[Federal Register Volume 86, Number 218 (Tuesday, November 16, 2021)]
[Rules and Regulations]
[Pages 63458-63998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24011]



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Vol. 86

Tuesday,

No. 218

November 16, 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; Final Rule

  Federal Register / Vol. 86, No. 218 / Tuesday, November 16, 2021 / 
Rules and Regulations  

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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-FC]
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

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

ACTION: Final rule with comment period.

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SUMMARY: This final rule with comment period revises the Medicare 
hospital outpatient prospective payment system (OPPS) and the Medicare 
ambulatory surgical center (ASC) payment system for Calendar Year (CY) 
2022 based on our continuing experience with these systems. In this 
final rule with comment period, we describe the changes to the amounts 
and factors used to determine the payment rates for Medicare services 
paid under the OPPS and those paid under the ASC payment system. Also, 
this final rule with comment period updates and refines the 
requirements for the Hospital Outpatient Quality Reporting (OQR) 
Program and the ASC Quality Reporting (ASCQR) Program, updates Hospital 
Price Transparency requirements, and updates and refines the design of 
the Radiation Oncology Model.

DATES: 
    Effective date: The provisions of the final rule with comment are 
effective January 1, 2022.
    Comment period: To be assured consideration, comments on the 
payment classifications assigned to the interim APC assignments and/or 
status indicators of new or replacement Level II HCPCS codes in this 
final rule with comment period (CMS-1753-FC) must be received at one of 
the addresses provided in the ADDRESSES section no later than 5 p.m. 
EST on December 2, 2021.

ADDRESSES: In commenting, please refer to file code CMS-1753-FC.
    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 submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    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-FC, P.O. Box 8010, 
Baltimore, MD 21244-1810.
    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 to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1753-FC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: [email protected] or at 410-
786-4617.
    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].
    Comment Solicitation on Temporary Policies for the PHE for COVID-
19, contact Emily Yoder via email at [email protected] or Abigail 
Cesnik 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 Allison Bramlett via email at 
[email protected], or Emily Yoder 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 at 
[email protected], or Abigail Cesnik at 
[email protected].
    Medical Review of Certain Inpatient Hospital Admissions under 
Medicare Part A for CY 2022 and Subsequent Years (2-Midnight Rule), 
contact Abigail Cesnik 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 Washington via email at [email protected].
    OPPS New Technology Procedures/Services, contact the New Technology

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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].
    RO Model, contact [email protected] or at 844-711-2664, 
Option 5.
    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 Payments Not 
Previously Identified, contact the OPPS mailbox at 
[email protected].
    All Other Issues Related to the Ambulatory Surgical Center Payments 
Not Previously Identified, contact the ASC mailbox at 
[email protected].

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 final rule with comment period, we use CPT codes 
and descriptions to refer to a variety of services. We note that CPT 
codes and descriptions are copyright 2021 American Medical Association. 
All Rights Reserved. CPT is a registered trademark of the American 
Medical Association (AMA). Applicable Federal Acquisition Regulations 
(FAR and Defense Federal Acquisition Regulations (DFAR) apply.

Table of Contents

I. Summary and Background
    A. Executive Summary of This Document
    B. Legislative and Regulatory Authority for the Hospital OPPS
    C. Excluded OPPS Services and Hospitals
    D. Prior Rulemaking
    E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel 
or the Panel)
    F. Public Comments Received in Response to the CY 2022 OPPS/ASC 
Proposed Rule
    G. Public Comments Received on the CY 2021 OPPS/ASC Final Rule 
With Comment Period
II. Updates Affecting OPPS Payments
    A. Recalibration of APC Relative Payment Weights
    B. Conversion Factor Update
    C. Wage Index Changes
    D. Statewide Average Default Cost-to-Charge Ratios (CCRs)
    E. Adjustment for Rural Sole Community Hospitals (SCHs) and 
Essential Access Community Hospitals (EACHs) Under Section 
1833(t)(13)(B) of the Act for CY 2022
    F. Payment Adjustment for Certain Cancer Hospitals for CY 2022
    G. Hospital Outpatient Outlier Payments
    H. Calculation of an Adjusted Medicare Payment From the National 
Unadjusted Medicare Payment
    I. Beneficiary Copayments
III. OPPS Ambulatory Payment Classification (APC) Group Policies
    A. OPPS Treatment of New and Revised HCPCS Codes
    B. OPPS Changes--Variations Within APCs
    C. New Technology APCs
    D. OPPS APC-Specific Policies
IV. OPPS Payment for Devices
    A. Pass-Through Payments for Devices
    B. Device-Intensive Procedures
V. OPPS Payment Changes for Drugs, Biologicals, and 
Radiopharmaceuticals
    A. OPPS Transitional Pass-Through Payment for Additional Costs 
of Drugs, Biologicals, and Radiopharmaceuticals
    B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals 
Without Pass-Through Payment Status
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, 
Biologicals, Radiopharmaceuticals, and Devices
    A. Background
    B. Estimate of Pass-Through Spending
VII. OPPS Payment for Hospital Outpatient Visits and Critical Care 
Services
VIII. Payment for Partial Hospitalization Services
    A. Background
    B. PHP APC Update for CY 2022
    C. Outlier Policy for CMHCs
IX. Services That Would Be Paid Only as Inpatient Services
    A. Background
    B. Changes to the Inpatient Only (IPO) List
    C. Summary of Final Policy and Changes to the IPO List for CY 
2022
X. Nonrecurring Policy Changes
    A. Medical Review of Certain Inpatient Hospital Admissions Under 
Medicare Part A for CY 2022 and Subsequent Years
    B. Changes to Beneficiary Coinsurance for Additional Procedures 
Furnished During the Same Clinical Encounter as Certain Colorectal 
Cancer Screening Tests
    C. Low Volume Policy for Clinical and Brachytherapy APCs
    D. Comment Solicitation on Temporary Policies To Address the 
COVID-19 PHE
    E. Use of CY 2019 Claims Data for CY 2022 OPPS and ASC Payment 
System Ratesetting Due to the PHE
    F. 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
XI. CY 2022 OPPS Payment Status and Comment Indicators
    A. CY 2022 OPPS Payment Status Indicator Definitions
    B. CY 2022 Comment Indicator Definitions
XII. MedPAC Recommendations
    A. OPPS Payment Rates Update
    B. ASC Conversion Factor Update
    C. ASC Cost Data
XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
    A. Background
    B. ASC Treatment of New and Revised Codes
    C. Update to the List of ASC Covered Surgical Procedures and 
Covered Ancillary Services
    D. Update and Payment for ASC Covered Surgical Procedures and 
Covered Ancillary Services

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    E. New Technology Intraocular Lenses (NTIOLs)
    F. ASC Payment and Comment Indicators
    G. Calculation of the ASC Payment Rates and the ASC Conversion 
Factor
XIV. Advancing to Digital Quality Measurement and the Use of Fast 
Healthcare Interoperability Resources (FHIR) in Outpatient Quality 
Programs--Request for Information
    A. Background
    B. Definition of Digital Quality Measures
    C. Use of FHIR for Current eCQMs
    D. Changes Under Consideration to Advance Digital Quality 
Measurement: Potential Actions in Four Areas to Transition to 
Digital Quality Measures by 2025
    E. Solicitation of Comments
XV. Requirements for the Hospital Outpatient Quality Reporting (OQR) 
Program
    A. Background
    B. Hospital OQR Program Quality Measures
    C. Administrative Requirements
    D. Form, Manner, and Timing of Data Submitted for the Hospital 
OQR Program
    E. Payment Reduction for Hospitals That Fail To Meet the 
Hospital OQR Program Requirements for the CY 2022 Payment 
Determination
XVI. Requirements for the Ambulatory Surgical Center Quality 
Reporting (ASCQR) Program
    A. Background
    B. ASCQR Program Quality Measures
    C. Administrative Requirements
    D. Form, Manner, and Timing of Data Submitted for the ASCQR 
Program
    E. Payment Reduction for ASCs That Fail To Meet the ASCQR 
Program Requirements
XVII. Radiation Oncology Model
    A. Introduction
    B. Background
    C. RO Model Regulations
XVIII. Updates to Requirements for Hospitals To Make Public a List 
of Their Standard Charges
    A. Introduction and Overview
    B. Increasing the Civil Monetary Penalty (CMP) Amounts Using a 
Scaling Factor
    C. Deeming of Certain State Forensic Hospitals as Having Met 
Requirements
    D. Improving Access to the Machine-Readable File
    E. Clarification and Requests for Comment
XIX. Additional Hospital Inpatient Quality Reporting (IQR) Program 
Policies
XX. Additional Medicare Promoting Interoperability Program Policies
XXI. Files Available to the Public via the Internet
XXII. Collection of Information Requirements
    A. Statutory Requirement for Solicitation of Comments
    B. ICRs for the Hospital OQR Program
    C. ICRs for the ASCQR Program
XXIII. Response to Comments
XXIV. Economic Analyses
    A. Statement of Need
    B. Overall Impact for the Provisions of This Final Rule With 
Comment Period
    C. Detailed Economic Analyses
    D. Regulatory Review Costs
    E. Regulatory Flexibility Act (RFA) Analysis
    F. Unfunded Mandates Reform Act Analysis
    G. Conclusion
    H. Federalism Analysis

I. Summary and Background

A. Executive Summary of This Document

1. Purpose
    In this final rule with comment period, we are updating the payment 
policies and payment rates for services furnished to Medicare 
beneficiaries in hospital outpatient departments (HOPDs) and ambulatory 
surgical centers (ASCs), beginning January 1, 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 final rule with comment period 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 final rule with comment period. In addition, 
this final rule with comment period updates and refines the 
requirements for the Hospital Outpatient Quality Reporting (OQR) 
Program, the ASC Quality Reporting (ASCQR) Program, Hospital Price 
Transparency requirements, and the design of the Radiation Oncology 
Model.
2. Summary of the Major Provisions
     OPPS Update: For 2022, we are increasing the payment rates 
under the OPPS by an Outpatient Department (OPD) fee schedule increase 
factor of 2.0 percent. This increase factor is based on the proposed 
hospital inpatient market basket percentage increase of 2.7 percent for 
inpatient services paid under the hospital inpatient prospective 
payment system (IPPS) reduced by a proposed productivity adjustment of 
0.7 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 $82.078 billion, an 
increase of approximately $5.913 billion compared to estimated CY 2022 
OPPS payments.
    We are continuing 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 0.9804 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 include 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 
utilizing CY 2019 data to set CY 2022 OPPS and ASC payment rates.
     Partial Hospitalization Update: For CY 2022, we are using 
the CMHC and hospital-based PHP (HB PHP) geometric mean per diem costs, 
consistent with existing methodology, but with a cost floor that will 
maintain the per diem costs finalized in CY 2021. We are also using the 
CY 2019 claims and cost report data for each provider type, consistent 
with the use of claims and cost report data prior to the PHE within the 
broader CY 2022 OPPS ratesetting.
     Changes to the Inpatient Only (IPO) List: For 2022, we are 
finalizing our proposal with modification to pause the elimination of 
the IPO list and add back to the IPO list the services removed in 2021, 
except for CPT code 22630 (Arthrodesis, posterior interbody technique, 
including laminectomy and/or discectomy to prepare interspace (other 
than for decompression), single interspace; lumbar); CPT code 23472 
(Arthroplasty, glenohumeral joint; total shoulder (glenoid and proximal 
humeral replacement (for example, total shoulder))); CPT code 27702 
(Arthroplasty, ankle; with implant (total ankle)) and their 
corresponding anesthesia codes: CPT code 00630 (Anesthesia for 
procedures in lumbar region; not otherwise specified), CPT code 00670 
(Anesthesia for extensive spine and spinal cord procedures (e.g., 
spinal instrumentation or vascular procedures)); CPT code 01638 
(Anesthesia for open or surgical arthroscopic procedures on humeral

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head and neck, sternoclavicular joint, acromioclavicular joint, and 
shoulder joint; total shoulder replacement); and CPT 01486 (Anesthesia 
for open procedures on bones of lower leg, ankle, and foot; total ankle 
replacement). We are also classifying CPT code 0643T (Transcatheter 
left ventricular restoration device implantation including right and 
left heart catheterization and left ventriculography when performed, 
arterial approach) as an inpatient only procedure. We are finalizing 
our proposal 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 3-year transition and 
to codify our five longstanding criteria for determining whether a 
service or procedure should be removed from the IPO list in the 
regulation in a new Sec.  419.23.
     Medical Review of Certain Inpatient Hospital Admissions 
under Medicare Part A for CY 2021 and Subsequent Years (2-Midnight 
Rule): For CY 2022, we are finalizing a policy to exempt procedures 
that are removed from the inpatient only (IPO) list under the OPPS 
beginning on or after January 1, 2022, 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: For CY 2022, we are continuing 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 
continuing 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 received preliminary approval for pass-through 
payment status through our quarterly review process. We solicited 
public comment on all eight of these applications and are making final 
determinations on these applications in this CY 2022 OPPS/ASC final 
rule with comment period.
     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 using 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 CY 2022, we are 
continuing to provide additional payments to cancer hospitals so that a 
cancer hospital's payment-to-cost ratio (PCR) after the additional 
payments is equal to the weighted average PCR for the other OPPS 
hospitals using the most recently submitted or settled cost report 
data. However, section 16002(b) of the 21st Century Cures Act requires 
that this weighted average PCR be reduced by 1.0 percentage point. 
Based on the data and the required 1.0 percentage point reduction, we 
are using a target PCR of 0.89 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 are increasing payment rates under the ASC payment system by 
2.0 percent for ASCs that meet the quality reporting requirements under 
the ASCQR Program. This increase is based on a hospital market basket 
percentage increase of 2.7 percent reduced by a productivity adjustment 
of 0.7 percentage point. Based on this update, we estimate that total 
payments to ASCs (including beneficiary cost-sharing and estimated 
changes in enrollment, utilization, and case-mix) for CY 2022 would be 
approximately 5.41 billion, an increase of approximately 40 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 payments.
    In accordance with our review and comments from stakeholders, for 
CY 2022, we are finalizing our proposal 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 be 
approved under a new drug application under section 505(c) of the 
Federal Food, Drug, and Cosmetic Act, 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 proposed that the drug or biological must also have an 
FDA-approved indication for pain management or analgesia and have a 
per-day cost in excess of the OPPS drug packaging threshold, which is 
finalized at $130 for CY 2022 and described in section V.B.1.a. of this 
final rule with comment period, to qualify for separate payment in the 
ASC setting. We appreciate the comments received on our multiple 
comment solicitations. We are not finalizing any policy modifications 
or additional criteria as a result of these comments but will take this 
information into consideration for future notice and comment 
rulemaking.
    For CY 2022, in accordance with our finalized criteria, CMS review, 
and stakeholder comments, we will pay separately in the ASC setting for 
four drugs that are non-opioid pain management drugs that function as 
surgical supplies.
     Changes to the List of ASC Covered Surgical Procedures: 
For CY 2022, we are reinstating the ASC Covered Procedures List (CPL) 
criteria that were in effect in CY 2020 and removing several of the 
procedures that were added to the ASC CPL in CY 2021. We requested 
comments on whether any of the procedures that we proposed to remove 
from the ASC CPL in CY 2021 met the CY 2020 criteria that we proposed 
to reinstate. After reviewing these recommendations, we determined that 
a total of six procedures should either remain on or be added to the 
CPL We are also finalizing our proposal to adopt a nomination process, 
under which stakeholders may nominate procedures they believe meet the 
requirements to be added to the ASC CPL. CMS will provide subregulatory 
guidance on the nomination process in early 2022, with procedure 
nominations due in March 2022, and the formal nomination process 
beginning in CY 2023.

[[Page 63462]]

     Hospital Outpatient Quality Reporting (OQR) Program: For 
the Hospital OQR Program, we proposed changes for the CY 2023, CY 2024, 
CY 2025, and CY 2026 payment determinations and subsequent years in the 
CY 2022 OPPS/ASC proposed rule (86 FR 42018). In this final rule, we 
are finalizing our proposals 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-3: Median Time to 
Transfer to Another Facility for Acute Coronary Intervention measure 
beginning with the CY 2025 payment determination; (3) adopt OP-38: 
COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure 
beginning with the CY 2024 payment determination; (4) adopt OP-39: The 
Breast Screening Recall Rates measure beginning with the CY 2023 
payment determination; (5) adopt OP-40: 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; and (6) restart reporting of the 
OP-37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of 
Healthcare Providers and Systems (OAS CAHPS) Survey-based measures 
beginning with voluntary reporting during the CY 2023 reporting period 
and mandatory reporting beginning with the CY 2024 reporting period/CY 
2026 payment determination. We are finalizing as proposed the data 
submission requirements for the OAS CAHPS Survey-based measures and the 
COVID-19 Vaccination Coverage Among HCP measure (OP-38). Similarly, we 
are finalizing as proposed the 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 finalizing 
as proposed three updates to our validation requirements 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. In the CY 2022 OPPS/ASC proposed 
rule (86 FR 42018) we requested 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 also 
requested 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.
    We are finalizing with modification, our proposal to make mandatory 
the reporting of the OP-31: Cataracts: Improvement in Patient's Visual 
Function within 90 Days Following Cataract Surgery measure. We are 
finalizing to make reporting of this measure mandatory beginning with 
the CY 2027 payment determination, instead of the CY 2025 payment 
determination.
     Ambulatory Surgical Center Quality Reporting (ASCQR) 
Program: For the ASCQR Program, we proposed changes for the CY 2024, CY 
2025, and CY 2026 payment determinations and subsequent years in the CY 
2022 OPPS/ASC proposed rule (86 FR 42018). For the ASCQR Program 
measure set, we are finalizing our proposals to: (1) Adopt ASC-20: 
COVID-19 Vaccination Coverage Among HCP measure beginning with the CY 
2024 payment determination; and (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. We are also finalizing as 
proposed the data submission requirements for the OAS CAHPS Survey-
based measures and the COVID-19 Vaccination Coverage Among HCP measure 
(ASC-20).
    We are finalizing, with modification, the proposal to require the 
ASC-15a-e: OAS CAHPS Survey-based measures with voluntary reporting 
beginning with the CY 2024 reporting period and mandatory reporting 
beginning with the CY 2025 reporting period/CY 2027 payment 
determination.
    We are also finalizing with modification the proposal to require 
the ASC-11: Cataracts: Improvement in Patient's Visual Function within 
90 Days Following Cataract Surgery measure. We are finalizing mandatory 
reporting of this measure beginning with the CY 2027 payment 
determination, instead of the CY 2025 payment determination.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42018) we requested 
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. We also requested 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 the CY 2022 OPPS/ASC proposed rule (86 FR 25549 through 25628) we 
requested 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 amending several hospital price 
transparency policies codified at 45 CFR part 180 in order to encourage 
compliance. We are: (1) Increasing the amount of the penalties for 
noncompliance through the use of a scaling factor based on hospital bed 
count; (2) deeming state forensic hospitals that meet certain 
requirements to be in compliance with the requirements of 45 CFR part 
180; and (3) finalizing a requirement that the machine-readable file be 
accessible to automated searches and direct downloads. 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.
     Radiation Oncology Model (RO Model): Section 133 of the 
Consolidated Appropriations Act (CAA), 2021 (Pub. L. 116-260), enacted 
on December 27, 2020, includes 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 with 
comment period. We are finalizing proposed provisions related to the 
additional delayed implementation of the RO Model due to the CAA, 2021, 
as well as modifications to certain RO Model policies not related to 
the delay.

[[Page 63463]]

     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 sought comment on whether there are 
certain policies that should be made permanent. Specifically, we sought 
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 a code and payment for COVID-19 
specimen collection. We will consider comments received for future 
rulemaking.
     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 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 are finalizing our proposal 
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 Benefits
    In sections XXIV. and XXV. of this final rule with comment period, 
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 84 in section XXIV.C. of this final rule with comment period 
displays the distributional impact of all the OPPS changes on various 
groups of hospitals and CMHCs for CY 2022 compared to all estimated 
OPPS payments in CY 2021. We estimate that the policies in this final 
rule with comment period will result in a 1.6 percent overall increase 
in OPPS payments to providers. We estimate that total OPPS payments for 
CY 2022, including beneficiary cost-sharing, to the approximately 3,659 
facilities paid under the OPPS (including general acute care hospitals, 
children's hospitals, cancer hospitals, and CMHCs) will increase by 
approximately $1.3 billion compared to CY 2021 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 1.1 percent increase in CY 2022 
payments to CMHCs relative to their CY 2021 payments.
b. Impacts of the Updated Wage Indexes
    We estimate that our update of the wage indexes based on the FY 
2022 IPPS final rule wage indexes will 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 final rule with comment period.
c. Impacts of the Rural Adjustment and the Cancer Hospital Payment 
Adjustment
    There are no significant impacts of our CY 2022 payment policies 
for hospitals that are eligible for the rural adjustment or for the 
cancer hospital payment adjustment. We are not making any change in 
policies for determining the rural hospital payment adjustments. While 
we are implementing the 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 OPD Fee Schedule Increase Factor
    For the CY 2022 OPPS/ASC, we are establishing an OPD fee schedule 
increase factor of 2.0 percent and applying that increase factor to the 
conversion factor for CY 2022. 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 2.1 percent and that rural hospitals will experience an 
increase in payments of 2.3 percent. Classifying hospitals by teaching 
status, we estimate nonteaching hospitals will experience an increase 
in payments of 2.2 percent, minor teaching hospitals will experience an 
increase in payments of 2.2 percent, and major teaching hospitals will 
experience an increase in payments of 1.8 percent. We also classified 
hospitals by the type of ownership. We estimate that hospitals with 
voluntary ownership will experience an increase of 2.2 percent in 
payments, while hospitals with government ownership would experience an 
increase of 1.7 percent in payments. We estimate that hospitals with 
proprietary ownership will experience an increase of 2.3 percent in 
payments.
e. Impacts of the 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 will increase payments by $80 
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.

[[Page 63464]]

    The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS. 
The following Acts made additional changes to the OPPS: The Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit 
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8, 
2006; the Medicare Improvements and Extension Act under Division B of 
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) 
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173), 
enacted on December 29, 2007; the Medicare Improvements for Patients 
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July 
15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
148), enacted on March 23, 2010, as amended by the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on 
March 30, 2010 (these two public laws are collectively known as the 
Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010 
(MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act 
of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the 
Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L. 
112-96), enacted on February 22, 2012; the American Taxpayer Relief Act 
of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR 
Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the 
Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93), 
enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization 
Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the 
Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2, 
2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113), 
enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-
255), enacted on December 13, 2016; the Consolidated Appropriations 
Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; 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 final rule with comment 
period. Section 1833(t)(1)(B) of the Act provides for payment under the 
OPPS for hospital outpatient services designated by the Secretary 
(which includes partial hospitalization services furnished by CMHCs), 
and certain inpatient hospital services that are paid under Medicare 
Part B.
    The OPPS rate is an unadjusted national payment amount that 
includes the Medicare payment and the beneficiary copayment. This rate 
is divided into a labor-related amount and a nonlabor-related amount. 
The labor-related amount is adjusted for area wage differences using 
the hospital inpatient wage index value for the locality in which the 
hospital or CMHC is located.
    All services and items within an APC group are comparable 
clinically and with respect to resource use, as required by section 
1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of 
the Act, subject to certain exceptions, items and services within an 
APC group cannot be considered comparable with respect to the use of 
resources if the highest median cost (or mean cost, if elected by the 
Secretary) for an item or service in the APC group is more than 2 times 
greater than the lowest median cost (or mean cost, if elected by the 
Secretary) for an item or service within the same APC group (referred 
to as the ``2 times rule''). In implementing this provision, we 
generally use the cost of the item or service assigned to an APC group.
    For new technology items and services, special payments under the 
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act 
provides for temporary additional payments, which we refer to as 
``transitional pass-through payments,'' for at least 2 but not more 
than 3 years for certain drugs, biological agents, brachytherapy 
devices used for the treatment of cancer, and categories of other 
medical devices. For new technology services that are not eligible for 
transitional pass-through payments, and for which we lack sufficient 
clinical information and cost data to appropriately assign them to a 
clinical APC group, we have established special APC groups based on 
costs, which we refer to as New Technology APCs. These New Technology 
APCs are designated by cost bands which allow us to provide appropriate 
and consistent payment for designated new procedures that are not yet 
reflected in our claims data. Similar to pass-through payments, an 
assignment to a New Technology APC is temporary; that is, we retain a 
service within a New Technology APC until we acquire sufficient data to 
assign it to a clinically appropriate APC group.

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

[[Page 63465]]

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 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 (the PHS 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 23, 2021, meeting that the 
subcommittees continue. We accepted this recommendation.
    For discussions of earlier Panel meetings and recommendations, we 
refer readers to previously published OPPS/ASC proposed and final 
rules, the CMS website mentioned earlier in this

[[Page 63466]]

section, and the FACA database at http://facadatabase.gov.

F. Public Comments Received in Response to the CY 2022 OPPS/ASC 
Proposed Rule

    We received approximately 18,864 timely pieces of correspondence on 
the CY 2022 OPPS/ASC proposed rule that appeared in the Federal 
Register on August 4, 2021 (86 FR 42018). We note that we received some 
public comments that were outside the scope of the CY 2022 OPPS/ASC 
proposed rule. Out-of-scope-public comments are not addressed in this 
CY 2022 OPPS/ASC final rule with comment period. Summaries of those 
public comments that are within the scope of the proposed rule and our 
responses are set forth in the various sections of this final rule with 
comment period under the appropriate headings.

G. Public Comments Received on the CY 2021 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 
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. Updates Affecting OPPS Payments

A. 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 the data from the year two years prior to the 
calendar year that is the subject of the rulemaking. As discussed in 
further detail in Section X.E. of the CY 2022 OPPS/ASC proposed rule 
(86 FR 42188 through 42190), given our concerns with CY2020 data as a 
result of the COVID-19 PHE we proposed to generally use CY 2019 claims 
data and the data components related to it in establishing the CY 2022 
OPPS. As discussed in further detail in Section X.E. of this final rule 
with comment period, we are finalizing our proposal to generally 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 proposed 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 proposed 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 the CY 
2022 OPPS/ASC proposed rule on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    Addendum N to the CY 2022 OPPS/ASC proposed rule (which is 
available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html) 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 proposed 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 proposed to add 
for CY 2022 are identified by asterisks (*) in the fourth column of 
Addendum N.
    We did not receive any public comments on our general proposal to 
recalibrate the relative payment weights for each APC based on claims 
and cost report data for HOPD services or on our proposed bypass code 
process. We are adopting as final the proposed ``pseudo'' single claims 
process and the final CY 2022 bypass list of 173 HCPCS codes, as 
displayed in Addendum N to this final rule with comment period (which 
is available via the internet on the CMS website). For this final rule 
with comment period, for the purpose of recalibrating the final APC 
relative payment weights for CY 2022, we used approximately 93 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. 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 final rule with comment period on the CMS 
website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
c. Calculation and Use of Cost-to-Charge Ratios (CCRs)
    For 2022, in the CY 2022 OPPS/ASC proposed rule (86 FR 42046) we 
proposed to continue to use the hospital-specific overall ancillary and 
departmental cost-to-charge ratios (CCRs) to convert charges to 
estimated costs through application of a revenue code-to-cost center 
crosswalk. To calculate the APC costs on which the CY 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

[[Page 63467]]

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 National Uniform Billing Committee (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 the CY 2022 OPPS/ASC 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.
    Comment: One commenter stated that coronary CT angiography (CCTA) 
requires considerably more resources than the procedures that are 
currently assigned to the CT cost center. The commenter suggests that 
this has resulted in over a decade of inadequate reimbursement for CCTA 
below the actual cost of performing the test. The commenter recommends 
that CMS provide specific instructions that allow hospitals to submit 
charges for cardiac CT using revenue codes that provide more accurate 
cost estimates. The commenter stated that hospitals do not have the 
ability to directly report costs for cardiac CT services and that CMS 
regulations mandate that cardiac CT be lumped into generic diagnostic 
CT revenue codes.
    Response: Hospital outpatient facilities make the final 
determination for reporting the appropriate cost centers and revenue 
codes. As stated in section 20.5 in Chapter 4 (Part B Hospital) of the 
Medicare Claims Processing Manual, CMS ``does not instruct hospitals on 
the assignment of HCPCS codes to revenue codes for services provided 
under OPPS since hospitals' assignment of cost vary. Where explicit 
instructions are not provided, providers should report their charges 
under the revenue code that will result in the charge being assigned to 
the same cost center to which the cost of those services are assigned 
in the cost report.'' Therefore, HOPDs must determine the most 
appropriate cost center and revenue code for the cardiac CT exams.
    After consideration of the public comment we received on the 
general CCR process, we are finalizing for CY 2022 using the hospital-
specific overall ancillary and departmental CCRs to convert charges to 
estimated costs through application of a revenue code-to-cost center 
crosswalk and the established methodology.
2. Final Data Development and Calculation of Costs Used for Ratesetting
    In this section of this final rule with comment period, we discuss 
the use of claims to calculate the OPPS payment rates for CY 2022. The 
Hospital OPPS page on the CMS website on which the CY 2022 OPPS/ASC 
final rule with comment period is posted (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html) 
provides an accounting of claims used in the development of the 
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 final payment rates for the CY 2022 OPPS/ASC final rule 
with comment period.
    Previously, the OPPS established the scaled relative weights on 
which payments are based using APC median costs, a process described in 
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188). 
However, as discussed in more detail in section II.A.2.f. of the CY 
2013 OPPS/ASC final rule with comment period (77 FR 68259 through 
68271), we finalized the use of geometric mean costs to calculate the 
relative weights on which the CY 2013 OPPS payment rates were based. 
While this policy changed the cost metric on which the relative 
payments are based, the data process in general remained the same under 
the methodologies that we used to obtain appropriate claims data and 
accurate cost information in determining estimated service cost.
    We did not receive any public comments on our proposed process and 
are finalizing our proposed methodology to continue to use geometric 
mean costs to calculate the relative weights on which the final 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 final rule with comment period to calculate the costs 
we used to establish the final relative payment weights used in 
calculating the OPPS payment rates for CY 2022 shown in Addenda A and B 
to the CY 2022 OPPS/ASC final rule with comment period (which are 
available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html). We refer readers to 
section II.A.4. of this final rule with comment period for a discussion 
of the

[[Page 63468]]

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 the CY 2022 
OPPS/ASC final rule with comment period, we refer readers to the claims 
accounting narrative under supporting documentation for the CY 2022 
OPPS/ASC final rule with comment period on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
a. 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 proposed to continue to establish payment rates for blood and 
blood products using our blood-specific CCR methodology, which utilizes 
actual or simulated CCRs from the most recently available hospital cost 
reports to convert hospital charges for blood and blood products to 
costs. This methodology has been our standard ratesetting methodology 
for blood and blood products since CY 2005. It was developed in 
response to data analysis indicating that there was a significant 
difference in CCRs for those hospitals with and without blood-specific 
cost centers, and past public comments indicating that the former OPPS 
policy of defaulting to the overall hospital CCR for hospitals not 
reporting a blood-specific cost center often resulted in an 
underestimation of the true hospital costs for blood and blood 
products. Specifically, to address the differences in CCRs and to 
better reflect hospitals' costs, we proposed to continue to simulate 
blood CCRs for each hospital that does not report a blood cost center 
by calculating the ratio of the blood-specific CCRs to hospitals' 
overall CCRs for those hospitals that do report costs and charges for 
blood cost centers. We also proposed to apply this mean ratio to the 
overall CCRs of hospitals not reporting costs and charges for blood 
cost centers on their cost reports to simulate blood-specific CCRs for 
those hospitals. We proposed 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 
proposed to continue to apply the blood-specific CCR methodology 
described in this section when calculating the costs of the blood and 
blood products that appear on claims with services assigned to the C-
APCs. Because the costs of blood and blood products would be reflected 
in the overall costs of the C-APCs (and, as a result, in the proposed 
payment rates of the C-APCs), we proposed 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 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 to the CY 2022 OPPS/ASC 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 proposed to continue to establish payment rates for 
blood and blood products using our blood-specific CCR methodology. We 
did not receive any comments on our proposal to establish payment rates 
for blood and blood products using our blood-specific CCR methodology 
and we are finalizing this policy as proposed. Please refer to Addendum 
B to the CY 2022 OPPS/ASC final rule with comment period (which is 
available via the internet on the CMS website) for the final CY 2022 
payment rates for blood and blood products.
(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

[[Page 63469]]

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 proposed 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 proposed 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 proposed to base the 
payment rates for brachytherapy sources on the geometric mean unit 
costs for each source, consistent with the methodology that we proposed 
for other items and services paid under the OPPS, as discussed in 
section II.A.2. of the CY 2022 OPPS/ASC proposed rule. We also proposed 
to continue the other payment policies for brachytherapy sources that 
we finalized and first implemented in the CY 2010 OPPS/ASC final rule 
with comment period (74 FR 60537). We proposed to pay for the stranded 
and nonstranded not otherwise specified (NOS) codes, HCPCS codes C2698 
(Brachytherapy source, stranded, not otherwise specified, per source) 
and C2699 (Brachytherapy source, non-stranded, not otherwise specified, 
per source), at a rate equal to the lowest stranded or nonstranded 
prospective payment rate for such sources, respectively, on a per-
source basis (as opposed to, for example, a per mCi), which is based on 
the policy we established in the CY 2008 OPPS/ASC final rule with 
comment period (72 FR 66785). We also proposed to continue the policy 
we first implemented in the CY 2010 OPPS/ASC final rule with comment 
period (74 FR 60537) regarding payment for new brachytherapy sources 
for which we have no claims data, based on the same reasons we 
discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR 
66786; which was delayed until January 1, 2010 by section 142 of Pub. 
L. 110-275). Specifically, this policy is intended to enable us to 
assign new HCPCS codes for new brachytherapy sources to their own APCs, 
with prospective payment rates set based on our consideration of 
external data and other relevant information regarding the expected 
costs of the sources to hospitals. The proposed CY 2022 payment rates 
for brachytherapy sources are included in Addendum B to the CY 2022 
OPPS/ASC 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 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 the CY 2022 OPPS/ASC proposed rule, 
given our concerns with CY 2020 data as a result of the COVID-19 PHE, 
in general we proposed to use CY 2019 claims data and the data 
components related to it in establishing the CY 2022 OPPS. Therefore, 
we proposed 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.
    We received no public comments and are finalizing our proposal, 
without modification, 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. of the CY 2022 OPPS/ASC proposed rule, we 
proposed to establish a Low Volume APC policy for New Technology APCs, 
clinical APCs, and brachytherapy APCs. For these APCs with fewer than 
100 single claims that can be used for ratesetting purposes in the 
existing claims year, we proposed 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 proposed to calculate the cost for Low Volume APCs based on 
the greatest of the arithmetic mean cost, median cost, or geometric 
mean cost. We proposed to designate 5 brachytherapy APCs as Low Volume 
APCs for CY 2022 as these APCs met our proposed criteria to be 
designated as a Low Volume APC. In Section X.C. of this final rule with 
comment period, we are finalizing our proposal to designate 5 
brachytherapy APCs as Low Volume APCs for CY 2022. For more information 
on the brachytherapy APCs we are designating as Low Volume APCs, see 
Section X.C. of this final rule with comment period.
    We continue to invite stakeholders to submit recommendations 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

[[Page 63470]]

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 one 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 three 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 the CY 2022 OPPS/ASC 
final rule (which is available via the internet on the CMS website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
    In the interim final rule with request for comments (IFC) titled, 
``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 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 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 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 
one day before the date of service for HCPCS code G0378 that are 
described by one of the following codes: HCPCS code G0379

[[Page 63471]]

(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, 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-

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APC (the C-APC to which the designated primary service is first 
assigned) to the next higher paying C-APC in the same clinical family 
of C-APCs. We apply this type of complexity adjustment when the paired 
code combination represents a complex, costly form or version of the 
primary service according to the following criteria:
     Frequency of 25 or more claims reporting the code 
combination (frequency threshold); and
     Violation of the 2 times rule, as stated in section 
1833(t)(2) of the Act and section III.B.2. of this final rule with 
comment period, in the originating C-APC (cost threshold).
    These criteria identify paired code combinations that occur 
commonly and exhibit materially greater resource requirements than the 
primary service. The CY 2017 OPPS/ASC final rule with comment period 
(81 FR 79582) included a revision to the complexity adjustment 
eligibility criteria. Specifically, we finalized a policy to 
discontinue the requirement that a code combination (that qualifies for 
a complexity adjustment by satisfying the frequency and cost criteria 
thresholds described above) also not create a 2 times rule violation in 
the higher level or receiving APC.
    After designating a single primary service for a claim, we evaluate 
that service in combination with each of the other procedure codes 
reported on the claim assigned to status indicator ``J1'' (or certain 
add-on codes) to determine if there are paired code combinations that 
meet the complexity adjustment criteria. For a new HCPCS code, we 
determine initial C-APC assignment and qualification for a complexity 
adjustment using the best available information, crosswalking the new 
HCPCS code to a predecessor code(s) when appropriate.
    Once we have determined that a particular code combination of 
``J1'' services (or combinations of ``J1'' services reported in 
conjunction with certain add-on codes) represents a complex version of 
the primary service because it is sufficiently costly, frequent, and a 
subset of the primary comprehensive service overall according to the 
criteria described above, we promote the claim including the complex 
version of the primary service as described by the code combination to 
the next higher cost C-APC within the clinical family, unless the 
primary service is already assigned to the highest cost APC within the 
C-APC clinical family or assigned to the only C-APC in a clinical 
family. We do not create new APCs with a comprehensive geometric mean 
cost that is higher than the highest geometric mean cost (or only) C-
APC in a clinical family just to accommodate potential complexity 
adjustments. Therefore, the highest payment for any claim including a 
code combination for services assigned to a C-APC would be the highest 
paying C-APC in the clinical family (79 FR 66802).
    We package payment for all add-on codes into the payment for the C-
APC. However, certain primary service add-on combinations may qualify 
for a complexity adjustment. As noted in the CY 2016 OPPS/ASC final 
rule with comment period (80 FR 70331), all add-on codes that can be 
appropriately reported in combination with a base code that describes a 
primary ``J1'' service are evaluated for a complexity adjustment.
    To determine which combinations of primary service codes reported 
in conjunction with an add-on code may qualify for a complexity 
adjustment for CY 2022, we proposed to apply the frequency and cost 
criteria thresholds discussed above, testing claims reporting one unit 
of a single primary service assigned to status indicator ``J1'' and any 
number of units of a single add-on code for the primary ``J1'' service. 
If the frequency and cost criteria thresholds for a complexity 
adjustment are met and reassignment to the next higher cost APC in the 
clinical family is appropriate (based on meeting the criteria outlined 
above), we make a complexity adjustment for the code combination; that 
is, we reassign the primary service code reported in conjunction with 
the add-on code to the next higher cost C-APC within the same clinical 
family of C-APCs. As previously stated, we package payment for add-on 
codes into the C-APC payment rate. If any add-on code reported in 
conjunction with the ``J1'' primary service code does not qualify for a 
complexity adjustment, payment for the add-on service continues to be 
packaged into the payment for the primary service and is not reassigned 
to the next higher cost C-APC. We list the complexity adjustments for 
``J1'' and add-on code combinations for CY 2022, along with all of the 
other final complexity adjustments, in Addendum J to the CY 2022 OPPS/
ASC final rule (which is available via the internet on the CMS website 
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
    Addendum J to the CY 2022 OPPS/ASC final 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 the CY 2022 OPPS/ASC final 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 finalized 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 four 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 the CY 2022 OPPS/
ASC proposed rule allows stakeholders the opportunity to better assess 
the impact associated with the proposed assignment of claims with each 
of the paired code combinations eligible for a complexity adjustment.
    Comment: One commenter expressed support of CMS' proposal to 
maintain existing complexity adjustment code pairs that were in effect 
for 2021 and to create new complexity adjustments for certain code 
pairs for CY 2022.
    Response: We thank the commenter for their support.
    Comment: Several commenters requested that CMS modify or eliminate 
the established C-APC complexity adjustment eligibility criteria of 25 
or more claims reporting the code combination (frequency) and a 
violation of the 2 times rule in the originating C-APC (cost) to allow 
additional code combinations to qualify for complexity adjustments. 
These commenters expressed concern that CMS' methodology for 
determining complexity adjustments is unnecessarily restrictive, 
specifically the 25-claim threshold. One commenter also requested that 
CMS apply the complexity adjustment to all blue light cystoscopy 
procedures performed with Cysview [supreg]in the HOPD. The specific C-
APC complexity adjustments requested by the commenters are listed in 
Table 1 below.
    Several commenters reiterated their request to allow clusters of 
procedures, consisting of a ``J1'' code-pair and multiple other 
associated add-on codes used in combination with that ``J1''

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code-pair to qualify for complexity adjustments, stating that this may 
allow for more accurate reflection of medical practice when multiple 
procedures are performed together or there are certain complex 
procedures that include numerous add-on codes. Commenters also 
requested that CMS continue to monitor and report on the impact of 
applying complexity criteria on APC assignments for code combinations 
within C-APCs.
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    Response: We appreciate these comments. We note that we did not 
propose that claims with the code combinations suggested by commenters 
would receive complexity adjustments because they failed to meet either 
the cost or frequency criteria. We also note that, at this time, we do 
not believe changes to the C-APC complexity adjustment criteria are 
necessary or that we should make exceptions to the criteria to allow 
claims with the code combinations suggested by the commenters to 
receive complexity adjustments. As we stated in the CY 2017 OPPS/ASC 
final rule (81 FR 79582), we believe that the complexity adjustment 
criteria, which require a frequency of 25 or more claims reporting a 
code combination and a violation of the 2 times rule in the originating 
C-APC, are appropriate to determine if a combination of procedures 
represents a complex, costly subset of the primary service that should 
qualify for the adjustment and be paid at the next higher paying C-APC 
in the clinical family. If a code combination meets these criteria, the 
combination receives payment at the next higher cost C-APC. Code 
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criteria receive the C-APC payment rate associated with the primary 
``J1'' service. As we previously stated in the CY 2020 OPPS/ASC final 
rule with comment period (84 FR 61161), a minimum of 25 claims is 
already a very low threshold for a national payment system. Lowering 
the minimum of 25 claims further could lead to unnecessary complexity 
adjustments for service combinations that are rarely performed.
    As stated in the CY 2019 OPPS/ASC final rule with comment period 
(83 FR 58843), we do not believe that it is necessary to adjust the 
complexity adjustment criteria to allow claims that include more than 
two ``J1'' procedures or procedures that are not assigned to C-APCs to 
qualify for a complexity adjustment. As previously mentioned, we 
believe the current criteria are adequate to determine if a combination 
of procedures represents a complex, costly subset of the primary 
service. We will continue to monitor the application of the complexity 
adjustment criteria.
    After consideration of the public comments we received on the 
proposed complexity adjustment policy, we are finalizing the C-APC 
complexity adjustment policy for CY 2022 as proposed. We are also 
finalizing the complexity adjustments proposed without modification.
(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 two years if sufficient data are available. 
It also allows us to retain a service in a New Technology APC for more 
than two 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 are 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.
    We did not receive any comments on this policy. We are finalizing 
as proposed without modification to continue this exclusion policy.
(3) Additional C-APCs for CY 2022
    In the CY 2022 proposed rule, we proposed to continue to apply the 
C-APC payment policy methodology. We refer readers to the CY 2017 OPPS/
ASC final rule with comment period (81 FR 79583) for a discussion of 
the C-APC payment policy methodology and revisions.
    Each year, in accordance with section 1833(t)(9)(A) of the Act, we 
review and revise the services within each APC group and the APC 
assignments under the OPPS. As a result of our annual review of the 
services and the APC assignments under the OPPS, we did not propose to 
convert any standard APCs to C-APCs in CY 2022, thus we proposed that 
the number of C-APCs for CY 2022 would be the same as the number for CY 
2021, which is 69 C-APCs.
    Comment: One commenter requested that CMS designate APC 5372 (Level 
2 Urology and Related Services) as a Comprehensive APC, noting that all 
other Urology and Related Services APCs are C-APCs and multiple 
procedures within this APC would qualify for complexity adjustments.
    Response: We appreciate the commenter's suggestion and will 
consider it for future rulemaking.
    Comment: Several commenters requested that CMS discontinue the C-
APC payment policy for all surgical insertion codes required for 
brachytherapy treatment. The commenters were concerned that the C-APC 
methodology lacks the charge capture mechanisms to accurately reflect 
the cost of radiation oncology services, particularly the delivery of 
brachytherapy for the treatment of cervical cancer. They also stated 
that they oppose C-APC payment for cancer care given the complexity of 
coding, use of serial billing, and the potential for different sites of 
service for the initial surgical device insertion and subsequent 
treatment delivery or other supportive services. These commenters 
suggested that CMS assign brachytherapy procedures to traditional APCs, 
move brachytherapy procedures to higher paying C-APC, or pay separately 
for preparation and planning services to fully account for the costs 
associated with these procedures.
    Response: We appreciate the comments. The calculations provided by 
commenters as to the cost of these services do not match how we 
calculate C-APC costs. We believe that the current C-APC methodology is 
appropriately applied to these surgical procedures and is accurately 
capturing costs. We will continue to examine these concerns and will 
determine if any modifications to this policy are warranted in future 
rulemaking.
    After consideration of the public comments we received, we are 
finalizing our C-APC policy and the proposed C-APCs as proposed for CY 
2022. Table 2 below lists the final C-APCs for CY 2022, all of which 
were established in past rules. All C-APCs are displayed in Addendum J 
to this CY 2022 OPPS/ASC final rule with comment period (which is 
available via the internet at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices). Addendum J to this final rule with comment 
period also contains all of the data related to the C-APC payment 
policy methodology, including the list of complexity adjustments and 
other information for CY 2022.
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c. Calculation of Composite APC Criteria-Based Costs
    As discussed in the CY 2008 OPPS/ASC final rule with comment period 
(72 FR 66613), we believe it is important that the OPPS enhance 
incentives for hospitals to provide necessary, high quality care as 
efficiently as possible. For CY 2008, we developed composite APCs to 
provide a single payment for groups of services that are typically 
performed together during a single clinical encounter and that result 
in the provision of a complete service. Combining payment for multiple, 
independent services into a single OPPS payment in this way enables 
hospitals to manage their resources with maximum flexibility by 
monitoring and adjusting the volume and efficiency of services 
themselves. An additional advantage to the composite APC model is that 
we can use data from correctly coded multiple procedure claims to 
calculate payment rates for the specified combinations of services, 
rather than relying upon single procedure claims which may be low in 
volume and/or incorrectly coded. Under the OPPS, we currently have 
composite policies for mental health services and multiple imaging 
services. (We note that, in the CY 2018 OPPS/ASC final rule with 
comment period, we finalized a policy to delete the composite APC 8001 
(LDR Prostate Brachytherapy Composite) for CY 2018 and subsequent 
years.) We refer readers to the CY 2008 OPPS/ASC final rule with 
comment period (72 FR 66611 through 66614 and 66650 through 66652) for 
a full discussion of the development of the composite APC methodology, 
and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163) 
and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241 
through 59242 and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
    We proposed to continue our longstanding policy of limiting the 
aggregate payment for specified less resource-intensive mental health 
services furnished on the same date to the payment for a day of partial 
hospitalization services provided by a hospital, which we consider to 
be the most resource-intensive of all outpatient mental health 
services. We refer readers to the April 7, 2000 OPPS final rule with 
comment period (65 FR 18452 through 18455) for the initial discussion 
of this longstanding policy and the CY 2012 OPPS/ASC final rule with 
comment period (76 FR 74168) for more recent background.
    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79588 
through 79589), we finalized a policy to combine the existing Level 1 
and Level 2 hospital-based PHP APCs into a single hospital-based PHP 
APC, and thereby discontinue APCs 5861 (Level 1--Partial 
Hospitalization (3 services) for Hospital-Based PHPs) and 5862 (Level 
2--Partial Hospitalization (4 or more services) for Hospital-Based 
PHPs) and replace them with APC 5863 (Partial Hospitalization (3 or 
more services per day)).
    In the CY 2018 OPPS/ASC proposed rule and final rule with comment 
period (82 FR 33580 through 33581 and 59246 through 59247, 
respectively), we proposed and finalized the policy for CY 2018 and 
subsequent years that, when the aggregate payment for specified mental 
health services provided by one hospital to a single beneficiary on a 
single date of service, based on the payment rates associated with the 
APCs for the individual services, exceeds the maximum per diem payment 
rate for partial hospitalization services provided by a hospital, those 
specified mental health services will be paid through composite APC 
8010 (Mental Health Services Composite). In addition, we set the 
payment rate for composite APC 8010 for CY 2018 at the same payment 
rate that will be paid for APC 5863, which is the maximum partial 
hospitalization per diem payment rate for a hospital, 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 proposed that when the aggregate payment for specified mental 
health services provided by one hospital to a single beneficiary on a 
single date of service, based on the payment rates associated with the 
APCs for the individual services, exceeds the maximum per diem payment 
rate for partial hospitalization services provided by a hospital, those 
specified mental health services would be paid through composite APC 
8010 for CY 2022. In addition, we proposed to set the payment rate for 
composite APC 8010 at the same payment rate that we proposed for APC 
5863, which is the maximum partial hospitalization per diem payment 
rate for a hospital, and that the hospital continue to be paid the 
proposed payment rate for composite APC 8010.
    We did not receive any public comment on these proposals and are 
finalizing them as proposed. In particular, we are finalizing our 
proposal, without modification, that when the aggregate payment for 
specified mental health services provided by one hospital to a single 
beneficiary on a single date of service, based on the payment rates 
associated with the APCs for the individual services, exceeds the 
maximum per diem payment rate for partial hospitalization services 
provided by a hospital, those specified mental health services would be 
paid through composite APC 8010 for CY 2022. In addition, we are 
finalizing our proposal to set the payment rate for composite APC 8010 
for CY 2022 at the same payment rate that we set for APC 5863, which is 
the maximum partial hospitalization per diem payment rate for a 
hospital.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and 
8008)
    Effective January 1, 2009, we provide a single payment each time a 
hospital submits a claim for more than one imaging procedure within an 
imaging family on the same date of service, 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 3 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

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provided either with or without contrast. The five multiple imaging 
composite APCs established in CY 2009 are:
     APC 8004 (Ultrasound Composite);
     APC 8005 (CT and CTA without Contrast Composite);
     APC 8006 (CT and CTA with Contrast Composite);
     APC 8007 (MRI and MRA without Contrast Composite); and
     APC 8008 (MRI and MRA with Contrast Composite).
    We define the single imaging session for the ``with contrast'' 
composite APCs as having at least one or more imaging procedures from 
the same family performed with contrast on the same date of service. 
For example, if the hospital performs an MRI without contrast during 
the same session as at least one other MRI with contrast, the hospital 
will receive payment based on the payment rate for APC 8008, the ``with 
contrast'' composite APC.
    We make a single payment for those imaging procedures that qualify 
for payment based on the composite APC payment rate, which includes any 
packaged services furnished on the same date of service. The standard 
(noncomposite) APC assignments continue to apply for single imaging 
procedures and multiple imaging procedures performed across families. 
For a full discussion of the development of the multiple imaging 
composite APC methodology, we refer readers to the CY 2009 OPPS/ASC 
final rule with comment period (73 FR 68559 through 68569).
    For CY 2022, we proposed to continue to pay for all multiple 
imaging procedures within an imaging family performed on the same date 
of service using the multiple imaging composite APC payment 
methodology. We 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 proposed 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 the 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 the CY 2022 OPPS/ASC proposed rule (which is available 
via the internet on the CMS website\1\) and are discussed in more 
detail in section II.A.1.b. of the CY 2022 OPPS/ASC proposed rule (86 
FR 42034 through 42040).
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    \1\ CY 2022 Medicare Hospital Outpatient Prospective Payment 
System and Ambulatory Surgical Center Payment System Proposed Rule 
(CMS-1753-P); Notice of Proposed Rulemaking. Available at: https://www.cms.gov/medicaremedicare-fee-service-paymenthospitaloutpatientppshospital-outpatient-regulations-and-notices/cms-1753-p.
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    For the 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 the 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 (86 FR 42037 through 42040).
    We did not receive any public comments on these proposals. We are 
finalizing our proposal to continue the use of multiple imaging 
composite APCs to pay for services providing more than one imaging 
procedure from the same family on the same date, without modification. 
Table 3 below lists the HCPCS codes that will be subject to the 
multiple imaging composite APC policy and their respective families and 
approximate composite APC final geometric mean costs for CY 2022.
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3. Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
    Like other prospective payment systems, the OPPS relies on the 
concept of averaging to establish a payment rate for services. The 
payment may be more or less than the estimated cost of providing a 
specific service or a bundle of specific services for a particular 
beneficiary. The OPPS packages payments for multiple interrelated items 
and services into a single payment to create incentives for hospitals 
to furnish services most efficiently and to manage their resources with 
maximum flexibility. Our packaging policies support our strategic goal 
of using larger payment bundles in the OPPS to maximize hospitals' 
incentives to provide care in the most efficient manner. For example, 
where there are a variety of devices, drugs, items, and supplies that 
could be used to furnish a service, some of which are more costly than 
others, packaging encourages hospitals to use the most cost-efficient 
item that meets the patient's needs, rather than to routinely use a 
more expensive item, which may occur if separate payment is provided 
for the item.
    Packaging also encourages hospitals to effectively negotiate with 
manufacturers and suppliers to reduce the purchase price of items and 
services or to explore alternative group purchasing arrangements, 
thereby encouraging the most economical health care delivery. 
Similarly, packaging encourages hospitals to establish protocols that 
ensure that necessary services are furnished, while scrutinizing the 
services ordered by practitioners to maximize the efficient use of 
hospital resources. Packaging payments into larger payment bundles 
promotes the predictability and accuracy of payment for services over 
time. Finally, packaging may reduce the importance of refining service-
specific payment because packaged payments include costs associated 
with higher cost cases requiring many ancillary items and services and 
lower cost cases requiring fewer ancillary items and services. Because 
packaging encourages efficiency and is an essential component of a 
prospective payment system, packaging payments for items and services 
that are typically integral, ancillary, supportive, dependent, or 
adjunctive to a primary service has been a fundamental part of the OPPS 
since its implementation in August 2000. For an extensive discussion of 
the history and background of the OPPS packaging policy, we refer 
readers to the CY 2000 OPPS final rule with comment period (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 proposed no changes to the overall packaging policy 
previously discussed. We proposed 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.
    We did not receive any public comments on the overall OPPS 
packaging policy and are finalizing our packaging policy as proposed. 
Specific packaging concerns are discussed in detail in their respective 
sections throughout this final rule with comment period.
b. ASC Payment System Policy for Non-Opioid Pain Management Drugs and 
Biologicals That Function as Surgical Supplies
(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

[[Page 63484]]

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 supported 
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) \2\ 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 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+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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    \2\ https://www.federalregister.gov/documents/2017/04/03/2017-06716/establishing-the-presidents-commission-on-combating-drug-addiction-and-the-opioid-crisis.
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    On October 24, 2018, the Substance Use-Disorder Prevention that 
Promotes Opioid Recovery and Treatment for Patients and Communities Act 
(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 outpatient 
department (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) of the Act, which requires any adjustments 
to be made in a budget neutral manner. Section 1833(i)(8) of the Act, 
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+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+6 percent 
for non-opioid pain management drugs that function as surgical supplies 
when furnished in the ASC setting for CY 2020. Under this

[[Page 63485]]

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+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 through 
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) of the Act, 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) of the Act. 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 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 proposed 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 solicited comment as to 
whether we should expand our current policy that only applies in the 
ASC setting--to pay separately at ASP+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.
    In the CY 2022 OPPS/ASC proposed rule, we stated we were 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 sought 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, in the proposed rule we sought comment on if we should 
treat

[[Page 63486]]

products the same depending on the setting, ASC or HOPD. For example, 
we sought comment on whether products should have the same eligibility 
requirements to qualify for revised payment in the ASC and the HOPD 
settings. We also sought comment on how the additional comment 
solicitations described below, which refer to the ASC setting, could 
also be applied to the HOPD setting.
    Comment: MedPAC commented that while it appreciated CMS's interest 
in addressing the issue of opioid overuse it continued to support a 
policy that maintains the packaging of drugs that function as supplies 
in surgical procedures. MedPAC stated that this policy is contrary to 
CMS's efforts to increase the size of payment bundles in the OPPS to 
increase incentives for efficient delivery of care.
    Response: We appreciate this feedback. We agree that packaging 
policies are a fundamental component of the OPPS and ASC payment 
systems. We strive to balance the importance of our packaging policies 
with the importance of addressing the opioid epidemic. In this specific 
scenario, we believe separate payment in the ASC setting for non-opioid 
pain management drugs and biologicals that function as surgical 
supplies is appropriate given the financial disincentives we have 
observed for these products in the ASC setting. As previously 
discussed, 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.
    Comment: Most commenters were in favor of expanding the policy to 
provide separate payment under the ASC payment system for certain non-
opioid pain management drugs that function as surgical supplies to the 
HOPD setting. Many providers commented that non-opioid pain management 
therapies are often superior to opioid-based ones in reducing pain, and 
indicated that they generally would prefer to use non-opioid therapies. 
However, many stated that payment dictated whether they could use a 
specific therapy. As such, commenters stated that the pain management 
therapies available in the ASC setting are not used to the same degree 
as in the HOPD setting. Commenters stated that although there has not 
been a drastic decrease in HOPD utilization of non-opioid pain 
management drugs, the utilization of opioid alternatives could be much 
higher if separate payment for these products was provided. Similarly, 
several commenters acknowledged that the disincentives to provide non-
opioid pain management drugs in the HOPD setting were not as 
substantial as the ASC setting; however, according to these 
stakeholders, there are still financial disincentives to use opioids 
instead of opioid alternatives in the HOPD setting. A drug manufacturer 
discussed its view on the disparities in utilization and access to non-
opioid pain management therapies in the HOPD setting compared to the 
ASC setting. Based on this commenter's geo-sociodemographic analysis, 
they believe that ASC access to their drug outpaced access in the HOPD 
setting due to CMS payment policies. A few drug manufacturers provided 
specific data on utilization of their individual products. Omeros, the 
manufacturer of the drug Omidria, cited that the drug's utilization 
had, in their view, decreased in the HOPD setting as a result of CMS 
packaging polices. Many commenters suggested that opioids were more 
cost effective for their HOPD facilities to use compared to non-opioid 
pain management drugs due to CMS payment policies. Some commenters 
suggested that a greater number of surgeries, particularly those with 
higher acuity and complexity that require pain management drugs, occur 
in the HOPD setting, compared to the ASC setting. The commenters 
contended that separate payment for non-opioid pain management drugs in 
this setting could potentially increase access to these treatments. 
Therefore, the commenters encouraged CMS to expand this policy to the 
HOPD setting.
    The commenters generally encouraged payment parity across the ASC 
and HOPD settings in order to enhance site neutrality and prevent a 
diversion of patients to the ASC setting based solely on the 
availability of separate payment for non-opioid pain management drugs. 
MedPAC had concerns that our proposed policy would further distort 
payment differences between two care settings that are the sites of 
many of the same services, creating financial incentives for providers 
to direct patients to one setting of care. Many commenters and 
providers pointed to the clinical benefit of non-opioid treatments, and 
encouraged CMS to pay separately, incentivize, or otherwise recognize 
the value of these drugs in the HOPD setting, regardless of utilization 
patterns. Commenters provided literature supporting the benefits of 
non-opioid pain management approaches, including how certain non-opioid 
pain management products were effective for pain and reduced opioid 
consumption.
    Response: We appreciate the many detailed comments we received from 
a wide variety of stakeholders in response to our comment solicitation 
on expanding our non-opioid pain management payment policy to the HOPD 
setting as well as those regarding the clinical benefit of non-opioid 
pain management treatments used in their clinical practice.
    As discussed in the CY 2022 OPPS/ASC proposed rule, we did not make 
a proposal to expand this policy to the HOPD setting based on many 
factors, including our continued claims analysis that demonstrates 
increasing utilization year after year of these products in the HOPD 
setting. In the proposed rule, we described our claims analysis for 
Exparel, a drug for which we have more than five years of reliable 
claims data. As stated in the proposed rule, even while Exparel was 
packaged in the HOPD setting, claims data shows that utilization 
continued to steadily increase year over year. For other drugs 
described by stakeholders, we found similar increases over years of 
claims data. We will continue to track the utilization in the HOPD and 
ASC settings for all of these drugs. However, as Exparel is the only 
drug that has been not recently been on pass-through and has been 
packaged in the HOPD setting over the last three years, we believe that 
Exparel's utilization is a good indicator of whether our payment 
policies are causing disincentives for non-opioids in the HOPD setting. 
We have explained in several prior rulemakings, including 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. As previously discussed, we strive to 
balance the importance of our packaging policies with the importance of 
addressing the opioid epidemic. In this specific scenario, we believe 
separate payment in the ASC setting for non-opioid pain management 
drugs and biologicals that function as surgical supplies is 
appropriate, given the financial disincentives we have observed for 
these products in the ASC setting. 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

[[Page 63487]]

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. We have not observed the same 
financial disincentives in the HOPD setting. We have also not observed 
conclusive trends that our packaging policies for non-opioid pain 
management are shifting patients from the HOPD setting to the ASC 
setting.
    After reviewing the public comments received, as described 
previously, 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. Our goal is 
to eliminate the disincentive to use non-opioid pain management drugs, 
rather than to incentivize products in the HOPD setting as some 
commenters have suggested. At this time, we have not observed any clear 
and conclusive financial disincentive to use non-opioid pain management 
drugs over opioids in the HOPD setting. However, based on the comments 
we received, we will continue to carefully analyze utilization data and 
engage with stakeholders.
    Therefore, for CY 2022, we are finalizing as proposed our proposal 
to continue to package payment under the OPPS for non-opioid pain 
management drugs that function as surgical supplies in the performance 
of surgical procedures in the HOPD setting.
(3) 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 proposed 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 were 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.
    Comment: Most commenters supported continuing our policy of 
separate payment for non-opioid pain management drugs that function as 
surgical supplies in the ASC setting. Commenters believe continuing 
separate payment in the ASC setting is essential given the continued 
overall low utilization of these drugs in the ASC setting and the 
positive clinical benefit the drugs provide.
    Response: We thank commenters for their support for our proposal. 
In the following sections we discuss in greater detail the specific 
aspects of the policy that commenters addressed.
    Comment: MedPAC expressed reservations regarding our policy to pay 
ASCs separately for non-opioid pain management drugs that function as 
supplies. It stated this policy is contrary to CMS's policy efforts to 
increase the size of payment bundles in order to increase incentives 
for efficient delivery of care. Additionally, it stated paying 
separately in the ASC would distort payment differences between the ASC 
and HOPD settings. Generally, MedPAC supported a policy that maintains 
the packaging of drugs that function as supplies in surgical 
procedures, especially in the absence of evidence in peer-reviewed 
publications indicating that the drug in question reduces the use of 
opioids.
    Response: We appreciate this comment and agree with the importance 
of maintaining our overarching packaging policies in the OPPS and ASC 
payment systems. However, given the seriousness of the opioid epidemic, 
we continue to believe this policy plays an important role in 
maintaining beneficiary access and enhancing patient care in the ASC 
setting by eliminating the financial disincentive to use non-opioid 
pain management drugs that function as surgical supplies over opioids.
    Based on public comments received, for CY 2022, we are finalizing 
our proposal as proposed to continue our current policy to pay 
separately for non-opioid pain management drugs that function as 
surgical supplies in the performance of surgical procedures in the ASC 
setting. We are also finalizing the new additional eligibility criteria 
we proposed for this policy, as discussed in the following section.
    Specifically, for CY 2022, we proposed the following criteria that 
non-opioid pain management drugs and biologicals that function as 
surgical supplies would be required to meet to be eligible for separate 
payment under the ASC payment system in accordance with section 
1833(t)(22)(C) of the Act.
Criterion One: FDA Approval and FDA-Approved Indication for Pain 
Management or Analgesia
    We proposed that the drug or biological product must be safe and 
effective, as determined by FDA. We proposed that the drug must be 
approved under a new drug application under section 505(c) of the 
Federal Food, Drug, and Cosmetic Act (FDCA), 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 
(the PHS Act). We further proposed 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 be eligible for this policy because FDA reviews new 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 would apply. Given that FDA has an existing and detailed 
review process already in place, we believe it would be appropriate and 
administratively efficient to utilize FDA approval as a requirement to 
ensure that the new drugs and biologicals approved under this policy 
are safe and effective for their intended use. 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)(A) of the Act, our current policy, and 
our proposed policy all focus on pain management products. 
Specifically, section 1833(t)(22)(A) of the Act refers to reviews of 
opioid and evidence-based non-opioid products for pain management. 
Therefore, we proposed to require an FDA-approved indication for pain 
management or analgesia for a drug or biological to qualify as a pain 
management product.

[[Page 63488]]

The FDA approval process would also allow us to confirm that a drug or 
biological is, in fact, a non-opioid. Drugs and biologicals that are 
characterized as opioids or opioid agonists in the labeling for the 
FDA-approved product would not be eligible for separate payment under 
this policy.
    Comment: Many commenters recommended CMS finalize its proposal to 
require an FDA-approved indication for pain management or analgesia for 
a drug or biological to qualify as a pain management product. Numerous 
commenters believe that this criterion is objective and would provide a 
transparent requirement for this policy moving forward. Commenters 
stated that FDA has a thorough and comprehensive process for evaluating 
drugs for approval and for specific FDA-approved indications. Other 
commenters did not express outright support for this criterion, but 
rather said they were not opposed to it. Generally, commenters were in 
favor of establishing an FDA approval requirement.
    Response: We thank commenters for their support. As described in 
our proposal, we agree with the importance of utilizing FDA approval 
and an indication for pain management as a criterion for separate 
payment for eligible non-opioids.
    Comment: Some commenters did not support requiring a specific FDA-
approved indication for pain management or analgesia because the 
commenters believed this requirement may limit the number of products 
to which the policy would apply. One commenter asked us to clarify 
whether an FDA-approved indication for the treatment of pain would be 
considered appropriate and satisfy this criterion. One drug 
manufacturer more generally asked for flexibility in the exact FDA-
approved indication. This commenter stated CMS should allow flexibility 
for a variety of indication statements that demonstrate that a drug 
mitigates or otherwise alleviates pain. Additionally, this commenter 
asked CMS to clarify if providing a drug during the pre-operative, 
post-operative, or intraoperative period could potentially qualify 
under the proposed policy. Some commenters asked CMS to expand this 
FDA-approved indication criterion to include anesthesia drugs, drugs 
used to treat inflammation, or more generally, any drugs that may have 
pain management properties. An additional commenter suggested limiting 
eligibility to drugs or biologicals with more restrictive FDA-approved 
indications, such as those drugs with opioid-sparing pain management 
indications.
    Response: Regarding comments on a specific FDA-approved indication, 
we believe an FDA-approved indication for pain management or analgesia 
is appropriate for this policy. Section 1833(t)(22) of the Act required 
us to assess incentives to use opioids rather than non-opioid products 
used for pain management. We believe using the FDA-approved indications 
as a method to determine which drug products are safe and effective for 
pain management is appropriate. Therefore, we do not believe drugs or 
biologicals that do not have an FDA--approved indication for pain 
management or as an analgesic, such as certain anesthesia drugs 
mentioned by stakeholders, would be appropriate under this policy. We 
do believe ``treatment of pain'' as described by one commenter, would 
be an appropriate indication to satisfy this criterion. In response to 
the recommendation that we include drugs used to treat inflammation, or 
more generally, any drugs that may have pain management properties, we 
are not modifying our proposal to include these types of drugs in the 
definition of an FDA-approved indication for pain management or 
analgesia.
    Additionally, we remind commenters 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 (83 FR 58855). 
Additionally, a drug product must meet all other requirements for 
payment and coverage under Medicare Part B in order to be paid and 
covered under this policy. We believe including those drugs with FDA-
approved indications for pain management or analgesia will capture the 
appropriate drug products intended for this policy without being so 
broad as to include drugs that may not be used for pain management or 
so restrictive as to exclude potentially useful non-opioid pain 
management products.
    Based on our review of public comments, we are finalizing criterion 
one as proposed, under which the drug or biological product must be 
safe and effective, as determined by FDA, and that the drug must be 
approved under a new drug application under section 505(c) of FDCA, 
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 
PHS Act. We are also finalizing for CY 2022 as part of criterion one 
the requirement that the drug or biological also have an FDA-approved 
indication for pain management or analgesia.
Criterion Two: 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. The proposed per-day drug packaging 
threshold for CY 2022 was $130, and the finalized per-day drug 
packaging threshold for CY 2022 is $130, as described in V.B.1.a of 
this final rule with comment period.
    As our second criterion, we proposed 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) of the Act if its per-
day cost exceeds the drug packaging threshold described in section 
V.B.1.a. of this final rule with comment period. 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, when the cost of non-opioid drugs and 
biologicals falls below the packaging threshold of $130 per-day, we 
believe the drug does not generally have a significant impact on the 
overall procedure costs; therefore, we believe use of these drugs and 
biologicals is less likely to be disincentivized by CMS packaging 
policies. However, when the per-day cost of the drug is above the drug 
packaging threshold, we believe the cost of these drugs or biologicals 
is more likely to have 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 
with costs above the threshold. We proposed 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 
proposed that drugs and biologicals would be required to have a per-day 
cost that exceeds the drug packaging threshold that CMS sets

[[Page 63489]]

annually through notice and comment rulemaking.
    We also believe the use of this threshold as an eligibility 
criterion for drugs under consideration for separate payment 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 is appropriate to continue to package drugs that would 
otherwise qualify for separate payment under this policy where their 
per-day cost is below the OPPS drug packaging threshold.
    Comment: Most commenters supported this criterion. Some commenters 
stated that they agreed with CMS's rationale that use of drugs and 
biologicals with per-day costs below the packaging threshold is not 
generally disincentivized by CMS packaging policies. Commenters 
generally thought this was a clear, transparent, and objective 
criterion. Other commenters did not express outright support for this 
criterion but stated that they were not opposed to it.
    Response: We thank commenters for their support of this proposed 
criterion.
    Comment: A few commenters stated that non-opioid pain management 
drugs that fall below the drug packaging threshold are still expensive 
relative to opioids, and therefore, the commenters believed CMS should 
not finalize a cost threshold for this policy. Specifically, the 
manufacturer of Anjeso (HCPCS code J1738; Injection, meloxicam, 1 mg), 
Baudax Bio, supported CMS adopting policies that encourage use of non-
opioid pain alternatives. However, they recognized that the per-day 
cost of their product fell below the drug packaging threshold and 
disagreed with CMS's proposed criterion two regarding per-day cost, 
because they indicated that the relative cost of opioids is still less 
than most non-opioid pain management products. Other commenters 
recommended that CMS pay for drugs and biologicals with per-day costs 
that fall below the drug packaging threshold, such as intravenous (IV) 
acetaminophen.
    Response: We thank the commenters for their feedback on this 
proposed criterion. At this time, we continue to believe that drugs and 
biologicals with per-day costs below the OPPS drug packaging threshold 
are not generally disincentivized by CMS packaging policies, as the 
drug cost is less likely to represent a substantial portion of the 
payment rate of the primary procedure in which the product is used. 
This criterion aligns with our policy objective of eliminating 
financial disincentives to use of non-opioid pain management products.
    Based on our rationale described above and feedback from 
stakeholders, we believe it is appropriate to finalize the second 
criterion as proposed. For CY 2022, we are finalizing our proposal that 
a non-opioid pain management drug or biological that functions as a 
supply in a surgical procedure would only be eligible for separate 
payment under the ASC payment system if its per-day cost exceeds the 
drug packaging threshold described in section V.B.1.a. of this final 
rule with comment period.
    In addition, we proposed 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. We proposed 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.
    Comment: Commenters requested that CMS determine the payment status 
of non-opioid drugs and biologicals after pass-through status expires 
as soon as possible through rulemaking.
    Response: We thank commenters for their feedback. We will make 
payment determinations for applicable drugs in the appropriate calendar 
year rule. For example, those drugs that may be eligible for separate 
payment under this policy for the first time in CY 2023 will be 
discussed during the CY 2023 rulemaking cycle and evaluated against the 
appropriate eligibility criteria for that year.
    Based on stakeholder feedback, we are finalizing as proposed that 
non-opioid pain management drugs and biologicals that function as 
supplies in surgical procedures that are already paid separately, or 
have transitional drug pass-through status under the OPPS, would not be 
candidates for this policy as they are already paid separately under 
the OPPS and ASC payment system. We also note that if a product has not 
received transitional pass-through status in the OPPS and ASC settings, 
separate payment in the ASC setting through this policy for non-opioid 
pain management drugs that function as surgical supplies does not 
preclude the manufacturer from applying for and receiving transitional 
pass-through status for their drug or biological if the drug or 
biological meets the criteria for transitional drug pass-through 
status. Please see section V.A., OPPS Transitional Pass-Through Payment 
for Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals, 
of this CY 2022 OPPS/ASC final rule for additional details on 
transitional pass-through payments.
(4) Regulation Text Changes
    We proposed 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 proposed 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 FDCA, under an abbreviated new drug 
application under section 505(j) of FDCA, or, in the case of a 
biological product, are licensed under section 351 of the PHS 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 proposed 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 covered surgical 
procedure and for which separate payment is allowed. We also proposed 
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

[[Page 63490]]

not paid an amount derived from the payment rate for the equivalent 
item or service under the OPPS.
    We received no comments on the specific regulation text changes. As 
we are finalizing the two criteria as proposed, we are also finalizing 
the corresponding regulation text changes as proposed.
(5) Eligibility for Separate Payment in CY 2022 for Exparel, Omidria, 
and Other Non-Opioid Drugs or Biologicals 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 in CY 2021 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 proposed that both 
products would be eligible for separate payment in CY 2022 under our 
proposed policy. We sought comment on whether there are any other non-
opioid drug or biological products that would meet the proposed 
criteria if finalized. We have included our evaluations of these 
products based on stakeholder comments in the follow sections.
(a) Eligibility for Separate Payment in CY 2022 for Exparel
    We proposed that Exparel (C9290; Injection, bupivacaine liposome, 1 
mg) 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. As we stated in the CY 2022 OPPS/ASC proposed rule, based on 
CMS's internal review, we believed Exparel met criterion one. Exparel 
was approved by FDA with a New Drug Application (NDA #022496) on 10/28/
2011.\3\ 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''.\4\ No component of 
Exparel is opioid-based. Accordingly, we proposed that Exparel meets 
criterion one.
---------------------------------------------------------------------------

    \3\ Exparel. FDA Letter. 28 October 2011. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf.
    \4\ Exparel. FDA Package Insert. 22 March 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf.
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    As discussed in section (3) above, for criterion two we proposed 
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 final rule with comment 
period. The finalized per-day cost threshold for CY 2022 is $130. Using 
the methodology described at V.B.1.a. of this final rule with comment 
period, the per-day cost of Exparel exceeds the $130 per-day cost 
threshold. Therefore, we proposed that Exparel meets criterion two.
    Based on the above discussion, we proposed that Exparel meets 
criteria 1 and 2, and should receive separate payment under the ASC 
payment system for CY 2022.
    Comment: The manufacturer of Exparel, Pacira BioSciences, supported 
finalizing both criteria as proposed and urged CMS to finalize the 
proposal to pay separately for Exparel in the ASC setting. The 
manufacturer also noted that numerous peer-reviewed studies demonstrate 
that Exparel can reduce or even replace use of postsurgical opioid pain 
medication and lead to improved patient outcomes. Several commenters, 
including a hospital association and surgery associations, also 
supported CMS's proposal to continue to unpackage and pay separately 
for Exparel in the ASC setting.
    Response: We appreciate the commenters' input. After reviewing the 
information provided during the public comment period, and as described 
in our proposal above, we have determined that Exparel meets criterion 
one for FDA approval and an FDA-approved pain management indication and 
that the per-day cost of Exparel exceeds the finalized $130 per-day 
cost threshold, meeting criterion two. Additionally, no component of 
Exparel is opioid-based.
    After consideration of the public comments we received and 
consistent with the eligibility criteria we are adopting, we are 
finalizing our proposal that Exparel will continue to receive separate 
payment under the ASC payment system in CY 2022 as a non-opioid pain 
management drug that functions as a surgical supply.
(b) Eligibility for Separate Payment for Omidria in CY 2022
    We proposed that Omidria (J1097; Phenylephrine 10.16 mg/ml and 
ketorolac 2.88 mg/ml ophthalmic irrigation solution, 1 ml) 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 during the proposed rule, we stated that 
we believed Omidria would meet criterion one. Omidria was approved by 
FDA with a New Drug Application (NDA #205388) on May 30, 2014.\5\ 
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''.\6\ No component of Omidria is 
opioid-based. Therefore, we proposed that Omidria would meet proposed 
criterion one.
---------------------------------------------------------------------------

    \5\ Omidria. FDA Letter. 30 May 2014. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf.
    \6\ 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. of this final rule with 
comment period, the per-day cost of Omidria exceeds the $130 per-day 
cost threshold. Therefore, we proposed that Omidria meets criterion 
two.
    Because we proposed that Omidria meets criteria one and two, we 
proposed that it should receive separate payment under the ASC payment 
system for CY 2022.
    Comment: The manufacturer of Omidria, Omeros, agreed with CMS's 
proposal that Omidria would satisfy the proposed criteria for CY 2022 
and noted their support for Omidria continuing to receive separate 
payment in ASC setting. The manufacturer noted that Omidria decreases 
the need for the opioid fentanyl during surgery and reduces opioids 
prescribed post operatively, but did not submit literature to support 
these assertions. One commenter, a hospital association, also supported 
CMS's proposal to continue to unpackage Omidria in the ASC setting. 
However, another individual commenter stated their opposition to this 
proposal, noting that Omidria should be treated as an incidental part 
of an ophthalmic surgery and not paid for separately, as, in this 
commenter's view, Omidria does not meaningfully ameliorate the opioid 
crisis, is not indicated or useful for the treatment of an opioid use 
disorder, and that separate payment does not provide a clinical benefit 
for Medicare beneficiaries. Additionally, this commenter noted that 
ophthalmic surgeons rarely prescribe opioids.
    Response: We appreciate the public comments on our proposal. We 
note that we have not proposed or adopted a requirement that a product 
must meaningfully ameliorate the opioid crisis or have a clinically 
significant

[[Page 63491]]

impact on opioid usage. As such, after reviewing the information 
provided during the public comment period, and as described in our 
proposal above, we have determined that Omidria meets finalized 
criterion one because it is FDA approved and has an FDA-approved pain 
management indication and meets finalized criterion two because it has 
a per-day cost that exceeds the $130 per-day cost threshold.
    After consideration of the public comments we received and our 
review of the criteria, we are finalizing the proposal for Omidria to 
continue to receive separate payment under the ASC payment system as a 
non-opioid pain management drug that functions as a surgical supply for 
CY 2022.
(c) Eligibility for Separate Payment in CY 2022 for Other Non-Opioid 
for Pain Management Drugs and Biologicals
    We received comments on the CY 2022 OPPS/ASC proposed rule on 
additional non-opioid pain management drugs and biologicals that 
commenters believe would be eligible for separate payment in CY 2022 
under our proposed policy. We have included a summary of these comments 
below as well as our analysis of whether these products meet the final 
eligibility criteria.
    Comment: The manufacturer of Dextenza (J1096; Dexamethasone, 
lacrimal ophthalmic insert, 0.1 mg), Ocular Therapeutix, commented that 
separate payment for Dextenza is necessary in the ASC setting for 
beneficiary access, as it is frequently used in that setting. The 
manufacturer requested continued separate payment after Dextenza's 
pass-through status expires.
    Response: Based on CMS's internal review, we believe Dextenza meets 
criterion one. Dextenza was approved by FDA with a New Drug Application 
(NDA #208742) on November 30, 2018.\7\ Dextenza's FDA-approved 
indication is as ``a corticosteroid indicated for the treatment of 
ocular pain following ophthalmic surgery''.\8\ No component of Dextenza 
is opioid-based. Accordingly, we believe that Dextenza meets criterion 
one.
---------------------------------------------------------------------------

    \7\ Dextenza. FDA Letter. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Approv.pdf.
    \8\ Dextenza. FDA Labeling. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Lbl.pdf.
---------------------------------------------------------------------------

    As discussed in section (3) above, for criterion two we proposed 
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 final rule with comment 
period. Using that methodology, the per-day cost of Dextenza exceeds 
the $130 per-day cost threshold. Therefore, we believe that Dextenza 
meets criterion two.
    We agree that Dextenza meets criteria one and two, and would be 
eligible to receive separate payment under the ASC payment system as a 
non-opioid pain management drug that functions as a surgical supply for 
CY 2022 if it was not already receiving separate payment-in CY 2022 as 
a pass-through drug. Please see section V.A. ``OPPS Transitional Pass-
Through Payment for Additional Costs of Drugs, Biologicals, and 
Radiopharmaceuticals'' of this final rule with comment period for 
additional details on transitional pass-through payments for drugs and 
biologicals, as well as section X. F. of this final rule with comment 
period, ``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.''
    Comment: The manufacturer of Dexycu (J1095; Injection, 
dexamethasone 9 percent, intraocular, 1 microgram), EyePoint 
Pharmaceuticals, commented that Dexycu should be eligible for separate 
payment in the ASC setting as a non-opioid pain management drug that 
functions as a surgical supply. An individual commenter, an 
ophthalmologist, noted that Dexycu is indicated for the treatment of 
inflammation following ocular surgery and provided summaries of several 
studies that discussed Dexycu's utility in controlling pain. Other 
commenters more broadly suggested that CMS provide separate payment for 
products that prevent inflammation.
    Response: Based on CMS's internal review, we do not believe Dexycu 
meets criterion one. Dexycu was approved by FDA with a New Drug 
Application (NDA #208912) on February 9, 2018.\9\ Dexycu's FDA-approved 
indication is as ``a corticosteroid indicated for the treatment of 
postoperative inflammation''.\10\ No component of Dexycu is opioid-
based. However, Dexycu does not have an FDA-approved indication for 
pain management or analgesia. Accordingly, we do not believe Dexycu 
meets criterion one.
---------------------------------------------------------------------------

    \9\ Dexycu. FDA Letter. 09 February 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208912Orig1s000Approv.pdf.
    \10\ Dexycu. FDA Labeling. 09 February 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208912Orig1s000Lbl.pdf.
---------------------------------------------------------------------------

    As discussed in section II.A.3. of this final rule with comment 
period, for criterion two we proposed 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 final rule with comment period. Using that methodology, the 
per-day cost of Dexycu does exceed the $130 per-day cost threshold. 
Therefore, we believe Dexycu meets criterion two.
    After consideration of the public comments we received and our 
review of the criteria, we have determined that Dexycu does not meet 
criteria one and, therefore, would not eligible to receive separate 
payment under the ASC payment system as a non-opioid pain management 
drug that functions as a surgical supply for CY 2022. Additionally, we 
note that Dexycu is already receiving separate payment through CY 2022. 
Please see section V.A. ``OPPS Transitional Pass-Through Payment for 
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals'' of 
this final rule with comment period for additional details on 
transitional pass-through payments for drugs and biologicals as well as 
section X. F. ``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.''
    Comment: The manufacturer of Xaracoll, Innocoll Pharmaceuticals, 
commented that Xaracoll meets the two proposed CMS criteria and 
qualifies for separate payment as a non-opioid pain management drug 
that functions as a surgical supply in the ASC setting. The 
manufacturer also provided additional details regarding the clinical 
benefit of their product, including discussion of studies in which 
Xaracoll demonstrated significant pain relief and opioid reduction in 
open inguinal hernia repair.
    Response: We appreciate the commenter's input. Based on CMS's 
internal review, we believe Xaracoll meets criterion one. Xaracoll was 
approved by FDA with a New Drug Application (NDA #209511) on August 28, 
2020.\11\ Regarding the specific FDA-approved indication requirement, 
Xaracoll is ``indicated in adults for placement into the surgical site 
to produce postsurgical analgesia for up to 24 hours following open 
inguinal hernia repair''.\12\ No component of Xaracoll is

[[Page 63492]]

opioid-based. Accordingly, we believe that Xaracoll meets criterion 
one.
---------------------------------------------------------------------------

    \11\ Xaracoll. FDA Letter. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/209511Orig1s000ltr.pdf.
    \12\ Xaracoll. FDA Labeling. 30 November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/209511s000lbl.pdf.
---------------------------------------------------------------------------

    As discussed in section II.A.3. of this final rule with comment 
period, for criterion two we proposed 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 final rule with comment period. Using that methodology, the 
per-day cost of Xaracoll exceeds the $130 per-day cost threshold. 
Therefore, we believe that Xaracoll meets criterion two.
    After consideration of the public comments we received and our 
review of the finalized criteria, we have determined that Xaracoll 
meets criteria one and two, and are approving Xaracoll (C9089; 
Bupivacaine, collagen-matrix implant, 1 mg) to receive separate payment 
under the ASC payment system as a non-opioid pain management drug that 
functions as a surgical supply for CY 2022.
    Comment: The manufacturer of Zynrelef, Heron Therapeutics, stated 
how Zynrelef meets CMS's proposed criteria for separate payment in the 
ASC setting and should be receive separate payment in that setting. The 
manufacturer also provided additional details regarding the clinical 
benefit of their product, including studies where Zynrelef demonstrated 
reduced opioid use.
    Response: We appreciate the commenter's input. Based on CMS's 
internal review, we believe Zynrelef meets criterion one. Zynrelef was 
approved by FDA with a New Drug Application (NDA #211988) on May 12, 
2021.\13\ Regarding the specific FDA-approved indication requirement, 
Zynrelef is ``indicated in adults for soft tissue or periarticular 
instillation to produce postsurgical analgesia for up to 72 hours after 
bunionectomy, open inguinal herniorrhaphy and total knee 
arthroplasty''.\14\ No component of Zynrelef is opioid-based. 
Accordingly, we believe that Zynrelef meets criterion one.
---------------------------------------------------------------------------

    \13\ Zynrelef. FDA Letter. 05 May 2021. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2021/211988Orig1s000ltr.pdf.
    \14\ Zynrelef. FDA Labeling. 05 May 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/211988s000lbl.pdf.
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    As discussed in section (3) above, for criterion two we proposed 
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 final rule with comment 
period. Using that methodology, the per-day cost of Zynrelef exceeds 
the $130 per-day cost threshold. Therefore, we believe that Zynrelef 
meets criterion two.
    After consideration of the public comments we received and our 
review of the finalized criteria, we have determined that Zynrelef 
meets criteria one and two, and are approving Zynrelef (C9088; 
Instillation, bupivacaine and meloxicam, 1 mg/0.03 mg) to receive 
separate payment under the ASC payment system as a non-opioid pain 
management drug that functions as a surgical supply for CY 2022.
    Comment: The manufacturer of Anjeso (HCPCS code J1738; Injection, 
meloxicam, 1 mg), Baudax Bio, expressed support for policies that 
encourage the use of non-opioid pain alternatives. In their comment, 
Baudax Bio discussed the clinical benefits of their product.
    Response: We appreciate the commenter's input. Based on CMS's 
internal review, we believe Anjeso meets criterion one. Anjeso was 
approved by FDA with a New Drug Application (NDA #210583) on February 
20, 2020.\15\ Anjeso's FDA-approved indication is ``indicated for use 
in adults for the management of moderate-to-severe pain, alone or in 
combination with non-NSAID analgesics''.\16\ No component of Anjeso is 
opioid-based. Accordingly, we believe that Anjeso meets criterion one.
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    \15\ Anjeso. FDA Letter. 02 February 2020. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2020/210583Orig1s000Approv.pdf.
    \16\ Anjeso. FDA Labeling. 02 February 2020. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2020/210583Orig1s000lbl.pdf.
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    As discussed in section II.A.3. of this final rule with comment 
period, for criterion two we proposed 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 final rule with comment period. Using that methodology, the 
per-day cost of Anjeso does not exceed the $130 per-day cost threshold. 
Therefore, we do not believe that Anjeso meets criterion two.
    After consideration of the public comments we received and our 
review of the finalized criteria, we have determined that Anjeso meets 
criteria one but not criterion two, and would not be eligible to 
receive separate payment under the ASC payment system as a non-opioid 
pain management drug that functions as a surgical supply for CY 2022. 
However, Anjeso remains on transitional pass-through status throughout 
CY 2022 and accordingly, is already receiving separate payment in the 
HOPD and ASC settings for CY 2022. Please see section V.A., OPPS 
Transitional Pass-Through Payment for Additional Costs of Drugs, 
Biologicals, and Radiopharmaceuticals, of this final rule with comment 
period for additional details on transitional pass-through payments for 
drugs and biologicals.
    Comment: Several commenters, including hospital and professional 
associations, recommended separate payment for Ofirmev, IV 
acetaminophen, stating they believed it decreased use of post-operative 
opioids.
    Response: We appreciate the commenters' input. Based on CMS's 
internal review, we believe Ofirmev meets criterion one. Ofirmev was 
approved by FDA with a New Drug Application (NDA #022450) on October 2, 
2010.\17\ Ofirmev's FDA-approved indication is ``management of mild to 
moderate pain, management of moderate to severe pain with adjunctive 
opioid analgesics, and reduction of fever''.\18\ No component of 
Ofirmev is opioid-based. Accordingly, we believe that Ofirmev meets 
criterion one.
---------------------------------------------------------------------------

    \17\ Ofirmev. FDA Letter. 02 November 2010. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2010/022450Orig1s000Approv.pdf.
    \18\ Ofirmev. FDA Labeling. 02 November 2010. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2010/022450Orig1s000Lbl.pdf.
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    As discussed in section (3) above, under criterion two a drug or 
biological is only eligible for separate payment if its per-day cost 
exceeds the drug packaging threshold described in section V.B.1.a. of 
this final rule with comment period. Using the methodology described at 
V.B.1.a. of this final rule with comment period, the per-day cost of 
Ofirmev does not exceed the $130 per-day cost threshold. Therefore, we 
do not believe Ofirmev meets criterion two.
    After consideration of the public comments we received and our 
review of the criteria, we have determined that Ofirmev meets criteria 
one but not criterion two and is not eligible to receive separate 
payment under the ASC payment system as a non-opioid pain management 
drug that functions as a surgical supply for CY 2022.
    Comment: Several commenters, including professional and hospital 
associations, commented that classes of drugs, such as NSAIDS, 
including IV ibuprofen and IV ketorolac, may reduce opioid usage if CMS 
paid separately for them. However, they did not request that CMS 
consider a specific non-opioid product for separate payment in the ASC 
setting.
    Response: We thank commenters for their comments. For both of these

[[Page 63493]]

products, we did not receive recommendations for a specific product, 
for a specific FDA approval, or from a specific manufacturer. We note 
that based on our review of these products, we do believe IV ibuprofen 
and IV ketorolac products, which have FDA approval and an FDA-approved 
indication for pain management or as an analgesic, would satisfy 
criterion one. However, based on our review of these products, using 
the methodology described at V.B.1.a. of this final rule with comment 
period, the per-day costs of HCPCS code 1741 (Injection, ibuprofen, 100 
mg) and HCPCS code J1885 (Injection, ketorolac tromethamine, per 15 mg) 
do not exceed the packaging threshold for criterion two.
    Comment: Commenters requested CMS consider the clinical value of 
Prialt (HCPCS Code J2278; Injection, ziconotide, 1 microgram) and 
Dsuvia, a sufentanil sublingual tablet, for separate payment in the ASC 
setting
    Response: Prialt is not eligible for separate payment under our 
final policy because it is not a drug that functions as a supply in a 
surgical procedure and is already receiving separate payment. Dsuvia is 
not eligible for separate payment under our final policy because it 
contains an opioid and therefore is not a non-opioid drug. We are not 
revising our policy to provide separate payment for opioid pain 
management products for CY 2022.
    As previously explained above, we are not modifying the eligibility 
criteria for our policy to include such products. However, we 
appreciate these comments and suggestions from stakeholders and will 
take them into consideration for future rulemaking.
(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 also 
sought 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 noted in the CY 2022 OPPS/ASC proposed rule that, 
depending on the public comments we received 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 provided substantial details, explanations, and 
considerations about these potential criteria. We welcomed input from 
stakeholders on these and any additional policy modifications or 
criteria they believe would enhance our proposed policy. We also sought 
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.
    Comment: A few comments from providers and drug manufacturers 
discussed additional barriers they faced in providing non-opioid pain 
management products. One commenter recommended CMS provide education to 
providers on non-opioid pain medications and to encourage patients to 
ask their providers about which medications they are being prescribed. 
One commenter noted that not allowing separate payment for non-opioid 
products in the HOPD setting limits the expansion of patient access to 
non-opioid therapies in new geographic areas. Another commenter noted 
that rural and underserved areas have been disproportionately harmed by 
opioid addiction and that geography, lack of provider education and 
training, and payment and coverage for these services may be barriers 
to treatment in these communities.
    Response: We are committed to implementing measures to combat the 
opioid epidemic. We appreciate stakeholders' comments in response to 
this solicitation. We will take these comments into consideration for 
future rulemaking.
    Comment: Many commenters appreciated CMS soliciting comment on 
potential additional criteria in the proposed rule. A few commenters 
recommended that CMS not finalize additional criteria based on 
responses to the comment solicitations. Rather, they suggested CMS 
finalize the two proposed criteria and assess the policy in the future 
to assess whether additional criteria are warranted.
    Response: We thank commenters for their input. We are not 
finalizing additional criteria or policy modifications based on the 
comments were received in response to the comment solicitations in the 
CY 2022 OPPS/ASC proposed rule. Please see the following sections for a 
summary of the comments received.
(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 a 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 solicited comment on whether specific evidence of 
reduced utilization should be part of our evaluation and determination 
as to whether a non-opioid pain management product should qualify for 
modified 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 also requested comment on whether 
utilization data requirements should vary based on the newness of a 
product or its FDA marketing approval date.
    Comment: Generally, commenters did not support adding a utilization 
requirement criterion. Several commenters stated that utilization data 
was useful in the original analysis to establish the original policy in 
the ASC setting, but they believe would be inappropriate to require new 
products to prove they are disincentivized by CMS packaging policies. 
These commenters noted it would take significant time for this data to 
be available after a new drug was introduced to the market. 
Additionally, several comments stated that utilization data is 
imperfect, as CMS described in the CY 2022 OPPS/ASC proposed rule.

[[Page 63494]]

    Response: We thank commenters for their feedback on a potential 
utilization requirement. However, we are not finalizing any policy 
modifications, including adopting a utilization requirement, for CY 
2022. We will take these comments into consideration for future 
rulemaking.
(b) FDA-Approved 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 one. Therefore, we solicited 
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-approved indication for pain 
management or analgesia, we sought 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 sought 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, when a drug or biological does not have an FDA-approved 
indication for pain management or analgesia.
    Comment: Some commenters were supportive of CMS taking into 
consideration other factors, such as specialty society endorsements, 
medical compendia, or inclusion in clinical practice guidelines, as 
part of the qualifying criteria if an FDA-approved indication for pain 
management or analgesia was not present. Commenters stated a specific 
FDA-approved indication may be too restrictive as some products may be 
used off-label for pain management. A few commenters suggested CMS take 
an individualized and holistic approach to each drug it evaluates, and 
therefore, consider association recommendations outside of FDA-approved 
indications. Commenters thought this would support increased access to 
drugs for off-label uses.
    Response: We appreciate the comments received as a part of this 
specific comment solicitation; however, for CY 2022, we are not making 
any policy modifications based on the public comments we received in 
response to this comment solicitation.
(c) Peer-Reviewed Literature Requirement Comment Solicitation
    We note that section 1833(t)(22)(B) of the Act 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. Therefore, we solicited comment 
as to whether we should only adopt a payment revision for 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 usage associated with the 
surgical procedure. 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 
sought 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 
sought comment on whether such decreases in opioid usage should be 
sustained decreases that continue into the post-operative period.
    Additionally, we sought input from commenters as to what they 
believe the requirements for peer-reviewed literature should be. For 
example, we solicited 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 asked 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 requested 
information on how stakeholders would define the standard of care in 
these circumstances. In the proposed rule we stated, 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 welcomed input from stakeholders 
about additional aspects of these studies that they believe CMS should 
focus on for this potential criterion. Additionally, we stated 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 
stated in the proposed rule that we believed 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 solicited comment on additional examples or measures that

[[Page 63495]]

would be beneficial for CMS to take into consideration. Additionally, 
we sought comment on whether we should require a specific objective 
measure for this criterion. We also sought input on how to assess 
whether changes are statistically and clinically significant. We 
requested 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.
    Comment: Many commenters did not support CMS finalizing any 
additional criteria, including a peer-reviewed literature requirement. 
A few commenters disagreed that a peer-reviewed literature requirement 
was necessary as they believed an FDA-approved indication for pain 
management or analgesia would be sufficient. Several commenters 
suggested CMS collect, review, and consider peer-reviewed literature, 
but not explicitly require it.
    Response: We appreciate the comments received as a part of this 
specific comment solicitation; however, for CY 2022, we are not making 
any policy modifications based on the public comments we received in 
response to this comment solicitation. We will take these comments into 
consideration for future rulemaking.
    Comment: A few commenters supported CMS requiring peer-reviewed 
literature that demonstrates that the drug in question reduces opioid 
use in the post-operative period. One commenter specified which type of 
literature endpoints would be important to incorporate into our review 
process. Specifically, one drug manufacturer recommended that CMS 
require that use of a drug demonstrate a significant reduction in the 
need for opioids and increase the number of patients who are opioid 
free in a randomized, well-controlled, head-to-head clinical trial 
versus an active comparator. A number of commenters requested that CMS 
provide separate payment for evidence-based, non-opioid pain management 
drugs. Specifically, in regards to peer-reviewed literature, MedPAC 
asserted that separately payable status should only be granted when 
evidence in peer-reviewed publications indicates that the drug in 
question reduces the use of opioids. Other commenters supported a 
criterion that requires a product to demonstrate the ability to 
replace, reduce, or avoid opioid use or the quantity of opioids 
prescribed.
    Response: We thank commenters for their detailed comments. We agree 
it is important that a non-opioid pain management product serve as an 
alternative to an opioid, and therefore replace, reduce, or avoid 
opioid use.
    We once again thank commenters for their detailed insights on this 
comment solicitation; however, for CY 2022, we are not making any 
policy modifications based on the public comments we received in 
response to this comment solicitation. We will take these comments into 
consideration for future rulemaking.
(d) Alternative Payment Mechanisms for Non-Opioid Drugs and Biologicals
    As previously discussed, for CY 2022, we proposed to pay separately 
at ASP+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 criteria. Section 1833(t)(22)(A)(iii) of the Act 
requires the Secretary to consider the extent to which revisions to 
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 sought comment on additional 
payment mechanisms that may be appropriate aside from separate payment. 
For instance, we requested 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) of the 
Act must be applied in a budget neutral manner under section 
1833(t)(9)(B) of the Act. We also sought input from stakeholders on any 
other innovative payment mechanisms for eligible non-opioid drugs and 
biologicals for pain management.
    Comment: Most commenters opposed any other payment methodologies 
aside from paying separately for non-opioid pain management drugs or 
biologicals at ASP+6 percent. Several commenters contended that an add-
on payment would not be appropriate because this would create 
differentials in payment across care settings, such as physician 
offices, and emphasized that stakeholders are more familiar with the 
ASP payment methodology. Some commenters also emphasized that drugs and 
biologicals are generally paid at ASP+6 percent when furnished in the 
physician office setting and encouraged CMS to pay ASP+6 percent under 
this policy to ensure payment parity across the different treatment 
settings.
    One commenter asked that CMS apply its final payment policy for 
340B-acquired drugs, to pay for non-opioid drug products at ASP minus 
22.5 percent instead of ASP+ 6 percent. Additionally, one commenter 
asked that CMS create new CPT codes in order to account for the work 
associated with opioid-sparing therapies furnished by surgeons.
    Response: We appreciate the comments received as a part of this 
specific comment solicitation; however, for CY 2022, we are not making 
any policy modifications based on the public comments we received in 
response to this comment solicitation. We will take these comments into 
consideration for future rulemaking.
(e) Non-Drug Products
    In the CY 2022 OPPS/ASC proposed rule, we stated we were also 
interested in information on any non-opioid non-drug products that 
function as surgical supplies that 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 in 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 also sought comment on whether 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 sought comment on whether it is appropriate to require non-drug 
products to meet the same criteria being proposed for drugs and 
biologicals. Additionally, we sought comment from

[[Page 63496]]

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 sought 
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 proposed to require FDA approval 
with an FDA-approved indication for pain management or analgesia for 
drugs and biologicals. We sought comment on whether, if the non-drug 
product is a ``device'' as defined in section 201(h) of FDCA, the 
device should have received FDA premarket approval (PMA), grant of a de 
novo request, 510(k) clearance or meet an exemption from premarket 
review. Finally, we solicited comment on all aspects of an extension of 
our current policy to include appropriate products that are not drugs 
or biologicals.
    We also sought comment on 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 solicited 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 sought 
comment on whether it would be appropriate to subject non-drug products 
to a cost threshold similar to the one we proposed to apply to drugs 
and biologicals.
    Comment: A few commenters supported CMS exploring a payment 
adjustment for non-opioid, non-drug items, including items such as 
devices. Some commenters discussed the benefit of spinal cord 
stimulators, and one commenter recommended an add-on payment for a 
narrowly constructed payment category, such as spinal cord stimulators. 
Commenters also cited the CMS prior authorization policy on spinal cord 
stimulators as inappropriately creating barriers to access to these 
devices, as beneficiaries could be prescribed opioids for longer 
periods of time while waiting for prior authorization to be approved. 
Commenters recommended CMS provide separate payment for nerve blocks, 
pain blocks (represented by CPT codes 64415, 64416, 64417, 64445, 
64446, 64447, 64448, 64450), joint injections, and neuromodulation.
    Some commenters stated that barriers for non-drug items are often 
more severe in the ASC setting. Commenters also suggested CMS consider 
payment methodologies for various other non-drug items, including for 
multi-modal pain management ERAS protocols, physical therapy, 
acupuncture, massage therapy, ON-Q pain relief system, devices that use 
ice water, dry needling, THC oil applied topically, and polar ice 
devices.
    Commenters pointed to the opioid-sparing abilities of some of these 
products. For example, commenters noted that spinal cord stimulators 
are useful in reducing opioid usage for chronic pain patients. 
Commenters urged CMS to change payment polices to make spinal cord 
stimulators a front-line option in combating chronic pain.
    Response: We appreciate the responses from commenters on this 
topic. As discussed in prior rulemaking (85 FR 85899), we have not 
found compelling evidence for non-drug, non-opioid pain management 
alternatives that commenters described to warrant separate payment 
under the OPPS or ASC payment system. For CY 2022, we are not 
finalizing any policy modifications in response to the comments we 
received on this comment solicitation. We will take these comments into 
consideration for future rulemaking.
    Comment: Some commenters recommended that criteria similar to those 
proposed for drug items also apply to non-drug items, including a 
potential requirement for peer-reviewed literature demonstrating that 
the product significantly limits or eliminates prescription opioids.
    Response: We thank commenters for their feedback regarding 
potential criteria for non-drug items and how we may incorporate non-
drug products into our non-opioid pain management packaging policy in 
the future. We will take these comments into consideration for future 
rulemaking.
(f) Coinsurance Waiver Request
    Comment: Multiple commenters, including providers and the 
manufacturer of Prialt, an intrathecal drug, requested CMS waive the 20 
percent coinsurance requirement for non-opioid pain management drugs. 
Specifically, these commenters discussed that waiving coinsurance for 
non-opioid drugs that are indicated for severe chronic pain in patients 
requiring intrathecal therapy could bolster patient access
    Response: The services described here, including intrathecal 
therapy, do not meet the statutory requirements process for 
``additional preventive services'' in section 1861(ddd)(1) of the Act 
that would be subject to coinsurance waiver under 1833(a)(1)(W). 
Providers may waive coinsurance amounts only if they comply with 
applicable law, including the Federal Anti-Kickback Statute and the 
civil monetary penalty provision prohibiting inducements to 
beneficiaries. We note that the drugs these commenters describe are 
already paid separately. Additionally, the intrathecal drug, Prialt, 
frequently described by commenters, does not function as a supply to a 
surgical procedure. As such, it would not qualify under our current 
policy to pay separately in the ASC setting for non-opioid pain 
management drugs and biologicals that function as surgical supplies. 
However, we appreciate the commenters' input about the potential value 
of these drugs.
Summary of Finalized Policy
    As discussed in the preceding sections, after consideration of the 
public comments we received, we are finalizing the proposed policy for 
CY 2022 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, are FDA-approved, have an FDA-
approved indication for pain management or as an analgesic, and have a 
per-day cost above the OPPS/ASC drug packaging threshold for CY 2022. 
As noted above, we are finalizing the proposed regulation text changes 
at Sec.  416.164(a)(4) and (b)(6), Sec.  416.171(b)(1), and Sec.  
416.174 as proposed. We determined that four products are eligible for 
separate payment in the ASC setting under our final policy for CY 2022. 
Future products, or products not discussed in this rulemaking that may 
be eligible for separate payment under this policy will be evaluated in 
future notice and comment rulemaking. We will continue to analyze the 
issue of access to non-opioid pain management alternatives in the OPPS 
and the ASC settings as part of any subsequent reviews we conduct under 
section 1833(t)(22)(A)(ii) of the Act, which would be discussed in 
future notice and comment rulemaking. We will also continue to evaluate 
whether there are other non-opioid pain management alternatives for 
which our payment policy should be revised to allow separate payment in 
future rulemaking. Table 4 below lists the four

[[Page 63497]]

drugs that meet our finalized criteria and will receive separate 
payment under the ASC payment system when furnished in the ASC setting 
for CY 2022.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.010

BILLING CODE 4120-01-C
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 of the CY 2021 
OPPS/ASC 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 the CY 2021 OPPS/ASC final rule with 
comment period. For CY 2022, as we did for CY 2021, we proposed 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 
proposed to continue to standardize all of the relative payment weights 
to APC 5012. We believe that standardizing relative payment weights to 
the geometric mean of the APC to which HCPCS code G0463 is assigned 
maintains consistency in calculating unscaled weights that represent 
the cost of some of the most frequently provided OPPS services. For CY 
2022, as we did for CY 2021, we proposed to assign APC 5012 a relative 
payment weight of 1.00 and to divide the geometric mean cost of each 
APC by the geometric mean cost for APC 5012 to derive the unscaled 
relative payment weight for each APC. The choice of the APC on which to 
standardize the relative payment weights does not affect payments made 
under the OPPS because we scale the weights for budget neutrality.
    We 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 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

[[Page 63498]]

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 proposed 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 
proposed to apply the same process using the estimated CY 2022 unscaled 
relative payment weights rather than scaled relative payment weights. 
We proposed 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 link labeled 
``CY 2022 OPPS/ASC Notice of Proposed Rulemaking'', which can be found 
under the heading ``Hospital Outpatient Prospective Payment System 
Rulemaking'' and open the claims accounting document link at the bottom 
of the page, which is labeled ``2022 NPRM OPPS Claims Accounting 
(PDF)''.
    We proposed 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 proposed to adjust the calculated CY 2022 unscaled 
relative payment weights for purposes of budget neutrality. We proposed 
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 the CY 2022 OPPS/ASC 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42026).
    Section 1833(t)(14) of the Act provides the payment rates for 
certain specified covered outpatient drugs (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 the CY 2022 OPPS/ASC proposed rule (86 FR 
42131 through 42133) is included in the budget neutrality calculations 
for the CY 2022 OPPS.
    We did not receive any public comments on the proposed weight 
scalar calculation. Therefore, we are finalizing our proposal to use 
the calculation process described in the proposed rule, without 
modification, for CY 2022. Using updated final rule claims data, we are 
updating the estimated CY 2022 unscaled relative payment weights by 
multiplying them by a weight scalar of 1.4416 to ensure that the final 
CY 2022 relative payment weights are scaled to be budget neutral. The 
final CY 2022 relative payments weights listed in Addenda A and B of 
this final rule with comment period (which are available via the 
internet on the CMS website) were scaled and incorporate the 
recalibration adjustments discussed in sections II.A.1 and II.A.2 of 
this final rule with comment period.

B. Conversion Factor Update

    Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to 
update the conversion factor used to determine the payment rates under 
the OPPS on an annual basis by applying the OPD fee schedule increase 
factor. For purposes of section 1833(t)(3)(C)(iv) of the Act, subject 
to sections 1833(t)(17) and 1833(t)(3)(F) of the Act, the OPD fee 
schedule increase factor is equal to the hospital inpatient market 
basket percentage increase applicable to hospital discharges under 
section 1886(b)(3)(B)(iii) of the Act. In the FY 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 proposed that the MFP adjustment for the CY 2022 OPPS 
is 0.2 percentage point. We also proposed that if more recent data 
become subsequently available after the publication of the CY 2022 
OPPS/ASC 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.

[[Page 63499]]

    We note that section 1833(t)(3)(F) of the Act provides that 
application of this subparagraph may result in the OPD fee schedule 
increase factor under section 1833(t)(3)(C)(iv) of the Act being less 
than 0.0 percent for a year, and may result in OPPS payment rates being 
less than rates for the preceding year. As described in further detail 
below, we proposed for CY 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 proposed that hospitals that fail to meet the Hospital OQR 
Program reporting requirements would be subject to an additional 
reduction of 2.0 percentage points from the OPD fee schedule increase 
factor adjustment to the conversion factor that would be used to 
calculate the OPPS payment rates for their services, as required by 
section 1833(t)(17) of the Act. For further discussion of the Hospital 
OQR Program, we refer readers to section XIV. of the proposed rule.
    To set the OPPS conversion factor for 2022, we proposed 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 proposed 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 proposed 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 proposed to maintain the current rural 
adjustment policy, as discussed in section II.E. of the CY 2022 OPPS/
ASC proposed rule. Therefore, the proposed budget neutrality factor for 
the rural adjustment is 1.0000.
    We proposed to continue previously established policies for 
implementing the cancer hospital payment adjustment described in 
section 1833(t)(18) of the Act, as discussed in section II.F. of the CY 
2022 OPPS/ASC proposed rule. We proposed 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 proposed 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 the 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 estimated 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 the CY 2022 OPPS/ASC proposed rule, we also proposed that 
hospitals that fail to meet the reporting requirements of the Hospital 
OQR Program would continue to be subject to a further reduction of 2.0 
percentage points to the OPD fee schedule increase factor. For 
hospitals that fail to meet the requirements of the Hospital OQR 
Program, we proposed to make all other adjustments discussed above, but 
use a reduced OPD fee schedule update factor of 0.3 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 proposed 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 proposed 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.
    Comment: Two commenters request that the OPD fee schedule update 
factor be larger than the proposed 2.3 percent increase. One commenter 
cited a MedPAC study \19\ that reported for 2019 that the aggregate 
Medicare margin for inpatient hospital providers was -8.7 percent among 
all inpatient hospital providers, and that the median Medicare margin 
was -1 percent for relatively efficient providers. This commenter 
appeared to request the OPD fee schedule update factor be increased 
sufficiently to substantially reduce the aggregate margin for hospital 
providers. The commenter also mentioned that the annual Consumer Price 
Index was 5.4 percent which was over 3 percentage points higher than 
the proposed 2.3 percent OPD fee schedule increase. The second 
commenter, a state hospital association, claimed that unspecified 
recent payment cuts for outpatient hospital services have hurt the 
financial position of hospitals in their state. The commenter asks us 
to identify additional ways to increase hospital payment more than the 
proposed 2.3 percent OPD fee schedule increase.
---------------------------------------------------------------------------

    \19\ Medicare Payment Advisory Commission, Report to the 
Congress: Medicare Payment Policy, v, 499 (Mar. 2021), http://medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf.
---------------------------------------------------------------------------

    Response: The OPD fee schedule update factor is designed to 
maintain a consistent level of payment for outpatient hospital services 
in Medicare year over year after taking into account changes in medical 
inflation and business productivity. In addition, the

[[Page 63500]]

OPPS conversion factor is not designed to redress payment reductions 
made in a non-budget neutral manner. The MedPAC study cited by one of 
the commenters reported, in addition to the aggregate Medicare margin 
for inpatient hospital providers, that the median margin for Medicare 
spending for relatively efficient hospitals was around -1 percent for 
2019. The same MedPAC study also recommended a 2.0 percent increase in 
outpatient hospital spending for 2022, which is actually lower than our 
proposed conversion factor update of 2.3 percent.
    The same commenter also suggested that the Consumer Price Index may 
be a better measure of medical inflation than the hospital market 
basket index used by CMS. The percentage change in the hospital market 
basket reflects the average change in the price of goods and services 
purchased by hospitals in order to provide medical care. A general 
measure of health care inflation (such as the Consumer Price Index for 
Medical Care Services) would not be appropriate as it is not specific 
to hospital medical services and is not reflective of the input price 
changes experienced by hospitals but rather the inflation experienced 
by the consumer for their medical expenses.
    Comment: Two commenters supported our proposed CY 2022 OPD fee 
schedule increase factor percentage increase of 2.3 percent.
    Response: We appreciate the support of the commenters.
    After reviewing the public comments that we received, we are 
finalizing these proposals with modification. For CY 2022, we proposed 
to continue previously established policies for implementing the cancer 
hospital payment adjustment described in section 1833(t)(18) of the Act 
(discussed in section II.F. of this final rule with comment period). 
Based on the final rule updated data used in calculating the cancer 
hospital payment adjustment in section II.F. of this final rule with 
comment period, the target payment-to-cost ratio for the cancer 
hospital payment adjustment, which was 0.90 for CY 2021, is also 0.90 
for CY 2022. As a result, we are applying a budget neutrality 
adjustment factor of 1.0000 to the conversion factor for the cancer 
hospital payment adjustment.
    For this CY 2022 OPPS/ASC final rule with comment period, as 
published in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45214), based 
on IGI's 2021 second quarter forecast with historical data through the 
first quarter of 2021, the hospital market basket update for CY 2022 is 
2.7 percent and the estimate of the 10-year moving average growth of 
MFP for FY 2022 is 0.7 percent.
    We note that as a result of the modifications in final policy for 
the CY 2022 wage index we are also including a change to the wage index 
budget neutrality adjustment so that the final overall budget 
neutrality factor of 1.0000 would apply for wage index changes. This 
adjustment is comprised of a 1.0001 budget neutrality adjustment, using 
our standard calculation of comparing proposed total estimated payments 
from our simulation model using the final FY 2022 IPPS wage indexes to 
those payments using the FY 2022 IPPS wage indexes, as adopted on a 
calendar year basis for the OPPS as well as a 0.9999 budget neutrality 
adjustment for the final CY 2022 5 percent cap on wage index decreases, 
requiring application of the 5 percent cap on CY 2021 wages, to ensure 
that this transition wage index is implemented in a budget neutral 
manner, consistent with the proposed FY 2022 IPPS wage index policy (86 
FR 45552).
    As a result of these finalized policies, the OPD fee schedule 
increase factor for the CY 2022 OPPS is 2.0 percent (which reflects the 
2.7 percent final estimate of the hospital inpatient market basket 
percentage increase with a 0.7 percentage point MFP adjustment). For CY 
2022, we are using a conversion factor of $84.177 in the calculation of 
the national unadjusted payment rates for those items and services for 
which payment rates are calculated using geometric mean costs; that is, 
the OPD fee schedule increase factor of 2.0 percent for CY 2022, the 
required wage index budget neutrality adjustment of 1.0000, and the 
adjustment of-0.32 percentage point of projected OPPS spending for the 
difference in pass-through spending that results in a conversion factor 
for CY 2022 of $84.177.

C. Wage Index Changes

    Section 1833(t)(2)(D) of the Act requires the Secretary to 
determine a wage adjustment factor to adjust the portion of payment and 
coinsurance attributable to labor-related costs for relative 
differences in labor and labor-related costs across geographic regions 
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion 
of the OPPS payment rate is called the OPPS labor-related share. Budget 
neutrality is discussed in section II.B. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42048 through 42049).
    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 proposed to continue this policy for 
the CY 2022 OPPS. We referred readers to section II.H. of the CY 2022 
OPPS/ASC proposed rule (86 FR 42056 through 42058) for a description 
and an example of how the wage index for a particular hospital is used 
to determine payment for the hospital. We did not receive any public 
comments on this proposal. Accordingly, for the reasons discussed above 
and in the CY 2022 OPPS/ASC proposed rule, we are finalizing our 
proposal, without modification, to continue this policy for the CY 2022 
OPPS.
    As discussed in the claims accounting narrative included with the 
supporting documentation for this final rule with comment period (which 
is available via the internet on the CMS website), for estimating APC 
costs, we are standardizing 60 percent of estimated claims costs for 
geographic area wage variation using the same FY 2022 pre-reclassified 
wage index that we 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 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

[[Page 63501]]

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 proposed to 
implement this provision in the same manner as we have since CY 2011. 
Under this policy, the frontier State hospitals would receive a wage 
index of 1.00 if the otherwise applicable wage index (including 
reclassification, the rural floor, and rural floor budget neutrality) 
is less than 1.00. Because the HOPD receives a wage index based on the 
geographic location of the specific inpatient hospital with which it is 
associated, the frontier State wage index adjustment applicable for the 
inpatient hospital also would apply for any associated HOPD. We 
referred 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. We did not receive any public comments on this proposal. 
Accordingly, for the reasons discussed above and in the CY 2022 OPPS/
ASC proposed rule, we are finalizing our proposal, without 
modification, to continue to implement the frontier State floor under 
the OPPS in the same manner as we have since CY 2011.
    In addition to the changes required by the Affordable Care Act, we 
noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42050) 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, we noted that 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 noted 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 referred 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.
    A summary of the comments we received regarding the rural floor and 
the imputed floor for all-urban states and our responses to those 
comments appear below:
    Comment: Some commenters expressed their support for the 
application of the rural floor policy which included support for the 
continued exclusion of the wage data of hospitals that have 
reclassified as rural under Sec.  412.103 when calculating the wage 
index for the rural floor.
    Response: We appreciate the commenters' support for the application 
of the rural floor policy.
    Comment: Some commenters opposed the continued application of a 
nationwide rural floor budget neutrality adjustment, noting that the 
policy does nothing more than benefit a few hospitals and exacerbate a 
downward spiral of the wage index for low wage index hospitals.
    Response: We appreciate the commenters' concerns about application 
of the nationwide rural floor budget neutrality policy. However, as 
stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56920), for 
discharges occurring on or after October 1, 2010, for purposes of 
applying the rural floor, section 3141 of the Affordable Care Act 
replaced the statewide budget neutrality adjustment policy with the 
national budget neutrality adjustment policy that was in place during 
FY 2008. That is, section 3141 required that budget neutrality for the 
rural floor be applied ``through a uniform, national adjustment to the 
area wage index'' instead of within each State beginning in FY 2011 (75 
FR 50160).
    We continue to believe it is reasonable and appropriate to continue 
the current policy of applying budget neutrality for the rural floor 
under the OPPS on a national basis, consistent with the IPPS. We 
believe that hospital inpatient and outpatient departments are subject 
to the same labor cost environment, and therefore, the wage index and 
any applicable wage index adjustments (including the rural floor and 
rural floor budget neutrality) should be applied in the same manner 
under the IPPS and OPPS. Furthermore, we believe that applying the 
rural floor and rural floor budget neutrality in the same manner under 
the IPPS and OPPS is reasonable and logical, given the inseparable, 
subordinate status of the HOPD within the hospital overall. In 
addition, we believe the application of different wage indexes and wage 
index adjustments under the IPPS and OPPS would add a level of 
administrative complexity that is overly burdensome and unnecessary. 
Therefore, we are

[[Page 63502]]

continuing the current policy of applying budget neutrality for the 
rural floor under the OPPS on a national basis, consistent with the 
IPPS.
    Comment: Some commenters supported the proposed implementation of 
the imputed floor wage index policy. However, one commenter opposed the 
reinstatement of the imputed floor, stating that it exacerbates wage 
index disparities, but acknowledged that the proposal was in accordance 
with legislation enacted by Congress. This commenter requested CMS 
include details by state of the effects of the imputed floor. 
Commenters both in support and in opposition of the imputed floor 
policy applauded its implementation without the application of budget 
neutrality, per section 9831 of the American Rescue Plan Act of 2021. A 
commenter specifically concurred with CMS' interpretation that the 
definition of an all-urban state according to section 9831 of the 
American Rescue Plan Act of 2021 is one in which no hospital receives 
the rural area wage index.
    Response: We appreciate the commenters' support of the proposed 
implementation of the imputed floor policy, which we note has been 
finalized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45176 through 
45178). Responding to the commenter opposed to this policy, we 
underscore that, as the commenter itself pointed out, the imputed floor 
has been reinstated by statute in section 9831 of the American Rescue 
Plan Act of 2021. We believe that it is appropriate to apply the 
imputed floor policy in the OPPS in the same manner as under the IPPS, 
given the inseparable, subordinate status of the HOPD within the 
hospital overall.
    In response to the commenter's request for details by state of the 
effects of the imputed floor, we direct the commenter to the data file 
that CMS posted concurrent with the FY 2022 IPPS/LTCH PPS proposed rule 
with estimated imputed floor value by state at https://www.cms.gov/files/zip/fy2022-ipps-nprm-imputed-state-floors.zip. Finally, we note 
that section 9831 of the American Rescue Plan Act of 2021 excluded the 
imputed floor from the budget neutrality requirement under the IPPS 
(section 1886(d)(3)(E)(i) of the Act) but did not specify that the same 
budget neutral treatment also would apply under the OPPS. As a result, 
the changes related to the reinstatement of the imputed floor would be 
budget neutralized through the standard OPPS wage index budget 
neutrality adjustment, as discussed in section II.B. of this final rule 
with comment period.
    For more information about the imputed floor required by section 
1886(d)(3)(E)(iv) of the Act, we refer readers to the regulations at 
Sec.  412.64(e)(1) and (4) and (h)(4) and (5), and the discussion in 
the FY 2022 IPPS/LTCH PPS final rule (86 FR 45176 through 45178).
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42050), we noted that 
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, 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

[[Page 63503]]

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 final rule (86 FR 45164), while we are adopting the updates 
set forth in OMB Bulletin No. 20-01 consistent with our general 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 are continuing to use the OMB delineations that 
were adopted beginning with FY 2015 (based on the revised delineations 
issued in OMB Bulletin No. 13-01) to calculate the area wage indexes, 
with updates as reflected in OMB Bulletin Nos. 15-01, 17-01, 18-04, and 
20-01, although as noted above the latter Bulletin did not require any 
wage area updates.
    We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42051) 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 referred 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 was 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).
    A summary of the comments we received regarding a wage index 
transition policy for 2022 as described above, and our responses to 
those comments, appear below:
    Comment: We received multiple comments strongly recommending CMS 
extend a transition policy similar to that implemented in FY 2020 and 
FY 2021 in the IPPS. Multiple commenters, citing the severity and 
continuing impact of changes related to the OMB updates, the low wage 
index policy, and the lingering financial burden caused by the COVID-19 
PHE, urged CMS to add an additional year of transition for both 
inpatient hospital and outpatient hospital providers, applied in a 
budget neutral manner. These commenters stated that given the wide-
ranging factors impacting wage index values, it would not be equitable 
to limit the transition adjustment only to the effects of the revised 
labor market delineations. The commenters requested the transition be 
implemented more broadly to all hospitals experiencing large declines 
in wage index values. Many of these commenters recommended CMS consider 
making a permanent 5 percent maximum reduction policy to protect 
hospitals from large year-to-year variations in wage index values as a 
means to reduce overall volatility.
    Multiple commenters requested that CMS extend a hold harmless 
policy for all hospitals negatively affected by CMS' adoption of 
revised delineations until OMB releases further revisions predicated on 
the results of the 2020 decennial census. A commenter recommended a 
hold-harmless transition be applied specifically to hospitals in CBSAs 
that were negatively affected by the FY 2021 adoption of revised CBSAs, 
citing specific CBSAs they believed warranted an additional transition 
adjustment.
    Multiple commenters, while supporting some form of transition 
adjustment for negatively affected hospitals, requested any such 
adjustment be made in a non-budget neutral manner. These commenters 
expressed their preference that any such adjustment should not come at 
the expense of the providers themselves. Some commenters stated that 
such a budget neutrality adjustment would disadvantage providers who 
have increased their wage index values due to a variety of factors.
    Response: We refer readers to the FY 2022 IPPS/LTCH PPS final rule 
(86 FR 45164 through 45165) for a detailed discussion of the wage index 
transition policy finalized for the FY 2022 IPPS wage index and for 
responses to these and other comments relating to the wage index 
transition policy.
    As we noted, in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45164 
through 45165), we finalized a wage index transition policy for the FY 
2022 IPPS wage index. Specifically, for hospitals that received the 
transition in FY 2021, we are continuing a wage index transition for FY 
2022 under which we will apply a 5 percent cap on any decrease in the 
hospital's wage index compared to its wage index for FY 2021 to 
mitigate significant negative impacts of, and provide additional time 
for hospitals to adapt to, the CMS decision to adopt the revised OMB 
delineations (86 FR 45164). We stated that, as discussed in the FY 2021 
IPPS/LTCH final rule, we believe applying a 5-percent cap on any 
decrease in a hospital's wage index from the hospital's final wage 
index from the prior fiscal year is an appropriate transition as it 
provides predictability in payment levels from FY 2021 to the upcoming 
FY 2022 as well as effectively mitigating any significant decreases in 
the wage index for FY 2022 (86 FR 45164). We considered and responded 
to comments requesting that we apply the transition adjustment in FY 
2022 to all hospitals with significant reductions in wage index values 
(not just those that received the transition adjustment in FY 2021), as 
well as comments recommending a 5-percent cap become a permanent policy 
for future fiscal years (86 FR 45164 through 45165). In addition, we 
considered and responded to comments recommending we not apply the 
transition in a budget neutral manner (86 FR 45165). We stated that

[[Page 63504]]

for FY 2022, similar to FY 2021, we are applying a budget neutrality 
adjustment to the standardized amount so that our transition, as 
previously described, is implemented in a budget neutral manner under 
our authority in section 1886(d)(5)(I) of the Act (86 FR 45165).
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42051 through 42052), 
we proposed 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 rate and the copayment rate 
for CY 2022. Therefore, as we stated in the CY 2022 OPPS/ASC proposed 
rule (86 FR 42052), any adjustments for the FY 2022 IPPS post-
reclassified wage index, including without limitation any wage index 
transition policy that may be applied, would be reflected in the final 
CY 2022 OPPS wage index beginning on January 1, 2022. 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. For this reason, as discussed later in this section, we are 
finalizing our proposal 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 rate and the 
copayment rate for CY 2022, which will include the wage index 
transition policy discussed previously.
    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 proposed 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 rate and the copayment 
rate for CY 2022. Therefore, we stated that 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 referred 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 
referred readers to section II.B. of the CY 2022 OPPS/ASC proposed rule 
(86 FR 42048 through 42049). We stated that 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.
    We refer readers to the discussion of comments on the wage index 
transition policy for 2022, and our responses to those comments, 
earlier in this section. We did not receive any additional comments on 
this proposal and are finalizing it without modification.
    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 the CY 2022 OPPS/ASC proposed 
rule, we proposed to continue this policy for CY 2022, and included a 
brief summary of the major proposed FY 2022 IPPS wage index policies 
and adjustments that we proposed to apply to these hospitals under the 
OPPS for CY 2022. which we have summarized below. 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 proposed 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 proposed 
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.
    We did not receive any comments on these proposals and are 
finalizing them without modification.
    For CMHCs, for CY 2022, we proposed to continue to calculate the 
wage index by using the post-reclassification IPPS wage index based on 
the CBSA where the CMHC is located. Furthermore, we proposed 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 proposed that the wage index that would apply to CMHCs would not 
include the outmigration adjustment because that

[[Page 63505]]

adjustment only applies to hospitals. We did not receive any comments 
on these proposals and are finalizing them without modification.
    Table 4A associated with the FY 2022 IPPS/LTCH PPS final rule 
(available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index) 
identifies counties eligible for the out-migration adjustment. Table 2 
associated with the FY 2022 IPPS/LTCH PPS final rule (available for 
download via the website above) identifies IPPS hospitals that 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 final rule as Addendum L to the CY 2022 OPPS/ASC 
final rule with the addition of non-IPPS hospitals that will receive 
the section 505 outmigration adjustment under the CY 2022 OPPS/ASC 
final 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 final FY 2022 IPPS wage index tables and Addendum L.

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

    In addition to using CCRs to estimate costs from charges on claims 
for ratesetting, 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 final rule Claims Accounting Narrative that is posted on our 
website. We proposed 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 the CY 
2022 OPPS/ASC proposed rule (86 FR 42188 through 42190).
    We did not receive any public comments on our proposal and are 
finalizing our proposal, without modification, 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.
    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.

E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential 
Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the 
Act for CY 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 proposed to continue the current policy of a 7.1 
percent payment adjustment that is done in a budget neutral manner for 
rural SCHs, including EACHs, for all services and procedures paid under 
the OPPS, excluding separately payable drugs and biologicals, 
brachytherapy sources, items paid at charges reduced to costs, and 
devices paid under the pass-through payment policy.
    Comment: One commenter requested that CMS make the 7.1 percent 
rural adjustment permanent. The commenter appreciated the policy that 
CMS

[[Page 63506]]

adopted in CY 2019 and reaffirmed in CY 2020 where we stated that the 
7.1 percent rural adjustment would continue to be in place until our 
data support establishing a different rural adjustment percentage. 
However, the commenter believes that this policy still does not provide 
enough certainty for rural SCHs and EACHs to know whether they should 
take into account the rural SCH adjustment when attempting to calculate 
expected revenues for their hospital budgets.
    Response: We thank the commenter for their input. We believe that 
our current policy, which states that the 7.1 percent payment 
adjustment for rural SCHs and EACHs will remain in effect until our 
data show that a different percentage for the rural payment adjustment 
is necessary, provides sufficient budget predictability for rural SCHs 
and EACHs. Providers would receive notice in a proposed rule and have 
the opportunity to provide comments before any changes to the rural 
adjustment percentage would be implemented.
    After consideration of the public comment we received, we are 
finalizing our proposal, without modification, to continue the current 
policy of a 7.1 percent payment adjustment that is done in a budget 
neutral manner for rural SCHs, including EACHs, for all services and 
procedures paid under the OPPS, excluding separately payable drugs and 
biologicals, devices paid under the passthrough payment policy, and 
items paid at charges reduced to costs.

F. Payment Adjustment for Certain Cancer Hospitals for CY 2022

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 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 5 displays the target PCR for purposes of the cancer 
hospital adjustment for CY 2012 through CY 2021.

[[Page 63507]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.011

2. 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 proposed to provide additional payments to the 11 specified 
cancer hospitals so that each cancer hospital's final PCR is equal to 
the weighted average PCR (or ``target PCR'') for the other OPPS 
hospitals, using the most recent submitted or settled cost report data 
that were available at the time of the development of the proposed 
rule, reduced by 1.0 percentage point, to comply with section 16002(b) 
of the 21st Century Cures Act. We did not propose an additional 
reduction beyond the 1.0 percentage point reduction required by section 
16002(b) of the 21st Century Cures Act 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 the 
CY 2022 OPPS/ASC 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 proposed 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).
    We did not receive any public comments on our proposal and we are 
finalizing our proposal to continue to use the CY 2021 target PCR of 
0.89 for the 11 specified cancer hospitals for CY 2022 without 
modification.
    Table 6 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.
BILLING CODE 4120-01-P

[[Page 63508]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.012

BILLING CODE 4120-01-C

G. Hospital Outpatient Outlier Payments

1. Background
    The OPPS provides outlier payments to hospitals to help mitigate 
the financial risk associated with high-cost and complex procedures, 
where a very costly service could present a hospital with significant 
financial loss. As explained in the CY 2015 OPPS/ASC final rule with 
comment period (79 FR 66832 through 66834), we set our projected target 
for aggregate outlier payments at 1.0 percent of the estimated 
aggregate total payments under the OPPS for the prospective year. 
Outlier payments are provided on a service-by-service basis when the 
cost of a service exceeds the APC payment amount multiplier threshold 
(the APC payment amount multiplied by a certain amount) as well as the 
APC payment amount plus a fixed-dollar amount threshold (the APC 
payment plus a certain amount of dollars). In CY 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. Using CY 2019 claims available for this final rule with 
comment period, we estimate that we paid approximately 0.89 percent of 
the total aggregated OPPS payments in outliers for CY 2019. Therefore, 
for CY 2019, we estimate that we paid 0.11 percentage points below the 
CY 2019 outlier target of 1.0 percent of total aggregated OPPS 
payments.
    For this final rule with comment period, using CY 2019 claims data 
and CY 2021 payment rates, we estimate that the aggregate outlier 
payments for CY 2021 would be approximately 1.07 percent of the total 
CY 2021 OPPS payments. We provide 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 proposed to continue our policy of estimating 
outlier payments to be 1.0 percent of the estimated aggregate total 
payments under the OPPS. We proposed that a portion of that 1.0 
percent, an amount equal to less than 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 proposed to 
continue our longstanding policy that if a CMHC's cost for partial 
hospitalization services, paid under APC 5853 (Partial Hospitalization 
for CMHCs), exceeds 3.40 times the payment rate for

[[Page 63509]]

proposed APC 5853, the outlier payment would be calculated as 50 
percent of the amount by which the cost exceeds 3.40 times the proposed 
APC 5853 payment rate.
    For further discussion of CMHC outlier payments, we refer readers 
to section VIII.C. of the CY 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 proposed that the hospital outlier threshold be set so that 
outlier payments would be triggered when a hospital's cost of 
furnishing a service exceeds 1.75 times the APC payment amount and 
exceeds the APC payment amount plus $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 CY 
2022 OPPS/ASC 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 generally 
use to model each OPPS update lag by 2 years. However, as discussed in 
section X.E. of the CY 2022 OPPS/ASC proposed rule, we proposed to use 
CY 2019 claims in establishing the CY 2022 OPPS.
    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-loss cost 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, 
applying the charge inflation factor for two years, to estimate CY 2021 
hospital outlier payments. The methodology for determining this charge 
inflation factor is discussed in the FY 2021 IPPS/LTCH PPS final rule 
(85 FR 59037 through 59040). As we stated in the CY 2005 OPPS final 
rule with comment period (69 FR 65844 through 65846), 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 cost centers to capture 
costs and charges for inpatient and outpatient services.
    As noted in the CY 2007 OPPS/ASC final rule with comment period (71 
FR 68011), we are concerned that we could systematically overestimate 
the OPPS hospital outlier threshold if we did not apply a CCR inflation 
adjustment factor. Therefore, we proposed to apply the same CCR 
inflation adjustment factor that we proposed to apply for the FY 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 proposed to apply an adjustment factor of 
0.94964 (or 0.974495 * 0.974495) to the CCRs that were in the April 
2020 OPSF to trend them forward from CY 2020 to CY 2022. We note that 
we proposed to use the April 2020 OPSF to address concerns regarding 
the impact of the PHE on data used in OPPS ratesetting, as discussed in 
section X.E. of the CY 2022 OPPS/ASC proposed rule. 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 the CY 2022 OPPS/ASC 
proposed rule, we applied the overall CCRs from the April 2020 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 note that the additional year in the 
charge inflation factor and CCR inflation factors is a result of the 
use of claims and OPSF data from a year earlier than the year that we 
would typically use in a standard ratesetting cycle. 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 proposed that, 
if a CMHC's cost for partial hospitalization services, paid under APC 
5853, exceeds 3.40 times the payment rate for APC 5853, the outlier 
payment would be calculated as 50 percent of the amount by which the 
cost exceeds 3.40 times the APC 5853 payment rate.
    Section 1833(t)(17)(A) of the Act, which applies to hospitals, as 
defined under section 1886(d)(1)(B) of the Act, requires that hospitals 
that fail to report data required for the quality measures selected by 
the Secretary, in the form and manner required by the Secretary under 
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point 
reduction to their OPD fee schedule increase factor; that is, the 
annual payment update factor. The application of a reduced OPD fee 
schedule increase factor results in reduced national unadjusted payment 
rates that will apply to certain outpatient items and services 
furnished by hospitals that are required to report outpatient quality 
data and that fail to meet the Hospital OQR Program requirements. For 
hospitals that fail to meet the Hospital OQR Program requirements, we 
proposed 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 the CY 
2022 OPPS/ASC proposed rule.
    Comment: One commenter recommended that, in light of the PHE, CMS 
should not update the OPPS outlier fixed-dollar threshold at a time 
when hospitals are struggling financially.
    Response: We maintain the target outlier percentage of 1.0 percent 
of estimated aggregate total payments under the OPPS and have a fixed-
dollar threshold so that OPPS outlier payments are made only when the 
hospital would experience a significant loss for furnishing a 
particular service. We continue to believe that the 1.0 percent OPPS 
outlier spending target appropriately mitigates the financial risk 
associated with exceptionally costly or complex cases. In addition, in 
a budget neutral system any spending for OPPS outliers would require a 
corresponding reduction to all other OPPS payments, which would have a 
universal impact on hospitals because every OPPS payment would be 
reduced. The fixed-dollar outlier threshold is specifically developed 
in order to best estimate aggregate outlier payments of 1.0 percent of 
the OPPS and ensure that outlier payments are directed towards the high 
cost and complex procedures associated with potential financial risk. 
Failing to update this outlier threshold would systemically 
underestimate the

[[Page 63510]]

amount of OPPS outlier payments and result in OPPS outlier payments in 
excess of 1.0 percent of aggregate OPPS payments.
    After consideration of the public comment we received, we are 
finalizing our proposal, without modification, to continue our policy 
of estimating outlier payments to be 1.0 percent of the estimated 
aggregate total payments under the OPPS and to use our established 
methodology to set the OPPS outlier fixed-dollar loss threshold for CY 
2022.
3. Final Outlier Calculation
    Historically, we have used updated data for the outlier fixed-
dollar threshold calculation for the final rule. However, as discussed 
in section X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 
through 42190) claims and other data that we would typically have used 
as part of our ratesetting process would have been affected by the PHE. 
As a result, we proposed to use CY 2019 OPPS claims as part of the CY 
2022 OPPS ratesetting process. For purposes of estimating the outlier 
threshold, we are finalizing our proposal to apply the same CCR 
inflation adjustment factor that we finalized to apply for the FY 2022 
IPPS outlier calculation to the CCRs used to simulate the final CY 2022 
OPPS outlier payments to determine the fixed-dollar threshold. As 
discussed in the FY 2022 IPPS/LTCH PPS final rule with comment period 
(86 FR 45537 through 45543), there are some changes to the typical 
charge and CCR inflation factors we would use for outlier estimating 
purposes as a result of the proposed and final policy to use data prior 
to the PHE. Ordinarily, we would use updated CCRs of the OPSF and apply 
an adjustment factor to adjust the CCRs from the most recent update of 
OPSF. However, as discussed previously, we believe the most recent CCRs 
in the OPSF may be significantly impacted by the PHE. As a result, and 
similar to the proposed use of CY 2019 claims in CY 2022 OPPS 
ratesetting more broadly, we proposed to use OPSF CCRs from the April 
2020 OPSF for CY 2022 outlier estimation purposes. The claims and OPSF 
data are not the most updated data available and therefore to properly 
update them for the prospective year--CY 2022--we needed to apply an 
additional year of CCRs and charge inflation. For CY 2022, we are 
applying the overall CCRs from the April 2020 OPSF file (using the CCR 
inflation adjustment factor of 0.94964 to approximate CY 2021 CCRs) to 
charges on CY 2019 claims that were adjusted using a charge inflation 
factor of 1.20469 to approximate CY 2022 charges. These are the same 
CCR adjustment and charge inflation factors that were used to set the 
IPPS fixed-loss cost threshold for the FY 2022 IPPS/LTCH PPS final rule 
(86 FR 45537 through 45543). We simulate aggregate CY 2022 hospital 
outlier payments using these costs for several different fixed-dollar 
thresholds, holding the 1.75 multiple-threshold constant and assuming 
that outlier payments will continue to be made at 50 percent of the 
amount by which the cost of furnishing the service would exceed 1.75 
times the APC payment amount, until total outlier payments equal 1.0 
percent of aggregated estimated total CY 2022 OPPS payments. We 
estimate that a fixed-dollar amount threshold of $6,175 combined with 
the multiplier threshold of 1.75 times the APC payment rate, will 
allocate the 1.0 percent of aggregated total OPPS payments to outlier 
payments. For CY 2022, we are finalizing a multiplier threshold of 1.75 
times the APC payment rate and a fixed-dollar amount threshold of 
$6,175.
    For CMHCs, if a CMHC's cost for partial hospitalization services, 
paid under APC 5853, exceeds 3.40 times the payment rate the outlier 
payment will be calculated as 50 percent of the amount by which the 
cost exceeds 3.40 times APC 5853.

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

    The basic methodology for determining prospective payment rates for 
HOPD services under the OPPS is set forth in existing regulations at 42 
CFR part 419, subparts C and D. For this final rule with comment 
period, the payment rate for most services and procedures for which 
payment is made under the OPPS is the product of the conversion factor 
calculated in accordance with section II.B. of this final rule with 
comment period and the relative payment weight determined under section 
II.A. of this final rule with comment period. Therefore, the national 
unadjusted payment rate for most APCs contained in Addendum A to this 
final rule with comment period (which is available via the internet on 
the CMS website) and for most HCPCS codes to which separate payment 
under the OPPS has been assigned in Addendum B to this final rule with 
comment period (which is available via the internet on the CMS website) 
was calculated by multiplying the final 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 Hospital OQR 
Program, we refer readers to section XIV. of this final rule with 
comment period.
    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

[[Page 63511]]

national unadjusted payment rate is calculated by multiplying the 
reporting ratio of 0.9804 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. 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 are continuing 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 are applying for 
the CY 2022 OPPS, we refer readers to section II.C. of this final rule 
with comment period.
    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 Pub. L. 
108-173. Addendum L to this final rule with comment period (which is 
available via the internet on the CMS website) contains the qualifying 
counties and the associated wage index increase developed for the final 
FY 2022 IPPS wage index, which are listed in Table 2 associated with 
the FY 2022 IPPS/LTCH PPS final 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 Final Rule Home Page'' 
and select ``FY 2022 Final 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 example, we are using a 
provider that is located in Brooklyn, New York that is assigned to CBSA 
35614. This provider bills one service that is assigned to APC 5071 
(Level 1 Excision/Biopsy/Incision and Drainage). The CY 2022 full 
national unadjusted payment rate for APC 5071 is $635.54. The proposed 
reduced national unadjusted payment rate for APC 5071 for a hospital 
that fails to meet the Hospital OQR Program requirements is $623.08. 
This proposed reduced rate is calculated by multiplying the reporting 
ratio of 0.9804 by the full unadjusted payment rate for APC 5071.
    The 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 1.3427. The labor-related portion of the proposed full 
national unadjusted payment is approximately $512.00 (.60 * $635.54 * 
1.3427). The labor-related portion of the proposed reduced national 
unadjusted payment is approximately $501.97 (.60 * $623.08 * 1.3427). 
The nonlabor-related portion of the proposed full national unadjusted 
payment is approximately $254.22 (.40 * $635.54). The nonlabor-related 
portion of the proposed reduced national unadjusted payment is 
approximately $249.23 (.40 * $623.08). The sum of the labor-related and 
nonlabor-related portions of the proposed full national adjusted 
payment is approximately $766.22 ($512.00 + $254.22). The sum of the 
portions of the proposed reduced national adjusted payment is 
approximately $751.20 ($501.97 + $249.23).
    We did not receive any public comments on these steps under the 
methodology that we included in the proposed rule to determine the APC 
payments for CY 2022. Therefore, we are using the steps in the 
methodology specified above, as we proposed, to demonstrate the 
calculation of the final

[[Page 63512]]

CY 2021 OPPS payments using the same parameters.

I. Beneficiary Copayments

1. Background
    Section 1833(t)(3)(B) of the Act requires the Secretary to set 
rules for determining the unadjusted copayment amounts to be paid by 
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of 
the Act specifies that the Secretary must reduce the national 
unadjusted copayment amount for a covered OPD service (or group of such 
services) furnished in a year in a manner so that the effective 
copayment rate (determined on a national unadjusted basis) for that 
service in the year does not exceed a specified percentage. As 
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective 
copayment rate for a covered OPD service paid under the OPPS in CY 
2006, and in CYs thereafter, shall not exceed 40 percent of the APC 
payment rate.
    Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered 
OPD service (or group of such services) furnished in a year, the 
national unadjusted copayment amount cannot be less than 20 percent of 
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the 
Act limits the amount of beneficiary copayment that may be collected 
for a procedure (including items such as drugs and biologicals) 
performed in a year to the amount of the inpatient hospital deductible 
for that year.
    Section 4104 of the Affordable Care Act eliminated the Medicare 
Part B coinsurance for preventive services furnished on and after 
January 1, 2011, that meet certain requirements, including flexible 
sigmoidoscopies and screening colonoscopies, and waived the Part B 
deductible for screening colonoscopies that become diagnostic during 
the procedure. For a discussion of the changes made by the Affordable 
Care Act with regard to copayments for preventive services furnished on 
and after January 1, 2011 we refer readers to section XII.B. of the CY 
2011 OPPS/ASC final rule with comment period (75 FR 72013).
2. OPPS Copayment Policy
    For CY 2022, we proposed to determine copayment amounts for new and 
revised APCs using the same methodology that we implemented beginning 
in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule 
with comment period (68 FR 63458).) In addition, we proposed to use the 
same standard rounding principles that we have historically used in 
instances where the application of our standard copayment methodology 
would result in a copayment amount that is less than 20 percent and 
cannot be rounded, under standard rounding principles, to 20 percent. 
(We refer readers to the CY 2008 OPPS/ASC final rule with comment 
period (72 FR 66687) in which we discuss our rationale for applying 
these rounding principles.) The proposed national unadjusted copayment 
amounts for services payable 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 the CY 2022 OPPS/ASC proposed 
rule and this final rule with comment period, 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 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

[[Page 63513]]

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 final rule with 
comment period for the full discussion of this policy.
    Comment: One commenter requested that CMS waive the patient 
coinsurance and deductible for Biomechanical Computed Tomography (BCT) 
analysis, CPT 0554T to 0558T under the Medicare preventive services 
benefit 42 CFR 410.152(l)(6). The commenter stated that these codes are 
considered preventive services for diagnostic screening of osteoporosis 
and that Change Request (CR) 11392 directed contractors to apply the 
same rules applied to CPT code 77078 (Computed tomography, bone mineral 
density study, 1 or more sites, axial skeleton (for example, hips, 
pelvis, spine)) to these BCT codes.
    Response: We disagree with the commenter that the BCT codes are not 
subject to coinsurance and the Part B deductible at this time. The 
service described by CPT code 77078 meets the National Coverage 
Determination (NCD) process for preventive services coverage and 
subject to its coinsurance and deductible waiver. However, the USPSTF 
has not changed its current recommendation for bone measurement testing 
(available here: https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/osteoporosis-screening#fullrecommendationstart) since 
2018. These new BCT codes became effective July 1, 2019, and the 
services described by these codes are not specifically included in the 
USPSTF grade B recommendation. Therefore, they do not meet requirements 
to have beneficiary coinsurance and deductible waived. We note that CMS 
may add preventive services coverage through the National Coverage 
Determination (NCD) process if the service meets all of the following 
criteria: Reasonable and necessary for prevention or early detection of 
illness or disability, USPSTF recommended with grade A or B, and 
appropriate for individuals entitled to benefits under Part A or 
enrolled under Medicare Part B. In the event that the USPSTF updates 
its recommendation for bone measurement testing to specifically include 
these services described by the new BCT codes, CMS would reevaluate 
whether to apply the coinsurance and deductible waiver.
3. Calculation of an Adjusted Copayment Amount for an APC Group
    Individuals interested in calculating the national copayment 
liability for a Medicare beneficiary for a given service provided by a 
hospital that met or failed to meet its Hospital OQR Program 
requirements should follow the formulas presented in the following 
steps.
    Step 1. Calculate the beneficiary payment percentage for the APC by 
dividing the APC's national unadjusted copayment by its payment rate. 
For example, using APC 5071, $127.11 is approximately 20 percent of the 
full national unadjusted payment rate of $635.54. For APCs with only a 
minimum unadjusted copayment in Addenda A and B to the CY 2022 OPPS/ASC 
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 the CY 2022 OPPS/ASC proposed rule. Calculate 
the rural adjustment for eligible providers, as indicated in Step 6 
under section II.H. of the CY 2022 OPPS/ASC 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 final rule with 
comment period, with and without the rural adjustment, to calculate the 
adjusted beneficiary copayment for a given service.

Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment 
* B.
Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted 
Medicare Payment * 1.071) * B.

    Step 4. For a hospital that failed to meet its Hospital OQR Program 
requirements, multiply the copayment calculated in Step 3 by the 
reporting ratio of 0.9804.
    The unadjusted copayments for services payable under the OPPS that 
will be effective January 1, 2022 are shown in Addenda A and B to this 
final rule with comment period (which are available via the internet on 
the CMS website). We note that the national unadjusted payment rates 
and copayment rates shown in Addenda A and B to this final rule with 
comment period reflect the CY 2022 OPD fee schedule increase factor 
discussed in section II.B. of this final rule with comment period.
    In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act 
limits the amount of beneficiary copayment that may be collected for a 
procedure performed in a year to the amount of the inpatient hospital 
deductible for that year.

III. OPPS Ambulatory Payment Classification (APC) Group Policies

A. OPPS Treatment of New and Revised HCPCS Codes

    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

[[Page 63514]]

procedures, and medical services not described by CPT codes.
    CPT codes are established by the 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 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. ``CY 2022 OPPS Payment Status 
and Comment Indicators'' of this final rule with comment period, we 
discuss the various status indicators used under the OPPS. We also 
provide a complete list of status indicators and their definitions in 
Addendum D1 to this final rule with comment period.
1. HCPCS Codes That Were Effective April 1, 2021 for Which We Solicited 
Public Comments in the CY 2022 OPPS/ASC 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 
were included in Table 5 of the proposed rule and are now listed in 
Table 7 of this final rule with comment period. 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 the CY 2022 OPPS/ASC proposed rule, 
we solicited public comments on the proposed APC and status indicator 
assignments for the codes which were listed in Table 5 of this CY 2022 
OPPS/ASC proposed rule with comment period.
    We did not receive any public comments on the proposed OPPS APC and 
SI assignments for the new Level II HCPCS codes implemented in April 
2021. Therefore, we are finalizing the proposed APC and SI assignments 
for these codes, as indicated in Table 7.
    The status indicator, APC assignment, and payment rate for each 
HCPCS code can be found in Addendum B to this final rule with comment 
period. In addition, the complete list of status indicators and 
corresponding definitions used under the OPPS can be found in Addendum 
D1 to this final rule with comment period. These new codes that were 
effective April 1, 2021 were assigned to comment indicator ``NP'' in 
Addendum B to the CY 2022 OPPS/ASC proposed rule to indicate that the 
codes were assigned to an interim APC assignment and that comments 
would be accepted on their interim APC assignments. Also, the complete 
list of comment indicators and definitions used under the OPPS can be 
found in Addendum D2 to this final rule with comment period. 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. HCPCS Codes That Were Effective July 1, 2021 for Which We Solicited 
Public Comments in the CY 2022 OPPS/ASC Proposed Rule
    For the July 2021 update, 55 new codes were established and made 
effective July 1, 2021. The codes and long descriptors were listed in 
Table 6 of the proposed rule and are now also listed in Table 8 of this 
final rule with comment period. 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 the CY 2022 OPPS/ASC proposed rule, we solicited 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 8.
    We did not receive any public comments on the proposed OPPS APC and 
SI assignments for the new Level II HCPCS codes implemented in July 
2021 and we are finalizing the proposed APC and SI assignments for 
these codes, as indicated in Table 8. We note that several of the HCPCS 
C-codes have been replaced with HCPCS J-codes, effective October 1, 
2021. Their replacement codes are listed in Table 8. The final payment 
rates for these codes can be found in Addendum B to this final rule 
with comment period.
    The status indicator, APC assignment, and payment rate for each 
HCPCS code can be found in Addendum B to this final rule with comment 
period. The complete list of status indicators and corresponding 
definitions used under the OPPS can be found in Addendum D1 to this 
final rule with comment period. These new codes that were effective 
July 1, 2021 were assigned to comment indicator ``NP'' in Addendum B to 
the CY 2022 OPPS/ASC proposed rule to indicate that the codes were 
assigned to an interim APC assignment and that comments would be 
accepted on their interim APC assignments. Also, the complete list of 
comment indicators and definitions used under the OPPS can be found in 
Addendum D2 to this final rule with comment period. 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 Are 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 
HCPCS codes that are effective October 1 in the final rule with comment 
period, thereby updating the OPPS for the following calendar year, as 
displayed in Table 7 of the CY 2022 OPPS/ASC proposed rule with comment 
period and reprinted as Table 9 of this final rule with comment period. 
These codes are released to the public through the October OPPS 
quarterly update CRs and via the CMS HCPCS website (for Level II HCPCS 
codes). For CY 2022, these codes are flagged with comment indicator 
``NI'' in Addendum B to this OPPS/ASC final rule with comment period to 
indicate that we are assigning them an interim payment status which is 
subject to public comment. Specifically, the interim SI and APC 
assignments for codes flagged with comment indicator ``NI'' are open to 
public comment in this final rule with comment period, and we will 
respond to these public comments in the OPPS/ASC final rule with 
comment period for the next year's OPPS/ASC update.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42068), we proposed to 
continue this process for CY 2022. Specifically, for CY 2022, we 
proposed to include in Addendum B to the CY 2022 OPPS/ASC final rule 
with comment period the new HCPCS codes effective October 1, 2021 that 
would be incorporated in the October 2021 OPPS quarterly update CR. 
Also, as stated above, the October 1, 2021 codes are flagged with 
comment indicator ``NI'' in Addendum B to this CY 2022 OPPS/

[[Page 63523]]

ASC final rule with comment period to indicate that we have assigned 
the codes an interim OPPS payment status for CY 2022. We are inviting 
public comments on the interim SI and APC assignments for these codes, 
if applicable, that will 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 Are Soliciting Public Comments 
in This CY 2022 OPPS/ASC Final Rule With Comment Period
    Consistent with past practice, we are soliciting comments on the 
new Level II HCPCS codes that will be effective January 1, 2022 of this 
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 the CY 2022 OPPS/ASC 
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 proposed to 
include in Addendum B to this 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, the Level II HCPCS codes effective January 1, 2022 are 
flagged with comment indicator ``NI'' in Addendum B to this final rule 
with comment period to indicate that we have assigned the codes an 
interim OPPS payment status for CY 2022. We are inviting public 
comments on the interim SI and APC assignments for these codes, if 
applicable, that will be finalized in the CY 2023 OPPS/ASC final rule 
with comment period.
b. CPT Codes for Which We Solicited Public Comments in the CY 2022 
OPPS/ASC Proposed Rule
    In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841 
through 66844), we finalized a revised process of assigning APC and 
status indicators for new and revised Category I and III CPT codes that 
would be effective January 1. Specifically, for the new/revised CPT 
codes that we receive in a timely manner from the AMA's CPT Editorial 
Panel, we finalized our proposal to include the codes that would be 
effective January 1 in the OPPS/ASC proposed rules, along with proposed 
APC and status indicator assignments for them, and to finalize the APC 
and status indicator assignments in the OPPS/ASC final rules beginning 
with the CY 2016 OPPS update. For those new/revised CPT codes that were 
received too late for inclusion in the OPPS/ASC proposed rule, we 
finalized our proposal to establish and use HCPCS G-codes that mirror 
the predecessor CPT codes and retain the current APC and status 
indicator assignments for a year until we can propose APC and status 
indicator assignments in the following year's rulemaking cycle. We note 
that even if we find that we need to create HCPCS G-codes in place of 
certain CPT codes for the PFS proposed rule, we do not anticipate that 
these HCPCS G-codes will always be necessary for OPPS purposes. We will 
make every effort to include proposed APC and status indicator 
assignments for all new and revised CPT codes that the AMA makes 
publicly available in time for us to include them in the proposed rule, 
and to avoid 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 the CY 
2022 OPPS/ASC proposed rule. The new, revised, and deleted CPT codes 
can be found in Addendum B to the CY 2022 OPPS/ASC 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 the CY 2022 OPPS/ASC proposed rule to indicate that the 
code is new for the next calendar year or the code is an existing code 
with substantial revision to its code descriptor in the next calendar 
year as compared to 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 included the 5-digit placeholder codes and the long 
descriptors for the new and revised CY 2022 CPT codes in Addendum O to 
the CY 2022 OPPS/ASC 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 would be included in this final rule with 
comment period. We also noted that not every code listed in Addendum O 
is subject to public comment. For the new and revised CPT codes, we 
requested public comments on only those codes that are assigned comment 
indicator ``NP''.
    In summary, in the CY 2022 OPPS/ASC proposed rule, we solicited 
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 listed them again in Addendum O to the CY 
2022 OPPS/ASC proposed rule with long descriptors. In addition, we 
proposed to finalize the status indicator and APC assignments for these 
codes (with their final CPT code numbers) in this final rule with 
comment period. The proposed status indicator and APC assignment for 
these codes can be found in Addendum B to the CY 2022 OPPS/ASC proposed 
rule (which is available via the internet on the CMS website).
    Commenters addressed several of the new CPT codes that were 
assigned to comment indicator ``NP'' in Addendum B of the 2022 OPPS/ASC 
Proposed Rule. We have responded to those public comments in sections 
III.D. ``OPPS APC-Specific Policies'' of this final rule with comment 
period.
    Finally, in Table 9, which is a reprint of Table 7 from the CY 2022 
OPPS/ASC proposed rule, 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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BILLING CODE 4120-01-C

B. OPPS Changes--Variations Within APCs

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

[[Page 63525]]

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 this 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 (FDCA)). 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 the 
CY 2022 OPPS/ASC proposed rule, for CY 2022, we proposed to make 
exceptions to this limit on the variation of costs within each APC 
group in unusual cases, such as for certain low-volume items and 
services.
    For the CY 2022 OPPS update, in the CY 2022 OPPS/ASC proposed rule, 
we identified the APCs with violations of the 2 times rule. Therefore, 
we proposed changes to the procedure codes assigned to these APCs in 
Addendum B to the CY 2022 OPPS/ASC proposed rule. We noted that 
Addendum B does not appear in the printed version of the Federal 
Register as part of the 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 proposed 
to reassign these procedure codes to new APCs that contain services 
that are similar with regard to both their clinical and resource 
characteristics. In many cases, the proposed procedure code 
reassignments and associated APC reconfigurations for CY 2022 included 
in the CY 2022 OPPS/ASC 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 the CY 2021 OPPS/ASC proposed rule 
identified with a comment indicator ``CH'' those procedure codes for 
which we proposed a change to the APC assignment or status indicator, 
or both, that were initially assigned in the July 1, 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. APC Exceptions to the 2 Times Rule
    Taking into account the APC changes that we proposed 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 the 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 
proposed 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 the CY 2022 OPPS/ASC 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 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 the CY 2022 OPPS/ASC proposed rule listed the 23 APCs 
for which we proposed 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 the CY 2022 
OPPS/ASC 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.
    Based on the updated final rule CY 2019 claims data used for this 
final rule with comment period, we identified the same 23 APCs that 
appeared in Table 8 of the CY 2022 OPPS/ASC proposed rule.
    Comment: We received two comments that agreed with the proposed 
exceptions identified in Table 8 of the CY 2021 OPPS proposed rule.
    Response: We appreciate the commenters' support.
    Comment: One commenter requested that CMS adjust the definition of 
a significant procedure code for cost significance purposes in 
evaluating the 2 times rule to only require 500 single claims rather 
than the current requirement of 1,000 single claims.
    Response: As stated earlier, in determining whether a 2 times rule 
violation exists in an APC, we consider only those HCPCS codes that are 
significant based on the number of claims for the codes. For purposes 
of identifying significant HCPCS codes to examine for 2 times rule 
violations, we consider codes that have more than 1,000 single major 
claims or codes that have both greater than 99 single major

[[Page 63526]]

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 HCPCS code is significant for 
purposes of the 2 times rule was selected because we believe that a 
subset of 1,000 claims is negligible within the set of approximately 
100 million single procedure or single session claims we use for 
establishing costs. Similarly, a HCPCS code for which there are fewer 
than 99 single claims and which comprises less than 2 percent of the 
single major claims within an APC will have a negligible impact on the 
APC cost. We continue to believe that these definitions remain 
appropriate and are therefore making no changes in this final rule with 
comment period.
    Comment: One commenter opposed the allowance of a 2 times rule 
exception for APC 5161 (Level 1 ENT Procedures) in Table 8 of the CY 
2021 OPPS proposed rule, based on the current construct of codes 
included in the APC.
    Response: We have reviewed the CY 2019 claims data available for CY 
2022 OPPS ratesetting for APC 5161 and believe that this APC remains 
appropriate as currently structured because it optimizes clinical and 
resource cost homogeneity. In addition, we note that the 2 times rule 
violation is based on the cost range of approximately $155.55 for CPT 
code 31500 (Insert emergency airway) and $315.60 for CPT code 69100 
(Biopsy of external ear) between the geometric mean costs for the 
lowest and highest cost significant codes in the APC. The difference 
between the geometric mean costs for CPT codes 31500 and 69100 violates 
the 2 times rule by a minimal amount and does not suggest there is a 
broader issue with the APC. However, we will continue to monitor the 
claims data for APC 5161 as they become available.
    After considering the public comments we received on proposed APC 
assignments and our analysis of the CY 2019 costs from hospital claims 
and cost report data available for this final rule with comment period, 
we are finalizing our proposals, with some modifications. Specifically, 
we are finalizing our proposal to except the 23 proposed APCs from the 
2 times rule for CY 2022.
    Table 10 below lists the 23 APCs that we are excepting from the 2 
times rule for CY 2022 based on the criteria described earlier and a 
review of claims data for dates of service between January 1, 2019, and 
December 31, 2019, that were processed on or before June 30, 2020. We 
note that, for cases in which a recommendation by the HOP Panel appears 
to result in or allow a violation of the 2 times rule, we generally 
accept the HOP Panel's recommendation because those recommendations are 
based on explicit consideration of resource use, clinical homogeneity, 
site of service, and the quality of the claims data used to determine 
the APC payment rates. The geometric mean costs for hospital outpatient 
services for these and all other APCs that were used in the development 
of this final rule with comment period can be found on the CMS website 
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
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BILLING CODE 4120-01-C

C. New Technology APCs

1. Background
    In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes 
to the time period in which a service can be eligible for payment under 
a New Technology APC. Beginning in CY 2002, we retain services within 
New Technology APC groups until we gather sufficient claims data to 
enable us to assign the service to an appropriate clinical APC. This 
policy allows us to move a service from a New Technology APC in less 
than 2 years if sufficient data are available. It also allows us to 
retain a service in a New Technology APC for more than 2 years if 
sufficient data upon which to base a decision for reassignment have not 
been collected.
    In the CY 2004 OPPS final rule with comment period (68 FR 63416), 
we restructured the New Technology APCs to make the cost intervals more 
consistent across payment levels and refined the cost bands for these 
APCs to retain two parallel sets of New Technology APCs, one set with a 
status indicator of ``S'' (Significant Procedures, Not Discounted when 
Multiple. Paid under OPPS; separate APC payment) and the other set with 
a status indicator of ``T'' (Significant Procedure, Multiple Reduction 
Applies. Paid under OPPS; separate APC payment). These current New 
Technology APC configurations allow us to price new technology services 
more appropriately and consistently.
    For CY 2021, there were 52 New Technology APC levels, ranging from 
the lowest cost band assigned to APC 1491 (New Technology--Level 1A 
($0-$10)) to 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 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.

[[Page 63528]]

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 the 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 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

[[Page 63529]]

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 proposed 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 4 
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 proposed to utilize our equitable 
adjustment authority through our proposed universal low volume APC 
policy described in section X.C. of the CY 2022 OPPS/ASC 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 procedures 
assigned to New Technology APCs, and would use the highest of the 
geometric mean, arithmetic mean, or median based on up to 4 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 
proposed 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 as well as clinical and brachytherapy APCs.
    We did not receive any comments on our proposal to end our separate 
New Technology APC low volume policy if we adopt the proposed universal 
low volume APC policy and we have decided to implement our universal 
low volume APC policy as described in section X.C. of this final rule 
with comment period. Therefore, we are implementing our proposal 
without modification and applying our universal low volume APC policy 
to procedures assigned to New Technology APCs as well as clinical and 
brachytherapy APCs.
3. Procedures Assigned to New Technology APC Groups for CY 2022
    As we described in the CY 2002 OPPS final rule (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 proposed 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 (APC 1908)
    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 of this final rule with comment period, we presented the result 
of each statistical methodology in the CY 2022 OPPS/ASC 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

[[Page 63530]]

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 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 proposed 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 the CY 2022 OPPS/ASC 
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 proposed to use claims data from CY 2016 through CY 
2019, which are the last 4 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 proposed to continue to assign the 
Argus[supreg] II procedure to New Technology APC 1908 for CY 2022.
    For our analysis for this final rule with comment period, we 
identified 35 claims reporting the procedure described by CPT code 
0100T for the 4-year period of CY 2016 through CY 2019, which were the 
same claims analyzed for the CY 2022 OPPS/ASC proposed rule. 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, which are the same results that we calculated for the 
proposed rule. All three potential statistical methodologies used to 
estimate the cost of the Argus[supreg] II procedure fall within the 
cost band for New Technology APC 1908, with the estimated cost being 
between $145,001 and $160,000.
    We received no public comments on our proposal. Therefore, we are 
finalizing our proposal without modification. We will maintain the 
assignment of the procedure described by CPT code 0100T in APC 1908 
(New Technology--Level 52 ($145,001- $160,000)), with a payment rate of 
$152,500.50 for CY 2021. We note that the final payment rate includes 
both the surgical procedure (CPT code 0100T) and the use of the 
Argus[supreg] II device (HCPCS code C1841). Please see Table 11 below 
for the final OPPS APC and status indicator for the Argus[supreg] II 
procedure (CPT code 0100T) for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.023


[[Page 63531]]


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 through 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.\20\ 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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    \20\ 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.\21\ 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.
---------------------------------------------------------------------------

    \21\ 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 a cost band that 
contains the geometric mean cost for HCPCS code 67036. The placeholder 
code C97X1 was replaced by C9770 in this final rule with comment 
period. 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 ($3,001-$3,500)) using the geometric mean 
cost of HCPCS code 67036. See Table 12 for the final descriptor and APC 
assignment of HCPCS code C9770 for CY 2021.
    For CY 2022, we proposed 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 proposed 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 
proposed to assign C9770 to the corresponding New Technology APC 
payment band, APC 1561 New Technology--Level 24 ($3,001-$3,500), with a 
payment rate of $3,250.50. Refer to Table 12 below for the proposed 
OPPS APC and status indicator for HCPCS code C9770 for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.024


[[Page 63532]]


    We received no comment on this proposal. Therefore, we are 
finalizing our proposal as proposed 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. As we proposed 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, we are finalizing this 
proposal. Based on CY 2019 claims data, the geometric mean cost of 
HCPCS code 67036 is $3,435.25 Therefore, we will assign C9770 to the 
corresponding New Technology APC payment band, APC 1561 New 
Technology--Level 24 ($3,001-$3,500), with a payment rate of $3,250.50. 
Please see Table 13 below for the final and proposed OPPS APC and 
status indicator for HCPCS code C9770 for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.025

c. Bronchoscopy With Transbronchial Ablation of Lesion(s) by Microwave 
Energy (APC 1562)
    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 four 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 proposed 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 proposed to use 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 
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 falls again within the cost band for New Technology 
APC 1562 (New Technology--Level 25 ($3,501-$4,000)). Therefore, we 
proposed 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.
    For our analysis for this final rule with comment period, we again 
used CY 2019 data, and we identified the same four claims reported for 
bronchoscopy with transbronchial ablation of lesions by microwave 
energy that were analyzed for the proposed rule and in CY 2021. Since 
the same claims were analyzed we received the same values for the 
geometric mean cost ($2,693), arithmetic mean cost ($3,086), and the 
median cost ($3,708) as we did for the proposed rule. As before, 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)).
    We did not receive any public comments regarding our proposal. We

[[Page 63533]]

are finalizing our proposal without modification to continue to assign 
HCPCS code C9751 to APC 1562 (New Technology--Level 25 ($3,501-
$4,000)), with a final payment rate of $3,750.50 for CY 2022. Details 
regarding HCPCS code C9751 are included in Table 14.
[GRAPHIC] [TIFF OMITTED] TR16NO21.026

d. Fractional Flow Reserve Derived From Computed Tomography (FFRCT) 
(APC 1511)
    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 with comment period, 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

[[Page 63534]]

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 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 proposed 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 proposed 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-$1000)), 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.
    Comment: The developer of HeartFlow and multiple other commenters 
stated that CPT code 0503T should not be assigned to New Technology APC 
1510. Instead, they suggested that the HeartFlow procedure be assigned 
to APC 5593 (Level 3 Nuclear Medicine and Related Services) with a 
payment rate of around $1,270. The developer asserted that even though 
the payment for APC 5593 is substantially higher than the estimated 
cost of CPT code 0503T, the cost of the service fits reasonably well 
with the cost of other procedures assigned to APC 5593. The developer 
and other commenters also assert that the HeartFlow procedure has 
enough clinical similarity to other procedures currently assigned to 
the Nuclear Medicine and Related Services APCs. According to the 
developer and the other commenters, HeartFlow is comparable to other 
nuclear medicine procedures that are image analysis tests 
characterizing organ-specific function. The developer and the other 
commenters also note that cardiac CT procedures, which are used to 
identify coronary artery disease, are assigned to the nuclear medicine 
APC family. Finally, the developer cited two examples of procedures in 
the OPPS that are assigned to APCs where the procedure in question does 
not have clinical similarity to the other procedures in the APC.
    Response: We disagree with the suggestion that CPT code 0503T 
should be assigned to APC 5593. As we stated in the CY 2021 OPPS/ASC 
final rule with comment period (85 FR 85942), the Nuclear Medicine and 
Related Procedures APCs describe diagnostic and therapeutic procedures, 
many of them involving imaging, where radiopharmaceuticals and other 
nuclear materials are critical supplies for the performance of the 
procedure. In comparison, HeartFlow is a computer algorithm that does 
not directly take images nor is it used on its own to generate a 
diagnosis for a patient. Instead, HeartFlow analyzes diagnostic images 
obtained through other medical procedures and assists with the 
interpretation of those diagnostic images to determine if a patient has 
coronary artery disease. We appreciate that there may be a limited 
number of examples where a procedure may have only a little clinical 
similarity to other procedures in the same APC, but we attempt to make 
those situations an exception rather than our regular practice. There 
is little clinical similarity between the HeartFlow procedure and the 
procedures currently assigned to the Nuclear Medicine and Related 
Procedures APCs and we are therefore not assigning CPT code 0503T to 
APC 5593.
    Comment: One commenter, the developer, suggested that, if we 
decided not to assign CPT code 0503T to a Nuclear Medicine and Related 
Services APC, that we assign the service to APC 5724 (Level 4--Level 4 
Diagnostic Tests and Related Services) with a payment rate of $896.09. 
The commenter states Heartflow generates critical diagnostic 
information for the treating physician and an anatomical mapping of FFR 
values that assists the physician in determining whether an invasive 
procedure is needed for a patient. Because HeartFlow generates 
diagnostic information, the commenter believes it can be described as a 
diagnostic service or a service related to a diagnostic service and can 
be assigned to APC 5724. The commenter gives examples of software-based 
services that are already assigned to APC 5724 and notes that the 
geometric mean cost of CPT code 0503T places the service in the 
midrange of cost for separately paid services assigned to APC 5724.
    Response: We appreciate the commenter's suggestion. However, one of 
the key reasons we assigned CPT code 0503T to a New Technology APC for 
CY 2021 and proposed assigning the service again to a New Technology 
APC for CY 2022, is that we are continuing to seek more cost data for 
the service before assigning it to a clinical APC. As mentioned 
earlier, we want to get a better understanding of the cost of HeartFlow 
as providers become more familiar with reporting and billing for 
artificial intelligence services. More broadly, we believe we need at 
least one more year of cost data before assigning HeartFlow to a 
clinical APC. Our concerns that the CY 2020 claims data and may not 
represent the outpatient hospital experience in CY 2022 make it 
challenging to refine or update our payment quality for HeartFlow given 
the need for additional claims data.
    Comment: Several commenters asserted the proposed payment rate for 
CPT code 0503T is too low and does not reflect their individual 
hospital's cost to use HeartFlow. Commenters mentioned cost issues, 
including the $1,100 list price for each individual HeartFlow service 
and the staff resources involved to transmit data to the HeartFlow 
analysis facility and review the results of the analyses performed by 
HeartFlow. Commenters suggested a range of potential payments for a 
HeartFlow procedure from $1,151 up to $2,100, and they encouraged CMS 
to use our equitable adjustment authority at section 1833(t)(2)(E) of 
the Act to establish an OPPS payment rate that would more closely 
reflect the costs the commenters believe they are incurring to perform 
the HeartFlow procedure.
    Response: For this final rule with comment period, we identified 
3,188

[[Page 63535]]

claims billed with CPT code 0503T including 465 single frequency claims 
for CPT code 0503T using claims from CY 2019. Our analysis has found 
that the geometric mean for CPT code 0503T is $807.58, and the 
geometric mean cost is lower than the cost band for New Technology APC 
1511 New Technology--Level 11 ($901-$1000) where CPT code 0503T is 
assigned. This result is similar to our results for the proposed rule 
and the CY 2021 OPPS/ASC final rule, which all used CY 2019 claims 
data. However, multiple commenters 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. 
HeartFlow is one of the first procedures utilizing artificial 
intelligence to be separately payable in the OPPS, and providers are 
still learning how to accurately report their charges to Medicare when 
billing for artificial intelligence services. This is especially the 
case for allocating the cost of staff resources between the HeartFlow 
procedure and the coronary CT imaging services. Also, the COVID-19 PHE 
potentially has affected the quality of the claims and cost data from 
CY 2020, and we have decided not to use that data to determine the 
payment rate for CPT code 0503T. That means it is difficult to 
determine whether the additional costs for HeartFlow that commenters 
state that their practices are incurring are reflected in the cost data 
for the service.
    Therefore, we believe it is appropriate 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 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 until we can review more recent 
reliable claims data. As mentioned earlier in this section, CPT code 
0503T was assigned to New Technology APC 1511 (New Technology--Level 11 
($901-$1000)) with a payment rate of $950.50 for CY 2020, and we will 
continue to assign CPT code 0503T to New Technology APC 1511 for CY 
2022.
    After reviewing all of the public comments, we are finalizing our 
proposal without modification to use our equitable adjustment authority 
under section 1833(t)(2)(E) of the Act to continue to assign CPT code 
0503T to New Technology APC 1511 (New Technology--Level 11 ($901-
$1000)) for CY 2022. Refer to Table 15 below for the final OPPS APC and 
status indicator for CPT code 0503T for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.027

e. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT) 
Studies (APCs 1522 and 1523)
    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 16 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 ($2001-$2500)) with a payment rate of $2,250.50. CPT codes 78432 and 
78433 were assigned to APC 1523 (New Technology--Level 23 ($2501-
$3000)) 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 ($2001-$2500)) 
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 ($2501-
$3000)) with a payment rate of $2,750.50.
    For CY 2022, we proposed 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 proposed to continue to assign 
CPT code 78431 to APC 1522 (New Technology--Level 22 ($2001-$2500)) 
with a payment rate of $2,250.50. Likewise, we proposed that CPT codes 
78432 and 78433 would continue to be assigned to APC 1523 (New 
Technology--Level 23 ($2501-$3000)) with a payment rate of $2,750.50.
    Comment: Multiple commenters supported our proposal to assign CPT 
code 78431 to APC 1522 (New Technology--Level 22 ($2001-$2500)) with a 
payment rate of $2,250.50, and to assign CPT codes 78432 and 78433 to 
APC 1523 (New Technology--Level 23

[[Page 63536]]

($2501-$3000)) with a payment rate of $2,750.50. Commenters noted that 
there were no available claims data for these services as we are using 
CY 2019 claims data for CY 2022 ratesetting, and these codes did not 
become active until January 2020.
    Response: We appreciate the support of the commenters for our 
policy. After our review of the public comments, we have decided to 
implement our proposal without modification. Table 16 lists code 
descriptors, status indicators, and APC assignments for these CPT 
codes.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.028

BILLING CODE 4120-01-C
f. V-Wave Medical Interatrial Shunt Procedure (APC 1590)
    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

[[Page 63537]]

(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/ASC final rule with comment period 
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 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 
proposed to continue to assign HCPCS code C9758 to New Technology APC 
1590 with a payment rate of $17,500.50 for CY 2022.
    Comment: Multiple commenters including the manufacturer supported 
our proposal to continue to assign HCPCS code C9758 to New Technology 
APC 1590 with a payment rate of $17,500.50 for CY 2022.
    Response: We appreciate the support of the commenters for our 
proposal. After reviewing the public comments, we are finalizing our 
proposal without modification. Details about the HCPCS code and its APC 
assignment are shown in Table 17. The final CY 2022 payment rate for 
C9758 can be found in Addendum B to this final rule with comment 
period.
[GRAPHIC] [TIFF OMITTED] TR16NO21.029

g. Corvia Medical Interatrial Shunt Procedure (APC 1592)
    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.\22\ 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.
---------------------------------------------------------------------------

    \22\ https://clinicaltrials.gov/ct2/show/NCT03088033?term=NCT03088033&rank=1.
---------------------------------------------------------------------------

    As we stated in the CY 2021 OPPS final rule with comment period, 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 proposed 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 proposed to continue to assign HCPCS code 
C9760 to New Technology APC 1592.
    Comment: Multiple commenters, including the manufacturer, supported 
our proposal to continue to assign HCPCS code C9760 to New Technology 
APC 1592.
    Response: We appreciate the support of the commenters of our 
proposal.
    Comment: One commenter, the manufacturer, requested that CPT code 
0613T (Percutaneous transcatheter implantation of interatrial septal 
shunt device, including right and left heart catheterization, 
intracardiac echocardiography, and imaging guidance by the 
proceduralist, when performed) be assigned to comprehensive APC 5194 
(Level 4

[[Page 63538]]

Endovascular Procedures) for CY 2022 and assigned a status indicator of 
``J1''. CPT code 0613T is the CPT code that will be used to report the 
Corvia Medical interatrial shunt procedure once the Corvia Medical 
interatrial shunt device associated with the procedure receives 
approval from the FDA, which the manufacturer believes will occur in CY 
2022. Currently, CPT code 0613T is a non-payable service code and is 
assigned a status indicator of ``E1''.
    Response: We will assign CPT code 0613T to a payable status 
indicator and assign the service to a clinically-appropriate APC when 
the Corvia Medical interatrial shunt device associated with the 
procedure has received approval from the FDA. OPPS payment policies are 
updated quarterly through a sub-regulatory process. If the Corvia 
Medical interatrial shunt device receives FDA approval, we will work to 
ensure a timely transition for the overall procedure to be reported 
with CPT code 0613T and end reporting of the service with HCPCS code 
C9760. We will also work to assign CPT code 0613T to an APC that 
reflects clinical and resource similarity to CPT code 0613T.
    Details about the HCPCS code and its APC assignment are shown in 
Table 18. The final CY 2022 payment rate for C9760 can be found in 
Addendum B to this final rule with comment period.
[GRAPHIC] [TIFF OMITTED] TR16NO21.030

h. Supervised Visits for Esketamine Self-Administration (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 through 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

[[Page 63539]]

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-$1000)) 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 proposed 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-$1000)).
    Comment: One commenter, the manufacturer, while understanding the 
rationale for our proposal to use CY 2019 claims data for CY 2022 
ratesetting, asked us to take into consideration CY 2020 claims data to 
finalize payment rates for HCPCS codes G2082 and G2083. The commenter 
noted that HCPCS codes G2082 and G2083 were not payable in CY 2019, and 
therefore there is no cost information in the CY 2019 claims data for 
these two procedures. The commenter also believes that CY 2020 data may 
show that the cost of G2082 and G2083 is substantially higher than the 
current New Technology APC assignments for the two services.
    Response: We reviewed the available CY 2020 OPPS claims data in 
response to the request by the commenter for HCPCS codes G2082 and 
G2083, but we decided that there were not enough data available to 
determine whether to change the APC assignments for HCPCS codes G2082 
and G2083. We would like to review another year of claims data for 
HCPCS codes G2082 and G2083 to assess the reliability of the cost 
information for CY 2020 and CY 2021 before using claims data to base 
our APC assignments for these services. Therefore, we will continue to 
use the same APC assignments for HCPCS codes G2082 and G2083 for CY 
2022 as for CY 2021.
    After reviewing the public comments for this proposal, we have 
decided to implement our proposal without modification to assign HCPCS 
code G2082 to New Technology APC 1508 and to assign HCPCS code G2083 to 
New Technology APC 1511. Details about the HCPCS codes and their APC 
assignments are shown in Table 19. The final CY 2022 payment rate for 
esketamine self-administration can be found in Addendum B to this final 
rule with comment period.
[GRAPHIC] [TIFF OMITTED] TR16NO21.031

i. DARI Motion Procedure (APC 1505)
    CPT code 0693T (Comprehensive full body computer-based markerless 
3D kinematic and kinetic motion analysis and report) will be effective 
January 1, 2022. The technology consists of eight cameras that surround 
a patient. The cameras send live video to a computer workstation that 
analyzes the video to create a 3D reconstruction of the patient without 
the need for special clothing, markers or devices attached to the 
patient's clothing or skin. The technology is intended to guide health 
care providers on pre and post-operative surgical intervention and on 
the best course of physical therapy and rehabilitation for patients.
    As displayed in Addendum B to the CY 2022 OPPS/ASC proposed rule, 
we

[[Page 63540]]

proposed to assign CPT code 0693T to APC 5721 (Level 1 Diagnostics and 
Related Services) with a proposed payment rate of $143.21. We note that 
CPT code 0693T was listed as placeholder code 0X60T in OPPS Addendum B 
of the CY 2021 OPPS/ASC proposed rule.
    Comment: One commenter, the manufacturer of the DARI Motion 
procedure, requested that CMS assign CPT code 0693T to APC 5723 (Level 
3 Diagnostics and Related Services) with a payment rate of $498.53. The 
commenter believed that the payment rate for APC 5721 is inadequate and 
will create a barrier to patient access.
    Response: We appreciate the concerns of the commenter and, for the 
reasons set forth below, agree that the proposed payment rate for CPT 
code 0693T may be too low and the procedure should be reassigned to a 
different APC.
    The AMA releases Category III codes in January, for implementation 
beginning the following July, and in July, for implementation beginning 
the following January. DARI Motion received a Category III code 
scheduled for implementation January 1, 2022. Some Category III CPT 
codes describe services that we have determined are not compatible with 
an existing clinical APC, yet are appropriately provided in the 
hospital outpatient setting. In these cases, we may assign the Category 
III CPT code to what we estimate is an appropriately priced New 
Technology APC (71 FR 68015). In addition, it should be noted that, 
with all new codes, CMS's policy has been to assign the service to an 
APC based on input from a variety of sources, including but not limited 
to review of the clinical similarity of the service to existing 
procedures, input from CMS medical advisors, information from 
interested specialty societies, review of all other information 
available to us, including information provided to us by the public, 
whether through meetings with stakeholders or additional information 
that is mailed or otherwise communicated to us. Based on information 
from the manufacturer, resources involved for the procedure described 
by CPT code 0693T appear to be higher than the payment rate for APC 
5721 (Level 1 Diagnostics and Related Services). CPT code 0693T is new 
for CY 2022 and, therefore, we had no claims data available for OPPS 
ratesetting. Further, based on input from our medical advisors and our 
understanding of the service, we believe that it is more appropriate to 
assign the DARI Motion procedure to APC 1505 (New Technology--Level 5 
($301-$400)), for CY 2022. We believe that assigning CPT code 0693T to 
New Technology APC 1505 will allow CMS to collect claims data before 
assigning CPT code 0693T to a clinical APC.
    Comment: A commenter argued the assignment of CPT code 0693T to APC 
5721 would create a 2 times rule violation within the APC based on 
geometric mean costs. The commenter calculated the 2-times threshold by 
multiplying the lowest cost significant procedure by 2 and arrived at a 
2-times threshold. According to the commenter, the 2-times threshold 
they calculated for APC 5721 is a lower payment rate than the 
technology described by CPT code 0693T. The commenter asserted that 
assigning CPT code 0693T to APC 5721 is a violation of the 2 times 
rule.
    Response: We thank the commenter for their feedback. To clarify, we 
determine APC 2 times rule violations by considering 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). CPT code 0693T is new for CY 2022 and, therefore, we had no 
claims data available for purposes of determining whether a 2 times 
rule violation occurs based on the code.
    In summary, after consideration of the public comments, we are 
finalizing our proposal with modification, and assigning CPT code 0693T 
to New Technology APC 1505 (New Technology--Level 5 ($301-$400)), for 
CY 2022. The final APC assignment and status indicator for CPT code 
0693T are found in Table 20. We refer readers to Addendum B of this 
final rule with comment period or the final payment rates for all codes 
reportable under the OPPS. Addendum B is available via the internet on 
the CMS website.
    As we do for all codes, we will reevaluate the APC assignments for 
CPT code 0693T once we have claims data. We remind hospitals that we 
review, on an annual basis, the APC assignments for all services and 
items paid under the OPPS based on the latest claims data.
[GRAPHIC] [TIFF OMITTED] TR16NO21.032


[[Page 63541]]


j. Histotripsy Service (APC 1575)
    Histotripsy is a non-invasive, non-thermal, mechanical process that 
uses a focused beam of sonic energy to destroy targeted cancerous liver 
tumors. The AMA's CPT Editorial Panel established a new code to 
describe the service associated with histotripsy, specifically, 
Category III CPT code, 0686T (Histotripsy (that is, non-thermal 
ablation via acoustic energy delivery) of malignant hepatocellular 
tissue, including image guidance), effective July 1, 2021.
    As displayed in Addendum B of the CY 2022 OPPS/ASC proposed rule 
with comment period, for CY 2022, we proposed to assign the new code to 
APC 5311 (Level 1 Lower GI Procedures) with a payment rate of $814.44 
effective January 1, 2022.
    Comment: One commenter, the manufacturer of histotripsy, stated 
that histotripsy is a new technology that delivers short pulses of 
ultrasound energy, resulting in acoustic cavitation that mechanically 
destroys the targeted cancerous liver tumors while avoiding damage to 
intervening or surrounding healthy tissues. The commenter stated that 
the proposed assignment of CPT code 0686T to APC 5311 (Level 1 Lower GI 
Procedures) was not clinically or resource cohesive to histotripsy. The 
commenter reported a list of HCPCS codes currently assigned to APC 5311 
and argued that the codes are not clinically or resource similar to 
histotripsy. The commenter referenced histotripsy's IDE clinical study 
(G200253-NCT04573881) and provided a description of the histotripsy 
procedure and a breakdown of the associated resource components. The 
commenter also provided a cost estimate of each resource, such as the 
device cost, the associated imaging cost, and total room time. The 
commenter stated that the total cost for the procedure is $22,782.51 
and requested assignment to a New Technology APC 1577 for the 
histotripsy service.
    Response: We appreciate the commenter's input on this new 
technology. As stated in the CY 2002 OPPS final rule, CMS staff will 
obtain information on cost from other appropriate sources before making 
a final determination on the cost of the procedure or service to 
hospital outpatient facilities (66 FR 59900). We note that for Category 
A IDE studies, Medicare may not furnish payment for costs associated 
with the histotripsy device since Category A devices are statutorily 
excluded from Medicare coverage. Based on our evaluation, for CY 2022, 
we estimated the cost of histotripsy, after removing the device cost, 
is within the cost band between $10,001 and $15,000. Accordingly, we 
believe reassigning CPT code 0686T to APC 1575 (New Technology--Level 
38 ($10,001-$15,000)), with a payment rate of $12,500.50, more 
appropriately reflects the costs for which Medicare may provide 
payment. We note that we retain services within New Technology APC 
groups until we obtain sufficient claims data to justify reassignment 
of the service to a clinically appropriate APC.
    In summary, after consideration of the public comments, we are 
finalizing our proposal with modifications. Specifically, we are 
assigning CPT code 0686T to APC 1575 for CY 2022. The final CY 2022 
OPPS payment rates for this code can be found in Addendum B to this 
final rule with comment period. In addition, we refer readers to 
Addendum D1 of this final rule with comment period for the SI meanings 
for all codes reported under the OPPS. Both Addenda B and D1 are 
available via the internet on the CMS website.
k. Liver Multiscan Service (APC 1511)
    Liver MultiScan is a Software as a medical Service (SaaS) that is 
intended to aid the diagnosis and management of chronic liver disease, 
the most prevalent of which is Non-Alcoholic Fatty Liver Disease 
(NAFLD). It provides standardized, quantitative imaging biomarkers for 
the characterization and assessment of inflammation, hepatocyte 
ballooning, and fibrosis, as well as steatosis, and iron accumulation. 
The SaaS receives MR images acquired from patients' providers and 
analyzes the images using their proprietary Artificial Intelligence 
(AI) algorithms. The SaaS then send the providers a quantitative metric 
report of the patient's liver fibrosis and inflammation. The AMA CPT 
Editorial Panel established two new codes, specifically, Category III 
CPT codes 0648T and 0649T for LiverMultiScan effective July 1, 2021, 
and CMS assigned the Category III CPT code 0648T to APC 5523 (Level 3 
Imaging without Contrast) with a status indicator of ``S'' effective 
July 1, 2021. We note that CPT code 0649T is packaged per our packaging 
policy for add-on code procedures. For the complete code descriptors 
for both codes, refer to Table 21.
    For CY 2022, we proposed to assign CPT code 0648T to APC 5523 
(Level 3 Imaging without Contrast) with a payment rate of $236.14 
effective January 1, 2022, and assign the add-on code, CPT code 0649T, 
to OPPS status indicator ``N'' (packaged) to indicate that payment for 
the add-on service is included in the primary service.

[[Page 63542]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.033

    Comment: Several commenters stated that LiverMultiScan is a new 
technology that represents a breakthrough for the diagnosis and 
monitoring of chronic parenchymal liver disease that will reduce the 
number of invasive procedures. The commenters stated that 
LiverMultiScan is an MRI measure of hepatic steatosis with performance 
equivalent to liver biopsy and superior to liver fat measures using 
ultrasound. Some commenters cited that biopsy is the gold standard for 
diagnosis, but it is not commonly used because of cost, patient 
discomfort, risk of complications, and possible sampling error. Another 
commenter stated that LiverMultiScan has excellent diagnostic accuracy 
for at-risk Nonalcoholic steotohepatitis (NASH), detects changes in 
response to investigational treatments within a very short timeframe, 
and predicts clinical outcomes in patients with liver disease as well 
as liver biopsy. The commenters believe LiverMultiScan improves the 
management of NAFLD by helping patients connect with their liver 
health, which encourages these patients to their recommended course of 
treatment. The commenters stated the assignment of CPT code 0648T to 
APC 5523 (Level 3 Imaging without Contrast) does not adequately cover 
the cost of delivering this service and discourages adoption of 
advanced liver care. The commenters stated that their hospital 
outpatient cost for the service is between $1,300 to $1,500 (versus 
approximately $7,000 for a liver biopsy), and they requested assignment 
of LiverMultiScan to a New Technology APC. One commenter referenced 
CMS's decision on Heartflow, which was initially packaged and then 
later recognized as a distinct service. The commenter requested CMS 
recognize LiverMultiScan as a distinct service.
    Response: We appreciate the commenters' feedback on this new 
technology. We note that before we assign a new service to a New 
Technology APC, we first perform our own cost analysis and cost 
estimate. As we stated in the CY 2002 OPPS final rule (66 FR 59900), we 
do not limit our determination of the cost of the procedure to 
information suggested by the commenters (or information submitted by 
the applicant for New Technology applications). To appropriately assign 
a service to a New Technology APC, our staff will obtain information on 
cost from other appropriate sources, including acquiring input from our 
medical advisors on the appropriateness of the service in the hospital 
outpatient setting, before making a final determination on the cost of 
the procedure or service. Based on the information provided, we 
recognize that LiverMultiScan is a new technology that will aid in the 
management of beneficiaries with NAFLD, which may avoid liver biopsies. 
We note that liver biopsy remains the current gold standard for 
diagnosing NASH, determining grade disease severity, and accurately 
staging fibrosis. Based on our evaluation of the service, we agree with 
the commenter's suggested reference to Heartflow. That is, we believe 
that LiverMultiScan and Heartflow share similar characteristics based 
on the nature of how the service is provided in the hospital outpatient 
setting. Both LiverMultiScan and Heartflow require the acquisition of 
radiological images as well as analysis of the images using proprietary 
AI algorithms to assist clinicians in appropriately diagnosing a 
patient's medical condition. In addition, our analysis of the estimated 
cost associated for this service is between $901 and $1,000. Therefore, 
after further evaluation of the service and the resources required to 
perform the LiverMultiScan analysis, we believe it is appropriate to 
assign this service to a New Technology APC, specifically, APC 1511 
(New Technology--Level 11 ($901-$1000)), which is the same APC 
assignment for Heartflow. Accordingly, we are assigning CPT code 0648T 
to New Technology APC 1511). We note that we retain services within New 
Technology APC groups until we obtain sufficient claims data to justify 
reassignment of the service to a clinically appropriate APC. For CPT 
code 0649T, an add-on code, we believe that our assignment of the 
status indicator of ``N'' is appropriate under 42 CFR 419.2(b). We note 
that CMS does not create the Category III CPT codes or their 
descriptors, but we follow an established set of payment policies 
consistent with our OPPS packaging policy. As stated in section III.A. 
``OPPS Treatment of New and Revised HCPCS Codes'' of this final rule 
with comment period, CPT codes are established and maintained by the 
American Medical Association (AMA), and changes to CPT codes should be 
referred to the AMA.
    In summary, after consideration of the public comment, we are 
finalizing our proposal with modification, to assign CPT code 0648T to 
New Technology APC 1511 ((New Technology--Level 11 ($901-$1000), for CY 
2022. Also, we are finalizing our proposal, without

[[Page 63543]]

modification, for CPT code 0649T and assigning the code to OPPS status 
indicator ``N'' for CY 2022. The final APC assignment and status 
indicators for CPT codes 0648T and 0649T can be found in OPPS Addendum 
B. We refer readers to Addendum B of the final rule for the final 
payment rates for all codes reportable under the OPPS. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the SI meanings for all codes reported under the OPPS. Both Addendum B 
and Addendum D1 are available via the internet on the CMS website.
l. Minimally Invasive Glaucoma Surgery (MIGS) (APCs 5491 and 5492)
    Prior to CY 2022, extracapsular cataract removal with insertion of 
intraocular lens was reported using CPT codes describing cataract 
removal alongside a CPT code for device insertion. Specifically, the 
procedure was described using CPT codes 66982 (Extracapsular cataract 
removal with insertion of intraocular lens prosthesis (1-stage 
procedure), manual or mechanical technique (for example, irrigation and 
aspiration or phacoemulsification), complex, requiring devices or 
techniques not generally used in routine cataract surgery (for example, 
iris expansion device, suture support for intraocular lens, or primary 
posterior capsulorrhexis) or performed on patients in the amblyogenic 
developmental stage; without endoscopic cyclophotocoagulation) or 66984 
(Extracapsular cataract removal with insertion of intraocular lens 
prosthesis (1-stage procedure), manual or mechanical technique (for 
example, irrigation and aspiration or phacoemulsification); without 
endoscopic cyclophotocoagulation) and 0191T (Insertion of anterior 
segment aqueous drainage device, without extraocular reservoir, 
internal approach, into the trabecular meshwork; initial insertion). 
For CY 2022, the AMA's CPT Editorial Panel created two new Category I 
CPT codes describing extracapsular cataract removal with insertion of 
intraocular lens prosthesis, specifically, CPT codes 66989 and 6691, 
deleted a Category III CPT code, specifically, CPT code 0191T, 
describing insertion of anterior segment aqueous drainage device, and 
created a new Category III CPT code, specifically, CPT code 0671T, 
describing interior segment aqueous drainage device without concomitant 
cataract removal. We proposed the following APC assignment:
     CPT code 66989 (Extracapsular cataract removal with 
insertion of intraocular lens prosthesis (1-stage procedure), manual or 
mechanical technique (e.g., irrigation and aspiration or 
phacoemulsification), complex, requiring devices or techniques not 
generally used in routine cataract surgery (e.g., iris expansion 
device, suture support for intraocular lens, or primary posterior 
capsulorrhexis) or performed on patients in the amblyogenic 
developmental stage; with insertion of intraocular (e.g., trabecular 
meshwork, supraciliary, suprachoroidal) anterior segment aqueous 
drainage device, without extraocular reservoir, internal approach, one 
or more) to APC 5492 (Level 2 Intraocular Procedures) with a proposed 
status indicator (SI) of ``J1'' and proposed payment rate of $4,018.82. 
We note this code was listed as placeholder code 669X1 in the OPPS 
Addendum B of the CY 2022 OPPS/ASC proposed rule.
     CPT code 66991 (Extracapsular cataract removal with 
insertion of intraocular lens prosthesis (1 stage procedure), manual or 
mechanical technique (for example, irrigation and aspiration or 
phacoemulsification); with insertion of intraocular (for example, 
trabecular meshwork, supraciliary, suprachoroidal) anterior segment 
aqueous drainage device, without extraocular reservoir, internal 
approach, one or more) to APC 5492. We note this code was listed as 
placeholder code 669X2 in the OPPS Addendum B of the CY 2022 OPPS/ASC 
proposed rule.
     CPT code 0671T (Insertion of anterior segment aqueous 
drainage device into the trabecular meshwork, without external 
reservoir, and without concomitant cataract removal, one or more) to 
APC 5491 (Level 1 Intraocular Procedures) with a proposed SI of ``J1'' 
and a proposed payment rate of $2,131.25. We note this code was listed 
as placeholder code 0X12T in the OPPS Addendum B of the CY 2022 OPPS/
ASC proposed rule.
    At the August 23, 2021 HOP Panel Meeting, a presenter requested 
that we reassign CPT codes 66989 and 66991 to APC 5493 (Level 3 
Intraocular Procedures) with a proposed payment rate of $7,529.00, and 
reassign 0671T to APC 5492, citing concerns over a decrease in payment 
for MIGS between how it is currently coded and how it will be coded 
beginning January 1, 2022. Based on the discussion during the meeting, 
the HOP Panel recommended that CMS reassign CPT codes 66989 and 66991 
to APC 5493 and reassign 0671T to APC 5492.
    Comment: Most commenters opposed the proposed APC assignment for 
these services and recommended that CMS implement the APC assignments 
recommended by the HOP Panel. They stated that the proposed APC 
assignments do not accurately account for the costs associated with 
MIGS and would result in an overall decrease in payment for MIGS from 
the current payment rates and that this decrease would negatively 
impact access to this service. Commenters stated placement in APC 5493 
and APC 5492 would better account for the resources associated with 
performing CPT codes 66989 and 66991, and CPT code 0671T, respectively. 
Commenters also suggested that CMS could consider assignment of these 
services to a New Technology APC or create an incremental intraocular 
APC between APC 5492 and 5493.
    Response: We do not believe that the costs associated with 
performing MIGS are accurately reflected by APC 5493. We note that 
while APC 5491 (Level 1 Intraocular Procedures) and APC 5492 have 40 or 
greater separately payable services assigned to them, only one service 
is assigned to the APCs 5493, 5494, and 5495 (Level 3-5 Intraocular 
Procedures, respectively). In instances where a single procedure is 
assigned to an APC, the geometric mean cost and the resulting payment 
rate is largely based on the geometric mean of the individual service 
assigned to the APC. However, we note that while only one service is 
assigned to APC 5493, there are certain complexity adjustments that 
move certain services assigned to the APC 5492 to APC 5493 when billed 
concurrently. These changes are also reflected in the claims data we 
use to develop geometric mean costs and the resulting payment rates. We 
note that the proposed payment rate for APC 5493 is almost double the 
payment rate for APC 5492. We also believe that the change in coding 
for MIGS is significant in that it changes longstanding billing for the 
service from reporting two separate CPT codes to reporting a single 
bundled code. Without claims data, and given the magnitude of the 
coding change, we do not believe we have the necessary information on 
the costs associated with CPT codes 66989 and 66991 to assign them to a 
clinical APC at this time. We agree with commenters that reassignment 
to a New Technology APC will maintain payment accuracy for these 
services while we collect cost data to support reassignment to the 
relevant clinical APC. We believe that APC 1526 (New Technology--Level 
26 ($4001-$4500)), with a payment rate of $4,250.50, most accurately 
accounts for the resources associated with furnishing MIGS.
    We regard to CPT code 0671T, we note that this code describes 
insertion of

[[Page 63544]]

intraocular lens without concurrent cataract removal and would not be 
billed alongside CPT codes 66989 or 66991. Based on our review of the 
clinical characteristics of the procedure and input from our medical 
advisors, we continue to believe that this service is more similar to 
the other services in APC 5491.
    In summary, after consideration of the public comments, we are 
finalizing the reassignment of CPT codes 66989 and 66991 to APC 1526 
and assignment of CPT code 0671T to APC 5491. The final CY 2022 OPPS 
payment rates for this code can be found in Addendum B to this final 
rule with comment period. In addition, we refer readers to Addendum D1 
to this final rule with comment period for the status indicator (SI) 
meanings for all codes reported under the OPPS. Both Addendum B and D1 
are available via the internet on the CMS website.
m. Scalp Cooling (APC 1520)
    For July 1, 2021, the CPT Editorial Panel created CPT code 0662T to 
describe initial measurement and calibration of a scalp cooling device 
for use during chemotherapy administration to prevent hair loss. For CY 
2022, we proposed to assign CPT code 0662T (Scalp cooling, mechanical; 
initial measurement and calibration of cap) to APC 5732 (Level 2 Minor 
Procedures) with a proposed payment rate of $34.72.
    At the August 23, 2021 HOP Panel Meeting, a presenter requested 
that we reassign CPT code 0662T to one of the following APCs:
     APC 5054 (Level 4 Skin Procedures) with a proposed payment 
rate of $1,759.21,
     APC 5055 (Level 5 Skin Procedures) with a proposed payment 
rate of $3,613.14,
     APC 1519 (New Technology--Level 19 ($1,701-$1,800)) with a 
proposed payment rate of $1,750.50, or
     APC 1520 (New Technology--Level 20 ($1,801-$1,900)) with a 
proposed payment rate of $1,850.50
    Based on the information presented, the HOP Panel recommended that 
CMS assign CPT code 0662T to a New Technology APC.
    Comment: Commenters encouraged CMS to accept the HOP Panel's 
recommendation and assign CPT code 0662T to APC 1519 or 1520 or 
reassign CPT code 0662T to either APC 5054 or 5055. Commenters stated 
that the cost of the scalp cooling cap itself was around $600 and that 
the rest of the costs associated with performing the measurement and 
calibration were around $2,500-$3,000.
    Response: Based on the information presented at the HOP Panel 
meeting, as well as input from our clinical advisors, and analysis of 
the information provided by the commenters, we believe that the 
procedure described by CPT code 0662T should be assigned to a New 
Technology APC. We note that according to Medicare's National Coverage 
Determination (NCD) policy, specifically, NCD 110.6 (Scalp Hypothermia 
During Chemotherapy to Prevent Hair Loss), the scalp cooling cap itself 
is classified as an incident to supply to a physician service, and 
would not be paid under the OPPS; however, stakeholders have indicated 
that there are substantial resource costs associated with calibration 
and fitting of the cap. Based on the estimate of costs provided by the 
commenter, without taking into account the costs of the cap, the 
overall cost associated with CPT code 0662T is between $1,900-$2,400, 
supporting reassignment to New Technology APC 1520. CPT guidance states 
that CPT code 0662T should be billed once per chemotherapy session, 
which we interpret to mean once per course of chemotherapy. Therefore, 
if a course of chemotherapy involves 6 or 18 sessions, HOPDs should 
report CPT 0662T only once for that 6 or 18 therapy sessions. We note 
that we review, on an annual basis, the APC assignments for all items 
and services paid under the OPPS.
    In summary, after consideration of the public comments, we are 
finalizing our proposal with modification. Specifically, we are 
finalizing assignment of CPT code 0662T to APC New Technology 1520. The 
final CY 2022 OPPS payment rate for this code can be found in Addendum 
B to this final rule with comment period. In addition, we refer readers 
to Addendum D1 of this final rule with comment period for the status 
indicator (SI) meanings for all codes reported under the OPPS. Both 
Addendum B and D1 are available via the internet on the CMS website.

D. OPPS APC-Specific Policies

1. AccuCinch Ventricular Restoration Procedure
    For the July 2021 update, the AMA's CPT Editorial Panel established 
CPT code 0643T (Transcatheter left ventricular restoration device 
implantation including right and left heart catheterization and left 
ventriculography when performed, arterial approach) to describe the 
AccuCinch device implantation procedure. For CY 2022, we proposed to 
assign the code to OPPS status indicator ``E1'' (Items, codes, and 
services not covered by any Medicare outpatient benefit category; 
statutorily excluded; not reasonable and necessary) to indicate that 
the service is not covered by Medicare.
    Comment: A commenter requested the reassignment in the status 
indicator to OPPS status indicator ``C'' (inpatient-only) since this is 
the more appropriate assignment for the ventricular restoration therapy 
based on the complex patient population enrolled in the US clinical 
trial. The commenter explained that the investigational device, the 
AccuCinch[supreg] Ventricular Restoration System, is currently under 
evaluation in the CORCINCH-HF pivotal trial (NCT04331769).
    Response: Based on our review of the clinical study, input from our 
medical advisors, as well review of Medicare's coverage policy for this 
clinical trial, we agree with the commenter. Review of the clinical 
study indicates that the CORCINCH-HF study (https://clinicaltrials.gov/ct2/show/NCT04331769) is a prospective, randomized, control multicenter 
clinical study that evaluates the safety and efficacy of the AccuCinch 
Ventricular Restoration System in patients with heart failure and 
reduced ejection fraction (HFrEF). Based on the interventional 
structural heart (SH) technique involved in the procedure, use of an 
experimental device, and close monitoring of the patient that is 
required during the intra- and post-op period consistent with the 
resources available in the hospital inpatient setting, we believe the 
AccuCinch procedure should be designated as an inpatient-only 
procedure. We note that the CORCINCH-HF pivotal trial (NCT04331769) was 
approved by Medicare and meet's CMS' standards for coverage as an 
Investigation Device Exemption (IDE) study effective November 11, 2020.
    In summary, after consideration of the public comment, we are 
modifying our proposal and revising the status indicator for CPT code 
0643T from ``E1'' to ``C'' (inpatient-only) for CY 2022. We refer 
readers to Addendum D1 of this final rule with comment period for the 
SI meanings for all codes reported under the OPPS. Addendum D1 is 
available via the internet on the CMS website.
2. Administration of Lacrimal Ophthalmic Insert Into Lacrimal 
Canaliculus (APC 5694)
    HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1 
mg) is a drug indicated ``for the treatment of ocular inflammation and 
pain following

[[Page 63545]]

ophthalmic surgery.'' \23\ Stakeholders assert that this drug is 
administered through CPT code 0356T (Insertion of drug-eluting implant 
(including punctal dilation and implant removal when performed) into 
lacrimal canaliculus, each). Stakeholders also state the drug is 
inserted in a natural opening in the eyelid (called the punctum) and 
that the drug is designed to deliver a tapered dose of dexamethasone to 
the ocular surface for up to 30 days. HCPCS code J1096 is currently on 
pass-through status and assigned to APC 9308 (Dexametha opth insert 0.1 
mg) with status indicator ``G''. Please see section V.A.5. of this 
final rule with comment period for further information regarding the 
pass-through status of J1096. CPT code 0356T is currently assigned to 
status indicator ``Q1'', indicating conditionally packaged payment 
under the OPPS. Packaged payment applies if a code assigned status 
indicator ``Q1'' is billed on the same claim as a HCPCS code assigned 
status indicator ``S'', ``T'', or ``V''. Accordingly, based on the OPPS 
assigned status indicator, CPT code 0356T is assigned to payment 
indicator ``N1'' in the ASC setting, meaning a packaged service/item. 
We refer readers to Addendum D1 of this final rule with comment period 
for a list of OPPS status indicators and their definitions, available 
via the internet on the CMS website. We also refer readers to Addendum 
AA for ASC payment indicator assignments and to Addendum DD1 for 
payment indicator definitions, available via the internet on the CMS 
website. For CY 2021, CPT code 0356T is assigned to APC 5692 (Level 2 
Drug Administration). Effective January 1, 2022, CPT code 0356T will be 
deleted. CPT code 68841, represented by placeholder code 68XXX in the 
proposed rule, will become effective on January 1, 2022.
---------------------------------------------------------------------------

    \23\ Dextenza FDA Package Insert: https://www.accessdata.fda.gov/drugsatfda_docs/label/2019/208742s001lbl.pdf.
---------------------------------------------------------------------------

    Due to the similarity between CPT code 0356T and CPT code 68841, we 
proposed to assign CPT code 68841 to the same APC, status indicator, 
and payment indicator assignments as CPT code 0356T.
    Additionally, we note that the manufacturer of the product that is 
usually administered through 0356T and placeholder code 68XXX, brought 
the issue of payment of this code to the Advisory Panel on Hospital 
Outpatient Payment (also known as HOP Panel) in 2021 for CY 2022 
rulemaking and requested a new APC placement. The HOP Panel did not 
make a recommendation to reassign placeholder code 68XXX to a different 
APC, OPPS status indicator, or ASC payment indicator as suggested by 
the presenters.
    Comment: Commenters asserted that the proposed placeholder code 
68XXX is used to describe the administration of Dextenza and the drug 
insertion procedure is typically performed after the completion of an 
ophthalmic procedure, such as a cataract, glaucoma, or retina 
procedure. Commenters state this procedure is typically done in the ASC 
setting 80 percent of the time, and is performed in the HOPD setting 20 
percent of the time.
    Several commenters had concerns with continuing the same APC 
placement of APC 5692 for CPT code 68XXX for CY 2022. Commenters 
generally advocated for increased payment for this CPT code in the HOPD 
and ASC settings. Some commenters did not make a specific suggestion as 
to what the final APC assignment should be, rather they argued the 
proposed payment was inadequate. However, some commenters made specific 
recommendations to change the APC assignment to APC 5503 (Level 3 
Extraocular, Repair and Plastic Eye Procedures). Commenters felt this 
would be a more appropriate and fair APC placement due to its resource 
similarity to procedures in this APC. Commenters frequently cited CPT 
66030 (Injection, anterior chamber of eye (separate procedure); 
medication) and CPT 0X78T (Injection, posterior chamber of eye; 
medication), which were proposed to be assigned to APC 5491 (Level 1 
Intraocular Procedures), as similar procedures to which 68XXX should be 
compared. However, commenters did recognize that 68XXX represents an 
extraocular procedure; therefore, they felt APC 5503 (Level 3 
Extraocular, Repair, and Plastic Eye Procedures) would be an 
appropriate alternative APC assignment.
    A minority of commenters discussed the proposed status indicator 
assignment and payment indicator assignment for 68XXX. Some said a 
``Q1'' status indicator was inappropriate, but did not provide an 
alternative suggestion. One commenter provided an alternate crosswalk 
for 68XXX and stated that, in their view, 68XXX was clinically similar 
to CPT Code 68761 (Closure of the lacrimal punctum; by plug, each), 
which is assigned to APC 5501 (Level 1 Extraocular, Repair and Plastic 
Eye Procedures), and is assigned to status indicator ``T''.
    Additionally, a commenter mentioned using available 2020 claims 
data for 0356T, instead of the zero claims data available using 2019 
claims as proposed, which would suggest a higher APC placement.
    Several stakeholders commented that the clinical importance of 
providing HCPCS code J1096 to patients is that it reduces ocular pain, 
inflammation, and reduces the burden of topical eyedrop application. 
Additionally, providers stated that they usually perform the procedure 
to administer Dextenza after the conclusion of ophthalmic surgeries. 
Commenters believe the procedure is a distinct surgical procedure that 
requires additional operating room time and resources. Commenters were 
concerned that the lack of increased or separate payment may reduce 
access to Dextenza, particularly in the ASC setting.
    Response: We thank commenters for their feedback. We note that 
placeholder code 68XXX will be replaced by CPT code 68841, and we will 
refer to this code from here on. Based on input from stakeholders, we 
believe an APC reassignment is appropriate for CY 2022. After careful 
consideration of the statements from commenters, we analyzed available 
claims data and similar procedures that approximate the clinical 
resources associated with CPT code 68841. We agree with a commenter 
that CPT code 68761 (Closure of the lacrimal punctum; by plug, each) 
may more appropriately approximate the resources associated with CPT 
code 68841. We also believe that CPT code 68801 (Dilation of lacrimal 
punctum, with or without irrigation) represents a clinically similar 
procedure and would also be an appropriate procedure with which to 
compare CPT code 68841. Additionally, based on our review of comments, 
we do not find it appropriate to use the three single frequency claims 
that are associated with the CY 2020 claims data for CPT code 0356T as 
a basis for CPT code 68841, as they seem anomalous compared to the 
1,543 total frequency claims available in the CY 2020 claims data 
dataset. Additionally, we do not find it appropriate to use CY 2019 
claims data for 0356T as there are zero single frequency claims, 53 
total frequency claims, and a zero-dollar geometric mean. Rather, we 
believe estimating the clinical resources needed for CPT code 68841 
through comparison to clinically similar codes is more appropriate for 
CY 2022.
    Based on the CY 2019 claims data available for CY 2022 OPPS 
ratesetting, the geometric mean cost associated with CPT code 68761 is 
$211.17 and the geometric mean cost associated with CPT code 68801 is 
$300.27. Based on these geometric mean costs, we believe assignment of 
CPT code 68841 to APC 5694 (Level 4 Drug Administration) is

[[Page 63546]]

appropriate. Additionally, we continue to believe that assignment of 
CPT code 68841 to an OPPS status indicator ``Q1'' and an associated ASC 
payment indicator of ``N1'', is appropriate. Commenters have stated 
that CPT code 68841 is performed during ophthalmic surgeries, such as 
cataract surgeries. A status indicator ``Q1'', 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. Although 
stakeholders state this is an independent surgical procedure and should 
not be packaged into the primary ophthalmic procedure in which the drug 
and drug administration are associated, based on stakeholder comment 
regarding clinical patterns as to how the drug is used, we do not 
agree. We find it appropriate to conditionally package CPT code 68841 
based on its clinical use patterns as described by commenters. This is 
consistent with 42 CFR 419.2(b). The conditional packaging of this code 
supports our overarching goal to make payments for all services paid 
under the OPPS and ASC payment system more consistent with those of a 
prospective payment system and less like those of a per-service fee 
schedule. We believe that packaging encourages efficiency and is an 
essential component of a prospective payment system, and that packaging 
payments for items and services that are typically integral, ancillary, 
supportive, dependent, or adjunctive to a primary service is a 
fundamental part of the OPPS. We therefore believe packaging of CPT 
code 68841 is appropriate.
    After consideration of the public comments, we are finalizing our 
proposal to assign CPT code 68841 to APC 5694 (Level 4 Drug 
Administration) with OPPS status indicator ``Q1'' for CY 2022. In 
addition, based on the OPPS assignments, we are finalizing an ASC 
payment indicator of ``N1'' for CPT code 68841 for CY 2022. Please see 
Table 22 for the code descriptor, APC assignment, status indicator 
assignment, and payment indicator assignment for CPT code 68841 for CY 
2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.034

3. Allergy Testing (APC 5724)
    For CY 2022, we proposed to continue to assign CPT code 95004 
(Percutaneous tests (scratch, puncture, prick) with allergenic 
extracts, immediate type reaction, including test interpretation and 
report, specify number of tests) and CPT code 95044 to APC 5724 (Level 
4 Diagnostic Tests and Related Services) with a proposed payment rate 
of $943.96.
    Comment: One commenter expressed concerns with the overall 
reimbursement for allergy testing, stating that reimbursement has 
increased dramatically over time for what the commenter asserted was a 
relatively routine procedure. The commenter recommended that CMS review 
the payment rates for these services to ensure that they are being 
accurately reimbursed.
    Response: We thank the commenter for their insight and will 
consider it for future rulemaking.
    In summary, after consideration of the public comment, we are 
finalizing our proposal without modification. Specifically, we are 
finalizing assignment of CPT codes 95004 and 95044 to APC 5724. The 
final CY 2022 OPPS payment rates for these codes can be found in 
Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the status indicator (SI) meanings for all codes reported under the 
OPPS. Both Addendum B and D1 are available via the internet on the CMS 
website.
4. Blood Not Otherwise Classified (NOC) (APC 9537)
    Providers and stakeholders in the blood products field have 
reported that product development for new blood products has 
accelerated. There may be several additional new blood products 
entering the market by the end of by CY 2022, compared to only one or 
two new products entering the market over the previous 15 to 20 years. 
To encourage providers to use these new products, providers and 
stakeholders requested that we establish a new HCPCS code to allow for 
payment for unclassified blood products prior to these products 
receiving their own HCPCS code. Under the OPPS, unclassified procedures 
are generally assigned to the lowest APC payment level of an APC 
family. However, since blood products are each assigned to their own 
unique APC, the concept of a lowest APC payment level does not apply in 
this context.
    Starting January 1, 2020, we established a new HCPCS code, P9099 
(Blood component or product not otherwise classified) which allows 
providers to report unclassified blood products. We assigned HCPCS code 
P9099 to status indicator ``E2'' (Not payable by Medicare when 
submitted on an outpatient claim) for CY 2020. We took this action 
because HCPCS code P9099 potentially could be reported for multiple 
products with different costs during the same period of time. 
Therefore, we could not identify an individual blood product HCPCS code 
that would have a similar cost to HCPCS code P9099, and were not able 
to crosswalk a payment rate from an

[[Page 63547]]

established blood product HCPCS code to HCPCS code P9099. Some 
stakeholders expressed concerns that assigning HCPCS code P9099 to a 
non-payable status in the OPPS meant that hospitals would receive no 
payment when they used unclassified blood products. Also, claim lines 
billed with P9099 are rejected by Medicare, which prevents providers 
from tracking the utilization of unclassified blood products.
    Because of the challenges of determining an appropriate payment 
rate for unclassified blood products, we stated in the CY 2021 OPPS/ASC 
proposed rule that we were considering packaging the cost of 
unclassified blood products into their affiliated primary medical 
procedure. Although we typically do not package blood products under 
the OPPS, for unclassified blood products, we stated that we do not 
believe it is possible to accurately determine an appropriate rate that 
would apply for all of the products (potentially several, with varying 
costs) that may be reported using HCPCS code P9099. Packaging the cost 
of unclassified blood products into the payment for the primary medical 
service by assigning HCPCS code P9099 a status indicator of ``N'' would 
allow providers to report the cost of unclassified blood products to 
Medicare. Over time, the costs of unspecified blood products would be 
reflected in the payment rate for the primary medical service if the 
blood product remains unclassified. However, we stated that we expect 
that most blood products would seek and be granted more specific coding 
such that the unclassified HCPCS code P9099 would no longer be 
applicable. We also explained that we believe that packaging the costs 
of unclassified blood products would be an improvement over the current 
non-payable status for HCPCS code P9099 as it would allow for tracking 
of the costs and utilization of unclassified blood products. We had 
concerns about this approach because providers would not receive 
separate payment for the blood products reported with HCPCS code P9099, 
and providers would have had to wait at least two years for the primary 
service billed with HCPCS code P9099 to potentially reflect some of the 
cost of the unclassified product. After considering the other payment 
options for HCPCS code P9099 and comments from providers and 
stakeholders, we decided against packaging HCPCS code P9099 for CY 
2021.
    The CMS HOP Panel and multiple stakeholders suggested another 
payment alternative to have unclassified blood products paid separately 
by using a weighted average of the payment rates of all separately 
payable blood products in the OPPS. The average payment rate would be 
weighted by the number of units billed for each service in the OPPS. 
Stakeholders believed a weighted average would be consistent with OPPS 
policy to provide separate payment for all blood products and would 
encourage the use of HCPCS code P9099 to track the utilization of 
unclassified blood products until the new products could receive 
individual HCPCS codes. Other stakeholders suggested that unclassified 
blood products be paid either at charges reduced to cost or at 
reasonable cost to appropriately compensate providers billing 
unclassified blood products.
    We decided against paying for HCPCS code P9099 through either a 
weighted average payment, charges reduced to cost, or reasonable cost 
for CY 2021. We had concerns that these payment methods could provide 
incentives to discourage manufacturers of new blood products from 
seeking individual HCPCS codes for their products. A weighted average 
payment would encourage manufacturers of relatively inexpensive 
unclassified blood products not to seek a HCPCS code for their products 
because the payment using HCPCS code P9099 for the products would be 
substantially higher than payment the products would receive once an 
individual code is established for the blood products. In addition, the 
level of payment from a weighted average payment may reduce the urgency 
of manufacturers to seek an individual HCPCS code even for higher-cost 
products, which would delay our ability to track payment for individual 
blood products.
    After considering our options, we decided for CY 2021 to pay for 
HCPCS code P9099 by making the blood not otherwise classified code 
separately payable, assigning it a status indicator of ``R'', and 
paying the code at a rate equal to the lowest paid separately payable 
blood product in the OPPS, which is P9043 (Infusion, plasma protein 
fraction (human), 5 percent, 50 ml) with a payment rate of $7.79 per 
unit. This policy aligns with our overall OPPS policy to pay NOC codes 
at the lowest available APC rate for a service category, while 
providing a payment for unclassified blood products when a service is 
reported on the claim. Our policy also provides incentives for 
manufacturers to seek individual HCPCS codes for new blood products, 
which helps us to track the utilization of these new blood products and 
establish a payment rate for these new products that better reflects 
their cost. For CY 2022, we proposed to continue our policy that was 
established in CY 2021 without modification.
    Comment: The HOP Panel and multiple commenters have requested that 
unclassified blood products assigned to HCPCS code P9099 be paid based 
on reasonable cost and that HCPCS code P9099 be assigned a status 
indicator of ``F'' (paid at reasonable cost). Unclassified blood 
products paid on the basis of reasonable cost would receive payment 
based on individual invoices submitted by the provider that detail the 
actual cost of the unclassified blood products for the provider. The 
commenters believe our current policy severely underpays for most 
unclassified blood products, which limits the ability of providers to 
use these new products, and discourages innovation in the blood 
products field. Commenters assert that the universe of blood products 
is very heterogeneous with each product having its own APC and payment 
rate, and our policy that assigns unclassified clinical services HCPCS 
codes to the lowest-paying APC in a clinical series is not appropriate 
for the payment of blood products.
    Commenters also believe the administrative burdens of submitting 
claims to receive payment through reasonable cost would encourage blood 
product manufacturers to classify their unclassified products. 
Relatedly, two other commenters urged us to reduce administrative 
burden for providers if we decide to implement reasonable cost payment 
for HCPCS code P9099.
    Response: We have concerns about paying unclassified blood products 
using reasonable cost and assigning HCPCS code P9099 a status indicator 
of ``F''. Although reasonable cost would likely provide a more granular 
reflection of the cost of unclassified blood products to providers, 
there would be no incentive for providers to manage their costs when 
using unclassified blood products, and no incentives for the 
manufacturers to seek individual HCPCS codes for the unclassified blood 
products. We agree with the commenters that the administrative burdens 
of seeking payment through reasonable cost methodology may provide some 
incentive to classify currently unclassified blood products. However, 
we believe that providers will prefer to receive full cost 
reimbursement for an unclassified blood product rather than risk 
receiving a prospective payment that could be less than full cost of 
the blood product if the blood product is classified and assigned a 
HCPCS code. Finally, we do not support reasonable cost payment for 
HCPCS code P9099 because the OPPS is a prospective payment system, and 
we

[[Page 63548]]

want to limit rather than expand the types of services within the OPPS 
that do not receive prospective payment.
    After reviewing the public comments we received, we have decided to 
implement our proposal without modification to keep HCPCS code P9099 
separately payable with a status indicator of ``R'', and pay the code 
at a rate equal to the lowest paid separately payable blood product in 
the OPPS, which is P9043 (Infusion, plasma protein fraction (human), 5 
percent, 50 ml) with a payment rate of $7.79 per unit. Therefore, we 
are finalizing our proposal to continue to assign HCPCS code P9099 to 
APC 9537 (Blood component/product noc) for CY 2022. We appreciate that 
establishing a fair and equitable payment methodology for HCPCS code 
P9099 continues to be a challenge, and we plan to explore other 
possible ideas for the payment of HCPCS code P9099 in future 
rulemaking.
5. Bone Substitute Material Injection (APC 5113)
    For January 1, 2022, the AMA's CPT Editorial Panel established new 
CPT code 0707T (Injection(s), bone substitute material (for example, 
calcium phosphate) into subchondral bone defect (that is, bone marrow 
lesion, bone bruise, stress injury, microtrabecular fracture), 
including imaging guidance and arthroscopic assistance for joint 
visualization). We note that CPT code 0707T was listed as placeholder 
code 0X79T in OPPS Addendum B of the CY 2022 OPPS/ASC proposed rule. 
For CY 2022, we proposed to assign CPT code 0707T to APC 5111 (Level 1 
Musculoskeletal Procedures) with a proposed payment rate of $211.47.
    Comment: Commenters did not agree with our proposed APC assignment. 
Instead, commenters stated that CPT code 0707T should be assigned to 
APC 5114 (Level 4 Musculoskeletal Procedure) with a proposed payment 
rate of $6,428.51 based on its clinical and resource homogeneity to the 
procedures and services in the APC. Commenters stated that 0707T is 
most clinically similar to Zimmer Biomet's AccuFill BSM procedure, 
which is the service described by CPT code 29855 (Arthroscopically 
aided treatment of tibial fracture, proximal (plateau); unicondylar, 
includes internal fixation, when performed (includes arthroscopy)), and 
assigned to APC 5114. Commenters stated that the injection of a bone 
substitute material into a subchondral bone defect is mainly accounted 
for by two products, Zimmer Biomet's AccuFill BSM and Anika, which 
range in price from $2,600-$2,800.
    Response: We do not agree that CPT code 0707T is comparable to CPT 
code 29855; however, based on our review of the clinical 
characteristics of the procedure and input from our medical advisors, 
we believe CPT code 0707T is more similar to the procedures assigned to 
APC 5113 (Level 3 Musculoskeletal Procedures) with a proposed payment 
rate of $2,906.75, and this payment rate better accounts for the cost 
of the procedure as well as the bone substitute material.
    In summary, after consideration of the public comments, we are 
assigning CPT code 0707T to APC 5113 for CY 2022 based on its resource 
and clinical similarity to the procedures in APC 5113. The final CY 
2022 OPPS payment rates for this code can be found in Addendum B to 
this final rule with comment period. In addition, we refer readers to 
Addendum D1 to this final rule with comment period for the SI meanings 
for all codes reported under the OPPS. Both Addendum B and D1 are 
available via the internet on the CMS website.
    As we do every year, we will reevaluate the APC assignment for CPT 
code 0707T for the next rulemaking cycle. We note that we review, on an 
annual basis, the APC assignments for all services and items paid under 
the OPPS.
6. Calculus Aspiration With Lithotripsy Procedure (APC 5376)
    For CY 2022, we proposed to assign HCPCS code C9761 
(Cystourethroscopy, with ureteroscopy and/or pyeloscopy, with 
lithotripsy (ureteral catheterization is included) and vacuum 
aspiration of the kidney, collecting system and urethra if applicable) 
to APC 5375 (Level 5 Urology and Related Services) with a proposed 
payment of $4,527.23. HCPCS code C9761 describes the procedure that 
uses a sterile, single-use aspiration-irrigation catheter that is 
designed to assist in the removal of stone fragments during standard 
ureteroscopy. Based on our analysis of the latest CY 2020 claims data 
for this CY 2022 OPPS/ASC final rule with comment period, our data 
reveals two single claims for HCPCS code C9761 with a geometric mean 
cost of $9,342.
    Comment: Several commenters expressed concerns that a significant 
difference between cost and payment prevented hospitals from providing 
this procedure to their patients. The commenters urged CMS to change 
the APC assignment of HCPCS code C9761 to APC 5376 (Level 6 Urology and 
Related Services). The commenters asked that CMS assign HCPCS code 
C9761 to APC 5376 for two reasons: (1) The current and proposed 
reimbursement rates for services in APC 5375 are inadequate to pay 
hospitals appropriately for the costs of furnishing the Steerable 
Ureteroscopic Renal Evacuation (SURE) procedure; and (2) the clinical 
characteristics and resources associated with HCPCS code C9761 are 
similar to codes in APC 5376 than services in APC 5375.
    Response: We thank the commenters for their feedback. Based on 
information from the manufacturer, resources involved for the procedure 
described by HCPCS code C9761 appear to be higher than for those 
procedures assigned to APC 5375. At this time, only two CY 2020 claims 
are available to assist in identifying costs associated with the 
procedure. The geometric mean cost of $9,342 for the two claims 
indicate that the cost of HCPCS code C9761 is substantially higher than 
the proposed payment rate of $4,527.23. However, two claims is not a 
significant data set; and we have concerns that the costs reported from 
the two claims for the procedure described by HCPCS code C9761 may not 
accurately reflect the geometric mean costs of the procedure. We also 
note that, in the manufacturer's 2020 New Technology APC application, 
they indicated that an appropriate payment for the procedure described 
by HCPCS code C9761 would be approximately $5,627.39 and that 
assignment to New Technology APC 1566 (New Technology--Level 29 
($5,501-$6,000)) would be appropriate. Based on the claims data along 
with the reported costs associated with the procedure presented to us 
by the manufacturer, we believe that it is appropriate to assign the 
procedure described by HCPCS code C9761 to APC 5376 (Level 6 Urology 
and Related Services), for CY 2022. As we do every year we will 
reevaluate the APC assignment for CPT code 9761 in the next rulemaking 
cycle. We remind hospitals that we review, on an annual basis, the APC 
assignments for all services and items paid under the OPPS based on the 
latest claims data available to us.
    In summary, after consideration of the public comments we received, 
we are modifying our proposal for the APC assignment of HCPCS code 
C9761. Instead of assigning this code to APC 5375 (Level 5 Urology and 
Related Services), for CY 2022, we are reassigning HCPCS code C9761 to 
APC 5376 (Level 6 Urology and Related Services). Table 23 below lists 
the final CY 2022 status indicator and APC assignments for the calculus 
aspiration

[[Page 63549]]

with lithotripsy procedure. We refer readers to Addendum B to this 
final rule with comment period for the final payment rates for all 
codes reportable under the OPPS. Addendum B is available via the 
internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR16NO21.035

7. Cardiac Computed Tomography (CT) (APC 5571)
    For CY 2022, we proposed to continue to assign the following 
cardiac CT exam codes to APC 5571 (Level 1 Imaging with Contrast) with 
a proposed payment rate of $183.30:
     75572 (Computed tomography, heart, with contrast material, 
for evaluation of cardiac structure and morphology (including 3d image 
postprocessing, assessment of cardiac function, and evaluation of 
venous structures, if performed));
     75573 (Computed tomography, heart, with contrast material, 
for evaluation of cardiac structure and morphology in the setting of 
congenital heart disease (including 3d image postprocessing, assessment 
of lv cardiac function, rv structure and function and evaluation of 
venous structures, if performed)); and
     75574 (Computed tomographic angiography, heart, coronary 
arteries and bypass grafts (when present), with contrast material, 
including 3d image postprocessing (including evaluation of cardiac 
structure and morphology, assessment of cardiac function, and 
evaluation of venous structures, if performed)).
    Comment: Many commenters opposed the assignment of CPT codes 75572, 
75573, and 75574 to APC 5571. They stated that the proposed CY 2022 
OPPS payment rate for APC 5571 is inadequate to cover the total cost of 
providing the service.
    Commenters stated that they also believe that the resource costs 
required to perform cardiac CT scans are similar to the tests that are 
assigned to APC 5573 rather than APC 5571. They noted that the low 
payment for the test limits patient access, and requested that CMS take 
action to increase reimbursement to levels in line with the actual 
testing costs. The commenters requested an APC reassignment for all 
three codes. Specifically, the commenters suggested reassigning CPT 
codes 75572 and 75573 to APC 5572 (Level 2 Imaging with Contrast) and 
CPT code 75574 to APC 5573 (Level 3 Imaging with Contrast). Most of the 
commenters reported that cardiac CT scans are more resource intensive 
than other CT and x-ray scans in APC 5571 and expressed concerns that 
APC-misallocation would suppress utilization for these services.
    Response: As we stated in the CY 2021 OPPS final rule with comment 
period (85 FR 85956), payments under the OPPS are based on our analysis 
of the latest available claims and cost report data submitted to 
Medicare. We have many years of claims data for CPT codes 75572, 75573, 
and 75574. Based on the geometric mean costs for these codes, we do not 
believe that CPT codes 75572, 75573, and 75574 utilize similar 
resources as the exams assigned to APC 5572 or APC 5573. We refer 
readers to the CY 2021 OPPS final rule with comment period for a more 
detailed discussion of the pricing methodology for CPT codes 75572, 
75573, and 75574 (85 FR 85956 through 85959).
    In summary, after consideration of the public comments, we are 
finalizing our proposal, without modification, to assign the cardiac CT 
exam codes, specifically, CPT codes 75572, 75573, and 75574 to APC 
5571. The final CY 2022 OPPS payment rates for these codes can be found 
in Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the SI meanings for all codes reported under the OPPS. Both Addendum B 
and D1 are available via the internet on the CMS website.
8. Cardiac Magnetic Resonance (CMR) Imaging (APC 5523, 5524, 5572, and 
5573)
    For CY 2022, we proposed to continue to assign the following 
cardiac magnetic resonance imaging (MRI) CPT codes to APC 5523, 5524, 
5572, and 5573, respectively:
     CPT code 75557 (Cardiac magnetic resonance imaging for 
morphology and function without contrast material) to APC 5523 (Level 3 
Imaging without Contrast) with a proposed payment of $236.14;
     CPT code 75559 (Cardiac magnetic resonance imaging for 
morphology and function without contrast material; with stress imaging) 
to APC 5524 (Level 3 Imaging without Contrast) with a proposed payment 
of $495.76;
     CPT code 75561 (Cardiac magnetic resonance imaging for 
morphology and function without contrast material(s), followed by 
contrast material(s) and further sequences) to APC 5572 (Level 2 
Imaging with Contrast) with a proposed payment of $377.80; and
     CPT code 75563 (Cardiac magnetic resonance imaging for 
morphology and function without contrast material(s), followed by 
contrast material(s) and further sequences; with stress imaging) to APC 
5573 (Level 3 Imaging with Contrast) with a proposed payment of 
$733.76.
    Comment: A few commenters expressed concern with the lack of 
payment stability for cardiac MRI services, specifically, those 
described by CPT codes 75557, 75559, 75561, and 75563. They indicated 
that the payments for these codes have decreased in the last several 
years, and prior to CY 2017, the codes were placed in appropriate APCs. 
Of significant concern are the payment rates for CPT codes 75561 and 
75563, which, according to the commenters, are grouped with services 
that are not

[[Page 63550]]

clinically similar. The commenters stated that CPT code 75561 is unlike 
CT of the abdomen or pelvis or MRI of the neck and spine in APC 5572, 
and instead, the code should be placed in APC 5573 with comparable 
services. The commenters further added that CPT code 75563 is labor-
intensive and should be assigned to APC 5593 (Level 3 Nuclear Medicine 
and Related Services).
    Response: As stated in the CY 2021 OPPS final rule with comment 
period, payments under the OPPS are based on our analysis of the latest 
available claims and cost report data submitted to Medicare. We have 
many years of claims data for CPT codes 75561 and 75563. Based on the 
geometric mean costs for these codes, we do not believe that CPT codes 
75561 and 75563 utilize similar resources as the exams assigned to APC 
5573 or APC 5593. We refer readers to the CY 2021 OPPS final rule with 
comment period for a more detailed discussion of the pricing 
methodology for CPT codes 75561 and 75563 (85 FR 85959 through 85960).
    In summary, after consideration of the public comments, we are 
finalizing our proposal, without modification, to assign the cardiac 
MRI codes, specifically, CPT codes 75561 and 75563 to APCs 5572 and 
5573. The final CY 2022 OPPS payment rates for these codes can be found 
in Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the SI meanings for all codes reported under the OPPS. Both Addendum B 
and D1 are available via the internet on the CMS website.
9. Chimeric Antigen Receptor Therapy (CAR-T) (APCs 5694, 9035, 9194, 
9391, 9413, and 9422)
    Chimeric Antigen Receptor T-Cell (CAR T-cell) therapy is a cell-
based gene therapy in which T-cells are collected and genetically 
engineered to express a chimeric antigen receptor that will bind to a 
certain protein on a patient's cancerous cells. The CAR T-cells are 
then administered to the patient to attack certain cancerous cells and 
the individual is observed for potential serious side effects that 
would require medical intervention. We refer readers to previous 
discussions in the OPPS/ASC final rules with comment period for 
background regarding the specific CAR T-cell products, in both the CY 
2020 OPPS/ASC final rule with comment period (84 FR 61231 through 
61234) and the CY 2019 OPPS/ASC final rule with comment period (83 FR 
58904 through 58908). In addition, for discussion about CY 2022 OPPS 
payment policies for separately paid drugs with pass-through status 
expiring or continuing in CY 2022, please see sections V.A.4. and 
V.A.5. of this final rule with comment period. The AMA created four 
Category III CPT codes that are related to CAR T-cell therapy, 
effective January 1, 2019. As discussed in the CY 2019 OPPS/ASC final 
rule with comment period (83 FR 58904 through 58908), the CY 2020 OPPS/
ASC final rule with comment period (84 FR 61231 through 61234), and the 
CY 2021 OPPS/ASC final rule with comment period (85 FR 85949 through 
85951) we finalized our proposal to assign procedures described by CPT 
codes 0537T, 0538T, and 0539T to status indicator ``B'' (Codes that are 
not recognized by OPPS when submitted on an outpatient hospital Part B 
bill type (12x and 13x)) to indicate that the services are not paid 
under the OPPS. The procedures described by CPT codes 0537T, 0538T, and 
0539T describe the various steps required to collect and prepare the 
genetically modified T-cells, and Medicare does not generally pay 
separately for each step used to manufacture a drug or biological. We 
also finalized that the procedures described by CPT code 0540T would be 
assigned status indicator ``S'' (Procedure or Service, Not Discounted 
when Multiple) and APC 5694 (Level 4 Drug Administration) for CY 2019, 
CY 2020, and CY 2021 and made no proposal to change the assignment for 
CY 2022. Additionally, the National Uniform Billing Committee (NUBC) 
established CAR T-cell-related revenue codes and a value code to be 
reportable on Hospital Outpatient Department (HOPD) claims effective 
for claims received on or after April 1, 2019. We made no specific 
proposal related to the CAR T-cell preparation codes, as described by 
CPT codes 0537T, 0538T, 0539T. As listed in Addendum B of the CY 2022 
OPPS/ASC proposed rule, we proposed to continue to assign procedures 
described by these CPT codes, 0537T, 0538T, and 0539T, to status 
indicator ``B'' (Codes that are not recognized by OPPS when submitted 
on an outpatient hospital Part B bill type (12x and 13x)) to indicate 
that the services are not paid under the OPPS. We proposed to continue 
to assign CPT code 0540T to status indicator ``S'' (Procedure or 
Service, Not Discounted when Multiple) and APC 5694 (Level IV Drug 
Administration).
    Comment: Two commenters opposed our proposal to continue to assign 
status indicator ``B'' to CPT codes 0537T, 0538T, and 0539T for CY 
2022. One commenter did not have a specific recommendation, but rather 
suggested CMS take into consideration the complex process and 
separately recognize the efforts associated with leukapheresis, cell 
handling, and processing. This commenter additionally mentioned the 
administrative burden associated with CAR T-cell therapy 
administration, among other resources that are specific to the process 
in which CAR-T is processed, manufactured, and then administered.
    The other commenter discussed a wide variety of topics related to 
CAR T-cell therapy and stated that a change in status indicator would 
be appropriate, with a preference for assigning CPT codes 0537T, 0538T, 
and 0539T to status indicator ``Q1''. This commenter believed that the 
procedures these CPT codes describe did not represent the steps 
required to manufacture the CAR T-cell product, as CMS has stated. 
Generally, this commenter advocated for a change in status indicator as 
they believed this change is necessary to allow services furnished to 
the patient to be eligible for payment and for hospitals to be paid 
appropriately for the services they provide during each step of the CAR 
T-cell process. This commenter pointed out that a number of patients 
may receive the preparation procedures, but then fail to receive the 
final CAR-T product. Accordingly, this commenter asked CMS to release 
new cost centers and to revise the instructions in MLN Matters Article 
SE19009 in order to no longer allow hospitals to put outpatient cell 
collection and process charges occurring more than three days prior to 
an inpatient stay on inpatient claims or to report cell collection and 
cell processing charges as part of the product charge.
    Response: We thank the commenters for their feedback. CMS does not 
believe that separate or packaged payment under the OPPS is necessary 
for the procedures described by CPT codes 0537T, 0538T, and 0539T for 
CY 2022. The procedures described by CPT codes 0537T, 0538T, and 0539T 
describe the various steps required to collect and prepare the 
genetically modified T-cells; and Medicare does not generally pay 
separately for each step used to manufacture a drug or biological 
product. Additionally, we note that CAR T-cell therapy is a unique 
therapy approved as a biologic, with unique preparation procedures, 
that cannot be directly compared to other therapies or existing CPT 
codes. We note that the current HCPCS coding for the currently approved 
CAR T-cell therapies include leukapheresis and dose preparation 
procedures, as these services are included in the manufacturing of 
these

[[Page 63551]]

biologicals. Therefore, payment for these services is incorporated into 
the drug codes. Please see Table 24 for HCPCS coding for CAR T-cell 
therapies.
[GRAPHIC] [TIFF OMITTED] TR16NO21.036

    We note that although there is no payment associated with CPT codes 
0537T, 0538T, and 0539T for reasons stated previously, these codes can 
still be reported to CMS for tracking purposes. We thank commenters for 
their feedback related to our guidance contained in MLN Matters Article 
SE19009. We are not revising this document at this time as we believe 
these instructions are consistent with our longstanding policies, but 
we appreciate the feedback from stakeholders. We believe that the 
comments in reference to payment for services in settings not payable 
under the OPPS are outside the scope of the CY 2022 OPPS/ASC proposed 
rule. Accordingly, we are not revising the existing codes for CAR T-
cell therapies to remove leukapheresis and dose preparation procedures, 
and we are not accepting the recommendations at this time to revise the 
status indicators for procedures described by CPT codes 0537T, 0538T, 
and 0539T. We will continue to evaluate and monitor payment for CAR T-
cell therapies.
    In summary, after consideration of the public comments we received, 
we are finalizing our proposal to assign status indicator ``B'' to CPT 
codes 0537T, 0538T, and 0539T for CY 2022. Additionally, we are 
continuing our policy from CY 2019 to assign status indicator ``S'' to 
CPT code 0540T for CY 2022. Table 25 below shows the final SI and APC 
assignments for HCPCS codes 0537T, 0538T, 0539T, and 0540T for CY 2022. 
For more information on CY 2022 OPPS final status indicators, APC 
assignments, and payment rates for HCPCS codes, including the CAR T-
cell drug codes, we refer readers to Addendum B to this final rule with 
comment period. In addition, the status indicator definitions can be 
found in Addendum D1 (OPPS Payment Status Indicators for CY 2022) to 
this final rule with comment period. Both Addendum B and D1 are 
available via the internet on the CMS website.

[[Page 63552]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.037

10. ClariFix Procedure (APC 5164)
    For CY 2022, we proposed to continue to assign HCPCS code C9771 
(Nasal/sinus endoscopy, cryoablation nasal tissue(s) and/or nerve(s), 
unilateral or bilateral)) to APC 5164 Level 4 ENT Procedures. We 
created HCPCS code C9771 to describe the technology associated with 
nasal endoscopy with cryoablation of nasal tissues and/or nerves, based 
on our review of a New Technology APC application submitted by the 
manufacturer of the technology. HCPCS code C9771 was effective on 
January 1, 2021.
    Comment: We received one comment from the manufacturer requesting 
that HCPCS code C9771 be reassigned to APC 5165 Level 5 ENT Procedures, 
which had a proposed CY 2022 OPPS payment rate of $5,218.17. The 
commenter believed that assigning HCPCS code C9771 to APC 5165 would be 
more appropriate due to the resource and clinical similarity to the 
procedures in that APC.
    Response: We thank the commenter for their recommendation. After 
reviewing the comment, and after further evaluation of the procedure, 
as well as input from our medical advisors, we continue to believe that 
the current APC assignment for HCPCS code C9771 is appropriate, based 
on its resource and clinical similarity to the procedures in APC 5164. 
Therefore, we are not accepting the commenter's recommendation. We 
remind hospitals that every year we review the APC assignments for all 
services and items paid under the OPPS. We will reassess the APC 
assignment for the procedure described by HCPCS C9771 once we have 
claims data for the code. We note that the first year that claims data 
will be available for HCPCS code C9771 will be during the CY 2023 
rulemaking cycle.
    In summary, after consideration of the public comment, we are 
finalizing our proposal without modification. The final CY 2022 OPPS 
payment rate for this code can be found in Addendum B to this final 
rule with comment period. In addition, we refer readers to Addendum D1 
of this final rule with comment period for the status indicator (SI) 
meanings for all codes reported under the OPPS. Both Addendum B and D1 
are available via the internet on the CMS website.
11. Dilapan-S Cervical Dilation Procedure (APC 5412)
    For CY 2022, we proposed to continue to assign CPT code 59200 
(Insertion of cervical dilator (for example, laminaria, prostaglandin) 
(separate procedure)) to APC 5412 (Level 2 Gynecologic Procedures) with 
a proposed payment rate of $289.30.
    Comment: A few commenters requested that CMS reassign CPT code 
59200 to APC 5413 (Level 3 Gynecologic Procedures) with a proposed 
payment rate of $650.81. These commenters state that the cost of 
Dilapan-S, a cervical softening and dilation device, is not reflected 
in the payment rate for APC 5412.
    Response: For CY 2022, OPPS payments are based on claims submitted 
between January 1, 2019, through December 31, 2019, that were processed 
on or before June 30, 2020. Based on our evaluation of the claims data 
for this final rule with comment period, the geometric mean cost for 
CPT code 59200 is $456.73, which, while it does fall outside the range 
of geometric mean costs for APC 5412 ($206.24-$402.55) it does not fall 
within the range of geometric mean costs for APC 5413 ($516.27-
$874.50.) Given that the Dilapan-S device and CPT code 59200 have both 
existed for a significant period of time, the fact that payment for CPT 
code 59200 does not reflect the costs of Dilapan-S suggests that this 
device is not routinely used to furnish CPT code 59200. Furthermore, 
based on our review of the clinical characteristics of the procedure 
and input from our medical advisors, we continue to believe that CPT 
code 59200 is more clinically similar to the other services in APC 
5412.
    In summary, after consideration of the public comments, we are 
finalizing our proposal to continue to assign CPT code 59200 to APC 
5412. The final CY 2022 OPPS payment rates for these codes can be found 
in Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the SI meanings for all codes reported under the OPPS. Both Addendum B 
and D1 are available via the internet on the CMS website.

[[Page 63553]]

12. Ellipsys System Hemodialysis Arteriovenous Fistula (AVF) Procedure 
(APC 5194)
    For CY 2022, we proposed to continue to assign HCPCS code G2170 to 
APC 5194 (Level 4 Endovascular Procedures) with a proposed payment rate 
of $16,484.41.
    Comment: Commenters supported this proposal.
    Response: We appreciate commenters' support.
    In summary, after consideration of the public comments, we are 
finalizing our proposal without modification. Specifically, we are 
finalizing our APC proposal to continue to assign HCPCS code G2170 to 
APC 5194.
    The final CY 2022 OPPS payment rate for this code can be found in 
Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the status indicator (SI) meanings for all codes reported under the 
OPPS. Both Addendum B and D1 are available via the internet on the CMS 
website.
13. Esophagogastroduodenoscopy (APC 5331)
    For CY 2022, we proposed to continue to assign CPT code 43240 
(Esophagogastroduodenoscopy, flexible, transoral; with transmural 
drainage of pseudocyst (includes placement of transmural drainage 
catheter[s]/stent[s], when performed, and endoscopic ultrasound, when 
performed)) to APC 5303 (Level 3 Upper GI Procedures) with a proposed 
payment rate of $3,160.76.
    Comment: One commenter requested the reassignment of CPT code 43240 
to APC 5331 (Complex GI Procedures) with a proposed payment rate of 
$5,159.81. The commenter stated that the geometric mean cost of CPT 
code 43240 ($5827.94) exceeds the 2 times threshold for APC 5303 and is 
within the range of the geometric mean costs for APC 5331 ($4,706.48-
$6,277.12). Furthermore, the commenter stated that CPT code 43240 is 
more clinically similar to the services in APC 5331, which includes all 
other gastroenterology stent placement codes.
    Response: Based on our review of the cost data and input from our 
clinical advisors, we agree that CPT code 43240 would be more 
appropriately placed in APC 5331 based on its clinical and resource 
homogeneity to the procedures in the APC. Therefore, we are reassigning 
CPT code 43240 to APC 5331.
    In summary, after consideration of the public comments, we are 
finalizing the reassignment of CPT code 43240 to APC 5331. The final CY 
2022 OPPS payment rate for this code can be found in Addendum B to this 
final rule with comment period. In addition, we refer readers to 
Addendum D1 of this final rule with comment period for the SI meanings 
for all codes reported under the OPPS. Both Addendum B and D1 are 
available via the internet on the CMS website.
14. External Electrocardiogram (ECG) (APCs 5733 and 5734)
    For CY 2022, we proposed to continue to assign CPT code 93242 
(External ECG recording for more than 48 hours up to 7 days by 
continuous rhythm recording) to APC 5732 (Level 2 Minor Procedures) 
with a proposed payment rate of $34.72 and CPT code 93243 (External ECG 
recording for more than 48 hours up to 7 days scanning analysis with 
report) to APC 5733 (Level 3 Minor Procedures) with a proposed payment 
rate of $57.12.
    Comment: A few commenters suggested that, based on clinical 
similarity to CPT codes 93225 (External electrocardiographic recording 
up to 48 hours by continuous rhythm recording and storage; recording 
(includes connection, recording, and disconnection)) and 93226 
(External electrocardiographic recording up to 48 hours by continuous 
rhythm recording and storage; scanning analysis with report), which 
include payment for a holter monitor, CMS should reassign CPT codes 
93242 and 93243 to APC 5734 (Level 4 Minor Procedures) with a proposed 
payment rate of $115.71. Commenters further stated that placement in 
APC 5734 would be consistent with the placement of the predecessor 
codes, CPT codes 0296T (External electrocardiographic recording for 
more than 48 hours up to 21 days by continuous rhythm recording and 
storage; recording (includes connection and initial recording)) and 
0296T (External electrocardiographic recording for more than 48 hours 
up to 21 days by continuous rhythm recording and storage; scanning 
analysis with report).
    Response: Based on our review of the clinical characteristics of 
the procedure and input from our medical advisors, we agree with 
commenters that resources associated with furnishing CPT codes 93242 
and 93243 may not be accurately reflected in their current APC 
assignment. We do not agree with commenters that both codes should be 
reassigned to APC 5734. We note that the predecessor codes, CPT codes 
0296T and 0297T, described 21 days of continuous monitoring, while the 
current codes, CPT codes 93242 and 93243, describe 7 days of 
monitoring. We believe that CPT code 93242 shares greater clinical and 
cost similarities to the services in APC 5733 (Level 3 Minor 
Procedures), which has a proposed payment rate of $57.12. We agree with 
commenters, however, the CPT code 93243 does share clinical and cost 
similarities with the other services in APC 5734.
    In summary, after consideration of the public comments, we are 
finalizing our proposal with modification. Specifically, we are 
assigning CPT code 93242 to APC 5733 and CPT code 93243 to APC 5734. 
The final CY 2022 OPPS payment rates for these codes can be found in 
Addendum B to this final rule with comment period. In addition, we 
refer readers to Addendum D1 of this final rule with comment period for 
the SI meanings for all codes reported under the OPPS. Both Addendum B 
and D1 are available via the internet on the CMS website.
15. Eye-Movement Analysis Without Spatial Calibration (CPT Code 0615T)
    The CPT Editorial Panel established a new CPT code 0615T, effective 
July 1, 2020, to describe eye-movement analysis without spatial 
calibration that involves the use of the EyeBOX system as an aid in the 
diagnosis of concussion, also known as mild traumatic brain injury 
(mTBI). The EyeBOX is intended to measure and analyze eye movements as 
an aid in the diagnosis of concussion within one week of head injury in 
patients 5 through 67 years of age in conjunction with a standard 
neurological assessment of concussion. A negative EyeBOX classification 
may correspond to eye movement that is consistent with a lack of 
concussion. A positive EyeBOX classification corresponds to eye 
movement that may be present in both patients with or without a 
concussion.
    We included this new code in the July quarterly OPPS update CR 
(Transmittal 10224, Change Request 11814, dated July 15, 2020). 
Effective July 1, 2020, we assigned CPT code 0615T to APC 5734 (Level 4 
Minor Procedures) with status indicator ``Q1'' (conditionally 
packaged).
    As displayed in the Addendum B to the CY 2022 ASC/OPPS proposed 
rule, we proposed to continue to assign 0615T to APC 5734 with status 
indicator ``Q1'' and a proposed OPPS payment rate of $115.71 for CY 
2022.
    Comment: The manufacturer of the EyeBOX resubmitted their comment 
again this year because they are still concerned that the lack of 
adequate, separate reimbursement will strongly discourage hospitals 
from providing this important technology to their patients.

[[Page 63554]]

The commenter urged CMS to: (1) Change the APC assignment of CPT code 
0615T to APC 5722 (Level 2 Diagnostic Tests and Related Services); and 
(2) change the status indicator for the service to ``S'' to allow for 
separate payment under the OPPS. The commenter continues to claim that 
the proposed reimbursement rate for services in APC 5734 is inadequate 
to pay hospitals appropriately for the costs of furnishing the EyeBOX 
test. They assert the EyeBOX test costs hospitals at least $200.00 to 
provide and the clinical characteristics and resources associated with 
0615T are more similar to codes in APC 5722 than services in APC 5734.
    Response: We note that OPPS payment rates for the CY 2022 final 
rule are based on claims submitted between January 1, 2019, through 
December 31, 2019, that were processed on or before June 30, 2020. 
Because HCPCS code 0615T was established on July 1, 2020, we did not 
have claims data available for CY 2022 OPPS ratesetting.
    As far as the resource similarity of CPT code 0615T to other eye-
related diagnostic tests that are assigned to APC 5722, such as CPT 
code 92240 (Indocyanine-green angiography (includes multiframe imaging) 
with interpretation and report, unilateral or bilateral) and CPT code 
92242 (Fluorescein angiography and indocyanine-green angiography 
(includes multiframe imaging) performed at the same patient encounter 
with interpretation and report, unilateral or bilateral), the EyeBOX 
test does not involve an injection. Therefore, we continue to believe 
that the resource costs for CPT code 0615T are not comparable to other 
eye-related diagnostic tests in APC 5722. Updated CY 2019 claims data 
for this final rule with comment period indicate that the geometric 
mean cost of APC 5722 is 257.89, while the geometric mean cost of APC 
5734 is $109.88. Based on the lack of claims data, we believe that 
maintaining assignment of APC 5734 for CPT code 0615T for CY 2022 
continues to be appropriate.
    Depending on the procedures submitted on the claim, and whether the 
procedure described by CPT code 0615T is performed with any other 
services on the same day, the procedure described by CPT code 0615T may 
be paid separately through an APC (in this case APC 5734) or receive 
packaged payment when accompanying a more significant procedure that is 
reported on the claim. Based on the nature of this procedure, which may 
be performed by itself or with other procedures on the same claim, we 
believe that the continued assignment of status indicator ``Q1'' is 
appropriate for the procedure described by CPT code 0615T.
    As we do every year, we will reevaluate the APC assignment for CPT 
code 0615T for the next rulemaking cycle. We note that we review, on an 
annual basis, the APC assignments for all services and items paid under 
the OPPS.
    We are finalizing our proposal, without modification, to continue 
to assign CPT code 0615T to status indicator ``Q1'' and APC 5734 for CY 
2022. The final CY 2022 payment rate for the CPT code can be found in 
Addendum B to this final rule with comment period (which is available 
via the internet on the CMS website).
16. FemSelect Enplace Procedure (APC 5415)
    For CY 2022, we proposed to continue to assign HCPCS code C9778 
(Colpopexy, vaginal; minimally invasive extra-peritoneal approach 
(sacrospinous)) to APC 5414 Level 4 Gynecologic Procedures. We created 
HCPCS code C9778 to describe the technology associated with vaginal 
colpopexy by sacrospinous ligament fixation, based on our review of a 
New Technology APC application submitted by the manufacturer of the 
technology. HCPCS code C9778 was effective on July 1, 2021.
    Comment: We received many comments from providers and the 
manufacturer requesting that HCPCS code C9778 be reassigned to APC 5415 
Level 5 Gynecologic Procedures, which had a proposed CY 2022 OPPS 
payment rate of $4,525.49. Commenters stated that the resource cost 
exceeded the payment provided by APC 5414, and that APC 5415 would be a 
more appropriate APC assignment.
    Response: We thank the commenters for their recommendations. Based 
on input from our medical advisors, further evaluation of the resources 
to perform the surgery, and its similarity to existing procedures, we 
believe that HCPCS code C9778 should be reassigned to APC 5415. Based 
on our assessment, we believe that the service described by HCPCS code 
C9778 shares similar resource and clinical characteristics to the 
procedures included in APC 5415.
    In summary, after consideration of the public comments, we are 
reassigning HCPCS code C9778 to APC 5415 Level 5 Gynecologic Procedures 
for CY 2022, as shown in Table 26 below. The final CY 2022 OPPS payment 
rates for this code can be found in Addendum B to this final rule with 
comment period. In addition, we refer readers to Addendum D1 of this 
final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Both Addendum B and D1 are available via the 
internet on the CMS website.
    As we do every year, we will reevaluate the APC assignment for 
HCPCS code C9778 for the next rulemaking cycle. We note that we review, 
on an annual basis, the APC assignments for all services and items paid 
under the OPPS. The first year that claims data will be available for 
HCPCS code C9778 will be during the CY 2023 rulemaking cycle.
[GRAPHIC] [TIFF OMITTED] TR16NO21.038


[[Page 63555]]


17. Hypoglossal Nerve Neurostimulator (HGNS) Procedure (APC 5465)
    Effective January 1, 2022, the AMA's CPT Editorial Panel created a 
new code to describe open implantation of hypoglossal nerve 
neurostimulator array. For CY 2022, we proposed to assign CPT code 
64582 to APC 5465 (Level 5 Neurostimulator and Related Procedures) with 
a proposed payment rate of $30,208.51. We note that CPT code 64582 was 
listed as placeholder code 645X1 in OPPS Addendum B of the CY 2022 
OPPS/ASC proposed rule.
    Comment: One commenter expressed support for the proposed APC 
assignment.
    Response: We thank the commenter for their support.
    In summary, after consideration of the public comments, we are 
finalizing our proposal without modification. Specifically, we are 
finalizing our APC proposal to assign CPT code 64582 to APC 5465. The 
final CY 2022 OPPS payment rate for this code can be found in Addendum 
B to this final rule with comment period. In addition, we refer readers 
to Addendum D1 of this final rule with comment period for the SI 
meanings for all codes reported under the OPPS. Both Addendum B and D1 
are available via the internet on the CMS website.
18. IDx-DR: Artificial Intelligence System To Detect Diabetic 
Retinopathy (APC 5733)
    For CY 2022, we proposed to continue to assign CPT code 92229 
(Imaging of retina for detection or monitoring of disease; with point-
of care automated analysis with diagnostic report; unilateral or 
bilateral) to APC 5733 (Level 3 Minor Procedures) with a proposed 
payment rate of $57.12.
    Comment: Some commenters disagreed with the proposed payment amount 
and requested a revision in the assignment from APC 5733 to APC 5734 
(Level 4 Minor Procedures) with a proposed payment rate of $115.71. The 
commenters reported that the service described by CPT code 92229 is 
similar to the technical components described by existing CPT code 
92250 (Fundus photography with interpretation and report), which was 
proposed for assignment to APC 5734. They stated that providers 
previously billed for this service on an interim basis under CPT code 
92250. The commenters indicated that APC 5734, which is the APC 
assigned to the predecessor CPT code 92250, is the more appropriate 
assignment for CPT code 92229 until sufficient Medicare claims data can 
be collected by CMS to either retain that assignment or reassign to 
another APC.
    One commenter expressed support for our proposal to continue APC 
assignment of CPT code 92229 to APC 5733.
    Response: As discussed in the CY 2021 OPPS final rule with comment 
period (85 FR 85962), we do not believe that CPT code 92250, which the 
commenters reported to be the predecessor code, is similar to the IDx-
DR test; otherwise, the placement of the new IDx-DR code would have 
been close to CPT code 92250. As the commenter did not provide any 
additional clinical information or cost data, we continue to believe 
that CPT code 92229 should be assigned to APC 5733.
    In summary, after consideration of the public comments, we are 
finalizing our proposal without modification. Specifically, we are 
continuing to assign CPT code 92229 to APC 5733. The final CY 2022 
payment rate for this code can be found in Addendum B to this final 
rule with comment period. In addition, we refer readers to Addendum D1 
of this final rule with comment period for the status indicator (SI) 
meanings for all codes reported under the OPPS. Both Addendum B and D1 
are available via the internet on the CMS website.
19. Intravascular Lithotripsy (IVL) Procedure (APCs 5193 and 5194)
    As explained in the CY 2021 OPPS/ASC final rule with comment 
period, we finalized our proposal to assign HCPCS codes C9764 
(Revascularization, endovascular, open or percutaneous, lower extremity 
artery(ies), except tibial/peroneal; with intravascular lithotripsy, 
includes angioplasty within the same vessel(s), when performed) and 
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) to APC 5192 and C9766 
(Revascularization, endovascular, open or percutaneous, lower extremity 
artery(ies), except tibial/peroneal; with intravascular lithotripsy and 
atherectomy, includes angioplasty within the same vessel(s), when 
performed) to APC 5193 (85 FR 85975 through 85976). For a detailed 
discussion on the APC assignments for HCPCS code(s) describing the IVL 
procedures, we refer readers to the CY 2021 OPPS/ASC final rule with 
comment period (85 FR 85975 through 85976).
    At the August 23, 2021 meeting, the HOP Panel recommended that CMS 
reassign HCPCS code C9764 to APC 5193 and HCPCS codes C9765 and C9766 
to APC 5194, as long as the cost of the IVL device is within 10 percent 
of other devices currently available.
    Comment: Several commenters, including the manufacturer, disagreed 
with CMS's proposed CY 2022 APC assignments for the IVL service 
described by HCPCS codes C9764, C9765, and C9766. They argued that, for 
new procedures that did not have claims in the CY 2019 claims data, 
current claims data should be used when reviewing for APC placement. 
The commenter also noted the CY 2020 claims data provided evidence to 
support their argument that the service described by HCPCS code C9764 
is not adequately reimbursed under APC 5192, and recommended 
reassignment to APC 5193 (Level 3 Endovascular Procedures). Similarly, 
the commenters indicated that assignment of HCPCS codes C9765 and C9766 
to APC 5193 does not provide adequate payment for the service based on 
2020 claims data and that those codes should instead be placed in APC 
5194 (Level 4 Endovascular Procedures).
    Response: In the CY 2022 OPPS/ASC proposed rule, we proposed to use 
2019 claims data in the OPPS due to the effects of the PHE on the CY 
2020 claims data. As the commenter noted, claims data are not available 
for HCPCS codes C9764 through C9766 in the CY 2019 claims data, only in 
CY 2020. As discussed in more detail in section X.E. of this final rule 
with comment period, we are not using CY 2020 claims data for 
ratesetting because of data integrity concerns with respect to the 
broader OPPS; however, based on stakeholder request, we are reviewing 
the CY 2020 claims data for determining potential APC assignments in 
cases where CY 2019 claims data did not include any information on new 
procedures.
    Under what would otherwise be the standard ratesetting process, we 
would typically use CY 2020 claims data submitted for services 
furnished in CY 2020, that were processed on or before June 30, 2021. 
Our analysis of that CY 2020 claims data supports reassigning CPT code 
C9764 to APC 5193 and CPT codes C9765 and C9766 to APC 5194, based on 
their estimated geometric mean costs. Specifically, our claims data 
show a geometric mean cost of approximately $11,442.47 for HCPCS code 
C9764 based on 253 single claims, which is comparable to the geometric 
mean cost of about $10,258.49 for APC 5193, rather than the geometric 
mean cost of approximately $5,061.89 for APC 5192. The geometric mean 
cost of approximately $17,372.02 for HCPCS code C9765 and the geometric 
mean

[[Page 63556]]

cost of approximately $19,285.11 for HCPCS code C9766 is also 
consistent with the costs for significant services in APC 5194, which 
range between about $10,670.16 (for HCPCS code C9754) to $24,311.10 
(for HCPCS code C9767). Based on our analysis of the latest available 
CY 2020 claims data, we believe that HCPCS codes C9765 and C9766 are 
more appropriately assigned to APC 5194.
    In summary, after consideration of the public comments, we are 
assigning HCPCS code C9764 to APC 5193 and HCPCS codes C9765 and C9766 
to APC 5194. Table 27 below lists the three HCPCS codes for the IVL 
procedure and their APC and SI assignments for CY 2022. The final CY 
2022 OPPS payment rates for the codes can be found in Addendum B of 
this final rule with comment period. Addendum B is available via the 
internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR16NO21.039

20. Lixelle Apheresis
    Lixelle [beta]2-microglobulin Apheresis Column is indicated for use 
in the treatment of dialysis[hyphen]related amyloidosis (DRA), a 
disease that affects people with end-stage renal disease (ESRD). DRA is 
a metabolic disorder from the failure of the kidney to filter and 
remove [beta]2-microglobulin, typically from chronic hemodialysis 
(typically 5 years or longer). The Lixelle device is used in an 
apheresis procedure that selectively removes [beta]2-microglobulin from 
circulating blood and used pursuant to a physician prescription in 
conjunction with hemodialysis. It is intended to be used at each 
hemodialysis session (that is, frequency of treatment is expected to be 
3 times per week). In March 2015, FDA approved LIXELLE[supreg] as a 
Class III Humanitarian Use Device (HUD) with an approved Humanitarian 
Device Exemption (HDE). There are currently no specific HCPCS or CPT 
code that represent the Lixelle service.
    Comment: Two commenters, including the manufacturer of Lixelle 
apheresis column, requested payment for the procedure under the OPPS. 
One commenter stated that Lixelle is the only device available for the 
treatment DRA and that all DRA patients are Medicare beneficiaries. The 
commenter stated that they have been unable to complete the FDA-
required post-approval study as a condition of the HDE, due to 
difficulty in securing patient enrollment because of lack of CMS 
payment for the Lixelle apheresis procedure. The commenter stated that 
CMS should rely upon the HUD program requirements and post-approval 
clinical studies mandated and approved by FDA for coverage and payment 
of Lixelle apheresis in the OPPS. The commenter acknowledged that 
Medicare payment under the ESRD PPS is not possible at this time but 
stated that payment under the OPPS may be more clinically appropriate. 
The commenter requested that CMS provide payment under the OPPS because 
the Lixelle apheresis is not eligible for Medicare payment when 
furnished in the dialysis facility at this time, and therefore, these 
treatments (even though technically not ``scheduled'' or ``non-
routine'') should be eligible for payment when furnished in the 
hospital outpatient department under the OPPS. Specifically, the 
commenter requested that CMS provide payment under the OPPS using the 
following pathways: (1) By paying for the apheresis procedure used with 
the Lixelle device through CPT code 36516 (Therapeutic apheresis with 
extracorporeal immunoadsorption, selective adsorption or selective 
filtration and plasma reinfusion), proposed to be assigned to APC 5243 
(Level 3 Blood Product Exchange and Related Services) for CY 2022, and 
requiring the use of a modifier or add-on code when the Lixelle 
apheresis procedure is billed to reduce the payment for the procedure 
to the payment rate for APC 5242 (Level 2 Blood Product Exchange and 
Related Services); (2) by allowing payment for

[[Page 63557]]

the dialysis performed as part of Lixelle apheresis procedure through 
HCPCS code G0257 (Unscheduled or emergency dialysis treatment for an 
ESRD patient in a hospital outpatient department that is not certified 
as an ESRD facility), which is assigned to APC 5401 (Dialysis) for CY 
2022, and requiring the use of a modifier or add-on code to provide 
additional payment beyond that provided for APC 5401; or (3) by 
creating a HCPCS C code or G code for the Lixelle apheresis procedure 
and assigning the code to APC 5242 (Level 2 Blood Product Exchange and 
Related Services).
    Response: We appreciate the commenters' input on the Lixelle device 
and will consider their recommendations for future rulemaking.
21. Low Dose Computed Tomography (LDCT) (APC 5522)
    For CY 2022, we proposed to continue to assign CPT code 71271 
(Computed tomography, thorax, low dose for lung cancer screening, 
without contrast material(s)) to APC 5521 (Level 1 Imaging without 
Contrast) with a proposed payment rate of $83.01.
    Comment: Several commenters stated that CPT code 71271 should be 
reassigned to APC 5523 (Level 3 Imaging without Contrast) with a 
proposed payment rate of $236.14. These commenters stated that CPT code 
71271 should not be in a lower APC than CPT code 71270 (Computed 
tomography, thorax; without contrast material, followed by contrast 
material(s) and further sections) given that CPT code 71271 has 
additional resource costs, such as greater clinical staff time. The 
commenter noted that we proposed to assign CPT code 71270 to APC 5571 
(Level 1 Imaging With Contrast) with a payment rate of $183.30.
    Response: The predecessor code to CPT code 71271 was HCPCS code 
G0297 (Low dose ct (ldct) scan for lung cancer screening) which was 
assigned to APC 5521. However, in the CY 2021 Physician Fee Schedule 
final rule, we stated that it was a longstanding CMS policy that the 
payment for HCPCS code G0297 match the payment rate for CPT code 71250, 
which we proposed to assign to APC 5522 (Level 2 Imaging without 
Contrast) with a payment rate of $111.73, as the services are almost 
identical in terms of clinical similarity and resource costs (85 FR 
84621 through 84622). In the interests of preserving the relationship 
between the predecessor code and CPT code 71250, and based on our 
review of the clinical characteristics of the procedure and input from 
our medical advisors, we believe that CPT code 71271 should be 
reassigned to APC 5522 (Level 2 Imaging without Contrast). We believe 
that assignment to APC 5522 for both CPT codes 71250 and 71271 
accurately reflects the resources associated with performing this 
service.
    In summary, after consideration of the public comments, we are 
finalizing our proposal, with modification. Specifically, we are 
reassigning CPT code 71271 to APC 5522. The final CY 2022 payment rate 
for this code can be found in Addendum B to this final rule with 
comment period. In addition, we refer readers to Addendum D1 to this 
final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Both Addendum B and D1 are available via the 
internet on the CMS website.
22. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS) (APC 
5463)
    CPT code 0398T (Magnetic resonance image guided high intensity 
focused ultrasound (mrgfus), stereotactic ablation lesion, intracranial 
for movement disorder including stereotactic navigation and frame 
placement when performed) describes MRgFUS procedures for the treatment 
of essential tremor. We have identified 175 paid claims for CY 2019 
with a geometric mean of $12,334.67. CPT code 0398T had been assigned 
to a New Technology APC for several years. Then, in CY 2021, we 
reorganized the Neurostimulator and Related Procedures APCs to add a 
new Level 3 category (APC 5463) that had a geometric mean of 
approximately $10,950. While the payment rate for APC 5463 was somewhat 
lower than the geometric mean of CPT code 0398T, it was a reasonable 
estimate of the cost of MRgFUS for the treatment of essential tremor in 
a prospective payment system where some services receive more payment 
than their geometric mean cost, while other services receive less 
payment than their geometric mean cost. For CY 2022, we proposed 
continuing to assign CPT code 0398T to APC 5463 with a payment rate of 
approximately $10,956.33.
    Comment: One commenter, the manufacturer, requests a higher paying 
APC for CPT code 0398T because the current payment rate for APC 5463 
(Level 3 Neurostimulator and Related Procedures) of approximately 
$10,956.33 is substantially lower than the geometric mean cost of the 
service. According to the commenter, the geometric mean of CPT code 
0398T has steadily increased from $10,136 in CY 2018 to $13,907 in CY 
2020.
    Response: We appreciate the commenter's concerns about the level of 
payment for CPT code 0398T. However, the OPPS is a prospective payment 
system and it is expected that any individual service may be paid more 
or less than the geometric mean cost of the service. The current 
payment difference between the geometric mean cost of CPT code 0398T 
and the payment rate for APC 5463 is $1,153.66 ($12,109.99 minus 
$10,956.33) with the payment rate of APC 5463 equal to $10,956.33. That 
means there is no violation of the two-times rule to assign CPT code 
0398T to APC 5463, and the service is assigned to an APC that covers 
around 90 percent of the geometric mean cost of the service. Also, CPT 
code 0398T is grouped with other neurostimulator and related procedures 
that have clinical and resource similarity to the MRgFUS.
    After our review of the public comments, we have decided to 
implement our proposal without modification to continue to assign CPT 
code 0398T to APC 5463 (Level 3 Neurostimulator and Related 
Procedures). The final CY 2022 payment rate for CPT code 0398T can be 
found in Addendum B to this final rule with comment period, which is 
available via the internet on the CMS website.
23. Medical Physics Dose (APC 5612)
    For CY 2022, we proposed to continue to assign CPT code 76145 
(Medical physics dose evaluation for radiation exposure that exceeds 
institutional review threshold, including report (medical physicist/
dosimetrist)) in APC 5611 (Level 1 Therapeutic Radiation Treatment 
Preparation) with a proposed payment rate of $130.19.
    Comment: Several commenters disagreed with the assignment to APC 
5611 and requested a reassignment to APC 5724 (Level 4 Diagnostic Tests 
and Related Services) with a proposed payment rate of $943.96. The 
commenters stated that the services assigned to APC 5724 require 
similar resource use as CPT code 76145. Commenters also stated that APC 
5724 contains a range of services that are clinically similar to CPT 
76145.
    Response: Given that we have no claims data for this service, and 
that APC 5724 does not contain any radiation oncology services, we do 
not believe that APC 5724 is an appropriate assignment on the basis of 
clinical similarity or similar costs. However, based on our review of 
the service associated with CPT code 76145 and input from our medical 
advisors, we believe that APC code 5612, with a proposed payment rate 
of $347.44, may be a more appropriate assignment for

[[Page 63558]]

the code. APC 5612 contains CPT code 77307 (Teletherapy isodose plan; 
complex (multiple treatment areas, tangential ports, the use of wedges, 
blocking, rotational beam, or special beam considerations), includes 
basic dosimetry calculation(s)), which is clinically similar to CPT 
code 76145 in that CPT code 77307 describes the work of a medical 
physicist and dosimetrist. Once we have claims data, we will review the 
APC assignment and determine whether a change is necessary. We note 
that we review, on an annual basis, the APC assignments for all items 
and services paid under the OPPS.
    In summary, after consideration of the public comments, we are 
reassigning CPT code 76145 to APC 5612. The final CY 2022 payment rate 
for this code can be found in Addendum B to this final rule with 
comment period. In addition, we refer readers to Addendum D1 to this 
final rule with comment period for the SI meanings for all codes 
reported under the OPPS. Both Addendum B and D1 are available via the 
internet on the CMS website.
24. MiVu Mucosal Integrity Testing System (APC 5303)
    For CY 2022, we proposed to continue to assign HCPCS code C9777 
(Esophageal mucosal integrity testing by electrical impedance, 
transoral (list separately in addition to code for primary procedure)) 
to OPPS status indicator ``N,'' to indicate that the payment for HCPCS 
code C9777 is packaged into the payment for the primary procedure. We 
created HCPCS code C9777 to describe mucosal integrity testing by 
electrical impedance, based on our review of a New Technology APC 
application submitted by the manufacturer of the technology. HCPCS code 
C9777 was effective on April 1, 2021. Based on the application 
submitted to CMS and our initial review of the procedure, we believed 
the MiVu test to be performed with another primary procedure on the 
same day. Because the MiVu test is always performed as an add-on test 
to either an esophagoscopy or esophagogastroduodenoscopy, we 
established a C-code to appropriately describe the add-on component. 
Under the regulation at 42 CFR 419.2, payment for add-on codes is 
packaged or conditionally packaged into the payment for the related 
procedures or services under the OPPS.
    Comment: We received several comments from providers and the 
manufacturer requesting that HCPCS code C9777 be separately reimbursed 
and reassigned to APC 5303 Level 3 Upper GI Procedures, which had a 
proposed CY 2022 OPPS payment rate of $3,160.76. Commenters argued that 
MiVu\TM\ should be considered the primary procedure, not the 
esophagoscopy or esophagogastroduodenoscopy and that based on the cost 
of the device and procedure, the appropriate APC assignment is APC 
5303.
    Response: We thank the commenters for their recommendations. After 
further evaluation of procedures performed in conjunction with the MiVu 
test on the same day, review of the comments, and input from our 
medical advisors, we believe that modifying the descriptor for the C-
code is appropriate. We believe that revising the long descriptor to 
describe the service of performing both the MiVu test with either an 
esophagoscopy or esophagogastroduodenoscopy on the same day would 
ensure accurate tracking and reporting of the service and minimize 
inappropriate reporting of the services. Consequently, effective 
January 1, 2022, we are revising the descriptor for HCPCS code C9777 to 
read ``Esophageal mucosal integrity testing by electrical impedance, 
transoral, includes esophagoscopy or esophagogastroduodenoscopy,'' to 
accurately reflect how the procedure is currently performed in the 
hospital outpatient setting. With the change in the descriptor for 
HCPCS code C9777, we are assigning HCPCS code C9777 to APC 5303 based 
on its resource and clinical homogeneity to the other procedures in the 
APC. We remind hospitals that because HCPCS code C9777 describes both 
the MiVu test performed with either an esophagoscopy or 
esophagogastroduodenoscopy on the same day, HOPDs should not report 
separate HCPCS codes for the esophagoscopy or 
esophagogastroduodenoscopy.
    In summary, after consideration of the public comments, we are 
modifying the long descriptor for HCPCS code C9777, as shown in Table 
28 below, and reassigning HCPCS code C9777 to APC 5303 (Level 3 Upper 
GI Procedures) for CY 2022. The final CY 2022 OPPS payment rates for 
this code can be found in Addendum B to this final rule with comment 
period. In addition, we refer readers to Addendum D1 of this final rule 
with comment period for the SI meanings for all codes reported under 
the OPPS. Both Addendum B and D1 are available via the internet on the 
CMS website.
    As we do every year, we will reevaluate the APC assignment for 
HCPCS code C9777 for the next rulemaking cycle. We note that we review, 
on an annual basis, the APC assignments for all services and items paid 
under the OPPS.
[GRAPHIC] [TIFF OMITTED] TR16NO21.040


[[Page 63559]]


25. Musculoskeletal Procedures (APCs 5111 Through 5116)
    Prior to the CY 2016 OPPS, payment for musculoskeletal procedures 
was primarily divided according to anatomy and the type of 
musculoskeletal procedure. As part of the CY 2016 reorganization to 
better structure the OPPS payments to utilize prospective payment 
packages, we consolidated these individual APCs so that they became a 
general Musculoskeletal APC series (80 FR 70397 through 70398).
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
59300), we continued to apply a six-level structure for the 
Musculoskeletal APCs because doing so provided an appropriate 
distinction for resource costs at each level and provided clinical 
homogeneity. However, we indicated that we would continue to review the 
structure of these APCs to determine whether additional granularity 
would be necessary.
    In the CY 2019 OPPS proposed rule (83 FR 37096), we recognized that 
commenters had previously expressed concerns regarding the granularity 
of the current APC levels and, therefore, requested comment on the 
establishment of additional levels. Specifically, we solicited comments 
on the creation of a new APC level between the current Level 5 and 
Level 6 within the Musculoskeletal APC series. While some commenters 
suggested APC reconfigurations and requests for change to APC 
assignments, many commenters requested that we maintain the current 
six-level structure and continue to monitor the claims data as they 
become available. Therefore, in the CY 2019 OPPS/ASC final rule with 
comment period, we maintained the six-level APC structure for the 
Musculoskeletal Procedures APCs (83 FR 58920 through 58921).
    Based on the claims data available for the CY 2022 OPPS/ASC 
proposed rule, we continued to believe that the six-level APC structure 
for the Musculoskeletal Procedures APC series is appropriate and we 
proposed to maintain the it for the CY 2022 OPPS update.
    Comment: One commenter requested that we assign CPT code 28297 
(Correction, hallux valgus (bunionectomy), with sesamoidectomy, when 
performed; with first metatarsal and medial cuneiform joint 
arthrodesis, any method) and CPT code 28740 (Arthrodesis, midtarsal or 
tarsometatarsal, single joint) from APC 5114 to APC 5115. They noted 
that if these codes were considered cost significant for purposes of 
the 2 times rule, then these codes would cause 2 times rule violations 
in APC 5114.
    Response: We appreciate the commenter's recommendation regarding 
the APC assignment of CPT 28297 and 28740. CPT codes 28297 and 28740 
are currently assigned to APC 5114 (Level 4 Musculoskeletal 
Procedures). We note that APC 5114 does not currently have a 2 times 
rule violation, under the requirements for cost significance as 
described in section III.B.2. of this final rule with comment period. 
In addition, we have reviewed the codes' geometric mean cost in both 
the CY 2019 and CY 2020 claims data available as well as their clinical 
similarity to other codes within APC 5114 and believe that their 
current APC assignment continues to be appropriate.
    Comment: One commenter supported the proposed assignment of HCPCS 
code 0627T (Percutaneous injection of allogeneic cellular and/or 
tissue-based product, intervertebral disc, unilateral or bilateral 
injection, with fluoroscopic guidance, lumbar; first level) and HCPCS 
code 0629T (Percutaneous injection of allogeneic cellular and/or 
tissue-based product, intervertebral disc, unilateral or bilateral 
injection, with ct guidance, lumbar; first level) to APC 5115. Another 
commenter supported the proposed assignment of HCPCS code 0627T 
(Percutaneous injection of allogeneic cellular and/or tissue-based 
product, intervertebral disc, unilateral or bilateral injection, with 
fluoroscopic guidance, lumbar; first level) and 0630T (Percutaneous 
injection of allogeneic cellular and/or tissue-based product, 
intervertebral disc, unilateral or bilateral injection, with ct 
guidance, lumbar; each additional level (list separately in addition to 
code for primary procedure)) to APC 5115.
    Response: We appreciate the commenters' support. We note that that 
the availability of these codes does not mean that the product(s) are 
legally marketed under the Federal Food, Drug and Cosmetic Act and/or 
the Public Health Service Act.
    Comment: A commenter requested that we allow an exception from the 
broader proposed OPPS ratesetting process to use the CY 2020 claims 
data for ratesetting for the musculoskeletal APC series (5111 through 
5116). Two commenters also requested that we allow an exception for the 
use of CY 2020 claims data for CPT code 27130 (Arthroplasty, acetabular 
and proximal femoral prosthetic replacement (total hip arthroplasty), 
with or without autograft or allograft), which was removed from the IPO 
list beginning in CY 2020.
    Response: We appreciate the commenters' concerns regarding 
available data and its use in OPPS ratesetting. However, we note that 
widespread use of claims data from two different years to set rates for 
a items and services in a single year could distort the OPPS relative 
payment weights, which we believe would be inappropriate and 
unnecessary when claims data from a single year--in this case, 2019--
are largely available for ratesetting and using these data generally to 
set CY 2022 rates allows us to avoid this sort of distortion. As a 
result, we are establishing a final policy of using CY 2019 claims for 
establishing the OPPS relative weights but allowing limited use of CY 
2020 claims for informational purposes where CY 2019 claims are not 
otherwise available. For additional detail regarding the use of CY 2019 
claims in CY 2022 OPPS ratesetting, please see section X.E. of this 
final rule with comment period.
    After consideration of the comments, we are finalizing the proposed 
assignment of CPT codes 28297 and 28740 to APC 5114, and the proposed 
assignment of CPT codes 0627T, 0629T and 0630T to APC 5115 for the CY 
2022 OPPS.
26. Non-Highly Enriched Uranium (Non-HEU) Sources (APC 1442)
    Radioisotopes are widely used in modern medical imaging, 
particularly for cardiac imaging and predominantly for the Medicare 
population. Some of the Technetium-99 (Tc-99m), the radioisotope used 
in the majority of such diagnostic imaging services, is produced in 
legacy reactors outside of the United States using highly enriched 
uranium (HEU).
    The United States would like to eliminate domestic reliance on 
these reactors, and is promoting the conversion of all medical 
radioisotope production to non-HEU sources. Alternative methods for 
producing Tc99m without HEU are technologically and economically 
viable, and conversion to such production has begun. We expect that 
this change in the supply source for the radioisotope used for modern 
medical imaging will introduce new costs into the payment system that 
are not accounted for in the historical claims data.
    Therefore, beginning in CY 2013, we finalized a policy to provide 
an additional payment of $10 for the marginal cost for radioisotopes 
produced by non-HEU sources (77 FR 68323). Under this policy, hospitals 
report HCPCS code Q9969 (Tc-99m from non-highly enriched uranium 
source, full cost recovery add-on per study

[[Page 63560]]

dose) once per dose along with any diagnostic scan or scans furnished 
using Tc-99m as long as the Tc-99m doses used can be certified by the 
hospital to be at least 95 percent derived from non-HEU sources (77 FR 
68321).
    Comment: Multiple commenters requested that we increase the payment 
rate for HCPCS add-on code Q9969 from $10 and to make the add-on code 
permanent. The commenters noted that we have not increased the payment 
rate for Q9969 since the code was established in CY 2013, and one of 
the commenters believes that we have made only token efforts to promote 
the use of non-HEU produced Mo-99, the parent nuclide to Tc-99m.
    One of the commenters supported a rate increase to Q9969 to fully 
reflect the additional cost to providers to obtain non-HEU medical 
isotopes. The same commenter suggested that if such a cost-analysis 
could not be done for CY 2022, we should increase the payment for Q9969 
by the annual market basket increase for CY 2022 along with a one-time 
increase to reflect prior increases to the market basket between CY 
2013 and CY 2021. Alternatively, the commenter suggested the payment 
rate could be increased by the change in the drug cost threshold 
packaging amount between CY 2013 and CY 2022.
    Response: We appreciate the information we received from the 
commenters supporting an increase to the payment rate of $10 for HCPCS 
code Q9969, especially since the conversion to non-HEU sources for 
medical isotopes has not been completed by all producers. As discussed 
in the CY 2013 OPPS/ASC final rule with comment period, we did not 
finalize a policy to use the usual OPPS methodologies to update the 
non-HEU add-on payment (77 FR 68317). The purpose of the additional 
payment is limited to mitigating any adverse impact of transitioning to 
non-HEU sources, and we believe the add-on is appropriate at this time.
    Comment: Multiple commenters supported the current payment amount 
for HCPCS code Q9969, and they requested that we finalize our proposed 
payment rate for the add-on.
    Response: We appreciate the support of the commenters for the 
proposed payment rate for HCPCS code Q9969.
    After consideration of the public comments we received, we are 
finalizing our proposal, without modification, to continue the policy 
of providing an additional $10 payment for radioisotopes produced by 
non-HEU sources for CY 2022 as represented by HCPCS code Q9969.
27. Nuclear Medicine Services: Single-Photon Emission Computed 
Tomography (SPECT) Studies (APC 5593)
    For CY 2022, we proposed to continue to assign CPT code 78803 
(Radiopharmaceutical localization of tumor, inflammatory process or 
distribution of radiopharmaceutical agent(s) (includes vascular flow 
and blood pool imaging, when performed); tomographic (spect), single 
area (eg, head, neck, chest, pelvis), single day imaging)) to APC 5593 
(Level 3 Nuclear Medicine and Related Services) with a proposed payment 
rate of $1,340.84.
    Comment: One commenter expressed support for the proposed APC 
assignment.
    Response: We thank the commenter for their support. We note that, 
based on our analysis of the claims data for this CY 2022 OPPS/ASC 
final rule with comment period, our data reveals a geometric mean cost 
of about $529.69 based on 4157 single claims (out of 9451 total 
claims), which is in line with the geometric mean cost of $1,273.36 for 
APC 5593.
    In summary, after consideration of the public comments, we are 
finalizing our proposal without modification to assign CPT code 78803 
to APC 5593. The final CY 2022 OPPS payment rate for this code can be 
found in Addendum B to this final rule with comment period. In 
addition, we refer readers to Addendum D1 of this final rule with 
comment period for the SI meanings for all codes reported under the 
OPPS. Both Addendum B and D1 are available via the internet on the CMS 
website.
28. Pathogen Test(s) for Platelets (APC 5733)
    For the July 2017 update, the HCPCS Workgroup established HCPCS 
code Q9987 (Pathogen(s) test for platelets) effective July 1, 2017. 
This new code and the OPPS APC assignment was announced in the July 
2017 OPPS quarterly update CR (Transmittal 3783, Change Request 10122, 
dated May 26, 2017). Subsequently, HCPCS code Q9987 was deleted on 
December 31, 2017, and replaced with permanent HCPCS code P9100 
(Pathogen(s) test for platelets) effective January 1, 2018. Each of the 
HCPCS codes were assigned to New Technology APCs for the period of July 
2017 through December 2020 with payment rates for the service ranging 
between $25.50 and $35.50. Starting in January 2021, we decided to 
assign P9100 to APC 5732 (Level 2 Minor Procedures) with a payment rate 
of approximately $33.
    From July 2017 until 2021, only one type of pathogen test for 
platelets, rapid bacterial testing, was described by HCPCS code P9100. 
The estimated cost for a rapid bacterial test was around $30, which has 
been confirmed through claims data. Starting in 2021, a new type of 
pathogen test for platelets, culture-based bacterial testing, using 
large volume delayed sampling (LVDS), was introduced. This culture-
based method is used to test for bacterial contamination of leukocyte-
reduced apheresis platelets and leukocyte-reduced whole blood platelet 
concentrates. We do not have claims data describing the cost of the 
LVDS test. For CY 2022, we proposed to assign HCPCS code P9100 to APC 
5732 (Level 2 Minor Procedures with a payment rate of approximately 
$33, which is the same APC assignment for HCPCS code P9100 as in CY 
2021.
    Comment: Two commenters requested we increase the payment rate for 
HCPCS code P9100 by moving the service from APC 5732 (Level 2 Minor 
Procedures) with payment rate of $32.98 to APC 5733 (Level 3 Minor 
Procedures) with a payment rate of $54.24. The commenters claim that 
the cost of the LVDS test is either $75 or $83, depending on which 
manufacturer's test is used, which is substantially higher than the 
approximately $30 cost of the rapid bacterial test for platelets. The 
commenters believe that the proposed payment rate of $32.98 for APC 
5732 is too low to adequately compensate hospitals for the share of 
pathogen tests for platelets using the more expensive culture-based 
test, using LVDS. Commenters believed assigning HCPCS code P9100 to APC 
5733 with a payment rate of $54.24 would better reflect the mixture of 
costs between culture-based platelet tests using LVDS and rapid 
bacterial tests.
    Response: We agree with the commenters that the payment rate for 
HCPCS code P9100 should better reflect the resource cost of the 
anticipated mixture of rapid bacterial platelet tests and culture-based 
platelet tests, using LVDS, that will be used in CY 2022 to test for 
bacterial contamination in platelets. Therefore, we support the 
suggestion of the commenters to reassign HCPCS code P9100 to APC 5733 
(Level 3 Minor Procedures) with a payment rate of $54.24.
    After reviewing the public comments, we have decided to modify our 
proposal and reassign HCPCS code P9100 from APC 5732 (Level 2 Minor 
Procedures) to APC 5733 (Level 3 Minor Procedures) for CY 2022. The 
final CY 2022 payment rate for HCPCS code P9100 can be found in 
Addendum B to this CY 2022 OPPS/ASC final rule with comment period

[[Page 63561]]

which is available via the internet on the CMS website.
29. Pulmonary Rehabilitation (APC 5733)
    For CY 2022, the AMA's CPT Editorial Panel created two new codes 
describing pulmonary rehabilitation services and requested that CMS 
delete HCPCS code G0424 (Pulmonary rehabilitation, including exercise 
(includes monitoring), one hour, per session, up to two sessions per 
day). We proposed to assign CPT code 94625 (Physician or other 
qualified health care professional services for outpatient pulmonary 
rehabilitation; without continuous oximetry monitoring (per session)) 
and CPT code 94626 (Physician or other qualified health care 
professional services for outpatient pulmonary rehabilitation; with 
continuous oximetry monitoring (per session)) to APC 5733 (Level 3 
Minor Procedures) with a proposed payment rate of $57.12. We note that 
CPT codes 94625 and 94626 were listed as placeholder codes 946X1 and 
946X2, respectively, in OPPS Addendum B of the CY 2022 OPPS/ASC 
proposed rule.
    Comment: Several commenters disagreed with the proposed APC 
assignment and requested that CMS reassign CPT codes 94625 and 94626 to 
either APC 5721 (Level 1 Diagnostic Tests and Related Services) with a 
proposed payment rate of $143.21 or to APC 5771 (Cardiac 
Rehabilitation) with a proposed payment rate of $119.09. These 
commenters stated that these APCs better reflected the clinical 
similarity and costs associated with furnishing these services.
    Response: CPT codes 94625 and 94626 do not describe diagnostic 
tests and so are not clinically similar to the other services in APC 
5721. While clinically similar to cardiac rehabilitation services, 
predecessor HCPCS code G0424 has a geometric mean cost of $45.63 based 
on 198,132 single claims (out of 199,356 total claims), which is 
significantly lower than the geometric mean cost of $113.12 for the 
services in APC 5771. Based on our analysis, we believe that assignment 
of CPT codes 94625 and 94626 to APC 5733 is appropriate because their 
costs are consistent with the cost data of the predecessor code. We 
note that we review, on an annual basis, the APC assignments for all 
items and services paid under the OPPS. We will consider whether the 
current APC structure adequately reflects the clinical similarities and 
costs associated with pulmonary rehabilitation services in future 
rulemaking.
    In summary, after consideration of the public comments, we are 
finalizing our proposal without modification to assign CPT codes 94625 
and 94626 to APC 5733. The final CY 2022 OPPS payment rates for the 
codes can be found in Addendum B to this final rule with comment 
period. In addition, we refer readers to Addendum D1 of this final rule 
with comment period for the SI meanings for all codes reported under 
the OPPS. Both Addendum B and D1 are available via the internet on the 
CMS website.
30. Sclerotherapy (APC 5054)
    For CY 2022, we proposed to continue assignment of both CPT codes 
36465 (Injection of non-compounded foam sclerosant with ultrasound 
compression maneuvers to guide dispersion of the injectate, inclusive 
of all imaging guidance and monitoring; single incompetent extremity 
truncal vein (for example, great saphenous vein, accessory saphenous 
vein)) and CPT code 36466 (Injection of non-compounded foam sclerosant 
with ultrasound compression maneuvers to guide dispersion of the 
injectate, inclusive of all imaging guidance and monitoring; multiple 
incompetent truncal veins (for example, great saphenous vein, accessory 
saphenous vein), same leg) to APC 5054 (Level 4 Skin Procedures) with a 
proposed payment rate of $1,759.21.
    Comment: One commenter disagreed with the proposed assignment of 
the procedures described by CPT codes 36465 and 36466 to APC 5054 and 
requested a reassignment to APC 5183 (Level 3 Vascular Procedures), 
which had a proposed payment rate of $2,937.76. The commenter stated 
that the per-procedure cost for the Varithena foam sclerosant used in 
the procedure is $1,054. The commenter stated that APC 5183 is more 
clinically appropriate and reflects the resources required to perform 
the procedure. Specifically, the commenter indicated that the 
procedures described by CPT codes 36465 and 36466 share similar 
clinical and resource characteristics to the following surgical 
procedures that are assigned to APC 5183:
     CPT code 36473 (Endovenous ablation therapy of incompetent 
vein, extremity, inclusive of all imaging guidance and monitoring, 
percutaneous, mechanochemical; first vein treated);
     CPT code 36475 (Endovenous ablation therapy of incompetent 
vein, extremity, inclusive of all imaging guidance and monitoring, 
percutaneous, radiofrequency; first vein treated); and
     CPT code 36478 (Endovenous ablation therapy of incompetent 
vein, extremity, inclusive of all imaging guidance and monitoring, 
percutaneous, laser; first vein treated).
    The commenter also stated that the proposed geometric mean cost of 
$1,567.45 for 36465 would not be the lowest cost procedure if placed in 
APC 5183 and that the geometric mean costs of CPT code 36466 would be 
better aligned with APC 5183.
    Response: Based on input from our clinical advisors, we believe 
that the procedures described by CPT codes 36465 and 36466 are 
clinically similar to the procedures assigned to APC 5054. We do not 
believe that the resources used for the procedures described by CPT 
codes 36465 and 36466 are comparable to the procedures described by CPT 
codes 36473, 36475, and 36478, which are assigned to APC 5183. We also 
note that the proposed geometric mean cost of $2,314.25 for CPT code 
36466 is greater than the other codes with significant volume in APC 
5183 and above the highest geometric mean cost of codes with 
significant volume in the next lower APC 5182 (Level 2 Vascular 
Procedures). Consequently, we believe that APC 5054 appropriately 
reflects the resources and clinical characteristics associated with the 
procedures described by CPT codes 36465 and 36466. We note that the 
geometric mean cost for APC 5054 is approximately $1,668.97, which 
exceeds the cost of the Varithena foam sclerosant ($1,054, as reported 
by the commenter) used in the procedure. We also note that the 
geometric mean costs for CPT codes 36465 and 36466 are well within the 
range of significant costs associated with APC 5054 ($1,402.75-
$2,752.68).
    Therefore, after consideration of the public comment received, we 
are finalizing our proposal without modification for assignment of the 
procedures described by CPT codes 36465 and 36466 to APC 5054. The 
final CY 2022 OPPS payment rates for the codes can be found in Addendum 
B to this final rule with comment period. In addition, we refer readers 
to Addendum D1 of this final rule with comment period for the SI 
meanings for all codes reported under the OPPS. Both Addendum B and D1 
are available via the internet on the CMS website.
31. Stromal Vascular Fraction (SVF) Therapy
    For CY 2022, we proposed to continue assignment of CPT codes 0565T 
(Autologous cellular implant derived from adipose tissue for the 
treatment of osteoarthritis of the knees; tissue harvesting and 
cellular implant creation) and 0566T (Autologous

[[Page 63562]]

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) to status indicator 
``E1'', indicating that these services are not paid by Medicare when 
submitted on outpatient claims.
    Comment: One commenter supported this proposal and indicated that 
adipose-derived stromal vascular fraction (SVF) therapy for 
osteoarthritis is an unproven treatment. The commenter stated that FDA 
has issued several warnings about unproven cellular therapies and 
regenerative medicines since they offer no proven clinical benefits and 
may harm patients. The commenter further reported there is no 
indication for which SVF has been proven to be safe and effective in 
well-controlled clinical trials. To eliminate abuse by businesses 
seeking to profit from unproven treatments, the commenter suggested not 
paying for SVF therapy since unproven therapies create economic burdens 
on health systems and patients.
    Response: We thank the commenter for their support.
    In summary, after consideration of the public comment, we are 
finalizing our proposal without modification to continue assignment of 
CPT codes 0565T and 0566T to status indicator ``E1''. We refer readers 
to Addendum D1 of this final rule with comment period for the SI 
meanings for all codes reported under the OPPS. Addendum D1 is 
available via the internet on the CMS website.
32. Synthetic Resorbable Skin Substitute
    The CY 2014 OPPS/ASC final rule with comment period describes skin 
substitute products as ``. . . a category of products that are most 
commonly used in outpatient settings for the treatment of diabetic foot 
ulcers and venous leg ulcers . . . [T]hese products do not actually 
function like human skin that is grafted onto a wound; they are not a 
substitute for a skin graft. Instead, these products are applied to 
wounds to aid wound healing and through various mechanisms of action 
that stimulate the host to regenerate lost tissue.'' (78 FR 74930 
through 74931). The CY 2014 OPPS/ASC final rule with comment period 
also described skin substitutes as ``. . . a class of products that we 
treat as biologicals . . .'' and mentioned that prior to CY 2014, skin 
substitutes were separately paid in the OPPS as if they were 
biologicals according to the ASP methodology (78 FR 74930 through 
74931).
    The CY 2014 OPPS final rule with comment period did not 
specifically mention whether synthetic products could be considered to 
be skin substitute products in the same manner as biological products, 
because there were no synthetic products at that time that were 
identified as skin substitute products. Then in 2018, a manufacturer 
made a request that an entirely synthetic product that it claimed is 
used in the same manner as biological skin substitutes, receive a HCPCS 
code that would allow the product to be billed with graft skin 
substitute procedure codes, including CPT codes 15271 through 15278 and 
C5271 through C5278, starting in 2019. Initially, the synthetic product 
was not described as a graft skin substitute product. However, we now 
believe that both biological and synthetic products could be considered 
to be skin substitutes for Medicare payment purposes.
    This view is supported by a paper referenced in a report we cited 
in the CY 2014 OPPS/ASC final rule with comment period titled ``Skin 
Substitutes for Treating Chronic Wounds Technology Assessment Report at 
ES- 2'', which is available on the AHRQ website at: https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/ta/skinsubs/HCPR0610_skinsubst-final.pdf.
    That paper, titled ``Regenerative medicine in dermatology: 
biomaterials, tissue engineering, stem cells, gene transfer and 
beyond'' by Dieckmann et al., states that skin substitutes should be 
divided into two broad categories: Biomaterial and cellular. The paper 
explains that ``. . . biomaterial skin substitutes do not contain cells 
(acellular) and are derived from natural or synthetic sources . . .'' 
The paper continues by describing biomaterial skin substitutes further: 
``Synthetic sources include various degradable polymers such as 
polylactide and polyglycolide. Whether natural or synthetic, the 
biomaterial provides an extracellular matrix that allows for 
infiltration of surrounding cells.'' The paper by Dieckmann et al. 
indicates that skin substitute products may be synthetic products as 
well as biological products.
    For CY 2021, we established a policy to include synthetic products 
in addition to biological products in our description of skin 
substitutes. Our new description defines skin substitutes as a category 
of biological and synthetic products that are most commonly used in 
outpatient settings for the treatment of diabetic foot ulcers and 
venous leg ulcers. We also retained the additional description of skin 
substitute products from the CY 2014 OPPS final rule which states ``. . 
. that skin substitute products do not actually function like human 
skin that is grafted onto a wound; they are not a substitute for a skin 
graft. Instead, these products are applied to wounds to aid wound 
healing and through various mechanisms of action they stimulate the 
host to regenerate lost tissue . . .'' (78 FR 74930 through 74931). 
Finally, our definition of skin substitutes does not include bandages 
or standard dressings and these items cannot be assigned to either the 
high cost or low cost skin substitute groups or be reported with either 
CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278. For 
CY 2022, we proposed to continue to report synthetic graft skin 
substitute products using HCPCS code C1849 in the same manner as in CY 
2021.
    Comment: As previously requested for CY 2021, several commenters 
requested that we establish product-specific HCPCS codes for synthetic 
graft skin substitute products and requested that we delete HCPCS code 
C1849 because the code is not product-specific. The primary reason 
commenters want product-specific codes for synthetic graft skin 
substitute is they feel that synthetic products should be assigned to 
either the high cost or low cost skin substitute group based on the 
cost of each individual product in a similar manner to biological skin 
substitute products. Commenters feel that because multiple synthetic 
graft skin substitute products can be assigned to HCPCS code C1849, 
there may be some synthetic products that should be in the low cost 
skin substitute group that will receive payment in the high cost skin 
substitute group if HCPCS code C1849 is assigned to the high cost 
group. Commenters also expressed concern about the opposite situation, 
in which high cost synthetic products would potentially be underpaid if 
HCPCS code C1849 is assigned to the low cost skin substitute group. 
Commenters believed the only resolution to these issues with HCPCS code 
C1849 is to delete the code and replace it with product-specific HCPCS 
codes for each graft synthetic product so there are not cases of 
synthetic products being either overpaid or underpaid.
    Response: HCPCS code C1849 was established in response to the need 
to pay for graft skin substitute application services performed with 
synthetic graft skin substitute products in the OPPS in a manner 
comparable to how we pay for graft skin substitute application services 
performed with biological graft skin substitute products. As mentioned 
earlier in this section, when we established our policy in the CY 2014 
OPPS/ASC final rule with comment period to package graft skin 
substitute

[[Page 63563]]

products into their associated application procedures (78 FR 74930 
through 74931), we did not specifically mention whether synthetic 
products could be considered skin substitute products in the same 
manner as biological products. The reason for this was that there were 
no synthetic products at that time that were identified as skin 
substitute products.
    We note that unless a graft skin substitute product has pass-
through status, graft skin substitute products are not paid separately 
under unique HCPCS or CPT codes in OPPS. However, in CY 2018, a 
manufacturer requested that CMS develop methodologies to allow 
synthetic graft skin substitute products to receive payment in the 
outpatient hospital setting and in the physician office setting. After 
extensive review, we made the determination to assign the synthetic 
product in CY 2019 to HCPCS codes A6460 and A6461, which were newly 
created HCPCS codes to report synthetic, resorbable wound dressings. 
HCPCS codes A6460 and A6461 are packaged under the OPPS and cannot be 
assigned to either the high cost or low cost skin substitute group. 
This meant that graft skin substitute products could not be billed with 
CPT codes 15271 through 15278 or HCPCS codes C5271 through C5278, even 
though synthetic graft skin substitute products and biological graft 
skin substitute products perform the same function and have similar 
efficacy. We quickly realized that using HCPCS codes A6460 and A6461 
would not work to appropriately describe the application of synthetic 
graft products when used in similar manner to biological graft skin 
substitute products. Therefore, we needed to consider other approaches 
to this issue.
    Because all skin substitutes, except those with pass-through 
status, are packaged under the OPPS, we explored solutions that would 
permit synthetic skin substitute products to be billed with either CPT 
codes 15271 through 15278 or HCPCS codes C5271 though C5278. We decided 
to create HCPCS code C1849 to describe any synthetic graft skin 
substitute product, and we revised the payment logic for the graft skin 
substitute application procedure codes to allow HCPCS code C1849 to be 
billed with those procedures. Multiple synthetic graft skin substitute 
products have now been identified as being described by HCPCS code 
C1849. We will average the pricing data from the various products to 
determine an amount for the products described by HCPCS code C1849 to 
compare against the MUC threshold. This comparison will determine if 
HCPCS code C1849 should be assigned to the high cost or low cost skin 
substitute category.
    We appreciate the concerns expressed by commenters that one service 
code for synthetic products could lead to low cost synthetic graft 
products receiving excess payment if HCPCS code C1849 is assigned to 
the high cost group, or lead to high cost synthetic graft products 
being underpaid if HCPCS code C1849 is assigned to the low cost group. 
We will take these concerns into consideration in future rulemaking.
    Comment: One commenter suggested that, if we do not establish 
product-specific HCPCS codes for each synthetic graft skin substitute 
product, we delete C1849 and establish two new HCPCS codes in its 
place. Specifically, the commenter recommended that one HCPCS code 
would be for high cost synthetic graft skin substitute products and the 
other HCPCS code would be for low cost synthetic graft skin substitute 
products. These two payment codes would ensure that all synthetic graft 
skin substitute products are assigned to the cost group that reflects 
whether the mean unit cost of any given synthetic graft skin substitute 
product is above or below the mean unit cost threshold for determining 
assignment to the high cost or low cost skin substitute group.
    Response: We appreciate the suggestion from the commenter. We note 
that our policy is to allow all synthetic skin substitutes described by 
C1849 to bill the skin graft application CPT codes for high cost skin 
substitute products (CPT codes 15271 through 15278). We appreciate the 
commenters suggestion, which we will consider for future rulemaking.
    Comment: One commenter provided suggestions on how we could revise 
our definition of synthetic graft skin substitute products to reduce 
the possibility that synthetic dressings or non-resorbable polymeric 
sheets could be considered synthetic skin substitute products and be 
reported using HCPCS code C1849.
    Response: We thank the commenter for their suggestions. Currently, 
we do not believe that there is an issue with the definition of 
synthetic skin substitute products that we established for the CY 2021 
OPPS/ASC final rule (85 FR 86064 through 86067). If during future 
rulemaking we find that synthetic graft products that do not function 
as skin substitutes are being reported using HCPCS code C1849, we may 
refer to the commenter's suggestions to help us revise our definition 
of synthetic graft skin substitute products.
33. Therapeutic Ultrafiltration (APC 5241)
    As displayed in Addendum B to the CY 2022 OPPS/ASC proposed rule, 
we proposed to assign placeholder CPT code 0692T (Therapeutic 
Ultrafiltration) to SI ``E1'' to indicate that the code is not payable 
by Medicare when submitted on outpatient claims (any outpatient bill 
type) because the service associated with the code is either not 
covered by any Medicare outpatient benefit category, is statutorily 
excluded from Medicare payment, or is not reasonable and necessary. We 
note that CPT code 0692T was listed as placeholder code 057XT in OPPS 
Addendum B of the CY 2022 OPPS/ASC proposed rule.
    Comment: Some commenters reported that the device associated with 
the CPT code 0692T describing therapeutic ultrafiltration received FDA 
approval by the U.S. Food and Drug Administration (FDA) in 2020 and 
requested separate payment for the code. They specifically requested 
assignment to APC 5242 (Level 2 Blood Product Exchange and Related 
Services) and SI ``S'' (Paid under OPPS; separate APC payment). They 
stated that CPT codes 36511 (Therapeutic apheresis; for white blood 
cells), and 36514 (Therapeutic apheresis; for plasma pheresis), which 
are assigned to APC 5242 and SI ``S,'' can be considered similar to 
therapeutic ultrafiltration in clinical and resource coherence.
    Response: For CY 2022, OPPS payments are based on claims submitted 
between January 1, 2019, through December 31, 2019, and processed 
through June 30, 2020. Because CPT code 0692T is a new code that will 
be effective January 1, 2022, we have no claims data available for 
ratesetting. However, after further review of the service, we believe 
that CPT code 0692T shares similar clinical characteristics and 
resource costs as CPT code 36513 (Therapeutic apheresis; for 
platelets), which is currently assigned to APC 5241 (Level 1 Blood 
Product Exchange and Related Services). Therefore, we are assigning CPT 
code 0692T to APC 5241 and SI ``S'' for CY 2022. The final payment rate 
for the code can be found in Addendum B to this final rule with comment 
period. In addition, the SI definitions can be found in Addendum D1 to 
this final rule with comment period. Both Addendum B and Addendum D1 
are available via the internet on the CMS website.
    We note that we review, on an annual basis, the APC assignments for 
all services and items paid under the OPPS. As a result, we will 
reevaluate the APC

[[Page 63564]]

placement for CPT code 0692T for the next rulemaking cycle.
34. Transcatheter Implantation of Coronary Sinus Reduction Device
    The Neovasc Reducer System is a novel device implanted into the 
coronary sinus vein using minimally invasive techniques. The Reducer is 
implanted by transvenous percutaneous approach from the right or left 
jugular vein into the coronary sinus. After positioning the balloon 
catheter at the implantation site, the Reducer is deployed by inflating 
the balloon catheter until apposition of the vessel wall is achieved. 
The balloon catheter is then deflated and removed from the coronary 
sinus, leaving the Reducer permanently inflated. After 6 to 8 weeks the 
hourglass shaped wire mesh is covered with endothelium and narrowing 
becomes effective by redistributing blood flow to ischemic areas of the 
heart.
    In 2021, Neovasc received FDA approval for the Investigational 
Device Exemption (IDE) regarding the COSIRA-II Clinical Trial. COSIRA-
II is a randomized, sham-controlled trial investigating the safety and 
effectiveness of the Reducer for patients suffering from refractory 
angina. Neovasc has been classified as a Category B device by FDA.
    In addition, the AMA's Editorial Panel established a new code, 
specifically, CPT code 0645T (Transcatheter implantation of coronary 
sinus reduction device including vascular access and closure, right 
heart catheterization, venous angiography, coronary sinus angiography, 
imaging guidance, and supervision and interpretation, when performed), 
to describe the implantation of a coronary sinus reduction device that 
is associated with the Neovasc Reducer System. This code was effective 
July 1, 2021.
    For CY 2022, we proposed to assign CPT code 0645T to SI ``E1'' to 
indicate that the code is not paid by Medicare when submitted on 
outpatient claims (any outpatient bill type).
    Comment: One commenter, specifically, the manufacturer of the 
Neovasc Reducer System, requested assignment to either New Technology 
APC 1576 (New Technology--Level 39 ($15,001-$20,000) with the payment 
rate of $17,500.50, or New Technology APC 1577 (New Technology--Level 
40 ($20,001-$25,000) with the payment rate of $22,500.50, in 
anticipation of its approval by Medicare for its Category B IDE study. 
The company stated there are no other surgical procedures that are 
similar in terms of resource costs and clinical homogeneity that would 
allow for the Neovasc Reducer System to be assigned to an appropriate 
clinical APC.
    Response: Based on the information presented by the commenter, and 
our review of the IDE study, we do not believe that it is appropriate 
to assign a payable status indicator under the OPPS to CPT code 0645T 
prior to the approval of the Category B IDE study. In addition, the 
clinical study has not yet met CMS' standards for coverage, nor does it 
appear on the CMS Approved IDE List, which can be found at this CMS 
website: https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html. Because the Neovasc Reducer System has not been approved 
for Medicare coverage as a Category B IDE, we believe that we should 
continue to assign CPT code 0645T to status indicator ``E1''. If this 
technology later meets CMS's standards for coverage, we will assess the 
APC assignment for the code in a future quarterly update and/or 
rulemaking cycle.
    Therefore, after consideration of the public comment, we are 
finalizing our proposal, without modification, to assign CPT code 0645T 
to SI ``E1''. We refer readers to Addendum D1 to this final rule with 
comment period for the complete list of the OPPS payment status 
indicators and their definitions for CY 2022. Addendum D1 is available 
via the internet on the CMS website.
35. Tympanostomy Using an Automated Tube Delivery System (APC 5163)
    For CY 2022, we proposed to continue to assign CPT code 0583T to 
APC 5163 (Level 3 ENT Procedures) with a proposed payment rate of 
$1,387.72.
    Comment: A few commenters disagreed with our proposed APC 
assignment. These commenters stated that CPT code 0583T should be 
reassigned to APC 5164 (Level 4 ENT Procedures) or APC 1523 (New 
Technology--Level 23 ($2,501-$3,000)) with proposed payment rates of 
$2,806.94 and $2,750.50, respectively. Commenters stated that CPT code 
0583T is clinically similar to CPT code 69421 (Myringotomy including 
aspiration and/or eustachian tube inflation requiring general 
anesthesia), which is assigned to APC 5164. Commenters further stated 
that APC 5164 also includes many other middle ear procedures that 
involve an incision, revision, repair, and removal of tubes.
    Response: We disagree with commenters on the clinical similarity 
between CPT code 0583T and the other services in APC 5164. For the 
reasons discussed in the CY 2021 OPPS final rule with comment period 
(85 FR 85983), based on our review of the procedure and input from our 
medical advisors, we continue to believe that the surgical procedure 
described by CPT code 0583T is most similar, in terms of clinical 
homogeneity and resource cost, to CPT code 69436 (Tympanostomy 
(requiring insertion of ventilating tube), local or topical 
anesthesia), which is assigned to APC 5163. Both procedures (as 
described by CPT codes 0583T and 69436) require ventilating tubes that 
require anesthesia.
    In summary, after consideration of the public comments, we are 
finalizing our proposal without modification to continue assignment of 
CPT code 0583T to APC 5163. The final CY 2022 OPPS payment rates for 
these codes can be found in Addendum B to this final rule with comment 
period. In addition, we refer readers to Addendum D1 of this final rule 
with comment period for the SI meanings for all codes reported under 
the OPPS. Both Addendum B and D1 are available via the internet on the 
CMS website.
36. Urology and Related Services (APCs 5371 Through 5378)
    For CY 2016, we established the APC reorganization and developed a 
urology specific series of APCs 5371-5377. Since that time, we have 
maintained that structure and added an additional level 8, APC 5378 
(Level 8 Urology and Related Services). Based on our analysis of the CY 
2019 claims available for ratesetting, we proposed to continue the 8 
level structure of Urology APCs in the CY 2022 OPPS. We received 
comments on the CY 2022 OPPS/ASC proposed rule suggesting we revise the 
APC assignments for the services assigned to the Urology & Related 
Services APCs. A commenter specifically noted that a reorganization for 
APCs 5375 through 5376 would be appropriate, but added that there were 
other adjustments across services within the Urology APCs that could 
improve the structure of these APCs.
    We received several comments on APC reassignments. Below are the 
comments and our responses.
a. High-Intensity Focused Ultrasound of the Prostate (HIFU) Procedure 
(APC 5375)
    In 2017, CMS received a new technology application for the prostate 
HIFU procedure and established a new code, specifically, HCPCS code 
C9747 (Ablation of prostate, transrectal, high intensity focused 
ultrasound (hifu), including imaging guidance). Based on the estimated 
cost provided in the new technology application, we assigned the new 
code to APC 5376 (Level 6 Urology and Related Services) with a payment 
rate of $7,452.66 effective July 1, 2017.

[[Page 63565]]

We announced the SI and APC assignment in the July 2017 OPPS quarterly 
update CR (Transmittal 3783, Change Request 10122, dated May 26, 2017).
    For the CY 2018 update, we maintained the assignment of HCPCS code 
C9747 to APC 5376 with a payment rate of $7,596.26. We note that the 
payment rates for the CY 2018 OPPS update were based on claims 
submitted between January 1, 2016 through December 30, 2016, that were 
processed on or before June 30, 2017. Since HCPCS code C9747 was 
established on July 1, 2017, we had no claims data for the procedure 
for use in ratesetting for CY 2018.
    However, for the CY 2019 update, based on the latest claims data 
for the final rule, we revised the APC assignment for HCPCS code C9747 
from APC 5376 to APC 5375 with a payment rate of $4,020.54. We note 
that the payment rates for CY 2019 were based on claims submitted 
between January 1, 2017 through December 30, 2017, that were processed 
on or before June 30, 2018. Our claims data showed a geometric mean 
cost of approximately $5,000 for HCPCS code C9747 based on 64 single 
claims (out of 64 total claims), which was significantly lower than the 
geometric mean cost of about $7,717 for APC 5376. We believed that the 
geometric mean cost for HCPCS code C9747 was more comparable to the 
geometric mean cost of approximately $4,055 for APC 5375. Consequently, 
we reassigned the code from APC 5376 to APC 5375 (Level 5 Urology and 
Related Services) for CY 2019 and C9747 remained in APC 5375 for CY 
2020.
    For the CY 2021 update, we replaced HCPCS code C9747 with CPT code 
55880 (Ablation of malignant prostate tissue, transrectal, with high 
intensity-focused ultrasound (hifu), including ultrasound guidance) on 
January 1, 2019. We maintained the assignment of HCPCS code C9747 to 
APC 5375 with a payment rate of $4,413.90. We note that the payment 
rates for the CY 2021 OPPS update were based on claims submitted 
between January 1, 2019 through December 30, 2019, that were processed 
on or before June 30, 2020. Our claims data showed a geometric mean 
cost of approximately $5,744,43 for HCPCS code C9747 (CPT code 55880) 
based on 279 single claims (out of 284 total claims), which was 
assigned to APC 5375 with a geometric mean cost of about $4,299.81.
    For CY 2022, we proposed to continue to assign HCPCS code C9747 to 
APC 5375 with a proposed payment rate $4,527.23.
    Comment: Several commenters requested CPT code 55880 be reassigned 
to APC 5376 from APC 5375. The commenters argued that the average cost 
of the HIFU procedure is closer to the APC 5376 proposed payment rate 
of $8,468.32. Several commenters recommended we assign this procedure 
to APC 5376 because they believe the service is clinically similar and 
comparable in terms of resources to cryoablation of the prostate, which 
is described by CPT code 55873 (Cryosurgical ablation of the prostate 
(includes ultrasonic guidance and monitoring) and assigned to APC 5376 
(Level 6 Urology and Related Services), with a proposed payment rate of 
$8,468.32. They also stated that the new CPT code 55880 descriptor 
treats malignant prostate tissue, which requires additional resources 
relative to its predecessor code descriptor that treated BPH. Some 
commenters stated that the CY 2019 OPPS reassignment of HCPCS code 
C9747 to APC 5375 from APC 5376 was due to inaccurate and incomplete 
claims that did not include the substantial cost of the disposable 
device required for the procedure and stated that HIFU is a device-
intensive procedure. They alleged the underpayment for HIFU discourages 
hospitals from providing this procedure for Medicare patients because 
the APC 5375 payment rate does not cover the hospital facility cost for 
this procedure. They alleged that maintaining the assignment in APC 
5375 will deter HOPD facilities from offering the HIFU treatment to 
Medicare beneficiaries because the payment is insufficient to cover the 
cost of the procedure. Several commenters argued that the current HIFU 
payment is a health equity issue because Americans in a lower socio-
economic class will have less access to high-quality healthcare. 
Furthermore, the commenters stated that prostate cancer affects more 
men of color whose rate of death is almost twice that of non-Hispanic 
white men.
    Response: We review, on an annual basis, the APC assignments for 
all services and items (including devices) paid under the OPPS based on 
our analysis of the latest claims data. For CY 2021, based on 
predecessor HCPCS code C9747, our claims data supported maintaining CPT 
code 55880 in APC 5375. For CY 2022, based on our analysis of the 
claims for this CY 2022 OPPS/ASC final rule with comment period, our 
data shows a geometric mean cost of approximately $5,708 for HCPCS code 
C9747 based on 279 single claims, which is more comparable to the 
geometric mean cost of about $4,299 for APC 5375, rather than the 
geometric mean cost of approximately $8,042 for APC 5376. Although we 
are not applying the CY 2020 claims data for the CY 2022 ratesetting 
due to the PHE, we noted that the geometric mean cost associated with 
HCPCS code C9747 is about $6,654, which is between the geometric means 
of APC 5375 and APC 5376. Our clinical advisors also acknowledge the 
clinical and resource similarity between CPT code 55880 and CPT code 
55873, both of which are treatment options for prostate cancer. We 
performed several APC modeling studies on the impact of reassigning a 
set of codes to better balance the procedures within APC 5375 and 5376, 
and we found that the reassignment of these codes would impact the 
payment level of both APC 5375 and 5376.
    In summary, after careful consideration of the public comments, and 
after our analysis of the claims data for this final rule with comment 
period, we are maintaining the APC assignment for CPT code 55880 in APC 
5375, but will consider its reassignment in future rulemaking. The 
final CY 2022 payment rate for CPT code 55880 can be found in Addendum 
B to this final rule with comment period. In addition, we refer readers 
to Addendum D1 to this final rule with comment period for the SI 
meanings for all codes reported under the OPPS. Both Addendum B and D1 
are available via the internet on the CMS website.
b. Rez[umacr]m Procedure--Water Vapor Thermotherapy (APC 5373)
    In 2018, CMS established a new code, specifically, HCPCS code C9748 
(Transurethral destruction of prostate tissue; by radiofrequency water 
vapor (steam) thermal therapy). Based on its estimated cost, we 
assigned the new code to APC 5373 (Level 3 Urology and Related 
Services) with a payment rate of $1,695.68 effective January 1, 2018. 
We announced the SI and APC assignment in the January 2018 OPPS 
quarterly update CR (Transmittal 3941, Change Request 10417, dated 
December 22, 2017).
    For the CY 2019 update, we replaced HCPCS code C9748 with CPT 53854 
(Transurethral destruction of prostate tissue; by radiofrequency 
generated water vapor thermotherapy) on January 1, 2019. We maintained 
the assignment of CPT 53854 (HCPCS code C9748) to APC 5373 with a 
payment rate of $1,695.57. We note that the payment rates for the CY 
2018 OPPS update were based on claims submitted between January 1, 2017 
through December 30, 2017, that were processed on or before June 30, 
2018. Since HCPCS code C9748

[[Page 63566]]

was established on January 1, 2018, we had no claims data for the 
procedure for use in ratesetting for CY 2019.
    For the CY 2020 update, we maintained the assignment of HCPCS code 
53854 to APC 5373 with a payment rate of $1,771.35. We note that the 
payment rates for the CY 2020 OPPS update were based on claims 
submitted between January 1, 2018 through December 30, 2018, that were 
processed on or before June 30, 2019. Our claims data showed a 
geometric mean cost of approximately $1,899.18 for HCPCS code C9748 
based on 191 single claims (out of 192 total claims), which was 
assigned to APC 5373 with a geometric mean of about $1,733.35.
    For the CY 2021 update, we maintained the assignment of HCPCS code 
53854 to APC 5373 with a payment rate of $1,792.99. We note that the 
payment rates for the CY 2020 OPPS update were based on claims 
submitted between January 1, 2019, through December 30, 2019, that were 
processed on or before June 30, 2020. Our claims data showed a 
geometric mean cost of approximately $2,414.69 for HCPCS code 53854 
based on 751 single claims (out of 752 total claims), which was 
assigned to APC 5373 with a geometric mean cost of about $1,746.64.
    For CY 2022, we proposed to continue to assign HCPCS code 53854 to 
APC 5373 with a proposed payment rate $1,839.83.
    Comment: A commenter requested the reassignment of CPT code 53854 
to APC 5374 (Level 4 Urology and Related Services) from APC 5373 (Level 
3 Urology and Related Services). The commenter stated the geometric 
mean costs associated with CPT Code 53854 are significantly higher than 
either all significant or almost all significant other procedures in 
APC 5373. The commenter further stated that based on the CY 2019 claims 
data, CPT code 53854 yields a geometric mean cost of about $2,410 with 
751 single frequency claims and suggested the geometric mean cost of 
CPT code 53854 is much closer to the geometric mean cost of APC 5374, 
which is approximately $2,996. The commenter cited the year over year 
increase in geometric cost of 18 percent or $423 from 2019 to 2020. In 
addition, the commenter stated CPT 53854 is a transurethral procedure 
for the treatment of benign prostatic hyperplasia (BPH) and is more 
clinically similar to the two transurethral BPH procedure codes CPT 
53850 (Transurethral destruction of prostate tissue; by microwave 
thermotherapy) and CPT 53852 (Transurethral destruction of prostate 
tissue; by radiofrequency thermotherapy) assigned to APC 5374.
    Response: We appreciate the commenter's input on this subject. 
Based on our evaluation of the latest claims data for this final rule 
with comment period, we noted the geometric mean cost associated with 
CPT code 53854 (HCPCS C9748) increased from $1,899.18 (from the CY 2018 
claims data) to $2,412.55 (from the CY 2019 claims data), which 
represented an approximately 27 percent increase year-over-year. Based 
on our review, our medical advisors agreed with the commenter that CPT 
code 53854 is similar to CPT code 53850 and CPT code 53852 in terms of 
clinical characteristics and resource. We noted that CPT codes 53850 
and 53852 represent treatment options for BPH which are assigned to APC 
5374 (Level 4 Urology and Related Services) while there are no BPH 
treatment procedures assigned to APC 5373 with the exception of CPT 
code 53854.
    In summary, after consideration of the public comments, we are 
finalizing our proposal with modification and reassigning CPT code 
53854 to APC 5374 from APC 5373 for CY 2022. The final CY 2022 OPPS 
payment rate for this code can be found in Addendum B to this final 
rule with comment period. In addition, we refer readers to Addendum D1 
to this final rule with comment period for the SI meanings for all 
codes reported under the OPPS. Both Addendum B and D1 are available via 
the internet on the CMS website.
37. VisONE Synchronized Diaphragmatic Stimulation (SDS) System
    For CY 2022, the CPT Editorial Panel created CPT codes 0674T 
through 0685T, which are listed in Table 29, to describe the 
VisONE[supreg] Synchronized Diaphragmatic StimulationTM 
(SDS[supreg]) System. For CY 2022, we proposed to assign these codes to 
OPPS SI ``E1'', indicating that these services are not paid by Medicare 
when submitted on outpatient claims. We note these codes were listed as 
placeholder codes 050XT through 055XT in OPPS Addendum B of the CY 2022 
OPPS/ASC proposed rule.
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    Comment: A commenter reported that the device associated with these 
codes has been approved for Breakthrough Device Designation by the FDA. 
The commenter added that they are currently in the process of applying 
for Medicare national coverage for the clinical trial as a Category B 
IDE study. The commenter requested that we crosswalk the new codes to 
the SIs and APC assignments of comparable procedures involving other 
stimulation technologies so that appropriate hospital outpatient 
payment may be made in the event the Category B IDE study is approved 
for Medicare coverage. The commenter listed the comparable codes with 
the SI and APCs assignments. See Table 30 for SI and APC assignments 
requested by commenter.

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    Response: The clinical trial associated with CPT codes 0674T 
through 0685T does not appear on the CMS Approved IDE List, which can 
be found at this CMS website: https://www.cms.gov/Medicare/Coverage/IDE/Approved-IDE-Studies.html. While we recognize the commenter's 
assertion that is was accepted for FDA's Breakthrough Device 
Designation and that it intends to apply for Medicare coverage as a 
Category B IDE clinical trial, since the clinical trial associated with 
these codes has not been approved for Medicare coverage, we believe we 
should continue to assign CPT codes 0674T through 0685T to SI ``E1'' 
for CY 2022. If Medicare approves the clinical trial as a Category B 
IDE study, we will reassess the SI and APC assignments for the codes.
    In summary, after consideration of the public comments, we are 
finalizing our proposal without modification. Specifically, we are 
finalizing our continued assignment of CPT code=0674T through 0685T to 
OPPS SI ``E1.''

IV. OPPS Payment for Devices

A. Pass-Through Payment for Devices

1. Beginning Eligibility Date for Device Pass-Through Status and 
Quarterly Expiration of Device Pass-Through Payments
a. Background
    The intent of transitional device pass-through payment, as 
implemented at 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

[[Page 63570]]

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. Currently, there are 11 device categories eligible for 
pass-through payment. These devices are listed in Table 31. 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 
X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188), due to the 
effects of the COVID-19 PHE, we proposed 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 
proposed 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 finalized policy 
is included in section X.F. of this CY 2022 OPPS/ASC final 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 31 shows the expiration dates of transitional pass-through 
payments for these devices.
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2. New Device Pass-Through Applications for CY 2022
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 are 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.2. of the CY 2022 
OPPS/ASC proposed rule (86 FR 42085), 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 the 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 FDA), or meet another appropriate FDA exemption; 
and the pass-through payment application must be submitted within 3 
years from the date of the initial FDA marketing authorization, if 
required, unless there is a documented, verifiable delay in U.S. market 
availability after FDA marketing

[[Page 63572]]

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 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.
    Comment: One commenter recommended that, for devices with FDA 
Breakthrough Device designation, CMS remove the requirement that the 
device prove they are not described by an existing transitional pass-
through category. The commenter asserted that FDA Breakthrough Device 
designation implies that a device is a first of kind in addressing the 
condition for which it is indicated.
    Response: We appreciate the commenter's input but note that we did 
not propose to eliminate the device category requirement in the CY 2022 
OPPS/ASC proposed rule. Moreover, section 1833(t)(6)(B)(ii) requires 
the Secretary to establish categories of medical devices in a manner 
such that no medical device is described by more than one category and 
to promptly establish a new category of medical devices for any new 
medical devices for which none of the categories in effect or 
previously in effect is appropriate.
    Comment: One commenter asked that CMS provide additional guidance 
to medical technology innovators to help clarify requirements for 
demonstrating ``substantial clinical improvement'' for purposes of 
transitional pass-through payment eligibility. The commenter stated 
that greater clarity should be provided in particular with regard to 
the evidence types and study designs that may be considered in 
evaluating substantial clinical improvement, including methods beyond 
randomized clinical trials (RCTs) that would produce evidence 
sufficient to demonstrate substantial clinical

[[Page 63573]]

improvement in a shorter period of time and at reduced cost.
    Response: We appreciate the commenter's input, but note that this 
comment is outside the scope of this rulemaking. We refer the commenter 
to the Device Pass-through application located on the CMS website 
(https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf) for further information 
regarding what evidence is considered in evaluating substantial 
clinical improvement of devices.
    Comment: One commenter offered their general support for our 
proposal to approve all eight applications for device pass-through 
status included in the CY 2022 OPPS/ASC proposed rule. The commenter 
added that CMS needs to ensure that pass-through payment amounts 
adequately cover the cost of the device to ensure that Medicare 
beneficiaries have access to innovative services and reduce facilities' 
economic burdens. The commenter also believed CMS should refrain from 
factoring a procedure off-set amount into the calculation of payment 
for these transitional pass though approved services.
    Response: We appreciate the general support for our proposals to 
approve the applications discussed in the CY 2022 OPPS/ASC proposed 
rule and the recommendations provided by the commenter. Our 
determinations on each application are described in detail in the next 
section. As we have in prior years, CMS continues to evaluate the 
application of the device offset amount on a case by case basis to 
ensure the appropriate payment is made for a device on pass-through 
status. In cases where a device on pass-through status replaces 
previously existing technologies, we continue to believe it is 
appropriate to apply the device offset amount.
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 in section IV.2.b.1. of this 
final rule with comment period.
    Applications received for the later deadlines for the remaining 
2021 quarters (June 1, September 1, and December 1), if any, will be 
discussed 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.
    Discussions of the applications we received by the March 1, 2021 
deadline are 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 the CY2022 
OPPS/ASC 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[supreg] System
    AVITA Medical submitted an application for a new device category 
for transitional pass-through payment status for the RECELL[supreg] 
System (RECELL[supreg]) for CY 2022. According to the applicant, 
RECELL[supreg] 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[supreg] is a stand-alone, single-use, 
battery-powered device used to process and apply an autologous skin 
cell suspension. According to the applicant, RECELL[supreg] is a Class 
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[supreg] system involves harvesting a small graft from the 
patient's healthy skin and placing it into the RECELL[supreg] 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[supreg] when compared to 
procedures involving a split-thickness skin graft (STSG) without 
RECELL[supreg]; where typical STSG expansion ranges from 2:1 to 6:1, 
RECELL[supreg] 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[supreg] 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[supreg] 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[supreg] 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,

[[Page 63574]]

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[supreg] 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 32:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.045


[[Page 63575]]


[GRAPHIC] [TIFF OMITTED] TR16NO21.046

BILLING CODE 4120-01-C
---------------------------------------------------------------------------

    \24\ Instructions for use--RECELL [reg] Autologous Cell 
Harvesting Device. Food and Drug Administration. https://www.fda.gov/media/116382/download.
    \25\ Ibid.
    \26\ 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.
    \27\ 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.
    \28\ Directions for Use--Epicel (cultured epidermal 
autograpfts). Food and Drug Administration. https://www.fda.gov/vaccines-blood-biologics/approved-blood-products/epicel-cultured-epidermal-autografts.
    \29\ 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 newness criterion at Sec.  419.66(b)(1), 
RECELL[supreg] is part of the FDA Breakthrough Devices Program. The 
applicant stated that RECELL[supreg] received PMA on September 20, 
2018. The applicant added that RECELL[supreg] 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[supreg] on August 7, 2020, which is within 3 years of the date 
of the initial FDA marketing authorization. We invited public comment 
on whether the RECELL[supreg] meets the newness criterion.
    Comment: The applicant reiterated that RECELL[supreg] received FDA 
PMA on September 20, 2018.
    Response: We appreciate the commenter's input. Because we received 
the RECELL[supreg] pass-through application on August 7, 2020, which is 
within 3 years of September 20, 2018, the date of FDA premarketing 
approval, we agree that the RECELL[supreg] meets the newness criterion. 
With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, RECELL[supreg] 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[supreg] meets the device eligibility 
requirements of Sec.  419.66(b)(4) because it is not equipment, 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[supreg] as a device that processes tissue into an 
autograft, we stated that it appears that the RECELL[supreg] system may 
not be surgically implanted or inserted (either permanently or 
temporarily) or applied in or on a wound or other skin lesion. We noted 
that we believed the product of the RECELL[supreg] system, the 
suspension, may be applied on a wound, but we were not certain that 
this suspension qualifies as a device. We invited public comments on 
whether RECELL[supreg] meets the eligibility criteria at Sec.  
419.66(b).
    Comment: In response to our concern regarding whether the 
suspension, that is applied in or on a wound or other skin lesion is 
the device for purposes of the requirement in Sec.  419.66(b) one 
commenter stated that FDA approved all components of the RECELL[supreg] 
as a device, and that in order to treat a patient, all components of 
the RECELL[supreg] device are required to treat the patient. Multiple 
commenters stated the process of harvesting, creating and applying the 
suspension as one continuous process would not be possible without the 
device hardware; the hardware and suspension are tightly integrated and 
there is no treatment without the suspension. Another commenter added 
that the buffer solution is a component of the RECELL[supreg] device, 
which allows the expansion of the donor skin and provides a suspension 
mechanism for the skin cells to be applied directly on the patient's 
burn wound.
    Response: We thank the commenters for their input. We have taken 
this information into consideration in our final determination of 
whether the device meets the criteria in Sec.  419.66(b)(3) and Sec.  
419.66(b)(4), discussed below.
    Comment: The applicant asserted that RECELL[supreg] is an integral 
part of the service, which cannot be performed without all device 
components including the suspension, is used for a single patient only, 
comes in contact with human tissue and is applied on a wound, and 
therefore, the applicant believes the RECELL[supreg] device meets the 
criteria in Sec.  419.66(b)(3).
    In response to our concern that the device is not applied in or on 
a wound or other skin lesion, the applicant stated that the 
RECELL[supreg] device is intended to harvest the cells from the 
patient's own donor skin to create a skin cell suspension which is then 
applied directly on the debrided and excised burn wound using a syringe 
fitted with a spray nozzle. According to the applicant, the RES 
Regenerative Epidermal Suspension (``Suspension'') contains autologous 
skin cells and buffer solution, a RECELL[supreg] device component, 
which is directly applied in or on a wound. The applicant added that 
the buffer is a pH neutral solution (sodium lactate) in liquid form 
that is used to carry, expand, and deliver the harvested skin cells in 
the RES Suspension for direct application to the burn wound. According 
to the applicant, RECELL[supreg] could not accomplish its intended use 
as described in its FDA label without the buffer, which is a necessary 
component of the device. The applicant and another commenter also 
contended that the Suspension qualifies as a device under FDA's 
definition, and cited provisions of the Federal Food, Drug, and 
Cosmetic Act and FDA guidance that they believed supported this 
position,
    Response: We appreciate the additional information from the 
applicant and commenters. The applicant and commenters indicated that 
the RECELL[supreg] device consists of several components, one of which 
is the buffer, which is combined with harvested skin cells to create 
the suspension that is then applied to a wound. Because the buffer, a 
component of the device, is part of the

[[Page 63576]]

suspension that is applied in or on a wound, RECELL[supreg] meets the 
eligibility criterion specified at Sec.  419.66(b)(3)). We did not 
receive any comments in regard to Sec.  419.66(b)(4), whether the 
device is equipment, an instrument, apparatus, implement, or item for 
which depreciation and financing expenses are recovered, and whether 
the device is a supply or material furnished incident to a service. 
Because the applicant asserted that the RECELL[supreg] device met the 
eligibility requirements at Sec.  419.66(b)(4) and we agree, we 
conclude that the RECELL[supreg] device meets this eligibility 
criterion.
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. We stated in 
the CY 2022 OPPS/ASC proposed rule that we have not yet identified an 
existing pass-through payment category that describes RECELL[supreg]. 
We invited public comment on whether RECELL[supreg] meets the device 
category criterion.
    Comment: The applicant asserted the RECELL[supreg] meets the first 
criterion for establishing a new device category at Sec.  419.66(c)(1) 
because there are no existing categories established for device TPT 
that describe the RECELL[supreg] device.
    Response: We agree there is no existing pass-through payment 
category that appropriately describes the RECELL[supreg] because no 
current category appropriately describes a device that creates a 
suspension from an autograft of the patient's skin that is then applied 
to treat acute thermal burns. Based on this information, we have 
determined that the RECELL[supreg] meets the first eligibility 
criterion at Sec.  419.66(c)(1).
    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 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[supreg] System has a Breakthrough Device designation and 
marketing authorization from FDA, and therefore, is not evaluated for 
substantial clinical improvement. We note that the applicant applied 
for new technology add-on payment under the alternative pathway for 
Breakthrough devices, as discussed in the FY 2022 IPPS/LTCH PPS final 
rule (86 FR 45150 through 45151). While we have determined that the 
RECELL[supreg] device meets the newness criterion for OPPS device pass-
through eligibility, in the FY 2022 IPPS/LTCH PPS final rule, we found 
that the RECELL[supreg] device was not within the newness period for FY 
2022 for eligibility for new technology add-on payments and was 
therefore ineligible to receive these payments (86 FR 45151).
    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[supreg] 
would be reported with the HCPCS codes listed in the following Table 
33:
[GRAPHIC] [TIFF OMITTED] TR16NO21.047


[[Page 63577]]


    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. In the CY 2022 OPPS/ASC proposed rule, we stated that 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[supreg] 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[supreg] 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 stated in the CY 2022 OPPS/ASC proposed rule 
that we believe RECELL[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 $7,500 for 
RECELL[supreg] 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 stated in the 
CY 2022 OPPS/ASC proposed rule that we believe RECELL[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 $7,500 for RECELL[supreg] 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 stated in the CY 2022 
OPPS/ASC proposed rule that we believe RECELL[supreg] meets the third 
cost significance requirement.
    We invited public comment on whether the RECELL[supreg] meets the 
device pass-through payment criteria discussed in this section, 
including the cost criterion for device pass-through payment status.
    Comment: One commenter asserted that RECELL[supreg] expands the 
donor skin by up to 80x compared to 2-4x for most autografts, the 
current standard of care. The commenter stated this is an important 
treatment option in light of the ongoing COVID-19 pandemic and its 
drain on the availability of inpatient bed space. The commenter 
respectfully requested that CMS approve the RECELL[supreg] pass-through 
payment application to make RECELL[supreg] available in the outpatient 
setting. A second commenter offered their general support for approval 
of RECELL[supreg] based on what they believe to be substantial 
improvements compared to current burn treatments. A third commenter 
urged CMS to finalize pass-through status for RECELL[supreg] so that 
they could offer the treatment to patients on an outpatient basis.
    Response: We thank the commenters for their support and we note 
that, as explained further below, we are approving RECELL[supreg] for 
device pass-through status beginning in CY 2022.
    Comment: The applicant stated that the cost of RECELL[supreg] is 
not insignificant and exceeds 25 percent of the applicable APC amount 
for the relevant procedures that would be reported with RECELL[supreg]. 
The applicant further stated that the cost of the RECELL[supreg] device 
also exceeds the device-related portion of the applicable APC amount by 
more than 25 percent for the relevant procedures that would be reported 
with RECELL[supreg].
    Response: After consideration of the public comments we received 
and our review of the device pass-through application, we have 
determined that RECELL[supreg] meets the requirements for device pass-
through payment status described at Sec.  419.66. As stated previously, 
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)(i) for purposes of determining device 
pass-through payment status, but must meet the other criteria for 
device pass-through status, and we believe RECELL[supreg] meets those 
other criteria.
    Therefore, effective beginning January 1, 2022, we are finalizing 
approval for device pass-through payment status for RECELL[supreg] 
under the alternative pathway for devices that have an FDA Breakthrough 
Device designation and have received FDA marketing authorization.
(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 
Catheter) 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 
Coronary IVL Catheter is removed, and the physician then implants a 
coronary stent to treat the lesion.
    The applicant asserts that the Coronary IVL Catheter 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

[[Page 63578]]

only address the calcium nearest to the vessel lumen. According to the 
applicant, the Coronary IVL Catheter addresses the calcium within the 
lumen as well as within the vessel walls.
    According to the applicant, the Coronary IVL Catheter 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 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 is utilized prior 
to the placement of a coronary stent.
    With respect to the newness criterion at Sec.  419.66(b)(1), the 
Coronary IVL Catheter received FDA 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 Catheter 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 Catheter 
on February 26, 2021, which is within 3 years of the date of the 
initial FDA marketing authorization. We invited public comment on 
whether the Coronary IVL Catheter meets the newness criterion.
    Comment: One commenter stated that the Coronary IVL Catheter meets 
the newness criteria.
    Response: We thank the commenter for the information.
    Comment: In their comment the applicant concurred with CMS' 
conclusion that Coronary IVL Catheter meets the transitional pass-
through criteria and supported CMS finalizing the transitional-pass 
through status for three years.
    Response: Because we received the Coronary IVL Catheter pass-
through application on February 26, 2021, which is within 3 years of 
February 12, 2021, the date of FDA premarketing approval for the 
device, we agree that the Coronary IVL Catheter meets the newness 
criterion.
    With respect to the eligibility criterion at Sec.  419.66(b)(3), 
according to the applicant, the Coronary IVL Catheter 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 the Coronary 
IVL Catheter meets the device eligibility requirements of Sec.  
419.66(b)(4) because it is not equipment, 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. In the CY 2022 OPPS/ASC proposed rule, we invited public 
comments on whether the Coronary IVL Catheter meets the eligibility 
criteria at Sec.  419.66(b).
    Comment: One commenter stated that the regulation at Sec.  
419.66(b)(3) is clear that pass-through is not appropriate for 
``equipment, an instrument, apparatus, implement, or item 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).'' \30\ The commenter stated we acknowledged in the CY 
2022 OPPS/ASC proposed rule that the Shockwave System Generator, which 
is the ``power source'' for the Shockwave System, is ``capital 
equipment'' \31\ with the list price referenced for the Coronary IVL 
System and not just the Coronary IVL Catheter.\32\ Next the commenter 
stated that the proposed rule does not consider if the Generator, an 
excluded piece of capital equipment, is the key component of the 
Coronary IVL System, and contended that CMS did not consider whether 
the Generator, an excluded piece of capital equipment is a ``key 
therapeutic component'' of the Shockwave System, and as such, that the 
Shockwave System as a whole should not be eligible for device pass-
through status.
---------------------------------------------------------------------------

    \30\ 42 CFR 419.66(b)(4); Medicare Provider Reimbursement 
Manual, Ch. 1, section 104.1.
    \31\ 86 FR 42089.
    \32\ 86 FR 45153.
---------------------------------------------------------------------------

    Response: As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 
42089), Shockwave Medical submitted an application for a new device 
category for transitional pass-through payment status for the Coronary 
IVL Catheter, and not for the remainder of the Coronary IVL System, 
which includes the IVL Cable and Generator. Given that the IVL Cable 
and Generator are not single-use devices, they are not eligible for 
device pass-through status. The only part of this device that is 
eligible for device pass-through status is the Coronary IVL Catheter--a 
sterile, single-use catheter.
    In terms of the commenter's contention that we have not evaluated 
which portion of the device is the key therapeutic component, we 
emphasize that the Coronary IVL Catheter is the device for which the 
applicant submitted an application for device pass-through status. We 
also note that we consider which portion of a combination product is 
the key therapeutic or diagnostic component solely for purposes of 
determining whether implantable biological products should be evaluated 
as drugs or devices for pass-through payment purposes (74 FR 60476). We 
do not determine which portion of a combination product is the key 
therapeutic or diagnostic component for purposes of analyzing a 
device's eligibility for pass-through status. Nonetheless, if we were 
to consider the Shockwave Coronary IVL System as a whole, we would 
conclude that the Coronary IVL Catheter is the key therapeutic 
component as it is the component in the Shockwave System that 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.
    Comment: The applicant concurred with CMS' conclusion that the 
Coronary IVL Catheter meets the transitional pass-through criteria, 
including the criteria at Sec.  419.66(b), and supported CMS finalizing 
the transitional-pass through status for the Coronary IVL Catheter for 
3 years.
    Response: Based on the information we have received and our review 
of the application, we agree with the applicant that the Coronary IVL 
Catheter is used for one patient only, comes in contact with human 
tissue, and is surgically implanted or inserted, and therefore meets 
the requirements in Sec.  419.66(b)(3). We also agree with the 
commenter that the Coronary IVL Catheter meets the device eligibility 
requirements of Sec.  419.66(b)(4) because it is not equipment, 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. Based on this assessment we have 
determined that the Coronary IVL Catheter meets the eligibility 
criteria at Sec.  419.66(b)(3) and (4).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS

[[Page 63579]]

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 Catheter: (1) C1714 and C1724, 
which include devices that use mechanical cutting tools; (2) C1725, 
which 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 stated in the CY 2022 OPPS/ASC proposed rule 
that we had not identified an existing pass-through device category 
that describes Coronary IVL Catheter and we invited public comment on 
this issue.
    Comment: In its comment, the applicant concurred with CMS' 
conclusion that Coronary IVL Catheter meets the transitional pass-
through device category eligibility criteria at Sec.  419.66(c)(1) and 
supported CMS finalizing transitional pass-through status for three 
years.
    Response: We agree there is no existing pass-through device 
category that appropriately describes the Coronary IVL Catheter because 
no current category describes a balloon catheter that generates sonic 
pressure waves using lithotripsy that can break up calcification in 
arterial walls. Based on this information, we have determined that the 
Coronary IVL Catheter meets the eligibility criterion at Sec.  
419.66(c)(1).
    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 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 
Coronary IVL Catheter has a Breakthrough Device designation and 
marketing authorization from FDA, and therefore, is not evaluated for 
substantial clinical improvement. We note that the applicant applied 
for the new technology add-on payment under the alternative pathway for 
Breakthrough devices as discussed in the FY 2022 IPPS/LTCH PPS final 
rule (86 FR 45151 through 45153). In the FY 2022 IPPS/LTCH PPS final 
rule (86 FR 45153), CMS approved the Coronary IVL Catheter for new 
technology add-on payments.
    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 Coronary 
IVL Catheter meeting the cost significance requirements. The applicant 
stated that the Coronary IVL Catheter would be reported with the HCPCS 
codes listed in the following Table 34:
BILLING CODE 4120-01-P

[[Page 63580]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.048

BILLING CODE 4120-01-C
    To meet the cost criterion for establishing a device category, a 
device must pass all three cost criteria for at least one APC. For our 
calculations for the CY 2022 OPPS/ASC proposed rule, 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.
    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 the Coronary IVL Catheter 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 stated in the CY 2022 OPPS/ASC proposed rule 
that we believe the Coronary IVL Catheter 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). 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. The estimated average reasonable 
cost for the Coronary IVL Catheter 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 stated in the CY 2022 OPPS/ASC proposed rule that we 
believe that the Coronary IVL Catheter 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 the Coronary IVL Catheter 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 stated in the 
CY 2022 OPPS/ASC proposed rule that we believe that the Coronary IVL 
Catheter meets the third cost significance requirement.
    We invited public comment on whether the Coronary IVL Catheter 
meets the device pass-through payment criteria discussed in this 
section,

[[Page 63581]]

including the cost criterion for device pass-through payment status.
    Comment: One commenter asserted that CMS' review of the Shockwave 
System (Coronary IVL) was based on an incorrect CPT/APC pairing and an 
assessment of charges, not actual costs.
    The commenter stated that CMS' analysis is contrary to its own 
regulation because it did not reference ``the applicable APC.'' \33\ 
According to the commenter, if APC 5194 (Level 4 Endovascular 
Procedures) is used to assess the Shockwave System, and not APC 5193 
(Level 3 Endovascular Procedures), it is clear that the Shockwave 
System would not meet any of the three cost criteria. The commenter 
makes a number of arguments about why it believes APC 5194 is ``the 
applicable APC,'' including that that the applicant referenced 92933 
(Percutaneous transluminal coronary atherectomy, with intracoronary 
stent, with coronary angioplasty when performed; single major coronary 
artery or branch) which the commenter explains maps to APC 5194, not 
APC 5193.\34\ According to the commenter, the applicant is clearly 
targeting this APC, as the applicant references a targeted population 
of patients with calcified lesions of approximately 15 percent of 
patients; \35\ this population maps to I25.84 (Coronary atherosclerosis 
due to calcified coronary lesion) for which a matching percentage of 
patients links to 92933 (and APC 5194), not 92928 (Percutaneous 
transcatheter placement of intracoronary stent(s), with coronary 
angioplasty when performed; single major coronary artery or branch) 
(and APC 5193).\36\ The commenter further asserted that in its 
development of the Shockwave System, the applicant references coronary 
orbital atherectomy (OA), which, in fact, breaks up and removes 
calcium, as occurs in atherectomy.\37\ According to the commenter, the 
applicant's public comments clearly present the Shockwave System as a 
replacement to atherectomy.\38\ The commenter stated that the proposed 
rule states that the pass-through criteria can be satisfied if ``any'' 
APC meets the criteria but refers to the regulation, which states the 
pass-through cost criteria can be met if ``the applicable'' APC is 
used. The commenter contended that it is clear the applicable APC for 
the Shockwave System is 5194 and not 5193. The commenter added that 
some stakeholders are under a misconception that, if the Shockwave 
System is granted pass-through status based on an analysis of the cost 
criterion using a pairing of 92928 and APC 5153, additional pass-
through payments will nevertheless be available when the Shockwave 
System is billed under APC 5194. The commenter asked CMS to ensure, if 
the agency confirms its quarterly pass-through determination for the 
Shockwave System, that appropriate safeguards are in place so that 
inappropriate payments are not made in connection with APC 5194.
---------------------------------------------------------------------------

    \33\ 42 CFR 419.66(d)(1).
    \34\ See CY 2022 OPPS Notice of Proposed Rulemaking Addendum B.
    \35\ 86 FR 42018, 42089 (August 4, 2021).
    \36\ 2019 Medicare Outpatient Claims data (showing 17.21 percent 
of 92933 is associated with I25.84).
    \37\ The Shockwave System's PMA was based in part on results 
from DISRUPT CAD III, which was designed to enroll the same 
population, using the same definitions and endpoints as in ORBIT II, 
which was the pivotal trial that paved the way for orbital 
atherectomy's approval in 2013. See Shelley Wood, MD, ``FDA Approves 
Shockwave Intravascular Lithotripsy for Calcified Coronaries'', 
available at https://www.tctmd.com/news/fda-approves-shockwave-intravascular-lithotripsy-calcified-coronaries (Feb. 16, 2021).
    \38\ See Shockwave Investor Presentation (August 2021), 
available at https://ir.shockwavemedical.com/static-files/84cb0382-3ad6-435e-a6de-1a132160ff68 (stating that the Shockwave System is a 
``Solution'' to ``Atherectomy'' and its ``Serious Complications'').
---------------------------------------------------------------------------

    The commenter next asserted that the Shockwave System cost 
significance test is based on list prices and not costs, is 
inadequately supported, and is inconsistent with available cost data. 
According to the commenter, the device cost used in assessing the cost 
criteria requirement reflects a list price and is contrary to publicly 
available information on Shockwave System pricing. The commenter stated 
that there are substantially more C9600 (Percutaneous transcatheter 
placement of drug eluting intracoronary stent(s), with coronary 
angioplasty when performed; single major coronary artery or branch) 
claims (i.e., 90,889) with drug-eluting stents than 92928 (i.e., 6,357) 
with bare metal stents, where the device-related portion is higher. The 
commenter asserted that CMS did not provide any information in the CY 
2022 OPPS/ASC proposed rule about why 92928 was used instead of C9600. 
The commenter explained that it is not clear to them why CMS chose 
92928 instead of C9600 to perform the cost significance calculations 
for the cost criterion.
    The commenter then asserted that CMS, without providing factual 
support, stated that the average reasonable cost for Coronary IVL is 
$5,640. According to the commenter, in the IPPS/LTCH final rule (86 FR 
44774, 45153) CMS used a value of $5,640 for the Shockwave System, but 
did not reference the IPPS/LTCH final rule in the CY 2022 OPPS/ASC 
proposed rule. The commenter went on to explain that CMS based this 
figure on a cost for the Shockwave System of $4,700 per device x 1.2 
devices required per case, and stated that CMS finalized this cost for 
the System ``as a whole'' without supporting this calculation except 
using preliminary information from the applicant. The commenter 
asserted that, under the Administrative Procedures Act, 5 U.S.C. 
553(b), an agency is required, in order to provide stakeholders with 
reasonable notice and opportunity to comment, to provide the factual 
basis that supports its proposal; the commenter added that CMS' failure 
to provide any support for its proposal is precisely the kind of defect 
in process that courts have repeatedly cautioned against.
    According to the commenter, in a published article, citing a 
Shockwave earnings call, the Shockwave national list price was stated 
to be $4,700.\39\ The commenter asserted that a list price is a charge 
and not a reflection of actual cost and does not address any discounts, 
rebates, free goods contingent on a purchase, or other price 
concessions. The commenter noted that blinded market research revealed 
prices to some purchasers as low as $4,200 and possibly lower.
---------------------------------------------------------------------------

    \39\ Shelley Wood, tctMD, ``FDA Approves Shockwave Intravascular 
Lithotripsy for Calcified Coronaries'', available at https://www.tctmd.com/news/fda-approves-shockwave-intravascular-lithotripsy-calcified-coronaries (February 16, 2021).
---------------------------------------------------------------------------

    Additionally, the commenter noted that in the proposed rule the 
applicant used a multiplier of 1.2 devices required per case to 
calculate the $5,640 used in assessing whether the device meets the 
cost criterion. According to the commenter, such a multiplier is not 
cited in the proposed rule and was not, therefore, framed appropriately 
for comment as part of this rulemaking. The commenter added three 
concerns related to the multiplier: (1) Use of a multiplier magnifies 
the invalid impact of incorrectly included ``equipment'' (the 
Generator) and a reusable item (the Cable) because the Generator and 
Cable would not be used in more than one case; (2) neither the CY 2022 
OPPS proposed rule nor the FY 2022 IPPS/LTCH final rule included data 
or support for the assertion that 1.2 devices are required per case; 
and (3) use of a multiplier is not appropriate where, as here, the 
pass-through regulation requires a ``reasonable'' estimate of costs and 
more than one device would be used in less than twenty percent of all 
cases. The commenter contended that CMS should use medians, rather than

[[Page 63582]]

averages, because of what the commenter believed was the inaccurate 
nature of averages in circumstances like these.\40\
---------------------------------------------------------------------------

    \40\ 42 CFR 419.66(d).
---------------------------------------------------------------------------

    Response: We appreciate the additional information provided by the 
commenter. We disagree with the commenter's assertion that the proposed 
rule references the incorrect HCPCS/APC pairing. Question D.7. of the 
device pass-through application states: Using Healthcare Common 
Procedure Coding System (HCPCS) Level I and/or Level II code(s), list 
all of the specific procedure(s) and/or services with which the 
nominated device is used. The applicant for the Coronary IVL Catheter 
provided a complete list of HCPCS codes with which their device can be 
billed. CMS evaluated the complete list of HCPCS codes to ensure each 
code represented a procedure with which the Coronary IVL Catheter could 
be used. Consistent with our evaluation of every other device pass-
through application, we identify the applicable APC with which to 
evaluate the cost of the device against the cost significance tests at 
Sec.  419.66(d). There are numerous APCs to which procedures with which 
the Coronary IVL Catheter can be performed are assigned. As we 
explained in the CY 2005 OPPS final rule (69 FR 65775), we generally 
use the lowest APC payment rate applicable for use with the nominated 
device when we assess whether a device meets the cost significance 
criterion, thus increasing the probability the device will pass the 
cost significance test. Furthermore, we disagree with the commenter's 
assertion that CMS should limit pass-through payments to one APC (5193) 
versus another (5194). The applicant identified HCPCS codes which CMS 
agrees align appropriately to both APC 5193 and 5194. Consistent with 
CMS' policy, we are not limited in applying pass-through payments to 
only the HCPCS/APC combination that was used in the cost significance 
test, but rather the entire list of procedures which appropriately 
represent the technology.
    We disagree with the commenter's assertions that the CY 2022 OPPS/
ASC proposed rule uses an assessment of charges, as opposed to cost, 
and failed to give commenters an opportunity to comment. As we stated 
in the proposed rule, 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. Given that parts one and two are not 
single-use devices, they are not under consideration for device pass-
through status. The only part of this device which is under 
consideration for device pass-through payments is the Coronary IVL 
Catheter--a sterile, single-use catheter. According to the applicant, 
the expected average sales price of each Shockwave C2 Coronary IVL 
single-use catheter is $4,700. We acknowledge that in the CY 2022 OPPS/
ASC proposed rule, we did not state that, per the applicant, the 
average number of catheters required per case is 1.2 based on the 
applicant's clinical trial experience; the applicant therefore 
calculated an expected cost to hospitals on a per-case basis for the 
Coronary IVL Catheter of $5,640. Based on our analysis, which includes 
a review by CMS clinical professionals, we agree with the applicant 
that the average number of catheters required per case is 1.2 and 
therefore, that a multiplier of 1.2 is appropriate in this situation. 
We appreciate the commenter identifying this information. We note that 
regardless of the value used, $4,700 (for one Coronary IVL Catheter per 
case) or $5,640 (for 1.2 Coronary IVL Catheters per case), the Coronary 
IVL Catheter meets the cost significance tests at Sec.  419.66(d). 
Finally, we are clarifying that although the FY 2022 IPPS/LTCH PPS 
final rule referred to the Shockwave C2 Intravascular Lithotripsy (IVL) 
System when discussing whether the device met the cost criterion for 
new technology add-on payments, we considered the cost only of the 
Coronary IVL Catheter in that determination.
    Comment: This same commenter asserts that the proposed rule failed 
to provide stakeholders with a reasonable opportunity to comment on 
issues central to the pass-through determination. The commenter 
asserted that the quarterly, sub-regulatory determination made for 
pass-through status for the Coronary IVL Catheter is invalid following 
the Supreme Court's decision in Azar v. Allina Health Services, 139 S. 
Ct. 1804 (2019). Based on these assertions, the commenter stated that 
the Coronary IVL Catheter should not be approved for pass-through 
status and the quarterly determination should be rescinded. The 
commenter stated that our process of approving applications for device 
pass-through status on a quarterly basis predates the Supreme Court's 
decision in Allina and should ``appropriately conform to the rulemaking 
obligations set forth in Allina''.\41\ The commenter concludes that the 
Shockwave System pass-through determination was invalid and in excess 
of CMS' authority and it should, therefore, be rescinded.
---------------------------------------------------------------------------

    \41\ CMS Memorandum, Impact of Allina on Medicare Payment Rules, 
at 1 (Oct. 31, 2019). See also section 1871(a)(2) of the Act.
---------------------------------------------------------------------------

    Response: We disagree with the commenter's assertion that the 
quarterly determination process is invalid, and that the quarterly, 
sub-regulatory determination to grant pass-through status for the 
Coronary IVL Catheter is invalid following Allina. We note that in the 
CY 2016 OPPS/ASC final rule (80 FR 70417-70418) CMS finalized through 
notice and comment rulemaking its proposal to revise the application 
process for device pass-through payments. Specifically, CMS stated that 
starting in CY 2016 all device pass-through payment applications 
submitted through the quarterly process would be subject to notice-and-
comment rulemaking in the next applicable OPPS annual rulemaking cycle. 
Furthermore, under the finalized policy, CMS stated that all 
applications that are approved upon quarterly review will automatically 
be included in the next applicable OPPS annual rulemaking cycle, and 
any information provided by the applicant would be available for 
consideration during the public comment process for the proposed rule. 
CMS stated that this process would allow those applications that meet 
all criteria to receive timely pass-through payment status, while also 
allowing for a transparent public review process for all applications 
as part of the next available rulemaking. Finally, we note that the 
quarterly approval process does not establish or change a substantive 
legal standard governing the scope of benefits or the payment for 
services, but only applies substantive legal standards adopted through 
notice and comment rulemaking to determine whether a particular device 
should qualify for pass-through status.
    Comment: In their public comment, the applicant stated that there 
are two issues associated with CMS' evaluation and implementation of 
transitional device pass-through payment status for the Coronary IVL 
Catheter that they wanted to bring to CMS' attention. In CMS 
Transmittal 10825, dated June 11, 2021, CMS limited HCPCS code C1761 to 
being reported with two procedures that describe placement of a 
coronary stent (HCPCS codes 92928 and C9600). The applicant noted that 
CMS most recently published Transmittal 10997, dated September 16, 
2021, which added four additional HCPCS codes--92933,

[[Page 63583]]

92943, C9602, and C9607--that can also be billed in conjunction with 
HCPCS code C1761 and be eligible for transitional pass-through 
effective July 1, 2021. The applicant noted that CMS included the 
device offset associated with these codes when calculating the 
incremental transitional pass-through payment when HCPCS code C1761 is 
billed. The applicant believes CMS applied the device offset for HCPCS 
codes 92933, 92943, C9602, and C9607 as an oversight, and requested 
that CMS remove the device offset for these codes when calculating the 
incremental transitional pass-through payment when billed in 
conjunction with C1761 because, similar to the determination for HCPCS 
codes 92928 and C9600, no device offset should be implemented as IVL 
costs are completely additive to the procedure and the devices 
represented by the device offset in each procedure are still required.
    Response: We disagree with the applicant's request to remove the 
device offset for HCPCS codes 92933, 92943, C9602 and C9607 when 
calculating the incremental transitional pass-through payment when 
billed in conjunction with HCPCS code C1761. In the above-identified 
procedures, the Coronary IVL Catheter is used in lieu of atherectomy to 
achieve a therapeutic outcome. Therefore, we believe a device offset as 
identified in Transmittal 10997 dated September 16, 2021 is warranted 
when HCPCS code C1761 is used in conjunction with these particular 
procedures.
    Comment: The applicant stated that while they agree that Coronary 
IVL Catheter meets all three cost criteria based on CMS' methodology, 
they are concerned that the methodology CMS utilizes is not the most 
appropriate for procedures that require the use of multiple devices. 
The applicant contends that CMS utilizes the entire device-related 
portion (DRP) as reported for the applicable procedure instead of 
evaluating the cost of the new technology relative to the specific 
devices that it is replacing. The applicant asserted that CMS has 
removed the device offset for other technologies that have received 
transitional pass-through payment where new technologies are completely 
additive to the procedure. The applicant stated that CMS does not 
utilize a similar methodology when evaluating the three cost criteria. 
The applicant asserted that this may create an artificially high bar 
that would make new technology that would otherwise qualify for pass-
through status ineligible, which the applicant believes is the case for 
the EluviaTM system. The applicant requested that CMS update 
its methodology for current and future transitional pass-through 
applications where multiple devices are utilized.
    Response: We thank the applicant for their input in regard to the 
calculation of the cost significance criterion, which we will take into 
consideration for future rulemaking. For a more detailed discussion of 
this issue as it relates to the EluviaTM system, please see 
section IV(a)(2)(b)(3) of this final rule with comment period.
    After consideration of the public comments we received and our 
review of the device pass-through application, we have determined that 
Coronary IVL Catheter meets the requirements for device pass-through 
payment status described at Sec.  419.66. As stated previously, 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 must meet the other criteria for device pass-
through status, which we believe the Coronary IVL Catheter does.
    As specified above, the Coronary IVL Catheter pass-through 
application was preliminarily approved for transitional pass-through 
payment under the alternative pathway effective July 1, 2021. We note 
that in the CY 2022 OPPS/ASC proposed rule we invited public comments 
on whether the Coronary IVL Catheter 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.
    We are finalizing our proposal to continue in 2022 device pass-
through payment status for the Coronary IVL Catheter under the 
alternative pathway for devices that have an FDA Breakthrough Device 
designation and have FDA marketing authorization.
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 (the 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-

[[Page 63584]]

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 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 US 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 in the CY 2022 OPPS/ASC proposed rule on 
whether the Guardian[supreg] system meets the newness criterion.
    Comment: The applicant reasserted that the Guardian[supreg] meets 
the newness criterion at Sec.  419.66(b)(1) as the application was 
submitted within 3 years of FDA approval.
    Response: We appreciate the commenter's input and agree that 
because we received the application for the Guardian[supreg] on 
February 28, 2021, which was within 3 years of the FDA premarketing 
approval on April 9, 2018, the Guardian[supreg] 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 the 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 invited public comments in the CY 2022 OPPS/
ASC proposed rule on whether the Guardian[supreg] meets the eligibility 
criteria at Sec.  419.66(b).
    Comment: The applicant stated the Guardian[supreg] meets the 
eligibility criteria at Sec.  419.66(b)(3) and 419.66(b)(4) as the 
Guardian[supreg] is used for one patient only, comes in contact with 
human tissue, and is surgically inserted.
    Response: Based on the information we have received and our review 
of the application, we agree with the applicant that the device is used 
for one patient only, comes in contact with human tissue, and is 
surgically implanted or inserted. We also agree with the commenter that 
the Guardian[supreg] meets the device eligibility requirements of Sec.  
419.66(b)(4) because it is not equipment, 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. Based on this assessment we have determined that the 
Guardian[supreg] meets the eligibility criterion at Sec.  419.66(b)(3) 
and (4).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. We stated in 
the CY 2022 OPPS/ASC proposed rule that we have not yet identified an 
existing pass-through payment category that describes the 
Guardian[supreg]. We invited public comment on whether the 
Guardian[supreg] meets the device category criterion.
    Comment: The applicant asserted the Guardian[supreg] meets the 
first criterion for establishing a new device category, at Sec.  
419.66(c)(1), as no existing categories or categories previously in 
effect appropriately describe the technology.
    Response: We agree there is no existing pass-through payment 
category that appropriately describes the Guardian[supreg] because no 
current or previously in effect category describes a device that 
provides detection of ACS events and notification to a patient. Based 
on this information, we have determined that the Guardian[supreg] meets 
the eligibility criterion at Sec.  419.66(c)(1).
    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 FDA's Breakthrough Devices Program and has received 
FDA marketing authorization.
    The applicant stated that the Guardian[supreg] represents a 
substantial clinical improvement over existing technologies. With 
respect to this criterion, the applicant asserted that the 
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.\42\ In support of this 
claim the applicant submitted two published articles, the first by 
Gibson et al. and the second by Holmes et al.43 44
---------------------------------------------------------------------------

    \42\ 66 FR 55852, November 2, 2001.
    \43\ 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.
    \44\ 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 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.\45\ 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

[[Page 63585]]

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 
6 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.
---------------------------------------------------------------------------

    \45\ 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.\46\ 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 the 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.\47\
---------------------------------------------------------------------------

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

    \48\ 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) 
49 50 51 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).\52\ The applicant adds that results were similar when 
restricted to myocardial infarction (MI) events.\53\ 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

[[Page 63586]]

Holmes et al. (2019).\54\ 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.55 56 57 58 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.
---------------------------------------------------------------------------

    \49\ 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.
    \50\ 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.
    \51\ 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.
    \52\ 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.
    \53\ 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.
    \54\ 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.
    \55\ 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.
    \56\ 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.
    \57\ 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.
    \58\ 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.\59\
---------------------------------------------------------------------------

    \59\ 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.\60\ 
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).\61\
---------------------------------------------------------------------------

    \60\ 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.
    \61\ Ibid.
---------------------------------------------------------------------------

    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.62 63 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 sought 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 invited public comments on whether the Guardian[supreg] 
system meets the substantial clinical improvement criterion.
---------------------------------------------------------------------------

    \62\ Ibid.
    \63\ 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.
---------------------------------------------------------------------------

    Comment: Many commenters offered support for the approval of the 
Guardian[supreg]. Numerous commenters noted that according to published 
studies a reduction in ischemic time is associated with less cardiac 
damage and better outcomes for ACS events; these commenters asserted 
that the Guardian[supreg] brought patients to the emergency room 
earlier and more reliably, which resulted in better outcomes. Some 
commenters stated that the two studies submitted by the applicant and 
described in the CY 2022 OPPS/ASC proposed rule 64 65 
support the finding of a substantial clinical improvement. Some 
commenters noted that detection of silent MI enables the diagnosis of a 
medical condition that is currently undetectable, which the commenters 
believe is a substantial clinical improvement. Many commenters stated 
that the use of the Guardian[supreg] will reduce unnecessary medical 
utilization, will be beneficial particularly for those who experience 
silent myocardial infarction, and will prevent cardiac deaths. Many 
commenters offered patient stories that in their opinion showed that 
the Guardian[supreg] offers an improvement over existing treatment 
options. Multiple commenters noted that the Guardian[supreg] offers 
patients positive mental health outcomes given a reduction in 
experience anxiety in high-risk ACS patients. Additionally, multiple 
commenters stated that the total false positive rate for the ALERTS ON 
group was statistically less than that of the ALERTS OFF group.
---------------------------------------------------------------------------

    \64\ 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.
    \65\ 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.
---------------------------------------------------------------------------

    One commenter stated they have been using the Guardian[supreg] for 
more than ten years, that the device is a valuable addition to 
diagnostic capabilities, and that in many cases it reduces health care 
utilization. A second commenter stated this technology represents a 
significant improvement to detecting myocardial infarction promptly. 
One commenter who described their experience seeing the exam prevent 
multiple cardiac catheterizations noted the exam is invaluable to 
modern medicine and that a reduction in reimbursement would threaten 
its realization in the appropriate context. Another commenter noted 
that almost all patients requested replacement of the Guardian[supreg] 
when it reached end of battery life, which is indicative of its safety 
and effectiveness.
    Response: We thank the commenters for additional information to 
support their belief that the Guardian[supreg] device is a substantial 
clinical improvement over

[[Page 63587]]

devices in existing categories or other available treatments.
    Comment: The applicant asserted the Guardian[supreg] meets the 
second criterion for establishing a new device category, at Sec.  
419.66(c)(2), by providing a substantial clinical improvement over 
existing therapies because the Guardian[supreg] ``has demonstrated that 
it will substantially improve the diagnosis or treatment of an illness 
or injury compared to the benefits of a device or devices in a 
previously established category or other available treatment''.
    The applicant pointed out that in the CY 2022 OPPS/ASC proposed 
rule we stated that the positive predictive value (PPV), false positive 
rate (FPR), and Silent myocardial infarction (MI) endpoints were 
reported in the ``second study'' (that is, Holmes et al.). The 
applicant clarified that Gibson et al. reported on both the original 
study analysis and the Expanded analysis, including the PPV, FPR, and 
Silent MI endpoints; Holmes et al. reported on pre-hospital delays and 
their distribution as a function of both prompt (alarm only, alarm + 
symptom, symptom only) and group (Alarms On vs Alarms OFF).
    In response to our concerns about the primary endpoints lacking 
statistical significance the applicant stated both AngelMed and FDA 
have expressed the position that the results of the ALERTS study are 
best assessed using the lens that statistical significance of primary 
endpoints should be assessed with respect to the totality of the data. 
The applicant stated the endpoint analyses requested by FDA for primary 
endpoints during its evaluation of the study data (for example, event 
based or crossover analysis) reached statistical significance. The 
applicant added as an example that an event-based analyses of the 
composite primary endpoints of the original study reached statistical 
significance when multiple events within patients were counted, rather 
than relying upon a patient-based analysis in which each patient could 
only be counted once. According to the applicant, since multiple events 
may occur in a single patient, they believe that the primary endpoint 
data is also valid and more accurately and realistically reflects 
Medicare patient experiences. The applicant added that the non-primary 
endpoint of sustained left ventricular ejection fraction (LVEF), which 
was independent of the primary endpoint measures, was statistically 
superior (Gibson et al. 2019, p. 1924).\66\ The applicant added that 
the Expanded analysis was explicitly designed to address the event rate 
seen in the original study design by leveraging the post-randomization 
data to derive a dataset covering an approximately three times larger 
study interval, which according to the applicant, greatly increased the 
number of events and statistical power. The applicant concluded that 
while not all endpoints reached statistical significance, AngelMed 
believes that the totality of the data supports substantial clinical 
improvement.
---------------------------------------------------------------------------

    \66\ 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.
---------------------------------------------------------------------------

    In response to our concerns about post-hoc validity, the applicant 
believes the Expanded analysis supports substantial clinical 
improvement for a number of reasons. The applicant acknowledged as 
noted by Gibson et al.,\67\ some post-hoc analyses were done in the 
original analysis but that the Expanded analysis was not post-hoc. The 
applicant asserted the Expanded analysis was a pre-specified analysis 
proposed by FDA, and agreed upon by AngelMed, that was completed using 
data both from the original randomized period and a large amount of 
data from the post-randomization period. While the post-randomization 
data was captured with the same rigor and predefined procedures as the 
randomization period, the Expanded analysis increased the pool of data 
from less than 450 years to 1,500 years. The applicant explained that 
this approach was adopted by FDA and AngelMed specifically with the aim 
of greatly increasing the number of endpoint events and maximizing the 
statistical power of the Expanded analysis for the new endpoints, new 
definition of acute coronary syndrome (ACS), etc. The applicant added 
that the Expanded analysis used a new analysis protocol which resulted 
in data which were analyzed to obtain new, distinct, and meaningful 
endpoints that used clearer measurements than the ALERTS design.
---------------------------------------------------------------------------

    \67\ 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.
---------------------------------------------------------------------------

    Lastly, the applicant responded to our concerns regarding 
appropriate measure[s] with which to evaluate substantial clinical 
improvement. The applicant reasserted that the original analysis used a 
composite primary efficacy endpoint of three outcomes that provided an 
initial assessment of the technology. The applicant asserted that the 
individual components of the primary efficacy endpoint for arrival 
times and new Q-waves were consistently in favor of the 
Guardian[supreg] with arrival times reaching significance. The 
applicant stated, as CMS noted, in the original ALERTS analysis ``at 
the pre-specified 7-day look back window, the median time from the 
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)'' (86 FR 42092). The applicant added 
these results should be combined with the Expanded analysis endpoints, 
which used new measures that reflected a better understanding by FDA 
and AngelMed for how best to evaluate the real-world impact of the 
Guardian System, when assessing substantial clinical improvement. The 
applicant asserted that more specifically, the co-primary endpoints 
(i.e., PPV and FPR) reflected real-world performance measures that were 
suggested by FDA and that more accurately demonstrate, and provide a 
complementary view of, the clinical benefit than the composite 
endpoints of the original ALERTS design.
    The applicant asserted that the main topics of interest for the 
Expanded analysis were the alarms in terms of frequency and accuracy, 
and how the subjects responded (e.g., distribution of patient pre-
hospital delay for each of the different prompts: Alarm + symptom; 
alarms only; or, symptom only). According to the applicant the Expanded 
analysis not only assessed device performance but also the behavior of 
the individual subjects in the Alarms ON group prompted by the alarms, 
symptoms or both. The applicant contended that the combination of the 
original study endpoints and Expanded analysis endpoints are the 
correct measures since these are able to show substantial clinical 
improvement according to multiple device pass-through criteria the 
ability to diagnose a medical condition that is currently undetectable, 
diagnose a medical condition earlier in a patient population then is 
currently available, decrease future hospitalizations, and improve 
patient outcomes.
    The applicant asserted that all the ALERTS data consistently showed 
compelling and statistically significant reduction in pre-hospital 
delays in the Alarms ON group compared to the Alarms OFF group. 
According to the applicant, reduced total ischemic time is a correct 
measure for assessing substantial clinical improvement since

[[Page 63588]]

it is a universal axiom that decreased delay decreases the associated 
risk of heart damage (e.g., larger infarct size, ejection fraction 
decrement);68 69 70 the applicant asserted that shorter 
total ischemic time is associated with better outcomes for ACS 
events.71 72 73 74 That is why, according to the applicant, 
multiple national agencies, including ACC, SCAI, AMA and NHLBI, have 
created programs specifically focused on reducing time to treatment for 
ACS events and have used time-based metrics as their sole assessment of 
provider quality for ACS care.\75\ For these reasons the applicant 
believes that the combination of original and Expanded analysis results 
provides clear evidence of substantial clinical improvement for high-
risk ACS patients experiencing ACS events.
---------------------------------------------------------------------------

    \68\ Weaver W.D., Cerqueira M., Hallstrom A.P., et al. 
Prehospital-Initiated vs. Hospital-Initiated Thrombolytic Therapy: 
The Myocardial Infarction Triage and Intervention Trial. JAMA. 
1993;270(10):1211-1216.
    \69\ Hasche E.T., Fernandes C., Freedman S.B., Jeremy R.W. 
Relation between ischemia time, infarct size, and left ventricular 
function in humans. Circulation. 1995;92:710-719.
    \70\ Liem A.L., van `t Hof A.W., Hoorntje J.C., de Boer M.J., 
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.
    \71\ Guerchicoff A., Brener S.J., 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.
    \72\ 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.
    \73\ 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.
    \74\ Gersh B.J., Stone G.W. Pharmacological facilitation of 
coronary intervention in ST-segment elevation myocardial infarction: 
Time is of the essence. JACC Cardiovasc Interv. 2010;3(12):1292-
1294.
    \75\ CMS. Timely & Effective Care. URL: https://data.cms.gov/provider-data/topics/hospitals/timely-effective-care#heart-attack-care.
---------------------------------------------------------------------------

    Response: We appreciate the additional information provided by the 
commenters. In the proposed rule, we articulated tour concern about the 
sufficiency of a post-hoc analysis. In their public comment the 
applicant asserted that while some post-hoc analyses were performed, 
the expanded analysis was a pre-specified analysis proposed by FDA. We 
further appreciate the clarification from the applicant that the 
expanded analysis increased the number of endpoint events. Given the 
additional endpoints evaluated in the expanded analysis that 
specifically show faster visits for real events while not increasing 
unnecessary emergency department visits, we agree that the 
Guardian[supreg] system meets the substantial clinical improvement 
criterion at Sec.  419.66(c)(2).
    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 
Guardian[supreg] would be reported with the HCPCS codes listed in the 
following Table 35:
[GRAPHIC] [TIFF OMITTED] TR16NO21.049

    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 for the CY 2022 OPPS/ASC proposed rule, 
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

[[Page 63589]]

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 the Guardian[supreg] is 126 percent of the 
applicable APC payment amount for the service related to the category 
of devices of $8,152.58 ((10,250/8,153) * 100 = 125.7 percent). 
Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that we 
believe the 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). We stated in the CY 2022 OPPS/ASC proposed rule that the 
estimated average reasonable cost for the 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 ((10,250/1,599) * 100 = 
641.0 percent). Therefore, we stated that we believe that the 
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. We stated in the CY 2022 OPPS/ASC proposed 
rule that the difference between the estimated average reasonable cost 
for the 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 (((10,250-1,599)/8,153) * 100 = 106.1 
percent). Therefore, we explained that we believe that the 
Guardian[supreg] meets the third cost significance requirement. In the 
CY 2022 OPPS/ASC proposed rule we invited public comment on whether the 
Guardian[supreg] meets the device pass-through payment criteria, 
including the cost criterion for device pass-through payment status.
    Comment: The applicant stated the Guardian[supreg] meets the three 
cost criteria at Sec.  419.66(d), consistent with CMS' analysis.
    Response: We appreciate the applicant's input and agree that the 
Guardian[supreg] meets the cost criterion for device pass-through 
payment status.
    After considering the public comments we received and our review of 
the device pass-through application, we have determined that the 
Guardian[supreg] system meets the criteria for device pass-through. 
Therefore, we are finalizing approval for device pass-through payment 
status for the Guardian[supreg] system effective beginning January 1, 
2022.
(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 9.3g, including the battery 
and magnet (strength 1). It has an 18-band digital equalizer, 18 
independent compression channels, and an audio frequency range of 250 
Hz to 8kHz. The audio processor is powered by a non-rechargeable 675 
zinc-air button cell with a nominal 1.4-volt supply and 600mA-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, 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 
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), 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. In the 
CY 2022 OPPS/ASC proposed rule, we invited public comments on

[[Page 63590]]

whether the BONEBRIDGE meets the newness criterion.
    We did not receive any comments in regard to whether the BONEBRIDGE 
meets the newness criterion at Sec.  419.66(b)(1). Because we received 
the BONEBRIDGE application on December 10, 2020, which is within 3 
years of the FDA premarketing approval date of July 20, 2018, which is 
within 3 years, we have concluded that 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 equipment, 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 explained in the CY 2022 OPPS/ASC 
proposed rule that 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 for this benefit 
category. We invited 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).
    Comment: One commenter agreed with CMS that BONEBRIDGE is not 
subject to the hearing aid exclusion at Sec.  411.15(d)(1).
    Response: We did not receive any comments on whether the BONEBRIDGE 
meets the eligibility criteria at Sec.  419.66(b)(3) or Sec.  
419.66(b)(4). We agree with the applicant that the BONEBRIDGE device 
meets the criteria of Sec.  419.66(b). We believe discussion concerning 
Sec.  411.15(d)(2)(i) is beyond the scope of the discussion here.
    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 device category, L8690 
(Auditory osseointegrated device, includes all internal and external 
components), which was in effect from January 1, 2007 through December 
31, 2008 does not appropriately describe 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 
(BAHAs). 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 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 Osia[supreg]2 System, which also 
submitted a device pass-through application for CY 2022, would also be 
described by the proposed additional category.
    Web stated in the CY 2022 OPPS/ASC proposed rule that 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.
    In the CY 2022 OPPS/ASC proposed rule, we invited public comment on 
whether the BONEBRIDGE meets the device category criterion.
    Comment: One commenter stated they do not support CMS' position 
that the BONEBRIDGE and Osia[supreg] 2 system should not be granted a 
new category, because these devices take much longer to implant 
surgically than percutaneous bone conduction implants, they are active 
sound processors, and they work differently than percutaneous devices 
like the BAHA or Oticon implants.
    Another commenter who also disagreed with CMS that the BONEBRIDGE 
and Osia[supreg] 2 system are

[[Page 63591]]

adequately described by L8690 stated that the BONEBRIDGE and 
Osia[supreg] 2 system are transcutaneous hearing implants, and that CMS 
should create a new HCPCS code that describes both the procedure and 
the implant for these devices. The commenter expressed their 
disappointment in what they described as CMS' continual resistance to 
conduct rulemaking specifically on Middle Ear Implants (MEIs) because 
they believe CMS should hear the opinions of clinical experts, 
physicians, and Medicare beneficiaries regarding the appropriateness of 
classifying MEIs as prosthetic implants.
    A different commenter supported CMS' conclusion in the proposed 
rule that BONEBRIDGE and Cochlear Osia[supreg] are appropriately 
described by a pass-through category previously in effect
    Two commenters stated that CMS must support the inclusion of middle 
ear implants in the prosthetic category. The commenters asserted that 
not including these devices denies beneficiaries access to all FDA-
approved hearing prosthetics and discourages in new technology for the 
hearing impaired.
    Response: We appreciate the input provided by these commenters. We 
have taken this information into consideration in our determination of 
the eligibility criterion at Sec.  419.66(c)(1), discussed below. We 
note some of the comments, those addressing hearing prosthetics, are 
outside of the scope of this rule.
    Comment: The applicant stated that BONEBRIDGE is not appropriately 
described by the previous device category L8690, ``Auditory 
osseointegrated device, includes all internal and external 
components''. The applicant asserted that even though the mechanism of 
action is the same (that is, replacing the function of the middle ear 
by transmitting mechanical energy from the external transducer/audio 
processor to the cochlea), there are significant differences between 
BONEBRIDGE and the devices described by the previous category of L8690, 
``Auditory osseointegrated device, includes all internal and external 
components'' that enable BONEBRIDGE to furnish a substantial clinical 
improvement over existing technology. According to the applicant, L8690 
was established in 2007 at a time when the technology to fully implant 
a transducer did not exist; the devices for which L8960 was established 
were percutaneous passive devices.
    According to the applicant, FDA created a new device classification 
for active implantable bone conduction hearing systems in response to 
BONEBRIDGE's application in 2018 (21 CFR 874.3340) which is 
specifically for active systems as opposed to passive systems (21 CFR 
874.3300). According to the applicant, FDA's description of active 
implantable bone conduction is that the transducer is implanted and the 
description of the technical method refers to the transcutaneous nature 
of the technology. The applicant stated that while they recognize that 
FDA and CMS classify devices differently for different purposes, they 
believe that the way FDA classifies bone conduction implants reinforces 
why CMS should distinguish active implantable bone conduction devices 
from passive, percutaneous systems for purposes of transitional pass-
through payment status.
    The applicant asserted that CMS has modified broadly worded device 
categories to recognize technological advances within a device class 
and to grant transitional pass-through payment status to the newer 
technologies. According to the applicant, in the neurostimulator 
category, the original descriptor of HCPCS code C1767 was ``Generator, 
neurostimulator (implantable).'' The applicant asserted that CMS 
modified this descriptor to ``Generator, neurostimulator (implantable), 
non-rechargeable'' to create a new device category and grant 
transitional pass-through payment status for rechargeable 
neurostimulators described by HCPCS codes C1820 (Generator, 
neurostimulator (implantable), with rechargeable battery and charging 
system) and C1822 (Generator, neurostimulator (implantable), high 
frequency, with rechargeable battery and charging system). The 
applicant added that CMS previously recognized differences in 
transluminal angioplasty catheters to support transitional pass-through 
payment status (for example, C2623, C1885, and C1725). The applicant 
asserted the new pass-through device category code should specifically 
describe active devices, which are those that have a fully implanted 
transducer attached transcutaneously to the external audio processor. 
The applicant suggested: CXXXX (Active auditory osseointegrated device, 
transcutaneous, requires implanted transducer and radiofrequency link 
to external sound processor). The applicant further suggested that CMS 
could refine L8960 to (Passive auditory osseointegrated device, 
percutaneous or transcutaneous, includes all internal and external 
components (new language underlined)). The applicant concluded that 
effective on January 1, 2022 there will be new and revised CPT codes 
that differentiate the surgical procedures for osseointegrated implants 
by the type of attachment (for example, 69X50 (Implantation, 
osseointegrated implant, skull; with magnetic transcutaneous attachment 
to external speech processor), 69X51 (Revision/replacement (including 
removal of existing device), osseointegrated implant, skull; with 
magnetic transcutaneous attachment to external speech processor)), 
69717 (Revision/replacement (including removal of existing device), 
osseointegrated implant, skull; with percutaneous attachment to 
external speech processor), and 69X51 (Revision/replacement (including 
removal of existing device), osseointegrated implant, skull; with 
magnetic transcutaneous attachment to external speech processor).
    Response: After consideration of the public comments we received, 
we agree there is no existing pass-through payment category that 
appropriately describes the BONEBRIDGE. The BONEBRIDGE device consists 
of an external processor that receives sound pressure energy and 
converts this to a radiofrequency signal which communicates with a 
surgically implanted subcutaneous transducer/actuator which is 
osseointegrated into the skull with screws. The transducer/actuator 
converts this signal to mechanical vibrations that are transmitted to 
the skull and inner ear. As stated by the applicant, when the existing 
pass-through category, Auditory osseointegrated device (L8690), was 
issued in 2007, the technology to implant the transducer/actuator did 
not exist. Based on this information, we have determined that the 
BONEBRIDGE meets the eligibility criterion at Sec.  419.66(c)(1). Due 
to the similarity between the devices, we refer the reader to section 
IV(A)(2)(b)(4) of this rule for a similar discussion of the 
Osia[supreg]2 system.
    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 FDA's Breakthrough

[[Page 63592]]

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 BAHAs, 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.\76\ 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.\77\
---------------------------------------------------------------------------

    \76\ MED-EL Medical Electronics. (2019). Safety outcomes of bone 
conduction implants: A systematic review [White paper].
    \77\ 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.\78\ 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 35.616.9 
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 sufficient 
information for evaluation, and included overlapping samples.
---------------------------------------------------------------------------

    \78\ 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).\79\
---------------------------------------------------------------------------

    \79\ 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.\80\ 
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 4000 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

[[Page 63593]]

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.81 82
---------------------------------------------------------------------------

    \80\ 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.
    \81\ 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.
    \82\ 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.\83\ 
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 5-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.\84\
---------------------------------------------------------------------------

    \83\ 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.
    \84\ 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.85 86 87
---------------------------------------------------------------------------

    \85\ Ibid.
    \86\ Ibid.
    \87\ 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.\88\ 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 16dB 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.
---------------------------------------------------------------------------

    \88\ 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.\89\ 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 6-year period. The patients' charts 
were reviewed for surgical outcomes and complications over the 6-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 calculated as the difference between preoperative AC thresholds and 
BONEBRIDGE aided thresholds measured 3 months postoperatively.
---------------------------------------------------------------------------

    \89\ 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 3000 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).\90\ 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

[[Page 63594]]

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, 1000, 2000, 
and 4000 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).
---------------------------------------------------------------------------

    \90\ 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 noted in the CY 2022 OPPS/ASC proposed rule that the 
studies submitted did not involve a direct comparison to other 
currently available treatments, namely percutaneous or passive, 
transcutaneous auditory osseointegrated devices. Therefore, we 
explained that it was difficult to determine whether the BONEBRIDGE 
provided a substantial clinical improvement over existing devices. We 
also indicated that 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 explained in the CY 
2022 OPPS/ASC proposed rule 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, we noted that 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 stated in the 
proposed rule that 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 invited public comments on 
whether BONEBRIDGE meets the substantial clinical improvement 
criterion.
    Comment: The applicant submitted a comment in response to CMS' 
concerns regarding the lack of direct comparison to existing 
technology; differences in adverse events; and small number of study 
participants in the studies submitted to illustrate that BONEBRIDGE 
meets the substantial clinical improvement criterion. In response to 
CMS' concern about a direct comparison to existing technology, the 
applicant stated that direct head-to-head trials are not necessary or 
appropriate in this situation. According to the applicant, differences 
in the devices make a blinded randomized controlled trial impossible. 
The applicant asserted that while a non-blinded randomized trial would 
be possible, it is unclear what additional data would be gained from 
that approach because the applicant believed the pass-through 
application already contained extensive, robust, and definitive data to 
support that BONEBRIDGE is a substantial clinical improvement over 
existing technologies. The applicant asserted that enrolling patients 
in a head-to-head trial in which the primary difference is expected to 
be adverse events associated with one treatment arm is extremely 
challenging.
    The applicant stated that the studies on BONEBRIDGE that were 
submitted with the pass-through application are primarily controlled 
case series and case reports. The applicant asserted that because the 
submitted studies used measures of device performance and adverse 
events that are consistent with studies of other devices, they allowed 
for direct comparison between different devices which demonstrate that 
BONEBRIDGE represents a substantial improvement over other bone 
conduction technology by achieving comparable performance in hearing 
improvement with fewer adverse events.
    In regard to CMS' concerns about differences in adverse events, the 
applicant agreed with CMS that the occurrence of both overall and minor 
adverse event ratio was significantly lower for BONEBRIDGE than other 
devices but disagreed with CMS' characterization of the major adverse 
event rate. The applicant stated that major adverse events are far less 
common across all devices, including BONEBRIDGE, than minor events.
    Next the applicant responded to CMS' concern that the small number 
of study participants could affect the generalizability of the data 
provided and that, because of the young age of the patients and the 
congenital nature of the hearing loss being treated, the study results 
may not be generalizable to the Medicare population. The applicant 
stated that BONEBRIDGE is indicated for patient who are 12 years or 
older, with conductive or mixed hearing loss and still can benefit from 
sound amplification, and who have profound sensorineural hearing loss 
in one ear and normal hearing in the opposite ear (i.e., single-sided 
deafness or ``SSD''). The applicant stated that the study sample sizes 
(and overall number of patients in those studies) are consistent with 
the anticipated number of implantations. The applicant stated that 
while the typical BONEBRIDGE patient is expected to be under age 65, 
several studies included patients of Medicare age and the experience of 
those patients was consistent with overall experience. The applicant 
concluded that the studies are generalizable to the Medicare population 
and reflective of expected results in the indicated population 
generally. Lastly, the applicant asserted the otologic community has 
accepted and adopted active transcutaneous devices as the standard of 
care for implanted bone conduction devices.
    Response: We appreciate the additional information from commenters' 
about the BONEBRIDGE device but note that none of the commenters 
provided new empirical evidence that demonstrates that BONEBRIDGE is a 
substantial clinical improvement over existing treatment options. Based 
on our review of the study evidence, the only purported differences 
between BONEBRIDGE and predicate technologies relate to the major and 
minor adverse events from the respective technologies. Based on the 
information we have, it appears that

[[Page 63595]]

while there is a difference amongst the rates of minor adverse event 
incidence favoring BONEBRIDGE, patients had a major adverse event 
occurrence (2.9 percent) that was comparable to other devices included 
in the provided evidence. While the incidence of minor adverse events 
(e.g., skin infections, soft tissue reactions, and healing 
difficulties) may benefit BONEBRIDGE, we believe these are less 
impactful on patient outcomes as compared to the incidence of major 
adverse events (e.g., revision surgery, explantation, removal at 
patient request, implant loss, implant device failure, skin revision 
surgery or skin infection) which is comparable to previous 
technologies. We maintain our concerns listed in the proposed rule, 
that the studies submitted included a small number of participants 
which may affect the generalizability of the data provided in support 
of the device, and the applicant's comparison of outcome data across 
multiple studies as opposed to direct comparisons controlling for 
confounding variables. Because of these reasons, we do not believe that 
BONEBRIDGE represents a substantial clinical improvement relative to 
existing therapies currently available. After consideration of the 
public comments we received and our review of the device pass-through 
application, we are not approving BONEBRIDGE for transitional pass-
through payment status in CY 2022 because the product does not meet the 
substantial clinical improvement criterion. Because we have determined 
that BONEBRIDGE does not meet the substantial clinical improvement 
criterion, we are not evaluating whether the device meets the cost 
criterion.
(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 (the 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 
inch (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.\91\ 
According to the applicant, PAD disproportionately affects African 
American and American Indian populations \92\ and nonrevascularized 
lower extremity PAD is among the most common causes of lower extremity 
amputation.
---------------------------------------------------------------------------

    \91\ Centers for Disease Control and Prevention. https://www.cdc.gov/heartdisease/pad.htm.
    \92\ 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.\93\ 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.
---------------------------------------------------------------------------

    \93\ 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 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. In the CY 2022 OPPS/ASC proposed rule we invited public 
comments on whether the Eluvia\TM\ system meets the newness criterion.
    Comment: The applicant stated that the EluviaTM system 
application was submitted within three years of regulatory approval and 
therefore meets the newness criterion for transitional device pass-
through eligibility.
    Response: We appreciate the commenter's input. and agree that the 
Eluvia\TM\ system meets the newness criterion because we received its 
device pass-through application on February 26, 2021, which is within 3 
years of the September 18, 2018, the date of FDA PMA.
    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 equipment, 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. In the CY 2020 OPPS/ASC final rule 
with comment period, we stated that we determined that the Eluvia\TM\ 
system

[[Page 63596]]

device meets the eligibility criteria at Sec.  419.66(b)(3) and (4) in 
response to a pass-through application that the applicant submitted on 
November 15, 2018 (84 FR 61286). Because the applicant submitted a new 
application for device pass-through status for the Eluvia\TM\ system, 
we again invited public comments on whether the Eluvia\TM\ system 
continues to meet the eligibility criteria at Sec.  419.66(b(3) and 
(4).
    Comment: The applicant stated that the EluviaTM system 
continues to meet the transitional pass-through eligibility criteria at 
Sec.  419.66(b)(3) and (4) as CMS initially concluded in the CY 2020 
OPPS/ASC final rule with comment period.
    Response: We agree with the applicant and continue to believe that 
the EluviaTM system meets the eligibility criteria at Sec.  
419.66(b)(3) and (4).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. We stated 
that 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 the 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 through 61287). We invited public comments on whether the 
Eluvia\TM\ system continues to meet this criterion.
    Comment: One commenter, a manufacturer of a competing product 
stated that CMS has reviewed drug-eluting vascular stents in the past 
and determined they fell into an already existing pass-through payment 
category. The commenter stated that in August of 2002, CMS concluded 
that coronary drug-eluting stents were described by existing pass-
through device categories C1874 (Stent, coated/covered, with delivery 
system) and C1875 (Stent, coated/covered, without delivery system).\94\ 
The commenter stated that at the time drug eluting stents were coated 
with paclitaxel and the same polymer currently used on the 
EluviaTM system. The commenter stated that in 2012, Zilver 
PTX DES was denied pass-through payment status and quotes a letter 
received from CMS which stated, ``. . . the outpatient clinical review 
team believes that the Zilver PTX Stent is appropriately described by 
previously active device pass-through category C1874, Stent, coated/
covered, with delivery system. This category describes drug-eluting 
stents.'' \95\ According to the commenter, FDA has grouped the 
EluviaTM system and Zilver PTX DES into the same product 
code:
---------------------------------------------------------------------------

    \94\ Federal Register/Vol. 67, No. 154/Proposed Rules/Page 
52106.
    \95\ Correspondence with Dr. John McInnes, Director, Division of 
Outpatient Care.

    ``NIU: Stent, Superficial Femoral Artery, Drug-Eluting--a metal 
scaffold with a drug coating placed via a delivery catheter into the 
SFA to maintain the lumen. The drug coating is intended to inhibit 
---------------------------------------------------------------------------
restenosis. Class III; Cardiovascular Review Panel.''

    The commenter asserted that both devices are self-expanding nitinol 
stents coated with the drug paclitaxel.96 97 The commenter 
further asserted that the EluviaTM system's underlying stent 
platform and delivery system is the same as Boston Scientific's Innova 
self-expanding stent (an uncoated stent for treating the superficial 
femoral artery); \98\ the drug paclitaxel is the same drug used on the 
Zilver PTX DES and earlier generation coronary drug-eluting stents; and 
the polymers used in the EluviaTM system coating are the 
same polymers as those used in the Xience V and Promus Element coronary 
stents.\99\ The commenter stated that this history precludes the 
establishment of a new device category for the EluviaTM 
system.
---------------------------------------------------------------------------

    \96\ https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfPCD/classification.cfm?id=1076.
    \97\ https://www.accessdata.fda.gov/cdrh_docs/pdf18/P180011B.pdf.
    \98\ Gray W, et al. A polymer-coated, paclitaxel-eluting stent 
(Eluvia) versus a polymer-free, paclitaxel-coated stent (Zilver PTX) 
for endovascular femoropopliteal intervention (IMPERIAL): A 
randomised, non-inferiority trial. Lancet; Published Online 
September 22, 2018; http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
    \99\ https://www.accessdata.fda.gov/cdrh_docs/pdf18/P180011B.pdf.
---------------------------------------------------------------------------

    Response: We appreciate the information provided by the commenter 
and have taken this into consideration in making our determination of 
Sec.  419.66(c)(1), discussed below.
    Comment: The applicant stated that in the CY 2020 OPPS/ASC proposed 
rule CMS stated that no existing device category describes the 
EluviaTM system and that since that time no new categories 
that would describe the system have been established.
    Response: We appreciate the information submitted by the 
commenters. Given the additional information provided by commenters CMS 
is concerned that the applicant's proposed long descriptor of `Stent, 
non-coronary, polymer matrix, minimum 12-month sustained drug release, 
with delivery system'' may not suitably differentiate the 
EluviaTM system from Zilver PTX. Specifically, given that 
CMS has previously determined that coronary drug-eluting stents were 
described by existing pass-through device categories C1874 (Stent, 
coated/covered, with delivery system) and C1875 (Stent, coated/covered, 
without delivery system), that FDA has classified the 
EluviaTM system and Zilver PTX into the same product code, 
and finally that CMS previously denied pass-through status to Zilver 
PTX, stating that it is appropriately described by previously active 
device pass-through category C1874 (Stent, coated/covered, with 
delivery system), we believe the same pass-through category code C1874 
appropriately describes the EluviaTM system. We note that 
HCPCS code C1874 is agnostic to the length of time a drug is released 
and therefore encapsulates the EluviaTM system's proposed 
long descriptor. Further, we do not believe it is appropriate for a 
discussion of substantial clinical improvement, i.e., the length of 
time a drug release is maintained, to be the primary motivating 
determinant in a determination of whether a device meets the device 
category criterion in Sec.  419.66(c)(1).
    After consideration of the public comments we received, we conclude 
there is an existing pass-through payment category or pass-through 
category previously in effect that appropriately describes the 
EluviaTM system. Based on this information, we have 
determined that the EluviaTM system does not meets the 
eligibility criterion at Sec.  419.66(c)(1).
    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\

[[Page 63597]]

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 2 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) the Eluvia\TM\ system 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.100 101 102 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.
---------------------------------------------------------------------------

    \100\ 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.
    \101\ 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.
    \102\ 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.\103\ Patients 
who were treated with the Eluvia\TM\ system were followed for a 3-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 a low 
reintervention rate (through 3 years).
---------------------------------------------------------------------------

    \103\ 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) (the 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.\104\ 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 randomized 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.
---------------------------------------------------------------------------

    \104\ 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.\105\ 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.
---------------------------------------------------------------------------

    \105\ 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.\106\ 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 < 0.0001). 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 -0.46]; p < .0.0001). 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.\107\
---------------------------------------------------------------------------

    \106\ 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.
    \107\ 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.\108\ 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

[[Page 63598]]

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.
---------------------------------------------------------------------------

    \108\ 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.\109\ 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 
2 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.
---------------------------------------------------------------------------

    \109\ 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.
---------------------------------------------------------------------------

    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.\110\ 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 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.\111\
---------------------------------------------------------------------------

    \110\ 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.
    \111\ 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 reduced 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.\112\ 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).\113\ The 
applicant notes that the published analysis presented in this 
application has a slightly different clinically-driven TLR rate at 2 
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, U.S. 
patients 65 and older, and patients with diabetes.
---------------------------------------------------------------------------

    \112\ 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.
    \113\ 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).\114\
---------------------------------------------------------------------------

    \114\ 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.\115\
---------------------------------------------------------------------------

    \115\ 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.\116\ 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.
---------------------------------------------------------------------------

    \116\ 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 through 61292). We note 
that we did not approve the Eluvia\TM\ system for CY 2020 transitional 
device pass-through payment due to the potential increased long-term 
mortality signal that FDA was evaluating at the time. We further note 
that in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58657), we 
discussed 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

[[Page 63599]]

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 asserted 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 
discussion of this issue, please see the CY 2020 OPPS/ASC final rule 
with comment period (84 FR 61290).
    In the CY 2022 OPPS/ASC proposed rule, we invited public comments 
on whether the EluviaTM Drug-Eluting Vascular Stent System 
meets the substantial clinical improvement criterion.
    Comment: One commenter, a manufacturer of a competitor device, 
asserted that EluviaTM does not meet the substantial 
clinical improvement criterion. The commenter asserted that the 
MAJESTIC study is inadequate to demonstrate substantial clinical 
improvement as use of a single arm study to support this criterion is 
problematic due to the small (n=57) and highly selective patient 
population (e.g., lesion length limited to a maximum of 11 cm).\117\ 
Further, the commenter stated that despite a very high primary patency 
rate of 96.4 percent at 12 months the rate drops substantially to 77.9 
percent at just 25 months,\118\ which suggests the potential of late 
catch-up phenomenon as previously observed with other polymer-coated 
peripheral DES.119 120 The commenter added that the target 
lesion revascularization (TLR) rate appears to double each year (i.e., 
quadruple from year 1 to year 3), increasing from 3.6 percent at 1 year 
to 7.2 percent at 2 years to 14.7 percent at 3 years.\121\
---------------------------------------------------------------------------

    \117\ M[uuml]ller-H[uuml]lsbeck S, et al. Twelve-Month Results 
From the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for 
Treatment of Obstructive Femoropopliteal Disease. J Endovasc Ther. 
2016;23(5):701-7.
    \118\ M[uuml]ller-H[uuml]lsbeck S, et al. Long-Term Results from 
the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for 
Femoropopliteal Treatment: 3-Year Follow-up. Cardiovasc Intervent 
Radiol. 2017;40(12):1832-1838.
    \119\ Duda SH, et al. Drug-eluting and Bare Nitinol Stents for 
the Treatment of Atherosclerotic Lesions in the Superficial Femoral 
Artery: Long-Term Results From the SIROCCO Trial. J Endovasc Ther. 
2006;13(6):701-710.
    \120\ Lammer J, et al. First Clinical Trial of Nitinol Self-
Expanding Everolimus-Eluting Stent Implantation for Peripheral 
Arterial Occlusive Disease. J Vasc Surg. 2011;54(2):394-401.
    \121\ M[uuml]ller-H[uuml]lsbeck S, et al. Long-Term Results from 
the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for 
Femoropopliteal Treatment: 3-Year Follow-up. Cardiovasc Intervent 
Radiol. 2017;40(12):1832-1838.
---------------------------------------------------------------------------

    The commenter next asserted that errors in the data analysis have 
been reported in scientific meetings\122\ and require a correction of 
the 1-year publication and results;\123\ the commenter also asserted 
that other publications also require a correction.\124\ The commenter 
stated that patency results are inconsistently presented and also 
contended that the primary endpoint of the 12-month patency study 
(n=409) indicate primary patency of 86.8 percent (231/266) for Eluvia 
vs. 81.5 percent (106/130) for Zilver PTX with the subsequent post-hoc 
analysis showing a larger difference of 86.8 percent (243/280) for 
EluviaTM vs. 77.5 percent (110/142) for Zilver PTX. The 
commenter asserted that the post-hoc analysis represents an additional 
14 EluviaTM and 12 Zilver PTX patients; the commenter notes 
that the results for the final 12 Zilver PTX patients added to the 
post-hoc analysis appear to be outliers who had significantly worse 
outcomes than the primary patient cohort (patency 77.5 percent [110/
142] in primary cohort vs. 33.3 percent [4/12] in post-hoc cohort, 
p=0.002) and raises doubt about the poolability of the data between 
these two cohorts.
---------------------------------------------------------------------------

    \122\ Gray WA. 2-year Outcomes from the IMPERIAL Randomized Head 
to Head Study of Eluvia DES and Zilver PTX. Oral presentation at: 
The Leipzig Interventional Course (LINC) Annual Meeting; January 
2020; Leipzig, Germany.
    \123\ 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(10157):1541-
1551.
    \124\ Soga Y, et al. Japanese Patients Treated in the IMPERIAL 
Randomized Trial Comparing Eluvia and Zilver PTX Stents. Cardiovasc 
Intervent Radiol. 2020;43(2):215-222.
---------------------------------------------------------------------------

    The commenter also asserted that in the most recently presented 2-
year results (with data correction),\125\ there is no significant 
difference in patency between Eluvia and Zilver PTX at 2 years (83.0 
percent vs. 77.1 percent, p=0.10, not significant). The commenter 
contended that based on these results a claim of superior primary 
patency cannot be maintained. The commenter was concerned by the claim 
of ``highest reported'' two-year primary patency, stating: (1) The 
modified definition of primary patency is inconsistent across multiple 
studies, (example, the Zilver PTX randomized trial and the IMPERIAL 
trial) which limits appropriate comparability; (2) the second Zilver 
PTX randomized trial, which had a higher 2-year primary patency rate of 
83.4 percent compared with 83.0 percent for the EluviaTM 
system, was excluded from the comparison; \126\ and (3) the claim of 
superiority requires head-to-head comparative studies or at a minimum 
an attempt to account for differences between compared studies.
---------------------------------------------------------------------------

    \125\ Gray WA. 2-year Outcomes from the IMPERIAL Randomized Head 
to Head Study of Eluvia DES and Zilver PTX. Oral presentation at: 
The Leipzig Interventional Course (LINC) Annual Meeting; January 
2020; Leipzig, Germany.
    \126\ Dake MD, et al. Durable Clinical Effectiveness With 
Paclitaxel-Eluting Stents in the Femoropopliteal Artery 5-Year 
Results of the Zilver PTX Randomized Trial. Circulation. 
2016;133(15):1472-1483.
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    The commenter next asserted that the long-term safety of the 
EluviaTM system has not been demonstrated due to: (1) A lack 
of long-term safety data; (2) multiple reports noting the presence of 
aneurysmal degeneration, peri-stent inflammation, or negative late 
lumen loss associated with the EluviaTM system,; (3) the 
total dose and not just the density must be considered; (4) paclitaxel 
is released directly to the target lesion by the Zilver PTX DES and not 
by the EluviaTM system; (5) avoiding use of a polymer, if 
possible, is a preferred stent design; and (6) long-term paclitaxel 
release may not be necessary or desired.
    Another commenter stated that the EluviaTM system meets 
the substantial clinical improvement criterion because CMS already 
concluded the same in the FY 2022 IPPS/LTCH final rule for new 
technology add-on payment.
    Response: We appreciate the information provided by the commenters 
and have taken this into consideration when making our determination of 
the substantial clinical improvement criterion, discussed below.
    Comment: The applicant submitted a comment in support of the 
substantial clinical improvement criterion. The applicant stated that 
in the CY 2022 OPPS/ASC proposed rule CMS referenced the FY 2021 IPPS/
LTCH final

[[Page 63600]]

rule (85 FR 58657) and stated that CMS no longer has concerns about the 
long-term mortality signal. The applicant further stated that in the FY 
2021 IPPS/LTCH final rule, CMS determined that the EluviaTM 
system represents a substantial clinical improvement over existing 
technologies. The applicant added that despite the assessment in the FY 
2021 IPPS/LTCH final rule, in the CY 2022 OPPS/ASC proposed rule, CMS 
asked for input regarding whether the EluviaTM system meets 
the substantial clinical improvement criterion, even raising concerns 
that CMS agreed were not an issue in the discussion of its NTAP 
decision. The applicant asserted that the regulations governing the 
substantial clinical improvement criterion for NTAP and for 
transitional device pass-through status are nearly identical. The 
applicant asserted that in its discussion of substantial clinical 
improvement for the EluviaTM system under the IPPS NTAP 
application, CMS found that the EluviaTM system met the 
criterion based on the following endpoints: Superior primary patency; 
reduced rate of subsequent therapeutic interventions; decreased future 
hospitalizations and physician visits; reduced hospital readmission 
rates; reduced rate of device-related complications; and similar 
functional outcomes and EQ-5D index values with half the rate of target 
lesion revascularizations (TLRs). The applicant added that these 
endpoints are clinically meaningful for all patients with PAD and not 
just for those in the inpatient setting. The applicant asserted that 
there is no evidence-based rationale that would lead CMS to a reach a 
different conclusion regarding substantial clinical improvement for the 
EluviaTM system for transitional device pass-through status 
versus NTAP. The applicant added that there is no difference in the 
indicated patient population for the EluviaTM system based 
on site of service, which is determined by physicians based on the 
totality of a patient's condition.
    Response: We appreciate the additional information provided by the 
commenters. We note in the FY 2021 IPPS/LTCH final rule (85 FR 58657) 
CMS determined that the EluviaTM system met the substantial 
clinical improvement criterion after consideration of the comments 
received and for the reasons discussed, including the improved outcomes 
shown in the IMPERIAL and MAJESTIC trials as well as the updated August 
7, 2019 FDA guidance in regard to paclitaxel-coated devices. As we 
stated in the FY 2021 IPPS/LTCH final rule, the applicant provided the 
following two-year results from the IMPERIAL global randomized 
controlled clinical trial, comparing the EluviaTM system to 
Zilver[supreg] PTX[supreg]:
     The EluviaTM system maintains higher primary 
patency than Zilver[supreg] PTX[supreg] at 2 years, 83.0 percent 
compared to 77.1 percent. The applicant contended that guidelines 
recognize the importance of primary patency in assessing the efficacy 
of peripheral endovascular therapies.\127\
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    \127\ Writing Committee Members, Gerhard-Herman MD, Gornik HL et 
al. 2016 AHA/ACC Guideline on the Management of Patients with Lower 
Extremity Peripheral Artery Disease: Executive Summary. Vasc Med. 
2017 Jun; 22(3):NP1-NP43.
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     The EluviaTM system's 2-year primary patency is 
the highest reported in a superficial femoral artery US pivotal trial 
for a drug-eluting stent or drug coated balloon.\128\ Per the 
applicant, the 2-year primary patency results are consistent with the 
2-year TLR results released earlier in 2019.\129\ According to the 
applicant, the EluviaTM system sustained a statistically 
significant reduction in TLR at 2 years compared to Zilver PTX, 12.9 
percent vs. 20.5 percent (p = 0.0472).\130\
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    \128\ Highest 2-year primary patency based on 24-month Kaplan-
Meier estimates reported for IMPERIAL, IN.PACT SFA, ILLUMENATE, 
LEVANT II and Primary Randomization for Zilver PTX RCT.
    \129\ BSC Data on File. As-treated ELUVIA and PTxControl data 
from IMPERIAL RCT.FDA PTA reference based on FDA Executive Summary 
(median of PTA arms).Abbreviations: DES, drug eluting stent; TLR, 
target lesion revascularization; PTx, paclitaxel.
    \130\ Boston Scientific Presentation to the Circulatory System 
Devices Panel of the Medical Devices Advisory Committee Meeting, 
June 19, 2019.
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     In a subgroup analysis of patients 65 years and older 
(Medicare population), the primary patency rate in the 
EluviaTM system stent group is 92.6 percent, compared to 
75.0 percent for the Zilver[supreg] PTX[supreg] stent group (p=0.0386).
    One commenter identified potential issues with the data used to 
evaluate the EluviaTM system for substantial clinical 
improvement. In spite of the information presented by the commenter, we 
concur with the assessment discussed in the FY 2021 IPPS/LTCH final 
rule and the applicant's additional clarification concerning the 
specific endpoints for which they believe the EluviaTM 
system meets the substantial clinical improvement criterion. We note 
one commenter takes issue with two of the above points that CMS relied 
upon in the FY 2021 IPPS/LTCH final rule in its determination of 
substantial clinical improvement, (e.g. the higher primary patency, the 
2-year primary patency being the ``highest reported'', and the target 
lesion revascularization rate). However, based upon the data and 
comments received we note that the EluviaTM system group 
maintained a higher primary patency rate than the Zilver[supreg] 
PTX[supreg] stent group (92.6 percent vs. 75.0 percent, p < 0.05) in 
the subgroup analysis of patients 65 years and older. Given this 
information and the information provided by the applicant and 
commenters in their comments, we agree that the EluviaTM 
system meets the substantial clinical improvement criterion at Sec.  
419.66(c)(2).
    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 36:
[GRAPHIC] [TIFF OMITTED] TR16NO21.050


[[Page 63601]]


    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 the 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 ((5,645/10,042.94) x 100 = 56.2 percent). 
Therefore, we stated in the CY 2022 OPPS/ASC proposed rule that 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 ((5,645/
4,843.71) x 100 = 116.5 percent). Therefore, we stated in the CY 2022 
OPPS/ASC proposed rule that 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 (((5,645-
4,843.71)/10,042.94) x 100 = 7.98 percent). Therefore, we stated in the 
CY 2022 OPPS/ASC proposed rule that we do not believe that the 
Eluvia\TM\ system meets the third cost significance requirement.
    We invited public comments 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.
    Comment: A manufacturer of a competitor device and a second 
commenter agreed that based on calculations included in the CY 2022 
OPPS/ASC proposed rule for the second and third cost significance 
tests, the EluviaTM system does not meet the cost 
significance requirements for device pass-through payment.
    A third commenter stated that in response to the CY 2021 OPPS/ASC 
proposed rule they noted that a device that meets the newness and 
substantial clinical improvement criteria for transitional pass-through 
payment may only replace some of the devices included in the device-
related portion (DRP).
    Multiple commenters asserted that the EluviaTM system 
meets the cost criteria for transitional device pass-through status. 
The commenters stated that the current methodology of the cost 
significance criterion uses a single number, which includes all devices 
utilized in a particular procedure. The commenters explained that since 
the DRP contains all devices for respective claims, the DRP is 
artificially high as a benchmark for the EluviaTM system 
since it only replaces one stent in the procedure. The commenters 
concluded that as a result of this issue, the EluviaTM 
system does not meet the cost criteria because the average sales price 
of the device is not sufficient to account for all the other devices 
included in the DRP, and not just the stent it is replacing.
    Response: We appreciate the information provided by the commenters 
and have taken this into consideration in making our final 
determination of the cost significance criterion discussed below.
    Comment: The applicant agreed that the EluviaTM system 
meets the first cost test. Regarding the second and third cost 
significance tests, the applicant stated that CMS overestimated the DRP 
used in the cost significance tests. According to the applicant, when 
calculating the OPPS payment for a procedure that uses a pass-through 
device, CMS has an established policy of only subtracting (as the DRP) 
the cost of those devices that are replaced by the transitional pass-
through device. The applicant asserted that the payment policy 
methodology for calculating the DRP should also be applied to the 
calculating cost significance for the cost criteria.
    The applicant asserted of the cost significance tests that the 
first question addresses the cost of the transitional pass-through 
device relative to total payment, whereas the second two questions 
address cases where the transitional pass-through device would replace 
device costs currently reflected in the associated procedure payment 
amount. The applicant offered three scenarios concerning candidate 
devices and the DRP: (1) A candidate device may replace all or nearly 
all of the devices that are accounted for in the DRP of the related 
procedures (e.g., neurostimulators); (2) a candidate device may replace 
only some of the devices included in the DRP (e.g., the 
EluviaTM system); and (3) a candidate device may not replace 
any of the devices included in the DRP (e.g., a single-use endoscope). 
According to the applicant, CMS' calculation of the DRP to include all 
the devices used in the related procedure overestimates the DRP in the 
latter two scenarios. The applicant asserted that because of this novel 
technologies that otherwise meet the transitional pass-through criteria 
would fail the cost significance tests since they will be compared to 
the cost of all devices used in a procedure and manufacturers may 
establish higher device prices to exceed an inflated DRP.
    The applicant asserted that CMS' current approach to calculating 
the DRP is contrary to the intent of the TPT program, which is to 
recognize the costs associated with novel, clinically beneficial 
technologies that are not yet incorporated into the procedural cost 
calculation with temporary, separate device-related payment until the 
new device cost is reflected in rate setting data. The applicant added, 
the intent of the DRP in the cost significance test is to compare the 
cost of the pass-through candidate device to the costs of the device(s) 
that the pass-through candidate device would replace and not to compare 
the costs of the candidate device to the total costs of all devices 
used in a procedure to include those that are unrelated and not 
replaced by the candidate device.
    Next the applicant stated that in its discussion of the pass-
through device offset policy for OPPS payment in the CY 2004 Outpatient 
Prospective Payment System (OPPS) Final Rule, CMS stated, ``Beginning 
with the implementation of the 2002 OPPS update (April 1, 2002), we 
deduct from the pass-through payments for the identified devices an 
amount that offsets the portion of the APC payment amount that we 
determine is associated with the

[[Page 63602]]

device, as required by section 1833(t)(6)(D)(ii) of the Act.''\131\ The 
applicant continued, ``We will apply an offset to a new device category 
only when we are able to determine that an APC contains costs 
associated with the new device. We will also continue our existing 
methodology for determining any offset amount if we find that device 
costs associated with a new device category are packaged into the APCs. 
We will include information about any applicable offset in the 
transmittal we issue to announce information regarding the new 
category''.\132\
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    \131\ Department of Health and Human Services. Centers for 
Medicare & Medicaid Services. 42 CFR parts 410 and 419. [CMS-1471-
FC]. Federal Register. 2003;68(216): 63438-9.
    \132\ Department of Health and Human Services. Centers for 
Medicare & Medicaid Services. 42 CFR parts 410 and 419. [CMS-1471-
FC]. Federal Register. 2003;68(216): 63439.
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    The applicant stated that on at least two occasions, CMS has 
referenced the above-stated policy in decisions not to apply a device 
offset when calculating payment for pass-through devices. The applicant 
cited two instances where they believe CMS has chosen to not apply a 
device offset, first with C2623 (Drug coated angioplasty balloon) \133\ 
and C1748 (Single use [disposable] endoscope).\134\ According to the 
applicant, with these two decisions, CMS has acknowledged that it does 
not consider the cost of devices that are not replaced by the pass-
through device when calculating the pass-through payment amount. The 
applicant asserted that given these decisions and the associated 
payment policy, CMS has not only shown that it has the authority to 
define the DRP calculation methodology, but it has also established a 
precedent for defining the DRP as only those devices that are replaced 
by the pass-through device. The applicant stated that it is therefore 
inconsistent for CMS to apply a different DRP methodology in the cost 
test for devices seeking transitional pass-through payment.
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    \133\ CMS Transmittal 3280 (R3280CP, June 5, 2015) https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3280CP.pdf.
    \134\ CMS Transmittal 10541 (R10541CP, December 31, 2020) 
https://www.cms.gov/files/document/r10541cp.pdf.
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    According to the applicant the prior precedents and this 
inconsistency are central to the application of the TPT cost 
significance test for the EluviaTM system. The applicant 
stated that as requested in their 2018 transitional pass-through 
application submission, they again ask CMS to consider only the cost of 
those devices replaced by the EluviaTM system when 
calculating the DRP for CPT Code 37226 (Revascularization, 
endovascular, open or percutaneous, femoral, popliteal artery(s), 
unilateral; with transluminal stent placement(s), includes angioplasty 
within the same vessel, when performed). According to the applicant the 
average femoral, popliteal stent placement procedure (CPT 37226) 
includes ancillary (non-stent) device costs of $2,311.26 and average 
stent device costs of $3,406.93. The applicant asserts then that a more 
appropriate comparison is of the EluviaTM system to the 
$3,406.93 in average stent device costs. The applicant contends that 
the non-stent devices should not be considered in the DRP utilized in 
the 3-part cost significance test because the EluviaTM 
system is not replacing these costs associated with the non-stent 
devices. The applicant concluded that should the $3,406.93 be used as 
the DRP, then the EluviaTM system passes the second and 
third cost significance tests at approximately 166 percent and 22 
percent, respectively.
    Response: As we stated above in section IV.2.a. of this final rule 
with comment period, to be eligible for device pass-through payments a 
device must 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). Since the CY 
2017 OPPS/ASC final rule (81 FR 79648 through 79649), CMS has described 
the manner in which it evaluates device pass-through applicants against 
the cost significance criterion at Sec.  419.66(d). Per the applicant, 
CMS has stated in prior rules that we will deduct from the pass-through 
payments for a device an amount that offsets the portion of the APC 
payment amount that we determine is associated with the device. Once a 
device is approved for pass-through payments CMS appropriately applies 
this rationale to determine the payment rate for devices with pass-
through status. However, except in rare circumstances, CMS has 
consistently applied the full device offset amount associated with the 
applicable APC used to evaluate the cost significance tests at Sec.  
419.66(d). In this manner we believe we are identifying devices whose 
average cost is not ``insignificant''.
    In reference to the prior precedents identified by the applicant 
(C2623 and C1748) where CMS determined to not apply an offset we 
disagree with the applicant's conclusion that these situations apply to 
the EluviaTM system and the request for a partial device 
offset. In some cases, CMS determines that none of the costs of a new 
device are included in the applicable APC. For example, in the CY 2021 
OPPS/ASC final rule (85 FR 85994), CMS determined for the 
EXALTTM Model D Single-Use Duodenoscope that the costs 
associated with the device were not already reflected in the device 
portions of APCs 5303 (Level 3 Upper GI Procedures) or 5331 (Complex GI 
Procedures) because there were no single-use duodenoscopes on the 
market previously so no operating cost data associated with such 
devices could be included in the historical OPPS claims data. 
Additionally, none of the costs associated with the device were 
reflected in the device portions of the applicable APCs. This is 
similarly reflected in the CMS transmittal 10541 dated December 31, 
2020 where CMS stated, ``we have determined that the costs associated 
with C1748 are not already reflected in APCs 5303 or 5331''.\135\
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    \135\ CMS Transmittal 10541 (R10541CP, December 31, 2020) 
https://www.cms.gov/files/document/r10541cp.pdf.
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    In its comment to CMS, the applicant asserts that the 
EluviaTM system replaces a portion of the previous related 
devices and not all of previous related devices. This is further 
evidenced by the applicant's request for a partial device-related 
portion (that is, device offset) of $3,406.93. CMS has historically 
used a full device offset related to the applicable APC in the majority 
of cases when assessing the cost criterion; to our knowledge CMS has 
never utilized a partial device offset in this manner. If CMS desired 
to change the cost criterion evaluation it must do so through notice 
and comment rulemaking to provide ample notice and an opportunity for 
public comment. Therefore, we do not believe the use of a partial 
device offset, as the applicant has requested, would be consistent with 
CMS' application of the cost significance criterion specified at Sec.  
419.66(d). Because the applicant did not meet the second and third cost 
significance tests, we do not believe the EluviaTM system 
meets the cost significance criterion specified at Sec.  419.66(d).
    After consideration of the public comments we received and our 
review of the device pass-through application, we are not approving the 
EluviaTM system for transitional pass-through payment status 
in CY 2022 because the product does not meet the cost significance 
criterion.
(4) CochlearTM Osia[supreg] 2 System
    Cochlear Americas submitted an application for a new device 
category

[[Page 63603]]

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 within 3 years of the date of the initial 
FDA marketing authorization. We invited public comments on whether the 
Osia[supreg] 2 System meets the newness criterion.
    Comment: The applicant asserted that the Osia[supreg] 2 system is 
new because it received FDA clearance on November 15, 2019 and its 
predicate device received FDA clearance on July 3, 2019, both of which 
are within 3 years of December 1, 2020, the date on which we received 
the device pass-through application for the Osia[supreg] 2 System. The 
applicant asserted that the predicate to these devices, the BONEBRIDGE 
System, received FDA authorization on July 20, 2018 which is also 
within the newness period for transitional pass-through status.
    Response: We appreciate the applicant's input and agree that 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 
equipment, 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 invited public 
comments on whether the Osia[supreg] 2 System meets the eligibility 
criteria at Sec.  419.66(b).
    We did not receive public comments in regard to whether the 
Osia[supreg] 2 system meets the eligibility criteria at Sec.  
419.66(b)(3) or Sec.  419.66(b)(4), therefore we agree with the 
applicant that the Osia[supreg] 2 system meets the criteria of 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 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-

[[Page 63604]]

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 stated in the CY 2022 OPPS/ASC proposed rule that 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. In the CY 2022 OPPS/ASC proposed rule, 
we invited public comment on whether the Osia[supreg] 2 system meets 
the device category criterion.
    Comment: We received multiple comments addressing Sec.  
419.66(c)(1) for both BONEBRIDGE and the Osia[supreg] 2 system. One 
commenter stated they do not support CMS' position that the BONEBRIDGE 
and Osia[supreg] 2 system should not be granted a new category, because 
these devices take much longer to implant surgically than percutaneous 
bone conduction implants, they are active sound processors, and they 
work differently than percutaneous devices like the BAHA or Oticon 
implants.
    Another commenter who also disagreed with CMS that the BONEBRIDGE 
and Osia[supreg] 2 system are adequately described by L8690 stated that 
the BONEBRIDGE and Osia[supreg] 2 system are transcutaneous hearing 
implants, and that CMS should create a new HCPCS code that describes 
both the procedure and the implant because both are new. The commenter 
expressed their disappointment in what they described as CMS' continual 
resistance to conduct rulemaking specifically on Middle Ear Implants 
(MEIs) because they believe CMS should hear the opinions of clinical 
experts, physicians, and Medicare beneficiaries regarding the 
appropriateness of classifying MEIs as prosthetic implants.
    A different commenter stated their support for CMS' conclusion in 
the proposed rule that BONEBRIDGE and Cochlear Osia[supreg] are 
appropriately described by a pass-through category previously in 
effect.
    Two commenters stated that CMS must support the inclusion of middle 
ear implants in the prosthetic category. The commenters asserted that 
not including these devices denies beneficiaries access to all FDA-
approved hearing prosthetics and discourages in new technology for the 
hearing impaired.
    Response: We appreciate the input provided by these commenters. We 
have taken this information into consideration in our determination of 
the eligibility criterion at Sec.  419.66(c)(1), discussed below. We 
note some of the comments, those addressing hearing prosthetics, are 
outside of the scope of this rule. Please refer to the above section 
(2) BONEBRIDGE where we summarize these comments in full.
    Comment: One commenter stated that the pass-through category 
identified by CMS, L8690, does not provide an accurate description of 
the Osia[supreg] 2 system as it does not account for several material 
differences that exist between Osia (and other active auditory 
osseointegrated implant (AOI) systems) and the devices intended to be 
described by L8690. The commenter asserted that the mechanism by which 
the vibrations are generated and reach the skull are entirely 
different, which is reflected by the FDA device classification. The 
commenter asserted that L8690, developed in 2007, could not account for 
active devices.
    Response: We appreciate the information provided by the commenter 
and have taken this into account in our determination of the Sec.  
419.66(c)(1) eligibility criterion, discussed below.
    Comment: The applicant stated that L8690 does not describe active, 
transcutaneous systems like Osia[supreg] 2 and BONEBRIDGE. First, the 
applicant stated that L8690 did not extend to active, transcutaneous 
active osseointegrated implants (AOIs) when it was created in 2007 
because the only osseointegrated implant at that time was passive and 
percutaneous. Second, the applicant, responding to CMS' statement, 
``that there is a similar mechanism of action for all these devices . . 
.'' \136\, stated that the mechanism by which the vibrations are 
generated and reach the skull are entirely different and can affect 
safety, clinical outcomes, and patient quality of life. The applicant 
asserted that the active nature of the Osia[supreg] 2 system, which 
diminishes skin-related complications associated with percutaneous 
devices and at the same time improves audiological outcomes, differs 
from passive systems which involve the transmission of mechanical 
vibrations from the external components to the internal components. As 
opposed to previous technologies, the applicant asserted that active 
systems incorporate a new mechanism of action that sends digital 
signals from the external sound processor to the internal components, 
which then convert a digital signal to a vibration directly at the 
point of bone contact, eliminating the need for percutaneous 
attachment. The applicant stated that although both active and passive 
systems ultimately generate a vibration to stimulate the cochlea, the 
way they do so and where the vibration is generated are entirely 
different. The applicant added that FDA created a new device 
classification for active implantable bone conducting hearing systems 
in response to BONEBRIDGE's application in 2018 (21 CFR 874.3340), 
which is specifically for active systems as opposed to that for passive 
systems (21 CFR 874.3300). The applicant stated that while they 
recognize that FDA and CMS classify devices differently for different 
purposes, they believe that the way FDA classifies bone conduction 
implants reinforces why CMS should distinguish active implantable bone 
conduction devices from passive, percutaneous systems for purposes of 
transitional device pass-through payment status.
---------------------------------------------------------------------------

    \136\ 86 FR at 42104.
---------------------------------------------------------------------------

    The applicant next stated that in other situations, CMS has 
modified broadly worded device categories to recognize technological 
advances within a device class. The applicant noted that the descriptor 
for HCPCS code C1767--``Generator, neurostimulator (implantable)''--was 
modified to ``Generator, neurostimulator (implantable), non-
rechargeable'' to create a new device pass-through category for HCPCS 
codes C1820 (Generator, neurostimulator (implantable), with 
rechargeable battery and charging system) and C1822 (Generator, 
neurostimulator (implantable), high frequency, with rechargeable 
battery and charging system).
    Response: After consideration of the public comments we received, 
we agree there is no existing pass-through payment category that 
appropriately describes the Osia[supreg] 2 system. The Osia[supreg] 2 
system device consists of an external

[[Page 63605]]

processor that receives sound pressure energy and converts this to a 
radiofrequency signal which communicates with a surgically implanted 
subcutaneous transducer/actuator via a stud. The transducer/actuator 
converts this signal to mechanical vibrations that are transmitted to 
the skull and inner ear. As stated by the applicant, when the existing 
pass-through category, Auditory osseointegrated device (L8690), was 
issued in 2007, the technology to implant the transducer/actuator did 
not exist. Based on this information, we have determined that the 
Osia[supreg] 2 system meets the eligibility criterion at Sec.  
419.66(c)(1). Due to the similarity between the devices, we refer the 
reader to section IV(A)(2)(b)(2) of this rule for a similar discussion 
of the BONEBRIDGE.
    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 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.137 138 139 140 141 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.142 143 144 145 146 
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.
---------------------------------------------------------------------------

    \137\ 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.
    \138\ 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.
    \139\ House JW, Kutz JW Jr. Bone-anchored hearing aids: 
incidence and management of postoperative complications. Otol 
Neurotol. 2007 Feb;28(2):213-7.
    \140\ 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.
    \141\ Shirazi MA, Marzo SJ, Leonetti JP. Perioperative 
complications with the bone-anchored hearing aid. Otolaryngol Head 
Neck Surg. 2006 Feb;134(2):236-9.
    \142\ Ibid.
    \143\ Ibid.
    \144\ Ibid.
    \145\ Ibid.
    \146\ 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[hairsp]=[hairsp]37) and 
single-sided sensorineural deafness (SSD, n[hairsp]=[hairsp]14). In 
regard to safety outcomes, patients experienced the following minor 
adverse events including pain (n[hairsp]=[hairsp]7), numbness 
(n[hairsp]=[hairsp]1), vertigo (n[hairsp]=[hairsp]3), swelling 
(n[hairsp]=[hairsp]3), tension implant site (n[hairsp]=[hairsp]1), 
warmth at the SP site (n[hairsp]=[hairsp]3), headache 
(n[hairsp]=[hairsp]3), hematoma/bleeding (n[hairsp]=[hairsp]2).\147\ 
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.
---------------------------------------------------------------------------

    \147\ 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.
---------------------------------------------------------------------------

    In the CY 2022 OPPS/ASC proposed rule, we expressed concern 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 
explained in the proposed rule that we were 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, in the CY 2022 OPPS/ASC proposed 
rule we explained that we were concerned that we are unable to 
determine a substantial clinical improvement of the Osia 2 system as 
compared to existing devices. We stated that 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 invited public comments in the CY 2022 
OPPS/ASC proposed rule on whether the Osia[supreg] 2 system meets the 
substantial clinical improvement criterion.
    Comment: In response to our concerns about whether the Osia[supreg] 
2 system meets the substantial clinical improvement criterion, one 
commenter stated that head-to-head comparisons are not a requirement 
for transitional pass-through status. The commenter added that because 
the Osia[supreg] 2 System and its predecessor system are substantially 
similar as determined by FDA, the clinical evidence for the predecessor 
system applies equally to the Osia[supreg] 2 System. The commenter 
asserted that the clinical evidence submitted by the applicant, as 
described by CMS in the CY 2022 OPPS/ASC proposed rule, supports that 
the Osia[supreg] 2 System is a substantial clinical improvement 
compared to percutaneous systems.
    Response: We thank the commenter for the information and have taken 
it into consideration in our determination of whether the Osia[supreg] 
2 System meets the substantial clinical improvement, discussed below.
    Comment: The applicant submitted a comment in support of its 
position that the Osia[supreg] 2 System meets the substantial clinical 
improvement criterion. The applicant contended, based on the discussion 
in the CY 2022 OPPS/ASC proposed rule, that CMS does not appear to be 
concerned that there is insufficient evidence to conclude that active/
transcutaneous systems are a substantial clinical improvement over 
passive/percutaneous systems. Rather, the applicant believes our 
concerns relate to the fact that

[[Page 63606]]

evidence was submitted for Osia[supreg] 1 and not Osia[supreg] 2.\148\
---------------------------------------------------------------------------

    \148\ 86 FR at 42,105.
---------------------------------------------------------------------------

    In response to CMS' concerns, the applicant stated that first, 
head-to-head trials are not a requirement for demonstrating substantial 
clinical improvement for purposes of qualifying for transitional pass-
through device--status and would not be appropriate in this situation. 
First, the applicant stated that enrolling patients in a head-to-head 
trial in which the primary difference is expected to be adverse events 
associated with one treatment arm is extremely challenging, and it is 
unclear what additional data would be gained, particularly since the 
nature and frequency of device-related complications between passive 
percutaneous and transcutaneous devices is established and commonly 
reported in the literature. Second, the applicant stated that clinical 
studies involving the first Osia[supreg] device are applicable to the 
Osia[supreg] 2 System because the devices are substantially equivalent 
and only minor differences exist between the two versions of the 
device. The applicant notes that the FDA 510(k) clearance for the 
Osia[supreg] 2 system expressly noted clinical performance data did not 
reveal significant differences in hearing performance between either 
system and did not raise new issues of safety or effectiveness.
    Next the applicant discussed two studies that involve the 
Osia[supreg] 2 system. The first study reported the surgical and 
audiological experience with the Osia 2 System based on a U.S. 
nationwide controlled market release (CMR) conducted between December 
9, 2019 and February 14, 2020 involving 23 surgeons who performed 44 
operations on 43 recipients.\149\ The applicant noted that no device-
related complications were reported and five complications not 
associated with the Osia[supreg] 2 system were reported that were all 
successfully resolved. According to the applicant, the authors 
concluded that the Osia[supreg] 2 system, ``. . . represents an 
important advance in hearing implant technology. Utilizing innovative 
digital piezoelectric stimulation, this active auditory osseointegrated 
implant (OSI) delivers high-power output and improved high frequency 
gain for optimizing speech perception while maintaining safety and 
engendering high patient satisfaction.'' \150\
---------------------------------------------------------------------------

    \149\ Goldstein MR, Bourn S, Jacob A. Early Osia[supreg] 2 bone 
conduction hearing implant experience: Nationwide controlled-market 
release data and single-center outcomes.
    \150\ Ibid.
---------------------------------------------------------------------------

    The second study is a systematic review that, according to the 
applicant, provides evidence of substantial clinical improvement for 
both the Osia[supreg] and Osia[supreg] 2 systems.\151\ According to the 
applicant, the authors reported their findings from reviewing adverse 
event reports associated with active transcutaneous bone conduction 
implants (atBCls) in the Manufacturer and User Facility Device 
Experience (MAUDE) database of FDA. According to the applicant, after 
removing irrelevant reports and duplicates, 83 MDRs describing 91 
adverse events (patient injuries and device malfunctions) were 
analyzed, all of which occurred postoperatively. The applicant asserted 
that the five most comment types of events, device malfunctions leading 
to a lack of conduction or hearing (n=26, 29 percent), infections 
(n=14, 15 percent), device malfunctions of intermittent or reduced 
hearing (n=12, 13 percent), and pain and wound formation (n=9 or 10 
percent), accounted for 77 percent of all events reported. The 
applicant asserted that device malfunctions were predominantly 
associated with BONEBRIDGE (93 percent of all device malfunctions 
reported), while patient injuries such as infections were more commonly 
reported for Osia[supreg] (67 percent of all reported injuries). 
According to the applicant, the authors concluded that complications 
observed with active transcutaneous BCI use are similar to those with 
passive transcutaneous BCIs.\152\
---------------------------------------------------------------------------

    \151\ Crowder HR, Bestourous DE, Reilly BK. Adverse events 
associated with Bonebridge and Osia bone conduction implant devices. 
Am J Otolaryngol. 2021 ;42(4):102968. doi:10.1016/
j.amjoto.2021.102968 PubMed ID: 33676070.
    \152\ Ibid.
---------------------------------------------------------------------------

    In regard to evidence submitted with their application, the 
applicant stated commonly reported adverse events which include ear 
inflammations, dizziness, and headache, are clearly not related to the 
implantation. Based on reported events in a comparison between the 
Osia[supreg] system \153\ and the Baha Connect System \154\ the 
applicant asserted that it is clear that the Osia[supreg] System has 
significantly lower rates of implantation-related adverse events than 
the passive/percutaneous system.
---------------------------------------------------------------------------

    \153\ Mylanus EAM et al. in the submission; Clinica/Trials.gov 
Identifier: NCT03086135.
    \154\ van Hoof M et al. 2020, PubMed JD: 32231633; Clinica/
Trials.gov Identifier: NCT01796236.
---------------------------------------------------------------------------

    Response: We thank the applicant for their submission and the 
additional information provided. Because of the overlap between 
comments for the Osia[supreg] 2 system and BONEBRIDGE, we direct 
readers to section (IV)(2)(b)(2)(2) of this final rule with comment 
period.
    We appreciate the commenters' responses on the Osia[supreg]2 system 
application. We disagree with the applicant's comment that commonly 
reported adverse events which include ear inflammations, dizziness, and 
headache, are clearly not related to the implantation. We note, the 
term ``dizziness'' can be used to explain a variety of symptoms that 
can include weakness, lightheadedness, unsteadiness and vertigo, and an 
argument against causality may be reasonable. ``Headache'', however, is 
pain affecting the head or face. To dismiss a possible connection 
between the skull implantation procedure and a complaint of post-
procedure headache does not seem reasonable.
    While new evidence was submitted by the applicant which attempts to 
address substantial clinical improvement for the Osia[supreg] 2 system, 
we are unable to conclude that the device meets the substantial 
clinical improvement criterion. Specifically, we note that the results 
of a meta-analysis are informative, however without controlling for the 
differences across studies (for example, study design, sampling 
technique, etc.) we are unable to determine if the treatment effects 
seen are due to the Osia[supreg] 2 system or due to differences in 
study design. In regard to commenter's suggestion that a head-to-head 
analysis not being required for an assessment of substantial clinical 
improvement, we agree in part. While it may be the case that a direct 
head-to-head comparison may not always be feasible or appropriate, we 
acknowledge that this is the ideal manner in which to address 
comparisons between one technology and another. For example, CMS 
utilized meta-analyses and historical controls as evidence of 
substantial clinical improvement when robust critical efforts have been 
made to account for variations in study design (i.e., confounding) in 
the former and comprehensive reviews to establish the validity of the 
latter. In regard to the second study \155\ discussed in the 
applicant's comment, we note that the small sample size of 43 
recipients and 44 procedures may not be generalizable to a larger 
Medicare beneficiary population. Therefore, we are unable to determine 
a substantial clinical

[[Page 63607]]

improvement of the Osia[supreg] 2 system as compared to existing 
devices.
---------------------------------------------------------------------------

    \155\ Goldstein MR, Bourn S, Jacob A. Early Osia[supreg] 2 bone 
conduction hearing implant experience: Nationwide controlled-market 
release data and single-center outcomes.
---------------------------------------------------------------------------

    After consideration of the public comments and additional 
information we have received, we are not approving the Osia[supreg] 2 
system for transitional pass-through payment status in CY 2022 because 
the product does not meet the substantial clinical improvement 
criterion. Because we have determined that the Osia[supreg] 2 system 
does not meet the substantial clinical improvement criterion, we have 
not evaluated the cost criterion.
(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 
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

[[Page 63608]]

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.
    Comment: In response to CMS' summary, the applicant stated that the 
Pure-Vu[supreg] System Generation 1 (Gen 1) received FDA 510(k) 
clearance in September 2016. The applicant added that the Gen 1 version 
of the system was used to gather clinical data using disposables sold 
at a discounted rate to one institution and five institutions in 2017 
and 2018, respectively. According to the applicant, after receiving 
feedback from providers concerning the Gen 1 system, the company 
decided not to make the Gen 1 product available to the market. 
According to the applicant, the Generation 2 (Gen 2) version of the 
Pure-Vu[supreg] System obtained FDA 510(k) clearance in June 2019. The 
applicant clarified that no application for the Gen 1 device was 
submitted for pass-through payment in the outpatient setting and 
asserted that since only a few institutions purchased the device, the 
cost burden of the Gen 1 system is not factored into the current 
marketplace. The applicant stated that the Gen 2 version is the product 
for which the applicant is seeking transitional device pass-through 
status.
    Response: We appreciate the commenter's input and agree that the 
Pure-Vu[supreg] System meets the newness criterion because we received 
its device pass-through application on September 1, 2020, which is 
within 3 years of the June 21, 2018, the date of FDA PMA.
    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 invited public comments on whether Pure-Vu[supreg] meets 
the eligibility criteria at Sec.  419.66(b).
    We did not receive any comments on whether Pure-Vu[supreg] meets 
the eligibility criteria at Sec.  419.66(b)(3) or Sec.  419.66(b)(4). 
We agree with the applicant that Pure-Vu[supreg] device meets the 
criteria of 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 stated in 
the CY 2022 OPPS/ASC proposed rule that we have not identified an 
existing pass-through payment category that describes Pure-Vu[supreg]. 
We invited public comment on whether Pure-Vu[supreg] meets the device 
category criterion.
    We did not receive any comments on whether Pure-Vu[supreg] meets 
the eligibility criteria at Sec.  419.66(c)(1). We continue to believe 
that Pure-Vu[supreg] device meets the criteria of Sec.  419.66(c)(1) 
because we have not identified an existing pass-through payment 
category that describes Pure-Vu[supreg].
    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 and was denied 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.\156\
---------------------------------------------------------------------------

    \156\ 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.\157\ 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

[[Page 63609]]

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.
---------------------------------------------------------------------------

    \157\ 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.\158\ 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]).
---------------------------------------------------------------------------

    \158\ Van Keulen KE, Neumann H, Schattenberg JM, Van Esch AAJ, 
Kievit W, Spaander MCW, Siersema PD. A novel device for 
intracolonoscopy cleansing of inadequately prepared colonoscopy 
patients: A feasibility study. Endoscopy. 2019 Jan;51(1):85-92. doi: 
10.1055/a-0632-1927. Epub 2018 Jul 11.
---------------------------------------------------------------------------

    In the third study provided by the applicant that directly 
evaluated the Pure-Vu[supreg] System in a clinical setting, Bertiger 
G., et al. performed a United States-based single center, prospective, 
outpatient study investigating regimes of reduced outpatient bowel 
preparations, which included low doses of over-the-counter laxatives, 
and eliminating the typical 24 hour clear liquid diet restriction, 
which was replaced by a low residue diet the day before the 
procedure.\159\ 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 619.48 years. The study found 
that each of the 3 study arms revealed significant differences in BBPS 
score between the baseline preparation and post-cleansing via Pure-
Vu[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.
---------------------------------------------------------------------------

    \159\ 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.\160\ 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.
---------------------------------------------------------------------------

    \160\ 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 2 cm. 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 explained 
in the CY 2022 OPPS/ASC proposed rule that we have the following 
observations. While

[[Page 63610]]

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 noted 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 noted 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 noted in the CY 2022 OPPS/ASC proposed rule 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 noted that this device may not be 
broadly applicable in the outpatient setting and are solicited comment 
on situations in which this device would have a substantial clinical 
benefit for patients or subpopulations of patients. For instance, in 
the outpatient setting, we explained that 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 noted that the Helmut et al. study noted one procedure-
related perforation which required surgical repair and we invited 
public comments regarding the concern of procedure-related 
perforation.\161\ Based upon the evidence presented, we invited public 
comments on whether the Pure-Vu[supreg] meets the substantial clinical 
improvement criterion.
---------------------------------------------------------------------------

    \161\ 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).
---------------------------------------------------------------------------

    Comment: One commenter stated that Pure-Vu[supreg] is a unique 
device with the ability to potentially change a patient's course of 
care due to its ability to create high-quality colonoscopies in 
patients that are unable to fully prep for an exam. The commenter 
stated that they want to make sure that patients who suffer from 
functional GI and motility disorders which affect the lower GI tract 
can get the surveillance and care that they need and Pure-Vu[supreg] 
can directly impact this. The commenter asserted there is a direct 
correlation between being able to provide a high-quality colonoscopy 
where the more the colon mucosa can be observed and the ability to 
better diagnose patients.
    Response: We appreciate the information provided by the commenter 
and have taken this into consideration in making our final 
determination, discussed below.
    Comment: In support of the substantial clinical improvement 
criterion, the applicant submitted a comment. The applicant responded 
to CMS' concerns in the proposed rule related to the Boston Bowel 
Preparation Score (BBPS) and stated that this is a measure of the 
amount of the colon mucosa that can be visualized and is independent of 
a particular technology or method used to clear fecal matter or debris. 
The applicant asserted that if significant areas of the colon tissue 
cannot be visualized due to retained debris, the endoscopist will miss 
any pathology covered. The applicant stated that this is especially 
critical as sessile serrated adenomas are pre-cancerous flat lesions 
that do not protrude from the colon wall making them impossible to 
detect in the presence of debris. According to the applicant, multiple 
publications validating the BBPS as a reliable measurement to predict 
adenoma and/or polyps have been published, for example: The polyp 
detection percentage in inadequate (BBPS 0, 1) and adequate (BBPS 2, 3) 
colon prep were 6 percent and 27 percent (p < 0.0001), respectively 
and,\162\ the polyp detection rate was 40 percent for patients with a 
BBPS score >5 compared to 24 percent for patients with a BBPS score of 
<5 (p < 0.02) with an increased percentage of recommendation for repeat 
procedures in the later group.\163\ The applicant further described the 
Aronchick scale and the Ottawa score which are other validated methods 
available to assess colon visualization.\164\ According to the 
applicant, these cited studies were based on current standard of care 
for performing colonoscopy. The applicant stated that despite use of 
the current standard of irrigation and suction through the working 
channel of a colonoscope, these patients continued to have inadequate 
bowel preparation over 7 percent. The applicant asserted that to the 
extent there is a reduction in the number of patients that have an 
inadequate/poor preparation, as noted by a low BBPS score, the 
endoscopist will improve the overall adenoma detection rate.
---------------------------------------------------------------------------

    \162\ Kluge MA, Williams JL, Wu CK, et al. Inadequate Boston 
Bowel Preparation Scale scores predict the risk of missed neoplasia 
on the next colonoscopy. Gastrointest Endosc. 2018 Mar;87(3):744-
751.
    \163\ Lai EJ, Calderwood AH, Doros G, et al. The Boston bowel 
preparation scale: a valid and reliable instrument for colonoscopy-
oriented research. Gastrointest Endosc. 2009 Mar;69(3 Pt 2):620-5.
    \164\ Hong SN, Sung IK, Kim JH, et al. The Effect of the Bowel 
Preparation Status on the Risk of Missing Polyp and Adenoma during 
Screening Colonoscopy: A Tandem Colonoscopic Study. Clin Endosc. 
2012 Nov;45(4):404-11.
---------------------------------------------------------------------------

    According to the applicant, there is a clear relationship between 
adenoma detection rates to the risk of receiving a diagnosis of an 
interval cancer as evidenced in an evaluation of 314,872 patients.\165\ 
Citing the article, the applicant states that, ``The risk of interval 
cancer decreased approximately linearly with increasing adenoma 
detection rates, without evidence of a threshold effect within the 
observed range of rates. With adenoma detection rate modeled as a 
continuous variable, each 1.0 percent increase in the rate predicted a 
3.0 percent decrease in the risk of interval cancer (hazard ration, 
0.97;95 percent CI, 0.96 to 0.98).'' \166\ According to the applicant, 
this study shows the clinical benefit to the patient population with 
low adenoma detection rates due to inadequate preparation, especially 
in high risk colorectal cancer patients who present with GI bleeding or 
a positive screening test, may be significant.
---------------------------------------------------------------------------

    \165\ Corley DA, Jensen CD, Marks AR, et al. Adenoma detection 
rate and risk of colorectal cancer and death. N Engl J Med. 2014 Apr 
3;370(14):1298-1306.
    \166\ Ibid.
---------------------------------------------------------------------------

    The applicant next responded to CMS' concerns about the sample 
sizes from the studies used in support of Pure-Vu[supreg]. In response, 
the applicant performed a meta-analysis of the four studies which were 
performed at different centers with different investigators to minimize 
the bias of any physician or institution. According to the applicant, 
for outpatient studies, the overall rate of adequate colonoscopy 
preparation was 99.4 percent compared to 25.3 percent for baseline; and 
the overall difference was 74.1 percent (95 percent CI = 60.3 percent, 
87.8 percent; p < 0.0001); the inpatient study had a lower overall 
success rate in the Pure-Vu[supreg] System (86.2 percent) but the 
impact of the Pure-Vu[supreg] was still dramatic with the overall rate 
of adequate colonoscopy preparation of 95.0 percent compared to 28.2 
percent

[[Page 63611]]

for baseline; and the overall difference was 66.8 percent (95 percent 
CI = 55.5 percent, 78.0 percent; p < 0.0001).
    Next the applicant responded to CMS' concern that the benefit of 
Pure-Vu[supreg] in the outpatient setting may be limited because 
patients have more time to prepare for the colonoscopy. According to 
the applicant, there are many patients that the physician may pre-
procedurally deem ready for the examination but upon insertion of the 
colonoscope the patient is found to be inadequately prepared to receive 
a quality examination. The applicant stated that, rather than terminate 
the procedure at this point, an endoscopist can remove the colonoscope 
and load the Pure-Vu[supreg] and complete the examination. The 
applicant added that in the studies used in the meta-analysis, Pure-
Vu[supreg] was able to convert inadequate preparation to adequate even 
in patients with a BBPS of 0 in one or more segments of the colon while 
the patient was on the table and under sedation, thereby avoiding 
another procedure. The applicant asserted that in addition to the risks 
associated with a repeat procedure, approximately 54 percent of 
patients do not come back for the repeat examination which places these 
patients at a higher risk for CRC.\167\ The applicant added that since 
history of inadequate preparation is one of the main indicators of poor 
preparation along with advanced age, those with motility issues, 
patients allergic to the PEG (key ingredient in the purgatives) and 
those with comorbidities there is no guarantee the follow-up 
colonoscopy will be successful.
---------------------------------------------------------------------------

    \167\ Murphy CJ, Jewel Samadder N, Cox K, et al. Outcomes of 
Next-Day Versus Non-next-Day Colonoscopy After an Initial Inadequate 
Bowel Preparation. Dig Dis Sci. 2016 Jan;61(1):46-52.
---------------------------------------------------------------------------

    Next the applicant addressed CMS' concern that there was no data to 
support that Pure-Vu[supreg] minimizes the colon collapsing during 
suctioning of debris while allowing use of the working channel of the 
scope. The applicant asserted that the provision of a pulsed mixture of 
air and fluid to break up and facilitate removal of adherent films of 
fecal matter from the mucosal lining of the colon, at a much higher 
energy level than irrigation through a scope, allows the endoscopist to 
simultaneously suction the debris, which is not possible through a 
scope with only one working channel. The applicant stated, the 
simultaneous action of pumping water and air into the colon while 
suctioning out debris inherently reduces the likelihood that the colon 
will collapse.
    Lastly, in response to CMS' concern related to one procedure-
related perforation, the applicant stated that this study focused on 
the inpatient population which is known to be at higher risk for 
perforation than the outpatient population.\168\ The applicant stated 
that this patient was discharged 48 hours post operatively and fully 
recovered with no additional clinical sequelae. The applicant asserted 
that inpatient cases undergoing colonoscopy are a high risk for 
perforation with a rate of approximately 1 in 500, which is more than 
two times higher than the outpatient population.\169\ The applicant 
stated that since the Helmut paper they have developed the Gen 2 Pure-
Vu[supreg] and have received no adverse reports in the last 18 months 
even with increased utilization across multiple institutions.
---------------------------------------------------------------------------

    \168\ 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).
    \169\ Gatto NM, Frucht H, Sundararajan V, et al. Risk of 
perforation after colonoscopy and sigmoidoscopy: a population-based 
study. J Natl Cancer Inst. 2003 Feb 5;95(3):230-6.
---------------------------------------------------------------------------

    Response: We appreciate the comment in support of the clinical 
benefits of the Pure-Vu[supreg] system. As we stated in the FY 2022 
IPPS/LTCH final rule (86 FR 45056), we continue to have concerns 
regarding the substantial clinical improvement criterion. In response 
to commenters' assertion that there is a direct correlation to being 
able to provide high-quality colonoscopy where the more the colon 
mucosa can be observed and the ability to better diagnose patients, we 
agree but are aware that correlation is not causation. While these data 
are correlated, without data testing this relationship (for example, 
the Pure-Vu[supreg] system and patient outcomes such as adenoma 
detection rates), we cannot be certain this relationship is true and 
not spurious or mediated by other factors. We note the further input 
provided by the applicant concerning the validity of the BBPS and agree 
that this is likely a well validated scoring tool. However, we remain 
concerned that the studies provided in support of the Pure-Vu[supreg] 
System measure improvement of bowel preparation using the BBPS but do 
not provide data indicating that the improved BBPS directly leads to 
improved clinical outcomes. In addition, the studies did not 
demonstrate outcomes in the emergent situations the Pure-Vu[supreg] 
System is intended to address. While an additional study provided by 
the applicant in their comment indicated a general link between 
improved BBPS and advanced adenoma detection rates, we note that the 
study occurred in patients undergoing screening colonoscopy, and did 
not include the use of the Pure-Vu[supreg] system. We also remain 
concerned about the lack of studies comparing 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.
    After consideration of the public comments we received and our 
review of the device pass-through application, we are not approving the 
Pure-Vu[supreg] system for transitional pass-through payment status in 
CY 2022 because the product does not meet the substantial clinical 
improvement criterion. Because we have determined that the Pure-
Vu[supreg] system does not meet the substantial clinical improvement 
criterion, we are not evaluating whether the device meets the cost 
criterion.
(6) 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 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 expenditures associated with reusable 
laparoscopes.
    With respect to the newness criterion, the XenoscopeTM 
received FDA 510(k) clearance on January 27, 2020, based on

[[Page 63612]]

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 invited public 
comments in the CY 2022 OPPS/ASC proposed rule on whether the 
XenoscopeTM meets the newness criterion.
    We did not receive any comments with respect to the newness 
criterion.
    We agree with the applicant that the XenoscopeTM meets 
the newness criterion because we received its device pass-through 
application on August 6, 2020, which is within 3 years of January 27, 
2020, the date of FDA 510(k) clearance.
    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 invited public comments on whether 
the XenoscopeTM meets the eligibility criteria at Sec.  
419.66(b).
    We did not receive any comments in regard to the eligibility 
criteria at Sec.  419.66(b). We agree with the applicant and believe 
that the XenoscopeTM meets the eligibility criterion at 
Sec.  419.66(b)(3) and (4).
    The criteria for establishing new device categories are specified 
at Sec.  419.66(c). The first criterion, at Sec.  419.66(c)(1), 
provides that CMS determines that a device to be included in the 
category is not appropriately described by any of the existing 
categories or by any category previously in effect, and was not being 
paid for as an outpatient service as of December 31, 1996. 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 stated in the CY 2022 OPPS/ASC proposed rule that we 
have not identified an existing pass-through payment category that is 
applicable to the XenoscopeTM. We invited public comment on 
whether the XenoscopeTM meets the device category criterion.
    We did not receive any comments in regard to the eligibility 
criteria at Sec.  419.66(c). We continue to believe that the 
XenoscopeTM meets the eligibility criterion at Sec.  
419.66(c)(1) because we have not identified an existing pass-through 
payment category that is applicable to the XenoscopeTM.
    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.\170\ 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.\171\
---------------------------------------------------------------------------

    \170\ Hewitt, A. (2002, November 1). Laparoscopic Instruments: 
Handle with Care. Infection Control Today. https://www.infectioncontroltoday.com/view/laparoscopic-instruments-handle-care.
    \171\ 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).\172\ 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

[[Page 63613]]

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 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.\173\
---------------------------------------------------------------------------

    \172\ 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.
    \173\ 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''.\174\ 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.
---------------------------------------------------------------------------

    \174\ Ibid.
---------------------------------------------------------------------------

    We stated in the CY 2022 OPPS/ASC proposed rule that 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, we stated that 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 invited public comment on whether the XenoscopeTM 
meets the substantial clinical improvement criterion.
    Comment: One commenter stated their opposition to the use of HCPCS 
code 58570 (Tlh uterus 250 g or less) in conjunction with the 
XenoscopeTM. The commenter stated that multiple searches in 
PubMed did not produce evidence of use or clinical improvement for 
gynecologic laparoscopic procedures, including HCPCS code 58570 (Tlh 
uterus 250 g or less). The commenter asserted that Obstetrician-
gynecologists and gynecologic oncologists are the primary billers of 
58570 and employ laparoscopy for many other surgeries such as tubal 
ligation and hysterectomy, positioning them as potential high-utilizers 
of new devices such as the XenoscopeTM. The commenter stated 
their concern for the unintended consequences of promoting the payment 
of a device for which a substantial clinical improvement in gynecologic 
surgery is undetermined.\175\
---------------------------------------------------------------------------

    \175\ Choosing the route of hysterectomy for benign disease. 
Committee Opinion No. 701. American College of Obstetricians and 
Gynecologists. Obstet Gynecol 2017:129:e155-9.
---------------------------------------------------------------------------

    Response: We appreciate the input from the commenter and we have 
noted the lack of data demonstrating evidence of use or clinical 
improvement for gynecologic laparoscopic procedures. We refer the 
commenter to our final response and determination regarding the 
substantial clinical improvement criterion below for a discussion of 
this concern. However, we note that the indication for use as stated by 
the FDA in the 510(k) clearance letter is, ``The Articulating 
XenoscopeTM is intended to be used in diagnostic and 
therapeutic procedures for endoscopy and endoscopic surgery within the 
thoracic and peritoneal cavities including the female reproductive 
organs.'' Given the role of the FDA in defining device indications, we 
believe the device is appropriately described by HCPCS 58570.
    Comment: A commenter representing Xenocor, Inc. stated that the 
safety profile for patients could be improved in the following ways: 
(1) Cross-contamination for the XenoscopeTM is not possible; 
(2) the XenoscopeTM has a top temperature of 129 degrees 
Fahrenheit where one of the most frequent causes of operating room 
fires and burns are traditional, reusable laparoscopes which often 
exceed 350 degrees Fahrenheit; (3) the XenoscopeTM's 
composite shaft is non-conductive which avoids risks with traditional 
laparoscopes which can arc stray current when using monopolar 
electrocautery where the scope acts as an antenna and burns adjacent 
structures; and (4) the XenoscopeTM eliminates fog and sees 
better through smoke and steam than any currently marketed resuables.
    We also received multiple comments stating general support for the 
XenoscopeTM. Two of the commenters stated that the 
XenoscopeTM reaches a temperature of 129 [deg]F, as opposed 
to the 350 [deg]F reached by light cords which can cause burns or 
patient injury, is fully shielded and will not cause stray energy burns 
or arcing issues that exist with other like products, its single-use 
nature ensures complete sterility and consistent image quality due to 
the new out of the box feature with each use, and the fog-free picture 
helps to ensure a consistent clear visualization of critical anatomy.
    One commenter stated the benefits of the XenoscopeTM are 
critical to both patient safety and cost control. Another commenter 
stated that having a disposable scope would enable surgery to be done 
more easily in a wider variety of places while also eliminating many 
problems associated with traditional scopes. Another commenter added 
that the ability to use XenoscopeTM with any USB enabled 
video device obviates the need for expensive auxiliary light sources, 
video drivers, etc.
    Response: We thank the commenters for their input. We agree that 
improved patient safety and a reduction in complications are clinical 
outcomes that may represent a substantial clinical improvement. 
However, we remain concerned that we did not receive any data to 
demonstrate improved outcomes using the XenoscopeTM. 
Further, we remain concerned that the applicant did not provide any 
comparison to existing technologies such as reusable scopes to 
demonstrate an improvement in clinical outcomes. Lastly, we note that 
the cost effectiveness of a technology does not substantially improve 
the diagnosis or treatment of a disease and therefore is not relevant 
to the discussion of substantial clinical improvement.

[[Page 63614]]

    After consideration of the public comments we received and our 
review of the device pass-through application, we are not approving the 
XenoscopeTM for transitional pass-through payment status in 
CY 2022 because the product does not meet the substantial clinical 
improvement criterion. Because we have determined that the 
XenoscopeTM does not meet the substantial clinical 
improvement criterion, we are not evaluating whether the device meets 
the cost criterion.

B. Device-Intensive Procedures

1. Background
    Under the OPPS, prior to CY 2017, device-intensive status for 
procedures was determined at the APC level for APCs with a device 
offset percentage greater than 40 percent (79 FR 66795). Beginning in 
CY 2017, CMS began determining device-intensive status at the HCPCS 
code level. In assigning device-intensive status to an APC prior to CY 
2017, the device costs of all the procedures within the APC were 
calculated and the geometric mean device offset of all of the 
procedures had to exceed 40 percent. Almost all of the procedures 
assigned to device-intensive APCs utilized devices, and the device 
costs for the associated HCPCS codes exceeded the 40-percent threshold. 
The no cost/full credit and partial credit device policy (79 FR 66872 
through 66873) applies to device-intensive APCs and is discussed in 
detail in section IV.B. of the CY 2022 OPPS/ASC proposed rule (86 FR 
42112 through 42114). 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 the CY 2022 OPPS/ASC proposed rule (86 
FR 42114). 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42112 
through 42114) are identified as device-intensive procedures and are 
subject to all the policies applicable to procedures assigned device-
intensive status under our established methodology, including our 
policies on device edits and no cost/full credit and partial credit 
devices discussed in sections IV.B.3. and IV.B.4. of the CY 2022 OPPS/
ASC proposed rule, respectively (86 FR 42114 thorough 42115).
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 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

[[Page 63615]]

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 expensive implantable device), 
temporarily assigning a higher offset percentage if warranted by 
additional information such as pricing data from a device manufacturer 
(81 FR 79658). Once claims data are available for a new procedure 
requiring the implantation 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 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

[[Page 63616]]

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 the CY 2022 OPPS/ASC proposed rule 
(86 FR 42188 through 42190), given our concerns regarding CY 2020 data 
as a result of the COVID-PHE, we proposed 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 proposed 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).
    Comment: Many commenters supported 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. One 
commenter requested that we use CY 2020 claims where CY 2020 claims 
volume is greater than CY 2019 claims volume. Another commenter 
requested that we apply the greater of the device offset percentage 
when comparing CY 2019 claims with CY 2020 claims.
    Response: We thank the commenters for their support. We are not 
accepting the recommendation to apply data from CY 2020 claims where CY 
2020 claims volume is greater than CY 2019 claims volume or to apply 
the greater of the device offset percentage when comparing CY 2019 
claims with CY 2020 claims. Specifically, as discussed in section X.E 
of this final rule with comment period, we continue to believe CY 2019 
represents the best full year of claims data for ratesetting. 
Therefore, we believe our proposal provides a more accurate device 
offset percentage only for certain device-intensive procedures that had 
no claims data in CY 2019 and for which the device offset percentage 
would otherwise be based on the default percentage or a similar 
procedure code's device offset percentage. Comment: Many commenters 
requested that we set the device offset percentage for several new 
procedures using the predecessor code's device offset percentage based 
on CY 2019 claims data. These procedures include:
     The predecessor CPT code 0191T in assigning the device 
offset percentage for CPT code 66989 (Extracapsular cataract removal 
with insertion of intraocular lens prosthesis (1-stage procedure), 
manual or mechanical technique (for example, irrigation and aspiration 
or phacoemulsification), complex, requiring devices or techniques not 
generally used in routine cataract surgery (for example, iris expansion 
device, suture support for intraocular lens, or primary posterior 
capsulorrhexis) or performed on patients in the amblyogenic 
developmental stage; with insertion of intraocular (for example, 
trabecular

[[Page 63617]]

meshwork, supraciliary, suprachoroidal) anterior segment aqueous 
drainage device, without extraocular reservoir, internal approach, one 
or more);
     The predecessor CPT code 0191T in assigning the device 
offset percentage for CPT code 66991 (Extracapsular cataract removal 
with insertion of intraocular lens prosthesis (1 stage procedure), 
manual or mechanical technique (for example, irrigation and aspiration 
or phacoemulsification); with insertion of intraocular (for example, 
trabecular meshwork, supraciliary, suprachoroidal) anterior segment 
aqueous drainage device, without extraocular reservoir, internal 
approach, one or more);
     The predecessor CPT code 0191T in assigning the device 
offset percentage for CPT code 0671T (Insertion of anterior segment 
aqueous drainage device into the trabecular meshwork, without external 
reservoir, and without concomitant cataract removal, one or more);
     The predecessor CPT code 0548T in assigning the device 
offset percentage for CPT code 53451 (Periurethral transperineal 
adjustable balloon continence device; bilateral insertion, including 
cystourethroscopy and imaging guidance);
     The predecessor CPT code 0549T in assigning the device 
offset percentage for CPT code 53452 (Periurethral transperineal 
adjustable balloon continence device; unilateral insertion, including 
cystourethroscopy and imaging guidance); and
     The predecessor HCPCS code C9752 in assigning the device 
offset percentage for CPT code 64628 (Thermal destruction of 
intraosseous basivertebral nerve, including all imaging guidance; first 
2 vertebral bodies, lumbar or sacral).
    Additionally, at the August 23, 2021 HOP Panel Meeting, a presenter 
requested that we use the predecessor CPT code 64568 in assigning the 
device offset percentage for CPT code 64582 (Open implantation of 
hypoglossal nerve neurostimulator array, pulse generator, and distal 
respiratory sensor electrode or electrode array). Based on the 
information presented at the meeting, the HOP Panel recommended we use 
CPT code 64568 to assign the device offset percentage for CPT code 
64582.
    Response: We agree with the commenters and the HOP Panel's 
recommendation. We note that we inadvertently did not apply the device 
offset percentage to several new HCPCS codes where claims data for a 
predecessor code was available. Therefore, we are revising the device 
offset percentage for these procedures for this final rule with comment 
period using CY 2019 claims data from these procedures' predecessor 
codes.
    Comment: A number of commenters recommended we assign device-
intensive status to CPT codes 0627T (Percutaneous injection of 
allogeneic cellular and/or tissue-based product, intervertebral disc, 
unilateral or bilateral injection, with fluoroscopic guidance, lumbar; 
first level) and 0630T (Percutaneous injection of allogeneic cellular 
and/or tissue-based product, intervertebral disc, unilateral or 
bilateral injection, with ct guidance, lumbar; each additional level 
(list separately in addition to code for primary procedure)).
    Response: We appreciate the commenters' recommendation. As we 
stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42113), 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.'' The 
products involved when reporting CPT code 0627T and 0630T that the 
commenter believed should necessitate a device intensive designation do 
not meet this requirement. Therefore, we are not accepting the 
commenters' recommendations and are not granting device-intensive 
status to these codes.
    Comment: One commenter requested that we assign HCPCS code C9778 
(Colpopexy, vaginal; minimally invasive extra-peritoneal approach 
(sacrospinous)) device-intensive status as this procedure meets our 
device-intensive criteria.
    Response: After further review, we agree with the commenter that 
HCPCS code C9778 meets our criteria for device-intensive status. We are 
accepting the commenter's recommendation and assigning a default device 
offset percentage of 31 percent to HCPCS code C9778 for CY 2022.
    Comment: One commenter recommended assigning CPT code 66179 
(Aqueous shunt to extraocular equatorial plate reservoir, external 
approach; without graft) as device-intensive as the procedure's device 
offset percentage is 32.78 percent in Addendum P to the CY 2022 OPPS/
ASC proposed rule, which exceeds our 30-percent threshold for device-
intensive status.
    Response: We have reviewed this procedure code with our medical 
officers and have determined that this procedure satisfies all of our 
device-intensive criteria. In particular, we agree with the commenter 
that this procedure involves an implantable single-use device and that 
the device meets the requirements for the procedure to receive device-
intensive assignment.
    Comment: Commenters requested that we assign device-intensive 
status to:
     CPT code 0499T (Cystourethroscopy, with mechanical 
dilation and urethral therapeutic drug delivery for urethral stricture 
or stenosis, including fluoroscopy, when performed);
     CPT code 58674 (Laparoscopy, surgical, ablation of uterine 
fibroid(s) including intraoperative ultrasound guidance and monitoring, 
radiofrequency);
     CPT code 50590 (Lithotripsy, extracorporeal shock wave);
     CPT code 59200 (Insertion of cervical dilator (e.g., 
laminaria, prostaglandin) (separate procedure));
     CPT code 66174 (Transluminal dilation of aqueous outflow 
canal; without retention of device or stent);
     CPT code 66175 (Transluminal dilation of aqueous outflow 
canal; with retention of device or stent);
     CPT code 93571 (Intravascular doppler velocity and/or 
pressure derived coronary flow reserve measurement (coronary vessel or 
graft) during coronary angiography including pharmacologically induced 
stress; initial vessel (list separately in addition to code for primary 
procedure); and
     HCPCS code 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).
    Response: Based on CY 2019 claims data available for this final 
rule with comment period, the procedures requested by commenters do not 
have device offset percentages that exceed the 30-percent threshold 
required for device-intensive status and, therefore, are not eligible 
to be assigned device-intensive status under the OPPS.
    Comment: Some commenters submitted invoices and requested a greater 
device offset amount and greater device offset percentage to reflect 
the invoice price of a particular device.

[[Page 63618]]

Other commenters also recommended utilizing invoice prices to establish 
device offset percentages for procedures with low or no claims volume 
or to correct situations commenters contend reflect underreported 
device costs attributable to hospital confusion when reporting HCPCS 
code C1889 (Implantable/insertable device, not otherwise classified).
    Response: While we appreciate the recommendations and additional 
information submitted by commenters, we are not applying the invoice 
prices submitted by commenters to establish the device offset amount 
and device offset percentage for these procedures. None of the invoice 
prices that were submitted suggest that we should apply our policy of 
temporarily applying a higher device offset percentage if warranted by 
additional information. As we have stated in previous rulemaking (85 FR 
86015), this policy of temporarily assigning a higher device offset 
percentage should be applied in rare instances, such as using CY 2020 
claims data in light of the COVID-19 PHE or where a device has an 
extremely abnormal cost and, in the absence of claims data, may be 
significantly underpaid under our policy to apply a default device 
offset percentage for the procedure that involves such device.
    Additionally, it would be inappropriate to apply a higher device 
offset percentage or increase the payment rate in the ASC setting 
simply because a device's invoice price is greater than the procedure's 
device offset amount. Our packaging policies are intended to promote 
the efficient use of resources both in the HOPD as well as ASC setting 
and these policies include the packaging of medical devices. While we 
provide separate transitional pass-through payments for devices for the 
cost of devices approved for transitional pass-through status, as we 
stated previously, the intent of transitional pass-through status for 
devices is to facilitate access for beneficiaries to the advantages of 
truly innovative devices by allowing for adequate payment for these new 
devices while the necessary cost data is collected. We believe it would 
be inappropriate to provide a similar method of calculating payment 
solely based on a device's cost or invoice price for devices that are 
not approved for transitional pass-through status.
    Lastly, we have heard concerns from stakeholders regarding 
hospitals' coding decisions for particular devices. Specifically, 
stakeholders have contended that hospitals do not report HCPCS code 
C1889 for a particular insertable device as the NUBC billing guidelines 
recommend that such HCPCS code crosswalk to revenue code 0278--Other 
Implants--and this revenue code would be inappropriate for the costs 
attributable to devices that are insertable and not implantable. While 
we understand stakeholder concerns regarding accurate device cost 
reporting, we expect hospitals to adhere to the guidelines of correct 
coding and append the correct device code to the claim when applicable. 
However, while we do not believe additional guidance from CMS or 
adjustment to the device offset calculation to exclude certain claims 
is warranted at this time, we will continue to monitor this issue going 
forward.
    After reviewing the public comments we received, we are finalizing 
our proposal to assign a device offset percentage based on CY 2020 data 
if CY 2020 claims information is available, for procedures that were 
assigned device-intensive status, but, because CY 2019 claims data is 
not available, would otherwise be assigned a default device offset 
percentage of 31 percent or a device offset percentage based on claims 
from a clinically-similar code. Based on updated data for this CY 2022 
OPPS/ASC final rule with comment period, we are applying device offset 
percentages from 2020 claims data to 14 procedures. These include the 
11 procedures described previously plus three additional procedures 
that were assigned default device offset percentages for CY 2021 and 
have available device offset percentages from CY 2020 claims data:
     CPT code 0519T (Removal and replacement of wireless 
cardiac stimulator for left ventricular pacing; pulse generator 
component(s) (battery and/or transmitter));
     CPT code 0618T (Insertion of iris prosthesis, including 
suture fixation and repair or removal of iris, when performed; with 
secondary intraocular lens placement or intraocular lens exchange); and
     HCPCS code C9761 (Cystourethroscopy, with ureteroscopy 
and/or pyeloscopy, with lithotripsy (ureteral catheterization is 
included) and vacuum aspiration of the kidney, collecting system and 
urethra if applicable).
    Additionally, in this final rule with comment period, we are 
correcting the device offset percentages for several new device-
intensive procedures to reflect available claims data from predecessor 
codes.
    The full listing of the final CY 2022 device-intensive procedures 
can be found in Addendum P to the CY 2022 OPPS/ASC final rule with 
comment period (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 final rule with comment period can be 
found under supporting documentation for the CY 2022 OPPS/ASC final 
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 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

[[Page 63619]]

HCPCS code C1889 is ``Implantable/insertable device, not otherwise 
classified''.
    We did not propose any changes to this policy for CY 2022.
    Comment: Some commenters recommended that we reinstate specific 
device-to-procedure edits. One commenter recommended we reinstate 
specific device-to-procedure edits for arthroplasty procedures and 
another commenter recommended we reinstate specific device edits for C-
code device-intensive procedures. One commenter contended that the 
removal of specific device-to-procedure edits has contributed to 
erosion in accuracy in the data highlighted by certain procedures 
having device offset percentages that are nearly 100 percent of the 
procedures' costs.
    Response: As we stated in the CY 2015 OPPS/ASC final rule with 
comment period (79 FR 66794), we continue to believe that the 
elimination of device-to-procedure edits and procedure-to-device edits 
is appropriate due to the experience hospitals now have in coding and 
reporting these claims fully. More specifically, for the most costly 
devices, we believe the C-APCs reliably reflect the cost of the device 
if charges for the device are included anywhere on the claim. We note 
that, under our current policy, hospitals are still expected to adhere 
to the guidelines of correct coding and append the correct device code 
to the claim when applicable. We also note that, as with all other 
items and services recognized under the OPPS, we expect hospitals to 
code and report their costs appropriately, regardless of whether there 
are claims processing edits in place.
    Additionally, we have not observed any increase in frequency of 
procedures with device offset percentages that are nearly 100 percent; 
and we do not believe the absence of device-to-procedure edits has 
precipitated an erosion in accuracy of our device cost statistics. 
Procedures with extremely significant device offset percentages of 
greater than 90 percent can be attributed to procedures with little 
claims volume as well as extremely significant device costs and not the 
absence of device-to-procedure edits. Therefore, we are not accepting 
the commenters' recommendations to reinstate device-to-procedure edits.
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

[[Page 63620]]

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 did not propose any changes and we did not receive any public 
comments related to our policies regarding payment for no cost/full 
credit and partial credit devices in CY 2022.
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 the CY 2022 OPPS/
ASC proposed rule (86 FR 42181 through 42185), we proposed 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 proposed 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 proposed 
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 did not receive any public 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 and we are finalizing our 
proposal without modification. Public comments related to our proposed 
Low Volume APC policy are discussed in section X.C (Low Volume Policy 
for Clinical and Brachytherapy APCs) of this final rule with comment 
period.

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

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

1. Background
    Section 1833(t)(6) of the Act provides for temporary additional 
payments or ``transitional pass-through payments'' for certain drugs 
and biologicals. Throughout the proposed rule, the term ``biological'' 
is used because this is the term that appears in section 1861(t) of the 
Act. A ``biological'' as used in the proposed rule includes (but is not 
necessarily limited to) a ``biological product'' or a ``biologic'' as 
defined under section 351 of the PHS 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

[[Page 63621]]

biologicals and their designated APCs are assigned status indicator 
``G'' in Addenda A and B to the proposed rule (which are available via 
the internet on the CMS website).
    Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through 
payment amount, in the case of a drug or biological, is the amount by 
which the amount determined under section 1842(o) of the Act for the 
drug or biological exceeds the portion of the otherwise applicable 
Medicare OPD fee schedule that the Secretary determines is associated 
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64. 
These regulations specify that the pass-through payment equals the 
amount determined under section 1842(o) of the Act minus the portion of 
the APC payment that CMS determines is associated with the drug or 
biological.
    Section 1847A of the Act establishes the average sales price (ASP) 
methodology, which is used for payment for drugs and biologicals 
described in section 1842(o)(1)(C) of the Act furnished on or after 
January 1, 2005. The ASP methodology, as applied under the OPPS, uses 
several sources of data as a basis for payment, including the ASP, the 
wholesale acquisition cost (WAC), and the average wholesale price 
(AWP). In the proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described 
therein. Additional information on the ASP methodology can be found on 
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.
    Comment: One commenter commended CMS for continuing the policy to 
provide for quarterly expiration of pass-through payment status, which 
allows a pass-through period that is as close to a full 3 years as 
possible.
    Response: We thank the commenter for their input and support of 
this policy, which was adopted in the CY 2017 OPPS/ASC final rule (81 
FR 79654 through 79655).
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 37. 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, 2021. 
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 the CY 2022 OPPS/ASC proposed rule (86 FR 
42127 through 42148). 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 the CY 2022 
OPPS/ASC proposed rule (86 FR 42132).
    We did not receive any public comments regarding our proposals. 
Therefore, we are adopting these proposals as final for CY 2022 without 
modification. Refer to Table 37 for the list of drugs and biologicals 
for which pass-through payment status will expire between March 31, 
2021 and December 31, 2021. The packaged or separately payable status 
of each of these drugs or biologicals is listed in Addendum B of the CY 
2022 OPPS/ASC final rule (which is available via the internet on the 
CMS website).
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4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through 
Payment Status Expiring in CY 2022
    We proposed 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 of the CY 2022 OPPS/ASC proposed rule (86 
FR 42121 through 42122). 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 the CY 2022 OPPS/ASC 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 proposed to continue to pay for pass-
through drugs and biologicals at ASP+6 percent, equivalent to the 
payment rate these drugs and biologicals would receive in the 
physician's office setting in CY 2022. We proposed 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. (86 FR 42120) 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 proposed 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 the CY 2022 OPPS/ASC proposed rule 
(86 FR 42126). We proposed 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 proposed 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 proposed to provide payment for 
both diagnostic and therapeutic radiopharmaceuticals that are granted 
pass-through payment status based on the ASP methodology. As stated 
earlier, for purposes of pass-through payment, we consider 
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a 
diagnostic or therapeutic radiopharmaceutical receives pass-through 
payment status during CY 2022, we proposed to follow the standard ASP 
methodology to determine the pass-through payment rate that drugs 
receive under section 1842(o) of the Act, which is proposed at ASP+6 
percent. If ASP data are not available for a radiopharmaceutical, we 
proposed to provide pass-through payment at WAC+3 percent (consistent 
with our proposed policy in section V.B.2.b. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42132)), 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 the CY 2022 OPPS/ASC proposed rule. If WAC information also 
is not available, we proposed to provide payment for the pass-through 
radiopharmaceutical at 95 percent of its most recent AWP. Refer to 
Table 38 below for the list of drugs and biologicals with pass-through 
payment status expiring during CY 2022.
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5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through 
Payment Status Continuing in CY 2022
    We proposed 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 January 1, 2022, are listed in Table 39. 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 the CY 2022 OPPS/
ASC 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 proposed to continue to pay for pass-
through drugs and biologicals at ASP+6 percent, equivalent to the 
payment rate these drugs and biologicals would receive in the 
physician's office setting in CY 2022. We proposed 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 
proposed 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42126). We 
proposed 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 proposed 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 proposed to provide payment for 
both diagnostic and therapeutic radiopharmaceuticals that are granted 
pass-through payment status based on the ASP methodology. As stated 
earlier, for purposes of pass-through payment, we consider 
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a 
diagnostic or therapeutic radiopharmaceutical receives pass-through 
payment status during CY 2023, we proposed to follow the standard ASP 
methodology to determine the pass-through payment rate that drugs 
receive under section 1842(o) of the Act, which is proposed at ASP+6 
percent. If ASP data are not available for a radiopharmaceutical, we 
proposed to provide pass-through payment at WAC+3 percent (consistent 
with our proposed policy in section V.B.2.b. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42132)), 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 the CY 2022 OPPS/ASC proposed rule. If WAC information also 
is not available, we proposed to provide payment for the pass-through 
radiopharmaceutical at 95 percent of its most recent AWP.
    The drugs and biologicals that we proposed to have pass-through 
payment status expire after December 31, 2022, are shown in Table 39.
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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 proposed to continue to 
apply the same policy-packaged offset policy to payment for pass-
through diagnostic radiopharmaceuticals, pass-through contrast agents, 
pass-through stress agents, and pass-through skin substitutes. The 
proposed APCs to which a payment offset may be applicable for pass-
through diagnostic radiopharmaceuticals, pass-through contrast agents, 
pass-through stress agents, and pass-through skin substitutes are 
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    We proposed 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.
    Comment: One commenter requested that CMS release a copy of the APC 
offset file with future OPPS/ASC proposed rules to enable the public to 
calculate the percentage of APC payment associated with packaged drug 
costs using APC offset data for the upcoming calendar year.
    Response: We thank the commenter for their suggestion, and we will 
consider addressing this request in future rulemaking.

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

1. Criteria for Packaging Payment for Drugs, Biologicals, and 
Radiopharmaceuticals
a. Packaging Threshold
    In accordance with section 1833(t)(16)(B) of the Act, the threshold 
for establishing separate APCs for payment of drugs and biologicals was 
set to $50 per administration during CYs 2005 and 2006. In CY 2007, we 
used the four quarter moving average Producer Price Index (PPI) levels 
for Pharmaceutical Preparations (Prescription) to trend the $50 
threshold forward from the third quarter of CY 2005 (when the Pub. L. 
108-173 mandated threshold became effective) to the third quarter of CY 
2007. We then rounded the resulting dollar amount to the nearest $5 
increment in order to determine the CY 2007 threshold amount of $55. 
Using the same methodology as that used in CY 2007 (which is discussed 
in more detail in the CY 2007 OPPS/ASC final rule with comment period 
(71 FR 68085 through 68086)), we set the packaging threshold for 
establishing separate APCs for drugs and biologicals at $130 for CY 
2021 (84 FR 61312 through 61313).
    Following the CY 2007 methodology, for the 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's Office of the Actuary. 
For the CY 2022 OPPS/ASC proposed rule, based on these calculations 
using the CY 2007 OPPS methodology, we proposed a packaging threshold 
for CY 2022 of $130.
    Comment: Two commenters expressed their support for maintaining the 
drug packaging threshold for CY 2022 at $130. One commenter believes, 
however, that the drug packaging threshold has been increasing faster 
than payment increases under the OPPS. This commenter would like us to 
research if the drug packaging threshold should be lowered in future 
years.
    Response: We appreciate the support of the commenters of the drug 
packaging threshold level of $130. We also thank the one commenter for 
their suggestion to consider reducing the drug packaging threshold in 
future years and will consider it for future rulemaking.
    After consideration of the public comments, we repeated our drug 
packaging threshold calculations for the final rule with the most 
current data available. Once again, we calculated a drug packaging 
threshold for CY 2022 of

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$130. Therefore, we are finalizing our proposal without modification to 
have a drug packaging threshold for CY 2022 of $130.
b. Packaging of Payment for HCPCS Codes That Describe Certain Drugs, 
Certain Biologicals, and Certain 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 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 
CY 2022 OPPS/ASC proposed rule (86 FR 42129), or for the following 
policy-packaged items that we proposed 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 proposed 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 were 
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 CY 2020 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 proposed 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 proposed to package items with a per day cost less than or equal 
to $130, and identify items with a per day cost greater than $130 as 
separately payable unless they are policy-packaged. Consistent with our 
past practice, we cross-walked historical OPPS claims data from the CY 
2019 HCPCS codes that were reported to the CY 2021 HCPCS codes that we 
display in Addendum B to the CY 2022 OPPS/ASC 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 the 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 proposed to use these 
data for budget neutrality estimates and impact analyses for the 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 
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

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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.
    We did not receive any public comments on our proposal to 
recalculate the mean unit cost for items that do not currently have an 
ASP-based payment rate from all of the CY 2019 claims data and updated 
cost report information available for this CY 2022 final rule with 
comment period to determine their final per day cost. We also did not 
receive any public comments on our proposal to continue to follow the 
established policies, initially adopted for the CY 2005 OPPS (69 FR 
65780), when the packaging status of some HCPCS codes for drugs, 
biologicals, and therapeutic radiopharmaceuticals in the proposed rule 
may be different from the same drug HCPCS code's packaging status 
determined based on the data used for the final rule with comment 
period. For CY 2022, we are finalizing these two proposals without 
modification. Please refer to Addendum B to this final rule with 
comment period, which is available via the internet on the CMS website, 
for information on the packaging status of drugs, biologicals, and 
therapeutic radiopharmaceuticals.
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).
    Comment: One commenter requested that we develop a policy to 
provide separate payment for drugs that are administered at the time of 
ophthalmic surgery and have an FDA-approved indication to treat or 
prevent postoperative issues.
    Response: A surgical procedure episode consists of both pre-
operative and post-operative care in addition to the surgical procedure 
itself. If a drug used to address a post-operative concern, such as 
pain management, is billed together with a surgical procedure, we 
assume that the pain management drug was given as a part of the overall 
surgical procedure. Since the pain management drug is ancillary to the 
primary ophthalmic surgery procedure, it is considered a surgical 
supply. The pain management drug is only administered to the patient 
because the patient has received ophthalmic surgery, and the drug would 
not have been administered to the patient if the patient did not have 
the surgery. In the OPPS, we pay one rate for the entire surgical 
procedure, and payment for supplies, such as pain management drugs, is 
packaged into the payment rate for the surgical procedure. We note 
exceptions to this policy in the ASC setting are discussed in II.A.3.b. 
(Payment Policy for Non-Opioid Pain Management Drugs and Biologicals 
that Function as Surgical Supplies under the ASC Payment System) of 
this final rule with comment period.
    Comment: One commenter recommended that CMS continue to apply 
radiolabeled product edits to the nuclear medicine procedures to ensure 
that all packaged costs are included on nuclear medicine claims in 
order to establish appropriate payment rates in the future. The 
commenter was concerned that many providers performing nuclear medicine 
procedures are not including the cost of diagnostic 
radiopharmaceuticals used for the procedures in their claims 
submissions. The commenter believes this lack of drug cost reporting 
could be causing the cost of nuclear medicine procedures to be 
underreported and therefore request that the radiolabeled product edits 
be reinstated.
    Response: We appreciated the commenter's feedback; however, we are 
not reinstating the radiolabeled product edits to nuclear medicine 
procedures, which required a diagnostic radiopharmaceutical to be 
present on the same claim as a nuclear medicine procedure for payment 
to be made under the OPPS. As previously discussed in the CY 2020 OPPS/
ASC final rule with comment period (85 FR 86033 through 86034), the 
edits were in place between CY 2008 and CY 2014 (78 FR 75033). We 
believe the period of time in which the edits were in place was 
sufficient for hospitals to gain experience reporting procedures 
involving radiolabeled products and to become accustomed to ensuring 
that they code and report charges so that their claims fully and 
appropriately reflect the costs of those radiolabeled products. As with 
all other items and services recognized under the OPPS, we expect 
hospitals to code and report their costs appropriately, regardless of 
whether there are claims processing edits in place.
    Comment: Several commenters requested that diagnostic 
radiopharmaceuticals be paid separately in all cases, not just when the 
drugs have pass-through payment status. One commenter suggested payment 
based upon ASP, WAC, AWP, or mean unit cost data derived from hospital 
claims. Some commenters mentioned that pass-through payment status 
helps the diffusion of new diagnostic radiopharmaceuticals into the 
market, but is not enough to make up for what the commenters believe is 
inadequate payment after pass-through status

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expires. Commenters opposed incorporating the cost of the drug into the 
associated APC, and provided evidence showing procedures in which 
diagnostic radiopharmaceuticals are considered to be a surgical supply, 
which the commenter believed are often paid at a lower rate than the 
payment rate for the diagnostic radiopharmaceutical itself when the 
drug had pass-through payment status. Additionally, commenters proposed 
alternative payment methodologies such as subjecting diagnostic 
radiopharmaceuticals to the drug packaging threshold, creating separate 
APC payments for diagnostic radiopharmaceuticals that cost more than 
$500, or using ASP, WAC, or AWP to account for packaged 
radiopharmaceutical costs.
    Response: We thank commenters for their suggestions. Commenters 
have made many of these suggestions in the past and we addressed them 
in previous rules, including the CY 2020 OPPS/ASC final rule (84 FR 
61314 through 61315) and the CY 2021 OPPS/ASC final rule (85 FR 86034). 
We continue to believe that diagnostic radiopharmaceuticals are an 
integral component of many nuclear medicine and imaging procedures and 
charges associated with them should be reported on hospital claims to 
the extent they are used, and accordingly, the payment for the 
radiopharmaceuticals is reflected within the payment for the primary 
procedure.
    In response to the comment regarding the proposed cost of the 
packaged procedure in CY 2022 being substantially lower than the 
payment rate of the radiopharmaceutical when it was on pass-through 
payment status plus the payment rate of the procedure associated with 
the radiopharmaceutical, we note that rates are established in a manner 
that uses the geometric mean of reported costs to furnish the procedure 
based on data submitted to CMS from all hospitals paid under the OPPS 
to set the payment rate for the service. Accordingly, the costs that 
are calculated by Medicare reflect the average costs of items and 
services that are packaged into a primary procedure and will not 
necessarily equal the sum of the cost of the primary procedure and the 
average sales price of the specific items and services used in the 
procedure in each case. Furthermore, the costs will be based on the 
reported costs submitted to Medicare by the hospitals and not the list 
price established by the manufacturer. Claims data that include the 
radiopharmaceutical packaged with the associated procedure reflect the 
combined cost of the procedure and the radiopharmaceutical used in the 
procedure. Additionally, we do not believe it is appropriate to create 
a new packaging threshold specifically for diagnostic 
radiopharmaceuticals as such a threshold would not align with our 
overall packaging policy and commenters have submitted only limited 
data to support a specific threshold.
    With respect to the request that we create a new APC for each 
radiopharmaceutical product, we do not believe it is appropriate to 
create unique APCs for diagnostic radiopharmaceuticals. Diagnostic 
radiopharmaceuticals function as supplies during a diagnostic test or 
procedure and following our longstanding packaging policy, these items 
are packaged under the OPPS. Packaging supports our goal of making OPPS 
payments consistent with those of a prospective payment system, which 
packages costs into a single aggregate payment for a service, 
encounter, or episode of care. Furthermore, diagnostic 
radiopharmaceuticals function as supplies that enable the provision of 
an independent service, and are not themselves the primary therapeutic 
modality, and therefore, we do not believe they warrant separate 
payment through creation of a unique APC at this time. We welcome 
ongoing dialogue with stakeholders regarding suggestions for payment 
changes for consideration in future rulemaking.
    Comment: One commenter expressed their approval of the drugs 
proposed to be included in our policy-packaged drug policy.
    Response: We appreciate the support of the commenter.
    After consideration of the public comments we received, we are 
finalizing our proposals without modification to continue our drug 
packaging policies, which are included in the regulation text 42 CFR 
419.2(b).
d. Packaging Determination for HCPCS Codes That Describe the Same Drug 
or Biological but Different Dosages
    In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490 
through 60491), we finalized a policy to make a single packaging 
determination for a drug, rather than an individual HCPCS code, when a 
drug has multiple HCPCS codes describing different dosages because we 
believe that adopting the standard HCPCS code-specific packaging 
determinations for these codes could lead to inappropriate payment 
incentives for hospitals to report certain HCPCS codes instead of 
others. We continue to believe that making packaging determinations on 
a drug-specific basis eliminates payment incentives for hospitals to 
report certain HCPCS codes for drugs and allows hospitals flexibility 
in choosing to report all HCPCS codes for different dosages of the same 
drug or only the lowest dosage HCPCS code. Therefore, we proposed to 
continue our policy to make packaging determinations on a drug-specific 
basis, rather than a HCPCS code-specific basis, for those HCPCS codes 
that describe the same drug or biological but different dosages in CY 
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 
the 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 41.

[[Page 63639]]

    Comment: One commenter supported our proposal to continue our 
current policy to make packaging determinations on a drug-specific 
basis rather than a HCPCS code basis when multiple HCPCS codes are used 
to describe different quantities of a drug or biological.
    Response: We appreciate the support of the commenter.
    After reviewing the public comments, we are finalizing our 
proposal, without modification, to continue our policy to make 
packaging determinations on a drug-specific basis, rather than a HCPCS 
code-specific basis, for those HCPCS codes that describe the same drug 
or biological but different dosages. The packaging status of each drug 
and biological HCPCS code to which this methodology applies in CY 2022 
is displayed in Table 41.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.064

BILLING CODE 4120-01-C

[[Page 63640]]

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.\176\
---------------------------------------------------------------------------

    \176\ 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 the 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 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. CY 2022 Payment Policy
    For 2022, we proposed 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 proposed 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 proposed 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

[[Page 63641]]

provides, in part, that the amount of payment for a SCOD is the average 
price of the drug in the year established under section 1847A of the 
Act. We also proposed to apply this provision to non-SCOD separately 
payable drugs. Because we proposed to establish the average price for a 
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 proposed that, if finalized, our proposal to pay for drugs or 
biologicals at WAC+3 percent, rather than WAC+6 percent, would apply 
whenever WAC-based pricing is used for a drug or biological 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 proposed 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 
proposed 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 the CY 2022 OPPS/ASC 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 the CY 2022 OPPS/ASC 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 in 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.
    Comment: Multiple commenters expressed their support for paying for 
separately payable drugs and biologicals at ASP+6 percent. The 
commenters believe this policy is consistent with statute and 
Congressional intent, and generates more predictable payment for 
providers than previous payment methodologies for drugs and 
biologicals. The commenters believe the ASP+6 percent payment policy 
ensures equivalent payment for drugs and biologicals between the 
outpatient hospital setting and the physician office, which encourages 
Medicare beneficiaries to receive care in the most clinically 
appropriate setting.
    Response: We appreciate the commenters' feedback.
    Comment: One commenter requested that an add-on percentage of 
greater than 6 percent of ASP be paid for separately payable 
radiopharmaceuticals to reflect higher overhead and handling costs for 
these products.
    Response: The add-on percentage of 6 percent is generally viewed as 
reflecting the overhead and handling cost of most drugs, 
radiopharmaceuticals, and biologicals that are separately payable in 
the OPPS even though the overhead and handling costs for individual 
products may be higher or lower than 6 percent of the ASP. We believe 
that the add-on percentage of 6 percent is appropriate for separately 
payable radiopharmaceuticals.
    Comment: Two commenters requested that we exclude both diagnostic 
and therapeutic radiopharmaceuticals from our proposed policy that 
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, that payments can be made for drugs using WAC pricing 
plus a 3 percent price add-on. The commenters believe the cost of 
preparing radiopharmaceuticals is higher than the cost of preparing 
other drugs and biologicals and a 6 percent price add-on should be 
required anytime that we use WAC to price a radiopharmaceutical.
    Response: The WAC of a drug or biological is defined in section 
1847A(c)(6)(B) of the Act as the manufacturer's list price for the drug 
or biological to wholesalers or direct purchasers in the United States, 
not including prompt pay or other discounts, rebates or reductions in 
price, for the most recent month for which the information is 
available, as reported in wholesale price guides or other publications 
of drug or biological pricing data. Because the WAC does not include 
discounts, it typically exceeds ASP, and the use of a WAC-based payment 
amount for the same drug results in higher dollar payments than the use 
of an ASP-based payment amount. Also, MedPAC in their June 2017 Report 
to the Congress (http://www.medpac.gov/docs/default-source/reports/jun17_reporttocongress_sec.pdf, pages 42 through 44) suggested that 
greater parity between ASP-based acquisition costs and WAC-based 
payments for Part B drugs could be achieved and recommended changing 
the 6 percent add-on for WAC-based payments to 3 percent. Given this 
evidence that WAC pricing tends to overestimate drug cost, we believe 
our current and proposed policy to pay drugs at WAC plus 3 percent for 
all drugs, biologicals, and radiopharmaceuticals when ASP is not 
available more accurately reflects the cost of new products recently 
entering the market than does WAC plus 6 percent.
    After considering the public comments we received, we are 
finalizing our proposals related to payment for SCODs and other 
separately payable drugs and biologicals without modification.
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

[[Page 63642]]

Act and to subject nonpass-through biosimilar biological products to 
our annual threshold-packaged policy (for CY 2016, 80 FR 70445 through 
70446; and for CY 2017, 81 FR 79674). In the CY 2018 OPPS/ASC proposed 
rule (82 FR 33630), for CY 2018, we proposed to continue this same 
payment policy for biosimilar biological products.
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
59351), we noted that, with respect to comments we received regarding 
OPPS payment for biosimilar biological products, in the CY 2018 PFS 
final rule, CMS finalized a policy to implement separate HCPCS codes 
for biosimilar biological products. Therefore, consistent with our 
established OPPS drug, biological, and radiopharmaceutical payment 
policy, HCPCS coding for biosimilar biological products is based on the 
policy established under the CY 2018 PFS final rule.
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 
59351), after consideration of the public comments we received, we 
finalized our proposed payment policy for biosimilar biological 
products, with the following technical correction: All biosimilar 
biological products are eligible for pass-through payment and not just 
the first biosimilar biological product for a reference product. In the 
CY 2019 OPPS/ASC proposed rule (83 FR 37123), for CY 2019, we proposed 
to continue the policy in place from CY 2018 to make all biosimilar 
biological products eligible for pass-through payment and not just the 
first biosimilar biological product for a reference product.
    In addition, in CY 2018, we adopted a policy that biosimilars 
without pass-through payment status that were acquired under the 340B 
Program would be paid the ASP of the biosimilar minus 22.5 percent of 
the reference product's ASP (82 FR 59367). We adopted this policy in 
the CY 2018 OPPS/ASC final rule with comment period because we believe 
that biosimilars without pass-through payment status acquired under the 
340B Program should be treated in the same manner as other drugs and 
biologicals acquired through the 340B Program. As noted earlier, 
biosimilars with pass-through payment status are paid their own ASP+6 
percent of the reference product's ASP. Separately payable biosimilars 
that do not have pass-through payment status and are not acquired under 
the 340B Program are also paid their own ASP 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 proposed to continue our policy to make all biosimilar 
biological products eligible for pass-through payment and not just the 
first biosimilar biological product for a reference product. We also 
proposed to continue our 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.
    Comment: One commenter supported our proposal to continue our 
policy from CY 2018 to make biosimilar biological products eligible for 
pass-through payment and not just the first biosimilar biological 
product for a reference product.
    Response: We appreciate the commenter's support of this established 
policy.
    Comment: Multiple commenters supported our proposal to pay nonpass-
through biosimilars acquired under the 340B Program at ASP minus 22.5 
percent of the biosimilar's ASP, rather than the reference product's 
ASP.
    Response: We appreciate the commenters' support. Please see section 
V.B.6. of this final rule with comment period for a discussion of 
payment policy for drugs and biologicals acquired under the 340B 
program.
    Comment: One commenter did not support our proposal to continue our 
CY 2018 policy to make all biosimilar biological products eligible for 
pass-through payment and not just the first biosimilar biological 
product for a reference product. The commenter believes that there 
should be a ``level playing field'' between biosimilars and their 
reference products in order to increase competition and reduce costs 
for beneficiaries. The commenter does not believe it is fair for 
biosimilars of a reference product to be receiving passthrough payment 
of ASP plus 6 percent of the reference product's ASP. The commenter 
pointed out that when the reference product is no longer eligible for 
pass-through payment, if it is acquired under the 340B program, 
hospitals would be paid for the product at ASP minus 22.5 percent, 
while the biosimilar that has pass-through status continues to receive 
payment at ASP plus 6 percent of the reference product's ASP. The 
commenter believes that this difference in the payment rates for 
biosimilars and their reference products could potentially lead to 
increased Medicare spending on biosimilars as providers utilize 
biosimilars instead of the biosimilars' reference products because of 
the higher payment rates for biosimilars in these circumstances.
    Response: As discussed in the CY 2019 OPPS/ASC final rule with 
comment period (83 FR 58977), we continue to believe that eligibility 
for pass-through payment status reflects the unique, complex nature of 
biosimilars

[[Page 63643]]

and is important as biosimilars become established in the market, just 
as it is for all other new drugs and biologicals. In terms of the 
potential increased payment for biosimilars under our policy to allow 
biosimilars to be eligible for pass-through status, overall increased 
competition due to the presence of more biosimilars on the market as a 
result of this policy is expected to drive payments down for both 
Medicare and for beneficiaries over time, even if there may be 
increased spending on biosimilars in the short term.
    After consideration of the public comments we received, we are 
finalizing our proposed payment policy for biosimilar products, without 
modification, to continue the policy established in CY 2018 to make all 
biosimilar biological products eligible for pass-through payment and 
not just the first biosimilar biological product for a reference 
product. We are also finalizing our proposal to continue to pay 
nonpass-through biosimilars acquired under the 340B Program at the 
biosimilar's ASP minus 22.5 percent of the biosimilar's, rather than 
the reference product's ASP. Our final policy regarding the payment 
rate for drugs and biologicals that are acquired under the 340B program 
is described in section V.B.6 of this final rule with comment period.
3. Payment Policy for Therapeutic Radiopharmaceuticals
    For CY 2022, we proposed to continue the payment policy for 
therapeutic radiopharmaceuticals that began in CY 2010. We pay for 
separately payable therapeutic radiopharmaceuticals under the ASP 
methodology adopted for separately payable drugs and biologicals. If 
ASP information is unavailable for a therapeutic radiopharmaceutical, 
we base therapeutic radiopharmaceutical payment on mean unit cost data 
derived from hospital claims. We believe that the rationale outlined in 
the CY 2010 OPPS/ASC final rule with comment period (74 FR 60524 
through 60525) for applying the principles of separately payable drug 
pricing to therapeutic radiopharmaceuticals continues to be appropriate 
for nonpass-through, separately payable therapeutic 
radiopharmaceuticals in CY 2022. Therefore, we proposed 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 proposed 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 the CY 2022 OPPS/ASC proposed rule 
(which are available via the internet on the CMS website).
    Comment: One commenter supported the continuation of this policy to 
provide a predicable payment methodology and avoid the payment swings 
that occurred prior to adoption of the statutory default rate for 
therapeutic radiopharmaceuticals.
    Response: We thank the commenter for their support.
    We did not receive any additional public comments on this proposal 
and are finalizing our proposal, without modification, to continue to 
pay all nonpass-through, separately payable therapeutic 
radiopharmaceuticals at ASP+6 percent. We are also finalizing our 
proposal to continue to rely on CY 2019 mean unit cost data derived 
from hospital claims data for payment rates for therapeutic 
radiopharmaceuticals for which ASP data are unavailable. The CY 2022 
final payment rates for nonpass-through separately payable therapeutic 
radiopharmaceuticals are included in Addenda A and B to this final rule 
with comment period (which are available via the internet on the CMS 
website).
4. Payment for Blood Clotting Factors
    For CY 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 proposed to pay for blood clotting factors at ASP+6 
percent, consistent with our proposed payment policy for other nonpass-
through, separately payable drugs and biologicals, and to continue our 
policy for payment of the furnishing fee using an updated amount. Our 
policy to pay 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 proposed to announce the actual figure for the percent 
change in the applicable CPI and the updated furnishing fee calculated 
based on that figure through applicable program instructions and 
posting on our website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
    We proposed 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.
    Comment: One commenter supports our proposal to continue to pay for 
blood clotting factors at ASP+6 percent plus a furnishing fee for the 
clotting factor update annually using the CPI. The commenter also 
supports our policy to pay the same clotting factor

[[Page 63644]]

furnishing fee in both the hospital outpatient and physician office 
settings.
    Response: We appreciate the commenter's support for our policies.
    After reviewing the public comment that we received, we are 
finalizing our proposal, without modification, to provide payment for 
blood clotting factors under the same methodology as other separately 
payable drugs and biologicals under the OPPS and to continue payment of 
an updated furnishing fee. We will announce the actual figure of the 
percent change in the applicable CPI and the updated furnishing fee 
calculation based on that figure through the applicable program 
instructions and posting on the CMS website.
5. Payment for Nonpass-Through Drugs, Biologicals, and 
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims 
Data
    For CY 2022, we proposed 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 
the CY 2022 OPPS/ASC proposed rule, which is available via the internet 
on the CMS website.
    We did not receive any comments on our proposal. Therefore, we are 
finalizing our CY 2022 proposal without modification, including our 
proposal to assign drug or biological products status indicator ``K'' 
and pay for them separately for the remainder of CY 2022 if pricing 
information becomes available. The 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 final rule with comment period, which is available via the 
internet on the CMS website.
6. CY 2022 OPPS Payment Methodology for 340B Purchased Drugs
a. Overview
    Under the OPPS, payment rates for drugs are generally provided for 
in section 1833(t)(14)(A). Under that provision, the payment amount is 
more specifically set forth by cross-reference to section 1847A, which 
generally sets a default rate of ASP+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 court's 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).\177\
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    \177\ https://www.supremecourt.gov/orders/courtorders/070221zor_4gc5.pdf. Accessed July 8, 2021.
---------------------------------------------------------------------------

b. 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 ASP+6 percent to ASP 
minus 22.5 percent. We stated that our goal was to make Medicare 
payment for separately payable drugs more aligned with the resources 
expended by hospitals to acquire such drugs, while recognizing the 
intent of the 340B 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 the statute--could stretch scarce Federal resources as 
far as possible, reaching more eligible patients and providing more 
comprehensive services. By 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. We 
note, however, that the 340B program does not contemplate subsidization 
from Medicare in the form of payments far exceeding hospitals' 
acquisition costs. We also note that 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

[[Page 63645]]

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.\178\ 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.\179\ 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.\180\ 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,'' \181\ 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.'' \182\ ``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.'' \183\
---------------------------------------------------------------------------

    \178\ American Hosp. Ass'n, et al. v. Azar, et al., No. 1:18-cv-
2084 (D.D.C. Dec. 27, 2018).
    \179\ Id. at 35 (quoting Amgen, Inc. v. Smith, 357 F.3d 103, 112 
(D.C. Cir. 2004) (citations omitted)).
    \180\ 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.
    \181\ Id. at 13.
    \182\ Id. at 19.
    \183\ Id. (citing Declaration of Elizabeth Richter).
---------------------------------------------------------------------------

    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 
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. In 
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 
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.\184\ 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

[[Page 63646]]

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).
---------------------------------------------------------------------------

    \184\ 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 increased 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) of the Act.
c. CY 2022 Proposed 340B Drug Payment Policy
    For CY 2022, we proposed to continue our current policy 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 proposed, 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 proposed 
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 also proposed 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 proposed 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. We stated that these hospitals would continue to report 
informational modifier ``TB'' for 340B-acquired drugs, and would 
continue to be paid ASP+6 percent. We also explained that 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 stated that 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 explained 
that 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 held 
that the interpretation of the statute was reasonable when the 340B 
drug payment policy was implemented in CY 2018. We noted 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 explained that 
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+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 stated that we continue to believe it is important to 
provide consistency and reliable payment for these drugs both for the 
remainder of the PHE, and after its conclusion, to give hospitals 
increased certainty as to payments for these drugs.
d. Comments on the Proposed CY 2022 340B Payment Policy
    Comment: Several commenters, including a hospital association, 
pharmaceutical research and manufacturing companies, and a community 
oncology association,

[[Page 63647]]

supported the current OPPS payment policy for 340B-acquired drugs. They 
believed that approximating payment based on acquisition costs is 
appropriate; however, they also recommended reform to the 340B program 
itself. Some of these commenters believed the policy would continue to 
address the inappropriate growth of the 340B Program, stem physician 
practice consolidation with hospitals, and preserve patient access to 
community-based care.
    Response: We thank the commenters for their support of our 340B 
payment policies. We note that comments related to the reform of the 
340B program are outside of the scope of this final rule and we also 
note that the 340B program is administered by the Health Resources and 
Services Administration, not CMS; however, we thank commenters for 
their input.
    Comment: A commenter inquired if the 340B drug payment policy 
applies to therapeutic radiopharmaceuticals that are paid based on the 
mean unit cost data, stating that it would be inappropriate and 
inaccurate to apply the 22.5 percent reduction to these payment 
amounts. Another commenter opposed the 340B drug payment policy 
specifically for therapeutic radiopharmaceuticals, citing the unique 
cost structure of radiopharmaceuticals. Another commenter requested a 
similar-product specific exemption for Chimeric Antigen Receptor T-cell 
(CAR T-cell) therapy when purchased through the 340B program.
    Response: The 340B drug payment policy applies to OPPS separately 
payable drugs (status indicator ``K'') purchased through the 340B drug 
program, which include therapeutic radiopharmaceuticals when these 
products are acquired through the 340B drug program. The classes of 
drugs exempted from the policy are vaccines (status indicator ``L'' or 
``M''), and drugs with transitional pass-through payment status (status 
indicator ``G''). We note that the drug cost methodology has no impact 
on the application of the 340B discount. As we noted above, our policy 
applies to all drugs purchased through the 340B drug program except for 
vaccines and drugs with transitional pass-through payment status. While 
we acknowledge that radiopharmaceuticals necessitate special handling, 
we note that there are other drug classes that also necessitate special 
handling under the 340B program. Therefore, we disagree with the 
commenter that therapeutic radiopharmaceuticals purchased through the 
340B drug program should qualify for an exemption from application of 
the payment adjustment. We note that, under the OPPS, the 340B payment 
adjustment is ASP minus 22.5 percent, WAC minus 22.5 percent, or 69.46 
percent of AWP. We reiterate, these payment rates are based on the 
minimum average discount for products purchased through the 340B 
program, with the actual acquisition costs likely being much lower.
    Comment: Some commenters had concerns that new biosimilars on pass-
through status would have a competitive advantage over their reference 
product as a result of the disparity in OPPS payment for these products 
when a biosimilar has pass-through status. Commenters believed the 
disparity resulting from the combined 340B drug payment and pass-
through policies would advantage biosimilars receiving pass-through 
payment if the applicable reference product is acquired under the 340B 
program and not receiving pass-through payment. The commenters believe 
the disparity would lead to inappropriate prescribing inconsistent with 
clinical guidelines and/or standards of care.
    Response: We disagree with commenters that the current payment 
policy would unfairly place reference products at a competitive 
disadvantage relative to their applicable biosimilars. We believe the 
continuation of our current biosimilar policy will allow for 
appropriate payment and access to these important treatments. As noted 
in the CY 2021 OPPS/ASC final rule with comment period (85 FR 86043), 
we do not believe that the biosimilars' temporary payments provided by 
pass-through status will create the substantial competitive advantage 
that commenters described. We note that the advantage of pass-through 
payment exists under the current 340B policy that includes both new 
drugs and biosimilars. We also note we are continuing the policy from 
previous years regarding biosimilars and 340B payment. Please see 
section V.B.2.C. of this final rule with comment period for additional 
discussion regarding biosimilars and section V.A.1. for additional 
discussion on drug pass-through payments. We note that the advantage of 
pass-through payment exists under the current 340B policy that includes 
both new drugs and biosimilars. We are continuing the policy from 
previous years regarding payment for biosimilars acquired under the 
340B program.
    Comment: Several commenters disagreed that ASP minus 22.5 was a 
conservative adjustment that represented the minimum discount that 
hospitals receive when they acquire drugs through the 340B program. 
They contended that they are losing money when dispensing certain drugs 
as the price paid by CMS is significantly lower than the price paid by 
the entity.
    Response: We thank the commenters for their feedback. The 22.5 
percent discount off of ASP is a conservative minimum discount for 
products acquired under the 340B program based on a 2015 MedPAC 
analysis, which we discussed in the CY 2018 OPPS/ASC final rule with 
comment period (82 FR 52496). Our 2020 Hospital Acquisition Cost Survey 
for 340B-Acquired SCODs has shown the average discount to be about 34.7 
percent. As noted in the 2021 OPPS/ASC final rule with comment period 
(85 FR 86045), the 2020 Hospital Acquisition Cost Survey for 340B-
Acquired SCODS incorporated the 340B ceiling prices for hospitals that 
did not affirmatively respond to the survey and may have skewed the 
average discount determined based on survey results (34.7 percent off 
of ASP) towards the minimum average discount (that is, the ceiling 
price) that a 340B hospital would receive on a drug. Since the ceiling 
price is the maximum amount covered entities may permissibly be 
required to pay for a drug under section 340B(a)(1) of the Public 
Health Service Act, we would not expect any 340B hospital to have 
acquisition costs for any acquired drug that are greater than ASP minus 
22.5 percent. Therefore, we disagree that covered entities are, on 
average, losing money under the current 340B drug payment policy of ASP 
minus 22.5 percent for drugs purchased through the 340B drug program.
    Comment: Several commenters requested that we make our 340B 
exemptions policy permanent. Additionally, commenters asked CMS to 
extend the exemption to urban SCHs, Medicare Dependent Hospitals, Rural 
Referral Centers.
    Response: We thank commenters for their recommendations. At this 
time, we do not believe it is appropriate to revise our 340B exemptions 
policy and believe we should maintain our current policy for CY 2022. 
Nonetheless, we will take these comments into consideration for future 
rulemaking.
    Comment: Several commenters stated that CMS has not provided 
sufficient analysis for the continuation of the 340B payment policy, 
expressing their belief that CMS has not considered changes in 
utilization or volume for hospitals that are actively participating in 
the 340B program since the implementation of the policy. They further 
noted that CMS has not analyzed the impact of the prior year's 
reimbursement changes for drugs acquired under the 340B program for the 
affected hospitals. They contended

[[Page 63648]]

that CMS has not provided evidence that the payment policy remains 
budget neutral by recalculating the policy's impact to make sure the 
conversion factor is properly adjusted over time to reflect changes in 
inflation or 340B drug utilization.
    Response: In the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 59369 through 59370), we implemented the 340B drug payment 
policy 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. This adjustment changed the 
payment rate from ASP+6 percent to ASP minus 22.5 percent for drugs 
subject to this policy. In that rule, 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. We believe 
the current 340B drug payment policy reflects the average minimum 
discount that 340B participating hospitals receive for drugs acquired 
under the 340B Program, and we believe it is inappropriate for Medicare 
to subsidize other programs through Medicare payments for separately 
payable drugs. We note the data collected in our 2020 Hospital 
Acquisition Cost Survey for 340B-acquired SCODs found the average 340B 
program drug discount to be 34.7 percent.
    With respect to OPPS budget neutrality and the conversion factor, 
OPPS budget neutrality is generally developed on a prospective basis by 
isolating the effect of any changes in payment policy or data under the 
prospective OPPS with all other factors held constant. We note that 
since the CY 2018 implementation of the 340B drug payment policy in 
which we developed a budget neutrality adjustment for the policy, the 
adjusted percentage payment has remained at ASP minus 22.5 percent. As 
a result, while some of the claims may change based on drug payment and 
billing, as indicated by the ``JG'' modifier, these drugs, including 
their utilization and expected payments, would be included as part of 
the broader budget neutrality adjustments, but collectively they would 
not have a separate budget neutrality adjustment specifically for the 
340B drug payment policy. We note that in the rules in which we 
proposed to establish or modify the adjustment, we have included in the 
impact analysis the estimated effects on different categories of 
providers based on the policy. Finally, we note that we monitor the 
payment and utilization patterns associated with this adjustment and 
for drug spending more broadly, and will continue to do so.
    Comment: Several commenters called on CMS to suspend the current 
340B drug payment policy and restore the 340B drug and biological 
payment rate to the statutory ASP+6 percent until the litigation is 
resolved in the U.S. Supreme Court. Other commenters recommended CMS 
postpone any changes to the 340B drug payment policy until the court 
case has concluded. Others recommended CMS suspend the policy amid the 
COVID-19 Public Health Emergency (PHE).
    Response: We acknowledge that the issue of the Secretary's 
authority to adjust the 340B drug payment rate is subject to litigation 
before the U.S. Supreme Court. As explained at prior stages of the 
litigation, we believe that the suit now before the Court is precluded 
by 1833(t)(12), and, in the alternative, that our 340B drug payment 
policy is within the statutory authority under 1833(t)(14)(A), which 
was confirmed by the D.C. Circuit. While the litigation involving this 
policy is pending, we believe maintaining the current payment policy 
for CY 2022 would be appropriate in order to maintain consistent and 
reliable payment. Regarding payment during the COVID-19 PHE, we believe 
maintaining consistent payment is important; therefore, we are 
maintaining our proposed policy. We note that any changes to this 
payment policy would be adopted through notice and comment rulemaking.
    Comment: Many commenters opposed the CY 2022 proposal to pay for 
drugs acquired under the 340B program at the payment rate of ASP minus 
22.5 percent. These commenters urged CMS to withdraw its proposed 
policy and contended that the policy was an unlawful application of the 
CMS's authority.
    Many commenters opposed the current 340B policy and argued that it 
redistributes resources designated for safety net hospitals to 
subsidize non-340B or private hospitals because the payment reduction 
is budget neutral. The commenters requested that CMS end its policy of 
paying for drugs obtained through the 340B program at ASP minus 22.5 
percent and restore the statutory default payment rate of ASP+6 
percent.
    Many commenters also alleged that private pharmacy benefit managers 
and third-party payers are citing Medicare's payment reduction to 
justify implementing similar policies that provide lower reimbursement 
for 340B drugs compared to non-340B drugs.
    Response: We respectfully disagree with the commenters' assertions 
that our 340B drug payment policy is illegal or an unlawful application 
of the law. We disagree with commenters that the OPPS 340B payment 
policy has taken away resources designated for safety net hospitals and 
our internal analyses have not demonstrated any issues related to 
access of separately payable drugs as a result of the implementation of 
this policy. As discussed in this section of the CY 2022 final rule 
with comment period, the D.C. Circuit has confirmed that our 340B drug 
payment policy is within our authority in section 1833(t)(14) of the 
Act.
    We note that CMS does not control policies created by private 
pharmacy benefit managers and third-party payers regarding payment for 
340B drugs compared to non-340B drugs.
    After reviewing the public comments for CY 2022, we are finalizing 
our proposal, without modification, to pay ASP minus 22.5 percent for 
340B-acquired drugs, including when furnished in nonexcepted off-campus 
PBDs paid under the PFS. Our finalized proposal continues the 340B 
Program policies that were implemented in CY 2018 with the exception of 
the way we are calculating payment for 340B-acquired biosimilars, which 
is discussed in section V.B.2.c. of the CY 2019 OPPS/ASC final rule 
with comment period, and 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 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+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 consistent and reliable 
payment for these drugs both for the remainder of the PHE, and after 
its conclusion, to give hospitals increased certainty as to payments 
for these drugs. We note that any changes to this payment policy would 
be adopted through notice and comment rulemaking.

[[Page 63649]]

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 proposed 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 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

[[Page 63650]]

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 from CY 
2019 and CY 2020.
    Comment: Multiple commenters provided suggestions on changes to the 
payment methodology for graft skin substitute payment policy for future 
rulemaking.
    Response: We appreciate the additional advice regarding possible 
changes to the payment methodology for graft skin substitute products, 
and we will consider this information as a part of future rulemaking.
b. Packaged Skin Substitutes for CY 2022
    For CY 2022, consistent with our policy since CY 2016, we proposed 
to continue to determine the high cost/low cost status for each skin 
substitute product based on either a product's geometric MUC exceeding 
the geometric MUC threshold or the product's PDC (the total units of a 
skin substitute multiplied by the MUC and divided by the total number 
of days) exceeding the PDC threshold. Consistent with the methodology 
as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC 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 proposed 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. (86 
FR 42137 through 42143) of the CY 2022 OPPS/ASC 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 proposed to assign each skin 
substitute that exceeds either the MUC threshold or the PDC threshold 
to the high cost group. In addition, we proposed to assign any skin 
substitute with a MUC or a PDC that does not exceed either the MUC 
threshold or the PDC threshold to the low cost group. For CY 2022, we 
proposed 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 CY 2022, we proposed to continue to assign skin substitutes 
with pass-through payment status to the high cost category. We proposed 
to assign skin substitutes with pricing information but without claims 
data to calculate a geometric MUC or PDC to either the high cost or low 
cost category based on the product's ASP+6 percent payment rate as 
compared to the MUC threshold. If ASP is not available, we proposed to 
use WAC+3 percent to assign a product to either the high cost or low 
cost category. Finally, if neither ASP nor WAC is available, we 
proposed to use 95 percent of AWP to assign a skin substitute to either 
the high cost or low cost category. We proposed to continue to use 
WAC+3 percent instead of WAC+6 percent to conform to our proposed 
policy described in section V.B.2.b of the CY 2022 OPPS/ASC proposed 
rule (86 FR 42132) 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 
proposed 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).
    Comment: The HOP Panel recommended and several commenters supported 
ending the packaging of the graft skin substitute add-on codes (CPT 
codes 15272, 15274, 15276, and 15278; HCPCS codes C5272, C5274, C5276, 
and C5278). The HOP Panel and the commenters request that these codes 
be assigned to APCs that reflect the estimated costs of these service 
codes. Commenters claim that packaging the graft skin substitute add-on 
codes eliminates the variation of payment for wound care treatment 
based on the size of the wound. They assert that providers are 
discouraged from treating wounds between 26 and 99 cm\2\ and over 100 
cm\2\ in the outpatient hospital setting because of the financial 
losses they experience to provide such care. Commenters believe that 
packaging graft skin substitute add-on codes disrupts the methodology 
of how the American Medical Association (AMA), the organization that 
manages CPT service codes, intended graft skin substitute procedures to 
be paid.
    Response: We do not believe the recommendation of the HOP Panel and 
the commenters is appropriate for paying for graft skin substitutes 
under the OPPS. The OPPS is a prospective payment system and not a fee-
for-service payment system. That means that we generally attempt to 
make one payment for all of the services billed with the primary 
medical procedure, including add-on procedures such as

[[Page 63651]]

the ones described by CPT codes 15272, 15274, 15276, and 15278, and 
HCPCS codes C5272, C5274, C5276, and C5278.
    More specifically, we calculate the OPPS payment rate by first 
calculating the geometric mean cost of the procedure. This calculation 
includes claims for individual services that used a lower level of 
resources and claims for individual services that used a higher level 
of resources. The resulting geometric mean cost will reflect the median 
service cost for a given medical procedure. Next, we group the medical 
procedure with other medical procedures with clinical and resource 
similarity in an APC and calculate the geometric mean of these related 
procedures to generate a base payment rate for all procedures assigned 
to the APC.
    A prospective payment system like the OPPS is designed to pay 
providers the geometric mean cost of the primary service they provide, 
and such a system encourages efficiencies and cost-savings in the 
administration of health care. However, a prospective payment system is 
not intended to discourage providers from rendering medically-necessary 
to patients. For example, it's possible that a provider could 
experience a financial loss when they perform a service where a patient 
receives 85 cm\2\ of a graft skin substitute product, but that same 
provider could see a financial gain when the next patient receives a 
skin graft where only 10 cm\2\ of product is used. Paying separately 
for add-on codes in a prospective payment system defeats the goals of 
such a payment system. If providers are paid at cost or nearly at cost 
for each individual service they render, there is no incentive for them 
to control costs. Add-on codes should be packaged with the primary 
medical service to be able to establish a median payment rate that 
gives providers incentives to keep their costs in line with typical 
providers throughout the Medicare program. The need for cost 
efficiencies in the application of graft skin substitutes to treat 
wounds is no different than need for cost efficiencies in other 
procedures administered in the outpatient hospital setting. Therefore, 
add-on codes, including the add-on codes for the administration of 
graft skin substitutes must remain packaged to maintain the integrity 
of the OPPS.
    Comment: The HOP Panel recommended and several commenters support 
ensuring that the payment rate of graft skin substitute procedures be 
the same no matter where on the body the graft skin substitute product 
is applied to the patient. There are four graft skin substitute 
application procedures for high cost skin substitute products (CPT 
codes 15271, 15273, 15275, and 15277) and a similar four graft skin 
substitute applications for low cost skin substitute products (HCPCS 
codes C5272, C5274, C5276, and C5278). The reason there are four 
application service codes is that there are different service codes for 
applying graft skin substitutes to children and infants as compared to 
adults and there are different service codes for applying graft skin 
substitutes to the trunk, arms, and legs as compared to the face, 
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, 
fingers, and toes. Commenters claim that the cost to apply graft skin 
substitute products does not depend on the location of the wound 
because the same amount of product is used on the wound and the same 
clinical resources are used to treat the wound independent of the 
location of the wound.
    Response: We appreciate commenters concerns and note that that 
current codes describing the application of high and low cost graft 
skin substitutes for adults (CPT codes 15271 and 15275, and HCPCS codes 
C5272 and C5276) have been assigned the same APC (5054). Because they 
are currently included in the same APC, OPPS payment for them is the 
same, and this payment policy is consistent with the recommendation 
from the HOP Panel and other commenters. We note that the codes 
describing the application of high and low cost products for children 
and infants in the trunk, arms, and legs (CPT code 15273 or HCPCS code 
C5274) have been assigned to a lower-paying APC (APC 5054) than the APC 
assignment for the application of high and low cost graft skin 
substitute products for children in the face, scalp, eyelids, mouth, 
neck, ears, orbits, genitalia, hand, feet, fingers, and toes--CPT code 
15277 or HCPCS code C5277, which are assigned to APC 5055. These APCs 
have different payment rates. We note that these services--the 
application of skin substitutes for children--are fairly low volume 
services in the OPPS because Medicare beneficiaries tend to be older. 
In addition, the differences in costs that have determined APC 
assignments for these services for children have been supported by 
historical cost data. We also note that none of these service codes are 
in violation of the 2-times rule. While we do not believe we should 
change the APC assignments for these services at this time, we are 
interested in additional feedback on this issue, including whether we 
should revaluate APC assignments for the application of skin 
substitutes for children in the future.
    Comment: One commenter did not support our proposal to assign graft 
skin substitute products to a high cost or a low cost group based on if 
the MUC or PDC of a product exceeds a weighted average of either the 
MUC or PDC of all graft skin substitute products. The commenter 
believes the current two-tier system provides incentives for providers 
to use higher-cost graft skin substitute products instead of lower-cost 
products that have similar efficacy to the higher-cost products. The 
commenter supports a payment system where the high cost and low cost 
groups have been eliminated. The commenter believes geometric mean 
payment rate for each graft skin substitute application service code 
would be calculated using all of the separately paid claims for a given 
code without consideration to the mean unit cost of the graft skin 
substitute product used in the service. The commenter believes this 
approach would reduce spending on graft skin substitute procedures by 
encouraging the use of lower-cost graft skin substitute products and 
will reduce administration burden for providers as they only need to 
use one set of product application codes.
    Response: As we explained in the CY 2014 OPPS/ASC final rule (78 FR 
74933), the graft skin substitute procedures described by CPT codes 
15271 through 15278 are clinically homogeneous, but there is resource 
heterogeneity between different skin substitute products with the cost 
per cm\2\ ranging from under $10 per cm\2\ to over $200 per cm\2\. As 
we discussed in prior rules, establishing high cost and low cost groups 
for skin substitutes makes the payment for these products more 
homogeneous and reduces the risk of excessive overpayment or 
underpayment to a provider when a skin substitute product is used. 
However, we appreciate the commenter's proposal and note that 
establishing a payment policy in which with only one set of product 
application service codes may have other benefits, such as simplifying 
coding and payments for these procedures and products, and we may 
explore these concepts in future rulemaking.
    Comment: Two commenters supported our proposal to continue to 
assign skin substitutes to the low cost or high cost group. Commenters 
also supported our proposal that any skin substitute product that was 
assigned to the high cost group in CY 2020 would be assigned to the 
high cost group for CY 2021, regardless of whether it exceeds or falls 
below the CY 2021 MUC or PDC threshold.

[[Page 63652]]

    Response: We appreciate the support of the commenters for our 
proposals.
    Comment: Two commenters supported our inclusion of synthetic 
products in our definition of skin substitute products.
    Response: We appreciate the support of the commenters.
    Comment: One commenter requested that CMS no longer use the term 
``skin substitutes'' to describe products that do not function like 
human skin that is grafted onto a wound and are not substitutes for 
skin grafts, but do aid in wound healing by stimulating the patient to 
regenerate lost tissue. Instead, the commenters request that we use the 
term ``cellular and/or tissue based products for skin wounds'' that is 
abbreviated ``CTPs''.
    Response: We appreciate the suggestion by the commenter, but we do 
not believe it is appropriate at this time to end our use of the term 
``skin substitute.'' Notably, the CPT and HCPCS codes used to report 
graft procedures using cellular and tissue based products to heal skin 
wounds, CPT codes 15271 through 15278 and HCPCS codes C5271 through 
C5278, use the term ``skin substitute'' in the descriptor. We feel that 
we should use terminology that reflects the service descriptors that 
are reported in the OPPS. Also, we believe the term ``skin substitute'' 
is well-understood by providers and industry stakeholders.
    Comment: Two commenters wanted us to confirm that our proposed rule 
language that encourages manufacturers of HCT/Ps to 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 applied only to those HCT/Ps that do not have 
either an FDA 510(k) clearance, premarket approval (PMA), or biologic 
license application (BLA) approval. These commenters are supportive of 
the policy as long as no consultation or determination is required for 
HCT/Ps with either a 510(k) clearance, a PMA, or a BLA approval.
    Response: We can confirm that our suggestion for manufacturers of 
HCT/Ps to 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 does apply only to those 
HCT/Ps that do not have either a 510(k) clearance, a PMA, or a BLA 
approval from FDA.
    Comment: Multiple commenters stated that HCPCS code C1849, which is 
used to report synthetic graft skin substitute products, should be 
assigned to the low cost skin substitute group by default, similar to 
how we pay for HCPCS code Q4100 (Skin substitute, not otherwise 
specified), which is used to report multiple biological skin substitute 
products that do not have product-specific HCPCS codes. Commenters also 
expressed concerns that synthetic graft skin substitute products that 
should receive payment through the low cost skin substitute group would 
instead receive payment in the high cost skin substitute group and 
increase overall graft skin substitute costs for Medicare.
    Response: We were aware of one synthetic graft skin substitute 
product that was described by HCPCS code C1849 when the code was 
established in July 2020. The manufacturer provided pricing data that 
showed the cost of the product is above the MUC threshold for graft 
skin substitute products and therefore HCPCS code C1849 should be 
assigned to the high cost skin substitute group. We note that we used 
pricing data to assign HCPCS code C1849 to the high cost group, and the 
assignment of HCPCS code C1849 to the high cost skin substitute group 
was not automatic. As more synthetic graft skin substitute products are 
identified, we will use their pricing data to calculate an average 
price for the products described by HCPCS code C1849 and compare that 
average price to the overall MUC threshold to determine whether HCPCS 
code C1849 should be assigned to the high cost or low cost skin 
substitute group.
    Comment: One commenter noted that CMS previously assigned HCPCS 
code Q4117 (Hyalomatrix, per square centimeter) to a product considered 
a synthetic skin substitute which demonstrates that synthetic skin 
substitutes can function within the current coding under both the PFS 
and OPPS frameworks. The commenter stated that it would be better for 
CMS to judiciously assign HCPCS codes to synthetic products that meet 
these application requirements.
    Response: We will take this suggestion into consideration for 
future rulemaking as we continue our work to address payment for all 
skin substitutes across settings, taking into account the intersection 
between biological, bioengineered, and synthetic components of these 
products. We also plan to further evaluate the characteristics of 
products with an existing Q-code for future rulemaking.
    Comment: One commenter, the manufacturer, has requested that HCPCS 
codes Q4122 (Dermacell, per square centimeter) and Q4150 (Allowrap ds 
or dry, per square centimeter) continue to be assigned to the high-cost 
skin substitute group.
    Response: HCPCS codes Q4122 and Q4150 were both assigned to the 
high cost group in CY 2021 and also were proposed to be assigned to the 
high-cost group for CY 2022. Any skin substitute assigned to the high 
cost group in CY 2021 will continue to be assigned to the high cost 
group in CY 2022 even if the MUC and PDC for the skin substitute 
product is below the overall MUC and PDC thresholds for all skin 
substitute products. Accordingly, we are finalizing our proposal to 
assign HCPCS codes Q4122 and Q4150 to the high-cost group in CY 2022.
    After consideration of the public comments we received, we are 
finalizing our proposal to assign a skin substitute with a MUC or a PDC 
that does not exceed either the MUC threshold or the PDC threshold to 
the low cost group, unless the product was assigned to the high cost 
group in CY 2021, in which case we would assign the product to the high 
cost group for CY 2022, regardless of whether it exceeds the CY 2022 
MUC or PDC threshold. We are also finalizing our proposal to assign to 
the high cost group any skin substitute product that exceeds the CY 
2022 MUC or PDC thresholds and assign to the low cost group any skin 
substitute product that does not exceed the CY 2021 MUC or PDC 
thresholds and was not assigned to the high cost group in CY 2021. We 
are finalizing our proposal to continue to use payment methodologies, 
including ASP+6 percent and 95 percent of AWP, for skin substitute 
products that have pricing information but do not have claims data to 
determine if their costs exceed the CY 2022 MUC. In addition, we are 
finalizing our proposal to continue to use WAC+3 percent instead of 
WAC+6 percent for skin substitute products that do not have ASP pricing 
information or claims data to determine if those products' costs exceed 
the CY 2022 MUC. We also are finalizing our proposal to retain our 
established policy to assign new skin substitute products with pricing 
information to the low cost group. Table 42 includes the final CY 2022 
cost category assignment for each skin substitute product.
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VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs, 
Biologicals, Radiopharmaceuticals, and Devices

A. Amount of Additional Payment and Limit on Aggregate Annual 
Adjustment

    Section 1833(t)(6)(E) of the Act limits the total projected amount 
of transitional pass-through payment for drugs, biologicals, and 
categories of devices for a given year to an ``applicable percentage,'' 
currently not to exceed 2.0 percent of total program payments estimated 
to be made for all covered services under the OPPS furnished for that 
year. If we estimate before the beginning of the calendar year that the 
total amount of pass-through payments in that year would exceed the 
applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a 
uniform prospective reduction in the amount of each of the transitional 
pass-through payments made in that year to ensure that the limit is not 
exceeded. We estimate the pass-through spending to determine whether 
payments exceed the applicable percentage and the appropriate 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 devices 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 determined the device pass-through estimated 
payments for each device category based on the amount of payment as 
required by section 1833(t)(6)(D)(ii) of the Act, and as outlined in 
previous rules, including the CY 2014 OPPS/ASC final rule with

[[Page 63659]]

comment period (78 FR 75034 through 75036). We note that, beginning in 
CY 2010, the pass-through evaluation process and pass-through payment 
methodology for implantable biologicals newly approved for pass-through 
payment beginning on or after January 1, 2010, that are surgically 
inserted or implanted (through a surgical incision or a natural 
orifice) use the device pass-through process and payment methodology 
(74 FR 60476). As has been our past practice (76 FR 74335), in the 
proposed rule, we proposed to include an estimate of any implantable 
biologicals eligible for pass-through payment in our estimate of pass-
through spending for devices. Similarly, we finalized a policy in CY 
2015 that applications for pass-through payment for skin substitutes 
and similar products be evaluated using the medical device pass-through 
process and payment methodology (76 FR 66885 through 66888). Therefore, 
as we did beginning in CY 2015, for CY 2022, we also proposed to 
include an estimate of any skin substitutes and similar products in our 
estimate of pass-through spending for devices.
    For drugs and biologicals eligible for pass-through payment, 
section 1833(t)(6)(D)(i) of the Act establishes the pass-through 
payment amount as the amount by which the amount authorized under 
section 1842(o) of the Act (or, if the drug or biological is covered 
under a competitive acquisition contract under section 1847B of the 
Act, an amount determined by the Secretary equal to the average price 
for the drug or biological for all competitive acquisition areas and 
year established under such section as calculated and adjusted by the 
Secretary) exceeds the portion of the otherwise applicable fee schedule 
amount that the Secretary determines is associated with the drug or 
biological. Our proposed estimate of drug and biological pass-through 
payment for CY 2022 for this group of items was $462.4 million, as 
discussed below, because we proposed 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 proposed would be paid at ASP minus 
22.5 percent, and because we proposed to pay for CY 2022 pass-through 
payment drugs and biologicals at ASP+6 percent, as we discuss in 
section V.A. of the CY 2022 OPPS/ASC proposed rule (86 FR 42116).
    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 are 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 other categories of drugs and biologicals, as 
discussed in section V.B.1.c. of the CY 2022 OPPS/ASC proposed rule (86 
FR 42129 through 42131). We proposed 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, less the policy-packaged drug APC offset amount described below. 
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. This is because the pass-through payment amount and the fee 
schedule amount associated with the drug or biological will not be the 
same, unlike for separately payable drugs and biologicals. In section 
V.A.6. of the CY 2022 OPPS/ASC proposed rule (86 FR 42126 through 
42127), 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 proposed to 
offset the amount of pass-through payment for the policy-packaged drug 
or biological. For these drugs or biologicals, the APC offset amount is 
the portion of the APC payment for the specific procedure performed 
with the pass-through drug or biological, which we refer to as the 
policy-packaged drug APC offset amount. If we determine that an offset 
is appropriate for a specific policy-packaged drug or biological 
receiving pass-through payment, we proposed to reduce our estimate of 
pass-through payments for these drugs or biologicals by the APC offset 
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. Estimate of Pass-Through Spending for CY 2022

    For 2022, we proposed 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). The 
pass-through payment percentage limit is calculated using pass-through 
spending estimates for devices and for drugs and biologicals.
    For the first group of devices, 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 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 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 proposed 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 the CY 2022 OPPS/ASC proposed 
rule will be newly eligible for pass-through payment in CY 2022; 
additional device categories that we estimated

[[Page 63660]]

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 proposed to use the general 
methodology described in the CY 2008 OPPS/ASC final rule with comment 
period (72 FR 66778), while also taking into account recent OPPS 
experience in approving new pass-through device categories. The 
proposed estimate of CY 2022 pass-through spending for this second 
group of device categories is $244.4 million.
    We did not receive any public comments on this proposal. As stated 
earlier in this final rule with comment period, we are approving three 
devices for pass-through payment status in the CY 2022 rulemaking 
cycle: RECELL[supreg] Autologous Cell Harvesting Device, Shockwave C2 
Coronary Intravascular Lithotripsy (IVL) catheter, and AngelMed 
Guardian[supreg] System. The manufacturers of these systems provided 
utilization and cost data that indicate the amount of spending for the 
devices would be approximately $18.4 million for RECELL[supreg] 
Autologous Cell Harvesting Device, $118.4 million for Shockwave C2 
Coronary Intravascular Lithotripsy (IVL) catheter, and $5.1 million for 
AngelMed Guardian[supreg] System. Therefore, we are finalizing an 
estimate of $141.9 million for this second group of devices for CY 
2022.
    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 proposed 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 these drugs and 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 proposed to pay ASP 
minus 22.5 percent. Therefore, the proposed 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 is not paid separately due to its pass-through 
payment status, we proposed to include in the CY 2022 pass-through 
estimate of 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.
    We did not receive any public comments on our proposal. Using our 
methodology for this final rule with comment period, we calculated a CY 
2022 spending estimate for this first group of drugs and biologicals of 
approximately $466.7 million based on our decision to maintain our 
current policy of paying ASP minus 22.5 percent for 340B-acquired 
drugs.
    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 proposed 
to use utilization estimates from pass-through applicants, 
pharmaceutical industry data, clinical information, recent trends in 
the per unit ASPs of hospital outpatient drugs, and projected annual 
changes in service volume and intensity as our basis for making the CY 
2022 pass-through payment estimate. We also proposed to consider the 
most recent OPPS experience in approving new pass-through drugs and 
biologicals. Using our proposed methodology for estimating CY 2022 
pass-through payments for this second group of drugs, we calculated a 
proposed spending estimate for this second group of drugs and 
biologicals of approximately $10 million.
    We did not receive any public comments on our proposal. Since the 
release of the CY 2022 OPPS/ASC proposed rule, we have identified seven 
additional policy-packaged drugs in addition to the three policy-
packaged drugs that had pass-through status when the proposed rule was 
released. Our original proposed estimate of $10 million of additional 
pass-through payments for the second group of drugs and biologicals did 
anticipate the approval of some of the additional policy-packaged drugs 
and biologicals with pass-through status, but not all of them. 
Therefore, for this final rule, we are revising our estimate of pass-
through spending for the second group of drugs and biologicals to be 
$20 million.
    We estimate for this final rule with comment period that the amount 
of 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 $936.5 million (approximately $449.8 million for device 
categories and approximately $486.7 million for drugs and biologicals) 
which represents 1.14 percent of total projected OPPS payments for CY 
2022 (approximately $82 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190), due 
to the effects of the COVID-19 PHE, we proposed to generally use CY 
2019 claims data instead of CY 2020 claims data to establish 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. We 
stated that 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.F. of the CY 
2022 OPPS/ASC proposed rule (86 FR 42190 through 42193), we proposed to

[[Page 63661]]

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 proposed 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 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 $34.5 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 $44.4 
million. We estimate that total spending for these 27 drugs and 
biologicals and one device category would be approximately $78.9 
million for CY 2022. The drugs, biologicals, and device category for 
which we proposed to provide separate payment for one to four quarters 
in CY 2022 are listed in Table 43 below. Please refer to section X.F. 
of this final rule with comment period regarding our decision to 
implement 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.
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VII. OPPS Payment for Hospital Outpatient Visits and Critical Care 
Services

    For CY 2022, we proposed to continue with our current clinic and 
emergency department (ED) hospital outpatient visits payment policies. 
For a description of the current clinic and ED hospital outpatient 
visits policies, we refer readers to the CY 2016 OPPS/ASC final rule 
with comment period (80 FR 70448). We also proposed to continue our 
payment policy for critical care services for CY 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 the CY 2022 OPPS/ASC proposed rule, we 
sought public comments on any changes to these codes that we should 
consider for future rulemaking cycles. We continue to encourage 
commenters to provide the data and analysis necessary to justify any 
suggested changes.
    In the CY 2022 OPPS/ASC proposed rule, we stated that we would 
continue the clinic visit payment policy for CY 2022 and beyond. More 
specifically, we stated that we would continue to utilize a PFS-
equivalent payment rate for the hospital outpatient clinic visit 
service described by HCPCS code G0463 when

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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 stated that we would continue to monitor the 
effect of this change in Medicare payment policy, including the volume 
of these types of OPD services.
    Comment: We received several comments on our payment policy for 
hospital outpatient visits. Many commenters expressed concerns that 
CMS's policy to pay the PFS-equivalent rate for outpatient clinic 
visits furnished in excepted off-campus provider-based departments 
would cause financial harm to hospitals. Other commenters suggested 
that CMS develop a set of national guidelines for coding ED visits, and 
a few of commenters provided specific edits to the descriptor of the 
HCPCS code for hospital outpatient clinic visits (G0463).
    Response: We appreciate commenters' concerns and will continue to 
examine these concerns and determine if any modifications to these 
policies are warranted in future rulemaking.
    After consideration of the public comments, we are finalizing our 
proposal to 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 
as proposed. We are also finalizing our proposal to continue our 
current ED outpatient visits and critical care payment policies.

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 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

[[Page 63665]]

comment period (84 FR 61352). We refer readers to section VIII.D. of 
the CY 2022 OPPS/ASC 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 CY 2021 
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, 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. PHP APC Update for CY 2022

1. PHP APC Geometric Mean Per Diem Costs
    In summary, for CY 2022 only, we proposed 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 
proposed, 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 proposed 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. We also proposed 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 the CY 2022 OPPS/ASC 
proposed rule, and we proposed that if the final CY 2022 cost for CMHCs 
or hospital-based PHPs was calculated to be above the proposed floor 
for that provider type, we would use the final calculated cost instead 
of the floor. Lastly, in accordance with our longstanding policy, we 
proposed 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)).
    We are finalizing these proposals in this CY 2022 OPPS/ASC final 
rule as proposed, and we discuss our rationale and the public comments 
received on these proposals in the following sections.
2. Development of the 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 CY 2022, we proposed to use 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). As discussed in section 
VIII.B.2.a of this OPPS/ASC final rule, we are finalizing our proposal 
to use HCRIS as the source for CMHC CCRs.
    As discussed in section X.E of the OPPS/ASC proposed rule (86 FR 
42188 through 42190), 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 of the proposed rule, 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, and we continue to observe those 
changes in the data for this OPPS/ASC final rule. For PHP services in 
particular, we observe that for hospital-based PHPs, the number of PHP 
days in our trimmed CY 2020 claims dataset is approximately 49 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 is approximately 51 percent less than the number of PHP days in 
our trimmed CY 2019 claims dataset.
    For this CY 2022 ratesetting, we proposed to use CY 2019 claims and 
the

[[Page 63666]]

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 
explained that 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 that we continue to observe 
for this CY 2022 OPPS/ASC final rule. Our trimmed CY 2020 claims 
dataset for this final rule contains cost and claim information from 31 
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 led us to believe that 
CY 2020 data are not the best overall approximation of expected PHP 
services in CY 2022. We stated that we believe the 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 the OPPS/ASC proposed rule (86 FR 42188 
through 42190), and consistent with what CMS proposed to do for other 
APCs under the OPPS, we proposed 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.
    Comment: We received 6 comments, which were all in support of our 
proposal to use the 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. Several commenters stated 
their agreement with CMS' assessment that the ongoing COVID-19 PHE has 
disrupted the provision PHP services, and acknowledged that the 
proposed PHP payment rate methodology outlined in the proposed rule 
should help lessen the impact of COVID-19 on providers. One national 
organization expressed its belief that ensuring financial stability and 
sustainability for these programs is critical to ensuring access to 
this level of care for some of Medicare's most vulnerable patients.
    Response: We thank commenters for their support. We agree with 
commenters that ensuring access to PHP services is critical, especially 
within the context of the COVID-19 PHE. As discussed above, we have 
analyzed more recent data for this CY 2022 OPPS/ASC final rule, and 
continue to observe significant changes from the CY 2019 PHP claims, 
which lead us to continue to believe that the 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.
    After careful consideration of the comments we received and after 
analyzing more recent data, we are finalizing our proposal to use the 
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 and 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 and 
hospital-based PHP APC per diem payment rates are the national 
unadjusted payment rates calculated from the CMHC and hospital-based 
PHP APC geometric mean per diem costs, respectively, after applying the 
OPPS budget neutrality adjustments described in section II.A.4 of this 
CY 2022 OPPS/ASC final rule.
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
    For this CY 2022 OPPS/ASC final 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 finalized our proposal 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 CY 2022 and future years, we also proposed to use 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 noted that CMHCs are now 
reporting their costs using the newer cost 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 the CY 2022 OPPS/ASC 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 had 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 stated that we believe 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 proposed 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.
    We did not receive any comments on this proposal, and we are 
finalizing it as proposed. For CY 2022 and future years, we will use 
HCRIS as the source for CMHC cost information used for calculating the 
geometric mean per diem cost for CMHC APC 5853. Accordingly, we used 
HCRIS as the source for the CMHC cost information for this CY 2022 
OPPS/ASC final rule.

[[Page 63667]]

    Prior to calculating the final geometric mean per diem cost for 
CMHC APC 5853, we prepared the data by first applying trims and data 
exclusions, and assessing CCRs as described in the CY 2016 OPPS/ASC 
final rule with comment period (80 FR 70463 through 70465), so that 
ratesetting is not skewed by providers with extreme data. Before any 
trims or exclusions were applied, there were 40 CMHCs in the PHP claims 
data file. Under the 2 standard deviation trim policy, we 
excluded any data from a CMHC for ratesetting purposes when the CMHC's 
geometric mean cost per day was more than 2 standard 
deviations from the geometric mean cost per day for all CMHCs. In 
applying this trim for CY 2022 ratesetting, one CMHC had geometric mean 
costs per day below the trim's lower limit of $32.94, and one had 
geometric mean costs per day above the trim's upper limit of $486.92. 
Therefore, we are excluding data for ratesetting from these 2 CMHCs.
    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 final 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 the CY 2022 OPPS/ASC proposed rule ratesetting and this 
OPPS/ACS final rule, 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, the application of these data preparation steps 
resulted in an adjusted 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 final rule 
ratesetting modeling. After applying all of the previously listed 
trims, exclusions, and adjustments, we followed the methodology 
described in the CY 2016 OPPS/ASC final rule with comment period (80 FR 
70464 through 70465) and modified in the CY 2017 OPPS/ASC final rule 
with comment period (81 FR 79687 through 79688, and 79691), using the 
CMHC CCRs calculated based on the cost information from HCRIS as 
discussed in this OPPS/ASC final rule, to calculate the CMHC APC 
geometric mean per diem cost.\185\ The calculated CY 2022 geometric 
mean per diem cost for all CMHCs for providing three or more services 
per day (CMHC APC 5853) is $129.93, a decrease from $136.14 calculated 
last year for CY 2021 ratesetting (85 FR 86080).
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    \185\ 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.
---------------------------------------------------------------------------

    In the CY 2022 OPPS/ASC proposed rule (86 FR 42151 through 42152), 
we proposed a cost floor of $136.14, which is equal to the final CY 
2021 geometric mean per diem cost for CMHC APC 5853, in order to 
stabilize the geometric mean per diem costs for CY 2022 only. We 
recognized the disruption that the ongoing COVID-19 PHE appears to be 
having on CMHCs' operations, and stated that 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. We stated that we were 
concerned that the calculated geometric mean per diem cost of $130.41 
for the proposed rule would result in a disruption to CMHC payments at 
a time when the need for mental health services has increased.\186\
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    \186\ https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e2.htm.
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    Because the calculated geometric mean per diem cost for CMHC APC 
5853 was below the cost floor, we proposed to calculate the CY 2022 
CMHC APC 5853 payment rate based on the cost floor of $136.14. We also 
proposed 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.
    Comment: We received 3 comments on our proposed calculation of the 
geometric mean per diem cost for CMHC APC 5853. All commenters were 
supportive of the proposed cost floor to stabilize the geometric mean 
per diem costs finalized in the prior year, CY 2021. Commenters also 
encouraged CMS to consider long-term approaches to addressing cost 
fluctuations in PHP services and provide more stable payment rates to 
ensure access to these important services. Additionally, one commenter 
urged CMS to consider making CMHCs financially whole, which should 
include payment that will expand their capacity to meet growing need, 
particularly in underserved communities.
    Response: We appreciate commenters' support for the proposed 
policies. We agree with commenters about the importance of maintaining 
stable payment rates to ensure access to PHP services. 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, since 
we did not propose a methodology for future years, we are not 
finalizing any methodology in this CY 2022 OPPS/ASC final rule to 
address cost fluctuations in future years.
    We also appreciate the commenter's suggestion about the need for 
ensuring that CMS supports the capacity of CMHCs to meet the growing 
needs of underserved communities. We recognize the critical role that 
CMHCs play in the communities they serve. The commenter did not offer 
specific information about which growing community needs CMHCs are 
facing or

[[Page 63668]]

what mechanism CMS should consider for enabling CMHCs to expand 
capacity in order to meet these needs, but we note that section 
1866(e)(2) of the Act only authorizes Medicare to make payments to 
CMHCs for PHP services.
    We agree with the commenter that PHP payment rates should 
accurately reflect the financial costs to providers of providing PHP 
services to their communities. Sections 1833(t)(2) and 1833(t)(9) of 
the Act set forth the requirements for establishing and adjusting OPPS 
payment rates, which are based on costs, and which include PHP payment 
rates. Because 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, which helps 
us capture accurate CMHC costs in rate setting. We furthermore 
encourage those CMHCs that do not file full cost reports to consider 
doing so.
    After careful consideration of the comments received, we are 
finalizing our proposal to establish a cost floor for CY 2022 equal to 
the final CY 2021 geometric mean per diem cost for CMHC APC 5853, which 
is $136.14. The calculated CY 2022 geometric mean per diem cost for all 
CMHCs for providing three or more services per day (CMHC APC 5853) is 
$129.93. Because this amount is below the cost floor, we are finalizing 
our proposal to calculate the CY 2022 CMHC APC 5853 payment rate based 
on the cost floor of $136.14.
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
    For this CY 2022 final 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 finalized our proposal 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 the CY 2022 OPPS/ASC final 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/index.html).\187\
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    \187\ Click on the link labeled ``CY 2022 OPPS/ASC Notice of 
Proposed Rulemaking'', which can be found under the heading 
``Hospital Outpatient Prospective Payment System Rulemaking'' and 
open the claims accounting document link at the bottom of the page, 
which is labeled ``2022 NPRM OPPS Claims Accounting (PDF)''.
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    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).\188\ 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 
$253.02, which is a very slight decrease from $253.76 calculated last 
year for CY 2021 ratesetting (85 FR 86080).
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    \188\ 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.
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    In the CY 2022 OPPS/ASC proposed rule (86 FR 42151 through 42152), 
we proposed a cost floor of $253.76, which is equal to the final CY 
2021 geometric mean per diem cost for CMHC APC 5863, in order to 
stabilize the geometric mean per diem costs for CY 2022 only. We noted 
that, in general, a decrease of the magnitude calculated for the 
proposed rule would not be unexpected due to normal variation in cost 
and claims data. However, we recognized the disruption that the ongoing 
COVID-19 PHE appears to be having on the operations of hospital-based 
PHPs, and stated that 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. We stated that 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 the 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. We also noted that 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,

[[Page 63669]]

which we were concerned would result in a disruption to hospital-based 
PHP payments at a time when the need for mental health services has 
increased.
    Because the calculated geometric mean per diem cost for hospital-
based PHP APC 5863 was below the cost floor, we proposed to calculate 
the CY 2022 hospital-based PHP APC 5863 payment rate based on the cost 
floor of $253.76. We also proposed 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.
    Comment: We received 5 comments on our proposed calculation of the 
geometric mean per diem cost for CMHC APC 5863. All commenters were 
supportive of the proposed cost floor to stabilize the geometric mean 
per diem costs finalized in the prior year, CY 2021. Commenters also 
encouraged CMS to consider long-term approaches to addressing cost 
fluctuations in PHP services and provide more stable payment rates to 
ensure access to these important services. Three national provider 
associations commented that while the PHE has magnified the need for 
improved access to behavioral healthcare, there are severe shortages of 
behavioral healthcare providers in many parts of the United States, 
stating their belief that the proposed ratesetting methodology should 
help lessen the impact of COVID-19 on PHP providers.
    Response: We appreciate commenters' support for the proposed 
policies. We share commenters' concerns about ensuring that Medicare 
beneficiaries continue to have access to PHP services, particularly in 
light of the impact of the COVID-19 PHE. We also 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, since we did not propose a 
methodology for future years, we are not finalizing any methodology in 
this CY 2022 OPPS/ASC final rule to address cost fluctuations in future 
years.
    After careful consideration of the comments received, we are 
finalizing our proposal to establish a cost floor for CY 2022 equal to 
the final CY 2021 geometric mean per diem cost for CMHC APC 5863, which 
is $253.76. The calculated CY 2022 geometric mean per diem cost for all 
hospital-based PHPs for providing three or more services per day (CMHC 
APC 5863) is $253.02. Because this amount is below the cost floor, we 
are finalizing our proposal to calculate the CY 2022 hospital-based PHP 
APC 5863 payment rate based on the cost floor of $253.76.The final CY 
2022 PHP geometric mean per diem costs are shown in Table 44 and are 
used to derive the proposed CY 2022 PHP APC per diem rates for CMHCs 
and hospital-based PHPs. The final CY 2022 PHP APC per diem rates are 
included in Addendum A to the CY 2022 OPPS/ASC 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).\189\
---------------------------------------------------------------------------

    \189\ As discussed in section XX. of the 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 the CY 2022 OPPS/ASC 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] TR16NO21.073

C. Outlier Policy for CMHCs

    For 2022, we proposed 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 final rule for our general policies for hospital 
outpatient outlier payments.
    We did not receive any public comments on our proposal, and are 
finalizing it as proposed.
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

[[Page 63670]]

separate outlier threshold for CMHCs resulted in $1.8 million in 
outlier payments to CMHCs in CY 2004 and $0.5 million in outlier 
payments to CMHCs in CY 2005 (82 FR 59381). In contrast, in CY 2003, 
more than $30 million was paid to CMHCs in outlier payments (82 FR 
59381).
2. CMHC Outlier Percentage
    In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267 
through 59268), we described the current outlier policy for hospital 
outpatient payments and CMHCs. We note that we also discussed our 
outlier policy for CMHCs in more detail in section VIII.C. of that same 
final rule (82 FR 59381). We set our projected target for all OPPS 
aggregate outlier payments at 1.0 percent of the estimated aggregate 
total payments under the OPPS (82 FR 59267). This same policy was also 
reiterated in the CY 2019 OPPS/ASC final rule with comment period (83 
FR 58996), 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 the CY 
2022 OPPS/ASC 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 the CY 2022 OPPS/ASC 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 the CY 2022 OPPS/ASC 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 proposed to continue to calculate the CMHC outlier percentage 
according to previously established policies, and we did not propose 
any changes to our current methodology for calculating the CMHC outlier 
percentage for CY 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 
proposed to designate approximately less than 0.01 percent of the 
estimated 1.0 percent hospital outpatient outlier threshold for CMHCs. 
This percentage is based upon the formula given in Step 3.
    We did not receive any public comments on our proposal, and are 
finalizing it as proposed.
3. Cutoff Point and Percentage Payment Amount
    As described in the CY 2018 OPPS/ASC final rule with comment period 
(82 FR 59381), our policy has been to pay CMHCs for outliers if the 
estimated cost of the day exceeds a cutoff point. In CY 2006, we set 
the cutoff point for outlier payments at 3.4 times the highest CMHC PHP 
APC payment rate implemented for that calendar year (70 FR 68551). For 
CY 2018, the highest CMHC PHP APC payment rate is the payment rate for 
CMHC PHP APC 5853. In addition, in CY 2002, the final OPPS outlier 
payment percentage for costs above the multiplier threshold was set at 
50 percent (66 FR 59889). In CY 2018, we continued to apply the same 50 
percent outlier payment percentage that applies to hospitals to CMHCs 
and continued to use the existing cutoff point (82 FR 59381). 
Therefore, for CY 2018, we continued to pay for partial hospitalization 
services that exceeded 3.4 times the CMHC PHP APC payment rate at 50 
percent of the amount of CMHC PHP APC geometric mean per diem costs 
over the cutoff point. For example, for CY 2018, if a CMHC's cost for 
partial hospitalization services paid under CMHC PHP APC 5853 exceeds 
3.4 times the CY 2018 payment rate for CMHC PHP APC 5853, the outlier 
payment would be calculated as 50 percent of the amount by which the 
cost 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 proposed to 
continue to pay for partial hospitalization services that exceed 3.4 
times the proposed CMHC PHP APC payment rate at 50 percent of the CMHC 
PHP APC geometric mean per diem costs over the cutoff point. That is, 
for CY 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))].
    We did not receive any public comments on our proposal, and are 
finalizing it as proposed.
4. Outlier Reconciliation
    In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594 
through 68599), we established an outlier reconciliation policy to 
address charging aberrations related to OPPS outlier payments. We 
addressed vulnerabilities in the OPPS outlier payment system that lead 
to differences between billed charges and charges included in the 
overall CCR, which are used to estimate cost and would apply to all 
hospitals and CMHCs paid under the OPPS. We initiated steps to ensure 
that outlier payments appropriately account for the financial risk when 
providing an extraordinarily costly and

[[Page 63671]]

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 proposed 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-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf).
    We did not receive any public comments on our proposal, and are 
finalizing it as proposed.
5. Outlier Payment Cap
    In the CY 2017 OPPS/ASC final rule with comment period, we 
implemented a CMHC outlier payment cap to be applied at the provider 
level, such that in any given year, an individual CMHC will receive no 
more than a set percentage of its CMHC total per diem payments in 
outlier payments (81 FR 79692 through 79695). We finalized the CMHC 
outlier payment cap to be set at 8 percent of the CMHC's total per diem 
payments (81 FR 79694 through 79695). This outlier payment cap only 
affects CMHCs, it does not affect other provider types (that is, 
hospital-based PHPs), and is in addition to and separate from the 
current outlier policy and reconciliation policy in effect. 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 the CY 2022 OPPS/ASC proposed rule, we did not propose 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 proposed to continue this policy for 
CY 2022.
    We did not receive any public comments on our proposal, and are 
finalizing it as proposed.

IX. 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 hospital 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 hospital 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 hospital 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

[[Page 63672]]

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 hospital 
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 clinicians 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 and appropriately performed on 
an outpatient basis, we assigned the service 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.
    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 hospital 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 hospital 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 hospital 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 
hospital 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 3-year transition. As part of the first phase of this elimination of 
the IPO list, we removed 298 codes, including 266 musculoskeletal-
related services, 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. Changes to the Inpatient Only (IPO) List

    In the CY 2022 OPPS/ASC proposed rule, for CY 2022, we proposed 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 proposed 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 proposed 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 
proposed 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 new Sec.  419.23.
1. Proposal To Halt the Elimination of the IPO List
    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

[[Page 63673]]

details concerning rate setting for procedures for which payment would 
be made when furnished in the hospital outpatient department (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.
    In the CY 2022 OPPS/ASC proposed rule, we stated that after further 
consideration of the policy we adopted in the CY 2021 OPPS/ASC 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 stated that 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. We stated 
that after further consideration, we continue to believe that the IPO 
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 had therefore reconsidered eliminating the IPO list at 
that time. We stated that 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 
recognized 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. Furthermore, we explained 
that 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 
was 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 also 
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 hospital outpatient setting (85 FR 86088). In the CY 
2021 OPPS/ASC proposed rule, we also reiterated 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 
explained that 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 2-midnight 
rule.
    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 recognized that the COVID-19 PHE has likely 
reduced providers' ability to prepare to furnish these services in the 
hospital outpatient setting in the manner they would absent the PHE. We 
acknowledged 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 recognized 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 hospital outpatient setting while 
guaranteeing them appropriate quality of care.
    We explained in the CY 2022 OPPS/ASC proposed rule that after 
further consideration and review of the additional feedback from 
stakeholders, we recognized that the timeframe we finalized in the CY 
2021 OPPS/ASC 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 explained 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 acknowledged 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 stated that we 
believe that we should continue to use the longstanding criteria for 
removing services from the IPO list to evaluate each service before 
proposing to remove it from the list, and, as noted above, we proposed 
to codify these criteria in the regulation in a new Sec.  419.23.
    We emphasized in the CY 2022 OPPS/ASC proposed rule that we still 
believe 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. We stated 
that while we recognize that there are services currently classified as 
inpatient only that may be appropriate in the hospital outpatient 
setting for some Medicare beneficiaries, we continue 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 explained that 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 stated that 
we believe that with additional time stakeholders can provide 
supportive evidence to aid in the evaluation of each individual 
procedure's assignment to the IPO list, as well as the appropriate APC 
assignment and corresponding payment for any codes, 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.
    Furthermore, we explained that an initial review of 2021 billing 
data through May 21, 2021 supported our proposal to halt the 
elimination of the list, revealing that 131 of the 298 codes removed 
from the IPO list in the CY 2021 OPPS/ASC final rule with comment 
period appeared on either zero or one OPPS claim and 269 of the 298

[[Page 63674]]

codes appeared on fewer than 100 claims. These data indicated that 
fewer than 3 percent of the services removed from the IPO list in 2021 
had seen notable volume in the hospital 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. We stated that, 
as a result, it was likely that not all of the reported claims 
represent services provided in the hospital outpatient setting due to 
these services being removed from the IPO list in CY 2021.
    Therefore, we proposed 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.
    Comment: Many commenters, including hospital associations, health 
systems, medical specialty societies, professional organizations, and 
advocacy groups supported our proposal to halt the elimination of the 
IPO list. Several commenters thanked CMS for listening to stakeholders' 
concerns about beneficiary safety and reconsidering the elimination of 
the IPO list. Commenters stated that the IPO list is a necessary tool 
and an important programmatic safeguard, and that maintaining the IPO 
list is necessary to set a national standard for services that should 
be restricted to the inpatient setting.
    Specifically, commenters who supported halting the elimination of 
the IPO list wanted to maintain the IPO list due to patient safety 
concerns. These commenters stated that the high-risk, invasive 
procedures that require post-operative monitoring and care coordination 
that are included on the IPO list would not be safe to perform on 
Medicare beneficiaries in the hospital outpatient setting. Commenters 
noted that complications can occur with any surgical procedure, 
particularly during the post-operative period and that for many 
services on the IPO list, such post-operative complications are best 
identified early and treated promptly in the inpatient hospital 
setting. Several commenters responded that even with future 
advancements in medical practice and technology, they could not 
anticipate that such complicated procedures could ever be provided 
safely in the hospital outpatient setting, given their clinical nature. 
Commenters noted that physicians are in the best position to make 
safety determinations for their patients, but CMS must make policies 
for the broader, average beneficiary population. The commenters 
suggested that a careful review is needed before removing extensive 
surgical procedures performed on patients with complications and/or 
comorbidities, which are common in the Medicare population.
    Supporters of maintaining the IPO list acknowledged operational and 
administrative concerns with maintaining the IPO list, largely focused 
on the 2-midnight rule and burden of proof required to allow services 
removed from the IPO list to be furnished inpatient, but contended that 
eliminating the IPO list would create new clinical and operational 
challenges for both practitioners and facilities that would require 
additional time and resources to adjust to. Several commenters also 
expressed concerns that the elimination of the IPO list could 
potentially inappropriately shift costs onto patients and subsequently 
discourage beneficiaries from seeking necessary care. Most supporters 
of maintaining the IPO list also supported CMS retaining its current 
process for evaluating and removing procedures from the IPO list 
through rulemaking.
    Response: We thank the commenters for their support and we refer 
readers to sections 1X.B.2. and B.4. of this final rule with comment 
period for additional discussion of commenters' feedback on 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.
    Comment: We also received comments from physicians and medical 
specialty societies who stated that, while they agreed that physicians 
should be the primary arbiters regarding the clinically appropriate 
site of service for a procedure for a particular beneficiary, they 
support maintaining the IPO list because a physician's medical judgment 
is not always the primary factor in determining whether a procedure is 
furnished in the inpatient or outpatient hospital setting. These 
commenters stated that many of the adverse impacts from removing 
procedures from the IPO list arise from hospitals that drive provider 
admission decisions. These commenters noted that when procedures are 
removed from the IPO list, many hospitals and other payers, including 
Medicare Advantage plans, make rules establishing outpatient status as 
the assumed baseline site of service for these procedures, regardless 
of patient characteristics or the physician's clinical assessment. 
Commenters divulged various reasons for this action on the part of 
hospitals and payers, including a desire to have the procedure 
performed in a lower cost setting, misinterpretation of CMS' rulemaking 
guidance, a desire for administrative simplicity, concerns regarding 
the application of the 2-midnight benchmark to services that are 
removed from the IPO list, the potential for claim denials if this 
benchmark is not met and/or excessive administrative burden to support 
the case-by-case exception to the 2-midnight rule. According to 
commenters, physicians must, at times, convince a hospital or payer 
that a particular patient should receive a given procedure in an 
inpatient setting due to patient safety concerns.
    Commenters requested that CMS provide robust stakeholder education 
and issue various forms of guidance as a means of reducing 
administrative and operational burden, to support site of service 
decisions and to encourage consideration of and deference to the 
judgment of the physician, professional societies, and hospital 
associations regarding the procedures that are appropriate to be 
performed in the HOPD setting. Commenters referenced prior CMS guidance 
as a useful tool for providers and hospitals. One commenter noted that 
guidance increases the likelihood of hospital awareness of CMS preamble 
statements on patient selection. One commenter acknowledged CMS' 
historical reticence to define clinical criteria in light of our 
deference to physician judgment but reasoned that a CMS-established 
baseline protocol would not limit clinical decision-making, as 
clinicians would still be able to provide supporting clinical 
documentation to justify inpatient stays for patients that may 
otherwise be candidates for outpatient surgery. Commenters also 
requested that CMS institute a safeguard against inappropriate payer 
behavior that requires services to be furnished in the HOPD setting, 
despite the clinical judgment of the physician or needs of the patient.
    Response: We thank the commenters for their support and we 
acknowledge the commenters' concerns regarding the administrative 
burden associated with the IPO list and the removal of

[[Page 63675]]

procedures from the list. As we have stated in previous rulemaking (85 
FR 86087; 84 FR 61354; 82 FR 59384; 81 FR 79697) when commenters raised 
similar concerns, the removal of a service from the IPO list does not 
require the service to be performed only on an outpatient basis. 
Rather, it allows for payment under the OPPS when the service is 
performed on a registered hospital outpatient. We reiterate that 
services that are removed from the IPO list can be and are performed on 
individuals who are admitted as inpatients (as well as individuals who 
are registered hospital outpatients) when the patient's condition 
warrants inpatient admission (65 FR 18456). It is a misinterpretation 
of CMS payment policy for providers to create policies or guidelines 
that establish the hospital outpatient setting as the baseline or 
default site of service for a procedure based on its removal from the 
IPO list. As stated in previous rulemaking, services that are no longer 
included on the IPO list are payable in either the inpatient or 
hospital outpatient setting subject to the general coverage rules 
requiring that any procedure be reasonable and necessary, and payment 
should be made pursuant to the otherwise applicable payment policies 
(84 FR 61354; 82 FR 59384; 81 FR 79697).
    We also recognize commenters' concerns regarding the need for 
additional stakeholder education on considerations that would support 
physician decision-making in selecting an appropriate site of service 
for procedures furnished to Medicare beneficiaries. We note the balance 
between several factors on this important issue, namely, the 
prohibition on CMS interfering with the practice of medicine in Section 
1801 of the Social Security Act, the need to provide clear information 
about CMS billing and payment rules that ensures hospitals, physicians 
and other stakeholders can understand and operate within them, and that 
the specific decision about the most appropriate care setting for a 
given surgical procedure is a complex medical judgment made by the 
physician based on the beneficiary's individual clinical needs and 
preferences and on the general coverage rules requiring that any 
procedure be reasonable and necessary (84 FR 61354). We note that, in 
the past when services have come off the IPO list, we have attempted to 
provide general educational information regarding our billing and 
payment rules. For example, we published Medicare Learning Network 
(MLN) Booklet 909065 regarding major hip and knee replacement 
procedures, which is available here: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/jointreplacement-ICN909065.pdf.
    We also note the Beneficiary and Family-Centered Care Quality 
Improvement Organizations (BFCC-QIOs) are contracted by CMS to review a 
sample of Medicare fee-for-service (FFS) short-stay inpatient claims 
(claims with hospital stays lasting less than 2 midnights after formal 
inpatient admission) for compliance with the 2-Midnight Rule. In the CY 
2020 OPPS/ASC final rule with comment period (84 FR 61364 through 
61365) the BFCC-QIO program adopted a period of exemption from certain 
medical review activities for procedures newly removed from the IPO 
list where the length of stay after inpatient admission is less than 2 
midnights. During the exemption period, BFCC-QIOs may conduct medical 
reviews for education purposes but will not deny claims or make 
referrals to RACs for noncompliance with the 2-midnight rule for 
procedures that are removed from the IPO list within the first 2 years 
of their removal. This exemption period was intended to allow providers 
time to become more familiar with the application of the 2-midnight 
rule to procedures newly removed from the IPO list, and allows the 
BFCC-QIOs the opportunity to provide education regarding application of 
that payment policy to such procedures. In section X.A of this CY 2022 
OPPS/ASC final rule with comment period we are reinstating this 2-year 
exemption policy, and believe that this will give providers needed time 
to adapt when procedures are newly removed from the IPO list starting 
January 1, 2022.
    In addition to the 2-year exemption period for certain medical 
review activities, in the coming months we plan to use our experience 
gained through BFCC-QIO reviews to engage stakeholders to determine if 
developing additional materials for services that are newly removed 
from the IPO list would be helpful, including materials that are 
similar to MLN Booklet 909065 noted above. We reiterate that any such 
materials will not supersede physicians' medical judgment about whether 
a procedure should be performed in the inpatient or outpatient hospital 
setting. With regard to the behavior of commercial payers and site 
selection for outpatient services, we believe that these comments are 
out of the scope of the proposed rule.
    We refer readers to section X. of this final rule with comment 
period for additional discussion regarding the 2-midnight rule. We also 
refer readers to sections 1X.B.2. and B.4. of this final rule with 
comment period for additional discussion of commenters' feedback on 
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.
    Comment: Numerous commenters, including some health systems, 
individual physicians and certain payers, opposed halting the 
elimination of the IPO list. Most of these commenters opposed halting 
the elimination of the IPO list due to administrative and operational 
issues that they believe stem from the existence of the IPO list, 
including site of service claims denials and compliance documentation. 
Other commenters contended that eliminating the IPO list would reduce 
administrative and operational burden and allow for necessary 
flexibility that could help providers serve the diversity of clinical 
needs and health statuses among Medicare beneficiaries and would 
increase patient choice and access to advances in surgical care that 
have made outpatient procedures safe, effective and efficient. 
Commenters who supported eliminating the IPO list maintained that the 
existence of the IPO list did not impact the quality of care 
beneficiaries receive as there is no distinction between inpatient and 
outpatient care. Specifically, a few commenters insisted that, for most 
hospitals the IPO list has no impact on the quality of care provided: 
Procedures are done in the same operating rooms, with the same 
infrastructure and the same staff. One commenter asserted that it is an 
inaccurate conclusion that the provision of services is less safe when 
conducted in an hospital outpatient setting. The commenter argued that 
no data has been provided to demonstrate that the removal of services 
from the IPO list in 2021 resulted in higher incidences of adverse 
events or increased risk to patient safety when performed in the 
hospital outpatient setting. Another commenter requested clarification 
on why CMS believes the IPO list is in the best interest of patient 
safety. The commenter stated that while there may be enhanced safety 
for surgeries performed in a hospital versus an ASC or physician 
office, it is unclear how patient safety differs between the hospital 
inpatient and hospital outpatient settings. They claimed that 
utilization of outpatient services

[[Page 63676]]

increased across all plan types with the 2021 elimination of the IPO 
list, highlighting the impact across the healthcare system. The 
commenter noted high levels of patient satisfaction and no compromise 
in quality as measured by unplanned returns to the emergency department 
or operating room and no readmissions following services performed in 
the hospital outpatient setting. Several commenters acknowledged that 
there will be patients for whom an inpatient procedure remains the 
safest and most clinically appropriate option but believed that there 
should be additional flexibility for Medicare beneficiaries who meet 
relevant clinical criteria. In addition, one commenter suggested that 
the elimination of the IPO list should occur over 5 to 7 instead of 3.
    Response: We appreciate the commenter's feedback. We again 
acknowledge commenters' concerns regarding the administrative and 
operational challenges associated with the IPO list, including the 
application of the 2-midnight benchmark to services that are removed 
from the IPO list. In addition to the mechanisms that are already in 
place, including the case-by-case exceptions to the 2-midnight 
benchmark and the exemption from certain medical review activities 
related to the 2-midnight rule for procedures that have been recently 
removed from the IPO list, CMS will continue to work with stakeholders 
to address these operational concerns in future rulemaking. We again 
refer readers to section X. of this final rule with comment period for 
additional discussion regarding the 2-midnight rule.
    We also acknowledge stakeholders' concerns regarding the lack of 
definitive data that shows a difference between services performed in 
the inpatient and outpatient settings. In the absence of data 
demonstrating that these procedures can be safely furnished to the 
typical Medicare beneficiary in the hospital outpatient setting we 
continue to believe that it is necessary to prioritize the potential 
impact that removing services from the IPO list has on beneficiary 
safety and quality of care and develop additional ways to monitor 
safety prior to removing such a large number of services from the IPO 
list. We note that certain commenters in this rulemaking cycle (and 
past OPPS rules) have indicated that hospitals and other payers may use 
the circumstance of CMS removing a service from the IPO list to 
encourage that service to be performed outpatient, even when not 
clinically appropriate for the patient, and we remain concerned about 
these potential spillover effects due to changes in our policy. As 
described above, we also believe that the policy to eliminate the IPO 
list transpired quickly, and we believe it is necessary to halt the 
elimination of the IPO list and reinstate a more measured process of 
separately evaluating the inpatient only classification of each service 
against the five longstanding criteria.
    We also note and appreciate commenters concerns about the varying 
clinical appropriateness of furnishing a given service in the hospital 
outpatient setting based on a beneficiary's clinical status; that is, 
we acknowledge that it may be appropriate to furnish certain services 
in the hospital outpatient setting for a certain number of 
beneficiaries due to their clinical circumstances, while at the same 
time it may not be appropriate to furnish those same services in the 
hospital outpatient setting for many other beneficiaries. As stated in 
the CY 2022 OPPS/ASC proposed rule, we continue to believe that 
physicians should use their complex clinical judgment, together with 
consideration of the beneficiary's needs, to determine the appropriate 
site of service. We continue to strive to balance the goals of 
increasing physician and patient choice of setting of care with 
consideration of patient safety for all Medicare beneficiaries.
    After consideration of the comments, we are finalizing our proposal 
without modification to halt the elimination of the IPO list. In 
accordance with this proposal, we are finalizing our proposal 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 3-year transition.
    We refer readers to section IX.B.3 of this final rule with comment 
period for a discussion on the services removed in CY 2021 that we 
proposed to return to the IPO list in CY 2022.
2. Proposal To Codify Longstanding Criteria
    As we stated in the CY 2022 OPPS/ASC proposed rule, we continue to 
believe that physicians must use their complex clinical judgment, 
together with consideration of the beneficiary's needs, to determine 
the appropriate site of service, but we explained that the broad 
removal of services from the IPO list in CY 2021 did not allow us to 
assess whether procedures proposed for removal met the longstanding 
removal criteria that we have historically used in consideration of the 
typical Medicare beneficiary. As discussed above and in the proposed 
rule, to ensure beneficiary safety, we have historically used 
longstanding criteria to determine if a procedure should be removed 
from the IPO list, but we noted that the procedures removed from the 
IPO list beginning in CY 2021 were not assessed against these criteria 
because we adopted a policy to eliminate the IPO list entirely. After 
further consideration, we explained that 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. In the CY 
2022 OPPS/ASC proposed rule, we proposed to codify in the regulation 
text in a new Sec.  419.23 our five longstanding criteria, listed 
above, for determining whether a service or procedure should be removed 
from the IPO list.
    Comment: A majority of commenters, including hospital systems, 
medical specialty societies, and professional organizations, supported 
our proposal to codify the five longstanding criteria to determine if a 
procedure should be removed from the IPO list and supported using the 
criteria to evaluate the 298 procedures removed from the IPO list in 
the CY 2021 OPPS/ASC final rule with comment period. Many commenters 
supported the criteria as proposed, stating that the longstanding 
criteria appropriately reflect progress and allow us to efficiently 
assess if outpatient departments are equipped to provide the services 
under consideration for removal.
    Response: We thank commenters for their support.
    Comment: Some commenters suggested modifications to the five 
proposed criteria. One commenter requested that CMS modify the first 
two criteria to change ``most outpatient departments'' to ``outpatient 
departments conducting surgical procedures,'' due to concerns that the 
proposed language is undefined and vague. The commenter also expressed 
that our third criterion--that the procedure is related to codes that 
we have already removed from the IPO list--was limiting and should be 
modified to address codes that do not have related codes being 
considered for removal from the IPO list. We also received comments 
requesting that we modify the fourth criterion (a determination is made 
that the procedure is being furnished in numerous hospitals on an 
outpatient basis) to further define ``outpatient basis'' and 
``numerous''. We also received a comment citing concerns that many 
hospitals do submit claims to Medicare for procedures on the IPO list 
when they are performed in the hospital outpatient setting due to lack 
of payment. We also received two

[[Page 63677]]

comments requesting that we remove the fifth criterion due to concerns 
that CMS is comparing the capabilities and safety of performing a 
service in the ASC setting to that of the hospital setting, noting that 
hospitals have greater resources and are able to admit patients if 
complications arise.
    Further, a few commenters believed our longstanding pre-2021 policy 
of requiring a service to meet only one criterion to be removed from 
the IPO list was too lenient and prevented stakeholders from 
anticipating when a procedure would be eligible for removal from the 
IPO list. The commenters recommended that we require services to meet 
all five criteria in order to be removed from the IPO list.
    Response: We appreciate the commenters' recommendations and will 
consider them for future rulemaking. Due in part to the overwhelming 
support we received from commenters to codify in regulation the current 
five criteria as well as our position that the criteria remain 
appropriate, we do not believe it is necessary to change them at this 
time. However, we plan to continue to engage stakeholders and consider 
feedback on modifications to the criteria.
    As we stated in previous rulemaking, we created the first three 
criteria because we identified services that were often safely 
performed in the hospital outpatient setting based on comments we 
received. We also identified additional services where the simplest 
procedure described by the code may be performed safely in the hospital 
outpatient setting or that they were related to codes we removed from 
the IPO list (65 FR 18456). We established the fourth and fifth 
criteria in later rulemaking after identifying procedures that were on 
the IPO list but were also being performed on an outpatient basis or 
being safely and appropriately performed in the ASC setting (67 FR 
66741). These criteria were created to ensure consistency between the 
IPO list and the ASC CPL and to identify services that are included on 
the ASC CPL, and therefore should be removed from the IPO list. These 
criteria were created to help independently identify procedures that 
could be appropriately performed in the hospital outpatient setting and 
we reiterate that a service does not need to meet all of the criteria 
to be removed from the IPO list, meaning that a service does not need 
to have related codes already removed from the IPO list or does not 
need to be safely furnished in the ASC setting to be removed from the 
IPO list.
    Additionally, we do not believe that our policy to only require a 
service to meet one criterion to be removed from the IPO list is too 
lenient. We believe that not requiring a service to meet multiple 
criteria allows for greater flexibility to determine if a service is 
appropriate to remove from the IPO list, as some criteria are 
irrelevant to certain services. As stated above, while we only require 
a service to meet one criterion to be considered for removal, 
satisfying only one criterion does not guarantee that the service will 
be removed, instead, the case for removal is strengthened with the more 
criteria the service meets.
    Comment: Commenters also recommended additional criteria as well as 
methods of evaluating the five existing criteria. We also received 
multiple comments recommending that criteria used to determine if a 
service is appropriate to remove from the IPO list should consider 
clinical factors and social factors, including patient's age and 
comorbidities, support systems, access to care, health literacy, prior 
hospitalizations, and functional status. Numerous commenters stressed 
that without consideration of clinical and social factors, patients, 
surgeons, and hospitals in underserved communities could bear a 
disproportionate burden and experience unintended consequences of more 
services being payable in the hospital outpatient setting. Commenters 
recommended that we also evaluate the out-of-pocket financial impact 
that moving a service to the hospital outpatient setting would have on 
Medicare beneficiaries.
    Commenters suggested that changes to the IPO list should be based 
upon scientific evidence on safety, quality, and advancements in 
medical technology. They acknowledged that a majority of inpatient 
procedures have limited or no evidence on the safety of performing them 
in the hospital outpatient setting and that at least some of the 
evidence available is based on limited, incomplete, or conflicting data 
from other claims.
    We also received some comments with recommendations regarding the 
data that CMS uses for evaluating services on the IPO list. We received 
several comments suggesting that CMS analyze claims data for services 
that had a stay less than 2-midnights and use this data to determine if 
a service should be eligible to be paid when furnished in the hospital 
outpatient setting. One commenter also requested that CMS clarify how 
different data, including commercial data, would be considered when 
evaluating services for removal using the five criteria as the general 
patient population used in the collection of the data may vary from the 
Medicare population.
    One commenter urged CMS not to use billed and denied outpatient 
claims as a source of data to determine if hospitals are equipped to 
provide a service in the hospital outpatient setting. The commenter 
advised that there would be few outpatient claims for services on the 
IPO list because hospitals would avoid billing claims that would be 
denied. The commenter suggested that CMS should instead analyze the 
geometric mean or median length of stay for IPPS claims reported with 
procedures on the IPO list, and crosswalk the ICD-10-PCS codes on the 
IPPS claims to the CPT codes on the IPO list, so that CMS could analyze 
data where the patient would remain in the hospital post-procedure, but 
require less time, less intensive care, or pose less risk than the 
typical hospital inpatient. The commenter also suggested that CMS 
analyze data on short-stay inpatient hospitalizations from the 
Beneficiary Family Centered Care-Quality Improvement Organizations 
(BFCC-QIOs), with the QIOs nominating procedures that they commonly see 
in their reviews. Finally, we also received comments recommending that 
CMS work closely with stakeholders and providers and consider their 
feedback when evaluating services on the IPO list against our criteria, 
and to allow for the consideration of factors in addition to the five 
criteria.
    Response: We appreciate the commenters' recommendations. We note 
that we take clinical evidence into consideration when evaluating a 
service for removal from the IPO list. We also consider all other 
available data, including outpatient, inpatient, and professional 
claims data. This includes data on length-of-stay, and we have 
continuously encouraged stakeholders to bring decreasing length-of-
stays and successful same day discharges to our attention to aid our 
review (65 FR 18456). We agree that there are limitations in the 
studies and data available to aid our assessment of the appropriateness 
of removing procedures from the IPO list, particularly studies that 
compare outcomes for services furnished in the inpatient hospital 
setting versus the outpatient hospital setting as well as studies that 
analyze outcomes for the typical Medicare beneficiary. More 
specifically, while studies may demonstrate safety for a given 
procedure in the outpatient hospital setting, those studies may not 
focus on a Medicare-aged population, or involve patients with certain 
comorbid conditions that are common for patients 65 and older. We 
continue to explore

[[Page 63678]]

ways to engage stakeholders to effectively address limitations in these 
studies, and we look forward to future work on these important issues. 
We reiterate that we do not believe it is appropriate at this time to 
modify the criteria, which were overwhelmingly supported by commenters, 
as we reinstate and codify them in regulation text. However, as 
previously stated, we will continue to engage stakeholders and consider 
feedback on modifications to the criteria for removal from the IPO 
list.
    Comment: One commenter opposed codifying the five longstanding 
criteria and expressed concern that codifying the criteria would delay 
timely updates to the IPO. The commenter was concerned that the process 
of submitting a request to add or remove a service and providing 
evidence, including peer-reviewed medical literature, physician 
comments, and outcome data, is time consuming and may cause unnecessary 
delays in hospitals' ability to provide care and be paid under the OPPS 
when services are furnished in the hospital outpatient setting for 
beneficiaries for whom the services are clinically appropriate.
    Response: We appreciate the commenter's response. We believe that 
using our five criteria to evaluate services for removal from the IPO 
list is necessary to ensure OPPS payment is available for services that 
are safe for the typical Medicare beneficiary to receive in the 
hospital outpatient setting. We also believe that the comments and 
evidence we receive are an important aspect of determining whether it 
is appropriate to remove a service from the IPO list. Because we review 
requests to add or remove services from the IPO list annually and 
address those removals or additions in notice-and-comment rulemaking, 
we do not believe that use of criteria to assess whether procedures 
should be removed causes unnecessary delays in making payment available 
for appropriate procedures under the OPPS.
    After reviewing the public comments we received we are finalizing 
our proposal without modification to codify our five longstanding 
criteria for determining whether a service or procedure should be 
removed from the IPO list in the regulation text in a new Sec.  419.23.
3. Returning Procedures Removed in CY 2021 to the IPO List for CY 2022
    As discussed earlier in section IX.A. of this final rule with 
comment period, 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, with the case for removing the 
service from the IPO list 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 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 had 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.
    During the 2021 rulemaking process, a number of commenters 
supported the removal of the 298 services, but 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 hospital outpatient setting.
    As previously stated in the CY 2021 OPPS/ASC final rule with 
comment period (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 stakeholders, allowing 
them to provide meaningful input on a procedure-by-procedure basis.
    We stated in the CY 2022 OPPS/ASC proposed rule that because we 
proposed to halt elimination of the IPO list, we also believe it is 
appropriate to continue to evaluate services that we proposed 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; whether the 
procedure is being performed in numerous hospitals on an outpatient 
basis; and 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 
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.

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    Furthermore, we explained in the CY 2022 OPPS/ASC proposed rule 
that in light of ongoing stakeholder feedback, we 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 for CY 2022. 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 initial 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 hospital 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 hospital 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 hospital 
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 hospital 
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 hospital 
outpatient setting. We were unable to find literature and data for 
services that included outcomes specific to the Medicare population, 
particularly in the hospital outpatient setting.
    We stated in the CY 2022 OPPS/ASC proposed rule that given that our 
initial review of each of the services removed from the list in CY 2021 
using the five criteria mentioned in section IX.A. of this final rule 
with comment period did not find sufficient evidence that any of these 
services would be safe to perform on the Medicare population in the 
hospital outpatient setting, we did not believe it would be appropriate 
for Medicare to pay for these services when performed in a hospital 
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 provide these services to the Medicare 
population, and the procedures were not being performed in numerous 
hospitals on an outpatient basis. We also did not believe the services 
could be appropriately and safely furnished in an ASC. As a result of 
this review, we proposed to return all of the procedures removed in the 
CY 2021 OPPS/ASC final rule with comment period to the IPO list for CY 
2022 because we did not believe they met 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 proposed to return these 298 
services to the IPO list, as shown in Table 45 below.
    We solicited 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 hospital outpatient setting in CY 
2022. If so, we requested 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 typical Medicare 
population in the hospital outpatient setting.
    As mentioned above, the services that we proposed 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 recognized 
that there may be a subset of Medicare beneficiaries who, on a case-by 
case-basis, may nonetheless be appropriate to treat in the hospital 
outpatient setting and we sought comment below on whether any services 
that were removed in CY 2021, but were proposed to be added back to the 
IPO for CY 2022, should in fact, remain off the IPO list. Table 45 
below contains the proposed additions to the IPO list for CY 2022.
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    Comment: Most comments supported returning all 298 services back to 
the IPO list for 2022. Of those commenters that supplied a rationale 
for their support for returning all 298 services to the IPO list, the 
most frequently cited reasons were the commenters' concerns with the 
pace that this shift would take place; the lack of data and evidence 
available to support furnishing these services in the hospital 
outpatient setting for the typical Medicare beneficiary; CMS' inability 
to monitor the impact of such a large migration of services from the 
inpatient setting to the hospital outpatient setting; CMS' inability to 
monitor patient safety outcomes for the services if furnished in the 
hospital outpatient setting; and that the PHE has impacted the 
commenters' ability to prepare for this shift. Commenters also 
expressed concerns regarding how quickly a large number of services 
were removed from the IPO list. Emphasizing the financial and clinical 
resources needed to prepare clear criteria for surgical site selection; 
develop criteria for patient selection; update their billing systems; 
and gain experience with furnishing newly removed services, commenters 
requested that CMS provide additional time in between removing services 
from the IPO list.
    Response: We thank commenters for their support for our proposal to 
return 298 services to the IPO list, and their detailed feedback 
regarding their concerns about patient safety and the timeline for 
transitioning services off of the IPO list.
    Comment: Some commenters opposed returning all 298 services to the 
IPO list and believed that if all 298 services are moved back on the 
IPO list in CY 2022, beneficiaries would receive care in an 
unnecessarily high-cost inpatient setting and experience higher out-of-
pocket costs for services. In addition, they argued that higher costs 
coupled with potential delays in returning home will cause beneficiary 
dissatisfaction and increase overall cost to the healthcare system. One 
commenter stated that policy changes over the past 2 years have 
burdened facilities and clinicians. The commenter noted that many 
inpatient procedures are canceled due to the PHE, adding additional 
delays and negatively affecting patient experience and health. For 
these reasons the commenter suggested CMS reassess returning all 298 
procedures to the IPO list.
    Some commenters expressed concerns regarding outpatient surgeries 
for procedures we are returning to the IPO list that were scheduled 
prior to the publication of the final rule and the subsequent impact on 
beneficiaries when these surgeries are cancelled or payment is not 
available for them under the OPPS. Commenters requested that in the 
event the policy is finalized as proposed, CMS allow services scheduled 
as outpatient prior to the final rule's implementation date to be 
payable as they believe this would decrease provider burden and 
minimize impact on patients expecting outpatient care. The commenters 
stated that it is difficult for facilities and clinicians to invest in 
new equipment and develop protocols to move new procedures to the 
outpatient department if they are unsure how long services will remain 
payable in the hospital outpatient setting.
    Response: We thank commenters for their support and for detailing 
their experiences. We recognize that there may be operational changes 
(including scheduling and other administrative changes) that may be 
necessary to adjust to our final policy to return services to the IPO 
list. We also recognize that the PHE has broadly impacted access to 
hospital services and note that we have taken several steps to broaden 
access to care during the PHE through rulemaking and through waivers 
issued using our authority in section 1135 of the Act. For additional 
information about the actions taken to expand access to care and 
otherwise address the PHE for COVID-19, please visit: https://www.cms.gov/about-cms/emergency-preparedness-response-operations/current-emergencies/coronavirus-waivers. However, we continue to share 
concerns expressed by other commenters regarding the speed at which we 
implemented this policy change. We believe that we need to reinstate a 
more measured process of evaluating individual services for removal 
from the IPO list against the five longstanding criteria, and to 
prioritize the potential impacts on the quality and safety of care for 
services when they are removed from the IPO list.
    Comment: Certain commenters (mainly specialists and medical 
associations) requested specific services (roughly 120 services in 
total, ranging in complexity) not be placed back on the IPO list. Those 
services are listed in Table 46 below. These commenters indicated that 
they were currently performing some of these procedures on an 
outpatient basis in both the HOPD and ASC setting on non-Medicare 
patients.
    Of those approximately 120 services requested to remain off of the 
IPO list, two stakeholders included supportive information for CPT 
22630 (Arthrodesis, posterior interbody technique, including 
laminectomy and/or discectomy to prepare interspace (other than for 
decompression), single interspace; lumbar); CPT 23472 (Arthroplasty, 
glenohumeral joint; total shoulder (glenoid and proximal humeral 
replacement (for example, total shoulder))); and CPT 27702 
(Arthroplasty, ankle; with implant (total ankle). Several commenters, 
including medical associations, specialty groups, and surgeons 
suggested that shoulder and ankle replacement surgeries performed in 
HOPDs and ASCs demonstrated optimal clinical outcomes. Commenters 
submitted several peer-reviewed studies

[[Page 63702]]

comparing outcomes for CPT 23472 and CPT 27702 performed in the 
inpatient versus the hospital outpatient setting. As a result, they 
believed performing CPT 23472 and CPT 27702 in a hospital outpatient 
setting is appropriate as determined by the treating health care 
provider. Some commenters cited all payer claims data and stated that, 
following the removal of services from the IPO list, nearly half of 
shoulder replacement surgeries were performed in the hospital 
outpatient setting in the first few months of 2021. Commenters that 
supported leaving CPT 23472 and CPT 27702 off the IPO list and payable 
under the OPPS highlighted that other procedures that were removed from 
the IPO list in CY 2021 did not demonstrate similar utilization in the 
hospital outpatient setting. The commenters stated that low utilization 
of the majority of services removed from the IPO in CY 2021 confirms 
physicians are using clinical judgment to determine when the hospital 
outpatient setting is clinically appropriate.
    In regards to CPT 22630, a commenter noted that CPT codes 22633 
(Arthrodesis, combined posterior or posterolateral technique with 
posterior interbody technique including laminectomy and/or discectomy 
sufficient to prepare interspace (other than for decompression), single 
interspace and segment; lumbar) and 22612 (Arthrodesis, posterior or 
posterolateral technique, single level; lumbar (with lateral transverse 
technique, when performed), which are not on the IPO list, are 
performed with CPT code 22630 when a posterior approach 360-degree 
spinal fusion is performed. The commenter noted that while CPT code 
22633 was removed from the IPO list in 2020 (84 FR 61355 through 
61357), the service described by CPT code 22630, if added to the IPO 
list, will in effect make the combined procedure, described by CPT 
codes 22630 and 22633, unable to be performed in the outpatient 
hospital setting because both procedures need to be payable under the 
OPPS to be performed there. The commenter recommended keeping CPT code 
22630 off the IPO list for CY 2022 so that the individual procedures, 
along with the combined procedure, are eligible for Medicare payment 
when furnished in the hospital outpatient setting for appropriate 
Medicare beneficiaries. A different commenter provided an unpublished 
study that they believe demonstrates that safety, efficacy, and patient 
satisfaction for lumbar inter-body fusion surgery furnished in the ASC 
setting are comparable to or better than in the hospital setting for 
Medicare beneficiaries.
    The services that commenters believed should remain off the IPO 
list in CY 2022 and continue to be paid under the OPPS when furnished 
in the hospital outpatient setting are included in Table 46.
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    Response: We conducted an additional clinical review and 
reevaluation using the five longstanding criteria for removing services 
from the IPO list discussed earlier in section IX.A of this final rule 
with comment period for the services we proposed to return to the IPO 
list to determine whether any of the procedures should remain off of 
the list and be paid for under the OPPS when furnished in the HOPD 
setting. We considered all the evidence that commenters submitted to 
demonstrate that a procedure was performed on an outpatient basis in a 
safe and appropriate manner--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, and our medical advisors thoroughly reviewed 
all information submitted to determine whether the procedures meet the 
evaluation criteria we are reinstating.
    We also conducted an additional review of 2021 OPPS claims data 
through September 2021. Our review indicated that hospitals have 
significantly increased the numbers of services described by CPT codes 
22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), and 
27702 (Reconstruct ankle joint) furnished in the hospital outpatient 
setting in the roughly nine months since the services were removed from 
the IPO list. While at this time we cannot determine from the claims 
data whether this increase in volume is a result of fundamental changes 
to clinical practice; the impact of the PHE on inpatient operating room 
availability; or other reasons, the data do indicate that these 
services are being furnished frequently in the hospital outpatient 
setting, and furnished at a substantial number of different outpatient 
departments. Given the studies submitted and the updated analyses of 
OPPS claims data, we believe that CPT codes 22630 (Lumbar spine 
fusion), 23472 (Reconstruct shoulder joint), and 27702 (Reconstruct 
ankle joint) meet several of the longstanding criteria for removing 
services from the IPO list: Most outpatient departments are equipped to 
provide the services to the Medicare population; the simplest procedure 
described by the codes may be furnished in most outpatient departments; 
the procedures are being furnished in numerous hospitals on an 
outpatient basis; and the procedures are related to codes that we have 
already removed from the IPO list. Therefore, at this time we agree 
that it is appropriate for CPT codes 22630 (Lumbar spine fusion), 23472 
(Reconstruct shoulder joint), and 27702 (Reconstruct ankle joint) and 
their corresponding anesthesia codes, CPT code 01638 (Anesthesia for 
open or surgical arthroscopic procedures on humeral head and neck, 
sternoclavicular joint, acromioclavicular joint, and shoulder joint; 
total shoulder replacement), and CPT 01486 (Anesthesia for open 
procedures on bones of lower leg, ankle, and foot; total ankle 
replacement) to remain off the IPO list and payable under the OPPS when 
furnished in the HOPD setting. We will continue to monitor and evaluate 
the impact our decision to pay for these services when furnished in the 
HOPD setting has on beneficiary outcomes, access to care, and hospital 
payments.
    As noted above, we also received comments requesting that 
approximately 115 other services remain off the IPO list in CY 2022. 
Based on our evaluation, we do not believe that there is sufficient 
evidence or data to support that these services can be safely furnished 
to the typical Medicare beneficiary in the hospital outpatient setting, 
and to support stakeholder assertions that these procedures meet one of 
the five longstanding criteria. We note that for many services 
stakeholders continued to provide conflicting feedback regarding the 
ability of providers to safely furnish them in the hospital outpatient 
setting. At this time, we do not believe it would be appropriate to 
keep these services off of the IPO list and therefore we are 
reclassifying these codes as inpatient only procedures for CY 2022. We 
acknowledge the unique circumstances for this CY2022 rulemaking cycle: 
These approximately 115 services were on the IPO list prior to CY 2021, 
they were removed from the IPO list for CY 2021 as part of the first 
phase of the elimination of the IPO list, and are now being added back 
to the list in CY 2022. It is not our intention to cause any 
disruptions or barriers to access care for these services, and we will 
prioritize the review of these services for potential removal from the 
IPO list in future rulemaking. We emphasize that the assignment of a 
service to the IPO list does not prohibit the service from being 
offered in the hospital outpatient setting and the assignment in this 
final rule should not be considered as a permanent or irrevocable 
designation (65 FR 18456). Furthermore, we continue to encourage 
stakeholders to provide supportive evidence to aid in the evaluations 
of procedures' 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 for future 
rulemaking considerations.

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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 in CY 2021 that 
our clinicians have determined do not meet the criteria for removal 
from the IPO list, we also sought 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, we requested 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' clinical evaluation of the safety of a service 
in the hospital 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 
hospital 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 hospital outpatient setting?
    Comment: Numerous commenters responded to CMS' comment solicitation 
on whether CMS should continue 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 ensure that inpatient only 
designations are consistent with current standards of practice. The 
overwhelming majority of the commenters, including professional 
associations, hospital associations, hospitals, and many providers, 
supported maintaining the IPO list.
    We received many of the same types of comments we received in 
response to our CY 2018 OPPS/ASC proposed rule comment solicitation for 
removing THA and in subsequent rulemaking. Supporters of maintaining 
the IPO list also acknowledged the possibility that in the future 
many--but not all--of the services on the IPO could potentially be 
safely performed on an outpatient basis. Commenters provided feedback 
on improvements to the IPO list maintenance process, as well as the 
criteria, evidence and data that should be required to support removing 
a procedure from the IPO list. Commenters also suggested alternatives 
to the IPO list, including different coding mechanisms and alternative 
approaches to APC assignment for services transitioning off of the IPO 
list, including changes to the ``CA'' modifier, which identifies a 
procedure payable only in the inpatient setting when performed 
emergently on an outpatient who expires prior to admission. Commenters 
also recommended ways for CMS to monitor patient outcomes and the 
impact of services migrating from the IPO list to ensure that there are 
not unintended consequences of removing procedures from the IPO list. 
Several commenters shared concerns regarding the unintended impact that 
large-scale changes to the IPO list may have on hospital finances, 
particularly rural hospitals, safety net hospitals, and SNFs.
    Response: We thank the commenters for their detailed feedback on 
this topic. We will consider all of these comments for future 
rulemaking.
    Comment: Several commenters recommended that CPT codes 19306 
(Mastectomy, radical, including pectoral muscles, axillary and internal 
mammary lymph nodes); 32853 (Lung transplant, double (bilateral 
sequential or en bloc); without cardiopulmonary bypass); 33523 
((Coronary artery bypass, using venous graft(s) and arterial graft(s), 
six or more); and 33935 (Heart-lung transplant with recipient 
cardiectomy-pneumonectomy), never come off of the IPO list due to their 
clinical intensity and nature of the services.
    Response: We thank commenters for their recommendations.
    Comment: Additionally, CMS received comments recommending the 
removal of two services not originally proposed for removal from the 
IPO list for CY 2022. The commenters contended that CPT codes 43775 
(Laparoscopy, surgical, gastric restrictive procedure; longitudinal 
gastrectomy (i.e., sleeve gastrectomy)) and 47550 (Biliary endoscopy, 
intraoperative (choledochoscopy) (list separately in addition to code 
for primary procedure)) should be removed from the IPO list because the 
commenters believed they meet the removal criteria that we are 
reinstating beginning CY 2022.
    Response: We thank commenters for their feedback regarding these 
services. We note CPT codes 43775 and 47550 were not included in the 
298 codes that were removed from the IPO list for CY 2021 and then 
proposed to be added back to the IPO list in the CY 2022 OPPS/ASC 
proposed rule. Rather, these codes were added to the IPO list prior to 
2021. As discussed above, we received many comments from stakeholders 
regarding the speed at which the 298 services were removed from the IPO 
list for CY 2021, and the need for CMS to reinstate a more measured 
process that includes additional opportunities for public input and 
transparency when evaluating codes for removal. In light of these 
comments, we believe it is appropriate to consider the removal of these 
services from the IPO list in future rulemaking in order to allow 
further discussion and evaluation. We also continue to encourage 
stakeholders to provide supportive evidence to aid in the evaluations 
of these procedures' assignment to the IPO list, 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 for future rulemaking 
considerations.
    Comment: One commenter, a medical device company, requested a 
reassignment of the OPPS status indicator for CPT code 0643T 
(Transcatheter left ventricular restoration device implantation 
including right and left heart catheterization and left 
ventriculography when performed, arterial approach) from ``E1'' (not 
covered by Medicare) to ``C'' (inpatient only) status due to the 
complex patient population, the need for intra- and post-

[[Page 63710]]

operative monitoring and their experience with clinical trials.
    Response: We thank the commenter for bringing this CPT code to our 
attention. CPT code 0643T became effective on July 1, 2021 and for CY 
2022, we proposed to assign the code to OPPS status indicator ``E1'' 
(Items, codes, and services not covered by any Medicare outpatient 
benefit category; statutorily excluded; not reasonable and necessary) 
to indicate that the service was not covered by Medicare. We note that 
the clinical study associated with CPT code 0643T was approved as a 
Medicare-approved IDE study \190\ with a Category B designation \191\ 
for the device effective November 12, 2020. We agree with commenters 
that given the invasive nature of the procedures, the clinical 
intensity of the services provided, and the underlying physical 
condition of the patient who would require surgery, CPT code 0643T 
should be classified as an inpatient only procedure.
---------------------------------------------------------------------------

    \190\ Clinical evaluation of the ACCUCINCH[supreg] ventricular 
restoration system in patients who present with symptomatic heart 
failure with reduced ejection fraction (hfref): The corcinch-HF 
study--full text view. Full Text View--ClinicalTrials.gov. (n.d.). 
Retrieved October 22, 2021, from https://clinicaltrials.gov/ct2/show/NCT04331769.
    \191\ G150249-NCT04331769. CMS Approved IDE Studies. (n.d.). 
Retrieved October 22, 2021, from https://www.cms.gov/medicarecoverageideapproved-ide-studies/g150249-nct04331769.
---------------------------------------------------------------------------

    We refer readers to sections III.D. ``OPPS APC-Specific Policies'' 
of this final rule with comment period for additional discussion 
regarding CY 2022 status indicators and APC assignments.
    Comment: Other commenters requested we keep services off the IPO 
list that were not included in the proposed CY 2022 IPO list.
    Response: We thank commenters for their recommendations. We do 
agree that it is appropriate for these services to remain payable in 
the OPPS for CY2022. We reiterate that assignment in this final rule 
should not be considered as a permanent or irrevocable designation (65 
FR 18456). Table 47 lists the CPT codes that were not included in the 
proposed CY 2022 IPO list and were affirmed by commenters.
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C. Summary of Final Policy and Changes to the IPO List for CY 2022

    As explained above, for CY 2022, we are finalizing our proposal to 
halt the elimination of the IPO list; to codify in regulation text in a 
new Sec.  419.22 our five longstanding criteria for determining whether 
a service or procedure should be removed from the IPO list; and to 
pause the elimination of the IPO list and add back to the IPO list the 
services removed in CY 2021, except CPT code 22630 (Arthrodesis, 
posterior interbody technique, including laminectomy and/or discectomy 
to prepare interspace (other than for decompression), single 
interspace; lumbar); CPT code 23472 (Arthroplasty, glenohumeral joint; 
total shoulder (glenoid and proximal humeral replacement (for example, 
total shoulder))); CPT code 27702 (Arthroplasty, ankle; with implant 
(total ankle) and their corresponding anesthesia codes: CPT code 01638 
(Anesthesia for open or surgical arthroscopic procedures on humeral 
head and neck, sternoclavicular joint, acromioclavicular joint, and 
shoulder joint; total shoulder replacement), and CPT 01486 (Anesthesia 
for open procedures on bones of lower leg, ankle, and foot; total ankle 
replacement). We are also classifying CPT code 0643T (Transcatheter 
left ventricular restoration device implantation including right and 
left heart catheterization and left ventriculography when performed, 
arterial approach) as an inpatient only procedure. Finally, we are also 
finalizing our proposal 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 3-year 
transition and to codify our five longstanding criteria for determining 
whether a service or procedure should be removed from the IPO list in 
the regulation in a new Sec.  419.23.
    The complete list of codes describing services that are designated 
as inpatient only services beginning in CY 2022 is also included as 
Addendum E to this final rule with comment period, which is available 
via the internet on the CMS website.

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BILLING CODE 4120-01-C

X. Nonrecurring Policy Changes

A. 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;

[[Page 63737]]

     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. Specifically, for inpatient admissions not 
related to a surgical procedure specified by Medicare as an IPO 
procedure under 42 CFR 419.22(n) and for which there is not a national 
exception, payment of the claim under Medicare Part A is subject to the 
clinical judgment of the medical reviewer to determine whether the 
medical record supports a reasonable expectation of the need for 
hospital care crossing at least 2 midnights or otherwise supports a 
need for inpatient care. 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.
    For 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 for providers regarding site-of-service 
determinations. 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, resulting in our decision to 
finalize an indefinite exemption period rather than continuing the 
previous 2 year exemption period.
    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, 
and are subject to denial for non-compliance with the 2-midnight rule.
    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.
    As stated in section IX. of the CY 2022 OPPS/ASC proposed rule (86 
FR 42155 through 42176), CMS proposed to halt the elimination of the 
IPO list. In accordance with this proposal, we proposed to amend 42 CFR 
419.22(n) to remove the reference to the elimination

[[Page 63738]]

of the list of services and procedures designated as requiring 
inpatient care through a 3-year transition. We also proposed 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 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 will 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 medical record supports either the 
admitting physician's reasonable expectation that the patient will 
require a stay that crosses at least 2 midnights, or the physician's 
determination that the patient required inpatient hospital care despite 
an expectation of a shorter length of stay.
    Because we proposed to halt the elimination of the IPO list and add 
298 services that were removed back to the IPO list, we believed this 
proposed change required 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 noted in the CY 2022 OPPS/ASC proposed rule that we believed 
that the indefinite exemption was appropriate when the agency was 
eliminating the IPO list and removing an unprecedented volume of 
procedures from the 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 3-year span. However, we explained in the CY 2022 
OPPS/ASC proposed rule that should we finalize our CY 2022 proposal to 
halt the elimination of the IPO list, there would 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. We explained in the CY 2022 OPPS/ASC proposed rule that 
because we were now proposing to move toward a much smaller volume of 
procedures becoming subject to the 2-Midnight rule at one time, we 
believed that in the event we finalized the proposed halt in the 
elimination of the IPO list, an indefinite exemption from medical 
review activities related to the 2-Midnight rule would no longer be 
warranted.
    We also explained in the CY 2022 OPPS/ASC proposed rule that we 
continued 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 proposed 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, we stated that under our 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. As we indicated in the CY 2022 OPPS/ASC proposed rule, if 
we finalized our proposal to halt the elimination of the IPO list, we 
believed that this rationale would apply 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.
    We also noted in the CY 2022 OPPS/ASC proposed rule that, 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 also said that we believed that this exemption period 
would aid in compliance with our

[[Page 63739]]

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 explained in the proposed rule that 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, we explained that it 
was 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 solicited public comments regarding the appropriate 
period of time for this exemption. Commenters indicated whether and why 
they believed the 2-year period is appropriate, or whether they 
believed a longer or shorter exemption period would be more 
appropriate.
    In summary, for CY 2021 and subsequent years, we proposed 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 encouraged 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 noted 
that we will monitor changes in site-of-service to determine whether 
changes may be necessary to certain CMS Innovation Center models. While 
we proposed to halt the elimination of the IPO list, we sought comment 
on whether a 2-year time period is appropriate, or if a longer or 
shorter period may be more warranted. We also explained in the CY 2022 
OPPS/ASC proposed rule, that if we did not finalize our proposal to 
halt the elimination of the IPO list we might continue with the 
indefinite exemptions. Finally, we proposed to amend 42 CFR 412.3 to 
clarify when a procedure removed from the IPO list is exempt from 
certain medical review activities. We proposed that for all services 
and procedures removed after January 1, 2020, this exemption would 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.
    Comment: Many commenters, including organizations representing 
health insurance plans, physician associations, and specialty medical 
associations supported an indefinite exemption from site-of-service 
claim denials under Medicare Part A, eligibility for BFCC-QIO referrals 
to RACs for noncompliance with the 2-Midnight rule, and RAC reviews for 
site-of-service for procedures that are removed from the IPO list under 
the OPPS beginning on January 1, 2021. Some of these commenters 
recommended exemption from site of service reviews until the procedure 
is performed in the outpatient setting more than 50 percent of the 
time, or until clinical evidence supports the safety of procedures 
performed in an outpatient setting. Additional commenters believed CMS 
should defer to the physician's judgment on the appropriate site of 
care and exempt providers from site-of-service claims denials beyond 
the proposed 2-year exemption period. Commenters stated 2 years does 
not provide enough time for adequate evidence and research to be 
conducted to demonstrate that procedures removed from the IPO list can 
be performed safely for Medicare beneficiaries in hospital outpatient 
settings. According to the commenters, a longer or indefinite exemption 
period would extend additional protection to beneficiaries and 
hospitals providing care in outpatient settings.
    Other commenters recommended extending site of service review to 3 
or 4 years to allow for quality and safety analysis.
    Response: We thank the commenters for their recommendations. As we 
explained in the CY 2021 OPPS/ASC final rule with comment period, we 
believed that the prior 2-year exemption might not be sufficient given 
the magnitude of the change for providers due to the elimination of the 
IPO list. We agreed at the time that due to the unprecedented number of 
services removed from the IPO list as part of the phased elimination of 
that list, additional time (beyond 2 years) would be more appropriate 
for hospitals and practitioners to adjust their billing and clinical 
systems, as well as develop their own internal processes to determine 
the appropriate setting of care for their patients, and review for 
quality and safety. We acknowledged that providers may not be 
experienced with assessing procedures on the IPO list against the 2-
Midnight benchmark and that a longer exemption would allow them ample 
time to update their processes to make appropriate decisions about 
whether to admit patients for the large numbers of procedures being 
removed from the IPO list at the time (85 FR 86116). We also heard from 
commenters that the 2-year exemption was appropriate when CMS was 
removing a smaller volume of procedures from the IPO list. We agreed 
then and still believe now that the 2-year exemption was appropriate 
when CMS was removing a smaller, more targeted population of procedures 
from the IPO list. Accordingly, because we are finalizing our proposal 
to halt the elimination of the IPO list and return most of the removed 
services back to the list, we are finalizing our proposal without 
modification to resume the 2-year exemption period for procedures 
removed from the IPO list for services removed from the IPO list on 
January 1, 2020 or later.
    Comment: Some commenters supported a two-year exemption from 2-
midnight medical reviews. They

[[Page 63740]]

believed a 2-year exemption will provide sufficient time for physicians 
to become more familiar with appropriate coding, billing, and 
documentation requirements for procedures removed from the IPO list. 
Commenters also noted that the 2-year exemption time period would help 
facilitate the transition of services off the IPO list and allow for 
the development of patient selection criteria to identify which 
patients are appropriate candidates for outpatient procedures. One 
commenter in support of the 2-year exemption time period also stressed 
the importance of CMS and BFCC-QIOs providing education to providers 
when services are removed from the IPO list.
    Response: We thank the commenters for their support. The BFCC-QIOs 
will continue to review claims even while procedures are exempt from 
denial based on site-of-service in order to provide education for 
practitioners and providers regarding compliance with the 2-Midnight 
rule (85 FR 86119). Additionally, in the future, we may provide 
additional educational material regarding considerations for the 
selection of site-of-service for a procedure to support physicians' 
decision-making. We note that this additional information will be for 
informational or educational purposes only and will not be intended to 
prohibit payment of procedures that were previously included on the IPO 
list in the outpatient setting.
    We appreciate the stakeholders' feedback regarding the appropriate 
period of time for exemptions 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 site-of-
service for services removed from the IPO list on January 1, 2021, and 
later. Given our decision to halt the elimination of the IPO list, and 
the fact that we are accordingly no longer removing an unprecedented 
number of procedures from the list at one time, we believe that a 2-
year exemption time period is adequate to let providers gain experience 
with the application of the 2-Midnight rule to those procedures that 
have been newly removed from the IPO list. We also believe that a 2-
year exemption from the medical review activities discussed above for 
procedures removed from the IPO list will be sufficient time for 
providers and BFCC-QIOs to understand the documentation necessary to 
support Part A payment for those patients for which the admitting 
physician determines that the procedures should be furnished in an 
inpatient setting. Therefore, we are finalizing our proposed policy 
without modifications. We are also finalizing our proposal to amend 
Sec.  412.3 of our regulations to clarify when a procedure removed from 
the IPO list is exempt from certain medical review activities.

B. Changes to Beneficiary Coinsurance for Additional Procedures 
Furnished During the Same Clinical Encounter as Certain Colorectal 
Cancer Screening Tests

    Section 122 of Division CC 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 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 Part B 
coinsurance (20 or 25 percent depending upon the setting) 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) of the Act 
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

[[Page 63741]]

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 coinsurance that 
applies to the services (20 or 25 percent of the cost of the services 
depending upon the setting).
    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 
proposed in the CY 2022 PFS proposed rule to modify our regulations to 
reflect the changes to Medicare 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 proposed in the CY 2022 PFS proposed rule to make two 
modifications to current regulations.
    At Sec.  410.37, we proposed in the CY 2022 PFS proposed rule to 
modify our 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 also proposed in the CY 2022 PFS 
proposed rule to modify our regulation. There we describe payment for 
colorectal cancer screening tests. Effective January 1, 2022, we 
proposed in the CY 2022 PFS proposed rule 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 proposed to revise Sec.  410.152(l)(5) to 
provide that Medicare payment in a specified year is equal to a 
specified percent of the lesser of the

[[Page 63742]]

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 proposed in the CY 2022 PFS proposed rule to our 
regulation at Sec.  410.37(j) (and the corresponding reduction in 
coinsurance) are as follows:
     80 percent payment for services furnished during CY 2022 
(with coinsurance equal to 20 percent);
     85 percent payment for services furnished during CY 2023 
through CY 2026 (with coinsurance equal to 15 percent);
     90 percent payment for services furnished during CY 2027 
through CY 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 over time from the current 20 or 25 percent 
to zero percent beginning CY 2030 and will remain at zero percent 
thereafter. We refer readers to the CY 2022 PFS proposed rule for the 
discussion of these changes to the regulations at Sec. Sec.  410.37 and 
410.152(l)(5) to implement section 122 of the CAA.
    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, in the CY 2022 OPPS/ASC proposed rule we proposed 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 explained that 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. We stated that providers must 
continue to report HCPCS modifier ``PT'' to indicate that a planned 
colorectal cancer screening service converted to a diagnostic service. 
We also noted that, if our proposal was finalized, we would 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.
    Comment: Overall, commenters expressed support for our proposal 
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.
    Response: We thank commenters for their support.
    Comment: Several commenters requested that CMS allow providers to 
waive coinsurance even earlier than 2030 or accelerate the reduction in 
the coinsurance amounts if they elect to do so without fear of 
violating any CMS rules. A commenter stated the gradual reduction in 
coinsurance amounts will lead to patient confusion and administration 
challenges. Other commenters stated that if providers are not permitted 
to accelerate the reductions in the coinsurance amounts, hospitals 
should be able to voluntarily waive the co-insurance prior to January 
1, 2030. The commenters believed this process could be similar to CMS 
allowing hospitals to reduce the beneficiary copayment for APC payable 
services below 20 percent. In addition, one commenter requested that 
CMS allow hospitals the option to waive the co-payment amounts as long 
as the hospitals electing this option consider it a contractual 
allowance not counted as bad debt.
    Response: Through this rulemaking, we are adopting Medicare 
regulations regarding beneficiary coinsurance that reflect the 
decreasing beneficiary financial obligations over time as established 
by statute. Prior to the complete phaseout of Medicare coinsurance 
amounts for colorectal cancer screening tests in CY 2030, suppliers may 
waive coinsurance amounts only if they comply with applicable law, 
including the Federal Anti[hyphen]Kickback Statute and the civil 
monetary penalty provision prohibiting inducements to beneficiaries. We 
also note that the election to offer reduced copayment amounts provided 
for in section 1833(t)(8)(B) of the Act provides copayments can be 
reduced to amounts not less than 20 percent of the OPD fee schedule 
amount. The coinsurance amount for colorectal cancer screening services 
in CY 2022 is 20 percent and therefore could not be further reduced 
under this provision.
    We received several comments that were outside the scope of the 
proposals made in the CY 2022 OPPS/ASC proposed rule. These comments 
included questions about coverage of bowel preparation products, 
coverage of non-invasive screening tests that require a follow-up 
colonoscopy, and cost-sharing for new colorectal screening 
technologies. Although we are not summarizing and responding to these 
comments in this final rule, we will take them into consideration for 
possible future healthcare provider education or rulemaking.
    After considering public comments, we are finalizing as proposed 
the proposals made in the CY 2022 OPPS/

[[Page 63743]]

ASC proposed rule to implement section 122 of the CAA. Specifically, we 
are finalizing 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. Providers must 
continue to report HCPCS modifier ``PT'' to indicate that a planned 
colorectal cancer screening service converted to a diagnostic service. 
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 or abuse of this 
policy.

C. Low Volume Policy for Clinical and Brachytherapy 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 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 four 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 42 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).
    As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42181 
through 42185), 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

[[Page 63744]]

procedures and procedures assigned to New Technology APCs. 
Specifically, we proposed to expand the existing low volume adjustment 
policy applied to procedures assigned to New Technology APCs and 
designate clinical APCs and brachytherapy 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 (for example, the CY 
2019 claims year for this CY 2022 OPPS/ASC proposed rule) as low volume 
APCs. For clinical and brachytherapy APCs designated as Low Volume, the 
number of claims available for ratesetting would include claims for all 
procedures assigned to such APC. Whereas, the existing low volume 
adjustment policy is applied to procedures assigned to New Technology 
APCs with fewer than 100 single claims. For APCs designated as low 
volume and for procedures assigned to New Technology APCs, we proposed 
to determine a low volume APC's cost and a low volume procedure 
assigned to a New Technology APC's cost, choosing the ``greatest of'' 
the median, arithmetic mean, or geometric mean.
    We proposed 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. 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 and procedures assigned to New Technology 
APCs. For items and services assigned to clinical and brachytherapy 
APCs we proposed to designate as low volume APCs, we proposed to use up 
to 4 years of claims data to establish an APC payment rate 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 proposed 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 proposed 
to formalize this approach for low volume procedures assigned to New 
Technology APCs as well as clinical and brachytherapy APCs. 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 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 procedures, we 
believe that choosing the methodology that yields the highest rate will 
ensure that these procedures 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 did not propose 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 the CY 
2022 OPPS/ASC proposed rule (86 FR 42028 through 42029), is 
appropriate. Further, as discussed in section IV.B.5. of the CY 2022 
OPPS/ASC proposed rule (86 FR 42116), we proposed to eliminate our low 
volume Device-Intensive Procedure policy, as 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 information on our proposed low volume APC designations, see 
Table 36 of the CY 2022 OPPS/ASC proposed rule (86 FR 42184).
    Comment: Many commenters supported our proposal. Commenters stated 
that the policy would provide a more accurate calculation of cost, help 
mitigate year-to-year payment fluctuations, and create better 
predictability in Medicare revenue for hospitals providing these low-
volume procedures. One commenter recommended that New Technology C-
codes with fewer than 100 claims be eligible for such adjustment. 
Another commenter recommended that the threshold for Brachytherapy APCs 
be increased to fewer than 500 claims.
    Response: We thank the commenters for their support of our 
proposal. We are not accepting the recommendation to apply our low-
volume adjustment to New Technology C-codes with fewer than 100 claims 
that are not assigned to New Technology APCs. New Technology C-codes 
are established to describe procedures that utilize emerging 
technologies that cannot be adequately described by existing CPT/HCPCS 
codes. We have routinely assigned such procedures to clinical APCs due 
to resource and clinical similarity of existing technologies described 
by other CPT/HCPCS codes and we are not convinced that we should 
utilize a unique ratesetting process for New Technology C-codes with 
fewer than 100 claims assigned to clinical APCs. We note that we assign 
new codes to New Technology APCs only if the service cannot be placed 
in any of the existing clinical APCs based on clinical similarity and 
resource homogeneity. Further, we believe our policy of addressing 
payment fluctuations for clinical and brachytherapy APCs due to limited 
claims data at the APC level rather than the CPT/HCPCS code level would 
more appropriately address stakeholder concerns and is more consistent 
with how our low volume policies have previously addressed limited 
claims data.
    Additionally, we are not accepting the recommendation to modify our 
criteria and apply a low volume adjustment to brachytherapy APCs with 
fewer than 500 claims that can be used for ratesetting. As discussed 
previously, under our existing policies, we believe that our definition 
of low volume as fewer than 100 single claims per year increases the 
probability that payment data for a procedure may not have a normal 
statistical distribution. Further, we believe that applying the same 
per-year limit of fewer than 100 single claims to all brachytherapy 
APCs, clinical APCs, and procedures assigned to New Technology APCs to 
determine whether they should qualify as low volume APCs or low volume 
procedures is the most consistent and equitable approach.
    After considering the public comments we received, we are 
finalizing our proposal without modification to designate clinical and 
brachytherapy APCs as low volume APCs if the APC has fewer than 100 
claims that can be used for ratesetting. We also are finalizing our 
proposal to designate procedures assigned to New Technology APCs as low 
volume

[[Page 63745]]

procedures if there are fewer than 100 claims for the procedure that 
can be used for ratesetting for the year. We are also finalizing our 
low volume APC payment adjustment to determine the APC cost (or 
procedure cost in the case of a low volume procedure assigned to a New 
Technology APC) as the greater of the geometric mean cost, arithmetic 
mean cost, or median cost based on up to 4 years of claims data. For a 
discussion of the low volume adjustment as it applies to certain 
procedures assigned to New Technology APCs, see section III.C. of this 
final rule with comment period.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42181 through 42185), 
we proposed to designate three clinical APCs and five brachytherapy 
APCs as low volume APCs. After reviewing updated CY 2019 claims data 
available for this final rule, APC 5881 (Ancillary Outpatient Services 
When Patient Dies) had 99 single claims available for CY 2022 
ratesetting purposes. Therefore, with the addition of APC 5881, we are 
finalizing our proposal, with modification, to designate four clinical 
APCs and five brachytherapy APCs as low volume APCs under the OPPS. The 
four clinical APCs and five brachytherapy APCs meet our criteria of 
having fewer than 100 single claims in the claims year (CY 2019 for the 
CY 2022 OPPS/ASC final rule with comment period) and therefore, we are 
finalizing our proposal, with modification, to designate these APCs as 
low volume APCs. Table 49 illustrates the APC geometric mean cost 
without the low volume APC designation, the median, arithmetic mean, 
and geometric mean cost using up to four years of claims data, as well 
as the statistical methodology we are finalizing to use as the APC's 
cost for ratesetting purposes for CY 2022. As discussed in section X.E 
of this final rule with comment period, 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 63746]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.129

    Additionally, for this final rule, based on the number of CY 2019 
available claims from the standard ratesetting methodology used for ASC 
ratesetting purposes in this final rule, for CY 2022, under the ASC 
payment system, we are also finalizing our proposal to designate the 
APCs in Table 50 as low volume APCs that meet our criteria of having 
fewer than 100 single claims in the claims year (CY 2019 for the CY 
2022 OPPS/ASC proposed rule) and are subject to our new low volume APC 
payment adjustment under the ASC payment system. Specifically, we are 
designating five brachytherapy APCs and four clinical APCs as low 
volume APCs for CY 2022. These are the same brachytherapy APCs we are 
finalizing as low volume APCs under the OPPS. We are also designating 
APC 5244, APC 5494, and APC 5495, which are finalizing as low volume 
under the OPPS, as low volume under the ASC payment system. 
Additionally, APC 5493--Level 3 Intraocular Procedures meets our 
criteria to be designated a low volume APC under the ASC payment system 
for CY 2022. The payment rates for these APCs are established 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, are claims data from 2016 through 2019, based on the standard 
ratesetting methodology. However, as discussed in section XIII.D.1.d of 
this final rule with comment period, we are finalizing our proposal to 
limit the ASC payment rate for procedures assigned to low volume APCs 
at an amount no greater than the procedure's OPPS payment rate.

[[Page 63747]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.130

BILLING CODE 4120-01-C

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. In the CY 2022 OPPS/ASC proposed rule (86 FR 42185) we sought 
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 sought 
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

[[Page 63748]]

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) of the Act, 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,\192\ 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.''
---------------------------------------------------------------------------

    \192\ http://medpac.gov/docs/default-source/reports/mar21_medpac_report_ch14_sec.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    Division CC, section 123 of the CAA modified the circumstances 
under which Medicare makes payment for mental health services furnished 
via telehealth technology under the PFS following the PHE. 
Specifically, this legislation removed 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.\193\ This change correlates with a growing acceptance of the 
use of technology in the provision of mental health care. According to 
the Commonwealth Fund,\194\ 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 
(for example, 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 (for example, 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.\195\
---------------------------------------------------------------------------

    \193\ 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.
    \194\ https://www.commonwealthfund.org/blog/2020/using-telehealth-meet-mental-health-needs-during-covid-19-crisis.
    \195\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7347331/.
---------------------------------------------------------------------------

    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

[[Page 63749]]

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 in the Federal Register 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.  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.  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.  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 
stated that we were 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 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 stated that we were 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 noted 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 stated that we were 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 sought 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 sought 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 also sought 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.
    Comment: Commenters expressed support for continuing OPPS payment 
for mental health services furnished to beneficiaries in their homes by 
clinical staff of the hospital through the use of communication 
technology as a permanent policy post-PHE, stating that the expansion 
of virtual care broadly during the PHE has been instrumental in 
maintaining and expanding access to mental health services during the 
PHE

[[Page 63750]]

while keeping beneficiaries in their homes and reducing exposure to 
COVID. A few commenters requested that CMS continue to allow for the 
beneficiary's home to be reclassified as a PBD post-PHE, while other 
commenters stated that CMS should ensure that facility-based providers 
are adequately reimbursed for their services when furnished remotely. A 
few commenters encouraged CMS to ensure that there are relevant quality 
and safety measures for services furnished by hospital staff through 
communication technology.
    Additionally, several commenters expressed support for the 
flexibilities allowing PHP services to be furnished to beneficiaries in 
their homes via telecommunication technology during the COVID-19 PHE, 
and encouraged CMS to maintain these flexibilities beyond the PHE or 
consider making these temporary policies permanent. Commenters 
expressed that these flexibilities, especially those allowing the use 
of audio-only telecommunication technology, increase access to vital 
mental health services amidst a persistent shortage of health care 
professionals and allow much greater and timelier access to mental 
health services, especially in rural areas and for vulnerable 
populations, while also helping drive reductions in the rates at which 
patients missed appointments. Commenters also shared research and 
analysis supporting the effectiveness of providing PHP services using 
telecommunication technology. One academic health center discussed 
outcomes analysis it conducted of its PHP services and noted that its 
analysis did not show a decrement in clinical care for patients who 
received only virtual PHP services. A national association of 
behavioral healthcare systems shared research showing that the main 
differences between patients who participated in PHPs via 
telecommunication technology and those who attended in-person was that 
those who participated via telecommunication technology had greater 
lengths of stay and were more likely to stay in treatment until 
completed.\196\
---------------------------------------------------------------------------

    \196\ https://www.psychiatrist.com/jcp/covid-19/telehealth-treatment-patients-intensive-acute-care-psychiatric-setting-during-covid-19/.
---------------------------------------------------------------------------

    Response: We thank commenters for their support. We will consider 
these comments for future rulemaking and, in addition, will continue to 
explore how hospital payment for virtual services could support access 
to care in underserved and/or rural areas.
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 acknowledged that the additional time between 
the issuance of the CY 2021 OPPS/ASC final rule with comment period and 
the issuance of the CY 2022 OPPS/ASC proposed rule may have allowed 
providers to collect more information that could inform CMS' decision 
making and therefore sought additional comment on whether this policy 
should be adopted on a permanent basis. While we did not propose to 
maintain this flexibility after the later of the end of the PHE or 
December 31, 2021, we did seek 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 sought 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 also sought 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 were made 
permanent, we sought 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.
    Comment: Commenters supported the adoption of the definition of 
direct supervision for cardiac rehabilitation and pulmonary 
rehabilitation, and intensive cardiac rehabilitation services to 
include presence of the supervising practitioner via two-way, audio/
video communication technology on a permanent basis, or, if CMS did not 
wish to adopt this policy permanently, commenters encouraged CMS to 
maintain it for a period of time following the conclusion of the PHE, 
such as until the end of 2022. Most commenters supported development of 
a service-level modifier, stating that this requirement will allow CMS 
to track and collect data, although a few commenters stated that 
requiring a service-level modifier would be unnecessary and create 
additional burden on providers.
    Response: We appreciate commenters' input on this policy and will 
consider these comments for future rulemaking.
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

[[Page 63751]]

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, which requires 
services classified in an APC to be comparable clinically and in terms 
of resource use. APC 5731--Level 1 Minor Procedures contains services 
similar to HCPCS code C9803 and 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'' in OPPS 
Addendum B.
    In the CY 2022 OPPS/ASC proposed rule we solicited 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.
    Comment: Commenters expressed appreciation for CMS' response to the 
pandemic, including the creation of HCPCS code C9803. One commenter 
noted that this code has had a positive impact on the delivery of care 
during the COVID-19 PHE. We received several comments in support of 
maintaining OPPS payment for HCPCS code C9803 beyond the conclusion of 
the COVID-19 PHE, with many commenters in support of making payment for 
this code permanent. Commenters cited concerns regarding the 
continuation of COVID-19 cases after the conclusion of the COVID-19 PHE 
and stressed the importance of continued testing in order to track and 
control COVID-19 cases. Multiple commenters also requested that CMS 
continue to pay for HCPCS code C9803 due to concerns regarding the 
unknown future role COVID-19 will play in our lives and potential 
increases in cases and new mutations of the virus. One commenter also 
requested that CMS continue payment for HCPCS code C9803 and reevaluate 
retiring this code when claims volume becomes low.
    One commenter also requested that if CMS were to retire HCPCS code 
C9803, that we provide significant notice and resources to healthcare 
providers to prevent disruptions in the delivery of care.
    Response: We appreciate the comments regarding payment for COVID-19 
specimen collection in hospital-based outpatient departments (HOPDs). 
We plan to take this feedback into consideration for possible future 
rulemaking.

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 the CY 2022 OPPS/ASC proposed rule 
(86 FR 42020), section 1833(t) of the Act requires the Secretary to 
annually review and update the payment rates for services payable under 
the Hospital 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) of the Act to take into account 
changes in medical practice, changes in technology, the addition of new 
services, new cost data, and other relevant information and factors.
    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 the 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 
and in the CY 2022 OPPS 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). In section X.E. of the 
CY 2022 OPPS/ASC proposed rule (86 FR 42188 through 42190) we noted 
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 also discussed how we have previously 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, we identified many of the same reasons to propose to use 2019 
data for 2022 ratesetting as discussed in the FY 2022 IPPS proposed 
rule.
    In section X.E. of the CY 2022 OPPS/ASC proposed rule (86 FR 42188 
through 42190) we also noted that we

[[Page 63752]]

observed 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 saw 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 it 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 
COVID-19 specimen collection. In the CY 2020 claims, HCPCS C9803 has 
1,023,957 single claims available for cost modeling, representing 
approximately 93 percent 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 may 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 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 believed that CY 2020 
data were not the best overall approximation of expected outpatient 
hospital services in CY 2022. Instead we believed that CY 2019 data, as 
the most recent complete calendar year of data prior to the COVID-19 
PHE, were a better approximation of expected CY 2022 hospital 
outpatient services.
    In the CY 2022 OPPS/ASC proposed rule, we also analyzed the extent 
to which 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 51.
[GRAPHIC] [TIFF OMITTED] TR16NO21.131

    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

[[Page 63753]]

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.
    Consistent with the proposal to use CY 2019 claims data in 
establishing the CY 2022 OPPS rates, we also proposed to use cost 
report data from 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 the CY 2022 OPPS/ASC 
proposed rule (86 FR 42053)). 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 
discussed 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 
noted in the CY 2022 OPPS/ASC proposed rule the specific cases where we 
used updated information, such as the ASP data used in determining drug 
packaging status discussed in section V. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42116).
    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 the alternative proposal for CY 
2022, we made available the cost statistics and addenda utilizing the 
CY 2020 data we would ordinarily have provided in conjunction with the 
CY 2022 OPPS/ASC proposed rule. We provided 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 made 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 the CY 2022 OPPS/ASC proposed rule for more 
information on where these supplemental files may be found.
    We note that the CY 2022 OPPS/ASC proposed rule appeared in the 
Federal Register on August 4, 2021. In the FY 2022 IPPS/LTCH PPS final 
rule, which appeared in the August 13, 2021 issue of the Federal 
Register, CMS finalized a policy to use FY 2019 MedPAR data in FY 2022 
IPPS ratesetting (rather than FY 2020 MedPAR data) after consideration 
of public comments, the vast majority of which supported CMS's proposal 
to use the FY 2019 data for FY 2022 ratesetting for circumstances where 
the FY 2020 data is significantly impacted by the COVID-19 PHE. Similar 
to the comments received on the FY 2022 IPPS proposed rule, we received 
broad support from commenters with many agreeing that CY 2019 claims 
data would likely be more similar to the CY 2022 outpatient experience.
    Comment: Commenters supported the use of CY 2019 claims in CY 2022 
OPPS ratesetting, agreeing that the billing patterns found in the CY 
2019 claims data would better approximate the outpatient utilization 
and costs in the CY 2022 OPPS, due to the effect of the PHE on the CY 
2020 claims. A commenter noted challenges during the PHE such as 
increasing labor costs and suggested that an interim wage index 
adjustment factor be applied. Several stakeholders agreed with using CY 
2019 claims for CY 2022 OPPS ratesetting, but noted that their support 
applied specifically for the CY 2022 OPPS, as similar policies for 
future years would need to be evaluated separately.
    Response: We appreciate the commenters' support for our proposal to 
use CY 2019 claims in CY 2022 OPPS ratesetting as a result of the 
impact of the PHE on CY 2020 claims data. We note that we are 
finalizing the use of CY 2019 claims data in CY 2022 OPPS ratesetting.
    With regards to the request for an interim wage index adjustment 
factor, we currently do not believe an interim wage index adjustment 
factor is necessary. The wage index that we would apply in the CY 2022 
OPPS is not affected in the same way as claims and cost report data due 
to the PHE, as a result of being on a longer data delay. As cost report 
information becomes available that reflects changes in labor costs and 
wage index inputs, we will continue to review and include as 
appropriate in the OPPS. For more detail regarding the OPPS wage index 
policy, please see section II.C. of this final rule with comment 
period. We note that the final policy to use CY 2019 claims data for 
OPPS ratesetting specifically applies to the CY 2022 OPPS, and we will 
continue to monitor the claims and cost report data available and their 
appropriateness for future OPPS ratesetting, as the PHE continues.
    Comment: Certain commenters supported the use of CY 2019 claims 
data for broader OPPS ratesetting but requested specific exceptions 
that would allow for the use of CY 2020 claims. These suggested 
exceptions included requests to use:
     CY 2020 claims data for ratesetting purposes for certain 
HCPCS codes that only have volume or significant volume in the CY 2020 
claims but not in the 2019 claims data;
     CY 2020 claims data for establishing the CY 2022 OPPS 
relative weights for specific APC series;
     CY 2020 claims data for contextual purposes where CY 2019 
claims are unavailable to make APC assignments, but to continue to use 
CY 2019 claims data for broader ratesetting; and
     Either CY 2019 or CY 2020 claims data in identifying which 
procedures receive device intensive status and to

[[Page 63754]]

use the higher of the device offsets between the 2 years of claims 
data.
    Response: We appreciate the commenters' input in determining what 
data is most appropriate for developing the CY 2022 OPPS relative 
payment weights. We recognize that there are two important distinct 
issues raised by these unique requests: (1) The integrity of the OPPS 
relative payments weights based on the data used, and (2) data 
availability for ratesetting, particularly as there is different 
information available in each of the claims and cost report datasets 
based on the time frame of data they include.
    In reviewing the CY 2019 and CY 2020 claims data available for 
developing the CY 2022 OPPS rates, we noted that we believed the CY 
2019 claims would be more reflective of our expectation of the CY 2022 
outpatient experience. We do not believe it is appropriate to 
selectively choose which claims year's data are included or not in 
establishing the CY 2022 relative payment weights. We note that the 
relative cost of services used in developing the OPPS relative payment 
weights is a fundamental part of the OPPS and choosing which claims to 
use when both CY 2019 and CY 2020 claims are broadly available may 
inappropriately distort certain components of the OPPS. Further, the 
choice of different time frames when establishing the claims dataset 
would raise additional concerns around data consistency and how to 
mitigate their effects, which may be outsized as a result of the COVID-
19 PHE. Potential additional adjustment factors would need to be 
applied for aspects such as charge inflation, volume adjustments, and 
CCR adjustments similar to how they are applied for other components of 
the OPPS, for example, outlier payments. The OPPS relative payment 
weights affect the budget neutrality calculations because the volume 
and estimated relative costs of services comprise the budget neutral 
model. If actual CY 2019 claims were used in some cases and CY 2020 
claims in others, we might then inadvertently over or underweight 
volume or estimated cost, both of which distort not just the specific 
OPPS payment rates for which they are used but also those of all other 
services within the budget neutrality model. Based on these data 
integrity concerns, we continue to believe using CY 2019 claims data--
and CY 2019 claims data alone--in establishing the CY 2022 OPPS 
relative payment weights to the extent possible is the best and most 
effective policy. We do not believe that it is appropriate to blend use 
of CY 2020 claims in this process.
    In the CY 2022 OPPS/ASC proposed rule, we recognized that there 
were certain cases in which the CY 2020 claims data may provide 
additional information around service costs than are available in the 
CY 2019 claims data, and therefore, may be the best data available for 
ratesetting. For example, we proposed to make an exception for 11 
specific device intensive procedures as described in section IV.B.2. of 
the CY 2022 OPPS/ASC proposed rule (86 FR 42114) in establishing the 
procedures' device offsets. In these instances, procedures were 
previously assigned a default device offset percentage of 31 percent or 
a device offset percentage based on claims from a clinically similar 
code, and focusing solely on CY 2019 claims data would yield no 
changes. However, we recognized that if CY 2020 claims information were 
available and provided more specific context around device offsets, 
this updated data would yield better and potentially more specific 
device offset assignments than the default or clinically similar codes. 
For more detailed discussion around device intensive status and device 
offsets, please see section IV.B. of this final rule with comment 
period.
    Along those lines, while we do not believe that it is generally 
appropriate to include actual CY 2020 OPPS claims data in the process 
of calculating the OPPS relative weights, we believe that in certain 
cases it is appropriate to use that cost information as contextual 
information for APC and device offset assignments in the CY 2022 OPPS. 
That is, while CY 2019 claims data are more representative of our 
expectation of the CY 2022 outpatient experience, in cases where there 
are no CY 2019 claims data available, the CY 2020 claims data may 
provide additional updated information around the estimated costs for 
specific services. Therefore, we are establishing an additional limited 
exception in this final rule with comment period where we will review 
CY 2020 claims data based on commenter requests and identification of 
areas where they believe the CY 2020 claims justify alternative 
placement, if no significant CY2019 claims data is available, as part 
of our review process for determining CY 2022 APC assignment. It has 
been our policy for updating OPPS rates annually to use the best 
available data for ratesetting, and we believe in certain limited, 
specific circumstances the CY 2020 claims data are the best available 
for setting CY 2022 rates. We note that throughout this rule, and 
particularly in section III.C. of this final rule with comment period, 
where we review the APC-specific policies, we discuss where we have 
reviewed the CY 2020 claims as part of our evaluation of data for the 
CY 2022 APC assignments.
    With regards to the request that we apply the device intensive 
policy and device offset calculation based on the higher calculation 
between that determined by the CY 2019 or CY 2020 claims data, we 
believe that in cases where claims are available from both years that 
the CY 2019 claims remain more reflective of actual expected outpatient 
experience. Based on the issues discussed earlier in this section we 
believe it is appropriate to use the CY 2019 claims data for 
establishing the device intensive policy, with the exception of device 
intensive procedures for which CY 2020 claims remain the only data 
source. For a more detailed discussion of the CY 2022 device intensive 
policy and the limited exceptions in which CY 2020 claims data will be 
used for those purposes, please see section IV.B. of this final rule 
with comment period.
    After consideration of the public comments received, we are 
finalizing the proposal to use CY 2019 claims data in CY 2022 OPPS 
ratesetting with modification to allow for review of the CY 2020 claims 
in determining CY 2022 APC placements based on commenter request and 
where CY 2019 claims data are unavailable. In addition, we note that we 
are finalizing the exception to allow for CY 2020 claims data for 
device offset assignments for the 11 codes for which we proposed 
exceptions, as discussed in more detail in section IV.B. of this final 
rule with comment period.

[[Page 63755]]

F. 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.\197\ 
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 and 
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.
---------------------------------------------------------------------------

    \197\ 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.
---------------------------------------------------------------------------

    As discussed elsewhere in section X.E. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42188 through 42190) and section I.F. of the FY 
2022 IPPS/LTCH proposed rule (86 FR 25211 through 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 the CY 2022 OPPS/ASC proposed rule. As noted in section X.E., 
however, we proposed 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 proposed a one-time 
equitable adjustment under section 1833(t)(2)(E) of the Act 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 
or that their payment should be packaged if we determine that 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 provides 
separate payment for drugs and biologicals with pass-through status 
that expires between December 31, 2021 and September 30, 2022 to mimic 
pass-through payment to the extent possible, we proposed 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+6 percent for the duration of the 
time period during which the adjustment applies.
    We explained that under our proposal, the device category, drugs, 
and biologicals that would be affected were 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 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.
    We explained that 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, we proposed that the adjusted 
payment would be made for between one and four quarters, depending on 
when the pass-through period expires for the

[[Page 63756]]

device category, drug, or biological. In particular, we proposed that 
separate payment would be made a full year for the device category and 
six drugs for which pass-through status will expire on December 31, 
2021, three quarters for the twelve drugs and biologicals for which 
pass-through status will expire on March 31, 2022, two quarters for the 
seven drugs for which pass-through status will expire on June 30, 2022, 
and one quarter for the two drugs for which pass-through status will 
expire on September 30, 2022.
    Table 52 lists pass-through drugs, biologicals and the device 
category that we proposed 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 proposed each drug or device 
category would receive.
BILLING CODE 4120-01-P

[[Page 63757]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.132


[[Page 63758]]


[GRAPHIC] [TIFF OMITTED] TR16NO21.133

BILLING CODE 4120-01-C
    In the CY 2022 OPPS/ASC proposed rule we solicited 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.
    Comment: The overwhelming majority commenters generally supported 
our proposal to utilize our equitable adjustment authority to pay 
separately for between one and four

[[Page 63759]]

quarters for certain devices, drugs, and biologicals whose pass-through 
status will expire between December 31, 2021 and September 30, 2022. 
One commenter stated their support for CMS' proposal and added that 
separate payment for items that will soon lose pass-through status will 
help ensure beneficiary access to innovative therapies. The commenter 
added that the COVID-19 pandemic has severely skewed hospital 
utilization data that is necessary to establish payment rates under the 
OPPS.
    Response: We thank the commenters for their support for our 
proposal.
    Comment: Multiple commenters requested changes to our proposed 
equitable payment adjustment to either expand or limit its scope. One 
commenter strongly supported CMS's policy that makes 
radiopharmaceuticals eligible for pass-through status and added that 
CMS should apply this pass-through period extension to all 
radiopharmaceuticals with pass-through status during the COVID-19 PHE. 
Several other commenters asked that the proposed pass-through extension 
be expanded to include all pass-through devices, drugs, and biologicals 
that currently have pass-through status. One commenter acknowledged the 
requirement in section 1833(t)(2)(E) that equitable adjustments be 
budget neutral, but nonetheless suggested that to the extent possible, 
CMS should consider whether the adjustment to continue separate payment 
could be made in a non-budget neutral manner to minimize the impact of 
this policy on payment for other items and services under the OPPS.
    Another commenter stated that if CMS finalizes use of its equitable 
adjustment authority to continue separate payment for certain pass-
through products, it should not do so for products that have already 
had more than 3 years of pass-through status. One commenter stated that 
CMS should not use its equitable adjustment authority to provide 
separate payments for pass-through drugs, biologicals, and biosimilar 
biological products after pass-through status expires for these 
products where the products would continue to receive separate payment 
under our existing policy. Multiple commenters asked for our proposal 
to be applied to specific products or HCPCS codes; in some cases the 
commenters asserted that products on pass-through status experienced 
claims processing challenges that impacted data collection, 
ratesetting, and beneficiary access because of the effects of the PHE.
    Response: We thank the commenters for the information provided in 
response to 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. We note that our proposal was 
limited to an extension for those drugs, biologicals, and devices for 
which pass-through status is ending between December 31, 2021 and 
September 30, 2022 and for which we would otherwise use data from CY 
2020 for ratesetting for these products in CY 2022. We agree that this 
proposal should not be applied to pass-through products that have 
previously received more than three years of pass-through status, 
however, to our knowledge no such product for which we proposed to 
provide continued separate payment has already had more than three 
years of pass-through status. In response to commenters' request that 
we implement the proposed adjustment in a non-budget neutral manner, we 
note that the equitable adjustment authority at section 1833(t)(2)(E) 
requires that any adjustments made under it be budget neutral.
    Furthermore, we note that some commenters alleged that CMS is 
effectively removing 1 year of pass-through data with their decision to 
use CY 2019 as opposed to CY 2020 data for ratesetting. We note that 
CMS is required to provide between 2 and 3 years of pass-through 
payment status and that each drug, device and biological will have had 
at least 3 years of pass-through status under our proposal. We will 
continue to assess this issue as it relates to pass-through status and 
ratesetting in future years.
    After considering the public comments, we are finalizing 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. CY 2022 OPPS Payment Status and Comment Indicators

A. 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 did not propose 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 did not receive any comments on the proposed definitions of the 
OPPS payment status indicators or their definitions for 2022. We 
believe that the existing definitions of the OPPS status indicators 
will continue to be appropriate for CY 2022. Therefore, we are 
finalizing those definitions without modification for CY 2022.
    The complete list of payment status indicators and their 
definitions that would apply for CY 2022 is displayed in Addendum D1 to 
the CY 2022 OPPS/ASC final rule with comment period, which is available 
on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    CY 2022 payment status indicator assignments for APCs and HCPCS 
codes are shown in Addendum A and Addendum B, respectively, to the CY 
2022 OPPS/ASC final rule with comment period, which are available on 
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.

B. CY 2022 Comment Indicator Definitions

    In the CY 2022 OPPS/ASC proposed rule, we proposed 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 
proposed 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.
     ``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,

[[Page 63760]]

interim APC assignment; comments will be accepted on the interim APC 
assignment for the new code.
     ``NP''--New code for the next calendar year or existing 
code with substantial revision to its code descriptor in the next 
calendar year, as compared to current calendar year, proposed APC 
assignment; comments will be accepted on the proposed APC assignment 
for the new code.
    The definitions of the OPPS comment indicators for CY 2022 are 
listed in Addendum D2 to the CY 2022 OPPS/ASC final rule with comment 
period, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
    We did not receive any comments on the proposed definitions of the 
OPPS comment indicators for 2022.
    We believe that the existing CY 2021 definitions of the OPPS 
comment indicators continue to be appropriate for CY 2022. Therefore, 
we are finalizing 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. 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.\198\ 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. Comments received from MedPAC for other 
OPPS policies are discussed in the applicable sections of this final 
rule with comment period.
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    \198\ 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. 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.\199\ 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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    \199\ 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 the CY 2022 OPPS/ASC proposed rule, 
we proposed 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 final CY 2022 ASC conversion factor for 
ASCs meeting quality reporting requirements and the final hospital 
market basket update factor are discussed in section XIII. of this 
final rule with comment period.

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 
whether 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.\200\
---------------------------------------------------------------------------

    \200\ 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 did not propose 
any cost reporting requirements for ASCs in the 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.
    Comment: MedPAC reiterated its previous recommendation and 
suggested that CMS should collect cost data from ASCs to set ASC 
payment rates that accurately reflect the costs of efficient providers 
and eliminate payment misalignments that exist as well as inform 
decisions about annual payment rate updates to the ASC payment system. 
MedPAC stated that it is feasible for ASCs to provide cost information 
and that smaller providers, such as hospices, currently provide such 
information to CMS. MedPAC suggested CMS could create a streamlined 
process of limited cost data with limited cost variables rather than a 
formal, and more time-consuming, cost report.
    Other commenters suggested that CMS work closely with industry 
associations in developing the methodology for cost reporting. An ASC 
industry association suggested that CMS recognize that cost experience 
can differ greatly depending on factors such as the size of the 
facility, location, and the specialties served. Further, the ASC 
association suggested that if CMS were to collect ASC cost reports that 
we consider developing a single market

[[Page 63761]]

basket update that could be applied to both ASCs as well as HOPDs.
    Response: We appreciate MedPAC's comment regarding cost submission 
and feedback submitted by other commenters and will take them into 
consideration in future rulemaking. While we did not propose any cost 
reporting requirements for CY 2022, the comments we did receive are 
helpful as we continue to explore methods for obtaining cost 
information in a manner that does not place undue burden on ASCs.
    Comments received from MedPAC for other ASC payment system policies 
are discussed in the applicable sections of this final rule with 
comment period. 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 
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 Sec.  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,

[[Page 63762]]

``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 ASC 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 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.  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 (85 FR 86153). As discussed in 
section XIII.C.1.d. of this final rule with comment period (below), we 
are finalizing our proposal for CY 2022 to revise the language in the 
regulation text at Sec.  416.166 and reinstate the general standards 
and exclusion criteria in place prior to CY 2021.

B. 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 drugs, devices, supplies, 
temporary procedures, and services not described by CPT codes.
    We finalized a policy in the August 2, 2007 ASC 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 the CY 2022 OPPS/ASC proposed rule.
    We have separated our discussion below based on when the codes are 
released and whether we proposed to solicit public comments in the CY 
2022 OPPS/ASC 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).
    We note that we sought public comments in the CY 2021 OPPS/ASC 
final rule with comment period (85 FR 85866) on the new and revised 
Level II HCPCS codes effective October 1, 2020 or January 1, 2021. 
These new and revised codes were flagged with comment indicator ``NI'' 
in Addenda AA and BB to the CY 2021 OPPS/ASC final rule with comment 
period to indicate that we were assigning them an interim payment 
status and payment rate, if applicable, which were subject to public 
comment following publication of the CY 2021 OPPS/ASC final rule with 
comment period. In the CY 2022 OPPS/ASC proposed rule, we stated that 
we will finalize the treatment of these codes under the ASC payment 
system in this CY 2022 OPPS/ASC final rule with comment period.
    2. April 2021 HCPCS Codes for Which We Solicited Public Comments in 
the 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 of the CY 2022 
OPPS/ASC proposed rule displayed the new Level II HCPCS codes that were 
implemented April 1, 2021, along with their final payment indicators 
for CY 2022.
    We invited public comments on the proposed payment indicators and 
payment rates 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 53. We proposed to 
finalize their payment indicators in this CY 2022 OPPS/ASC final rule 
with comment period.
    We did not receive any comments on the proposed ASC payment 
indicator assignments for the new Level II HCPCS codes implemented in 
April 2021 and we are finalizing the proposed ASC payment indicator 
assignments for these codes, as indicated in Table 53. We note that 
several of the temporary drug HCPCS C-codes have been replaced with 
permanent drug HCPCS J-codes, effective January 1, 2022. Their 
replacement codes are also listed in Table 53.
    The final comment indicators, payment indicators and payment rates, 
where applicable, for these April 2021 codes can be found in Addendum 
BB to this CY 2022 OPPS/ASC final rule with

[[Page 63763]]

comment period rule (which is available via the internet on the CMS 
website). The list of final ASC payment indicators and corresponding 
definitions can be found in Addendum DD1 to the CY 2022 OPPS/ASC final 
rule. These new codes that were effective April 1, 2021, were assigned 
to comment indicator ``NP'' in Addendum BB to the CY 2022 OPPS/ASC 
proposed rule to indicate that the codes were assigned to an interim 
APC assignment and that comments would be accepted on their interim APC 
assignments. Also, the list of final comment indicators and definitions 
used under the ASC payment system can be found in Addendum DD2 in this 
final rule with comment period. We note that ASC Addenda AA, BB, DD1, 
and DD2 are available via the internet on the CMS website.
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3. July 2021 HCPCS Codes for Which We Solicited Public Comments in the 
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 of the CY 2022 OPPS/ASC 
proposed rule displayed the new HCPCS codes that were effective July 1, 
2021. 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. These codes were listed in Table 41 
of the CY 2021 OPPS/ASC proposed rule, along with the proposed comment 
indicators and payment indicators.
    We invited 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

[[Page 63764]]

listed in Tables 40 and 41 of the CY 2022 OPPS/ASC proposed rule. We 
proposed to finalize the proposed payment indicators in this final rule 
with comment period.
    We did not receive any public comments on the proposed ASC payment 
indicator assignments for the new Category III CPT codes or Level II 
HCPCS codes implemented in July 2021 and are finalizing the proposed 
ASC payment indicator assignments for these codes, as indicated in 
Tables 54 and 55. We note that several of the HCPCS C-codes have been 
replaced with HCPCS J-codes, effective January 1, 2022. Their 
replacement codes are listed in Table 54. The final CY 2022 payment 
rates for these new codes can be found in Addenda AA and BB to this 
final rule with comment period.
    The list of final ASC payment indicators and corresponding 
definitions can be found in Addendum DD1 to this final rule with 
comment period (which is available via the internet on the CMS 
website). These new codes that were effective July 1, 2021, were 
assigned comment indicator ``NP'' in Addendum BB to the CY 2022 OPPS/
ASC proposed rule to indicate that the codes were assigned to an 
interim APC assignment and that comments would be accepted on those 
assignments. The list of final comment indicators and definitions used 
under the ASC payment system can be found in Addendum DD2 to the CY 
2022 OPPS/ASC final rule. We note that ASC Addenda AA, BB, DD1, and DD2 
are available via the internet on the CMS website.
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4. October 2021 HCPCS Codes for Which We Are Soliciting Public Comments 
in This CY 2022 OPPS/ASC Final Rule With Comment Period
    In the past, we released new and revised HCPCS codes that are 
effective October 1 through the October OPPS quarterly update CRs and 
incorporated these new codes in the final rule with comment period.
    For CY 2022, consistent with our established policy, we proposed 
that the Level II HCPCS codes that will be effective October 1, 2021, 
would be flagged with comment indicator ``NI'' in Addendum B to this 
final rule with comment period to indicate that we have assigned the 
codes an interim OPPS payment status for CY 2022. We did not receive 
any public comments regarding this proposed process; and, for CY 2022, 
we are finalizing our proposal, without modification, to continue our 
established process for recognizing and soliciting public comments on 
new Level II HCPCS codes that become effective on October 1, 2021. We 
note all codes flagged with comment indicator ``NI'' in ASC Addenda.
    AA and BB to this final rule with comment period, including the 
codes effective October 1, 2021, will be assigned an interim payment 
status to indicate that they are subject to public comment.
    In the October 2021 ASC quarterly update (Transmittal 11004, Change 
Request 12451, dated September 17, 2021), we added several separately 
payable Level II HCPCS codes to the list of covered surgical procedures 
and ancillary services. We note that because many of the new drug HCPCS 
J codes effective October 1 have predecessor HCPCS C-codes, they are 
not completely new to the ASC payment system, and have been paid 
separately under their predecessor codes. Table 56 shows the interim 
ASC payment indicators for the new codes effective October 1, 2021, 
with no predecessor codes. The final comment indicators, payment 
indicators, and payment rates, where applicable, for these October 2021 
codes can be found in Addendum AA and Addendum BB to this CY 2022 OPPS/
ASC final rule with comment period rule (which is available via the 
internet on the CMS website). Because these codes were effective 
October 1, 2021, we were not able to include them in the CY 2022 OPPS/
ASC proposed rule that appeared in the Federal Register on August 4, 
2021. We note that the definitions for the ASC payment indicators can 
be found in Addendum DD1 to this final rule with comment period. In 
addition, the definitions for the ASC comment indicators can be found 
in Addendum DD2 to this final rule with comment period. We are inviting 
public comments in this final rule with comment period for the codes 
listed in Table 56 on the interim payment indicators, which would then 
be finalized in the CY 2023 OPPS/ASC final rule with comment period.
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[[Page 63768]]

5. January 2022 HCPCS Codes
a. Level II HCPCS Codes for Which We Are Soliciting Public Comments in 
This 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 the CY 2022 OPPS/ASC 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, however, the codes are flagged with comment indicator 
``NI'' in ASC Addenda AA and BB to this final rule with comment period 
to indicate that we are assigning them an interim payment status, which 
is subject to public comment. Therefore, as we stated in the CY 2022 
OPPS/ASC proposed rule, these Level II HCPCS codes that will be 
effective January 1, 2022 will be released to the public through the 
January 2022 ASC Update CR and included on the CMS HCPCS website and in 
this final rule with comment period.
    In addition, for CY 2022, we proposed 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 are inviting public comments in this 
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 Solicited Public Comments in the CY 2022 
OPPS/ASC Proposed Rule
    For new and revised CPT codes effective January 1, 2022, that were 
received in time to be included in the CY 2022 OPPS/ASC proposed rule, 
we proposed the appropriate payment indicator assignments, and 
solicited public comments on those assignments. We stated we would 
accept comments and finalize the payment indicators in this final rule 
with comment period. For those new/revised CPT codes that were received 
too late for inclusion of the CY 2022 OPPS/ASC proposed rule, we stated 
that we may either make interim final assignments in this 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 final rule with comment period 
(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 included the 
5-digit placeholder codes and their long descriptors for the new and 
revised CY 2022 CPT codes in Addendum O to the CY 2022 OPPS/ASC 
proposed rule (which is available via the internet on the CMS website) 
so that the public could adequately comment on our proposed payment 
indicator assignments. The 5-digit placeholder codes were in Addendum O 
to the CY 2022 OPPS/ASC proposed rule, specifically under the column 
labeled ``CY 2021 OPPS/ASC Proposed Rule 5-Digit Placeholder Code.'' 
The final CPT code numbers are included in this final rule with comment 
period, and can be found in Addendum AA, Addendum BB, and Addendum O.
    In summary, we solicited 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 listed 
them again in Addendum O with the long descriptors. We also proposed to 
finalize the payment indicator for these codes (with their final CPT 
code numbers) in this final rule with comment period. The final payment 
indicator and comment indicator for these codes can be found in 
Addendum AA and BB to this final rule with comment period. The list of 
ASC payment indicators and corresponding definitions can be found in 
Addendum DD1 to this final rule with comment period. These new CPT 
codes that will be effective January 1, 2022, were assigned to comment 
indicator ``NP'' in Addendum AA and BB to the CY 2022 OPPS/ASC proposed 
rule to indicate that the codes were assigned to an interim payment 
indicator and that comments would 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 of this 
final rule with comment period. We note that ASC Addenda AA, BB, DD1, 
and DD2 are available via the internet on the CMS website.
    Finally, in Table 57 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. 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 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 ASC standard ratesetting methodology based on its OPPS relative 
payment weight or at the MPFS nonfacility PE RVU-based amount.
    Consistent with our final policy to annually review and update the 
ASC CPL to include all covered surgical procedures eligible for payment 
in ASCs, each year we identify covered surgical procedures as either 
temporarily office-based (these are new procedure codes with little or 
no utilization data that we have determined are clinically similar to 
other procedures that are permanently office-based), permanently 
office-based, or nonoffice-based, after taking into account updated 
volume and utilization data.
    Comment: A number of commenters requested that we modify our 
approach to incorporate PFS nonfacility PE RVUs in response to our 
proposal to update clinical labor pricing data in the CY 2022 PFS 
proposed rule. These commenters contended that our proposal to update 
clinical labor pricing data would cause significant declines in ASC 
payment for certain office-based services. The commenters recommended 
we delay or transition the proposed changes in nonfacility PE RVUs 
under the ASC payment system.
    Response: We are not accepting this recommendation. While we 
acknowledge that certain proposals under the PFS may have a downstream 
impact on ASC payment rates for office-based procedures, our office-
based policy is meant to achieve payment parity between the ASC and 
physician office settings. Therefore, we believe ASC payment rates for 
office-based procedures should be consistent with the PFS payment rates 
where nonfacility PE RVU data is available. Additionally,

[[Page 63770]]

under the PFS, we are finalizing a policy to update clinical labor 
pricing over a four-year transition. For more information on the 
proposed clinical labor pricing update under the PFS, see 86 FR 39118 
through 39123.
(2) Changes for CY 2022 to Covered Surgical Procedures Designated as 
Office-Based
    In developing the 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. of this final rule with comment period), 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 X.E of the CY 2022 OPPS/ASC proposed 
rule (86 FR 42188 through 42190), given our concerns with CY 2020 
claims data as a result of the PHE, we did not propose to review the 
most recent claims volume and utilization data from CY 2020 claims and 
instead we proposed 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 also proposed 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''. Instead, we proposed to continue to designate these procedures, 
shown in Table 58 below, as temporarily office-based for CY 2022. CPT 
code 0551T (Transperineal periurethral balloon continence device; 
adjustment of balloon(s) fluid volume) is removed from Table 58 below 
as this code is being deleted effective January 1, 2022. The procedures 
we proposed to designate as temporarily office-based for CY 2022 are 
identified with an asterisk in Addendum AA to this final rule with 
comment period (which is available via the internet on the CMS 
website).
BILLING CODE 4120-01-P

[[Page 63771]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.141

BILLING CODE 4120-01-C
    As discussed in the August 2, 2007 ASC final rule 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 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 proposed 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 59 would be predominantly performed in physicians' offices. We 
believe the procedure described by CPT code 42975

[[Page 63772]]

(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 53454 
(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 proposed to add 
CPT codes 42975 (CMS placeholder code 42XXX) and 53454 (CMS placeholder 
code 53XX4) in Table 59 to the list of ASC covered surgical procedures 
designated as temporarily office-based for CY 2022.
[GRAPHIC] [TIFF OMITTED] TR16NO21.142

    Comment: One commenter recommended that we not assign office-based 
payment indicator ``P3'' to CPT code 64640 (Destruction by neurolytic 
agent; other peripheral nerve or branch) and suggested this procedure 
is not predominantly performed in the office setting.
    Response: CPT code 64640 has been assigned permanent office-based 
status since CY 2008. With the exceptions of procedures assigned 
temporary office-based status and calendar years for which office-based 
procedures meet the criteria to be assigned device-intensive status, 
office-based procedures are not eligible to remove their office-based 
designation. As discussed previously, these are permanent assignments. 
While we acknowledge that certain office-based procedures can become 
more predominantly performed in higher cost settings, such as a 
hospital outpatient department, we do not believe this suggests that 
our office-based payment policy is hindering access to care for these 
procedures in an ASC setting.
    Comment: One commenter recommended we reevaluate the permanent 
office-based designation for CPT code 42975. The commenter suggested 
that this procedure is more similar to CPT code 31546 (Laryngoscopy, 
direct, operative, with operating microscope or telescope, with 
submucosal removal of non-neoplastic lesion(s) of vocal cord; 
reconstruction with graft(s) (includes obtaining autograft))--a 
procedure that is not predominantly performed in a physician office 
setting.
    Response: We are not accepting this recommendation. As discussed 
previously, we believe the procedure described by CPT code 42975 is 
similar to CPT code 31505 (Laryngoscopy, indirect; diagnostic (separate 
procedure)), which is predominantly performed in the physician office 
setting and 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.
    After reviewing the public comments we received, we are finalizing 
our proposal, without modification, to designate the procedures shown 
in Tables 58 and 59 above as temporarily office-based. The procedures 
for which the office-based designation for CY 2022 is temporary are 
indicated by an asterisk in Addendum AA to this final rule with

[[Page 63773]]

comment period (which is available via the internet on the CMS 
website).
b. 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. 
Corresponding to this change in the cost criterion we adopted a policy 
that the default device offset for new codes that describe procedures 
that involve the implantation of medical devices will be 31 percent 
beginning in CY 2019. For new codes describing procedures that are 
payable when furnished in an ASC and involve the implantation of a 
medical device, we adopted a policy that the default device offset 
would be applied in the same manner as the policy we adopted in section 
IV.B.2. of the CY 2019 OPPS/ASC final rule with comment period (83 FR 
58944 through 58948). We amended Sec.  416.171(b)(2) of the regulations 
to reflect these new device criteria.
    In addition, as also adopted in section IV.B.2. of CY 2019 OPPS/ASC 
final rule with comment period, to further align the device-intensive 
policy with the criteria used for device pass-through status, we 
specified, for CY 2019 and subsequent years, that for purposes of 
satisfying the device-intensive criteria, a device-intensive procedure 
must involve a device that:
     Has received FDA marketing authorization, has received an 
FDA investigational device exemption (IDE) and has been classified as a 
Category B device by FDA in accordance with 42 CFR 405.203 through 
405.207 and 405.211 through 405.215, or meets another appropriate FDA 
exemption from premarket review;
     Is an integral part of the service furnished;
     Is used for one patient only;
     Comes in contact with human tissue;
     Is surgically implanted or inserted (either permanently or 
temporarily); and
     Is not 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 proposed to update the ASC 
CPL to indicate procedures that are eligible for payment according to 
our device-intensive procedure payment methodology, based on the 
proposed individual HCPCS code device-offset percentages using the CY 
2019 OPPS claims and cost report data available for the CY 2022 OPPS/
ASC proposed rule.
    The ASC covered surgical procedures that we proposed to designate 
as device-intensive, and therefore subject to the device-intensive 
procedure payment methodology for CY 2022, are assigned payment 
indicator ``J8'' and are included in ASC Addendum AA to the CY 2022 
OPPS/ASC proposed rule (which is available via the internet on the CMS 
website). The CPT code, the CPT code short descriptor, 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 ASC standard ratesetting methodology to the 
OPPS national unadjusted payment based on the ASC 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

[[Page 63774]]

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 proposed 
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, given 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 proposed 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 solicited comments on our proposed changes related to 
designating surgical procedures as device-intensive under the ASC 
payment system.
    Comment: Many commenters supported our proposed changes related to 
designating surgical procedures as device-intensive under the ASC 
payment system. One commenter requested that we allow for the 
continuation of the default device offset percentage of 31 percent for 
procedures with fewer than 100 claims if the device offset percentage 
under the comprehensive and standard ratesetting methodology is less 
than 30 percent.
    Response: We thank the commenters for their support of our 
proposal. We do not believe it would be appropriate to eliminate our 
device offset calculation for procedures with fewer than 100 claims 
because it is not our general policy to judge the accuracy of hospital 
charging and hospital cost reporting practices for purposes of 
ratesetting. Therefore, we will continue to rely on available claims 
data for determining device offset percentages for procedures with 
fewer than 100 claims.
    Comment: Many commenters requested that we apply the device offset 
percentage for several new procedures with the predecessor code's 
device offset percentage based on CY 2019 claims data. These procedures 
include:
     The predecessor CPT code 0191T in assigning the device 
offset percentage for CPT code 66989 (Extracapsular cataract removal 
with insertion of intraocular lens prosthesis (1-stage procedure), 
manual or mechanical technique (e.g., irrigation and aspiration or 
phacoemulsification), complex, requiring devices or techniques not 
generally used in routine cataract surgery (e.g., iris expansion 
device, suture support for intraocular lens, or primary posterior 
capsulorrhexis) or performed on patients in the amblyogenic 
developmental stage; with insertion of intraocular (e.g., trabecular 
meshwork, supraciliary, suprachoroidal) anterior segment aqueous 
drainage device, without extraocular reservoir, internal approach, one 
or more);
     The predecessor CPT code 0191T in assigning the device 
offset percentage for CPT code 66991 (Extracapsular cataract removal 
with insertion of intraocular lens prosthesis (1 stage procedure), 
manual or mechanical technique (e.g., irrigation and aspiration or 
phacoemulsification); with insertion of intraocular (e.g., trabecular 
meshwork, supraciliary, suprachoroidal) anterior segment aqueous 
drainage device, without extraocular reservoir, internal approach, one 
or more);
     The predecessor CPT code 0191T in assigning the device 
offset percentage for CPT code 0671T (Insertion of anterior segment 
aqueous drainage device into the trabecular meshwork, without external 
reservoir, and without concomitant cataract removal, one or more);
     The predecessor CPT code 0548T in assigning the device 
offset percentage for CPT code 53451 (Periurethral transperineal 
adjustable balloon continence device; bilateral insertion, including 
cystourethroscopy and imaging guidance);
     The predecessor CPT code 0549T in assigning the device 
offset percentage for CPT code 53452 (Periurethral transperineal 
adjustable balloon continence device; unilateral insertion, including 
cystourethroscopy and imaging guidance); and
     The predecessor HCPCS code C9752 in assigning the device 
offset percentage for CPT code 64628 (Thermal destruction of 
intraosseous basivertebral nerve, including all imaging guidance; first 
2 vertebral bodies, lumbar or sacral).
    Additionally, at the August 18, 2021 HOP Panel Meeting, a presenter 
requested that we use the predecessor CPT code 64568 (Incision for 
implantation of cranial nerve (e.g., vagus nerve) neurostimulator 
electrode array and pulse generator) in assigning the device offset 
percentage for CPT code 64582 (Open implantation of hypoglossal nerve 
neurostimulator array, pulse generator, and distal respiratory sensor 
electrode or electrode array). Based on the information presented at 
the meeting, the HOP Panel recommended we use CPT code 64568 to assign 
the device offset percentage for CPT code 64582.
    Response: We agree with the commenters and the HOP Panel's 
recommendation. We note that we inadvertently did not apply device 
offset percentages to the new HCPCS codes mentioned by commenters and 
recommended by the HOP Panel where claims data of a predecessor code 
was available. Therefore, we are revising the device offset percentages 
for these procedures for this final rule to use CY 2019 claims data 
from these procedures' predecessor codes.
    Comment: One commenter requested that we assign HCPCS code C9778 
(Colpopexy, vaginal; minimally invasive extra-peritoneal approach 
(sacrospinous)) device-intensive status as this procedure meets our 
device-intensive criteria.
    Response: After further review, we agree with the commenter that 
HCPCS code C9778 meets our criteria for device-intensive status. We are 
accepting the commenter's recommendation and assigning a default device 
offset percentage of 31 percent to HCPCS code C9778 under the ASC 
payment system for CY 2022.
    Comment: Commenters requested that we assign device-intensive 
status to:
     CPT code 0499T (Cystourethroscopy, with mechanical 
dilation and urethral therapeutic drug delivery for urethral stricture 
or stenosis, including fluoroscopy, when performed);
     CPT code 58674 (Laparoscopy, surgical, ablation of uterine 
fibroid(s) including intraoperative ultrasound guidance and monitoring, 
radiofrequency);

[[Page 63775]]

     CPT code 50590 (Lithotripsy, extracorporeal shock wave);
     CPT code 59200 (Insertion of cervical dilator (e.g., 
laminaria, prostaglandin) (separate procedure));
     CPT code 66174 (Transluminal dilation of aqueous outflow 
canal; without retention of device or stent);
     CPT code 66175 (Transluminal dilation of aqueous outflow 
canal; with retention of device or stent);
     CPT code 93571 (Intravascular doppler velocity and/or 
pressure derived coronary flow reserve measurement (coronary vessel or 
graft) during coronary angiography including pharmacologically induced 
stress; initial vessel (list separately in addition to code for primary 
procedure); and
     HCPCS code 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).
    Response: Based on CY 2019 claims data available for this final 
rule, the procedures requested by commenters do not have device offset 
percentages that exceed the 30-percent threshold required for device-
intensive status under the OPPS or ASC payment system and, therefore, 
are not eligible to be assigned device-intensive status.
    Comment: Some commenters recommended that the 30 percent device-
intensive threshold be based on the final ASC payment rate and not OPPS 
costs. Additionally, one commenter requested that we lower the device-
intensive threshold to 25 percent.
    Response: We do not believe device offset percentages should be 
determined by dividing the OPPS-derived device offset portion by the 
final ASC payment rate as this would, in effect, be substantially 
reducing the device-intensive threshold under the ASC payment system. 
As we stated in the CY 2021 OPPS/ASC final rule with comment period (85 
FR 86015), lowering the device-intensive threshold assigns a greater 
amount of device costs, which are held constant between the OPPS and 
ASC payment system, into the prospective year. Lowering the device-
intensive threshold, even to 25 percent, would put additional downward 
pressure on the ASC weight scalar and reduce the nondevice portion of 
ASC payment rates for surgical procedures. Therefore, for these reasons 
we are not accepting these recommendations.
    Comment: One commenter suggested that we modify the device-
intensive criteria to allow packaged procedures that trigger a 
complexity adjustment under OPPS to be eligible for device-intensive 
status under the ASC payment system.
    Response: We do not believe any changes are warranted to our 
packaging policies under the ASC payment system at this time. 
Therefore, we are not accepting this comment but may consider it in 
future rulemaking.
    Comment: One commenter recommended we publish an Addendum to our 
proposed and final rules that displays the device offset percentages 
for both device-intensive and nondevice-intensive procedures under the 
ASC payment system similar to Addendum P for the OPPS.
    Response: We are accepting this recommendation. We are creating an 
Addendum FF for this final rule with comment period and subsequent 
proposed and final rules that will display the device offset 
percentages calculated under the standard ASC ratesetting methodology 
for covered surgical procedures.
    After review of the public comments we received, we are finalizing 
our proposed methodology, without modification, to designate surgical 
procedures as device-intensive under the ASC payment system. 
Specifically, for CY 2022 and subsequent years, we are finalizing our 
proposal to designate procedures 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. Additionally, for CY 
2022 and subsequent years, we are finalizing our proposal 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.
    Additionally, after reviewing the public comments we received, we 
are designating the ASC covered surgical procedures displayed in 
Addendum AA with payment indicator ``J8'' as device-intensive and 
subject to the device-intensive procedure payment methodology for CY 
2022. The full listing of the final CY 2022 device offset percentages 
under the ASC payment system for covered surgical procedures can be 
found in Addendum FF to the CY 2022 OPPS/ASC final rule with comment 
period (which is available via the internet on the CMS website).
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 amount of 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

[[Page 63776]]

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 proposed 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 did not receive any comments on our policies related to no/cost 
full credit or partial credit devices, and we are continuing our 
existing policies for CY 2022 and subsequent years.
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 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 with comment period, 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

[[Page 63777]]

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 Sec.  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 Sec.  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 could 
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 258 of the 267 
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 typical Medicare beneficiary. After 
evaluating the 267 surgery or surgery-like codes 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, including that nearly all would likely 
require active medical monitoring and care at midnight following the 
procedure. In the CY 2021 OPPS/ASC final rule with comment period, 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

[[Page 63778]]

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 the CY 2022 OPPS/ASC proposed rule, 
we proposed 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 proposed 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 proposed 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 proposed to again provide in paragraph (b) of Sec.  416.166 that, 
subject to the exclusions we proposed 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 proposed to revise paragraph (c) to again 
include the five criteria currently included in paragraph (d) of the 
regulation as safety factors physicians consider. We proposed 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 
proposed 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 stated that 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 proposed to reinstate would have 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.
    Comment: Commenters were largely split on the issue of reinstating 
the general standards and exclusion criteria at Sec.  416.166 that were 
in place prior to CY 2021. Many commenters opposed this proposal and 
recommended that CMS not re-adopt these criteria. These commenters 
expressed concern at the complete reversal to reinstate the 
longstanding criteria. Commenters contended that this proposal may 
substitute administrative criteria for physician clinical judgment, 
reduce beneficiary choice, and increase costs since the lack of payment 
for the ASC setting would push these procedures into the higher-cost 
hospital setting.
    However, numerous other commenters supported our proposal to 
reinstate the general standards and exclusion criteria at Sec.  416.166 
that were in place prior to CY 2021 due to patient safety and quality 
of care concerns. Several commenters urged caution in how CMS modifies 
criteria and adds procedures to the ASC CPL, as they believe there is 
not enough information about which procedures are clinically 
appropriate for the ASC setting. One commenter noted that the general 
standards and exclusion criteria that were in effect in CY 2020 allowed 
the ASC CPL to evolve and expand with surgical advancements, while 
ensuring that procedures that continue to pose significant patient 
safety risks would only be payable when furnished in the hospital 
setting.
    Several commenters, including providers and professional medical 
societies, expressed their belief that physicians are best equipped to 
conduct the clinical evaluation of the safety of procedures and decide 
whether to perform them on a particular beneficiary in a particular 
setting.
    Response: We thank commenters for their feedback and suggestions. 
After reviewing the public comments provided, we believe that 
reinstating the longstanding general standards and exclusion criteria 
that were in place prior to CY 2021 is the most appropriate way to 
ensure that procedures that cannot be safely performed on an ambulatory 
basis for the typical Medicare beneficiary are not added to the ASC CPL 
and payable under the ASC payment system. The general standards and 
exclusion criteria identify procedures that typically require overnight 
stays or require post-operative active medical monitoring and care at 
midnight following the procedure. When used in conjunction with 
information from public comments, data from inpatient, outpatient, and

[[Page 63779]]

ambulatory sites of service, and medical review, we believe these 
criteria enable us to make an accurate assessment of whether a 
procedure can be safely performed in an ASC on the typical Medicare 
beneficiary. As a result, we are finalizing our proposal to revise the 
regulatory language at Sec.  416.166 and reinstate the general 
standards and exclusion criteria in place prior to CY 2021. We will 
take the additional recommendations suggested by commenters into 
consideration for future rulemaking.
(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 proposed 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. 
These procedures were listed in Table 45 of CY 2022 OPPS/ASC proposed 
rule (86 FR 42210). Based on our internal review of preliminary claims 
submitted to Medicare, we stated in the proposed rule that we do not 
believe that ASCs have been furnishing the majority of the 267 
procedures finalized in 2021. Because of this, we explained that we 
believed it is unlikely that ASCs have made practice changes in 
reliance on the policy we adopted in CY 2021. Therefore, we stated that 
we do not anticipate that ASCs would be significantly affected by the 
removal of these 258 procedures from the ASC CPL. We sought 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 requested 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.
    Comment: Numerous commenters did not support our proposal to remove 
258 surgical procedures from the ASC CPL beginning in CY 2022 that had 
been added to the ASC CPL in CY 2021, but that we proposed would not 
meet the reinstated general standards and exclusion criteria. These 
commenters, including several ambulatory surgical center associations, 
providers, and professional associations, supported retaining all 258 
procedures on the ASC CPL and requested that CMS reconsider this 
proposal. Commenters stated that these procedures are being safely and 
effectively performed on Medicare beneficiaries in the ASC setting with 
high levels of patient satisfaction, improved efficiency, and lower 
cost to both the insurer and the patient. Many noted that CMS's 
decision to add and then remove hundreds of procedures from the ASC CPL 
was jarring, as well as lacking in transparency and support from data 
to justify the decision. Several commenters also noted that access to 
additional surgical procedures in ASCs during the PHE may be an 
important and viable option for beneficiaries.
    However, many other commenters supported our proposal to remove 258 
surgical procedures from the ASC CPL, including hospital associations, 
professional associations, and device manufacturers. These commenters 
believed that our proposal, if finalized, would lead to improved 
patient outcomes and safety with fewer complex procedures being done in 
the ASC setting. Commenters noted that they believe procedures that 
would pose a high risk of complications that ASCs are not equipped to 
handle should remain off the ASC CPL until there is careful 
consideration of the potential safety risks for beneficiaries and the 
procedures are determined appropriate to be performed in the ASC 
setting.
    Numerous commenters suggested specific codes or code ranges that 
they believed should be added to or remain on the ASC CPL. We received 
140 surgical procedure recommendations in total, listed in Table 61 
below. The majority of these recommendations were not accompanied by 
any supporting literature or evidence, with some providing only 
experiential data and simply stating support for CMS paying for the 
surgical procedures when they are furnished in the ASC setting.
    Response: We thank commenters for their input. We assessed the 
commenters' recommendations to keep 140 surgical procedures on the ASC 
CPL. The recommendations included 123 codes that were part of the 258 
codes proposed for removal, 14 codes that were not on the ASC CPL due 
to being on the Inpatient Only list or not being surgery-like codes, 
and 3 codes that have been on the ASC CPL and that we did not propose 
to remove in CY 2022. We individually assessed each of these 140 
procedures, evaluating clinical data on these procedures from multiple 
sites of services, using literature and experiential data provided in 
public comments, and ASC claims volume from CY 2021 to determine 
whether these procedures meet each of the proposed regulatory criteria.
    Based on our review of the clinical characteristics of the 
procedures, claims volume in the ASC setting for CY 2021, and their 
similarity to other procedures that are currently on the ASC CPL, we 
believe that six procedures (CPT codes 0499T, 54650, 60512, 69660, 
28005, and 27412) out of the 140 procedure recommendations we received 
can be safely performed for the typical beneficiary in the ASC setting 
and meet the general standards and exclusion criteria for the ASC CPL 
that we are reinstating. These codes have few to no inpatient 
admissions and are largely performed in outpatient settings. We agree 
with commenters who stated that advancements in clinical practice, less 
invasive techniques, and patient selection have contributed to allowing 
these procedures to be safely performed in an ASC setting. Therefore, 
in this final rule with comment period, we are finalizing keeping each 
of these six procedures on the ASC CPL. These procedures, listed in 
Table 60 below, are:
     CPT 0499T (Cystourethroscopy, with mechanical dilation and 
urethral therapeutic drug delivery for urethral stricture or stenosis, 
including fluoroscopy, when performed);
     CPT 54650 (Orchiopexy, abdominal approach, for intra-
abdominal testis (e.g., fowler-stephens));
     CPT 60512 (Parathyroid autotransplantation (list 
separately in addition to code for primary procedure));
     CPT 69660 (Stapedectomy or stapedotomy with 
reestablishment of ossicular continuity, with or without use of foreign 
material);
     CPT 28005 (Incision, bone cortex (e.g., osteomyelitis or 
bone abscess), foot), and
     CPT 27412 (Autologous chondrocyte implantation, knee).
    Of these six procedures, two of the codes (CPT 69660 and CPT 28005) 
were already on the ASC CPL prior to CY 2020. One of the codes (CPT 
27412) was added in CY 2020, and was determined to meet the general 
standards and exclusion criteria and was not proposed for removal this 
year. Three codes (CPT 0499T, CPT 54650, CPT 60512) were added to the 
ASC CPL under the revised criteria in CY 2021 and proposed for removal 
this year.
    Due to patient safety concerns, for the remaining procedures that 
we proposed to remove from the ASC CPL but that commenters recommended 
that we retain on the list, we believe that 255 of 258 codes proposed 
for removal this year should be removed from the ASC CPL and that the 
14 procedures not currently on the ASC CPL not be added because they 
are on the IPO list or are not surgery-like. In the CY 2022 OPPS/ASC 
proposed rule, we assessed all 258

[[Page 63780]]

codes against the revised criteria and proposed to remove them based 
upon our determination that they did not meet the criteria we proposed 
to reinstate. Therefore, for this final rule with comment period, we 
solely re-reviewed the 140 codes that commenters specifically 
recommended for review, 123 of which were among the 258 codes proposed 
for removal from the ASC CPL beginning in CY 2022, one code of which 
was added in CY 2021 that was not proposed for removal, and 16 of which 
are new codes, in order to consider the additional information received 
from public comments to determine whether these codes should remain on 
or be added to the ASC CPL. We explain below for each anatomical 
category of the 135 recommended procedures our rationale for not 
including them on the ASC CPL beginning in CY 2022.
     35 genitourinary codes, including laparoscopic 
ureterolithotomy, nephrectomy, and renal ablation, penis and urethra 
revision procedures, vaginal repair and removal procedures, and 
hysterectomy procedures. Many of these procedures have associated 
inpatient admissions, where the beneficiary requires active medical 
monitoring and care at midnight following the procedure. Additionally, 
a number of these procedures would pose a significant safety risk to 
beneficiaries without post-operative inpatient care.
     31 musculoskeletal codes, including total shoulder 
arthroplasty procedures, incision of hip tendons, amputation through 
metatarsal, reconstruction of mandibular rami procedures, open 
treatment of orbital floor blowout fracture procedures, knee 
arthroscopy meniscal transplantation, and lumbar spine fusion 
procedures. Although a few of these procedures have some claims volume 
in the outpatient setting, many of them are also complex procedures 
with inpatient admissions and multiple post-operative inpatient days, 
where infections and need for intravenous antibiotics are not uncommon 
events, indicating that the beneficiary would require active monitoring 
and care past midnight following the procedure.
     24 cardiovascular codes, including procedures like blood 
vessel lesion repair, implantable defibrillator electrode removal, 
infected graft excision, arm artery repair, insertion and removal of 
intravascular vena cava filter, or wireless cardiac stimulator 
insertion. These procedures are largely performed in inpatient settings 
and require multiple post-operative inpatient days, indicating that the 
beneficiary would require active monitoring and care past midnight 
following the procedure. These procedures also involve major blood 
vessels, are emergent or life threatening in nature, and require 
systemic thrombolytic therapy in some cases.
     10 respiratory codes, including nasal or sinus 
endoscopies, laryngoplasties, and windpipe incision. While several of 
these codes have some outpatient volume, these procedures are largely 
performed in an inpatient setting. Many of these procedures have 
associated inpatient admissions and multiple post-operative days, 
indicating the beneficiary would require active monitoring and care 
past midnight following the procedure. Additionally, some of these 
procedures could be emergent or life-threatening in nature.
     12 gastrointestinal codes, including paraesophageal hernia 
repairs, laparoscopic esophagogastric fundoplasty, appendectomy, 
laparoscopic gastric restrictive procedures, and laparoscopic revision 
or removal of gastric neurostimulator electrodes. While some of these 
procedures have outpatient volume, many have inpatient admissions and 
potential procedure risks (e.g. perforation), indicating that the 
beneficiary would require active monitoring and care past midnight 
following the procedure. Additionally, these procedures can involve 
prolonged invasion of body cavities, and be life-threatening or 
emergent in nature. Additionally, several of these procedures are less 
commonly done in Medicare patients and more frequently performed in a 
younger population.
     13 nervous system codes, including neck spine disk 
surgery, laminectomy and laminotomy procedures, spinal cord 
decompression, spinal lamina removal, spinal disk surgery, and spinal 
canal catheter implant. These codes have associated inpatient 
admissions and post-operative days, indicating that the beneficiary 
would require active monitoring and care past midnight following the 
procedure. Many of these procedures also pose a significant safety risk 
to the beneficiary when close post-operative neurosurgical surveillance 
is not frequently provided.
     4 endocrine codes including thyroidectomy and 
parathyroidectomy procedures. While these procedures have outpatient 
volume, there are inpatient admissions associated with these 
procedures, indicating the beneficiary would be expected to stay past 
midnight following the procedure. Additionally, the intraservice time 
for these procedures can vary greatly, often becoming a prolonged 
invasion of body cavities.
     2 chest and lymphatic codes, including biopsy or excision 
of lymph nodes and mediastinoscopy with lymph node biopsy. There are 
inpatient admissions associated with these procedures, indicating the 
beneficiary would be expected to stay past midnight following the 
procedure.
     1 ear code, decompression of the internal auditory canal. 
This procedure is largely performed in the inpatient setting and has 
associated ICU admissions, indicating the beneficiary would be expected 
to stay past midnight following the procedure. Additionally, patients 
often require frequent neurosurgical checks in the post-operative 
period.
     1 mastectomy code, modified radical mastectomy. There are 
inpatient admissions associated with this procedure, indicating the 
beneficiary would be expected to stay past midnight following the 
procedure. Additionally, performing this procedure in an ASC can pose 
safety risks to the typical beneficiary.
     2 imaging/study codes, including esophagus motility study 
and liver elastography. These codes are not surgical or surgery-like 
procedures and would not be covered when furnished in an ASC.
    Given these considerations, we believe that these 135 codes do not 
meet the proposed criteria to be included on the ASC CPL due to 
inpatient admissions, multiple-day stays past midnight, safety risks to 
the typical beneficiary without active post-operative monitoring, 
involvement of major blood vessels, or prolonged invasion of a body 
cavity. We also note that there is insufficient volume data to fully 
assess concerns about patient safety risks when these procedures are 
performed in the ASC, with fewer than 25 procedures proposed for 
removal from ASC CPL having more than 10 claims in the ASC setting 
during CY 2021.
    However, as medical practice continues to evolve, we recognize that 
there will be additional advancements and improvements that allow these 
procedures to be safely offered in the ASC setting for the typical 
Medicare beneficiary. We believe that there is potential for some of 
the procedures removed this year to be added back to the ASC CPL if 
there is adequate evidence that these procedures meet our criteria and 
can be safely performed on the typical Medicare beneficiary in the ASC 
setting. We encourage stakeholders to continue to submit this 
information in future rulemaking.
    In summary, we added 267 procedures to the ASC CPL in the CY

[[Page 63781]]

2021 OPPS/ASC final rule with comment period, based on the revised 
criteria for the ASC CPL. In the CY 2022 OPPS/ASC proposed rule, we 
proposed to remove 258 of the 267 procedures, based on our proposed 
reinstatement of the CY 2020 criteria. We requested comment on whether 
we should keep any of these procedures on the ASC CPL. During the 
public comment period, commenters recommended that 140 surgical 
procedures either remain on or be added to the ASC CPL, including 3 
codes that have been on the ASC CPL that we did not propose to remove 
in CY 2022, 123 codes that were among the 258 we proposed for removal 
from ASC CPL, and 14 codes that were not on the ASC CPL due to being on 
the IPO list or not surgery-like.
    Therefore, in this CY 2022 OPPS/ASC final rule with comment period, 
after reviewing those 140 procedure recommendations, we are finalizing 
retaining six codes that commenters recommended we retain on the ASC 
CPL, specifically the 3 codes that have been on the ASC CPL that we did 
not proposed to remove in CY 2022, as well as 3 codes of the 258 codes 
proposed for removal. Thus, we are removing the remaining 255 of 258 
codes proposed for removal. These procedures are listed below in Tables 
60, 61, and 62 of this CY 2022 OPPS/ASC final rule with comment period.
Nomination Process Proposal
    For CY 2022, we proposed to change the current notification process 
for adding surgical procedures to the ASC CPL to a nomination process. 
We proposed 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 proposed 
to include the nomination process in a new subparagraph (d)(1) of Sec.  
416.166. We proposed 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 
proposed to 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 
nominated procedures added to the ASC CPL effective January 1, 2023. We 
proposed that we would evaluate procedures nominated by stakeholders 
based on the applicable statutory and regulatory requirements for ASC 
covered surgical procedures. We proposed to address nominated 
procedures beginning in the CY 2023 rulemaking cycle. We proposed to 
address in rulemaking nominated procedures for which stakeholders have 
provided sufficient information for us to evaluate the procedure. We 
proposed 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. We proposed 
that, after reviewing comments provided during the public comment 
period, we would indicate whether or not we are adding the procedures 
to ASC CPL in this final rule with comment period. 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. We indicated that 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 also sought 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 sought 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. We stated that, if we 
were to finalize a prioritization hierarchy for CMS' 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' 
prioritization hierarchy.
    We stated that we believe 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 stated that 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 acknowledged that stakeholders will need time to 
consider and evaluate potential surgical procedures to nominate. We 
proposed to accept nominations for surgical procedures to be added to 
the ASC CPL beginning in CY 2023.
    Comment: The majority of commenters, which included device 
manufacturers, hospital associations, and ambulatory surgery 
associations, supported the proposal to establish a process for the 
public to nominate procedures for addition to the ASC CPL. Stakeholders 
believed this process would provide more transparency and engagement on 
procedures earlier in the process, formalize the review process, and 
allow for more gradual expansion of the ASC CPL. One commenter 
suggested CMS publish nominations publicly before the proposed rule 
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allow more opportunity for input, while another requested more 
information on the data needs related to the nomination process. Two 
commenters did not support the nomination process as they believe it 
would cause additional bureaucracy and delay the ASC CPL additions 
process.
    Commenters offered suggestions on different approaches for CMS to 
consider when approaching criteria including prioritizing procedures 
endorsed by physician specialty societies, ASC specialty societies, 
and/or multi-specialty physician organizations that can directly attest 
to the safety profile of procedures furnished in ASCs; consider real-
world evidence when evaluating a procedure for addition to the ASC CPL; 
consider evidence that commercial payers are paying for a service in 
the ASC setting for private and/or Medicare Advantage patients; 
consider procedures that have been successfully performed for Medicare 
FFS patients during the COVID-19 PHE under the ``Hospital without 
Walls'' initiative; convene a panel of medical experts to assess the 
ASC CPL criteria to ensure they reflect contemporary thinking and 
current medical practice; take into account current length of stay 
(LOS) requirements of a procedure; determine how procedures promote 
access for beneficiaries and providing deference to the patient-
clinician decision-making process; and develop a framework that 
combines aspects of cost savings based on site of service, patient 
safety considerations, and volume of procedures that can and have been 
performed in an ASC setting.
    Response: We thank the commenters for their input on the nomination 
process. We agree with commenters that a formalized process whereby the 
public notifies CMS of procedures to be added to the ASC CPL would 
provide more transparency and increase opportunities for CMS to engage 
with providers and external stakeholders in adding procedures to the 
ASC CPL. We intend to provide details on how procedures can be 
nominated early next year, in order for commenters to be able to send 
their nominations on March 1, 2022. After consideration of the public 
comments we received, we are finalizing our proposal to add a 
nomination process under our current regulations at Sec.  
416.166(d)(1), which describes how an external party may nominate a 
surgical procedure by March 1 of a calendar year for the ASC CPL for 
the following year. We are also finalizing the regulation text we 
proposed to add at Sec.  416.166(d)(2), which provides that if CMS 
identifies a surgical procedure that meets the requirements at Sec.  
416.166(a), including a surgical procedure nominated under paragraph 
(d)(1), it will propose to add the surgical procedure to the ASC CPL in 
the next available rulemaking.
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BILLING CODE 4120-01-C
2. Covered Ancillary Services
    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/ASC final rule with comment period. 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 was discussed in section XIII.F. of the 
CY 2022 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 2022.
    For CY 2022, as discussed in section II.A.3.b. of this final rule 
with comment period, we are finalizing our proposal 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 
final payment indicators for CY 2022 can be found in section XIII.B of 
this final rule with comment period. All ASC covered ancillary services 
and their final payment indicators for CY 2022 are also included in 
Addendum BB to the CY 2022 OPPS/ASC proposed rule (which is available 
via the internet on the CMS website).

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

1. ASC Payment for Covered Surgical Procedures
a. Background
    Our ASC payment policies for covered surgical procedures under the 
revised ASC payment system are described in the CY 2008 OPPS/ASC final 
rule with comment period (72 FR 66828 through 66831). Under our 
established policy, we use the ASC standard ratesetting methodology of 
multiplying the ASC relative payment weight for the procedure by the 
ASC conversion factor for that same year to calculate the national 
unadjusted payment rates for procedures with payment indicators ``G2'' 
and ``A2''. Payment indicator ``A2'' was developed to identify 
procedures that were included on the list of ASC covered surgical 
procedures in CY 2007 and, therefore, were subject to transitional 
payment prior to CY 2011. Although the 4-year transitional period has 
ended and payment indicator ``A2'' is no longer required to identify 
surgical procedures subject to transitional payment, we retained 
payment indicator ``A2'' because it is used to identify procedures that 
are exempted from the application of the office-based designation.
    The rate calculation established for device-intensive procedures 
(payment indicator ``J8'') is structured so only the service portion of 
the rate is subject to the ASC 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

[[Page 63806]]

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. Update to ASC Covered Surgical Procedure Payment Rates for CY 2022
    We proposed 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 the CY 2022 OPPS/ASC proposed rule. 
Because the proposed OPPS relative payment weights are generally based 
on geometric mean costs, we proposed that the ASC payment system would 
generally use the geometric mean cost to determine proposed relative 
payment weights under the ASC standard methodology. We proposed to 
continue to use the amount calculated under the ASC standard 
ratesetting methodology for procedures assigned payment indicators 
``A2'' and ``G2''.
    We proposed to calculate payment rates for office-based procedures 
(payment indicators ``P2'', ``P3'', and ``R2'') and device-intensive 
procedures (payment indicator ``J8'') according to our established 
policies and to use our proposed modified definition to identify 
device-intensive procedures, as discussed in section XII.C.1.b. of the 
CY 2022 OPPS/ASC proposed rule. Therefore, we proposed 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. We proposed that 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 proposed to 
continue our policy for device removal procedures, such that device 
removal procedures that are conditionally packaged in the OPPS (status 
indicators ``Q1'' and ``Q2'') would be assigned the current ASC payment 
indicators associated with those procedures and would continue to be 
paid separately under the ASC payment system.
    Comment: Several commenters recommended that Medicare allow ASCs to 
bill procedures with an unlisted code, particularly new technologies 
and innovative techniques in the ASC setting. They noted that many new 
procedures are performed in the ASC setting before procedure-specific 
CPT codes are established. These commenters also mentioned that codes 
include the narrowly defined anatomic region of the service, which 
could provide the basis for a safety determination, and noted there is 
not a clear safety rationale for the policy on unlisted codes in the 
ASC setting. Another commenter requested that MACs be able to price 
unlisted codes. Commenters requested that CMS eliminate the restriction 
on billing with unlisted codes in the ASC setting.
    Response: Under Sec.  416.166(c)(7), covered surgical procedures do 
not include procedures that can only be reported using a CPT unlisted 
surgical procedure code. As discussed in the August 2, 2007 ASC final 
rule (72 FR 42485), it is not possible to know what specific procedure 
would be represented by an unlisted code. Additionally, although the 
code may include the narrowly defined anatomic region of the service, 
this information is not sufficient to fully assess the procedure 
against the applicable regulatory criteria at Sec.  416.166. Therefore, 
as it is not possible to appropriately evaluate procedures reported by 
unlisted CPT codes, we are not accepting this recommendation.
    We are finalizing our proposed policies without modification to 
calculate the CY 2022 payment rates for ASC covered surgical procedures 
according to our established rate calculation methodologies under Sec.  
416.171 and using the modified definition of device-intensive 
procedures as discussed in section XIII.C.1.b. of this CY 2022 OPPS/ASC 
final rule with comment period. For covered office-based surgical 
procedures, the payment rate is the lower of the final CY 2022 MPFS 
nonfacility PE RVU-based amount or the final CY 2022 ASC payment amount 
calculated according to the ASC standard ratesetting methodology. The 
final payment indicators and rates set forth in this final rule with 
comment period are based on a comparison using the PFS PE RVUs and the 
conversion factor effective January 1, 2022. For a discussion of the 
PFS rates, we refer readers to the CY 2022 PFS final rule with comment 
period, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

[[Page 63807]]

c. Limit on ASC Payment Rates for Procedures Assigned to Low Volume 
APCs
    As stated in section XIII.D.1.b. of the 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 the 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 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.C of the CY 2022 OPPS/ASC proposed rule 
(86 FR 42181 through 42185), we proposed a low volume APC policy for CY 
2022 and subsequent calendar years. Under our proposal, we expanded the 
low volume adjustment policy that is applied to procedures assigned to 
New Technology APCs and applied such policy to clinical and 
brachytherapy APCs. Specifically, a clinical APC or brachytherapy APC 
with fewer than 100 claims per year would be designated as a low volume 
APC. For items and services assigned to APCs we proposed to designate 
as low volume APCs as well as procedures assigned to New Technology 
APCs with fewer than 100 claims, we proposed 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. 
The payment rate for a low volume APC or a low volume New Technology 
procedure 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 proposed to adopt a low volume APC policy, we 
also proposed to eliminate our low volume device-intensive procedure 
policy and address ratesetting for HCPCS code 0308T--the only code 
designated as a low volume device-intensive procedure--within our 
broader low volume APC proposal. Consequently, we proposed 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 sought 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.
    Comment: One commenter recommended that we not finalize our 
proposal to apply a limit to the ASC payment rate for services assigned 
to low volume APCs to the payment rate for the OPPS. The commenter 
argued that only comprehensive APCs would be affected by our proposal 
and that the comprehensive ratesetting methodology generally is able to 
utilize a greater number of claims than under the ASC standard 
ratesetting methodology. The commenter stated that such additional 
claims may include claims that are inaccurately coded for other 
services and thus produce less accurate payment rates.
    Response: We disagree. We do not believe ASCs incur greater costs 
than hospitals and that the ASC payment rate should be greater than the 
payment rate under the OPPS. We believe such situations represent a 
data anomaly and that the ASC payment rate should be limited to the 
OPPS payment rate for procedures assigned to low volume APCs.
    After reviewing the public comment we received, we are finalizing 
our proposal, without modification, 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.
d. 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. Detailed discussions on 
implementing this legislation are included in the CY 2022 PFS final 
rule and section X.B., ``Changes to Beneficiary Coinsurance for Certain 
Colorectal Cancer Screening Tests'' of this final rule with comment 
period.
    After considering public comments, we are finalizing the proposals 
made in the CY 2022 OPPS/ASC proposed rule to implement section 122 of 
the CAA without modification. Specifically, we are finalizing 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. Providers must continue to report HCPCS 
modifier ``PT'' to indicate that a planned colorectal cancer screening 
service converted to a diagnostic service. 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 or abuse of this policy.
2. Payment for Covered Ancillary Services
a. Background
    Our payment policies under the ASC payment system for covered 
ancillary services generally vary according to the particular type of 
service and its payment policy under the OPPS. Our overall policy 
provides separate ASC payment for certain ancillary items and services 
integrally related to the provision of ASC covered surgical procedures 
that are paid separately under the OPPS and provides packaged ASC 
payment for other ancillary items and services that are packaged or 
conditionally packaged (status indicators ``N'', ``Q1'', and ``Q2'') 
under the OPPS. In the CY 2013 OPPS/ASC rulemaking (77 FR 45169 and 77 
FR 68457 through 68458), we further clarified our policy regarding the 
payment indicator assignment 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 
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payment is packaged when it is provided with a significant procedure 
but is separately paid when the service appears on the claim without a 
significant procedure. Because ASC services always include a surgical 
procedure, HCPCS codes that are conditionally packaged under the OPPS 
are generally packaged (payment indictor ``N1'') under the ASC payment 
system (except for device removal procedures, as discussed in section 
IV. of the CY 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 ancillary items and services also to be paid, 
the ancillary items and services must be provided integral to the 
performance of ASC covered surgical procedures for which the ASC bills 
Medicare.
    Our ASC payment policies generally provide separate payment for 
drugs and biologicals that are separately paid under the OPPS at the 
OPPS rates and package payment for drugs and biologicals for which 
payment is packaged under the OPPS. However, as discussed in section 
XIII.D.3. of the CY 2022 OPPS/ASC proposed rule, for CY 2022, we 
proposed 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.
    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.
    Comment: One commenter recommended that we publish guidance on how 
MACs are to calculate transitional pass-through payments under the ASC 
payment system for devices that are eligible for pass-through payment 
under the OPPS similar to how such guidance is provided under the OPPS.
    Response: As previously discussed, devices that are eligible for 
pass-through payment under the OPPS are separately paid under the ASC 
payment system and are contractor-priced. Transitional pass-through 
payments under the OPPS utilize hospital cost-to-charge ratios to 
reduce the pass-through device to cost and provide the hospital an 
additional payment of the amount by which the cost of the pass-through 
device exceeds the applicable device offset amount. ASCs do not submit 
cost reports and, as such, we are unable to replicate the transitional 
pass-through payment under the ASC payment system. Currently, MACs have 
been instructed to pay for such devices in the ASC setting based on 
invoice or cost. We are unaware of a compelling reason, at this time, 
to provide additional guidance or clarification on this process, beyond 
that provided in Section 40, Chapter 14 of the Medicare Claims 
Processing Manual.
b. Final Payment for Covered Ancillary Services for CY 2022
    We are finalizing our proposal to update the ASC payment rates and 
to make changes to ASC payment

[[Page 63809]]

indicators, as necessary, to maintain consistency between the OPPS and 
ASC payment system regarding the packaged or separately payable status 
of services and the final CY 2022 OPPS and ASC payment rates and 
subsequent year's payment rates. We are also finalizing our proposal to 
continue to set the CY 2022 ASC payment rates and subsequent year's 
payment rates for brachytherapy sources and separately payable drugs 
and biologicals equal to the OPPS payment rates for CY 2022 and 
subsequent year's payment rates.
    Covered ancillary services and their final payment indicators for 
CY 2022 are listed in Addendum BB of this final rule with comment 
period (which is available via the internet on the CMS website). For 
those covered ancillary services where the payment rate is the lower of 
the rate under the ASC standard rate setting methodology and the PFS 
final rates (similar to our office-based payment policy), the final 
payment indicators and rates set forth in the final 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 
final 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 final CY 
2022 OPPS/ASC for payment for non-opioid pain management drugs and 
biologicals.

E. New Technology Intraocular Lenses (NTIOLs)

    New Technology Intraocular Lenses (NTIOLs) are intraocular lenses 
that replace a patient's natural lens that has been removed in cataract 
surgery and that also meet the requirements listed in 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 titled ``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 did not propose to revise the payment adjustment amount for CY 2022.
    The comments and our responses to the comments are set forth below.
    Comment: Some commenters requested that we re-evaluate our payment 
adjustment for a new NTIOL class. Commenters noted that our $50 payment 
adjustment has not been adjusted since CY 1999 and that the stagnant 
payment adjustment has been a barrier to intraocular lens innovation. 
One commenter requested that the $50 be inflated to 2022 dollars and 
updated by inflation in subsequent years. Another commenter requested 
that the $50 payment adjustment be increased to $100.
    Response: We thank the commenter for their recommendations. We did 
not propose revising the payment adjustment amount for CY 2022. 
However, we will take the commenters' recommendations into 
consideration in future rulemaking.
4. Announcement of CY 2022 Deadline for Submitting Requests for CMS 
Review of Applications for a New Class of NTIOLS
    In accordance with Sec.  416.185(a) of our regulations, CMS 
announces that in order to be considered for payment effective 
beginning in CY 2023, requests for review of applications for a new 
class of new technology IOLs must be received by 5:00 p.m. EST, on 
March 1, 2022. Send requests via email to [email protected] or 
by mail to ASC/NTIOL, Division of Outpatient Care, Mailstop C4-05-17, 
Centers for Medicare and Medicaid Services, 7500 Security Boulevard, 
Baltimore, MD 21244-1850. To be considered, requests for NTIOL reviews 
must include the information requested on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.

F. ASC Payment and Comment Indicators

1. Background
    In addition to the payment indicators that we introduced in the 
August 2, 2007 ASC 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

[[Page 63810]]

methodology; and their classification as separately payable ancillary 
services, including radiology services, brachytherapy sources, OPPS 
pass-through devices, corneal tissue acquisition services, drugs or 
biologicals, or NTIOLs.
    We also created Addendum DD2 that lists the ASC comment indicators. 
The ASC comment indicators included in Addenda AA and BB to the 
proposed rules and final rules with comment period serve to identify, 
for the revised ASC payment system, the status of a specific HCPCS code 
and its payment indicator with respect to the timeframe when comments 
will be accepted. The comment indicator ``NI'' is used in the OPPS/ASC 
final rule to indicate new codes for the next calendar year for which 
the interim payment indicator assigned is subject to comment. The 
comment indicator ``NI'' also is assigned to existing codes with 
substantial revisions to their descriptors such that we consider them 
to be describing new services, and the interim payment indicator 
assigned is subject to comment, as discussed in the CY 2010 OPPS/ASC 
final rule with comment period (74 FR 60622).
    The comment indicator ``NP'' is used in the OPPS/ASC proposed rule 
to indicate new codes for the next calendar year for which the proposed 
payment indicator assigned is subject to comment. The comment indicator 
``NP'' also is assigned to existing codes with substantial revisions to 
their descriptors, such that we consider them to be describing new 
services, and the proposed payment indicator assigned is subject to 
comment, as discussed in the CY 2016 OPPS/ASC final rule with comment 
period (80 FR 70497).
    The ``CH'' comment indicator is used in Addenda AA and BB to the 
proposed rule (these addenda 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 this 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 with comment period, 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 proposed new and revised Category I and III CPT codes 
as well as new and revised Level II HCPCS codes. Therefore, proposed 
Category I and III CPT codes that are new and revised for CY 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 the CY 2022 OPPS/ASC 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 
the CY 2022 OPPS/ASC 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 noted in the CY 2022 OPPS/ASC proposed rule that we would 
respond to public comments on ASC payment and comment indicators and 
finalize them in this CY 2022 OPPS/ASC final rule with comment period. 
We refer readers to Addenda DD1 and DD2 of the CY 2022 OPPS/ASC 
proposed rule (these addenda 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 final rule 
with comment period (these addenda are available via the internet on 
the CMS website) contain the complete list of ASC payment and comment 
indicators for CY 2022.
    We did not receive any public comments on the proposed ASC payment 
and comment indicators and we are finalizing their use as proposed 
without modification. Addenda DD1 and DD2 to this CY 2022 OPPS/ASC 
final rule (theses addenda are available via the internet on the CMS 
website) contain the complete list of ASC payment and comment 
indicators for CY 2022.

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

1. Background
    In the August 2, 2007 ASC 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 ASC final rule (72 FR 42521 through 
42531) and as applied to updated data available for the CY 2008 OPPS/
ASC final rule with comment

[[Page 63811]]

period. The application of that methodology to the data available for 
the CY 2008 OPPS/ASC final rule with comment period resulted in a 
budget neutrality adjustment of 0.65.
    For CY 2008, we adopted the OPPS relative payment weights as the 
ASC relative payment weights for most services and, consistent with the 
final policy, we calculated the CY 2008 ASC payment rates by 
multiplying the ASC relative payment weights by the final CY 2008 ASC 
conversion factor of $41.401. For covered office-based surgical 
procedures, covered ancillary radiology services (excluding covered 
ancillary radiology services involving certain nuclear medicine 
procedures or involving the use of contrast agents, as discussed in 
section XII.D.2. of the CY 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 ASC 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.
    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. In the CY 2022 OPPS/ASC proposed rule (86 FR 
42228 through 42229), we inadvertently failed to note that OMB Bulletin 
No. 20-01 had revised certain statistical area delineation; however, 
after reviewing OMB Bulletin No. 20-01, we have determined that the 
changes in Bulletin 20-01 encompassed delineation changes that had no 
effect on the ASC wage index for CY 2022. Specifically, the updates 
consisted of changes to NECTA delineations and the redesignation of a 
single rural county into a newly created Micropolitan Statistical Area. 
The ASC wage indexes do not utilize NECTA definitions, and we include 
hospitals located in Micropolitan Statistical Areas in each state's 
rural wage index. Therefore, we note that these OMB updates would not 
affect any geographic areas for purposes of the ASC wage index 
calculation for CY 2022.
    The final 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, 18-04, and 20-01). We note that, in certain 
instances, there might be urban or rural areas for which there is no 
IPPS hospital that has wage index data that could be used to set the 
wage index for that area.

[[Page 63812]]

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 are applying 
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.
    Comment: Several commenters recommended that we refrain from wage-
adjusting the device portion of device-intensive procedures by the wage 
index for that particular area and only wage-adjust non device portions 
of the ASC payment rate. The commenters contend that wage-adjusting 50 
percent of the ASC payment rate by the wage index for a particular area 
can reduce ASC payment rates below the cost of certain devices.
    Response: We appreciate the commenters recommendation. We did not 
propose such a change to our application of the ASC wage index but, as 
we stated in the CY 2019 OPPS/ASC final rule with comment period (83 FR 
59042), we will consider the feasibility of this change and take this 
comment into consideration for future rulemaking.
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 are 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 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 the CY 2022 OPPS/ASC 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 the CY 2022 OPPS/ASC proposed rule. Consistent 
with our established policy, we proposed 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 proposed 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 proposed 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. Based on 
updated data for this final rule with comment period, the final CY 2022 
ASC weight scalar is 0.8552. 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. While we would ordinarily use CY 2020 claims data to model 
the budget neutrality adjustment for the CY 2022 OPPS/ASC final rule, 
as discussed in Section X.E. of this final rule, we are finalizing our 
proposal to use, in general, CY 2019 claims data to model our budget 
neutrality adjustment. At the time of the CY 2022 OPPS/ASC proposed 
rule, we had 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

[[Page 63813]]

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 was 
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 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 was 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 proposed 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 proposed 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 the 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 proposed 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 proposed 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 proposed 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 
this final rule with comment period.
    For 2022, we proposed 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 proposed 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.
    The comments we received on our proposals for updating the CY 2022 
ASC conversion factor and our responses are set forth below.
    Comment: Commenters supported continued use of the hospital market 
basket for updating ASC payments on an annual basis and suggested that 
using the hospital market basket better aligns the OPPS and ASC payment 
system. One commenter requested that we permanently use the hospital 
market basket to update ASC payment rates rather than limiting such 
update factor through CY 2023.
    Response: We thank the commenters for their support of our 
proposal. We believe using the same update factor to calculate payments 
to ASC and hospital outpatient departments encourages the migration of 
services from the hospital setting to the ASC setting, and could 
potentially increase the presence of ASCs in health care markets or 
geographic areas where previously there were none or few. The migration 
of services from the higher cost hospital

[[Page 63814]]

outpatient setting to the ASC setting is likely to result in savings to 
beneficiaries and the Medicare program. This policy will also further 
our goal of giving both physicians and beneficiaries a greater choice 
in selecting the care setting that best suits their needs.
    As we discussed in the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 59075 through 59080), we finalized our policy to apply 
the hospital market basket update to ASC payment system rates for an 
interim period of 5 years (CY 2019 through CY 2023), during which we 
will assess whether there is a migration of the performance of 
procedures from the hospital setting to the ASC setting as a result of 
the use of a hospital market basket update, as well as whether there 
are any unintended consequences, such as less than expected migration 
of the performance of procedures from the hospital setting to the ASC 
setting. We intend to publish our assessment of service migration and 
other factors as a result of the hospital market basket update and any 
proposals related to our results in the CY 2023 OPPS/ASC proposed rule.
    After consideration of the public comments we received, consistent 
with our proposal that if more recent data are subsequently available 
(for example, a more recent estimate of the hospital market basket 
update and 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, we are incorporating more recent 
data to determine the final CY 2022 ASC update. Therefore, for this 
final rule with comment period, the hospital market basket update for 
CY 2022 is 2.7 percent, as published in the FY 2022 IPPS/LTCH PPS final 
rule (86 FR 42343), based on IGI's 2021 second quarter forecast with 
historical data through the first quarter of 2021. The productivity 
adjustment for this CY 2022 OPPS/ASC final rule with comment period is 
0.7 percentage point, as published in the FY 2022 IPPS/LTCH PPS final 
rule (84 FR 42343) based on IGI's 2021 second quarter forecast.
    For CY 2022, we are finalizing the hospital market basket update of 
2.7 percent minus the productivity adjustment of 0.7 percentage point, 
resulting in a productivity-adjusted hospital market basket update 
factor of 2.0 percent for ASCs meeting the quality reporting 
requirements. Therefore, we apply a 2.0 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 rates. We are finalizing the hospital market 
basket update of 2.7 percent reduced by 2.0 percentage points for ASCs 
that do not meet the quality reporting requirements and then subtract 
the 0.7 percentage point productivity adjustment. Therefore, we apply a 
0.0 percent productivity -adjusted hospital market basket update factor 
to the CY 2021 ASC conversion factor for ASCs not meeting the quality 
reporting requirements.
    For CY 2022, we are adjusting the CY 2021 ASC conversion factor 
($48.952) by a wage index budget neutrality factor of 0.9997 in 
addition to the productivity-adjusted hospital market basket update of 
2.0 percent, discussed above, which results in a final CY 2022 ASC 
conversion factor of $49.916 for ASCs meeting the quality reporting 
requirements. For ASCs not meeting the quality reporting requirements, 
we are adjusting the CY 2021 ASC conversion factor ($48.952) by the 
wage index budget neutrality factor of 0.9997 in addition to the 
quality reporting/productivity-adjusted hospital market basket update 
of 0.0 percent discussed above, which results in a final CY 2022 ASC 
conversion factor of $48.937.
3. Display of CY 2022 ASC Payment Rates
    Addenda AA and BB to this final rule with comment period (which are 
available on the CMS website) display the final 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 
final rates under the ASC standard ratesetting methodology and the MPFS 
final rates, the final payment indicators and rates set forth in this 
final rule with comment period 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 final rule that is 
available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    The final payment rates included in addenda AA and BB to this final 
rule with comment period 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 final 
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.
    Comment: One commenter recommended that we remove the ``Y'' 
indicator for CPT code 64582 and not apply the multiple procedure 
discount as the predecessor code, CPT code 64568, was not subject to 
the multiple procedure discounting policy.
    Response: We agree with the commenter that the predecessor code CPT 
code 64568 was not subject to multiple procedure discounting and that 
applying our discounting policy to this procedure would be 
inappropriate due to its high device costs. Therefore, we are removing 
the ``Y'' indicator for CPT code 64582 for CY 2022.
    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 2022. 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.
    In Addendum BB, the column titled ``Drug Pass-Through Expiration 
during Calendar Year'' flags, 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 ``Final CY 2022 Payment 
Weight'' are the final relative payment weights for each of the listed 
services for CY 2022. The final 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

[[Page 63815]]

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 final CY 2022 payment rate displayed in the ``Final 
CY 2022 Payment Rate'' column, each ASC payment weight in the ``Final 
CY 2022 Payment Weight'' column was multiplied by the final CY 2022 
conversion factor of $49.916. The conversion factor includes a budget 
neutrality adjustment for changes in the wage index values and the 
annual update factor as reduced by the productivity adjustment. The 
final CY 2022 ASC conversion factor uses the CY 2022 productivity-
adjusted hospital market basket update factor of 2.0 percent (which is 
equal to the projected hospital market basket update of 2.7 percent 
reduced by a projected productivity adjustment of 0.7 percentage 
point).
    In Addendum BB, there are no relative payment weights displayed in 
the ``Final CY 2022 Payment Weight'' column for items and services with 
predetermined national payment amounts, such as separately payable 
drugs and biologicals. The ``Final CY 2022 Payment'' column displays 
the final CY 2022 national unadjusted ASC payment rates for all items 
and services. The final 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.
    In response to public comments we received, we are finalizing an 
Addendum FF to this final rule with comment period as well as 
subsequent OPPS/ASC proposed and final rules. Addenda FF to this final 
rule with comment period displays the OPPS payment rate (based on the 
standard ratesetting methodology), the device offset percentage, and 
the device portion of the ASC payment rate for CY 2022 for covered 
surgical procedures.

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, in the CY 2022 OPPS/ASC proposed 
rule (86 FR 42234) we issued a request for information (RFI). The 
purpose of this RFI was 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 we had 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.\201\ 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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    \201\ 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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[[Page 63816]]

    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).\202\ 
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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    \202\ 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).\203\ The 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.\204\ 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).\205\
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    \203\ 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.
    \204\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
    \205\ 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.\206\ 
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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    \206\ 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.

[[Page 63817]]

B. Definition of Digital Quality Measures

    In the proposed rule, we sought 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 the RFI, we sought 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 discussed one potential approach to developing dQM software in 
section XIV.D.2. of the preamble of the CY 2022 OPPS/ASC proposed rule 
(86 FR 42235) and in this final rule with comment period. In that 
section, we sought comment on the potential definition of dQMs in this 
RFI.
    We also sought 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.\207\ These fully digital measures continue to be important 
drivers of interoperability advancement and learning. As discussed in 
the CY 2022 OPPS/ASC proposed rule and the next section of this final 
rule with comment period, 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. We 
intend 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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    \207\ eCQI Resource Center. Available at: https://ecqi.healthit.gov/.
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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 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

[[Page 63818]]

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. 
The 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 requested 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 we 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 
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 sought feedback on the goal of aligning data needed for quality 
measurement with interoperability requirements and the strengths and 
limitations of this approach. We also sought feedback on the importance 
of and approaches to supporting inclusion of PGHD and other currently 
non-standardized data. We also welcomed 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

[[Page 63819]]

well as diffusion of quality measurement and related quality 
improvement and clinical tools through, for example, the use of open-
source core architecture.
    We sought 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 were 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 \208\ 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.
---------------------------------------------------------------------------

    \208\ 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.
---------------------------------------------------------------------------

    We sought feedback on aggregation of data from multiple sources to 
inform measurement and potential policy considerations. We also sought 
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 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.\209\ 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.
---------------------------------------------------------------------------

    \209\ 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 sought 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 sought 
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 sought input on the future development of 
the following in the CY 2022 OPPS/ASC proposed rule (86 FR 42232):
     Definition of Digital Quality Measures. We sought feedback 
on the following as described in section XIV.2. of the CY 2022 OPPS/ASC 
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 welcomed more specific 
comments on the attributes or functions to support such an approach of 
deploying dQMs.
     Use of FHIR for Current eCQMs. We sought feedback on the 
following as described in section XIV.3. of the

[[Page 63820]]

preamble of the CY 2022 OPPS/ASC 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 sought feedback on the following as described in section 
XIV.4.a. of the preamble of the CY 2022 OPPS/ASC 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 sought feedback on the following as described in section 
XIV.4.b. of the preamble of the CY 2022 OPPS/ASC 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 sought feedback on the following as described in section 
XIV.4.c. of the preamble of the CY 2022 OPPS/ASC 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 sought feedback on the following as described in section 
XIV.4.d. of the preamble of the CY 2022 OPPS/ASC proposed rule:

--What are initial priority areas for the dQM portfolio given evolving 
interoperability requirements (for example, measurement areas, measure 
requirements, tools)?
--We also sought 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.

    We requested commenters to consider provisions in the CMS 
Interoperability and Patient Access final rule (85 FR 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 this final rule with 
comment period, 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.
    We received comments on these topics:
    Comment: There was widespread support among commenters for digital 
quality measurement in general. Many commenters specifically expressed 
support for CMS' transition to digital quality measurement. Some 
commenters noted digital quality measurement holds promise to improve 
the quality measurement enterprise, and patient outcomes and 
experience; reduce administrative burden; and make meaningful data more 
readily available for quality improvement. Commenters encouraged CMS to 
set up incentives for those who participate in digital measurement to 
help prepare their facilities' technology for the change, as well as 
incentives for reporting their quality data. Commenters noted CMS must 
plan for and design digital quality measure requirements while 
considering the availability of data standards, data security, and 
technical infrastructure and capabilities.
    However, a few commenters did not fully support CMS' transition to 
digital measurement, for example, due to lack of readiness, technical 
capabilities, or specificity from CMS about the transition plan. The 
commenters expressed concerns with the readiness of ASCs and their 
informational technology capabilities. Another commenter strongly 
opposed CMS' access to a facility's EHR for measurement. The commenter 
noted technological challenges in the outpatient setting and 
administrative burdens as made evident and exacerbated by the COVID-19 
public health emergency.
    Regarding the timeline for the transition to digital quality 
measurement, while some commenters agreed the 2025 timeline is 
feasible, some questioned the feasibility of the full transition by 
2025. Commenters who were hesitant about the 2025 timeline noted the 
timeline is ambitious or aggressive. Some noted the timeline is 
ambitious due to the burden facilities have incurred through the COVID-
19 public health emergency. Others noted the timeline is impractical 
for ASCs since ASCs were not included in the provisions of the American 
Recovery and Reinvestment Act of 2009, which established provisions to 
encourage adoption of EHRs, and ASCs' current use of EHRs is limited. 
Some commenters suggested delaying the transition until after the 
COVID-19 Public Health Emergency (for example, 2 years after its end), 
while others suggested CMS revert back to the 2030 goal or delay 
transition until CMS can provide further guidance to stakeholders on 
their plans for the transition to digital measurement. Other commenters 
noted CMS' transition will need to account for real-world testing to 
ensure the availability of data, technical infrastructure, and 
alignment with other requirements such as ONC's CEHRT. The commenters 
noted CMS will need to plan for this, coordinate efforts, and encourage 
adoption by stakeholders particularly in underserved communities.
    Response: We appreciate all of the comments on this topic. We 
believe that this input is very valuable in the continuing development 
of our transition to digital quality measurement in CMS quality 
reporting and value-based purchasing programs by 2025. We will continue 
to take all comments into account as we develop future regulatory 
proposals or other guidance for our digital quality measurement 
efforts.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42232), we clarified a

[[Page 63821]]

potential future definition of dQMs as a software that processes 
digital data to produce a measure score or measure scores.
    Comment: Several commenters noted appreciation for CMS' 
clarifications of the potential dQM definition. While some commenters 
supported the broad definition of dQMs and the ability of dQMs to 
promote rapid-cycle feedback for quality reporting, some commenters 
found the definition to still be too broad. A few commenters 
appreciated the broad range of digital data sources included in the 
definition and noted the definition captures the evolving availability 
of digital data. A few commenters who also supported the broad 
definition noted dQMs should and could capture data from across the 
continuum of care.
    Some commenters who did not support the broad definition noted not 
all of the digital data sources in the definition have been adequately 
vetted or tested. The commenters noted not all of the digital data 
sources are currently ready to be used as reliable and valid sources 
for digital measurement (for example, data from wearable devices, 
patient-generated health data), although they hold promise for the 
future. Another commenter who also opposed CMS' transition to digital 
measurement did not support the use of emerging digital data sources, 
such as patient-generated health data, without specific details about 
CMS' plans to incorporate digital data sources in dQMs and ensuring the 
data would be understandable to beneficiaries.
    Several commenters sought additional information and clarification 
regarding the definition. Specifically, several stakeholders requested 
further clarification on the potential definition of dQMs, how CMS 
envisions the future of dQMs, and how the future use of dQMs would 
differ from the current state. Some stakeholders requested 
clarification about the use of the term ``software'' in the potential 
dQM definition and suggested refinements to the definition. For 
example, one commenter who noted software development does not align 
with the current specification or structure of quality measures, 
suggested using alternative terms in the dQM definition such as 
``computer readable'' or ``computer executable.'' Some commenters 
suggested CMS better define goals and expectations for dQM use. Some 
commenters requested a specific roadmap of implementation for providers 
to better understand how to prepare for dQMs.
    Response: We appreciate all of the comments on and interest in this 
topic. We believe that this input is very valuable in the continuing 
development of our transition to digital quality measurement in CMS 
quality reporting and value-based purchasing programs by 2025. We will 
continue to take all comments into account as we develop future 
regulatory proposals or other guidance for our digital quality 
measurement efforts.
    As noted above, we requested input on the use of FHIR for eCQMs and 
actions in four areas to transition to dQMs by 2025 including:
    (1) Leveraging and advancing standards for digital data and 
obtaining all EHR data required for quality measures via provider FHIR-
based APIs.
    (2) Redesigning quality measures to be self-contained tools.
    (3) Building a pathway to data aggregation in support of quality 
measurement.
    (4) Potential future alignment of measures across reporting 
programs, Federal and state agencies, and the private sector.
    Comment: Some commenters agreed FHIR-based quality reporting would 
reduce burden on providers. Commenters acknowledged FHIR provides a 
standardized way of sharing information and agreed the use of FHIR 
would increase interoperability and harmonization of data standards 
across providers and care settings. However, some commenters noted not 
all EHR or health IT vendors have adopted FHIR. Commenters encouraged 
CMS to evaluate the adoption of FHIR standard as well as understand the 
potential burden and costs associated with its adoption before 
requiring its use for digital measurement. Some commenters also 
requested CMS provide guidance to measure developers, vendors, and 
other stakeholders on the transition to FHIR-based eCQMs (for example, 
which version of FHIR to implement and which implementation guides will 
be used) and ensure sufficient testing prior to widespread adoption. 
One commenter agreed with incentivizing the use of FHIR but not 
requiring it as to not place undue burden on hospital or other 
providers who are not yet ready to adopt FHIR. Another commenter who 
did not agree with using the FHIR standard cautioned relying on any 
single approach or standard (for example, FHIR) until successful model 
elements can be identified.
    Some commenters agreed with the goal of aligning data needed for 
quality measurement with interoperability requirements, and those data 
necessary for clinical care. For example, one commenter suggested using 
data elements in quality measures that conform to the data elements and 
classes in the United States Core Data for Interoperability (USCDI), 
where possible, to reduce measure complexity and improve data quality. 
A few commenters noted challenges with managing health information from 
unstructured data fields for digital measurement in the outpatient 
setting. The commenters noted some health information in the outpatient 
setting (for example, for anesthesia and imaging) is contained in 
unstructured data fields, and this would pose a challenge for FHIR-
based quality measurement. Some commenters also expressed concerns 
about inclusion of data from sources outside of the EHR in measurement 
due to privacy and validity concerns. Other commenters noted that 
broader data sources used in measurement will improve measurement but 
may need to be phased in.
    Regarding building a pathway to data aggregation, some commenters 
agreed that data aggregation will become easier with more aligned and 
interoperable data, and aggregation of data will strengthen measurement 
and provide a better understanding of population health. Other 
commenters requested more clarity on how third-party aggregators will 
be incorporated into the quality measurement ecosystem. A commenter 
also noted the need for a national strategy to improve patient 
identification and matching to facilitate more accurate data 
aggregation. One commenter identified the potential measure development 
and testing burden when combining data from multiple sources. 
Commenters also noted the need for increased data security as data 
sharing and aggregation is broadly implemented; one commenter 
recommended the Trusted Exchange Framework and Common Agreement (TEFCA) 
as a framework to support secure data sharing.
    Some commenters supported using provider FHIR-based APIs for 
quality measurement and agreed with obtaining all EHR data captured for 
quality measure via provider FHIR-based APIs as a stride towards 
interoperability. Some commenters also requested CMS provide 
expectations and clarifications to ensure privacy and data security 
(for example, security transfer guidelines and security procedures).
    However, some commenters expressed concerns about the use of FHIR-
based APIs such as the technical infrastructure and financial 
readiness, and providers' unfamiliarity with or varied uptake of FHIR. 
For example, as noted above, some commenters pointed out the limited 
use of EHRs by ASCs. They noted that the technological

[[Page 63822]]

hurdles created by FHIR may prove problematic for some ASCs. Because 
ASCs are not required to use EHRs, stakeholders voiced that many do not 
use EHRs or they use EHRs that are certified. The commenters encouraged 
any regulations of applications be backwards compatible so as to allow 
more ASCs to participate. Commenters also identified the need for 
significant support for small ASCs or ASCS in rural or underserved 
areas that do not have the resource to have dedicated health IT staff. 
For support, commenters requested CMS provide technical assistance, 
advanced notice of requirements, and adequate time for rollout. A few 
commenters encouraged CMS to rigorously test any programs they 
implement to ensure patient safety and security as well as checking 
that systems do not cause accidental bias.
    Some commenters agreed with redesigning quality measures as self-
contained tools and agreed with their functionalities necessary to 
achieve digital quality measurement. The recommended CMS work with 
stakeholders to identify how and when the functionalities of the self-
contained tools could be sequenced (for example, which could be 
achievable by 2025) and scaled. Further, commenters noted the tools 
should be tested and validated.
    Many commenters expressed support for alignment of measurement 
areas, specifications, data elements used to build the specifications, 
and tools across reporting programs and payers. Several commenters 
noted alignment will require input from stakeholders and leadership 
across federal agencies. Some commenters recommended CMS work with 
other federal agencies and stakeholders such as patients to understand 
their role as an active EHR end-user, the National Quality Forum (NQF), 
the health IT community, the Core Quality Measures Collaborative 
(CQMC), and others. Some commenters encouraged CMS to partner with ONC 
on data standards and interoperability requirements (for example, 
health IT certification requirements) to plan for validating dQMs and 
ensure alignment across agencies.
    Several commenters supported the development of a common dQM 
portfolio. Some commenters suggested initial priority areas for the 
common dQM portfolio. For example, some commenters noted the importance 
of standardizing social risk factor data collection and use of social 
risk factor data in measurement. Some commenters suggested CMS 
prioritize dQMs with clinical relevance, dQMs focusing on 
immunizations, and dQMs for anesthesia care as well as ensure dQMs 
would be available to cover all medical specialties and practitioners. 
Some commenters encouraged CMS to identify which existing measures 
could be used as dQMs while concurrently identifying future priority 
areas. Commenters also noted alignment could leverage data routinely 
captured during and across the continuum of clinical care, simplify 
quality reporting, and help address challenges associated with managing 
various standards and formats.
    Several commenters supported a phased approach to dQM 
implementation. Several commenters requested CMS allow adequate time 
for setting up capabilities for implementation, testing, and validation 
to ensure successful transition to and use of dQMs. Several commenters 
requested CMS provide a plan for transition to digital quality 
measurement and consider program incentives, flexibilities in 
reporting, and technical assistance for providers. One commenter 
suggested CMS incorporate this plan as part of their creation of the 
common dQM portfolio. Another commenter recommended CMS develop a 
staged long-term plan on digital measurement in conjunction with a 
long-term plan on equity. One commenter, however, expressed concern 
about the phased approach and noted alignment should be a priority 
alongside interoperability.
    Many commenters expressed they are committed to working with CMS in 
supporting the transition to digital quality measurement.
    Response: We appreciate all of the comments on this topic. We 
believe that this input is very valuable in the continuing development 
of our transition to digital quality measurement in CMS quality 
reporting and value-based purchasing programs by 2025. We will continue 
to take all comments into account as we develop future regulatory 
proposals or other guidance for our digital quality measurement 
efforts.

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 419.46. In the CY 2021 OPPS/ASC 
final rule (85 FR 86179), we finalized updates to 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

[[Page 63823]]

Program at 42 CFR[thinsp]419.46. We refer readers to section XV.E. of 
this final rule with comment period 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 did not propose any changes to these policies in the 
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 did not propose any changes to these policies in the 
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).\210\ We did not propose any changes to these policies 
in the proposed rule.
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    \210\ 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).\211\ We did not propose any changes to these policies in the 
proposed rule.
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    \211\ We initially referred to this process as ``retirement'' of 
a measure in the 2010 OPPS/ASC proposed rule, but later changed it 
to ``removal'' during final rulemaking.
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c. Measure 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 CY 2022 OPPS/ASC proposed rule (86 FR 42237), we proposed 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 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 as 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 as OP-3 (for the CY 2010 payment 
determination and subsequent years).
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42237), we proposed 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 the CY 2022 OPPS/ASC proposed rule (86 FR 
42237), we proposed 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 the CY 
2022 OPPS/ASC proposed rule (86 FR 42244) and section XV.B.4.c. of this 
final rule with comment period 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 an 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 (OP-40) 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 (OP-40) allows for the retrieval of data 
directly from the electronic health record (EHR) using patient-level 
data. As a result, in the proposed rule we stated our belief that the 
STEMI eCQM (OP-40) is a more broadly applicable measure and transitions 
the Hospital OQR Program toward the use of EHR data for quality 
measurement. We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 
42237) that removal of these measures was contingent on the 
finalization of the STEMI eCQM. We invited public comment on our 
proposals to remove these measures.
    The following is a summary of the comments we received on these 
proposals and our responses.
    Comment: Many commenters supported the proposal to remove the two 
chart-abstracted measures, Fibrinolytic Therapy Received Within

[[Page 63824]]

30 Minutes of ED Arrival (OP-2) and Median Time To Transfer to Another 
Facility for Acute Coronary Intervention (OP-3), and they were favor of 
adopting the ST-Segment Elevation Myocardial Infarction (STEMI) eCQM. 
These commenters also believed that the STEMI eCQM would reduce data 
collection burden and be more useful than OP-2 and OP-3.
    Response: We thank the commenters for their support of our proposal 
to remove OP-2 and OP-3. We agree that adopting the STEMI eCQM would 
reduce data collection burden and would be a more broadly applicable 
measure that transitions the Hospital OQR Program toward the use of EHR 
data for quality measurement.
    Comment: A few commenters supported removing OP-2 and OP-3 in favor 
of introducing the ST-Segment Elevation Myocardial Infarction (STEMI) 
eCQM, but expressed concerns about the transition to the STEMI eCQM. 
One commenter noted that the STEMI eCQM had not yet been endorsed by 
the NQF and recommended delaying the proposed removal of OP-2 and OP-3 
and the addition of the STEMI eCQM until 2024 to allow for completion 
of NQF review. Another commenter suggested that CMS delay removing OP-2 
and OP-3 so that hospitals have time to implement the new STEMI eCQM 
for an additional year.
    Response: We thank the commenters for their support and acknowledge 
their concerns. We note that, in regard to the endorsement status of 
the STEMI eCQM, the MAP voted to conditionally support the measure, 
pending NQF endorsement.\212\ CMS is in the process of seeking NQF 
endorsement for the STEMI eCQM. We refer the reader to section 
XV.B.4.c. of this final rule with comment period for additional 
information on the adoption of the STEMI eCQM, including our rationale 
for adopting the measure when it has not yet been endorsed by the NQF. 
In response to the suggestion that removing OP-2 and OP-3 should be 
delayed to allow additional time for transitioning to eCQM reporting, 
we believe that, as we proposed the reporting of this measure to be 
voluntary for the CY 2023, hospitals would have sufficient time to 
practice and operationalize reporting in order to transition from OP-2 
and OP-3 to the STEMI eCQM.
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    \212\ 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.
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    Comment: One commenter did not support removing OP-2 and OP-3 from 
the measure set and believed that it would increase burden for 
hospitals that are not equipped for electronic reporting, especially 
smaller and more rural facilities. The commenter stated that reporting 
requirements for eCQMs exceed those for chart-abstracted measures and 
that introducing an eCQM will require training or hiring new staff.
    Response: We thank the commenter for their input. While we 
acknowledge that removing two chart-abstracted measures and 
transitioning to an eCQM may pose certain short-term challenges for 
hospitals, we reiterate the value of transitioning to an eCQM. That is, 
we believe that this transition aligns with our overall efforts to 
reduce regulatory burden on hospitals, lower health care costs, and 
enhance patient care by streamlining the quality reporting and value-
based purchasing programs as stated in the Meaningful Measures 
Framework. We note, OP-2 and OP-3 measures are chart-abstracted 
measures, which generally places greater burden on the provider due to 
the labor and cost of manual abstraction. In contrast, the STEMI eCQM 
would allow for the retrieval of data directly from the electronic 
health record (EHR) using patient-level data, thus reducing provider 
burden.
    We believe adoption of this proposal would place limited burden on 
smaller and more rural facilities. Small hospitals and facilities that 
do not have the volume of data required for reporting of the eCQMs will 
be exempt from reporting of those measures based on the case threshold 
exemptions outlined in section XV.D.6.d.(3) of this final rule with 
comment period. Additionally, the Medicare and Medicaid EHR Incentive 
Programs, established by the Health Information Technology for Economic 
and Clinical Health Act of 2009 (HITECH), authorized HHS to provide 
financial incentives to hospitals and eligible professionals for the 
``meaningful use'' of certified EHR technology to improve patient 
care.\213\ These financial incentives assisted hospitals in 
transitioning to the use of EHR technology.\214\ Successful 
demonstration of meaningful use included, among other requirements, 
using certified EHR technology to meet specified thresholds for a 
number of objectives and measures and reporting clinical quality 
measures (CQMs). Given the exemption for facilities that do not meet 
case thresholds and past efforts to assist with the transition to EHR, 
we believe that the value added by streamlining the quality reporting 
and value-based purchasing programs justifies the burden these 
standards may place on facilities. We refer readers to section XXII.B. 
of this final rule with comment period for additional information on 
the burden calculations for removing OP-2 and OP-3 and adopting the 
STEMI eCQM.
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    \213\ Ibid.
    \214\ American Hospital Association. A Study of The Impact of 
Meaningful Use Clinical Quality Measures. Available at: https://www.aha.org/sites/default/files/hospitals-face-challenges-using-electronic-health-records-to-generate-clinical-quality-measures.pdf.
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    After consideration of the public comments we received, we are 
finalizing this provision as proposed.
4. Adoption of New Measures for the Hospital OQR Program Measure Set
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42238), we proposed 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 Cancer Screening Recall Rates measure, 
beginning with the CY 2022 reporting period; and (3) STEMI eCQM, 
beginning as a voluntary measure for the CY 2023 reporting period, and 
then as a mandatory measure beginning with the CY 2024 reporting 
period.
a. Adoption of 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).\215\ COVID-19 is a 
contagious respiratory infection \216\ 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

[[Page 63825]]

complications from COVID-19.217 218 As of July 2, 2021, the 
U.S. reported over 33 million cases of COVID-19 and over 600,000 COVID-
19 deaths.\219\ As of October 14, 2021, the U.S. reported over 44 
million cases and over 718,000 COVID-19 deaths.\220\ Hospitals and 
health systems saw significant surges of COVID-19 patients as community 
infection levels increased.\221\ Between December 2, 2020 and January 
30, 2021, more than 100,000 Americans with COVID-19 were hospitalized 
at the same time.\222\
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    \215\ 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.
    \216\ 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.
    \217\ 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.
    \218\ 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.
    \219\ 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.
    \220\ 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.
    \221\ 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.
    \222\ 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.\223\ 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.\224\ 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.\225\ 
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.\226\ Experts believe that COVID-19 spreads less commonly 
through contact with a contaminated surface \227\ and that in certain 
circumstances, infection can occur through airborne transmission.\228\ 
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.\229\ 
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.\230\ 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.\231\
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    \223\ 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.
    \224\ 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.
    \225\ Ibid.
    \226\ Ibid.
    \227\ Ibid.
    \228\ 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.
    \229\ 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.
    \230\ 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 
at: https://www.cdc.gov/coronavirus/2019-ncov/hcp/faq.html#Transmission.
    \231\ 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.\232\ 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.\233\ Subsequently, FDA issued EUAs 
for additional COVID-19 vaccines.234 235 Following the 
publication of the proposed rule, FDA granted full approval to 
Comirnaty, the Pfizer-BioNTech COVID-19 vaccine on August 23, 2021 for 
individuals 16 years of age and older.\236\
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    \232\ 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.
    \233\ 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.
    \234\ U.S. Food and Drug Administration. (2021). Moderna COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download.
    \235\ U.S. Food and Drug Administration. (2021). Janssen COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/146303/download.
    \236\ U.S. Food and Drug Administration. (2021). Comirnaty and 
Pfizer-BioNTech COVID-19 Vaccine. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/comirnaty-and-pfizer-biontech-covid-19-vaccine.
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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.\237\ On 
April 21, 2021, it was announced that this goal had been achieved.\238\ 
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.\239\ 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

[[Page 63826]]

settings and the need to preserve health care system capacity.\240\ 
Research suggests most states followed this recommendation,\241\ and 
HCP began receiving the vaccine in mid-December of 2020.\242\
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    \237\ 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/.
    \238\ 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/.
    \239\ Health and Human 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. Services, Department of 
Defense. (2020) From the Factory to the Frontlines: The Operation.
    \240\ 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.
    \241\ 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/.
    \242\ 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.\243\ 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.\244\ As of July 2, 2021, the CDC reported that over 328 
million doses of COVID-19 vaccine have been administered and 
approximately 155.9 million people were fully vaccinated.\245\ 
Subsequently, the CDC reported that as of October 14, 2021, over 405 
million doses of COVID-19 vaccine have been administered and 
approximately 188.3 million people had received full doses.\246\ 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.\247\ Finally, as part of the 
Biden Administration's efforts to vaccinate those who are still 
unvaccinated through increasing the number of Americans covered by 
vaccination requirements,\248\ on September 9, 2021, the Biden 
Administration announced that COVID-19 vaccination will be required of 
all staff within Medicare and Medicaid-certified facilities to protect 
both patients and HCP against COVID-19.\249\
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    \243\ Centers for Disease Control and Prevention. Healthcare 
Workers. (2017) Accessed February 18, 2021 at: https://www.cdc.gov/niosh/topics/healthcare/default.html.
    \244\ 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/.
    \245\ 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.
    \246\ This information has been updated from the proposed rule 
to reflect current data from the Centers for Disease Control and 
Prevention. (2021). COVID Data Tracker. COVID-19 Vaccinations in the 
United States. Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
    \247\ 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/.
    \248\ The White House. Path Out of the Pandemic: President 
Biden's COVID-19 Action Plan. Accessed on October 14, 2021. 
Available at: https://www.whitehouse.gov/covidplan/#vaccinate.
    \249\ CMS. Press Release: Biden-Harris Administration to Expand 
Vaccination Requirements for Health Care Settings. September 9, 
2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings. In order to implement this plan, CMS is working with 
the CDC to develop an Interim Final Rule with Comment Period that 
will extend emergency regulations to require vaccination among staff 
in a wide range of healthcare settings including dialysis 
facilities. This action will create a consistent standard across the 
country, while giving patients assurance of the vaccination status 
of those delivering care.
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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 proposed 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 
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 
\250\ with major reductions in SARS-CoV-2 infections among those 
receiving two dose COVID-19 vaccine despite a high community infection 
rate.\251\ Data from influenza vaccination demonstrates that provider 
vaccination is associated with that provider recommending vaccination 
to patients,\252\ 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.''
---------------------------------------------------------------------------

    \250\ 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.
    \251\ 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.
    \252\ 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.\253\
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    \253\ 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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[[Page 63827]]

    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-19.254 255 256 257 258 A complete vaccination course 
is defined under the specific manufacturer and may require multiple 
doses or regular revaccination.\259\ 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.\260\ The proposed specifications for the COVID-19 
vaccination coverage among HCP measure are available on the NQF website 
at: https://www.cdc.gov/nhsn/nqf/index.html.
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    \254\ 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.
    \255\ 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.
    \256\ Centers for Disease Control and Prevention. Measure 
Specification: NHSN COVID-19 Vaccination Coverage Updated August 
2021. Available at: https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf.
    \257\ National Health Safety Network. Healthcare Personnel 
COVID-19 Vaccination Cumulative Summary (CDC 57.219, Rev 5). Updated 
September 2021. Available at: https://www.cdc.gov/nhsn/forms/57.219-p.pdf.
    \258\ https://www.cdc.gov/coronavirus/2019-ncov/vaccines/
faq.html#:~:text=If%20you%20have%20received%20all,to%20be%20fully%20v
accinated.
    \259\ 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.
    \260\ 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.
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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,'' \261\ 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.\262\ 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.\263\
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    \261\ The National Quality Forum. (2021) Accessed March 14, 2021 
at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
    \262\ Measure Applications Partnership. MAP Preliminary 
Recommendations 2020-2021. Accessed on January 24, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \263\ 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.\264\ 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.\265\ Subsequently, the MAP Coordinating 
Committee met on January 25, 2021, and reviewed the COVID-19 HCP 
vaccination measure. In its 2020-2021 MAP Final Recommendations, the 
MAP offered conditional support for rulemaking contingent on CMS 
bringing the measure back to the MAP once the specifications were 
further refined. The MAP specifically stated, ``the incomplete 
specifications require immediate mitigation and further development 
should continue.'' \266\ 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.\267\ The spreadsheet of final recommendations 
no longer cited concerns regarding evidence, testing, or NQF 
endorsement.\268\ 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 was in process. These preliminary 
findings showed numerator data should be feasible to collect and 
reliable. Testing of the measure numerator (the number of HCP 
vaccinated) involved 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.\269\ 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

[[Page 63828]]

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.\270\
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    \264\ Ibid.
    \265\ Ibid.
    \266\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on February 23, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \267\ Ibid.
    \268\ Ibid.
    \269\ 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.
    \270\ 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 Hospital OQR 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, the Secretary shall develop 
measures that the Secretary determines to be appropriate for the 
measurement of the quality of care 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 COVID-19 HCP vaccination measure is not NQF-endorsed; however, 
the CDC submitted the measure for consideration in the NQF Fall 2021 
measure cycle.
    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 proposed that hospitals would be required to begin 
reporting data on the COVID-19 HCP vaccination measure (OP-38) 
beginning January 1, 2022, for the CY 2024 payment determination for 
the Hospital OQR Program. Thereafter, we proposed quarterly reporting 
periods. While we considered annual reporting periods for the Hospital 
OQR Program, we proposed quarterly reporting periods given the 
immediacy of the PHE and the importance of alignment across quality 
payment programs that have since finalized this measure.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42241), we stated that 
if our proposal to adopt this measure is finalized, hospitals would 
report the measure through the CDC's NHSN web-based surveillance 
system.\271\ 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 (OP-38) (78 FR 75096 through 75099), section 
XV.D.5.b.(1) of the CY 2022 OPPS/ASC proposed rule (86 FR 42259), and 
this final 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.
---------------------------------------------------------------------------

    \271\ 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.
---------------------------------------------------------------------------

    To report this measure, we proposed 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 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, 
the third week data would be used. If first, second, and fourth week 
data are submitted, fourth week data would be used. For each quarter, 
we proposed 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.\272\
---------------------------------------------------------------------------

    \272\ Ibid.
---------------------------------------------------------------------------

    We received comments on these topics.
    Comment: Many commenters supported our proposal to adopt the 
COVID19 Vaccination Coverage Among HCP Measure and expressed the 
importance of vaccination in the fight against COVID-19. Several 
commenters noted that their facilities have already implemented COVID-
19 vaccination requirements and that the measure bolsters their efforts 
to promote vaccination among HCP. Some commenters stated that, given 
the surge of the Delta variant, the implementation of this measure 
should not be delayed as widespread vaccination is critical to prevent 
the spread and further variants of COVID-19. Other commenters noted 
that the measure has already been approved in other Medicare quality 
reporting programs and its inclusion in outpatient programs is 
appropriate and consistent. Some commenters also stated that reporting 
the measure will ensure transparency and accountability in infection 
prevention and control for

[[Page 63829]]

vulnerable populations and communities. Still other commenters 
appreciated that the measure would make COVID-19 vaccination 
information available to the public to make informed health care 
decisions.
    Response: We thank commenters for their support of the measure and 
agree that the measure is critically important in the ongoing fight 
against COVID-19.
    Comment: Several commenters expressed concern that COVID-19 
vaccines are authorized under EUA and the measure should not be adopted 
until such time that a vaccine has received full FDA approval. One 
commenter stated that all three currently available vaccinations should 
be fully approved by FDA prior to adoption of this measure because the 
commenter believes that this will reduce vaccine hesitancy.
    Response: On August 23, 2021, subsequent to the publication of the 
CY 2022 OPPS/ASC proposed rule (86 FR 42240), FDA granted full approval 
to Comirnaty, formerly known as the Pfizer-BioNTech COVID-19 
vaccine.\273\ While we recognize that there are differences between EUA 
authorization and full FDA approval, we note that the process for each 
is scientifically rigorous. We refer readers to information related to 
FDA's process for evaluating an Emergency Use Authorization (EUA) 
request at https://www.fda.gov/vaccines-blood-biologics/vaccines/emergency-use-authorization-vaccines-explained.\274\ Each vaccine 
manufacturer that received EUA authorization enrolled tens of thousands 
of participants in randomized clinical trials, which is similar to what 
is required for full FDA approval.\275\ Manufacturers submit robust and 
rigorous data for both an EUA authorization and full FDA approval, and 
more than 380 million doses of COVID-19 vaccines have been 
administered.\276\ We believe all COVID-19 vaccines with either full 
approval or EUA authorization to be proven safe and effective. Thus, we 
believe it is appropriate to include the measure in the Hospital OQR 
Program.
---------------------------------------------------------------------------

    \273\ U.S. Food and Drug Administration. Comirnaty and Pfizer-
BioNTech COVID-19 Vaccine. August 30, 2021. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/comirnaty-and-pfizer-biontech-covid-19-vaccine.
    \274\ At https://www.fda.gov/vaccines-blood-biologics/vaccines/emergency-use-authorization-vaccines-explained.
    \275\ Harvard Law Petrie-Flom Center. ``What's the Difference 
Between Vaccine Approval (BLA) and Authorization (EUA)?'' June 15, 
2021. Available at: https://blog.petrieflom.law.harvard.edu/2021/06/15/whats-the-difference-between-vaccine-approval-bla-and-authorization-eua/.
    \276\ Centers for Disease Control and Prevention. (2021). CDC 
COVID Data Tracker: COVID-19 Vaccinations in the United States. 
Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
---------------------------------------------------------------------------

    We further note that the COVID-19 Vaccination Coverage Among HCP 
measure does not itself require HCP to receive the vaccination, nor 
does this measure reward or penalize HOPDs for the rate of HCP who have 
received a COVID-19 vaccine. The COVID-19 Vaccination Coverage Among 
HCP measure requires HOPDs to collect and report COVID-19 vaccination 
data that would support public health tracking and provide 
beneficiaries and their caregivers information to support informed 
decision making.
    Comment: Several commenters expressed concern that this measure 
should not be adopted until there is clarity around the impact of 
future booster recommendations. One commenter stated that the numerator 
requirement of a completed vaccination course may change over time and 
recommended that CMS establish a definition of completed vaccination 
course using the national guidelines as of the date the OPPS Final Rule 
is published each year. Some commenters noted that supply disruptions 
could have an impact on vaccination coverage among HCP. Some commenters 
observed that tracking whether HCP have received a complete vaccination 
course when there are individual differences regarding what is 
considered a complete vaccination course increases reporting burden. 
Another commenter questioned how COVID-19 vaccinations will be financed 
in the future, and whether HCP will be required to pay out of pocket 
for vaccines and boosters which could impact the numerator requirement 
for the measure and lead HCP to decline future required doses of the 
vaccine. Other commenters recommended that reporting for the measure 
should be optional or delayed until a completed vaccination course can 
be more clearly and specifically defined. Several commenters 
recommended that CMS issue guidance on how the measure addresses 
boosters after booster recommendations have been issued by FDA and the 
CDC.
    Response: The COVID-19 Vaccination Coverage Among HCP measure is a 
measure of a completed vaccination course (as defined in section 
XV.B.4.a.2. of the CY 2022 OPPS/ASC proposed rule (86 FR 42240)) and 
does not address booster shots. On August 12, 2021, FDA amended the 
emergency use authorizations (EUAs) for both the Pfizer-BioNTech COVID-
19 Vaccine and the Moderna COVID-19 Vaccine to allow for the use of an 
additional dose in certain immunocompromised individuals, specifically, 
solid organ transplant recipients or those who are diagnosed with 
conditions that are considered to have an equivalent level of 
immunocompromise.\277\ The Centers for Disease Control on September 27, 
2021 further recommended Pfizer-BioNTech boosters for individuals who 
completed their initial series at least six months ago and are 65 years 
of age or older; 18 years of age or older with underlying medical 
conditions; and 18 years of age or older living and working in high-
risk settings, which includes healthcare workers.\278\ We acknowledge 
commenter concerns that hospitals may be required to collect additional 
information from HCP on booster doses. However, we believe that the 
numerator is sufficiently broad to include future boosters as part of a 
``complete vaccination course''.
---------------------------------------------------------------------------

    \277\ U.S. Food and Drug Administration. Coronavirus (COVID-19) 
Update: FDA Authorizes Additional Vaccine Dose for Certain 
Immunocompromised Individuals. August 12, 2021. Available at: 
https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-additional-vaccine-dose-certain-immunocompromised.
    \278\ Ibid.
---------------------------------------------------------------------------

    Comment: A few commenters expressed concern about the burden of 
accurately capturing the number of eligible HCP in the facility for the 
measure specifications and believed that the total population intended 
to be captured in the denominator is unclear. Some of these commenters 
further noted that capturing data such as contraindications would 
further increase the burden. Commenters further requested CMS clarify 
the measure specifications of the denominator.
    One commenter discussed the challenge for systems or facilities 
with multiple locations that share the same CCN, facilities located on 
the same physical site that do not share the same CCN, or systems with 
many HCP that provide care in more than one setting during a calendar 
year including physicians who provide most of their services at an 
outpatient hospital or facility but also provide inpatient care for a 
few days per year. The commenter stated that in the example of a HCP 
who primarily practices at an outpatient hospital, but sometimes 
provides inpatient care, a review of charge-level details for each 
provider would be necessary to determine if the physicians provided 
services at the hospital during a specific reporting period, which 
would be burdensome. The commenter further discussed their system's 
policy to require vaccination of all HCP as a

[[Page 63830]]

condition of employment and noted that this alternative approach was 
more administratively feasible than the proposed measure 
specifications. To alleviate the challenge of collecting the 
denominator of eligible HCP working in the facility during the 
reporting period, the commenter requested CMS define ``eligible'' HCP 
and further recommended that CMS offer an attestation alternative for 
reporting by which an institution would receive 100 percent compliance 
for the measure if the institution attests that there is a COVID-19 
Vaccine Policy which requires that all current employees, students, 
residents, volunteers, and contractors be fully vaccinated on or before 
December 31, 2021, and furthermore requires that all new employees 
receive their first COVID-19 vaccination before starting work and the 
new employee must be fully vaccinated within 60 days of the hire date. 
If an institution does not have a policy that meets these criteria, the 
commenter suggested the institution would be required to report the 
numerator and denominator as specified in the proposed measure. One 
commenter requested clarification of whether reporting data for IQR 
meets the requirements to report for the OQR program.
    Response: We recognize commenters' concerns regarding reporting 
burden associated with the specifications of this measure specifically 
around the definition of HCP. We note that given the highly infectious 
nature of the COVID-19 virus, we believe it is important to encourage 
all personnel within the hospital, regardless of patient contact, role, 
or employment type, to receive the COVID-19 vaccination to prevent 
outbreaks within the hospital which may affect resource availability 
and have a negative impact on patient access to care.
    We also note that the measure specifications define ``eligible'' 
HCP as all persons receiving a direct paycheck from the reporting 
facility (that is, on the facility's payroll), regardless of clinical 
responsibility or patient contact, licensed independent practitioners, 
and adult students, trainees and volunteers.\279\ CDC's guidance for 
entering data requires submission of HCP count at the facility 
level,\280\ and the measure requires reporting consistent with that 
guidance. Hospitals should count HCP working in all inpatient or 
outpatient units that are physically attached to the inpatient site and 
share the same CCN, regardless of the size or type of unit.\281\ 
Hospitals should also count HCP working in inpatient and outpatient 
departments that are affiliated with the specific hospital (such as 
sharing medical privileges or patients), regardless of distance from 
the hospital and also share the same CCN.\282\ The decision to include 
or exclude HCP from the hospital's HCP vaccination counts should be 
based on whether individuals meet the specified NHSN criteria and are 
physically working in a location that is considered any part of the on-
site hospital that is being monitored.\283\
---------------------------------------------------------------------------

    \279\ Centers for Disease Control and Prevention. Measure 
Specification: NHSN COVID-19 Vaccination Coverage Updated August 
2021. Available at: COVID-19 Vaccination of Healthcare Personnel 
Measure Specifications (cdc.gov).
    \280\ COVID-19 Vaccination Non-LTC Healthcare Personnel TOI 
(cdc.gov).
    \281\ Centers for Disease Control and Prevention. Measure 
Specification: NHSN COVID-19 Vaccination Coverage. Available at: 
https://www.cdc.gov/nhsn/pdfs/nqf/covid-vaxhcpcoverage-508.pdf.
    \282\ Ibid.
    \283\ Centers for Disease Control and Prevention. CMS Reporting 
Requirements FAQs. Available at: https://www.cdc.gov/nhsn/PDFs/CMS/faq/FAQs-CMS-Reporting-Requirements.pdf.
---------------------------------------------------------------------------

    The CDC has provided a number of resources including a tool called 
the Data Tracking Worksheet for COVID-19 Vaccination among Healthcare 
Personnel to help hospitals log and track the number of HCP who are 
vaccinated for COVID-19. Hospitals would enter COVID-19 vaccination 
data for each HCP in the tracking worksheet, and select a reporting 
week, and the data to be entered into the NHSN will automatically be 
calculated on the Reporting Summary.\284\ Using the CDC Data Tracking 
Worksheet and Reporting Summary, hospitals would only be required to 
report information once to capture inpatient and outpatient HCP as long 
as the HCP included in the report work at facilities that share the 
same CCN. Therefore, hospitals would be required to submit once for 
both the Hospital IQR and Hospital OQR Programs so long as the HCP 
included in the report work at facilities that share the same CCN. If 
HCP work at multiple facilities that do not share the same CCN, those 
individuals must be counted under each facility's CCN where they work 
during the week of data collection.\285\
---------------------------------------------------------------------------

    \284\ Data Tracking Worksheet for COVID-19 Vaccination among 
Healthcare Personnel at https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html.
    \285\ Centers for Disease Control and Prevention. FAQs on 
Reporting COVID-19 Vaccination Data. August 2021. Available at: 
https://www.cdc.gov/nhsn/hps/weekly-covid-vac/faqs.html.
---------------------------------------------------------------------------

    Comment: A few commenters noted that, while vaccination plays an 
important role in ending the COVID-19 pandemic, the measure is not 
currently endorsed by the National Quality Forum and they believed it 
should not be adopted until it receives such an endorsement. One 
commenter observed that NQF endorsement improves credibility and 
affords patients certainty that the measure data is reliable. One 
commenter recommended that CMS clarify that the adoption of a measure 
prior to NQF endorsement is only due to the exigency of the current 
circumstances.
    Response: We believe that in the context of the current COVID-19 
PHE and continued monitoring and surveillance following the PHE, it is 
important to adopt this measure as quickly as possible to allow 
tracking and reporting of COVID-19 Vaccination Coverage Among HCP. This 
tracking would allow hospitals to identify the appropriateness and 
effectiveness of their initiatives to improve vaccination coverage and 
would provide patients and consumers with important information. We 
therefore believe it is appropriate to use our authority pursuant to 
section 1833(t)(17)(C)(i) of the Act to develop this measure. That 
provision permits the Secretary to develop measures that the Secretary 
determines to be appropriate for the measurement of the quality of care 
furnished by hospitals in outpatient settings and that reflect 
consensus among affected parties and, to the extent feasible and 
practicable, shall include measure set forth by one or more national 
consensus building entities. As described above, we believe that 
consensus among affected parties regarding a measure can be achieved 
through the measure development process, through broad acceptance, use 
of the measure(s), and through public comment.
    Here, we note our efforts to build consensus regarding this measure 
through our coordination with the CDC, the use of this measure across 
quality programs, and the pressing need to better track and report 
COVID-19 vaccination coverage among HCP. There is no National Quality 
Forum endorsed measure on the topic of COVID-19 vaccination coverage 
among healthcare personnel, let alone any such measure that is feasible 
or practical for CMS to implement. We also note that the CDC has 
submitted this measure for consideration in the NQF Fall 2021 measure 
cycle.
    Separately, we believe that the Secretary's selection of this 
measure is additionally supported by section 1833(t)(17)(C)(ii) of the 
Act, which permits the Secretary to select measures that are the same 
as (or a subset of) the measure for which data are required to

[[Page 63831]]

be submitted under the Hospital Inpatient Quality Reporting (IQR) 
Program. The Hospital IQR Program recently adopted the COVID-19 
Vaccination Coverage Among HCP measure (86 FR 45382).
    Comment: One commenter recommended that CMS monitor for unintended 
consequences associated with the COVID-19 Vaccination Coverage Among 
HCP measure due to its short development and adoption timeline.
    Response: We appreciate the commenter's suggestion. As previously 
stated, the COVID-19 vaccines have received rigorous scientific review 
and FDA has determined that the known and potential benefits outweigh 
the known and potential risks. Additionally, as the measure steward, 
the CDC continuously monitors reporting of COVID-19 vaccination data 
via the NHSN to improve infection control and help target facility-
level improvement efforts.\286\
---------------------------------------------------------------------------

    \286\ Ibid.
---------------------------------------------------------------------------

    We acknowledge the commenter's concern regarding the development 
timeline of COVID-19 vaccines. However, as stated previously, we 
believe all authorized COVID-19 vaccines to be proven safe and 
effective and believe it is appropriate to include the measure in the 
Hospital OQR Program.
    Comment: A few commenters supported the use of NHSN to report 
measure data and noted that reporting via NHSN is likely to reduce 
burden for hospitals.
    Response: We thank the commenters for their support.
    Comment: Several commenters cited Equal Employment Opportunity 
Commission (EEOC) guidelines, which state that employers must provide a 
reasonable accommodation if an employee's sincerely held religious 
belief, practice, or observance prevents them from receiving the 
vaccination. The commenters requested CMS and the CDC to revise the 
measure exclusions to align with EEOC guidance.
    Response: We recognize that there are reasons, including religious 
objections or concerns regarding an individual provider's specific 
health status, that may lead an individual HCP to decline vaccination. 
We emphasize that this measure does not mandate vaccines; it only 
requires reporting of vaccination rates for successful program 
participation. However, we believe that accurate vaccination rates of 
HCP are meaningful data for patients and beneficiaries to use when 
choosing a hospital. The CDC, the measure's steward, offers guidance to 
hospitals that may decide to report HCP who decline vaccination due to 
religious reasons.\287\ Those HCP, however, would be included in the 
measure denominator along with other HCP who have not received a 
completed vaccination course.\288\ We further note that the Equal 
Employment Opportunity Commission (EEOC) released updated and expanded 
technical assistance on May 28, 2021, stating that Federal equal 
employment opportunity (EEO) laws do not prevent an employer from 
requiring all employees physically entering the workplace to be 
vaccinated for COVID-19, so long as the employer complies with the 
reasonable accommodation provisions of the Americans with Disabilities 
Act (ADA) and Title VII of the Civil Rights Act of 1964 and other EEOC 
considerations.\289\ In summary, we do not believe that this measure 
conflicts with any EEOC guidance and believe that it is appropriate to 
require hospitals to report these data.
---------------------------------------------------------------------------

    \287\ Centers for Disease Control and Prevention. Reporting 
Weekly COVID-19 Vaccination Data for Healthcare Personnel Using the 
National Healthcare Safety Network (NHSN). September 2021. Available 
at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-reporting-508.pdf.
    \288\ Centers for Disease Control and Prevention. Reporting 
Weekly COVID-19 Vaccination Data for Healthcare Personnel Using the 
National Healthcare Safety Network (NHSN). September 2021. Available 
at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-reporting-508.pdf.
    \289\ U.S. Equal Employment Opportunity Commission. What You 
Should Know About COVID-19 and the ADA, the Rehabilitation Act, and 
Other EEO Laws. May 28, 2021. Available at: https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws.
---------------------------------------------------------------------------

    Comment: A few commenters stated that they do not believe the 
measure is appropriate for quality reporting programs at this time. One 
commenter stated that the COVID-19 Vaccination Coverage Among HCP 
measure is dissimilar to the Influenza Vaccination Coverage Among HCP 
(NQF #0431) measure and the discrepancy between time and resources 
required for reporting renders the proposed COVID-19 Vaccination 
Coverage Among HCP measure inappropriate for hospitals at this time. 
Another commenter stated that the COVID-19 pandemic is ongoing, and the 
evolving nature of the vaccination effort indicates the measure is not 
yet mature enough for inclusion in the program. Another commenter 
observed that it is inappropriate to base this measure on the influenza 
vaccination measure due to the lack of evidence that COVID vaccines and 
influenza vaccines are clinically similar.
    Response: We thank the commenters for their feedback. We 
acknowledge that while the CDC, the measure's steward, has sought to 
align this measure with the Influenza Vaccination Coverage Among HCP 
measure (NQF #0431), these are different public health initiatives, and 
different vaccines, and therefore the measure specifications are not in 
complete alignment. For example, influenza is seasonal while SARS-CoV-2 
has circulated continuously since the first cases were reported in the 
U.S. in January 2020.
    With regard to commenters stating that it is premature to adopt the 
measure, we believe that COVID-19 vaccines are a crucial tool for 
slowing the spread of disease and death among patients, hospital staff, 
and the general public. Based on FDA's review, evaluation of the data, 
and its decision to authorize three vaccines for emergency use and to 
provide full approval to one vaccine, these vaccines meet FDA's 
applicable standards for safety and effectiveness to prevent COVID-19, 
including hospitalization and death.\290\ The combination of 
vaccination, universal source control (that is, wearing masks), social 
distancing, and handwashing offers further protection from COVID-
19.\291\ Since the publication of the proposed rule, the emergence of 
coronavirus variants have resulted in 8.9 million new virus cases.\292\ 
Given the EUA and full approval decisions by FDA and the continued PHE, 
we do not believe that adoption of the measure is premature. We believe 
our proposal to adopt the COVID-19 Vaccination Coverage among HCP 
measure to the Hospital OQR Program is appropriate and necessary for 
patient safety and to better inform patient decision-making.
---------------------------------------------------------------------------

    \290\ U.S. Food and Drug Administration. COVID-19 Vaccines. 
(2021). Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-vaccines.
    \291\ Centers for Disease Control and Prevention. How to Protect 
Yourself & Others. August 13, 2021. Available at https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/prevention.html.
    \292\ Centers for Disease Control and Prevention. Trends in 
Number of COVID-19 Cases and Deaths in the US Reported to CDC. 
Accessed September 22, 2021. Available at: https://covid.cdc.gov/covid-data-tracker/#trends_totalcases.
---------------------------------------------------------------------------

    Comment: Some commenters stated that it is inappropriate to use 
payment policies to drive vaccination coverage among HCP. Some 
commenters expressed concern that this measure could lead facilities to 
mandate vaccines for staff, with potential unintended consequences 
(specifically, staff quitting or legal risk for facilities for staff 
experiencing adverse events).
    Response: We thank commenters for their feedback and. understand 
their

[[Page 63832]]

concerns. We emphasize that this measure does not require a hospitals 
to enforce staff vaccination in order for the hospital to successfully 
participate in the Hospital OQR Program; instead, the hospital must 
report the rate of its staff that have completed a complete vaccination 
course.
    We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42239) that a 
survey of HCP from April 2021 found that 66 percent of hospital HCP and 
64 percent of outpatient department HCP reported receiving at least one 
dose of the vaccine.\293\ Subsequent to the publication of the CY 2022 
OPPS/ASC proposed rule, research from August 2021 suggests that nearly 
73 percent of HCP across all health care facilities have received at 
least one dose of the vaccine.\294\ Based on the findings, we 
understand that HCP have been receiving the COVID-19 vaccine prior to 
the adoption of this measure and we do not believe that there is a 
negative relationship between vaccine uptake among HCP and vaccine 
requirements. We further emphasize the importance of HCP vaccination to 
reduce transmission of COVID-19 among hospital staff and patients, and 
we believe the measure is appropriate for inclusion in the Hospital OQR 
program.
---------------------------------------------------------------------------

    \293\ KFF/The Washington Post Frontline Health Care Workers 
Survey. (2021). Available at: https://www.kff.org/coronavirus-covid-19/pollfinding/kff-washington-post-health-care-workers/.
    \294\ Lazer, D. et al. The Covic States Project: A 50-State 
Covid-19 Survey Report #62: Covid-19 Vaccine Attitudes Among 
Healthcare Workers. Northeastern University, Harvard University, 
Rutgers University, and Northwestern University. August 16, 2021. 
Available at: http://news.northeastern.edu/uploads/COVID19%20CONSORTIUM%20REPORT%2062%20HCW%20August%202021.pdf.
---------------------------------------------------------------------------

    Comment: Many commenters expressed concern that the measure 
reporting requirements are duplicative of other state and federal 
COVID-19 vaccination reporting requirements and that inclusion of the 
measure in quality reporting programs is unnecessarily burdensome for 
hospitals. Some commenters questioned the purpose of the measure given 
the CMS announcement on September 9, 2021 that the agency will require 
COVID-19 vaccination of staff within all Medicare and Medicaid-
certified facilities.\295\ Other commenters noted that they are 
currently required to report COVID-19 vaccination information to HHS 
and requested that such reporting might be considered a substitute to 
reporting proposed for the measure. A few commenters recommended a 
change to attestation-based reporting to reduce resources and burden 
required for reporting based on the proposed measure specifications. 
One commenter observed that time spent on multiple reporting 
requirements would take away from time available for efforts to improve 
vaccination coverage. Another commenter requested an analysis of burden 
and feasibility of data collection prior to adoption of the measure.
---------------------------------------------------------------------------

    \295\ Centers for Medicare & Medicaid Services. Biden-Harris 
Administration to Expand Vaccination Requirements for Health Care 
Settings. September 9, 2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings.
---------------------------------------------------------------------------

    Response: We appreciate commenters' feedback. We note that most 
Immunization Information Systems do not include the information needed 
to determine if an immunized person is a resident of a nursing home, a 
dialysis patient, or a healthcare worker. Using the NHSN COVID-19 
Vaccination Modules allows tracking vaccination coverage among the 
residents, patients, or healthcare personnel in your facilities.\296\ 
We do recognize that this measure may lead to duplicative reporting if 
hospitals voluntarily report COVID-19 HCP vaccination information to 
other data reporting systems in addition to this measure requirement 
via the NHSN, and we are collaborating with other HHS agencies, 
including the CDC to minimize reporting burden to the extent feasible. 
We believe that the COVID-19 vaccination of HCP information submitted 
for this measure is important as it will be made publicly available for 
use by Medicare beneficiaries and others in making informed decisions 
regarding their care including facility choice.
---------------------------------------------------------------------------

    \296\ Centers for Disease Control and Prevention. FAQs on 
Reporting COVID-19 Vaccination Data. August 2021. Available at: 
https://www.cdc.gov/nhsn/hps/weekly-covid-vac/faqs.html.
---------------------------------------------------------------------------

    With regard to measure burden analysis, we refer the commenter to 
section XXII.B.3.a. of this final rule with comment period, where we 
discuss the burden associated with the measure. We thank the commenters 
for the suggestion that the measure be attestation-based and note that 
any changes to the measure specifications would be proposed through 
future rulemaking.
    Comment: A few commenters recommended that CMS reduce reporting 
frequency from quarterly to twice-yearly or annually to limit reporting 
burden. One characterized the reporting requirements to be weekly and 
recommended less frequent reporting requirements. Another commenter 
stated that the measure is duplicative with other requirements from the 
CDC and recommended that CMS not adopt the measure but instead collect 
the information directly from the CDC. Another commenter observed that 
there are not likely to be large changes in performance at quarterly 
intervals and recommended less frequent reporting.
    Response: As stated in the CY 2022 OPPS/ASC proposed rule (86 FR 
42270), 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 some facilities 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. We believe that reporting at a lower frequency may result in 
data that is less meaningful and timely to consumers who want to 
consider HCP vaccination rates as part of their health care decision-
making process. As stated previously, we are collaborating with other 
HHS agencies, including the CDC to minimize reporting duplication to 
the extent feasible.
    Comment: One commenter recommended development of a validation 
process for the COVID-19 Vaccination Coverage Among HCP measure.
    Response: We thank the commenter for the suggestion and note that, 
as stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42241), the 
measure has been tested and shown to be feasible and reliable.
    Comment: One commenter supported public reporting of this measure, 
and specifically noted support for early publication through the 
initial shortened reporting period.
    Response: We thank the commenter for its support.
    Comment: A few commenters did not support publicly reporting the 
measure data. One commenter stated that, all HCP should be vaccinated; 
however, reporting this information for payment purposes could create 
incentives for hospital employers to coerce and intimidate HCP who 
decline the vaccine. Some commenters recommended providing confidential 
feedback reports to hospitals instead of publicly reporting the data. 
One commenter recommended delaying public reporting until the 
underlying evidence is stable and hospitals have had opportunity to 
report data for several years.
    Response: We thank commenters for their feedback. We believe that 
HCP vaccination is important to prevent the spread of COVID-19 and 
encourage HCP to disclose their vaccination status to facilitate 
reporting of the measure. We

[[Page 63833]]

do not believe public reporting of vaccination data will incentivize 
coercion or intimidation on the part of hospitals. We noted previously 
in this section as well as in the CY 2022 OPPS/ASC proposed rule (86 FR 
42239), a survey of HCP from April 2021 found that 66 percent of 
hospital HCP and 64 percent of outpatient department HCP reported 
receiving at least one dose of the vaccine. Subsequent to the 
publication of the CY 2022 OPPS/ASC proposed rule, research from August 
2021 suggests that nearly 73 percent of HCP across all health care 
facilities have received at least one dose of the vaccine.\297\ Based 
on this data, we understand that HCP have been receiving the COVID-19 
vaccine prior to the adoption of this measure and do not believe that 
this represents performance that suggests negative relationship between 
vaccine uptake among HCP and employer vaccination requirements. We 
believe that publicly reporting the data will be useful to consumers in 
choosing healthcare providers, including by making comparisons between 
hospitals.
---------------------------------------------------------------------------

    \297\ Lazer, D. et al. The COVID States Project: A 50-state 
COVID-19 Survey Report #62: COVID-19 Vaccine Attitudes Among 
Healthcare Workers. Northeastern University, Harvard University, 
Rutgers University and Northwestern University. August 16, 2021. 
Available at: http://news.northeastern.edu/uploads/COVID19%20CONSORTIUM%20REPORT%2062%20HCW%20August%202021.pdf.
---------------------------------------------------------------------------

    Comment: One commenter recommended aligning with the policy 
finalized in the FY 2022 IPPS/LTCH PPS final rule in which only the 
most recent quarter of data will be used for public reporting (as 
opposed to a rolling 12-month report).
    Response: We agree with the commenter and note that, in alignment 
with the FY 2022 IPPS/LTCH PPS final rule (86 FR 45382), we will not 
finalize our plan to add one additional quarter of data during each 
advancing refresh, until the point that four full quarters of data is 
reached and then report the measure using four rolling quarters of 
data. Instead, we will only report the most recent quarter of data. 
This would result in more meaningful information that is up to date and 
not diluted with older data. We emphasize that this modification of our 
proposal does not affect the data collection schedule established for 
submitting data to NHSN for the COVID-19 vaccination measure. This 
would simply update the data that are displayed for the public 
reporting purposes.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the COVID-19 Vaccination Coverage 
Among HCP measure (Newly designated as OP-38) with modification to the 
quarterly reporting deadlines beginning with the CY 2022 reporting 
period/CY 2024 payment determination and subsequent years. Based on the 
comments we have received, it is our belief that reporting a single HCP 
count for each healthcare facility enrolled in NHSN would reduce 
burden. Therefore, in collaboration with the CDC, facilities will 
report data to NHSN by enrolled facility (also known as OrgID). Similar 
to the data submission process used previously for the Influenza 
Vaccination Coverage Among Healthcare Personnel (OP-27) (79 FR 66945), 
the CDC will then translate and submit the data to CMS on behalf of the 
facilities by CCN.
    Additionally, in order to reduce reporting burden, we are 
finalizing our proposal that facilities must count HCP working in all 
inpatient or outpatient units that are physically attached to the 
inpatient site and share the same CCN, regardless of the size or type 
of unit.\298\ Facilities must also count HCP working in inpatient and 
outpatient departments that are affiliated with the specific hospital 
(such as sharing medical privileges or patients), regardless of 
distance from the hospital and also share the same CCN. Reporting data 
in this way will allow healthcare facilities with multiple care 
settings to simplify data collection and submit a single count 
applicable across the inpatient and outpatient settings. We will then 
publicly report the percentage of HCP who received a complete course of 
the COVID-19 vaccination per CCN. This single HCP count per CCN will 
inform the public of the percentage of vaccinated HCP at a particular 
healthcare facility, which will provide meaningful data and help to 
improve the quality of care while reducing the burden of reporting.
---------------------------------------------------------------------------

    \298\ Centers for Disease Control and Prevention. Measure 
Specification: NHSN COVID-19 Vaccination Coverage. Available at: 
https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf.
---------------------------------------------------------------------------

    We are also finalizing our proposal to publicly report the measure, 
which will begin with the October 2022 Care Compare refresh, or as soon 
as technically feasible, using data collected from Q1 2022 (January 1, 
2022 through March 31, 2022). However, based on public comment, we are 
finalizing a modification to our proposal. We will not finalize our 
plan to add one additional quarter of data during each advancing 
refresh, until the point that four full quarters of data is reached and 
then report the measure using four rolling quarters of data. Instead, 
we will only report the most recent quarter of data. This would result 
in more meaningful information that is up to date and not diluted with 
older data.
b. Adoption of the Breast Cancer 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.\299\ 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.\300\ This could result in 
increased prevalence of radiation-induced cancers in younger 
individuals including those carrying related gene mutations, such as 
BRCA-1 and BRCA-2 301 302 or additional imaging and 
biopsies, which could lead to unnecessary procedures for individuals 
who do not have breast cancer.303 304 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.\305\ Given the potential

[[Page 63834]]

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 five to 12 percent.306 307
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    \299\ 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.
    \300\ 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.
    \301\ 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.
    \302\ 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.
    \303\ 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.
    \304\ 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.
    \305\ 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.
    \306\ 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/.
    \307\ 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.
---------------------------------------------------------------------------

    To address the health and clinical risks associated with too many 
or too few breast cancer screening recalls, in the CY 2022 OPPS/ASC 
proposed rule (86 FR 42242), we proposed to adopt the Breast Cancer 
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).\308\ 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).309 310 311 312 313 314 315 316 The Breast Cancer 
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 
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.
---------------------------------------------------------------------------

    \308\ 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).
    \309\ 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.
    \310\ 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.
    \311\ 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.
    \312\ 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.
    \313\ 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.
    \314\ 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.
    \315\ 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.
    \316\ 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 cancer screening 
recall rates at the facility level. The Breast Cancer 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.317 318 The adoption of this measure could 
potentially fill a gap in breast cancer 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; 319 320 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.\321\
---------------------------------------------------------------------------

    \317\ 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.
    \318\ 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.
    \319\ 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.
    \320\ 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.
    \321\ 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

[[Page 63835]]

Medicare programs.\322\ In January 2021, the Breast Cancer Screening 
Recall Rates measure was reviewed by both the MAP's rural health 
workgroup and hospital workgroup, overseen by the Coordinating 
Committee (MUC20-0005).\323\ Both groups and the Coordinating Committee 
voted to conditionally support the measure, pending NQF 
endorsement.\324\ 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.\325\ Despite these concerns, some 
members of the rural health workgroup, hospital workgroup, and 
Coordinating Committee expressed support of the Breast Cancer 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.\326\ As a part of measure 
implementation, we noted that we would develop a suite of education and 
outreach materials to aid stakeholders in the interpretation of measure 
performance data (86 FR 42243). 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); updates to the measure specifications 
would be made iteratively, as appropriate, on an annual basis.
---------------------------------------------------------------------------

    \322\ 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.
    \323\ 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.
    \324\ 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.
    \325\ 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.
    \326\ 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 directs the Secretary to 
develop measures that the Secretary determines to be appropriate for 
the measurement of the quality of care (including medication 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.
    We have reviewed those NQF-endorsed measures that are related to 
breast imaging and have not identified any that are appropriate for the 
measurement of mammography or DBT recall rates specifically. As such, 
we proposed 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.
(3) Measure Calculation
    This claims-based process measure documents breast cancer screening 
recall rates at the facility level. The Breast Cancer 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 Cancer 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.\327\ 
We refer readers to the QualityNet website at https://qualitynet.cms.gov for the full measure specifications.
---------------------------------------------------------------------------

    \327\ 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 Cancer 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 Cancer 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.

[[Page 63836]]

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).
    The following is a summary of the comments we received on this 
proposal and our responses.
    Comment: One commenter supported implementation of the Breast 
Cancer Screening Recall Rates measure into the Hospital OQR Program but 
encouraged CMS to rename the metric to Breast Cancer Screening Recall 
Rates.
    Response: We thank the commenter for their suggestion. We are 
refining the name of the measure to the Breast Cancer Screening Recall 
Rates measure, as this name more accurately describes what this measure 
assesses.
    Comment: Many commenters supported the addition of Breast Cancer 
Screening Recall Rates measure to the Hospital OQR Program as proposed. 
A few commenters believe the Breast Cancer Screening Recall Rates 
measure fills a measurement gap left in the Hospital OQR Program by the 
removal of Mammography Follow-Up Rates (OP-9) in the CY 2019 OPPS/ASC 
PPS final rule with comment period (83 FR 59096 through 59097). One 
commenter acknowledged the low level of burden associated with 
reporting of claims-based measures.
    Response: We thank the commenters for their support.
    Comment: A few commenters did not support the addition of Breast 
Cancer Screening Recall Rates measure to the Hospital OQR Program based 
on the removal of the Mammography Follow-Up Rates measure (OP-9) in the 
CY 2019 OPPS/ASC PPS final rule (83 FR 59096 through 59097). The 
commenters highlight that the measure would not be useful to patients, 
as it is not based on a clinical practice guideline, systematic review, 
meta-analysis, or other experimental form of evidence to demonstrate a 
connection between public reporting of the measure score and its impact 
on patient outcomes, which is similar to the reason why the OP-9 
measure was removed from the Hospital OQR program.
    Many commenters provided input on the usability of the Breast 
Cancer Screening Recall Rates measure's performance scores, suggesting 
that patients may not be able to fully interpret a facility's 
performance score presented in comparison to a target range. Commenters 
also expressed concern about the evidence-base for the measure's 5 
percent to 12 percent target range.
    Response: We appreciate the commenters' input on the removal of OP-
9 from the Hospital OQR Program. We elected to remove OP-9 as it did 
not align with current clinical practice. The Breast Cancer Screening 
Recall Rates measure improves upon the OP-9 technical specifications, 
which had been in use for nearly 10 years, incorporating digital breast 
tomosynthesis (DBT) as a screening and diagnostic imaging modality to 
the measure's denominator and numerator, respectively, and refining 
guidance for interpretation the measure score by presenting a target 
performance range. OP-9 provided a ceiling for appropriate rates of 
recall at 14 percent, but did not present a lower bound (due to a lack 
of evidence at the time of specification). Thus, we believe that the 5 
percent to 12 percent range is more interpretable and useful for 
patients and other consumers than the previously used metric. We will 
continue to monitor and evaluate the usefulness and usability of the 
Breast Cancer Screening Recall Rates measure specifications, and 
specifically the range, during routine measure reevaluation. 
Additionally, we will ensure education and outreach materials provide 
meaningful information on data interpretation for our stakeholders.
    We acknowledge commenters' concern about the evidence base on which 
the Breast Cancer Screening Recall Rates measure is based. We convened 
a technical expert panel (TEP) to gather input from a breadth of 
stakeholders while specifying this measure; we also collected feedback 
from additional members of the clinical community through a listening 
session during which the measure's draft technical specifications were 
discussed. Based on these qualitative data, we defined the range for 
appropriate imaging based on the 2013 Breast Imaging Reporting and Data 
System (BIRADS) Atlas.\328\
---------------------------------------------------------------------------

    \328\ 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.
---------------------------------------------------------------------------

    Comment: Several commenters provided feedback on the Breast Cancer 
Screening Recall Rate measure's technical specifications. One commenter 
questioned why a benchmark value for the measure's range was not 
provided. Several commenters disagreed with use of the five percent to 
12 percent range for appropriate imaging. A few commenters encouraged 
CMS to consider exclusion of individuals for whom patient or clinical 
factors necessitate more frequent recall following screening for breast 
cancer. A few commenters asked why CMS did not include the Breast 
Cancer Screening Recall Rates measure in a composite of breast cancer 
measures. A few commenters encouraged CMS to risk adjust the measure to 
account for potential inequities in care among racial and ethnic 
minorities. A commenter suggested the incorporation of additional 
imaging modalities into the measure's technical specifications.
    Response: We appreciate the commenters' recommendations on ways to 
improve the Breast Cancer Screening Recall Rates measure technical 
specifications. Rather than providing a single benchmark, we used 
guidance from the American College of Radiology's 2013 BIRADS Manual to 
define appropriate recall as between five percent and 12 percent of 
patients for whom follow-up imaging was performed. If, in the future, a 
single benchmark value is more appropriate for use in public reporting 
than a range (based on the release of guidance that appears in a 
clinical practice guideline or other documentation), we will consider 
revisions to the measure's specifications accordingly.
    With respect to the comments that encourage we risk-adjust the 
measure to account for potential inequities in care around racial and 
ethnic minorities, we believe risk adjustment for the Breast Cancer 
Screening Recall Rates measure could have the effect of masking true 
differences in care provided to patients of different races, 
ethnicities, and genders. We will continue to monitor and evaluate 
results for the Breast Cancer Screening Recall Rates measure to ensure 
high-quality care is provided to all Medicare fee-for-service patients, 
regardless of their racial, ethnic or gender identities.
    We appreciate input on the structure of the Breast Cancer Screening 
Recall Rates measure and the composition of its data elements. We will 
continue to monitor the peer-reviewed evidence and feedback from 
stakeholders to identify future changes to the technical 
specifications, including the potential need to exclude individuals 
with certain clinical or patient-focused characteristics. We will also 
review the additional imaging modalities suggested by commenters to 
identify if they are appropriate to include in either the

[[Page 63837]]

measure's denominator or numerator or both. We will consider ways to 
maximize the value of the Breast Cancer Screening Recall Rates measure 
including incorporation of facility performance scores into a composite 
evaluating other types of breast-cancer care.
    Comment: One commenter encouraged CMS to engage the clinical 
community and medical societies in the creation of documentation for 
implementation of the Breast Cancer Screening Recall Rates measure, 
including files for education and outreach to its members.
    Response: We thank the commenter for their support and welcome 
feedback from the clinical community and medical societies on the 
creation of education and outreach resources that would be beneficial 
for measure implementation.
    Comment: One commenter encouraged CMS to perform a dry run of 
facility performance data prior to implementation of the Breast Cancer 
Screening Recall Rates measure into the Hospital OQR Program. Another 
commenter asked CMS to make public reporting of the Breast Cancer 
Screening Recall Rates measure optional. A third commenter asked CMS to 
delay implementation of the Breast Cancer Screening Recall Rates 
measure into the Hospital OQR Program until CY 2025.
    Response: We appreciate the feedback received on timing for 
implementation of the Breast Cancer Screening Recall Rates measure. 
Because this measure builds upon results presented for OP-9 (prior to 
its retirement from the Hospital OQR Program in CY 2019), we do not 
believe a dry run is needed prior to implementation As the Breast 
Cancer Screening Recall Rates measure closely mirrors the OP-9 
technical specifications that were in use within the Hospital OQR 
Program from 2010 to 2018 and as the measure was publicly reported 
through April 2020, stakeholders are anticipated to have some 
familiarity with the measure, Thus, we do not believe data for public 
reporting of the measure need to be delayed to future years. Further, 
facilities will receive their claims data, to be used in calculation of 
the Breast Cancer Screening Recall Rates measure, through a claims 
detail report (CDR) in 2022, which will allow facilities to identify 
any errors in processed claims and/or plan for future quality-
improvement efforts following implementation of the measure into 
Hospital OQR.
    Comment: A few commenters expressed concern about using data in 
calculation of the Breast Cancer Screening Recall Rates measure that 
were processed during the COVID-19 pandemic and encouraged CMS to 
monitor trends in imaging use during this time.
    Response: We appreciate commenters' concern about the impact of 
COVID-19 pandemic, including delays in care resulting from availability 
of imaging services and changes in the ways patients accessed care 
since March 2020. In response to the COVID-19 pandemic, we will not use 
data from January 1, 2020, through June 30, 2020, for performance 
calculation.\329\ We will continue to monitor trends in utilization and 
impacts of the COVID-19 pandemic as we implement the Breast Cancer 
Screening Recall Rates measure.
---------------------------------------------------------------------------

    \329\ https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
---------------------------------------------------------------------------

    Comment: Many commenters encouraged CMS to seek National Quality 
Forum (NQF) endorsement prior to implementation of the Breast Cancer 
Screening Recall Rates measure into the Hospital OQR Program.
    Response: We appreciate commenters' input on the need for NQF 
endorsement of Breast Cancer Screening Recall Rates measure and will 
consider how best to leverage NQF endorsement review of the measure 
following its implementation. We believe the Breast Cancer Screening 
Recall Rates measure addresses a gap area within the Hospital OQR 
Program for both cancer care and women's health, and think that 
addition of this measure to the Program before pursuing NQF endorsement 
will ensure that the quality of services provided is monitored by CMS.
    After consideration of the public comments we received, we are 
finalizing the adoption Breast Cancer Screening Recall Rates measure 
(newly designated as OP-39) as proposed.
c. Adoption of 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.\330\ Each year over 250,000 Americans experience a STEMI, 
approximately 50 percent of whom are Medicare 
beneficiaries.331 332 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).\333\ 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.334 335 336 Primary 
percutaneous coronary intervention (PCI), which is the use of balloons 
and stents to restore blood flow, is the preferred reperfusion 
modality.\337\ 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).\338\ Specifically, if a patient presents to a PCI-capable 
facility, primary PCI is recommended within 90 minutes of FMC.\339\ If 
a patient presents to a non-PCI-capable facility, the patient should be 
expeditiously transported to a PCI-capable facility and receive PCI

[[Page 63838]]

within a total of 120 minutes.\340\ 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.\341\ The guidelines recommend that eligible patients 
should receive fibrinolytic therapy within 30 minutes of hospital 
arrival.
---------------------------------------------------------------------------

    \330\ Anderson JL, Morrow DA. Acute Myocardial Infarction. New 
England Journal of Medicine. 2017;376(21):2053-2064.
    \331\ 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.
    \332\ 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.
    \333\ 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.
    \334\ 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.
    \335\ 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.
    \336\ 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.
    \337\ Anderson JL, Morrow DA. Acute Myocardial Infarction. New 
England Journal of Medicine. 2017;376(21):2053-2064.
    \338\ 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.
    \339\ Ibid.
    \340\ Ibid.
    \341\ Ibid.
---------------------------------------------------------------------------

(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 issues that are most vital to delivering quality, 
value-based care to improve patient outcomes.\342\ 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.
---------------------------------------------------------------------------

    \342\ 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.\343\ 
In January 2021, the STEMI eCQM was reviewed by the MAP's rural health 
workgroup, hospital workgroup, and Coordinating Committee (MUC20-0004) 
\344\ The MAP rural health workgroup conducted discussions 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 (OP-40) \345\ for rural providers in the 
Hospital OQR Program.\346\ The MAP voted to conditionally support the 
measure, pending NQF endorsement. 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).
---------------------------------------------------------------------------

    \343\ 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.
    \344\ 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.
    \345\ 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.
    \346\ Ibid. 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.
---------------------------------------------------------------------------

    Section 1833(t)(17)(C)(i) of the Act requires the Secretary to 
develop measures that the Secretary determines to be appropriate for 
the measurement of the quality of care (including medication 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 (for example, NQF). We 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 the CY 2022 OPPS/ASC proposed rule (86 FR 
42237), we proposed 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 included in the measure to include 
patients who present to and receive primary PCI at a PCI-capable 
facility, which is the vast majority of STEMI patients. The OP-2 and 
OP-3 measures only include patients presenting to non-PCI-capable 
facilities who either receive fibrinolytics or are 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.\347\ We believe that the STEMI eCQM 
(OP-40) 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 the CY 2022 
OPPS/ASC proposed rule (86 FR 42237) and section XV.B.3.c. of this 
final rule with comment period for further discussion on our proposal 
to remove the OP-2 and OP-3 measures from the Hospital OQR Program.
---------------------------------------------------------------------------

    \347\ 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, in the CY 2022 OPPS/ASC proposed rule (86 FR 42244), we 
proposed 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:

[[Page 63839]]

     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
    This 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.\348\ The 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.
---------------------------------------------------------------------------

    \348\ National Quality Forum. What NQF Endorsement Means. 
Available at: https://www.qualityforum.org/Measuring_Performance/ABCs/What_NQF_Endorsement_Means.aspx.
---------------------------------------------------------------------------

(5) Implementation
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42246), we proposed 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 the CY 
2022 OPPS/ASC proposed rule (86 FR 42259) and section XV.D.6. of this 
final rule with comment period for additional information related to 
eCQM data submission and reporting requirements under the Hospital OQR 
Program.
    The following is a summary of the comments we received on this 
proposal and our responses.
    Comment: Many commenters supported the addition of the STEMI eCQM 
to the Hospital OQR Program as proposed. Two commenters appreciated the 
phased implementation approach, which would allow facilities the 
ability to make the necessary adjustments for data submission over 
time. A commenter specifically cited the transition from voluntary to 
mandatory reporting of the STEMI eCQM as a preferred strategy for 
implementation. Another commenter suggested phasing the STEMI eCQM (OP-
40) into Hospital OQR concurrent to the OP-2 and OP-3 removal would 
give facilities sufficient time to adjust workflows in how care is 
provided and documented within sites' EHRs. An additional commenter 
pointed out the importance of ensuring the STEMI eCQM is implemented 
concurrent to the removal of OP-2 and OP-3, ensuring the transition is 
seamless. Commenters noted the adoption of the STEMI eCQM is consistent 
with CMS' move to modernization and use of meaningful measures.
    Many commenters expressed support for CMS' plan to remove 
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), replacing them with the STEMI eCQM 
as proposed. Several commenters asserted that the STEMI eCQM is less 
burdensome for collection and reporting. They noted the replacement of 
OP-2 and OP-3 with the STEMI eCQM would reduce burden on facilities to 
abstract information about a sample of cases for each measure quarterly 
and would provide more precise, evidence-based guidance for how to 
interpret the STEMI eCQM's quality actions in the numerator.
    Response: We thank the commenters for their support.
    Comment: One commenter encouraged CMS to delay removal of OP-2 and 
OP-3 from the Hospital OQR Program until the STEMI eCQM is implemented 
and data are available for public reporting. Another commenter 
recommended CMS retain OP-2 and OP-3 in the Hospital OQR Program as 
optional measures for facilities with limited resources for eCQM 
reporting.
    Response: We appreciate commenters' position on retention of OP-2 
and OP-3 as optional measures or for additional years. However, we 
believe the incremental approach we proposed for implementation of the 
STEMI eCQM will give facilities sufficient time to meet requirements 
under the ONC's requirements for interoperability through the ONC 21st 
Century Cures Act final rule (85 FR 25642 through 25961) and to map 
data elements for interoperability via the FHIR based API (85 FR 
70075). Additionally, to delay removal of OP-2 and OP-3 or to retain 
them as optional measures would undermine the incremental nature of our 
implementation. Retaining these measures may cause hospitals to delay 
their implementation of the STEMI eCQM until the last minute. Thus, we 
believe that the delayed implementation or retention of OP-2 and OP-3 
is not necessary.
    Comment: Several commenters encouraged CMS to delay implementation 
of the STEMI eCQM until the measure obtains endorsement by the NQF.
    Response: We appreciate commenters' concern about delaying 
implementation of this measure into the Hospital OQR program until they 
are endorsed by NQF. We submitted the STEMI eCQM for endorsement review 
through NQF's Cardiovascular Project in spring 2021. The NQF 
Cardiovascular Standing Committee passed the measure on all criteria 
and on overall suitability for endorsement.\349\ At the close of 
comment period for the CY 2022 OPPS/ASC PPS proposed rule, the STEMI 
eCQM was undergoing public comment through NQF and would receive review 
by NQF's Consensus Standards Advisory Committee (CSAC) in fall 2021. 
Should it be approved by the CSAC, the STEMI eCQM will be endorsed by 
NQF as #3613e.
---------------------------------------------------------------------------

    \349\ National Quality Forum. (2021). Cardiovascular Spring 2021 
Cycle: CDP Report: Draft Report for Comment. Accessed on September 
21, 2021, at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=96018.
---------------------------------------------------------------------------

    As noted in section XV.D.4.a.(2)(c). of this final rule with 
comment period, CMS is not limited by section 1833(t)(17) of the Act to 
select measures for the Hospital OQR Program that have been approved by 
a consensus base

[[Page 63840]]

entity such as NQF. Given the broad support for the measure obtained 
during development, including support from the TEP, during measure 
development public comment, and by the MAP's Rural Health Advisory 
group, Hospital Workgroup, Coordinating Committee, and MAP public 
comment, as well as the benefits of the STEMI eCQM over the OP-2 and 
OP-3 measures, we believe it is critical to implement this measure on 
the timeline discussed above even if the measure does not obtain NQF 
endorsement in fall 2021.
    Comment: Several commenters recommended CMS support facilities, 
vendors, and other stakeholders during the implementation of the STEMI 
eCQM into the Hospital OQR program, as it would be the first eCQM added 
to the program. Specifically, a few commenters expressed concern about 
the costs associated with initial implementation of eCQMs (for example, 
building eCQM logic, validation, certification, etc.) and the timing by 
which EHR standards must be in place to meet the deadline for voluntary 
reporting.
    Response: We appreciate commenters' concern regarding the start-up 
costs and requirements for eCQM reporting. However, data elements for 
the STEMI eCQM are all readily available in structured fields (or will 
be, based on the FHIR-based API, which is required for implementation 
by December 31, 2022 (85 FR 70075)). The proposed measure also aligns 
with interoperability guidance from the ONC 21st Century Cures Act 
final rule (85 FR 25642 through 25961) published May 1, 2020, therefore 
facilities and vendors have received advanced notice and guidance on 
FHIR API standardization that will support the transition to eCQMs. We 
also note that many facilities have operationalized and gained 
experience in reporting eCQM for the Hospital IQR Program. Thus, we 
believe that many facilities have demonstrated readiness in reporting 
eCQM and the implementation burden will not exceed requirements from 
other federal regulation already in place.
    Additionally, we will provide assistance to facilities, vendors, 
and other stakeholders through the release of education and outreach 
materials following adoption of the measure in the program.
    Comment: One commenter expressed concern about external factors 
(such as delays in resuscitation or a family's decision to not pursue 
aggressive care) that could affect facility performance through no 
fault of the clinician. This commenter encouraged CMS to exclude these 
cases to avoid penalization of the facility for care that does not meet 
the numerator's quality action.
    Response: We appreciate the commenter's feedback on measure 
exclusions and considered these issues during measure development. 
Certain delays in resuscitation, such as cardiopulmonary arrest, are 
contraindicated and therefore excluded from the measure. We found that 
family refusal is not consistently captured in a structured data field. 
For this reason, we believe that family refusal cannot be reliably used 
an exclusion criterion at this time.
    Comment: One commenter questioned how patients for whom a 
contraindication to fibrinolytic therapy would be excluded from the 
STEMI eCQM's initial patient population.
    Response: We thank the commenter for their question. To clarify, we 
specified the measure's exclusions to remove a patient if the patient 
presents with any of a breadth of clinical diagnoses that reflect a 
contraindication to fibrinolytic therapy (such as suspected aortic 
dissection, ischemic stroke, intracranial or intraspinal surgery, 
etc.); a full list of exclusions for the STEMI eCQM is available on 
HealthIT.gov (https://ecqi.healthit.gov/ecqm/eh/pre-rulemaking/1/cms996v2).
    We will monitor and evaluate additional clinical reasons for not 
using fibrinolytics to treat a myocardial infarction as this 
information becomes available.
    Comment: One commenter asked how CMS would use data from third-
party electrocardiograms (ECGs) in identifying patients for inclusion 
in the measure's initial population.
    Response: We thank the commenter for their feedback. At this time, 
data from ECGs are not used to identify the STEMI eCQM's initial 
patient population. Rather, individuals are identified for inclusion in 
the measure if they were diagnosed with a myocardial infarction and did 
not have documentation of one or more excluded condition. The full 
technical specifications for the measure are available on 
HealthIT.gov.\350\
---------------------------------------------------------------------------

    \350\ (https://ecqi.healthit.gov/ecqm/eh/pre-rulemaking/1/cms996v2).
---------------------------------------------------------------------------

    Comment: A commenter encouraged CMS to perform larger-scale testing 
and a feasibility assessment for implementation, expanding upon the two 
sites at which electronic health record (EHR) testing occurred 
previously, to ensure the measure is truly reliable and valid.
    Response: We appreciate the commenter's concern about measure 
testing. With regards to measure reliability and validity, the NQF 
Cardiovascular Project's Standing Committee performed an evaluation of 
the measure's reliability and validity. They concluded that the results 
represented a moderate level of scientific acceptability. The measure 
was tested using data from two large hospital systems (with 20 EDs), 
whereby one system treated a large number, and the second system 
treated a smaller number of STEMI patients during the data period used 
for testing. As noted in section XV.B.4.c.(4) of this final rule with 
comment period, the 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 two systems. 
The validity testing results showed a wide range of agreement among 
data elements between the electronic and manual data extracts. 
Statistical methods indicate equivalent agreement that the denominator 
value is expected by chance in the first system and slight agreement in 
the second system, with a moderate indication of denominator exclusion 
values in both EHR systems.\351\ With regards to the test sites and EHR 
systems tested, the two EHR vendors utilized by the two hospital 
systems tested constitute the vast majority of EHRs.
---------------------------------------------------------------------------

    \351\ National Quality Forum. (2021). Cardiovascular Spring 2021 
Cycle: CDP Report: Draft Report for Comment. Accessed on September 
21, 2021, at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=96018.
---------------------------------------------------------------------------

    After consideration of the public comments we received, we are 
finalizing the adoption of STEMI eCQM (Newly designated as OP-40) as 
proposed.
5. Modifications to Previously Adopted Measures
a. Requiring 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

[[Page 63841]]

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 \352\ 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.
---------------------------------------------------------------------------

    \352\ 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42246), we proposed 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 proposed 
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. As proposed in the CY 2022 OPPS/ASC proposed rule (86 FR 
42246), our intent is 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. The reporting process for HOPDs to 
submit OAS CAHPS Survey data would remain unchanged. That is, HOPDs 
would submit OAS CAHPS Survey data through their vendors, who would 
submit these data to CMS as appropriate. We refer readers to section 
XV.D.4.b. of the preamble of the CY 2022 OPPS/ASC proposed rule (86 FR 
42258) and of this final rule with comment period 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). of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42258), we proposed 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.\353\ 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.\354\ 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) 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).
---------------------------------------------------------------------------

    \353\ We note that the mixed modes will be available as part of 
the National OAS CAHPS voluntary reporting program beginning in CY 
2022.
    \354\ 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.
---------------------------------------------------------------------------

    We refer readers to section XV.D.4.b. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42258) and of this final rule with comment period 
for our related proposals regarding form, manner, and timing for 
reporting the OP-37a-e Survey-based measures.
    We received comments on these topics.
    Comment: A few commenters supported the voluntary collection of OAS 
CAHPS Survey in the Hospital OQR Program beginning in CY 2023 reporting 
period.
    Response: We thank the commenters for their support.
    Comment: A few commenters supported voluntary collection of the OAS 
CAHPS Survey and recommended releasing additional information regarding 
operational or technical knowledge learned during the voluntary period 
prior to the start of mandatory reporting.
    Response: We agree that information learned during the OAS CAHPS 
Survey voluntary reporting period and the National OAS CAHPS Survey 
voluntary reporting program should be disseminated to HOPDs to help 
improve their performance and patient safety. For information about the 
National OAS CAHPS Survey voluntary reporting, we encourage hospitals 
to visit: https://oascahps.org/General-Information/National-Implementation. We believe the information learned through this prior 
voluntary reporting timeframe can inform practice during the voluntary 
reporting period and eventually mandatory reporting as part of the 
Hospital OQR Program. Specifically, as part of the National OAS CAHPS 
Survey voluntary reporting, a summary report that includes information 
about patient-mix adjustments for each quarter is updated and posted 
before each quarterly data submission period. Preview reports for each 
facility participating voluntarily is posted on the OAS CAHPS website 
two weeks prior to public reporting. The Protocols and Guidelines 
Manual is updated annually with any necessary clarifications about 
participation requirements and protocols. Training has been provided 
annually to approved

[[Page 63842]]

vendors to clarify administration protocols. We refer reader to https://oascahps.org/Training/Training-Materials for more information.
    Comment: Several commenters supported the mandatory collection of 
the OAS CAHPS Survey in the Hospital OQR Program. One commenter stated 
that the OAS CAHPS Survey will help HOPDs strategically identify 
strengths, weaknesses, and areas for improvement related for patient 
experience.
    Response: We appreciate the support of mandatory reporting of OAS 
CAHPS Survey as part of the Hospital OQR program. We believe that these 
survey-based measures will be useful to assess aspects of care where 
the patient is the best or only source of information, and to enable 
objective and meaningful comparisons between HOPDs. We also believe 
this feedback will help HOPDs identify and improve patient related 
experiences.
    Comment: A few commenters expressed concern with the OAS CAHPS 
Survey use of CPT codes. These commenters also expressed concern that 
these codes were not consistent with certain IT vendor support. Another 
recommended that OAS CAHPS Survey patient eligibility should not rely 
on CPT codes. A commenter expressed concern surrounding the timeframe 
around submission of claims and coding information simply does not 
match--meaning that coding may not be completed to accommodate the 21- 
to 60-day survey timeframe and recommended that CMS to eliminate the 
use of CPT codes to trigger survey distribution.
    Response: We appreciate this feedback. We interpret the commenters' 
concern to be that there may be confusion over which patients would be 
eligible to be surveyed as part of the OAS CAHPS Survey reporting. We 
note that the OAS CAHPS Survey is administered to all eligible 
patients, or a random sample thereof, who had at least one outpatient 
surgery/procedure during the applicable month. Many CPT codes have been 
excluded from inclusion in the OAS CAHPS Survey, including services 
like application of a cast or splint, in order to ensure that only 
patients receiving applicable procedures are surveyed.\355\
---------------------------------------------------------------------------

    \355\ Updates on OAS CAHPS Survey specifications and guidelines 
are available at https://oascahps.org/General-Information/Announcements.
---------------------------------------------------------------------------

    With regard to the timing of the availability of CPT codes for 
sample selection, we recognize in some cases there could be delays in 
getting the CPT codes updated in the patient record and transmitted to 
the survey vendor in a timely manner. Under the current protocol for 
survey administration, we allow survey vendors to work with HOPD and 
ASC facilities to identify alternative ways to identify the patient 
records for outpatient surgery or diagnostic procedures that were 
performed in eligible HOPDs or ASCs (as identified by the facility-
level eligibility criteria). Vendors can submit exception requests to 
request alternative methods for identifying the eligible population. We 
also note that the current protocol for survey administration allows 
for late start requests for situations in which the complete patient 
records are not available within the target window of time for survey 
administration. Vendors can submit late start requests when the patient 
data file is received more than 26 days after the sample month. This 
allows for flexibility in situations when the CPT codes are not 
available initially but can be updated. Further, sampling is allowed to 
proceed if 90 percent of the patient records have CPT codes. Updates to 
the Survey Specifications and Guidelines will be available on the OAS 
CAHPS Survey website.\356\ We will take all comments under 
consideration as we consider future refinements for the OAS CAHPS 
Survey.
---------------------------------------------------------------------------

    \356\ https://oascahps.org/.
---------------------------------------------------------------------------

    Comment: A few commenters expressed concern that there is little 
variation in performance scores for this measure.
    Response: We thank the commenters for their feedback. Performance 
scores are measured and reported publicly at the facility, state, and 
national levels through the Provider Data Catalog (PDC) datasets 
(https://data.cms.gov/provider-data/). OAS CAHPS Survey results are 
publicly reported as ``top-box'', ``bottom-box'', ``middle-box'', and 
``linear scaled scores''. The scores are adjusted for patient mix 
within each quarter to account for facility differences in patient mix. 
During voluntary participation, facilities may choose to have their 
survey results published or only reported privately through preview 
reports. Variation in performance scores is expected to increase as 
more facilities participate. We believe that the OAS CAHPS Survey-based 
measures will be useful to assess aspects of care where the patient is 
the best or only source of information, and to enable objective and 
meaningful comparisons between HOPDs.
    Comment: A commenter opposed mandatory reporting for OAS CAHPS 
Survey, expressing concern regarding its reliability. This commenter 
also expressed the belief that many of the issues from when the measure 
was originally delayed have not yet been resolved, namely the potential 
for low patient response rate, administration burden on providers and 
lack of reliable national OAS CAHPS Survey data.
    Response: We thank the commenter for their feedback and acknowledge 
their concern. We believe that OAS CAHPS Survey is reliable and that 
our prior concerns that resulted in the delay of the OAS CAHPS Survey 
implementation have been resolved. HOPDs have been able to report OAS 
CAHPS Survey data as part of the National OAS CAHPS Survey since 2016. 
Based on our experience through this reporting, we are able 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. We also 
note that, unit-level reliability analysis of the publicly reported 
composites for OAS CAHPS are well above the .70 cut-off typically used 
to assess reliability of a measure.
    Comment: A few commenters opposed mandatory reporting and expressed 
concern regarding the financial burden of OAS CAHPS Survey vendors, and 
IT resource strain. Several commenters opposed mandatory reporting due 
to the operational burden on patients and facilities, as well as the 
repetitive nature of this extensive and complex outpatient survey.
    Response: We thank these commenters for their feedback and 
acknowledge their concerns. While there are administrative and 
financial burdens associated with implementing the OAS CAHPS Survey and 
OAS CAHPS Survey-based measures in the Hospital OQR Program, we believe 
the benefits of capturing patient experience of care data in the HOPD 
setting outweigh the burdens. In selecting measures for the Hospital 
OQR Program, we weigh the relevance and utility of measures against the 
potential burden to HOPDs resulting from the measure's adoption, and we 
believe the OAS CAHPS Survey is a vital source of information in 
assessing the quality of care provided at an HOPD.
    We post the list of the approved OAS CAHPS Survey vendors on 
https://oascahps.org and we encourage HOPDs to contact vendors for cost 
and service information pertaining to OAS CAHPS Survey as there may be 
differences among vendors and multiple modes of

[[Page 63843]]

conducting the survey provide greater economical choice.
    In addition, we address additional modes to collect OAS CAHPS 
Survey data in section XVI.D.4.b.(1) of the CY 2022 ASC/OPPS proposed 
rule (86 FR 42258) which we expect to reduce the future cost of 
administration. 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.
    With respect to the burden on patients, we believe that patients 
appreciate the opportunity to provide feedback to their providers and 
that the information learned from their responses has the potential to 
improve communication and care that HOPDs provide and can simply opt 
not to respond to the survey if so inclined.
    Further, while we did not propose a solely digital mode of 
conducting the OAS CAHPS Survey, we will continue to analyze whether a 
web-only or digital-only format would be appropriate for the OAS CAHPS 
Survey, which could potentially further reduce the costs of 
administering the survey.
    Comment: A few commenters opposed mandatory reporting and cited 
staffing shortages and the ongoing COVID-19 crisis as reasons for 
opposing the mandatory adoption of OAS CAHPS Survey at this time.
    Response: We understand the commenters' concerns and the aim to 
accommodate HOPDs while our nation works through the unprecedented 
COVID-19 pandemic. However, we believe the OAS CAHPS Survey is a 
critical measure of patient experience at this time. We also note that, 
since many hospitals already have vendors in place and are successfully 
reporting the HCAHPS Survey in the IQR program, the burden of finding a 
vendor and operationalizing the OAS CAHPS is minimal.
    Comment: A commenter expressed concern that there is overlap 
between CAHPS Surveys that would be administered by Clinician Groups, 
Outpatient/ASCs, as well as from Surgical Care teams and that there is 
potential for patients to receive multiple requests to complete CAHPS 
Surveys in connection with a single episode of care, causing confusion 
and survey fatigue.
    Response: While we understand the commenter's concerns regarding 
resources needed to collect the survey, and survey administration 
burden for hospitals, the OAS CAHPS Survey was developed for use in 
assessing patient experience of care for select outpatient surgical 
procedures. We are dedicated to improving the quality of care provided 
to patients, and believe patients are a vital source of information in 
assessing the quality of care provided at a hospital outpatient 
department. We 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.
    Regarding confusion among patients and multiple overlapping survey 
tools, we note that other CAHPS Surveys, such as the HCAHPS Survey, are 
tailored to different aspects of care provided by hospitals, such as 
inpatient care. In addition, the survey introduction (and letter) 
provided to patients includes the date and location of the surgery or 
procedure that the patient received at the facility. Furthermore, 
patients will also be reminded of the date and location of the surgery 
or procedure they received during the telephone interviews. For these 
reasons, we do not believe there will be issues associated with overlap 
or confusion for these surveys.
    Comment: A commenter expressed concern that departments may have 
multiple sets of patient experience results and recommended applying 
the OAS CAHPS Survey for only people who have a day surgery where 
anesthesia is used.
    Response: We thank the commenter for their suggestion; however, we 
believe that the OAS CAHPS Survey is appropriately scoped to provide 
patients and facilities meaningful data on the services provided by 
HOPDs and not just those that require anesthesia.
    Comment: A few commenters opposed the OAS CAHPS Survey measures 
because the OAS CAHPS is not endorsed by the NQF. The commenters 
encouraged CMS to pursue NQF endorsement of these measures before the 
OAS CAHPS Survey is required in order to ensure all stakeholders are 
given insight into the measure and to ensure it is fair and accurate.
    Response: We thank commenters for their feedback. We note, section 
1833(t)(17) of the Act does not require that each measure we select for 
the Hospital OQR Program be endorsed by a national consensus building 
entity, or the NQF specifically. Under this paragraph, the Secretary 
has the authority to select non-endorsed measures. While we strive to 
develop NQF-endorsed measures, including when feasible and practicable, 
we believe the requirement that measures developed by the Secretary for 
use in the Hospital OQR Program reflect consensus among affected 
parties can be achieved in other ways, including through the measure 
development process, which often includes stakeholder input via a 
Technical Expert Panel (TEP), review by the MAP, broad acceptance and 
use of the measure, and public comments.
    We also believe that lack of NQF endorsement does not limit insight 
into whether the measures portray hospital performance in a fair and 
accurate manner. The survey was tested in both the outpatient and ASC 
settings in 2014 (field testing) and 2015 and 2019 (mode testing) was 
found to be reliable. We refer readers to https://oascahps.org/ for 
more information about field and mode testing for these measures. The 
OAS CAHPS Survey development process followed the principles and 
guidelines outlined by AHRQ and its CAHPS Consortium.\357\ This process 
included: (1) Reviewing existing literature; (2) reviewing surveys 
submitted under a public call for measures; (3) conducting focus groups 
with patients who had recent outpatient surgery; (4) conducting 
cognitive interviews with patients to assess their understanding and 
ability to answer survey questions; (5) obtaining stakeholder input on 
the draft survey and other issues that may affect implementation; 
conducting a field test; and (6) conducting a test of the various data 
collection mode effects on survey responses.
---------------------------------------------------------------------------

    \357\ Agency for Healthcare Research and Quality. ``The CAHPS 
Program.'' Available at: https://ahrq.gov/cahps/index.html.
---------------------------------------------------------------------------

    Comment: One commenter strongly recommended that CMS reconsider its 
position on respondent confidentiality and remove the requirement to 
include the question on consent to share identifying information from 
the OAS CAHPS Survey if the facility is interested in receiving 
patient-level response data connected to the patient's identifying 
data. Another commenter explained that if facilities understood the 
patient, they could more easily provide their employees immediate, and 
targeted improvement training. One commenter recommended that CMS align 
the OAS CAHPS patient confidentiality rules with HCAHPS, which allows 
for the release of patient-level data for quality improvement purposes 
with the stipulation that the patient identity should not be shared 
with direct care staff. Another commenter expressed concern about a 
question on the OAS CAHPS Survey that seeks information on ``Consent to 
Share Identifying Information'', believing that the question limits the

[[Page 63844]]

ability to identify trends and thereby limits opportunities.
    Response: We thank these commenters for their feedback. While the 
desire to have patient identifying information to develop responsive 
training and remediation steps is admirable, we believe that patient 
confidentiality is an important aspect of the OAS CAHPS Survey to help 
encourage accurate reporting. The administration protocols for the OAS 
CAHPS Survey follow protocols for CAHPS[supreg] Surveys, restricting 
the release of patient-level data if the patient has not consented. We 
note that for the Hospital IQR Program, we do not state that patients' 
responses and identifying information will not be shared with the 
hospital because hospitals can self-administer the HCAHPS Survey. 
However, for surveys administered via a third-party vendor, the survey 
is not linked to a sample patient's name unless the patient gives his 
or her consent. We note that facilities may choose to add the ``Consent 
to Share'' question to the OAS CAHPS Survey, which asks whether a 
patient gives permission for their name to be linked to their survey 
responses. However, we note that each facility should consult with its 
own counsel to ensure compliance with applicable privacy and security 
laws.
    Comment: A requester sought clarification on whether the OAS CAHPS 
Survey will be mandated in CY 2024 if outpatient surgery is included in 
their HCAHPS submission.
    Response: The Hospital OQR Program is an independent quality 
reporting program, and as part of its requirements, HOPDs will be 
required to meet the reporting requirement for the OAS CAHPS Survey 
once the OAS CAHPS Survey begins mandatory reporting in CY 2024 
reporting period/CY 2026 payment determination.
    Comment: A commenter requested that CMS do more to ensure correct 
attribution of experience and requested CMS provide evidence of the 
survey's reliability before it requires survey administration, which 
the commenter believes could reduce the reliability of the results and 
negatively impact data-driven decision making.
    Response: We thank the commenter for their feedback. The purpose of 
the OAS CAHPS Survey is to obtain data on a patient's experience of 
care received from a hospital/facility, specifically from an HOPD. 
While there is always potential that a patient gets confused, we 
believe that the OAS CAHPS Survey is focused on patients' experience of 
care received for their ambulatory surgery or procedure. A physician/
surgeon who performs surgeries/procedures at a facility is a member of 
that facility with both rights and responsibilities. We believe it is 
the facility's responsibility to ensure that someone--whether the 
doctor, nurse, or other facility staff member--provide patients with 
information about preparing for their procedure, about the procedure 
itself, as well as what to expect following the procedure/surgery. 
Therefore, we believe it is appropriate to include these important 
communications with patients in the OAS CAHPS Survey and believe 
experience with the provider attributed to the facility is appropriate.
    Further, we believe that the information provided in the OAS CAHPS 
Survey ``Instructions'' is sufficient to inform the patient regarding 
the purpose of the OAS CAHPS Survey and provides sufficient instruction 
and details for the patient to correctly identify and relate the survey 
to the facility and procedure that patient received. We began 
developing the Outpatient and Ambulatory Surgery Survey in 2012 using 
the principles and guidelines established by the Agency for Healthcare 
Research and Quality's (AHRQ) CAHPS program and AHRQ approved this 
instrument as a CAHPS Survey in February 2015.\358\
---------------------------------------------------------------------------

    \358\ See https://www.ahrq.gov/cahps/surveys-guidance/oas/index.html.
---------------------------------------------------------------------------

    We reiterate that based on our experience through the National OAS 
CAHPS voluntary reporting program, we can confirm the OAS CAHPS Survey 
reliability and (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. We also note that, unit-level reliability 
analysis of the publicly reported composites for OAS CAHPS are well 
above the .70 cut-off typically used to assess reliability of a 
measure. Based on this reliability, we believe that the information 
learned from the survey data will allow hospitals to make more informed 
decisions to improve care.
    Comment: Many commenters expressed concern regarding the length of 
the survey and recommended that the survey should be significantly 
shortened to focus on actionable aspects of the patient experience and 
to encourage higher response rates amongst patients. Specifically, some 
commenters recommended that a revised OAS CAHPS Survey should include 
five to ten questions.
    Response: The OAS CAHPS Survey is comparable in length and survey 
response rate to other patient experience of care surveys. The survey 
instrument was developed in order to provide a more complete picture of 
patients' experience of care in the HOPD setting. We believe allowing 
facilities to administer a selection of the survey items, or greatly 
reducing the questions to patients would impair the assessment of a 
facility's quality of care and would also inhibit the comparison of 
performance across facilities and the reliability of a facility's 
scores. In addition, the 24 core questions of the OAS CAHPS Survey are 
either directly actionable (that is, give feedback to hospitals) or 
inform the need for patients to answer subsequent questions that are 
actionable. We note that the survey results to date do not show that 
respondents are terminating the interview before the last question, 
which would be an indication of respondent fatigue for a survey that is 
too long. Based on the most recently received national implementation 
data for voluntary reporting, the nonresponse due to terminated 
interviews is less than one percent.
    Implementing the OAS CAHPS Survey in the Hospital OQR Program will 
enable patients to compare patient experience of care data across 
multiple HOPDs as part of their healthcare decision-making. In 
addition, we believe implementing the OAS CAHPS Survey in the Hospital 
OQR Program will incentivize HOPDs to factor patient experience of care 
into their quality improvement efforts more proactively. Implementing a 
shorter ``sample survey'' would not enable the same type of comparison 
as a fully tested survey.
    However, we also acknowledge these commenters' concerns about the 
length of the OAS CAHPS Survey and will continue to consider whether 
refinement would be appropriate.
    Comment: A commenter sought more information regarding the future 
of the ``Preparations for Discharge and Recovery'' domain of the OAS 
CAHPS Survey and whether CMS will publicly report data collected from 
the domain.
    Response: We plan to report information from ``Preparations for 
Discharge and Recovery'' beginning with the data collected in 2022 as 
part of National OAS CAHPS voluntary reporting and address public 
reporting OAS CAHPS data as part of the Hospital OQR Program in future 
rulemaking.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.

[[Page 63845]]

    We also refer readers to section XVI.B.4.c. of this final rule with 
comment period where we are also finalizing this measure in the ASCQR 
program with modification.
b. 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 \359\ 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) via the administration of pre-operative and post-operative 
visual function surveys.
---------------------------------------------------------------------------

    \359\ 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.\360\ 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. In addition, 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).
---------------------------------------------------------------------------

    \360\ 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/files/5d3792e74b6d1a256059d87d?filename=2013-40-OP.pdf. 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/files/5d3793174b6d1a256059d8e3?filename=2014-14-OP,0.pdf.
---------------------------------------------------------------------------

(2) OP-31 Measure Beginning With the CY 2025 Reporting Period/CY 2027 
Payment Determination and for Subsequent Years
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42247), we stated that 
we believed it would be appropriate to require hospitals to report on 
OP-31. We stated that hospitals have had the opportunity for 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 noted that a small 
number of facilities have consistently reported data for this measure 
and these data have been made publicly available. While we previously 
had concerns regarding the use of different surveys to assess visual 
function (79 FR 66947), we believe that using different surveys will 
not result in inconsistencies, as the allowable surveys are 
scientifically validated and provide comparable results.\361\ Research 
has demonstrated that of 16 different cataract surgery outcome 
questionnaires, it has been demonstrated that all were able to detect 
clinically important change.\362\
---------------------------------------------------------------------------

    \361\ 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.
    \362\ 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.
---------------------------------------------------------------------------

    In the CY 2022 OPPS/ASC proposed rule (86 FR 42247), we proposed 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 the CY 2022 OPPS/ASC 
proposed rule (86 FR 42259) and section XV.D.5.a.(1). of this final 
rule with comment period for information about submitting data via a 
CMS web-based tool.
    We received comments on these topics.
    Comment: Several commenters expressed support for mandatory 
reporting of OP-31: Cataracts: Improvement in Patient's Visual Function 
within 90 Days Following Cataract Surgery.
    Response: We thank the commenters for their support. The 
implementation of this measure underwent a number of changes aimed to 
address previous concerns regarding burden and the usage of various 
surveys to assess visual function. However, after review of public 
comments, which are discussed in this section, we are finalizing to 
require the OP-31 measure beginning with the CY 2025 reporting period/
CY 2027 payment determination, instead of our originally proposed data 
collection beginning with the CY 2023 reporting period.
    Comment: A few commenters expressed concern about making this 
measure mandatory, stating that because the OP-31: Cataracts: 
Improvement in Patient's Visual Function within 90 Days Following 
Cataract Surgery measure is not currently mandatory, many facilities 
have not been ``practicing'' reporting it even though it is voluntary 
in the Hospital OQR Program measure set.
    Response: We thank the commenters for their feedback. We note that 
even though a small number of facilities have reported data for this 
measure, those that have reported on this measure have done so 
successfully and consistently. We believe the 2-year extension from our 
originally proposed timeline of the CY 2023 reporting period/CY 2025

[[Page 63846]]

payment determination will provide facilities with sufficient time to 
provide staff training and operationalize the measure for successful 
reporting in the Hospital OQR program.
    Comment: Many commenters did not support the requirement for 
mandatory reporting of OP-31: Cataracts: Improvement in Patient's 
Visual Function within 90 Days Following Cataract Surgery and cited 
concerns about the operational complexity of collection and sharing 
data for the measure across physicians and outpatient settings. Many 
commenters believed administering surveys and tracking responses for 
the OP-31 measure would be burdensome. Specifically, many commenters 
were concerned that EHR systems were not compatible across physicians 
and outpatient settings, and were concerned by the potential burden 
their clinics and staff might face in extracting and sharing patient 
data. Several commenters were also concerned that requiring OP-31 would 
increase reporting burden during the ongoing COVID-19 pandemic and 
asked CMS to delay implementation.
    Response: We thank the commenters for their input, and we 
acknowledge their concerns. We highly encourage hospitals, 
ophthalmologists, and other clinicians to actively and routinely engage 
in exchanging information to better communicate and coordinate the care 
of patients to promote quality of care. However, we acknowledge the 
complexity of administering and sharing data for OP-31 across different 
settings. In response to these concerns, we are finalizing the 
requirement to report the OP-31 measure beginning with the CY 2025 
reporting period/CY 2027 payment determination instead of our 
originally proposed data collection beginning with the CY 2023 
reporting period. We believe the 2-year extension will provide 
facilities with sufficient time for clinics and staff to address 
potential issues with extracting and sharing patient data. The 2-year 
extension will also allow facilities to prepare and update systems and 
technology, and prevent additional reporting burden during the COVID-19 
pandemic.
    Comment: A few commenters raised concerns with measure 
specifications, especially the lack of specificity around 
administration of the survey to ensure consistency between the pre- and 
post-operative surveys as well as comparability of the measure across 
hospitals. Several commenters requested additional guidance and 
education from CMS regarding measure specifications and survey 
instruments. Several commenters expressed their belief that this 
measure would be better suited to the Physician Quality Reporting 
System as it was developed as a physician-level measure. A few 
commenters expressed concern and confusion about administering a 90-day 
post-op examination. One of the commenters disagreed with the use of 
the study cited, noting that it reviewed responsiveness of different 
questionnaires and not comparison of agreement across different 
questionnaires. One commenter believed that surveys would have a low 
response rate and that results would not be reliable.
    Response: We thank commenters for their feedback. We recognize 
commenters' concerns related to the measure specifications. However, we 
continue to believe the assessment of the McAlinden et al. study 
demonstrated that the use of different surveys did not result in 
inconsistencies \363\ and we maintain that it is appropriate for 
inclusion in the Hospital OQR Program measure set. We also acknowledge 
that this measure has been tested at the physician-level and not the 
facility-level. We would like to clarify, in response to concerns about 
the administering a 90-day post-op examination, OP-31 is based on a 
patient survey to assess visual function and not a post-op examination, 
which tests for visual acuity. We reiterate our belief that OP-31 
provides a valuable opportunity for patient feedback on visual function 
outside of the clinical setting.
---------------------------------------------------------------------------

    \363\ 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.
---------------------------------------------------------------------------

    Comment: Several commenters believed OP-31 has a limited use in 
evaluating patient improvement. A few commenters noted that cataract 
operations already have high rates of success. A few commenters noted 
that cataract surgeries are performed for other medical reasons beyond 
improving visual function. One commenter noted its belief that there is 
not just one measure that can be used to assess improved visual 
function.
    Response: We thank commenters for their input. However, even if 
cataract procedures have high rates of success, this does not preclude 
facilities from reporting on OP-31 or continuously working to improve 
patient outcomes. We agree with the commenters that there is no one 
measure that can assess all possible medical needs and possible visual 
function outcomes; however, we continue to believe that OP-31 is a 
valuable and appropriate measure to close the gap for a high impact, 
frequently performed procedure.
    After consideration of the public comments we received, we are 
finalizing the proposal to require OP-31: Cataracts: Improvement in 
Patient's Visual Function within 90 Days Following Cataract Surgery 
with modification. To address commenters' concerns, we are finalizing 
to require OP-31: Cataracts: Improvement in Patient's Visual Function 
within 90 Days Following Cataract Surgery beginning with the CY 2025 
reporting period/CY 2027 payment determination, instead of our 
originally proposed data collection beginning with the CY 2023 
reporting period. We believe the 2-year extension from our originally 
proposed timeline of the CY 2023 reporting period/CY 2025 payment 
determination will provide facilities with additional time to implement 
coordination strategies between the surgeon and the ophthalmologist, to 
provide staff training, and operationalize the measure for successful 
reporting in the Hospital OQR Program.
6. Summary of Previously and Newly Finalized Hospital OQR Program 
Measure Sets
a. Summary of Previously and Newly Finalized 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. As discussed previously, we are 
finalizing adoption of the Breast Cancer Screening Recall Rates measure 
in this final rule for the CY 2023 payment determination and subsequent 
years (OP-39). Table 63 summarizes the previously and newly finalized 
Hospital OQR Program measure set for the CY 2023 payment determination:
BILLING CODE 4120-01-P

[[Page 63847]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.166

b. Summary of Previously and Newly Finalized Hospital OQR Program 
Measure Set for the CY 2024 Payment Determination

[[Page 63848]]

    Table 64 summarizes the previously and newly finalized Hospital OQR 
Program measure set for the CY 2024 payment determination, which 
includes the COVID-19 Vaccination Coverage Among HCP measure (OP-38):
[GRAPHIC] [TIFF OMITTED] TR16NO21.167

c. Summary of Previously and Newly Finalized Hospital OQR Program 
Measure Set for the CY 2025 Payment Determination

[[Page 63849]]

    Table 65 summarizes the previously and newly finalized Hospital OQR 
Program measure set for the CY 2025 payment determination, which 
includes the ST-Segment Elevation Myocardial Infarction (STEMI) eCQM 
(OP-40) and removal of the OP-2 and OP-3 measures, and voluntary 
reporting of OAS CAHPS measures (OP-37a-e):
[GRAPHIC] [TIFF OMITTED] TR16NO21.168

d. Summary of Previously and Newly Finalized Hospital OQR Program 
Measure Set for the CY 2026 Payment Determination and Subsequent Years

[[Page 63850]]

    Table 66 summarizes the previously and newly finalized Hospital OQR 
Program measure set for the CY 2026 payment determination and 
subsequent years, which includes the mandatory reporting of the ST-
Segment Elevation Myocardial Infarction (STEMI) eCQM (OP-40) and the 
requirement of the OAS CAHPS measures (OP-37a-e):
[GRAPHIC] [TIFF OMITTED] TR16NO21.169

BILLING CODE 4120-01-C
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.\364\ As discussed in 
section IX. of the CY 2022 OPPS/ASC proposed rule (86 FR 42155) and 
section IX. of this final rule with comment period, 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

[[Page 63851]]

opportunity to carefully assess whether a procedure can be removed from 
the IPO list while still ensuring beneficiary safety. In the CY 2022 
OPPS/ASC proposed rule (86 FR 42155), for CY 2022, we proposed to halt 
the elimination of the IPO list and, after clinical review of the 
services removed from the IPO list in CY 2021, we proposed to add the 
298 services removed from the IPO list in CY 2021 back to the IPO list 
beginning in CY 2022.
---------------------------------------------------------------------------

    \364\ 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, in the CY 2022 OPPS/ASC proposed rule (86 FR 42251), we 
sought 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 invited 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.
    We received comments on these topics and provide a summary of these 
comments below.
    Comment: Many commenters offered suggestions in response to the 
Request for Comment on potential adoption of future measures in the 
Hospital OQR program. Several commenters encouraged CMS to work with 
stakeholders to identify a balanced set of high-quality, safe, and 
patient-centered measures that would be appropriate and useful across 
care settings particularly as procedures transition from the inpatient 
only list to outpatient settings. The commenters recommended that the 
measures should also address reporting challenges before proposing to 
adopt new measures into the OQR program. Several commenters believed 
CMS should explore additional measures addressing nutrition, breast 
cancer screening and diagnostic exams, structural equity related to 
disparity impact and the development of service-specific quality 
measures. One commenter also strongly recommended that CMS align with 
Leapfrog and its purchaser constituency by publicly reporting data in a 
way that puts the needs of consumers first.
    Response: We thank commenters for their feedback. We will continue 
to work with stakeholders and take recommendations into consideration 
as we determine future updates to the Hospital OQR measure set. We will 
also explore the program need and feasibility of the commenters' 
measure recommendations as we consider measures for inclusion in future 
rulemaking.
    Comment: A few commenters recommended that CMS should focus on 
developing Patient Reported Outcome (PROs) and patient experience 
measures to gather feedback directly from the patient without 
interpretation from a third-party source. Commenters stated that these 
measures can be broadly applied across the surgical domain and other 
procedures. Furthermore, they believed that prioritizing measures that 
focus on patients' feeling of inclusivity and developing patient 
reported metrics of inclusion in the care process is also an important 
step in addressing systemic bias in health care delivery.
    Response: We appreciate the commenters' recommendations. We believe 
in the importance of patients having a greater role in their healthcare 
decision making. Accordingly, placing an emphasis on PRO measures 
directly aligns with our goals to modernize and drive value-based care. 
We will consider commenters' recommendations as we gather information 
for future rulemaking efforts.
    Comment: Many commenters recommended that CMS consider adopting 
measures that are currently in the ASCQR Program measure set into the 
Hospital OQR Program's measure set. The measures commenters recommended 
for inclusion were: ASC-1, ASC-2, ASC-3, ASC-4, ASC-13, and ASC-14. 
Commenters noted that moving to adopt measures similar to these in the 
Hospital OQR Program would increase the alignment of measures between 
the Hospital OQR and ASCQR Programs and would allow consumers more 
opportunities to compare quality and safety across settings of care.
    Additionally, a few commenters suggested that CMS should consider 
adopting the Toxic Anterior Segment Syndrome (TASS) measure and the 
Ambulatory Breast Procedure Surgical Site Infection Outcome Measure in 
the Hospital OQR Program.
    Lastly, one commenter suggested that CMS should consider measures 
that focus on access to surgical care. The commenter suggests that 
these measures can provide information on whether patients gained 
timely access to a surgeon when/if they needed surgery.
    Response: We thank the commenters for this valuable feedback. We 
recognize the need to consider measures that enhance quality 
improvement efforts moving forward. We also continue to explore ways to 
address measure gaps, reduce burden and increase efficiency through 
alignment and streamlining our programs. The information provided in 
response to this request for comment may inform future Hospital OQR 
Program rulemaking.
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. of the CY 2022 OPPS/ASC proposed 
rule (86 FR 42251), we sought 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 also requested comment on the potential future adoption of a 
respecified 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 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). We refer readers to the FY 2022 IPPS/LTCH PPS final rule for a 
summary of public comments (86 FR 45408). 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)

[[Page 63852]]

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 
would 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 
invited 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 in the CY 2022 OPPS/ASC proposed rule (86 FR 
42252). Specifically, we invited 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.
    We received comments on these topics.
    Comment: Many commenters supported inclusion of a Risk-Standardized 
Patient Reported Outcomes Measure Following Elective Primary Total Hip 
and/or Total Knee Arthroplasty (THA/TKA) measure in the OQR program. As 
these procedures move from inpatient to outpatient settings, commenters 
noted it was important to monitor quality outcomes and publicly report 
results. Additionally, commenters stated that the proposed measure is 
aligned with patient values, being presented in a manner that is easy 
to understand. Commenters supported use of the HOOS, JR and the KOOS, 
JR as they are a widely used and less burdensome subset of the HOOS and 
KOOS surveys.
    Response: We thank the commenters for their support of the 
potential future adoption of a respecified version of PRO measures for 
elective THA/TKA PRO-PM for the Hospital OQR Program.
    Comment: Several commenters expressed concern regarding data 
collection burden. Commenters noted the increasing reporting threshold 
for hospitals voluntary participating in PRO collection in the 
Comprehensive Care for Joint Replacement (CJR) Model made it difficult 
for participants to meet the threshold. These commenters encouraged CMS 
to consider whether a lower rate of response is sufficient for 
measuring performance and asked that CMS cite specific reasons for the 
thresholds. A few commenters also raised concerns about patient burden, 
noting that completing patient-reported outcome surveys is burdensome 
for patients and may compete with other surveys, such as the OAS CAHPS 
Survey. Although commenters felt it was beneficial to have multiple 
options for collecting patient data, one commenter shared that their 
facility still struggled to collect patient-reported outcomes data 
despite using different modes that best fit their patient population.
    Response: We thank the commenters for their feedback and would like 
to clarify the reporting thresholds. Through the CJR final rules (80 FR 
73273 and 86 FR 23496), we finalized a data submission requirement that 
strategically increased with each performance year. To be successful, a 
hospital needed to submit PRO data for 50 percent or 50 eligible 
procedures in the first year of the Model. By performance year 8, 
hospitals will need to submit PRO data for 90 percent or 500 eligible 
procedures to be successful. The incremental increase over time allows 
hospitals to gradually build up their infrastructure and processes for 
collecting and storing data. While patient-reported outcome-based 
performance measures require providers to integrate data collection 
into clinical workflows, this integration provides opportunity for PROs 
to inform clinical decision making and benefit patients by

[[Page 63853]]

engaging them in discussions about potential outcomes.
    We do not expect this PRO-PM to contribute to survey fatigue or to 
negatively impact other PRO-PMs. The Patient-Reported Outcome Measure 
(PROM) instruments used to calculate pre- and postoperative scores for 
this THA/TKA PRO-PM were carefully selected, with extensive stakeholder 
input, to be low burden for patients. We appreciate the feedback 
regarding challenges experienced in collecting PRO data; we encourage 
providers to incorporate data collection approaches that make PRO 
survey responses available to patients and providers for clinical 
decision making, for increased patient investment in PRO response.
    Comment: A few commenters recommended using the American Joint 
Replacement Registry (AJRR) for implementation, citing that 
participation in the AJRR is a requirement for certification as a 
center of excellence by The Joint Commission. The commenters felt that 
using the AJRR would allow facilities to pool their resources for 
lowest costs. They also noted that as the AJRR incorporates Medicare 
Administrative Data for populating the database, its use would allow 
for robust risk adjustment, improved research, and independent 
reporting for participating facilities to normalize quality. Commenters 
noted that implementation through the AJRR infrastructure would be 
efficient for providers while minimizing duplication of reporting.
    Response: We appreciate commenters' recommendations regarding the 
AJRR and we will consider the feasibility and appropriateness of using 
this registry for future implementation if we proceed with development 
of an HOPD THA/TKA PRO-PM. We agree that leveraging existing resources, 
such as registries, will help decrease data collection burden.
    Comment: A few commenters provided feedback on differences related 
to having a joint replacement in the inpatient versus the outpatient 
setting. Specifically, these commenters noted that patients who undergo 
joint replacement in the inpatient setting tend to be sicker and more 
complex, which could result in an inappropriate comparison of quality 
amongst inpatient settings and outpatient settings. Commenters 
encouraged CMS to take this into consideration when developing a risk-
adjustment strategy. Commenters also noted that caregiver support plays 
an important role in patient outcomes for procedures performed in the 
outpatient setting. Commenters also noted that it may be challenging 
for outpatient facilities to meet the minimum reporting threshold. To 
alleviate cohort concerns, one commenter encouraged CMS to consider 
implementing this measure with a three-year measurement period and to 
include all patients ages 18 and older.
    Response: We thank commenters for their insights on the differences 
between inpatient and outpatient settings. With regards to facilities' 
ability to meet the reporting threshold, we agree that there must be a 
sufficient number of procedures in these settings to reliably measure a 
meaningful number of facilities, and we anticipate an increase in the 
number of THA/TKA procedures performed in the outpatient setting in 
future years. We will continue to monitor the cohort specification 
(including age) and the number of procedures captured during the 
specified measurement period to ensure meaningful measure results can 
be calculated. We appreciate the commenters' insight on the differences 
in patient complexity across different care settings, the need for 
having support at home, and the impact it may have on risk adjustment. 
We will continue to take this into consideration if we move forward 
with respecifying the measure for use in the HOPD setting. Any 
proposals to implement the measure will be announced through future 
rulemaking.
    Comment: A few commenters expressed concern about the risk 
adjustment strategy for the measure. Commenters noted the risk 
adjustment model does not include a variable for Medicare dual 
eligibility status, nor does it take into consideration a patient's 
spoken language and other social risk factors that could impact survey 
completion. Commenters noted that PRO-PMs have the potential to provide 
valuable insights into health care disparities related to lower 
extremity arthroplasty and encouraged CMS to further stratify the 
results by additional social risk factors.
    Response: We thank the commenters for their concern and would like 
to clarify the risk adjustment approach. For the development of the 
hospital measure, we assessed the impact of Medicare dual eligibility, 
the Agency for Health Research and Quality (AHRQ) socioeconomic status 
(SES) Index (socioeconomic status), and non-white race. The addition of 
each of these three social risk variables provided no statistically 
significant change to the risk model performance, variable 
coefficients, or the model outcome. As such, these variables were not 
included in the hospital risk model. These social risk variables were, 
however, statistically significantly associated with response to PRO 
surveys--whether patient-reported outcomes were obtained for patients 
undergoing primary elective THA/TKA--and so were included in the 
calculation of stabilized inverse probability weights used to account 
for potential response-bias. These variables, along with other social 
risk variables that may become available over time, will be reassessed 
as part of the respecification process if we proceed with developing an 
HOPD version of the measure as part of CMS' commitment to improving 
health equity.
    Comment: A few commenters provided feedback for developing and 
implementing patient-reported outcomes. One commenter encouraged CMS to 
collect multi-stakeholder input throughout the development process. In 
addition to the KOOS, one commenter recommended the visual analog scale 
(VAS), and mobility, self-care, usual activities, pain/discomfort, and 
anxiety/depression (EQ-5D-3L) scales. Lastly, a commenter recommended 
incentivized, phased implementation as hospitals who were not part of 
the CJR Model will need to build up infrastructure to support patient-
reported outcome measures.
    Response: We thank commenters for their feedback. As part of the 
inpatient hospital measure development process, the measure developer 
engaged extensively with technical expert panels and patient working 
groups to obtain feedback on key measure decisions. We thank the 
commenter for their suggestion to utilize an incentivized, phased 
implementation approach. We will continue to engage with stakeholders 
around these issues of additional survey instruments, phased 
implementation, and infrastructure improvements during any future 
development or implementation of an outpatient version of this measure, 
which would also be announced through notice and comment rulemaking.
    Comment: A few commenters recommended measuring patient-reported 
outcomes at the provider-level as the provider has a strong influence 
on outcomes and a more direct relationship with the patient.
    Response: We thank commenters for their recommendation to measure 
patient-reported outcomes at the clinician-level. Any future proposals 
to implement such a measure will be announced through notice and 
comment rulemaking.
    Comment: A few commenters did not support the inclusion of a Risk-
Standardized Patient Reported Outcomes Measure Following Elective

[[Page 63854]]

Primary THA/TKA measure in the OQR program. They cited the burden of 
collecting patient-reported outcomes data as the reason for not 
supporting this measure. Another commenter noted that although the 
procedures were removed from the IPO List, they did not agree that 
there will be a shift to the HOPD setting. The commenter questioned the 
validity of patient-reported outcomes data, noting that because a 
patient did not improve as he/she expected after surgery does not mean 
the patient did not receive quality care from the hospital. The 
commenter stated that determining clinical improvement after joint 
replacement is best determined by the orthopedist who is caring for the 
patient both pre- and post-procedure.
    Response: We reiterate that the PROM instruments that are used to 
calculate pre- and postoperative scores for this THA/TKA PRO-PM were 
carefully selected, with extensive stakeholder input, to be low burden 
for patients and to capture information clinicians deemed essential to 
understanding response to THA/TKA. We believe that patient-reported 
outcome-based performance measures provide critical quality information 
and reflect outcomes that are meaningful to patients. Between January 
1, 2018 and September 30, 2020, 264,997 total hip and/or total knee 
arthroplasties were performed in the outpatient setting. Developing a 
patient-reported outcomes measure for the Hospital OQR program would 
ensure these procedures benefit patients undergoing surgery by 
achieving meaningful improvement. The hospital-level measure was 
developed with considerable input from stakeholders including patients 
and orthopedic surgeons. In addition to the patient-reported outcome-
based performance measure, CMS publicly reports results related to 
hospital readmission and complications following these procedures in 
the inpatient setting and the Hospital Visits after Hospital Outpatient 
Surgery (OP-36) measure covers these procedures in the outpatient 
setting.
    Comment: One commenter recommended CMS consider measures that 
evaluate patient and caregiver engagement in decision-making, outcome 
measures that assess pain and functional status 3, 6, and 9-months 
post-procedure, and timely public reporting of comparative quality 
information about surgeons, surgical facilities, rehabilitation 
services, and home health services.
    Response: We appreciate the commenter's recommendations regarding 
patient engagement, follow-up period, and public reporting. We engaged 
patients and patient advocates throughout the development of the 
Hospital-Level THA/TKA PRO-PM (NQF #3559). We will continue to engage 
patients and patient advocates, as appropriate, if this measure is 
respecified for the HOPD setting. We agree that timely public reporting 
of quality information is important for informed patient decision-
making.
    We appreciate all of the comments submitted in response to this 
request for comment. These comments may inform future policy 
development.
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.\365\ 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.366 367 368 369 370 371 372 373 Such 
disparities in health outcomes are the 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.374 375 376 377 378 379 
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.380 381 382 383 384 
Studies have also shown that African Americans are significantly more 
likely than White Americans to die prematurely from heart disease and 
stroke.\385\ The COVID-19 pandemic has further highlighted

[[Page 63855]]

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.386 387 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.'' \388\ 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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    \365\ 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.
    \366\ 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.
    \367\ 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.
    \368\ 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.
    \369\ 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.
    \370\ 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.
    \371\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
    \372\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
    \373\ 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.
    \374\ 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.
    \375\ 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.
    \376\ 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.
    \377\ 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.
    \378\ 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.
    \379\ 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.
    \380\ 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.
    \381\ Centers for Medicare and Medicaid Services. Medicare 
Hospital Quality Chartbook: Performance Report on Outcome Measures; 
2014.
    \382\ 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.
    \383\ 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.
    \384\ 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.
    \385\ HHS. Heart disease and African Americans. (March 29, 
2021). https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19.
    \386\ https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
    \387\ 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/.
    \388\ 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.\389\ For the purposes of the RFI in the CY 2022 OPPS/
ASC PPS proposed rule (86 FR 42232), we used 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.'' \390\ We noted 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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    \389\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \390\ 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.\391\
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    \391\ 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) and the FY 2022 IPPS/LTCH PPS final rule (86 FR 42252) 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) and the FY 2022 IPPS/LTCH PPS final rule 
(86 FR 42252), 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 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.\392\ 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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    \392\ https://qualitynet.cms.gov/inpatient/measures/disparity-methods/methodology.
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    We received high-level comments on CMS' larger aforementioned plans 
to address health equity in quality reporting programs.
    Comment: Many comments provided general support for efforts to 
improve equity through quality improvement programs and payment 
policies but not specific to the measurement considerations in the OQR 
and ASCQR RFIs. Commenters had varied recommendations for advancing 
equity through measurement and payment programs. Comments included 
statements that while there are numerous social risk factors, it is 
critical to prioritize equity as an emergent issue for Black, Hispanic/
Latino, Indigenous and Asian communities and noted that systemic 
racism, not race, is a social risk factor.
    Commenters recommended expanding the portfolio of programs and 
resources to support the related work of health care providers 
including data analyses and quality improvement activities to bridge 
hospital-level efforts with post-acute and community-based programs and 
models to close health equity gaps. A commenter noted that there are 
inadequate healthcare-based solutions for addressing social 
determinants of health. Another stated that working to solve the 
problems requires federal leadership, and a major aspect of that 
leadership needs to be addressing the inequities in resources these 
hospitals experience that have helped lead to the health care 
disparities in the communities in question. One commenter recommended 
that CMS build programs for addressing inequities from existing efforts 
from the public and private sector.

[[Page 63856]]

    A number of commenters recommended that CMS engage in a robust 
stakeholder engagement process to discuss the input that was received.
    Finally, on the broader use of measures to address health equity, 
one commenter stated CMS should not use equity health care quality 
metrics to rank hospitals on health equity because it could create 
competition rather than collaboration, while another stated that it 
would be helpful to see the disparities reported at the national level.
    Response: We appreciate the feedback provided by the commenters 
regarding additional approaches to improving health equity outside of 
the specific topics covered in our OQR and ASCQR health equity RFIs. We 
will take commenters' feedback into consideration in future policy 
development.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42252), we sought 
comment on expanding our efforts to provide results of the disparity 
methods to promote health equity and improve healthcare quality. 
Specifically, we sought 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.\393\ We sought public comment on potential future 
confidential reporting of the six aforementioned measures, as well as 
other potential measures described in section XV.B.4. of the CY 2022 
OPPS/ASC proposed rule (86 FR 42238) and of this final rule with 
comment period, stratified by dual eligibility status, if technically 
feasible, adequately representative, and statistically reliable.
---------------------------------------------------------------------------

    \393\ https://qualitynet.cms.gov/outpatient/specifications-manuals.
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    The Within- and Across-Facility Disparity Methods would be applied 
to the selected measures. The methods offer two different, but 
complementary metrics of a facility's disparity. The Within-Facility 
method reports a difference in performance for patient populations at a 
specific facility (where a score of zero indicates equal outcomes), 
while the Across-Facility method reports a risk-standardized rate for 
the measure for only the target population, which shows facilities how 
they compare to the national average.
(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.\394\ 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.
---------------------------------------------------------------------------

    \394\ 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.
---------------------------------------------------------------------------

    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). We also refer 
readers to the FY 2022 IPPS/LTCH PPS final rule for a summary of public 
comments (86 FR 45349).
    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.\395\ 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.\396\
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    \395\ 2020 Disparity Methods Updates and Specifications Report. 
Available at: https://qualitynet.cms.gov/inpatient/measures/disparity-methods/methodology.
    \396\ 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.
---------------------------------------------------------------------------

    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

[[Page 63857]]

source of the race and ethnicity code in Medicare administrative data 
to reclassify some beneficiaries as Hispanic or Asian/Pacific Islander 
(API).\397\ 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, applying both Bayesian updating and multinomial 
logistic regression to estimate the probability of belonging to each of 
the six racial/ethnic groups.\398\
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    \397\ 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.
    \398\ 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.\399\ 
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 2.1.400 401 402 The 
algorithms under consideration are considerably less accurate for 
individuals who self-identify as American Indian/Alaskan Native or 
multiracial.\403\ 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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    \399\ https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
    \400\ 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.
    \401\ https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
    \402\ We note for readers that the statistics reported for the 
MBISG 2.0 model in the CY 2020 OPPS/ASC proposed rule were 
incorrectly described and should be disregarded. In this final rule 
with comment period we correct this sentence to read as follows: 
``With respect to Asian and Pacific Islander, Black, Hispanic, and 
White Medicare beneficiaries, the MBISG 2.1 has 96-99 percent 
concordance with what Medicare beneficiaries themselves report when 
allowed a full set of response options.'' Source: MBISG 2.1 
validation results performed under contract #GS-10F-0012Y/HHSM-500-
2016-00097G. Pending public release of the 2021 Part C and D 
Performance Data Stratified by Race, Ethnicity, and Gender Report, 
available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
    \403\ 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.
---------------------------------------------------------------------------

    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.\404\ 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.\405\ 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.
---------------------------------------------------------------------------

    \404\ 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.
    \405\ 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.
---------------------------------------------------------------------------

    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 solicited comment on current data collection practices by 
facilities to

[[Page 63858]]

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) 
\406\ 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).\407\ 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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    \406\ https://minorityhealth.hhs.gov/assets/pdf/checked/1/Fact_Sheet_Section_4302.pdf.
    \407\ https://www.healthit.gov/sites/default/files/2020-08/2015EdCures_Update_CCG_USCDI.pdf.
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(b) Solicitation of Public Comments
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42252), we sought 
comment on the possibility of expanding our current disparities methods 
to include reporting by race and ethnicity using indirect estimation. 
We also sought 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 sought 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 invited 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.
    We received comments on these program-specific topics to address 
health equity.
    Comment: Many commenters expressed support for the potential future 
application of the two disparity methods to the Hospital OQR Program, 
noting appreciation for CMS' recognition of the importance of closing 
the health equity gap. Commenters noted the importance of addressing 
health equity gaps in the outpatient settings and of providing 
hospitals with detailed data on their patient's dual eligibility status 
to enable tracking as procedures shift from acute care to outpatient. A 
few commenters expressed support for confidential reporting of 
stratified results in facility specific reports as it would result in 
actionable data for quality improvement. Several commenters stressed 
the importance of continued stakeholder engagement in projects designed 
to address structural and socioeconomic barriers to health, 
particularly to help policymakers understanding current practice trends 
and data collection challenges. Other commenters also recommended 
engagement through advisory groups and subject matter experts to test 
and pilot the application of the disparity methods to the Hospital OQR 
program to thoughtfully scale initiatives and promote nationwide 
standardization. One commenter requested CMS communicate their goals 
for future application of the disparity methods and inquired whether 
the goals are for accountability or resource assessment.
    Some commenters expressed concern with any potential administrative 
burden placed onto providers and requested time to implement data 
collection efforts. A few commenters noted that many contributors to 
health inequities and related disparities are outside of the control of 
the health care system. Two commenters urged CMS to invest resources 
for data collection and in software upgrading.
    While several commenters supported the proposed six measures as 
high-priority for stratified reporting, several commenters recommended 
thoughtful consideration of measurement gaps in identifying measures to 
be stratified, in addition to quality outcome benchmarks being 
developed prior to stratifying overused measure to avoid unintended 
consequences. Several commenters also recommended additional measure 
types for future stratification from additional data sources, such as 
experience surveys, or measurement domains, such as resource 
utilization/cost, access to surgical care, time of diagnosis or those 
that consider referrals to specialty care from a primary care setting. 
One commenter requested procedure-specific disparity reporting related 
to endoscopy, chemotherapy, or outpatient surgeries. One commenter 
recommended considering reinstating some quality measures where 
performance is felt to already be high, and to stratify these by social 
risk factors to assess additional room for improvement.
    Response: We appreciate the feedback provided by the commenters 
regarding the potential future application of the two disparity methods 
in the Hospital OQR Program. We continue to prioritize minimizing 
provider burdened in efforts to improve equity, and to ensure 
stakeholder involvement in all initiatives. Confidential reporting of 
the disparity methods for the proposed six measures would use existing 
administrative records to calculate facility-level results, and as 
such, the provider burden would be minimal. In the upcoming year, we 
intend to begin confidential reporting for a number of the 
aforementioned measures stratified by dual eligibility status, if 
technically feasible, adequately representative, and statistically 
reliable.
    Comment: Many commenters were generally supportive of our health 
equity initiatives and provided helpful recommendations on improving 
disparity measurement. Two commenters recommended structural and 
process measures to drive health equity improvement. One commenter 
recommended stratification methodologies compare safety net

[[Page 63859]]

systems solely with other safety net systems to allow for a fairer 
comparison between hospitals treating similar patients and that are 
subject to similar levels of available resources. One commenter noted 
that current hospital-specific reports are based on outdated data and 
suggested data should be timely.
    One commenter recommended leveraging technology, such as machine 
learning and artificial intelligence (AI), to analyze quality-of-care 
and outcomes using both patient demographics and clinical data to 
identify and address disparities. One commenter, however, disagreed 
noting that bias can manifest in machine learning and artificial 
learning if the AI algorithm is trained with incomplete data, and 
recommended a framework to guide the development and validation of 
algorithms to reduce bias. One commenter provided examples of how their 
organization has developed a social determinants of health framework to 
facilitate implementation of robust interventions through multi-
stakeholder engagement. Another commenter discussed a local program 
that leverages data-driven approaches to confront and overcome health 
disparities.
    Response: We appreciate the feedback provided by the commenters 
regarding future potential approaches to investigate disparities in our 
quality programs, and analyze outcomes data, and agree that adequate 
attention must be paid to limit the potential for unintended 
consequences. We will take commenters' feedback into consideration in 
future policy development.
    Comment: Several commenters supported the expansion of the CMS 
Disparity Methods beyond dual eligibility for the potential future 
application of an algorithm to indirectly estimate race and ethnicity 
in the Hospital OQR Program. A few commenters requested that 
stratification by race and ethnicity begin with confidential reporting, 
as it would allow healthcare organizations an opportunity to improve 
planning for needed services; understand patterns in access and 
outcomes for different patients; and engage in quality improvement for 
new policies to reduce disparities. Two commenters preferred any 
stratified data be publicly available to allow stakeholders to assess 
the diverse needs of different patient populations.
    While some commenters acknowledged that it is important to 
understand disparity by race and ethnicity, several commenters noted 
concern with the validity of using race and ethnicity data identified 
through indirect estimation, adding that it could lead to misleading 
results and introduce measurement bias. Three commenters noted concern 
with the use of first and last names to impute data as the results may 
be unreliable due to the various naming conventions commonly, noting 
that some beneficiaries, women or children in particular, may take the 
name of their husband or father, or an adopted individual may take 
their adoptive family's surname. Another commenter raised concerns with 
the use of the proposed indirect estimation MBISG approach, sharing an 
opinion that this method may raise questions about informed consent and 
that if the approach were to measure smaller racial/ethnic groups it 
may lose accuracy. Another commenter suggested that the existing 
limitations in using race-estimation algorithms outweigh the potential 
benefit of their use. Another commenter noted concern with the 
application of the indirect estimation of race and ethnicity data to 
MIPS measures due to the different levels of measurement, adding that 
imputed data can only be attributed to groups, while measures are often 
at the patient- or encounter-level. Several commenters did not support 
the confidential reporting of measure results by race and ethnicity as 
there was concern with the accuracy and actionability of the data. 
Three commenters did not support the use of indirect estimation of 
ethnicity and race in public reporting, however two commenters 
supported use in confidential reporting.
    A few commenters recommended that CMS pursue standardized 
collection of race and ethnicity since there variation exists in the 
race and ethnicity categories collected by institutions and suggested 
advisory stakeholder engagement to inform a unified approach. Some 
commenters recommended that standards include more granular information 
about race and ethnicity. Several commenters requested CMS indicate 
short-term and long-term objectives for stratification by race and 
ethnicity to reduce inequities through heath care payment and delivery. 
One commenter suggested that the use of place-based risk factors may be 
a better approach. Another stated it was important that hospitals have 
the opportunity to address self-identified inaccuracies and a process 
to appeal data and outcomes.
    Response: We appreciate the feedback provided by the commenters 
regarding stratification by race and ethnicity, the use of a model to 
estimate patient race and ethnicity and expanded disparity 
stratification. We will take commenters' feedback into consideration in 
future policy development.
    We are sensitive to the concerns raised by stakeholders about 
indirect estimation. As referenced in the CY 2022 OPPS/ASC proposed 
rule (86 FR 42018) and summarized in the FY 2022 IPPS final rule (86 FR 
25070), the Medicare program does not directly collect information from 
beneficiaries on race and ethnicity, instead relying on data collected 
by the Social Security Administration. A number of barriers contribute 
to this information being insufficiently accurate to examine hospital-
level disparities. For example, prior to 1980, only three categories 
(White, Black, and Other) were available for individuals to self-report 
race, and respondents were not able to indicate other identities such 
as Asian, American Indian/Alaska Native, Hispanic, or Pacific Islander. 
As a result of these constrained response options, many current 
beneficiaries may not have had the opportunity to accurately self-
report their race and ethnicity. Although we have undertaken 
significant efforts to update incorrect race and ethnicity information 
many inaccuracies remain limiting our ability to measure disparities.
    In recent years we have sponsored the development of two indirect 
estimation algorithms, both intended to correct and improve 
administrative information on race and ethnicity. Indirect estimation 
methods such as these can generally be used in two different ways: (a) 
To estimate race/ethnicity in the absence of self-reported data; or (b) 
to improve administrative data in which beneficiaries provided a self-
report of race/ethnicity but were not permitted a full set of response 
options (post-1980). While there is evidence supporting the validity of 
both approaches, accuracy and performance is particularly high in 
situation (b), where indirect estimation allows the administrative 
variables to better match the responses people would give when 
permitted a full set of response options. The approach for indirect 
estimation we intend to apply is situation (b), which uses an algorithm 
to augment existing data to allow a constrained administrative self-
reported variable to better match what Medicare beneficiaries 
themselves may have chosen when given a comprehensive set of response 
options on race and ethnicity.
    The Medicare Bayesian Improved Surname Geocoding Version 2.1 (MBISG 
2.1) uses the original beneficiary self-report, but uses additional 
information supplied by Medicare beneficiaries and information about 
neighborhood composition, to make this variable

[[Page 63860]]

better match what Medicare beneficiaries themselves self-report when 
given a full set of response options. With respect to Asian and Pacific 
Islander, Black, Hispanic, and White Medicare beneficiaries, the 
improved version of the administrative variable has 96-99 percent 
concordance with what Medicare beneficiaries themselves report when 
allowed a full set of response options, matching much better than the 
original self-reported variable in which most Medicare beneficiaries 
were not allowed to indicate Asian, American Indian/Alaska Native, 
Hispanic, or Pacific Islander identities. The MBISG 2.1 also offers 
distinct advantages because it generates probabilities of 
identification in each racial and ethnic group for each beneficiary, 
rather than assigning a single identification.
    The MBISG 2.1 incorporates multiple sources of information to 
develop racial and ethnic probabilities. In addition to the information 
on race and ethnicity which that person reported to the SSA, the model 
also considers the person's first and last name, the composition of the 
census block group where they live, and other demographic information 
that Medicare beneficiary shared. Through such a holistic approach, the 
MBISG 2.1 can make accurate comparisons between groups of Medicare 
beneficiaries regarding the quality of care received, including people 
whose surnames are common among several racial and ethnic groups, and 
people who changed their surnames upon marriage. The MBISG 2.1 is also 
designed to consider those who identify as Multiracial and allows 
measurement in Census categories that distinguish those who chose 
single or multiple racial identity, as well as considering endorsement 
of Hispanic ethnicity separately. Notably, we only intend to use the 
MBISG 2.1 to make inferences about aggregated groups at the hospital 
level, and do not intend to use it to make inferences about any single 
individual, validation studies indicate that these aggregate estimates 
further improve upon the higher predictive accuracy of the model.
    We believe that use of statistical imputation models, such as the 
MBISG 2.1 will permit us to provide more accurate, less biased 
information on disparities in hospital outcomes when reported 
confidentially. We plan to report results confidentially to facilities 
in Spring 2022 where results are technically feasible, meaningful, and 
statistically reliable. Any potential future proposal to publicly 
display the disparity results on Care Compare would be made through 
future rulemaking. We are sensitive to the concerns raised by 
stakeholders and will continue to evaluate the validity of the 
readmission measures when stratified by indirect estimation during the 
confidential reporting period.
    We appreciate the feedback provided by the commenters regarding 
measuring health equity in our hospital outpatient and ambulatory 
surgical center quality measurement programs. We will continue to take 
all concerns, comments, and suggestions into account in our future 
policies.
    Comment: Several commenters supported the facility collection of 
patient demographics. Many commenters recommended healthcare workforce 
education regarding data collection to ensure accurate and culturally 
sensitive collection of patients' demographic information. Other 
commenters urged education to beneficiaries on the need to share 
sensitive and personal information and the use of such data. Three 
commenters recommended use of EHR capabilities to facilitate data 
collection and routinely collect race, ethnicity, and language 
preference data, noting that the use of these capabilities can reduce 
administrative burden on healthcare facilities. One commenter 
recommended CMS engage nurses to identify and capture demographics for 
data collection to address health equity. A few commenters encouraged 
alternative collection methods such as updating the common working file 
(CWF) or utilizing HIPAA transaction sets to capture race and 
ethnicity. Other commenters recommended development of additional 
billing codes for social needs and evaluation of existing social 
determinants of health (SDOH) billing codes and International 
Classification of Diseases, Tenth Revision (ICD-10) Z codes, which 
identify non-medical factors that may influence a patients' health 
status. Further, commenters recommended using screening tools such as 
the Protocol for Responding to and Assessing Patients' Assets, Risks, 
and Experiences (PRAPARE) tool or the Accountable Health Communities 
Health-Related Social Needs Screening Tool developed by CMS.
    Commenters urged CMS to expand data collection to include factors 
such as sexual orientation, gender identity, language preference, 
tribal membership, disability status, socioeconomic status (SES), 
education, social support, food security, transportation access, and 
housing stability to provide a more comprehensive assessment of health 
equity. A few commenters included the need for information on language 
spoken, health literacy, incarceration status and veteran status. Other 
commenters expressed support for expanding stratification to additional 
social risk factors and demographic variables, such as primary 
language, geographic location, socioeconomic status, gender identity, 
sexual orientation, age, and ability status. Additionally, a few 
commenters recommended CMS require data collection methods that rely 
only on self-reported data. Another commenter asserted that emerging 
evidence suggests that healthcare disparities may be rooted in lived 
experiences and recommended CMS include questions specific to 
experiences of certain racial or ethnic groups within the healthcare 
system, such as mistrust of the healthcare system and providers, 
experiences of microaggression and perceived discrimination or 
injustices. Additionally, a few commenters encouraged improvement of 
hospital data collection by mandating a minimum data collection 
threshold. Similarly, one suggested limiting the number of social risk 
factors collected to ensure consistent reliable data prior to expanding 
the number of factors. Others recommended CMS set reasonable goals and 
timelines for the collection of self-reported demographic data. 
Finally, a commenter suggested that CMS work with state Medicaid 
agencies to improve the consistency of data collection at the time of 
Medicaid enrollment and another noted unique challenges to collecting 
data from certain sub-populations of beneficiaries such as homeless 
patients.
    Two commenters did not support an expanded data collection, noting 
concern with the burden and costs that would impact hospitals, or 
providers in QPP. Three commenters urged for alternative methods of 
capturing patient demographics via facility collection to reduce 
administrative burden on providers and encouraged leveraging of data in 
certified electronic medical records, adding that physicians should not 
have to invest resources for any modifications. A few commenters 
encouraged investment in interoperable and secure data infrastructure. 
One commenter suggested rather than health systems, payers such as CMS 
take the lead in collecting demographic data as a more efficient 
approach.
    Several commenters urged CMS to develop information technology 
standards and consistent guidance across programs for the capture, use, 
and exchange of relevant data such as the use of electronic health 
records and FHIR standards. Three commenters recommended CMS adopt the 
Office of the National Coordinator for Health Information Technology's 
(ONC) 2015

[[Page 63861]]

Edition Health Information Technology Certification standards across 
all CMS quality programs including the Promoting Interoperability 
Program, to leverage existing infrastructures for data collection.
    While supportive of collecting and utilizing demographic and SDOH 
data to measure and improve health equity, several commenters expressed 
concerns about protecting patient privacy. One of these commenters 
recommended CMS increase beneficiary education on the sharing of their 
sensitive health information with their providers. Another of these 
commenters asked that CMS address privacy considerations related to 
privacy, confidentiality and alignment with other federal standards 
related to data sharing and interoperability.
    Response: We appreciate the feedback provided by the commenters 
regarding expanded demographic and social risk factor data collection. 
We will take commenters' feedback into consideration in future policy 
development.
    Comment: We received mixed feedback from commenters about a 
potential facility equity score. A few commenters supported a facility 
equity score, noting a composite score is helpful to gauge disparities 
in large populations. One commenter noted that the composite equity 
score, however, depends on the comprehensiveness of the data and 
requires a broad spectrum of factors to avoid inaccuracies and 
undermining of the scoring methodology. One commenter recommended a 
patient-level equity score to identify patient populations that require 
additional services such as nutritional counseling, access to healthy 
foods, or transportation. Additional commenters suggested using tools 
such as the Health Equity Report Card or developing an SDOH report 
based on U.S Department of Health and Human Services (HHS') Health 
People 2030 framework. One commenter also suggested CMS consider the 
recommendations that identified by the American Hospital Association 
for improving care for vulnerable communities, such as including 
screening patients for social needs, offering navigation services to 
help patients access community services, and partnering with community 
stakeholders to align with local needs.
    A majority of commenters did not believe a facility equity score 
would provide actionable information to the patients or hospitals and 
encouraged other mechanisms for health equity advancement be developed, 
such as further stratification of quality measures by race, ethnicity, 
and dual eligibility. Several commenters noted concern that a facility 
equity score may inadvertently obscure lower performances on quality 
measures or impact reimbursements of facilities with greater 
proportions of vulnerable populations. Other commenters were concerned 
with the accuracy of facility scores that use data which may not be 
uniformly collected across hospitals. One commenter requested local 
customization of the hospital health equity score that would allow an 
accurate reflection of hospital's commitment to its community, and a 
hospital-specific methodology, versus the application of the Medicare 
Advantage hospital health equity score.
    Response: We appreciate the feedback provided by the commenters 
regarding the potential creation of a facility equity score. We will 
take commenters' feedback into consideration in future policy 
development.
    Comment: Commenters also provided broad feedback to us around other 
approaches, beyond quality measurement, that we may undertake to ensure 
more equitable care for Medicare beneficiaries in the hospital 
outpatient setting. One commenter suggested CMS consider developing and 
implementing measures that are stratified by access to healthcare, 
access to primary care, and quality of care. Three commenters noted 
that many safety net systems operate with limited resources that can 
impact patient access to care, forcing patients to wait months for 
screening and prevention or advanced imaging, adding that to improve 
the care of this population both acute and primary care must improve 
care coordination and CMS must provide necessary resources.
    Response: We appreciate the feedback provided by the commenters 
regarding equitable access to care in the outpatient setting. We will 
take commenters' feedback into consideration in future policy 
development.
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 did 
not propose any changes to these policies in the CY 2022 OPPS/ASC 
proposed rule.
    In section XV.B.4. of the CY 2022 OPPS/ASC proposed rule (86 FR 
42244), we proposed the adoption of eCQMs into the Hospital OQR Program 
measure set beginning with the CY 2023 reporting period. Therefore, we 
also proposed the manner to update the technical specifications for 
eCQMs. We proposed 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 received comments on these topics.
    Comment: A few commenters supported our proposal, expressing 
agreement with the alignment of the Hospital OQR Program's eCQM 
technical specification updates with other quality reporting programs, 
specifically, the Hospital IQR Program.
    Response: We thank the commenters for their support.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
    We also refer readers to section XIV. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42232) where we requested 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).

[[Page 63862]]

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 did not 
propose any changes to these policies in the 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 did not propose any changes to this policy in 
the 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 did not propose any changes to this 
policy in the CY 2022 OPPS/ASC proposed rule.
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).
    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 the CY 2022 OPPS/ASC proposed rule (86 FR 42257), we 
clarified 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 did not propose any 
changes to these policies in the 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 67.
[GRAPHIC] [TIFF OMITTED] TR16NO21.170

    We did not propose any changes to these policies in the 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 
did not propose any changes to these policies in the 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); \408\
---------------------------------------------------------------------------

    \408\ In the CY 2022 OPPS/ASC proposed rule (86 FR 42237) we 
proposed to remove OP-2 beginning with the CY 2023 reporting period/
CY 2025 payment determination. We are finalizing this proposal in 
this final rule with comment period.

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

[[Page 63863]]

     OP-3: Median Time from ED Arrival to ED Departure for 
Discharged ED Patients (NQF #0496); \409\
---------------------------------------------------------------------------

    \409\ In CY 2022 OPPS/ASC proposed rule (86 FR 42237), we 
proposed to remove OP-3 beginning with the CY 2023 reporting period/
CY 2025 payment determination. We are finalizing this proposal in 
this final rule with comment period.
---------------------------------------------------------------------------

     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 Cancer Screening 
Recall Rates measure (OP-39), 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
     OP-39: Breast Cancer Screening Recall Rates.\410\
---------------------------------------------------------------------------

    \410\ We note that that we are finalizing our proposal as 
proposed for the inclusion of OP-39: Breast Cancer Screening Recall 
Rates into the Hospital OQR Program measure set.
---------------------------------------------------------------------------

    We refer readers to the CY 2019 OPPS/ASC final rule with comment 
period (83 FR 59106 through 59107), where we established a 3-year 
reporting period for OP-32: Facility 7-Day Risk-Standardized Hospital 
Visit Rate after Outpatient Colonoscopy beginning with the CY 2020 
payment determination and for subsequent years. In that final rule with 
comment period (83 FR 59136 through 59138), we established a similar 
policy under the ASCQR Program. We did not propose any changes to these 
policies in the proposed rule. We refer readers to section XV.B.4.b. of 
this final rule with comment period where we are finalizing a 3-year 
reporting period for the Breast Cancer Screening Recall Rates measure 
(OP-39).
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. 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 final rule with comment 
period, we are finalizing 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,\411\ 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 proposed requirements related to survey 
administration, vendors, and oversight activities.
---------------------------------------------------------------------------

    \411\ As stated in section XV.B.5.a. of this final rule with 
comment period, 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42258), we 
reaffirmed our approach to the form, manner, and timing which OAS CAHPS 
information will be submitted and proposed to add two additional data 
collection modes (web with mail follow-up of non-respondents and web 
with telephone follow-up of non-respondents),\412\ 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 Survey website: 
https://oascahps.org. We reiterated our clarification from when we 
adopted these measures in the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79773) 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. We also refer readers to section XVI.D.1.d. of this final 
rule with comment period where we are finalizing similar policies for 
the ASCQR Program.
---------------------------------------------------------------------------

    \412\ 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 CY 2018 OPPS/ASC final rule 
with comment period (82 FR 59433), we expressed interest in 
investigating the feasibility of offering the OAS CAHPS Survey using a 
web-based format. 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);

[[Page 63864]]

and 35 percent (web with telephone follow-up).
    Based on these results, in addition to the three previously 
established modes, in the CY 2022 OPPS/ASC proposed rule (86 FR 42258), 
we proposed 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 
\413\ and mandatory reporting for the CY 2024 reporting period/CY 2026 
payment determination--the first year the survey would be required. We 
did not propose 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.
---------------------------------------------------------------------------

    \413\ As stated in section XV.B.5.a. of the CY 2020 OPPS/ASC 
proposed rule, 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 (86 FR 42258).
---------------------------------------------------------------------------

    For all five proposed modes of administration as part of the 
Hospital OQR Program, we proposed 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42259)), 
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 proposed 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 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, 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 in the CY 2017 OPPS/ASC final rule with comment 
period (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. Once data collection and 
reporting become mandatory beginning with the CY 2024 reporting period 
as finalized in section XV.B.5.a of this final rule with comment 
period, all locations that offer outpatient services of each eligible 
Medicare participating hospital would be required to participate in the 
OAS CAHPS Survey finalized in the CY 2017 OPPS/ASC final rule with 
comment period (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 as finalized in the CY 2017 
OPPS/ASC final rule with comment 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 as finalized in the CY 2017 OPPS/ASC final 
rule with comment period (81 FR 79784).
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42259), we also 
proposed 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 Survey quality reporting requirements. Therefore, 
in regard to any OAS CAHPS Survey 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 the 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 received comments on these topics.
    Comment: A commenter supported the proposal that the CAHPS 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.''
    Response: We thank the commenter for its support.
    Comment: A commenter recommended that CMS consider adopting ``real 
time surveys'' or surveys performed within 48 hours as a survey option 
for OAS CAHPS Survey.

[[Page 63865]]

    Response: Under the current guidelines, HOPDs can request to do 
continuous sampling to receive more ``real time'' feedback, which could 
include initiating their own surveys within 48 hours.
    Comment: Many commenters supported the two additional survey 
administration modes taking advantage of web-based technology: Web with 
mail follow-up of non-respondents and web with telephone follow-up of 
non-respondents. Among the reasons for support were the belief that 
these additional modes will enable providers to reach a larger patient 
population, to receive more and timelier information to improve patient 
experience, to reduce burden associated with this measure, and to 
provide greater flexibility for providers to collect data and patients 
to respond. A few commenters encouraged CMS to monitor the data and 
patient response rates, particularly of the two additional web-based 
survey modes, and data.
    Response: We thank the commenters for their support. We agree that 
as we expand the use of additional OAS CAHPS Survey modes, it will be 
important to monitor data, patient responses and ensure that the OAS 
CAHPS Survey is refined as appropriate. We will continue to monitor and 
evaluate methods available to assess and collect patient experience 
feedback in a reliable manner.
    Comment: Many commenters appreciated the proposal for the 
additional two new mixed mode options that include web-based 
collection, but expressed the belief that there needs to be a web-only 
or additional digital modes to reduce financial burden of the survey 
and make the survey easier for patients to complete. Several commenters 
recommended that CMS should permit a web-only survey administration 
mode and noted that web-only would likely be popular form of 
administration, has a better response rate and could achieve minimum 
surveys more efficiently than telephone only and would also reduce the 
financial burden of administration. One commenter specifically noted 
that these modes of survey distribution could help reach younger and 
minority populations.
    Response: We agree that the web-based mode interactions with smart 
phones, email, texting and other electronic distribution create the 
potential for new and engaging ways to connect with patients, 
especially to traditionally underserved communities. We believe that 
the potential to expand and increase access to patient feedback is of 
the utmost importance and will continue to evaluate the potential 
refinement to methods of contact for the OAS CAHPS Survey. However, as 
we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42258), we did 
not propose a purely web-based format at this time because the purely 
web-based format would create response bias since not all patients have 
access and the ability to respond via website. Additionally, the use of 
a web-based mode is included in the two mixed modes options being 
proposed and we believe that providing the additional follow-up 
provides patients with a greater opportunity to respond to the OAS 
CAHPS Survey, if they so choose.
    Comment: A few commenters expressed concern that patients may be 
confused by web-based surveys and CMS should ensure that patients 
understand the survey.
    Response: We note that an objective of the OAS CAHPS Survey is to 
obtain data on a patient's experience of care received from a facility, 
specifically from an HOPD. While there is always potential that a 
patient gets confused, we believe that the OAS CAHPS Survey is focused 
on patients' experience of care received for their ambulatory surgery 
or procedure. A physician/surgeon who performs surgeries/procedures at 
a facility is a member of that facility with both rights and 
responsibilities. We believe it is the facility's responsibility to 
ensure that someone--whether the doctor, nurse, or other facility staff 
member--provide patients with information about preparing for their 
procedure, about the procedure itself, as well as what to expect 
following the procedure/surgery. Therefore, we believe it is 
appropriate to include these important communications with patients in 
the OAS CAHPS Survey and believe experience with the provider 
attributed to the facility is appropriate.
    Further, we believe that the information provided in the OAS CAHPS 
Survey ``Instructions'' is sufficient to inform the patient regarding 
the purpose of the OAS CAHPS Survey and provides sufficient instruction 
and details for the patient to correctly identify and relate the survey 
to the facility and procedure that patient received. CMS began 
developing the Outpatient and Ambulatory Surgery Survey in 2012 using 
the principles and guidelines established by the Agency for Healthcare 
Research and Quality's (AHRQ) CAHPS program and AHRQ approved this 
instrument as a CAHPS Survey in February 2015.\414\
---------------------------------------------------------------------------

    \414\ Agency for Healthcare Research and Quality. ``The CAHPS 
Program.'' Available at: https://ahrq.gov/cahps/index.html.
---------------------------------------------------------------------------

    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
(2) Vendor Requirements
    We did not propose any new vendor requirements in the CY 2022 OPPS/
ASC proposed rule (86 FR 42018), 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

[[Page 63866]]

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.
    Comment: A few commenters opposed the use of third-party survey 
vendors to administer OAS CAHPS data and stated the belief that many 
organizations have the capacity to build more secure, more patient-
friendly, more community focused surveying platforms and questions, and 
that the financial expense of third-party vendors is not needed as 
evidenced by HCAHPS.
    Response: In order to meet the survey administration requirements 
for these measures, the HOPD must administer the OAS CAHPS Survey in 
accordance with the requirements listed in the OAS CAHPS Survey 
Protocols and Guidelines Manual.\415\
---------------------------------------------------------------------------

    \415\ https://oascahps.org/Survey-Materials Current Survey 
Materials (oascahps.org).
---------------------------------------------------------------------------

    OAS CAHPS Survey requires that the survey be administered by an 
approved survey vendor to ensure that patients respond to the survey in 
a way that reflects their actual experiences with outpatient surgical 
care and is not influenced by the facility. If vendors were removed as 
neutral third parties, there could be concerns of objectivity and bias.
    We believe that OAS CAHPS Survey vendors have gained experience 
during the voluntary reporting as part of the voluntary National OAS 
CAHPS program, and approved vendors will be able to support HOPDs. We 
post the list of the approved OAS CAHPS vendors on https://oascahps.org, and we encourage HOPDs to contact vendors for cost and 
service information pertaining to OAS CAHPS as there may be differences 
among vendors and multiple modes of conducting the survey provide 
greater economical choice.
    Comment: A commenter requested clarification on the ramifications 
if a HOPD does not receive enough completed surveys despite vendor 
attempts to collect information from eligible patients.
    Response: We agree with commenters that patient response is largely 
out of the control of the facility. We clarify we did not propose to 
penalize HOPDs for patients' decision not to complete the survey. An 
HOPD will not receive a payment reduction as long as it participates in 
the survey, its vendor administers the survey according to the OAS 
CAHPS Survey Protocol and Guidelines Manual, and submits that data to 
CMS by the data submission deadline.
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 did not propose any changes to these policies in 
the proposed rule.
    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 
Interval for Normal Colonoscopy in Average Risk Patients (NQF #0658).
(1) Form, Manner, and Timing for Reporting OP-31: Cataracts: 
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery (NQF #1536)
    In the CY 2022 OPPS/ASC Proposed rule (86 FR 42259) we proposed 
that this measure 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 did not propose changes 
to those policies in the proposed rule.
    We received no comments on this proposal regarding the form, 
manner, and timing for the OP-31: Cataracts: Improvement in Patient's 
Visual Function within 90 Days Following Cataract Surgery measure be 
submitted through the HQR System. As discussed in section XV.B.5.b. of 
this final rule with comment period, we are finalizing our proposal to 
require the reporting of the OP-31 measure with modification.
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 did not propose any changes to those policies in the 
CY 2022 OPPS/ASC proposed rule (86 FR 42018), we did propose policies 
specific to the proposed COVID-19 Vaccination Coverage Among HCP 
measure (OP-38), which will be submitted via the CDC NHSN website.
(1) Form, Manner, and Timing for the COVID-19 Vaccination Coverage 
Among HCP Measure (OP-38) Beginning With the CY 2022 Reporting Period/
CY 2024 Payment Determination and Subsequent Years
    For the COVID-19 Vaccination Coverage Among HCP measure (OP-38), in 
the CY 2022 OPPS/ASC proposed rule (86 FR 86 FR 42260), we proposed 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 (OP-38), we 
proposed 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 proposed that hospitals would report the 
measure through the NHSN web-based surveillance system.\416\ 
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. In the CY 2022 
OPPS/ASC proposed rule (86 FR 42260), we contemplated each quarter, the 
CDC would calculate a summary measure of

[[Page 63867]]

COVID-19 vaccination coverage from the reporting periods for the 
quarter in four-quarter increments, when four quarters of data are 
available.
---------------------------------------------------------------------------

    \416\ 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.
---------------------------------------------------------------------------

    We refer readers to section XV.B.4.a.2. of this final rule with 
comment period received on the COVID-19 Vaccination Coverage Among HCP 
Measure (OP-38). We did not receive public comments on the form, 
manner, and timing for the COVID-19 Vaccination Coverage Among HCP 
Measure (OP-38); as such, we are finalizing our proposal to adopt the 
COVID-19 Vaccination Coverage Among HCP measure (OP-38) beginning with 
the CY 2022 reporting period/FY 2024 payment determination and 
subsequent years with the modifications described in section XV.B.4.a. 
of this final rule with comment period.
6. 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. 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 CY 2022 OPPS/ASC proposed rule (86 FR 
42244) and in section XV.B.4.c. of this final rule with comment period, 
we discuss adoption of the STEMI eCQM (OP-40). In the CY 2022 OPPS/ASC 
proposed rule (86 FR 42260), we proposed 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 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 final rule with comment period, 
we are finalizing the adoption of the STEMI eCQM (OP-40) with voluntary 
reporting beginning with the CY 2023 reporting period. For the CY 2023 
reporting period, we proposed that hospitals submit STEMI eCQM (OP-40) 
data during this reporting period voluntarily for any quarter. 
Hospitals that chose to submit data voluntarily must submit in 
compliance with the eCQM certification requirements in sections 
XV.D.6.c., XV.D.6.d, and XV.D.6.e. of this final rule with comment 
period.
    For the CY 2024 reporting period/CY 2026 payment determination, we 
proposed that hospitals report one self-selected calendar quarter of 
data for the STEMI eCQM (OP-40). We note that in section XV.B.4.c. of 
this final rule with comment period, we are finalizing that the STEMI 
eCQM (OP-40) is required beginning with the CY 2024 reporting period/CY 
2026 payment determination.
    For the CY 2025 reporting period/CY 2027 payment determination, we 
proposed to increase the amount of data required. We proposed that 
hospitals report two self-selected calendar quarters of data for the 
required STEMI eCQM (OP-40).
    For the CY 2026 reporting period/CY 2028 payment determination, we 
proposed to further increase the amount of data required for the STEMI 
eCQM (OP-40). Specifically, we proposed 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 (OP-40). Beginning with the CY 2027 reporting period/CY 2029 
payment determination, we proposed to require that hospitals report all 
four calendar quarters (one calendar year) of data for the required 
STEMI eCQM (OP-40).
    We also refer readers to Table 68 for a summary of the finalized 
quarterly data increase in eCQM reporting beginning with the CY 2023 
reporting period.

[[Page 63868]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.171

    We received comments on these topics.
    Comment: One commenter suggested that we require hospitals submit 
one year of data instead of the incremental approach of increasing the 
number of quarters of data yearly.
    Response: We thank the commenter for its feedback. We interpret the 
commenter's suggestion to mean that we should require hospitals to 
begin the initial data submission with one calendar year (four 
quarters) of eCQM data instead of the initial requirement to submit one 
quarter of data beginning with the CY 2024 reporting period/CY 2026 
payment determination. While we appreciate the suggestion, we 
respectfully note that we proposed an incremental increase of data 
submission requirements to provide hospitals with a phased approach 
that would reduce reporting burden as eCQMs are new to the Hospital OQR 
Program.
    We believe that hospitals should be given an opportunity to gain 
experience with reporting data (including time to implement the eCQM 
and provide training to support eCQM reporting, if necessary). 
Additionally, we aligned our approach with that of the Hospital IQR 
Program (82 FR 38355). In the FY 2018 IPPS/LTCH PPS final rule, we 
received public comment that resulted in the modification of the 
Hospital IQR Program's requirements to this incremental increase to 
alleviate stakeholder concerns and challenges with eCQM reporting (82 
FR 38356). We believe it is important to learn from our approach and 
the public comments received regarding eCQMs in previous rulemaking for 
the Hospital IQR Program when proposing and finalizing equivalent 
requirements for the Hospital OQR Program. We believe our finalized 
policy to progressively increase the number of quarters of data 
collected over three years balances the benefit of additional eCQM data 
reported and allow adequate time for successful reporting experience. 
Any changes to eCQM reporting and submission requirements will be 
addressed in future notice and comment rulemaking.
    Comment: One commenter recommended that we identify the time period 
of data submission instead of allowing hospitals to self-select which 
quarters of data to submit (prior to the requirement of one calendar 
year of data submission beginning with the CY 2027 reporting period/CY 
2029 payment determination).
    Response: We thank the commenter for the recommendation. We believe 
that allowing the flexibility to self-select quarter(s) of eCQM data to 
report, beginning with the CY 2024 reporting period/CY 2026 payment 
determination, will allow hospitals to gradually transition toward more 
robust electronic quality measure reporting. We believe that the 
ability to self-select quarters of data will provide the necessary time 
for quality, health IT, and clinical teams to gain experience and 
operationalize integration of eCQMs in the Hospital OQR Program. 
Additionally, we believe that smaller hospitals may require more time 
to become proficient in all the parameters (mapping, new workflows, 
education, etc.) associated with eCQM reporting. Therefore, we believe 
that following this same incremental approach for the Hospital OQR 
Program allows us to remain consistent across hospital quality 
reporting programs and reduce provider burden.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
c. Electronic Quality Measure Certification Requirements for eCQM 
Reporting
(1) Requiring 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, in the CY 2022 OPPS/ASC proposed rule 
(86 FR 42261), we proposed 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 noted that this proposal is in alignment

[[Page 63869]]

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), and which has since been 
finalized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45418).
    We received no comments on this proposal. Therefore, we are 
finalizing this proposal as proposed.
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.
    Therefore, in alignment with the Hospital IQR Program file format 
requirements (85 FR 58940), in the CY 2022 OPPS/ASC proposed rule (86 
FR 42262), we proposed that, beginning with the CY 2023 reporting 
period/CY 2025 payment determination, hospitals: (1) Must submit eCQM 
data via the QRDA Category I (QRDA I) file format; \417\ (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. of the CY 2022 OPPS/ASC proposed rule (86 FR 42256) 
and in this section of this final rule with comment period where we 
outline the maintenance of technical specifications including those for 
eCQMs.
---------------------------------------------------------------------------

    \417\ 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.
---------------------------------------------------------------------------

    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 received comments on these topics.
    Comment: One commenter supported our alignment of these 
requirements with other quality reporting programs, particularly the 
Hospital IQR Program.
    Response: We thank the commenter for their support.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
(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, in the CY 2022 
OPPS/ASC proposed rule (86 FR 42262), we proposed 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 will therefore 
report a zero denominator for that fibrinolytic therapy eCQM, and this 
will count toward the required eCQMs for the Hospital OQR Program. 
Hospitals within that health system for which that fibrinolytic therapy 
eCQM does apply will provide data on that measure.
    We received one comment on these topics.
    Comment: One commenter supported our alignment of these 
requirements with other quality reporting programs, particularly the 
Hospital IQR Program.
    Response: We thank the commenter for its support.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
(3) Case Threshold Exemptions
    We understand that in some cases, a hospital may not meet the case 
threshold of discharges for a particular eCQM. In the CY 2022 OPPS/ASC 
proposed rule (86 FR 42262), we proposed 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.\418\ The 
exemption would not have to be used; hospitals could report those 
individual cases if they would like to.
---------------------------------------------------------------------------

    \418\ CMS Adds New Features to Denominator Declaration Screen 
for eCQM Reporting, available at: https://qualitynet.cms.gov/news/5fa161829314190021d3c262.
---------------------------------------------------------------------------

    We received one comment on these topics.
    Comment: One commenter supported our alignment of these 
requirements with other quality reporting programs, particularly the 
Hospital IQR Program.
    Response: We thank the commenter for its support.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.

[[Page 63870]]

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 the CY 2022 OPPS/ASC proposed rule (86 FR 42262), for the 
Hospital OQR Program, we proposed 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 developing this policy, 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 received comments on these topics.
    Comment: One commenter supported our alignment of the submission 
deadline requirements across quality reporting programs.
    Response: We thank the commenter for their support.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42262), we indicated 
that we considered a deadline of May 15. To allow more time for data 
submission and for hospitals to review their data, we believe that a 
May 15 deadline is more appropriate. Additionally, this is consistent 
with the Hospital OQR Program data submission deadline for web-based 
measures which provides inter-program alignment. Therefore, after 
consideration of public comments, we are finalizing this proposal with 
modification, establishing May 15 as the data submission deadline for 
eCQMs for the CY 2023 reporting period/CY 2025 payment determination 
and for subsequent years. We note the submission deadline may be moved 
to the next business day if it falls on a weekend or Federal holiday.
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 did not propose any changes to 
these policies in the proposed rule. We note that we did not propose 
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.
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 we formalized a review and 
corrections period for chart-abstracted measures in the Hospital OQR 
Program. We did not propose any changes to these policies in the 
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 did not propose any changes to these policies in the proposed rule.
c. Electronic Clinical Quality Measures (eCQMs)
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42263), we proposed 
that hospitals would have a review and corrections period for eCQM data 
submitted to the Hospital OQR Program. We proposed 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 received no comments on this proposal. Therefore, we are 
finalizing this proposal as proposed.
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 the CY 2022 OPPS/
ASC proposed rule (86 FR 42259) and this final 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. Use of 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

[[Page 63871]]

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 the CY 2022 OPPS/ASC proposed rule (86 FR 42263), we 
proposed 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 proposed 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 received comments on these topics.
    Comment: Several commenters supported the proposed changes to 
require the use of electronic file submissions and remove the paper 
submission option beginning with the CY 2022 reporting period/CY2024 
payment determination and for subsequent years because this change will 
align the data validation process for chart abstracted measures with 
the Hospital IQR Program.
    Response: We thank the commenters for their support.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
c. 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, 
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 the CY 2022 OPPS/ASC proposed rule (86 FR 42263), we 
proposed 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 proposed 
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 received comments on these topics.
    Comment: Several commenters supported this change to 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.
    Response: We thank the commenters for their support.
    Comment: Several commenters expressed concern with the proposal to 
reduce the submission time for validation from 45 to 30-calendar days. 
A few commenters noted that it takes time to review copied charts and 
recompile them for CDAC review. Commenters also noted that the time 
allotted for preparation of files will be even more important as 
measures move to eCQMs. A few other commenters mentioned that they do 
not support reducing hospital response times to validation requests 
without assurances from CMS that hospitals will receive timely feedback 
as a result. One commenter had concerns that given the scarce resources 
in health care currently, this proposal will present increased hardship 
to many facilities. The commenters requested that CMS continue to allow 
45 days for submission of medical records to CDAC.
    Response: As previously noted, the majority of participating 
hospitals in the Hospital OQR program have submitted their records 
prior to 30 calendar days in the current process according to the CDAC 
data. Given this, we believe that this adjusted timeline will not 
impose hardship on those hospitals. Additionally, our findings show 
that outpatient records contain less pages than inpatient records 
therefore, we do not anticipate that HOPDs will require additional 
time, resources, or administrative burden compared to inpatient 
hospitals, which already complete this process within the 30-day 
timeframe. We acknowledge that the reduction in time may require some 
hospitals to adjust their procedures to meet the new deadline, but this

[[Page 63872]]

proposal does not change the number of records requested, and we 
believe that a majority of hospitals have already shown the 30-day 
timeframe is feasible. Furthermore, as stated in the CY 2022 OPPS/ASC 
proposed rule (86 FR 42263 through 42264), this proposal would allow us 
to reduce the time needed to complete validation and provide hospitals 
with valuable and timely feedback of their results.
    We also thank the commenters for their concern about the timing of 
this proposal as CMS shifts focus to eCQMs. As we gain more experience 
with eCQMs we will continue to monitor any potential challenges and 
adjust our validation requirements in future rulemaking if necessary.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
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) Addition of Targeting Criteria
    Beginning with validations affecting the CY 2022 reporting period/
CY 2024 payment determination and subsequent years, in the CY 2022 
OPPS/ASC proposed rule (86 FR 42264), we proposed to add to the two 
established targeting criteria used to select the 50 additional 
hospitals. Specifically, we proposed 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 stated in the proposed rule our belief that 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, the 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.\419\
---------------------------------------------------------------------------

    \419\ Government Accountability Office. ``Hospital Quality Data. 
CMS needs more rigorous methods to ensure reliability of publicly 
released data''. GAO-06-54, January 2006.
---------------------------------------------------------------------------

    We received comments on these topics.
    Comment: A few commenters supported the proposed changes to the 
targeting criteria used in the data validation process beginning with 
the CY 2022 reporting period/CY 2024 payment determination and 
subsequent years.
    Response: We thank the commenters for their support.
    Comment: One commenter did not support targeting a hospital that 
passed validation in the previous year with a two-tailed confidence 
interval that includes 75 percent.
    Response: We appreciate the commenters feedback and reiterate that 
validation continues to be an integral part of maintaining data 
integrity. We believe that finalizing these additional targeting 
criteria will provide more hospitals the opportunity to be selected for 
validation and ensure data integrity.
    Comment: A few commenters provided recommendations to CMS regarding 
the targeting criteria for validation policies. One commenter urged CMS 
to coordinate validation requirements between the Hospital OQR and 
Hospital IQR programs to ensure that hospitals that are selected for 
validation are only required to validate data for the Hospital OQR or 
Hospital IQR program, instead of both programs. Another commenter noted 
that validation is an intense year long process for facilities and 
recommended that the administration should not repeatedly require 
administrative processes for validation efforts in order to create 
additional availability for important quality improvement initiatives.
    Response: We appreciate the commenters' feedback and reiterate that 
validation is an important part of ensuring data integrity and that the 
finalization of these policies will help ensure data integrity and 
align validation policies across quality reporting programs. Each year 
there are only 10-15 hospitals that overlap in selection for 
validation. We closely review the selected hospitals to ensure there is 
no overlap in the record requests between the Hospital OQR and Hospital 
IQR programs. This review also allows us to ensure that hospitals have 
sufficient time to fulfill one request at a time. These policies are 
intended to align the Hospital OQR Program validation process with the 
Hospital IQR Program, which furthers overall cross-program alignment 
goals.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
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

[[Page 63873]]

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 did not propose any changes to these policies in the 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. Expanding 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, in the CY 2022 OPPS/ASC proposed rule (86 FR 42264), we proposed 
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 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 proposed 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 
received comments on these topics.
    Comment: A few commenters expressed support for the expansion of 
the ECE policy to cover eCQMs under the Hospital OQR Program.
    Response: We thank the commenters for their support.
    After consideration of the public comments we received, we are 
finalizing this proposal as proposed.
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 did not propose any 
changes to these policies in the proposed rule.

E. 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

[[Page 63874]]

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 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 final rule with 
comment period.
2. Reporting Ratio Application and Associated Adjustment Policy for CY 
2022
    We proposed to continue our established policy of applying the 
reduction of the OPD fee schedule increase factor through the use of a 
reporting ratio for those hospitals that fail to meet the Hospital OQR 
Program requirements for the full CY 2022 annual payment update factor. 
For the 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 proposed to continue to apply 
the reporting ratio to all services calculated using the OPPS 
conversion factor. We proposed 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 proposed to continue to exclude services paid 
under New Technology APCs. We proposed to continue to apply the 
reporting ratio to the national unadjusted payment rates and the 
minimum unadjusted and national unadjusted copayment rates of all 
applicable services for those hospitals that fail to meet the Hospital 
OQR Program reporting requirements. We also proposed to continue to 
apply all other applicable standard adjustments to the OPPS national 
unadjusted payment rates for hospitals that fail to meet the 
requirements of the Hospital OQR Program. Similarly, we proposed to 
continue to calculate OPPS outlier eligibility and outlier payment 
based on the reduced payment rates for those hospitals that fail to 
meet the reporting requirements. In addition to our proposal to 
implement the policy through the use of a reporting ratio, we also 
proposed 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.
    Comment: Two commenters asserted that the proposed reduced 
conversion factor of $82.810 and the proposed reporting ratio of 0.9805 
are incorrect. Both commenters claim the proposed reduced conversion 
factor should be $83.227 and the proposed reporting ratio should be 
0.9854. The commenters did not provide detailed calculations to support 
these assertions.

[[Page 63875]]

    Response: We reviewed our calculations from the proposed rule after 
receiving these comments, and we were able to reconfirm our findings 
from the proposed rule that the reduced conversion factor was correctly 
calculated at $82.810 and the reporting ratio was correctly calculated 
at 0.9805. We would refer the commenters to the earlier text in this 
section (section XV.E.1. of this final rule with comment period) that 
provides a detailed description of the calculations we perform to 
generate the reduced conversion factor and the reporting ratio. In 
addition, we refer readers to the Conversion Factor calculation 
described in Part 2 of the OPPS Claims Accounting narrative, included 
with each proposed and final OPPS rule, available on the CMS website 
at: https://www.cms.gov/.
    For this final rule with comment period, the final reporting ratio 
is 0.9804, which, when multiplied by the final full conversion factor 
of 84.177, equals a final conversion factor for hospitals that fail to 
meet the requirements of the Hospital OQR Program (that is, the reduced 
conversion factor) of 82.526. We are finalizing our proposal 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. We are also finalizing our proposals 
to implement the policy through the use of a reporting ratio, and 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 hospitals that fail to meet 
the Hospital OQR Program requirements for CY 2022 payment.

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

A. Background

1. Overview
    We refer readers to section XIV.A.1. of this final rule with 
comment period (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 did not propose any changes to these policies in the 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 did not 
propose any changes to this policy in the proposed rule.
b. Removal Factors for ASCQR Program Measures
    In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59111 
through 59115), we clarified, finalized, and codified at Sec.  416.320 
an updated set of factors \420\ and the process for removing measures 
from the ASCQR Program. We did not propose any changes to the measure 
removal factors in the proposed rule.
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    \420\ 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.
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3. Proposal To Adopt a New Measure for the ASCQR Program Measure Set
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42267), we proposed to 
adopt one new measure: COVID-19 Vaccination Coverage Among Health Care 
Personnel (HCP) measure (to be designated ASC-20) beginning with the CY 
2022 reporting period/2024 payment determination.
a. Adoption of the COVID-19 Vaccination Coverage Among Health Care 
Personnel (HCP) Measure (ASC-20) 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).\421\ COVID-19 is a contagious 
respiratory infection \422\ 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-19.423 424 As of July 
2, 2021, the U.S. reported over 33 million cases of COVID-19- and over 
600,000 COVID-19 deaths.\425\ As of October 14, 2021, the U.S. reported 
over 44 million cases and over 718,000

[[Page 63876]]

COVID-19 deaths.\426\ Hospitals and health systems have seen 
significant surges of COVID-19 patients as community infection levels 
increased.\427\ From December 2, 2020 through January 30, 2021, more 
than 100,000 Americans with COVID-19- were hospitalized at the same 
time.\428\
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    \421\ 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.
    \422\ 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.
    \423\ 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.
    \424\ 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.
    \425\ Centers for Disease Control and Prevention. (2021). CDC 
COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
    \426\ 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.
    \427\ 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.
    \428\ 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.\429\ 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.\430\ 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.\431\ 
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.\432\ Experts believe that COVID-19 spreads less commonly 
through contact with a contaminated surface \433\ and that in certain 
circumstances, infection can occur through airborne transmission.\434\ 
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.\435\ 
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.\436\ The CDC has emphasized that health care 
settings can be high-risk places for COVID-19 exposure and 
transmission.\437\
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    \429\ 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.
    \430\ 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.
    \431\ 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.
    \432\ 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.
    \433\ 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.
    \434\ 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.
    \435\ 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.
    \436\ 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.
    \437\ 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.\438\ 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.\439\ Subsequently, FDA issued EUAs 
for additional COVID-19 vaccines.440 441 Following the 
publication of the proposed rule, FDA granted full approval to 
Comirnaty[supreg], the Pfizer-BioNTech COVID-19 vaccine, on August 23, 
2021.\442\
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    \438\ 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.
    \439\ 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.
    \440\ U.S. Food and Drug Administration. (2021). Moderna COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download.
    \441\ U.S. Food and Drug Administration. (2021). Janssen COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/146303/download.
    \442\ U.S. Food and Drug Administration. (2021). Comirnaty and 
Pfizer-BioNTech COVID-19 Vaccine. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/comirnaty-and-pfizer-biontech-covid-19-vaccine
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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 administering 200 million shots in 100 days.\443\ On 
April 21, 2021, it was announced that this goal had been achieved.\444\ 
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.\445\ 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.\446\ Reportedly most states 
followed this recommendation,\447\ and HCP began

[[Page 63877]]

receiving the vaccine in mid-December of 2020.\448\
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    \443\ 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/.
    \444\ 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/.
    \445\ 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.
    \446\ 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.
    \447\ 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/.
    \448\ 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.\449\ 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.\450\ As of July 2, 2021, the CDC reported that over 328 
million doses of COVID-19 vaccine have been administered and 
approximately 155.9 million people had received full doses.\451\ 
Subsequently, the CDC reported that as of October 14, 2021, over 405 
million doses of COVID-19 vaccine have been administered and 
approximately 188.3 million people had received full doses.\452\ 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.\453\ Finally, as part of the efforts to 
vaccinate those who are still unvaccinated through increasing the 
number of Americans covered by vaccination requirements,\454\ on 
September 9, 2021, the Biden Administration announced that COVID-19 
vaccination will be required of all staff within Medicare and Medicaid-
certified facilities to protect both patients and HCP against COVID-
19.\455\
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    \449\ Centers for Disease Control and Prevention. Healthcare 
Workers. (2017) Accessed February 18, 2021 at: https://www.cdc.gov/niosh/topics/healthcare/default.html.
    \450\ 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/.
    \451\ Centers for Disease Control and Prevention. (2021), COVID 
Data Tracker. COVID-19 Vaccinations in the United States. Available 
at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
    \452\ This information has been updated from the proposed rule 
to reflect current data from the Centers for Disease Control and 
Prevention. (2021). COVID Data Tracker. COVID-19 Vaccinations in the 
United States. Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
    \453\ 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/.
    \454\ The White House. Path Out of the Pandemic: President 
Biden's COVID-19 Action Plan. Accessed on October 14, 2021. 
Available at: https://www.whitehouse.gov/covidplan/#vaccinate.
    \455\ CMS. Press Release: Biden-Harris Administration to Expand 
Vaccination Requirements for Health Care Settings. September 9, 
2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings. In order to implement this plan, CMS is working with 
the CDC to develop an Interim Final Rule with Comment Period that 
will extend emergency regulations to require vaccination among staff 
in a wide range of healthcare settings including dialysis 
facilities. This action will create a consistent standard across the 
country, while giving patients assurance of the vaccination status 
of those delivering care.
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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 this step 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 proposed adoption of a new measure, COVID-19 Vaccination 
Coverage Among HCP (ASC-20), 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 \456\ with major reductions in SARS-CoV-2 infections 
among those receiving a two dose COVID-19 vaccine despite a high 
community infection rate.\457\ Data from influenza vaccination 
demonstrate that provider vaccination is associated with that provider 
recommending vaccination to patients \458\ 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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    \456\ 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.
    \457\ 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.
    \458\ 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'') (ASC-20) 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.\459\
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    \459\ 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-
19.460 461 462 463 A complete vaccination course may require 
multiple doses or regular revaccination.\464\ Vaccination coverage for 
purposes of this measure is defined

[[Page 63878]]

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).\465\ The specifications for the COVID-19 HCP vaccination measure 
(ASC-20) are available on the NQF website at: https://www.cdc.gov/nhsn/nqf/index.html.\466\
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    \460\ 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.
    \461\ Centers for Disease Control and Prevention. Measure 
Specification: NHSN COVID-19 Vaccination Coverage Updated August 
2021. Available at: https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf.
    \462\ National Health Safety Network. Healthcare Personnel 
COVID-19 Vaccination Cumulative Summary (CDC 57.219, Rev 5). Updated 
September 2021. Available at: https://www.cdc.gov/nhsn/forms/57.219-p.pdf.
    \463\ Centers for Disease Control and Prevention. Frequently 
Asked Questions about COVID-19 Vaccination. How do I know if I have 
been fully vaccinated if I was vaccinated in another country? 
https://www.cdc.gov/coronavirus/2019-ncov/vaccines/faq.html (updated 
October 21, 2021).
    \464\ 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.
    \465\ 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.
    \466\ 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 (ASC-20) was included on the 
publicly available ``List of Measures Under Consideration for December 
21, 2020,'' \467\ 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 (ASC-20). 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.\468\ 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.\469\
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    \467\ https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94212.
    \468\ Measure Applications Partnership. MAP Preliminary 
Recommendations 2020-2021. Accessed on January 24, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \469\ 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.\470\ 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.\471\ Subsequently, the MAP Coordinating 
Committee met on January 25, 2021 and reviewed the COVID-19 HCP 
vaccination measure (ASC-20). 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.\472\ The MAP stated, ``the 
incomplete specifications require immediate mitigation and further 
development should continue.'' \473\ 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.\474\ The spreadsheet of final 
recommendations no longer cited concerns regarding evidence, testing, 
or NQF endorsement.\475\ 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 (ASC-20) 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 2 weeks of reporting.\476\ 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.\477\
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    \470\ Ibid.
    \471\ Ibid.
    \472\ 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.
    \473\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on February 23, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \474\ Ibid.
    \475\ Ibid.
    \476\ 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.
    \477\ 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 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

[[Page 63879]]

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 COVID-19 HCP vaccination measure (ASC-20) is not NQF-endorsed 
and has not been submitted to NQF for endorsement consideration. The 
CDC, in collaboration with CMS, is planning to submit the measure for 
consideration in the NQF Fall 2021 measure cycle. However, we found no 
other feasible and practicable measures on the topic of COVID-19 
vaccination among HCP.
    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 the 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 proposed that ASCs would be required to begin reporting 
data on the COVID-19 HCP vaccination measure (ASC-20) beginning January 
1, 2022, for the CY 2024 payment determination for the ASCQR Program. 
Thereafter, we proposed quarterly reporting periods. While we 
considered annual reporting periods for the ASCQR Program, we proposed 
quarterly reporting periods given the immediacy of the PHE and the 
importance of alignment across quality payment programs that proposed 
this measure.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42270), we stated that 
ASCs would report the measure through the CDC NHSN web-based 
surveillance system.\478\ While the ASCQR Program does not currently 
require use of the NHSN web-based surveillance system, we 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 the 
CY 2022 OPPS/ASC proposed rule (86 FR 42282) 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 with comment period 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 more aspects of society than 
influenza, including availability of the healthcare system. With 
respect to reporting for the COVID-19 HCP vaccination measure (ASC-20), 
CDC guidance for entering data requires submission of HCP count at the 
facility level \479\ 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 CY 2022 OPPS/ASC 
proposed rule.
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    \478\ 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.
    \479\ Centers for Disease Control and Prevention. COVID-19 
Vaccination Non-LTC Healthcare Personnel TOI https://www.cdc.gov/nhsn/index.html.
---------------------------------------------------------------------------

    To report this measure, we proposed that ASCs would collect the 
numerator and denominator for the COVID-19 HCP vaccination measure 
(ASC-20) 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 1 
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 1 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 proposed 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. 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.\480\
---------------------------------------------------------------------------

    \480\ Ibid.
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    We received comments on these topics. We note that this measure was 
also proposed for the Hospital Outpatient Quality Reporting Program; 
comments specific to hospitals and this program are discussed in 
section XV.B.4.a. of this final rule with comment period.
    Comment: Many commenters supported our proposal to adopt the COVID-
19 Vaccination Coverage Among HCP measure (ASC-20) and expressed the 
importance of vaccination in the fight against COVID-19. Some 
commenters stated that reporting the measure will ensure transparency 
and accountability in infection prevention and control for vulnerable 
populations and communities. Other commenters appreciated that the 
measure would make COVID-19 vaccination information available to the 
public in health care decisions.
    Response: We thank commenters for their support of the measure and 
agree that the measure is critically important in the ongoing fight 
against COVID-19. Additionally, we agree with the commenter that 
reporting and

[[Page 63880]]

publication of this measure would assist the public in making more 
informed health care decisions.
    Comment: A few commenters expressed concern that COVID-19 vaccines 
are authorized under EUA, and the measure should not be adopted until 
such time that a vaccine has received full FDA approval. One commenter 
observed that all three currently available vaccines should be fully 
approved by FDA prior to adoption of this measure to reduce vaccine 
hesitancy.
    Response: On August 23, 2021, subsequent to the publication of the 
CY 2022 OPPS/ASC proposed rule (86 FR 42267), FDA granted full approval 
to Comirnaty[supreg], which has been known as the Pfizer-BioNTech 
COVID-19 vaccine.\481\ While we recognize there are differences between 
EUA authorization and full FDA approval, we note that the process for 
each is scientifically rigorous and we refer readers to information 
related to FDA's process for evaluating an Emergency Use Authorization 
(EUA) request at https://www.fda.gov/vaccines-blood-biologics/vaccines/emergency-use-authorizationvaccines-explained. Each vaccine 
manufacturer that received EUA authorization enrolled tens of thousands 
of participants in randomized clinical trials, which is similar to what 
is required for full FDA approval.\482\ Manufacturers submit robust and 
rigorous data for both an EUA authorization and full FDA approval, and 
more than 404 million doses of COVID-19 vaccines have been 
administered.\483\ We believe all COVID-19 vaccines granted full 
approval and EUA authorization to be proven safe and effective and we 
believe it is appropriate to include the measure in the ASCQR Program.
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    \481\ U.S. Food and Drug Administration. Comirnaty and Pfizer-
BioNTech COVID-19 Vaccine. August 30, 2021. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/comirnaty-and-pfizer-biontech-covid-19-vaccine.
    \482\ Harvard Law Petrie-Flom Center. ``What's the Difference 
Between Vaccine Approval (BLA) and Authorization (EUA)?'' June 15, 
2021. Available at: https://blog.petrieflom.law.harvard.edu/2021/06/15/whats-the-difference-between-vaccine-approval-bla-and-authorization-eua/.
    \483\ Centers for Disease Control and Prevention. (2021). CDC 
COVID Data Tracker: COVID-19 Vaccinations in the United States. 
Available at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
---------------------------------------------------------------------------

    We further note that the COVID-19 Vaccination Coverage Among HCP 
measure does not itself require HCP to receive the vaccination, nor 
does this measure reward or penalize HOPDs for the rate of HCP who have 
received a COVID-19 vaccine. The COVID-19 Vaccination Coverage Among 
HCP measure requires HOPDs to collect and report COVID-19 vaccination 
data that would support public health tracking and provide 
beneficiaries and their caregivers information to support informed 
decision making.
    Comment: Several commenters opposed adoption of the COVID-19 
Vaccination Coverage Among HCP measure (ASC-20) due to a lack of 
evidence that ASCs contribute to the spread of COVID-19. These 
commenters cited a survey that found that, despite ASCs performing 
essential outpatient surgeries during March and April 2020, patients 
faced virtually no increase to the risk of contracting COVID-19.\484\
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    \484\ Mukerji, S. ASC QC COVID-19 Survey Confirms Continued 
safety in ASCs. ASC Focus. December 2020. Available at: https://www.ascfocus.org/ascfocus/content/articles-content/articles/2020/digital-debut/asc-qc-covid-19-survey-confirms-continued-safety-in-ascs.
---------------------------------------------------------------------------

    Response: We appreciate the commenters' feedback. Patient safety is 
a top priority of the ASCQR Program, and we believe that the COVID-19 
Vaccination Coverage Among HCP measure (ASC-20) will promote infection 
prevention and control for patients as well as HCP and other staff 
working in ASCs. We acknowledge that there is evidence that ASCs 
previously experienced low rates of COVID-19 among patients. The survey 
cited by the commenter and conducted by the ASC Quality Collaboration 
surveyed 709 ASCs in eight states about outpatient surgical procedures 
performed on 84,446 patients in March and April 2020; only 16 patients 
tested positive for COVID-19 within 14 days after the procedure.\485\ 
We note that incidence of new cases and the nation's capacity to test 
for new cases during the March and April 2020 time frame cited in the 
survey shared by the commenters is not representative of current 
conditions. At the time, new cases per day did not exceed 35,000. More 
recently, COVID-19 cases and deaths nationally have continued to rise. 
Comparatively in recent months, new cases per day have reached more 
than 189,000 with seven-day average case rates exceeding 100,000 during 
most of August and September 2021.\486\ Since the publication of the 
proposed rule, the emergence of coronavirus variants have resulted in 
8.9 million new virus cases.\487\ Thus, we believe it is appropriate to 
adopt the COVID-19 Vaccination Coverage Among HCP measure in the ASCQR 
Program as soon as possible to further infection control efforts and to 
increase transparency regarding vaccination status of HCP.
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    \485\ Mukerji, S. ASC QC COVID-19 Survey Confirms Continued 
safety in ASCs. ASC Focus. December 2020. Available at: https://www.ascfocus.org/ascfocus/content/articles-content/articles/2020/digital-debut/asc-qc-covid-19-survey-confirms-continued-safety-in-ascs.
    \486\ Centers for Disease Control and Prevention. Trends in 
Number of COVID-19 Cases and Deaths in the U.S. Reported to CDC for 
March 1-April 30, 2020 and August 1-September 20, 2021. Available 
at: https://covid.cdc.gov/covid-data-tracker/#trends_dailycases.
    \487\ Centers for Disease Control and Prevention. Trends in 
Number of COVID-19 Cases and Deaths in the U.S. Reported to CDC. 
Accessed September 22, 2021. Available at: https://covid.cdc.gov/covid-data-tracker/#trends_totalcases.
---------------------------------------------------------------------------

    Comment: Some commenters stated that it is inappropriate to use 
payment policies to drive vaccination coverage among HCP. Some 
commenters expressed concern that this measure could lead facilities to 
mandate vaccines for staff, with potential unintended consequences 
(specifically, staff quitting or legal risk for facilities for staff 
experiencing adverse events).
    Response: We note that this measure does not financially reward or 
punish ASCs for their vaccine coverage rate. As part of the ASCQR 
Program, an ASC's payment is affected only if it fails to report the 
requisite measures, not by the rate it reports. As such, we do not 
believe that the adoption of this measure uses Medicare payment 
policies to drive vaccination coverage among HCP. Additionally, we 
believe that publicly reporting the data will be useful to consumers in 
choosing healthcare providers, including by making comparisons between 
ASCs. We noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42239), a 
survey of HCP from April 2021 found that 66 percent of hospital HCP and 
64 percent of outpatient clinic HCP reported receiving at least one 
dose of the vaccine.\488\ Subsequent to the publication of the CY 2022 
OPPS/ASC proposed rule, research from August 2021 suggests that nearly 
73 percent of HCP across all health care facilities have received at 
least one dose of the vaccine.\489\ Based on these findings, we 
understand that HCP have been receiving the COVID-19 vaccine prior to 
the adoption and we believe that this measure encourages continued 
vaccination within ASCs.
---------------------------------------------------------------------------

    \488\ KFF/The Washington Post Frontline Health Care Workers 
Survey. (2021). Available at: https://www.kff.org/coronavirus-covid-19/pollfinding/kff-washington-post-health-care-workers/.
    \489\ Lazer, D. et al. THE COVID STATES PROJECT: A 50-STATE 
COVID-19 SURVEY REPORT #62: COVID-19 VACCINE ATTITUDES AMONG 
HEALTHCARE WORKERS. Northeastern University, Harvard University, 
Rutgers University, and Northwestern University. August 16, 2021. 
Available at: http://news.northeastern.edu/uploads/COVID19%20CONSORTIUM%20REPORT%2062%20HCW%20August%202021.pdf.

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[[Page 63881]]

    Comment: One commenter requested clarification on the definition of 
``health care personnel.'' Several commenters expressed a preference 
for data collection at the NPI level instead of by CCN.
    Response: We recognize commenters' concerns regarding the reporting 
burden associated with the specifications of this measure, specifically 
around the definition of HCP. We note that given the highly infectious 
nature of the COVID-19 virus, we believe it is important to encourage 
all personnel within the hospital, regardless of patient contact, role, 
or employment type, to receive the COVID-19 vaccination to prevent 
outbreaks within the hospital which may affect resource availability 
and have a negative impact on patient access to care. We also note that 
the measure specifications define ``eligible'' HCP as all persons 
receiving a direct paycheck from the reporting facility (that is, on 
the facility's payroll), regardless of clinical responsibility or 
patient contact, licensed independent practitioners, and adult 
students/trainees and volunteers.\490\ We recognize that ASCs utilize 
their NPIs for billing and are more familiar with this identifier; 
whereas, the NHSN system has been constructed to use the CCN as the 
facility identifier. A look-up tool mapping NPI to CCN is available for 
ASCs at https://www.qualityreportingcenter.com/en/ascqr-program/data-dashboard/ccn/.
---------------------------------------------------------------------------

    \490\ Centers for Disease Control and Prevention. Measure 
Specification: NHSN COVID-19 Vaccination Coverage Updated August 
2021. Available at: https://www.cdc.gov/nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf.
---------------------------------------------------------------------------

    Comment: Several commenters expressed concern that this measure 
should not be adopted until there is clarity around the impact of 
future booster recommendations. One commenter stated that the numerator 
requirement of a completed vaccination course may change over time and 
recommended that CMS establish a definition of completed vaccination 
course using the national guidelines as of the date the OPPS final rule 
is published each year. Other commenters recommended that reporting for 
the measure should be optional or delayed until a completed vaccination 
course can be more clearly and specifically defined.
    Response: The COVID-19 Vaccination Coverage Among HCP measure (ASC-
20) is a measure of a completed vaccination course (as defined in 
section XVI.B.3.a.2. of the CY 2022 OPPS/ASC proposed rule (86 FR 
42268)) and does not address booster shots. On August 12, 2021, FDA 
amended the EUAs for both the Pfizer-BioNTech COVID-19 Vaccine and the 
Moderna COVID-19 Vaccine to allow for the use of an additional dose in 
certain immunocompromised individuals, specifically, solid organ 
transplant recipients or those who are diagnosed with conditions that 
are considered to have an equivalent level of immunocompromise.\491\ 
The Centers for Disease Control on September 27, 2021 further 
recommended Pfizer-BioNTech boosters for individuals who completed 
their initial series at least six months ago and are 65 years of age or 
older; 18 years of age or older with underlying medical conditions; and 
18 years of age or older living and working in high-risk settings, 
which includes healthcare workers.\492\ We acknowledge commenter 
concerns that ASCs will be required to collect additional information 
from HCP on booster doses. However, we believe that the numerator is 
sufficiently broad to include future boosters as part of a ``complete 
vaccination course.''
---------------------------------------------------------------------------

    \491\ U.S. Food and Drug Administration. Coronavirus (COVID-19) 
Update: FDA Authorizes Additional Vaccine Dose for Certain 
Immunocompromised Individuals. August 12, 2021. Available at: 
https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-additional-vaccine-dose-certain-immunocompromised.
    \492\ Ibid.
---------------------------------------------------------------------------

    Comment: Several commenters cited Equal Employment Opportunity 
Commission (EEOC) guidelines, which state that employers must provide a 
reasonable accommodation if an employee's sincerely held religious 
belief, practice, or observance prevents them from receiving the 
vaccination. The commenters requested that CMS and the CDC revise the 
measure exclusions to align with EEOC guidance. One commenter expressed 
concern that the measure may lead to violation of individual employee's 
rights to choose whether to receive the vaccine.
    Response: We recognize that there are reasons, including religious 
objections or concerns regarding an individual's specific health 
status, that may lead individual HCP to decline vaccination. We 
emphasize that this measure does not mandate vaccines, it only requires 
reporting of vaccination rates for successful program participation. 
However, we believe that accurate vaccination rates of HCP are 
meaningful data for patients and beneficiaries to use when choosing an 
ASC. The CDC, the measure's steward, offers guidance regarding the 
reporting on HCP who decline vaccination due to religious reasons. 
Those HCP, however, would be included in the measure denominator along 
with other HCP who have not received a completed vaccination 
course.\493\
---------------------------------------------------------------------------

    \493\ Centers for Disease Control and Prevention. Reporting 
Weekly COVID-19 Vaccination Data for Healthcare Personnel Using the 
National Healthcare Safety Network (NHSN). September 2021. Available 
at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-reporting-508.pdf.
---------------------------------------------------------------------------

    We further note that the EEOC released updated and expanded 
technical assistance on May 28, 2021, stating that Federal equal 
employment opportunity (EEO) laws do not prevent an employer from 
requiring all employees physically entering the workplace to be 
vaccinated for COVID-19, so long as the employer complies with the 
reasonable accommodation provisions of the Americans with Disabilities 
Act (ADA) and Title VII of the Civil Rights Act of 1964 and other EEOC 
considerations.\494\ Thus, we do not believe that this measure 
conflicts with any EEOC guidance and believe it is appropriate to 
require facilities to report these data.
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    \494\ U.S. Equal Employment Opportunity Commission. What You 
Should Know About COVID-19 and the ADA, the Rehabilitation Act, and 
Other EEO Laws. May 28, 2021. Available at: https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws.
---------------------------------------------------------------------------

    Comment: A few commenters noted that, while vaccination plays an 
important role in ending the COVID-19 pandemic, the measure is not 
currently endorsed by the National Quality Forum and these commenters 
believed it should not be adopted until it receives such an 
endorsement. One commenter observed that NQF endorsement improves 
credibility and affords patients certainty that the measure data is 
reliable. One commenter recommended that CMS clarify that the adoption 
of a measure prior to NQF endorsement is only due to the exigency of 
the current circumstances. One commenter expressed a preference for 
measures that have been thoroughly tested and reviewed.
    Response: We acknowledge that the COVID vaccination of HCP measure 
is not NQF endorsed. However, as discussed in section 
XVI.B.3.a.(2).(c). of this final rule with comment period and below, we 
believe it is appropriate to develop and select this measure and that 
such development and selection is consistent with section 1833(i)(7)(B) 
of the Act. While we prefer to develop measures endorsed by a consensus 
building entity such as the NQF, we note that sections 1833(i)(7)(B) 
and 1833(t)(17)(C) of the Act do not limit CMS to developing and 
selecting such measures.

[[Page 63882]]

    At this time, there is no NQF endorsed measure addressing the 
COVID-19 vaccination rate of HCP. Further, we believe that in the 
context of the current COVID-19 PHE and continued monitoring and 
surveillance following the PHE, it is important to adopt this measure 
as quickly as possible to allow tracking and reporting of COVID-19 
Vaccination Coverage Among HCP. This tracking would allow facilities to 
identify the appropriateness and effectiveness of their infection 
control efforts, their initiatives to improve vaccination coverage, and 
would provide patients and consumers with important information for 
them to make more informed health care decisions. As such, it is 
neither feasible nor practical for CMS to delay the adoption of this 
measure until the NQF has endorsed it. We do note, nonetheless, that 
the CDC recently submitted the quarterly reported HCP COVID-19 
vaccination measure for the NQF Fall 2021 measure cycle and intends to 
submit a biannual reporting version of the COVID-19 vaccination measure 
for HCP in January 2022.
    In addition to the above, we note that the adoption of this measure 
is consistent with sections 1833(t)(17)(C)(ii) and 1886(b)(3)(B)(viii) 
of the Act, as incorporated into section 1833(i)(7)(B) of the Act. 
Pursuant to this authority, the ASCQR Program may select measures that 
are the same as (or a subset of) the measures for which data are 
required to be submitted under the Hospital IQR Program. We note that 
the Hospital IQR Program recently adopted a COVID-19 HCP Vaccination 
measure for which this data is required to be submitted (86 FR 45374 
through 45382).
    Comment: One commenter recommended development of a validation 
process for the COVID-19 Vaccination Coverage Among HCP measure (ASC-
20).
    Response: We appreciate the commenter's suggestion; we interpret 
the comment's referral to ``validation'' as what is done under our 
quality reporting programs where data reported is verified against data 
contained in original documentation, usually medical records. As 
discussed in section XVI.3.a.(2).(b). of the CY 2022 OPPS/ASC proposed 
rule (86 FR 42269), a comparison of two independent databases indicate 
that the measure is highly reliable and feasible. We agree that it 
would be preferable to validate COVD-19 vaccination data and will 
investigate how this could be done in balance with potential burden on 
ASCs and other facility types for any such process.
    Comment: One commenter supported public reporting of this measure 
and specifically noted support for early publication through the 
initial shortened reporting period.
    Response: We thank the commenter for the support.
    Comment: A few commenters expressed concern about reporting 
frequency. One commenter recommended that CMS reduce reporting 
frequency from quarterly to twice-yearly or annually to limit reporting 
burden. Another commenter stated that the reporting frequency would be 
time-intensive for ASCs with more than one location as those ASCs would 
need to collect information for staff across multiple facilities.
    Response: As stated in the CY 2022 OPPS/ASC proposed rule (86 FR 
42270), we believe that it would be ideal to have HCP vaccination data 
for every week of each month, and 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 1 
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. We believe that reporting at a lower frequency may result in 
data that is less meaningful and timely to consumers who want to 
consider HCP vaccination rates as part of their health care decision-
making process. Additionally, the CDC has provided a number of 
resources including a tool called the Data Tracking Worksheet for 
COVID-19 Vaccination among Healthcare Personnel to help facilities log 
and track the number of HCP who are vaccinated for COVID-19, which may 
reduce burden for ASCs. COVID vaccination data would be entered for 
each HCP in the tracking worksheet, and select a reporting week, and 
the data to be entered into the NHSN will automatically be calculated 
on the Reporting Summary.
    Comment: One commenter observed that it is difficult for consumers 
to locate ASC quality data through CMS websites and recommended that 
CMS prioritize simplifying access to data on this measure due to the 
ongoing PHE.
    Response: We acknowledge the commenters concern regarding 
availability of ASCQR Program data located currently on the CMS 
Provider Data Catalog rather than on the Care Compare site and intend 
to investigate alternate sites for making these data publicly available 
on a more expedient basis.
    Comment: Many commenters expressed concern that the measure 
reporting requirements are duplicative of other state and federal 
COVID-19 vaccination reporting requirements and that inclusion of the 
measure in quality reporting programs is unnecessarily burdensome for 
ASCs. Some commenters questioned the purpose of the measure given the 
CMS announcement on September 9, 2021 that the agency will require 
COVID-19 vaccination of staff within all Medicare and Medicaid-
certified facilities.\495\ Other commenters noted that they are 
currently required to report COVID-19 vaccination information to HHS 
and requested that such reporting might be considered a substitute to 
reporting proposed for the measure. A few commenters recommended a 
change to attestation-based reporting to reduce resources and burden 
required for reporting based on the proposed measure specifications. 
One commenter observed that time spent on multiple reporting 
requirements would take away from time available for efforts to improve 
vaccination coverage. Another commenter requested an analysis of burden 
and feasibility of data collection prior to adoption of the measure. 
One commenter recommended re-evaluating the burden of data collection 
after measure data has been collected for one year.
---------------------------------------------------------------------------

    \495\ Centers for Medicare & Medicaid Services. Biden-Harris 
Administration to Expand Vaccination Requirements for Health Care 
Settings. September 9, 2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings.
---------------------------------------------------------------------------

    Response: We appreciate commenters' feedback. We believe that the 
COVID-19 vaccination of HCP information submitted for this measure will 
be important as it will be made publicly available for use by Medicare 
beneficiaries and others in making informed decisions regarding their 
care including facility choice. We note that most Immunization 
Information Systems through which commenters may already be required to 
report vaccination information to HHS do not include the information 
needed to determine if an immunized person is a healthcare worker. 
Using the NHSN COVID-19 Vaccination Modules allows tracking vaccination 
coverage among the patients or HCP in ASCs.\496\ We do recognize that 
this measure may lead to duplicative reporting if ASCs voluntarily 
report COVID-19 HCP vaccination information to other data reporting 
systems in addition to this measure requirement via the NHSN, and

[[Page 63883]]

we are collaborating with other HHS agencies, including the CDC to 
minimize reporting burden to the extent feasible.
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    \496\ Centers for Disease Control and Prevention. FAQs on 
Reporting COVID-19 Vaccination Data. August 2021. Available at: 
https://www.cdc.gov/nhsn/hps/weekly-covid-vac/faqs.html.
---------------------------------------------------------------------------

    With regard to measure burden analysis, we refer the commenter to 
section XXIII.C. of this final rule with comment period, where we 
discuss the burden associated with the measure. We thank the commenters 
for the suggestion that the measure be attestation-based and note that 
any changes to the measure specifications would be proposed through 
future rulemaking.
    Comment: Several commenters observed that there are no currently 
required measures in the ASCQR Program measure set that require use of 
NHSN. These commenters observed that this significantly increases 
reporting burden for this measure because ASCs will be required to 
enroll in NHSN to submit data for this measure, and NHSN enrollment and 
account maintenance is a burdensome process. Some of these commenters 
recommended postponing implementation of the COVID-19 Vaccination 
Coverage Among HCP measure (ASC-20) to provide more time for ASCs to 
enroll in NHSN.
    Response: We recognize commenters' concerns about operational 
requirements of reporting and reiterate the availability of resources 
from the CDC.\497\ We believe that given the current COVID-19 PHE as 
well as the need for continued monitoring and surveillance, it is 
important to adopt this measure as quickly as possible to allow 
tracking and reporting of COVID-19 Vaccination Coverage Among HCP 
measure (ASC-20). As we stated in the CY 2022 OPPS/ASC proposed rule 
(86 FR 42270) and initially discussed in the CY 2019 OPPS/ASC final 
rule (83 FR 59115 through 59117), we further recognize 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. We believe, nonetheless, that the public health 
benefits to having these data available justify 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, including equity, justify this reporting burden.
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    \497\ Centers for Disease Control and Prevention. Reporting 
Weekly COVID-19 Vaccination Data for Healthcare Personnel Using the 
National Healthcare Safety Network (NHSN). September 2021. Available 
at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-reporting-508.pdf.
---------------------------------------------------------------------------

    Comment: One commenter observed that requiring collection of data 
at least once monthly is burdensome for ASCs, many of which are small 
businesses. This commenter further observed that this frequency of data 
collection does not support the goal of providing patient information 
because the data will only be publicly reported on a quarterly basis. 
This commenter recommended aligning data requirements with public 
reporting frequency.
    Response: As stated previously and in the CY 2022 OPPS/ASC proposed 
rule (86 FR 42270), we believe that it would be ideal to have HCP 
vaccination data for every week of each month, but are mindful of the 
time and resources that ASCs would need to report the data. Some COVID-
19 vaccines require multiple doses over a period of weeks or months, 
and we believe that a lower frequency of reporting as recommended by 
the commenter would likely undercount fully vaccinated HCP within the 
ASC. 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.
    Comment: One commenter recommended aligning with the policy 
finalized in the FY 2022 IPPS/LTCH PPS final rule in which only the 
most recent quarter of data will be used for public reporting (as 
opposed to a rolling 12-month report). Another commenter recommended 
against averaging monthly data points and suggested only reporting the 
most recent month's vaccination data to provide the most up-to-date 
information for patient decision making.
    Response: We agree with the commenters; in alignment with the FY 
2022 IPPS/LTCH PPS final rule (86 FR 45382) we will not finalize our 
plan to add one additional quarter of data during each advancing 
refresh until the point that four full quarters of data is reached and 
then report the measure using four rolling quarters of data. Instead, 
we will only report the most recent quarter of data. This would result 
in more meaningful information that is up to date and not diluted with 
older data. We emphasize that this modification of our proposal does 
not affect the data collection schedule established for submitting data 
to NHSN for the COVID-19 vaccination measure. This would simply update 
the data that are displayed for the public reporting purposes.
    After consideration of the public comments we received, we are 
finalizing our proposal to adopt the COVID-19 Vaccination Coverage 
Among HCP measure (ASC-20) with a modification to publicly report only 
the most recent quarter of data. Additionally, data will also be 
available for preview by ASCs for 30 days prior to being made publicly 
available. This will result in more meaningful information that is up 
to date and not diluted with older data.
4. 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. of this final rule with 
comment period, these measures were either paused or suspended from the 
ASCQR Program.
a. Requirement of 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

[[Page 63884]]

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.\498\ 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).
---------------------------------------------------------------------------

    \498\ 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.
---------------------------------------------------------------------------

    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, 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.
    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), but retained these measures in the measure 
set. 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) Requirement of 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42271 through 42272), 
we proposed to again require and resume data collection for ASC-1, 
ASC2, ASC-3, and ASC-4 beginning with the CY 2023 reporting period/CY 
2025 payment determination and subsequent years. We proposed that 
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.2.f. of this final rule with comment 
period.
    We stated that we believed that revising the data submission method 
for 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 the CY 2022 OPPS/ASC 
proposed rule (86 FR 42281), where we discussed the data submission 
process for web-based measures, for more detail on how ASCs would be 
expected to submit data.
    We received comments on these topics.
    Comment: Many commenters supported resuming ASC-1, ASC-2, ASC-3, 
and ASC-4. Commenters noted that the measures will help improve care 
and patient experience while minimizing unnecessary burden. Commenters 
further stated that the measures focus on areas of critical importance 
for the safety of patients treated in ASCs. One commenter specifically 
stated the importance of ASC-2 as virtually all patients having 
outpatient procedures or surgery receive sedatives, anesthetics and/or 
pain

[[Page 63885]]

medications as a routine part of their care, which in turn increases 
the likelihood of a fall. This commenter also expressed the importance 
of ASC-4 and agreed that the rate of such transfers and admissions 
should be monitored to flag where improvements in practices or patient 
selection criteria are needed, given that ASCs can take steps to reduce 
the incidence of such events. One commenter supported the measures and 
recommended that physical therapists be consulted for falls as part of 
ASC-2.
    Response: We thank the commenters for their support and agree that 
resuming ASC-1, ASC-2, ASC-3, and ASC-4 so that collecting information 
on the incidence of these patient safety events and making the 
information publicly available is important.
    Comment: A few commenters did not support resuming reporting of the 
measures. Some commenters noted that the measures no longer maintain 
NQF endorsement and recommended that NQF endorsement be restored before 
reporting resumes. A few commenters stated that the measures were no 
longer required for reporting because they were topped out and rare, 
and their reintroduction into the program is unlikely to offer 
meaningful or actionable data for ASCs.
    Response: While it is true that these measures are no longer NQF 
endorsed, endorsement was not removed, but instead lapsed as the 
measure steward made the decision not to submit the measures for 
reconsideration of endorsement. Data for these measures continues to be 
collected and reported under the Ambulatory Surgical Center Association 
(ASCA)'s benchmarking effort for their members. Thus, we believe that 
these measures continue to meet the statutory requirement of consensus.
    With regard to the measures being topped out, as we stated in the 
CY 2022 OPPS/ASC proposed rule (86 FR 42271) and initially discussed in 
the CY 2019 OPPS/ASC final rule with comment period (83 FR 59118), we 
re-evaluated the measure data and reviewed many studies demonstrating 
the importance of measuring and reporting the data for these measures. 
ASC-1, ASC-2, ASC-3, and ASC-4 are measures that provide information to 
consumers about overall quality and safety within an ASC compared to 
other measures in the ASCQR Program measure set that focus on the 
quality and safety of specific procedures or events that may take place 
in an ASC setting. Therefore, we believe these measures are valuable 
and that it is important to continue to monitor these types of events, 
given the potential negative impacts to patients' morbidity and 
mortality, in order to continue to prevent their occurrence and ensure 
that they remain rare.
    Comment: Some commenters requested clarification on the reporting 
population and noted that previously, these claims-based measures were 
reported only for Medicare FFS patients, but could be expanded to all 
patients. A few of these commenters recommended expanding reporting to 
all patients to increase transparency and accountability of the 
measures. One commenter stated that there have been problems with the 
batch submission function for reporting the measure data in the HQR 
platform and requested an update from CMS on how this issue has been 
addressed. One commenter requested clarification on what is meant by CY 
2023 reporting period/CY 2025 payment determination. The commenter 
noted that it understood the first year of reporting was data 
collection, the second year was data reporting, and the third year was 
payment impact. If data collection is required to resume in January 
2022, the commenter notes this would be challenging to implement. One 
commenter expressed a preference for reporting the measures via 
QualityNet instead of HQR.
    Response: We appreciate commenter questions regarding the reporting 
population. As commenters noted, these measures were previously claims-
based measures and applied to Medicare FFS patients. However, we would 
like to clarify that because the measures have been reintroduced as 
web-based, they will apply to all ASC patients in accordance with the 
measure developer's specifications, which define the denominator as all 
ASC admissions.\499\ As stated in the CY 2022 OPPS/ASC proposed rule 
(86 FR 42281), ASC-1, ASC-2, ASC-3, and ASC-4 were proposed for 
reintroduction as measures submitted via an online data submission 
tool. In the CY 2014 OPPS/ASC final rule (78 FR 75113), we discussed 
data submission for measures submitted via web-based reporting tools 
and stated that hospitals and ASCs would submit aggregate-level data 
through the CMS web-based tools for measures with such specifications. 
We agree with the commenters that reporting for all ASC patients will 
promote transparency and accountability for the measure data. With 
regard to batch submission issues, we appreciate the comment and note 
that systems changes are in progress for restoring the batch submission 
functionality that was compromised with the implementation of new 
infrastructure. We acknowledge the commenter's concern about reporting 
beginning in January 2022 and note that data collection will resume 
beginning CY 2023 with reporting in CY 2024 and payment in CY 2025. 
Many ASCs are familiar with reporting for these measures and we believe 
it is appropriate to finalize the measures for inclusion in the ASCQR 
Program beginning CY 2023. We clarify that for reporting purposes, 
reporting via the HQR System and QualityNet are equivalent. Reporting 
via HQR allows ASCs to make corrections during the data submission 
period which was not possible in the past if an ASC identified an 
erroneous or missing QDC on a claim that had already been submitted and 
processed, reduces the amount of time and resources required to submit 
measure data, and simplifies the requirements of the ASCQR Program by 
streamlining the number of methods required for quality measure data 
submission.
---------------------------------------------------------------------------

    \499\ Ambulatory Surgical Center Quality Collaboration. Quality 
measures developed and tested by the ASC Quality Collaboration (ASC 
QC). Accessed at: https://higherlogicdownload.s3.amazonaws.com/ASCACONNECT/1b34f1a1-0180-4005-9507-902fdf8f242e/UploadedImages/ASC_Quality_Collaboration/Documents/2019-Summary-ASC-QC-Measures.pdf.
---------------------------------------------------------------------------

    After consideration of the public comments we received, we are 
finalizing this proposal as proposed with the clarification regarding 
the population for which data will be collected.
b. 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.\500\ 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) via the administration of pre-operative 
and post-operative visual function surveys.
---------------------------------------------------------------------------

    \500\ 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

[[Page 63886]]

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.\501\
---------------------------------------------------------------------------

    \501\ 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 (79 FR 66984). In addition, 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) ASC-11 Measure Beginning With the CY 2023 Reporting Period/CY 2025 
Payment Determination and for Subsequent Years
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42272 through 42273), 
we stated that we believed it would be appropriate to require that ASCs 
report on ASC-11. We stated that ASCs have had the opportunity for 
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 
noted that a small number of facilities have consistently reported data 
for this measure and these data have been made publicly available. 
While we previously had concerns regarding the use of different surveys 
to assess visual function (79 FR 66984), using different surveys has 
been found to not result in inconsistencies; the allowable surveys are 
scientifically validated and provide comparable results.\502\ Of 16 
different cataract surgery outcome questionnaires it has been 
demonstrated that all were able to detect clinically important 
change.\503\
---------------------------------------------------------------------------

    \502\ 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.
    \503\ 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.
---------------------------------------------------------------------------

    In the CY 2022 OPPS/ASC proposed rule (86 FR 42272 through 42273), 
we proposed 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 as well as providing 
opportunities for care coordination as well as direct patient feedback.
    We refer readers to section XVI.D.1.c.(1). of this final rule with 
comment period for information about submitting data via a CMS web-
based tool.
    We received comments on these topics.
    Comment: A few commenters supported our proposal to require the 
reporting of the ASC-11: Cataracts: Improvement in Patient's Visual 
Function within 90 Days Following Cataract Surgery measure.
    Response: We thank the commenters for their support. We agree that 
this measure has considerable merit as a patient-reported outcome 
measure for a large volume procedure for the ASC setting. We emphasize 
the value of this measure and continue to believe that ASC-11 addresses 
a high-impact condition and that it provides opportunities for care 
coordination and direct patient feedback.
    Comment: Many commenters expressed concern about making this 
measure mandatory, stating that because the ASC-11: Cataracts: 
Improvement in Patient's Visual Function within 90 Days Following 
Cataract Surgery measure is not currently mandatory, many facilities 
have not been ``practicing'' reporting it. One commenter additionally 
noted that this measure would be difficult to coordinate between 
physicians and ASCs.
    Response: We thank the commenters for their feedback. We recognize 
from the challenges shared in the public comments, and discussed 
herein, that while the measure has been voluntary and available for 
reporting since the CY 2015 reporting period, a number of facilities 
have reported data for this measure and those that have reported it 
have done so consistently. To address commenters' concerns, we are 
finalizing to require ASC-11: Cataracts: Improvement in Patient's 
Visual Function within 90 Days Following Cataract Surgery beginning 
with the CY 2025 reporting period/CY 2027 payment determination, 
instead of our originally proposed data collection beginning with the 
CY 2023 reporting period. We believe the 2-year extension from our 
originally proposed timeline of the CY 2023 reporting period/CY 2025 
payment determination, will provide facilities with sufficient time to 
provide staff training and operationalize the measure for successful 
reporting in the ASCQR Program.
    Comment: Many commenters did not support the requirement for 
mandatory reporting of the ASC-11: Cataracts: Improvement in Patient's 
Visual Function within 90 Days Following Cataract Surgery measure, 
citing concerns about the operational complexity of collection and 
sharing data for the measure across physician and ASC settings. Many 
commenters believed administering surveys and tracking responses for 
the ASC-11 measure would be burdensome. Specifically, many commenters 
were concerned that this measure was developed as a physician-level 
measure, and related data would be generated and obtained in a 
physician's medical record and/or EHR that is not necessarily 
accessible by ASCs. One commenter expressed concern about being able to

[[Page 63887]]

share data between facilities and clinicians within the bounds of 
HIPAA.
    Response: We thank the commenters for their input, and we 
acknowledge their concerns. Our overarching goal for proposing the 
adoption of the ASC-11 measure is to encourage the coordination of care 
across health care settings, providers, and suppliers as frequently as 
possible (78 FR 75126). We aim to see ASCs, ophthalmologists, and other 
clinicians such as optometrists, actively and routinely engaged in 
exchanging information to better communicate and coordinate the care of 
patients. We understand, however, that it may be difficult and complex 
to share data generated in different settings. We believe the 2-year 
extension from our originally proposed timeline of the CY 2023 
reporting period/CY 2025 payment determination will provide ASCs with 
sufficient time for clinics and staff to address potential issues 
regarding extracting and sharing patient data. The 2-year extension 
will also allow facilities to prepare and update systems and 
technology, and prevent additional reporting burden during the COVID-19 
pandemic. Additionally, we recognize that the ASC-11 measure is 
currently tested at the clinician-level and not at the facility-level. 
We will continue to monitor this measure and will address potential 
updates, as appropriate.
    We note that the HIPAA Privacy Rule permits a covered entity to 
disclose PHI to another covered entity for certain health care 
operations of the recipient covered entity. Additionally, a covered 
entity may disclose PHI to a business associate and to allow a business 
associate to create, receive, maintain, or transmit PHI on its behalf, 
provided that the parties have a Business Associate Agreement (BAA) 
that meets the requirements of 45 CFR 164.504(e) and permits the 
business associate to use or disclose PHI only as permitted or required 
by its BAA or as required by law. The BAA must, among other things, 
establish the permitted and required uses and disclosures of PHI by the 
business associate.
    Comment: A few commenters requested the measure remain voluntary 
because they believe that obtaining the data 90 days after outpatient 
surgery would be difficult. Commenters raised concerns that surveying 
patients and getting appropriate responses in this timeline may result 
in a resource burden for ASCs.
    Response: We thank the commenters for their feedback and 
acknowledge their concerns. We highly encourage hospitals, 
ophthalmologists, and other clinicians to actively and routinely engage 
in exchanging information to better communicate and coordinate the care 
of patients to promote quality of care. We acknowledge complexity of 
administering and sharing data for ASC-11 across different settings; 
however, we emphasize the value of this measure and continue to believe 
that ASC-31 addresses a high-impact condition and provides 
opportunities for care coordination and direct patient feedback. We 
believe the 2-year extension from our originally proposed timeline of 
the CY 2023 reporting period/CY 2025 payment determination, will 
provide facilities with sufficient amount of time to provide staff 
training and operationalize the measure for successful reporting in the 
ASCQR Program, including implementing methods to procure appropriate 
data 90 days after outpatient surgery.
    Comment: A few commenters raised concerns with measure 
specifications, especially the lack of specificity around 
administration of the survey to ensure consistency between the pre- and 
post-operative surveys as well as comparability of the measure across 
ASCs. One of these commenters disagreed with the use of the study 
cited, noting that it reviewed responsiveness of different 
questionnaires and not comparison of agreement across different 
questionnaires.
    Response: We thank commenters for their feedback. We recognize 
commenter concerns related to the measure specifications. However, we 
respectfully disagree with the assessment of the McAlinden et al. study 
cited.\504\ While that study indicated that the use of one survey is 
ideal for measuring visual function outcomes, we reiterate that their 
findings showed that the use of different surveys did not result in 
inconsistencies and we maintain that it is appropriate for inclusion in 
the ASCQR Program measure set. We reiterate our belief that ASC-11 
provides a valuable opportunity to hear patient feedback on visual 
function outside of the clinical setting. After consideration of the 
public comments we received, we are finalizing the proposal to require 
ASC-11: Cataracts: Improvement in Patient's Visual Function within 90 
Days Following Cataract Surgery with modification. To address 
commenters' concerns, we are finalizing to require ASC-11: Cataracts: 
Improvement in Patient's Visual Function within 90 Days Following 
Cataract Surgery beginning with the CY 2025 reporting period/CY 2027 
payment determination, instead of our originally proposed data 
collection beginning with the CY 2023. We believe the two-year 
extension from our originally proposed timeline of the CY 2023 
reporting period/CY2025 payment determination, will provide ASCs with 
sufficient amount of time to implement coordination strategies between 
the surgeon and the ophthalmologist, provide staff training, and 
operationalize the measure for successful reporting in the ASCQR 
Program.
---------------------------------------------------------------------------

    \504\ 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.
---------------------------------------------------------------------------

c. Requirement of 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 
Survey voluntary reporting program for the survey, which began in 
January 2016 \505\ and is unrelated to

[[Page 63888]]

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 Survey 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.
---------------------------------------------------------------------------

    \505\ 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 Survey 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 
Survey questions, and that those responses are reliable based on 
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 measuring patient experience 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). of the CY 2022 OPPS/ASC proposed rule (86 FR 42282 
through 42284), we proposed 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.\506\ We believe these additional collection 
modes 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.\507\ 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 are valuable in 
assessing the quality of care provided at an ASC and assisting patients 
in selecting a provider for their care (82 FR 59450).
---------------------------------------------------------------------------

    \506\ We note that the mixed modes will be available as part of 
the National OAS CAHPS voluntary reporting program beginning in CY 
2022.
    \507\ 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42273), we proposed 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 proposed 
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 Survey voluntary 
reporting program is independent of the ASCQR Program and the Hospital 
OQR Program. 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. The reporting process 
for ASCs to submit OAS CAHPS Survey data would remain unchanged, that 
is, ASCs would submit OAS CAHPS Survey data through their vendors who 
would submit these data to CMS as appropriate. We refer readers to 
section XVI.D.1.d. of this final rule with comment period for 
additional information 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 Survey 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 proposed in section XVI.D.1.d.(2) of 
the CY 2022 OPPS/ASC proposed rule (86 FR 42282 through 42284), will be 
available in 2022 as part of the National OAS CAHPS voluntary reporting 
program, we proposed 1 year of voluntary reporting as part of the ASCQR 
Program for the CY 2023 reporting period. As described in the NPRM, we 
believed that ASCs would 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. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42282) for our related proposals regarding the 
form, manner, and timing for reporting the ASC-15a-e Survey-based 
measures.
    We also refer readers to section XV.B.5.a. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42246 through 42247) where we proposed to restart 
this measure in the Hospital OQR Program. We received comments on these 
topics.
    Comment: A few of commenters supported voluntary reporting of the 
ASC-15a-e: OAS CAHPS Survey-based measures for the CY 2023 reporting 
period/CY 2025 payment determination for the ASCQR Program. One 
commenter expressed support for CMS' efforts to develop the OAS CAHPS 
Survey-based measures and is pleased the OAS CAHPS Survey addresses the 
experience of surgical care received at both HOPDs and ASCs, which the 
commenter believes will support consumers' ability to compare 
facilities.
    Response: We thank the commenters for their support for the 
voluntary reporting of the OAS CAHPS Survey-based measures as part of 
the ASCQR Program. We believe that these survey-based measures will be 
useful to assess aspects of care where the patient is the best or only 
source of information, and to enable objective and meaningful 
comparisons between ASCs. We believe reporting for these measures as 
part of the ASCQR Program would provide meaningful information to 
patients and provide ASCs the opportunity to experience reporting as 
part of the ASCQR Program. As the OAS CAHPS Survey results are 
available, they will be made publicly available along with other ASCQR 
measure data (currently on the CMS Provider Data Catalog), which is 
made available to inform consumers and encourage healthcare facilities 
to make continued improvements in care quality.
    Comment: One commenter did not support the 1-year voluntary 
reporting period, but generally supported the inclusion of the OAS 
CAHPS Survey and recommended the 2-year period that CMS had initially 
considered. Another commenter urged CMS to delay voluntary 
implementation under the ASCQR Program until CY 2024. These commenters 
expressed concerns about staffing shortages and the cost and time to 
update systems to accommodate the measure during the unprecedented 
challenges posed by the COVID-19

[[Page 63889]]

pandemic, and the requirements imposed by other federal regulations, 
which they believe warrant extended preparation time for OAS CAHPS 
Survey implementation.
    Response: We thank the commenters for their general support for 
inclusion of the OAS CAHPS Survey-based measures in the ASCQR Program 
and understand preference to delay the start of voluntary reporting 
based on concerns about COVID-19 and the need to accommodate ASCs while 
our nation works through the unprecedented COVID-19 pandemic. We also 
understand how delaying the implementation of the OAS CAHPS Survey-
based measures as part of the ASCQR Program will afford ASCs additional 
time to address staffing shortages, prepare for additional federal 
regulations, and respond to the public health emergency caused by 
COVID-19. Due to the impact of the ongoing PHE for COVID-19 on ASC 
facilities, we are delaying the start of mandatory reporting by one 
year, to begin with the CY 2025 reporting period/CY 2027 payment 
determination under the ASCQR Program. Voluntary reporting will still 
be available as part of the ongoing program for voluntarily reporting 
the National OAS CAHPS Survey.
    Comment: A couple commenters supported CMS' proposal to require 
mandatory reporting of the OAS CAHPS Survey-based measures within the 
ASCQR Program beginning with the CY 2024 reporting period/CY 2026 
payment determination. One commenter noted the belief that the OAS 
CAHPS Survey-based measures will help facilities identify areas of 
strengths and areas of improvement for patient experience, while 
another believed the OAS CAHPS Survey-based measures would provide more 
real time quality data to inform ASCs' decision-making.
    Response: We thank the commenters for their support for mandatory 
reporting of the OAS CAHPS Survey-based measures. We believe the 
measures will provide facilities with important feedback and support 
their ability to improve patient experience.
    Comment: A few commenters recommended delaying mandatory 
implementation of the survey-based measures. Among commenters concerns 
were the ongoing COVID-19 pandemic and current staffing shortages.
    Response: We thank the commenters for their feedback. We understand 
the commenters' requests to delay the mandatory implementation of the 
OAS CAHPS Survey-based measures and their concerns regarding the on-
going public health emergency and staffing. We agree that delaying 
mandatory reporting of the OAS CAHPS Survey-based measures while ASCs 
respond to the COVID-19 pandemic and related staffing shortages is 
appropriate. As a result, we are delaying the start of mandatory 
reporting as part of the ASCQR Program until the CY 2025 reporting 
period/CY 2027 payment determination. Voluntary reporting will still be 
available as part of voluntary National OAS CAHPS Survey reporting.
    Comment: A few commenters opposed mandatory reporting of the OAS 
CAHPS Survey-based measures and expressed concern regarding the 
financial and administrative burden of OAS CAHPS on ASCs. One commenter 
expressed concern that the cost of implementing the survey-based 
measures could exceed the 2 percent penalty for failing to meet the 
ASCQR Program requirements. Another commenter believed that ASCs may 
decide to stop providing services due to the cost of survey 
implementation. Other commenters opposed the OAS CAHPS Survey-based 
measure because they believe that ASCs are inadequately compensated by 
CMS to support the additional cost of the administration of the survey 
and OAS CAHPS Survey could force ASCs to reconsider remaining open or 
closing. Another commenter suggested that mandatory reporting of OAS 
CAHPS Survey may cause some small ASCs to stop reporting.
    Response: We thank the commenters for their feedback. While there 
are administrative and financial burdens associated with implementing 
the OAS CAHPS Survey-based measures in the ASCQR Program, we believe 
the benefits of capturing patient experience of care data in the ASC 
setting outweigh the burdens. In selecting measures for the ASCQR 
Program, we weigh the relevance and utility of measures against the 
potential burden to ASCs resulting from the measure's adoption, and we 
believe the OAS CAHPS Survey-based measures are a vital source of 
information in assessing the quality of care provided at ASCs.
    We post the list of the approved OAS CAHPS Survey vendors on 
https://oascahps.org, and we encourage ASCs to contact vendors for cost 
and service information pertaining to survey administration as there 
may be differences among vendors and multiple modes of conducting the 
survey provide greater economic choice.
    In addition, we proposed additional modes to collect the OAS CAHPS 
Survey-based measures, which we expect to reduce the future cost of 
administration. 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.
    While we did not propose solely digital modes of conducting the OAS 
CAHPS Survey in the CY 2022 OPPS/ASC proposed rule, we are analyzing 
whether a web-only or digital-only format would be appropriate for the 
OAS CAHPS Survey-based measures, which could potentially further reduce 
the costs of administering the survey. We also refer to readers to 
section XVI.D.1.d.(2).(a) of this final rule with comment period and 
below where we finalize a reduced number of required surveys to meet 
the time, form and manner requirements, which should further reduce the 
expected burden on ASCs.
    Comment: A few commenters requested we delay mandatory reporting of 
the OAS CAHPS Survey-based measures because of perceived issues with 
the CPT coding consistency across vendors and the IT requirements to 
maintain CPT and DRG code lists.
    Response: We thank the commenters for their feedback. We interpret 
the commenters' concern to mean that there may be confusion over which 
patients would be eligible to be surveyed as part of the OAS CAHPS 
Survey reporting. The OAS CAHPS Survey is administered to all eligible 
patients--or a random sample thereof--who had at least one outpatient 
surgery/procedure during the applicable month. We acknowledge the 
concern about the use of CPT codes, including those for procedures that 
patients may not perceive as surgery. However, we note that many CPT 
codes have been excluded from inclusion in the OAS CAHPS Survey, 
including services like application of a cast or splint, in order to 
ensure that only patients receiving applicable procedures are 
surveyed.\508\
---------------------------------------------------------------------------

    \508\ See Announcements (oascahps.org) where updates on Survey 
specifications and guidelines are available.
---------------------------------------------------------------------------

    CMS recognizes in some cases there could be delays in getting the 
CPT codes updated in the patient record and transmitted to the survey 
vendor in a timely manner. Under the current protocol for survey 
administration, CMS allows survey vendors to work with HOPD and ASC 
facilities to identify alternatives ways to identify the patient 
records for outpatient surgery or diagnostic procedures that were 
performed in eligible HOPDs or ASCs (as identified by the facility-
level eligibility criteria). Vendors can submit exception requests to 
request alternative

[[Page 63890]]

methods for identifying the eligible population. We also note that the 
current protocol for survey administration allows for late start 
requests for situations in which the complete patient records are not 
available within the target window of time for survey administration. 
Vendors can submit late start requests when the patient data file is 
received more than 26 days after the sample month. This allows for 
flexibility in situations when the CPT codes are not available 
initially but can be updated. Further, sampling is allowed to proceed 
if 90 percent of the patient records have CPT codes.
    Any updates to the Survey Specifications and Guidelines will be 
available on the OAS CAHPS Survey website (https://oascahps.org/).
    Comment: Many commenters expressed concern regarding the length of 
the survey, recommending that the survey should be significantly 
shortened to focus on actionable aspects of the patient experience and 
to encourage higher response rates amongst patients. Specifically, some 
commenters recommended that a revised survey should include 5-10 
questions.
    Response: The OAS CAHPS Survey is comparable in length and survey 
response rate to other patient experience of care surveys. The survey 
instrument was developed to provide a more complete picture of the 
patients' experience of care in the ASC setting. The 24 core questions 
of the OAS CAHPS Survey are either directly actionable (that is, give 
feedback to ASCs/hospitals) or inform the need for patients to answer 
subsequent questions that are actionable. We note that the survey 
results to date do not show that respondents are terminating the 
interview before the last question, which would be an indication of 
respondent fatigue for a survey that is too long. Based on the most 
recently received national implementation data for voluntary reporting, 
the nonresponse due to terminated interviews is less than 1 percent.
    Implementing the OAS CAHPS Survey-based measures in the ASCQR 
Program will enable patients to compare patient experience of care data 
across multiple ASCs as part of their healthcare decision-making. In 
addition, we believe implementing these measures in the ASCQR Program 
will incentivize ASCs to factor patient experience of care into their 
quality improvement efforts more proactively. However, we also 
acknowledge these commenters' concerns about the length of the OAS 
CAHPS Survey and will continue to consider whether refinement would be 
appropriate.
    Comment: A commenter opposed mandatory reporting and expressed 
concern about the national data reliability of the OAS CAHPS Survey.
    Response: We thank the commenter for its comments. We disagree that 
OAS CAHPS Survey does not have national data reliability. OAS CAHPS 
Survey data has been collected as part of the voluntary National OAS 
CAHPS Survey since 2016. Based on our experience through this 
reporting, we are able 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. Unit-level reliability analysis of the publicly 
reported composites for OAS CAHPS are well above the .70 cut-off 
typically used to assess reliability of a measure.
    Comment: One commenter expressed concern that the OAS CAHPS Survey 
uses the Top-Box methodology rather than the net promoter score (NPS) 
to measure patient satisfaction, which the commenter believes provides 
less meaningful data on measuring patient satisfaction. Another 
commenter noted that the response scale and compact scoring 
distribution may limit the ability for consumers to differentiate high 
and low quality providers.
    Response: We thank the commenters for their feedback. In 2014, 
field-tested data were evaluated and analyzed to identify item-level 
refinements necessary for the survey instrument. The field test 
psychometric analysis included evaluations of individual items and 
composite item sets. Individual items were analyzed to report item-
level missing data and item response distributions (including ceiling 
and floor effects), which included response variance. Composite item 
sets were analyzed using factor analysis and item response theory (IRT) 
analysis to assess dimensionality, discriminability, dimensional 
coverage, and subgroup response differences. Internal consistency 
statistics (reliability) and correlational checks for composite 
validity were performed to evaluate the final composite item sets. The 
item-level recommendations for the field test were based on the 
findings from the factor analyses, the internal consistency checks, and 
the IRT analysis. As a result, 10 questions were recommended for 
deletion. Reliability of the remaining measures was assessed using the 
Cronbach's alpha coefficient, with an estimate range from zero to one. 
An estimate of zero indicated no measurement consistency and one 
indicates perfect consistency. The cutoff criterion for the examination 
was 0.70, which indicated adequate consistency.\509\ The composites 
analytically derived maintained adequate internal consistency even when 
reduced to Top-Box scoring and across the facility types and modes of 
administration. Based on the rigorous testing that was undertaken 
during the development process, we believe the OAS CAHPS Survey, and 
measure scores derived therefrom, are both reliable and valid. 
Therefore, we believe that the scoring used in the OAS CAHPS Survey 
measures is appropriate. Updated unit-level reliability analysis of the 
publicly reported composites during voluntary national implementation 
continues to be well above the .70 cut-off for reliability.
---------------------------------------------------------------------------

    \509\ Dillman, D. A. 1978. Mail and Telephone Surveys: The Total 
Design Method. New York: Wiley & Sons.
---------------------------------------------------------------------------

    Comment: A couple of commenters opposed the OAS CAHPS Survey-based 
measures due to the lack of NQF endorsement. The commenters encouraged 
CMS to pursue NQF endorsement of these measures before the OAS CAHPS 
Survey is required in order to ensure all stakeholders are given 
insight into the measure and to guarantee that it is fair and accurate.
    Response: We thank the commenters for their comments. As we have 
stated in prior rules (81 FR 79808 and 82 FR 59433), section 
1833(t)(17)(C)(i) of the Act does not require that each measure we 
adopt for the ASCQR Program be endorsed by a national consensus 
building entity, or the NQF specifically. Further, under section 
1833(i)(7)(B) of the Act, section 1833(t)(17)(C)(i) of the Act applies 
to the ASCQR Program, except as the Secretary may otherwise provide. 
Under this provision, the Secretary has further authority to adopt non-
endorsed measures. While we strive to adopt NQF-endorsed measures when 
feasible and practicable, we believe the requirement that measures 
reflect consensus among affected parties can be achieved in other ways, 
including through the measure development process, stakeholder input 
via a Technical Expert Panel (TEP), review by the MAP, broad acceptance 
and use of the measure, and public comments.
    We refer readers to the CY 2017 OPPS/ASC final rule with comment 
period (81 FR 79803 through 79824) for a fuller discussion of the 
rigorous testing applied to the OAS CAHPS Survey and our belief that it 
is appropriate for the ASCQR Program.

[[Page 63891]]

    Comment: A commenter expressed concern regarding the ophthalmology-
specific ASCs and the number of OAS CAHPS Survey questions regarding 
ophthalmology as many ophthalmology patients are unable to regularly 
check their email due to their limited vision.
    Response: We appreciate the commenters concern regarding the well-
being of patients who undergo eye procedures. However, we do not 
believe completing the survey poses an additional hardship on 
ophthalmology patients. After a patient has a surgery or procedure, the 
survey can be completed up to 6 weeks (42 days) following the 
invitation to complete the survey. Additionally, we provide different 
modes of survey administration that would allow for greater 
accessibility by patients completing the survey, including telephonic 
surveying, which may provide greater accessibility to individuals with 
limited vision. We believe that the OAS CAHPS Survey assesses patient 
experience of care for outpatient surgical procedures, and therefore, 
takes the outpatient/ambulatory setting into account and captures 
information about the appropriate experiences of care for this setting, 
including ophthalmology patients. Based on the results of the 2019 OAS 
CAHPS mode experiment, the response rates for ophthalmology patients 
were not significantly different from other types of outpatients. 
However, we will monitor this issue to ensure that the response data 
does not indicate that ophthalmology patients are not outliers to the 
rest of patients surveyed.
    Comment: A few commenters opposed mandatory reporting of the OAS 
CAHPS Survey because of concerns regarding the patient response rate.
    Response: We thank the commenters for their feedback. We agree with 
commenters that patient response is largely out of the control of the 
facility. However, we note that we did not propose to penalize ASCs for 
patients' decision not to complete the survey. Payment implications 
under the ASCQR Program are tied to the successful and timely reporting 
of required quality measure data. An ASC will not receive a payment 
reduction based on performance under the OAS CAHPS Survey-based 
measures if the ASC administers the survey according to the OAS CAHPS 
Survey Protocol and Guidelines Manual \510\ and submits that data to 
CMS by the data submission deadline, regardless of the number of 
completed surveys the facility receives. Results will be used for 
public reporting only.
---------------------------------------------------------------------------

    \510\ https://oascahps.org/Survey-Materials.
---------------------------------------------------------------------------

    Comment: A commenter expressed concern for ASC departments that 
will incur multiple sets of patient experience results and recommended 
that the OAS CAHPS Survey only apply to services where anesthesia is 
used.
    Response: We thank the commenter for its suggestion; however, we 
believe that the OAS CAHPS Survey is appropriately scoped to provide 
patients and facilities meaningful data on the services provided by 
ASCs and not just those that require anesthesia.
    Comment: A commenter requested that we do more to ensure correct 
attribution of the patient experience and requested we provide evidence 
of the OAS CAHPS Survey's reliability before it requires survey 
administration, which could reduce the reliability of the results and 
negatively impact data-driven decision making.
    Response: We thank the commenter for its feedback. The OAS CAHPS 
Survey is used to obtain data on a patient's experience of care 
received from a facility. While there is always potential that a 
patient gets confused, we believe that the OAS CAHPS Survey is focused 
on patients' experience of care received for their ambulatory surgery 
or procedure. A physician/surgeon who performs surgeries/procedures at 
a facility is a member of that facility with both rights and 
responsibilities. We believe it is the facility's responsibility to 
ensure that someone whether the doctor, nurse, or other facility staff 
member, provide patients with information about preparing for their 
procedure, about the procedure itself, as well as what to expect 
following the procedure/surgery. Therefore, we believe it is 
appropriate to include these important communications with patients in 
the OAS CAHPS Survey and believe experience with the provider 
attributed to the facility is appropriate.
    Further, we believe that the information provided in the OAS CAHPS 
Survey ``Instructions'' is sufficient to inform the patient regarding 
the purpose of the OAS CAHPS Survey and provides sufficient instruction 
and details for the patient to correctly identify and relate the survey 
to the facility and from which that patient received the procedure. CMS 
began developing the OAS CAHPS Survey in 2012 using the principles and 
guidelines established by the Agency for Healthcare Research and 
Quality's (AHRQ) CAHPS program and AHRQ approved this instrument as a 
CAHPS survey in February 2015.\511\
---------------------------------------------------------------------------

    \511\ See CAHPS Outpatient and Ambulatory Surgery Survey. 
Content last reviewed July 2019. Agency for Healthcare Research and 
Quality, Rockville, MD.
    https://www.ahrq.gov/cahps/surveys-guidance/oas/index.html.
---------------------------------------------------------------------------

    Comment: A commenter sought information on whether the OAS CAHPS 
Survey may have a positive, indirect effect on the way physicians 
communicate with patients and recommended an on-going evaluation of the 
effectiveness of the survey to understand the benefit and whether the 
survey data is informing improvements in care delivery. The commenter 
also requested additional information on patient experience of care in 
the HOPD and ASC settings, and we believe patient experience the effect 
the OAS CAHPS Survey has on care delivery and quality improvement. 
Another commenter stated that the money spent on OAS CAHPS Survey would 
be less effective than spending money directly on patient care.
    Response: We thank the commenters for their comments. Studies show 
a relationship between the clinical quality of care provided at a 
facility and patients' experience of care.512 513 The OAS CAHPS Survey 
is specifically designed to measure of care is an important indicator 
of the quality of care provided at a facility. As noted above, patients 
are the best source for certain information about the quality of care. 
Additionally, we believe that the insights provided by the OAS CAHPS 
Survey enable objective and meaningful information to ASCs about 
patient experience, which will help facilities identify areas to 
improve patient experience and to increase communication with patients.
---------------------------------------------------------------------------

    \512\ Isaac, T., Zaslavsky, A.M., Cleary, P.D., and Landon, B.E. 
The Relationship Between Patients' Perception of Care and Measures 
of Hospital Quality and Safety. Health Services Research. 
2010;45:1024-1040.
    \513\ Anhang, P. et al. Examining the Role of Patient Experience 
Surveys in Measuring Health Care Quality. Med Care Res Rev. 
2014;71(5):552-554.
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    Comment: A commenter recommended that for the most meaningful and 
user-centric approach to public reporting, we should not use CCN-level 
reporting and instead use NPI-based reporting method because it would 
allow the public to directly correlate quality measure data with an 
individual facility.
    Response: We thank the commenter for the feedback. The OAS CAHPS 
Survey results are collected and reported at the CCN level. However, we 
thank the commenter for its recommendation to report OAS CAHPS

[[Page 63892]]

Survey-based measures data at the NPI level for patient ease and 
individual facility performance improvement purposes. We will consider 
the feasibility of requiring ASCs to collect and report OAS CAHPS 
Survey data at the NPI level and will put forward any proposals in 
future notice and comment rulemaking, but note that CCN level reporting 
can reduce burden for ASCs with multiple facilities under a single CCN.
    After consideration of the public comments we received, we are 
finalizing this proposal with modification. We are finalizing voluntary 
reporting as part of the ASCQR Program, modified to begin in CY 2024 
reporting period/CY 2026 payment determination period and mandatory 
reporting of the OAS CAHPS Survey-based measures, modified to begin in 
the CY 2025 reporting period/CY 2027 payment determination.
5. Summary of Previously and Newly Finalized ASCQR Program Quality 
Measure Set
a. Summary of Previously and Newly Finalized ASCQR Program Quality 
Measure Set for the CY 2022 Reporting Period/CY 2024 Payment 
Determination
    Table 69 summarizes the previously and newly finalized ASCQR 
Program measure set for the CY 2022 reporting period/CY 2024 payment 
determination.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.172

b. Summary of Previously and Newly Finalized ASCQR Program Quality 
Measure Set for the CY 2023 Reporting Period/CY 2025 Payment 
Determination
    Table 70 summarizes the previously and newly finalized ASCQR 
Program measure set for the CY 2023 reporting period/CY 2025 payment 
determination.

[[Page 63893]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.173

c. Summary of Previously and Newly Finalized ASCQR Program Quality 
Measure Set for the CY 2024 Reporting Period/CY 2026 Payment 
Determination and Subsequent Years

[[Page 63894]]

    Table 71 summarizes the previously and newly finalized ASCQR 
Program measure set for the CY 2024 reporting period/CY 2026 payment 
determination and subsequent years.
[GRAPHIC] [TIFF OMITTED] TR16NO21.174

d. Summary of Previously and Newly Finalized ASCQR Program Quality 
Measure Set for the CY 2025 Reporting Period/CY 2027 Payment 
Determination and Subsequent Years
    Table 72 summarizes the previously and newly finalized ASCQR 
Program measure set for the CY 2025 reporting period/CY 2027 payment 
determination and subsequent years.

[[Page 63895]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.175

BILLING CODE 4120-01-C
6. ASCQR Program Measures and Topics for Future Consideration
a. Potential Adoption of Future Measures for the ASCQR Program
    We continue to 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.\514\ As discussed in 
section IX of the CY 2022 OPPS/ASC proposed rule (86 FR 42155), 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 proposed to halt the elimination of 
the IPO list and, after clinical review of the services removed from 
the IPO list in CY 2021, we proposed to add the 298 services removed 
from the IPO list in CY 2021 back to the IPO list beginning in CY 2022.
---------------------------------------------------------------------------

    \514\ 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: https://www.cms.gov/newsroom/fact-sheets/cy-2021-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center.
---------------------------------------------------------------------------

    We also proposed 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\515\ 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 sought 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 invited 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.
    We received comments on these topics.
    Comment: Many commenters supported the future development of 
measures that would allow for a comparison of outcomes across care 
settings, particularly as procedures transition from the inpatient only 
list to the outpatient and ASC settings. The commenters encouraged CMS 
to work with stakeholders to improve measure alignment and reporting 
between hospital outpatient surgery centers and ambulatory surgery 
centers and also identify new measures that address

[[Page 63896]]

reporting challenges in the ASCQR Program.
    A few commenters recommended that CMS require all accredited ASCs 
to submit comprehensive safety and quality data to a nonprofit 
organization with extensive experience in collecting and reporting ASC 
quality data on a public website to ensure the data is trusted and 
useful for purchasers and consumers. Commenters also suggested the 
reporting should utilize consensus-based nationally endorsed standards. 
The commenters stated their belief that patients and purchasers do not 
have access to enough information to be able to make an informed 
decision on care.
    Response: We thank commenters for their feedback. As mentioned in 
section XVI.B.6.a. of the final rule with comment period, we seek to 
adopt a comprehensive set of quality measures for widespread use to 
inform decision-making regarding care and for quality improvement 
efforts. We will continue to work with stakeholders as we consider 
measures for inclusion in future rulemaking. Additionally, we agree on 
the importance of measure alignment. It is our goal to continue to 
explore ways to address measurement gaps, reduce burden and increase 
efficiency through measure alignment.
    We also agree with commenters on the importance of submitting 
safety and quality data publicly to promote transparency, 
accountability as well as providing a means of delivering important 
healthcare information to consumers. Our public websites, including the 
Provider Data Catalog, were launched with the purpose of providing 
public facing quality data to help inform consumer care and to 
encourage healthcare facilities to make continued improvements to the 
quality of care provided. We will consider the feasibility of the 
commenters' recommendations and take them into consideration in future 
rulemaking.
    Comment: Commenters encouraged CMS to work with stakeholders to 
identify measures that would be appropriate and useful across programs 
and to address reporting challenges before proposing to adopt new 
measures into the program. Several commenters suggested that CMS re-
introduce measures previously proposed in the CY 2018 OPPS/ASC proposed 
rule including the Toxic Anterior Segment Syndrome (TASS), Endoscopy/
Polyp Surveillance: Colonoscopy Interval for Patients with a History of 
Adenomatous Polyps and the Ambulatory Breast Procedure Surgical Site 
Infection Outcome measure. Commenters stated that these measures fill 
an important gap in the ASCQR Program related to addressing HAIs, 
colonoscopy services, and Ophthalmic devices. Commenters also noted 
that these measures would be appropriate for the Hospital OQR Program 
which would expand alignment between the Hospital OQR and ASCQR 
Programs and would allow consumers more opportunities to compare 
quality and safety across settings of care.
    Additionally, one commenter recommended that CMS should improve 
mechanisms for comparison between hospital outpatient surgery centers 
and ASCs. The commenter stated that surgical procedures should produce 
ratings that allow for comparisons of the same procedure regardless of 
setting.
    Response: We thank the commenters for their recommendations. We are 
committed to working with stakeholders to identify appropriate and 
useful measures across our programs and address any measurement gaps to 
reduce burden. Concerning the creation of ratings that would allow for 
comparisons of the same procedure regardless of setting, we are 
committed to looking for more effective ways to align our programs and 
will monitor this concern for future rulemaking. We thank commenters 
for their input on additional ASCQR Program measures and topics for 
future consideration and will take this feedback into account for 
future measure development in the ASCQR Program.
b. 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. of this final rule with comment 
period and above, we sought 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 CPL (84 FR 61388 and 85 
FR 86146).
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42276 through 42277), 
we also requested 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) and responded to public comments 
received in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45408). 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. As only a subset of ASCs performs 
orthopedic procedures, 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), the FY 2022 IPPS/LTCH PPS final rule (86 FR

[[Page 63897]]

45408) 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 invited 
public comment on the potential future adoption of a respecified 
version of PRO measures for elective THA/TKA PRO-PM for the ASCQR 
Program. Specifically, we invited 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/TKAs 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 received comments on these topics.
    Comment: Several commenters expressed support for the 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). Commenters noted that as 
procedures shift to the outpatient setting, it is important for quality 
programs to reflect the settings in which beneficiaries receive 
surgical care and agreed that PROs are the best available means for a 
patient-centered measurement of functional status improvement. 
Commenters expressed support for this measure across multiple settings, 
including hospitals, outpatient departments, and ambulatory surgical 
centers. Additionally, a few commenters expressed support for the 
patient-reported outcome surveys used to collect preoperative and 
postoperative data. The Hip dysfunction and Osteoarthritis Outcome 
Score for Joint Replacement (HOOS, JR) and the Knee injury and 
Osteoarthritis Outcome Score for Joint Replacement (KOOS, JR) are 
widely used across the country and are lower burden compared to the 
HOOS and KOOS. Commenters also supported use of either the Patient-
Reported Outcomes Measurement Information System (PROMIS)-Global or the 
Veterans RAND 12-Item Health Survey (VR-12) for risk adjustment and 
felt that measure development was responsive to stakeholder feedback.
    Response: We thank the commenters for their support and will 
consider these comments for future policy development.
    Comment: A few commenters expressed concern about data collection 
and reporting thresholds. Commenters encouraged CMS to explore ways to 
reduce the burden of collecting patient-reported outcomes data and 
support hospitals in their efforts to increase responsiveness. Some 
commenters expressed concern over the increasing threshold for 
submitting data, noting that the threshold within the Comprehensive 
Care for Joint Replacement (CJR) model incrementally increased over 
time and fewer hospitals have been able to meet the thresholds. 
Commenters asked CMS to explain the rationale behind the chosen 
thresholds and consider whether a lower rate of response is sufficient 
for measuring performance. One commenter recommended phased 
implementation of the measure to allow facilities time to coordinate 
collection and reporting of PRO data. They recommended a two-year 
voluntary reporting period to allow facilities who were not part of the 
CJR model to build up infrastructure to collect data and further 
research to determine exemption criteria for low volume facilities. One 
commenter also expressed concern about patient burden, noting that 
patient response rates to various surveys across the continuum of care 
are dropping, and increasing the number of surveys may result in fewer 
completed surveys overall.
    Response: We thank the commenters for their feedback and would like 
to provide more explanation regarding the reporting thresholds as 
described in prior rules. Through the CJR final rules, we finalized a 
data submission requirement that strategically increased with each 
performance year. To be successful, a hospital needed to submit PRO 
data for 50 percent or 50 eligible procedures in the first year of the 
model. By performance year 8, hospitals will need to submit PRO data 
for 90 percent or 500 eligible procedures to be successful. The 
incremental increase over a set period of time allows hospitals to 
gradually build up their infrastructure and processes for collecting 
and storing data. Future proposals for implementation and reporting of 
this measure will be announced through notice and comment rulemaking. 
While patient-reported outcome-based performance measures require 
providers to integrate data collection into clinical workflows, this 
integration provides opportunity for PROs to inform clinical decision 
making and benefit patients by engaging them in discussions about 
potential outcomes. We do not expect this PRO-PM to contribute to 
survey fatigue or to negatively impact other PRO-PMs. The Patient-
Reported Outcome Measure (PROM) instruments that are used to calculate 
preoperative and postoperative data scores for this THA/TKA PRO-PM were 
carefully selected, with extensive stakeholder input, to be low burden 
for patients and to capture information clinicians deemed essential to 
understanding response to THA/TKA.
    Comment: A few commenters called for robust risk adjustment for 
this measure. They noted patients who receive these procedures in the 
inpatient setting will tend to be sicker and more complex compared to 
patients who receive these procedures in the outpatient or ASC setting. 
Commenters encouraged CMS to take the differences

[[Page 63898]]

in patient complexity into account when developing a risk adjustment 
strategy and to do so in a way that minimizes lag between the procedure 
and reporting. Commenters also encouraged CMS to consider incorporating 
sociodemographic factors, such as dual eligibility status and preferred 
language, and stratifying results by proportions of dual-eligible 
patients similar to the approach now used by the CMS Hospital 
Readmission Reduction Program.
    Response: We thank the commenters for their insights on the 
differences in patient complexity across different care settings and 
the impact it may have on risk adjustment. We will continue to take 
this into consideration if we move forward with re-specifying this 
measure for use in ASCs. With respect to sociodemographic factors, we 
would like to clarify the risk adjustment approach. For the development 
of the hospital-level measure, we assessed the impact of dual 
eligibility, the Agency for Health Research and Quality (AHRQ) 
socioeconomic status (SES) Index (socioeconomic status), and non-white 
race. The addition of each of these three social risk variables 
provided no statistically significant change to the risk model 
performance, variable coefficients, or the model outcome. As such, 
these variables were not included in the hospital risk model. These 
social risk variables were, however, statistically significantly 
associated with response to PRO surveys--whether patient-reported 
outcomes were obtained for patients undergoing primary elective THA/
TKA--and so were included in the calculation of stabilized inverse 
probability weights used to account for potential response-bias. These 
variables, along with other sociodemographic variables that may become 
available over time, will be reassessed as part of the respecification 
process if CMS proceeds with developing a version of the measure for 
the ASC setting as part of CMS' commitment to addressing improving 
health equity.
    Comment: A few commenters recommended use of the American Joint 
Replacement Registry (AJRR) for future implementation of this measure 
citing that participation in the AJRR is a requirement for 
certification as a center of excellence by The Joint Commission. The 
commenters felt that using the AJRR would allow facilities to pool 
their resources for lowest costs. They also noted that as the AJRR 
incorporates Medicare Administrative Data for populating the database, 
its use would allow for robust risk adjustment, improved research, and 
independent reporting for participating facilities to normalize 
quality. The AJRR is widely used by providers in the United States and 
implementing the measure through the AJRR will minimize duplication of 
reporting efforts. Commenters felt this approach would be faster, more 
efficient, and would incentivize use of Qualified Clinical Data 
Registries (QCDRs).
    Response: We appreciate commenters' recommendations regarding the 
AJRR and we will consider the feasibility and appropriateness of using 
this registry for future implementation, if we proceed with development 
of a THA/TKA PRO-PM in ASCs. We agree that leveraging existing 
resources, such as registries, will help decrease patient and provider 
data collection burden.
    Comment: A few commenters provided feedback on future 
implementation of this measure. One commenter recommended a benchmark 
approach to facility measure scores, where CMS would evaluate success 
by establishing a benchmark percentage of THA/TKA procedures reaching a 
significant clinical improvement, rather than requiring providers to 
compete for percentile rankings of success rates across tightly bunched 
score rates. Another commenter recommended that CMS consider 
incentivized, phased implementation that would allow facilities to 
build up their processes and infrastructure to collect and report on 
patient-reported outcomes data. They also encouraged CMS to reevaluate 
the minimum number of cases that would trigger reporting as low volume 
can lead to wider variances in outcomes for smaller volume hospitals.
    Response: We appreciate commenters' recommendations regarding 
future implementation of the measure. With regards to facilities' 
ability to meet the reporting threshold, we agree that there must be a 
sufficient number of procedures in these settings to reliably measure a 
meaningful number of facilities, and we anticipate an increase in the 
number of THA/TKA procedures performed in ASCs in future years. We will 
continue to take this into consideration if we move forward with 
respecifying the measure for use in ASCs. Any future proposals to 
implement the measure will be announced through notice and comment 
rulemaking.
    Comment: A few commenters did not support potential future adoption 
and inclusion of an ASC-Level, Risk-Standardized Patient Reported 
Outcomes Measure Following Elective Primary THA/TKA. Commenters noted 
that ASC regulations limit the scope of ASC services and the timeframe 
during which ASCs are permitted to be involved in patient care. As 
such, ASCs are limited in their preoperative, intraoperative, and 
postoperative services.
    Response: We acknowledge the commenter's concern and will consider 
the impact of regulatory requirements on any future measurement, but we 
believe it is important to monitor quality in all settings where these 
procedures are performed. As performance of THAs and TKAs shift into 
the outpatient and ASC settings, it is important for quality 
measurement programs to adapt to the changing care settings.
    Comment: One commenter recommended development of a surgical site 
infection measure following THA and TKA.
    Response: We thank the commenter for their suggestion. Surgical 
site bleeding and surgical site complications during the index 
admission or a subsequent inpatient admission within 30 days from the 
start of the index admission are captured in the hospital-level risk-
standardized complication rates (RSCRs) following an elective primary 
THA and/or TKA measure in the Hospital Value-Based Purchasing Program. 
Hospital admissions within seven days of the surgery are captured in 
the Hospital Visits after Hospital Outpatient Surgery (OP-36) measure 
for procedures performed in the outpatient setting. Any future measure 
development or respecification proposals for ASCs will be announced 
through notice and comment rulemaking. We thank commenters for their 
input on the potential future adoption of an ASC-Level, Risk-
Standardized Patient Reported Outcomes Measure Following Elective 
Primary Total Hip and/or Total Knee Arthroplasty (THA/TKA) and will 
take this input into account for future measure development in the 
ASCQR Program.
c. 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

[[Page 63899]]

outcomes.516 517 518 519 520 521 522 523 Such 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.524 525 526 527 528 529 
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.530 531 532 533 534 
Studies have also shown that African Americans are significantly more 
likely than White Americans to die prematurely from heart disease and 
stroke.\535\ 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.536 537 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.'' \538\ 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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    \516\ 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.
    \517\ 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.
    \518\ 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.
    \519\ 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.
    \520\ 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.
    \521\ 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.
    \522\ Heslin KC, Hall JE. 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.
    \523\ 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.
    \524\ 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.
    \525\ 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.
    \526\ 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.
    \527\ 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.
    \528\ 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.
    \529\ 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.
    \530\ 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.
    \531\ Centers for Medicare and Medicaid Services. Medicare 
Hospital Quality Chartbook: Performance Report on Outcome Measures; 
2014.
    \532\ 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.
    \533\ 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.
    \534\ 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.
    \535\ HHS. Heart disease and African Americans. (March 29, 
2021). https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19.
    \536\ 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.
    \537\ 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/.
    \538\ 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.\539\ In the CY 2022 OPPS/ASC proposed rule (86 FR 
42277 through 42279), we used 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.'' \540\ We noted 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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    \539\ CMS. CMS Quality Strategy. (2016). Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \540\ 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 Innovation 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.\541\
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    \541\ 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 final rule (86 FR 
45349) which summarizes our existing initiatives aimed at closing the 
equity gap in outcomes for Medicare beneficiaries. We also refer 
readers to section XV.B.7.c.(1). of the CY 2022

[[Page 63900]]

OPPS/ASC proposed rule (86 FR 42253) 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, an 
indicator of social risk, as a powerful predictor of poor health 
outcomes among the social risk factors that were 
tested.542 543
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    \542\ Office of the Assistant Secretary for Planning and 
Evaluation. Report to Congress: Social Risk Factors and Performance 
Under Medicare's Value-Based Purchasing Programs. Available at: 
https://aspe.hhs.gov/reports/report-congress-social-risk-factors-performance-under-medicares-value-based-purchasing-programs.
    \543\ 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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    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.\544\ 
In the CY 2022 OPPS/ASC proposed rule (86 FR 42279), we sought comment 
on and were interested in learning more about the potential for 
measuring disparities in care provided in this setting.
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    \544\ 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.
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(2) Solicitation of Public Comments
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42279), we sought 
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 were 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 invited 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.
    We received comments on these topics.
    Comment: Many commenters expressed support for CMS' commitment to 
address health disparities and closing the health equity gap. Some 
commenters specifically supported collection and reporting of 
stratified disparities information in the ASC setting and recommended 
specific data that CMS should collect. One commenter expressed strong 
support for data collection and measurement by characteristics 
including race, ethnicity, sex, sexual orientation, gender identity, 
language preference, tribal membership, and disability status. This 
commenter urged CMS to avoid using indirect estimation methods for race 
and ethnicity data, and instead establish a timeframe for meeting 
specific direct data collection goals, including data completeness and 
accuracy requirements.
    Another commenter asserted that emerging evidence suggests that 
healthcare disparities may be rooted in lived experiences, and 
recommended CMS include questions that specifically address the 
experiences of racialized minorities within the healthcare system, such 
as trust of the healthcare system and providers, experiences of 
microaggression, and perceived discrimination or injustices. The 
commenter also recommended CMS accommodate the literacy needs and 
linguistic barriers of patients during these data collection efforts. 
Another commenter recommended CMS and providers collect data on 
nutritional status and specifically malnutrition to understand and 
improve health equity, since malnutrition is a risk factor for worse 
outcomes after surgery or trauma. An additional commenter supported 
stratification initially by race and ethnicity, but suggested future 
expansion to primary language, geographic location, socioeconomic 
status, gender identity, sexual orientation, age, and ability status.
    An additional commenter described working on a Health Equity Report 
Card tool to reduce racial disparities in other care settings. Another 
commenter described developing a social determinants of health (SDOH) 
report based on the U.S. Department of Health and Human Services (HHS) 
Health People 2030 framework that recommends developing a standard set 
of SDOH definitions, utilizing community-based organizations, and 
building a national clearinghouse of program information and best 
practices, all aimed at reducing health disparities. This commenter 
also recommended CMS consider the three general paths that have been 
identified by the American Hospital Association in vulnerable 
communities including screening patients for social needs, offering 
navigation services to help patients access community services, and 
partnering with community stakeholders to align with local needs.
    Response: We appreciate the feedback provided by the commenters 
regarding approaches for incorporating other demographic 
characteristics and social risk factors into analyses that address and 
advance health equity. We will continue to take all concerns, comments, 
and suggestions into account in our future policies.
    We are also sensitive to the concerns raised by stakeholders about 
indirect estimation. As referenced in the

[[Page 63901]]

proposed rule (86 FR 42018) and summarized in the 2022 IPPS final rule 
(86 FR 25070), the Medicare program does not directly collect 
information from beneficiaries on race and ethnicity, instead relying 
on data collected by the Social Security Administration. A number of 
barriers contribute to this information being insufficiently accurate 
to examine hospital-level disparities. For example, prior to 1980, only 
three categories (White, Black, and Other) were available for 
individuals to self-report race, and respondents were not able to 
indicate Asian, American Indian/Alaska Native, Hispanic, or Pacific 
Islander identities. As a result of these constrained response options, 
many current beneficiaries may not have had the opportunity to 
accurately self-report their race and ethnicity. Although we have 
undertaken significant efforts to update incorrect race and ethnicity 
information many inaccuracies remain limiting our ability to measure 
disparities.
    In recent years we have sponsored the development of two indirect 
estimation algorithms, both intended to correct and improve 
administrative information on race and ethnicity. Indirect estimation 
methods such as these can generally be used in two different ways: (a) 
To estimate race/ethnicity in the absence of self-reported data; or (b) 
to improve administrative data in which beneficiaries provided a self-
report of race/ethnicity but were not permitted a full set of response 
options (post-1980). While there is evidence supporting the validity of 
both approaches, accuracy and performance is particularly high in 
situation (b), where indirect estimation allows the administrative 
variables to better match the responses people would give when 
permitted a full set of response options. The approach for indirect 
estimation we intend to apply is situation (b), which uses an algorithm 
to augment existing data to allow a constrained administrative self-
reported variable to better match what Medicare beneficiaries 
themselves may have chosen when given a comprehensive set of response 
options on race and ethnicity.
    The Medicare Bayesian Improved Surname Geocoding Version 2.1 (MBISG 
2.1) uses the original beneficiary self-report, but uses additional 
information supplied by Medicare beneficiaries and information about 
neighborhood composition, to make this variable better match what 
Medicare beneficiaries themselves self-report when given a full set of 
response options. With respect to Asian and Pacific Islander, Black, 
Hispanic, and White Medicare beneficiaries, the improved version of the 
administrative variable has 96-99% concordance with what Medicare 
beneficiaries themselves report when allowed a full set of response 
options, matching much better than the original self-reported variable 
in which most Medicare beneficiaries were not allowed to indicate 
Asian, American Indian/Alaska Native, Hispanic, or Pacific Islander 
identities. The MBISG 2.1 also offers distinct advantages because it 
generates probabilities of identification in each racial and ethnic 
group for each beneficiary, rather than assigning a single 
identification.
    The MBISG 2.1 incorporates multiple sources of information to 
develop racial and ethnic probabilities. In addition to the information 
on race and ethnicity which that person reported to the SSA, the model 
also considers the person's first and last name, the composition of the 
census block group where they live, and other demographic information 
that Medicare beneficiary shared. Through such a holistic approach, the 
MBISG 2.1 can make accurate comparisons between groups of Medicare 
beneficiaries regarding the quality of care received, including people 
whose surnames are common among several racial and ethnic groups, and 
people who changed their surnames upon marriage. The MBISG 2.1 is also 
designed to consider those who identify as Multiracial and allows 
measurement in Census categories that distinguish those who chose 
single or multiple racial identity, as well as considering endorsement 
of Hispanic ethnicity separately. Notably, we only intend to use the 
MBISG 2.1 to make inferences about aggregated groups at the hospital 
level, and do not intend to use it to make inferences about any single 
individual, validation studies indicate that these aggregate estimates 
further improve upon the higher predictive accuracy of the model.
    We believe that use of statistical imputation models, such as the 
MBISG 2.1 would permit us to provide more accurate, less biased 
information on disparities in hospital outcomes when reported 
confidentially. We plan to report results confidentially to facilities 
in Spring 2022 where results are technically feasible, meaningful, and 
statistically reliable. Any potential future proposal to publicly 
display the disparity results would be made through future rulemaking. 
We are sensitive to the concerns raised by stakeholders and will 
continue to evaluate the validity of the readmission measures when 
stratified by indirect estimation during the confidential reporting 
period.
    Comment: Several commenters noted the difficulty of collecting data 
related to health disparities and reliable patient demographic 
information and recommended CMS support facilities with data collection 
efforts. One commenter noted provider time constraints as an impediment 
to collecting demographic and social risk factor data and recommended 
CMS considering developing and reimbursing for billable encounters 
related to social determinants of health screening. A few commenters 
also recommended CMS standardize collection and reporting of social 
risk factor data. Commenters recommended using screening tools such as 
the Protocol for Responding to and Assessing Patients' Assets, Risks, 
and Experiences (PRAPARE) tool or the Accountable Health Communities 
Health-Related Social Needs Screening Tool developed by CMS. Another 
commenter asserted that without standardized tools, providers lack the 
necessary information to uniformly assess and identify potential social 
risk factors among patients. Several commenters urged CMS to develop 
information technology standards and consistent guidance across 
programs for the capture, use, and exchange of relevant data such as 
the use of electronic health records and FHIR standards. One commenter 
noted that facilities have had difficulty collecting demographic 
information for other quality measurement programs and should not be 
penalized for submission of data that is inaccurate or incomplete for 
reasons beyond their control.
    Response: We appreciate the feedback provided by the commenters 
regarding standardization of demographic data collection to additional 
social risk factors for the purposes of illuminating health inequities. 
We will continue to take all concerns, comments, and suggestions into 
account in our future policies.
    Comment: Several commenters provided helpful insights into the 
unique challenges of measuring disparities in ASCs and potential ways 
to address these challenges. With regards to small sample size, several 
commenters recommended facility-level instead of measure-specific 
equity measurement, such as utilizing outcome measures that are 
applicable across multiple procedures with adjustment by procedure type 
or aggregating the ASCQR measures for each facility. A commenter also 
recommended addressing upstream access challenges that can lead to the 
smaller proportion of patients with social risk factors receiving care 
in ASCs, such as by developing and utilizing access measures. The 
commenter also suggested CMS consider developing and

[[Page 63902]]

implementing measures that directly assess health equity, such as 
structural measures that assess an organization's commitment to equity, 
collecting demographic data, and ensuring training on best practices; 
and measuring areas such as access, community partnerships, and patient 
experiences centered on identifying discrimination and structural 
racism. A commenter requested CMS support facilities in accessing and 
collecting socioeconomic data in the future.
    Response: We appreciate the feedback provided by the commenters 
regarding the unique challenges of measuring disparities in ASCs. We 
will take commenters' feedback into consideration in future policy 
development.
    Comment: A few commenters expressed support for incorporating 
neighborhood-level socioeconomic factors into methods for measuring 
disparities, especially when there are limitations in sample size or 
availability of more granular data. One commenter asserted that 
neighborhood-level socioeconomic factors can tell important information 
about the conditions in which people live, work, and play, and 
understanding them is vital to improving health outcomes. The commenter 
noted that since such data is less accurate than patient-level data, 
they recommended that CMS initially use results stratified by 
neighborhood-level factors for confidential reporting. If CMS chooses 
to publicly report results stratified by neighborhood-level factors, 
the commenter recommended we demonstrate the statistical soundness of 
the results prior to public reporting. Similarly, another commenter 
expressed concern that the approach of using neighborhood-level 
socioeconomic factors is susceptible to an ecologic fallacy which could 
vary greatly across different regions. One commenter recommended that 
standardizing CMS' SDOH data collection and measurement initiatives 
will not be enough--they must also incorporate tools that help 
clinicians connect patients with the community resources they need in 
order to improve outcomes.
    Response: We appreciate the feedback provided by the commenters 
regarding the potential incorporation of neighborhood-level 
socioeconomic factors into methods for measuring disparities in ASCs, 
and for additional measures of equity in this setting. We will take 
commenters' feedback into consideration in future policy development.
    Comment: Several commenters discussed the incorporation of existing 
codes into risk adjustment. One commenter recommended CMS evaluate the 
use of existing SDOH billing codes and the International Classification 
of Diseases, 10th Revision (ICD-10) Z codes which identify non-medical 
factors that may influence a patient's health status and recommended 
CMS consider developing additional codes for social needs care across 
payers to promote screening and referrals for social services. Another 
commenter recommended incorporating social risk adjustment into 
traditional hierarchical condition categories (HCCs)/clinical risk 
adjustment models. However, another commenter provided an example of 
how incorporating social risk factors such as dual eligibility, the 
AHRQ SES index, or non-white race into a hospital measure risk model 
didn't provide evidence of significant differences in outcomes and 
encouraged CMS to test such factors in current or future ASCQR Program 
measures.
    Response: We appreciate the feedback provided by the commenters 
regarding risk adjustment for social risk and demographic variables in 
ASC quality measurement. We will take commenters' feedback into 
consideration in future policy development.
    Comment: While supportive of collecting and utilizing demographic 
and SDOH data to measure and improve health equity, several commenters 
expressed concerns about protecting patient privacy. One of these 
commenters recommended CMS increase beneficiary education on the 
sharing of their sensitive health information with their providers. 
Another of these commenters asked that CMS answer privacy questions 
such as where the data will be kept, what happens if a patient declines 
to answer these questions for providers and/or do not wish to share the 
data with CMS? This commenter also questioned whether utilizing EHRs to 
data-mine patient data would comply with HIPPA and the OIG's provisions 
regarding interoperability and information blocking.
    Response: We are very sensitive to data privacy, and of patient 
education and empowerment. We appreciate the feedback provided by the 
commenters on these topics, and we will take commenters' feedback into 
consideration in future policy development.
    Comment: Several commenters noted that social factors broadly 
influence access to care at ASCs, including for example, reimbursement 
differences between Medicaid and other forms of insurance, federal and 
state policies regarding ASCs, access to specialty care, and 
transportation barriers. One commenter encouraged measurement of access 
to care barriers, community factors, and patient experiences centered 
on identifying discrimination and structural racism could help address 
barriers to receiving care in an ASC.
    Response: We appreciate the feedback provided by the commenters on 
the unique challenges of providing care to patients with social risk 
factors at ASCs. We will take commenters' feedback into consideration 
in future policy development.
    We thank commenters for their input on the potential future efforts 
to address health equity in the ASCQR Program and will take this input 
into account for future measure development in the ASCQR Program.
d. Future Development and Inclusion of a Pain Management Measure
    Chronic pain is linked to a number of adverse physical and mental 
conditions 545 546 547 548 and contributes to increased 
health care costs.\549\ An estimated 20.4 percent (50 million) of U.S. 
adults have chronic pain.\550\ As patients with acute and chronic pain 
continue to face challenges in obtaining adequate care,\551\ Congress 
has advanced policies to improve the treatment of pain and substance 
use disorders. The Comprehensive Addiction and Recovery Act of 2016

[[Page 63903]]

(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.\552\ 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.\553\ 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.\554\
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    \545\ 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/.
    \546\ Hooten WM. Chronic 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.
    \547\ De Heer EW, Gerrits MMJG, Beekman ATF, Dekker J, van 
Marwijk HWJ, de Waal MWM, Spinhoven P, Penninx BWJH, van der Feltz-
Cornelis CM. (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.
    \548\ Rayner L, Hotopf M, Petkova H, Matcham F, Simpson A, and 
McCracken LM. (2016). Depression in patients with chronic pain 
attending a specialized pain treatment centre: prevalence and impact 
on health care costs. Pain; 157(7): 1472-1479. doi: 10.1097/
j.pain.0000000000000542.
    \549\ Gaskin DJ 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.
    \550\ 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.
    \551\ https://www.hhs.gov/sites/default/files/pmtf-final-report-2019-05-23.pdf.
    \552\ H.R.6--SUPPORT for Patients and Communities Act. Available 
at: https://www.congress.gov/bill/115th-congress/house-bill/6/text.
    \553\ 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.
    \554\ CMS Opioid Misuse Strategy 2016. Available at: https://www.cms.gov/outreach-and-education/outreach/partnerships/downloads/cms-opioid-misuse-strategy-2016.pdf.
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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 \555\ and more such 
procedures are being performed in ASCs.\556\ ASCs specializing in pain 
management services are also growing as a share of overall ASCs.\557\ 
The most common multispecialty ASCs that focused on two specialties in 
2017 were those specializing in pain management and either neurology or 
orthopedic services.\558\
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    \555\ 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.
    \556\ 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.
    \557\ 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.
    \558\ 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 73). 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] TR16NO21.176

    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 received comments on these topics.
    Comment: Many commenters supported this request for comment to

[[Page 63904]]

assess the future inclusion of a pain management surgical procedures 
measure. The commenters encouraged CMS to continue to implement 
policies that will incentivize and promote nonopioid, 
nonpharmacological treatment of pain and innovative pain management 
therapies. They also encouraged CMS to work with pain specialty 
societies, CRNAs and ASC industry representatives on the development of 
future pain management specialty measures.
    A few commenters offered additional pain management measurement 
recommendations including: tracking health equity issues in pain 
management, and adding patient reported outcome performance measures 
(PRO-PM) to include service delivery. One commenter also recommend that 
PRO-PM measures are the best measurement type to gauge a patient's 
status prior to health service intervention. Lastly, one commenter 
recommended that CMS facilitate an open forum to discuss ASCQR 
measures.
    Response: We thank the commenters for their suggestions. As 
discussed in the RFC on THA/TKA PRO-PM measure, we are considering the 
future implementation of PRO-PM measures across the quality reporting 
programs. We thank commenters for their input on the potential future 
development and adoption of a pain management measure and will take the 
feedback received into account for future measure development in the 
ASCQR Program.
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 did not propose any changes to these 
policies in the proposed rule.
    We also refer readers to section XIV. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42232 through 42237) where we requested 
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 did not propose any changes to these 
policies in the 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 (now 
referred to as the HQR system HCQIS Access Roles and Profiles (HARP) 
ID) 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 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 did not propose any changes to this policy in the 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 did not propose any changes to these policies in the 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 did 
not propose any changes to these requirements in the CY 2022 OPPS/ASC 
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. of 
this final rule with comment period, 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 did not propose any changes to these policies in the 
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

[[Page 63905]]

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 did not propose any changes to these requirements in the 
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 did not propose any 
changes to these policies for data submitted via a CMS online data 
submission tool in the 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 the CY 2022 OPPS/ASC 
proposed rule (86 FR 42271 through 42272), we proposed 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 did not 
propose any changes to those policies in the CY 2022 OPPS/ASC proposed 
rule, we did propose policies specific to the proposed COVID-19 
Vaccination Coverage Among HCP measure (ASC-20), for which data would 
be submitted via the CDC NHSN website.
(a) Form, Manner, and Timing for the COVID-19 Vaccination Coverage 
Among HCP Measure (ASC-20) Beginning With the CY 2022 Reporting Period/
CY 2024 Payment Determination and Subsequent Years
    For the COVID-19 Vaccination Coverage Among HCP measure (ASC-20), 
we proposed 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 proposed that ASCs would report the measure through the NHSN 
web-based surveillance system.\559\ 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.
---------------------------------------------------------------------------

    \559\ 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.
---------------------------------------------------------------------------

    For the COVID-19 Vaccination Among HCP measure (ASC-20), we 
proposed 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 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 did not receive comments on the form, manner, and timing for the 
COVID-19 Vaccination Coverage Among HCP Measure (ASC-20). We refer 
readers to section XVI.B.3.a.2. of this final rule with comment period 
for public comments received on the COVID-19 Vaccination Coverage Among 
HCP Measure (ASC-20).
    After consideration of the public comments, we are finalizing our 
proposal to adopt the COVID-19 Vaccination Coverage Among HCP measure 
(ASC-20) with a modification to only publicly report the most recent 
quarter of data. Additionally, data will also be available for preview 
by ASCs for 30 days prior to being made publicly available. This would 
result in more meaningful information that is up to date and not 
diluted with older data.
d. 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

[[Page 63906]]

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) Addition of Data Collection Survey Modes of OAS CAHPS Measures 
Collection to Existing Three Modes
    As discussed in section XVI.B.4.c. of the CY 2022 OPPS/ASC proposed 
rule (86 FR 42273), we proposed 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,\560\ 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. We proposed requirements related to 
survey administration, vendors, and oversight activities.
---------------------------------------------------------------------------

    \560\ As stated in section XVI.B.4.c. of the CY 2022 OPPS/ASC 
proposed rule, ``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''.
---------------------------------------------------------------------------

    In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79822 
through 79825), we previously discussed the time, form, and manner in 
which OAS CAHPS information will be submitted. In the CY 2022 OPPS/ASC 
proposed rule (86 FR 42282 through 42284) we proposed two additional 
data collection modes (web with mail follow-up of non-respondents and 
web with telephone follow-up of non-respondents) \561\ 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. 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 CY 2022 OPPS/ASC proposed rule where we describe our similar 
policy for the Hospital OQR Program.
---------------------------------------------------------------------------

    \561\ The two additional modes will be available as part of 
National OAS CAHPS voluntary reporting in 2022.
---------------------------------------------------------------------------

(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 nonrespondents). 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 CY 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42282 
through 42283) we proposed to incorporate two additional administration 
methods: (1) Web with mail follow-up of non-respondents; and (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 \562\ 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--and 
thereafter. We did not propose 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.
---------------------------------------------------------------------------

    \562\ As stated in section XVI.B.4.c. of the CY 2022 OPPS/ASC 
proposed rule, ``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''.
---------------------------------------------------------------------------

    For all five proposed modes of administration as part of the ASCQR 
Program, we proposed 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 policy, 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 proposed 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 
\563\ 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

[[Page 63907]]

submission deadlines would be posted on the OAS CAHPS Survey website 
(https://oascahps.org). Late submissions would not be accepted.
---------------------------------------------------------------------------

    \563\ 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.
---------------------------------------------------------------------------

    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, we 
previously finalized 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 the CY 2022 OPPS/ASC proposed rule (86 FR 42283 through 42284), 
we also proposed 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 received comments on these topics.
    Comment: A commenter supported the proposal that the OAS CAHPS 
Survey 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/facility 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 for 
subsequent years.
    Response: We thank the commenter for its support.
    Comment: Many commenters supported the two additional survey 
administration modes taking advantage of web-based technology: Web with 
mail follow-up of non-respondents and web with telephone follow-up of 
non-respondents. Among the reasons for support were the belief that 
these additional modes will enable providers to reach a larger patient 
population, to receive more and timelier information to improve patient 
experience, to reduce burden associated with this measure, and to 
provide greater flexibility for providers to collect data and patients 
to respond. A few commenters encouraged CMS to monitor the data and 
patient response rates, particularly of the two additional web-based 
survey modes, and data.
    Response: We thank the commenters for their support. We agree that 
as we expand the use of additional OAS CAHPS Survey modes, it will be 
important to monitor data, patient responses, and ensure that the OAS 
CAHPS Survey is refined as appropriate.
    Comment: A few commenters recommended clarifying how CMS could 
distribute the web-based mode and suggested addressing how smart 
phones, email and texting could promote distribution of the survey.
    Response: We thank the commenters for their feedback. Information 
regarding how OAS CAHPS Survey vendors may utilize the two web-based 
modes with telephone or mail follow-up, respectively, will be available 
on the OAS CAHPS website (https://oascahps.org/).
    Comment: Many commenters appreciated the proposal for the 
additional two new mixed mode options that include web-based 
collection, but believe that there needs to be a web-only or additional 
digital modes to reduce financial burden of the survey and make the 
survey easier for patients to complete. Several commenters recommended 
that CMS should permit a web-only survey administration mode and noted 
that web-only would likely be popular form of administration, has a 
better response rate, could achieve minimum surveys more efficiently 
than telephone only, and would also reduce the financial burden of 
administration. One commenter specifically noted that these modes of 
survey distribution could help reach younger and minority populations.
    Response: We thank the commenters for their feedback. We agree that 
the web-based mode interactions with smart phones, email, texting, and 
other electronic distribution create the potential for new and engaging 
ways to connect with patients, especially to traditionally underserved 
communities. We believe that the potential to expand and increase 
access to patient feedback is of the utmost importance and will 
continue to study potential refinement to methods of contact for the 
OAS CAHPS Survey.
    Comment: A few commenters supported a web-only administration and 
noted that access to the internet should not limit the adoption of a 
web-only mode because neither telephone nor physical mail are available 
to everyone, and there is increasing access to technological resources.
    Response: We thank the commenters for their feedback. We agree that 
no one mode of administration will work for every patient, which is why 
we are going to include five modes of survey administration. As we 
stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42283), we did not 
propose 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 access and the ability to respond via 
website. These two modes offer respondents the opportunity to respond 
via web-modes, but we believe that providing the additional follow-up 
provides patients with a greater opportunity to respond to the OAS 
CAHPS Survey, if they so choose. We will continue to review

[[Page 63908]]

digital-only modes of administration and seek to propose additional 
modes that are supported by research.
    Comment: A commenter supported the use of web-based survey modes as 
an important survey option, but recommended that CMS ensure that 
patients are clear what information the OAS CAHPS Survey is seeking.
    Response: We appreciate the commenters support for the web-based 
survey modes. We believe that patients will understand the web-based 
modes and be able to respond to the OAS CAHPS Survey. We also think 
patients will be able to associate the OAS CAHPS Survey with the 
appropriate facility and service that they received. As we stated in 
response to commenters who opposed mandatory reporting of the OAS CAHPS 
Survey in section XVI.B.4.c.(1) of this final rule with comment period, 
we believe that the information provided in the OAS CAHPS Survey 
``Instructions'' is sufficient to inform the patient regarding the 
purpose of the OAS CAHPS Survey and provides sufficient instruction and 
details for the patient to correctly identify and relate the survey to 
the facility and procedure that patient received. CMS began developing 
the Outpatient and Ambulatory Surgery Survey in 2012 using the 
principles and guidelines established by the Agency for Healthcare 
Research and Quality's (AHRQ) CAHPS program and AHRQ approved this 
instrument as a CAHPS survey in February 2015.\564\
---------------------------------------------------------------------------

    \564\ See CAHPS Outpatient and Ambulatory Surgery Survey. 
Content last reviewed July 2019. Agency for Healthcare Research and 
Quality, Rockville, MD. https://www.ahrq.gov/cahps/surveys-guidance/oas/index.html.
---------------------------------------------------------------------------

    Comment: Many commenters opposed the requirement of 300 completed 
surveys as burdensome and requested that CMS set the initial 
requirement at 100 surveys.
    Response: We are committed to ensuring high reliability in publicly 
reported OAS CAHPS Survey results. Acceptable methods of sampling 
survey-eligible patients can be found in Chapter IV-Sampling Procedures 
of the Protocols and Guidelines Manual at https://oascahps.org/Survey-Materials. We refer readers to our discussion on the reliability 
criterion that resulted in the 300 completed survey and 60-patient 
eligible threshold in the CY 2017 OPPS/ASC final rule (81 FR 79809 
through 79810).
    Currently, the target number of completed interviews for ASCs is 
300 annually, or 25 per month. The target of 300 completed surveys for 
analysis is derived from the formula for the precision of a proportion 
with the estimate at 0.5, the confidence interval of about 0.05, and a confidence level of 95 percent. If a facility's 
patient volume is too small to yield 300 completed surveys per year, a 
census of patients is surveyed and participation in public reporting is 
possible. If participation drops below 100 completed surveys, a 
footnote is applied to the publicly reported data indicating that the 
scores should be used with caution as the number of surveys may be too 
low to accurately reflect the facility's performance.
    If the target number of completed interviews for ASCs were reduced 
to 200 completes annually, or about 17 per month, the precision of the 
estimate would be lower. The confidence interval would be 7 
percent. Given the smaller size of ASCs and specialization of services, 
we are finalizing a revised target number of completes, reducing it to 
200 completes annually. We now believe that the 200 surveys will 
provide the appropriate balance of ensuring sufficient confidence in 
the results of the OAS CAHPS Survey, such that facilities will receive 
important patient feedback, while still reducing the overall burden of 
the OAS CAHPS Survey. We believe that this burden reduction is 
important as ASCs continue to respond to COVID-19. While we expect this 
reduction from 300 to 200 completed to be permanent, we will continue 
to assess whether the 200 completed surveys amount ensures appropriate 
levels of confidence in the OAS CAHPS Survey results and propose 
additional further modifications in future rulemaking.
    As a reminder, under the current protocol, Medicare-certified HOPDs 
and ASCs that treat fewer than 60 survey-eligible patients during the 
same 12-month eligibility period have the option to submit a request 
for exemption from participating in the OAS CAHPS Survey. Also, ASCs 
that qualifies for an exemption from the ASCQR Program because they had 
fewer than 240 Medicare claims (Medicare primary and secondary payer) 
in the year prior to the data collection year for the applicable 
payment determination would also qualify for the exemption from the OAS 
CAHPS Survey for the same time period. These ASCs are not required to 
submit a participation exemption request form for the OAS CAHPS Survey 
for the same time period.
    Comment: A commenter requested additional information on whether 
ASCs will be penalized for failure to reach the minimum number of 
required surveys because patients simply choose not to respond to OAS 
CAHPS.
    Response: We agree with commenters that patient response is largely 
out of the control of the facility. We note that we did not propose to 
penalize ASCs for patients' decision not to complete the survey. An ASC 
will not receive a payment reduction as long as it participates in the 
survey, its vendor administers the survey according to the OAS CAHPS 
Survey Protocol and Guidelines Manual and submits that data to CMS by 
the data submission deadline.
    Comment: A commenter strongly recommended that CMS reconsider their 
position on respondent confidentiality and remove the requirement to 
include the question on consent to share identifying information from 
the OAS CAHPS Survey if the facility is interested in receiving 
patient-level response data connected to the patient's identifying 
data. Another commenter explained that if facilities understood the 
patient, they could more easily provide their employees immediate, and 
targeted improvement training. The commenter recommended that CMS align 
the OAS CAHPS patient confidentiality rules with HCAHPS, which allows 
for the release of patient-level data for quality improvement purposes 
with the stipulation that the patient identity should not be shared 
with direct care staff. A commenter expressed concern about a question 
on the OAS CAHPS Survey that seeks information on ``Consent to Share 
Identifying Information'' because they believe it limits the ability to 
identify trends and thereby limits opportunities.
    Response: While the desire to have patient identifying information 
to develop responsive training and remediation steps is admirable, we 
believe that patient confidentiality is an important aspect to the OAS 
CAHPS Survey. The administration protocols for OAS CAHPS follow 
protocols for CAHPS[supreg] Surveys, restricting the release of 
patient-level data if the patient has not consented. We note that, for 
the Hospital IQR Program, because hospitals can self-administer the 
HCAHPS Survey, we do not state that patients' responses and identifying 
information will not be shared with the hospital. However, for surveys 
administered via a third-party vendor, the survey is not linked to a 
sample patient's name unless the patient gives his or her consent. We 
note that facilities may choose to add the ``Consent to Share'' 
question to the OAS CAHPS Survey. This question asks whether a patient 
gives permission for their name to be linked to their survey responses. 
However, we note that each facility should consult with its own

[[Page 63909]]

counsel to ensure compliance with applicable privacy and security laws.
    Comment: A commenter recommended that CMS revise the OAS CAHPS 
patient eligibility definition such that it is based on a set of 
consistently knowable criteria and does not rely on Current Procedural 
Terminology (CPT) codes as the primary method to determine eligibility.
    Response: The OAS CAHPS Survey is administered to all eligible 
patients or a random sample thereof who had at least one outpatient 
surgery/procedure during the applicable month. We acknowledge the 
concern about the use of CPT codes, including those for procedures that 
patients may not perceive as surgery, and note that we will consider 
this issue. We note that many CPT codes have been excluded from 
inclusion in the OAS CAHPS Survey, including services like application 
of a cast or splint, in order to ensure that only patients receiving 
applicable procedures are surveyed.\565\ We thank the commenters and 
will take all comments under consideration as we craft future policy 
for the OAS CAHPS Survey. As materials are updated, they will be posted 
here: https://oascahps.org/General-Information/Announcements.
---------------------------------------------------------------------------

    \565\ https://oascahps.org/General-Information/Announcements.
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    After consideration of the public comments we received, we are 
finalizing this proposal with modification. The annual required number 
of surveys that must be reported for an ASC to successfully complete 
the measure is reduced from 300 to 200, and if more than 200 completed 
surveys are anticipated, an ASC can choose to randomly sample their 
eligible patient population.
(b) Vendor Requirements
    We did not propose 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 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.
    Comment: Several commenters opposed the requirement that OAS CAHPS 
Survey be administered by third party vendors. Reasons given included 
that requiring third-party vendors increases the expense of the survey, 
vendors may not be fiduciaries for ASCs, the use of vendors adds 
unnecessary bureaucracy, vendor errors could negatively impact ASCs 
results and that ASCs are capable of collecting information and 
reporting data. Another commenter stated that of the number of approved 
vendors may not be prepared to accept the additional volume of work 
from the nation's ASCs. Another commenter stated its belief that the 
False Claims Act is sufficient to ensure compliance.
    Response: In order to meet the survey administration requirements 
for these measures, the ASC must administer the OAS CAHPS Survey in 
accordance with the requirements listed in the OAS CAHPS Survey 
Protocols and Guidelines Manual.\566\
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    \566\ Current Survey Materials (oascahps.org).
---------------------------------------------------------------------------

    OAS CAHPS Survey requires that the survey be administered by an 
approved survey vendor to ensure that patients respond to the survey in 
a way that reflects their actual experiences with outpatient surgical 
care and is not influenced by the facility. If vendors were removed as 
neutral third parties, there could be concerns of objectivity and bias.
    We believe that OAS CAHPS Survey vendors have gained experience 
during the voluntary reporting as part of the voluntary National OAS 
CAHPS program, and approved vendors will be able to support ASCs. We 
post the list of the approved OAS CAHPS Survey vendors on https://oascahps.org, and we encourage ASCs to contact vendors for cost and 
service information pertaining to OAS CAHPS Survey as there may be 
differences among vendors and multiple modes of conducting the survey 
provide greater economical choice.
    We acknowledge that it is possible an ASC could fail to meet the 
requirements under the ASC-15a-e Survey-based measures if its vendor 
fails to administer the survey properly or submit the required data to 
CMS by the data submission deadline. However, we continue to 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. We encourage all ASCs to be fully apprised of 
the methods and actions of their survey vendors--especially the 
vendors' full compliance with the OAS CAHPS Survey Administration 
protocols--and to carefully inspect all data warehouse reports in a 
timely manner. After the survey vendor submits the data to the OAS 
CAHPS Data Center, we strongly recommend that ASCs promptly review 
their two OAS CAHPS feedback reports and submit corrections under the 
process outlined in the OAS CAHPS Protocol and Guidelines Manual.\567\ 
These reports enable an ASC to ensure that its survey vendor has 
submitted the data on time, the data has been accepted into the OAS 
CAHPS Data Center, and the data accepted into the OAS CAHPS Data Center 
are complete and accurate. Finally, we note that submission of 
complete, accurate, and timely data is the responsibility of the ASC. 
ASCs should check-in regularly with survey vendors to ensure that 
vendors are properly submitting timely survey data.
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    \567\ OAS CAHPS Survey Materials, including the OAS CAHPS 
Protocol and Guidelines Manual are available at Current Survey 
Materials (oascahps.org).

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[[Page 63910]]

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 did not propose any changes to this policy in the 
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).\568\ 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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    \568\ 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 did not 
propose any changes to this policy in the 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). of this 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 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 did 
not propose any changes to this policy in the 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 did not propose any changes to this 
policy in the proposed rule.

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

1. Statutory Background
    We refer readers to the CY 2012 OPPS/ASC final rule with comment 
period (76 FR 74492 through 74493) 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 in certain 
payment rates under the ASC payment system shall be reduced by 2.0 
percentage points for ASCs that fail to meet the reporting requirements 
of the ASCQR Program. This reduction applied beginning with the CY 2014 
payment rates (77 FR 68500). For a complete discussion of the 
calculation of the ASC conversion factor and our finalized proposal to 
update the ASC payment rates using the inpatient hospital market basket 
update for CYs 2019 through 2023, we refer readers to the CY 2019 OPPS/
ASC final rule with comment period (83 FR 59073 through 59080).
    In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499 
through 68500), in order to implement 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

[[Page 63911]]

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 CY2013 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 have noted our belief 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 proposed 
the continuation of these policies for CY 2022 in the CY 2022 OPPS/ASC 
proposed rule (86 FR 42284 through 42285), did not receive any public 
comments on these policies, and are finalizing the continuation of 
these policies for CY 2022.

XVII. Radiation Oncology Model

A. Introduction

    The purpose of this final rule with comment period is to finalize 
provisions related to the delay of the Radiation Oncology (RO) Model 
and finalize modifications to certain policies proposed in the CY 2022 
OPPS/ASC proposed rule.
    Section 1115A of the Act authorizes the Center for Medicare and 
Medicaid Innovation (Innovation Center) to test innovative payment and 
service delivery models expected to reduce Medicare, Medicaid, and 
Children's Health Insurance Program (CHIP) expenditures while 
preserving or enhancing the quality of care furnished to the 
beneficiaries of such programs. Under the Medicare fee-for-service 
(FFS) program, Medicare generally makes a separate payment to providers 
and suppliers for each item or service furnished to a beneficiary 
during the course of treatment. Because the amount of payments received 
by a provider or supplier for such items and services varies with the 
volume of items and services furnished to a beneficiary, some providers 
and suppliers may be financially incentivized to inappropriately 
increase the volume of items and services furnished to receive higher 
payments. Medicare FFS may also detract from a provider's or supplier's 
incentive to invest in quality improvement and care coordination 
activities if it means those activities will result in payment for 
fewer items and services. As a result, care may be fragmented, 
unnecessary, or duplicative.
    The 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 will pay participating providers and suppliers a site-neutral, 
episode-based payment for specified professional and

[[Page 63912]]

technical RT services furnished during a 90-day episode to Medicare FFS 
beneficiaries diagnosed with certain cancer types. The RO Model will 
include approximately 30 percent of all eligible RO episodes 
nationally. Under the RO Model, the episode payment amounts for 
included cancer types that are treated with RT services included in the 
RO Model will be the same for hospital outpatient departments (HOPDs) 
and freestanding radiation therapy centers.
    The RO Model will offer RO participants the opportunity to examine 
and better understand their own care processes and patterns with regard 
to RO beneficiaries receiving included RT services for included cancer 
types. We believe that RO participants in the RO Model will have a 
significant opportunity to redesign care and improve the quality of 
care furnished to RO beneficiaries receiving these services. We believe 
the RO Model will further the agency's goal of increasing the extent to 
which CMS initiatives pay for value and outcomes, rather than for 
volume of services alone, by promoting the alignment of financial and 
other incentives for health care providers caring for beneficiaries 
receiving treatment for cancer. Payments that are made to health care 
providers for assuming financial accountability for the cost and 
quality of care create incentives for the implementation of care 
redesign among model participants and other providers and suppliers.

B. Background

    CMS is 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 the care of cancer patients, most notably with 
our Oncology Care Model. We believe that a model in radiation oncology 
will further these efforts to improve cancer care for Medicare 
beneficiaries and reduce Medicare expenditures. RT is a common 
treatment, received by nearly two thirds of all patients undergoing 
cancer treatment, and it is typically furnished by a radiation 
oncologist. As described in the 2017 Report to Congress: ``Episodic 
Alternative Payment Model for Radiation Therapy Services'', and also in 
the ``Specialty Care Models to Improve Quality of Care and Reduce 
Expenditures'' (84 FR 34490) (hereinafter referred to as the 
``Specialty Care Models proposed rule''), 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 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. 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.
    On September 29, 2020, we published in the Federal Register the 
final rule titled ``Specialty Care Models to Improve Quality of Care 
and Reduce Expenditures'' (85 FR 61114) (hereinafter referred to as the 
``Specialty Care Models final rule'') and codified policies at 42 CFR 
part 512. Due to the state of the public health emergency (PHE) for the 
Coronavirus disease 2019 (COVID-19) pandemic in Fall 2020, CMS revised 
the RO Model's model performance period to begin on July 1, 2021, and 
to end December 31, 2025, in the CY 2021 Hospital Outpatient 
Prospective Payment (OPPS) and Ambulatory Surgical Center (ASC) Payment 
Systems and Quality Reporting Programs final rule with comment period 
(85 FR 85866) (hereinafter referred to as ``CY 2021 OPPS/ASC final 
rule''), giving RO participants an additional 6 months to prepare for 
the RO Model. As we stated at 85 FR 86261, the delay was intended to 
give RO participants additional time to learn the RO billing 
requirements and train staff on new procedures. It was also intended to 
give more time to RO participants to understand their participant-
specific case mix and historical experience adjustments and the payment 
they expect to receive under the RO Model. It was not CMS' intention to 
delay the RO Model until the COVID-19 PHE ended. 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 (CDEs), 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) (hereinafter referred to as ``CAA, 2021''), enacted 
on December 27, 2020, includes a provision that prohibits 
implementation of the RO Model before January 1, 2022. This 
Congressional action supersedes the RO Model delayed model performance 
period established in the CY 2021 OPPS/ASC final rule with comment 
period. To respond to the congressionally mandate delay, we proposed 
provisions related to the additional delayed implementation of the RO 
Model due to the CAA, 2021, including a proposed model performance 
period starting on January 1, 2022, with a 5-year model performance 
period, as well as modifications to certain RO Model policies not 
related to the delay, in the CY 2022 OPPS/ASC proposed rule.
    We proposed 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. We received 
approximately 554 timely pieces of correspondence in response to our 
solicitation of public comments on the proposed rule from 143 
commenters. We are finalizing the majority of the proposals without 
modification, and there are two proposals that we are finalizing with 
modification. These include the definitions for RO Track One and RO 
Track Two, as well as the extreme and uncontrollable circumstances 
(EUC) policy. There were a few sections where we asked for comments but 
noted we would not respond to those comments in the rule. There were 
also points of clarification that we did not ask for comments on. We 
will not be responding to comments in either of those cases in this 
rule. We also note that some of the public comments were outside of the 
scope of the proposed rule. These out-of-scope public comments are not 
addressed in this final rule with comment period. Many were previously 
addressed in the Specialty Care Models final rule (85 FR 61114) and/or 
a set of Frequently Asked Questions on the RO Model website. Summaries 
of the public comments that are within the scope of the proposed rule 
and our responses to those public comments are set forth in the various 
sections of this final rule with comment period under the appropriate 
heading.

[[Page 63913]]

C. RO Model Regulations

1. Model Performance Period
    In the Specialty Care Models final 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 (85 FR 86261).
    The CAA, 2021, enacted on December 27, 2020, includes a provision 
that prohibits implementation of the RO Model prior to January 1, 2022. 
In the CY 2022 OPPS/ASC proposed rule, CMS proposed 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. 
CMS also proposed to modify the model performance period to begin on 
January 1, 2022, and end December 31, 2026, as described in the 
proposed definitions in section XVIII.C.2 of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42290). If finalized as proposed, no new RO 
episodes would begin after October 3, 2026, in order for all RO 
episodes to end by December 31, 2026. We also proposed that each PY 
would 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 
would begin on that date and end on December 31 of that year (86 FR 
42290).
    We solicited public comments on our proposal in section XVIII.C.1 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42290).
    The following is a summary of the public comments received on this 
proposal and our responses:
    Comment: A few commenters supported the model performance period 
beginning on January 1, 2022. One of these commenters stated that the 
extra 12-month delay from the original implementation date of January 
1, 2021 has provided sufficient time for RO Model participants to 
prepare and be able to meet the requirements for participation in the 
RO Model. Another commenter noted that the agency has been working on 
proposals for the RO Model for a number of years, stakeholders have 
provided comprehensive feedback, and they urged CMS to proceed with 
implementation on January 1, 2022. A commenter supported CMS' proposal 
to align each 12-month performance year with the calendar year, 
starting in 2022, as that will simplify the RO Model for RO 
participants.
    Response: We thank these commenters for their support.
    Comment: Many commenters commented that the model performance 
period should be further delayed. Of the commenters who suggested an 
alternative model performance period for the RO Model, a few commenters 
recommended delaying until mid-2022, some commenters recommended 
delaying until 2023, a couple commenters recommended delaying until the 
COVID-19 PHE has ended, and a few commenters suggested delaying until 
the calendar year after the PHE has ended. Many commenters noted that 
the extension of the COVID-19 PHE and the financial and operational 
challenges brought on by the COVID-19 PHE warrant an additional delay.
    Response: We thank commenters for their comments on the model 
performance period for the RO Model. CMS proposed the earliest model 
performance period permitted under the CAA, 2021 because we believe in 
prioritizing a prospective episode payment model in the radiation 
oncology space in order to provide payment stability and promote high 
quality care for Medicare beneficiaries. Further, we do not find that 
it is appropriate to further delay the model performance period due to 
the COVID-19 PHE because it will be nearly 2 years into the COVID-19 
PHE by January 1, 2022, when the RO Model is slated to begin. RO 
participants have been aware that they have been selected for 
participation in the RO Model since September 2020. Therefore, we 
believe that RO participants have had sufficient time to prepare for 
the RO Model and to adjust their workflows in light of the COVID-19 
PHE. We also believe that delaying the model performance period further 
would penalize those RO participants who have been preparing to 
implement the RO Model, would further postpone RO participants' ability 
to participate in an Advanced APM and MIPS APM, and has the potential 
to generate confusion.
    To address concerns related to the start of the model and the 
effects of the COVID-19 PHE, we are finalizing in section XVII.C.10. of 
this final rule with comment period an Extreme and Uncontrollable 
Circumstances (EUC) policy, codified at Sec.  512.294, that would allow 
CMS flexibility in responding to national, regional, or local 
circumstances that adversely impact RO participants' ability to deliver 
care in accordance with the RO Model's requirements, including the 
COVID-19 PHE. As we proposed in section XVIII.C.10 of the CY 2022 OPPS/
ASC proposed rule, in a national, regional, or local event, we would 
apply EUC 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 stated that 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. CMS will continue to monitor the impact of the COVID-19 PHE on 
RO participants. As proposed, if CMS invokes any of the EUC policies, 
related to the COVID-19 PHE or otherwise, we will communicate this 
decision via the RO Model website and written correspondence to RO 
participants.
    Comment: Many commenters stated that they would not have sufficient 
time to prepare for the implementation of the RO Model, as there will 
be approximately two months between the publication of the CY 2021 
OPPS/ASC final rule and the beginning of the proposed model performance 
period. A commenter noted that January 1, 2022 is fewer than 4 months 
away, and physician practices and their medical center administrations 
should have at least 12 months of notification of the final model 
requirements and definitions to prepare for their clinical 
implementation and related billing changes.
    Response: We will have already delayed the model performance period 
twice: From January 1, 2021 to July 1, 2021, in the CY 2021 OPPS/ASC 
final rule (85 FR 85866); and from July 1, 2021 to January 1, 2022, in 
this final rule. CMS posted the RO Model's participating ZIP Code list 
in September of 2020 and noted in a subsequent rule (85 FR 85866) that 
the CBSAs selected for participation in the RO Model would not change 
due to the revised model performance periods. We also reiterated

[[Page 63914]]

our intent that the CBSAs selected for participation in the RO Model 
would not change due to the revised model performance period in the CY 
2022 OPPS/ASC proposed rule (86 FR 42290). We believe that RO 
participants have had sufficient time to prepare for the implementation 
of the RO Model, as they have known that they would be required to be 
in the RO Model since the publication of the Specialty Care Model final 
rule in September of 2020 (85 FR 61149 through 61151). We also note 
that none of the modifications to the RO Model finalized in this final 
rule will change how the RO Model is operationalized. RO participants 
have therefore had over a year to prepare for the implementation of the 
RO Model, which we believe is sufficient.
    Comment: A commenter noted that it may be challenging for some 
hospitals to prepare for a model performance period beginning January 
1, 2022, particularly given the impact of the COVID-19 PHE, and 
encouraged CMS to be mindful of this strain and to monitor its impacts 
on model participants.
    Response: We appreciate this commenter's concern regarding the 
COVID-19 PHE. We will have already delayed the model performance period 
twice, from January 1, 2021 to July 1, 2021 due to the COVID-19 PHE in 
the CY 2021 OPPS/ASC final rule (85 FR 85866), and subsequently to 
January 1, 2022 in this final rule, as required by the CAA, 2021. We 
will continue to monitor the RO Model's impacts on RO participants, as 
finalized in 85 FR 61257 through 61258.
    Comment: A few commenters requested a delay to the model 
performance period to allow more time for radiation oncology Electronic 
Health Records (EHR) vendors to comply with the RO Model requirements 
and to test the functionality of these new software systems. These 
commenters stated that nearly all radiation oncology practices have 
separate management systems in addition to their practice's EHR; there 
are only two vendors nationwide that provide these EHR systems for 
radiation oncology; a new software build to capture the relevant fields 
can take between 12 and 18 months; and there are a limited number of 
vendor IT support staff whose services are necessary to facilitate 
these upgrades.
    Response: As we discussed in the Specialty Care Models final rule 
(85 FR 61136), we agree with commenters' concerns that EHR vendors will 
need time to design, develop, build, test, validate, and implement the 
software to allow RO participants to fulfill the requirements of the RO 
Model in a streamlined manner through their EHR platforms. We 
understand that successful implementation of the RO Model may require 
many RO participants as well as software vendors to change EHR 
configurations, organizational policies, and end user workflows. 
However, we believe that we have provided sufficient time, since the 
publication of the Specialty Care Models final rule in September 2020, 
for RO participants and their EHR vendors to implement the software 
that RO participants may need to adhere to the RO Model requirements. 
We also note that although an RO participant may document these 
requirements using their EHR system if they wish, no changes to EHR 
systems are required for tracking compliance with RO Model 
requirements.
    Comment: Many commenters requested delaying the model performance 
period to have more time to meet quality and CDE requirements. Many 
commenters stated that RO Model participants are only now learning 
additional details on quality and CDE requirements, which may require 
significant practice changes in order to ensure compliance. A couple 
commenters also asked that if the model performance period were to 
begin January 1, 2022, we delay some of the requirements, including 
quality measure and CDE reporting, and implement them after PY1.
    Response: We thank commenters for their comments around delaying 
some of the requirements of the RO Model. RO participants were notified 
of their inclusion in the RO Model upon publication of the Specialty 
Care Models final rule in September 2020. RO participants have had more 
than a year to prepare for their participation in the RO Model, which 
we believe is sufficient.
    In July 2021, CMS released the Quality Measure and Clinical Data 
Elements Guide on the RO Model website, along with the associated CDE 
templates. We have provided education and outreach support to encourage 
the efficient collection and submission of this data, including a 
webinar related to Model requirements in September 2021 to help 
participants prepare for the various requirements, and we have 
additional webinars planned specifically on the Quality Payment Program 
(QPP) and quality measures and CDEs. We believe we have provided RO 
participants with this information in sufficient time for them to 
prepare for the quality and reporting requirements.
    Comment: Many commenters requested a delay to the model performance 
period in order to have more time to implement the billing processes 
required for the Model, which may require significant practice changes. 
Many commenters stated that RO Model participants are only now learning 
additional details on the billing requirements under the RO Model. A 
couple commenters recommended postponing the model performance period 
because providers need additional clarification around appropriate 
billing, which they believe CMS has not yet provided. One of these 
commenters maintained that the education seminars and tools CMS has 
provided to date were insufficient to prepare RO participants to 
execute the billing process under the RO Model.
    Response: We believe that we have created a billing process that 
will be easily implemented within current systems because it is based 
on how FFS claims are currently submitted, which all RO participants 
should have experience submitting. We provided information on billing 
and coding changes under the RO Model in the Specialty Care Models 
final rule (85 FR 61205 through 61211). The RO Model-specific HCPCS 
codes were made public July 19, 2021. And the three modifiers and one 
condition code used for billing previously existed in the current PFS 
and OPPS claims systems and have addressed related questions in FAQs. 
We also hosted a RO Model Billing webinar on August 24, 2021, of which 
the slides and recording can be found on the RO Model website, https://innovation.cms.gov/innovation-models/radiation-oncology-model, and we 
hosted RO Model Billing Office Hours on August 31, 2021. Finally, we 
would encourage RO participants to access a billing guide document that 
restates the information provided in the aforementioned webinar 
available on the RO Model website in mid-November. We believe these 
resources provide sufficient guidance on implementing the billing 
process to RO participants, as we endeavored to explain the process in 
detail and answer RO participants' billing questions through these 
resources. We will continue to answer any billing questions RO 
participants may have, which can be submitted to 
[email protected]. Further, we believe that RO participants 
have had adequate time to operationalize the Model's billing 
requirements, which are based on the current FFS claims systems, as RO 
participants have known they would be required to participate in the RO 
Model since the publication of the Specialty Care Models final rule in 
September of 2020 (85 FR 61149 through 61151).
    Comment: A couple commenters offered an alternative proposal that 
the

[[Page 63915]]

RO Model should establish an implementation year, or ``PY0'', before 
the actual start of the model performance period to allow CMS to 
address complexities in the billing design, and allow participants to 
change workflows to align with the RO Model, utilize performance data 
from CMS to identify areas for transformation, receive additional 
education from CMS on RO Model parameters and meeting objectives, and 
allow providers and vendors additional time to operationalize data 
collection and reporting requirements.
    Response: We appreciate the commenters' suggestions but, as 
discussed above, we will have already revised the model performance 
period twice. RO participants have known they would be required to 
participate in the RO Model since the publication of the Specialty Care 
Models final rule in September of 2020 (85 FR 61149 through 61151), so 
we believe that RO participants have had adequate time to prepare for 
the Model. We believe that a PY0 is unnecessary because RT providers 
and RT suppliers have had more than a year to prepare for the RO Model 
and its requirements and a PY0 would only further delay the model.
    After considering public comments, we are finalizing as proposed 
that the model performance period will begin January 1, 2022 and end 
December 31, 2026. We are also finalizing as proposed that 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 finalizing as proposed 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 are also finalizing our proposed definition that the model 
performance period means the five 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.
    Finally, we received no comments on our proposed definition for PY 
(performance year) to be 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 PY1 will begin on that date and end on December 31 of that 
year. We are finalizing as proposed to codify this definition at Sec.  
512.205.
2. Definitions
    Definitions for the RO Model are codified at Sec.  512.205. We 
proposed to modify some of these definitions and add several new terms 
and definitions as described in section XVIII. of the CY 2022 OPPS/ACS 
proposed rule.
    We proposed 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 proposed 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 proposed 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 proposed to add a definition for ``EUC'' (extreme and 
uncontrollable circumstances) to correspond with the proposed EUC 
policy described in section XVIII.C.10 of the CY 2022 OPPS/ACS proposed 
rule. To describe how changes in CMS Certification Numbers (CCNs) and 
Tax Identification Numbers (TINs) are treated under the RO Model, which 
was described in section XVIII.C.5.g. of the CY 2022 OPPS/ACS proposed 
rule, we also proposed to add definitions for ``legacy CCN'' and 
``legacy TIN''. And, to clarify how RO Model requirements align with 
the Quality Payment Program (QPP), we proposed to add definitions for 
``Track One'' and ``Track Two'' as described in section XVIII.C.7. of 
the CY 2022 OPPS/ACS proposed rule.
    We proposed to add a definition for ``baseline period'', specifying 
which episodes (dependent on the model performance period) are used in 
the pricing methodology. We proposed 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).
    In the CY 2022 OPPS/ASC proposed rule, we solicited public comments 
on our proposed definitions. To the extent we have received comments 
relating to the definitions that we had proposed, we have responded to 
those comments in context throughout section XVII.C. of this final rule 
with comment period.
3. 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 proposed in the CY 2022 OPPS/ASC proposed rule (86 FR 42290 
through 42291) 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. As we 
stated in the proposed rule, we continue to believe that HOPDs that are 
participating in PARHM should be excluded from the RO Model because 
these hospitals receive global budgets, and these global budgets would 
include payments for RT services and as such

[[Page 63916]]

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, as we stated in the CY 2022 OPPS/ACS proposed rule, 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, we stated in the 
CY 2022 OPPS/ACS proposed rule that 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. As described in the CY 2022 OPPS/ASC 
proposed rule, because the RO Model's PYs would align with CYs, we 
concluded in the CY 2022 OPPS/ACS proposed rule that it would be 
possible to update the RO Model exclusions for a given PY if an HOPD 
leaves or joins PARHM. For instance, we stated in the CY 2022 OPPS/ACS 
proposed rule that 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. (As we discuss further in response to comments 
in this section, we are clarifying in this final rule that 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 CY quarter that includes the HOPD's start date in PARHM.) 
Similarly, we stated that 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 stated in the CY 2022 OPPS/ACS proposed rule that 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 proposed 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 solicited public comments on our proposal to include HOPDs 
eligible to participate in PARHM, but that are not current PARHM 
participants in the RO Model (86 FR 42291).
    The following is a summary of the public comments received on this 
proposal and our responses:
    Comment: A few commenters supported our proposal 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.
    Response: We thank commenters for their support.
    Comment: Some commenters opposed the inclusion in the RO Model of 
only HOPDs participating in PARHM, stating that they believe that 
participation in the RO Model should be voluntary, and thus no new PGPs 
or HOPDs, including HOPDs identified as eligible to participate in 
PARHM, should be required to participate in the RO Model.
    Response: We did not solicit comments on mandatory participation 
under the RO Model in the CY 2022 OPPS/ASC proposed rule. We did, 
however, respond to comments requesting voluntary participation in the 
RO Model in the Specialty Care Models final rule. As discussed in the 
Specialty Care Models final rule, mandatory participation avoids the 
selection bias inherent to any model in which providers and suppliers 
may choose whether or not to participate (85 FR 61141). Such a design 
ensures sufficient proportional participation of both HOPDs and 
freestanding radiation therapy centers, which is necessary to obtain a 
diverse, representative sample of RT providers and RT suppliers that 
will allow a statistically robust test of the prospective episode 
payments made under the RO Model (85 FR 61141). Mandatory participation 
also facilitates a comparable evaluation comparison group (85 FR 
61138). We therefore maintain, as we did in the Specialty Care Models 
final rule, that the mandatory design for the RO Model is necessary to 
enable CMS to detect change reliably in a generalizable sample of RT 
providers and RT suppliers to support a potential model expansion (85 
FR 61138).
    In terms of our proposal to include HOPDs that have been identified 
as eligible to participate in PARHM, but that are not actually 
participating in PARHM, in the RO Model, as we noted in the CY 2022 
OPPS/ASC proposed rule, we no longer believe that including these 
hospitals in the RO Model will impact the PARHM evaluation because 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. In addition, as described above, we now 
expect that the PARHM evaluation's comparison group will consist only 
of hospitals located outside of Pennsylvania. 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, as we stated in the proposed rule, while it remains 
the case that hospitals and CAHs may join

[[Page 63917]]

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 stated in the CY 2022 OPPS/ACS proposed rule that we concluded 
it would be possible to update the RO Model exclusions for a given PY 
if an HOPD leaves or joins PARHM. In the CY 2022 OPPS/ACS proposed 
rule, we provided an example of a rural hospital identified as eligible 
to participate in PARHM that later initiates its participation in PARHM 
by signing a PARHM participation agreement with CMS (86 FR 42291). In 
the CY 2022 OPPS/ACS proposed rule, we inadvertently stated that 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. This statement was inaccurate. Rather, 
consistent with the exclusion from the RO Model of hospitals 
participating in PARHM, because these hospitals receive global budgets 
that would include payments for RT services and as such would overlap 
with the RO Model, we are clarifying that 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 CY quarter 
that includes the HOPD's start date in PARHM. Specifically, to avoid 
overlapping participation between the RO Model and PARHM, in the rare 
circumstance that an HOPD begins its participation in PARHM on a date 
other than the first day of a CY quarter, that HOPD would be excluded 
from participation in the RO Model as of the start of the CY quarter 
when the HOPD joins PARHM--rather than as of the start of the following 
CY quarter. We similarly stated that, 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 further clarify that, to avoid any overlap between 
the global budget payments and the RO Model payment, the HOPD would be 
required to participate in the RO Model as of the start of the CY 
quarter following the former PARHM participant's final global budget 
payment.
    After considering public comments, we are finalizing the proposal 
to exclude only those HOPDs that are participating in the PARHM from 
the RO Model as opposed to all HOPDs that are eligible to participate 
in the PARHM. We are codifying this policy at our regulation at Sec.  
512.210(b)(5). As stated in the proposed rule (86 FR 42291), we will 
continue to use the list on the PARHM website at https://innovation.cms.gov/initiatives/pa-ruralhealth-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 are further finalizing that HOPDs that are identified as 
eligible to participate in PARHM, but that are not current PARHM 
participants, will 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. As 
previously described, if an HOPD begins its participation in PARHM on a 
date other than the first day of a CY quarter, that HOPD would be 
excluded from participation in the RO Model as of the start of the CY 
quarter when the HOPD joins PARHM, not of the start of the following CY 
quarter.
b. Community Health Access and Rural Transformation (CHART)
    We also proposed 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 would be 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 proposed 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 proposed 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 proposed that we would 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 solicited public comments on our proposal in section 
XVIII.C.3.B. of the CY 2022 OPPP/ASC proposed rule (86 FR 42291).
    The following is a summary of the public comments received on this 
proposal and our responses:
    Comment: We received some comments about the exclusion of HOPDs of 
any participating hospital in the Community Transformation Track of the 
CHART Model from the RO Model. All of these commenters supported this 
exclusion. A commenter also supported that 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 is 
described at 85 FR 61260. A couple of commenters commented that 
exclusion from the RO Model of an HOPD of any participating hospital in 
the Community Transformation track of the CHART Model will have minimal 
impact, as 15 lead organizations will be selected for participation in 
the Community track CHART out of all specialties and it is unlikely 
that a radiation oncology practice would be selected to participate in 
CHART.
    Response: We thank commenters for their support. We agree that the 
overlap between RO Model participants and participating hospitals in 
the Community Track of the CHART Model will be minimal. However, we 
need to account for any overlap that could potentially exist between 
the RO Model and CHART. We believe the best way to account for this 
overlap is to exclude HOPDs participating in the CHART Community 
Transformation track and for the CHART ACO Transformation track to 
follow the same policy that applies for overlap between the RO Model 
and the Medicare Shared Savings Program ACOs.
    After considering public comments, we are finalizing as proposed to 
exclude HOPDs participating in the CHART Community Transformation track 
from the RO Model. We are codifying this policy at Sec.  512.210(b)(6). 
We are clarifying in this final rule that HOPDs furnishing included RT 
services selected for participation in the CHART Community 
Transformation track will be RO participants in PY1 of the RO Model and 
are only excluded once the CHART Community Transformation track model 
performance period begins.
    And, for the CHART ACO Transformation track, we are finalizing as 
proposed that we will follow the same policy for overlap as exists for 
overlap between the RO Model and the

[[Page 63918]]

Medicare Shared Savings Program ACOs.
c. Low Volume Opt-Out
    We codified under 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. We 
codified at Sec.  512.210(c)(6) that 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 eligible RO participant 
wishes to opt out, it must attest that it intends to do so prior to the 
start of the upcoming PY.
    Because section 133 of the CAA, 2021 prohibits implementation of 
the RO Model prior to January 1, 2022, we proposed to modify the dates 
of the data used to determine eligibility for the low volume opt-out in 
the CY 2022 OPPS/ASC proposed rule to align with the requirements of 
the CAA, 2021. We proposed 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 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. We further proposed 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 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 proposed definitions for legacy CCN and legacy TIN as follows. 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 proposed 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 proposed to add 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.
    We solicited 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 (86 FR 42291).
    The following is a summary of the public comments received on these 
proposals and our responses:
    Comment: One commenter requested clarification on how the low 
volume opt-out policy will be applied to completely new entities or for 
existing CCNs or TINs that add a radiation therapy service line. This 
commenter stated that CMS indicated in prior communications that such 
entities would not be eligible for the opt-out policy since they would 
have no historical claims to determine if they are eligible for the 
policy. This commenter asked CMS to establish a process by which new 
entities or entities adding a new service line that anticipate having 
low volume in the performance year could apply for the low volume opt-
out.
    A couple of the commenters noted that the low volume opt-out will 
not protect all small and rural facilities as many will not be eligible 
to opt out under this policy. These commenters stated that the RO 
Model's provisions may prove to be unexpectedly burdensome or 
financially infeasible for these RO participants. One commenter 
specifically disagreed with the threshold of fewer than 20 episodes or 
RO episodes, claiming that the threshold is exceedingly low and does 
not exempt radiation oncologists working less than half-time. This 
commenter explained that in small and rural counties, older adults 
(65+) make up a larger share of the population compared to urban and 
suburban areas, resulting in a large Medicare population to serve, thus 
making the 20-episode threshold impractical. This commenter suggested 
that a more realistic approach would be to use the low-volume threshold 
used in MIPS of 200 or fewer Medicare fee-for-service encounters.
    One commenter recommended CMS allow RO participants to 
retrospectively request to opt out of a PY if it furnished fewer than 
20 episodes in that PY. In this instance, an RO participant that 
retrospectively opts out would have its payments adjusted based on the 
FFS amount the RO participant would have been paid had it not been 
included in the RO Model.
    Response: We thank these commenters for their comments. We 
finalized in the Specialty Care Models final rule (85 FR 61188) that a 
PGP, freestanding radiation therapy center, or HOPD which would 
otherwise be required to participate in the RO Model under Sec.  
512.210(c) may choose to opt-out of the RO Model on an annual basis if 
the PGP, freestanding radiation therapy center, or HOPD furnishes fewer 
than 20 episodes across all CBSAs selected for participation in the 
most recent calendar year with available claims data. We codified this 
policy at Sec.  512.210(c) of that final rule.
    As discussed in the Specialty Care Models final rule (85 FR 61188), 
the low volume opt-out option is intended to allow RO participants 
furnishing a small volume of RT services in the CBSAs selected for 
participation in the Model to opt out if they so choose, given the 
investment required to implement the RO Model versus the benefit of 
participating in the RO Model for a limited frequency of RT services. 
We note that prospective payments in general, including episode-based 
payment rates of the RO Model, are not designed to reflect specific 
investment decisions of individual RT providers and RT suppliers, such 
as practice-specific technology acquisition of new service lines.
    We believe that requiring those RO participants eligible to opt-out 
of the RO Model to attest to the intention of opting

[[Page 63919]]

out of the RO Model prior to the start of the applicable PY (that is, 
on or before December 31 of the prior PY in which the opt-out would 
occur), and to do so before every PY for which the RO participant is 
eligible to opt out, is less disruptive to these RO participants than 
allowing them to opt out of the RO Model retrospectively. They can 
continue to bill and operate as they do under FFS without needing to 
meet additional RO Model requirements. Allowing RO participants to opt 
out of the RO Model retrospectively would be operationally complex. We 
also believe that it would not make sense to allow for RO participants 
to opt out retrospectively, since these RO participants would have 
prepared for the RO Model, billed RO episodes and carried out their 
requirements only to be paid under FFS for the few RO episodes they 
furnished.
    In response to concerns from commenters concerning rural RT 
providers and RT suppliers, we did further analysis concerning the 
rural and urban landscape of the ZIP Codes linked to CBSAs selected for 
participation in the Model. We used the U.S. Department of 
Agriculture's Economic Research Service's ``2010 Rural-Urban Commuting 
Area (RUCA) Code, ZIP Code file'' last updated in August 2020 (https://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx) 
to analyze the population density, urbanization, and daily commuting 
patterns of the RO Model's participating ZIP Codes that are linked to 
CBSAs selected to participate in the RO Model. The Primary RUCA 
classification contains whole numbers (1-10) to delineate metropolitan, 
micropolitan, small town, and rural commuting areas based on the size 
and direction of the primary (largest) commuting flows, where RUCA 
category 1 is highly urban and RUCA category 10 is highly rural. RUCA 
category 1 is described in the ZIP Code file as having a metropolitan 
area core with primary flow within an urbanized area. RUCA category 10 
is described in the code file as having a primary flow to a tract 
outside an urbanized area or urban cluster. RUCA category 4 is defined 
as having a micropolitan area core with primary flow within a large 
urban cluster of 10,000 to 49,999.
    Among RT providers and RT suppliers eligible to participate in the 
RO Model, we found that approximately 98 percent of their 2020 episodes 
furnished in participating ZIP Codes were furnished in RUCA categories 
classified as 1 and 4, with approximately 85 percent in RUCA category 1 
and 13 percent in RUCA category 4. We found that approximately less 
than 2 percent of 2020 episodes furnished in participating ZIP Codes 
were furnished by those RT providers or RT suppliers billing in RUCA 
category classified as 2. No 2020 episodes were furnished in 
participating ZIP Codes by those RT providers or RT suppliers in RUCA 
category classified as 3. Less than 1 percent of 2020 episodes 
furnished in participating ZIP Codes were furnished by RT providers or 
RT suppliers billing in RUCA categories classified as 5 through 10.
    We then examined the range of the combined adjustments, reflecting 
the RO participant's historical experience and case mix values, for 
both the PC and TC based on our proposed policies where the historical 
experience and case mix adjustments for PY1 would be based on 2017-2019 
episodes. We found similar patterns of adjustment values across those 
RT providers and RT suppliers in RUCA category 1 and 4. Although we 
also found similar patterns of adjustment values across RT providers 
and RT suppliers furnishing episodes in the remaining RUCA categories, 
the number of those RT providers and RT suppliers and their 
corresponding episodes in the other RUCA categories are too small to 
draw reliable conclusions. We uncovered no evidence that rural 
providers have sufficiently different patterns of adjustment values 
than non-rural providers to indicate participation in the RO Model may 
be burdensome or financially infeasible for RO participants that 
furnish RT care in rural areas such that a change in our low volume 
opt-out policy specific to rural areas is warranted. We also note that 
any RO participant, regardless of the RUCA category within which they 
are furnishing RO episodes, can opt out of the RO Model if they are so 
eligible due to low volume.
    As we stated in the Specialty Care Models final rule (85 FR 61147), 
we believe that allowing entities with fewer than 20 episodes to opt-
out achieves the right balance of allowing very small entities to opt-
out if they believe the burden from participation in the RO Model would 
outweigh the possibility of benefits from model participation (for 
example, potential for care improvements or increased payments), while 
also maintaining a variety of RO participant types in the RO Model to 
promote generalizability (to the extent possible) of any impact 
results. We do not believe it is necessary to allow RO participants 
adding new service lines to 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. The trend factor will 
reflect updates to input prices as reflected in updated PFS and OPPS 
rates. As we stated in the Specialty Care Models final rule (85 FR 
61188), prospective payments in general, including episode-based 
payment rates of the RO Model, are not designed to reflect specific 
investment decisions of individual providers and suppliers. We do not 
currently classify episodes based on whether they are related to an 
existing service line or a service line that was not furnished and 
billed by the RO participant historically, and therefore, whether an RO 
participant has added a new service line or not is not relevant to our 
payment methodology or low volume opt-out policy. We did note in the 
Specialty Care Models final rule (85 FR 61188) that we may consider 
revising this policy in the future.
    Please note that any new TIN or new CCN, regardless of whether it 
is result of a merger, acquisition, or other business relationship, 
must opt out of a PY prior to the start of that PY, if it is so 
eligible. If a PGP, freestanding radiation therapy center, or HOPD 
begins furnishing included RT services in a CBSA selected for 
participation in the RO Model during a PY, that entity would be unable 
to opt out of the PY that is currently underway.
    After considering public comments, we are finalizing as proposed 
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 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. We are 
finalizing 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 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 and

[[Page 63920]]

PY5, respectively. We are codifying this policy at our regulation at 
Sec.  512.210(c).
    We received no comments on the definitions of legacy TIN and legacy 
CCN, and therefore we are finalizing these definitions at Sec.  512.205 
with one technical change to the proposed definition of legacy CCN. We 
are changing ``radiotherapy services'' to ``RT services'' because that 
is the defined term in the regulations. After considering public 
comments, we are also finalizing the policy that CMS will 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), in determining whether the participant is eligible for the low 
volume opt out. We are finalizing as proposed that an entity will 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. We are codifying these 
definitions and this policy at our regulation at Sec.  512.205 and 
Sec.  512.210(c)(7) respectively.
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). CMS proposed to reorganize Sec.  
512.230(a) and (b) to improve the clarity and internal consistency of 
the regulatory text. We proposed 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 proposed that CMS 
would remove from the RO Model a cancer type that does not meet all 
three of these criteria or for which CMS discovers a greater than 10 
percent error in the established national base rates.
    Comment: We received a few comments in support of the RO Model's 
current policy, including support for including radiation therapy 
treatments that are commonly used for multiple cancer types. A few 
commenters noted that the list of included cancer types is still too 
broad and CMS should limit the number of cancers to those cancers where 
there is strong clinical evidence for a range of treatment 
alternatives, such as prostate cancer, breast cancer, and lung cancer. 
We received a comment expressing support for including only cancer 
types with evidence of effective use of hypofractionation to ensure 
delivery of clinically appropriate care and value. A separate commenter 
asked that CMS reduce the 15 cancer types to a smaller number for the 
initial rollout of the RO Model.
    Response: We appreciate the comments. We note that we did not 
propose any substantive changes to our policy that determines what 
cancer types are included in the RO Model, but instead simply 
reorganized the content in Sec.  512.230(a) and (b). The included 
cancer types are determined by the following criteria as stated in the 
proposed reorganization for Sec.  512.230(a): All are commonly treated 
with radiation per nationally recognized, evidence-based clinical 
treatment guidelines; all cancer types have one or more associated 
current ICD-10 codes that have demonstrated pricing stability; and the 
Secretary has not determined that the cancer type is not suitable for 
inclusion.
    As we noted at 85 FR 61157, the cancer types that are included in 
the RO Model are cancers commonly treated with RT, and we exclude those 
cancers that are rarely treated with radiation. CMS believes that 
limiting or phasing in the number of included cancer types would be 
more burdensome for most RO participants. For most RO participants, 
limiting or phasing in cancer types would mean that the RO Model 
requirements and billing guidance would apply to a subset of their RT 
services rather than to than to the majority of their RT services for a 
significant portion of the model performance period (or if cancer types 
were further limited, for the entire model performance period).
    Further, as we stated in the Specialty Care Models final rule at 85 
FR 61157, CMS believes that phasing in the included cancer types would 
prevent a robust evaluation because doing so would reduce the amount of 
available data for any cancer types phased in at a later time. We 
believe that a model performance period of at least 5 years is 
sufficient to obtain data to compute a reliable impact estimate.
    As we stated in the Specialty Care Models final rule at 85 FR 
61156, the RO Model is designed to be disease-specific and agnostic to 
treatment and modality type. That is, we do not require that multiple 
treatment alternatives exist for a given cancer type, or that 
hypofractionation be an option for treating the cancer type, to be 
included in the RO Model because the purpose of the RO Model is to test 
an episode-based payment that is not specific to how many treatments or 
which modalities are furnished, which would retain FFS incentives. 
Rather than these types of requirements, our criteria for the included 
cancer types includes the requirement that each cancer type demonstrate 
pricing stability. As we described in the Specialty Care Models final 
rule at 85 FR 61157, although individual episodes may deviate from the 
average number of fractions for the cancer type (depending on the 
clinical profile of the individual patient), we have determined that 
all of the included cancer types have pricing stability, which allows 
them to be accurately priced to support the RO Model test.
    We will continue to review whether the included cancer types meet 
the criteria at Sec.  512.230. As we recently did with liver cancer, we 
will update the included cancer types as is detailed in Sec.  512.230 
when a cancer type needs to be added to the RO Model or excluded from 
the RO Model.
    Comment: We received one comment in which the commenter expressed 
concern about the inclusion of bone and brain metastases because the 
treatments of both cancers can vary widely in the approach and 
technology used depending on the specific patient and disease 
progression.
    Response: We appreciate this comment. CMS has determined that brain 
and bone metastases meet all three criteria for inclusion. As we stated 
in the Specialty Care Models final rule (85 FR 61188), we believe that 
treatment patterns as reflected in the episode file represent the 
variation in care patterns currently delivered nationally for all 
included cancer types. The case mix model incorporates cancer type and 
so the participant-specific case mix adjustment for the PC and/or the 
TC of the RO Models reflects the case mix of the RO participant's 
population, including those with bone and brain metastases. The same is 
true for the approach taken for the historical experience adjustment.
    We are finalizing our proposal to reorganize our regulations at 
Sec.  512.230(a) and (b) without modification.

[[Page 63921]]

b. Removal of Liver Cancer From Included Cancer Types
    In section XVIII.C.4.b. of the CY 2022 OPPS/ASC proposed rule we 
stated that liver cancer met the criteria for exclusion set forth in 
regulatory language in Sec.  512.230(a) and (b), regulatory text that 
we also proposed to reorganize as described above. While we did not 
request comment on removing liver cancer from the RO Model, we received 
supportive comments related to removing liver cancer from the list of 
included cancer types. See Table 74 below, for the current list of 
included cancer types.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.177

BILLING CODE 4120-01-C
c. Removal of 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 proposed 
to amend Sec.  512.240 to remove brachytherapy as an included modality 
in the RO Model.
    We finalized a waiver of section 1833(t)(2)(H) of the Act 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, as discussed in the Specialty 
Care Models final rule at 85 FR 61242 and codified at Sec.  
512.280(f)(4). Given that our proposal to remove brachytherapy from the 
RO Model, if finalized, would render our waiver of section 
1833(t)(2)(H) of the Act moot, we proposed to withdraw this waiver if 
our proposal to remove brachytherapy is finalized as proposed, because 
it would no longer be necessary solely for the purposes of testing the 
RO Model.
    We solicited public comments on our proposal in section 
XVIII.C.4.c. of the CY 2022 OPPS/ASC proposed rule (86 FR 42293).

[[Page 63922]]

    The following is a summary of the public comments received on this 
proposal and our responses:
    Comment: CMS received many comments in support of the proposed 
policy to remove brachytherapy from the RO Model's list of included 
modalities; no commenters opposed removing brachytherapy. One commenter 
noted that the removal of brachytherapy will significantly lessen the 
number of RO Model claims that will be incorrectly paid. Another 
commenter supported removal because of the frequency in which 
brachytherapy is being furnished at PPS-exempt hospitals. One commenter 
noted that historically, brachytherapy has been under-reimbursed 
compared to other forms of radiotherapy, and its utilization in the 
United States has declined in recent years, and that this trend has not 
been observed in other countries. This commenter supported the 
potential for including brachytherapy services in future iterations of 
the RO Model. A couple commenters asked that CMS work with stakeholders 
to find a way to include brachytherapy in later model performance 
periods.
    A few commenters stated that they did not support including 
brachytherapy within the RO Model's bundled payment in the future. One 
commenter did not support including brachytherapy during the model 
performance period given the commenter's perception that the RO Model's 
pricing and payment mechanism are complex. This commenter opposed 
inclusion because it would increase the Model's complexity.
    One commenter stated that brachytherapy sources are vastly 
different than other included modalities. This commenter stated that 
brachytherapy sources are more similar to drugs and 
radiopharmaceuticals that are also excluded from the bundled payments 
under the RO Model. This commenter also stated that external beam 
radiation often requires less variation in resource use among patients 
with similar types of cancer who are treated by the same radiation 
oncology provider than do those who receive brachytherapy treatment. A 
couple commenters supported the removal of brachytherapy because they 
did not believe the episode payments adequately covered brachytherapy 
sources, pointing to low dose rate brachytherapy sources such as 
Cesium-131 as an example.
    Some commenters supporting the brachytherapy exclusion stated their 
belief that the RO pricing methodology is insufficient for 
multimodality episodes, such as those that include brachytherapy. Many 
of these commenters noted that although they are supportive of the 
proposal to remove brachytherapy, it does not address what commenters 
perceived to be the inadequate payment for brachytherapy services under 
FFS Medicare, which they argued has created access to care issues for 
this particular modality for years.
    Response: We appreciate the feedback. CMS seeks to neither 
incentivize nor discourage the use of one modality over another, but 
rather to encourage RT providers and RT suppliers to choose RT services 
that are the most clinically appropriate for RO 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 were brachytherapy to remain in the RO 
Model under the existing pricing methodology.
    We note that we are not responding at this time to comments related 
to how we might include brachytherapy as a single modality or as 
multimodality episodes in the future. We are also not addressing 
comments about the perceived inadequate payment for brachytherapy 
services under FFS Medicare. We appreciate these comments and will 
consider them in future rulemaking.
    Comment: Many commenters noted that if CMS finalizes the removal of 
brachytherapy, we should consider removing the incorrect payment 
withhold from the RO Model's pricing methodology. These commenters 
argued that without brachytherapy in the RO Model, this withhold is 
unnecessary.
    Response: There are additional payment scenarios (such as 
incomplete episodes and duplicate services) beyond a multimodality 
episode with brachytherapy that require reconciliation and payment from 
the incorrect payment withhold. Therefore, we are not removing the 
incorrect payment withhold from the RO Model's pricing methodology.
    Comment: We received a few comments in support of withdrawing our 
waiver of section 1833(t)(2)(H) of the Act in Sec.  512.280(f)(4). A 
few commenters urged CMS to continue to uphold the safeguards that 
Congress established for paying for brachytherapy sources under the 
hospital OPPS under section 1833(t)(2)(H) of the Act and refrain from 
waiving the safeguards in the future.
    Response: We thank commenters for their support.
    We are finalizing the removal of brachytherapy from the list of 
included modalities in the RO Model codified at Sec.  512.240 and are 
amending Sec.  512.280(f)(4) to remove 1833(t)(2)(H).
d. Exclusion of IORT
    We finalized in the Specialty Care Models final rule (85 FR 61114) 
that IORT would not be included as a modality in the RO Model. We asked 
for comments on how we might include IORT in future years at 
XVIII.C.4.d. of the CY 2022 OPPS/ASC proposed rule and we noted at 86 
FR 42296 that we did not intend to respond to these comments in this 
final rule. We received some comments related to this issue and 
appreciate these comments. We will consider these comments in future 
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

[[Page 63923]]

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 final 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 the proposed rule, we clarified paragraph (2) at 86 FR 42296. 
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 metastasis claim line will not qualify as two or more claim 
lines that fall within brain metastases or bone metastases or secondary 
malignancies. Instead, the episode will be assigned whatever cancer 
type had the highest line count among all other cancers.
    We clarified in the CY 2022 OPPS/ASC proposed rule 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 is posted on the RO Model 
website at https://innovation.cms.gov/innovationmodels/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 this 
proposed rule. 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.
    We did not solicit public comments on this clarification in section 
XVIII.C.5.a. of the CY 2022 OPPS/ASC proposed rule (86 FR 42296).
b. Constructing Episodes Using Medicare FFS Claims and Calculation of 
Episode Payment
    We proposed to update how we describe our pricing methodology. We 
proposed to remove references to specific CYs from the definition of 
baseline period, but we would 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 proposed to remove references to specific CYs, 
we would 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 invited 
comment on the proposal to weigh the most recent episodes more heavily 
than those that occurred in earlier years in the baseline period. We 
solicited public comments on our proposal in section XVIII.C.5.b. of 
the CY 2022 OPPS/ASC proposed rule (86 FR 42297).
    The following is a summary of the public comments received on this 
proposal and our responses:
    Comment: A couple of commenters agreed with CMS's proposed policy 
to weigh the most recent episodes more heavily than those that occurred 
in earlier years in the baseline. One of those commenters added that 
this weighting scheme is appropriately balanced giving more weight to 
the most recent data while using multiple years in the baseline period 
provides year-to-year stability.
    Response: We thank these commenters for their support.
    After considering public comments, we are finalizing as proposed to 
weigh the most recent episodes more heavily than those that occurred in 
earlier years in the baseline period. We received no comments on our 
proposed modification to the definition of baseline period, and 
therefore, we are also finalizing as the definition of baseline period 
without modification and codifying the definition at Sec.  512.205.
    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. 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 CAA, 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 proposed 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 solicited public comments on our proposal in section XVIII.C.5.b 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42298).
    The following is a summary of the public comments received on this 
proposal and our responses:
    Comment: A couple of commenters all supported removing the specific 
reference to the sequestration percentage amount and changing text 
language to indicate that the exact amount will be determined in 
accordance with the applicable current law.
    Response: We thank these commenters for their support.
    After considering public comments, we are finalizing our proposal 
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 are also codifying these policies at Sec.  
512.255(c)(13).
c. National Base Rates
    We codified at Sec.  512.250(b) the criteria for excluding 
episodes, as more fully described in 85 FR 61183 through

[[Page 63924]]

61184. We finalized that we would exclude episodes in the baseline 
(finalized in this rule 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 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 
proposed 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 the CY 2022 OPPS/ASC proposed rule, 
we proposed 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 also clarified 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 proposed to amend Sec.  512.250(b) accordingly.We solicited 
public comments on our proposal in section XVIII.C.5.c. of the CY 2022 
OPPS/ASC proposed rule (86 FR 42298).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: We received no comments on the proposal 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. We 
received comments concerning the inclusion of HOPDs identified as 
eligible to participate in PARHM, which we summarized and responded to 
in section XVII.C.3.a of this final rule with comment period, but we 
received no comments specifically related to PARHM considerations in 
episode construction.
    Response: After considering public comments, we are finalizing our 
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 are 
also finalizing 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 proposed to define the baseline period as 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. We proposed that 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 will 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).
    Comment: A couple commenters expressed concern about how we will 
handle episode data from CYs 2020 and 2021 in the RO Model given the 
COVID-19 PHE. One commenter noted that because we proposed that the 
historical experience adjustment be based on 2017-2019 data which would 
stay constant throughout the duration of the model performance period, 
the additional cost associated with delivering more expensive treatment 
for advanced disease due to the COVID-19 PHE would not be captured in 
that component of the pricing methodology. One commenter supported this 
2017-2019 baseline period, specifically because it does not include 
2020. The commenter argued that the pandemic depressed healthcare 
utilization including essential treatment for conditions such as cancer 
in ways that are not representative of best practices outside of a 
pandemic.
    Response: We thank these commenters for stating their concerns. 
Please reference the RO Model's EUC policy in section XVII.C.10. of 
this final rule with comment period for discussion about the pricing 
methodology and how specific episode data may be handled should an EUC 
policy be invoked. We are finalizing our policy that the baseline 
period will be defined as 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. We 
are finalizing that the baseline period is January 1, 2017 through 
December 31, 2019, unless the RO Model is prohibited by law from 
starting in CY 2022. Our finalized national base rates for the model 
performance period are based on the criteria set forth for cancer type 
inclusion and are summarized in Table 75 of this final rule with 
comment period.
BILLING CODE 4120-01-P

[[Page 63925]]

[GRAPHIC] [TIFF OMITTED] TR16NO21.178

BILLING CODE 4120-01-C
d. 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. In the Specialty Care 
Models final rule at 85 FR 61186, we stated that 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. We clarified in the CY 2022 OPPS/ASC proposed rule at 86 
FR 42299 through 42300, that the number of separate trend factors will 
vary depending on the number of cancer types included in the RO Model.
    Given the multiple delays in the model performance period and our 
proposal to update the baseline period, we proposed that the numerator 
of the trend factor would be the product of (a) the average number of 
times each

[[Page 63926]]

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 and (b) the component's FFS 
payment rate (as paid under OPPS or PFS) for the CY of the upcoming PY. 
We proposed that the denominator of the trend factor would 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. We also clarified that the trended national base 
rates will be made available on the RO Model website prior to the start 
of the applicable PY, along with this final rule.
    We solicited public comments on our proposals in section 
XVIII.C.5.d. of the CY 2022 OPPS/ASC proposed rule (86 FR 42300).
    The following is a summary of the public comments received on the 
proposal to base the denominator of the trend factor on the third year 
of the proposed baseline period, and the numerator of the trend factor 
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, and our response:
    Comment: Many commenters disagreed with the proposed modification 
of the trend factor, because it did not include guardrails to prevent 
significant shifts in payment rates under the RO Model's trend factors, 
since the trend factor methodology incorporates the MPFS and OPPS rates 
as part of an annual update for the PC and TC of each disease site. 
These commenters argued that without the guardrails, the proposed trend 
factor methodology limits rate stability if MPFS and OPPS experience 
significant payment shifts from year-to-year. Many of these commenters 
recommended a guardrail of +/-2 percent to help establish rate 
stability. One commenter argued that it was inappropriate to apply, in 
part, the rate of growth in physician payments to payments for RT 
services furnished in HOPDs, as CMS intends to do under the RO Model. 
This commenter argued that when Congress passed MACRA, it did not 
intend to apply the annual PFS update factor of 0 percent to payments 
made under OPPS for the years 2020 through 2025. This commenter 
recommended that CMS calculate one trend factor for the technical 
component of RT services furnished in the freestanding radiation 
therapy center setting using the change in PFS payments and one for the 
technical component of RT services furnished in an HOPD setting using 
the change in OPPS payments.
    Another commenter argued it will likely take several years before 
new technology or treatments are reflected in sufficient volume to 
impact and be reflected in the FFS rates, and, as a result, CMS should 
establish an add-on payment to account for new technologies.
    Many commenters stated that not having access to trend factor 
values coupled with not having access to participant-specific case mix 
and historical experience adjustment values until two months prior to 
the start of the model performance period prevented them from having 
the critical data they needed to assess the financial implications of 
the RO Model.
    Response: We thank these commenters for their comments. We note 
that modifications in this section involve the removal of references to 
specific years, and, instead, add references to specific periods of 
time relative to the baseline period or upcoming PY. For example, 
instead of stating a specific year like ``2019,'' we now state ``3 
years prior to the CY used to determine the FFS payment rates.'' This 
allows the text to remain current even if there is a change in baseline 
period or model performance period.
    As we stated in the Specialty Care Models final rule (85 FR 61188), 
we believe the best way to calculate the trend factors such that 
spending under the RO Model does not diverge too far from spending 
under FFS Medicare that non-participants will receive for the 
underlying bundle of included RT services had they been in the RO 
Model, is to base the trend factors on service volumes from episodes 
attributed to both HOPDs and freestanding radiation therapy centers, 
and on updated PFS and OPPS rates. Calculating unique trend factors for 
the PC and TC for each cancer type and separately for those furnished 
in the HOPD setting from those furnished in the freestanding radiation 
therapy center setting works against the RO Model's goal of site 
neutrality. As we stated in the Specialty Care Models final rule (85 FR 
61188), the trend factors will only generate significant swings if 
there are large swings in payment rates for RT services that are 
frequently used during episodes. CMS believes that setting up 
guardrails risks paying significantly more under the Model than to non-
participants. Moreover, to the extent that new technologies and new 
equipment are billed under new HCPCS codes, we would go through 
rulemaking to add those new codes to the list of included RT services 
as we stated at 85 FR 61165.
    Since the numerator of the trend factor is based, in part, on each 
component's (PC or TC) FFS payment rate (as paid under OPPS or PFS) for 
the CY of the upcoming PY, it is not possible to post trended national 
base rates prior to when those FFS payment rates are finalized in 
November prior to the upcoming PY. Please note that we will monitor the 
adequacy of payments over time, including the trend factor, and 
consider re-baselining in a later PY if our analysis indicates it is 
appropriate. Although it may be inferred from the description of the 
trend factor calculation, we would also like to clearly state that the 
accounting of ``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'' as described in the numerator and denominator, 
is by episode.
    We are finalizing our policies as proposed, that is, we will base 
the denominator of the trend factor on the third year of the baseline 
period and the numerator of the trend factor 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.
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, will be multiplied by the corresponding trended 
national base rate from Step 2 for each included 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. In the CY 
2022 OPPS/ASC proposed rule, we clarified 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

[[Page 63927]]

included cancer types. For example, with the removal of liver cancer 
there are 15 included cancer types that yields 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.
    We did not solicit public comments on this clarification.
f. 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 final rule (85 FR 61114). Under this stop-loss 
limit, CMS uses 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 pays 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 are 
determined at the time of reconciliation. We proposed to modify this 
stop-loss limit policy such that it applies to RO participants that 
have fewer than 60 episodes during the baseline period, as we proposed 
to define at Sec.  512.205, and that were furnishing included RT 
services before the start of the model performance period in the CBSAs 
selected for participation and amend Sec.  512.255(c)(7)(iv) 
accordingly.
    We solicited public comments on our proposal in section 
XVIII.C.5.f. of the CY 2022 OPPS/ASC proposed rule (86 FR 42301).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: Some commenters disagreed with the stop-loss policy. A few 
commenters stated that the stop-loss policy should apply to all RO 
participants, not just to RO participants that have fewer than 60 
episodes during the proposed baseline period. Another commenter 
requested clarification as to why the stop-loss policy is limited in 
this way, because the number of episodes an RO participant furnishes is 
unrelated to case complexity, which the commenter believed is the 
reason for stop-loss policies in general. They cited the modeling of 
one entity's 2019 bone metastases episodes, which they believe 
demonstrates that under the Model, this entity would see a 66 percent 
rate reduction for that cancer type. Another commenter argued that 
limiting the stop-loss policy to entities with fewer than 60 episodes 
during the baseline period ignores the larger impact of financial loss 
that would be experienced by higher-volume entities serving large, 
vulnerable Medicare populations.
    One commenter recommended that the stop-loss policy be applied to 
entities with gradually fewer episodes after PY1. A couple of 
commenters recommended a 20 percent stop-loss policy for rate variance 
per tumor site.
    Response: We thank these commenters for their comments. We proposed 
to modify the stop-loss policy in only one respect, expanding one 
criterium of eligibility in that RO participants had to be furnishing 
included RT services ``before the start of the model performance period 
in the CBSAs selected for participation,'' instead of ``furnishing 
included RT services in the CBSAs selected for participation at the 
time of the effective date of the Specialty Care Models final rule'' as 
stated in that rule at 85 FR 61114. We received no comments on this 
specific proposal.
    We refer to the Specialty Care Models final rule (85 FR 61177 
through 61178) where we summarize and respond to comments on the stop-
loss policy similar to those we received here. We would like to point 
out that those RO participants that have fewer than 60 episodes in the 
baseline period would not receive an historical experience adjustment. 
The heavy weight of the RO participants' historical experience in their 
participant-specific RO payment amount would prevent most if not all of 
RO participants from qualifying for the stop-loss policy if an 
historical experience adjustment were applied, particularly in the 
early PYs of the Model.
    We are finalizing the policy as proposed such that those RO 
participants that had begun furnishing included RT services any time 
before the start of the model performance period in the CBSAs selected 
for participation are eligible for such a stop-loss limit and amend 
Sec.  512.255(c)(7)(iv) accordingly.
g. 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 proposed to add Sec.  512.255(c)(14) to establish 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 proposed 
that we would 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 
proposed to eliminate the requirement that RO participants provide a 
notification regarding all new clinical or business relationships that 
may or may not constitute a change in control. We proposed to add Sec.  
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 solicited public comments on our proposal in section 
XVIII.C.5.g. of the CY 2022 OPPS/ASC proposed rule (86 FR 42301).

[[Page 63928]]

    The following is a summary of the public comments received on this 
proposal and our responses:
    Comment: One commenter supported the policy to consider the legacy 
CCN(s) or TIN(s) for the purposes of risk adjustment, as this process 
is both straightforward and fair to the RO participant.
    Response: We thank this commenter for their support.
    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. After consideration of the comment we received, we are 
finalizing our policies as proposed with one technical change. We are 
adding subparagraphs to Sec.  512.255(c)(14).
h. 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 proposed at 86 FR 42301 to 
lower the discount factor for the PC to 3.5 percent and the discount 
factor for the TC to 4.5 percent. Given our other proposed 
modifications to the RO Model, including removing brachytherapy and 
liver cancer, modifying the baseline period, and the current size of 
the RO Model (approximately 30 percent of eligible episodes), in the CY 
2022 OPPS/ASC proposed rule at 86 FR 42301 we described that these 
modifications would enable us to lower these discounts without 
increasing the size of the RO Model due to a reduction in pricing 
variability and expecting 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. The 
definition of discount factor codified at Sec.  512.205 also included 
the proposed percentages. To simplify the regulation text, we proposed 
to include the discount percentages at Sec.  512.205 and remove the 
percentages from Sec.  512.255(c)(8).
    We solicited public comments on our proposal in section 
XVIII.C.5.h. of the CY 2022 OPPS/ASC proposed rule (86 FR 42301).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: No commenters agreed with the proposed discounts, and many 
commenters proposed that discounts be set to 3 percent or less. Some 
commenters stated that they believe the RO pricing methodology fails to 
recognize that radiation oncology services rely heavily on the use of 
advanced technology and equipment that requires a significant financial 
investment. One of those commenters estimated that 85 percent of costs 
are equipment and technology related, and that beyond upfront capital 
investment in equipment, hospitals incur significant on-going costs 
related to software upgrades and equipment calibration. Furthermore, 
this commenter argued that the high-upfront investment costs and the 
proprietary nature of the equipment pose a barrier to switching 
vendors. Given this, the commenter stated that there are limited 
opportunities for RT providers and RT suppliers that are already 
adhering to evidence-based treatment guidelines to generate additional 
savings through internal cost reduction efforts.
    One commenter noted that the proposed discounts, along with other 
aspects of the RO Model's pricing methodology, do not recognize the 
ongoing support of skilled staff necessary to operate a clinic. Many 
commenters specifically referenced the proposed discounts in 
combination with continued declines in MPFS payment rates as the source 
of their concern. They believe the combination will result in payment 
cuts that will put many RO participants in financial jeopardy.
    One commenter stated the impact of the discount factor will be 
particularly acute for clinics in communities that serve patients who 
are more likely to be covered by Medicare or Medicaid programs, rather 
than privately funded employer-based health plans. According to the 
commenter, due to this payer mix, this group of physicians typically 
has more limited financial resources than their peers in other areas, 
making it difficult to invest in the resources necessary to participate 
in value-based payment programs. This commenter argued that as a result 
of this, the RO Model will exacerbate health disparities.
    One commenter recommended that if CMS implements the RO Model 
during the COVID-19 PHE, that CMS gradually phase in the discount 
factor to allow time for RO participants to implement the systems 
necessary to succeed under the RO Model, retain the resources necessary 
to respond quickly to the ever-evolving PHE, and reinvest in a capital-
intensive service line to ensure that access to care is maintained. One 
commenter stated its belief that in the event of a resurgence of the 
COVID-19 PHE or another nationwide emergency that leads to large 
disruptions in medical care, CMS should eliminate all downside risk for 
all participants as was done across models during the COVID-19 PHE in 
2020.
    Many commenters, recommending a discount factor of 3 percent or 
less, argued that this would be more in line with other payment models 
and ensure that radiation oncology providers have sufficient capital to 
remain operational and invest in the necessary resources (human and 
equipment) to increase efficiency and enhance beneficiary care. A few 
commenters recommended a discount of less than 3 percent to align with 
the discounts CMS applied to Oncology Care Model participants in a two-
sided risk arrangement. A few commenters called attention to the 
discounts in both the Bundled Payment for Care Improvement-Advanced and 
Comprehensive Care for Joint Replacement (CJR) models. One commenter 
noted that the discounts in both models are no more than 3 percent, and 
that in CJR, hospitals that exhibit superior quality outcomes will have 
their discount factor reduced to as low as to 1.5 percent. Another 
commenter recommended CMS set lower discount rates for high performers, 
citing the CJR model as an example where CMS allows participants to 
earn back a percentage of the discount applied to the episodes based on 
quality performance. This commenter noted the recent finalized changes 
to the CJR model, which essentially eliminate the discount applied 
under the CJR model for the highest performing hospitals. One commenter 
recommended that CMS eliminate the discount factors altogether.
    Response: We thank these commenters for expressing their concerns 
and for their suggestions. We designed the RO Model to test whether 
prospective episode payments in lieu of traditional FFS payments for RT 
services will reduce Medicare expenditures while preserving or 
enhancing quality. CJR finalized the elimination of the discount for 
high performers in PY6-8 so as to increase the accuracy of target 
prices compared to actual performance period spending. We would like to 
note that the RO Model's discount factors do not inform the accuracy of 
its episode pricing in the way that discounts do for CJR's pricing. We 
have made every effort to be responsive to stakeholder requests to 
lower the discount from what was finalized. In order to be able to 
detect an impact of the Model, we cannot further reduce the discounts 
beyond 3.5 percent and 4.5 percent for the PC and TC, respectively, 
without changing

[[Page 63929]]

other aspects of the Model, such as increasing the size of the Model. 
There has been no interest from stakeholders in increasing the number 
of CBSAs selected for participation in the Model.
    As for the concern that the RO Model will exacerbate health 
disparities, we have no data or evidence to suggest that this will be 
the case. We believe that the RO Model presents a number of 
opportunities to minimize health disparities that currently exist. 
First, under the RO Model, RO participants will also have the 
opportunity to work collaboratively on performance improvement. The RO 
Model will offer shared communication platforms and educational 
webinars on specific topics of interest. These opportunities will 
enable RO participants to learn from their peer network and share best 
practices. CMS will also provide quarterly feedback reports to RO 
participants so they can better understand their individual patterns of 
care delivery, compare their data to other similar RO participants in 
the RO Model, and identify opportunities for quality improvement. In 
addition, RO participants can submit a DRA, requesting beneficiary 
line-level claims data, episode-level data, and participant-level data 
from CMS to help improve their patient care and care coordination.
    At the beneficiary-level, we believe the RO Model has the potential 
to minimize health disparities in care. The potential for fewer 
treatments under the episode-based payment approach may lead to reduced 
side effects from treatment, reduced travel time required for 
treatment, less time spent in a doctor's office or waiting room, and 
more free time to engage in other activities that can help improve 
their overall quality of life. Furthermore, RO participants will be 
required to document an RO beneficiary's performance status to help 
inform the treatment plan and assess the effects of treatment on that 
individual and their quality of life. Every RO participant will be 
required to send a treatment summary to each RO beneficiary's referring 
physician to facilitate communication and coordination of care. Prior 
to the start of treatment, RO participants are also required to discuss 
with RO beneficiaries whether the goal of treatment is curative or 
palliative and the associated costs including cost-sharing 
responsibilities to facilitate shared decision-making. As we stated in 
the Specialty Care Models final rule (85 FR 61171), we plan to 
carefully monitor the RO Model for unintended consequences as finalized 
in sections III.C.14 (85 FR 61252) and III.C.16 (85 FR 61257). If our 
monitoring reveals that the Model reduces patient access to care, we 
would consider making changes to the Model via future rulemaking. 
Moreover, our evaluation will consider longer-term impacts on health 
outcomes associated with the Model.
    We are finalizing as proposed the discount factor for the PC at 3.5 
percent and the discount factor for the TC at 4.5 percent. We received 
no comments specifically on the proposed definition of discount factor, 
and therefore, we are finalizing as proposed to codify this definition 
at Sec.  512.205, removing the percentages from Sec.  512.255(c)(8). If 
the RO Model's scope were to increase at some point in the future via 
rulemaking, we could explore lowering the discount.
i. 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 the CY 2022 OPPS/
ASC proposed rule, we proposed that RO participants submit quality 
measure data starting in PY1 (when the model performance period begins) 
as described in section XVIII.C.6. of the CY 2022 OPPS/ASC 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 solicited public comments on our proposal in section 
XVIII.C.5.i. of the CY 2022 OPPS/ASC proposed rule (86 FR 42301).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: Some commenters disagreed with this proposal. A few 
commenters expressed concern, because they believe RO participants will 
not be able to earn back the full amount withheld, no matter how good 
the performance. One commenter recommended that the 2 percent quality 
withhold should not occur until PY2, as was originally proposed. 
Another commenter recommended that CMS allow RO participants the 
opportunity to earn back above their quality withhold based on quality 
performance just as CMS allows participants in the Direct Contracting 
model to qualify for a bonus above the participant's quality withhold 
from a High Performers Pool.
    Response: We thank these commenters for expressing their concerns 
and for their suggestions. We believe that the upfront quality withhold 
will provide the incentive for RO participants to provide high-quality 
care. Further, we believe that the predetermined withholds help support 
the Model goal of providing RO participants with prospective, 
predictable payments. The quality withhold allows the Model to link 
quality to payment, which is a key requirement of QPP. Please note that 
Professional participants and Dual participants could earn up to the 
full amount of the quality withhold (2 percent of the professional 
episode payment amounts) for a given PY based on their performance on 
the AQS. Since we are collecting quality measures in PY1, it is 
necessary to have a quality withhold in PY1. Please note that we did 
not propose to change the amount of the quality withhold.
    After consideration of the public comments, we are finalizing as 
proposed that RO participants submit quality measure data starting in 
PY1 (when the model performance period begins) as described in section 
XVIII.C.6. of the CY 2022 OPPS/ASC proposed rule, and that beginning in 
PY1, a 2 percent quality withhold for the PC will be applied to the 
applicable trended national base rates after the case mix and 
historical experience adjustments. We are codifying this policy at 
Sec.  512.255(c)(10).
j. Adjustment for Geography
    We described in the Specialty Care Models final 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 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. We proposed in the CY 
2022 OPPS/ASC proposed rule 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.

[[Page 63930]]

    We solicited public comments on our proposal to use the final year 
of the baseline period to calculate the implied RVU shares in the CY 
2022 OPPS/ASC proposed rule (86 FR 42302).
    We received no comments and therefore, we are finalizing our 
proposal without modification to use the final year of the baseline 
period to calculate the implied RVU shares.
k. Example of Participant-Specific Professional Episode Payment and 
Participant-Specific Technical Episode Payment for an Episode Involving 
Lung Cancer in PY1
    In section XVIII.C.5.k of the CY 2022 OPPS/ASC proposed rule (86 FR 
42304), we noted that we are analyzing whether the COVID-19 PHE 
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 the CY 2022 OPPS/ASC proposed rule, pending 12-months of 
claims run-out for RT services furnished in 2020, we described that we 
would consider the removal of 2020 data from the calculation of any 
applicable baseline period or trend factor. We also noted that 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 solicited public comments on our EUC policy as it concerns 
pricing methodology and the use of certain episode data (86 FR 42311 
through 42312). We have summarized and responded to comments in that 
section.
6. Quality-Form, Manner, and Timing for Quality Reporting
    In the Specialty Care Models final rule (85 FR 61220 through 
61223), we finalized that the RO Model quality measure reporting will 
be based on a CY. We also stated in that final rule at 85 FR 61222, 
that in selecting measures for the RO Model, we sought to include a set 
of meaningful, parsimonious measures, reflective of the CMS Meaningful 
Measures framework that balances the need for data about participant 
performance without creating undue burden on participants. One set of 
measures used by all RO participants will provide insight for CMS and 
the radiation oncology field as a whole into how care quality compares 
across multiple markets. Selective or limited reporting of measures 
would hinder the ability of CMS to measure or analyze the impact of the 
Model on quality. In the CY 2021 OPPS/ASC final rule, we delayed RO 
Model quality measures requirements to PY2 (January 1, 2022 through 
December 31, 2022). We proposed in in section XVIII.C.6. of the CY 2022 
OPPS/ASC proposed rule that Professional participants and Dual 
participants submit quality measure data starting in PY1 during the 
proposed model performance period (86 FR 42306 through 42307). Under 
this proposal, if the proposed model performance period starts mid-
year, the CY collection period would remain the same as if the model 
performance period began on January 1. For example, if the model 
performance period starts in July, RO participants would collect 
quality measure data for that CY starting in January, allowing RO 
participants to use their MIPS data submission to meet the RO Model 
requirements.
    We solicited public comments on our proposal in section XVIII.C.6 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42306 through 42307).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: We received many comments from RO participants stating 
that they will not be ready to start gathering quality measure data on 
January 1, 2022, in order to report for PY1. Commenters stated that the 
requirements were extensive and additional time would be required to 
develop new processes and procedures.
    Response: We thank commenters for their comments. The RO Model was 
finalized to start January 1, 2021, in the Specialty Care Model final 
rule (85 FR 61135 through 61137) and RO participants were notified at 
that time of their inclusion in the RO Model when that final rule was 
published in September 2020. RO participants have had over a year to 
prepare for their participation in the RO Model. When the CY 2022 OPPS/
ASC proposed rule was published, CMS released the Quality Measure and 
Clinical Data Elements Guide on the RO Model website, along with the 
associated CDE templates for each of the five cancer types. We have 
provided education and outreach support to encourage the efficient 
collection and submission of this data, including a webinar related to 
Model requirements in September 2021 to help RO participants prepare 
for the various requirements. We have additional webinars planned 
specifically on the QPP, and quality measures and CDEs. Therefore, we 
believe that RO participants have had adequate time to prepare.
    We direct readers to section XVII.C.10 of this final rule with 
comment period, which discusses our proposal and decision to finalize 
an EUC policy that would allow CMS flexibility in responding to 
national, regional, or local circumstances that adversely impact RO 
participants' ability to deliver care in accordance with the RO Model's 
requirements, including the COVID-19 PHE. The EUC policy will give CMS 
the ability to delay some of these quality measure and CDE reporting 
requirements, as needed.
    Comment: Many commenters recommended changes to the quality measure 
process. Many commenters asked for a voluntary phase-in period to 
collect quality measure data, which they believe would allow RO 
participants to become operational within the RO Model and provide 
better data. We received many comments asking CMS to delay the 
implementation of data collection for 2 years, while one commenter 
requested an 18-month delay.
    Response: We proposed that RO participants' first submission for 
the set of quality measures for PY1 (beginning on January 1, 2022) in 
section XVIII.C.8.b. of the CY 2022 OPPS/ASC proposed rule, would occur 
in March 2023, based on the timeline finalized in the Specialty Care 
Models final rule at 85 FR 61211 (footnote 44). We believe beginning 
the model performance period on January 1, 2022 will allow RO 
participants to review and to develop best practices to facilitate 
their data collection and to work with EHR vendors to seek additional 
EHR support as necessary. We have also done outreach to vendors since 
the Specialty Care Models final rule published in 2020 to help prepare 
them for the start of the RO Model.
    Comment: A couple of commenters urged CMS to provide additional 
details on quality measure and CDE collection and submission processes 
to give RO participants additional time to prepare their systems and 
comply with these requirements. One commented asked for additional 
tools and supportive resources up front to aid in implementation. The 
same commenter asked for an expansion of collection types and reporting 
mechanisms for the quality measures in order to align with quality 
reporting programs in other models.
    Response: When the CY 2022 OPPS/ASC proposed rule was published, 
CMS released the Quality Measure and Clinical Data Elements Guide on 
the RO Model website, along with the

[[Page 63931]]

associated CDE templates for each of the five cancer types \569\. This 
guide may be updated in the future to include additional details on 
implementation. We have provided education and outreach support to 
encourage the efficient collection and submission of this data, 
including a webinar related to Model requirements in September 2021 to 
help RO participants prepare for the various requirements, and we have 
additional webinars planned specifically on the QPP program and quality 
measures and CDEs.
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    \569\ These documents are currently located at https://innovation.cms.gov/innovation-models/radiation-oncology-model. If 
newer versions are posted, these documents will be moved to https://innovation.cms.gov/innovation-models/radiation-oncology-archived-materials.
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    Comment: A few commenters opposed the implementation of quality 
measures in the RO Model, stating that the measures would not yield 
information reflective of quality in a radiation oncology practice and 
would do little to encourage actual improvement in the quality of 
patient care.
    Response: We disagree with commenters' assertions regarding the 
impact of quality measurement in the RO Model. As we discussed in the 
Specialty Care Models final rule (85 FR 61214), we believe that the 
measures we are adopting are appropriate for inclusion in the RO Model. 
We selected all measures based on clinical appropriateness for RT 
services spanning a 90-day episode period. We believe that radiation 
oncologists have an important role to play in ensuring that their 
patients have a plan to address pain, that they communicate treatment 
with other providers and suppliers to ensure the RO beneficiaries are 
receiving coordinated care, and that they have been screened for 
depression and have an advance care plan. By encouraging radiation 
oncologists to provide guidance and care coordination as well as engage 
with patients throughout their treatments, we believe these measures 
will improve both patients' outcomes and their experience of care. We 
believe both depression screening and advance care planning help RO 
beneficiaries ensure they are engaged and pursuing the best course of 
treatment for them. We believe that including appropriate quality 
measures in the RO Model--as in other Innovation Center Alternative 
Payment Models (APMs)--is critical to ensuring that quality of care is 
preserved or enhanced within an episode payment model testing whether 
CMS expenditures are reduced. Furthermore, if we did not finalize 
quality measures for the RO Model, it would not satisfy the criteria to 
be an Advanced APM or a MIPS APM.
    Comment: One commenter asked that CMS retain two of the finalized 
quality measures but consider revising the full list to focus on the 
work of radiation oncologists with Medicare patients. The same 
commenter asked that we revise the specifications for all quality 
measures in the RO Model to only include Medicare patients in the 
denominator.
    Response: As stated in the Specialty Care Models final rule (85 FR 
61220) we believe collecting data for all patients who meet the 
denominator specifications for each measure from a Professional 
participant or Dual participant, and not just Medicare beneficiaries, 
is appropriate because it is consistent with the applicable measure 
specifications, and any segmentation to solely the Medicare populations 
would be inconsistent with the measure and add substantial reporting 
burden to RO participants. We continue to believe that reporting on 
all-payer data is important to improve and drive the quality of care 
furnished to all patients, including Medicare beneficiaries.
    Comment: Many commenters expressed concern that EHR vendors will 
use the new requirements to generate additional fees for their 
products, thereby placing RO participants, especially those that are 
small and rural, at greater financial risk.
    Response: We understand the commenters' concern about the cost of 
these requirements, but we note that three of the four proposed quality 
measures are already included in the MIPS program, so we expect that 
some of these measures may already be familiar to EHR vendors. We 
believe that the quality measures and CDEs can be collected manually if 
desired, which would not require payment of additional fees to EHR 
vendors.
    After consideration of the comments received, we are finalizing as 
proposed that Professional participants and Dual participants submit 
quality measure data starting in PY1 of the model performance period.
    We also proposed that 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 will be 
reported using the RO Model secure data portal in the manner consistent 
with that submission portal and the measures' specifications. We intend 
to use data submitted by Professional participants and Dual 
participants for the Treatment Summary Communication--Radiation 
Oncology measure in PY 1 and PY2 to propose a benchmark to re-specify 
it as a pay-for-performance measure, for PY3.
    We proposed 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 solicited public comments on our proposal in section XVIII.C.6. 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42307).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: One commenter agreed with the proposal.
    Response: We thank the commenter.
    Comment: We received some comments disagreeing with the proposal 
because the Treatment Summary Communication--Radiation Oncology measure 
is not NQF-endorsed, is not an outcome measure, is burdensome, and is 
not used in other CMS programs.
    Response: We believe that updated specifications for the Treatment 
Summary Communication--Radiation Oncology measure may allow for easier 
implementation of the quality measure and reduced burden. While NQF 
endorsement and status as an outcome measure are important criteria to 
consider in the selection of quality measures, we continue to believe 
that the information captured by this measure is relevant to the RO 
Model and critical to patients' care continuity and coordination.
    After consideration of the comments received, we are finalizing as 
proposed 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 will 
be communicated in a form and manner specified by CMS. Any substantive 
changes to measure specifications will be addressed through notice and 
comment rulemaking.

[[Page 63932]]

    We 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 proposed in section 
XVIII.C.6 of the CY 2022 OPPS/ASC proposed rule (86 FR 42307) that we 
would 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 solicited public comments on our proposal in section XVIII.C.6 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42307).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: One commenter supported our proposal.
    Response: We thank the commenter.
    Comment: Some commenters requested additional clarification on 
future pay-for-performance use of the CAHPS[supreg] Cancer Care Survey 
for Radiation Therapy, requested clarification of sampling of the 
CAHPS[supreg] Cancer Care Survey for Radiation Therapy, suggested use 
of a web-based data collection mode, requested clarification on overlap 
with non-RO Model uses of CAHPS[supreg] surveys, or requested 
modifications to account for low patient survey response rates.
    Response: We appreciate these comments; however, they are not 
related to our proposal. Please refer to our policies related to the 
CAHPS[supreg] Cancer Care Survey for Radiation Therapy in the Specialty 
Care Models final rule (85 61219-61220). We may consider other comments 
on the CAHPS[supreg] Cancer Care Survey for Radiation Therapy in future 
notice and comment rulemaking.
    After consideration of the comments received, we are finalizing 
without modification our proposal that the CMS-approved contractor will 
begin administering the Consumer Assessment of Healthcare Providers and 
Systems (CAHPS[supreg]) Cancer Care Survey for Radiation Therapy as 
soon as there are completed RO episodes, no earlier than the fourth 
month of the model performance period.
    In the Specialty Care Models final rule at 85 FR 61223 we discussed 
that in selecting CDEs for the RO Model, we sought to balance the need 
for data about participant performance without creating undue burden on 
participants. In that same final rule (85 FR 61223 through 61226), 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 collection starting in PY1. In the CY 2021 OPPS/ASC final rule (85 
FR 86262), we revised this policy so that the collection period for 
CDEs would begin on January 1, 2022. We proposed in section XVIII.C.6 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42307) that Professional 
participants and Dual participants submit CDEs starting in PY1.
    We solicited public comments on our proposal in section XVIII.C.6 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42307).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: We received a few comments asking for changes to the 
reporting timeline for the CDEs. A few commenters asked that the 
reporting period for the CDEs align with the quality measures so there 
is one reporting period every year in March. Many commenters expressed 
concern that the CDEs would need to be manually reported, which would 
take time and resources. One commenter asked that the CDE reporting 
requirement under the RO Model be delayed for two years to allow time 
for RO participants to develop work flows and work with EHR vendors. 
Many commenters asked that we select CDEs that can be extracted from 
EHRs and linear accelerators.
    Response: While we appreciate that commenters may prefer 
streamlined reporting periods, we believe that it is important to 
capture the CDEs twice per year to allow for appropriate monitoring of 
the RO Model and support early work on the development of outcomes-
based quality measures. In contrast, we do not believe that twice per 
year quality measure data reporting is necessary as it is not used in 
the development of new outcomes-based quality measures. CMS has shared 
the CDEs and templates with vendors to facilitate the work needed to 
extract the CDEs from their EHR systems.
    Comment: We received a few comments asking that we reduce the CDE 
reporting threshold lower than 95 percent.
    Response: We believe that the 95 percent threshold is important to 
ensure the quality and usability of the CDEs received by CMS. By 
maintaining the 95 percent threshold, CMS will maximize its ability to 
support monitoring and evaluation of the Model and begin developing new 
outcome-based quality measures. A reduction in this threshold may 
jeopardize the ability to draw conclusions from data received from RO 
participants, thus defeating the purpose of the CDEs.
    Comment: We received a comment stating that CDEs should not be 
captured unless they will be used to risk adjust quality performance or 
to set payment rates.
    Response: As we described in the Specialty Care Models final rule 
at 85 FR 61223, these data may be used to inform future refinements to 
the RO Model.
    After consideration of comments received, we are finalizing as 
proposed that Professional participants and Dual participants submit 
CDE data starting in PY1 of the model performance period.
7. RO Model as an Advanced Alternative Payment Model (Advanced APM) and 
a Merit Based Incentive Payment System APM (MIPS APM)
    At the time of the publication of the Specialty Care Models final 
rule, the model performance period began on January 1, 2021 and ended 
December 31, 2025 (42 CFR 512.205). We finalized in the Specialty Care 
Models final rule the policy 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.
    In the CY 2021 OPPS/ASC final rule (85 FR 86262), we finalized our 
proposal to amend 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 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 APM status and a list of 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.
    As stated in the CY 2022 OPPS/ASC proposed rule, the first 
criterion to be an Advanced APM is set forth at

[[Page 63933]]

Sec.  414.1415(a), CEHRT use. For the RO Model, this criterion is 
satisfied by the requirements of 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 (86 FR 42307).
    As stated in the CY 2022 OPPS/ASC proposed rule, 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 the Specialty Care Models 
final rule at 85 FR 61211 through 61231.
    As stated in the CY 2022 OPPS/ASC proposed rule, 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 finalized changes to the 
stop-loss policy described in section XVII.C.5.f. and the discount 
amounts described in section XVII.C.5.h. of this final rule with 
comment period do not affect the satisfaction of the Financial Risk 
criterion.
    As finalized in the CY 2021 OPPS/ASC final rule at 85 FR 61237, and 
reiterated in the CY 2022 OPPS/ASC proposed rule, 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).
    As stated in the CY 2022 OPPS/ASC proposed rule, 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 
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 clarified in the CY 2022 OPPS/ASC proposed rule (86 FR 42308) 
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, would fall into a category called 
``Track One'' of the RO Model. We noted that RO Model participants in 
Track One would be considered to be participating in the Advanced APM 
track of the RO Model, and we would 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. In the 
CY 2022 OPPS/ASC proposed rule, we stated that we anticipated that 
Track One of the RO Model would also meet the criteria to be a MIPS APM 
under the definition at Sec.  414.1305 starting January 1, 2022 (86 FR 
42307). If eligible clinicians who are Track One RO Participants do not 
meet the thresholds to become QPs, they can report to MIPS using 
reporting options applicable to MIPS APM participants as specified at 
Sec.  414.1367.
    We also proposed in the CY 2022 OPPS/ASC proposed rule that, at the 
start of a PY, if Professional participants or Dual participants failed 
to meet any of the RO Model requirements codified at Sec.  512.220, 
which includes use of CEHRT, they would be moved into a separate 
category called ``Track Two'' of the RO Model for that PY (86 FR 
42308). We proposed 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 would not be 
participating in an Advanced APM or MIPS APM for the RO Model. As such, 
we would not make QP determinations for the eligible clinicians on the 
RO Model Participation List for Track Two. We proposed 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 would be moved to Track One of the RO Model and 
would be 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.
    In the CY 2022 OPPS/ASC proposed rule, we stated that we recognized 
that any failure, however minor, to comply with the RO Model 
requirements set forth at Sec.  512.220(a)(2) would 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) would have resulted in Track Two status for the RO 
participant and would be subject to remedial action under Sec.  
512.160. However, we recognized 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) (86 FR 42308). 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,

[[Page 63934]]

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. We noted in the CY 2022 OPPS/ASC 
proposed rule that we were 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 
were considering whether to require those actions for a majority of RO 
beneficiaries or substantially all RO beneficiaries. In addition, we 
noted that we were considering whether to modify certain requirements 
to permit payment of some or all of the payments made based on the QP 
status the RO participant's eligible clinicians pursuant to its Track 
One participation, depending on the severity of noncompliance and other 
factors (86 FR 42308).
    We solicited public comments on these proposals, 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 in section XVIII.C.7 of the CY 
2022 OPPS/ASC proposed rule (86 FR 42308).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: A few commenters agreed with our proposal as a whole. Many 
commenters asked that CMS remove the Track One and Track Two policy as 
it makes it more difficult for RO participants to achieve QP status or 
was otherwise unfair to some RO participants.
    Response: We appreciate the commenters' concerns. We would like to 
note that the definitions of Track One and Track Two were only added as 
a clarification for RO participants. Removing Track One and Track Two 
would not, in fact, make it easier for an RO participant to meet QP 
status as it might disqualify the entire RO Model from being an 
Advanced APM and a MIPS APM.
    Further, in order to better align the RO Model with the QPP, and in 
response to these comments, we are creating three categories for RO 
participants, ``Track One'', ``Track Two'', and ``Track Three'' 
codified at Sec.  512.205. Structurally, Track One as proposed will now 
be divided into two tracks and Track Two as proposed will become Track 
Three. Track One will be for RO participants who comply with all RO 
requirements, including CEHRT, and we anticipate that Track One will be 
both an Advanced APM and MIPS APM. Track Two will be for those RO 
participants who comply with all RO requirements except for CEHRT, and 
we anticipate that Track Two will be a MIPS APM, but would not meet the 
CEHRT use criterion to be an Advanced APM. Track Three will be for all 
other RO participants, and we anticipate that Track Three will not be 
an Advanced APM or MIPS APM. We believe that identifying these three 
tracks is responsive to some of the concerns raised by these 
commenters. This change would create an incentive for RO participants 
that are not able to implement CEHRT to be compliant with other aspects 
of the RO Model in order to participate in a MIPS APM. This also avoids 
misalignment of RO Model tracks with the MIPS APM criteria, which do 
not require CEHRT.
    After considering public comments, we are finalizing with 
modification the definitions of Track One, and Track Two, and adding a 
definition for Track Three. We are finalizing the definition of Track 
One to mean a track for Professional participants and Dual participants 
that meet all RO Model requirements set forth at Sec.  512.220, 
including use of CEHRT. Consistent with this definition, we anticipate 
that RO Model participants in Track One will be considered to be 
participating in an Advanced APM and MIPS APM under 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. We anticipated that Track One of the RO 
Model would also meet the criteria to be a MIPS APM under the 
definition at Sec.  414.1305 starting January 1, 2022. If eligible 
clinicians who are Track One RO Participants do not meet the thresholds 
to become QPs, can report to MIPS using reporting options applicable to 
MIPS APM participants as specified at Sec.  414.1367.
    We are finalizing the definition of Track Two to mean a track for 
Professional participants and Dual participants that meet all RO Model 
requirements set forth at Sec.  512.220, except for use of CEHRT. That 
is, a Dual participant or Professional participant who does not use 
CEHRT but meets all other RO Model requirements set forth at Sec.  
512.220 would be in Track Two. We anticipate that RO participants in 
Track Two will be considered to be participating in a MIPS APM under 
the RO Model.
    We are finalizing the definition of Track Three to mean a track for 
Professional participants and Dual participants who do not meet one or 
more of the RO Model requirements set forth at Sec.  512.220(a); and 
for all Technical participants. For example, a Professional participant 
or Dual participant that does not adhere to nationally recognized, 
evidence-based clinical treatment guidelines when appropriate would be 
in Track Three. We anticipate that RO participants that fall into Track 
Three will be considered to be participating in an APM, but not in an 
Advanced APM or MIPS APM, under the RO Model. As such, we will not make 
QP determinations for the eligible clinicians on the RO Model 
Participation List for Tracks Two and Three. And eligible clinicians on 
the RO Model Participation List for Track Three will not have the 
unique MIPS reporting options available to participants in a MIPS APM 
(though they will receive MIPS Improvement Activity scoring credit for 
participation in an APM). We are codifying these definitions at Sec.  
512.205.
    We would also like to note that we are not modifying any 
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.
a. Technical Participants and the Quality Payment Program
    In the CY 2022 OPPS/ASC proposed rule, we proposed that 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. We proposed that Technical 
participants would not be considered to be participating in Advanced 
APMs or MIPS APMs under the RO Model. However, Technical participants 
that are freestanding radiation therapy centers would be able to 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).
    In the CY 2022 OPPS/ASC proposed rule, we also proposed 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

[[Page 63935]]

performance period, then they must notify CMS within 30 days, in a form 
and manner specified by CMS. We proposed that they would also be 
required under the RO Model to report quality measures by the next 
reporting period, which would be March following a PY for quality 
measures and July of a PY or January following a PY for the CDEs, as 
finalized at 85 FR 61211 through 61231. If they meet the requirements 
to be a Track One RO 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 noted that we would monitor these RO participants for compliance 
with the requirement to report quality measures if they begin providing 
the professional component. We proposed to codify this policy at Sec.  
512.275(d).
    We solicited public comments on our proposal in section 
XVIII.C.7.a. of the CY 2022 OPPS/ASC proposed rule (86 FR 42308 through 
42309). The following is a summary of the public comments received on 
this proposal and our response:
    Comment: CMS received many comments asking that Technical 
participants be eligible for QP determination. Some commenters noted 
that the APM Incentive Payment is not only an incentive to participate 
in the Model, but these commenters believe that it is also designed to 
support practice transformation essential for meaningful APM 
participation. According to the commenters, the RO Model participation 
requirements establish new, unreimbursed practice expenses that would 
normally be paid from technical fee revenue. Unless the APM Incentive 
Payment is applied to both the professional and technical charges, the 
commenter stated that those RO participants will be at a distinct 
disadvantage and unable to achieve true practice transformation.
    Response: We appreciate the commenters' concerns regarding 
Technical participant eligibility for QP determination. We understand 
that the APM Incentive Payment can support practice transformation, but 
we do not agree with the commenter that purpose of the APM Incentive 
Payment is to support practice transformation for meaningful APM 
participation. Please refer to Sec.  414.1450 for more information on 
the APM Incentive Payment. We disagree with the commenters that 
Technical participants should be eligible for QP determinations under 
the RO Model. We continue to believe that eligibility for QP 
determination should be limited to Professional participants and Dual 
participants. This model is intended to be site neutral, meaning that 
Technical participants that are freestanding radiation therapy centers 
paid under the PFS and Technical participants that are HOPDs paid under 
the OPPS should be treated equally. The majority of Technical 
participants are HOPDs and are not subject to QPP and there are only a 
few freestanding radiation therapy centers that furnish only the TC. We 
would also note that Technical participants are not required to report 
quality measures or clinical data, or to have CEHRT, under the RO 
Model.
    After considering public comments, we are finalizing as proposed 
our proposals related to Technical participants that are freestanding 
radiation therapy centers. We would like to add one non-substantive 
change to the text of the CY 2022 OPPS/ASC proposed rule. We proposed 
that Technical participants would not be considered to be participating 
in Advanced APMs or MIPS APMs under the RO Model. We would like to 
clarify this text to state that we proposed that Technical participants 
will not be participating in Track One or Track Two of the RO Model, 
and are therefore would not be participants in an Advanced or MIPS APM 
under the RO Model.
    We have also removed the regulation at Sec.  512.217(c)(3)(iii) 
that Technical participants that are freestanding radiation therapy 
centers would be able to 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), as this language was 
unnecessary. All participants in APMs are evaluated for Improvement 
Activity credits under MIPS (Sec.  414.1355).
    We are codifying these policies related to Technical participants 
that are freestanding radiation therapy centers at Sec.  512.275(d). We 
are also revising for clarification the notice requirement language at 
Sec.  512.275(d)(1) to remove the duplicative use of the term 
``certify.''
b. Individual Practitioner List
    In the Specialty Care Models final rule, we finalized our proposal 
to codify the requirements concerning the review and certification of 
the individual practitioner list at Sec.  512.217. In the 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 QPP 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 the purpose of making QP 
determinations and for certain aspects of MIPS under the Quality 
Payment Program. The CAA, 2021 prohibits implementation of the RO Model 
prior to January 1, 2022. We clarified in section XVIII.C.7.b of the CY 
2022 OPP/ASC proposed rule 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 (86 FR 42309).
    In the Specialty Care Models final rule, 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 proposed in section XVIII.C.7.b of the CY 2022 ASC/OPPS proposed 
rule to modify this policy to include that Technical participants that 
are freestanding radiation therapy centers would also be provided an 
individual practitioner list (86 FR 42309). We also proposed 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.

[[Page 63936]]

    In the CY 2022 ASC/OPPS proposed rule we proposed 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 would 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 solicited public comments on reviewing and certifying individual 
practitioner lists. The following is a summary of the public comments 
received on this proposal and our response:
    Comment: We received one comment in support of the proposal to 
review and certify individual practitioner lists.
    Response: We thank this commenter for their support.
    We are finalizing as proposed to codify this policy to review and 
certify individual practitioner lists at our regulation at Sec.  
512.217(b).
    In the Specialty Care Models final rule, 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.
    In section XVIII.C.7.b of the CY 2022 ASC/OPPS proposed rule, we 
proposed 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 proposed 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 (86 FR 
42309).
    We invited public comments on this proposal to modify the timeframe 
for which individual practitioner lists shall be certified in the 
proposed rule.
    We received no comments on this proposal (86 FR 42309) and 
therefore we are finalizing as proposed to codify this policy at our 
regulation at Sec.  512.217(c)(1) and at Sec.  512.217(d)(1)(i) and 
(d)(2)(i), and we are finalizing our policy at Sec.  512.217(b) with a 
non-substantive modification for clarity. We are revising Sec.  
512.217(b) for clarity to remove the duplicate use of the term 
``certify'' regarding an RO participant's requirement to certify the 
individual practitioner list.
    In the Specialty Care Models final rule, we codified at Sec.  
512.217(c)(3) that if 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.
    In section XVIII.C.7.b. of the CY 2022 ASC/OPPS proposed rule, we 
proposed to add at 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 would not be eligible to receive 
Improvement Activity credit under MIPS.
    We solicited public comments on this proposal to add Sec.  
512.217(c)(3)(iii) in section XVIII.C.7.b of the CY 2022 OPPS/ASC OPPS 
proposed rule (86 FR 42309).
    We received no comments on this proposal and therefore we are 
finalizing as proposed to codify this policy at our regulation at Sec.  
512.217(c)(3)(iii).
c. RO Model Requirements
    In the Specialty Care Models final rule, 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.
    In section XVIII.C.7.c. of the CY 2022 OPPS/ASC OPPS proposed rule, 
we proposed that the CEHRT requirement would begin in PY1 of the 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 also proposed 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 would have to certify 
their use of CEHRT by the last QP determination snapshot date specified 
at Sec.  414.1325.
    In the Specialty Care Models final rule, 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. In 
section XVIII.C.7.c. of the CY 2022 OPPS/ASC OPPS proposed rule, we 
proposed to amend Sec.  [thinsp]512.220(a)(1) to state that RO 
participants must satisfy the requirements set forth at Sec.  
[thinsp]512.220 to be included in Track One of the RO Model. If RO 
participants do not meet those requirements in a PY, the RO participant 
would be in Track Two for the applicable PY.
    We invited 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. The following is a summary of 
the public comments received on this proposal and our response:
    Comment: Many commenters disagreed with the proposal, stating that 
there is added expense and time required to implement CEHRT. Some 
commenters recommended that we implement rural or low-volume exemptions 
to the CEHRT requirement.
    Response: We appreciate the commenters' concerns. While we 
understand the expense and time required to implement CEHRT, we believe 
that CEHRT is an important element of high-quality care delivery and 
provides the foundation for improved communication and review of 
clinical data. We believe that the low-volume opt-out included in the 
RO Model eliminates the need for an additional low-volume or rural 
exemption to the CEHRT requirement, and we believe that use of CEHRT is 
still important in rural areas.
    As discussed in section XVII.C.7.a of this final rule with comment 
period, we are finalizing with modification our proposal to categorize 
RO participants into three tracks. We believe that the finalized 
``Track Two'' RO participant category allows RO participants who do not 
wish to certify their use of CEHRT to be eligible for MIPS APM 
reporting and scoring pathways. We believe that this modified policy 
may lessen the burden of the CEHRT requirement by allowing participants 
who do not wish or are not able to meet the CEHRT requirement to be 
eligible for MIPS APM scoring pathways.
    Comment: We received many comments noting that the requirements at 
Sec.  512.220 are burdensome and should be modified or removed because 
EHR vendors may require additional time to develop fields necessary to 
capture adherence to the requirements.
    Response: We appreciate that the requirements at Sec.  512.220 may 
require additional effort by RO participants. However, we disagree with 
the

[[Page 63937]]

commenters and do not believe that the requirements will add 
significant administrative burden as CMS will not require RO 
participants to report to CMS on these actions with the exception of 
attesting to the use of CEHRT, the accuracy of their IPL, and 
participation in a PSO. Rather, compliance with these requirements will 
be confirmed during virtual and in-person site visits, as described in 
the Specialty Care Models final rule and codified at Sec. Sec.  512.130 
and 512.150 where CMS may ask for evidence that these requirements are 
being met. CMS has taken meaningful action to prepare RO participants 
for the requirements listed at Sec.  512.220. For example, CMS has 
hosted a webinar on RO Model requirements. Further, as stated in 
section XII.C.1 of this final rule, we believe that we have provided 
sufficient time, since the publication of the Specialty Care Models 
final rule in September 2020, for RO participants and their EHR vendors 
to implement the software that RO participants may need to adhere to 
the RO Model requirements. We also note that although an RO participant 
may document these requirements using their EHR system if they wish, no 
changes to EHR systems are required for tracking compliance with RO 
Model requirements. We would also note that how an RO participant 
tracks their compliance is at their discretion, as long as the RO 
participant can substantiate their compliance with documentation during 
a CMS site visit or audit. We are finalizing as proposed to maintain 
the requirements at Sec.  512.220.
    After considering public comments, we are finalizing with 
modification that RO participants must satisfy the requirements set 
forth at Sec.  [thinsp]512.220 to be included in Track One of the RO 
Model. RO participants that meet all of these RO Model requirements in 
a PY, except for use of CEHRT, will be in Track Two for the applicable 
PY. RO participants that do not meet one or more of the RO Model 
requirements in paragraph (a) of this section will be in Track Three 
for the applicable PY. This policy is codified at Sec.  512.220(a)(1). 
We are also finalizing as proposed to 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. This policy is codified at Sec.  512.220(b)(1) and 
(2). Finally, we are finalizing as proposed that RO 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. This policy is 
codified at Sec.  512.220(c).
8. 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 final 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 our proposed changes in section XVIII.C.1. of the CY 
2022 OPPS/ASC proposed rule to the model performance period (86 FR 
42290) which we made in response to the delay under section 133 of the 
CAA 2021, and our decision to finalize that proposal in section 
XVII.C.1. of this final rule with comment period, 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 with comment period, we 
finalized our proposal to amend our regulations at Sec.  512.285(d) 
such that the quality reconciliation payment amount would not be 
applicable for PY1, because there would not be a quality withhold in 
PY1. Proposing to change the model performance period and the 
application of a quality withhold to begin in PY1 as described in 
section XVIII.C.5.i. of the CY 2022 OPPS/ASC proposed rule required 
proposing an amendment to our regulations at Sec.  512.285(d) such that 
the quality reconciliation payment amount will apply to all PYs.
    We solicited public comments on our proposal in section 
XVIII.C.8.a. of the CY 2022 OPPS/ASC proposed rule (86 FR 42310).
    The following is a summary of the public comments received on this 
proposal and our response:
    Comment: Some commenters disagreed with the proposal for the 
quality withhold to begin in PY1as described and summarized in section 
XVIII.C.5.i. of this final rule with comment period.
    Response: Because we are finalizing our proposals at section 
XVII.C.6. of this final rule with comment period that quality measures 
and CDEs will be reported in PY1, we cannot delay the application of 
the quality withhold in PY1, making the quality reconciliation payment 
amount applicable to all PYs. The quality withhold allows the RO Model 
to include quality measure results as a factor when determining payment 
to RO participants, which is one of the Advanced APM criteria as 
codified in 42 CFR 414.1415(b)(1).
    We are finalizing as proposed that beginning in PY1, a 2 percent 
quality withhold for the PC will be applied to the applicable trended 
national base rates after the case mix and historical experience 
adjustments, and we will codify this policy at Sec.  512.255(c)(10). We 
are finalizing as proposed that the application of a quality withhold 
will begin in PY1. Finally, we are amending our regulations at Sec.  
512.285(d) such that the quality reconciliation payment amount will 
apply to all PYs.
b. True-Up Reconciliation
    The true-up reconciliation is the process used 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 final rule 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 (85 FR 61244). We 
note that this section only involves the removal of the reference to 
specific years, and, instead, references the specific period of time of 
``August of the CY following an initial reconciliation for a PY.'' This 
allows the text to remain current even if there is a change in baseline 
period or model performance period. 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. 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 will 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

[[Page 63938]]

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 proposed in section XVIII.C.8.c. of the CY 2022 OPPS/ASC 
proposed rule to modify this policy such that for all incomplete 
episodes as defined at Sec.  [thinsp]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 further 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 proposed in section XVIII.C.8.c. of the CY 
2022 OPPS/ASC proposed rule to amend Sec.  512.285(c)(3) and (4) 
accordingly.
    In light of the proposal to modify payment for incomplete episodes, 
we also proposed conforming changes to Sec.  512.255(c)(12)(iv) 
regarding beneficiary coinsurance for incomplete episodes. 
Specifically, we proposed 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 final 
rule for the loss incurred under the RO Model as described in Sec.  
512.285(f). We proposed 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 proposed model performance 
period.
    We solicited public comments on our proposals in section 
XVIII.C.8.c. of the CY 2022 OPPS/ASC proposed rule (86 FR 42310). The 
following is a summary of the public comments received on these 
proposals and our response:
    We solicited public comments on our proposal to modify Sec.  
512.255(c)(12)(iv) 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. 
We received no comments on this proposal.
    We solicited public comments on our proposal to specify that the 
coinsurance for all incomplete episodes is 20 percent of the FFS amount 
applicable to the RT services that were furnished and to make 
conforming changes to Sec.  512.255(c)(12)(iv) regarding beneficiary 
coinsurance for incomplete episodes.
    Comment: We received one comment requesting additional information 
on how RO participants should reconcile beneficiary coinsurance for 
incomplete episodes in a way that is least burdensome to RO 
participants and their RO beneficiaries.
    Response: We finalized in the Specialty Care Models final rule our 
proposal to codify at Sec.  512.255(c)(12) a policy that: (1) Permits 
RO participants to collect beneficiary coinsurance payments for 
services furnished under the RO Model in multiple installments via a 
payment plan, (2) prohibits RO participants from using the availability 
of payment plans as a marketing tool to influence beneficiary choice of 
health care provider; and (3) provides that an RO participant offering 
such a payment plan may inform the beneficiary of the availability of 
the payment plan prior to or during the initial treatment planning 
session and as necessary thereafter. We believe that this policy places 
a low burden on RO participants and their RO beneficiaries. We also 
noted in the Specialty Care Models final rule (85 FR 61199) that RO 
participants that set up coinsurance payment plans may be able to 
charge and adjust coinsurance more timely and accurately for incomplete 
episodes, but in some circumstances the true amount owed by the 
beneficiary may not be determined until the reconciliation process has 
occurred.
    We are finalizing as proposed to 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 included RT services using no-pay 
claims and codifying this policy at our regulation at Sec.  
512.255(c)(12)(iv).
    We solicited comments in section XVIII.C.2. of the CY 2022 OPPS/ASC 
proposed rule on 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.  [thinsp]512.285(f).
    Comment: Some commenters disagreed with the proposed stop-loss 
policy as described and summarized in section XVIII.C.5.f of this final 
rule with comment period.
    Response: We responded to these comments in section XVII.C.5.f of 
this final rule with comment period. As noted in that section, we are 
finalizing our proposal to modify the stop-loss policy such that those 
RO participants that had begun furnishing included RT services any time 
before the start of the model performance period in the CBSAs selected 
for participation are eligible for such a stop-loss limit. Accordingly, 
as noted in that section, we are finalizing Sec.  
[thinsp]512.255(c)(7)(iv) and Sec.  512.205 as proposed. We are also 
finalizing our proposal to revise the introductory text for Sec.  
512.285(f) with one modification, the removal of the word ``any time'' 
for consistency with Sec.  512.255(c)(7)(iv).
9. Potential Overlap With Other Models Tested Under Section 1115A of 
the Act and CMS Programs
    In the Specialty Care Models final 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

[[Page 63939]]

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, as we noted in in section XVIII.C.9. of the CY 2022 OPPS/ASC 
proposed rule (86 FR 42310), 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 proposed 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 under 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 solicited public comments on our proposal to codify our overlap 
policy in section XVIII.C.9 of the CY 2022 OPPS/ASC proposed rule (86 
FR 42310).
    We received no comments on this proposal and therefore we are 
finalizing the proposed new regulation at Sec.  512.292 without 
modification.
10. 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 (EUC) outside of their control that impact their ability 
to operate in the ordinary course of business for short-term or 
sometimes even extended periods. For example, the U.S. has been 
responding to an the ongoing COVID-19 PHE, which has impacted the U.S. 
health care system, presenting 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 proposed to adopt an EUC 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 pricing methodology.
a. Extreme and Uncontrollable Circumstance Affects the Nation, Region, 
or a Locale
    We proposed in section XVIII.C.10. of the CY 2022 OPPS/ASC proposed 
rule (86 FR 42311) to define an 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 proposed that 
if CMS determines that there has been 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 proposed to apply the 
EUC 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 EUC 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 solicited public comments on our proposal in section XVIII.C.10 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42311). The following is a 
summary of the public comments received on this proposal and our 
response:
    Comment: We received many comments on the proposed policy. All 
commenters expressed support for adopting an EUC policy to the RO 
Model.
    Response: We thank commenters for their support.
    Comment: Many commenters asked for clarity on how CMS will 
determine a geographic region or geographic area when determining an 
EUC. One commenter asked that CMS maintain ample flexibility in 
defining ``geographic region or geographic area'' and ``state of 
emergency.'' Many commenters encouraged CMS to maintain ample 
flexibility regarding how the Agency will define a ``geographic region 
or geographic area'' and ``state of emergency'' declaration under this 
proposal in order to address participant-level COVID-19 infection 
trends, hospitalizations and staffing shortages irrespective of the 
status of a state or geographic region, as a whole.
    Response: We are clarifying that the affected geographic region(s) 
or geographic area(s) is/are generally identified by state, county, or 
ZIP Code within the emergency declaration. CMS will identify affected 
RO participants by ZIP Code just as we did for participation in the 
Model. ``State of emergency'' is equivalent to the situation described 
in the emergency declaration including the emergency area and emergency 
period. If RO participants are concerned that CMS may be unaware of a 
situation that they believe should qualify for modification under the 
EUC policy, RO participants could contact the RO Model Help Desk at 
[email protected] with the RO Participant's RO Model ID, a 
description of the emergency, the affected areas, and the duration of 
the emergency period included in the declaration. If an emergency 
exists only in specific geographic areas, the EUC policy would allow 
CMS to invoke the provisions

[[Page 63940]]

related to reporting requirements and other RO Model requirements, and 
adjust the quality withhold portion of the pricing methodology, for 
only the affected geographic areas, as described below and finalized at 
Sec.  512.249.
    After consideration of comments received, we are finalizing as 
proposed our definition that 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. We are also 
finalizing as proposed to codify this definition at Sec.  512.205.
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 proposed 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 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 did not propose to modify the model 
performance period, but proposed instead to either delay or exempt RO 
Model requirements, as discussed in section XVIII.C.10.c. of the CY 
2022 OPPS/ASC proposed rule for the RO participants in the impacted 
region.
    We solicited public comments on our proposal in section XVIII.C.10. 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42311). The following is a 
summary of the public comments received on this proposal and our 
response:
    Comment: A few commenters asked whether, if we were still in a PHE 
on January 1, 2022, CMS would use this authority to change any RO Model 
requirements. Many commenters stated their belief that the current PHE 
warrants a delay in the start of the model performance period. Many 
cited the continued rise in Delta variant cases causing delays in 
cancer surgeries, staffing shortages, and decreased RT services in 
their comments. One commenter stated their assumption that by including 
this provision of the EUC policy that CMS would be delaying the start 
of the model performance period.
    Response: We appreciate commenters' feedback on the impact of the 
COVID-19 PHE on them, and we will consider this feedback in any 
decisions related to potential EUC flexibilities. We note that there 
has been another 90-day extension of the current PHE declaration such 
that the current PHE will overlap with the start of the model 
performance period, unless the Secretary terminates the PHE before the 
latest 90-day extension expires CMS will continue to monitor the 
impacts of COVID-19 on radiation oncology to determine whether the EUC 
policy may need to be invoked, and if so, which flexibilities to 
invoke. If and when CMS invokes any of the flexibilities due to an EUC, 
related to the COVID-19 PHE or otherwise, we will communicate this 
decision via the RO Model website and written correspondence to RO 
participants.
    Comment: One commenter encouraged CMS to identify in the final rule 
regions that it intends to declare as EUC regions for the 2022 calendar 
year, and to develop and conduct monthly reviews of a ``EUC map'' and 
add new EUC regions should the COVID-19 PHE continue to surge into 
2022.
    Response: We thank the commenter for the feedback We will take this 
comment into consideration in the future.
    After consideration of the comments received, we are finalizing our 
proposal that, 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, CMS may delay the start date 
of the model performance period by up to one CY.
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 
CDE reporting requirements, we proposed that CMS may delay or exempt 
the affected RO participants from the reporting requirements, make the 
requirements optional, extend the time for RO participants to report 
data to CMS, as applicable, or both. CMS would modify or grant 
exceptions to the RO Model's reporting requirements if, for example, 
affected RO participants could not submit their quality and clinical 
data reporting due to electricity or internet outages caused by an EUC.
    Other Model Requirements: Because RO participants must focus on 
direct care, we proposed 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 solicited public comments on our proposal in section XVIII.C.10. 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42311). The following is a 
summary of the public comments received on this proposal and our 
response:
    Comment: One commenter encouraged CMS to deploy the EUC policy 
options related to quality measure and clinical data reporting whenever 
a given state or region faces a relevant emergency that impacts their 
patients and staff.
    Response: The EUC regulations allow CMS to determine the impact of 
the EUC on RO participants' ability to comply with the RO Model's 
quality measure or CDE reporting requirements. CMS may delay or exempt 
the affected RO participants from the reporting requirements, make the 
requirements optional, extend the time for RO participants to report 
data to CMS, as applicable, or both. CMS may modify or grant exceptions 
to the RO Model's reporting requirements if, for example, affected RO 
participants could not submit their quality and clinical data reporting 
due to electricity or internet outages caused by an EUC. If RO 
participants are concerned that CMS may be unaware of a situation that 
they believe should qualify for modification under the EUC policy, RO 
participants could contact the RO Model Help Desk at 
[email protected] with the RO Participant's RO Model ID, a 
description of the emergency, the affected areas, and the duration of 
the emergency period included in the declaration.
    After consideration of comments we received, we are finalizing as 
proposed that CMS may delay or exempt the affected RO participants from 
quality measure and CDE reporting requirements, make the requirements 
optional, extend the time for RO participants to report data to CMS, as 
applicable, or both.
    We are also finalizing as proposed 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.

[[Page 63941]]

d. Pricing Methodology
    Adjusting the Quality Withhold: If CMS were to remove (not merely 
extend) quality and clinical data submission requirements for affected 
RO participants due to a national, regional, or local event, we 
proposed 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 proposed 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 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 proposed to codify the EUC policies at Sec.  512.294.
    We solicited public comments on our proposal in section XVIII.C.10. 
of the CY 2022 OPPS/ASC proposed rule (86 FR 42311). The following is a 
summary of the public comments received on this proposal and our 
response:
    Comment: Many commenters agreed with the proposal to revise the 
volume component associated with the trend factor during an EUC to 
address fluctuations in utilization due to national disruptions in 
care, such as those caused by COVID-19. Some commenters did not agree 
with the application of a 10 percent threshold. Instead, these 
commenters argued that CMS should simply not use the affected year's 
data and apply the most recent unaffected year's data to the volume 
component when calculating the trend factor. One commenter noted that 
during the COVID-19 PHE, treatments have been interrupted or truncated 
prior to the treatment's completion due to COVID-19 infection. 
Furthermore, according to the commenter, local quarantine requirements 
with unknown impacts on patient care could underestimate the true cost 
of care and true patient volume. Many commenters supported removal of 
2020 data from the calculation of any applicable baseline period or 
trend factor. Some commenters noted that they have experienced a 
reduction in beneficiaries and a reduction in income in 2020. One 
commenter noted that businesses on average lost 8 percent of their 
revenue. A few commenters stated that they are still seeing the impacts 
of the COVID-19 PHE on their businesses in 2021.
    Response: We continue to analyze whether the COVID-19 PHE has 
significantly changed the utilization and cost patterns within episodes 
of RT services. We will utilize Medicare claims data to validate 
concerns about costs and volumes raised by commenters. If this data 
show that modifications to this policy will be needed due to the 
ongoing COVID-19 PHE, we will address those modification through future 
rulemaking.
    We believe that so long as there is sufficient evidence, removal of 
a year's worth of episode data from the trend factor calculation may be 
warranted. In this case, we believe sufficient evidence constitutes 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. An increase or decrease at a 
lower threshold, such as 5 percent, for example, may remove data that 
is appropriately reflecting changes in treatment patterns and payment 
rates that have occurred under OPPS and PFS. We believe that removal of 
data without sufficient evidence will introduce bias into the Model's 
pricing methodology.
    After consideration of the comments received, we are finalizing as 
proposed that 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, CMS 
may modify the trend factor calculation for the PC and/or TC of an 
included cancer type.
    Upon recognition of an omitted phrase in the proposed rule (86 FR 
42311), we are finalizing with modification that if CMS were to remove 
(not merely extend the submission window) quality and clinical data 
submission requirements for affected RO participants due to a national, 
regional, or local event, we 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, or not apply 
the quality withhold to RO Model payments during the EUC, which would 
potentially increase episode payments during this time.
    We are finalizing the proposed new regulation at Sec.  512.294 with 
modification to address the aforementioned omitted phrase and for 
precision. We are also modifying cross-references at Sec.  512.294(a) 
for accuracy and precision.

XVIII. 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, in 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

[[Page 63942]]

Public'' (84 FR 65524, November 27, 2019\570\, 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.
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    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 also noted that more work would need to be done to ensure consumers 
have access to the information they need to make healthcare decisions, 
and therefore encouraged hospitals and other health care providers to 
go further in addressing barriers to price transparency.
    We received many comments expressing support for or objecting to 
the policies established and finalized in the CY 2020 Hospital Price 
Transparency final rule. Issues ranged from CMS's authority to enforce 
the regulations and assess CMPs, the requirement disclosure of standard 
charges in a machine-readable format, establishment of payer-specific 
negotiated charges as a type of standard charge, the burden imposed by 
the regulation, and other issues unrelated to the policies proposed in 
the CY 2022 OPPS/ASC proposed rule. We addressed comments on these 
issues in the CY 2020 Hospital Price Transparency final rule (84 FR 
65588) and did not propose in the CY 2022 OPPS/ASC proposed rule to 
change any of the policies previously established. Accordingly, we 
consider these comments out of scope.
2. Summary of Final Policies
    We are finalizing the following policies in this final rule with 
comment period: (1) Increasing the dollar amount of penalties for 
noncompliance through the use of a scaling factor based on hospital bed 
count; (2) deeming state forensic hospitals that meet certain 
requirements to be in compliance with the requirements of 45 CFR part 
180, and (3) requiring that the machine-readable file be accessible to 
automated searches and direct downloads. As indicated in the CY 2022 
OPPS/ASC proposed rule, we believe these modifications to the hospital 
price transparency regulations (at 45 CFR part 180) 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, where there 
may be issues 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 
appreciate the thoughtful comments submitted in response to our request 
for input on a variety of issues that we may consider in future 
rulemaking to improve standardization of the data disclosed by 
hospitals.
    Comment: While many hospital and hospital associations expressed 
general support for helping patients know their costs of care, 
particularly their out-of-pocket costs, such commenters expressed 
strong concerns that patients will be confused over all the `tools' 
available for price transparency, in light of the forthcoming 
implementation of the No Surprises Act and Transparency in Coverage 
regulations. These commenters urged CMS to: Ensure alignment across 
federal transparency initiatives and policies; convene a multi-
stakeholder group prior to implementation to ensure alignment across 
initiatives; and seek input from the public on the information that 
would be useful for consumers.
    Response: We appreciate the commitment expressed by hospitals and 
hospital associations to improve patient access to and knowledge of 
their potential out-of-pocket costs and look forward to continued 
engagement as additional federal price transparency initiatives are 
implemented. In particular, we appreciate the comments requesting 
alignment across such initiatives, including those that occur through 
implementation of the Transparency in Coverage regulations (the TiC 
Final Rules) and title I (the No Surprises Act) and title II 
(Transparency) of Division BB of the Consolidated Appropriations Act, 
2021 (the CAA).
    As the federal government undertakes to implement these new laws 
and regulations over the next several years, we will continue to 
monitor and align the Hospital Price Transparency regulations, as 
necessary. In particular, we note that in the recently published 
Requirements Related to Surprise Billing; Part II,\571\ HHS is seeking 
comment on how the Hospital Price Transparency requirements for 
hospitals to display standard charges in a consumer-friendly manner (45 
CFR 180.60), and, specifically, the voluntary use of online price 
estimator tools (45 CFR 180.60(a)(2)), may be leveraged to provide a 
good faith estimate under the CAA. HHS is also seeking comments on 
whether there are other opportunities to use the Hospital Price 
Transparency machine-readable file requirements (45 CFR 180.50) to 
inform good faith estimates with expected charges, whether or not the 
comprehensive machine-readable files can assist uninsured (or self-pay) 
individuals in determining if the good faith estimate charges are 
reasonable and/or accurate, and what limitations exist in using the 
comprehensive machine-readable files for purposes of meeting the 
requirements for provision of the good faith estimates to uninsured (or 
self-pay) individuals. We encourage the public's continued 
participation in providing feedback necessary to ensure alignment by 
responding to the request for comment.
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    Comment: Many commenters generally welcomed the proposed updates to 
the Hospital Price Transparency policies and urged CMS to ``make the 
guidelines for hospitals even stronger.'' Other commenters, hospitals 
in particular, objected to any modifications for any reason at this 
time, citing burden imposed by the ongoing COVID-19 PHE.
    Response: We appreciate both the general support for the proposals 
as well as the concerns raised by some commenters. We believe that the 
proposed modifications are both limited in scope and necessary to 
ensure compliance with the Hospital Price Transparency final rule and 
we are therefore finalizing the policies as proposed. Overall, we have 
also determined that the policies finalized in this rule will result in 
a burden reduction for hospitals (see Economic

[[Page 63943]]

Analysis at XXIV.C.7 of this final rule with comment period).

B. Increasing the Civil Monetary Penalty (CMP) 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 that 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 CMP 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 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.
    In the CY 2022 OPPS/ASC proposed rule, based on our initial months 
of experience with enforcing the hospital price transparency 
requirements in 45 CFR part 180, we expressed our concern 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 cited in the proposed rule. One approach 
we considered to address this trend was 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 indicated that we believe that CMPs are an 
important component in holding hospitals accountable for their 
noncompliance with hospital price transparency requirements, and would 
signal the Secretary's continued support for public access to pricing 
information and enforcement.
    Therefore, we considered two general approaches for increasing the 
CMP amount: (1) 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 $1000 per day per hospital, or 
(2) 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 proposed 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, we indicated that 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 prior 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.\572\ 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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    \572\ 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.

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[[Page 63944]]

    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 proposed 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 noted that for purposes of this 
discussion, we consider ``number of beds'' to be synonymous with ``bed 
count,'' and that we would use the terms interchangeably.
    We indicated we believed 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.\573\ Cost Report form CMS-
2552-10 and related instructions are effective for hospitals and 
hospital health care complexes with cost reporting periods beginning on 
or after May 1, 2010.\574\
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    \573\ CMS.gov, Cost Reports. Available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports.
    \574\ 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.\575\ 
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.\576\
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    \575\ 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.
    \576\ 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.\577\ 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.\578\ 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.\579\
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    \577\ 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.
    \578\ 42 CFR 413.24(f)(5)(iii).
    \579\ 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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    As explained in the CY 2022 OPPS/ASC proposed rule, 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.'' \580\
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    \580\ 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 proposed 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 proposed the following approach to scaling the CMP amount based 
on the hospital's number of beds, and as summarized in Table 76 of this 
final rule with comment period:
     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

[[Page 63945]]

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.
[GRAPHIC] [TIFF OMITTED] TR16NO21.179

    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.\581\
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    \581\ See section 1176(a)(3) of the Social Security Act; 45 CFR 
160.404.
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    We proposed 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 proposed 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 proposed 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 proposed 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 the CY 2022 OPPS/ASC 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 noted 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, we referred readers to data files by fiscal year (through 
FY 2020, at the time of the CY 2022 OPPS/ASC 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://

[[Page 63946]]

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 sought 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 sought 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 sought 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 sought comment on establishing a maximum daily penalty 
amount of $5,500 for hospitals with more than 550 beds. We also sought 
comment on our proposal to use hospital cost report data, as specified 
in HCRIS, to determine bed count, or if we should consider using other 
validated data sources or files. In particular, we expressed interest 
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,'' \582\ 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 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. We indicated that if we 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. Further, we expressed concern 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, and we noted 
evidence that suggests that noncompliance is fairly high among larger 
hospitals.\583\ Additionally, we explained that by failing to post the 
standard charge data, hospitals are directly hindering consumers' 
decision-making ability, and our belief that the larger the hospital 
size (as determined by bed count), the more potential patients are 
impacted, and, thus, our belief 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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    \582\ 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).
    \583\ 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.
    We explained in the CY 2022 OPPS/ASC proposed rule that 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 did not propose it because we believed 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 
sought 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 
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 proposed 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 proposed 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

[[Page 63947]]

day, with introductory text specifying the provision is applicable for 
CY 2021. We proposed 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 proposed 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 proposed 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 
welcomed comments on these proposals, and the alternatives we 
considered.
    Comment: Many commenters expressed strong support for the proposal 
to increase civil monetary penalties for noncompliance. Such commenters 
explained their belief that increased penalties are necessary to ensure 
hospital compliance so consumers can have access to standard charge 
information. Many commenters urged CMS to not delay the proposed 
increase in penalties past the proposed effective date of January 1, 
2022, indicating their belief that any delay in enforcement will cause 
harm to patients, and that compliance is particularly necessary for 
patients during the COVID-19 PHE.
    By contrast, many commenters strongly opposed any proposed methods 
that would increase penalties for noncompliance. Some commenters 
indicated their belief that the proposed increase in penalties is 
misplaced and ``heavy-handed'', given that hospitals may have valid 
reasons for noncompliance, for example, due to the ongoing COVID-19 PHE 
or confusion over what is required by the Hospital Price Transparency 
regulations. Several commenters indicated their belief that it is too 
early for CMS to conclude there is widespread noncompliance or to 
determine what effect CMS enforcement has had on improving compliance; 
at least one commenter asserted that the industry receipt of warning 
notices from CMS has served to improve compliance and should therefore 
be viewed as sufficient. Another commenter indicated their belief that 
the proposal to increase penalties is premature because the regulations 
and audit process are new to both hospitals and CMS.
    These commenters suggested that CMS should, rather than proposing 
increases to penalties, do the following: Improve the specificity of 
the requirements; seek to provide technical assistance and guidance; 
clarify and provide sufficient detail about the enforcement process; 
clarify how compliance is defined, assessed, and evaluated; publicize 
results of audits to allow others to learn from the findings; seek to 
better understand and take into account the reasons for noncompliance; 
provide ``clearly defined measures that can be obtained and reported 
across the board by all providers''; and work with hospitals and other 
stakeholders in an iterative way to improve compliance.
    Other commenters made recommendations for delaying enforcement and 
for delaying the implementation of the new penalties, if finalized. 
Specifically, commenters recommended enforcement delays: Indefinitely; 
until enforcement of the No Surprises Act and Transparency in Coverage 
commences or until the No Surprises Act and Transparency in Coverage 
policies are aligned with the Hospital Price Transparency rule; or, if 
proposed increases are finalized, until one full calendar year after 
the end of the PHE.
    Response: We appreciate commenters' support for increasing the 
civil monetary penalty amounts and for application of a January 1, 2022 
effective date as proposed. As indicated in the CY 2022 OPPS/ASC 
proposed rule, based on CMS' internal analysis of noncompliance, we 
determined it was necessary to propose an increase in the penalty 
amount to ensure hospital compliance with the Hospital Price 
Transparency regulations. Additionally, the CY 2020 Hospital Price 
Transparency final rule was published in November 2019 and the 
effective date for compliance was delayed, in response to comments, 
until January 1, 2021, providing hospitals additional time to prepare 
for compliance. We believe this delay provided hospitals with 
sufficient time to collect and display the standard charge information 
required under this rule. Further, after the Departments finalized the 
TiC Final Rules (which were finalized a year after the Hospital Price 
Transparency final rule), Congress enacted title I (the No Surprises 
Act) and title II (Transparency) of Division BB of the CAA, which 
impose important new transparency requirements on plans and issuers. As 
indicated in FAQs About Affordable Care Act And Consolidated 
Appropriations Act, 2021 Implementation Part 49,\584\ the Departments 
recognize the number of CAA provisions plans and issuers are required 
to implement by January 1, 2022 and the considerable time and effort 
required to make the machine-readable files available in the form and 
manner required in the TiC Final Rules at the same time. Therefore, the 
Departments are deferring enforcement of some of the TiC Final Rules' 
requirements. In particular, the Departments are deferring enforcement 
of the machine-readable file requirements which are more extensive and 
overlapping with the CAA requirements than the Hospital Price 
Transparency machine-readable file requirement. We believe that the 
circumstances surrounding the delay of the TiC Final Rules are not 
analogous to, and therefore do not warrant, a further delay in the case 
of the Hospital Price Transparency requirements or its enforcement. As 
a result, we are finalizing the increased penalties as proposed and 
decline to delay our enforcement activities or the effective date of 
the increase in civil monetary penalties for the reasons raised by 
commenters.
---------------------------------------------------------------------------

    \584\ https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-49.pdf.
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    We appreciate the suggestions related to additional actions CMS may 
take to improve compliance and will consider them for future 
rulemaking. Commenters seeking clarity related to CMS' assessment can 
review the regulations at 45 CFR 180.40, 180.50, and 180.60. Commenters 
seeking clarity related to the enforcement process can review the 
enforcement process outlined in the regulations at 45 CFR 180 Subpart 
C--Monitoring and Penalties for Noncompliance. Additional detail for 
both can be found in the preamble of the Hospital Price Transparency 
final rule (84 FR 65524). In response to comments related to the need 
for additional guidance and adequately preparing hospitals, we note

[[Page 63948]]

that CMS has engaged in a number of education and outreach activities 
related to the Hospital Price Transparency regulations, including 
several Open Door Forums. We continue to encourage hospitals to review 
the guidance found our dedicated hospital price transparency website 
(https://www.cms.gov/hospital-price-transparency).
    We continue to welcome and encourage hospitals and other 
stakeholders to submit specific questions and concerns to us directly 
at [email protected].
    Comment: Regarding the proposed use of bed count to scale civil 
monetary penalties, many commenters including consumers, consumer 
advocates, and clinician associations expressed support for increasing 
CMPs, while several supported specifically the use of bed count as a 
scaling factor, indicating their belief that such an approach would 
serve as an effective enforcement measure and ensure consistency and 
fairness across noncompliant hospitals. One commenter stated their view 
that the use of bed count would be more meaningful than using a percent 
of net patient revenue. Two commenters supported use of bed count but 
recommended that CMS using a ``tiering'' approach rather than a sliding 
scale approach. Several commenters opposed the proposal to cap the bed 
count at 550, indicating their belief that the cap should be higher 
(such as 1000) or uncapped.
    One commenter questioned the appropriateness of using bed count as 
a method of determining a penalty amount because `most shoppable 
services . . . have little or no relation to the number of beds in a 
hospital.' One commenter opposed the 30 bed count minimum, stating that 
the minimum should be lowered to 25 for consistency with CAH 
designation.
    Many other commenters offered suggestions for alternative 
approaches or factors that should be used to assess penalties or scale 
the penalty amount, rather than use of bed count, including: Assessing 
penalties based on unique hospital characteristics (such as geographic 
location, rural or critical access designation, nonprofit status, or 
availability of financial resources) or on a case-by-case basis; 
phasing in penalties over time; penalties that are based on the scope, 
nature, or severity of noncompliance, similar to other federal 
initiatives; refining penalty formulas to ensure ``fairness'' across 
hospitals; assessment of penalties that take into consideration whether 
the hospital is demonstrating a good faith effort to comply, has taken 
actions to address deficiencies, or has communicated with CMS regarding 
identified issues; penalties that take into account the reason for 
hospital noncompliance, including any extreme and unusual 
circumstances, such as the impact of the COVID-19 PHE; and penalties 
that take into account other hospital price transparency efforts and 
investments and the burden imposed by the Hospital Price Transparency 
regulations.
    Additionally, many commenters suggested that CMS prioritize certain 
requirements over others and apply or scale penalties only in cases 
where hospitals are noncompliant with ``priority'' or ``major'' 
requirements, and not for ``minor'' infractions or deficiencies. 
Commenters recommended the following requirements be viewed as 
priorities: Making public a consumer-friendly display; making public a 
machine-readable file; making public all five types of standard 
charges; presence of payer-specific negotiated charges in the machine-
readable file; display of all payers and plans with which the hospital 
contracts; and whether the machine-readable file and consumer display 
are ``generally complete.''
    By contrast, several commenters disagreed with alternative methods 
for scaling penalties based on factors such as scope, nature, or 
severity of deficiencies because, as one commenter noted, variability 
in providers would not permit CMS to scale such penalties equitably. A 
few recommended CMS consider additional types of penalties such as 
putting Medicare enrollment status or Medicare reimbursement at risk 
for noncompliance, or withholding ``federal infrastructure research'' 
until hospitals become compliant.
    Response: We agree with commenters that application of a scaling 
approach using bed count would be an effective way to ensure 
compliance, consistency and fairness in application of penalties across 
noncompliant hospitals. Additionally, as explained in the proposed 
rule, we believe that use of bed count would allow us to penalize a 
hospital on a sliding scale in a manner that generally correlates to 
the hospital's characteristics, and is an appropriate proxy for 
hospital size and the relative impact a hospital's noncompliance may 
have on the population, although we acknowledge that this proxy would 
not necessarily take into account the total number of patients 
(including outpatients) served by the hospital. However, not all 
hospitals offer outpatient services, so we believe that use of bed 
count is an appropriate and consistent factor that could be used across 
all hospitals subject to the regulation. Moreover, we believe using bed 
count as a scaling factor takes into consideration the size of the 
hospital which can help avoid overly penalizing smaller hospitals, such 
as CAHs.
    We appreciate the comments related to the many other factors that 
could be taken into account to determine the amount of a penalty for 
noncompliance, including use of alternative penalties. As we explained 
in the CY 2022 OPPS/ASC proposed rule, use of other or 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, however, 
we continue to decline to include additional factors at this time 
because we do not believe we have a method to ensure such factors could 
be applied in a consistent manner across all hospitals that are subject 
to these regulations. However, we will continue to consider the use of 
alternative factors and, should we find it necessary to refine the 
determination of the penalty amount, we will revisit this issue in 
future rulemaking.
    We appreciate the other suggestions made by commenters, including 
the use of a ``tiering'' approach, but we continue to believe that the 
scaled approach avoids the cliff effect. We further believe that 
setting a minimum of 30 beds and maximum of 550 beds is appropriate 
because the calculated CMP for a hospital with 30 beds or fewer is 
consistent with the current CMP amount of $300 per day or $109,500 per 
year (84 FR 65589). Given our experience with compliance, we do not 
think it is appropriate to lower the CMP amount, and the CMP for a 
hospital with the 550 or more beds would be approximately $2 million 
which we believe will provide sufficient incentive for large hospitals 
to comply with the requirements. However, we will continue to monitor 
and assess the impact of the minimum and maximum number of beds and may 
revisit in future rulemaking.
    Comment: Several commenters expressed various concerns related to 
the proposed method for determining the number of hospital beds, and 
whether the use of Cost Report bed count would be accurate or 
sufficient for purposes of assessing penalties for noncompliance with 
45 CFR 180. A few commenters objected to the use of the Cost Report to 
identify bed size because the date of submission of the cost report 
varies and may not reflect an `official count.' A few commenters 
requested clarification about what field in the cost

[[Page 63949]]

report file would be used to determine bed count. Another commenter 
suggested that the ``OPPS Hospital Impact File'' would be more user-
friendly and requested alignment of the two files such that the bed 
count used from the Cost Report would be reflected in the OPPS Hospital 
Impact File, if not already reflected in the ``Number of Beds'' column.
    Commenters requested that CMS publish a list of bed sizes annually 
that would be solely used for CMP assessment for noncompliance with 45 
CFR part 180, and provide a mechanism for hospitals to submit 
corrections within 30 days of the publication of such a list. One 
commenter suggested using the ``number of licensed beds'' for those 
that are not Medicare-enrolled and asserted that such an approach would 
be more equitable and would enable CMS to utilize each state's 
facilities division information on licensed beds.
    Response: We appreciate the comments related to the proposed method 
for determining hospital bed count via use of the most recently 
available, finalized hospital cost report. As explained in the proposed 
rule, 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. We therefore believe that 
use of the hospital cost report is both accurate, official, and 
sufficient for purposes of assessing penalties for noncompliance with 
45 CFR 180 for most hospitals.
    As we stated in the CY 2022 OPPS/ASC proposed rule, the field in 
the hospital cost report we proposed to use to determine bed count is 
designated as ``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.'' \585\ Moreover, 
because the hospital cost report is readily available to the public, we 
do not believe it would be necessary to publish a separate list for 
purposes of assessing penalties for noncompliance with 45 CFR part 180.
---------------------------------------------------------------------------

    \585\ 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.
---------------------------------------------------------------------------

    We appreciate the suggestion to use and/or modify the ``OPPS 
Hospital Impact File'' to determine or reflect the number of hospital 
beds used to assess a penalty amount, however, the OPPS Hospital Impact 
File \586\ gathers and presents bed count data from multiple years of 
HCRIS data primarily for the purpose of analyzing the impact of the 
OPPS payment system on hospitals that are paid under that system. While 
it may draw from the same data set we proposed to use for purposes of 
determining hospital bed count, we believe using the primary source for 
such information will be more accurate, complete, and timely than 
relying on similar data from a secondary analysis. For example, unlike 
the OPPS Hospital Impact File, the HCRIS primary data set includes the 
status of the reported information (for example, Settled without audit, 
Settled with audit, Reopened, or Amended) which we proposed to use 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. Additionally, the HCRIS primary data set includes cost 
reports from all Medicare-enrolled hospitals, unlike the OPPS Hospital 
Impact File which contains data from only those hospitals paid under 
the OPPS payment system. We therefore believe that using the primary 
source (HCRIS) is more accurate, complete, and timely.
---------------------------------------------------------------------------

    \586\ https://www.cms.gov/medicaremedicare-fee-service-paymenthospitaloutpatientppshospital-outpatient-regulations-and-notices/cms-1717-cn.
---------------------------------------------------------------------------

    Finally, regarding the proposal to use documentation provided by 
non-Medicare enrolled hospitals for determining the number of beds to 
be used to assess the CMP amount, we agree with the commenters that 
each state's facilities division documentation of number of licensed 
beds could be appropriate for this purpose. As such, if such 
information is necessary and requested for purposes of assessing a CMP, 
we would accept documentation of number of licensed beds from a state's 
facilities division that is provided by non-Medicare enrolled hospitals 
in the form and manner and by the specified deadline. However, should a 
hospital fail to provide CMS with this documentation, in the prescribed 
form and manner and by the specified deadline, we would impose a CMP on 
the hospital at the highest, maximum daily dollar amount.
    Comment: Regarding the proposed $10/bed/day penalty amount, not to 
exceed $5,500/day, many commenters urged CMS to consider even greater 
penalty amounts including: increasing the penalty amount to $70/bed/
day, $100/bed/day, $300/bed/day or even $1000/bed/day; or increasing 
the penalty amount to achieve a total penalty of $5 million per year. 
Such commenters indicated their belief that the proposed increase would 
remain insufficient to drive hospital compliance and asserted that lack 
of pricing data amounts to a patient harm issue due to the threat of 
financial ruin from medical debt. Commenters requested that CMS 
continue to monitor compliance carefully and signal an intent to 
increase penalties again in the future should hospital noncompliance 
persist.
    By contrast, others suggested that the penalty should be lower than 
proposed because they disagreed that noncompliance should be viewed as 
a patient safety issue, or that it rises to the level of a Health 
Insurance Portability and Accountability Act of 1996 (HIPAA)-related 
violation. A few commenters, including rural and critical access 
hospital advocates, requested that CMS retain the current maximum 
penalty amount of $300/day instead of proposing $300/day as a minimum 
penalty amount.
    Response: Given the comments, we believe our proposed maximum daily 
dollar penalty amount on a sliding scale between $300 and $5,500 per 
day per hospital strikes a good balance and is commensurate with the 
level of severity of the potential violation. However, we will continue 
to monitor and assess the impact of this penalty and may revisit in 
future rulemaking.
    Final Policy: We are finalizing, as proposed, a revision to 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 are finalizing, as proposed, 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

[[Page 63950]]

introductory text specifying the provision is applicable for CY 2021. 
We are also finalizing, as proposed, with a technical modification to 
Sec.  180.90(c)(2)(ii)(B) for clarity, that we will 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 hospital's 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 at least 31 beds up to and including 550 beds; 
and (C) a maximum daily dollar CMP amount of $5,500 for hospitals with 
a number of beds greater than 550. We also finalize, as proposed, to 
specify in Sec.  180.90(c)(2)(ii)(D)(1) that CMS will determine the 
number of beds for a Medicare-enrolled hospital using the most recently 
available, finalized Medicare hospital cost report. We also finalize, 
as proposed, to specify in Sec.  180.90(c)(2)(ii)(D)(2) the process by 
which CMS will determine the hospital's number of beds if such 
information cannot be determined using Medicare hospital cost report 
data. Specifically, we will 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 will impose a CMP on the hospital at the highest, 
maximum daily dollar amount ($5,500 per day).

C. Deeming of 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\587\ 
impose no cost-sharing, or, in the case of VA hospitals\588\ and 
Department of Defense MTFs,\589\ 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 are 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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    \587\ Section 1680r(b) of the Indian Health Care Improvement Act 
(25 U.S.C. 1680r).
    \588\ VA cost-sharing information available at: https://www.va.gov/HEALTHBENEFITS/cost/copays.asp.
    \589\ MTF cost-sharing information available at: https://tricare.mil/Costs/Compare and https://comptroller.defense.gov/Portals/45/documents/rates/fy2019/2019_ia.pdf.
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    In the CY 2022 OPPS/ASC proposed rule, we indicated that we had 
become 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.\590\ We stated we believed 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 proposed 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 proposed 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.\591\ 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.\592\ 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 psychiatric hospital with a forensic 
wing would not meet criteria necessary to be deemed to be in 
compliance). We estimated there are approximately 111 such institutions 
that could meet the definition of hospital at Sec.  180.20.\593\ We 
proposed to add this exception to Sec.  180.30(b). We welcomed comments 
on this proposal.
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    \590\ 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[ne]4843.pdf.
    \591\ CMS.gov, Psychiatric Hospitals, available at: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/PsychHospitals.
    \592\ 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.
    \593\ 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.
---------------------------------------------------------------------------

    Comment: All commenters that submitted comments on this proposal to 
deem state forensic hospitals as having met requirements expressed 
general support. We did not receive any comments opposing the proposal.
    Response: We appreciate the support for the proposal to deem state 
forensic hospitals as having met requirements and are finalizing as 
proposed.
    Comment: One commenter requested that CMS publish a list of all 
hospitals subject to this deeming requirement.
    Response: Many states, which license such institutions as 
hospitals, maintain this information on publicly available websites, 
therefore we decline to

[[Page 63951]]

maintain a separate public list of state forensic hospitals deemed 
compliant with the hospital price transparency regulations.
    Final Policy: We are finalizing, as proposed, the policy to deem 
state forensic hospitals as having met the requirements of 45 CFR part 
180. Specifically, we are finalizing this policy 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 are adding 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.\594\ 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 psychiatric hospital with a forensic wing would 
not meet criteria necessary to be deemed to be in compliance).
---------------------------------------------------------------------------

    \594\ CMS.gov, Psychiatric Hospitals, available at: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/PsychHospitals.
---------------------------------------------------------------------------

D. Improving Access to 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.''
    As explained in the CY 2022 OPPS/ASC proposed rule, 45 CFR 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.
    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.
    As explained in the CY 2022 OPPS/ASC proposed rule, 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. We noted that because of the 
flexibility we allowed to hospitals to choose the internet location, we 
recognized and expected that there would 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, we indicated 
our belief that this flexibility is 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 through 65562).
    In the CY 2022 OPPS/ASC proposed rule, we expressed our concern 
that, 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. We cited examples of 
such activities and practices including:
     Employing common methods that hinder the findability \595\ 
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 commonly used web search engines from caching web 
pages on which the link to machine-readable files reside.\596\ 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.
---------------------------------------------------------------------------

    \595\ 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.
    \596\ 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

[[Page 63952]]

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 proposed 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 indicated our belief that this additional requirement would 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 sought comment on whether stakeholders have identified 
additional barriers that we should prohibit. We noted 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 sought 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.'' We explained our 
belief that files that are posted in a prominent manner can reduce 
public burden for searching and finding the files, and can ensure the 
public can easily find the machine-readable file and the information 
contained within it. When files are posted prominently, we noted, we 
would be able to more easily monitor and assess hospital compliance 
with the CY 2020 Hospital Price Transparency final rule. For example, 
we indicated we were 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 could 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 
sought comment on these methods for ensuring that the machine-readable 
files posted are prominently displayed and easily accessible.
    Comment: Many commenters expressed general support for removal of 
any and all barriers to access. Commenters strongly supported the 
current accessibility requirements (specifically, that the information 
be accessible free of charge, without having to establish a user 
account or password, and without having to submit personal identifying 
information) and urged CMS to finalize the additional proposed 
requirement that the machine-readable file be accessible ``to automated 
searches and direct file downloads through a link posted on a publicly 
available website.'' Commenters stated that the proposed rule's 
examples of activities that present barriers to access are accurate and 
expressed their belief that such a policy is ``necessary, important, 
and worthwhile'' to improve public access to machine-readable files. 
Commenters noted that by employing such strategies, hospitals are 
engaging in additional and unnecessary work, and suggested that the 
self-imposed additional burden reflects an active intent on the part of 
a hospital to obfuscate the data and new regulations. Additionally, 
some commenters expressed appreciation for the specific examples cited 
by CMS in the proposed rule and urged CMS to continue to provide this 
type of guidance to help hospitals comply with the new rules.
    By contrast, many commenters requested that CMS not impose any 
additional requirements on hospitals at this time. Instead, commenters 
recommended that CMS: Identify practices that support access and allow 
hospitals flexibility to tailor different strategies to their own 
organizational goals; improve education and outreach; and not impose 
requirements that would increase hospital administrative costs to 
comply and `redevelop' their price transparency solutions.
    Several commenters objected to the proposal because ensuring the 
machine-readable file is accessible to direct downloads from a link 
posted on a web page would prohibit the use of certain activities and 
methods such as the use of pop-up disclaimers and agreements as a 
prerequisite to accessing the machine-readable file. Commenters 
asserted that pop-up disclaimers are necessary because the information 
in the machine-readable files could be confusing or even misleading to 
consumers if presented without context or explanation, and that pop-up 
disclaimers ``are the only protection hospitals have to avoid negative 
consequences of misinterpreting information.'' Additionally, commenters 
argued that CMS itself encouraged use of disclaimers, citing the 
Hospital Price Transparency final rule in which CMS encouraged 
hospitals to include ``appropriate disclaimers in their price estimator 
tools'' (84 FR 65579). Commenters indicated their belief that hospitals 
can properly require that a consumer acknowledge the hospital's 
disclaimers through pop-ups without compromising the accessibility of 
the machine-readable file.
    A few commenters objected to the requirement to ensure direct 
download of the machine-readable file because it would prevent using 
methods such as CAPTCHA which, commenters asserted, is necessary for 
hospitals to safeguard the overall web-based hosting environment. 
Commenters explained that due to the size of some of the files, 
repeated automated attempts by external sources could place stress on 
the bandwidth of hospital networks and could present as a ``denial of 
service'' attack. Denial of service attacks, in turn, could result in 
the shutdown of the website and interrupt patient access to the 
website. Commenters recognized there are mitigation strategies 
available to hospitals, but that some such strategies may represent an 
additional cost to the facility to implement. Additionally, commenters 
pointed out that the federal government uses CAPTCHA on some websites 
for certain purposes, such as the submission of public comment to 
proposed rules on the Federal Register site.
    One commenter objected to requiring direct access to the machine-
readable file through a link posted on the web page because such a 
requirement would prohibit the ability to use other methods for 
displaying standard charge information, such as the use of APIs. 
Commenters asserted that use of APIs should be permitted because 
machine-

[[Page 63953]]

readable file information that is searchable through an API is 
beneficial to the end-user. This commenter asserted that finalizing the 
proposal would increase burden because hospitals using APIs in lieu of 
providing the public with access to a single machine-readable file may 
require some hospitals to redevelop their price transparency solutions.
    Response: We appreciate and agree with commenters that additional 
criteria are necessary at this time to ensure public access to the 
information in the machine-readable file. We believe that prohibiting 
practices that prevent automated access and direct downloads permits 
greater flexibility than prescribing the way a hospital must support 
access. Although we recognize, as articulated by commenters, that there 
may be legitimate reasons why a hospital may have chosen to display its 
data the way it currently does, we nonetheless believe the employment 
of such practices articulated in the proposed rule present barriers to 
access to the information in the machine-readable file and are thus 
finalizing the policy as proposed. Any such practice that prevents 
accessibility of the machine-readable file via automated searches and 
direct file downloads would be prohibited under this final rule.
    We continue to believe that pop-ups (including pop-up disclaimers) 
present a barrier to both automated and manual access to the machine-
readable file by preventing direct download of the file via a link on 
the hospital's web page. We do not believe, as suggested by some 
commenters, that such pop-up disclaimers are the only protection 
afforded to hospitals to avoid negative consequences of misinterpreting 
the information contained in the machine-readable file. Even so, we 
note that this prohibition would not prevent a hospital from providing 
any additional information or relevant disclaimers in the machine-
readable file itself or on the web page containing the link to the 
machine-readable file. However, under the new requirements, such 
disclaimers or explanatory information may not be used as a barrier to 
direct downloads of the file from a link on the hospital's web page. 
Additionally, we do not believe that the policy to require direct 
downloads is inconsistent with our encouragement of the use of 
disclaimers in price estimator tools because such tools are designed 
specifically for manual use by an individual, in contrast to a display 
of data that is intended to be widely accessible, including accessible 
by machines. Moreover, we have not received complaints that pop-ups 
(including pop-up disclaimers) are creating a barrier to access to 
price estimator tools. However, we will monitor this issue and, to the 
extent that CAPTCHA or pop-ups (including pop-up disclaimers) present a 
barrier to access to price estimator tools, we may address it in future 
rulemaking.
    We agree with commenters who indicated that prohibiting use of 
CAPTCHA (and other similar barriers to directly downloading the 
machine-readable file) will increase the usability of the machine-
readable file for the public, including for researchers and others who 
seek to update their data sources as part of an automated process. We 
acknowledge that some commenters may have concerns related to bandwidth 
considerations and server security. We note, however, that access to 
machine-readable files from websites is not unusual, nor are direct 
downloads. Moreover, accounting for bandwidth considerations and 
preventing attempted denial of service attacks is within the scope of 
routine server administration. Server administrators therefore have 
mitigation strategies to address both issues. For example, in our 
compliance reviews, we have noticed that some hospitals have employed 
alternative hosting or caching of the machine-readable file. We note 
that the regulations related to location and accessibility of the 
machine-readable file require hospitals to ``select a publicly 
available website for purposes of making public the standard charge 
information'' (45 CFR 180.50(d)). Thus, hospitals have flexibility to 
determine the most appropriate public website for posting that permits 
the public access to the machine-readable file in accordance with the 
requirements of the final rule. We believe that hospitals can carefully 
consider how to display the link to the machine-readable file such that 
all requirements for posting may be met.
    We disagree with commenters that suggest that we should not 
finalize the policy as proposed because some federal websites, such as 
the Federal Register, use CAPTCHA for submission of comments. Use of 
CAPTCHA for purposes of comment submission to the Federal Register is a 
fundamentally different process than the process for downloading a 
static file. In the comment response process, the CAPTCHA helps to 
prevent automated data submission, thereby protecting the value of the 
comments received by the federal government by ensuring the content 
submitted is user-created. When downloading a static file, no user-
created content is submitted to a web server and therefore there is no 
data to protect. A more appropriate comparison than the comment 
submission process to the Federal Register would be public access to 
information that can be downloaded from Data.gov which allows the 
public to directly download data files; Data.gov does not have CAPTCHA 
requirements or other impediments for accessing direct data downloads.
    In the CY 2020 OPPS/ASC proposed rule (84 FR 39582 through 39583), 
we specifically sought comment on adopting a requirement that hospitals 
use an open standards-based API through which they would disclose their 
standard charges and associated data elements. Ultimately, we finalized 
a policy for hospitals to make public their standard charges by posting 
a single machine-readable file online as a good initial step, while 
indicating that as hospital disclosure of standard charges matures, we 
intended to revisit the issue. Thus, while hospitals are not prohibited 
under the final rule from making public standard charges via API 
technology, or using such technology for a consumer-friendly display of 
standard charges, hospitals must still make public their standard 
charges in a single machine-readable file. Under this finalized 
accessibility policy, such single machine-readable files must 
additionally be accessible to automated searches and direct file 
downloads through a link on the hospital website.
    Comment: Some commenters noted that the most pressing barrier to 
access is the lack of hospital compliance with the Hospital Price 
Transparency regulations. Others outlined various technical challenges 
in identifying and searching for the location of the file related to 
website domain names, hospitals that don't maintain websites, and 
search results that include links to third party aggregators of the 
files. Several commenters requested more guidance related to what is 
acceptable to meet the current `prominently displayed' requirement. 
Others provided detailed suggestions for improving future requirements 
related to file `findability,' including: Consideration for developing 
a centralized location for hospitals to either make public the machine-
readable file or to submit a link to the machine-readable file's 
location; requiring use of certain searchable words or terms on the web 
page that contains the link to the machine-readable file; requiring 
hospitals to place a link to the file (or its web page) on the 
hospital's homepage; requiring the file to be on a web page that is no 
more than two clicks from the hospital's homepage; requiring hospitals 
to locate the file on a dedicated price

[[Page 63954]]

transparency web page on the hospital's own website. Several commenters 
supported the establishment of a CMS-specified URL, although one 
commenter noted that this would not be necessary if CMS chose instead 
to establish and enforce a specific location for the link to the 
machine-readable file.
    By contrast, other commenters supported the current flexible 
approach and objected to more specificity in file location 
requirements, other than ensuring the file is `not blocked from public 
view.' One commenter noted that hospitals have frequently chosen to 
post the link to the machine-readable file on the hospital billing web 
page.
    Response: We appreciate the feedback and acknowledge that hospitals 
may be experiencing technical challenges as they implement the hospital 
price transparency requirements. As noted above, we will continue to 
educate hospitals about the requirements, including the requirement to 
use the CMS-specified naming convention. Regarding the request for 
additional guidance related to how a hospital should ensure that the 
machine-readable file is displayed `prominently,' we refer hospitals to 
the detailed discussion in the CY 2020 Hospital Price Transparency 
final rule (84 FR 65561) (84 FR 65561). In response to commenters 
requesting additional guidance for how to ensure their machine-readable 
files are `prominently displayed', we recommend hospitals do the 
following:
     Review and use, as applicable, the HHS Web Standards and 
Usability Guidelines (available at: https://webstandards.hhs.gov/), 
which are research-based and are intended to provide best practices 
over a broad range of web design and digital communications issues.
     Post a link to machine-readable file on a website where 
the value and purpose of the web page and its content is clearly 
communicated, for example, a dedicated price transparency web page or a 
web page devoted to patient billing or financing healthcare services.
     While ``breadcrumbs'' (for example, secondary navigation 
aids) can be useful for navigating a website, they should not be relied 
upon in order for consumers to find the link to the machine-readable 
file. Instead, facilitate user navigation by including searchable terms 
on the web page such as ``price transparency,'' ``standard charges,'' 
or ``machine-readable file.''
     Ensure that the link to the machine-readable file is 
visually distinguished on the web page, and that its purpose is to open 
the single machine-readable file for a clearly indicated hospital 
location.
    Additionally, we appreciate the detailed comments related to 
challenges in locating files, and will continue to consider these 
suggestions for future rulemaking.
    Final Policy: We are finalizing, as proposed, an amendment to 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 that this additional requirement will serve to 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.

E. Clarification and Requests for Comment

1. Clarification of the Price Estimator Tool Option
    In the CY 2022 OPPS/ASC Proposed Rule, we indicated that we had 
previously finalized a requirement that hospitals make public certain 
standard charges for 300 ``shoppable'' services in a consumer-friendly 
manner. We very briefly summarized the rationale and policy finalized 
in the CY 2020 Hospital Price Transparency final rule 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.
    In the CY 2022 OPPS/ASC proposed rule, we clarified that 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 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) \597\ We went on to note our concern that 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. We 
stated in the proposed rule that such price estimator tools would 
therefore fail to satisfy our requirements at Sec.  180.60(a)(2).
---------------------------------------------------------------------------

    \597\ There were several typographical errors in the 
clarification published in the proposed rule. The sentence should 
read as follows: Moreover, such price estimator tools 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'' 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 noted that under the CY 2020 Hospital Price Transparency final 
rule, hospitals are not required to offer online price estimator tools. 
However, we emphasized that when a hospital chooses to offer an online 
price estimator tool as an alternative to presenting its 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

[[Page 63955]]

the individual's circumstances into consideration when developing the 
estimate. Moreover, we stated that 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 emphasized that nothing in the Hospital Price Transparency 
regulations would preclude 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.
    Finally, we indicated that we were 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 sought 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, sought 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?
    Comment: Many commenters supported the policy finalized in the 
Hospital Price Transparency final rule to permit use of price estimator 
tools that ``[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,'' in lieu of making public 
standard charges in a consumer-friendly manner at 45 CFR 180.60. A few 
commenters urged CMS to go further and permit such tools to satisfy the 
requirements for all hospital price transparency rules, including the 
machine-readable file requirements at 45 CFR 180.50. By contrast, many 
commenters expressed concerns with permitting hospital use of price 
estimator tools for any purpose, including meeting the consumer-
friendly display requirements at 45 CFR 180.60, because they believe 
that hospitals are using such tools to continue to obfuscate and avoid 
making public their standard charges, as required by the law and in 
accordance with the Hospital Price Transparency final rule. Such 
commenters explained that consumers want knowledge of `real' prices, 
including standard charges, and not just their final out-of-pocket 
obligations. Commenters asserted that full disclosure of the inputs to 
determine the out-of-pocket costs are necessary for consumers to 
validate the final bill. A few commenters therefore urged CMS to 
rescind the flexibility afforded in the rule that allows hospitals to 
voluntarily offer price estimator tools that offer only out-of-pocket 
estimates instead of making public their standard charges for shoppable 
services in a consumer-friendly manner.
    Many commenters, including several providers and provider 
organizations, expressed strong support and agreement with the 
clarification that price estimator tools must take into consideration 
the individual's insurance information when providing an out-of-pocket 
estimate. Commenters stated that such tools are routinely in use in 
hospital systems around the country and provide meaningful and accurate 
estimates to consumers of their out-of-pocket obligations. Others noted 
that since finalization of the Hospital Price Transparency final rule, 
the adoption of such real-time tools has increased, along with vendor 
support for price estimator tools that take individuals' payer 
information into account. One commenter noted that regular 
communication channels between both payers and their estimation tool 
vendor had proven to be a valuable best practice to address estimation 
accuracy issues.
    A few commenters strongly disagreed with the clarification. One 
commenter objected to requiring that, in order to qualify for an 
exception to 45 CFR 180.60(b) through (e), a price estimator tool must 
use a `standard-charges-based' methodology to provide an estimate of a 
patient's expected cost sharing obligation. This commenter stated that 
such a requirement would unduly limit a hospital's flexibility without 
benefitting consumers. Two commenters pointed out that a statement 
attributed as a quote from the Hospital Price Transparency final rule 
(specifically the quote attributed to 84 FR 65578) could not be found 
and therefore invalidates the clarification. One of the commenters 
noted that the sections of the quote are contained in separate sections 
of the Hospital Price Transparency final rule but that the combined 
quote does not exist. Both commenters suggested that the clarification 
is contradictory because the Hospital Price Transparency final rule 
indicates that hospitals should advise user to ``consult, as 
applicable, with his or her health insurer to confirm individual 
payment responsibilities and remaining deductible balances.''
    Several commenters disagreed that the examples we provided in the 
proposed rule of price estimator tools would be considered 
noncompliant, including the following that would be considered out of 
compliance:
     Tools that provide estimated amounts or ranges, instead of 
a single dollar out-of-pocket amount. Commenters asserted that ranges 
are useful to consumers.
     Tools that use prior claims to estimate the potential 
total standard charges. A commenter asserted that past claims, properly 
used, can provide a more accurate basis for establishing a reasonable 
estimate than the use of standard charges. Another indicated that it is 
impractical to load the information from all payers and all plans and 
therefore some amount of averaging is necessary.
     Tools that do not combine hospital standard charges with 
benefit information directly from the insurer, requiring the user to 
input their own benefit information. Some commenters indicated that 
some tools request benefit information to be submitted by the consumer, 
explaining not all payer information is available electronically or 
updated frequently enough. One commenter noted that, in order to 
provide more meaningful and accurate estimates, some hospitals have 
developed an option for patients to manually input or override certain 
information, such as their progress toward meeting a deductible. Some 
commenters noted that each electronic transaction with the payer may 
result in a transaction fee borne by the hospital. Another indicated 
that electronic requests do not consistently return necessary 
information from the payer.
     Tools that indicate the price is not what the hospital 
anticipates the individual would be obligated to pay, even in the 
absence of unusual or unforeseeable circumstances. One commenter 
requested that CMS clarify that `unusual and unforeseen circumstances' 
are not the only reasons that a final cost could deviate from an 
estimate because some patient needs are unknowable but not unforeseen; 
for example, having to order lab tests may not be unusual or 
unforeseen, but it may not be known in advance which exact labs will be 
needed. Others requested that CMS enforce the requirement that the 
price estimator tool reflect the amount that the individual would be 
``obligated'' to pay as a binding and

[[Page 63956]]

guaranteed estimate and not permit any disclaimers to the contrary. A 
few commenters expressed understanding that some hospital costs are 
challenging to predict with certainty but asserted that in such cases, 
rather than a disclaimer, it would be useful to be offered a reasonable 
`bundled' price for a procedure, along with prices for potential `a la 
carte' items and services that could be included in the final bill.
    A few commenters requested that CMS delay finalizing any additional 
criteria for the use of hospital price estimator tools. Commenters 
noted that both the Transparency in Coverage rule as well as the No 
Surprises Act have requirements for payers to establish price 
comparison tools.\598\ Additionally, the No Surprises Act includes 
requirements for providers to communicate ``good faith estimates'' to 
uninsured (including self-pay) patients as well as communication of 
estimated charges to payers so that payers can, in turn, provide a 
``good faith estimate'' to people using insurance. Commenters suggest 
that the estimates provided by hospital price estimator tools could be 
related to the ``good faith estimates'' that hospitals will be required 
to provide under the No Surprises Act. As such, commenters requested 
that CMS consider and ensure alignment of requirements across these 
initiatives.
---------------------------------------------------------------------------

    \598\ https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-49.pdf
---------------------------------------------------------------------------

    Response: We appreciate commenter support for our Hospital Price 
Transparency final rule policies related to voluntary use of price 
estimator tools to satisfy the consumer-friendly display requirements 
at 45 CFR 180.60. We do not believe the clarification we provided in 
the proposed rule presents a change to the existing price estimator 
tool requirements that we previously finalized. However, we appreciate 
comments related to changes that we may consider in future rulemaking 
(such as expanding the policy to permit such tools to satisfy other 
requirements or rescinding the policy to permit hospitals to meet 
requirements for a consumer-friendly display via use of price estimator 
tools).
    We appreciate commenter support for the clarification of the 
requirement that voluntary price estimator tools take into account 
patient insurance information when presenting out-of-pocket estimates. 
We agree that such tools are routinely used in hospital systems and can 
be used to provide meaningful and accurate estimates to consumers about 
their out-of-pocket obligations. We also noted in the Hospital Price 
Transparency final rule ``that price estimator tools pick up where our 
rule ends and take the additional steps that would otherwise be 
required by the consumer to determine their individualized out-of-
pocket by combining hospital standard charge information with the 
individual's benefit information directly from the insurer [italics 
added for emphasis].'' (84 FR 65578).
    Thus, the estimate from a price estimator tool, voluntarily used by 
the hospital in lieu of making public a consumer-friendly list of 
standard charges, must be tailored to individuals' circumstances and 
represent a real-time individualized out-of-pocket estimate of the 
amount they would have to pay the hospital that takes into account any 
applicable benefit information.
    However, although we would expect a personalized out-of-pocket 
estimate to use hospital standard charges and to take insurer 
information directly into account, we did not specify the method by 
which a price estimator tool would do so. As suggested by commenters, 
we recognize that a population-based analysis of prior reimbursements 
for hospital services (particularly for complex procedures that have 
many possible combinations of items and services and corresponding 
payer-specific negotiated charges, or for procedures that have payer-
specific negotiated charges for a service package based on complex 
contracting arrangements) could help inform the inputs (for example, 
items and services and total expected payer-specific negotiated 
charges) that are likely to be encountered by the individual. 
Additionally, we agree with commenters that there may be existing 
challenges for electronically accessing some payer information that is 
necessary to determine an accurate out-of-pocket cost estimate for all 
individuals seeking to use insurance, and that such challenges may 
require an individual to input data that comes directly from the payer. 
Further, we recognize that there may be an opportunity in the future to 
align requirements for a consumer-friendly display of standard charges 
with the requirements of the Transparency in Coverage regulations and 
the implementation of the No Surprises Act.
    Accordingly, if a hospital chooses to offer a price estimator tool 
in lieu of displaying standard charges in a consumer-friendly manner, 
the hospital must ensure (among the other requirements at 45 CFR 
180.60(a)(2)) that the tool allows healthcare consumers to, at the time 
they use the tool, obtain an estimate of the amount that the hospital 
anticipates the individual would be obligated to pay. This means that 
the estimated amount is personalized and represented as a single out-
of-pocket dollar amount that takes into account the individual's 
insurance status. However, the Hospital Price Transparency final rule 
is not prescriptive regarding the method by which a hospital's price 
estimator tool estimates the individual's single out-of-pocket dollar 
amount. Specifically, we note that nothing in the rule prevents a 
hospital from developing an accurate and reliable cost estimate using 
prior claims information or from providing additional information that 
may be useful to the end-user, such as the range of out-of-pocket costs 
for the population to which the individual belongs. However, the 
estimate of ``the amount'' the individual would be obligated to pay 
must be displayed as a single dollar out-of-pocket amount within the 
tool. Similarly, the Hospital Price Transparency final rule is not 
prescriptive regarding the method by which the tool accesses the 
individual's insurance information ``directly from the insurer.'' We 
therefore agree with commenters that the tool could require the 
consumer to manually submit such information in order to generate the 
estimated out-of-pocket amount.
    Finally, the Hospital Price Transparency final rule requires price 
estimator tools to allow consumers to obtain an estimate of the amount 
``they will be obligated to pay'' the hospital for the shoppable 
service and we encouraged hospitals to take note of best practices for 
developing accurate and reliable cost estimates and seek to ensure the 
price estimator tools they offer are maximally consumer-friendly. 
Additionally, as noted by commenters, we encouraged, but did not 
require, that hospitals ``provide appropriate disclaimers in their 
price estimator tools, including acknowledging the limitation of the 
estimation and advising the user to consult, as applicable, with his or 
her health insurer to confirm individual payment responsibilities and 
remaining deductible balances.'' As such, we believe such disclaimers 
should serve to educate the public regarding the estimate and should 
not be used to avoid making every attempt to ensure the estimate is 
accurate. We agree that the `absence of unusual or unforeseeable 
circumstances' are not the only reasons why a price estimate may change 
and we encourage hospitals to use the disclaimer as an opportunity to 
identify, explain, and document any limitations of the analysis, 
including but not

[[Page 63957]]

limited to any assumptions and exclusions that were made when 
developing the estimate.
2. Responses To Request for Comment
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42312 through 42321), 
we sought comment on a number of issues including: (1) Input for future 
consideration related to the price estimator tool policies, including 
identifying best practices, common features, and solutions to 
overcoming common technical barriers; (2) whether we should require 
specific plain language standards, and, if so, what those plain 
language standards should be; (3) potential ways that we could 
highlight exemplar hospital price transparency practices; and (4) 
recommendations for improving standardization of the machine-readable 
file. We received approximately 396 timely comments on this RFI. We 
appreciate the detailed input provided by commenters on these topics.

XIX. 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);
     The FY 2021 IPPS/LTCH PPS final rule (85 FR 58926 through 
58959); and
     The FY 2022 IPPS/LTCH PPS final rule (86 FR 45360 through 
45426);
    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.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42321), we sought 
input through a request for information (RFI) 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 eCQM. 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 eCQM. 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 the RFI was 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 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

[[Page 63958]]

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 noted in the CY 2022 OPPS/ASC proposed rule (86 FR 42322) that 
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 had 
expressed concern about potential unintended consequences associated 
with requiring reporting on the measure. Specifically, these 
stakeholders had noted their concern that requiring reporting on the 
Safe Use of Opioids eCQM could disincentivize clinicians from 
appropriately concurrently prescribing buprenorphine for the treatment 
of OUD. They believed 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 noted that during measure development, clinicians from the 
expert panel convened by the measure developer on behalf of CMS 
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 sought 
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, we noted 
that 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 the RFI, we sought public input on the following:
     Potential future measure updates of the Safe Use of 
Opioids eCQM. We sought 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) 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 sought 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.
    We received comments on these topics.
    Comment: Several commenters suggested that CMS should not mandate 
reporting of the Safe Use of Opioids eCQM, and instead retain the 
measure as an option to self-select to fulfill the eCQM requirement. 
Several commenters also requested that CMS delay mandatory reporting 
until NQF re-endorsement or until the concern about unintended 
consequences has been addressed.
    Response: We thank the commenters for their inputs and interest in 
this measure. We believe that these comments are very valuable to both 
the continued development of the Safe Use of Opioids eCQM and also the 
Hospital IQR Program's reporting policies. We will continue to take 
these comments into account as we develop future regulatory proposals 
or other guidance for the Safe Use of Opioids eCQM.
    Comment: Several commenters recommended refinements to the measure 
specifications for the Safe Use of Opioids eCQM. Several commenters 
urged us to consider incorporating more exclusions, such as for single-
condition exclusions (opioid use disorder), appropriate concurrent 
prescribing, HIV, ESRD, opioid prescriptions from outside facilities, 
or long encounters (such as those 120 days or longer). Some commenters 
suggested revising the measure to report on the prevalence of addiction 
specialists and formal addiction medicine programs. Some commenters 
requested that the measure be revised to allow for appropriate 
concurrent prescribing and prevent unintended consequences. One 
commenter requested that the measure

[[Page 63959]]

specifications be clarified so that one prescription for differing 
dosage of a medication would not be interpreted as two prescriptions 
for purposes of the Safe Use of Opioids eCQM. One commenter requested 
that CMS focus on co-prescriptions of opioids and specific 
benzodiazepines because concurrent prescription of these medications 
carry a higher risk of accidental overdose and mortality.
    Response: We thank the commenters for their suggestions and 
interest in refinements to this measure. We believe that these comments 
are very valuable in the continuing development of the Safe Use of 
Opioids eCQM and will inform the NQF re-endorsement process. We will 
continue to take these comments into account as we develop future 
regulatory proposals or other guidance for the Safe Use of Opioids 
eCQM.
    Comment: One commenter encouraged CMS to retain the required 
reporting of the Safe Use of Opioids eCQM, but also suggested that CMS 
identify and require reporting of other eCQMs to remove hospital 
choice.
    Response: We thank the commenter for their suggestions and will 
consider them for future rulemaking.
    Comment: One commenter suggested that we share information from the 
years in which the Safe Use of Opioids eCQM was voluntarily submitted 
via hospital selection.
    Response: We thank the commenters for their input and interest in 
this measure. We will take this suggestion into consideration.

XX. 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);
     The FY 2021 IPPS/LTCH PPS final rule (85 FR 58966 through 
58977); and
     The FY 2022 IPPS/LTCH PPS final rule (86 FR 45460 through 
45498).
    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.
    In the CY 2022 OPPS/ASC proposed rule (86 FR 42323 through 42324), 
we sought input in a request for information (RFI), in alignment with 
the Hospital Inpatient Quality Reporting Program, 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 under the Medicare Promoting Interoperability Program 
beginning with the CY 2021 EHR 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) where 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 for re-endorsement consideration as part of the measure 
maintenance process. The purpose of this RFI was 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] of the CY 2022 OPPS/ASC 
proposed rule (section [XIX.A.3] of this final rule).
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 two or more opioids, or a combination of 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 receiving 
combinations of medications that could lead to adverse drug reactions 
at discharge, and motivates providers to consider whether a re-
evaluation of the patient's 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 who are 
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 who 
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 deemed medically necessary. Patients who are 
receiving medication for an opioid use disorder (OUD) would be included 
in the

[[Page 63960]]

measure denominator if they continue with their active prescription 
upon discharge, and would be counted in the numerator if they receive 
an additional 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 noted in the proposed rule (86 FR 42323 through 42324) that we 
monitor and evaluate quality measures after they are adopted and 
implemented under 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 for unintended consequences 
associated with requiring reporting on this measure. Specifically, 
stakeholders had noted that in requiring reporting on the Safe Use of 
Opioids eCQM, this could disincentivize clinicians from appropriately 
prescribing buprenorphine for the treatment of OUD. 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 potential patient harm in a vulnerable population.
    We noted that during measure development, clinicians from the 
expert panel convened by the measure developer on behalf of CMS 
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 remains an important topic and a particular focus 
area of our monitoring efforts. For further discussion, we refer 
readers to section XX.A.4 of the CY 2022 OPPS/ASC proposed rule 
(section XIX.A.4 of this final rule with comment period).
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, we noted 
that 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
    The Medicare Promoting Interoperability Program previously 
finalized policy for the CY 2022 reporting period requiring that 
eligible hospitals and CAHs report on 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 maintained alignment with proposals finalized under the 
Hospital IQR Program.
    Beginning with the CY 2021 reporting period, the Safe Use of 
Opioids eCQM was added to the eCQM measure set as one of the eCQMs that 
eligible hospitals and CAHs can choose from to meet the eCQM reporting 
requirements for the Hospital Inpatient Quality Reporting Program and 
the 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
    In the RFI, in alignment with a similar RFI pertaining to the 
Hospital IQR Program, we sought public comment on the following:
     Potential future measure updates of the Safe Use of 
Opioids eCQM. We sought 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 sought comment on the appropriateness of 
maintaining this previously finalized policy, or, allowing hospitals to 
self-select the Safe Use of Opioids eCQM from a finalized set of eCQMs 
(which includes the Safe Use of Opioids eCQM) for the CY 2022 EHR 
reporting period and subsequent years.
    We received comments on these topics, and that feedback is 
summarized below.
    Comment: Several commenters suggested that CMS not mandate the 
reporting of the Safe Use of Opioids eCQM, and instead retain the 
measure as optional, to fulfill the eCQM requirement. Several 
commenters also requested that CMS delay mandatory reporting until 
after NQF re-endorsement, or until the concern about unintended 
consequences has been addressed.
    Response: We thank the commenters for their input and suggestions. 
We believe that these comments are valuable to both the continued 
development of the Safe Use of Opioids eCQM, and also the Medicare 
Promoting Interoperability Program's reporting policies. Alongside the 
Hospital IQR Program, we may take these comments under consideration as 
we develop future policy, or other guidance for the Safe Use of Opioids 
eCQM.
    Comment: One commenter encouraged CMS to retain the required 
reporting of the Safe Use of Opioids eCQM, but also suggested that CMS

[[Page 63961]]

identify and require reporting of other eCQMs to remove, per hospital 
choice.
    Response: We thank the commenter for their suggestions and may 
consider this for future rulemaking.

XXI. 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 titled ``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 proposed 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 titled ``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 did not receive 
any public comments and are, therefore, finalizing our proposal 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 the CY 2022 OPPS/ASC final rule with comment 
period pertaining to final 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-FC'' from the list of 
regulations. All OPPS Addenda to the CY 2022 OPPS/ASC final rule with 
comment period are contained in the zipped folder titled ``2022 NFRM 
OPPS Addenda'' in the related links section at the bottom of the page. 
To view the Addenda to the CY 2022 OPPS/ASC final rule with comment 
period 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-FC'' from the list of regulations. The 
ASC Addenda to the CY 2022 OPPS/ASC final rule with comment period are 
contained in a zipped folder titled ``Addendum AA, BB, DD1, DD2, and 
EE.'' in the related links section at the bottom of the page.

XXII. 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 title 44 of the U.S. Code, as 
added by section 2 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 solicited public comment on each of these issues for the 
following sections of this final rule with comment period 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 (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 (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.\599\ 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.
---------------------------------------------------------------------------

    \599\ 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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2. Summary
    In section XV.B.4. of this final rule with comment period, we are 
finalizing our proposals to: (1) Adopt the COVID-19 Vaccination 
Coverage Among Health Care Personnel (HCP) measure (OP-38), beginning 
with the CY 2022 reporting period; (2) adopt the Breast Cancer 
Screening Recall Rates measure (OP-39), beginning with the CY 2022 
reporting period; (3) adopt the ST-Segment Elevation Myocardial 
Infarction (STEMI) eCQM (OP-40), beginning as a voluntary measure with

[[Page 63962]]

the CY 2023 reporting period, and then as a mandatory measure beginning 
with the CY 2024 reporting period; (4) 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; (5) remove the Fibrinolytic Therapy Received Within 30 
Minutes measure (OP-2), effective with the CY 2023 reporting period; 
(6) remove the Median Time to Transfer to Another Facility for Acute 
Coronary Intervention measure (OP-3), effective with the CY 2023 
reporting period; (7) 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; (8) 
reduce the number of days hospitals have to submit medical records to 
the CDAC from 45 days to 30 days for validation; (9) 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; (10) expand our Extraordinary Circumstances Exception 
(ECE) policy to apply to electronic clinical quality measures (eCQMs), 
to further align with the Hospital IQR Program; (11) require use of 
technology updated consistent with 2015 Edition Cures Update criteria 
beginning with the CY 2023 reporting period/CY 2025 payment 
determination; and (12) provide a review and corrections period for 
eCQM data submitted to the Hospital OQR Program. We are also finalizing 
our proposal with modification to require the Cataracts: Improvement in 
Patient's Visual Function within 90 Days Following Cataract Surgery 
measure (OP-31) beginning with the CY 2025 reporting period/CY 2027 
payment determination instead of the CY 2023 reporting period/CY 2025 
payment determination.
3. Estimated Burden of Hospital OQR Program Requirements for the CY 
2024 Payment Determination and Subsequent Years
a. Information Collection Burden Estimate for the COVID-19 Vaccination 
Coverage Among Health Care Personnel (HCP) Measure (OP-38)
    In section XV.B.4 of this final rule with comment period, we are 
finalizing our proposal to adopt the COVID-19 Vaccination Coverage 
Among HCP measure (OP-38), beginning with the CY 2022 reporting period/
CY 2024 payment determination. Hospitals will 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 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).\600\ 
As such, the finalized adoption of this measure will not impose any 
additional information collection under the Paperwork Reduction Act for 
hospitals for the duration of the public health emergency (PHE), but 
will impose information collection burden for any reporting of this 
measure taking place after conclusion of the PHE. Although the burden 
associated with the COVID-19 Vaccination Coverage Among HCP measure 
(OP-38) 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. We will work with CDC to ensure that this burden is accounted 
for in an updated PRA under OMB control number 0920-1317.
---------------------------------------------------------------------------

    \600\ 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 Breast Cancer 
Screening Recall Rates Measure (OP-39)
    In section XV.B.4.b of this final rule with comment period, we are 
finalizing our proposal to adopt the Breast Cancer Screening Recall 
Rates measure (OP-39), beginning with the CY 2023 payment determination 
using a data collection period of July 1, 2020, to June 30, 2021; for 
subsequent years, we will 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 
will use data from July 1, 2021, through June 30, 2022). Because the 
measure is calculated using claims data that are already submitted 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 ST-Segment Elevation 
Myocardial Infarction (STEMI) Measure (OP-40)
    In section XV.B.4.c. of this final rule with comment period, we are 
finalizing our proposal to adopt the STEMI eCQM (OP-40), 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 
will be able to voluntarily report the measure for one or more quarters 
during the year. For subsequent years, we are finalizing our proposal 
to gradually increase the number of quarters of data hospitals will 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 will voluntarily 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 participating 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 participating 
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

[[Page 63963]]

burden for all participating 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 participating 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 OP-31: Cataracts--
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery Measure
    As discussed in section XV.B.5.b. of this final rule with comment 
period, we are finalizing our proposal with modification to require the 
Cataracts: Improvement in Patient's Visual Function within 90 Days 
Following Cataract Surgery measure (OP-31), beginning with the CY 2025 
reporting period/CY 2027 payment determination instead of the proposed 
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 web-based tool. As a result of this 
policy, we estimate a total annual burden estimate for all 
participating hospitals of 550 hours (3,300 hospitals x 0.1667 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 
assumes 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 participating 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 will be required to report this measure.
    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.
e. Information Collection Burden Estimate for the Requirement of OP-
37a-e: Outpatient and Ambulatory Surgery Consumer Assessment of 
Healthcare Providers and Systems (OAS CAHPS) Survey Measures and Add 
Administration Methods
    The information collection requirements associated with the five 
OAS CAHPS survey-based measures (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 final rule with 
comment period, we are finalizing our proposal 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). Finalizing 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 final rule with comment 
period, we are finalizing our proposal 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 will 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 2025 reporting period/
CY 2027 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 additional administration methods will be 
utilized to increase the response rate of patients to achieve the same 
required number of 300 patients surveyed per practice; therefore, we 
are not changing the number of respondents. We also believe that the 
two administration methods will require approximately the same time to 
conduct; therefore, we are not changing the currently approved 
estimate.
f. Information Collection Burden Change for the Removal of Measures OP-
2: The Fibrinolytic Therapy Received Within 30 Minutes and OP-3: Median 
Time To Transfer to Another Facility for Acute Coronary Intervention
    In section XV.B.3.c. of this final rule with comment period, we are 
finalizing our proposal 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 participating hospitals is 151,800 hours at a cost of 
$6,436,320 (151,800 hours x $42.40) for each measure per year. 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 Removal of the Option 
for Hospitals to Send Medical Records to the Validation Contractor via 
Paper and Removable Media and Require Electronic Submission
    In section XV. D.9.b. of this final rule with comment period, we 
are finalizing our proposal to remove the option for hospitals to send 
medical records to the validation contractor via paper and removable 
media and are requiring electronic submission. As noted in the CY 2015 
OPPS/ASC final rule (79 FR 67015), we have been reimbursing hospitals 
directly for expenses

[[Page 63964]]

associated with submission of medical records for data validation. 
Specifically, we reimbursed 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 reimbursed 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 will continue to be reimbursed at $3.00 per 
record for electronic files submitted via secure file transmission.
h. Information Collection Burden Estimate for the Reduction in 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 final rule with comment period, we are 
finalizing our proposal 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 this 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 change in section XXV.C.4.b. of 
this final rule with comment period. 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 Addition of Targeting 
Criteria Used for Hospital Selection by Adopting Criteria Currently 
Used in Inpatient Data Validation
    In section XV.D.9.d.(2). of this final rule with comment period, we 
are finalizing our proposal 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 this 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 Expanding our Existing 
ECE Policy To Apply to Electronic Clinical Quality Measures (eCQMs).
    In section XV.D.10.b. of this final rule with comment period, we 
are finalizing our proposal 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 
participating in the CMS Quality Reporting Programs 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 hospitals. We are unable to 
forecast the number of additional ECE requests which may be submitted 
as a result of this change; however, we continue to estimate that each 
submission will continue to require approximately 15 minutes to 
complete. Using this estimate of 15 minutes per submission, our 
estimate of 1,100 hours would be adequate to account for a maximum of 
4,400 submissions (1,100 hours / 0.25 hours/submission), or 4,234 more 
than what was received in CY 2017. Therefore, we believe the estimate 
of 1,100 hours across all hospitals is conservative enough to account 
for any increase in burden that may be associated with this finalized 
change in ECE policy.
k. Information Collection Burden Estimate for the Required Use of 2015 
Edition Cures Update Certified Technology
    In section XV.D.6.c.(1). of this final rule with comment period, we 
are finalizing our proposal that 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 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 final rule with comment period.
l. Information Collection Burden Estimate for the Review and 
Corrections Period for eCQM Data Submitted to the Hospital OQR Program
    In section XV.D.8 of this final rule with comment period, we are 
finalizing our proposal 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. 
of this final rule with comment period. 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 finalized period does not 
require hospitals to submit additional data and 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 updated assumptions and policies 
promulgated in this final rule with comment period 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 77, 78, 79, 80, and 81 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

[[Page 63965]]

reflects the cumulative burden changes). We note that for the STEMI 
eCQM (OP-40), 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 voluntarilyreport 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.\601\
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    \601\ 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 (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 (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 (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.\602\ 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 by necessity is 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.
---------------------------------------------------------------------------

    \602\ 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.
---------------------------------------------------------------------------

    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. 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 ECE 
policy in consideration of the COVID-19 PHE; 3,957 of these ASCs would 
have been required to participate without 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 section XVI. B.3.a. and XVI. B.4. of this final rule with 
comment period, we are finalizing our proposals to: (1) Adopt the 
COVID-19 Vaccination Coverage Among HCP measure, beginning with the CY 
2022 reporting period/CY 2024 payment determination (ASC-20); (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); and (3) add two additional data 
collection survey modes of OAS CAHPS measures collection to the 
existing three modes of collection and provide survey administration 
requirements. We are finalizing with modification our proposals to: (1) 
Require the Cataracts: Improvement in Patient's Visual

[[Page 63969]]

Function within 90 days Following Cataract Surgery (ASC-11) measure 
beginning with the CY 2025 reporting period/CY 2027 payment 
determination instead of the CY 2023 reporting period/CY 2025 payment 
determination; and (2) require the Outpatient and Ambulatory Surgery 
Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) 
Survey measures (ASC-15 a-e) with voluntary reporting beginning with 
the CY 2023 reporting period and mandatory reporting beginning with CY 
2025 reporting period/CY 2027 payment determination instead of the CY 
2024 reporting period/CY 2026 payment determination.
3. Estimated Burden of ASCQR Program Proposals for the CY 2024 Payment 
Determination and Subsequent Years
a. Information Collection Burden Estimate for the COVID-19 Vaccination 
Coverage Among Health Care Personnel (HCP) Measure (ASC-20)
    In section XVI.B.3.a. of this final rule with comment period, we 
are finalizing our proposal to adopt the COVID-19 Vaccination Coverage 
Among HCP measure (ASC-20), beginning with the CY 2022 reporting 
period/CY 2024 payment determination. ASCs will submit data through the 
NHSN, 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.\603\ As such, 
the burden associated with the COVID-19 Vaccination Coverage Among HCP 
measure (ASC-20) 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. 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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    \603\ 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 Requirement of 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 final rule with comment period, we are 
finalizing our proposal 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 will 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 facility 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 finalizing this requirement, we 
estimate a resulting 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 ASC-11, Cataracts: 
Improvement in Patient's Visual Function Within 90 Days Following 
Cataract Surgery Measure
    As discussed in section XVI.B.4.b. of this final rule with comment 
period, we are finalizing with modification our proposal to require the 
Cataracts: Improvement in Patient's Visual Function within 90 Days 
Following Cataract Surgery (ASC-11) measure beginning with the CY 2025 
reporting period/CY 2027 payment determination instead of 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 policy, 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 policy, 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. Considering the 
increase in the number of ASCs submitting data, there 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. The 
information collection under OMB Control number 0938-1270 will be 
revised and submitted to OMB for approval.
d. Information Collection Burden Estimate for the Requirement of ASC-15 
a-e: The Outpatient and Ambulatory Surgery Consumer Assessment of 
Healthcare Providers and Systems (OAS CAHPS) Survey Measures and 
Incorporation of 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 
final rule with comment period, we are finalizing our proposal with 
modification 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 2025 
reporting period/CY 2027 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. Finalizing this change will

[[Page 63970]]

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 final rule with 
comment period, we finalized our proposal 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. The addition of these two 
survey administration methods will provide 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 2025 reporting period/CY 2027 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 the two administration methods will require approximately 
the same time to conduct, therefore, we are not changing the currently 
approved estimate. In addition, the two administration methods will be 
utilized to increase the response rate of patients to achieve the same 
required number of 200 patients surveyed per practice, therefore we are 
not changing 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 
final rule with comment period 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). Tables 82 and 83 summarize 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.\604\
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    \604\ CY 2021 Final Rule ASCQR Program ``Supporting Statement-
A''. Available at: https://www.reginfo.gov/public/do/DownloadDocument?objectID=108544300.
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BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR16NO21.193


[[Page 63971]]


[GRAPHIC] [TIFF OMITTED] TR16NO21.194

BILLING CODE 4120-01-C
    All comments on the CY 2022 OPPS/ASC proposed rule were received on 
or by September 17, 2021.

XXIII. 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 considered all comments we received by 
the date and time specified in the DATES section of this preamble and 
responded to the comments in the preamble of this final rule with 
comment period.

XXIV. Economic Analyses

A. Statement of Need

    This final rule with comment period 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 are revising 
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 final policy of using data prior to 
the start of the PHE.
    This final rule with comment period 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 Final Rule With Comment Period

    We have examined the impacts of this final rule with comment 
period, 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 the Unfunded 
Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive 
Order 13132 on Federalism (August 4,

[[Page 63972]]

1999), and the Congressional Review Act (5 U.S.C. 804(2)). This section 
of this final rule with comment period contains the impact and other 
economic analyses for the provisions we are finalizing 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 final rule with comment period has been designated as 
an economically significant rule under section 3(f)(1) of Executive 
Order 12866 and hence also a major rule under Subtitle E of the Small 
Business Regulatory Enforcement Fairness Act of 1996 (also known as the 
Congressional Review Act).'' Accordingly, this final rule with comment 
period 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 
final rule with comment period. We solicited public comments on the 
regulatory impact analysis in the CY 2022 OPPS/ASC proposed rule, and 
we address any public comments we received in this CY 2022 OPPS/ASC 
final rule with comment period, 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 final rule with comment period, 
would be approximately $1.27 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 $82.1 billion, which is 
approximately $5.9 billion higher than estimated OPPS expenditures in 
CY 2021. Because the provisions of the OPPS are part of a final 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 84 of this final rule with 
comment period 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 final CY 2022 policy, drugs and biologicals 
that are acquired under the 340B Program are paid at ASP minus 22.5 
percent, WAC minus 22.5 percent, or 69.46 percent of AWP, as 
applicable.
    Our final policy for the CY 2022 OPPS pauses the elimination of the 
IPO list and adds services removed in 2021 back to the IPO list, with 
several codes remaining off the IPO list for CY 2022. We note that CY 
2019 OPPS claims are being used in the CY 2022 OPPS ratesetting process 
and because the initial policy to remove codes from the IPO list was 
originally established in CY 2021, the effects of such policy would not 
be observed in our data or in the impact table. Based on our initial 
review of the CY 2021 claims data, we observe that most of the changes 
resulting from that policy have been more code-specific in nature and 
have had a limited broader impact. As more CY 2021 claims become 
available, we will continue to review that data. For a more detailed 
discussion of the IPO list changes, please see section IX. of this 
final rule with comment period.
    We also note that there are changes to the ASC CPL for the CY 2022 
ASC payment system. Based on initial review of the available CY 2021 
claims data for ASCs, we observe that there is limited aggregate impact 
for codes initially added to the ASC CPL list in the CY 2021 ASC 
payment. In addition, we note that because CY 2019 claims data are 
being used in developing the impact analysis and the initial changes to 
the list were implemented in CY 2021, the effect of changes related to 
those services would not appear in this impact analysis. For a more 
detailed discussion of changes to the ASC CPL, please see section XIII 
of this final rule with comment period.
    We estimate that the final update to the conversion factor and 
other budget neutrality adjustments would increase total OPPS payments 
by 2.1 percent in CY 2022. The changes to the APC relative payment 
weights, the changes to the wage indexes, the continuation of a payment 
adjustment for rural SCHs, including EACHs, the continuation of payment 
policy for separately payable drugs acquired under the 340B program, 
and the 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 budget-neutral payment 
adjustments, changes in estimated total outlier payments, pass-through 
payments and the 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 1.6 percent.
    We estimate the total increase (from changes to the ASC provisions 
in this final rule with comment period 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 $40 million. Because the 
provisions for the ASC payment system are part of a final 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 final rule with comment period. Tables 
85 and 86 of this final rule with comment period 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 Final Rule With Comment 
Period
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 final rule with 
comment period. 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-FC'' 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 final 
rule with comment period. We show hospital-specific data only for 
hospitals whose claims were used for

[[Page 63973]]

modeling the impacts shown in Table 84. 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 final rule with comment period 
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 the Payment Policy for Drugs and Biologicals 
Obtained Under the 340B Program
    In section V.B. of this final rule with comment period with comment 
period, we discuss our policy of adjusting the payment amount for 
nonpass-through, separately payable drugs acquired by certain 340B 
participating hospitals through the 340B Program. Rural SCHs, 
children's hospitals, and PPS-exempt cancer hospitals continue to be 
excepted from this payment policy in CY 2022. Specifically, in this 
final rule with comment period for CY 2022, for hospitals paid under 
the OPPS (other than those that are excepted for CY 2022), we are 
paying for separately payable drugs and 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 continuing 
current Medicare payment policy for CY 2022, there is no change to the 
budget neutrality adjustment as a result of the 340B drug payment 
policy.
c. Estimated Effects of OPPS Changes on Hospitals
    Table 84 shows the estimated impact of this final rule with comment 
period 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 84, 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 are continuing 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 final rule with 
comment period.
    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 IPPS 
market basket percentage increase applicable to the OPD fee schedule 
for CY 2022 is 2.7 percent. Section 1833(t)(3)(F)(i) of the Act reduces 
that 2.7 percent by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act, which is 0.7 percentage point for CY 
2022 (which is also the productivity adjustment for FY 2022 in the FY 
2022 IPPS/LTCH PPS final rule (86 FR 45214)), resulting in the CY 2022 
OPD fee schedule increase factor of 2.0 percent. We are using the OPD 
fee schedule increase factor of 2.0 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 84 of this final rule with comment period.
    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 84 
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 2.0 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 maintaining 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 final rule with comment period 
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 1.6 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 1.6 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 84 shows the total number of 
facilities (3,659), including designated cancer and children's 
hospitals and CMHCs, for which we were able to use CY 2019 hospital 
outpatient and CMHC claims

[[Page 63974]]

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 final rule with comment period. 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 (3,552), 
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 84) and discuss 
that impact separately below.
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 0.1, depending on the number of beds. Rural hospitals will 
experience no change overall. Major teaching hospitals will experience 
an estimated decrease of 0.1 percent.
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 FY 2022 IPPS 
post-reclassification wage indexes; the rural adjustment; the frontier 
adjustment, and the 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 updated wage 
indexes, including the application of budget neutrality for the rural 
floor policy on a nationwide basis, as well as the CY 2022 changes in 
wage index policy discussed in section II.C. this final rule with 
comment period. We did not model a budget neutrality adjustment for the 
rural adjustment for SCHs because we are continuing the rural payment 
adjustment of 7.1 percent to rural SCHs for CY 2022, as described in 
section II.E. of this final rule with comment period. We also did not 
model a budget neutrality adjustment for the cancer hospital payment 
adjustment because the 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 are 
applying in section II.F. of this final rule with comment period.
    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 2.0 
percent. Overall, these changes will increase payments to urban 
hospitals by 2.1 percent and to rural hospitals by 2.3 percent. Both 
sole community hospitals and other rural hospitals receive an estimated 
increase of 2.3 percent.
Column 5: All Changes for CY 2022
    Column 5 depicts the full impact of the final 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 final rule with comment period; 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 final rule 
with comment period); 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 
changes for CY 2022 will increase payments to all facilities by 1.6 
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 final relative payment weights for CY 2022. We used the final 
conversion factor for CY 2021 of $82.797 and the final CY 2022 
conversion factor of $84.177 discussed in section II.B. of this final 
rule with comment period.
    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 1.07 percent of total 
payments. The estimated current outlier payments of 1.07 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

[[Page 63975]]

0.974495 (86 FR 25718), to reflect relative changes in cost and charge 
inflation between CY 2019 and CY 2022, to model the final CY 2022 
outliers at 1.0 percent of estimated total payments using a multiple 
threshold of 1.75 and a fixed-dollar threshold of $6,175. The charge 
inflation and CCR inflation factors are discussed in detail in the FY 
2021 IPPS/LTCH PPS final rule (84 FR 45542).
    Overall, we estimate that facilities will experience an increase of 
1.6 percent under this final rule with comment period in CY 2022 
relative to total spending in CY 2021. This projected increase (shown 
in Column 5) of Table 84 reflects the 2.0 percent OPD fee schedule 
increase factor, minus 0.32 percent for the change in the pass-through 
payment estimate between CY 2021 and CY 2022 and the 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 (1.07 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 1.6 percent. Overall, we 
estimate that rural hospitals will experience a 1.6 percent increase as 
a result of the 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 1.4 percent for major teaching hospitals and an increase of 
1.7 percent for nonteaching hospitals. Minor teaching hospitals will 
experience an estimated increase of 1.6 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 1.6 percent, proprietary hospitals will 
experience an increase of 1.7 percent, and governmental hospitals will 
experience an increase of 1.7 percent.
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d. Estimated Effects of OPPS Changes on CMHCs
    The last line of Table 84 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 rate 
setting in the final 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 1.1 
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 the estimated impact of adopting the final FY 2022 
wage index values will result in a decrease of 1.0 percent to CMHCs. 
Column 4 shows that combining the OPD fee schedule increase factor, 
along with final changes in APC policy for CY 2022 and the final FY 
2022 wage index updates, will result in an estimated increase of 1.4 
percent. Column 5 shows that adding the changes in outlier and pass-
through payments will result in a total 1.1 percent increase in payment 
for CMHCs. This reflects all final 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 refer readers to section II.I. of 
this final rule with comment period. 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 18.2 percent for all services paid under the OPPS in CY 2022. 
The estimated aggregate beneficiary coinsurance reflects general system 
adjustments, including the final CY 2022 comprehensive APC payment 
policy discussed in section II.A.2.b. of this final rule. We note that 
the individual payments, and therefore copayments, associated with 
services may differ based on the setting in which they are furnished. 
However, at the aggregate system level, because site of service changes 
related to the IPO list and ASC CPL for certain procedures are more 
service specific and because the overall impact has been limited in 
nature, we do not currently observe significant impact on beneficiary 
coinsurance as a result of those policies.
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 changes in the final 
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 
$1.27 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 changes in the 
final rule would increase these Medicaid beneficiary payments by 
approximately $80 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 $80 million 
Medicaid increase, approximately $45 million will be from the Federal 
Government and $35 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 the CY 2022 OPPS/ASC 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 was 
to use CY 2019 claims and cost report data generally in CY 2022 OPPS 
ratesetting. In this final rule, as discussed in section X.E., we are 
finalizing a policy of using the CY 2019 claims data in CY 2022 OPPS 
ratesetting, while allowing for certain exceptions in which we would 
use CY 2020 claims in consideration of factors such as APC placement.
    We note that these policy considerations also have ASC implications 
since the relative weights for certain surgical procedures

[[Page 63980]]

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 final rule with comment period, we are 
setting the CY 2022 ASC relative payment weights by scaling the final 
CY 2022 OPPS relative payment weights by the final ASC scalar of 
0.8552. The estimated effects of the final updated relative payment 
weights on payment rates are varied and are reflected in the estimated 
payments displayed in Tables 85 and 86.
    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, the CY 2022 payment 
determinations will be based on the application of a 2.0 percentage 
point reduction to the annual update factor, which will 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 0.9997 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 2.0 
percent (which is equal to the projected hospital market basket update 
of 2.7 percent reduced by a productivity adjustment of 0.7 percentage 
point). The CY 2022 ASC conversion factor is $49.916 for ASCs that 
successfully meet the quality reporting requirements.
a. Limitations of Our Analysis
    Presented here are the projected effects of the final 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 final 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 final 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 includes tables that display estimates of the 
impact of the final 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 85 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 CY 2022 payments, and Table 86 shows a comparison of 
estimated CY 2021 payments to estimated CY 2022 payments for procedures 
that we estimate will receive the most Medicare payment in CY 2021.
    In Table 85, 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 85.
     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 final updates to ASC payment rates for CY 
2022 compared to CY 2021.
    As shown in Table 85, 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 2-percent increase in aggregate payment amounts for 
nervous system procedures, 2-percent increase in aggregate payment 
amounts for digestive system procedures, a 3-percent increase in 
aggregate payment amounts for musculoskeletal system procedures, a 6-
percent increase in aggregate payment amounts for cardiovascular system 
procedures, and a 3-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 2.0 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 2.0 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 6-percent increase in 
proposed aggregate cardiovascular procedure payments.

[[Page 63981]]

The increase in payment rates for cardiovascular procedures as a result 
of increased device-intensive designations is further increased by the 
final 2.0 percent ASC rate update for these procedures. Conversely, we 
estimate a 1-percent decrease in proposed aggregate eye and ocular 
adnexa procedures related to certain high-volume procedures no longer 
being assigned device-intensive status as well as estimates in 
utilization for certain new cataract removal and device insertion 
procedures. For estimated changes for selected procedures, we refer 
readers to Table 85 provided later in this section.
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    Table 85 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 payment for CY 2021 and 
the estimated payment for CY 2022 based on the final update.
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c. Estimated Effects of Proposed ASC Payment System Policies on 
Beneficiaries
    We estimate that the 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 designated as office-
based for 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 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

[[Page 63983]]

nonfacility practice expense based amount payable under the PFS. For 
those additional procedures that we 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 final rule with comment period. The first 
accounting statement, Table 87, illustrates the classification of 
expenditures for the CY 2022 estimated hospital OPPS incurred benefit 
impacts associated with the final CY 2022 OPD fee schedule increase. 
The second accounting statement, Table 88, illustrates the 
classification of expenditures associated with the 2.0 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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[[Page 63984]]

4. Effects of Changes in Requirements for the Hospital OQR Program
a. Background
    We refer readers to the CY 2018 OPPS/ASC final rule (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 CY 2022 OPPS/ASC Finalized Policies
    We anticipate that some of the CY 2022 Hospital OQR Program 
finalized policies will impact the number of facilities that will 
receive payment reductions. In this final rule, we are finalizing our 
proposals to: (1) Adopt the COVID-19 Vaccination Coverage Among HCP 
measure (OP-38), beginning with the CY 2022 reporting period; (2) adopt 
the Breast Screening Recall Rates measure (OP-39), beginning with the 
CY 2022 reporting period; (3) adopt the STEMI eCQM (OP-40), 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 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; (5) remove the Fibrinolytic Therapy 
Received Within 30 Minutes measure (OP-2), effective with the CY 2023 
reporting period; (6) remove the Median Time to Transfer to Another 
Facility for Acute Coronary Intervention measure (OP-3), effective with 
the CY 2023 reporting period; (7) remove the option for hospitals to 
send medical records to the validation contractor via paper and 
removable media and require electronic submission; (8) reduce the 
number of days hospitals have to submit medical records to the CDAC 
from 45 days to 30 days; (9) 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; (10) extend our existing ECE 
policy to apply to eCQMs, to further align with the Hospital Inpatient 
Quality Reporting (IQR) Program; and (11) require use of technology 
updated consistent with 2015 Edition Cures Update criteria beginning 
with the CY 2023 reporting period. We are also finalizing our proposal 
with modification to require the Cataracts: Improvement in Patient's 
Visual Function within 90 Days Following Cataract Surgery measure (OP-
31) beginning with the CY 2025 reporting period/CY 2027 payment 
determination instead of the CY 2023 reporting period/CY 2025 payment 
determination.
    As shown in Table 81 in section XXII.B.4. (Collection of 
Information) of this final rule with comment period, 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 this final 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 in this 
section of the final rule, we are finalizing policies that will have 
additional economic impact. The finalized policies not discussed in 
this section are believed to have no further economic impact beyond 
information collection burden.
    In section XV.B.4.a. of this final rule with comment period, we are 
finalizing the adoption of the COVID-19 Vaccination Coverage Among HCP 
measure (OP-38) beginning with the CY 2022 reporting period/CY 2024 
payment determination. Hospitals will 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).\605\ Although the burden 
associated with the COVID-19 Vaccination Coverage Among HCP measure 
(OP-38) 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 
will take each hospital on average approximately 1 hour per month to 
report data for the COVID-19 Vaccination Coverage Among HCP measure 
(OP-38) which may vary 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 will 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 will incur 
an estimated cost of between $323.28 (9 hours x $35.92/hr) and $538.80 
annually (15 hours x $35.92/hr).\606\ The estimated cost across all 
3,300 hospitals will 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 
(OP-38) outweigh the associated costs of reporting. We did not receive 
any comments on the estimated time to collect data and enter it into 
the NHSN as well as any additional costs associated with this measure.
---------------------------------------------------------------------------

    \605\ 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.
    \606\ 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 final rule with comment period, we are 
finalizing the adoption of the STEMI eCQM (OP-40). 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

[[Page 63985]]

for use in the Hospital OQR Program (83 FR 41771).
    As described in section XV.D.6. of this final rule with comment 
period, we are finalizing certification requirements requiring the use 
of the 2015 Edition Cures Update for eCQMs beginning with the CY 2025 
payment determination. We expect this finalization 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 policy 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 the finalization of this policy. 
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 final rule with comment period, we are 
finalizing the proposal 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 finalizing this policy to be minimal.
5. Effects of Requirements for the ASCQR Program
a. Background
    In section XVI. of this final rule with comment period, we discuss 
our finalized 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.\607\
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    \607\ 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.
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b. Impact of CY 2022 OPPS/ASC Finalized Policies
    In section XVI. of this final rule with comment period, we are 
finalizing our proposals 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) 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 (3) adopt the COVID-19 Vaccination 
Coverage Among HCP measure (ASC-20), beginning with the CY 2022 
reporting period/CY 2024 payment determination. We note that we are 
finalizing with modification our proposals to: (1) Require the 
Cataracts: Improvement in Patient's Visual Function within 90 days 
Following Cataract Surgery (ASC-11) measure beginning with the CY 2025 
reporting period/CY 2027 payment determination instead of the CY 2023 
reporting period/CY 2025 payment determination; and (2) require the 
Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare 
Providers and Systems (OAS CAHPS) Survey measures (ASC-15 a-e) with 
voluntary reporting beginning with the CY 2023 reporting period and 
mandatory reporting beginning with CY 2025 reporting period/CY 2027 
payment determination instead of the CY 2024 reporting period/CY 2026 
payment determination.
    As shown in Tables 82 and 83 in section XXII.C.3.e. (Collection of 
Information) of this final rule with comment period, 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 final rule with 
comment period (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 this final rule with comment period, we 
are finalizing the adoption of the COVID-19 Vaccination Coverage Among 
HCP measure (ASC-20) beginning with the CY 2022 reporting period/CY 
2024 payment determination. The impacts and benefits associated with 
finalizing this proposal are comparable to those previously discussed 
for the same measure being finalized in 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 
(NCVIA).\608\ Although the burden associated with the COVID-19 
Vaccination Coverage Among HCP measure (ASC-20) 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 (ASC-20) and enter it into NHSN. 
We have estimated that the associated burden is comprised of 
administrative hours and wages. We believe an Administrative Assistant 
will 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

[[Page 63986]]

determination, ASCs will 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 will 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 will 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 did not receive comments on the estimated time 
to collect data and enter it into the NHSN as well as any additional 
costs associated with this measure.
---------------------------------------------------------------------------

    \608\ 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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6. Effects of Requirements for the RO Model
a. Financial Impact
    We have examined the impact of this final rule as required by 
Executive Order 12866 and other laws and Executive Orders, requiring 
economic analysis of the effects of final rules. We are finalizing 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 (85 FR 85866) (hereinafter referred to as ``CY 2021 
OPPS/ASC final rule''). We are also finalizing 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 modifications to the RO Model 
design in this final rule. Accordingly, we have prepared an RIA that, 
to the best of our ability, reflects the economic impact of the 
policies contained in this final rule.
b. Statement of Need for the Radiation Oncology (RO) Model
    In the CY 2021 OPPS/ASC proposed rule (86 FR 42350), we noted that 
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.
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 
with comment period (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 finalized modifications included in this final 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 $150 million for Medicare 
over the course of the five-year model performance period.
d. Anticipated Effects
(1) Scale of the Radiation Oncology (RO) Model
    As we stated in the CY 2022 OPPS/ASC proposed rule (86 FR 42350), 
revising the model performance period to begin January 1, 2022 will 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 was 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 than 
was assumed in the Specialty Care Models final rule in September 2020.
(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 is 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 2022 OPPS/ASC proposed rule (86 FR 42350), a stochastic simulation 
based on the policies in this final rule was created to estimate the 
financial impacts of the RO Model relative to baseline expenditures.
(c) Medicare Estimate
    Table 91 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 $150 
million over the 5-year model performance period. Changes in the 
estimated impacts for this policy relative to those presented in the 
CY2022 OPPS/ASC proposed rule (86 FR 42350 through 42352) generally 
reflect updated economic assumptions, no material technical changes 
were made to our projection methodology. As in the Specialty Care 
Models final rule (85 FR 61350) and the CY 2021 OPPS/ASC final rule 
with comment period (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 projected that 80 percent (down from 83 percent as 
projected in the Specialty Care Models final rule) of physician 
participants (measured by unique NPI) will receive the APM incentive 
payment under the Quality Payment Program for 2022.
    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 
assumed 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

[[Page 63987]]

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 estimated 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 $280 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 have resumed by the start of 2022.To the extent that 
this assumption does not hold, actual experience may vary 
significantly. Table 91 summarizes our estimated impacts of this final 
rule with comment period.
[GRAPHIC] [TIFF OMITTED] TR16NO21.189

e. Effects on RO Participants
    We believe that the finalized 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 with comment period (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 estimated to be approximately $1,845 per 
entity per year based on 2020 wages. Since we estimated 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, and this 
remains unchanged in this final rule.
    Like the Medicare Specialty Models final rule (85 FR 61358), this 
final rule with comment period affects: (1) Radiation oncology PGPs 
that furnish RT services in both freestanding radiation therapy centers 
and HOPDs; (2) PGPs that furnish RT services only in HOPDs; (3) PGPs 
that are categorized as freestanding radiation therapy centers; and (4) 
HOPDs. Based on the finalized modifications to the design of the RO 
Model, we believe that on average, Medicare FFS payments to PGPs 
(including freestanding radiation therapy centers) will increase by 6.3 
percent and Medicare FFS payments to HOPDs will be reduced by 9.9 
percent over the life of the Model as shown in Table 92 below. This 
estimate is made under the assumption of no changes to PFS clinical 
labor rates as outlined in the CY 2022 PFS proposed rule (CMS-1751-P) 
occurring. To the extent the PFS were to finalize clinical labor RVU 
adjustment policies outlined in the recent proposed rule, we would 
expect PGPs to see an average increase of 10.2 percent and HOPDs a 
decrease of 11.3 percent over the lifetime of the RO Model.

[[Page 63988]]

    Under Medicare FFS, PGPs that furnish RT professional services to 
HOPDS are largely paid through the PFS and freestanding radiation 
therapy centers are largely paid through the PFS for both RT 
professional and technical services. In contrast, HOPDs are paid 
through the OPPS for RT technical services. 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 (including 
freestanding radiation therapy centers), 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 
(including freestanding radiation therapy centers) 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 92 provides additional 
information about the expected impacts by year:
[GRAPHIC] [TIFF OMITTED] TR16NO21.190

    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 
XVII.C.3.d. of this final rule with comment period).
    We solicited comment on the assumptions and analysis presented 
throughout the regulatory impact section, section XXIV.C.6, of this 
final rule with comment period.
    Comment: Some commenters called attention to the three percent 
change in the number of physician participants (measured by unique NPI) 
that will receive the APM incentive payment under the Quality Payment 
Program for 2022 as CMS now projects 80 percent (down from 83 percent 
as projected in the Specialty Care Models final rule) of physician 
participants will receive the APM incentive payment. These commenters 
note that it will be devastating for those practices unable to attain 
Advanced APM status as many of them will be left with fewer resources.
    Response: Please see Table 92 in this final rule with comment 
period. It is important to note that the PGP figures in Table 92 
encompass entities defined under the RO Model as a Medicare-enrolled 
PGPs and includes freestanding radiation therapy centers, as both are 
paid through the MPFS. The HOPD figures in Table 92 encompass entities 
defined under the RO Model as HOPDs, which are paid through the OPPS. 
On average, we estimate that PGPs (including freestanding radiation 
therapy centers) furnishing included RT services under the RO Model 
will see an increase in payment relative to those same entities outside 
of the RO Model, whereas HOPDs furnishing included RT services under 
the RO Model are expected, on average, to see a decrease in payment 
relative to their counterparts outside of the RO Model.
    As seen in Table 92, we project that for PGP participants, the RO 
Model discounts will be offset in the first year of the model 
performance period by use of blended PFS and OPPS trend update factors. 
By 2024 RO participants that are PGPs (including freestanding radiation 
therapy centers) are expected to see an average increase in payment 
rates on average of approximately 6.3 percent. Over the lifetime of the 
RO Model we expect about 95 percent of RO participants that are PGPs 
(including freestanding radiation therapy centers) to see increases in 
payment relative to traditional FFS. This is due to the OPPS receiving 
projected updates of 2.3 percent on average for the 2019-2026 period, 
the PFS being legislated to receive effectively no conversion factor 
update on net for these years, and the use of blended updates 
redistributing a large portion of work RVU revisions finalized in the 
CY 2021 PFS PPS final rule onto HOPDs. Also, we assume limited dollars 
under the APM incentive payment, because it is limited to one year.
    Comment: Some commenters stated that CMS' regulatory impact 
analysis significantly underestimates the cost of collecting and 
reporting quality measures and CDEs, and that CMS does not adequately 
recognize the time and resources necessary to comply with the reporting 
requirements. One commenter stated hearing that one hospital system 
that spanned eight regions within the health system uses an existing 
radiation oncology EHR system, but only a couple of the regions are 
using it to document care. Those systems that are using the EHR system 
to document care need to implement various software product upgrades to 
support the higher level CEHRT requirements. The commenter reported a 
cost of an estimated $1.74 million for all eight regions to be 
compliant with Model requirements, and that this cost does not include 
the cost associated with staff time or the ramp up time necessary to 
train and operationalize these new systems. This same commenter 
reported that a large academic medical center with OCM experience, has 
reported to them that

[[Page 63989]]

the cost of compliance is three- to four-times the anticipated cost of 
the 2-percent withhold.
    Response: We thank these commenters for explaining their concerns. 
We continue to expect the burden costs per small entity associated with 
quality measure reporting to be small because three of the four 
measures for the RO Model are already in use in other CMS programs; and 
compliance with the Treatment Summary Communication (the measure not 
currently in use) is a best practice that should already be the 
standard of care across PGPs and HOPDs. In the Medicare Specialty 
Models final rule (85 FR 61360), we explain that the use of EHR 
technology is not included in the regulatory impact analysis as part of 
the cost of the Model, because an entity's EHR has many uses within the 
clinical setting and is not solely used for RO Model measures 
reporting. Please note that we will be monitoring burden on RO 
participants throughout the model performance period.
    Comment: Many commenters stated that CMS estimates do not 
appropriately account for the proposed conversion factor and relative 
value units (RVUs) under the CY 2022 Medicare Physician Fee Schedule 
(MPFS) proposed rule. Many commenters believed CMS has failed to 
account for the continued decline in MPFS rates that factor into the RO 
Model payment methodology as part of the trend factor calculation. 
These commenters stated that under the CY 2022 MPFS proposed rule, CMS 
is proposing cuts of 8.75 percent across all radiation oncology 
services, due to the proposed change in Clinical Labor Pricing Inputs 
and the expiration of the Consolidated Appropriations Act (CCA), which 
equates to a cut of 3.75 percent to the conversion factor. These 
commenters stated that the MPFS proposals in the CY 2022 MPFS proposed 
rule affect the RO Model due to its trend factors, which use the MPFS 
and the OPPS payment rates to update the national base rate amounts 
each year. These commenters argued that CMS is understating the impact 
of the cuts with the comparison to 2020, not 2021. One commenter noted 
that CMS's impact estimates for PGPs, in particular, is deceiving, 
given significant reductions in MPFS payments proposed by CMS. Many 
commenters also noted their belief that the proposed payment reductions 
under the MPFS, when combined with the Model's withholds and discount 
factor, will be unsustainable for RT providers and RT suppliers under 
the Model and likely result in access issues for beneficiaries. They 
argued that these reductions have the potential to put many practices 
at financial risk, particularly those with thin operating margins.
    One commenter argued that CMS inappropriately included the 
incentive payments provided to Qualified Participant (QP) status in its 
budgetary calculations for the RO Model. This commenter cites the Act 
at section 1833(z)(1)(C), which states: ``Payments under this 
subsection shall not be taken into account for purposes of determining 
actual expenditures under an alternative payment model and for purposes 
of determining or rebasing any benchmarks used under the alternative 
payment model.'' In Table 78 of the CY 2022 OPPS/ASC proposed rule (86 
FR 42351), CMS has included the incentive payments for RO Model QPs in 
its calculations of net savings attributable to the Model. The 
commenter stated that the purpose of the QP incentive payments is to 
help support APM participants as they transition from the traditional 
fee-for-service system to payment under APMs, and that these incentive 
payments should not be considered costs attributable to the RO Model.
    A couple of commenters stated that CMS estimates do not 
appropriately account for sequestration. Finally, a commenter urges CMS 
to release the assumptions upon which their actuaries rest their 
analysis, as well as the analysis itself, so that stakeholders can 
understand how they arrived at their calculations.
    Response: We direct readers to section XVIII.C.5.h of this final 
rule with comment period where we address comments specific to the 
impact of the discount factors on payment and to section XVIII.C.5.d of 
this final rule with comment period where we address comments 
concerning the trend factor methodology with its incorporation of MPFS 
and OPPS rates as part of an annual update for the PC and TC of each 
disease site. We do, however, acknowledge that the RO estimates could 
change due to CY 2022 or subsequent MPFS policies, in addition to a 
variety of other factors. It is important to note that the figures 
listed in Table 92 should be interpreted as an overall comparison 
between those participating in the RO Model to those outside of it 
during the 5-year model performance period, all else equal. This 
analysis therefore excludes impacts due to other CMS policy changes. 
The figures listed in Table 92 are averages and should not be 
interpreted as the reduction or increase in current payment that an 
individual PGP (including freestanding radiation therapy centers) or an 
individual HOPD receives.
    As for the comment concerning the inclusion of APM incentive 
payments in the RO Model savings estimates, the APM incentive payment 
will not be included in accounting of expenditures during the Model's 
reconciliation for RO participants. Finally, actuarial assumptions used 
to calculate the financial impacts of the RO Model are included in this 
section of this final rule with comment period. We have added several 
clarifying statements throughout this section to facilitate 
understanding of the RO Model's financial impacts and the actuarial 
assumptions on which these impacts are based.
7. Effects of Requirements for Hospitals To Make Public a List of Their 
Standard Charges
    In this final rule with comment period, we are modifying 45 CFR 
180.30(b) and adding new Sec.  180.30(b)(3) to include that state 
forensic hospitals will be deemed to have met requirements, similar to 
our policy to deem Federally owned/operated hospitals as having met 
requirements. 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 at 45 CFR 180.
    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 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

[[Page 63990]]

Hospital Price Transparency final rule, the burden reduction applies to 
CY 2022 and subsequent years.
    We estimate that 111 \609\ 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 
93.\610\
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    \609\ 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.
    \610\ Bureau of Labor Statistics. National Occupational 
Employment and Wage Estimates, May 2020. Available at https://www.bls.gov/oes/current/oes_nat.htm.
[GRAPHIC] [TIFF OMITTED] TR16NO21.191

    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 94.
[GRAPHIC] [TIFF OMITTED] TR16NO21.192

    We received a several comments related to the burden and costs of 
complying with the Hospital Price Transparency final rule. We addressed 
comments on these issues in the CY 2020 Hospital Price Transparency 
final rule's Collection of Information Requirements and Regulatory 
Impact Analysis (84 FR 65591-65602) and did not propose in the CY 2022 
OPPS/ASC proposed rule to change any of the policies or cost analysis 
previously established. Accordingly we consider these comments out of 
scope.
    Comment: Some commenters indicated that any modifications to the 
hospital price transparency final rule requirements could negate much 
of the

[[Page 63991]]

work that has been done and would require hospitals to start over to 
recreate their files in a new format. Commenters stated that additional 
requirements would create excess administrative burden and would 
require a minimum of six months to implement, noting the needed time to 
gather data and execute the necessary IT build for reporting.
    Response: In this final rule with comment period, we are finalizing 
the following policies: (1) Increasing the civil monetary penalty using 
a scaling factor; (2) deeming state forensic hospitals as having met 
requirements; and (3) requiring hospitals to ensure that the machine-
readable file is accessible to automated searches and direct downloads. 
In the proposed rule, we determined that neither increasing the penalty 
amount nor ensuring the machine-readable file is barrier free would 
result in a cost burden over the amount that was estimated in the 
impact analysis in the Hospital Price Transparency final rule. We 
further estimated that the policy to deem state forensic hospitals as 
having met requirements would reduce hospital burden. None of the 
policies modify any other requirements in the Hospital Price 
Transparency final rule (such as changes in formatting requirements or 
data elements that must be displayed). We therefore disagree with 
commenters that the modifications made in this final rule will 
``negate'' work already done by hospitals to come into compliance or 
that such policy modifications would cause a hospital to spend 6 months 
to gather and display information or that such policy modifications 
would ``require hospitals to start over to recreate their files in a 
new format.'' Additionally, we have assessed the final policies in this 
final rule with comment period to result in an overall burden reduction 
and therefore disagree that the policies we are finalizing in this rule 
will ``create excess administrative burden.''
    Comment: Some commenters recommended that in the spirit of setting 
hospitals up for success, CMS should provide sufficient notification 
when making any changes to the reporting requirements and allow 
hospitals adequate time for feedback related to costs of 
implementation. A few commenters suggested that CMS collect post-
implementation cost estimates and publish them on a public facing 
website or otherwise take them into account in future impact analyses.
    Response: We believe that the rulemaking process provides 
sufficient notification of proposed changes and allows adequate time 
for stakeholders to submit substantive comments related to costs of 
implementation. We appreciate the additional suggestions related to 
development of future impact analyses, however, we believe that such a 
requirement (if finalized in future rulemaking) would impose an 
unnecessary burden on stakeholders and CMS.

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 final rule with comment period (1,349) will be the number of 
reviewers of this final rule with comment period. 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 final rule. 
We welcome any comments on the approach in estimating the number of 
entities that will review the final 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 2020 BLS for medical and health 
service managers (Code 11-9111), we estimated that the cost of 
reviewing this rule is $114.24 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 final rule. For each facility 
that reviewed the proposed rule, the estimated cost is $913.92 (8 hours 
x $114.24). Therefore, we estimated that the total cost of reviewing 
the final rule is $17,057,493 ($913.92 x 18,664 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 final rule with comment period. As 
a result, the Secretary has determined that this final rule with 
comment period 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 final 
rule with comment period would increase payments to small rural 
hospitals by approximately 2 percent. Therefore, it should not have a 
significant impact on approximately 583 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. We note that the policies established in this final rule with 
comment period apply more broadly to OPPS providers and do not 
specifically focus on small rural hospitals. As a result, the impact on 
those providers may depend more significantly on their case mix of 
services provided, since the broader impact on the hospital category is 
more dependent on the OPD update factor, as indicated in the impact 
table.

[[Page 63992]]

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 $158 million. This final 
rule with comment period 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 final rule with comment period 
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 84 demonstrates the estimated distributional impact of the OPPS 
budget neutrality requirements that would result in a 1.6 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 are making 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 85 demonstrates 
the estimated distributional impact among ASC surgical specialties of 
the productivity-adjusted hospital market basket update factor of 2.0 
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 final rule with comment period 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 84 of this final rule with comment period, we 
estimate that OPPS payments to governmental hospitals (including state 
and local governmental hospitals) will increase by 1.7 percent under 
this final rule with comment period. 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 final rule 
with comment period, in conjunction with the remainder of this 
document, demonstrate that this final rule with comment period is 
consistent with the regulatory philosophy and principles identified in 
Executive Order 12866, the RFA, and section 1102(b) of the Act.
    This final rule with comment period 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. However, as noted in section XXIV.E., this 
final rule should not have a significant effect on small rural 
hospitals.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on October, 28, 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 amends 42 CFR chapter IV as set forth below:

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:

[[Page 63993]]

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), 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.
* * * * *

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

[[Page 63994]]

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'', ``Track Two'', and ``Track 
Three'' 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 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 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 before the start of the 
model performance period in the CBSAs selected for participation.
* * * * *
    Track One means a track for Professional participants and Dual 
participants that meet all RO Model requirements as specified in Sec.  
512.220, including use of CEHRT.
    Track Two means a track for Professional participants and Dual 
participants that meet all RO Model requirements as specified in Sec.  
512.220, except for use of CEHRT.
    Track Three means a track for Professional participants and Dual 
participants who do not meet one or more of the RO Model requirements 
set forth at Sec.  512.220(a); 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

[[Page 63995]]

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; and
0
 d. 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 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 its 
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.
* * * * *
    (d) * * *
    (1) * * *
    (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) An RO participant must satisfy the requirements of this section 
to be included in Track One under the RO Model in a particular PY. An 
RO participant that meets all of these RO Model requirements in a 
particular PY, excluding use of CEHRT, will be in Track Two for such 
PY. An RO participant that does not meet one or more of the RO Model 
requirements in paragraph (a) of this section in a particular PY will 
be in Track Three for such 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

[[Page 63996]]

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 that have fewer than 60 episodes in the 
baseline period 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 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 no later than 30 days after the technical 
participant begins

[[Page 63997]]

furnishing the professional component, in a form and manner specified 
by CMS; and
    (2) 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) to read as follows:


Sec.  512.280  RO Model Medicare Program Waivers

* * * * *
    (f) * * *
    (4) [Reserved]
* * * * *

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 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 512.294 is added to read as follows:


Sec.  512.294  Extreme and uncontrollable circumstances.

    (a) General. 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 pricing methodology under paragraphs (e) and (f) 
of this section.
    (b) Determination factors. 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) Modified requirements. 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) Model performance period. 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.
    (e) Trend factor. 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) Quality withhold. 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 or to not apply the 
quality withhold to RO Model payments during the EUC 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 amends 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:


[[Page 63998]]


    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 at least 31 and up to and including 550 
beds, 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: October 29, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-24011 Filed 11-2-21; 4:15 pm]
BILLING CODE 4120-01-P