on the RO Model 
Participation List for Track Two. We are proposing to codify 
definitions for ``Track One'' and ``Track Two'' at Sec.  512.205. If an 
RO participant meets the CEHRT use requirements pursuant to Sec.  
414.1415(a)(1)(i) by the last QP determination snapshot date specified 
at Sec.  414.1325, they will be moved to Track One of the RO Model and 
considered at that point to be participating in an Advanced APM, 
provided the RO participant meets all other RO Model requirements set 
forth at Sec.  512.220.
    We recognize that any failure, however minor, to comply with the RO 
Model requirements set forth at Sec.  512.220(a)(2) will have an impact 
on whether an RO Model participant is in Track One versus Track Two. 
Section 512.220(a)(2) contains a number of requirements, including 
requirements to discuss goals of care and RO Model cost-sharing 
responsibilities with each RO beneficiary; adhere to nationally 
recognized, evidence-based clinical treatment guidelines when 
appropriate; assess each RO beneficiary's tumor, note, and metastasis 
cancer stage; and send a treatment summary to each RO beneficiary's 
referring physician within 3 months of the end of the treatment. Under 
our proposal, any failure to comply with the requirements of Sec.  
512.220(a)(2) will result in Track Two status for the RO participant 
and would be subject to remedial action under Sec.  512.160. However, 
we recognize that an RO participant's noncompliance with the terms of 
Sec.  512.220(a)(2) might not be discovered until after CMS has treated 
the RO participant as if they were in Track One, including potentially 
making QP determinations for an RO participant's eligible clinicians 
and making APM Incentive Payments (or, in years beginning with CY 2026, 
applying a differentially higher update under the physician fee 
schedule). In that event, the payments we would make based on the QP 
status of the RO participant's eligible clinicians pursuant to its 
Track One status would constitute overpayments. We are concerned that, 
in the case of minor noncompliance with the requirements of Sec.  
512.220(a)(2), such overpayment liability may be too harsh. We 
considered removing the requirement that RO Model participants must 
meet all of the requirements codified in Sec.  512.220(a)(2) to remain 
in Track One, but feel that these requirements are important to quality 
improvement in radiation oncology. Nevertheless, we are considering 
whether the final rule should modify some of the requirements in Sec.  
512.220(a)(2). For example, instead of requiring certain actions for 
``each RO beneficiary,'' we are considering whether to require those 
actions for a majority of RO beneficiaries or substantially all RO 
beneficiaries. In addition, we are considering whether the final rule 
should modify certain requirements to permit payment of some or all of 
the payments made based on the QP status of the RO participant's 
eligible clinicians pursuant to its Track One participation, depending 
on the severity of noncompliance and other factors.
    We welcome comments on these considerations, including whether the 
RO Model can meaningfully improve the quality of care if any of the 
requirements specified in Sec.  512.220(a)(2) are modified, which 
requirements would be appropriate for modification, the impact of 
recoupment, and if there are more effective ways to encourage quality 
improvement and Track One participation.
a. Technical Participants and the Quality Payment Program
    Technical participants that are freestanding radiation therapy 
centers (as identified by a TIN) that only provide the technical 
component (TC) are not required to report quality measures under the RO 
Model and fall into Track Two of the RO Model. Technical participants 
will not be considered to be participating in Advanced APMs or MIPS 
APMs under the RO Model. However, Technical participants can attest to 
their participation in an APM for purposes of MIPS, and may be eligible 
to receive Improvement Activity credit as specified at Sec.  
414.1317(b)(3).
    We are also proposing that if the Technical participants that are 
freestanding radiation therapy centers (as identified by a TIN) begin 
providing the PC at any point during the model performance period, then 
they must notify CMS within 30 days, in a form and manner specified by 
CMS. We propose that they would also be required under the RO Model to 
report quality measures by the next reporting period, which would be 
March of a PY for Quality Measures and January and July of a PY for the 
clinical data elements, as finalized at 85 FR 61211 through 61231. If 
they meet the requirements to be a Track One RO Model participant at 
one of the QP determination dates specified in Sec.  414.1425(b), they 
would be considered to be participating in an Advanced APM and a MIPS 
APM. Once a Technical participant that is a freestanding radiation 
therapy center begins providing the professional component, the 
freestanding radiation therapy center becomes a Dual participant as 
defined in Sec.  512.205. We will monitor these RO participants for 
compliance with the requirement to report quality measures if they 
begin providing the professional component. We are proposing to codify 
this policy at Sec.  512.275(d).
    We invite public comments on these proposals related to Technical

[[Page 42309]]

participants that are freestanding radiation therapy centers.
b. Individual Practitioner List
    We codified the requirements concerning the review and 
certification of the individual practitioner list at Sec.  512.217. In 
CY 2021 OPPS/ASC final rule (85 FR 86262), we amended this regulation 
so that the individual practitioner list was not to be used for QP 
determinations or for determining participants in a MIPS APM for 
purposes of MIPS reporting and scoring rules in PY1, and the individual 
practitioner list was to only be used for the Quality Payment Program 
in PY1 to assign an automatic 50 percent score for the Improvement 
Activity performance category in MIPS for RO participants. This 
amendment stated that starting in PY2 (January 1, 2022), the individual 
practitioner list was to be used to identify the relevant eligible 
clinicians for purposes of making QP determinations and for certain 
aspects of MIPS under the Quality Payment Program. Section 133 of the 
CAA 2021 prohibits implementation of the RO Model prior to January 1, 
2022. In this proposed rule, we are clarifying that all requirements 
concerning the review and certification of the individual practitioner 
list finalized and codified at Sec.  512.217 will remain in effect 
starting on the first day of the model performance period.
    We codified at Sec.  512.217(a) that upon the start of each PY, CMS 
creates and provides to each Dual participant and Professional 
participant an individual practitioner list which identifies by NPI 
each individual practitioner associated with the RO participant.
    We are proposing to modify this policy to include that Technical 
participants that are freestanding radiation therapy centers will also 
be provided an individual practitioner list. We are also proposing to 
add to the regulation at Sec.  512.217(b) that in the case of a Dual 
participant, Professional participant, or Technical participant that is 
a freestanding radiation therapy center, which begins participation in 
the RO Model after the start of a given PY, but at least 30 days prior 
to the last QP determination snapshot date specified at Sec.  414.1325, 
of that PY, CMS would create and provide the new Dual participant, 
Professional participant, or Technical participant that is a 
freestanding radiation therapy center with an individual practitioner 
list. Any new Dual participant, Professional participant, or Technical 
participant that is a freestanding radiation therapy center that begins 
participation in the RO Model after the start of the PY must review and 
certify their individual practitioner list by the last QP determination 
snapshot date specified at Sec.  414.1325.
    We are proposing to change this policy to be inclusive of new RT 
providers and RT suppliers that would be required to participate in the 
RO Model after the start of a PY; we believe this proposal will give 
all RO participants, including those that begin participation in the RO 
Model after the start of a PY, more time to review and certify their 
individual practitioner lists.
    We invite public comments on reviewing and certifying individual 
practitioner lists.
    We codified at Sec.  512.217(b) and (c)(1) that the RO participant 
must review and certify the individual practitioner list within 30 days 
of receipt of the individual practitioner list. We also codified at 
Sec.  512.217(d)(1)(i) and (d)(2)(i) that the RO participant must 
notify CMS within 30 days when there are any additions or removals of 
eligible clinicians to the individual practitioner list. We are 
proposing to modify these policies so that RO participants will have 
the ability to review their individual practitioner list and add or 
drop the necessary NPIs from the list up until the last QP 
determination snapshot date specified at Sec.  414.1325. We are 
proposing to change this policy to give RO participants more time to 
review and certify their individual practitioner lists by requiring 
this by the last QP determination snapshot date specified at Sec.  
414.1325, instead of within 30 days of receipt of the individual 
practitioner list.
    We invite public comments on this proposal to modify the timeframe 
for which individual practitioner lists shall be certified.
    We codified at Sec.  512.217(c)(3) that if the Dual participant or 
Professional participant does not verify and certify the individual 
practitioner list by the deadline specified by CMS, RO participants on 
the unverified list are not recognized as participants on a 
participation list of either a MIPS APM or Advanced APM. We are 
proposing to add Sec.  512.217(c)(3)(iii) that if individual 
practitioners who participate in the RO Model with Technical 
participants that are freestanding radiation therapy centers are not 
included on a verified list they will not be eligible to receive 
Improvement Activity credit under MIPS.
    We invite public comments on this proposal to add Sec.  
512.217(c)(3)(iii).
c. RO Model Requirements
    We codified at Sec.  512.220(b) that RO participants must use 
CEHRT, that the RO participant must annually certify its use of CEHRT 
during the model performance period, and that the RO participant will 
be required to certify its use of CEHRT within 30 days of the start of 
each PY. In CY 2021 OPPS/ASC final rule (85 FR 86262), we amended the 
CEHRT requirement beginning in PY2, on January 1, 2022, and to be 
required for PY2 through PY5. However, section 133 of the CAA 2021 
prohibits implementation of the RO Model prior to January 1, 2022.
    Accordingly, we are proposing that the CEHRT requirement would 
begin in PY1 of the proposed model performance period and that RO 
participants must certify their use of CEHRT at the start of PY1 and 
each subsequent PY, as codified at Sec.  512.220(b)(1) and (2). We are 
proposing to codify at Sec.  512.220(b)(3) that if an RO participant 
begins participation in the RO Model at any time during an ongoing PY, 
they must certify their use of CEHRT by the last QP determination 
snapshot date specified at Sec.  414.1325.
    We codified at Sec.  512.220(a)(1) that RO participants must 
satisfy the requirements set forth at Sec.  512.220 to qualify for the 
APM Incentive Payment. We propose to amend Sec.  512.220(a)(1) to state 
that RO participants must satisfy the requirements set forth at Sec.  
512.220 to be included in Track One of the RO Model. If RO participants 
do not meet those requirements in a PY, the participant will be in 
Track Two for the applicable PY. This proposed change is necessary to 
align with the Quality Payment Program.
    We invite public comments on these proposals related to compliance 
with the CEHRT requirements and the other requirements as conditions to 
be included in Track One of the RO Model.
8. Proposed Reconciliation Process
a. Initial Reconciliation
    Reconciliation is the process to calculate reconciliation payments 
or repayment amounts for incomplete episodes and duplicate RT services. 
We stated in the Specialty Care Models Rule at 85 FR 61243 that we 
would conduct the initial reconciliation for PY1 as early as August 
2022, and the PY2 initial reconciliation as early as August 2023, and 
so forth. Given the proposed change in model performance period due to 
the delay under section 133 of the CAA 2021, we expect to conduct the 
initial reconciliation each August for the preceding PY. For example, 
for PY1, we would conduct the initial reconciliation as early as August 
of PY2.
    In the CY 2021 OPPS/ASC final rule we amended Sec.  512.285(d) such 
that the

[[Page 42310]]

quality reconciliation payment amount would not be applicable for PY1, 
because there would not be a quality withhold in PY1. Given the 
proposed change in model performance period due to the delay under 
section 133 of the CAA 2021, and our proposal that the application of a 
quality withhold would begin in PY1 as described in section XVIII.C.5 
of this proposed rule, we propose to amend Sec.  512.285(d) such that 
the quality reconciliation payment amount will apply to all PYs. We 
invite public comments on our proposal.
b. True-Up Reconciliation
    The true-up reconciliation is the process to calculate additional 
reconciliation payments or repayment amounts for incomplete episodes 
and duplicate RT services that are identified after the initial 
reconciliation and after a 12-month claims run-out for all RO episodes 
initiated in the applicable PY. We stated in the Specialty Care Models 
Rule at 85 FR 61244 that we would conduct the PY1 true-up 
reconciliation as early as August 2023, and the PY2 true-up 
reconciliation as early as August 2024, and so forth. Given the 
proposed change in model performance period due to the delay under 
section 133 of the CAA 2021, we expect to conduct the true-up 
reconciliation as early as August of the CY following an initial 
reconciliation for a PY. For example, for PY1, we would conduct the 
true-up reconciliation as early as August of PY3.
c. Proposed Reconciliation Amount Calculation
    We codified at Sec.  512.285(c)(3) that a subset of incomplete 
episodes in which (1) the TC is not initiated within 28 days following 
the PC; (2) the RO beneficiary ceases to have traditional FFS Medicare 
prior to the date upon which a TC is initiated, even if that date is 
within 28 days following the PC; or (3) the RO beneficiary switches RT 
provider or RT supplier before all RT services in the RO episode have 
been furnished, the RO participant would be owed only what it would 
have received under FFS for the RT services furnished to that RO 
beneficiary. CMS would reconcile the episode payment for the PC and TC 
that was paid to the RO participant with what the FFS payments would 
have been for those RT services using no-pay claims. Furthermore, we 
finalized in the case that traditional Medicare ceases to be the 
primary payer for an RO beneficiary after the TC of the RO episode has 
been initiated but before all included RT services in the RO episode 
have been furnished, each RO participant would be paid only the first 
installment of the episode payment. The RO participant would not be 
paid the EOE PC or TC for these RO episodes.
    We are proposing to modify this policy such that for all incomplete 
episodes as defined at Sec.  512.205, including when the RO beneficiary 
ceases to have traditional FFS Medicare before all included RT services 
in the RO episode have been furnished, CMS would reconcile the episode 
payment for the PC and TC that was paid to the RO participant(s) with 
what the FFS payments would have been for those RT services using no-
pay claims. After reviewing data for incomplete episodes, including 
incomplete episodes where an RO beneficiary ceases to have traditional 
FFS Medicare before the end of an episode, we determined that the data 
did not support paying RO participants only the first installment of an 
episode for this type of incomplete episode. Upon further review of 
this data and stakeholder comments on this policy we propose to amend 
Sec.  512.285(c)(3) and (4) accordingly.
    In light of the proposal to modify payment for incomplete episodes, 
we are proposing conforming changes to Sec.  512.255(c)(12)(iv) 
regarding beneficiary coinsurance for incomplete episodes. 
Specifically, we propose to modify Sec.  512.255(c)(12)(iv) to specify 
that the coinsurance for all incomplete episodes is 20 percent of the 
FFS amount applicable to the RT services that were furnished.
    We codified at Sec.  512.205 a definition for ``stop-loss 
reconciliation amount'' to mean the amount owed to RO participants that 
have fewer than 60 episodes during 2016 through 2018 and were 
furnishing included RT services in the CBSAs selected for participation 
at the time of the effective date of the Specialty Care Models Rule for 
the loss incurred under the RO Model as described in Sec.  512.285(f). 
We propose to modify the definition for ``stop-loss reconciliation 
amount'' to mean the amount owed to RO participants that have fewer 
than 60 episodes during the baseline period and were furnishing 
included RT services before the start of the model performance period 
in the CBSAs selected for participation for the loss incurred under the 
RO Model as described in Sec.  512.285(f), in order to make this 
definition consistent with the updated model performance period.
    We invite public comments on these proposals related to the 
reconciliation amount calculation.
9. Potential Overlap With Other Models Tested Under Section 1115A 
Authority and CMS Programs
    In the Specialty Care Models Rule (85 FR 61258), we stated that we 
did not envision that the prospective episode payments made under the 
RO Model would need to be adjusted to reflect payments made under any 
of the existing models being tested under section 1115A of the Act or 
the Medicare Shared Savings Program (Shared Savings Program) under 
section 1899 of the Act. We also stated that if, in the future, we 
determined that such adjustments are necessary, we would propose 
overlap policies for the RO Model through notice and comment 
rulemaking. However, we did not codify this policy in the regulations 
for the RO Model at that time. The RO Model is not a total cost of care 
model, and includes only RT services in the episode payment. The RO 
Model's payments are narrow in scope because they are limited to RT 
services furnished during a distinct period of time. Because the RO 
Model makes prospective payments for only RT services provided during 
an episode, a practice participating in the RO Model would receive the 
same prospective episode payment for RT services regardless of its 
participation in other CMS models or programs.
    Thus, at this time, we continue to see no need to adjust the 
prospective episode payments made under the RO Model to reflect 
payments made under the Shared Savings Program or under any other 
models tested under section 1115A of the Act. We are proposing to 
codify this policy on overlaps at Sec.  512.292. The financial 
methodology and accounting policies under the applicable model tested 
under section 1115A of the Act or the Shared Savings Program will 
continue to govern the way in which RO Model payments are factored into 
reconciliation calculations for that initiative. We believe that other 
initiatives that use a total cost of care approach could consider 
taking the necessary steps to update their financial methodologies to 
adjust for the RO Model payments, but we note that the RO Model 
payments may only be a small portion of the population's overall 
payments.
    We invite public comments on this proposal to codify our overlap 
policy.
10. Proposed Extreme and Uncontrollable Circumstances Policy
    The nation, its communities, and its health care providers, on 
certain occasions, are forced to confront extreme and uncontrollable 
circumstances outside of their control that impact their ability to 
operate in the ordinary course of business for short-term or sometimes 
even extended periods. The U.S. is currently responding to an outbreak 
of respiratory disease caused by a novel coronavirus,

[[Page 42311]]

referred to as ``COVID-19'', which has created serious public health 
threats that have greatly impacted the U.S. health care system, 
presenting significant challenges for stakeholders across the health 
care delivery system and supply chain. Other extraordinary events that 
have a disruptive impact may also occur in the future. These events may 
include other public health emergencies, large-scale natural disasters 
(such as, but not limited to, hurricanes, tornadoes, and wildfires), or 
other types of disasters. Such events may strain health care resources, 
and CMS understands that RT providers and RT suppliers may have limited 
capacity to continue normal operations and fulfill RO Model 
participation requirements under such circumstances.
    Therefore, we propose to adopt an extreme and uncontrollable 
circumstance policy for the RO Model which would allow CMS to revise 
the model performance period; grant certain exceptions to RO Model 
requirements to ensure the delivery of safe and efficient health care; 
and revise the RO Model's payment methodology.
a. Extreme and Uncontrollable Circumstance Affects the Nation, Region, 
or a Locale
    We propose to define an extreme and uncontrollable circumstance 
(EUC) as a circumstance that is beyond the control of one or more RO 
participants, adversely impacts such RO participants' ability to 
deliver care in accordance with the RO Model's requirements, and 
affects an entire region or locale. We propose that if CMS declares an 
EUC for a geographic region, CMS may: (1) Amend the model performance 
period; (2) eliminate or delay certain reporting requirements for RO 
participants; and (3) amend the RO Model's pricing methodology. 
Application of the modifications would be based on the severity and 
types challenges that the circumstance imposes on RO participants. In 
every circumstance, CMS would seek to minimize impact on the RO 
participants not affected by the EUC, while supporting those that are 
affected.
    In a national, regional, or local event, we would apply the extreme 
and uncontrollable circumstance policy only if the magnitude of the 
event calls for the use of special authority to help providers respond 
to the emergency and continue providing care. We would not use a 
bright-line test to assess all types of public health emergencies, 
disasters, or other extraordinary circumstances; application of the 
policy would be tailored to the specific circumstance, and to the 
affected geographic areas. To help identify RO participants that are 
experiencing an extreme and uncontrollable circumstance, CMS would 
consider the following factors:
     Whether the RO participants are furnishing services within 
a geographic area considered to be within an ``emergency area'' during 
an ``emergency period'' as defined in section 1135(g) of the Social 
Security Act.
     Whether the geographic area within a county, parish, U.S. 
territory, or tribal government designated under the Stafford Act 
served as a condition precedent for the Secretary's exercise of the 
1135 waiver authority, or the National Emergencies Act.
     Whether a state of emergency has been declared in the 
relevant geographic area.
    In the event that one or more of these conditions are present, CMS 
would announce that the extreme and uncontrollable circumstances policy 
applies to one or more RO participants within an affected geographic 
area. CMS would communicate this decision via the RO Model website and 
written correspondence to RO participants.
    We invite public comment on the definition of EUC.
b. Model Performance Period
    In instances where an EUC is nation-wide and impacts RO 
participants' ability to implement the requirements of the RO Model at 
the start of the model performance period, we propose that CMS may 
delay the start date of the model performance period by up to one CY. 
RO participants would be notified of any changes to the model 
performance period on the RO Model website no later than 30 days prior 
to the original start date. In the case where a delay to the RO Model 
performance period is required because of an EUC, various other aspects 
of the RO Model may be impacted, including its status as an Advanced 
APM and the years that would be included in the baseline period. The 
implications of a model performance period delay on other aspects of 
the RO Model would also be included in the RO Model website 
notification no later than 30 days prior to the original start date. In 
the case of a regional EUC, we propose to not change the model 
performance period, but instead only to delay or exempt requirements, 
as discussed in section XVIII.C.10.c for the RO participants in the 
impacted region.
    We invite public comment on this proposal related to when we would 
amend the model performance period.
c. Reporting Requirements
    Quality Measures and Clinical Data Elements: If an EUC impacts RO 
participants' ability to comply with the RO Model's quality measure or 
clinical data element reporting requirements, we propose that CMS may 
delay or exempt the affected RO participants from the reporting 
requirements, make the requirements optional, and/or extend the time 
for RO participants to report data to CMS, as applicable. CMS would 
modify or grant exceptions to the RO Model's reporting requirements if, 
for example, affected RO participants cannot submit their quality and 
clinical data reporting due to electricity or internet outages caused 
by an EUC.
    Other Participation Requirements: Because RO participants must 
focus on direct care, we propose that CMS may waive compliance with or 
adjust the requirement that RO participants actively engage with an 
AHRQ-listed patient safety organization (PSO) and provide Peer Review 
(audit and feedback) on treatment plans.
    We invite public comment on these proposals related to reporting 
requirements during an EUC.
d. Pricing Methodology
    Adjusting the Quality Withhold: If CMS decides to remove (not 
merely extend) quality and clinical data submission requirements for 
affected RO participants due to a national, regional, or local event, 
we propose that CMS could choose to repay the quality withhold during 
the next reconciliation, and award all possible points in the 
subsequent AQS calculation for affected RO participants, which would 
potentially increase episode payments during this time.
    Trend Factor Adjustments: In situations where RO participants 
nation-wide experience significant, aggregate-level disruptions to 
their service utilization, in that the trend factor (specific to a 
cancer type and component) for the upcoming PY has increased or 
decreased by more than 10 percent compared to the corresponding trend 
factor of the previous CY when FFS payment rates are held constant with 
the previous CY, we propose that CMS may modify the trend factor 
calculation for the PC and/or TC of an included cancer type.
    For example, for PY2, a change in the trend factor calculation for 
the PC and/or TC of an included cancer type could be warranted if 
[(2020 volume * 2022 rates)/(2019 volume * 2019 rates)] is more than 10 
percent change from [(2019 volume *2022 rates)/(2019 volume * 2019 
rates)]. The 10 percent

[[Page 42312]]

change threshold aligns with the 10 percent criterion for removing an 
included cancer type, whereby if CMS discovers a >=10 percent (>=10%) 
error in established national base rates, the cancer type will be 
removed from the RO Model. If CMS were to implement this modification, 
CMS would ensure that the trend factor calculation is most consistent 
with the average utilization from the previous CY. We propose to codify 
the extreme and uncontrollable circumstances policies at Sec.  512.294.
    We invite public comments on these proposals related to changes in 
the pricing methodology due to an EUC.

XIX. Proposed Updates to Requirements for Hospitals To Make Public a 
List of Their Standard Charges

A. Introduction and Overview

1. Statutory Basis and Background
    Section 1001 of the Patient Protection and Affordable Care Act 
(Pub. L. 111-148), as amended by section 10101 of the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152), amended Title 
XXVII of the Public Health Service Act (the PHS Act), in part, by 
adding a new section 2718(e). Section 2718 of the PHS Act, entitled 
``Bringing Down the Cost of Health Care Coverage,'' requires each 
hospital operating within the United States (U.S.) for each year to 
establish (and update) and make public a list of the hospital's 
standard charges for items and services provided by the hospital, 
including for diagnosis-related groups established under section 
1886(d)(4) of the Social Security Act (the Act). Section 2718(b)(3) of 
the PHS Act requires the Secretary of the Department of Health and 
Human Services (Secretary) to promulgate regulations to enforce the 
provisions of section 2718 of the PHS Act, and, in so doing, the 
Secretary may provide for appropriate penalties.
    As published in the Federal Register, the final rule entitled ``CY 
2020 Hospital Outpatient PPS Policy Changes and Payment Rates and 
Ambulatory Surgical Center Payment System Policy Changes and Payment 
Rates. Price Transparency Requirements for Hospitals to Make Standard 
Charges Public'' (84 FR 65524 (November 27, 2019), herein referred to 
as the CY 2020 Hospital Price Transparency final rule), we implemented 
these sections by adopting requirements for hospitals to make public 
their standard charges in two ways: (1) As a comprehensive machine-
readable file; and (2) in a consumer-friendly format. We codified these 
requirements at new 45 CFR part 180.
    In the CY 2020 Hospital Price Transparency final rule, we indicated 
that we believe our policies requiring public release of hospital 
standard charge information are a necessary and important first step in 
ensuring transparency in health care prices for consumers, although we 
also recognized that the release of hospital standard charge 
information would not be sufficient by itself to achieve the ultimate 
goals for price transparency. The final regulations were designed to 
begin to address some of the barriers that limit price transparency 
with a goal of increasing competition among healthcare providers to 
bring down costs. In particular, the regulations sought to address the 
barriers related to lack of hospital standard charge data by requiring 
some uniformity in the release of hospital standard charge information. 
We indicated our belief that more work would need to be done to ensure 
consumers have access to the information they need to make healthcare 
decisions. We therefore encouraged hospitals and other health care 
providers to go further in addressing barriers to price transparency.
2. Summary of Proposals
    We are proposing to amend several hospital price transparency 
policies codified at 45 CFR part 180 in order to encourage compliance. 
For the reasons explained in this section of the preamble, we are 
proposing to: (1) Increase the amount of the penalties for 
noncompliance through the use of a proposed scaling factor based on 
hospital bed count; (2) deem state forensic hospitals that meet certain 
requirements to be in compliance with the requirements of 45 CFR part 
180, and (3) prohibit certain conduct that we have concluded are 
barriers to accessing the standard charge information. We believe these 
proposed modifications are responsive to stakeholders and are necessary 
to ensure compliance with the hospital price transparency disclosure 
requirements. We are also clarifying the expected output of hospital 
online price estimator tools, an issue that occurs with respect to a 
hospital that chooses to use an online price estimator tool in lieu of 
posting its standard charges for the required shoppable services in a 
consumer-friendly format. Finally, we are seeking comment on a variety 
of issues that we may consider to improve standardization of the data 
disclosed by hospitals.

B. Proposal To Increase the Civil Monetary Penalty Amounts Using a 
Scaling Factor

    Section 2718(b)(3) of the PHS Act requires the Secretary to 
promulgate regulations to enforce the provisions of section 2718 of the 
PHS Act, and, in so doing, the Secretary may provide for appropriate 
penalties. In the CY 2020 Hospital Price Transparency final rule (84 FR 
65581 through 65590), we established monitoring and enforcement 
policies at new 45 CFR part 180, subpart C. Specifically, we finalized 
a process for monitoring hospital compliance with section 2718(e) of 
the PHS Act, by evaluating complaints made by individuals or entities 
to the Centers for Medicare & Medicaid Services' (CMS), reviewing 
individuals' or entities' analysis of noncompliance, and auditing 
hospitals' websites. Should CMS conclude a hospital is noncompliant 
with one or more of the requirements to make public standard charges, 
CMS may take any of the following actions, which generally, but not 
necessarily, will occur in the following order:
     Provide a written warning notice to the hospital of the 
specific violation(s).
     Request a corrective action plan from the hospital if its 
noncompliance constitutes a material violation of one or more 
requirements.
     Impose a civil monetary penalty not in excess of $300 per 
day, on the hospital and publicize the penalty on a CMS website if the 
hospital fails to respond to CMS' request to submit a corrective action 
plan or comply with the requirements of a corrective action plan.
    As described in the CY 2020 Hospital Price Transparency final rule 
(84 FR 65588 and 65589), we noted that commenters tended to be divided 
between those in favor of lower and higher CMP amounts, which indicated 
to us that the proposed (and subsequently finalized) $300 per day 
amount struck an appropriate balance between commenter concerns. We 
also noted that this $300 maximum daily dollar CMP amount is lower than 
CMPs imposed under certain other authorities administered by HHS 
agencies, where an entity's noncompliance poses immediate jeopardy, 
results in actual harm, or both, and stated our belief that the 
relatively lower amount for a CMP associated with a hospital's 
noncompliance with requirements to make public standard charges was 
reasonable since such noncompliance is less serious than noncompliance 
that poses or results in harm to the public.
    As discussed in the CY 2020 Hospital Price Transparency final rule 
(84 FR

[[Page 42313]]

65589), we considered commenters' concerns that some hospitals may 
prefer to forgo meeting the requirements of 45 CFR part 180 (for 
example, to not expend resources on reporting or to protect pricing 
information they consider sensitive), and, instead, face compliance 
actions including a $300 maximum daily CMP amount. Although we declined 
at the time to increase the amount of the CMP based on this concern 
alone, we indicated that as we gained experience with implementing the 
policy we intended to monitor for such occurrences, and may revisit the 
need to adjust the amount of the CMP in future rulemaking.
    We also considered the feasibility of implementing a sliding scale 
CMP approach across institutions that meet the definition of hospital 
according to Sec.  180.20 (84 FR 65588 and 65589). However, at the 
time, we believed it would be challenging to find a reliable source of 
data that provides for a scalable factor across all institutions that 
meet the definition of hospital. Therefore, we declined the commenters' 
suggestions to scale the CMP amount based on such factors as hospital 
bed size, location or patient volume. However, we indicated that we 
would continue to consider this issue and might revisit use of a CMP 
scaling methodology in future rulemaking.
    Based on our initial months of experience with enforcing the 
hospital price transparency requirements in 45 CFR part 180, we are 
concerned by what appears to be a trend towards a high rate of hospital 
noncompliance identified by CMS through sampling and reviews to date, 
and the reported initial high rate of hospital noncompliance with 45 
CFR part 180 reflected in early 
studies.410 411 412 413 414 415 One approach we considered 
to address this trend is to amend the regulations to impose potentially 
higher CMPs for noncompliance with the hospital price transparency 
requirements, and to scale the CMP to ensure the penalty amount would 
be more relevant to the characteristics of the noncompliant hospital. 
We believe that CMPs are an important component in holding hospitals 
accountable for their noncompliance with hospital price transparency 
requirements, and signal the Secretary's continued support for public 
access to pricing information and enforcement.
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    \410\ Henderson M & Mouslim MC. Low Compliance From Big 
Hospitals On CMS's Hospital Price Transparency Rule. Health Affairs. 
March 16, 2021. Available at: https://www.healthaffairs.org/do/10.1377/hblog20210311.899634/full/.
    \411\ Kennedy K, et al. The Insanity of U.S. Health Care 
Pricing: An Early Look at Hospital Price Transparency Data. Health 
Care Cost Institute. April 1, 2021. Available at: https://healthcostinstitute.org/hcci-research/hospital-price-transparency-1.
    \412\ Kurani N, et al. Early results from federal price 
transparency rule show difficulty in estimating the cost of care. 
Peterson-KFF Health System Tracker. April 9, 2021. Available at: 
https://www.healthsystemtracker.org/brief/early-results-from-federal-price-transparency-rule-show-difficultly-in-estimating-the-cost-of-care/.
    \413\ Severn C. The state of hospital price transparency, with 
pictures!. Turquoise Health. February 12, 2021. Available at: 
https://blog.turquoise.health/state-of-hospital-price-transparency-with-pictures/.
    \414\ Gondi S, et al. Early Hospital Compliance with Federal 
Requirements for Price Transparency. Research Letter. JAMA Intern 
Medicine. June 14, 2021. Available at: doi:10.1001/
jamainternmed.2021.2531.
    \415\ Letter from Representatives Frank Pallone, Jr., Anna G. 
Eshoo, Cathy McMorris Rodgers & Brett Guthrie, to Secretary Xavier 
Becerra (April 13, 2021), available at https://energycommerce.house.gov/sites/democrats.energycommerce.house.gov/files/documents/HHS.2021.04.13.pdf.
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    Therefore, we considered two general approaches for increasing the 
CMP amount: (1) Use a flat increase in the amount that would be applied 
uniformly across all hospitals, for example, increasing the maximum CMP 
amount from $300 per day per hospital to $1,000 per day per hospital, 
or (2) establish a minimum penalty amount and apply a scaling factor 
(such as bed count or hospital revenue) to increase the penalty in a 
manner uniquely tailored to the noncompliant hospital. After 
considering these two general approaches, we propose to use a scaling 
factor to establish the CMP amount for a noncompliant hospital.
    Several factors informed our proposal to use a scaling factor to 
determine the CMP amount for noncompliance with hospital price 
transparency requirements. First, this would allow us to penalize a 
hospital on a sliding scale in a manner that generally correlates to 
the hospital's characteristics, such as using the hospital's number of 
beds as a proxy for the size of the patient population it serves. 
Second, in the previous rulemaking, commenters suggested using a 
scaling factor as an alternative to a uniform CMP amount so as to not 
overly penalize smaller hospitals, while also providing a sufficient 
incentive for hospitals to comply. Third, other Federal programs use 
scaling factors in determining a CMP amount, in particular by taking 
into consideration the size of the entity subject to the penalty, or 
calculating the penalty based on the number of enrollees affected.\416\ 
Fourth, since finalization of the CY 2020 Hospital Price Transparency 
final rule, we have had the opportunity to evaluate and determine a 
reliable source of data that could be used to establish a CMP amount 
across most institutions that meet the definition of `hospital' as 
defined at Sec.  180.20.
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    \416\ See for example: 42 CFR 3.408(e), specifying factors 
considered in determining the amount of a civil money penalty 
include the financial condition of the respondent, including the 
size of the respondent (among other factors).
    45 CFR 160.408(d), specifying factors considered in determining 
the amount of a civil money penalty include the financial condition 
of the covered entity or business associate, consideration of which 
may include but is not limited to the size of the covered entity or 
business associate (among other factors).
    CMS, Civil Money Penalty Calculation Methodology, Revised, June 
21, 2019. Available at: https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/Downloads/2019CMPMethodology06212019.pdf (Pursuant to 42 CFR 422.760(b)(1) and 
(2), 423.760(b)(1) and (2), 417.500(c), and 460.46, CMS determines 
if the penalty for a deficiency should be calculated on a per 
enrollee or per determination basis.).
    42 CFR 1003.510 and 45 CFR 102.3, specifying penalty amounts 
that vary based on number of beds of the hospital; imposing higher 
penalties for a hospital that has 100 beds or more compared to a 
hospital that has less than 100 beds.
    \417\ CMS.gov, Cost Reports. Available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports.
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    We also considered the potential specific scaling factor or factors 
that could be used, and an appropriate data source. We considered two 
options for a scaling factor: Hospital bed count and hospital revenue. 
We are proposing to use the noncompliant hospital's number of beds, as 
specified in hospital cost report data submitted to CMS, as the scaling 
factor to establish CMP amounts. We note that for purposes of this 
discussion, we consider ``number of beds'' to be synonymous with ``bed 
count,'' and we use the terms interchangeably.
    We believe the hospital cost report data would be an appropriate 
data source for a scaling factor for the CMP amount because it is 
routinely submitted by Medicare-enrolled hospitals, is certified by a 
hospital official, and is reviewed by a Medicare Administrative 
Contractor (MAC) to determine acceptability. As explained on the 
CMS.gov website, Cost Reports web page, Medicare-certified 
institutional providers are required to submit an annual cost report to 
a MAC. The cost report contains provider information such as facility 
characteristics and financial statement data. CMS maintains the cost 
report data in the Healthcare Provider Cost Reporting Information 
System (HCRIS). HCRIS includes subsystems for the Hospital Cost Report 
(CMS-2552-96 and CMS-2552-10), among others.\417\ Cost Report form CMS-
2552-10 and related instructions are effective for

[[Page 42314]]

hospitals and hospital health care complexes with cost reporting 
periods beginning on or after May 1, 2010.\418\
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    \418\ CMS, The Provider Reimbursement Manual--Part 2, 
publication #15-2. Chapter 40, Hospital and Hospital Health Care 
Complex Cost Report Form CMS-2552-10. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935, Chapter 40-(T16)--Hospital & Hospital 
Health Care (Form CMS-2552-10) (ZIP), file ``R16P240.pdf'' (herein 
The Provider Reimbursement Manual--Part 2, Chapter 40). Refer to 
section 4000, General, 40-7.
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    For cost reporting purposes, Medicare requires submission of annual 
reports covering a 12-month period of operations based upon the 
provider's accounting year. There are also circumstances under which a 
provider may file a short period cost report for part of a year.\419\ 
Further, there are several exceptions to full cost reporting, 
including: If a provider does not furnish any covered services to 
Medicare beneficiaries during a cost reporting period (42 CFR 
413.24(g)); or if the provider has had low utilization of covered 
services by Medicare beneficiaries (as determined by the MAC) and has 
received correspondingly low interim payments for the cost reporting 
period (42 CFR 413.24(h)). If the provider fails to submit the cost 
report, the MAC imposes a penalty by suspending claims payments until 
the hospital submits the cost report.\420\
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    \419\ CMS, The Provider Reimbursement Manual--Part 2, 
publication #15-2. Chapter 1, Cost Reporting--General. Available at: 
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935, Chapter 1--Cost Reporting General 
(ZIP), file ``pr2_100_to_140.doc''. Refer to section 102, Cost 
Reporting Period, 1-3.
    \420\ 42 CFR 413.20(e). See also, CMS, Hospital and Hospital 
Health Care Complex Cost Report, CMS Form CMS-2552-10, dated 2020-
11-10. Available at: https://www.cms.gov/regulations-and-guidancelegislationpaperworkreductionactof1995pra-listing/cms-2552-10, CMS-2552-10.zip (ZIP), file ``CMS-2552-
10_Supporting_Statement_Part_A.pdf'' (Payment/Gifts to Respondents).
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    The chief financial officer or administrator of the provider 
certifies the content of the submitted cost report are true, correct, 
complete and prepared from the books and records of the provider in 
accordance with applicable instructions.\421\ The MAC reviews the cost 
report within 30 days of receipt of the provider's cost report to 
determine acceptability. If the cost report is considered unacceptable, 
the MAC returns the cost report with a letter explaining the reasons 
for the rejection. When a cost report is rejected, it is deemed an 
unacceptable submission and treated as if a report had never been 
filed.\422\ Further, the MAC enters certain data on the hospital cost 
report into HCRIS, including the cost report status as either: As 
submitted; Settled without audit; Settled with audit; Reopened; or 
Amended.\423\
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    \421\ 42 CFR 413.24(f)(4)(iv). See also, Form CMS-2552-10. 
Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935, Chapter 40-(T16)--
Hospital & Hospital Health Care (Form CMS-2552-10) (ZIP), file 
``R16P240f.pdf'', Part II--Certification.
    \422\ 42 CFR 413.24(f)(5)(iii).
    \423\ The Provider Reimbursement Manual--Part 2, Chapter 40. 
Refer to Worksheet S--HOSPITAL AND HOSPITAL HEALTH CARE COMPLEX COST 
REPORT CERTIFICATION AND SETTLEMENT SUMMARY, section 4003.1, Part 
I--Cost Report Status, Line 5, column 1.
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    One of the facility characteristics contained in the cost report is 
``number of beds,'' which is the number of beds available for use by 
patients at the end of the cost reporting period. Specifically, ``[a] 
bed means an adult bed, pediatric bed, portion of inpatient labor/
delivery/postpartum (LDP) room (also referred to as birthing room) bed 
when used for services other than labor and delivery, or newborn ICU 
bed (excluding newborn bassinets) maintained in a patient care area for 
lodging patients in acute, long term, or domiciliary areas of the 
hospital. Beds in post-anesthesia, post-operative recovery rooms, 
outpatient areas, emergency rooms, ancillary departments (however, see 
exception for labor and delivery department), nurses' and other staff 
residences, and other such areas which are regularly maintained and 
utilized for only a portion of the stay of patients (primarily for 
special procedures or not for inpatient lodging) are not termed a bed 
for these purposes.'' \424\
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    \424\ The Provider Reimbursement Manual--Part 2, Chapter 40. 
Refer to Worksheet S-3--HOSPITAL AND HOSPITAL HEALTH CARE COMPLEX 
STATISTICAL DATA AND HOSPITAL WAGE INDEX INFORMATION, section 
4005.1, Part 1--Hospital and Hospital Health Care Complex 
Statistical Data, Column 2.
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    For Medicare-enrolled hospitals, we propose to determine the CMP 
amount using the number of beds for the noncompliant hospital, as 
specified on the most recently available, finalized cost report data. 
We anticipate this would be the number of beds for the hospital as 
indicated in HCRIS as either Settled without audit, Settled with audit, 
Reopened, or Amended.
    We propose the following approach to scaling the CMP amount based 
on the hospital's number of beds, and as summarized in Table 63:
     For a noncompliant hospital with a number of beds equal to 
or less than 30, the maximum daily dollar CMP amount would be $300, 
even if the hospital is in violation of multiple discrete requirements 
of 45 CFR part 180.
     For a noncompliant hospital with a number of beds between 
31 and 550, the maximum daily dollar CMP amount would be the number of 
beds times $10, even if the hospital is in violation of multiple 
discrete requirements of 45 CFR part 180.
     For a noncompliant hospital with a number of beds greater 
than 550, the maximum daily dollar CMP amount would be $5,500, even if 
the hospital is in violation of multiple discrete requirements of 45 
CFR part 180.
    Therefore, for hospitals with 30 or fewer beds, the CMP amount 
under the proposed approach would be unchanged compared to the existing 
policy under Sec.  180.90(c)(2). The proposed use of bed count as a 
scaling factor would increase the penalty, in some cases significantly, 
for larger hospitals. The following examples illustrate the proposed 
approach. A small noncompliant hospital with a bed count of fewer than 
30 would be subject to the current CMP amount of $300/day or $109,500/
year (that is, 365 days or a full CY of noncompliance). A noncompliant 
hospital with a bed count of 200 would be assessed a penalty of $2,000/
day ($10*200/day) or $730,000/year. A noncompliant hospital with a bed 
count of 550 beds or more would be assessed a maximum penalty of 
$5,500/day ($10*550/day) or $2,007,500/year.

[[Page 42315]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.114

    We reviewed CMP amounts for other HHS programs that require 
reporting information and we believe our proposed maximum daily dollar 
penalty amount on a sliding scale between $300 and $5,500 per day per 
hospital is commensurate with the level of severity of the potential 
violation, taking into consideration that nondisclosure of standard 
charges does not rise to the level of harm to the public as other 
violations (such as safety and quality issues) for which HHS imposes 
CMPs and, therefore, should remain at a relatively lower level. For 
instance, the proposed maximum amount of $5,500/day, totaling 
$2,007,500/year would generally align with amounts used by other HHS 
initiatives that impose CMPs, such as HIPAA-related CMPs that, pursuant 
to statute, cap penalties at $1.5 million annually.\425\
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    \425\ See section 1176(a)(3) of the Social Security Act; 45 CFR 
160.404.
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    We propose that if the number of beds for the hospital cannot be 
determined according to the most recently available, finalized Medicare 
cost report data in HCRIS, CMS would use documentation provided by the 
hospital to determine the number of beds for purposes of calculating 
the CMP. This approach would be needed to determine the number of beds 
for a hospital that is not Medicare-enrolled and therefore does not 
submit to CMS a hospital cost report. Further, we believe there could 
be circumstances under which there may be an apparent discrepancy, or 
obvious error, in the most recently available, finalized cost report 
data for a hospital within HCRIS, and additional documentation from the 
hospital would be needed to accurately determine the CMP amount.
    In the event that CMS requires additional documentation to 
determine the CMP amount, we propose to require that the hospital 
provide CMS with documentation of its number of beds, in a form and 
manner and by the deadline prescribed by CMS in a written notice 
provided to the hospital. Should a hospital fail to provide CMS with 
this documentation, in the prescribed form and manner and by the 
specified deadline, we propose that we would impose a CMP on the 
hospital at the highest, maximum daily dollar amount within the 
proposed sliding scale. For example, under the proposed approach, if 
CMS cannot determine a noncompliant hospital's number of beds using 
hospital cost report data in HCRIS, and if the noncompliant hospital 
fails to provide CMS with documentation of its number of beds, in the 
form and manner and by the deadline specified by CMS, we would impose a 
CMP calculated based on a number of beds greater than 550, and 
therefore we would impose the maximum penalty of $5,500/day ($10*550/
day) or $2,007,500/year.
    Additionally, we propose that the approach for scaling the CMP 
amount based on the hospital's number of beds would apply to days the 
hospital is out of compliance with hospital price transparency 
requirements beginning with the effective date of the final rule, 
assuming the rule is finalized as proposed, and which we anticipate 
would be January 1, 2022. Further, according to Sec.  180.90(c)(3), the 
amount of the CMP will be adjusted annually using the multiplier 
determined by OMB for annually adjusting CMP amounts under 45 CFR part 
102. As described in the CY 2020 Hospital Price Transparency final rule 
(84 FR 65586), this multiplier is based on the Consumer Price Index for 
All Urban Consumers (CPI-U), not seasonally adjusted. Given that the 
requirements in 45 CFR part 180, as established by the CY 2020 Hospital 
Price Transparency final rule, were effective January 1, 2021, and 
because of the proposed effective date of January 1, 2022, for the 
modifications to the CMP amounts in this proposed rule, we would apply 
the cost-of-living adjustment multiplier determined by OMB, in 
calculating CMP amounts for hospital noncompliance with the 
requirements in 45 CFR part 180, beginning in CY 2023 and subsequent 
years.
    To assist the public in considering the proposals to determine the 
CMP amount based on the most recently available, finalized number of 
beds for a hospital indicated in HCRIS, we note that CMS makes public 
hospital cost report data in several resources. Data files by fiscal 
year are accessible through the Cost Reports by Fiscal Year web page, 
available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Cost-Reports-by-Fiscal-Year. 
Specifically, refer to data files by fiscal year (through FY 2020, at 
the time of this proposed rule) for facility type ``HOSPITAL-2010.'' 
Further, a subset of hospital cost report data for 2014 through 2017 is 
also made public through the Hospital Cost Report Public Use File web 
page, available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Cost-Report/HospitalCostPUF (providing access to data as either an Interactive 
Dataset or a Downloadable Excel file).
    We seek comment on the proposal to use a sliding scale approach, 
based on the hospital's number of beds, to determine the CMP amount. In 
particular, we seek comment on specifying a minimum penalty amount of 
$300, consistent with the existing CMP amount, for hospitals with 30 
beds or fewer, and whether 30 beds is an appropriate number to 
delineate for this part of the scale. We seek comment on the proposal 
to impose a CMP of $10/bed/day on hospitals with 31 beds up to 550 
beds, including whether we should specify a higher amount to ensure 
hospitals' compliance with the requirements to make public standard 
charges. We seek comment on establishing a maximum daily penalty amount 
of $5,500 for hospitals with more than 550 beds. We also seek comment 
on our proposal to use hospital cost report data, as specified in 
HCRIS, to determine bed count, or if we

[[Page 42316]]

should consider using other validated data sources or files. In 
particular, we are interested in commenters' input on whether there are 
any available data sources that would encompass relevant scaling data 
for all hospitals that are subject to the regulations at 45 CFR part 
180, including hospitals that are not Medicare-enrolled.
    As an alternative approach, we considered using hospital revenue as 
a scaling factor, instead of or in addition to hospital bed count, as 
it could more directly take into account the financial burden that a 
CMP might impose on a noncompliant hospital. For example, we considered 
using hospital cost report data to determine the noncompliant 
hospital's annual ``net patient revenues,'' \426\ and to calculate a 
CMP amount as 0.1 percent of hospital revenue, prorated based on the 
number of days the hospital is out of compliance. That is, we would 
multiply the revenue amount by 0.001, and then divide the resulting 
product by 365 to determine the daily CMP amount. Under this 
alternative approach to scaling the CMP amount based on hospital 
revenue, as summarized in Table 64, the minimum penalty applied would 
remain $300 per day up to a maximum penalty of approximately $5,480 per 
day, which would continue to generally align with CMPs for issues 
unrelated to harm to the public. Were we to adopt an approach for using 
hospital revenue to scale the CMP amount, we would need to address with 
greater specificity additional factors, including the amount of 
precision used in the calculations, such as whole dollar amounts, or 
two decimal place precision.
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    \426\ The Provider Reimbursement Manual--Part 2, Chapter 40. 
Refer to section 4040.4, Worksheet G-3--Statement of Revenues and 
Expenses, describing calculation of Net Patient Revenues (subtract 
Less: Allowance and Discounts on Patient's Accounts from Total 
Patient Revenue).
[GRAPHIC] [TIFF OMITTED] TP04AU21.115

    However, we are concerned that an approach that uses hospital 
revenue as a scaling factor for determining the CMP amount may not be 
as effective as a scaling factor based on bed count in targeting 
penalties to the size of the hospital. As indicated previously, current 
evidence suggests that noncompliance is fairly high among larger 
hospitals.\427\ By failing to post the standard charge data, these 
hospitals are directly hindering consumers' decision-making ability. We 
believe that the larger the hospital size (as determined by bed count), 
the more potential patients are impacted, and that hospital bed count 
can serve as a more reliable proxy for the number of potential patients 
that the hospital serves than using net patient revenues. Conversely, 
application of a penalty based on net patient revenues would increase 
the penalty for better resourced hospitals compared to those that might 
have fewer resources. Such an approach may be more effective at 
deterring noncompliance among better resourced hospitals which may 
choose not to comply with the hospital price transparency requirements 
when the financial benefit of noncompliance outweighs a relatively low 
CMP amount.
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    \427\ Henderson M & Mouslim MC. Low Compliance From Big 
Hospitals On CMS's Hospital Price Transparency Rule. Health Affairs. 
March 16, 2021. Available at: https://www.healthaffairs.org/do/10.1377/hblog20210311.899634/full/.
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    In addition to bed size and hospital revenue, we also considered 
whether and how we could use additional scaling factors for assessing 
CMPs such as:
     Other financial metrics for scaling the CMP amount, such 
as using gross revenue, inpatient, or outpatient revenue to establish a 
penalty amount.
     The nature, scope, severity, and duration of the 
noncompliance. For example, taking into account the nature and number 
of deficiencies found upon review, in addition to applying penalties 
based on the number of days out of compliance.
     The hospital's reason for noncompliance. For example, 
applying a greater penalty for intentional noncompliance, such as if a 
hospital states its willful noncompliance on its website or in response 
to a compliance action from CMS, or application of a lesser penalty 
that takes into account extreme and uncontrollable circumstances.
    While using multiple scaling factors might have advantages, such as 
being able to tailor the amount of the CMP to account for unique 
hospital circumstances and the potential to assess a greater CMP for 
egregious noncompliance, we are not proposing it at this time because 
we would need additional time and input to ensure that such scaling 
factors could be applied in a consistent manner across all hospitals 
that are subject to these regulations. However, we believe such 
refinements could improve our application of CMPs to promote hospital 
compliance and therefore seek comment on the following:
     What additional factors would be feasible for scaling a 
CMP amount?
     What data sources for the criteria could be used to ensure 
consistency in application of the criteria across all hospitals subject 
to these regulations? For example, if hospital revenue was used to 
scale penalties, what data source to determine revenue should be used? 
For example, are gross income, net income, net patient revenues, or 
some other metric appropriate for determining burden imposed by a CMP?
     How should nature, scope, and severity of noncompliance be

[[Page 42317]]

determined and applied for purposes of assessing CMPs?
     How should a hospital's reason for noncompliance be 
determined? What factors should be considered when evaluating reason 
for noncompliance? Are there bases for imposing lower CMPs, such as 
resource limitations or extreme or unusual circumstances? If yes, how 
could resource limitations or circumstances contributing to 
noncompliance be demonstrated and should that be treated differently 
than documented statements of intent to not comply with the 
requirements?
     If multiple factors are used to scale the CMP amount, 
should there be a priority applied to specific factors? Should some 
factors be weighted more when determining the CMP amount? If yes, which 
one(s)?
    We propose to revise the regulations at 45 CFR 180.90(c)(2) to 
specify an amended approach for determining the daily dollar amount for 
a CMP CMS may impose upon a hospital for noncompliance with the 
requirements in 45 CFR part 180. As conforming changes, we propose to 
specify in the regulations at Sec.  180.90(c)(2)(i), the existing 
approach to determining the CMP amount, as not to exceed $300 per day, 
with introductory text specifying the provision is applicable for CY 
2021. We propose to specify in the regulations at Sec.  
180.90(c)(2)(ii), provisions for determining the CMP amount for each 
day a hospital is determined by CMS to be out of compliance beginning 
January 1, 2022. The CMP amount would be based on the hospitals' number 
of beds: (A) A maximum daily dollar CMP amount of $300 for hospitals 
with a number of beds equal to or less than 30; (B) a maximum daily 
dollar CMP amount calculated as number of beds times $10 for hospitals 
with a number of beds between 31 and 550; and (C) a maximum daily 
dollar CMP amount of $5,500 for hospitals with a number of beds greater 
than 550. We also propose to specify within Sec.  
180.90(c)(2)(ii)(D)(1) that CMS would determine the number of beds for 
a Medicare-enrolled hospital using the most recently available, 
finalized Medicare hospital cost report. We also propose to specify 
within Sec.  180.90(c)(2)(ii)(D)(2) the process by which CMS would 
determine the hospital's number of beds if such information could not 
be determined using Medicare hospital cost report data. We specify the 
conditions for CMS' receipt of documentation from the hospital to 
determine its number of beds, and specify that if the hospital does not 
provide CMS with such documentation (in the prescribed form and manner, 
and by the specified deadline), CMS would impose a CMP on the hospital 
at the highest, maximum daily dollar amount ($5,500 per day). We 
welcome comments on these proposals, and the alternatives we 
considered.

C. Proposal To Deem Certain State Forensic Hospitals as Having Met 
Requirements

    Section 180.30(b) of our regulations states that the hospital price 
transparency requirements at 45 CFR part 180 are not applicable to 
federally-owned or operated hospitals, including hospitals operated by 
an Indian Health Program as defined in section 4(12) of the Indian 
Health Care Improvement Act, and federally owned hospital facilities 
such as facilities operated by the U.S. Department of Veterans Affairs 
and Military Treatment Facilities (MTFs) operated by the U.S. 
Department of Defense. As we explained in the CY 2020 Hospital Price 
Transparency final rule, we concluded that these exceptions were 
appropriate because, with the exception of some emergency services, 
these facilities do not provide services to the general public and 
their established payment rates for services are not subject to 
negotiation. Instead, each of these facility types is authorized to 
provide services to specific populations that meet specific eligibility 
criteria (84 FR 65532). In addition, federally-owned or operated 
hospitals such as Indian Health Service and Tribal facilities \428\ 
impose no cost-sharing, or, in the case of VA hospitals \429\ and 
Department of Defense MTFs,\430\ little cost-sharing. With respect to 
such facilities where there is cost-sharing, the charges are publicized 
through the Federal Register, Federal websites, or direct communication 
and therefore known to the populations served by such facilities in 
advance of receiving health care services. Only emergency services, 
which would not be shoppable services under our definition because they 
cannot be scheduled in advance, are available to otherwise non-eligible 
individuals at federally-owned or operated facilities. Because these 
hospitals do not treat the general public and their rates are not 
subject to negotiation, we concluded that it was appropriate to 
establish different requirements that apply to these hospitals.
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    \428\ Section 1680r(b) of the Indian Health Care Improvement Act 
(25 U.S.C. 1680r).
    \429\ VA cost-sharing information available at: https://www.va.gov/HEALTHBENEFITS/cost/copays.asp.
    \430\ MTF cost-sharing information available at: https://tricare.mil/Costs/Compare and https://comptroller.defense.gov/Portals/45/documents/rates/fy2019/2019_ia.pdf.
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    Following publication of the final rule, we became aware that some 
state psychiatric facilities, specifically, state forensic hospitals, 
may be similarly situated to the types of facilities to which the 
exception in Sec.  180.30(b) applies and should therefore also be 
deemed to be in compliance with 45 CFR part 180. Some state forensic 
facilities are public psychiatric hospitals that exclusively treat 
patients who are in the custody of penal authorities and who are not 
responsible for payment for the cost of their care in such facilities 
which are wholly funded through state general funds.\431\ We believe it 
is reasonable to consider deeming such hospitals as having met the 
requirements of 45 CFR part 180 for similar reasons that we articulated 
in the CY 2020 Hospital Price Transparency final rule for deeming 
federally owned or operated facilities as having met these 
requirements. Specifically, such state forensic hospitals have 
specialized patient populations, are not open to the general public, 
and the rates for such hospital services are not negotiated. Therefore 
we are proposing to adopt this exception by modifying the introductory 
language in Sec.  180.30(b) and adding new Sec.  180.30(b)(3) to 
include state forensic hospitals. For purposes of application of this 
exception, we propose to add a definition to Sec.  180.20 to define a 
``state forensic hospital'' as a public psychiatric hospital that 
provides treatment for individuals who are in the custody of penal 
authorities.\432\ Such forensic patients typically include: (1) 
Offenders incompetent to stand trial, (2) offenders with mental health 
disorders, (3) mentally ill prisoners transferred from prison, (4) 
offenders found not guilty by reason of insanity, or (5) post 
incarcerated civilly committed individuals.\433\ In order to be deemed 
as having met requirements, the state forensic hospital must provide 
treatment exclusively for individuals who are in the custody of penal 
authorities (for example, a state

[[Page 42318]]

psychiatric hospital with a forensic wing would not meet criteria 
necessary to be deemed to be in compliance). We estimate there are 
approximately 111 such institutions that could meet the definition of 
hospital at Sec.  180.20.\434\ We propose to add this exception to 
Sec.  180.30(b). We welcome comments on this proposal.
---------------------------------------------------------------------------

    \431\ Substance Abuse and Mental Health Services Administration, 
Controlled Expenditures and Revenues for Mental Health Services, 
State Fiscal Year 2009. Available at: https://store.samhsa.gov/sites/default/files/d7/priv/sma14-4843.pdf.
    \432\ CMS.gov, Psychiatric Hospitals, available at: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/PsychHospitals.
    \433\ National Association of State Mental Health Program 
Directors. Forensic Patients in State Psychiatric Hospitals: 1999-
2016. August 2017. Available at: https://nasmhpd.org/sites/default/files/TACPaper.10.Forensic-Patients-in-State-Hospitals_508C_v2.pdf.
    \434\ National Mental Health Services Survey (N-MHSS): 2019, 
Data On Mental Health Treatment Facilities. Substance Abuse and 
Mental Health Services Administration. 2020. Available at: https://www.samhsa.gov/data/report/national-mental-health-services-survey-n-mhss-2019-data-mental-health-treatment-facilities. See Table 3.6.a.
---------------------------------------------------------------------------

D. Proposals Prohibiting Additional Barriers To Accessing the Machine-
Readable File

    Section 2718(e) of the PHS Act requires hospitals to ``make public 
(in accordance with guidelines developed by the Secretary) a list of 
the hospital's standard charges for items and services.''
    In the CY 2020 OPPS/ASC final rule (84 FR 65556), we explained that 
we reviewed how hospitals were implementing earlier guidelines for 
making public hospital chargemasters, which took effect on January 1, 
2019, and we expressed concern that some charge information made public 
by hospitals may be difficult for the public to locate. For example, 
information may be difficult to locate if the public is required to 
click down several levels in order to find the information. We also 
expressed our concern about barriers that could inhibit the public's 
ability to access the information once located. For example, we 
indicated that we were aware that some hospitals require consumers to 
set up a username and password, or require consumers to submit various 
types of other information, including, but not limited to, their email 
address, in order to access the data. We expressed concern that these 
requirements might deter the public from accessing hospital charge 
information.
    Accordingly, we proposed and finalized regulations that a hospital 
would have discretion to choose the internet location it uses to post 
its file containing the list of standard charges so long as the 
comprehensive machine-readable file is displayed on a publicly-
available web page, it is displayed prominently and clearly identifies 
the hospital location with which the standard charges information is 
associated, and the standard charge data are easily accessible, without 
barriers, and the data can be digitally searched (84 FR 65561).
    Specifically, Sec.  180.50 requires a hospital to make public its 
standard charges in a single machine-readable file. Section 
180.50(d)(1) of our regulations gives a hospital discretion to choose a 
website for purposes of making its standard charge information 
available to the public in the machine-readable file. Section 
180.50(d)(2) through (5) set forth our accessibility requirements for 
this information, including that the standard charge information must 
be displayed prominently and clearly identify the hospital location 
with which it is associated; easily accessible, without barriers, 
including but not limited to being free of charge, without having to 
establish a user account or password, and without having to submit 
personal identifying information (PII); and contained in a digital 
file, within which the standard charge information is digitally 
searchable. For purposes of these requirements: (1) ``displayed 
prominently'' means that the value and purpose of the web page and its 
content is clearly communicated, there is no reliance on breadcrumbs to 
help with navigation, and the link to the standard charge file is 
visually distinguished on the web page; (2) ``easily accessible'' means 
that standard charge data are presented in a single machine-readable 
file that is searchable and that the standard charges file posted on a 
website can be accessed with the fewest number of clicks; and (3) 
``without barriers'' means that the data can be accessed free of 
charge, users do not have to input information (such as their name, 
email address, or other PII) or register to access or use the standard 
charge data file. Additionally, both the machine-readable file and its 
contents must be digitally searchable.
    As discussed in the CY 2020 Hospital Price Transparency final rule, 
we believe there is a direct connection between transparency in 
hospital standard charge information and having more affordable 
healthcare and lower healthcare coverage costs (84 FR 65526). For 
purposes of displaying all standard charges for all items and services 
in a comprehensive machine-readable file, we proposed and finalized 
requirements for the file format, the content of the data in the file, 
and how to ensure the public could easily access and find the file. We 
acknowledged that the machine-readable file would contain a large 
amount of data; however, we indicated that we believe that a single 
data file would be highly useable by the public because all the data 
would be in one place. By ensuring accessibility to all hospital 
standard charge data for all items and services, we stated these data 
would be available for use by the public in price transparency tools, 
to be integrated into EHRs for purposes of clinical decision-making and 
referrals, or to be used by researchers and policy officials to help 
bring more value to healthcare.
    In our experience, many publicly available web pages that are 
selected by hospitals to host the machine-readable file (or a link to 
the machine-readable file) are discoverable using simple internet 
searches (using key words such as the hospital name plus `standard 
charges,' `price,' or `machine-readable file') or, for example, by 
navigating to the hospital's home page and clicking and searching 
through pages related to patient billing and financing. Because of the 
flexibility we allowed to hospitals to choose the internet location, we 
recognize and expect that there will be some variability in how 
hospitals choose to publicly display their machine-readable file and 
how quickly the file can be found by the public. However, as noted 
earlier, this flexibility afforded under the regulation so long as the 
hospital ensures that the machine-readable file is accessible ``without 
barriers,'' including that the file and its contents would be digitally 
searchable (84 FR 65561).
    In some cases, it appears that hospitals have made standard charge 
data available online but embedded it in websites without any ability 
for users to easily or directly download a ``single machine-readable 
file.'' In other cases, hospitals have posted a link to a single 
machine-readable file but have, either intentionally or 
unintentionally, placed barriers that make it more challenging for the 
public find and access the file and its contents. Examples of such 
activities and practices include:
     Employing common methods that hinder the findability \435\ 
of a web page that contains a link to the machine-readable file, such 
as through the use anti-automation tools such as form submission, or 
other technological devices that place a ``locked door'' in front of 
the content thereby making it difficult or impossible for search 
engines to identify the data. There have also been reports of hospitals 
using ``blocking codes'' such as use of NOINDEX and ``rel canonical'' 
tagging or disallow statements or removing the URL from the search 
index through the use of the webmaster tools URL removal service. These 
techniques prevent

[[Page 42319]]

commonly used web search engines from caching web pages on which the 
link to machine-readable files reside.\436\ These examples of tools and 
codes present barriers because they limit the public's ability to 
easily search for and find the web page that hosts a link to the 
machine-readable file.
---------------------------------------------------------------------------

    \435\ Fishkin R. 12 Ways to Keep Your Content Hidden from the 
Search Engines. Moz. January 15, 2008. Available at: https://moz.com/blog/12-ways-to-keep-your-content-hidden-from-the-search-engines.
    \436\ McGinty T, et al. Hospitals Hide Pricing Data from Search 
Results. The Wall Street Journal. March 22, 2021. Available at: 
https://www.wsj.com/articles/hospitals-hide-pricing-data-from-search-results-11616405402.
---------------------------------------------------------------------------

     Employing common methods that prevent direct access to the 
file and its contents. For example, some hospitals implement anti-
automation tools such as requiring users to pass tests proving they are 
human users prior to accessing the file, for example, the 
implementation of CAPTCHA and reCAPTCHA in web applications. CAPTCHA 
stands for ``Completely Automated Public Turing test to Tell Computers 
and Humans Apart.'' Common CAPTCHA and reCAPTCHA mechanisms may include 
distorted text inside images, where the user has to type the text or 
nine or sixteen square images, where the user has to identify the 
images that contain certain objects, such as vehicles, trees, or street 
signs. In other instances, some hospitals require the user to take 
additional actions upon clicking the link to the machine-readable file, 
prior to download. For example, pop-up windows that require the user to 
agree all terms and conditions in a legal disclaimer prior to 
permitting the machine-readable file and its contents to be downloaded. 
Such pop-up windows do not permit direct access to the file and its 
contents, and present a barrier.
     Developing file constructs and web forms that obscure 
access to the data in a single machine-readable file through the use of 
Application Programming Interfaces (APIs). For example, we have found 
APIs that use calls for data that will not return a complete data file, 
that do not provide supporting documentation on the use of the API to 
retrieve the file, and that do not allow a single query to return all 
data in a single machine-readable file. These APIs control access to 
the data in a way that prevents or conceals access to the entire data 
file. As such, these types of APIs present barriers to direct access to 
a `single machine-readable file' and are therefore not permissible 
forms of APIs for use by a hospital.
    Given this additional experience, we are proposing to amend the 
regulations by adding paragraph (d)(3)(iv) to Sec.  180.50 to specify 
that the hospital must ensure that the standard charge information is 
easily accessible, without barriers, including, but not limited to, 
ensuring the information is accessible to automated searches and direct 
file downloads through a link posted on a publicly available website. 
We believe this additional requirement will ensure greater 
accessibility to the machine-readable file and its contents and would 
prohibit practices we have encountered in our compliance reviews, such 
as lack of a link for downloading a single machine-readable file, using 
``blocking codes'' or CAPTCHA, and requiring the user to agreement to 
terms and conditions or submit other information prior to access.
    We seek comment on whether stakeholders have identified additional 
barriers that we should prohibit. We note that the list of examples of 
barriers we have encountered in our reviews of hospital websites is not 
intended to be exhaustive, and that should we identify additional 
barriers that prevent automated searches or direct download of the 
machine-readable file, we may prohibit them via, as appropriate, 
guidance or future rulemaking.
    Finally, we seek comment on whether there are specific criteria we 
should consider when evaluating whether a hospital has displayed the 
machine-readable file in a ``prominent manner.'' Files that are posted 
in a prominent manner can reduce public burden for searching and 
finding the files and ensure the public can easily find the machine-
readable file and the information contained within it. When files are 
posted prominently, we can also more easily monitor and assess hospital 
compliance with the CY 2020 Hospital Price Transparency final rule. For 
example, we are considering establishing a more standardized approach 
for how hospitals would be required to make public the machine-readable 
file, in order to relieve the burden on the public and ensure files are 
found easily. One such method would be to require hospitals to post 
their machine-readable files using a CMS-specified URL, in addition to 
the CMS-specified naming convention. Another approach could be to 
require a standardized location for hospitals to post a link to the 
file from the hospital's homepage, thus limiting the public's search 
for such files to the homepage of the hospital and relieving burden on 
the public to spend time searching for the file. We seek comment on 
these methods for ensuring that the machine-readable files posted are 
prominently displayed and easily accessible.

E. Clarifications and Requests for Comment

1. Clarification of the Price Estimator Tool Option and Request for 
Comment on Considerations for Future Price Estimator Tool Policies
    In the CY 2020 Hospital Price Transparency final rule, we finalized 
requirements for hospitals to make public payer-specific negotiated 
charges, discounted cash prices, the de-identified minimum negotiated 
charge, and the de-identified maximum negotiated charge for 300 
``shoppable'' services that are displayed and packaged in a consumer-
friendly manner. We were also persuaded by commenters' suggestions that 
hospitals offering online price estimator tools that meet certain 
requirements including providing real-time individualized out-of-pocket 
cost estimates adequately satisfy our aim that hospitals communicate 
their standard charges in a consumer-friendly manner, and therefore 
deemed these price estimator tools as meeting our requirements for 
making public standard charges for a limited set of shoppable services 
(84 FR 65579).
    We therefore finalized a policy at Sec.  180.60(a)(2) that a 
hospital may voluntarily offer an internet-based price estimator tool 
and thereby be deemed to have met our requirements to make public its 
standard charges for selected shoppable services in a consumer-friendly 
manner, so long as such a price estimator tool:
     Provides estimates for as many of the 70 CMS-specified 
shoppable services that are provided by the hospital, and as many 
additional hospital-selected shoppable services as is necessary for a 
combined total of at least 300 shoppable services.
     Allows healthcare consumers to, at the time they use the 
tool, obtain an estimate of the amount they will be obligated to pay 
the hospital for the shoppable service.
     Is prominently displayed on the hospital's website and be 
accessible without charge and without having to register or establish a 
user account or password.
    To satisfy our requirement at Sec.  180.60(a)(2)(ii), a price 
estimator tool ``[a]llows healthcare consumers to, at the time they use 
the tool, obtain an estimate of the amount they will be obligated to 
pay the hospital for the shoppable service''. Moreover, such a price 
estimator tool must be ``tailored to individuals' circumstances 
(whether an individual is paying out of pocket or using insurance) and 
provide real-time individualized out of pocket estimates

[[Page 42320]]

that combines hospital standard charge information with the 
individual's benefit information directly from the insurer, or provide 
the self-pay amount.'' (84 FR 65578) We emphasize this because our 
reviews of hospital compliance have identified that some hospital price 
estimator tools do not tailor a single estimated amount based on the 
individual's circumstance, but, instead, provide estimated average 
amounts or ranges for the price of a shoppable service that appear to 
be generated based on a broad population of patients, including 
outliers. Others do not appear to combine hospital standard charges 
with the individual's benefit information directly from the insurer to 
create the estimate, but instead, appear to use information from prior 
reimbursements or require the user to input benefit information. Still 
others appear tailored to the individual, but indicate that the price 
is not what the hospital anticipates that the individual would be 
obligated to pay, even in the absence of unusual or unforeseeable 
circumstances. Hence they fail to satisfy our requirements at Sec.  
180.60(a)(2).
    We note that under the CY 2020 Hospital Price Transparency final 
rule, hospitals are not required to offer online price estimator tools. 
However, when a hospital chooses to offer an online price estimator 
tool as an alternative to presenting their standard charge information 
in a consumer friendly format, we believe it is important for the 
hospital to select and offer a price estimator tool that provides a 
single dollar amount that is tailored to the individual seeking the 
estimate, taking the individual's circumstances into consideration when 
developing the estimate. Moreover, the estimate must reflect the amount 
the hospital anticipates will be paid by the individual for the 
shoppable service, absent unusual or unforeseeable circumstances. We 
also emphasize that nothing in this rule precludes a hospital from 
providing additional information that may be helpful to the consumer, 
such as a range of prices paid by a defined population of consumers for 
the item or service in the past, or informing the inquirer what 
circumstances could change the personalized estimate.
    Beyond these current minimum requirements, we are considering 
whether we should add requirements for the use of an online price 
estimator tool as an alternative to making public the standard charges 
for shoppable services in a consumer-friendly format. We seek 
stakeholder input for future consideration related to the price 
estimator tool policies, including identifying best practices, common 
features, and solutions to overcoming common technical barriers, and 
specifically, seek input on:
     What best practices should online price estimator tools be 
expected to incorporate?
     Are there common data elements that should be included in 
the online price estimator tool to improve functionality and consumer-
friendliness?
     What technical barriers exist to providing patients with 
accurate real-time out-of-pocket estimates using an online price 
estimator tool? How could such technical barriers be addressed?
2. Request for Comment on the Definition of `Plain Language'
    In the CY 2020 Hospital Price Transparency final rule, we finalized 
requirements for displaying shoppable services in a consumer-friendly 
manner (Sec.  180.60). At Sec.  180.60(b), we finalized certain 
required data elements a hospital must include when displaying its 
standard charges for its list of shoppable services, the first of which 
is a `plain-language' description of each shoppable service. We 
recommended, but did not require, that hospitals review and use the 
Federal plain language guidelines,\437\ which have been developed to 
assist Federal agencies to write clearly so that users can find what 
they need and understand and use what they find. The Federal plain 
language guidelines inform readers how to write to focus an audience on 
what it wants to know and guide it through the information, and how to 
organize information and carefully choose words to avoid jargon and 
minimize abbreviations.
---------------------------------------------------------------------------

    \437\ See Federal plain language guidelines, available at: 
https://plainlanguage.gov/guidelines/.
---------------------------------------------------------------------------

    In our reviews of hospital compliance, we have noticed that not all 
hospitals appear to be using what could reasonably be considered `plain 
language' to describe shoppable services. For example, some hospitals 
have used internal code descriptions from the comprehensive machine-
readable file rather than translating those descriptions into 
terminology that consumers may readily understand. In our effort to 
ensure hospital compliance with the use of `plain language,' we seek 
public comment on whether we should require specific plain language 
standards, and, if so, what those plain language standards should be.
3. Request for Comment on Identifying and Highlighting Hospital 
Exemplars
    We are aware that some hospitals are not only fully complying with 
the hospital price transparency requirements we have adopted, but are 
also embracing and exemplifying the spirit of consumer price 
transparency. Moreover, identification of such hospitals may draw 
attention to developing best practices that other hospitals may choose 
to adopt, or that could be used to establish criteria for assessing 
hospital compliance in the future. We therefore seek public comment on 
potential ways that we could highlight such hospital practices, and are 
considering approaches that include:
     Opportunities to highlight hospitals that are in 
compliance with various aspects of the Hospital Price Transparency 
regulations through education and outreach materials.
     Opportunities to highlight exemplar hospitals on existing 
CMS websites, for example, the Hospital Price Transparency website, 
Care Compare, or other CMS websites.
     Publicizing the results of comprehensive compliance 
reviews on our website.
     Opportunities to collaborate with consumer organizations, 
health policy organizations, hospital accrediting organizations or 
others to develop a price transparency certification. Depending on how 
such a certification process would be structured, we might consider 
proposing future regulatory action to deem certified hospitals as being 
in compliance with our regulations.
     Opportunities for integrating price transparency questions 
into patient experience of care assessments and surveys or other 
methods for integrating into hospital quality measurement and value-
based purchasing initiatives.
    In considering ways we could hold out hospitals as exemplars for 
patient-centered price transparency, we are also seeking public input 
on the following:
     Should hospitals be recognized for patient-centered price 
transparency efforts? If yes, how should such hospitals be identified 
and by whom? What criteria should be used for assessing patient-
centered price transparency efforts?
     What method or methods for highlighting exemplar hospitals 
would be most beneficial to consumers?
     Of the methods described above, what are the relative 
advantages or disadvantages of each?
4. Request for Comment on Improving Standardization of the Machine-
Readable File
    In the CY 2020 Hospital Price Transparency final rule, we expressed 
our concern that lack of uniformity in

[[Page 42321]]

the way that hospitals display their standard charges leaves the public 
unable to meaningfully use, understand, and compare standard charge 
information across hospitals (84 FR 65556). We agreed with commenters 
that standardization in some form would be important to ensure high 
utility for users of the hospital standard charge information, and we 
therefore finalized certain requirements, such as the data elements and 
file formats, that would be standardized across hospitals.
    We codified these requirements at new Sec.  180.50(b) and indicated 
that we believed that the finalized data elements (which included, as 
applicable, the hospital's standard charges, a description of the item 
or service, and common billing and accounting code) would be necessary 
to ensure that the public can compare standard charges for similar or 
the same items and services provided by different hospitals.
    Commenters provided many additional suggestions for how to 
standardize the standard charge information displayed by hospitals. At 
the time we declined to be more prescriptive in our approach, but we 
noted that we may revisit these requirements in future rulemaking 
should we find it is necessary to make improvements in the display and 
accessibility of hospital standard charge information for the public.
    Since implementation of the final rule, early feedback from 
stakeholders, particularly from IT specialists, researchers, and others 
who seek to use the standard charge information that hospitals are now 
required to make public, have indicated that more standardization of 
the machine-readable file may be necessary to meet the goal of 
permitting comparisons of standard charges from one hospital to the 
next. We are therefore seeking comment on the following issues:
     What is the best practice for formatting data such as 
hospital standard charge data? Is there a specific data format that 
should be required to be used across all hospitals? Are there any 
barriers to requiring a specific format to be used by all hospitals 
when displaying standard charge information?
     Are there additional data elements that should be required 
for inclusion in the future in order to ensure standard charge data is 
comparable across hospitals? What one(s)? Is such data readily found in 
hospital systems? In what ways would inclusion of such data impact 
hospital burden?
     Are there any specific examples of hospital disclosures 
that represent best practice for meeting the requirements and goals of 
the CY 2020 Hospital Price Transparency final rule? We invite 
submissions of links to machine-readable files that the public would 
consider to represent a best practice.
     What other policies or incentives should CMS consider to 
improve standardization and comparability of these disclosures?
     What other policies should CMS consider to ensure the data 
posted by hospitals is accurate and complete, for example, ensuring 
that hospitals post all payer-specific negotiated charges for all 
payers and plans with which the hospital has a contract, as required by 
the regulations?

XX. Additional Hospital Inpatient Quality Reporting (IQR) Program 
Policies

A. Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e) and 
eCQM Reporting Requirements in the Hospital IQR Program--Request for 
Information

1. Hospital IQR Program Background
    We refer readers to the following final rules for detailed 
discussions of the history of the Hospital IQR Program, including 
statutory history, and for the measures we have previously adopted for 
the Hospital IQR Program measure set:
     The FY 2010 IPPS/LTCH PPS final rule (74 FR 43860 through 
43861);
     The FY 2011 IPPS/LTCH PPS final rule (75 FR 50180 through 
50181);
     The FY 2012 IPPS/LTCH PPS final rule (76 FR 51605 through 
61653);
     The FY 2013 IPPS/LTCH PPS final rule (77 FR 53503 through 
53555);
     The FY 2014 IPPS/LTCH PPS final rule (78 FR 50775 through 
50837);
     The FY 2015 IPPS/LTCH PPS final rule (79 FR 50217 through 
50249);
     The FY 2016 IPPS/LTCH PPS final rule (80 FR 49660 through 
49692);
     The FY 2017 IPPS/LTCH PPS final rule (81 FR 57148 through 
57150);
     The FY 2018 IPPS/LTCH PPS final rule (82 FR 38326 through 
38328, 38348);
     The FY 2019 IPPS/LTCH PPS final rule (83 FR 41538 through 
41609);
     The FY 2020 IPPS/LTCH PPS final rule (84 FR 42448 through 
42509); and
     The FY 2021 IPPS/LTCH PPS final rule (85 FR 58926 through 
58959).
    We note this is not an exhaustive list of all prior rulemaking for 
the Hospital IQR Program. We also refer readers to 42 CFR 412.140 for 
Hospital IQR Program regulations, as well as the FY 2022 IPPS/LTCH PPS 
proposed rule (86 FR 25561 through 25601) for currently proposed 
program changes for the Hospital IQR Program.
    In this request for information (RFI), we seek input regarding the 
Safe Use of Opioids--Concurrent Prescribing electronic clinical quality 
measure (eCQM) (NQF # 3316e) (hereinafter referred to as the ``Safe Use 
of Opioids eCQM'') as well as our previously finalized policy of 
requiring hospitals to report on the Safe Use of Opioids eCQM beginning 
with the CY 2022 reporting period/FY 2024 payment determination (84 FR 
42503 through 42505). We refer readers to the FY 2020 IPPS/LTCH PPS 
final rule (84 FR 42448 through 42459) where we adopted the Safe Use of 
Opioids eCQM into the Hospital IQR Program beginning with the CY 2021 
reporting period/FY 2023 payment determination. We refer readers to the 
FY 2020 IPPS/LTCH PPS final rule (84 FR 42503 through 42505) in which 
we finalized our policy requiring hospitals to report on the Safe Use 
of Opioids eCQM beginning in the CY 2022 reporting period. We also 
refer readers to the FY 2021 IPPS/LTCH PPS final rule in which we 
finalized reporting of the Safe Use of Opioids eCQM as one of the four 
required eCQMs beginning with the CY 2022 reporting period/FY 2024 
payment determination (85 FR 58933 through 58939). Specifically, for 
the CY 2022 reporting period/FY 2024 payment determination, hospitals 
will be required to report three self-selected calendar quarters of 
data for each required eCQM: (a) Three self-selected eCQMs; and (b) the 
Safe Use of Opioids eCQMs. For the CY 2023 reporting period/FY 2025 
payment determination and subsequent years hospitals will be required 
to report four calendar quarters of data for each required eCQM: (a) 
Three self-selected eCQMs; and (b) the Safe Use of Opioids eCQMs. The 
Safe Use of Opioids eCQM is scheduled to be submitted to the National 
Quality Forum (NQF) in 2022 for re-endorsement consideration as part of 
the measure maintenance process. The purpose of this RFI is to gather 
public input for potential measure updates as we prepare for NQF re-
endorsement of the endorsed Safe Use of Opioids--Concurrent Prescribing 
eCQM and to potentially inform any future rulemaking regarding this 
measure. We provide more detail on both the Safe Use of Opioids eCQM 
and the eCQM reporting requirements below.
2. Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e)
a. Overview
    The Safe Use of Opioids eCQM seeks to reduce preventable mortality 
and the costs of adverse events associated with opioid use by 
encouraging providers to identify patients who have concurrent 
prescriptions for opioids, or opioids and

[[Page 42322]]

benzodiazepines, and discouraging providers from prescribing these 
drugs concurrently, unless medically necessary or appropriate. This 
measure is intended to support a patient-centric approach to help 
identify and monitor patients at risk, and ultimately reduce the risk 
of harm to patients across the continuum of care. Specifically, the 
measure encourages providers to identify patients on medication 
combinations that could lead to adverse drug events at discharge and 
motivates providers to consider whether reevaluation of the current 
medication regimen is warranted. This measure ultimately seeks to help 
combat the opioid crisis, which has been declared a public health 
emergency and is recognized as a priority focus area for measurement by 
CMS and HHS. We refer readers to the FY 2020 IPPS/LTCH PPS final rule 
(84 FR 42448 through 42459) where we adopted the Safe Use of Opioids 
eCQM into the Hospital IQR Program beginning with the CY 2021 reporting 
period/FY 2023 payment determination.
    The Safe Use of Opioids eCQM assesses the proportion of inpatient 
hospitalizations for patients 18 years of age and older prescribed, or 
continued on, two or more opioids or an opioid and benzodiazepine 
concurrently at discharge. The numerator is comprised of patients whose 
discharge medications include two or more active opioids or an active 
opioid and benzodiazepine resulting in concurrent therapy at discharge 
from the hospital-based encounter (84 FR 42452). The denominator 
consists of patients who have inpatient hospitalizations (inpatient 
stay less than or equal to 120 days) that end during the measurement 
period, where the patient is 18 years of age and older at the start of 
the encounter, and is prescribed a new or continuing opioid or 
benzodiazepine at discharge (84 FR 42452). Patients who have cancer or 
are receiving palliative care would be excluded from the denominator 
(84 FR 42452).
    A lower percentage for the measure indicates fewer concurrent 
prescriptions written. We emphasize that the Safe Use of Opioids eCQM 
is not expected to have a measure rate of zero (84 FR 42456). Clinician 
judgment, clinical appropriateness, or both may indicate that 
concurrent prescribing of two unique opioids, or an opioid and a 
benzodiazepine is medically necessary. For example, patients who are on 
medication for opioid use disorder (OUD) would be included in the 
measure denominator if they continue that active prescription at 
discharge and would be counted in the numerator if they receive another 
prescription for an opioid or benzodiazepine (84 FR 42452). We also 
refer readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42448 
through 42459) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58932 
through 58939) for more details on the Safe Use of Opioids eCQM.
b. Prior Stakeholder Feedback
    We monitor and evaluate quality measures after they are adopted and 
implemented into the Hospital IQR Program measure set. We also engage 
with stakeholders through education and outreach opportunities, which 
include webinars and help desk questions submitted through the Office 
of the National Coordinator for Health Information Technology (ONC) 
Project Tracking System (JIRA) eCQM issue tracker for eCQM 
implementation and maintenance (84 FR 42454).
    Since adopting the Safe Use of Opioids eCQM in the FY 2020 IPPS/
LTCH PPS final rule (84 FR 42448 through 42459), stakeholders have 
expressed concern about potential unintended consequences associated 
with requiring reporting on the measure. Specifically, these 
stakeholders have noted their concern that requiring reporting on the 
Safe Use of Opioids eCQM could disincentivize clinicians from 
appropriately concurrently prescribing medications for the treatment of 
OUD, such as methadone and buprenorphine. They believe that if 
hospitals are required to report on this measure, clinicians might 
alter their prescribing practices, making it more difficult for 
patients to access appropriate treatment for OUD, and ultimately 
leading to patient harm in a vulnerable population.
    We note that during measure development, clinicians from our expert 
panel considered single-condition exclusions such as OUD. After 
reviewing test results, they recommended continuing to include patients 
for whom concurrent prescribing is medically necessary, because they 
stated that those populations: (1) Have the highest risk of receiving 
concurrent prescriptions; (2) can experience a lag in adverse events; 
and (3) can experience adverse drug events if an overlap with 
benzodiazepines occurs (84 FR 42450 through 42451). As we previously 
noted in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42456), the Safe 
Use of Opioids eCQM is not expected to have a measure rate of zero; 
however, this is an important topic and a particular focus area of our 
monitoring efforts as the eCQM data start to be submitted and on which 
we are currently seeking comment, as further discussed below.
c. National Quality Forum Re-Endorsement
    The Safe Use of Opioids eCQM is scheduled to be submitted to the 
NQF in 2022 for re-endorsement. In support of that effort, our measure 
development contractor plans to conduct additional testing, which will 
include substance use disorder treatment and sickle cell disease. 
Testing will include discussions with the technical expert panel to 
identify any potential updates to test as well as testing the rate of 
concurrent morphine/buprenorphine prescribing alongside opioids and 
benzodiazepines. Testing work will also include recruiting test sites, 
receiving test site data, reassessing validity, reliability, 
performance scores, exclusions, and performance gaps. This testing 
could be used to inform possible future measure updates or exclusions.
3. Current eCQM Reporting and Submission Requirements for the Hospital 
IQR Program
    Beginning with the CY 2021 reporting period/FY 2023 payment 
determination, the Safe Use of Opioids eCQM was added as part of the 
eCQM measure set as one of the eCQMs that eligible hospitals can choose 
from to meet the eCQM reporting requirements for the Hospital IQR and 
Medicare Promoting Interoperability Programs (84 FR 42449 through 42459 
and 84 FR 42598 through 42599, respectively). Beginning with the CY 
2022 reporting period/FY 2024 payment determination, hospitals are 
required to report data for each required eCQM: (a) Three self-selected 
eCQMs from the set of available eCQMs for CY 2022, and (b) the Safe Use 
of Opioids eCQM (85 FR 58933 through 58939). We refer readers to the FY 
2021 IPPS/LTCH PPS final rule (85 FR 58932 through 58939) and the FY 
2020 IPPS/LTCH PPS final rule (84 FR 42501 through 42506) for more 
detailed discussions of the current eCQM reporting and submission 
requirements for the Hospital IQR Program.
4. Solicitation of Comments
    In this RFI, we seek public input on the following:
     Potential future measure updates of the Safe Use of 
Opioids eCQM. We seek additional information or considerations to 
inform future measure updates to the Safe Use of Opioids eCQM.
     Required Reporting and Submission Requirement for the Safe 
Use of Opioids eCQM. Currently, hospitals are required to report: (a) 
Three self-selected eCQMs from the set of available eCQMs, and (b)

[[Page 42323]]

the Safe Use of Opioid eCQM for the CY 2022 reporting period/FY 2024 
and subsequent years. As we consider future reporting on the Safe Use 
of Opioids eCQM, we seek comments on the appropriateness of maintaining 
this previously finalized policy or allowing hospitals to self-select 
the Safe Use of Opioids eCQM from our finalized set of eCQMs.

XXI. Additional Medicare Promoting Interoperability Program Policies

A. Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e) and 
eCQM Reporting Requirements in the Medicare Promoting Interoperability 
Program--Request for Information

1. Medicare Promoting Interoperability Program Background
    We refer readers to the following final rules for detailed 
discussions regarding the history of the Medicare Promoting 
Interoperability Program (previously known as part of the Medicare and 
Medicaid Electronic Health Record Incentive Programs):
     The Electronic Health Record Incentive Program Stage 1 
final rule (75 FR 44314);
     The Electronic Health Record Incentive Program Stage 2 
final rule (77 FR 53968);
     The Electronic Health Record Incentive Program Stage 3 
final rule (80 FR 62762);
     The FY 2017 IPPS/LTCH PPS final rule (81 FR 25245 through 
25247);
     The FY 2018 IPPS/LTCH PPS final rule (82 FR 38487 through 
38493);
     The FY 2019 IPPS/LTCH PPS final rule (83 FR 41634 through 
41677);
     The FY 2020 IPPS/LTCH PPS final rule (84 FR 42591 through 
42602); and
     The FY 2021 IPPS/LTCH PPS final rule (85 FR 58966 through 
58977).
    We note this is not an exhaustive list of all prior rulemaking for 
the Medicare Promoting Interoperability Program. We also refer readers 
to 42 CFR part 495 for the Medicare Promoting Interoperability Program 
regulations, as well as the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 
25628 through 25654) for proposed changes to the Medicare Promoting 
Interoperability Program.
    In this request for information (RFI), to maintain alignment with 
the Hospital Inpatient Quality Reporting Program, we seek input 
regarding the Safe Use of Opioids--Concurrent Prescribing electronic 
clinical quality measure (eCQM) (NQF #3316e) (hereinafter referred to 
as the ``Safe Use of Opioids eCQM'') as well as our previously 
finalized policy of requiring hospitals to report on the Safe Use of 
Opioids eCQM beginning with the CY 2022 reporting period (84 FR 42598 
through 42600 and 85 FR 58970 through 58975). We refer readers to the 
FY 2020 IPPS/LTCH PPS final rule (84 FR 42598 through 42599) where we 
adopted the Safe Use of Opioids eCQM into the Medicare Promoting 
Interoperability Program beginning with the CY 2021 reporting period, 
as we continued to align with the Hospital IQR Program. We also refer 
readers to the FY 2020 and FY 2021 IPPS/LTCH PPS final rules (84 FR 
42597 through 42600 and 85 FR 58970 through 58975 respectively) in 
which we finalized our policy requiring hospitals to report on the Safe 
Use of Opioids eCQM beginning with CY 2022 reporting period. The Safe 
Use of Opioids eCQM is scheduled to be submitted to the National 
Quality Forum (NQF) in 2022 as part of the measure maintenance process. 
The purpose of this RFI is to gather public input for potential measure 
updates as we prepare for NQF re-endorsement of the endorsed Safe Use 
of Opioids--Concurrent Prescribing eCQM and to potentially inform any 
future rulemaking regarding this measure. We provide more detail on 
both the Safe Use of Opioids eCQM and the eCQM reporting requirements 
in section XX.A.3.
2. Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e)
a. Overview
    The Safe Use of Opioids eCQM seeks to reduce preventable mortality 
and the costs of adverse events associated with opioid use by 
encouraging providers to identify patients who have concurrent 
prescriptions for opioids, or opioids and benzodiazepines, and 
discouraging providers from prescribing these drugs concurrently, 
unless medically necessary or appropriate. This measure is intended to 
support a patient-centric approach to help identify and monitor 
patients at risk, and ultimately reduce the risk of harm to patients 
across the continuum of care. Specifically, the measure encourages 
providers to identify patients on medication combinations that could 
lead to adverse drug events at discharge and motivates providers to 
consider whether reevaluation of the current medication regimen is 
warranted. This measure ultimately seeks to help combat the opioid 
crisis, which has been declared a public health emergency and is 
recognized as a priority focus area for measurement by CMS and HHS.
    The Safe Use of Opioids eCQM assesses the proportion of inpatient 
hospitalizations for patients 18 years of age and older prescribed, or 
continued on, two or more opioids or an opioid and benzodiazepine 
concurrently at discharge. The numerator is comprised of patients whose 
discharge medications include two or more active opioids or an active 
opioid and benzodiazepine resulting in concurrent therapy at discharge 
from the hospital-based encounter. The denominator consists of patients 
who have inpatient hospitalizations (inpatient stay less than or equal 
to 120 days) that end during the measurement period, where the patient 
is 18 years of age and older at the start of the encounter, and is 
prescribed a new or continuing opioid or benzodiazepine at discharge. 
Patients who have cancer or are receiving palliative care would be 
excluded from the denominator (84 FR 42452).
    A lower percentage for the measure indicates fewer concurrent 
prescriptions written. We emphasize that the Safe Use of Opioids eCQM 
is not expected to have a measure rate of zero (84 FR 42456). Clinician 
judgment, clinical appropriateness, or both may indicate that 
concurrent prescribing of two unique opioids, or an opioid and a 
benzodiazepine is medically necessary. Patients who are on medication 
for opioid use disorder (OUD) would be included in the measure 
denominator if they continue that active prescription at discharge and 
would be counted in the numerator if they receive another prescription 
for an opioid or benzodiazepine (84 FR 42452). We also refer readers to 
the FY 2020 IPPS/LTCH PPS final rule (84 FR 42598 through 42599) and 
the FY 2021 IPPS/LTCH PPS final rule (85 FR 58932 through 58939) for 
more details on the Safe Use of Opioids eCQM.
b. Prior Stakeholder Feedback
    We monitor and evaluate quality measures after they are adopted and 
implemented into the Medicare Promoting Interoperability Program 
measure set. In collaboration with the Hospital IQR Program, we engage 
with stakeholders through education and outreach opportunities, which 
include webinars and help desk questions submitted through the Office 
of the National Coordinator for Health Information Technology (ONC) 
Project Tracking System (JIRA) eCQM issue tracker for eCQM 
implementation and maintenance (84 FR 42454).
    Since adopting the Safe Use of Opioids eCQM in the FY 2020 IPPS/
LTCH PPS final rule (84 FR 42598 through 42599), stakeholders have 
expressed concern about the potential unintended consequences 
associated with requiring reporting on the measure. Specifically, these 
stakeholders have

[[Page 42324]]

noted their concern that requiring reporting on the Safe Use of Opioids 
eCQM could disincentivize clinicians from appropriately concurrently 
prescribing medications for the treatment of OUD, such as methadone and 
buprenorphine. They believe that if hospitals are required to report on 
this measure, clinicians might alter their prescribing practices, 
making it more difficult for patients to access appropriate treatment 
for OUD, and ultimately leading to patient harm in a vulnerable 
population.
    We note that during measure development, clinicians from our expert 
panel considered single-condition exclusions such as OUD. After 
reviewing test results, they recommended continuing to include patients 
for whom concurrent prescribing is medically necessary, because they 
stated that those populations: (1) Have the highest risk of receiving 
concurrent prescriptions; (2) can experience a lag in adverse events; 
and (3) can experience adverse drug events if an overlap with 
benzodiazepines occurs (84 FR 42450 through 42451). As was explained by 
the Hospital IQR Program in the FY 2020 IPPS/LTCH PPS final rule (84 FR 
42456), the Safe Use of Opioids eCQM is not expected to have a measure 
rate of zero; however, this is an important topic and a particular 
focus area of our monitoring efforts as the eCQM data start to be 
submitted and on which we are currently seeking public comments, as 
further discussed in section XX.A.4.
c. National Quality Forum Re-Endorsement
    The Safe Use of Opioids eCQM is scheduled to be submitted to the 
NQF in 2022 for re-endorsement. In support of that effort, our measure 
development contractor plans to conduct additional testing, which will 
include substance use disorder treatment and sickle cell disease. 
Testing will include discussions with the technical expert panel to 
inform potential updates to test as well as testing the rate of 
concurrent morphine/buprenorphine prescribing alongside opioids and 
benzodiazepines. Testing work will also include recruiting test sites, 
receiving test site data, reassessing validity, reliability, 
performance scores, exclusions, and performance gaps. This testing 
could be used to inform possible future measure updates or exclusions.
3. Current eCQM Reporting and Submission Requirements for the Medicare 
Promoting Interoperability Program
    Previously finalized Medicare Promoting Interoperability Program 
policy for the CY 2022 reporting period requires eligible hospitals and 
CAHs to report three self-selected calendar quarters of data for each 
required eCQM: (a) Three self- selected eCQMs from the set of available 
eCQMs for CY 2022, and (b) the Safe Use of Opioids eCQM, for a total of 
four eCQMs (85 FR 58970 through 58975). We finalized the requirement 
that hospitals report on the Safe Use of Opioids eCQM in the FY 2020 
IPPS/LTCH PPS final rule (84 FR 42598 through 42600) such that the 
Medicare Promoting Interoperability Program was in direct alignment 
with finalized proposals in the Hospital IQR Program.
    Beginning with the CY 2021 reporting period, the Safe Use of 
Opioids eCQM was added as part of the eCQM measure set as one of the 
eCQMs that eligible hospitals can choose from to meet the eCQM 
reporting requirements for the Hospital Inpatient Quality Reporting 
Program and Medicare Promoting Interoperability Program (84 FR 42449 
through 42459 and 84 FR 42598 through 42599, respectively). We refer 
readers to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58970 through 
58975) and the FY 2020 IPPS/LTCH PPS final rule (84 FR 42598 through 
42600) for more detailed discussions of the current eCQM reporting and 
submission requirements for the Medicare Promoting Interoperability 
Program.
4. Solicitation of Comments
    For this RFI, in alignment with a similar RFI pertaining to the 
Hospital IQR Program, we seek public input on the following:
     Potential future measure updates of the Safe Use of 
Opioids eCQM. We seek additional information or considerations to 
inform future measure updates of the Safe Use of Opioids eCQM;
     Required Reporting and Submission Requirement for the Safe 
Use of Opioids eCQM. Currently eligible hospitals and CAHs are required 
to report (a) Three self-selected eCQMs from the set of available 
eCQMs, and (b) the Safe Use of Opioid eCQM for the CY 2022 reporting 
period and subsequent years. As we consider future reporting on the 
Safe Use of Opioids eCQM, we seek comments on the appropriateness of 
maintaining this previously finalized policy or allowing hospitals to 
self-select the Safe Use of Opioids eCQM from our finalized set of 
eCQMs (which includes the Safe Use of Opioids eCQM) for the CY 2022 
reporting period and subsequent years.

XXII. Files Available to the Public via the Internet

    The Addenda to the OPPS/ASC proposed rules and the final rules with 
comment period are published and available via the internet on the CMS 
website. In the CY 2019 OPPS/ASC final rule with comment period (83 FR 
59154), for CY 2019, we changed the format of the OPPS Addenda A, B, 
and C, by adding a column entitled ``Copayment Capped at the Inpatient 
Deductible of $1,364.00'' where we flag, through use of an asterisk, 
those items and services with a copayment that is equal to or greater 
than the inpatient hospital deductible amount for any given year (the 
copayment amount for a procedure performed in a year cannot exceed the 
amount of the inpatient hospital deductible established under section 
1813(b) of the Act for that year). For CY 2022, we are proposing to 
retain these columns, updated to reflect the amount of the 2022 
inpatient deductible. In the CY 2021 OPPS/ASC final rule with comment 
period (85 FR 86266), we updated the format of the OPPS addenda A, B, 
and C by adding a new column to the OPPS addenda, A, B, and C, entitled 
``Drug Pass-Through Expiration during Calendar Year'' where we flagged 
through the use of an asterisk, each drug for which pass-through 
payment was expiring during the calendar year on a date other than 
December 31. For CY 2022, we are proposing to retain these columns that 
are updated to reflect the drug codes for which pass-through payment is 
expiring in CY 2022.
    To view the Addenda to this proposed rule pertaining to proposed CY 
2022 payments under the OPPS, we refer readers to the CMS website at: 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; 
select ``CMS-1753-P'' from the list of regulations. All OPPS Addenda to 
this proposed rule are contained in the zipped folder entitled ``2022 
NPRM OPPS Addenda'' in the related links section at the bottom of the 
page. To view the Addenda to this proposed rule pertaining to CY 2022 
payments under the ASC payment system, we refer readers to the CMS 
website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.html; select ``CMS-1753-
P'' from the list of regulations. The ASC Addenda to this

[[Page 42325]]

proposed rule are contained in a zipped folder entitled ``Addendum AA, 
BB, DD1, DD2, and EE.'' in the related links section at the bottom of 
the page.

XXIII. Collection of Information Requirements

A. Statutory Requirement for Solicitation of Comments

    Under the Paperwork Reduction Act of 1995 (PRA), we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

B. ICRs for the Hospital OQR Program

1. Background
    The Hospital Outpatient Quality Reporting (OQR) Program is 
generally aligned with the CMS quality reporting program for hospital 
inpatient services known as the Hospital Inpatient Quality Reporting 
(IQR) Program. We refer readers to the CY 2011 through CY 2021 OPPS/ASC 
final rules with comment periods (75 FR 72111 through 72114; 76 FR 
74549 through 74554; 77 FR 68527 through 68532; 78 FR 75170 through 
75172; 79 FR 67012 through 67015; 80 FR 70580 through 70582; 81 FR 
79862 through 79863; 82 FR 59476 through 59479; 83 FR 59155 through 
59156; 84 FR 61468 through 61469; and 85 FR 86266 through 86267, 
respectively) for detailed discussions of the previously finalized 
Hospital OQR Program ICRs. The ICRs associated with the Hospital OQR 
Program are currently approved under OMB control number 0938-1109, 
which expires on March 31, 2023. We continue to estimate a total of 
3,300 hospitals will submit required measure data for the Hospital OQR 
Program, unless otherwise noted. While the exact number of hospitals 
required to submit data annually may vary, we use this estimate to be 
consistent with previous rules and for ease of calculation across 
reporting periods.
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
52617), we finalized a proposal to utilize the median hourly wage rate 
for Medical Records and Health Information Technicians, in accordance 
with the Bureau of Labor Statistics (BLS), to calculate our burden 
estimates for the Hospital OQR Program. The BLS describes Medical 
Records and Health Information Technicians as those responsible for 
organizing and managing health information data; therefore, we believe 
it is reasonable to assume that these individuals will be tasked with 
abstracting clinical data for submission to the Hospital OQR Program. 
The latest data from the BLS' May 2020 Occupational Employment and 
Wages data reflects a median hourly wage of $21.20 per hour for a 
Medical Records and Health Information Technician professional.\438\ We 
have finalized a policy to calculate the cost of overhead, including 
fringe benefits, at 100 percent of the mean hourly wage (82 FR 52617). 
This is necessarily a rough adjustment, both because fringe benefits 
and overhead costs can vary significantly from employer-to-employer and 
because methods of estimating these costs vary widely from study-to-
study. Nonetheless, we believe that doubling the hourly wage rate 
($21.20 x 2 = $42.40) to estimate the total cost is a reasonably 
accurate estimation method and allows for a conservative estimate of 
hourly costs.
---------------------------------------------------------------------------

    \438\ https://www.bls.gov/oes/current/oes292098.htm (Accessed 
April 13, 2021). The hourly rate of $42.40 includes an adjustment of 
100 percent of the median hourly wage to account for the cost of 
overhead, including fringe benefits.
---------------------------------------------------------------------------

2. Summary
    In section XV.B.4. of this proposed rule, we propose to: (1) Adopt 
the COVID19 Vaccination Coverage Among Health Care Personnel (HCP) 
measure, beginning with the CY 2022 reporting period; (2) adopt the 
Breast Screening Recall Rates measure, beginning with the CY 2022 
reporting period; (3) adopt the ST-Segment Elevation Myocardial 
Infarction (STEMI) eCQM, beginning as a voluntary measure with the CY 
2023 reporting period, and then as a mandatory measure beginning with 
the CY 2024 reporting period; (4) require the Cataracts: Improvement in 
Patient's Visual Function within 90 Days Following Cataract Surgery 
measure (OP-31) beginning with the CY 2023 reporting period/CY 2025 
payment determination; (5) require the Outpatient and Ambulatory 
Surgery Consumer Assessment of Healthcare Providers and Systems (OAS 
CAHPS) Survey measures (OP-37 a-e), with voluntary reporting beginning 
with the CY 2023 reporting period and mandatory reporting beginning 
with CY 2024 reporting period/CY 2026 payment determination; (6) remove 
the Fibrinolytic Therapy Received Within 30 Minutes measure (OP2), 
effective with the CY 2023 reporting period; (7) remove the Median Time 
to Transfer to Another Facility for Acute Coronary Intervention measure 
(OP-3), effective with the CY 2023 reporting period; (8) remove the 
option for hospitals to send medical records to the CMS Data 
Abstraction Center (CDAC) via paper and removable media and require 
electronic submission for validation; (9) reduce the number of days 
hospitals have to submit medical records to the CDAC from 45 days to 30 
days for validation; (10) enhance the targeting criteria used for 
hospital selection for validation by adopting criteria currently used 
in inpatient data validation by adding the following criteria: (a) 
Having a lower bound confidence interval score of 75 percent or less; 
and (b) having not been selected in the previous 3 years; (11) expand 
our Extraordinary Circumstances Exception (ECE) policy to apply to 
electronic clinical quality measures (eCQMs), to further align with the 
Hospital IQR Program; (12) require use of technology updated consistent 
with 2015 Edition Cures Update criteria beginning with the CY 2023 
reporting period/CY 2025 payment determination; and (13) provide a 
review and corrections period for eCQM data submitted to the Hospital 
OQR Program.
3. Estimated Burden of Hospital OQR Program Proposals for the CY 2024 
Payment Determination and Subsequent Years
a. Information Collection Burden Estimate for the Proposed COVID-19 
Vaccination Coverage Among Health Care Personnel (HCP) Measure
    In section XV.B.4.a. of this proposed rule, we are proposing to 
adopt the COVID-19 Vaccination Coverage Among HCP measure, beginning 
with the CY 2022 reporting period/CY 2024 payment determination. 
Hospitals would submit data through the Centers for Disease Control and 
Prevention (CDC) National Healthcare Safety Network (NHSN). The NHSN is 
a secure, internet-based surveillance system maintained and provided 
free by the CDC. Currently, the CDC does not estimate burden for COVID-
19

[[Page 42326]]

vaccination reporting under the CDC PRA (OMB control number 0920-1317, 
which expires on January 31, 2024) because the agency has been granted 
a waiver under section 321 of the National Childhood Vaccine Injury Act 
(NCVIA).\439\ As such, the proposed measure would not impose any 
additional information collection under the Paperwork Reduction Act for 
hospitals for the duration of the public health emergency (PHE). 
Although the burden associated with the COVID-19 Vaccination Coverage 
Among HCP measure is not accounted for under the CDC PRA 0920-1317 or 
0920-0666 (which expires on December 31, 2023) due to the NCVIA waiver, 
the cost and burden information is included in the Regulatory Impact 
Analysis section. Upon receiving comment, we will work with CDC to 
ensure that this burden is accounted for in an updated PRA under OMB 
control number 0920-1317.
---------------------------------------------------------------------------

    \439\ Section 321 of the National Childhood Vaccine Injury Act 
(NCVIA) provides the PRA waiver for activities that come under the 
NCVIA, including those in the NCVIA at section 2102 of the Public 
Health Service Act (42 U.S.C. 300aa-2). Section 321 is not codified 
in the U.S. Code, but can be found in a note at 42 U.S.C. 300aa-1.
---------------------------------------------------------------------------

b. Information Collection Burden Estimate for the Proposed Breast 
Screening Recall Rates Measure
    In section XV.B.4.b. of this proposed rule, we are proposing to 
adopt the Breast Screening Recall Rates measure, beginning with the CY 
2023 payment determination using a data collection period of July 1, 
2020, to June 30, 2021; for subsequent years, we would use data 
collection periods from July 1 through June 30 for the 3 years prior to 
the applicable payment calendar year (for example, for the CY 2024 
payment determination, we would use data from July 1, 2021, through 
June 30, 2022). Because the measure is calculated using claims data 
that are already reported to the Medicare program for payment purposes, 
we do not anticipate that adopting this measure will result in any 
increase in information collection burden.
c. Information Collection Burden Estimate for the Proposed ST-Segment 
Elevation Myocardial Infarction (STEMI) Measure
    In section XV.B.4.c. of this proposed rule, we are proposing to 
adopt the STEMI eCQM, with voluntary reporting beginning with the CY 
2023 reporting period and mandatory reporting beginning with CY 2024 
reporting period/CY 2026 payment determination. For the CY 2023 
voluntary reporting period, hospitals would be able to voluntarily 
report the measure for one or more quarters during the year. In 
subsequent years, we have proposed to gradually increase the number of 
quarters of data hospitals would be required to report on the measure 
starting with one self-selected quarter for the CY 2024 reporting 
period/CY 2026 payment determination, two self-selected quarters for 
the CY 2025 reporting period/CY 2027 payment determination, three self-
selected quarters for the CY 2026 reporting period/CY 2028 payment 
determination, and four quarters for the CY 2027 reporting period/CY 
2029 payment determination and for subsequent years.
    For the voluntary reporting period in CY 2023, we estimate 20 
percent of hospitals would report at least one quarter of data for the 
measure with 100 percent of hospitals reporting the measure as required 
in subsequent years. Based on experience with reporting of eCQMs on the 
Hospital IQR program, we are aligning our estimate of the time required 
for a Medical Records and Health Information Technician professional to 
submit the data required for the measure to be 10 minutes per quarter 
for each hospital. For the CY 2023 voluntary reporting period, we 
estimate an annual burden for all participating hospitals of 110 hours 
(3,300 hospitals x 20 percent x .1667 hours x 1 quarter) at a cost of 
$4,664 (110 hours x $42.40). For the CY 2024 reporting period/CY 2026 
payment determination, we estimate the annual burden for all hospitals 
to be 550 hours (3,300 hospitals x .1667 hours x 1 quarters) at a cost 
of $23,320 (550 hours x $42.40). For the CY 2025 reporting period/CY 
2027 payment determination, we estimate the annual burden for all 
hospitals to be 1,100 hours (3,300 hospitals x .1667 hours x 2 
quarters) at a cost of $46,640 (1,100 hours x $42.40). For the CY 2026 
reporting period/CY 2028 payment determination, we estimate the annual 
burden for all hospitals to be 1,650 hours (3,300 hospitals x .1667 
hours x 3 quarters) at a cost of $69,960 (1,650 hours x $42.40). For 
the CY 2027 reporting period/CY 2029 payment determination and 
subsequent years, we estimate the annual burden for all hospitals to be 
2,200 hours (3,300 hospitals x .1667 hours x 4 quarters) at a cost of 
$93,280 (2,200 hours x $42.40).
    The information collection requirement and the associated burden 
will be submitted as part of a revision of the information collection 
request currently approved under OMB control number 0938-1109, which 
expires on March 31, 2023.
d. Information Collection Burden Estimate for the Proposal To Require 
the Cataracts: Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery Measure (OP-31)
    In section XV.B.5.b. of this proposed rule, we are proposing to 
require the Cataracts: Improvement in Patient's Visual Function within 
90 Days Following Cataract Surgery measure (OP-31), beginning with the 
CY 2023 reporting period/CY 2025 payment determination. We previously 
finalized voluntary reporting of this measure in the CY 2015 OPPS/ASC 
final rule (79 FR 66947 through 66948) and estimated that 20 percent of 
hospitals would elect to report it annually (79 FR 67014). We continue 
to estimate it will require hospitals 10 minutes once annually to 
report this measure using a CMS online tool. As a result of this 
proposal, we estimate a total annual burden estimate for all hospitals 
of 550 hours (3,300 hospitals x .1667 hours) at a cost of $23,320 (550 
hours x $42.40). In addition to reporting the measure, we also require 
hospitals to perform chart abstraction and estimate that each hospital 
would spend 25 minutes (0.417 hours) per case to perform this activity. 
The currently approved burden estimate is based on an assumption of 384 
cases requiring chart abstraction per measure. We are updating this 
assumption to 242 cases per measure based on data from the CY 2019 
reporting period. Updating this assumption results in an annual burden 
of 101 hours (0.417 hours x 242 cases) at a cost of $4,282 (101 hours x 
$42.40/hour) per hospital and a total annual burden of 333,300 hours 
(3,300 hospitals x 101 hours) at a cost of $14,131,920 (333,300 hours x 
$42.40/hour) for all hospitals. In aggregate, we estimate a total 
annual burden of 333,850 hours (550 hours + 333,300 hours) at a cost of 
$14,155,240 ($23,320 + $14,131,920) for all hospitals. This is an 
increase of 267,080 hours and $11,324,192 per year from the currently 
approved estimate due to the additional 80 percent of hospitals that 
would be required to report this measure if our proposal is finalized.
    The information collection requirement and the associated burden 
will be submitted as part of a revision of the information collection 
request currently approved under OMB control number 0938-1109, which 
expires on March 31, 2023.

[[Page 42327]]

e. Information Collection Burden Estimate for the Proposals To Require 
the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare 
Providers and Systems (OAS CAHPS) Survey Measures (OP-37a-e) and Add 
Administration Methods
    The information collection requirements associated with the five 
OAS CAHPS survey-based measures (proposed OP-37a, OP-37b, OP-37c, OP-
37d, and OP-37e) are currently approved under OMB control number 0938-
1240 which expires December 31, 2021. In section XV.B.5.a. of this 
proposed rule, we are proposing to require data collection for five OAS 
CAHPS survey-based measures with voluntary reporting beginning with the 
CY 2023 reporting period and mandatory reporting beginning with CY 2024 
reporting period/CY 2026 payment determination and subsequent years: 
(1) OAS CAHPS--About Facilities and Staff (OP-37a); (2) OAS CAHPS--
Communication About Procedure (OP-37b); (3) OAS CAHPS--Preparation for 
Discharge and Recovery (OP-37c); (4) OAS CAHPS--Overall Rating of 
Facility (OP-37d); and (5) OAS CAHPS--Recommendation of Facility (OP-
37e). This proposal will neither require additional questions to be 
added to the survey nor any other changes which will affect the time 
required for respondents to complete the survey. Therefore, we are not 
making any changes to the currently approved burden estimate of 8 
minutes per respondent.
    In addition, in section XV.D.4.b. of this proposed rule, we are 
proposing to incorporate two additional administration methods for the 
OAS CAHPS Survey: (1) Mixed mode web with mail follow-up of non-
respondents, and (2) mixed mode web with telephone follow-up of non-
respondents. This proposal would allow a total of five methods of 
survey administration for reporting beginning with voluntary reporting 
for the CY 2023 reporting period/CY 2025 payment determination and 
mandatory reporting for the CY 2024 reporting period/CY 2026 payment 
determination. We currently assume that completion of the OAS CAHPS 
survey requires approximately 8 minutes per respondent using one of the 
three current administration methods (mail-only, telephone-only, and 
mixed-mode (mail with telephone follow-up of non-respondents)). The two 
proposed administration methods would be utilized to increase the 
response rate of patients in order to achieve the same required number 
of 300 patients surveyed per practice, therefore we are not proposing 
any changes to the number of respondents. We also believe that both of 
the two proposed administration methods will require approximately the 
same time to conduct, therefore, we are not proposing any changes to 
the currently approved estimate.
f. Information Collection Burden Change for the Proposals To Remove the 
Fibrinolytic Therapy Received Within 30 Minutes (OP-2) and Median Time 
To Transfer to Another Facility for Acute Coronary Intervention (OP-3) 
Measures
    In section XV.B.3.c. of this proposed rule, we are proposing to 
remove the Fibrinolytic Therapy Received Within 30 Minutes (OP-2) and 
Median Time to Transfer to Another Facility for Acute Coronary 
Intervention (OP-3) measures effective with the CY 2023 reporting 
period. The currently approved burden estimate under OMB control number 
0938-1109 (which expires on March 31, 2023) for all hospitals is 
151,800 hours at a cost of $6,436,320 (151,800 hours x $42.40) for each 
measure per year. If the proposals to remove both of these measures are 
finalized, we estimate a total burden decrease of 303,600 hours 
(151,800 hours x 2 measures) at a cost of $12,872,640 (303,600 hours x 
$42.40). The information collection under OMB Control number 0938-1109 
will be revised and submitted to OMB for approval.
g. Information Collection Burden Estimate for the Proposal To Remove 
the Option for Hospitals To Send Medical Records to the Validation 
Contractor via Paper and Removable Media and Require Electronic 
Submission
    As noted in the CY 2015 OPPS/ASC final rule (79 FR 67015), we have 
been reimbursing hospitals directly for expenses associated with 
submission of medical records for data validation. Specifically, we 
reimburse hospitals at 12 cents per photocopied page; for hospitals 
providing medical records digitally via a rewritable disc, such as 
encrypted Compact Disc--Read Only Memory, Digital Video Discs, or flash 
drives, we reimburse hospitals at a rate of 40 cents per disc, along 
with $3.00 per record; and for hospitals providing medical records as 
electronic files submitted via secure file transmission, we reimburse 
hospitals at $3.00 per record. Because we directly reimburse, we do not 
anticipate any net change in information collection burden associated 
with our finalized proposal to require electronic file submissions of 
medical records via secure file transmission for hospitals selected for 
chart-abstracted measures validation. Hospitals would continue to be 
reimbursed at $3.00 per record for electronic files submitted via 
secure file transmission, if our proposal is finalized.
h. Information Collection Burden Estimate for the Proposal To Reduce 
the Number of Days Hospitals Have To Submit Medical Records to the CDAC 
From 45 Days to 30 Days
    In section XV.D.9.b. of this proposed rule, we are proposing to 
reduce the number of days hospitals would have to submit medical 
records to the CDAC from 45 days to 30 days. We expect that our 
proposal will not yield a change in burden as it does not affect the 
amount of data required for hospitals to submit. We discuss 
administrative burdens regarding this proposal in section XXV.C.4.b. of 
this proposed rule. The existing information collection requirement and 
the associated burden are currently approved under OMB control number 
0938-1109, which expires on March 31, 2023.
i. Information Collection Burden Estimate for the Proposal To Add the 
Targeting Criteria Used for Hospital Selection by Adopting Criteria 
Currently Used in Inpatient Data Validation
    In section XV.D.9.d.(2). of this proposed rule, we are proposing to 
add to the targeting criteria used for hospital selection for 
validation by adopting criteria currently used in inpatient data 
validation by adding the following criteria: (a) Having a lower bound 
confidence interval score of 75 percent or less; and (b) having not 
been selected in the previous 3 years. We expect that our proposal will 
not yield a change in burden as it does not affect the total number of 
hospitals selected for data validation nor the data submission 
requirements for the hospitals selected. The existing information 
collection requirement and the associated burden are currently approved 
under OMB control number 0938-1109, which expires on March 31, 2023.
j. Information Collection Burden Estimate for the Proposal To Expand 
Our Existing ECE Policy To Apply to Electronic Clinical Quality 
Measures (eCQMs)
    In section XV.D.10.b. of this proposed rule, we are proposing to 
expand our existing ECE policy to apply to eCQMs, to further align with 
the Hospital IQR Program. The burden associated with submission of the 
ECE request form is included under OMB control number 0938-1022 which 
expires on December 31, 2022. As noted in 0938-1022, the total 
estimated burden for all hospitals

[[Page 42328]]

participating in the CMS Quality Reporting Program for completing forms 
including the ECE request form is 1,100 hours. In CY 2017, 166 ECE 
requests were submitted by hospitals for an exception from reporting 
requirements in the Hospital IQR Program. Based on the estimate of 15 
minutes per record to submit the ECE Request Form, the total burden 
calculation for the submission of 166 ECE requests was 2,490 minutes 
(or 41.5 hours) across 3,300 IPPS hospitals. We are unable to forecast 
the number of additional ECE requests which may be submitted as a 
result of this proposal, however we continue to assume that each 
submission will continue to require approximately 15 minutes to 
complete. We believe the estimate of 1,100 hours across all IPPS and 
non-IPPS hospitals is conservative enough to account for any increase 
in burden that may be associated with this proposal.
k. Information Collection Burden Estimate for the Proposal To Require 
Use of 2015 Edition Cures Update Certified Technology
    In section XV.D.6.c.(1). of this proposed rule, we are proposing 
hospitals use certified technology updated consistent with the 2015 
Edition Cures Update beginning with the CY 2023 reporting period/CY 
2025 payment determination and subsequent years, which includes both 
the voluntary period and required submissions of eCQMs. We do not 
expect that this proposal, if finalized, would affect our information 
collection burden estimates currently approved under OMB control number 
0938-1109 (which expires on March 31, 2023) because this policy does 
not require hospitals to submit additional data to CMS. With respect to 
any costs unrelated to data submission, we refer readers to section 
XXV.C.4.b. of this proposed rule.
l. Information Collection Burden Estimate for the Proposal To Provide a 
Review and Corrections Period for eCQM Data Submitted to the Hospital 
OQR Program
    In section XV.D.8. of this proposed rule, we are proposing that 
hospitals would have a review and corrections period for eCQM data 
submitted to the Hospital OQR Program. Early testing and the use of 
pre-submission testing tools to reduce errors and inaccurate data 
submissions in eCQM reporting is encouraged but not required; 
therefore, we are unable to estimate the number of hospitals that may 
elect to submit test data files. We account for the burden of 
submission of production data files in section XXIII.B.3.C. Similar to 
our previously finalized burden assumptions regarding a review and 
corrections period for chart-abstracted measures (79 FR 66964 and 
67014) and web-based measures (85 FR 86184 and 86267) this proposal 
does not require hospitals to submit additional data, therefore we do 
not believe it will increase burden for these hospitals.
    4. Summary of Information Collection Burden Estimates for the 
Hospital OQR Program
    In summary, under OMB control number 0938-1109 which expires on 
March 31, 2023, we estimate that the policies promulgated in this 
proposed rule will result in a decrease of 73,344 hours annually for 
3,300 OPPS hospitals across a 5-year period from the CY 2022 reporting 
period/CY 2024 payment determination through the CY 2027 reporting 
period/CY 2029 payment determination. The total cost decrease related 
to this information collection is approximately -$3,109,786 (-73,344 
hours x $42.40/hour) (which also reflects use of an updated hourly wage 
rate as previously discussed). Tables 65, 66, 67, 68, and 69 summarize 
the total burden changes for each respective CY payment determination 
compared to our currently approved information collection burden 
estimates (the table for the CY 2029 payment determination reflects the 
cumulative burden changes). Note that for the proposed STEMI eCQM, the 
tables do not reflect the maximum burden for the CY 2025 payment 
determination, because we estimate only 20 percent of hospitals will 
voluntarily report the measure during the CY 2023 reporting period. 
While it is possible that more than 20 percent of hospitals may 
voluntarily report the measure during the CY 2023 reporting period, 
this percentage is consistent with our experience implementing eCQM 
measures with voluntary reporting periods under the Hospital IQR 
Program. We will submit the revised information collection estimates to 
OMB for approval under OMB control number 0938-1109.\440\
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    \440\ CY 2020 Final Rule Hospital OQR Program ``Supporting 
Statement-A''. Available at: https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201911-0938-015.
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BILLING CODE 4120-01-C

C. ICRs for the ASCQR Program

1. Background
    We refer readers to the CY 2012 OPPS/ASC final rule with comment 
period (76 FR 74554), the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53672), and the CY 2013, CY 2014, CY 2015, CY 2016, CY 2017, CY 2018, 
CY 2019, CY 2020, and CY 2021 OPPS/ASC final rules with comment period 
(77 FR 68532 through 68533; 78 FR 75172 through 75174; 79 FR 67015 
through 67016; 80 FR 70582 through 70584; 81 FR 79863 through 79865; 82 
FR 59479 through 59481; 83 FR 59156 through 59157; 84 FR 61469; and 85 
FR 86267, respectively) for detailed discussions of the Ambulatory 
Surgical Center Quality Reporting (ASCQR) Program ICRs we have 
previously finalized. The ICRs associated with the ASCQR Program for 
the CY 2014 through CY 2023 payment determinations are currently 
approved under OMB control number 0938-1270, which expires on December 
31, 2022.
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 52619 
through 52620), we finalized a proposal to utilize the median hourly 
wage rate for Medical Records and Health Information Technicians, in 
accordance with the BLS, to calculate our burden estimates for the 
ASCQR Program. The BLS describes Medical Records and Health Information 
Technicians as those responsible for organizing and managing health 
information data; therefore, we believe it is reasonable to assume that 
these individuals will be tasked with abstracting clinical data for 
submission to the ASCQR Program. The latest data from the BLS' May 2020 
Occupational Employment and Wages data reflects a median hourly wage of 
$21.20 per hour for a Medical Records and Health Information Technician 
professional.\441\ We have finalized a policy to calculate the cost of 
overhead, including fringe benefits, at 100 percent of the mean hourly 
wage (82 FR 52619 through 52620). This is necessarily a rough 
adjustment, both because fringe benefits and overhead costs can vary 
significantly from employer-to-employer and because methods of 
estimating these costs vary widely from study-to-study. Nonetheless, we 
believe that doubling the hourly wage rate ($21.20 x 2 = $42.40) to 
estimate the total cost is a reasonably accurate estimation method and 
allows for a conservative estimate of hourly costs.
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    \441\ https://www.bls.gov/oes/current/oes292098.htm (Accessed 
April 13, 2021). The hourly rate of $42.40 includes an adjustment of 
100 percent of the median hourly wage to account for the cost of 
overhead, including fringe benefits.
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    Based on an analysis of the CY 2020 payment determination data, we 
found that of the 6,651 ASCs that met eligibility requirements for the 
ASCQR Program, 3,494 were required to participate in the Program and 
did so.

[[Page 42334]]

In addition, 689 ASCs that were not required to participate, did so, 
for a total of 4,183 participating facilities. As noted in section 
XXV.C.5.a. of the Regulatory Impact Analysis, for the CY 2021 payment 
determination, all 6,811 ASCs that met eligibility requirements for the 
ASCQR Program received the annual payment update due to data submission 
requirements being excepted under the ASCQR Program's ECEs policy in 
consideration of the COVID-19 PHE; of these 3,957 would have been were 
required to participate sans the PHE exception. Therefore, we estimate 
that 3,957 plus 689 or 4,646 ASCs will submit data for the ASCQR 
Program for the CY 2022 payment determination unless otherwise noted.

2. Summary

    In this proposed rule, we propose to: (1) Adopt the COVID-19 
Vaccination Coverage Among HCP measure, beginning with the CY 2022 
reporting period/CY 2024 payment determination; (2) require four 
patient safety outcome measures beginning with the CY 2023 reporting 
period/CY 2025 payment determination: (a) Patient Burn (ASC-1); (b) 
Patient Fall (ASC-2); (c) Wrong Site, Wrong Side, Wrong Patient, Wrong 
Procedure, Wrong Implant (ASC-3); and (d) All-Cause Hospital Transfer/
Admission (ASC-4); (3) require the Cataracts: Improvement in Patient's 
Visual Function within 90 Days Following Cataract Surgery (ASC-11) 
measure beginning with the CY 2023 reporting period/CY 2025 payment 
determination; (4) require the Outpatient and Ambulatory Surgery 
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) 
Survey measures (ASC-15 a-e), with voluntary reporting for the CY 2023 
reporting period/CY 2025 payment determination and mandatory reporting 
beginning with the CY 2024 reporting period/CY 2026 payment 
determination; and (5) add two additional data collection survey modes 
of OAS CAHPS measures collection to the existing three modes of 
collection and provide survey administration requirements.
    3. Estimated Burden of ASCQR Program Proposals for the CY 2024 
Payment Determination and Subsequent Years
    a. Information Collection Burden Estimate for the Proposed COVID-19 
Vaccination Coverage Among Health Care Personnel (HCP) Measure
    In section XVI.B.3.a. of the preamble of this proposed rule, we are 
proposing to adopt the COVID-19 Vaccination Coverage Among HCP measure, 
beginning with the CY 2022 reporting period/CY 2024 payment 
determination. ASCs would submit data through the CDC/NHSN. The NHSN is 
a secure, internet-based surveillance system maintained and provided 
free by the CDC. Currently the CDC does not estimate burden for COVID-
19 vaccination reporting under the CDC PRA (OMB control number 0920-
1317, which expires on January 31, 2024) because the agency has been 
granted a waiver under section 321 of the NCVIA.\442\ As such, the 
burden associated with the COVID-19 Vaccination Coverage Among HCP 
measure has not been accounted for under the CDC PRA 0920-1317 or 0920-
0666 (which expires on December 31, 2023) due to the NCVIA waiver, 
however the cost and burden information is included in the Regulatory 
Impact Analysis section. Upon receiving comment, we will work with CDC 
to ensure that the burden is accounted for in an updated PRA under OMB 
control number 0920-1317.
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    \442\ Section 321 of the National Childhood Vaccine Injury Act 
(NCVIA) provides the PRA waiver for activities that come under the 
NCVIA, including those in the NCVIA at section 2102 of the Public 
Health Service Act (42 U.S.C. 300aa-2). Section 321 is not codified 
in the U.S. Code, but can be found in a note at 42 U.S.C. 300aa-1.
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b. Information Collection Burden Estimate for the Proposal To Require 
Four Patient Safety Outcome Measures: Patient Burn (ASC-1); Patient 
Fall (ASC-2); Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, 
Wrong Implant (ASC-3); and All-Cause Hospital Transfer/Admission (ASC-
4)
    In section XVI.B.4.a. of this proposed rule, we are proposing to 
resume and require four patient safety outcome measures beginning with 
the CY 2023 reporting period/CY 2025 payment determination: (1) Patient 
Burn (ASC-1); (2) Patient Fall (ASC-2); (3) Wrong Site, Wrong Side, 
Wrong Patient, Wrong Procedure, Wrong Implant (ASC-3); and (4) All-
Cause Hospital Transfer/Admission (ASC-4). Measure data for these 
measures would be submitted via the CMS Hospital Quality Reporting 
(HQR) system secure portal (also known as the CMS QualityNet Secure 
Portal). Consistent with prior years (78 FR 75171 through 75172), we 
estimate that each participating hospital will spend 10 minutes per 
measure per year to collect and submit the data via a CMS web-based 
tool (OMB control number 0938-1270, which expires on December 31, 
2022). As a result of this proposal, we estimate a total annual burden 
estimate for all ASCs of 3,098 hours (0.1667 hours/measure x 4 measures 
x 4,646 ASCs) at a cost of $131,355 (3,098 hours x $42.40). The 
information collection under OMB Control number 0938-1270 will be 
revised and submitted to OMB for approval.
c. Information Collection Burden Estimate for the Proposal To Require 
the Cataracts: Improvement in Patient's Visual Function Within 90 Days 
Following Cataract Surgery (ASC-11) Measure
    In section XVI.B.4.b. of this proposed rule, we are proposing to 
require the Cataracts: Improvement in Patient's Visual Function within 
90 Days Following Cataract Surgery (ASC-11) measure beginning with the 
CY 2023 reporting period/CY 2025 payment determination. We previously 
finalized voluntary reporting of this measure in the CY 2015 OPPS/ASC 
final rule (79 FR 66985) and estimated that 20 percent of ASCs would 
elect to report it annually (79 FR 67016). We continue to estimate it 
will require ASCs 10 minutes once annually to report this measure. As a 
result of this proposal, we estimate a total annual burden estimate for 
all ASCs to report the measure of 774 hours (4,646 ASCs x 0.1667 hours) 
at a cost of $32,818 (774 hours x $42.40). In addition to reporting the 
measure, we also require ASCs to perform chart abstraction for a 
minimum required yearly sample size of 63 cases. We estimate that each 
ASC would spend 15 minutes per case to perform this activity. As a 
result of this proposal, we estimate an annual burden of 16 hours (0.25 
hours x 63 measures) at a cost of $678 (16 hours x $42.40) per ASC and 
a total annual burden of 74,336 hours (4,646 ASCs x 16 hours) at a cost 
of $3,151,846 (74,336 hours x $42.40). In aggregate, we estimate a 
total annual burden of 75,110 hours (774 + 74,336) at a cost of 
$3,184,664 (75,110 hours x $42.40) for all ASCs. Taking into account 
the increase in the number of ASCs submitting data, this is an increase 
of 60,088 hours (75,110 hours x 80 percent) and $2,547,731 ($3,184,664 
x 80 percent) per year from the currently approved estimate (OMB 
control number 0938-1270, which expires on December 31, 2022) due to 
the additional 80 percent of ASCs that would be reporting this measure 
if our proposal is finalized. The information collection under OMB 
Control number 0938-1270 will be revised and submitted to OMB for 
approval.

[[Page 42335]]

d. Information Collection Burden Estimate for the Proposals To Require 
the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare 
Providers and Systems (OAS CAHPS) Survey Measures (ASC-15 a-e) and 
Incorporate Additional Administration Methods
    The information collection requirements associated with the five 
OAS CAHPS Survey-based measures (proposed ASC-15a, ASC-15b, ASC-15c, 
ASC-15d, and ASC-15e) are currently approved under OMB control number 
0938-1240 which expires December 31, 2021.
    In section XVI.B.4.c. of this proposed rule, we are proposing to 
require five OAS CAHPS Survey-based measures with voluntary reporting 
beginning with the CY 2023 reporting period/CY 2025 payment 
determination and mandatory reporting beginning with CY 2024 reporting 
period/CY 2026 payment determination and subsequent years: (1) ASC-15a: 
OAS CAHPS--About Facilities and Staff; (2) ASC-15b: OAS CAHPS--
Communication About Procedure; (3) ASC-15c: OAS CAHPS--Preparation for 
Discharge and Recovery; (4) ASC-15d: OAS CAHPS--Overall Rating of 
Facility; and (5) ASC-15e: OAS CAHPS--Recommendation of Facility. This 
proposal will neither require additional questions to be added to the 
survey nor any other changes which will affect the time required for 
respondents to complete the survey. Therefore, we are not making any 
changes to the currently approved burden estimate of 8 minutes per 
respondent.
    In addition, in section XVI.D.1.d.(2). of this proposed rule, we 
are proposing to incorporate two additional administration methods for 
the OAS CAHPS Survey: (1) Mixed mode web with mail follow-up of non-
respondents, and (2) mixed mode web with telephone follow-up of non-
respondents. This proposal would allow a total of five methods of 
survey administration for reporting beginning with voluntary reporting 
for the CY 2023 reporting period/CY 2025 payment determination and 
mandatory reporting for the CY 2024 reporting period/CY 2026 payment 
determination. We currently assume that completion of the OAS CAHPS 
survey requires approximately 8 minutes per respondent using one of the 
three current administration methods (mail-only, telephone-only, and 
mixed-mode (mail with telephone follow-up of nonrespondents)). We 
believe that both of the two proposed administration methods will 
require approximately the same time to conduct, therefore, we are not 
proposing any changes to the currently approved estimate. In addition, 
the two proposed administration methods would be utilized to increase 
the response rate of patients in order to achieve the same required 
number of 300 patients surveyed per practice, therefore we are not 
proposing any changes to the number of respondents.
e. Summary of Information Collection Burden Estimates for the ASCQR 
Program
    In summary, under OMB control number 0938-1270 which expires on 
December 31, 2022, we estimate that the policies promulgated in this 
proposed rule will result in an increase of 67,085 hours annually for 
4,646 ASCs across a 4-year period from the CY 2023 reporting period/CY 
2025 payment determination through the CY 2026 reporting period/CY 2028 
payment determination. The total cost increase related to this 
information collection is approximately $2,844,404 (67,085 hours x 
$42.40). Table 70 summarizes the total burden changes for each 
respective CY payment determination compared to our currently approved 
information collection burden estimates. We will submit the revised 
information collection estimates to OMB for approval under OMB control 
number 0938-1270.\443\
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    \443\ CY 2021 Final Rule ASCQR Program ``Supporting Statement-
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    If you comment on these information collection, that is, reporting, 
recordkeeping or third-party disclosure requirements, please submit 
your comments electronically as specified in the ADDRESSES section of 
this proposed rule.
    Comments must be received on/by September 17, 2021.

XXIV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

XXV. Economic Analyses

A. Statement of Need

    This proposed rule is necessary to make updates to the Medicare 
hospital OPPS rates. It is necessary to make changes to the payment 
policies and rates for outpatient services furnished by hospitals and 
CMHCs in CY 2022. We are required under section 1833(t)(3)(C)(ii) of 
the Act to update annually the OPPS conversion factor used to determine 
the payment rates for APCs. We also are required under section 
1833(t)(9)(A) of the Act to review, not less often than annually, and 
revise the groups, the relative payment weights, and the wage and other 
adjustments described in section 1833(t)(2) of the Act. We must review 
the clinical integrity of payment groups and relative payment weights 
at least annually. We propose to revise the APC relative payment 
weights using claims data for services furnished on and after January 
1, 2019, through and including December 31, 2019, and processed through 
June 30, 2020, and prior cost report information, consistent with our 
proposal to use data prior to the start of the PHE.
    This proposed rule also is necessary to make updates to the ASC 
payment rates for CY 2022, enabling CMS to make changes to payment 
policies and payment rates for covered surgical procedures and covered 
ancillary services that are performed in ASCs in CY 2022. Because ASC 
payment rates are based on the OPPS relative payment weights for most 
of the procedures performed in ASCs, the ASC payment rates are updated 
annually to reflect annual changes to the OPPS relative payment 
weights. In addition, we are required under section 1833(i)(1) of the 
Act to review and update the list of surgical procedures that can be 
performed in an ASC, not less frequently than every 2 years.
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075 
through 59079), we finalized a policy to update the ASC payment system 
rates using the hospital market basket update instead of the CPI-U for 
CY 2019 through 2023. We believe that this policy will help stabilize 
the differential between OPPS payments and ASC payments, given that the 
CPI-U has been generally lower than the hospital market basket, and 
encourage the migration of services to lower cost settings as 
clinically appropriate.

B. Overall Impact of Provisions of This Proposed Rule

    We have examined the impacts of this proposed rule, as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social 
Security Act, section 202 of

[[Page 42337]]

the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-
4), Executive Order 13132 on Federalism (August 4, 1999), and the 
Congressional Review Act (5 U.S.C. 804(2)). This section of this 
proposed rule contains the impact and other economic analyses for the 
provisions we propose for CY 2022.
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This proposed rule has been designated as an economically 
significant rule under section 3(f)(1) of Executive Order 12866. 
Accordingly, this proposed rule has been reviewed by the Office of 
Management and Budget. We have prepared a regulatory impact analysis 
that, to the best of our ability, presents the costs and benefits of 
the provisions of this proposed rule. We are soliciting public comments 
on the regulatory impact analysis in the proposed rule, and we address 
any public comments we received in this proposed rule, as appropriate.
    We estimate that the total increase in Federal Government 
expenditures under the OPPS for CY 2022, compared to CY 2021, due only 
to the changes to the OPPS in this proposed rule, would be 
approximately $1.35 billion. Taking into account our estimated changes 
in enrollment, utilization, and case-mix for CY 2022, we estimate that 
the OPPS expenditures, including beneficiary cost-sharing, for CY 2022 
would be approximately $82.7 billion, which is approximately $10.8 
billion higher than estimated OPPS expenditures in CY 2021. Because the 
provisions of the OPPS are part of a proposed rule that is economically 
significant, as measured by the threshold of an additional $100 million 
in expenditures in 1 year, we have prepared this regulatory impact 
analysis that, to the best of our ability, presents its costs and 
benefits. Table 71 of this proposed rule displays the distributional 
impact of the CY 2022 changes in OPPS payment to various groups of 
hospitals and for CMHCs.
    We note that under our proposed CY 2022 policy, drugs and 
biologicals that are acquired under the 340B Program are proposed to be 
paid at ASP minus 22.5 percent, WAC minus 22.5 percent, or 69.46 
percent of AWP, as applicable.
    We estimate that the proposed update to the conversion factor and 
other budget neutrality adjustments would increase total OPPS payments 
by 2.3 percent in CY 2022. The proposed changes to the APC relative 
payment weights, the changes to the wage indexes, the proposed 
continuation of a payment adjustment for rural SCHs, including EACHs, 
the proposed continuation of payment policy for separately payable 
drugs acquired under the 340B program, and the proposed payment 
adjustment for cancer hospitals would not increase OPPS payments 
because these changes to the OPPS are budget neutral. However, these 
updates would change the distribution of payments within the budget 
neutral system. We estimate that the total change in payments between 
CY 2021 and CY 2022, considering all proposed budget-neutral payment 
adjustments, changes in estimated total outlier payments, pass-through 
payments and the proposed adjustment to provide separate payment for a 
device category, drugs, and biologicals with pass-through status 
expiring between December 31, 2021, and September 30, 2022, and the 
application of the frontier State wage adjustment, in addition to the 
application of the OPD fee schedule increase factor after all 
adjustments required by sections 1833(t)(3)(F), 1833(t)(3)(G), and 
1833(t)(17) of the Act, would increase total estimated OPPS payments by 
1.8 percent.
    We estimate the total decrease (from changes to the ASC provisions 
in this proposed rule as well as from enrollment, utilization, and 
case-mix changes) in Medicare expenditures (not including beneficiary 
cost-sharing) under the ASC payment system for CY 2022 compared to CY 
2021, to be approximately $20 million. Because the provisions for the 
ASC payment system are part of a proposed rule that is economically 
significant, as measured by the $100 million threshold, we have 
prepared a regulatory impact analysis of the changes to the ASC payment 
system that, to the best of our ability, presents the costs and 
benefits of this portion of this proposed rule. Tables 72 and 73 of 
this proposed rule display the redistributive impact of the CY 2022 
changes regarding ASC payments, grouped by specialty area and then 
grouped by procedures with the greatest ASC expenditures, respectively.

C. Detailed Economic Analyses

1. Estimated Effects of OPPS Changes in This Proposed Rule
a. Limitations of Our Analysis
    The distributional impacts presented here are the projected effects 
of the CY 2022 policy changes on various hospital groups. We post on 
the CMS website our hospital-specific estimated payments for CY 2022 
with the other supporting documentation for this proposed rule. To view 
the hospital-specific estimates, we refer readers to the CMS website 
at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html. At the website, select ``regulations 
and notices'' from the left side of the page and then select ``CMS-
1753-P'' from the list of regulations and notices. The hospital-
specific file layout and the hospital-specific file are listed with the 
other supporting documentation for this proposed rule. We show 
hospital-specific data only for hospitals whose claims were used for 
modeling the impacts shown in Table 71. We do not show hospital-
specific impacts for hospitals whose claims we were unable to use. We 
refer readers to section II.A. of this proposed rule for a discussion 
of the hospitals whose claims we do not use for ratesetting or impact 
purposes.
    We estimate the effects of the individual policy changes by 
estimating payments per service, while holding all other payment 
policies constant. We use the best data available, but do not attempt 
to predict behavioral responses to our policy changes in order to 
isolate the effects associated with specific policies or updates, but 
any policy that changes payment could have a behavioral response. In 
addition, we have not made adjustments for future changes in variables, 
such as service volume, service-mix, or number of encounters.
b. Estimated Effects of Proposal To Update the 340B Program Payment 
Policy
    In section V.B. of this proposed rule with comment period, we 
discuss our proposal to adjust the payment amount for nonpass-through, 
separately payable drugs acquired by certain 340B participating 
hospitals through the 340B Program. We propose that rural SCHs, 
children's hospitals, and PPS-exempt cancer hospitals continue to be 
excepted from this payment policy in CY 2022. Specifically, in this 
proposed rule for CY 2022, for hospitals paid under the OPPS (other 
than those that are excepted for CY 2022), we propose to pay for 
separately payable drugs and

[[Page 42338]]

biologicals that are obtained with a 340B discount, excluding those on 
pass-through payment status and vaccines, at ASP minus 22.5 percent. 
Because we are proposing to continue current Medicare payment policy 
for CY 2022, there is no change to the proposed budget neutrality 
adjustment as a result of the 340B drug payment policy.
c. Estimated Effects of OPPS Changes on Hospitals
    Table 71 shows the estimated impact of this proposed rule on 
hospitals. Historically, the first line of the impact table, which 
estimates the change in payments to all facilities, has always included 
cancer and children's hospitals, which are held harmless to their pre-
BBA amount. We also include CMHCs in the first line that includes all 
providers. We include a second line for all hospitals, excluding 
permanently held harmless hospitals and CMHCs.
    We present separate impacts for CMHCs in Table 71, and we discuss 
them separately below, because CMHCs are paid only for partial 
hospitalization services under the OPPS and are a different provider 
type from hospitals. In CY 2022, we propose to continue to pay CMHCs 
for partial hospitalization services under APC 5853 (Partial 
Hospitalization for CMHCs) and to pay hospitals for partial 
hospitalization services under APC 5863 (Partial Hospitalization for 
Hospital-Based PHPs).
    The estimated increase in the total payments made under the OPPS is 
determined largely by the increase to the conversion factor under the 
statutory methodology. The distributional impacts presented do not 
include assumptions about changes in volume and service-mix. The 
conversion factor is updated annually by the OPD fee schedule increase 
factor, as discussed in detail in section II.B. of this proposed rule.
    Section 1833(t)(3)(C)(iv) of the Act provides that the OPD fee 
schedule increase factor is equal to the market basket percentage 
increase applicable under section 1886(b)(3)(B)(iii) of the Act, which 
we refer to as the IPPS market basket percentage increase. The proposed 
IPPS market basket percentage increase applicable to the OPD fee 
schedule for CY 2022 is 2.5 percent. Section 1833(t)(3)(F)(i) of the 
Act reduces that 2.5 percent by the productivity adjustment described 
in section 1886(b)(3)(B)(xi)(II) of the Act, which is proposed to be 
0.2 percentage point for CY 2022 (which is also the productivity 
adjustment for FY 2022 in the FY 2022 IPPS/LTCH PPS proposed rule (86 
FR 25436)), resulting in the CY 2022 OPD fee schedule increase factor 
of 2.3 percent. We are proposing to use the OPD fee schedule increase 
factor of 2.3 percent in the calculation of the CY 2022 OPPS conversion 
factor. Section 10324 of the Affordable Care Act, as amended by HCERA, 
further authorized additional expenditures outside budget neutrality 
for hospitals in certain frontier States that have a wage index less 
than 1.0000. The amounts attributable to this frontier State wage index 
adjustment are incorporated in the estimates in Table 71 of this 
proposed rule.
    To illustrate the impact of the CY 2022 changes, our analysis 
begins with a baseline simulation model that uses the CY 2021 relative 
payment weights, the FY 2021 final IPPS wage indexes that include 
reclassifications, and the final CY 2021 conversion factor. Table 71 
shows the estimated redistribution of the increase or decrease in 
payments for CY 2022 over CY 2021 payments to hospitals and CMHCs as a 
result of the following factors: The impact of the APC reconfiguration 
and recalibration changes between CY 2021 and CY 2022 (Column 2); the 
wage indexes and the provider adjustments (Column 3); the combined 
impact of all of the changes described in the preceding columns plus 
the 2.3 percent OPD fee schedule increase factor update to the 
conversion factor (Column 4); the estimated impact taking into account 
all payments for CY 2022 relative to all payments for CY 2021, 
including the impact of changes in estimated outlier payments, and 
changes to the pass-through payment estimate and adjustment to provide 
separate payment for a device category, drugs, and biologicals with 
pass-through status expiring between December 31, 2021, and September 
30, 2022 (Column 5).
    We did not model an explicit budget neutrality adjustment for the 
rural adjustment for SCHs because we are proposing to maintain the 
current adjustment percentage for CY 2022. Because the updates to the 
conversion factor (including the update of the OPD fee schedule 
increase factor), the estimated cost of the rural adjustment, and the 
estimated cost of projected pass-through payment for CY 2022 are 
applied uniformly across services, observed redistributions of payments 
in the impact table for hospitals largely depend on the mix of services 
furnished by a hospital (for example, how the APCs for the hospital's 
most frequently furnished services will change), and the impact of the 
wage index changes on the hospital. However, total payments made under 
this system and the extent to which this proposed rule will 
redistribute money during implementation also will depend on changes in 
volume, practice patterns, and the mix of services billed between CY 
2021 and CY 2022 by various groups of hospitals, which CMS cannot 
forecast.
    Overall, we estimate that the rates for CY 2022 will increase 
Medicare OPPS payments by an estimated 1.8 percent. Removing payments 
to cancer and children's hospitals because their payments are held 
harmless to the pre-OPPS ratio between payment and cost and removing 
payments to CMHCs results in an estimated 1.8 percent increase in 
Medicare payments to all other hospitals. These estimated payments will 
not significantly impact other providers.
Column 1: Total Number of Hospitals
    The first line in Column 1 in Table 71 shows the total number of 
facilities (3,662), including designated cancer and children's 
hospitals and CMHCs, for which we were able to use CY 2019 hospital 
outpatient and CMHC claims data to model CY 2021 and CY 2022 payments, 
by classes of hospitals, for CMHCs and for dedicated cancer hospitals. 
We excluded all hospitals and CMHCs for which we could not plausibly 
estimate CY 2021 or CY 2022 payment and entities that are not paid 
under the OPPS. The latter entities include CAHs, all-inclusive 
hospitals, and hospitals located in Guam, the U.S. Virgin Islands, 
Northern Mariana Islands, American Samoa, and the State of Maryland. 
This process is discussed in greater detail in section II.A. of this 
proposed rule. At this time, we are unable to calculate a DSH variable 
for hospitals that are not also paid under the IPPS because DSH 
payments are only made to hospitals paid under the IPPS. Hospitals for 
which we do not have a DSH variable are grouped separately and 
generally include freestanding psychiatric hospitals, rehabilitation 
hospitals, and long-term care hospitals. We show the total number of 
OPPS hospitals (3,555), excluding the hold-harmless cancer and 
children's hospitals and CMHCs, on the second line of the table. We 
excluded cancer and children's hospitals because section 1833(t)(7)(D) 
of the Act permanently holds harmless cancer hospitals and children's 
hospitals to their ``pre-BBA amount'' as specified under the terms of 
the statute, and therefore, we removed them from our impact analyses. 
We show the isolated impact on the 39 CMHCs at the bottom of the impact 
table (Table 71) and discuss that impact separately below.

[[Page 42339]]

Column 2: APC Recalibration--All Changes
    Column 2 shows the estimated effect of APC recalibration. Column 2 
also reflects any changes in multiple procedure discount patterns or 
conditional packaging that occur as a result of the changes in the 
relative magnitude of payment weights. As a result of APC 
recalibration, we estimate that urban hospitals will experience no 
change, with the impact ranging from a decrease of 0.1 percent to an 
increase of 0.2, depending on the number of beds. Rural hospitals will 
experience an increase of 0.1 overall. Major teaching hospitals will 
see no change.
Column 3: Wage Indexes and the Effect of the Provider Adjustments
    Column 3 demonstrates the combined budget neutral impact of the APC 
recalibration; the updates for the wage indexes with the proposed FY 
2022 IPPS post-reclassification wage indexes; the proposed rural 
adjustment, and the proposed cancer hospital payment adjustment. We 
modeled the independent effect of the budget neutrality adjustments and 
the OPD fee schedule increase factor by using the relative payment 
weights and wage indexes for each year, and using a CY 2021 conversion 
factor that included the OPD fee schedule increase and a budget 
neutrality adjustment for differences in wage indexes.
    Column 3 reflects the independent effects of the proposed updated 
wage indexes, including the application of budget neutrality for the 
rural floor policy on a nationwide basis, as well as the CY 2022 
proposed changes in wage index policy discussed in section II.C. of 
this CY 2022 OPPS/ASC proposed rule. We did not model a budget 
neutrality adjustment for the rural adjustment for SCHs because we 
propose to continue the rural payment adjustment of 7.1 percent to 
rural SCHs for CY 2022, as described in section II.E. of this proposed 
rule. We also did not model a budget neutrality adjustment for the 
proposed cancer hospital payment adjustment because the proposed 
payment-to-cost ratio target for the cancer hospital payment adjustment 
in CY 2022 is 0.89, the same as the ratio that was reported for the CY 
2021 OPPS/ASC final rule with comment period (85 FR 85914). We note 
that, in accordance with section 16002 of the 21st Century Cures Act, 
we are applying a budget neutrality factor calculated as if the cancer 
hospital adjustment target payment-to-cost ratio was 0.90, not the 0.89 
target payment-to-cost ratio we propose to apply in section II.F. of 
this proposed rule.
    We modeled the independent effect of updating the wage indexes by 
varying only the wage indexes, holding APC relative payment weights, 
service-mix, and the rural adjustment constant and using the CY 2022 
scaled weights and a CY 2021 conversion factor that included a budget 
neutrality adjustment for the effect of the changes to the wage indexes 
between CY 2021 and CY 2022.
Column 4: All Budget Neutrality Changes Combined With the Market Basket 
Update
    Column 4 demonstrates the combined impact of all of the changes 
previously described and the update to the conversion factor of 2.3 
percent. Overall, these changes will increase payments to urban 
hospitals by 2.3 percent and to rural hospitals by 2.3 percent. The 
increase for classes of rural hospitals will vary with sole community 
hospitals receiving a 2.2 percent increase and other rural hospitals 
receiving an increase of 2.5 percent.
Column 5: All Proposed Changes for CY 2022
    Column 5 depicts the full impact of the proposed CY 2022 policies 
on each hospital group by including the effect of all changes for CY 
2022 and comparing them to all estimated payments in CY 2021. Column 5 
shows the combined budget neutral effects of Columns 2 and 3; the OPD 
fee schedule increase; the impact of estimated OPPS outlier payments, 
as discussed in section II.G. of this proposed rule; the change in the 
Hospital OQR Program payment reduction for the small number of 
hospitals in our impact model that failed to meet the reporting 
requirements (discussed in section XIV. of this proposed rule); and the 
difference in total OPPS payments dedicated to transitional pass-
through payments and the proposed adjustment to provide separate 
payment for the device category, drugs, and biologicals with pass-
through status expiring between December 31, 2021, and September 30, 
2022.
    Of those hospitals that failed to meet the Hospital OQR Program 
reporting requirements for the full CY 2021 update (and assumed, for 
modeling purposes, to be the same number for CY 2022), we included 17 
hospitals in our model because they had both CY 2019 claims data and 
recent cost report data. We estimate that the cumulative effect of all 
proposed changes for CY 2022 will increase payments to all facilities 
by 1.8 percent for CY 2022. We modeled the independent effect of all 
changes in Column 5 using the final relative payment weights for CY 
2021 and the proposed relative payment weights for CY 2022. We used the 
final conversion factor for CY 2021 of $82.797 and the proposed CY 2022 
conversion factor of $84.457 discussed in section II.B. of this 
proposed rule.
    Column 5 contains simulated outlier payments for each year. We used 
the 2-year charge inflation factor used in the FY 2021 IPPS/LTCH PPS 
final rule (85 FR 59039) of 13.2 percent (1.13218) to increase 
individual costs on the CY 2019 claims, and we used the overall CCR in 
the April 2020 Outpatient Provider-Specific File (OPSF) with a 1-year 
CCR adjustment factor of 0.974495 (85 FR 59040) to estimate outlier 
payments for CY 2021. Using the CY 2019 claims and a 13.2 percent 
charge inflation factor, we currently estimate that outlier payments 
for CY 2021, using a multiple threshold of 1.75 and a fixed-dollar 
threshold of $5,300, will be approximately 1.06 percent of total 
payments. The estimated current outlier payments of 1.06 percent are 
incorporated in the comparison in Column 5. We used the same set of 
claims and a charge inflation factor of 20.4 percent (1.20469) and the 
CCRs in the April 2020 OPSF, with an adjustment of 0.974495 multiplied 
by 0.974495 (86 FR 25718), to reflect relative changes in cost and 
charge inflation between CY 2019 and CY 2022, to model the proposed CY 
2022 outliers at 1.0 percent of estimated total payments using a 
multiple threshold of 1.75 and a fixed-dollar threshold of $6,100. The 
charge inflation and CCR inflation factors are discussed in detail in 
the FY 2021 IPPS/LTCH PPS proposed rule (84 FR 42629).
    Overall, we estimate that facilities will experience an increase of 
1.8 percent under this proposed rule in CY 2022 relative to total 
spending in CY 2021. This projected increase (shown in Column 5) of 
Table 71 reflects the 2.3 percent OPD fee schedule increase factor, 
minus 0.40 percent for the change in the pass-through payment estimate 
between CY 2021 and CY 2022 and the proposed adjustment to provide 
separate payment for the device category, drugs, and biologicals with 
pass-through status expiring between December 31, 2021, and September 
30, 2022, minus the difference in estimated outlier payments between CY 
2021 (1.06 percent) and CY 2022 (1.0 percent). We estimate that the 
combined effect of all proposed changes for CY 2022 will increase 
payments to urban hospitals by 1.8 percent. Overall, we estimate that 
rural hospitals will experience a 1.8 percent increase as a result of 
the

[[Page 42340]]

combined effects of all the proposed changes for CY 2022.
    Among hospitals, by teaching status, we estimate that the impacts 
resulting from the combined effects of all changes will include an 
increase of 1.7 percent for major teaching hospitals and an increase of 
2.0 percent for nonteaching hospitals. Minor teaching hospitals will 
experience an estimated increase of 1.8 percent.
    In our analysis, we also have categorized hospitals by type of 
ownership. Based on this analysis, we estimate that voluntary hospitals 
will experience an increase of 1.8 percent, proprietary hospitals will 
experience an increase of 2.0 percent, and governmental hospitals will 
experience an increase of 2.4 percent.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP04AU21.122


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[GRAPHIC] [TIFF OMITTED] TP04AU21.123


[[Page 42342]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.124


[[Page 42343]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.125

BILLING CODE 4120-01-C
d. Estimated Effects of OPPS Changes on CMHCs
    The last line of Table 71 demonstrates the isolated impact on 
CMHCs, which furnish only partial hospitalization services under the 
OPPS. In CY 2021, CMHCs are paid under APC 5853 (Partial 
Hospitalization (3 or more services) for CMHCs). We modeled the impact 
of this APC policy assuming CMHCs will continue to provide the same 
number of days of PHP care as seen in the CY 2019 claims used for 
ratesetting in the proposed rule. We excluded days with 1 or 2 services 
because our policy only pays a per diem rate for partial 
hospitalization when 3 or more qualifying services are provided to the 
beneficiary. We estimate that CMHCs will experience an overall 1.6 
percent increase in payments from CY 2021 (shown in Column 5). We note 
that this includes the trimming methodology as well as the proposed CY 
2022 geometric mean costs used for developing the PHP payment rates 
described in section VIII.B. of this final rule with comment period.
    Column 3 shows that the estimated impact of adopting the proposed 
FY 2021 wage index values will result in a decrease of 0.8 percent to 
CMHCs. Column 4 shows that combining this proposed OPD fee schedule 
increase factor, along with proposed changes in APC policy for CY 2022 
and the proposed FY 2021 wage index updates, will result in an 
estimated increase of 2.1 percent. Column 5 shows that adding the 
proposed changes in outlier and pass-through payments will result in a 
total 1.6 percent increase in payment for CMHCs. This reflects all 
proposed changes for CMHCs for CY 2022.
e. Estimated Effect of OPPS Changes on Beneficiaries
    For services for which the beneficiary pays a copayment of 20 
percent of the payment rate, the beneficiary's payment would increase 
for services for which the OPPS payments will rise and will decrease 
for services for which the OPPS payments will fall. For further 
discussion of the calculation of the national unadjusted copayments and 
minimum unadjusted copayments, we

[[Page 42344]]

refer readers to section II.I. of this CY 2022 OPPS/ASC proposed rule. 
In all cases, section 1833(t)(8)(C)(i) of the Act limits beneficiary 
liability for copayment for a procedure performed in a year to the 
hospital inpatient deductible for the applicable year.
    We estimate that the aggregate beneficiary coinsurance percentage 
would be 18.1 percent for all services paid under the OPPS in CY 2022. 
The estimated aggregate beneficiary coinsurance reflects general system 
adjustments, including the proposed CY 2022 comprehensive APC payment 
policy discussed in section II.A.2.b. of this final rule.
f. Estimated Effects of OPPS Changes on Other Providers
    The relative payment weights and payment amounts established under 
the OPPS affect the payments made to ASCs, as discussed in section XIII 
of the final rule. No types of providers or suppliers other than 
hospitals, CMHCs, and ASCs will be affected by the proposed changes in 
the proposed rule.
g. Estimated Effects of OPPS Changes on the Medicare and Medicaid 
Programs
    The effect on the Medicare program is expected to be an increase of 
$1.35 billion in program payments for OPPS services furnished in CY 
2022. The effect on the Medicaid program is expected to be limited to 
copayments that Medicaid may make on behalf of Medicaid recipients who 
are also Medicare beneficiaries. We estimate that the proposed changes 
in the proposed rule would increase these Medicaid beneficiary payments 
by approximately $95 million in CY 2022. Currently, there are 
approximately 10 million dual-eligible beneficiaries, which represent 
approximately thirty percent of Medicare Part B fee-for-service 
beneficiaries. The impact on Medicaid was determined by taking 30 
percent of the beneficiary cost-sharing impact. The national average 
split of Medicaid payments is 57 percent Federal payments and 43 
percent state payments. Therefore, for the estimated $95 million 
Medicaid increase, approximately $55 million will be from the Federal 
Government and $40 million would be from state governments.
h. Alternative OPPS Policies Considered
    Alternatives to the OPPS changes we proposed and the reasons for 
our selected alternatives are discussed throughout the final rule.
     Alternatives Considered for the Claims Data used in OPPS 
and ASC Ratesetting due to the PHE.
    We refer readers to section X.E. of this proposed rule with comment 
period for a discussion of our proposed policy of generally using 
claims, cost report and other data prior to the PHE. We note that in 
that section we discuss the alternative proposal we considered 
regarding applying the standard ratesetting process, in particular the 
selection of data used, which would include claims and cost report data 
including the timeframe of the PHE. We note that there are potential 
issues related to that data including the effect of the PHE on the OPPS 
relative payment weights and the service mix applied in the budget 
neutrality process, and therefore our primary proposal is to use CY 
2019 claims and cost report data generally in CY 2022 OPPS ratesetting. 
However, we are making the supporting data files typically included as 
part of the rulemaking process, available online at the CMS website to 
allow stakeholders the opportunity to provide meaningful comment.
    We note that these policy considerations also have ASC implications 
since the relative weights for certain surgical procedures performed in 
the ASC setting are developed based on the OPPS relative weights and 
claims data.
2. Estimated Effects of CY 2022 ASC Payment System Changes
    Most ASC payment rates are calculated by multiplying the ASC 
conversion factor by the ASC relative payment weight. As discussed 
fully in section XIII. of this proposed rule, we are setting the CY 
2022 ASC relative payment weights by scaling the proposed CY 2022 OPPS 
relative payment weights by the proposed ASC scalar of 0.8591. The 
estimated effects of the proposed updated relative payment weights on 
payment rates are varied and are reflected in the estimated payments 
displayed in Tables 72 and 73.
    Beginning in CY 2011, section 3401 of the Affordable Care Act 
requires that the annual update to the ASC payment system (which, in CY 
2019, we adopted a policy to be the hospital market basket for CY 2019 
through CY 2023) after application of any quality reporting reduction 
be reduced by a productivity adjustment. Section 1886(b)(3)(B)(xi)(II) 
of the Act defines the productivity adjustment to be equal to the 10-
year moving average of changes in annual economy-wide private nonfarm 
business multifactor productivity (MFP) (as projected by the Secretary 
for the 10-year period, ending with the applicable fiscal year, year, 
cost reporting period, or other annual period). For ASCs that fail to 
meet their quality reporting requirements, we propose that the CY 2022 
payment determinations would be based on the application of a 2.0 
percentage point reduction to the annual update factor, which we 
propose would be the hospital market basket for CY 2022. We calculated 
the CY 2022 ASC conversion factor by adjusting the CY 2021 ASC 
conversion factor by 0.9993 to account for changes in the pre-floor and 
pre-reclassified hospital wage indexes between CY 2021 and CY 2022 and 
by applying the CY 2022 productivity-adjusted hospital market basket 
update factor of 2.3 percent (which is equal to the projected hospital 
market basket update of 2.5 percent reduced by a productivity 
adjustment of 0.2 percentage point). The proposed CY 2022 ASC 
conversion factor is $50.043 for ASCs that successfully meet the 
quality reporting requirements.
a. Limitations of Our Analysis
    Presented here are the projected effects of the proposed changes 
for CY 2022 on Medicare payment to ASCs. A key limitation of our 
analysis is our inability to predict changes in ASC service-mix between 
CY 2019 and CY 2022 with precision. We believe the net effect on 
Medicare expenditures resulting from the proposed CY 2022 changes will 
be small in the aggregate for all ASCs. However, such changes may have 
differential effects across surgical specialty groups, as ASCs continue 
to adjust to the payment rates based on the policies of the revised ASC 
payment system. We are unable to accurately project such changes at a 
disaggregated level. Clearly, individual ASCs will experience changes 
in payment that differ from the aggregated estimated impacts presented 
below.
b. Estimated Effects of ASC Payment System Policies on ASCs
    Some ASCs are multispecialty facilities that perform a wide range 
of surgical procedures from excision of lesions to hernia repair to 
cataract extraction; others focus on a single specialty and perform 
only a limited range of surgical procedures, such as eye, digestive 
system, or orthopedic procedures. The combined effect on an individual 
ASC of the proposed update to the CY 2022 payments will depend on a 
number of factors, including, but not limited to, the mix of services 
the ASC provides, the volume of specific services provided by the ASC, 
the percentage of its patients who are Medicare beneficiaries, and the 
extent to which an ASC provides different services in the coming year. 
The following discussion presents tables that display estimates of the 
impact of the

[[Page 42345]]

proposed CY 2022 updates to the ASC payment system on Medicare payments 
to ASCs, assuming the same mix of services, as reflected in our CY 2019 
claims data. Table 72 depicts the estimated aggregate percent change in 
payment by surgical specialty or ancillary items and services group by 
comparing estimated CY 2021 payments to estimated proposed CY 2022 
payments, and Table 73 shows a comparison of estimated CY 2021 payments 
to estimated proposed CY 2022 payments for procedures that we estimate 
will receive the most Medicare payment in CY 2021.
    In Table 72, we have aggregated the surgical HCPCS codes by 
specialty group, grouped all HCPCS codes for covered ancillary items 
and services into a single group, and then estimated the effect on 
aggregated payment for surgical specialty and ancillary items and 
services groups. The groups are sorted for display in descending order 
by estimated Medicare program payment to ASCs. The following is an 
explanation of the information presented in Table 72.
     Column 1--Surgical Specialty or Ancillary Items and 
Services Group indicates the surgical specialty into which ASC 
procedures are grouped and the ancillary items and services group which 
includes all HCPCS codes for covered ancillary items and services. To 
group surgical procedures by surgical specialty, we used the CPT code 
range definitions and Level II HCPCS codes and Category III CPT codes, 
as appropriate, to account for all surgical procedures to which the 
Medicare program payments are attributed.
     Column 2--Estimated CY 2021 ASC Payments were calculated 
using CY 2019 ASC utilization data (the most recent full year of ASC 
utilization) and CY 2021 ASC payment rates. The surgical specialty and 
ancillary items and services groups are displayed in descending order 
based on estimated CY 2021 ASC payments.
     Column 3--Estimated CY 2022 Percent Change is the 
aggregate percentage increase or decrease in Medicare program payment 
to ASCs for each surgical specialty or ancillary items and services 
group that is attributable to proposed updates to ASC payment rates for 
CY 2022 compared to CY 2021.
    As shown in Table 72, for the six specialty groups that account for 
the most ASC utilization and spending, we estimate that the proposed 
update to ASC payment rates for CY 2022 will result in a 1-percent 
decrease in aggregate payment amounts for eye and ocular adnexa 
procedures, a 3-percent increase in aggregate payment amounts for 
nervous system procedures, 4-percent increase in aggregate payment 
amounts for digestive system procedures, a 4-percent increase in 
aggregate payment amounts for musculoskeletal system procedures, and a 
4-percent increase in aggregate payment amounts for genitourinary 
system procedures. We note that these changes can be a result of 
different factors, including updated data, payment weight changes, and 
proposed changes in policy. In general, spending in each of these 
categories of services is increasing due to the 2.3 percent proposed 
payment rate update. After the payment rate update is accounted for, 
aggregate payment increases or decreases for a category of services can 
be higher or lower than a 2.3-percent increase, depending on if payment 
weights in the OPPS APCs that correspond to the applicable services 
increased or decreased or if the most recent data show an increase or a 
decrease in the volume of services performed in an ASC for a category. 
For example, we estimate a 4-percent increase in proposed aggregate 
gastrointestinal procedure payments. The increases in payment weights 
for gastrointestinal procedure payments is further increased by the 
proposed 2.3 percent ASC rate update for these procedures. For 
estimated changes for selected procedures, we refer readers to Table 73 
provided later in this section.
[GRAPHIC] [TIFF OMITTED] TP04AU21.126

    Table 73 shows the estimated impact of the updates to the revised 
ASC payment system on aggregate ASC payments for selected surgical 
procedures during CY 2022. The table displays 30 of the procedures 
receiving the greatest estimated CY 2021 aggregate Medicare payments to 
ASCs. The HCPCS codes are sorted in descending order by estimated CY 
2021 program payment.
     Column 1--CPT/HCPCS code.
     Column 2--Short Descriptor of the HCPCS code.
     Column 3--Estimated CY 2021 ASC Payments were calculated 
using CY 2019 ASC utilization (the most recent full year of ASC 
utilization) and the CY 2021 ASC payment rates. The estimated CY 2021 
payments are expressed in millions of dollars.
     Column 4--Estimated CY 2022 Percent Change reflects the 
percent differences between the estimated ASC

[[Page 42346]]

payment for CY 2021 and the estimated payment for CY 2022 based on the 
proposed update.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP04AU21.127

c. Estimated Effects of Proposed ASC Payment System Policies on 
Beneficiaries
    We estimate that the proposed CY 2022 update to the ASC payment 
system will be generally positive (that is, result in lower cost-
sharing) for beneficiaries with respect to the new procedures we 
propose to designate as office-based for CY 2022. For example, using 
2019 utilization data and proposed CY 2022 OPPS and ASC payment rates, 
we estimate that if 10 percent of colpopexy procedures migrate from the 
hospital outpatient setting to the ASC setting, Medicare payments will 
be reduced by approximately $7 million in CY 2022 and total beneficiary 
copayments will decline by approximately $1.4 million in CY 2022. 
First, other than certain preventive services where coinsurance and the 
Part B deductible is waived to comply with sections 1833(a)(1) and (b) 
of the Act, the ASC coinsurance rate for all procedures is 20 percent. 
This contrasts with procedures performed in HOPDs under the OPPS, where 
the beneficiary is responsible for copayments that range from 20 
percent to 40 percent of the procedure payment (other than for certain 
preventive services), although the majority of HOPD procedures have a 
20-percent copayment. Second, in almost all cases, the ASC payment 
rates under the ASC payment system are lower than payment rates for the 
same procedures under the OPPS. Therefore, the beneficiary coinsurance 
amount under the ASC payment system will almost always be less than the 
OPPS copayment amount for the same services. (The only exceptions will 
be if the ASC coinsurance amount exceeds the hospital inpatient 
deductible since the statute requires that OPPS copayment amounts not 
exceed the hospital inpatient deductible. Therefore, in limited 
circumstances, the ASC coinsurance amount may exceed the

[[Page 42347]]

hospital inpatient deductible and, therefore, the OPPS copayment amount 
for similar services.) Beneficiary coinsurance for services migrating 
from physicians' offices to ASCs may decrease or increase under the ASC 
payment system, depending on the particular service and the relative 
payment amounts under the MPFS compared to the ASC. While the ASC 
payment system bases most of its payment rates on hospital cost data 
used to set OPPS relative payment weights, services that are performed 
a majority of the time in a physician office are generally paid the 
lesser of the ASC amount according to the standard ASC ratesetting 
methodology or at the nonfacility practice expense based amount payable 
under the PFS. For those additional procedures that we propose to 
designate as office-based in CY 2022, the beneficiary coinsurance 
amount under the ASC payment system generally will be no greater than 
the beneficiary coinsurance under the PFS because the coinsurance under 
both payment systems generally is 20 percent (except for certain 
preventive services where the coinsurance is waived under both payment 
systems).
3. Accounting Statements and Tables
    As required by OMB Circular A-4 (available on the Office of 
Management and Budget website at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/assets/OMB/circulars/a004/a-4.html), we have 
prepared accounting statements to illustrate the impacts of the OPPS 
and ASC changes in this proposed rule. The first accounting statement, 
Table 74, illustrates the classification of expenditures for the CY 
2022 estimated hospital OPPS incurred benefit impacts associated with 
the proposed CY 2022 OPD fee schedule increase. The second accounting 
statement, Table 75, illustrates the classification of expenditures 
associated with the 2.3 percent CY 2022 update to the ASC payment 
system, based on the provisions of the final rule with comment period 
and the baseline spending estimates for ASCs. Both tables classify most 
estimated impacts as transfers.
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[GRAPHIC] [TIFF OMITTED] TP04AU21.129

[GRAPHIC] [TIFF OMITTED] TP04AU21.130


[[Page 42348]]


[GRAPHIC] [TIFF OMITTED] TP04AU21.131

BILLING CODE 4120-01-C
4. Effects of Changes in Requirements for the Hospital OQR Program
a. Background
    We refer readers to the CY 2018 OPPS/ASC final rule with comment 
period (82 FR 59492 through 59494), for the previously estimated 
effects of changes to the Hospital Outpatient Quality Reporting (OQR) 
Program for the CY 2018, CY 2019, and CY 2021 payment determinations. 
Of the 3,163 hospitals that met eligibility requirements for the CY 
2021 payment determination, we determined that 77 hospitals did not 
meet the requirements to receive the full annual Outpatient Department 
(OPD) fee schedule increase factor.
b. Impact of Proposals in This CY 2022 OPPS/ASC Proposed Rule
    We anticipate that some of the CY 2022 Hospital OQR Program 
proposed policies, if finalized, will impact the number of facilities 
that will receive payment reductions. In this proposed rule with 
comment period, we are proposing to: (1) Adopt the COVID-19 Vaccination 
Coverage Among HCP measure, beginning with the CY 2022 reporting 
period; (2) adopt the Breast Screening Recall Rates measure, beginning 
with the CY 2022 reporting period; (3) adopt the STEMI eCQM, beginning 
as a voluntary measure with the CY 2023 reporting period, and then as a 
mandatory measure beginning with the CY 2024 reporting period; (4) 
require the Cataracts: Improvement in Patient's Visual Function within 
90 Days Following Cataract Surgery measure (OP-31), beginning with the 
CY 2023 reporting period/CY 2025 payment determination; (5) require the 
Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare 
Providers and Systems (OAS CAHPS) Survey measures (OP-37a-e), with 
voluntary reporting beginning with the CY 2023 reporting period and 
mandatory reporting beginning with CY 2024 reporting period/CY 2026 
payment determination; (6) remove the Fibrinolytic Therapy Received 
Within 30 Minutes measure (OP-2), effective with the CY 2023 reporting 
period; (7) remove the Median Time to Transfer to Another Facility for 
Acute Coronary Intervention measure (OP-3), effective with the CY 2023 
reporting period; (8) remove the option for hospitals to send medical 
records to the validation contractor via paper and removable media and 
require electronic submission; (9) reduce the number of days hospitals 
have to submit medical records to the CDAC from 45 days to 30 days; 
(10) enhance the targeting criteria used for hospital selection by 
adopting criteria currently used in inpatient data validation by adding 
the following criteria: (a) Having a lower bound confidence interval 
score of 75 percent or less; and (b) having not been selected in the 
previous 3 years; (11) extend our existing ECE policy to apply to 
eCQMs, to further align with the Hospital Inpatient Quality Reporting 
(IQR) Program; and (12) require use of technology updated consistent 
with 2015 Edition Cures Update criteria beginning with the CY 2023 
reporting period.
    As shown in Table 69 in section XXIII.B.4. (Collection of 
Information), we estimate a total information collection burden 
decrease for 3,300 OPPS hospitals of -73,344 hours at a cost of -
$3,109,786 annually associated with our proposed policies and updated 
burden estimates across a 5 year period from the CY 2022 reporting 
period/CY 2024 payment determination through the CY 2027 reporting 
period/CY 2029 payment determination, compared to our currently 
approved information collection burden estimates. We refer readers to 
section XXII.B. of the preamble of this proposed rule (information 
collection requirements) for a detailed discussion of the calculations 
estimating the changes to the information collection burden for 
submitting data to the Hospital OQR Program. As discussed later in this 
section of the preamble, we detail proposed policies that would have 
additional economic impact. The proposals not discussed in this section 
are believed to have no further economic impact beyond information 
collection burden.
    In section XV.B.4.a. of the preamble of this proposed rule, we are 
proposing to adopt a COVID-19 Vaccination Coverage Among HCP measure 
beginning with the CY 2022 reporting period/CY 2024 payment 
determination. Hospitals would submit data through the Centers for 
Disease Control and Prevention (CDC) National Healthcare Safety Network 
(NHSN). The NHSN is a secure, internet-based system maintained by the 
CDC and provided free. Currently the CDC does not estimate burden for 
COVID-19 vaccination reporting under the CDC PRA package currently 
approved under OMB control number 0920-1317 because the agency has been 
granted a waiver under section 321 of the National Childhood Vaccine 
Injury Act (NCVIA).\444\ Although the burden associated with the COVID-
19 Vaccination Coverage Among HCP measure is not accounted for under 
the CDC PRA 0920-1317 or 0920-0666, the cost and burden information is 
included here. We estimate that it would take each hospital on average 
approximately 1 hour per month to collect data for the COVID-19 
Vaccination Coverage Among HCP measure and enter it into NHSN. We have 
estimated the time to complete this entire activity, since it could 
vary based on provider systems and staff availability. This burden is 
comprised of administrative hours and wages. We believe an 
Administrative Assistant \445\ would spend between 45 minutes and 1 
hour and 15 minutes to enter this data into NHSN. Beginning with the CY 
2022 reporting period/FY 2024 payment determination, hospitals

[[Page 42349]]

would incur an additional annual burden between 9 hours (0.75 hours/
month x 12 months) and 15 hours (1.25 hours/month x 12 months) per 
hospital and between 29,700 hours (9 hours/hospital x 3,300 hospitals) 
and 49,500 hours (15 hours/hospital x 3,300 hospitals) for all 
hospitals. Each hospital would incur an estimated cost of between 
$323.28 (9 hours x $35.92/hr) and $538.80 annually (15 hours x $35.92/
hr). The estimated cost across all 3,300 hospitals would be between 
$1,066,824 ($323.28/hospital x 3,300 hospitals) and $1,778,040 
($538.80/hospital x 3,300 hospitals) annually thereafter. We recognize 
that many healthcare facilities are also reporting other COVID-19 data 
to HHS. We believe the benefits of reporting data on the COVID-19 
Vaccination Coverage Among HCP measure to monitor, track, and provide 
transparency for the public on this important tool to combat COVID-19 
outweigh the costs of reporting. We welcome comments on the estimated 
time to collect data and enter it into the NHSN as well as any 
additional costs associated with this measure.
---------------------------------------------------------------------------

    \444\ Section 321 of the National Childhood Vaccine Injury Act 
(NCVIA) provides the PRA waiver for activities that come under the 
NCVIA, including those in the NCVIA at section 2102 of the Public 
Health Service Act (42 U.S.C. 300aa-2). Section 321 is not codified 
in the U.S. Code, but can be found in a note at 42 U.S.C. 300aa-1.
    \445\ https://www.bls.gov/oes/current/oes436013.htm. Accessed on 
April 13, 2021. The adjusted hourly wage rate of $35.92/hr includes 
an adjustment of 100 percent of the median hourly wage to account 
for the cost of overhead, including fringe benefits.
---------------------------------------------------------------------------

    In section XV.B.4.c. of this proposed rule, we are proposing to 
adopt the STEMI eCQM. Similar to the FY 2019 IPPS/LTCH PPS final rule, 
we believe that costs associated with adoption of eCQMs are 
multifaceted and include not only the burden associated with reporting 
but also the costs associated with implementing and maintaining Program 
requirements, such as maintaining measure specifications in hospitals 
EHR systems for all of the eCQMs available for use in the Hospital OQR 
Program (83 FR 41771).
    As described in section XV.D.6. of this proposed rule, we are 
proposing certification requirements requiring the use of the 2015 
Edition Cures Update for eCQMs beginning with the CY 2025 payment 
determination. We expect this proposal to have no impact on information 
collection burden for the Hospital OQR Program because this policy does 
not require hospitals to submit new data to CMS. With respect to any 
costs unrelated to data submission, although this finalized proposal 
will require some investment in systems updates, the Medicare Promoting 
Interoperability Program (previously known as the Medicare and Medicaid 
EHR Incentive Programs) previously finalized a requirement that 
hospitals use the 2015 Edition Cures Update for eCQMs (85 FR 84818 
through 84825). Because all hospitals participating in the Hospital OQR 
Program are subsection (d) hospitals that also participate in the 
Medicare Promoting Interoperability Program (previously known as the 
Medicare and Medicaid EHR Incentive Programs), we do not anticipate any 
additional costs as a result of this finalized proposal. This is 
because the burden and costs involved in updating to the 2015 Edition 
Cures Update is the same regardless of whether the technology is used 
for eCQMs. Therefore, we believe that the Medicare Promoting 
Interoperability Program has already addressed the additional costs 
unrelated to data submission through their previously finalized 
requirements.
    In section XV.D.9.c. of this proposed rule, we are proposing to 
reduce the number of days hospitals have to submit medical records to 
the CDAC from 45 days to 30 days. In previous years, charts were 
requested by the CMS CDAC contractor and hospitals were given 45 days 
from the date of the request to submit the requested records. This may 
be an additional administrative burden to hospitals selected for 
validation. However, this deadline is in line with the Hospital IQR 
Program's validation policy, the large majority of hospitals that have 
participated in Hospital OQR Program data validation efforts have 
submitted their records prior to 30 days in the current process, and 
outpatient records typically contain significantly fewer pages than the 
inpatient records. Therefore, we believe the impact of this proposal to 
be minimal.
5. Effects of Requirements for the ASCQR Program
a. Background
    In section XVI. of this proposed rule, we discuss our proposed 
policies affecting the Ambulatory Surgical Center Quality Reporting 
(ASCQR) Program. For the CY 2021 payment determination, all 6,811 ASCs 
that met eligibility requirements for the ASCQR Program received the 
annual payment update due to data submission requirements being 
excepted under the ASCQR Program's Extraordinary Circumstances 
Exceptions policy in consideration of the COVID-19 public health 
emergency.\446\
---------------------------------------------------------------------------

    \446\ Centers for Medicare & Medicaid Services. COVID-19 Quality 
Reporting Programs Guidance Memo. Available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
---------------------------------------------------------------------------

b. Impact of Proposals in This CY 2022 OPPS/ASC Proposed Rule
    In section XVI. of this proposed rule, we propose to: (1) Require 
four patient safety outcome measures beginning with the CY 2023 
reporting period/CY 2025 payment determination: (a) Patient Burn (ASC-
1); (b) Patient Fall (ASC-2); (c) Wrong Site, Wrong Side, Wrong 
Patient, Wrong Procedure, Wrong Implant (ASC-3); and (d) All-Cause 
Hospital Transfer/Admission (ASC-4); (2) require the Cataracts: 
Improvement in Patient's Visual Function within 90 Days Following 
Cataract Surgery (ASC-11) measure, beginning with the CY 2023 reporting 
period/CY 2025 payment determination; (3) require the Outpatient and 
Ambulatory Surgery Consumer Assessment of Healthcare Providers and 
Systems (OAS CAHPS) Survey measures (ASC-15 a-e), with voluntary 
reporting for the CY 2023 reporting period/CY 2025 payment 
determination and mandatory reporting beginning with CY 2024 reporting 
period/CY 2026 payment determination; (4) add two additional data 
collection survey modes of OAS CAHPS measures collection to the 
existing three modes of collection and provide survey administration 
requirements; and (5) adopt the COVID-19 Vaccination Coverage Among HCP 
measure, beginning with the CY 2022 reporting period/CY 2024 payment 
determination.
    As shown in Table 70 in section XXIII.C.3.e. (Collection of 
Information), we estimate a total information collection burden 
increase for 4,646 ACSs of +67,085 hours at a cost of +$2,844,404 
annually associated with our proposed policies and updated burden 
estimates across a 4 year period from the CY 2023 reporting period/CY 
2025 payment determination through the CY 2026 reporting period/CY 2028 
payment determination, compared to our currently approved information 
collection burden estimates. We refer readers to section XXIII.C. of 
the preamble of this proposed rule (information collection 
requirements) for a detailed discussion of the calculations estimating 
the changes to the information collection burden for submitting data to 
the ASCQR Program.
    In section XVI.B.3.a. of the preamble of this proposed rule, we are 
proposing to adopt a COVID-19 Vaccination Coverage Among HCP measure 
beginning with the CY 2022 reporting period/CY 2024 payment 
determination. The impacts and benefits associated with this proposal 
are similar to those previously discussed for the same measure being 
proposed for the Hospital OQR Program. Currently the CDC does not 
estimate burden for COVID-19 vaccination reporting under the CDC PRA 
package currently approved under OMB control number 0920-1317 because 
the agency has been granted a waiver under section 321 of the National 
Childhood Vaccine Injury Act

[[Page 42350]]

(NCVIA).\447\ Although the burden associated with the COVID-19 
Vaccination Coverage Among HCP measure is not accounted for under the 
CDC PRA 0920-1317 or 0920-0666, the cost and burden information is 
included here. We estimate that each ASC will spend on average 
approximately 1 hour per month to collect data for the COVID-19 
Vaccination Coverage Among HCP measure and enter it into NHSN. We have 
estimated the time to complete this entire activity since it could vary 
based on provider systems and staff availability. This burden is 
comprised of administrative hours and wages. We believe an 
Administrative Assistant would spend between 45 minutes and 1 hour and 
15 minutes to enter this data into NHSN. Beginning with the CY 2022 
reporting period/FY 2024 payment determination, ASCs would incur an 
additional annual burden between 9 hours (0.75 hours/month x 12 months) 
and 15 hours (1.25 hours/month x 12 months) per ASC and between 41,814 
hours (9 hours/hospital x 4,646 ASCs) and 69,690 hours (15 hours/
hospital x 4,646 ASCs) for all ASCs. Each ASC would incur an estimated 
cost of between $323.28 (9 hours x $35.92/hour) and $538.80 annually 
(15 hours x $35.92/hour). The estimated cost across all 4,646 ASCs 
would be between $1,501,959 ($323.28/ASC x 4,646 ASCs) and $2,503,265 
($538.80/ASC x 4,646 ASCs) annually thereafter. We welcome comments on 
the estimated time to collect data and enter it into the NHSN as well 
as any additional costs associated with this measure.
---------------------------------------------------------------------------

    \447\ Section 321 of the National Childhood Vaccine Injury Act 
(NCVIA) provides the PRA waiver for activities that come under the 
NCVIA, including those in the NCVIA at section 2102 of the Public 
Health Service Act (42 U.S.C. 300aa-2). Section 321 is not codified 
in the U.S. Code, but can be found in a note at 42 U.S.C. 300aa-1.
---------------------------------------------------------------------------

    We anticipate that the proposals affecting the ASCQR Program in 
this proposed rule may impact the number of ASCs that will receive 
payment reductions.
6. Effects of Requirements for the RO Model
a. Financial Impact
    We have examined the impact of this proposed rule as required by 
Executive Order 12866 and other laws and Executive Orders, requiring 
economic analysis of the effects of final rules. We are proposing a 
different Model performance period than was finalized in the Hospital 
Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center 
(ASC) Payment Systems and Quality Reporting Programs final rule with 
comment period (CMS-1736-IFC) (85 FR 85866) (hereinafter referred to as 
``CY 2021 OPPS/ASC final rule''). We are also proposing an updated 
baseline period, lower discounts, the removal of brachytherapy from the 
included modalities, and the removal of liver cancer from the list of 
included cancer types finalized under the publication of the Medicare 
Program; Specialty Care Models to Improve Quality of Care and Reduce 
Expenditures Final Rule (Specialty Care Models final rule) (85 FR 
61114) on September 29, 2020. We have updated our net estimate of the 
RO Model impact to reflect all of the proposals in this proposed rule. 
Accordingly, we have prepared an RIA that, to the best of our ability, 
reflects the economic impact of the policies contained in this proposed 
rule.
b. Statement of Need for the Radiation Oncology (RO) Model
    The statement of need for the RO Model described in the Specialty 
Care Models final rule (85 FR 61347) and the CY 2021 OPPS/ASC final 
rule (85 FR 86296) remains unchanged with this proposed rule.
c. Impact of RO Model
    Based on the finalized policy of the Specialty Care Models final 
rule (85 FR 61114), we expected a savings of $230 million for Medicare 
over a 5-year model performance period. The CY 2021 OPPS/ASC final rule 
(85 FR 86296) included a savings estimate of $220 million for Medicare 
over a 4.5-year model performance period. We now expect that the 
proposals included in this proposed rule, which include a change to a 
revised model performance period that begins January 1, 2022 and ends 
December 31, 2026, a revised baseline period, the removal of 
brachytherapy and liver cancer, as well as the lowered discounts, will 
reduce savings to $160 million for Medicare.
d. Anticipated Effects
(1) Scale of the Radiation Oncology (RO) Model
    Revising the model performance period to begin January 1, 2022 
would not affect the number of PGPs or HOPDs we expect to furnish RT 
services in the simulated selected CBSAs. We currently expect the model 
performance period that begins January 1, 2022, and ends December 31, 
2026, will include approximately 282,000 episodes, 250,000 
beneficiaries, and $4.6 billion in total episode spending of allowed 
charges over the Model performance period. The revision is primarily 
the result of updated FFS Part B enrollment projections, slower assumed 
growth in RT episodes per patient, and minor technical changes to the 
projection process.
(2) Effects of the RO Model on the Medicare Program
(a) Overview
    Under the current FFS payment system, RT services are paid on a per 
service basis to both PGPs (including freestanding radiation therapy 
centers) and HOPDs through the PFS and the OPPS, respectively. The RO 
Model would be a mandatory model designed to test a prospectively 
determined episode payment for RT services furnished to Medicare 
beneficiaries during episodes initiated between January 1, 2022, and 
December 31, 2026.
(b) Data and Methods
    Similar to the analysis performed for the regulatory impact 
analysis for the Specialty Care Models final rule (85 FR 61347) and the 
CY 2021 OPPS/ASC final rule (85 FR 86296), a stochastic simulation 
based on the policies in this proposed rule was created to estimate the 
financial impacts of the RO Model relative to baseline expenditures.
(c) Medicare Estimate
    Table 78 summarizes the estimated impact of the RO Model with a 
model performance period that begins January 1, 2022, and ends December 
31, 2026. We estimate that on net the Medicare program would save $160 
million over the model performance period. As in the Specialty Care 
Models final rule (85 FR 61350) and the CY 2021 OPPS/ASC final rule (85 
FR 86297), this is the net Medicare Part B impact that includes both 
Part B premium and Medicare Advantage United States Per Capita Costs 
(MA USPCC) rate financing interaction effects. This estimate excludes 
changes in beneficiary cost sharing liability to the extent it is not a 
Federal outlay under the policy.
    As codified at Sec.  512.280(d), the APM incentive payment will 
apply only to the professional episode payment amounts and not the 
technical episode payment amounts. Moreover, due to the 2-year lag in 
Quality Payment Program performance and payment periods and quality 
data reporting starting in 2022, APM incentive payments will only be 
made during 2024. We are now projecting that 80 percent (down from 83 
percent as projected in the Specialty Care Models final rule) of 
physician participants (measured by unique NPI) would receive the APM 
incentive payment under the Quality Payment Program for 2022.

[[Page 42351]]

    Complete information regarding the data sources and underlying 
methodology used to determine amounts for reconciliation were not 
available at the time of this forecast. Like in the Specialty Care 
Models final rule, in the case of the incomplete payment withhold, we 
assume CMS retains payment only in the event that offsetting payment 
errors were made elsewhere. Moreover, past CMS experience in the and 
Hospital Value-Based Purchasing (VBP) and Merit-based Incentive Payment 
System (MIPS) programs that included value-based reporting requirements 
has shown a low rate of non-compliance on the part of providers and 
suppliers. Given the limited spending being withheld, scoring criteria, 
(that is the use of the Aggregate Quality Score (AQS) and its 
application to the quality withhold, as finalized at 85 FR 61226 
through 61231), and specified timeframes involved, we assume that 
quality and patient experience withholds, on net, would have a 
negligible financial impact to CMS.
    A key assumption underlying the impact estimate is that the volume 
and intensity (V&I) of the bundled services per episode remains 
unchanged between the baseline period and when bundled RO payments are 
made. If V&I were to decrease by 1.0 percent annually for the bundled 
services absent the RO Model, then we estimate the RO Model to be 
approximately budget neutral between January 1, 2022 and December 31, 
2026. Similarly, if V&I increases by 1.0 percent annually then net 
Medicare outlays would be reduced by $285 million for this projection 
period. Although V&I growth from 2014 through 2019 fell within this 1.0 
percent range and did not exhibit a secular trend, actual experience 
may differ. Please also note that due to the current public health 
crisis caused by the COVID-19 virus, the forecasted impacts for the RO 
Model are subject to an additional level of uncertainty. The duration 
of the current COVID-19 pandemic, its severity, and future policy 
measures taken in response are variables that are significant but 
unknown at this time. This forecast assumes that Medicare FFS billing 
and treatment patterns for beneficiaries observed during the 2017 to 
2019 baseline period resume by the start of 2022. To the extent that 
this assumption does not hold, actual experience may vary 
significantly. Table 78 summarizes our estimated impacts of this 
proposed rule.
[GRAPHIC] [TIFF OMITTED] TP04AU21.132

e. Effects on RO Participants
    We believe that the proposed changes will not affect the total cost 
of learning the billing system for the RO Model but will, however, 
affect the burden estimate for reporting quality measures and clinical 
data elements.
    We believe the burden estimate for quality measure and clinical 
data element reporting requirements that is provided for Small 
Businesses in CY 2021 OPPS/ASC final rule (85 FR 86297) apply to RO 
participants that are not considered small entities. The burden 
estimate for collecting and reporting quality measures and clinical 
data for the RO Model may be equal to or less than that for small 
businesses, which we estimate to be approximately $1,845 per entity per 
year based on 2020 wages. Since we estimate approximately 500 
Professional participants and Dual participants will be collecting and 
reporting this data, the total annual burden estimate for collecting 
and reporting quality measures and clinical data is approximately 
$922,500 for a total of $4,612,500 over 5 years.
f. Regulatory Flexibility Act (RFA)
    In the Medicare Specialty Models final rule, we provided an 
analysis for the RO Model's impact on small businesses based on the 
finalized policies (85 FR 61358). The policies proposed in this 
proposed rule do not change those estimates.
    Like the Medicare Specialty Models final rule (85 FR 61358), this 
proposed rule affects: (1) Radiation oncology PGPs that furnish RT 
services in both freestanding radiation therapy centers and HOPDs; (2) 
PGPs that furnish RT

[[Page 42352]]

services only in HOPDs; (3) PGPs that are categorized as freestanding 
radiation therapy centers; and (4) HOPDs. Based on the proposed 
modifications to the design of the RO Model, we believe that on 
average, Medicare FFS payments to PGPs will increase by 5.5 percent and 
Medicare FFS payments to HOPDs will be reduced by 9.6 percent over the 
life of the Model. Under Medicare FFS, PGPs are largely paid through 
the PFS for RT services while HOPDs are paid through the OPPS. Unit-
cost increases under the PFS are projected to be lower than under the 
OPPS over time. This means that when the payment rates of the PFS and 
the OPPS (along with the volume of HCPCS codes of non-participant 
episodes) are used to determine the trend factors for each cancer type, 
PGPs, on average, are projected to experience incremental gains to 
payment over time, while HOPDs, on average, are projected to experience 
incremental losses to payment over time. In other words, the impact for 
HOPDs and PGPs depends on a combination of the RO Model's discount 
factor and the RO Model's trend factor, which blends the latest OPPS 
and PFS payment rates based on their historical claims volume in non-
participating RT providers and RT suppliers. Given that PFS rates are 
not expected to increase between 2019 and 2026 and the OPPS rates are, 
blending these rates together leads to an average increase in allowed 
charges expected for PGPs and an average decrease in allowed charges 
expected for HOPDs (because HOPDs that are RO participants will not get 
the full OPPS rate increase but rather a trend that blends OPPS with 
PFS). Table 79 provides additional information about the expected 
impacts by year:
[GRAPHIC] [TIFF OMITTED] TP04AU21.133

    We believe that this impact would be reduced for smaller RO 
participants, those RO participants that are eligible for the low 
volume opt-out in some performance years, and that there would be no 
impact for those RO participants that are eligible for the low volume 
opt-out for the entire model performance period (See section 
XVIII.C.3.d.).
7. Effects of Requirements for Hospitals To Make Public a List of Their 
Standard Charges
    In this proposed rule, we are proposing a modification to 45 CFR 
180.30(b) and adding new Sec.  180.30(b)(3) to include that State 
forensic hospitals will deemed to have met requirements, similar to our 
policy to deem Federally owned/operated hospitals as having met 
compliance. These State forensic hospitals and have closed populations, 
are not open to the general public, and the cost of care is funded by 
the state. This proposal will reduce the overall burden we estimated in 
the Hospital Price Transparency final rule by removing such hospitals 
from the obligation to make public standard charges in the form and 
manner prescribed by the Secretary.
    In the Hospital Price Transparency final rule, we estimated the 
total burden for hospitals to review and post their standard charges 
for the first year to be 150 hours per hospital at $11,898.60 per 
hospital for a total burden of 900,300 hours (150 hours x 6,002 
hospitals) and total cost of $71,415,397 ($11,898.60 x 6,002 hospitals) 
(84 FR 65595). We estimated the total annual burden for hospitals to 
review and post their standard charges for subsequent years to be 46 
hours per hospital at $3,610.88 per hospital for a total annual burden 
for subsequent years of 276,092 hours (46 hours x 6,002 hospitals) and 
total annual cost of $21,672,502 ($3,610.88 x 6,002 hospitals). For 
purposes of the proposed changes in this rule, we assume that state 
forensic hospitals have complied with the Hospital Price Transparency 
final rule requirements in the first year of implementation (CY 2021) 
and are therefore basing our burden reduction estimate on the cost of 
implementation for subsequent years alone. In other words, because 
state forensic hospitals would no longer be required to make the annual 
updates as required under the Hospital Price Transparency final rule, 
the burden reduction applies to CY 2022 and subsequent years.
    We estimate that 111 \448\ hospitals would meet our definition of 
`State forensic hospital'. To estimate the associated burden reduction 
for State forensic hospitals, we used the hourly cost for each labor 
category by referencing Bureau of Labor Statistics report on 
Occupational Employment and Wages (May 2020), as indicated in Table 
80.\449\
---------------------------------------------------------------------------

    \448\ SAMHSA. National Mental Health Services Survey (N-MHSS): 
2019 Data on Mental Health Treatment Facilities. https://www.samhsa.gov/data/sites/default/files/reports/rpt29388/2019_NMHSS/2019-NMHSS-R.pdf.
    \449\ Bureau of Labor Statistics. National Occupational 
Employment and Wage Estimates, May 2020. Available at https://www.bls.gov/oes/current/oes_nat.htm.

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

[[Page 42353]]

[GRAPHIC] [TIFF OMITTED] TP04AU21.134

    We estimate a reduction in burden of 2 hours for a general 
operations manager to review and determine updates in compliance 
requirements, or a savings of $241.80 (2 hours * $120.90) per hospital. 
We estimate a total burden reduction of 222 hours (2 hours * 111 
hospitals) with a total burden reduction $26,839.80 (222 hours * 
$120.90).
    Next, we estimate a reduction in burden of 32 hours for a business 
operations specialist because they will no longer be required to update 
necessary processes and procedures and gather and compile required 
information, a savings of $2,410.24 (32 hours * $75.32) per hospital. 
We estimate a total burden reduction of 3,552 hours (32 hours * 111 
hospitals) with a total burden reduction $267,536.64 (3,552 hours * 
$75.32).
    Finally, we estimate a reduction in burden of 12 hours for network 
and computer system administrator because they will no longer be 
required to maintain the required systems to make this data publicly 
available, a savings of $1,032.24 (12 hours * $86.02) per hospital. We 
estimate a total burden reduction of 1,332 hours (12 hours * 111 
hospitals) with a total burden reduction $114,578.64 (1,332 hours * 
$86.02).
    Therefore, we believe the total annual burden reduction for the 
proposal in this rule, for subsequent years, to be 46 hours (2 hours + 
32 hours + 12 hours) per hospital, with a savings of $3,684.28 ($241.80 
+ $2,410.24 + $1,032.24) per hospital. We also estimate a total annual 
burden reduction for subsequent years of 5,106 hours (46 hours * 111 
hospitals) and a total cost of $408,955.08 ($3,684.28 * 111 hospitals), 
as shown in Table 81.
[GRAPHIC] [TIFF OMITTED] TP04AU21.135

D. Regulatory Review Costs

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret a rule, we should 
estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review a rule, we assumed that the number of commenters on 
this CY 2022 OPPS/ASC proposed rule (1,349) will be the number of 
reviewers of this proposed rule. We acknowledge that this assumption 
may understate or overstate the costs of reviewing proposed rule. It is 
possible that not all commenters will review the proposed rule in 
detail, and it is also possible that some reviewers will choose not to 
comment on the proposed rule. Nonetheless, we believe that the number 
of commenters on the CY 2022 OPPS/ASC proposed rule is a fair estimate 
of the number of reviewers of the proposed rule. We welcome any 
comments on the approach in estimating the number of entities that will 
review the proposed rule. We also recognize that different types of 
entities are, in many cases, affected by mutually exclusive sections of 
the proposed rule and the final rule with comment period, and, 
therefore, for the purposes of our estimate, we assumed that each 
reviewer reads approximately 50 percent of the rule.
    Using the wage information from the 2019 BLS for medical and health 
service managers (Code 11-9111), we estimated that the cost of 
reviewing this rule is $110.74 per hour, including overhead and fringe 
benefits (https://www.bls.gov/oes/current/oes_nat.htm). Assuming an 
average reading speed, we estimate that it will take approximately 8 
hours for the staff to review half of proposed rule. For each facility 
that reviewed the proposed rule, the estimated cost is $885.92 (8 hours 
x $110.74). Therefore, we estimated that the total cost of reviewing 
the proposed rule is

[[Page 42354]]

$1,195,106 ($885.92 x 1,349 reviewers on the CY 2022 proposed rule).

E. Regulatory Flexibility Act (RFA) Analysis

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, many hospitals are 
considered small businesses either by the Small Business 
Administration's size standards with total revenues of $41.5 million or 
less in any single year or by the hospital's not-for-profit status. 
Most ASCs and most CMHCs are considered small businesses with total 
revenues of $16.5 million or less in any single year. For details, we 
refer readers to the Small Business Administration's ``Table of Size 
Standards'' at http://www.sba.gov/content/table-small-business-size-standards. As its measure of significant economic impact on a 
substantial number of small entities, HHS uses a change in revenue of 
more than 3 to 5 percent. We do not believe that this threshold will be 
reached by the requirements in this proposed rule. As a result, the 
Secretary has determined that this proposed rule will not have a 
significant impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has 100 or fewer beds. We estimate that this 
proposed rule would increase payments to small rural hospitals by 
approximately 3 percent; therefore, it should not have a significant 
impact on approximately 586 small rural hospitals. We note that the 
estimated payment impact for any category of small entity will depend 
on both the services that they provide as well as the payment policies 
and/or payment systems that may apply to them. Therefore, the most 
applicable estimated impact may be based on the specialty, provider 
type, or payment system.
    The analysis above, together with the remainder of this preamble, 
provides a regulatory flexibility analysis and a regulatory impact 
analysis.

F. Unfunded Mandates Reform Act Analysis

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2021, that 
threshold level is currently approximately $175 million. This proposed 
rule does not mandate any requirements for state, local, or tribal 
governments, or for the private sector.

G. Conclusion

    The changes we are making in this proposed rule will affect all 
classes of hospitals paid under the OPPS and will affect both CMHCs and 
ASCs. We estimate that most classes of hospitals paid under the OPPS 
will experience a modest increase or a minimal decrease in payment for 
services furnished under the OPPS in CY 2022. Table 71 demonstrates the 
estimated distributional impact of the OPPS budget neutrality 
requirements that would result in a 1.8 percent increase in payments 
for all services paid under the OPPS in CY 2022, after considering all 
of the changes to APC reconfiguration and recalibration, as well as the 
OPD fee schedule increase factor, wage index changes, including the 
frontier State wage index adjustment, estimated payment for outliers, 
and changes to the pass-through payment estimate. However, some classes 
of providers that are paid under the OPPS would experience more 
significant gains or losses in OPPS payments in CY 2022.
    The updates we propose to the ASC payment system for CY 2022 would 
affect each of the approximately 5,600 ASCs currently approved for 
participation in the Medicare program. The effect on an individual ASC 
would depend on its mix of patients, the proportion of the ASC's 
patients who are Medicare beneficiaries, the degree to which the 
payments for the procedures offered by the ASC are changed under the 
ASC payment system, and the extent to which the ASC provides a 
different set of procedures in the coming year. Table 72 demonstrates 
the estimated distributional impact among ASC surgical specialties of 
the productivity-adjusted hospital market basket update factor of 2.3 
percent for CY 2022.

H. Federalism Analysis

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct costs on state and local 
governments, preempts State law, or otherwise has federalism 
implications. We have examined the OPPS and ASC provisions included in 
this proposed rule in accordance with Executive Order 13132, 
Federalism, and have determined that they will not have a substantial 
direct effect on state, local or tribal governments, preempt State law, 
or otherwise have a federalism implication. As reflected in Table 71 of 
this proposed rule, we estimate that OPPS payments to governmental 
hospitals (including state and local governmental hospitals) will 
increase by 2.3 percent under this proposed rule. While we do not know 
the number of ASCs or CMHCs with government ownership, we anticipate 
that it is small. The analyses we have provided in this section of this 
proposed rule, in conjunction with the remainder of this document, 
demonstrate that this proposed rule is consistent with the regulatory 
philosophy and principles identified in Executive Order 12866, the RFA, 
and section 1102(b) of the Act.
    This proposed rule will affect payments to a substantial number of 
small rural hospitals and a small number of rural ASCs, as well as 
other classes of hospitals, CMHCs, and ASCs, and some effects may be 
significant.
    I, Chiquita Brooks-LaSure, Administrator of the Centers for 
Medicare & Medicaid Services, approved this document on July 16, 2021.

List of Subjects

42 CFR Part 412

    Administrative practice and procedure, Health facilities, Medicare, 
Puerto Rico, Reporting and recordkeeping requirements.

42 CFR Part 416

    Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements.

42 CFR Part 419

    Hospitals, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 512

    Administrative practice and procedure, Health facilities, Medicare, 
Reporting and recordkeeping requirements.

45 CFR Part 180

    Hospitals, Reporting and recordkeeping requirements.

Centers for Medicare & Medicaid Services

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

[[Page 42355]]

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL 
SERVICES

0
1. The authority citation for part 412 continues to read as follows:

    Authority: 42 U.S.C. 1302 and 1395hh.

0
2. Section 412.3 is amended by revising paragraph (d)(2)(i) to read as 
follows:


Sec.  412.3   Admissions.

* * * * *
    (d) * * *
    (2) * * *
    (i) For those services and procedures removed on or after January 
1, 2020, the exemption in this paragraph (d)(2) will last for 2 years 
from the date of such removal.
* * * * *

PART 416--AMBULATORY SURGICAL SERVICES

0
3. The authority citation for part 416 continues to read as follows:

    Authority:  42 U.S.C. 1302 and 1395hh.

0
4. Section 416.164 is amended by revising paragraphs (a)(4) and (b)(6) 
to read as follows:


Sec.  416.164   Scope of ASC services.

    (a) * * *
    (4) Drugs and biologicals for which separate payment is not allowed 
under the hospital outpatient prospective payment system (OPPS), with 
the exception of non-opioid pain management drugs and biologicals that 
function as a supply when used in a surgical procedure as determined by 
CMS under Sec.  416.174;
* * * * *
    (b) * * *
    (6) Non-opioid pain management drugs and biologicals that function 
as a supply when used in a surgical procedure as determined by CMS 
under Sec.  416.174.
* * * * *
0
5. Section 416.166 is revised to read as follows:


Sec.  416.166   Covered surgical procedures.

    (a) Covered surgical procedures. Effective for services furnished 
on or after January 1, 2022, covered surgical procedures are those 
procedures that meet the general standards described in paragraph (b) 
of this section (whether commonly furnished in an ASC or a physician's 
office) and are not excluded under paragraph (c) of this section.
    (b) General standards. Subject to the exclusions in paragraph (c) 
of this section, covered surgical procedures are surgical procedures 
specified by the Secretary and published in the Federal Register and/or 
via the internet on the CMS website that are separately paid under the 
OPPS, that would not be expected to pose a significant safety risk to a 
Medicare beneficiary when performed in an ASC, and for which standard 
medical practice dictates that the beneficiary would not typically be 
expected to require active medical monitoring and care at midnight 
following the procedure.
    (c) General exclusions. Notwithstanding paragraph (b) of this 
section, covered surgical procedures do not include those surgical 
procedures that--
    (1) Generally result in extensive blood loss;
    (2) Require major or prolonged invasion of body cavities;
    (3) Directly involve major blood vessels;
    (4) Are generally emergent or life-threatening in nature;
    (5) Commonly require systemic thrombolytic therapy;
    (6) Are designated as requiring inpatient care under Sec.  
419.22(n) of this chapter;
    (7) Can only be reported using a CPT unlisted surgical procedure 
code; or
    (8) Are otherwise excluded under Sec.  411.15 of this chapter.
    (d) Additions to the list of ASC covered surgical procedures. 
Surgical procedures are added to the list of ASC covered surgical 
procedures as follows:
    (1) Nominations. On or after January 1, 2023, an external party may 
nominate a surgical procedure by March 1 of a calendar year for the 
list of ASC covered surgical procedures for the following calendar 
year.
    (2) Inclusion in rulemaking. If CMS identifies a surgical procedure 
that meets the requirements at paragraph (a) of this section, including 
a surgical procedure nominated under paragraph (d)(1) of this section, 
it will propose to add the surgical procedure to the list of ASC 
covered surgical procedures in the next available annual rulemaking.
0
6. Section 416.171 is amended by revising paragraphs (b)(1) and (4) to 
read as follows:


Sec.  416.171   Determination of payment rates for ASC services.

* * * * *
    (b) * * *
    (1) Covered ancillary services specified in Sec.  416.164(b), with 
the exception of radiology services and certain diagnostic tests as 
provided in Sec.  416.164(b)(5) and non-opioid pain management drugs 
and biologicals that function as a supply when used in a surgical 
procedure as determined by CMS under Sec.  416.174.
* * * * *
    (4) Notwithstanding paragraph (b)(2) of this section, procedures 
assigned to Low Volume APCs where the otherwise applicable payment rate 
calculated based on the standard methodology for such procedures 
described in paragraph (b) of this section would exceed the payment 
rate for the equivalent service set under the payment system 
established under part 419 of this chapter, for which the payment rate 
will be set at an amount equal to the amount under that payment system.
* * * * *
0
7. Section 416.174 is added to reads as follows:


Sec.  416.174   Payment for non-opioid pain management drugs and 
biologicals that function as supplies in surgical procedures.

    (a) Eligibility for separate payment for non-opioid pain management 
drugs and biologicals. Beginning on or after January 1, 2022, a non-
opioid pain management drug or biological that functions as a surgical 
supply is eligible for separate payment if CMS determines it meets the 
following requirements:
    (1) The drug is approved under a new drug application under section 
505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), generic drug 
application under an abbreviated new drug application under section 
505(j), or, in the case of a biological product, is licensed under 
section 351 of the Public Health Service Act. The product has an FDA 
approved indication for pain management or analgesia.
    (2) The per-day cost of the drug or biological must exceed the OPPS 
drug packaging threshold set annually through notice and comment 
rulemaking.
    (b) [Reserved]

PART 419--PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT 
DEPARTMENT SERVICES

0
8. The authority citation for part 419 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395l(t), and 1395hh.

0
9. Section 419.22 is amended by revising paragraph (n) to read as 
follows:


Sec.  419.22   Hospital services excluded from payment under the 
hospital outpatient prospective payment system.

* * * * *
    (n) Services and procedures that the Secretary designates as 
requiring inpatient care.
* * * * *

[[Page 42356]]

0
10. Section 419.23 is added to read as follows:


Sec.  419.23   Removal of services and procedures from the Inpatient 
Only List.

    (a) Inpatient Only List. CMS maintains a list of services and 
procedures that the Secretary designates as requiring inpatient care 
under Sec.  419.22(n) that are not paid under the hospital outpatient 
prospective payment system. This list is referred to as the Inpatient 
Only List.
    (b) Removals from the Inpatient Only List. CMS assesses annually 
whether a service or procedure on the Inpatient Only List described in 
paragraph (a) of this section should be removed from the list by 
determining whether the service or procedure meets at least one of the 
following criteria:
    (1) Most outpatient departments are equipped to provide the service 
or procedure to the Medicare population.
    (2) The simplest service or procedure described by the code may be 
performed in most outpatient departments.
    (3) The service or procedure is related to codes that CMS has 
already removed from the Inpatient Only List described in paragraph (a) 
of this section.
    (4) CMS determines that the service or procedure is being performed 
in numerous hospitals on an outpatient basis.
    (5) CMS determines that the service or procedure can be 
appropriately and safely performed in an ambulatory surgical center, 
and is specified as a covered ambulatory surgical procedure under Sec.  
416.166 of this chapter, or CMS has proposed to specify it as a covered 
ambulatory surgical procedure under Sec.  416.166 of this chapter.
0
11. Section 419.46 is amended by revising paragraphs (f)(1) and (3) to 
read as follows:


Sec.  419.46   Participation, data submission, and validation 
requirements under the Hospital Outpatient Quality Reporting (OQR) 
Program.

* * * * *
    (f) * * *
    (1) Upon written request by CMS or its contractor, a hospital must 
submit to CMS supporting medical record documentation that the hospital 
used for purposes of data submission under the program. The specific 
sample that a hospital must submit will be identified in the written 
request. A hospital must submit the supporting medical record 
documentation to CMS or its contractor within 30 days of the date 
identified on the written request, in the form and manner specified in 
the written request.
* * * * *
    (3) CMS will select a random sample of 450 hospitals for validation 
purposes, and will select an additional 50 hospitals for validation 
purposes based on the following criteria:
    (i) The hospital fails the validation requirement that applies to 
the previous year's payment determination; or
    (ii) The hospital has an outlier value for a measure based on the 
data it submits. An ``outlier value'' is a measure value that is 
greater than 5 standard deviations from the mean of the measure values 
for other hospitals, and indicates a poor score; or
    (iii) Any hospital that has not been randomly selected for 
validation in any of the previous 3 years; or
    (iv) Any hospital that passed validation in the previous year, but 
had a two-tailed confidence interval that included 75 percent.
* * * * *

PART 512--RADIATION ONCOLOGY MODEL AND END STAGE RENAL DISEASE 
TREATMENT CHOICES MODEL

0
12. The authority citation for part 512 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1315a, and 1395hh.

0
13. Section 512.205 is amended by:
0
a. Adding the definition for ``Baseline period'' in alphabetical order;
0
b. Revising the definition for ``Discount factor'';
0
c. Adding definitions for ``EUC'', ``Legacy CCN'', and ``Legacy TIN'' 
in alphabetical order;
0
d. Revising the definition for ``Model performance period'';
0
e. Removing the definition of ``Performance year (PY)'';
0
f. Revising the definition for ``PY'' and ``Stop-loss reconciliation 
amount''; and
0
g. Adding definitions for ``Track One'' and ``Track Two'' in 
alphabetical order.
    The additions and revisions read as follows:


Sec.  512.205   Definitions.

* * * * *
    Baseline period means the three calendar year period that begins on 
January 1 no fewer than five years but no more than six years prior to 
the start of the model performance period during which episodes must 
initiate in order to be used in the calculation of the national base 
rates, each RO participant's historical experience adjustment for the 
PC or TC or both for the model performance period, and the RO 
participant's case mix adjustment for the PC or TC or both for PY1. The 
baseline period is January 1, 2017 through December 31, 2019, unless 
the RO Model is prohibited by law from starting in calendar year (CY) 
2022, in which case the baseline period will be delayed based on the 
new model performance period (for example, if the model performance 
period starts any time in CY 2023, then the baseline period would be CY 
2018 through CY 2020).
* * * * *
    Discount factor means the percentage by which CMS reduces payment 
of the professional component and technical component.
    (1) The reduction of payment occurs after the trend factor, the 
geographic adjustment, and the RO Model-specific adjustments have been 
applied, but before beneficiary cost-sharing and standard CMS 
adjustments, including sequestration, have been applied.
    (2) The discount factor does not vary by cancer type.
    (3) The discount factor for the professional component is 3.5 
percent; the discount factor for the technical component is 4.5 
percent.
* * * * *
    EUC stands for ``extreme and uncontrollable circumstance'' and 
means a circumstance that is beyond the control of one or more RO 
participants, adversely impacts such RO participants' ability to 
deliver care in accordance with the RO Model's requirements, and 
affects an entire region or locale.
* * * * *
    Legacy CCN means a CMS certification number (CCN) that an RO 
participant that is a hospital outpatient department (HOPD) or its 
predecessor(s) previously used to bill Medicare for included 
radiotherapy (RT) services but no longer uses to bill Medicare for 
included RT services.
    Legacy TIN means a taxpayer identification number (TIN) that an RO 
participant that is a PGP, or a freestanding radiation therapy center, 
or its predecessor(s) previously used to bill Medicare for included RT 
services but no longer uses to bill Medicare for included RT services.
* * * * *
    Model performance period means the five performance years (PYs) 
during which RO episodes must initiate and terminate. The model 
performance period begins on January 1, 2022 and ends on December 31, 
2026, unless the RO Model is prohibited by law from starting on January 
1, 2022, in which case the model performance period begins on the 
earliest date permitted by law that is January 1, April 1, or July 1.
* * * * *
    PY stands for performance year and means each 12-month period 
beginning on January 1 and ending on December 31 during the model 
performance

[[Page 42357]]

period, unless the model performance period begins on a date other than 
January 1, in which case, the first performance year (PY1) begins on 
that date and ends on December 31 of the same year.
* * * * *
    Stop-loss reconciliation amount means the amount set forth in Sec.  
512.285(f) owed by CMS for the loss incurred under the Model to RO 
participants that have fewer than 60 episodes during the baseline 
period and were furnishing included RT services any time before the 
start of the model performance period in the CBSAs selected for 
participation.
* * * * *
    Track One means an Advanced APM and MIPS APM track for Dual 
participants and Professional participants that meet all RO Model 
requirements as specified in Sec.  512.220, including use of CEHRT.
    Track Two means an APM for Dual participants and Professional 
participants who do not meet the RO Model requirements set forth at 
Sec.  512.220; and for all Technical participants.
* * * * *
0
14. Section 512.210 is amended by--
0
a. Revising paragraphs (a) and (b)(5).
0
b. Adding paragraph (b)(6);
0
c. Revising paragraph (c); and
0
d. Adding paragraph (e).
    The revisions and additions read as follows:


Sec.  512.210   RO participants and geographic areas.

    (a) RO participants. Unless otherwise specified in paragraph (b) or 
(c) of this section, any Medicare-enrolled PGP, freestanding radiation 
therapy center, or HOPD that furnishes included RT services in a 5-
digit ZIP Code linked to a CBSA selected for participation to an RO 
beneficiary for an RO episode that begins and ends during the model 
performance period must participate in the RO Model.
    (b) * * *
    (5) Participates in the Pennsylvania Rural Health Model; or
    (6) Participates in the Community Transformation Track of the 
Community Health Access and Rural Transformation (CHART) Model as a 
participating hospital.
    (c) Low volume opt-out. A PGP, freestanding radiation therapy 
center, or HOPD that would otherwise be required to participate in the 
RO Model may choose to opt-out of the RO Model as follows:
    (1) If the PGP, freestanding radiation therapy center, or HOPD 
furnished fewer than 20 episodes in the calendar year that is two years 
prior to the start of PY1 across all CBSAs selected for participation, 
it may opt out of the RO Model for PY1.
    (2) If the PGP, freestanding radiation therapy center, or HOPD 
furnished fewer than 20 episodes in the calendar year that is two years 
prior to the start of PY2 across all CBSAs selected for participation, 
it may opt out of the RO Model for PY2.
    (3) If the PGP, freestanding radiation therapy center, or HOPD 
furnished fewer than 20 RO episodes in PY1 across all CBSAs selected 
for participation, and PY1 begins on January 1, it may choose to opt 
out of the RO Model for PY3. In the event that PY1 begins on a date 
other than January 1, the PGP, freestanding radiation therapy center, 
or HOPD may opt-out of the RO Model for PY3 if the total number of 
furnished episodes of the calendar year in which PY1 began and RO 
episodes in PY1 is fewer than 20 across all CBSAs selected for 
participation.
    (4) If the PGP, freestanding radiation therapy center, or HOPD 
furnished fewer than 20 RO episodes in PY2 across all CBSAs selected 
for participation, it may opt out of the RO Model for PY4.
    (5) If the PGP, freestanding radiation therapy center, or HOPD 
furnished fewer than 20 RO episodes in PY3 across all CBSAs selected 
for participation, it may opt out of the RO Model for PY5.
    (6) At least 30 days prior to the start of each PY, CMS provides 
notice to RO participants eligible for the low volume opt-out for the 
upcoming PY of such eligibility. The RO participant must attest that it 
intends to opt out of the RO Model prior to the start of the upcoming 
PY.
    (7) An entity is not eligible for the low-volume opt out if its 
current TIN or CCN, or its legacy TIN or legacy CCN, or both were used 
to bill Medicare for 20 or more episodes or RO episodes, as applicable, 
of RT services in the two years prior to the applicable PY across all 
CBSAs selected for participation.
* * * * *
    (e) Notice of change in TIN or CCN. An RO participant must furnish 
written notice to CMS in a form and manner specified by CMS at least 90 
days before the effective date of any change in TIN or CCN that is used 
to bill Medicare.
0
15. Section 512.217 is amended--
0
 a. By revising paragraphs (a), (b), and (c)(1);
0
 b. In paragraph (c)(3)(i) by removing the word ``and'' at the end of 
the paragraph;
0
 c. In paragraph (c)(3)(ii) by removing the period at the end of the 
paragraph and adding ``; and'' in its place;
0
 d. By adding paragraph (c)(3)(iii); and
0
 e. By revising paragraphs (d)(1)(i) and (d)(2)(i).
    The revisions and addition read as follows:


Sec.  512.217   Identification of individual practitioners.

    (a) General. Upon the start of each PY, CMS creates and provides to 
each RO participant that is a PGP or a freestanding radiation therapy 
center an individual practitioner list identifying by NPI each 
individual practitioner associated with the RO participant. For RO 
participants that begin participation in the RO Model after the start 
of a PY, but at least 30 days prior to the last QP determination date 
as specified at Sec.  414.1325 of this chapter, CMS creates and 
provides an individual practitioner list to that RO participant.
    (b) Review of individual practitioner list. Up until the last QP 
determination date as specified at Sec.  [thinsp]414.1325 of this 
chapter, the RO participant must review and certify the individual 
practitioner list, correct any inaccuracies in accordance with 
paragraph (d) of this section, and certify the list (as corrected, if 
applicable) in a form and manner specified by CMS and in accordance 
with paragraph (c) of this section. The RO participant may correct any 
inaccuracies in their individual practitioner list until the last QP 
determination date as specified at Sec.  414.1325 of this chapter. Any 
Dual participant, Professional participant, or Technical participant 
that is a freestanding radiation therapy center and joins the RO Model 
after the start of a PY must review and certify its individual 
practitioner list by the last QP determination date as specified at 
Sec.  414.1325 of this chapter.
    (c) * * *
    (1) Up until the last QP determination date as specified at Sec.  
414.1325 of this chapter, an individual with the authority to legally 
bind the RO participant must certify the accuracy, completeness, and 
truthfulness of the individual practitioner list to the best of his or 
her knowledge, information, and belief.
* * * * *
    (3) * * *
    (iii) Technical participants that are freestanding radiation 
therapy centers are not eligible to receive Improvement Activity credit 
for their participation in the RO Model under MIPS.
    (d) * * *
    (1) * * *

[[Page 42358]]

    (i) An RO participant must notify CMS of an addition to its 
individual practitioner list when an eligible clinician reassigns his 
or her rights to receive payment from Medicare to the RO participant. 
The notice must be submitted in the form and manner specified by CMS up 
until the last QP determination date as specified at Sec.  414.1325 of 
this chapter.
* * * * *
    (2) * * *
    (i) An RO participant must notify CMS when an individual on the RO 
participant's individual practitioner list ceases to be an individual 
practitioner up until the last QP determination date as specified at 
Sec.  414.1325 of this chapter. The notice must be submitted in the 
form and manner specified by CMS.
* * * * *
0
16. Section 512.220 is amended by revising paragraphs (a)(1) and (b) to 
read as follows:


Sec.  512.220   RO participant compliance with RO Model requirements.

    (a) * * *
    (1) RO participants must satisfy the requirements of this section 
to be included in Track One under the RO Model. RO participants that do 
not meet these RO Model requirements in a PY will be in Track Two for 
the applicable PY.
* * * * *
    (b) CEHRT. (1) RO participants must use CEHRT, and ensure that 
their individual practitioners use CEHRT, in a manner sufficient to 
meet the applicable requirements of the Advanced APM criteria as 
specified at Sec.  414.1415(a)(1)(i) of this chapter.
    (2) Within 30 days of the start of PY1 and each subsequent PY, the 
RO participant must certify its use of CEHRT throughout such PY in a 
manner sufficient to meet the requirements set forth in Sec.  
414.1415(a)(1)(i) of this chapter.
    (3) An RO participant that joins the RO Model at any time during an 
ongoing PY must certify their use of CEHRT by the last QP determination 
date as specified at Sec.  414.1325 of this chapter.
0
17. Section 512.230 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  512.230   Criteria for determining cancer types.

    (a) Included cancer types. CMS includes in the RO Model cancer 
types that satisfy the following criteria:
    (1) The cancer type is commonly treated with radiation per 
nationally recognized, evidence-based clinical treatment guidelines;
    (2) The cancer type has one or more associated current ICD-10 codes 
that have demonstrated pricing stability; and
    (3) The Secretary has not determined that the cancer type is not 
suitable for inclusion in the RO Model.
    (b) Removing cancer types. CMS removes cancer types in the RO Model 
if it determines:
    (1) That there is a >=10 percent error in established national base 
rates; or
    (2) The cancer type does not meet the criteria set forth in 
paragraph (a) of this section.
* * * * *
0
18. Section 512.240 is revised to read as follows:


Sec.  512.240   Included modalities.

    The modalities included in the RO Model are 3-dimensional conformal 
RT (3DCRT), intensity-modulated RT (IMRT), stereotactic radiosurgery 
(SRS), stereotactic body RT (SBRT), proton beam therapy (PBT), and 
image-guided radiation therapy (IGRT).
0
19. Section 512.245 is amended by revising paragraph (a) to read as 
follows:


Sec.  512.245   Included RO episodes.

    (a) General. Any RO episode that begins on or after the first day 
of the model performance period and ends on or before the last day of 
the model performance period is included in the model performance 
period.
* * * * *
0
20. Section 512.250 is amended by revising (b)(1) and (2) to read as 
follows:


Sec.  512.250   Determination of national base rates.

* * * * *
    (b) * * *
    (1) CMS excludes from episode pricing and RO episode pricing any 
claim containing an RT service furnished:
    (i) In Maryland, Vermont, or any of the U.S. Territories;
    (ii) In the inpatient setting;
    (iii) By an entity classified as an ASC, CAH, or PPS-exempt cancer 
hospital; or
    (iv) By an HOPD participating in the Pennsylvania Rural Health 
Model at the time the RT service was furnished.
    (2) CMS excludes the following episodes from the determination of 
the national base rates:
    (i) Episodes that are not linked to a CBSA selected for 
participation in the RO Model;
    (ii) Episodes that are not attributed to an RT provider or RT 
supplier;
    (iii) Episodes that are not assigned an included cancer type; or
    (iv) Episodes for which the total allowed amount for RT services 
listed on claims used to calculate an episode's payment amount is not 
greater than $0.
* * * * *
0
21. Section 512.255 is amended by--
0
a. Revising paragraphs (c)(7), (8), and (10), (c)(12)(iv), and (c)(13); 
and
0
b. Adding paragraph (c)(14).
    The revisions and addition read as follows:


Sec.  512.255   Determination of participant-specific professional 
episode payment and participant-specific technical episode payment 
amounts.

* * * * *
    (c) * * *
    (7) Adjustments for RO participants with fewer than 60 episodes 
during the baseline period. (i) RO participants that have fewer than 60 
episodes in the baseline period do not receive a historical experience 
adjustment during the model performance period.
    (ii) RO participants that have fewer than 60 episodes in the 
baseline period do not receive a case mix adjustment for PY1.
    (iii) RO participants described in paragraph (c)(7)(ii) of this 
section that continue to have fewer than 60 episodes in the rolling 3-
year period used to determine the case mix adjustment for each PY and 
that have never received a case mix adjustment do not receive a case 
mix adjustment for that PY.
    (iv) RO participants that have fewer than 60 episodes in the 
baseline period and were furnishing included RT services in the CBSAs 
selected for participation before the start of the model performance 
period are eligible to receive a stop-loss reconciliation amount, if 
applicable, as described in Sec.  512.285(f).
    (8) Discount factor. CMS reduces each episode payment by the 
discount factor after applying the trend factor, geographic adjustment, 
and case mix and historical experience adjustments to the national base 
rate.
* * * * *
    (10) Quality withhold. In accordance with Sec.  414.1415(b)(1) of 
this chapter, CMS withholds 2 percent from each professional episode 
payment after applying the trend factor, geographic adjustment, case 
mix and historical experience adjustments, and discount factor to the 
national base rate. RO participants may earn back this withhold, in 
part or in full, based on their AQS.
* * * * *
    (12) * * *
    (iv) In the case of incomplete episodes, the beneficiary 
coinsurance payment equals 20 percent of the FFS amounts that would 
have been paid in the absence of the RO Model for the

[[Page 42359]]

services furnished by the RO participant that initiated the PC and the 
RO participant that initiated the TC (if applicable).
* * * * *
    (13) Sequestration. In accordance with applicable law, CMS deducts 
a percentage from each episode payment after applying the trend factor, 
geographic adjustment, case mix and historical experience adjustments, 
discount, withholds, and coinsurance to the national base rate.
    (14) Modifications to the participant-specific adjustments for 
changes in TINs or CCNs. (i) CMS calculates the RO participant's case 
mix adjustments in accordance with paragraph (c)(3) of this section 
based on all episodes and RO episodes, as applicable, attributed to the 
RO participant's legacy TIN(s) or legacy CCN(s), and current TIN or 
CCN, during the 3-year period that determines the case mix adjustment 
for each PY.
    (ii) CMS calculates the RO participant's historical experience 
adjustments in accordance with paragraph (c)(4) of this section based 
on all episodes attributed to the RO participant's legacy TIN(s) or 
legacy CCN(s), and current TIN or CCN, during the baseline period.
0
22. Section 512.275 is amended by adding paragraph (d) to read as 
follows:


Sec.  512.275   Quality measures, clinical data, and reporting.

* * * * *
    (d) Technical participants and reporting of quality measures and 
clinical data elements. Technical participants that are freestanding 
radiation therapy centers and also begin furnishing the professional 
component during the model performance period must:
    (1) Notify CMS within 30 days of when the technical participant 
begins furnishing the professional component, in a form and manner 
specified by CMS; and
    (2) Must report quality measures and clinical data elements by the 
next submission period, as described in paragraph (c) of this section.


Sec.  512.280   [Amended]

0
23. Section 512.280 is amended by removing and reserving paragraph 
(f)(4).
0
24. Section 512.285 is amended by revising paragraphs (c)(3), (c)(4)(i) 
and (ii), (d), and (f) introductory text to read as follows:


Sec.  512.285   Reconciliation process.

* * * * *
    (c) * * *
    (3) Total incomplete episode amount. For incomplete episodes 
initiated in the PY, CMS determines the total incomplete episode amount 
by calculating the difference between the following amounts:
    (i) The sum of all FFS amounts that would have been paid to the RO 
participant in the absence of the RO Model for any included RT services 
furnished during such incomplete episodes, as determined by no-pay 
claims. CMS owes this sum to the RO participant for such incomplete 
episodes.
    (ii) The sum of the participant-specific episode payment amounts 
paid to the RO participant for such incomplete episodes initiated in 
the PY.
    (4) * * *
    (i) If the sum described in paragraph (c)(3)(i) of this section is 
more than the sum described in paragraph (c)(3)(ii) of this section, 
the difference is subtracted from the total duplicate RT services 
amount described in paragraph (c)(2) of this section and the resulting 
amount is the total incorrect episode payment amount.
    (ii) If the sum described in paragraph (c)(3)(i) of this section is 
less than the sum described in paragraph (c)(3)(ii) of this section, 
the difference is added to the total duplicate RT services amount 
described in paragraph (c)(2) of this section and the resulting amount 
is the total incorrect episode payment amount.
* * * * *
    (d) Quality reconciliation payment amount. For Professional 
participants and Dual participants, CMS determines the quality 
reconciliation payment amount for each PY by multiplying the 
participant's AQS (as a percentage) by the total quality withhold 
amount for all RO episodes initiated during the PY.
* * * * *
    (f) Stop-loss reconciliation amount. CMS determines the stop-loss 
reconciliation amount for RO participants that have fewer than 60 
episodes during the baseline period and were furnishing included RT 
services any time before the start of the model performance period in 
the CBSAs selected for participation by--
* * * * *
0
25. Section 512.292 is added to read as follows:


Sec.  512.292   Overlap with other models tested under Section 1115A 
and CMS programs.

    Participant-specific professional episode payments and Participant-
specific technical episode payments made under the RO Model are not 
adjusted to reflect payments made under models being tested under 1115A 
of the Act or the Medicare Shared Savings Program under section 1899 of 
the Act.
0
26. Section 512.594 is added to read as follows:


Sec.  512.294   Extreme and uncontrollable circumstances.

    (a) If CMS determines that there is an EUC pursuant to paragraph 
(b) of this section, CMS may grant RO participants exceptions to the RO 
Model requirements under paragraph (c) of this section and revise the 
RO Model's payment methodology under paragraph (d) of this section.
    (b) CMS determines whether there is an EUC based on the following 
factors:
    (1) Whether the RO participants are furnishing services within a 
geographic area considered to be within an ``emergency area'' during an 
``emergency period'' as defined in section 1135(g) of the Social 
Security Act;
    (2) Whether the geographic area within a county, parish, U.S. 
territory, or tribal government designated under the Stafford Act 
served as a condition precedent for the Secretary's exercise of the 
1135 waiver authority, or the National Emergencies Act; or
    (3) Whether a state of emergency has been declared in the 
geographic area.
    (c) CMS may grant RO Participants exceptions to the following RO 
Model requirements:
    (1) Reporting requirements. CMS may delay or exempt RO participants 
from one or more of the RO Model's quality measure or clinical data 
element reporting requirements if an EUC impacts the RO participants' 
ability to comply with quality measure or clinical data element 
reporting requirements.
    (2) Other requirements. CMS may issue a notice on the RO Model 
website that may waive compliance with or modify the following RO Model 
requirements:
    (i) The requirement set forth at Sec.  512.220(a)(2)(vii) that RO 
participants provide Peer Review (audit and feedback) on treatment 
plans.
    (ii) The requirement set forth at Sec.  512.220(a)(3) that RO 
participants actively engage with an AHRQ-listed patient safety 
organization (PSO).
    (d) If CMS determines that the EUC affects the United States and if 
CMS determines that the EUC would impact RO participants' ability to 
implement the requirements of the RO Model prior to the start of the 
model performance period, CMS may amend the model performance period. 
CMS will notify RO participants of such a determination via the RO 
Model website no later than 30 days prior to the start date of the 
model performance period.

[[Page 42360]]

    (e) If CMS determines that the EUC affects the entire United 
States, and if CMS determines that as a result of the EUC, the trend 
factor (specific to the PC, TC, or both for an included cancer type) 
for the upcoming PY has increased or decreased by more than 10 percent 
compared to the corresponding trend factor of the previous CY when FFS 
payment rates are held constant with the previous CY, CMS may modify 
the trend factor calculation for the PC, TC, or both the PC and TC of 
an included cancer type in a manner that ensures the trend factor is 
consistent with the average utilization from the previous CY.
    (f) In response to a national, regional, or local event, CMS may 
adjust the quality withhold by choosing to repay the quality withhold 
during the next reconciliation, and award all possible points in the 
subsequent AQS calculation amount if CMS removes the quality measure 
and clinical data element reporting requirements pursuant to paragraph 
(c)(1) of this section.

Department of Health and Human Services

    For the reasons set forth in the preamble, the Department of Health 
and Human Services proposes to amend 45 CFR part 180 as set forth 
below:

PART 180--HOSPITAL PRICE TRANSPARENCY

0
27. The authority citation for part 180 continues to read as follows:

    Authority: 42 U.S.C. 300gg-18, 42 U.S.C. 1302.

0
28. Section 180.20 is amended by adding a definition for ``State 
forensic hospital'' in alphabetical order to read as follows:


Sec.  180.20   Definitions.

* * * * *
    State forensic hospital means a public psychiatric hospital that 
provides treatment for individuals who are in the custody of penal 
authorities.
* * * * *
0
29. Section 180.30 is amended--
0
a. In paragraph (b) introductory text by removing the phrase 
``Federally owned or operated hospitals'' and adding in its place the 
phrase ``Federal and State hospitals''; and
0
b. By adding paragraph (b)(3).
    The addition reads as follows:


Sec.  180.30   Applicability.

* * * * *
    (b) * * *
    (3) State forensic hospitals that provide treatment exclusively to 
individuals who are in the custody of penal authorities.
* * * * *
0
30. Section 180.50 is amended--
0
a. In paragraph (d)(3)(ii) by removing the word ``and'' at the end of 
the paragraph;
0
b. In paragraph (d)(3)(iii) by removing the period at the end of the 
paragraph and adding ``; and'' in its place; and
0
c. By adding paragraph (d)(3)(iv).
    The addition reads as follows:


Sec.  180.50   Requirements for making public hospital standard charges 
for all items and services.

* * * * *
    (d) * * *
    (3) * * *
    (iv) To automated searches and direct file downloads through a link 
posted on a publicly available website.
* * * * *
0
31. Section 180.90 is amended by revising paragraph (c)(2) to read as 
follows:


Sec.  180.90   Civil monetary penalties.

* * * * *
    (c) * * *
    (2) CMS determines the daily dollar amount for a civil monetary 
penalty for which a hospital may be subject as follows:
    (i) For each day during Calendar Year 2021 that a hospital is 
determined by CMS to be out of compliance, the maximum daily dollar 
amount for a civil monetary penalty to which the hospital may be 
subject is $300. Even if the hospital is in violation of multiple 
discrete requirements of this part, the maximum total sum that a single 
hospital may be assessed per day is $300.
    (ii) Beginning January 1, 2022, for each day a hospital is 
determined by CMS to be out of compliance:
    (A) For a hospital with a number of beds equal to or less than 30, 
the maximum daily dollar civil monetary penalty amount to which it may 
be subject is $300, even if the hospital is in violation of multiple 
discrete requirements of this part.
    (B) For a hospital with a number of beds between 31 and 550, the 
maximum daily dollar civil monetary penalty amount to which it may be 
subject is the number of beds times $10, even if the hospital is in 
violation of multiple discrete requirements of this part.
    (C) For a hospital with a number of beds greater than 550, the 
maximum daily dollar civil monetary penalty amount to which it may be 
subject is $5,500, even if the hospital is in violation of multiple 
discrete requirements of this part.
    (D)(1) CMS will use the most recently available, finalized Medicare 
hospital cost report to determine the number of beds for a Medicare-
enrolled hospital, for purposes of determining the maximum daily dollar 
civil monetary penalty amount under paragraph (c)(2) of this section.
    (2) If the number of beds for the hospital cannot be determined 
according to paragraph (c)(2)(ii)(D)(1) of this section, CMS will 
request that the hospital provide documentation of its number of beds, 
in a form and manner and by the deadline prescribed by CMS in a written 
notice provided to the hospital. Should the hospital fail to provide 
CMS with this documentation in the prescribed form and manner, and by 
the specified deadline, CMS will impose on the hospital the maximum 
daily dollar civil monetary penalty amount according to paragraph 
(c)(2)(ii)(C) of this section.
* * * * *

    Dated: July 16, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-15496 Filed 7-19-21; 4:15 pm]
 BILLING CODE 4120-01-P